The company said Atlas’ Mt Francisco project represented the highest quality lithium asset in the Pilbara outside its Pilgangoora project.

Pilbara can earn 80% of Mt Francisco by spending $A1 million on exploration and completing a definitive feasibility study.

The company said the tenement, 50km south-west of Pilgangoora, was the last remaining large occurrence of outcropping pegmatites close to Port Hedland.

It was previously only explored for tin and tantalum, but re-assaying returned grades of up to 1.92% lithium oxide.

Brinsden said the addition of Mt Francisco to the company’s portfolio meant that it had the two best lithium exploration assets in the Pilgangoora district.

“The north Pilbara pegmatite swarms have proven to be richly endowed, with significant resource bases now established at Pilgangoora, and now Wodgina,” he said.

“While our exploration team still has plenty of unfinished business at Pilgangoora, the acquisition of Mt Francisco gives them another outstanding early stage project to get their teeth into.

“We believe the scale and potential of the pegmatite swarms at Mt Francisco is enormous and opens up an exciting new growth front for Pilbara as we continue to advance Pilgangoora towards development and first production.”

Pilgangoora already has a resource of 156.3 million tonnes at 1.25% lithium oxide and 128 parts per million tantalum pentoxide for 1.95Mt of lithium oxide and 44.2 million pounds of tantalum pentoxide, making it one of the world’s largest hard rock lithium deposits.

Pilbara remains on track to start full-scale construction at Pilgangoora next month, pending financing, with news on that front due shortly.

Meanwhile, Pilbara also signed a non-binding memorandum of understanding with Atlas for a proposed infrastructure services agreement.

Under the proposed agreement, Atlas would provide access, processing, bulk handling and haulage services to Pilbara for its run-of-mine ore operation from Pilgangoora.

Pilbara would use infrastructure from Atlas’ Mt Dove, as well as port access and capacity at Port Hedland.

The agreement, if finalised, would allow Pilbara to meet its target of establishing a direct shipping ore operation by mid-year to generate early cashflow.

Under an offtake deal with Shandong Ruifu, signed in November, Pilbara can supply 1.9 million tonnes of crushed, but unprocessed ROM product at 1.5% lithium oxide.

Pilbara is yet to formalise the Ruifu deal or make a final investment decision on the DSO operation.

Shares in Pilbara were up by half a cent to 45c, while Atlas shares were unchanged at 3c.