Provides Funds to Materially Advance the
Kindersley Lithium Project
Conference call and webcast to be held at
10:00am (MST) on January 17, 2024 to describe the transaction
CALGARY,
AB, Jan. 16, 2024 /PRNewswire/ - (TSXV:
GRD) (OTCQB: GRDAF) – Grounded Lithium Corp. ("GLC" or
the "Company") is pleased to announce we entered into a
definitive agreement dated January 15,
2024 with Denison Mines Corp (TSX: DML NYSE American:
DNN) ("Denison") whereby Denison has the option to earn
up to a 75% working interest in the Kindersley Lithium Project
("KLP") by funding in aggregate up to $15,150,000 comprised of both cash payments to
GLC of up to $3,150,000 and funding
project expenditures of up to $12,000,000 through a structured earn-in option.
(the "Agreement").
The Agreement is expected to provide more than sufficient
funding for a field pilot (the "Pilot") for the KLP which
both the Company and Denison (collectively, the "Parties")
plan to advance on a priority basis. Beyond the Pilot, Denison
may also provide further capital during the earn-in period to fund
other activities as necessary to drive the overall KLP value such
as further technical evaluations and studies, drilling, sampling
and expenditures to maintain the KLP lands in good standing.
The Agreement highlights are as follows:
- Three distinct earn-in options (each, an "Earn-in
Option") which include a cash payment directly to the Company
along with dedicated expenditures to advance the KLP, as described
below. During the earn-in period, KLP expenditures will
generally be funded 100% by Denison, and Denison will be
entitled to an increased working interest in the KLP as it
completes each Earn-in Option phase. Key economic parameters of the
Agreement are summarized in the table below:
(all amounts in CAD$000's)
|
Earn-in Option
Phase
|
|
|
|
|
|
|
|
Phase 1
|
Phase 2
|
Phase 3
|
|
|
|
|
|
Royalty Financing
Payment
|
|
800
|
|
|
Cash Payments to
GLC
|
|
-
|
850
|
1,500
|
Cumulative Cash
Payments
|
|
800
|
1,650
|
3,150
|
|
|
|
|
|
Project
Expenditures
|
|
2,200
|
3,800
|
6,000
|
Cumulative Project
Expenditures
|
|
2,200
|
6,000
|
12,000
|
|
|
|
|
|
Total Contributions per
Option Phase
|
|
3,000
|
4,650
|
7,500
|
Cumulative Total
Contributions
|
|
3,000
|
7,650
|
15,150
|
|
|
|
|
|
Denison Working
Interest in the KLP
|
|
30 %
|
55 %
|
75 %
|
- Upon funding the total amounts of each Earn-in Option, Denison
has the right to either exercise the Earn-In Option and acquire the
working interest associated with that Earn-In Option phase or move
on to the ensuing option phase;
- Should Denison exercise the Earn-In Option and elect to acquire
a working interest in the KLP, a formal joint venture will be
created to govern the Parties. The joint venture agreement will
contain customary language and terms associated with an arrangement
of this nature, including but not limited to, governance
provisions, rights of first refusals, dilution provisions for
non-participation and technical and management committees;
- The Agreement terminates on the earlier of (i) Denison electing
to acquire its working interest and convert to a formal joint
venture, (ii) June 30, 2028, or (iii)
a date as otherwise agreed between the Parties;
- The ability exists for either Party to recommend drilling
expenditures, outside of the earn-in option terms detailed above,
for which the purpose is to preserve lithium rights associated with
the various KLP permits; and
- Denison will become the named operator of the KLP during the
Earn-In Period, however, to ensure continuity of site activities,
the Parties will enter into a two-year site management contract
whereby a fee will be paid to the Company to effectively manage the
day-to-day site activities of the KLP.
The Company also sold a 5% gross overriding royalty
("GORR") on the KLP to Denison in accordance with the terms
of a royalty agreement (the "Royalty Agreement") for a cash
payment of $800,000. Pursuant to the
terms of the Royalty Agreement, the GORR drops to 2% upon the
receipt of all approvals, inclusive of GLC shareholder approval of
the Agreement. The GORR is eliminated in its entirety on the
date that is fifteen (15) months after the closing of the Earn-In
Agreement unless Denison elects to forfeit its rights to exercise
an Earn-In Option.
GLC and Denison have established an area of mutual interest in
respect of any lands acquired within 10 kilometers of any existing
lands contained within the KLP that are prospective for lithium
("AMI Lands"). GLC is free to explore for, acquire and
develop lands outside of the AMI Lands for its own account and we
currently have developed several prospects which honour our
geological model for economic lithium resource plays, while we
benefit from intellectual knowledge gained from the technical work
on the KLP.
"Grounded remains steadfast in our vision to economically
produce battery grade lithium with a focus on low-cost operations
and this strategic investment from Denison is a major step in that
regard," stated Gregg Smith,
President & CEO. "Denison has a considerable operating
footprint in Saskatchewan as well
as an excellent reputation within the Province, and we continue to
be impressed with the diligence and professionalism of the Denison
team. We look forward to working together to unlock the full value
potential of the KLP for the benefit of our respective
shareholders. Further, the strategic investment from Denison
in both GLC and the KLP eliminates many perceived or distinct risks
in our anticipated path to commercial production."
David Cates, President and CEO of
Denison commented, "Denison is excited to acquire a royalty and
enter into an earn-in agreement with GLC that supports the further
assessment of the KLP in Saskatchewan. Denison has developed a unique
platform for the de-risking of mine development projects in the
Province with its innovative and highly skilled Saskatoon-based technical, regulatory, and
operations teams. Lithium is a complementary mineral
to Denison's core uranium business, with both identified as
critical minerals needed to support the clean energy transition.
Brine extraction also has many similarities to the In-Situ Recovery
mining method that the Company has successfully validated for use
at its flagship Wheeler River uranium project in northern
Saskatchewan. Combining our deep
local technical capabilities with the Grounded team's experience
on KLP has the potential to create an incredible environment
to incubate the KLP to emerge as a premier lithium project in a top
mining jurisdiction."
"The transaction with Denison is a great outcome for both
parties," commented Greg Phaneuf,
Senior Vice President Corporate Development & CFO. "Denison
gains exposure to a high-potential lithium brine project in
Saskatchewan with similarities to
its impressive uranium project development portfolio in the
Province while Grounded receives immediate funding and partners
with a strategic investor with a much lower cost of capital to
advance the KLP without incurring dilution at the corporate
level."
The Agreement is subject to the regulatory approval of the TSX
Venture Exchange and is subject to receipt of shareholder approval
by way of the written consent of shareholders holding over 50% of
the current issued and outstanding shares of the Company.
Conference Call Details
Those interested can listen to Company officials describe the
transaction with Denison by participating in the following
conference call details:
Participant Toll-Free Dial-In Number: 1 (888) 300-4030
Participant Toll Dial-In Number: 1 (646) 970-1443
Conference ID: 5553583
Webcast url: https://events.q4inc.com/attendee/658855672
The Company will post a playback of the conference call on the
Company's website.
About Denison Mines
Corp.
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. The Company has an effective 95% interest in its
flagship Wheeler River Uranium Project, which is the largest
undeveloped uranium project in the infrastructure rich eastern
portion of the Athabasca Basin
region of northern Saskatchewan.
In mid-2023, a Feasibility Study was completed for Wheeler River's
Phoenix deposit as an ISR mining
operation, and an update to the previously prepared PFS was
completed for Wheeler River's Gryphon deposit as a conventional
underground mining operation. Based on the respective studies, both
deposits have the potential to be competitive with the lowest cost
uranium mining operations in the world. Permitting efforts for the
planned Phoenix ISR operation commenced in 2019 and have advanced
significantly, with licensing in progress and a draft Environmental
Impact Statement submitted for regulatory and public review in
October 2022.
Denison's interests in Saskatchewan also include a 22.5% ownership
interest in the McClean Lake Joint Venture, which owns several
uranium deposits and the McClean Lake uranium mill, contracted to
process the ore from the Cigar Lake mine under a toll milling
agreement, plus a 25.17% interest in the Midwest Main and Midwest A
deposits and a 67.41% interest in the THT and Huskie deposits on
the Waterbury Lake property. The Midwest Main, Midwest A, THT and
Huskie deposits are located within 20 kilometres of the McClean
Lake mill.
Through its 50% ownership of JCU (Canada) Exploration Company, Ltd
("JCU"), Denison holds additional interests in various
uranium project joint ventures in Canada, including the Millennium project (JCU,
30.099%), the Kiggavik project (JCU, 33.8118%) and Christie Lake (JCU, 34.4508%).
Denison's exploration portfolio includes further interests in
properties covering approximately 285,000 hectares in the
Athabasca Basin region.
About Grounded Lithium
Corp.
GLC is a publicly traded lithium brine exploration and
development company that controls approximately 1.0 million metric
tonnes of Measured & Indicated lithium carbonate equivalent
mineral resource and approximately 3.2 million metric tonnes of
Inferred lithium carbonate equivalent resource over our focused
land holdings in Southwest
Saskatchewan as per the Company's updated PEA. The updated
PEA, titled "NI 43-101 Technical Report: Preliminary Economic
Assessment Kindersley Lithium Project – Phase 1 Update" dated
November 7, 2023 and effective as of
June 30, 2023, reports a Phase 1
NPV8 after-tax of US$1.0
billion with an after-tax IRR of 48.5%. GLC's multi-faceted
business model involves the consolidation, delineation,
exploitation and ultimately development of our opportunity base to
fulfill our vision to build a best-in-class, environmentally
responsible, Canadian lithium producer supporting the global energy
transition shift. U.S. investors can find current financial
disclosure and Real-Time Level 2 quotes for the Company
on https://www.otcmarkets.com/.
Qualified Person
Scientific and technical information contained in this press
release has been prepared under the supervision of Doug Ashton, P.Eng., Alexey Romanov, P. Geo., Meghan Klein, P. Eng., Dean Quirk, P.Eng., Jeffrey Weiss, P.Eng., Chad Hitchings., P.L. Eng., and Michael Munteanu, P.Eng., each of whom is a
qualified person within the meaning of NI 43-101.
Forward-Looking
Statements
This press release may contain forward-looking statements and
forward-looking information within the meaning of applicable
Canadian securities laws. The opinions, forecasts, projections and
statements about future events of results, are forward looking
information, forward-looking statements or financial outlooks
(collectively, "forward-looking statements") under the
meaning of applicable Canadian securities laws. These statements
are made as of the date of this press release and the fact that
this press release remains available does not constitute a
representation by GLC that the Company believes these
forward-looking statements continue to be true as of any subsequent
date. Although GLC believes that the assumptions underlying, and
expectations reflected in, these forward-looking statements are
reasonable, it can give no assurance that these assumptions and
expectations will prove to be correct. Such statements include, but
are not limited to, statements pertaining to the advancement of the
Pilot and the timing thereof, GLC's expectation of the funding
required for the Pilot; Denison's funding to the Company, the
timing and amount thereof and the use of proceeds from such
funding; shareholder approval of the Agreement activities necessary
to drive the overall KLP value; the entering into of the joint
venture agreement if at all and the timing and terms thereof; the
impact of the Agreement on the shareholders of the Company;
prospective lands outside of the AOI Lands and the viability for
economic lithium resource plays; and GLC's vision of becoming a
best-in-class, environmentally responsible, Canadian lithium
producer supporting the global energy transition.
Among the important factors, risks, uncertainties and
assumptions that could cause actual results to differ materially
from those indicated by such forward-looking statements are: GLC's
expectation that our operations will be in Western Canada, unexpected problems can arise
due to technical difficulties and operational difficulties which
impact the production, transport or sale of our products;
geographic and weather conditions can impact the production; the
risk that current global economic and credit conditions may impact
commodity prices and consumption more than GLC currently predicts;
the failure to obtain financing on reasonable terms; the risk that
unexpected delays and difficulties in developing currently owned
properties may occur; the failure of drilling to result in
commercial projects; unexpected delays due to the limited
availability of drilling equipment and personnel; and the other
risk factors detailed from time to time in GLC's periodic reports.
GLC's forward-looking statements are expressly qualified in their
entirety by this cautionary statement.
This news release shall not constitute an offer to sell or
the solicitation of an offer to buy any securities in any
jurisdiction.
Neither the TSX Venture Exchange 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 news release.
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SOURCE Grounded Lithium Corp