TSX-V: AAL
OTCQX: AVLIF
VANCOUVER, June 21, 2017 /CNW/ - Dear Shareholders:
As Founder, President and CEO I wanted to take this opportunity
to provide our shareholders with some comments on where we are, how
we got here and, more importantly, where we are going.
We completed our listing as a lithium explorer in July 2016 with the acquisition of an option to
earn up to a 70% interest in three, and a 50% interest in two,
Nevada lithium brine properties.
Our exploration programs moved forward aggressively and to date we
have drilled six holes at Clayton Northeast. The work programs in
Nevada have gone well and we have
built a strong portfolio of properties.
While these Nevada assets were
a good starting point for our entry into the lithium exploration
market our longer term objective was to seek out world class
opportunities in the lithium space.
This search took us to Latin
America and, in particular to Argentina and the assets of Orocobre in the
lithium triangle. On March
27th, we closed on the acquisition of up to a 75%
interest in the Cauchari advanced lithium exploration project and a
100% interest in five other lithium properties totaling 85,543
Hectares. Orocobre will hold the remaining 25% of Cauchari and will
be our joint venture partner, as well as our largest shareholder.
Orocobre, is the first new independent lithium brine producer in 20
years, having constructed the 17,500 tpa Olaroz Lithium facility
and has built up extensive technical and in-country experience
while operating in Argentina since
2007.
Our technical team is led by Callum
Grant and Orocobre's former VP of exploration, Miguel Peral. Callum is an engineer with broad
experience from exploration to production focusing on South America and in particular, Argentina. Miguel's focus on lithium brine
deposits led him to the development of Salar de Olaroz, the first
new production in the lithium space in 20 years which is now in
production and ramping up towards 17 500 tons of lithium carbonate
per year with plans to double this production within the next three
years. Miguel has been involved in the discovery of approximately
8.5 million tonnes of LCE and has been part of the team that is
credited with discovering Salar Oloraz, Salar Cauchari, Salar del
Rincón and Salar Cangrejillos.
As for myself, over the years I have taken a number of companies
from exploration to production and my most recent success was
American Oil and Gas sold to Hess Corporation for US$630 million.
The Argentine basin is well advanced and has seen tremendous
exploration success with up to 18 million tonnes of lithium
resources in place already, most of this surrounding and directly
beside our Cauchari project. This is not simply a near-ology play
but an extension of salars that continue through our properties.
Orocobre is one of two producers in Argentina with the Olaroz production facility
located just over 10 kilometers north from our Cauchari property.
The operation at Olaroz is currently going through an expansion
program and Orocobre estimates 2H FY17 guidance at 5,500 – 6,000
tonnes with gross margins of US$6,646/tonne, up 21% quarter over quarter.
We recognized an opportunity to acquire the cornerstone
exploration assets of Orocobre and advance these to production
stage while Orocobre is focused on operations at
Olaroz.
The portfolio of properties we have acquired from Orocobre
includes our flagship Cauchari Property with an existing inferred
resource of 470,000 tonnes of Lithium Carbonate Equivalent and a
large exploration target to be tested with a 17 hole drill program.
Almost immediately on closing of the acquisition the drill rig got
to work and we most recently announced the successful casing of
Hole CAU07, the first of the five-hole Phase One program located in
the North-West block of our Cauchari property. We provided an
update to the market on June
7th and I am pleased to say that the drill
program is going very well and on budget. We expect initial
sampling results to be available in July along with geophysical
profiling which will provide key information on target zones
through the salt lake sedimentary sequence.
The objective of our work programs at Cauchari is to rapidly
advance the property through exploration and towards development by
2018/2019. A diamond drill program to complement the rotary
program will start as soon as a contractor is confirmed in the next
few weeks. The overall objective for 2017 remains an updated
resource estimate combining both NW and SE blocks of our core area
moving into a Scoping Study in early 2018. More advanced technical
and engineering studies will continue through 2018 and into 2019 by
which time we aim to have a bankable Feasibility Study in place
along with the required environmental permits for the development
phase.
We can see a shortened timeline to production for the Cauchari
project given our location adjacent to Orocobre's production
facility and our contractual relationship with Orocobre regarding
processing rights. This is particularly the case for the NW sector
of the property which sits only a few kilometres to the south of
our partner's processing facility at Olaroz. The SE block could
also provide incremental feed to Olaroz although over a longer, but
still economic distance.
Supplying brine to Olaroz for processing is an alternative that
could provide a lower-capex, quick-start to production and cash
flow from our wells versus building a standalone plant which would
require higher capex and would depend largely on the level of
resources and reserves to be defined.
We will not require any further funding to advance our projects
to the development stage unless we embark on a large scale
processing facility such as that built by our partner Orocobre.
In addition to Cauchari the Company holds a 100% interest in the
following earlier stage lithium brine properties; Incahuasi,
Guayatayoc and Antofalla. We recently just acquired another 3,000
Ha in Antofalla in the province of Catamarca in close proximity to
the southern part of the salar which Albemarle owns. This brings
the company to the total of 13,000 Ha in the province of Salta and
Catamarca. Albemarle late last year entered into an agreement
with Bolland Minera S.A., for the exclusive exploration and
acquisition rights to a lithium resource in Antofalla, within the
Catamarca Province of Argentina. At this time we are currently
reviewing additional opportunities to bring value to the company
from these assets and I am pleased to say that Advantage Lithium is
receiving proposals for possible joint ventures or sales agreements
and has signed several confidentiality agreements with companies
who are currently doing due diligence to support further
exploration and development of these assets.
The acquisition of these Argentine lithium brine assets has
moved us to the forefront of lithium exploration companies. We have
the cash, approximately $20 million,
to fund our exploration and development of these properties and we
have the assets which merit such expenditures.
Advantage has been mentioned in several publications; most
recently in the highly acclaimed publication "The Economist"
http://www.advantagelithium.com/_resources/pdf/Advantage-Lithium-Australian.pdf
The lithium market is not a fad but is here to stay and will
continue to grow at rapid pace mainly through Electric Vehicle
production and sales with an estimated 120 models of electric
vehicles available by 2020. This will drive an increase in demand
for lithium carbonate which is unlikely to be met by current
producers which will create opportunities for company's such as
Advantage Lithium.
The Company has progressed tremendously over the past ten
months, growing from an initial asset base of less than
$2 million to more than $60 million. We have the technical team, a
seasoned joint venture partner in Orocobre, the cash, approximately
$ 20 million, to fund our exploration
and development of these properties and we have the assets which
merit such expenditures. Our objective remains to continue to grow
the company as quickly as possible.
We wish to thank all our shareholders for their ongoing
support.
ADVANTAGE LITHIUM CORP.
Per:
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"David
Sidoo"
|
|
David Sidoo, CEO,
President, Director Tel:
604.343.3760 | Fax: 604.683.1585 Email: info@advantagelithium.com
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Cautionary Statement:
The technical information in this letter has been reviewed and
approved on behalf of the Company by Murray
Brooker, MAIG, RPGEO, a "Qualified Person" as defined in
NI-43-101.
Certain information contained in this press release constitutes
"forward-looking information", within the meaning of Canadian
legislation. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur", "be
achieved" or "has the potential to". Forward looking statements
contained in this press release may include statements regarding
the outcome of the Closing, and the future operating or financial
performance of Advantage Lithium which involve known and unknown
risks and uncertainties which may not prove to be accurate. Actual
results and outcomes may differ materially from what is expressed
or forecasted in these forward-looking statements. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Among those factors
which could cause actual results to differ materially are the
following: market conditions and other risk factors listed from
time to time in our reports filed with Canadian securities
regulators on SEDAR at www.sedar.com. The forward-looking
statements included in this press release are made as of the date
of this press release and the Company and Advantage Lithium
disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as expressly required by
applicable securities legislation.
Neither 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.
SOURCE Advantage Lithium Corp