Third Element Metals

Third Element Metals Pty Ltd (“TEM”) was established in 2016 as a 50:50 joint venture through which Lepidico (ASX : LPD) and Crusader Resources (ASX : CAS) would investigate opportunities in Brazil, and later in Portugal, to leverage Lepidico’s proprietary L-Max® process technology.  As part of those activities, TEM lodged an application for an exploration licence (“Gaia”) in the Guarda area contiguous with the Alvarrões property.

The joint venture partners have agreed a restructure of the TEM joint venture that will see Lepidico focusing on the existing mines in the area with a view to lithium mica concentrate supply for export to L-Max®  plant(s), including the Grupo Mota over the Alvarrões property. Meanwhile Crusader (through TEM) will concentrate on exploration at Gaia (and in Brazil) with a longer term objective of being able to justify the contraction of L-Max® plants in Brazil and Portugal

Lepidico will transfer its interest in TEM to Crusader, which will become the sole shareholder of TEM.  TEM will maintain the Gaia application and associated rights on grant, but should Crusader elect to divest, TEM will transfer the application and associated rights to Lepidico.

Crusader/TEM will have rights to one L-Max® licence in each of Portugal and Brazil.  Should TEM develop an L-Max® plant in Portugal, Lepidico will supply any concentrate from Alvarroes on reasonable commercial terms.

If Crusader/TEM develops lithium mica assets in Brazil and produces concentrate for export, Lepidico will have the option to secure an offtake agreement on reasonable commercial terms.

This simplified structure will allow both Lepidico and Crusader to leverage their respective strengths and strategic objectives.