The close proximity of two properties offers
promise of synergies for these firms.
With an eye toward partnering in a joint venture (JV), Cypress
Development Corp. (CYP:TSX.V; CYDVF:OTCQB; C1Z1:FSE) signed a nonbinding letter of intent with Dajin
Resources Corp. (DJI:TSX.V; DJIFF:OTCPK) concerning Dajin's Alkali Spring
Valley lithium property in Nevada, 12 kilometers from Cypress' Clayton Valley
lithium project.
Under the agreement, Cypress gains the exclusive right and option to acquire
a 50% interest in Dajin's 145 unpatented mining claims at Alkali Spring
Valley, as well as its application for 1,000-acre-feet per year of water
rights in Nevada's Esmeralda County.
In exchange, Cypress will give Dajin 150,000 Cypress shares plus $50,000.
Cypress has two years to complete its earn-in, which requires issuing another
150,000 Cypress shares to Dajin, and spending $200,000 on exploration at
Alkali Spring Valley in year one and $250,000 in year two. Following that
two-year period, the two companies will establish the JV.
If Dajin does not want to participate in the JV at that point, it may
"dilute to a 10% net profits' interest on the value of the JV property
in Alkali Spring Valley," a news release explained.
The next steps are for Cypress to perform due diligence on Dajin and draft
a definitive agreement for the deal. Once those are done and the TSX Venture
Exchange approves the transaction, Cypress will compensate Dajin with the
above mentioned shares and cash.
After the JV is in place, Cypress and Dajin will "share
proportionally in property development if lithium brine resources are
discovered," according to the release.
"We look forward to working with Dajin on the exploration of the
Alkali Spring Valley lithium property, and we appreciate its work to date
toward obtaining related water rights," Cypress' CEO Bill Willoughby
said in the release. "We particularly welcome the prospect to explore
synergies with our Clayton Valley lithium project."
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