International Lithium (TSXV:ILC.V) has entered an option agreement and strategic alliance with Pioneer Resources (ASX:PIO), under which Pioneer can earn up to an 80 percent interest in International Lithium’s Mavis Lake property.
As quoted in the press release:
- Pioneer will either pay CAN$65,000 cash to ILC or subject to TSXV approval, subscribe for $100,000 of units of ILC at a price of $0.08 per unit (as part of the recently announced financing ILC NR 2 March 2016) in exchange for an exclusive 90-day due diligence period.
- On electing to proceed, Pioneer may earn a 51% interest in the project by expending CAN$1.5 million on exploration activities within three years and paying to ILC a total of CAN$375,000 in cash and shares 50/50 over the same three years (the “First Earn-in”).
- Following the First Earn-in, ILC will be granted a 1.5% Net Smelter Return royalty (“NSR”), purchasable at any time for CAN$1.5 million.
- Pioneer will then be granted, if they choose, a Second Option where they can earn an additional 29% through expending CAN$8.5 million within seven years (total CAN$10 million over ten years). Thereafter the Parties will contribute on a pro-rata basis. If either Party dilutes to 15% Project Equity, their interest is converted to a 1.5% NSR.
International Lithium CEO, Gary Schellenberg, said:
This is the first step of our new strategy developed for North America. We see an escalating demand for lithium in North America, especially in the automotive sector with new sources being either many years away, or with logistic and metallurgical challenges. Our strategy for the Upper Canada region sees us advancing a multitude of smaller deposits that possess near perfect accessible infrastructure and that can supply a central lithium carbonate processing facility. Identifying smaller high-grade deposits within close proximity can greatly enhance the economics of a processing facility as well as allowing these smaller deposits to be mined at a greatly reduced CAPEX. We intend on bringing our strategy to reality through strategic partners, like Pioneer, that share our vision.
Click here for the full press release.
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