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ELKO, Nevada - Lithium Corporation (OTCQB:LTUM), a $4.8 million market cap exploration company whose shares have surged over 40% in the past six months, announced Wednesday the execution of a binding agreement with Morella Corporation Limited (ASX:1MC) to restructure their joint venture arrangements over lithium prospects in Nevada. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt.
Under the new agreement, Morella will assume 100% ownership of the Fish Lake Valley (FLV) South and North Big Smoky (NBS) project areas, while Lithium Corporation will retain full ownership of the FLV North claims, where lithium-boron enriched brine was previously produced.
Lithium Corporation will maintain a 3.5% Net Smelter Royalty on both the FLV South and NBS projects. Morella has the option to repurchase 50% of these royalties for $3 million and $2 million respectively within five years.
The restructuring follows Morella’s comprehensive review of the project areas, which showed promising lithium exploration results. The agreement also includes provisions for equity considerations, with shares previously due to Lithium Corporation in 2025 now to be issued over an 18-month period.
Both companies have granted each other rights of first refusal on any future transfer of claims or royalty interests.
"This restructuring reflects a pragmatic and mutually beneficial evolution of our long-standing relationship with Morella," said Tom Lewis, President of Lithium Corporation, in the press release statement.
The company stated that the reappearance of FLV North as a wholly owned asset will enhance its broader portfolio, which includes the San Emidio lithium prospect in northwestern Nevada and various critical mineral prospects in British Columbia, Canada. InvestingPro analysis shows the company currently maintains a "Fair" overall financial health score of 2.2 out of 5, with particularly strong momentum scores. Subscribers can access 5 additional ProTips and detailed financial metrics to better evaluate LTUM’s growth potential.
Lithium Corporation focuses on energy metals exploration in North America, with operations in Nevada and British Columbia. The stock has delivered a 31.6% return over the past year, though InvestingPro analysis suggests the shares may be trading above their Fair Value at current levels.
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