Reynolds Range Lithium Project Gains Momentum but Faces Exploration Risks

Strategic Partnership with SQM

In a pivotal development for iTech Minerals Ltd (ASX: ITM), the company has formalised a binding Memorandum of Understanding with Sociedad Química y Minera de Chile (SQM), one of the world’s largest lithium chemicals producers. Through its Australian subsidiary, SQM Australia Pty Ltd, the global lithium leader will partner with iTech to advance the Reynolds Range Lithium Project in the Northern Territory.

This collaboration is structured as an earn-in agreement, allowing SQM to progressively acquire up to a 70% interest in the lithium mineral rights of the project. The staged approach begins with a $2 million upfront fee following due diligence, granting SQM an immediate 30% stake. Subsequent exploration expenditure commitments of $7 million over 4.5 years can increase SQM’s interest to 51%, with a final stage enabling a 70% stake upon meeting resource milestones or additional exploration spend.

Reynolds Range: A Lithium and Polymetallic Frontier

The Reynolds Range project spans 375 square kilometres of the Aileron Province, a geologically prospective region within the Paleoproterozoic North Australian Craton. Recent rock chip sampling has revealed lithium grades exceeding 8% Li2O in spodumene-bearing pegmatites, alongside significant polymetallic mineralisation including gold, silver, antimony, lead, and copper. These findings underscore the project's multi-commodity potential.

Beyond lithium, iTech’s ongoing exploration has expanded gold-silver-antimony mineralisation across several prospects, Sabre, Falchion, and Lander 1, covering a strike length of over 2.6 kilometres. The identification of a 6.3 by 2.5 kilometre antimony soil anomaly further highlights the extensive mineralisation footprint. These polymetallic targets complement the lithium focus and could enhance the project's overall value proposition.

Operational and Financial Outlook

Under the earn-in terms, SQM will operate the project during the exploration phase, bringing its considerable technical expertise and financial resources to bear. iTech retains full ownership of all non-lithium minerals, including copper and gold, preserving upside potential in these commodities.

Financially, iTech reported a cash balance of $3.47 million at the end of December 2024, with $529,000 spent on exploration activities during the quarter. The company is advancing approvals to commence drilling at the high-priority Scimitar copper-gold prospect, signalling a broadening of its exploration agenda beyond lithium.

Implications and Next Steps

This partnership with SQM represents a significant validation of the Reynolds Range project’s potential and a strategic move to accelerate its development. SQM’s involvement mitigates financial risk for iTech while providing access to world-class lithium development expertise. The coming months will be critical as SQM completes its due diligence and exploration activities ramp up, with the potential to rapidly advance the project towards resource definition.

For investors, the deal offers a compelling blend of exposure to lithium’s robust market fundamentals alongside promising polymetallic exploration upside. However, the success of the project hinges on exploration outcomes and regulatory approvals, underscoring the inherent risks in early-stage mineral development.