Alchemy Resources Ltd (ASX:ALY) has signed a farm-in and joint venture agreement with Japanese government agency JOGMEC (Japan Organization for Metals and Energy Security) to boost development of its Karonie Lithium and Gold Project near Kalgoorlie in Western Australia.

The agreement would enable JOGMEC to earn up to 51% interest in the Roe Hills tenure where key parts of Karonie are located, based on the agency funding up to $6,000,000 of exploration expenditure there.

Exploration itself to be managed by Alchemy, which will also be operator of the project during the farm-in period. Upon JOGMEC earning a vested interest in the tenements, it will then become a JV partner.

The Karonie project comprises 694 square kilometres, and the JV agreement focuses on 248 square kilometres of target areas within this, which are deemed prospective for lithium of a similar type to Global Lithium Resources’ Manna deposit to the east.

Alchemy chief executive officer James Wilson said the agreement was an acknowledgment of Karonie’s importance as a prime WA lithium play.

“This is a fantastic outcome for Alchemy and a great endorsement for the Karonie project and we look forward to working with the team at JOGMEC to explore this prospective area,” he said.

“The Farm-in and JV deal gives a clear path for exploration at Roe Hills in the medium term, and along with our existing gold exploration plans in the region, provides JOGMEC and Alchemy the best opportunity for exploration success in the region.

“Exploration has been ongoing through the year and has resulted in the delineation of several priority targets which we plan on testing once the requisite approvals are in place.”

The agreement will also need to be signed off on by the Australian Foreign Investment Review Board (FIRB).

Alchemy has been trading at 0.7 cents.

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