All dollar amounts are in U.S. dollars unless
otherwise indicated.
TORONTO, June 30, 2017 /CNW/ - LSC Lithium Corporation
("LSC" or together with its subsdiaries, the "Company") (TSXV:LSC)
is pleased to announce that further to its news release dated
March 15, 2017, the Company has
completed the acquisition of LitheA Inc. ("LitheA").
LitheA's portfolio adds another 30,000 hectares to LSC's
Argentina exploration portfolio,
bringing the Company's portfolio to 15 properties totaling
approximately 300,000 hectares. LitheA's principal asset is its
Salar de Pozuelos tenements (the
"Pozuelos Property") located in the Province of Salta,
Argentina. The Pozuelos Property covers approximately 99% of
the surface area of the Salar and has been subject to extensive
exploration by LitheA since 2008. LSC has been funding Lithea
during the option period in order to advance the exploration
program at the Pozuelos Property prior to acquisition.
Further details of the Pozuelos Property are set out in the
Company's Filing Statement dated January 27,
2017, and news releases dated March
15, 2017 and April 10, 2017. A
technical report prepared under NI 43-101 on the Pozuelos Property
by Donald H. Hains, P. Geo entitled
"Technical Rpeort on the Salar de Pozuelos Project, Salta Province, Argentina" with an effective date of
December 31, 2016 will be filed by
the Company on SEDAR. Mr. Hains is an independent qualified person
under NI 43-101.
TERMS OF THE ACQUISITION OF LITHEA
Pursuant to the option agreement dated November 23, 2016, as amended, between, LitheA,
BMC Global Limited ("BMC"), its parent company BMC Holdings Limited
("BMC Holdings"), its beneficial shareholder Ho Sok Lim ("Lim") and LSC Lithium Inc. ("LSC
Lithium"), a wholly owned subsidiary of the Company (the "Option
Agreement") the Company has (through its subsidiary) acquired all
of the issued and outstanding shares of LitheA for an aggregate
purchase price of approximately $44
million.
The aggregate purchase price was paid by the issuance of
31,203,355 LSC common shares and the payment of $12,859,848 in cash. In accordance with the terms
of the Option Agreement and Put-Call Agreement, the purchase price
was satisfied by:
- $9,947,811 cash payment to
BMC;
- $1,466,973 offset of principal
and accrued interest on indebtedness owed to the Company by BMC
Holdings;
- 5,181,347 common shares of the Company issued to Enirgi Group
at a price of $0.965 per share
- 22,909,975 common shares of the Company issued to BMC at a
price of $0.964 per share;
- $2,912,037 cash payment to Lim;
and
- 3,112,033 common shares of the Company issued to Lim at a price
of $0.964 per share.
The consideration paid to Lim was made in exchange for the
assignment by Lim to LSC Lithium of a loan in the amount of
$5.5 million, bearing interest at a
rate of 12% per annum and owing by LitheA.
The cash payment to BMC was directed by BMC towards the
repayment and discharge of an outstanding loan in the aggregate
principal amount of $14,275,816 (plus
all accrued interest thereon) which was advanced to BMC Holdings in
November 2016 by Lithium S
Corporation (an indirect subsidiary of the Company), as lender (for
itself and on behalf of a syndicate of lenders, which included
(among others) Enirgi Group Corporation (Enirgi) and Regent
Mercantile Holdings Limited (Regent)). Enirgi and Regent are each a
Non-Arm's Length Party of the Company under TSX-V policies as a
result of their shareholdings in the Company and/or
cross-directorships.
In connection with the repayment of the portion of the loan owed
to Enirgi, an aggregate of 5,181,347 common shares of the Company
were issued to Enirgi at a price of $0.965 per share in satisfaction of the repayment
of the $5 million principal amount
owing to Enirgi pursuant to the terms of the loan.
In addition, the Company will issue approximately
539,669 common shares to an employee of LitheA in
satisfaction of the payment of a $500,000 finder's fee payable to such employee
following the completion of the acquisition.
As a result of the issuance of common shares of the Company in
connection with the completion of the acquisition (prior to the
issuance of the finder's fee shares):
- Lim beneficially owns and/or controls (directly and through
BMC) in aggregate 26,022,008 common shares of the Company,
representing approximately 22.4% of the current outstanding common
shares, and
- Enirgi holds an aggregate of 20,588,372 common shares of the
Company, representing approximately 17.7% of the current
outstanding common shares.
The shares of the Company issued to Lim and BMC are subject to a
4-month hold period until October 30,
2017 and are also subject ot the TSXV's "value escrow"
requirements.
LitheA has $16,219,619 of
unsecured, subordinated debt owing to BMC (the "Subordinated BMC
Debt"). The Subordinated BMC Debt does not bear interest, and
will be repaid by LitheA in semi-annual installments calculated on
the following basis: 20% of net income, plus 20% of depreciation
and amortization, less 20% of capital expenditures, less 20% of net
changes in working capital (excluding cash and debt), less certain
other specified amounts. In addition, pursuant to a amended and
restated secured promissory grid note (the "Note") dated
March 14, 2017 LitheA has
$2,000,000 outstanding under a loan
facility from the Company, which has been primarily used by LitheA
to advance due diligence and exploration work on the Pozuelos
Property. The Note has become an inter-company debt of LSC as a
result of the acquisition of LitheA.
ABOUT LSC LITHIUM CORPORATION:
LSC Lithium has amassed a large portfolio of prospective lithium
rich salars. LSC is focused on developing its tenements located in
five salars: Pozuelos, Pastos Grandes, Rio Grande, Salinas Grandes
and Jama. All LSC tenements are located in the "Lithium
Triangle," an area at the intersection of Argentina, Bolivia, and Chile where the world's most abundant lithium
brine deposits are found. LSC Lithium has a land package portfolio
totaling approximately 300,000 hectares, which represents extensive
lithium prospective salar holdings in Argentina.
Qualified Person/Data Verification
The scientific and technical information included in this press
release is based upon information prepared and approved by
Donald H. Hains, P.Geo. Donald H. Hains is a qualified person, as
defined in NI 43-101 and is independent of LSC and Lithea.
Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking information. These statements relate to future
events or future performance, including statements as to the
following: LSC's intentions regarding an exploration program for
the Pozuelos Property and the timing and ability to advance the
Pozuelos Property to feasibility study level. The use of any of the
words "could", "intend", "expect", "believe", "will", "projected",
"estimated" and similar expressions and statements relating to
matters that are not historical facts are intended to identify
forward-looking information and are based on LSC's current belief
or assumptions as to the outcome and timing of such future events.
Whether actual results and developments will conform with LSC's
expectations is subject to a number of risks and uncertainties
including factors underlying management's assumptions, such as
risks related to exploration and the establishment of resources and
reserves on the Pozuelos Property or other LSC properties; the
application and future licensing of new technologies; the risks
around timing, permitting, funding and construction of a regional
processing facility at the Salar del Rincón by Enirgi Group and the
ability of LSC to fast-track production from its own properties by
supplying brine to such a facility; risks relating to proposed
acquisitions; volatility in lithium prices and the market for
lithium; exchange rate fluctuations; volatility in LSC's share
price; the requirement for significant additional funds for
development that may not be available; changes in national and
local government legislation, including permitting and licensing
regimes and taxation policies and the enforcement thereof;
regulatory, political or economic developments in Argentina or elsewhere; litigation; title,
permit or license disputes related to interests on any of the
properties in which the Company holds an interest; excessive cost
escalation as well as development, permitting, infrastructure,
operating or technical difficulties on any of the Company's
properties; risks and hazards associated with the business of
development and mining on any of the Company's properties. Actual
future results may differ materially. The forward-looking
information contained in this release is made as of the date hereof
and LSC is not obligated to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
Because of the risks, uncertainties and assumptions contained
herein, investors should not place undue reliance on
forward-looking information. The foregoing statements expressly
qualify any forward-looking information contained herein. For more
information see the Company's filing statement on SEDAR at
www.sedar.com.
Neither the TSX Venture Exchange Inc. 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.
The TSX Venture Exchange Inc. has neither approved nor
disapproved the contents of this press release.
SOURCE LSC Lithium Corporation