LSC Lithium Acquires Strategic Tenements from Orocobre and Option from Advantage Lithium and Consolidates Control of the Centre of the High Grade Lithium Salinas Grandes Salar
All dollar amounts are in U.S. dollars unless otherwise indicated.
TORONTO, June 5, 2017 /CNW/ - LSC Lithium Corp. (the "Company" or "LSC") (TSXV: LSC) is pleased to announce that it has completed the previously announced acquisition of:
- the tenements and other mineral rights held by Orocobre Ltd. ("Orocobre"), South American Salars SA ("SAS") and Borax Argentina SA ("BA") (collectively, the "Orocobre Group") located in the Salinas Grandes Salar, in Salta and Jujuy provinces, Argentina, covering approximately 25,027 hectares; and
- the option from Advantage Lithium Corp. ("Advantage") over the 1,471 hectare Stella Marys Project located in the Salinas Grandes Salar, in Salta province, Argentina.
These acquisitions increase LSC's land package on the Salinas Grandes Salar bringing LSC's portfolio of lithium brine salars to approximately 300,000 hectares, which represents extensive lithium prospective salar holdings in Argentina, and which, together with LSC's existing tenements, cover 86% in the centre of the Salar in Salta province and 45% of the centre of the Salar in Jujuy province. In the Jujuy province, a large portion of the Salar is also controlled by the cooperatives.
TERMS OF THE ACQUISITION OF THE SALINAS GRANDES TENEMENTS
Pursuant to the agreement made on March 28, 2017, as amended on June 2, 2017 (the "LSC-Orocobre Agreement") among LSC, its Argentine subsidiary Lithium S Corporaiton S.A. ("LSCSA"), and the Orocobre Group, LSC has (through LSCSA) acquired: (a) all tenements held by the Orocobre Group located in the Salinas Grandes Salar, in Salta and Jujuy provinces, Argentina, (the "Salinas Grandes Tenements"); (b) interests in the portion of a mining exploration application (cateo) that is in proximity to the Salinas Grandes Tenements in Jujuy province; (c) a royalty held by Orocobre in certain tenements located on the Salar de Pozuelos in Salta province owned by LitheA Inc. (which company is being acquired by LSC as disclosed in its news release dated March 15, 2017); and (d) certain usufruct rights to extract borates located in the Salinas Grandes Salar.
In connection with, and as consideration for, the acquisition, LSCSA:
| (a) | has transferred to Orocobre three tenements in the Salar de Olaroz located in Jujuy province covering approximately 3,821 hectares; | |
| (b) | has paid to Orocobre $4 million at closing; | |
| (c) | will pay to Orocobre $1 million on each of the 1st and 2nd anniversaries of closing and $944,630 on the 3rd anniversary of closing; and | |
| (d) | has granted to an affilate of Orocobre a 2% royalty on the brine concentrate produced from the Salinas Grandes Tenements, calculated using the same methodology applied by Orocobre and its affiliates for the calculation of the royalties paid by Orocobre or its affiliates to the provincial government of Jujuy for Orocobre's last two fiscal years (the "Salinas Grandes Royalty") regardless of any retroactive or future changes to such methodology made after December 31, 2016. |
Payment of the deferred cash consideration may be postponed to the 4th anniversary of closing and/or subject to reduction of up to $1,222,712 at LSC's option in the event that valid title to certain mineral interests covering up to 4,503 hectares cannot be transferred to LSCSA within three years of closing. LSC has guaranteed the payment obligations of LSCSA for the deferred cash consideration.
In addition, each of Orocobre and BA has agreed to: (a) a 10 year exclusion area covering the 10 km area from the external perimeter of any of the Salinas Grandes Tenements, and (b) a 10 year non-interference zone respecting all properties held by LSC located south of Río Las Burras.
TERMS OF THE ACQUISITION OF STELLA MARYS PROJECT
Pursuant to the agreement made on March 28, 2017 (the "LSC-Advantage Agreement") between LSC and Advantage, LSC has acquired from Advantage its option over the 1,471 hectare Stella Marys Project located in the Salinas Grandes Salar, in Salta province, Argentina (the "MSR Option"). The MSR Option is governed by an agreement with Minera Santa Rita SRL ("MSR") dated October 27, 2016 (the "MSR Option Agreement") and the LSC-Advantage Agreement.
On closing, Advantage assigned the MSR Option to LSC in exchange for:
| (a) | LSC making aggregate cash payments of approximately $690,000 to Advantage in reimbursement of option payments and related expenses previously paid by Advantage pursuant to the MSR Option Agreement and a commitment to pay up to an additional $48,000 in finder's fees payable by Advantage; | |
| (b) | LSC issuing 256,520 LSC common shares to Advantage as reimbursement for the 600,000 Advantage shares previously issued by Advantage to MSR pursuant to the MSR Option Agreement. |
LSC has the right to acquire the Stella Marys Project pursuant to the exercise of the MSR Option prior to Setpember 21, 2017 by:
| (a) | making a cash payment of $650,000 to MSR; | |
| (b) | issuing to Advantage a number of LSC common shares (calculated on the basis of the proportionate closing prices of the LSC common shares and Advantage common shares on the trading day preceding the date of closing of the MSR Option exercise), as reimbursement for the issuance by Advantage of the 900,000 Advantage common shares to MSR in connection with the exercise of the MSR Option; and | |
| (c) | entering into a royalty agreement with Advantage with respect to a 2% royalty on the brine concentrate produced from the Stella Marys Project that will be granted by LSC to Advantage, calculated using the same methodology as used for the Salinas Grandes Royalty. |
Advantage has agreed to: (a) a 10 year exclusion area covering the 10 km area from the external perimeter of any of the Salinas Grandes Tenements, and (b) a 10 year non-interference zone respecting all properties held by LSC located south of Rio Las Barros, subject in each case to an exclusion in respect of tenements held by Advantage in the Guayatayoc area.
The 256,520 LSC common shares issued to Advantage are subject to a 4-month hold period until October 3, 2017.
Qualified Person/Data Verification
The scientific and technical information included in this press release related to LSC tenements is based upon information prepared and approved by Donald H. Hains, P.Geo. Donald H. Hains is a qualified person, as defined in NI 43-101 and is independent of LSC, Orocobre and Advantage. No Qualified Person has reviewed or verified any information in this press release related to the Orocobre tenements to be acquired by LSC.
ABOUT LSC Lithium Corp.:
LSC Lithium is an emerging lithium producer that has amassed a large portfolio of prospective lithium rich salars. LSC is focused on developing its tenements located in five salars: Pozuelos, Pastos Grandes, Rio Grande, Salinas Grandes and Jama. All LSC tenements are located in the "Lithium Triangle," an area at the intersection of Argentina, Bolivia and Chile where the world's most abundant lithium brine deposits are found. LSC Lithium has a land package portfolio totaling approximately 300,000 hectares, which represents extensive lithium prospective salar holdings in Argentina.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or future performance, including statements as to the following: the timing, ability and right to acquire any tenements or exploration applications from the Orocobre Group after closing of the transaction; the timing or completion of the acquisition of the Stella Marys Project through exercise of the MSR Option; the amount of hectares and expected control by LSC of the tenements on Salinas Grande after closing of the acquisitions. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on LSC's current belief or assumptions as to the outcome and timing of such future events. Whether actual results and developments will conform with LSC's expectations is subject to a number of risks and uncertainties including factors underlying management's assumptions, such as risks related to: title of the Orocobre and Advantage Lithium tenements and their ability to be transferred post-closing; title, permitting and regulatory risks; exploration and the establishment of resources and reserves on the Salinas Grande tenements or other LSC properties; volatility in lithium prices and the market for lithium; exchange rate fluctuations; volatility in LSC's share price; the requirement for significant additional funds for development that may not be available; changes in national and local government legislation, including permitting and licensing regimes and taxation policies and the enforcement thereof; regulatory, political or economic developments in Argentina or elsewhere; litigation; title, permit or license disputes related to interests on any of the properties in which the Company holds an interest; excessive cost escalation as well as development, permitting, infrastructure, operating or technical difficulties on any of the Company's properties; risks and hazards associated with the business of development and mining on any of the Company's properties. Actual future results may differ materially. The forward-looking information contained in this release is made as of the date hereof and LSC is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein. For more information see the Company's filing statement on SEDAR at www.sedar.com.
Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The TSX Venture Exchange Inc. has neither approved nor disapproved the contents of this press release.
SOURCE LSC Lithium Corp.
Contact
LSC Lithium Corp., Jessica Helm, VP, Corporate Communications and Investor Relations, Suite 3001, 1 Adelaide Street East, Toronto, Ontario M5C 2V9, (416) 867 9298, Email: info@lsclithium.com, Web: lsclithium.com