Buxton Resources has signed a binding earn-in agreement with Solution Metals to secure 100% ownership of the Matrix Manganese Project in Mohave County, Arizona, US.

Matrix lies adjacent to the Artillery Peak project, which has a resource of 277mt at 2.8% manganese. 

Buxton noted that the Matrix Project features high-porosity sandstone and low-gangue acid consumption, which are conducive to efficient leaching compared with other manganese deposits.

Under the agreement, Buxton will invest A$1m over two years to earn full ownership of 154 BLM Lode Mining Claims.

The company will issue A$150,000 worth of shares to Solution Metals within 20 days post-agreement execution and grant a 1.5% net smelter return (NSR) royalty, with Buxton retaining the right of first refusal on this royalty.

A second tranche of shares valued at A$100,000 will be issued to Solution Metals either on the second anniversary of the agreement or upon completion of the earn-in, whichever occurs first.

Buxton's mandatory commitments are limited to annual claim maintenance fees of $25,410, due on 1 January each year.

In the event of an initial public offering (IPO) of the project, Solution Metals is entitled to a 10% stake in the new entity's capital structure, along with a priority option to subscribe for an additional 9.9% under the same conditions as other investors in the IPO.

Furthermore, if Buxton decides to advance the project, Solution Metals will receive milestone payments, which can be settled in Buxton shares or cash at Buxton's discretion.

These payments are set at 3% upon defining a resource, 2% at the completion of a feasibility study and 1% at the decision to mine.

Buxton CEO Marty Moloney said: “The Matrix Project acquisition provides Buxton shareholders a low-cost option on the high-purity manganese sulphate market, which is predicted to grow between 4–6 times by 2030.

“The strategic context is highly compelling as the project is located proximal to >1 TWh [terawatt-hours] of announced US auto pipeline battery cell capacity across > 35 plants. The USA currently relies 100% on manganese imports and significant incentives, such as the Biden Administration’s massive Inflation Reduction Act, are available for critical mineral projects.

“The project is located in a proven manganese province and we will be commencing work on the ground in Q3 2024, with drilling designed to test extensions of known manganese mineralisation expected in Q4.”