Chilean Lithium Project Set to Join Pan Asia Metals' Growing Portfolio

Pan Asia Metals (ASX: PAM) experienced a notable surge in its stock value on Tuesday, propelled by the announcement of binding option agreements for the acquisition of the Tama Atacama lithium project in Chile. The project stands out as one of the largest lithium brine initiatives in South America, spanning an expansive 1,200 square kilometers across three salt flats. Encompassing the Dolores North, Dolores South, Pozon, and Pink projects, Pan Asia Metals is also set to secure the northern segment of the adjacent Ramatidas project.

Managing director Paul Lock emphasized the exceptional lithium surface assays at the Tama Atacama project, highlighting its strategic significance with all infrastructure requirements meticulously addressed. The decision to acquire this project aligns with a broader trend of multinational mining and chemical companies, such as France-based Eramet SA, pursuing acquisitions in Chile. Concurrently, Australian and Chinese processors are establishing lithium conversion plants in the region.

Under the terms of the deal, Pan Asia Metals will attain a 100% interest in the Dolores North and South project over the next three years, with the potential for an additional year through mutual agreement with the vendor, Rajo Partnership. This will be facilitated by a structured payment plan, including a $100,000 option payment by December 2024, another $100,000 option payment by the end of 2025, and a final $2 million option payment by December 2026. Geophysics and drilling activities at the Tama Atacama project are slated to commence in the early months of 2024, signaling the company's commitment to the project's development.

The announcement of Pan Asia Metals' strategic move coincides with the establishment of a new government-controlled lithium partnership that amalgamates assets from the state-run Codelco and private miner SQM (NYSE: SQM). This initiative aligns with Chilean President Gabriel Boric's push for increased public control over the battery metal. SQM is set to collaborate with copper giant Codelco for the future development and production of lithium in the Atacama salt flat. This collaborative effort is scheduled to commence in 2025 and extend through 2060, with Codelco securing majority control in line with President Boric's earlier plans.

In response to these significant developments, Pan Asia Metals' stock witnessed a substantial increase, soaring by as much as 40% to A$0.175. This marked the most significant intraday percentage gain since May 19, 2023, and the stock reached its highest level since December 15, 2023, closing at A$0.16. Investors and industry observers are closely monitoring the company's strategic moves in the dynamic lithium market, as it positions itself for future growth and success in the South American region.