The share price of lithium small-cap Trek Metals Ltd (ASX: TKM) is rocketing on Friday after the company revealed a deal with iron ore giant Rio Tinto Ltd (ASX: RIO).
It will see the S&P/ASX 200 Index (ASX: XJO) icon exploring Trek Metals' Jimblebar Project – considered highly prospective for nickel and copper mineralisation.
Handing over exploration of the project will allow the ASX small-cap to focus its efforts on its flagship Tambourah Lithium Project and its Kendeka Manganese Project.
Right now, the Trek Metals share price is 13.33% higher than its previous close, trading at 6.8 cents.
Let's take a closer look at the latest news from the lithium hopeful.
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ASX small-cap lithium share rockets on Rio Tinto agreement
The market is bidding the Trek Metals share price higher after the $22 million company announced an exploration agreement with ASX 200 goliath Rio Tinto.
The agreement grants Rio Tinto the option to earn an 80% joint venture interest in the Jimblebar Project, located in Western Australia's Pilbara region.
Trek Metals CEO Derek Marshall commented on today's news, saying:
We are delighted to be partnering with Rio Tinto Exploration (RTX) to advance the exploration for magmatic nickel-copper at Jimblebar.
RTX brings significant technical and operational expertise to the table, and we are very excited to be able to collaborate with their team to generate, refine and test targets across the tenements.
The deal will initially see Rio Tinto paying $50,000 for an exclusive six-month option to explore the project. Another $25,000 could see that extended by another six months.
The mining giant has also committed to spending $100,000 at the project over the exclusivity period.
Beyond that, it has the option to farm in to earn an 80% joint venture interest by funding $5 million of exploration expenditure, including at least 2,000 metres of drilling, within six years.
If it does so, it will fund Trek Metals' portion of the venture until the project reaches an advanced scoping study level or Rio Tinto has forked out $40 million, whichever comes first.
Marshall continued:
This agreement allows Trek to continue to focus on our flagship Tambourah Lithium Project, where
we plan to commence our maiden drill program this quarter, and continue to advance our high-grade
Hendeka Manganese Project, while keeping a free-carried exposure to the nickel-copper potential at
Jimblebar and allowing it to progress much quicker than would otherwise be achievable.
Rio Tinto has an extensive presence in the Pilbara region, where it boasts 17 mines, four port terminals, and a 2,000 kilometre rail network.
