Int'l Battery to acquire lithium extraction technology Mr. Logan Anderson reports
INTERNATIONAL BATTERY METALS INC. ENTERS INTO LETTER OF INTENT WITH NORTH AMERICAN LITHIUM, INC. TO ACQUIRE INTELLECTUAL PROPERTY RELATED TO OIL FIELD BRINE LITHIUM EXTRACTION
International Battery Metals Ltd. has entered into a binding letter of intent with North American Lithium Inc. (NAL) dated Sept. 28, 2017, pursuant to which International Battery Metals will acquire NAL's intellectual property related to lithium extraction from oil field brines for petrolithium extraction projects.
NAL is a California corporation that has developed unique technology that allows direct extraction of lithium from complex brines such as those found in oil fields.
The technology involves processes that are highly selective for lithium and an extraction system that allows lithium extraction from complex brines with only minimal pretreatment. There is no need to pretreat the brine to remove divalent cations such as calcium or magnesium. The process also inherently rejects troublesome anions such as sulphate and borate. Rather, brine flows into the process. Lithium chloride is removed and the brine is injected back into the ground through an environmentally permitted well.
The output of these patent-pending processes is a clean lithium salt solution that is suitable for further processing to desired products.
Additionally, the patent-pending process and equipment are specifically designed to be compatible with the demands of remote oil field operations.
NAL's technology provides significant advantages, including significant cost savings due to minimal brine pretreatment and exceedingly low chemical consumption. The unique equipment design also allows rapid implementation, minimizing traditional lag time for bringing resources on line.
NAL is led by Dr. John Burba, who has 40 years of experience with Dow Chemical, FMC and Simbol Minerals in the lithium extraction industry. Included in his team are Marc Privitera (an AIChE (American Institute of Chemical Engineers) fellow), a chemical engineer with over 30 years of experience, and Christina Borgese (AIChE), who has a depth of experience in developing, engineering and constructing large chemical projects.
In order to effect the transfer of the intellectual property to International Battery Metals, NAL will form a new company (Subco) and transfer 100 per cent of the intellectual property to Subco, following which International Battery Metals will acquire 100 per cent of the issued and outstanding securities of Subco in consideration of up to 23.7 million common shares of International Battery Metals as follows:
- 4.7 million vend-in shares on closing of the proposed transaction;
- Four million vend-in shares upon Subco and International Battery Metals completing an agreed-upon milestone in respect of the intellectual property;
- Five million vend-in shares upon Subco and International Battery Metals completing an additional agreed-upon milestone in respect of the intellectual property;
- Five million vend-in shares upon Subco and International Battery Metals filing completing an additional agreed-upon milestone in respect of the intellectual property;
- Five million vend-in shares upon International Battery Metals: (i) completing one or more private placement financing(s) resulting in the issuance of no less than five million common shares of International Battery Metals; and (ii) completing a laboratory-scale pilot plant for the processing of lithium or lithium concentrates.
Additionally, pursuant to the terms of the letter of intent, International Battery Metals will acquire from NAL data, analyses and reports related to lithium extraction from various oil field brines to be considered for initial siting and development of the project. In consideration of the transfer of the data, the letter of intent prescribes that:
- On execution of the letter of intent, the company will pay NAL $135,000 (U.S.) to review data from oil field brines and analyze the data to prepare a brine source identification report.
- Upon delivery of the brine identification report, the company will pay NAL $175,000 (U.S.), with such payment to be made on the date that is the earlier of: (i) 30 days from the date of the letter of intent; or (ii) the date that is five days after the date that International Battery Metals receives net proceeds from an equity financing in the amount of not less than $1-million.
- Upon delivery of a block flow diagram of the lithium extraction process previously developed by NAL, International Battery Metals will pay NAL $215,000 (U.S.).
- Upon delivery of an initial overall project flow chart and design document, International Battery Metals will pay NAL $225,000 (U.S.).
- Upon delivery of a final opinion letter from NAL in respect of proposed applications of the intellectual property, International Battery Metals will pay NAL $125,000 (U.S.).
On closing, the board of International Battery Metals shall be reconstituted in a manner that complies with the requirements of the Canadian Securities Exchange and applicable laws and will include a total of five members, including three members of International Battery Metals' current board chosen by International Battery Metals, and two new members to be nominated by NAL, subject to the receipt of all applicable regulatory approvals. International Battery Metals will, on or before the 90th day following closing, cause an additional one of the International Battery Metals directors to resign and shall appoint in his or her stead one additional director nominated by NAL, subject to the receipt of all applicable regulatory approvals. In the event the board of International Battery Metals is expanded in the future to include greater than five members, NAL shall be given the right to nominate additional director(s) such that the total number of International Battery Metals directors nominated by NAL is as close as possible to, but not less than, 51 per cent of the International Battery Metals board. On closing of the proposed transaction, NAL's president and chief executive officer Dr. John Burba will be appointed as the president and chief executive officer of International Battery Metals. Closing of the proposed transaction is subject to a number of conditions precedent customary for a transaction of this nature, including the entry into a definitive agreement between the parties.
"We are excited to get this critical piece of the company's development plan in place and look forward to working with Dr. John Burba and his experienced team at North American Lithium," commented Logan Anderson, president and chief executive officer of International Battery Metals. "North American Lithium has developed a unique portfolio of intellectual property in the emerging petrolithium brine extraction space, and we are eager to collaborate with them in realizing its potential."
In connection with the proposed transaction and subject to approval of the CSE, Mackie Research Capital Corp. has agreed to provide a bridge loan to International Battery Metals in the amount of $200,000. The loan will be for a term of 12 months and carry interest at a rate of 10 per cent per year. In further consideration of the loan, International Battery Metals shall grant Mackie 500,000 special units. Each special unit will be exercisable at a price of 40 cents into an underlying unit of the company comprising one common share of International Battery Metals and one common share purchase warrant. Each underlying warrant will be exercisable for a period of two years to purchase one additional common share of International Battery Metals at the price of 52 cents per common share, subject to acceleration. If the closing price of the common shares of International Battery Metals on the CSE is equal to or greater than $1.25 per common share for 20 consecutive trading days any time after the date of issuance of the underlying warrants, then Mackie shall have until 4 p.m. PST on the 10th calendar day after the last day of the threshold period to exercise the underlying warrants. Any underlying warrants not exercised before the accelerated expiry deadline shall expire immediately on the passing of the accelerated expiry deadline.