Andrada Mining Ltd on Monday said it will develop the Lithium Ridge in Namibia with Sociedad Quimica y Minera de Chile SA through the latter’s subsidiary SQM Australia Pty Ltd.

The raw materials producer with mining and exploration assets in Namibia said SQM is one of the world’s largest lithium chemicals producers.

Andrada Mining shares jumped 20% to 3.80 pence each on Monday during midday trade in London.

Andrada said Grace Simba Investments Pty Ltd now holds the Lithium Ridge mining licence. Grace Simba is a subsidiary of Andrada’s subsidiary Uis Tin Mining Co.

Under the deal, SQM can earn into Grace Simba by funding the exploration, and in the future via a definitive feasibility study at Lithium Ridge.

The agreement requires approval from the Namibian Competition Commission.

SQM will be entitled to earn its interest in Grace Simba. In stage 1, SQM may earn a 30% interest in Grace Simbas by funding $7 million towards exploration over an 18-month period. In stage 2, SQM may earn an additional 10% interest, increasing its shareholding to 40% via additional $13 million funding for exploration over a further 24-month period.

In stage 3, SQM may earn an additional 10% stake in Grace Simba, increasing its shareholding to 50%, via either the completion of a Lithium Ridge definitive feasibility study or a total of $40 million being incurred on development.

Andrada Chief Executive Anthony Viljoen said: ‘The SQM partnership aligns perfectly with our strategic objectives, enabling us to develop our neighbouring lithium asset, and to accelerate exploration initiatives. The terms of this agreement establish a long-term, value-creating relationship that incentivises operational milestones and delivers sustained returns for our shareholders. The introduction of a substantial player in the global lithium market will also place Namibia at the forefront of the African lithium development trajectory and unlock value for the Namibian mining industry.’

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