Searchlight Resources (TSXV:SCLT) is finally benefiting from the current booming demand for prospective lithium hard rock projects in Canada. The company announced today that Brunswick Exploration Inc. (BRW:V), currently valued at CAD 115 million and, in its own words, "Canada's largest grassroots lithium initiative", has secured an earn-in option on two potential lithium targets in Searchlight's portfolio: the 148.6 km² Jan Lake Claims Block and Searchlight's 50% JV interest in the 12.4 km² Hanson Lake property in Saskatchewan. Searchlight had secured the Jan Lake Claims itself just before Christmas at minimal cost. Brunswick's entry thus validates Searchlight's business model of identifying geological opportunities in Saskatchewan at the earliest possible stage. If successful, the deal could be worth CAD 4.5 million to Searchlight.

Brunswick Exploration, in which Osisko Group also holds a major interest, will pay CAD 35,000 in cash or shares at its option upon signing; a further CAD 700,000 in cash, shares or a combination of both, at Brunswick's option, and a further CAD 250,000 in cash, shares or a combination of both upon submission of a resource estimate. An additional CAD 250,000 in cash, shares is due upon submission of a preliminary economic assessment. In addition, Brunswick is committed to exploration expenditures of CAD 1,000,000 over four years. Searchlight retains a 2% net smelter royalty, half of which can be purchased by Brunswick for CAD 1,000,000 and the other half for CAD 2,000,000.

The claims are located approximately 60 km west of Creighton, Saskatchewan and Flin Flon, Manitoba. Historical sampling indicates anomalous rare metals including beryllium, rubidium, gallium, tantalum, cesium and lithium. Brunswick will be the operator of the exploration programs on the option properties.

Stephen Wallace, CEO of Searchlight commented, "Searchlight is pleased to sign an agreement with Brunswick, a leading lithium exploration company focused on exploration in Canada using state-of-the-art exploration techniques."

 

Map 1. Location of Searchlight's Jan Lake and Hanson Lake Claims in Saskatchewan.

Conclusion: Sometimes the value of resource projects changes overnight - according to the law of supply and demand. Brunswick Exploration didn't flinch long at Searchlight's prospective pegmatite projects in this option arrangement. Just weeks after Searchlight CEO Steven Wallace staked the projects for Searchlight, Brunswick is paying many times the price and is willing to take on the exploration risk. If successful, the deal could be worth as much as CAD 4.5 million to Searchlight over the next four years. For Brunswick, of course, success could be much greater. Interestingly, the contract is worded in such a way that Brunswick will decide in each case whether to pay Searchlight in cash or shares. If the lithium boom continues or Brunswick finds elsewhere, Searchlight could benefit disproportionately from payment in shares. We look forward to more news from Searchlight, especially from the Kulyk Lake rare earth project, from which samples are still pending from last year.

 

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