TSX Venture Exchange: "LITH"
OTC-QB: LTMCF
CALGARY, June 13, 2018 /CNW/ - Lithium Chile Inc.
("Lithium Chile" or the
"Company") is pleased to announce that it has entered into a
memorandum of understanding ("MOU") with Prosper One
International Holdings Company Limited ("Prosper One"), a
Hong Kong Stock Exchange listed company.
MOU Highlights
- Prosper One and Lithium Chile will enter into a joint venture
agreement ("Joint Venture Agreement") whereby Prosper One
may earn a 55% interest in Lithium Chile's Pintadas Norte project
in Chile by incurring $3,000,000 of staged exploration expenditures on
or before December 31, 2021; and
- Prosper One to make a $1,000,000
equity investment in Lithium Chile at a minimum price of
$1.00 per share; and
- Lithium Chile will operate the
exploration programs for the Pintadas Norte project and as
operator, Lithium Chile will receive a management fee from Prosper
One equal to 17.5% of the funds expended on the Pintadas Norte
exploration programs; and
- A $250,000 break fee will be
payable by Prosper One to Lithium Chile should a definitive
agreement not be signed.
Steve Cochrane, President and CEO
of Lithium Chile, commented, "We are pleased to have reached
this agreement with Prosper One which accelerates our ability to
unlock the potential of our dominant land package in Chile. Essentially, we are combining our
technical expertise and Chilean experience with Prosper One's
financial acumen and support to explore our highly prospective
Pintadas Norte project in the coastal region of Chile. We look forward to a mutually rewarding
working relationship."
The MOU contemplates that Prosper One will make an equity
investment of CDN$1,000,000
(equivalent to approximately HK$6,000,000) into Lithium Chile which is to be
completed within 60 days from the signing of the formal Joint
Venture Agreement. The shares being issued to Prosper One
will be done at a price determined on the date of this press
release in accordance with the TSX Venture Exchange ("TSXV")
Policies involving an allowable discounted market price subject to
a minimum price of CDN$1.00 per
Lithium Chile common share ("LC Share"). The equity
investment will be done on a unit basis to be made up of one LC
Share and one-half of one warrant. Each whole warrant will be
exercisable into one LC Share at a price of CDN$1.50 for a period of two years from the date
of completion of the equity investment.
The MOU contemplates the Pintadas Norte exploration program will
have a term of three years involving an annual financial commitment
of CDN$1,000,000 to be paid by
Prosper One. The first annual financial commitment is payable
within 60 days from the date of the completion of the equity
investment by Prosper One into Lithium Chile. Prosper One has
no obligation to complete the second or third year financial
commitment whereupon it will surrender its interest. Upon
completion of the Pintadas Norte exploration program, Prosper One
will have earned a 55% working interest in the Pintadas Norte
property. Further, the Joint Venture Agreement will include a
provision allowing Prosper One to earn an additional 20% working
interest in the Pintadas Norte property upon completion of a
pre-feasibility study. Lithium Chile will operate the
Pintadas Norte exploration program on behalf of the joint venture
for which it will receive a management fee equal to 17.5% of the
funds expended under the Pintadas Norte exploration programs. The
Joint Venture Agreement will provide that Prosper One will be
entitled to nominate a representative to the Joint Venture
operating committee and provides each party the ability to complete
a due diligence review.
Except for provisions relating to governing law,
confidentiality, securities trading restriction, costs and
expenses, binding effect, exclusivity and termination, the MOU does
not constitute a legally binding commitment on any of the parties
to the MOU in relation to the transactions contemplated.
Further, the Joint Venture Agreement will include a
three year right of first refusal for Prosper One to enter into a
joint venture agreement for exploration of Pintadas Sur, the
southern extension to Pintadas Norte. If the Joint Venture
Agreement is not entered into, Prosper One will pay to Lithium
Chile a break fee of CDN$250,000.
The Joint Venture Agreement, including the equity investment,
remains subject to regulatory approval.
About Prosper One International Holdings Company
Limited
Prosper One is an investment holding company listed on the Hong
Kong Stock Exchange under the stock code 1470 and is engaged in the
sale and trading of fertilisers, raw materials and related
fertiliser products, and public consumption products.
About Lithium Chile
Lithium Chile is advancing a
lithium property portfolio consisting of 152,900 hectares covering
sections of 14 salars and 1 laguna complex in Chile. The
properties include 64 square kilometres on the Salar de Atacama
which hosts the world's highest concentration lithium brine
production and is currently the source of approximately 30% of the
world's lithium production. Lithium Chile's common shares are
listed on the TSX-V under the symbol "LITH" and on the
OTC-QB under the symbol "LTMCF".
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.
Forward Looking Statements
This news release may contain certain forward-looking
information and forward-looking statements within the meaning of
applicable securities legislation (collectively "forward-looking
statements"). Generally, forward-looking information can be
identified by the use of forward-looking terminology such as
"expects", "believes", "aims to", "plans to" or "intends to" or
variations of such words and phrases or statements that certain
actions, events or results "will" occur. In particular, this
news release contains forward-looking statements relating to, among
other things, regulatory approval of the Joint Venture Agreement
and equity investment, the satisfactory completion of the due
diligence review, and the entering into of definitive agreements
including the Joint Venture Agreement.
You are cautioned that the following list of material factors
and assumptions is not exhaustive. Specific material factors
and assumptions include, but are not limited to: the general
stability of the economic and political environment in which the
Company operates; the timely receipt of required regulatory
approvals; the ability of the Company to obtain future financing on
acceptable terms; currency, exchange and interest rates; operating
costs; and the success the Company will have in exploring its
prospects and the results from such prospects. Accordingly,
readers should not place undue reliance on forward-looking
statements. The Company does not undertake to update any
forward-looking statements herein, except as required by applicable
securities laws. All forward-looking statements contained in
this press release are expressly qualified by this cautionary
statement.
SOURCE Lithium Chile Inc.