Deal Volume of More Than $26 Million

Lithium companies are no longer in? At least for the USA, this is only partially true. For a few days now, the integrated lithium start-up Stardust Power, Inc. (NASDAQ: SDST) has been listed on NASDAQ and has achieved – albeit with comparatively low trading volumes – a market value of more than a billion at its peak. At the current price of around $14, the company is still valued at about $630 million.

Stardust Power is developing a lithium refinery in Muskogee, Oklahoma, with a production capacity of up to 50,000 tons of battery-grade lithium carbonate per year. Upon completion, Stardust Power expects to secure several raw material sources from various lithium producers and become one of the largest lithium refineries in the United States. One of the possible lithium sources could be Usha Resources’ Jackpot Lake lithium brine project.

Usha Resources Can Benefit for Years to Come

The successful IPO of Stardust is therefore immediately relevant for the Canadian Usha Resources Ltd. (TSXV: USHA) (OTCQB: USHAF; FSE: JO0), as Stardust Power has secured the right to acquire up to 90% of Jackpot Lake. Stardust Power’s stock market listing is a necessary condition for signing a definitive agreement, which in turn would trigger a series of payments to Usha as well as investments in the Jackpot project. Stardust has already paid $75,000 to Usha just for the Letter of Intent. Upon completion of a definitive agreement, an initial payment of $500,000 to Usha would be due immediately, payable half in cash and half in Stardust shares. $500,000 corresponds to about 700,000 CAD at the current exchange rate of the Canadian dollar.

The complete earn-in by Stardust would have a volume of $26,025,000. This sum includes work commitments of $8,000,000 spread over a period of five years, as well as payments totaling $1,525,000 in cash, $750,000 in shares, and $15,750,000 in shares or cash at Stardust Power’s discretion to Usha. In the end, Usha would retain 10% of the project and a 2% NSR and would be involved in the Joint Venture (“JV”) formed between Usha and Stardust Power until a formal decision to mine is made after completion of a feasibility study. Stardust would be entitled to buy back 1% of the NSR for a cash payment of $7,500,000.

Deepak Varshney, CEO of Usha, commented: “We congratulate Stardust Power on its stock market listing. With the recent acquisition of the Southern Arm Copper-Gold VMS Project from Abitibi Metals, our focus will now shift to copper and other critical metals. With working capital of approximately $1.2 million, Usha is in a strong financial position to navigate the coming year, and we look forward to our first drilling program at Southern Arm, particularly the ‘Hollywood’ target, which has a ~1.8 km large area that is open along strike.”

Conclusion: Although the letter of intent for the earn-in to Jackpot Lake is not yet binding, it speaks to Stardust’s seriousness that the company has already spent $75,000 just for the option. The Jackpot Lake project would fit perfectly with Stardust’s profile. USHA’s Jackpot Lake lithium brine project is located in Clark County, 35 kilometers northeast of Las Vegas, Nevada, and covers approximately 35.3 km2. The geological environment of the project is similar to that of Albemarle’s Silver Peak Nevada lithium mine, the only producing lithium mine in North America, which has been in continuous operation since 1966. Modeling suggests that Jackpot Lake is open for expansion in all directions. The target lies at shallow depth, predominantly above the bedrock at a depth of 600 meters, and is about 450 meters thick. A definitive agreement with Stardust could secure Usha Resources considerable additional revenue over the coming years – without dilution!