Vancouver,
B.C. / ACCESSWIRE / March - 2014 / International Lithium Corp. (the
"Company" or "ILC") (TSX VENTURE:ILC.V) announces several major transactions with
strategic partner GFL
International Co., Ltd. ("Ganfeng Lithium" or
"GFL").
ILC and strategic partner Ganfeng Lithium
have finalized two separate agreements. The parties have finalized
their joint venture agreement for operation of the Blackstairs
lithium pegmatite project in Ireland and have entered into a loan
conversion and investment agreement on the Mariana lithium brine
project in Argentina in exchange for work commitments and the
cancellation of approximately US$3.3 million in loans plus interest
indebted to GFL. The aggregate work commitments on both projects is
approximately $20 million.
The resultant ownership of the Blackstairs
project will be 51% GFL and 49% ILC until the CAN$10 million
expenditures are reached or a positive feasibility study is
produced for the project at which time the ownership will be 75%
GFL and 25% ILC.
The resultant ownership of the Mariana
project if all conditions are met will be 80% GFL and 20% ILC. ILC
is granted a back in right to acquire an additional 10% in the
project following the completion of a Feasibility Study (as
described in National Instrument 43-101 - Standards of Disclosure
for Mineral Projects) that demonstrates the feasibility of placing
the Mariana Property or part thereof into commercial
production. Additionally,
GFL will grant ILC a loan for up to $2 million to carry ILC's
participating interest in the project, which if fully executed will
amount to a total of US$10 million being expended on the project.
The loan (and any accrued interest) is repayable from ILC's
proportionate share of the proceeds from the joint
venture.
Blackstairs Lithium Project, Ireland - Joint
Venture
Further to the Company's press releases dated
October 2, 2012 and
November 14, 2012, announcing the original option terms, GFL have
approved and finalized a joint venture agreement on the Blackstairs
Lithium project in Ireland. GFL exercised their option to acquire
51% of the Blackstairs project (press release October 1, 2013) and
subsequently, according to the option agreement have now entered
into a joint venture with the Company with the possibility to
acquire an additional 24% in the project by spending CAN$10,000,000
within 10 years or producing a positive feasibility study.
According to the terms of the joint venture agreement, ILC has
formed an Irish subsidiary company, Blackstairs Lithium Ltd.
("BLL"), where 51% of the shares will be held by GFL. BLL will act
as the joint venture company and carry out any and all activities
required to advance the project. ILC will initially be the manager
of the project and will receive a management fee of up to 10% of
the exploration expenditures. The companies are currently working
out the budget for the first phase of exploration at
Blackstairs.
Loan Conversion
and Investment Agreement for Mariana Property, Argentina
Further to the Company's press releases
dated November 28, 2012,
April 30, May 10 and June 5, 2013 announcing the original loan
arrangements and amendments, ILC and GFL have negotiated a Loan
Conversion and Investment Agreement, subject to TSX Venture
Exchange approval, involving the Mariana lithium brine project in
Argentina. The agreement settles repayment provisions of the loans
described in the above press releases and grants GFL an additional
interest in the Mariana project for cash.
Notice of
Conversion of Loans for Mariana Property
Interest
In a loan agreement dated May 3, 2013 and
amended July 18, 2013 GFL loaned ILC a principal amount of
US$2,289,000 to be issued in two
installments for the purposes of completing the property payments
to the underlying vendors
of the Mariana project. These loans were convertible into a total
51% interest in the Mariana project.
On March 17, 2014 under the terms of the May
3, 2013 loan agreement, GFL gave notice to ILC that it is
converting the first advance of the loan ($1,199,000) into a 26%
interest in the Mariana project. As a result of the conversion all
repayment obligations of ILC to GFL in respect of the first advance
and related interest are extinguished.
In accordance
with the loan agreement, GFL will make the second advance
($1,090,000) to ILC on or before May 1, 2014. Upon receipt by ILC,
the second advance will convert automatically into a 25% interest
in the Mariana property. As a result of the deemed conversion, the
repayment obligations of ILC to GFL in respect of the second
advance and related interest are cancelled.
Additional
Mariana Interest granted on conversion of Non-Equity Convertible
loan
In a loan agreement dated
November 16, 2012 (press
release November 28, 2012) and amended July 18, 2013, GFL loaned
ILC a principal amount of CAN$2,000,000, of which CAN$1,000,000 is
convertible into shares of the Company at a price of $0.10 per
share. GFL and ILC agree that the Non-Equity Convertible Loan and
any outstanding accrued and unpaid interest from January 1, 2014
owing from ILC to GFL under the November 16, 2012 loan agreement
will be converted by GFL into a 19% interest in ILC's rights in the
Mariana Property. GFL agrees and confirms that as a result of the
conversion, the repayment obligations of ILC to GFL in respect of
the Non-Equity Convertible Loan are extinguished, and ILC agrees
that GFL has earned an additional 19% Interest in ILC's rights in
the Mariana Property.
GFL and ILC
agreed to extend the due date of the Convertible Loan to December
19, 2015.
Additional
Interest for Cash
Under the terms of the Loan
Conversion and Investment
Agreement ILC grants to GFL the sole and exclusive right and option
to earn an additional 10% interest in ILC's rights in the Mariana
Property by paying ILC US$450,000 within 15 days of GFL receiving
shareholder approval of the transaction.
Joint Venture for
the Mariana Property
Upon performance by GFL of the obligations
above, GFL and ILC will enter into a joint venture for operation of
the Mariana Property with GFL having an 80% participating interest
and ILC having a 20% participating interest.
If required,
GFL will make available to ILC a loan of up to US$2,000,000 to
cover a portion of, or the entirety of, ILC's required contribution
to the joint venture. The loan will carry 10% annual interest. ILC
may repay the loan and accrued interest from ILC's proportionate
share of the proceeds of the joint venture or the NSR, if such are
payable to ILC at the relevant time. ILC will not receive proceeds
or the NSR until the loan and accrued interest are repaid to
GFL.
Back-In Right
At any time and
up until 120 days from the completion of a Feasibility Study (as
described in National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101") as may cross-reference to the
standards of the Canadian Institute of Mining, Metallurgy and
Petroleum) that demonstrates the feasibility of placing the Mariana
Property or part thereof into commercial production, ILC will have
the right to elect to "buy back" a 10% Participating Interest in
the Mariana Property (the "Back-in Right") by giving written notice
to GFL of the exercise of the Back-in Right.
If ILC exercises the Back-in Right, ILC must
pay to GFL 10% of the total exploration costs incurred by GFL from
the date of the Loan Conversion and Investment Agreement to the
time of ILC's election to exercise the Back-in Right. In addition
to the payment of this fee, ILC must also pay to GFL interest on
the fee at a rate of 10% per annum calculated annually on a
straight-line basis and calculated for each budget year
accordingly. The fee, along with the interest amount, must be paid
by ILC to GFL within 15 days of ILC's delivery of written notice to
GFL that it is exercising the Back-in Right.
Mr. Kirill Klip, President, International
Lithium Corp. comments, "We are very pleased to complete the
negotiation of these agreements with our strategic partner Ganfeng
Lithium, a leading Lithium materials producer. ILC has now secured
a means to advance these projects without the need for dilutive
equity financings at depressed share prices.
We can now look forward to finalizing the budget
details for the Blackstairs project and begin the next phase of
exploration work (up to $10 million) immediately following the
transfer of 51% of the shares of Blackstairs Lithium Ltd., the
joint venture company registered in Ireland to advance the
project.
The corporate transactions with Ganfeng Lithium
regarding the various loans and new investment into the Mariana
project allows us to strengthen our balance sheet, dramatically
reduce our debt and move forward with the development of the
Mariana project. The exploration loan provisions with Ganfeng
Lithium will finance our portion of the exploration budget to the
point where $10 million will be invested in the project with no
further dilution of ILC's interest and more importantly, no
dilution to ILC's shareholders. The back-in right will provide
additional benefits to our shareholders, as it is a lowered risk
investment into the project deferred until a production decision is
made for the project.
I would like to thank Ganfeng Lithium for
their patience and fortitude in working with our team to finalize
these deals. We have learned a lot from this experience and believe
that our relationship will continue to get stronger as we jointly
advance these projects."
TNR Gold Corp.
Grants Short Term Loan to ILC
To facilitate the transactions between ILC
and GFL, TNR Gold Corp. ("TNR")(TSX VENTURE:TNR.V) which holds
approximately 25% of the shares of ILC, has agreed to provide a
short term loan in the amount of CAN$200,000 to ILC. The loan bears
interest of 20% per annum and is due September 30, 2014.
Advance Notice
Provisions
At its recent AGM,
ILC's shareholders approved new articles, which included Advance
Notice provisions for the election of directors at future
shareholder meetings. The operation of the Advance Notice
provisions is summarized in ILC's information circular for the AGM
and the new articles are filed on ILC's SEDAR profile at
www.sedar.com. All shareholders are encouraged to review the new
articles in their entirety.
About
International Lithium Corp.
International Lithium Corp. is an exploration company with an
outstanding portfolio of projects, strong management ownership,
robust financial support and a strategic partner and keystone
investor Ganfeng
Lithium Co. Ltd., a leading China
based lithium product manufacturer.
The Company's primary focus is the Mariana lithium-potash brine
project, within the renowned South American "Lithium Belt" that is
the host to the vast majority of global lithium resources, reserves
and production. The 160
square kilometre Mariana project strategically encompasses an
entire mineral rich evaporate basin that ranks as one of the more
prospective salars or 'salt lakes" in the region.
Complementing the Company's lithium brine project are rare metals
pegmatite properties in Canada and Ireland. These projects reported
highly encouraging lithium mineralization in drill holes targeting
pegmatites that are unexposed at surface (news releases dated April
3,2013 and June 25, 2013).
With the
increasing demand for high tech rechargeable batteries used in
vehicle propulsion technologies and portable electronics, lithium
is paramount to tomorrow's "green-tech" economy. By positioning
itself with solid development partners and acquiring high quality
grass roots projects at an early stage of exploration, ILC aims to
be the green tech resource explorer of choice for investors and
build value for its shareholders.
On behalf of the
Board of Directors,
Kirill Klip
President,
International Lithium Corp.
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 release. Statements in this press release other than
purely historical information, historical estimates should not be
relied upon, including statements relating to the Company's future
plans and objectives or expected results, are forward-looking
statements. News release contains certain "Forward-Looking
Statements" within the meaning of Section 21E of the United States
Securities Exchange Act of 1934, as amended. Forward-looking
statements are based on numerous assumptions and are subject to all
of the risks and uncertainties inherent in the Company's business,
including risks inherent in resource exploration and development.
As a result, actual results may vary materially from those
described in the forward-looking statements.
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