Oceana Resources Limited (Oceana) has made a decision to opt out of a joint venture proposed with Montello Resources Limited (Montello) for a lithium project in the James Bay region of Canada. The decision came as a surprise to many industry observers, as Oceana had previously made strong commitments towards the project, stating their intentions to explore and develop the large mineral deposit within the area.
The potential lithium joint venture agreement would have seen Oceana take control of Montello’s James Bay databank, which contains a wealth of data from initial exploration, as well as a subsequent battery of field work. It seemed like a mutually beneficial deal; in exchange for significant capital investment, Oceana would have had rights to the James Bay project.
Despite the potential, Oceana decided to walk away from the project. In a statement released to the public, they expressed their gratitude to Montello for taking the initiative, as well as for their willingness to work together. Oceana cited the long-term economic situation in the area as its main reason for declining the deal.
According to the statement, Oceana believes that “while the project has potential, it does not satisfy the criteria for a commercially viable venture for Oceana at this time”. They had not overlooked the financial and technical risks associated with the project, but ultimately they felt the economic conditions and the current laws in effect in the area posed too much uncertainty.
It appears that Oceana’s decision to opt out of the Montello lithium project in James Bay was a carefully weighed decision, made after taking into consideration all the technical, financial, and legal aspects of the venture. Although their stance may be disappointing to some, it’s a positive sign of a responsible company committed to best practices in mineral exploration and development.