XTC Lithium (ASX:XTC) signed a non-exclusive, non-binding letter of intent with American Battery Materials for a proposed partnership to develop the Carachi lithium project in Argentina, according to a Thursday Australian bourse filing.

Under the letter of intent, the US-based firm will have the opportunity to acquire up to a 50% interest in the project, subject to the finalization of a definitive agreement, among other conditions.

Upon securing a 10% interest in the project by paying $3.5 million, American Battery Materials will have the right to enter into a joint venture agreement with XTC for the continued exploration and development of the tenements.