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Scientific Metals to acquire Li property in Utah
2016-05-31 04:34 PT - News Release
Mr. Brian Kirwin reports
SCIENTIFIC METALS ACQUIRES THE PARADOX BASIN LITHIUM BRINE PROPERTY, UTAH
Scientific Metals Corp. has entered into an arm's-length agreement to acquire a 100-per-cent interest in the Paradox basin lithium brine property located in Utah in the western United States.
The Paradox property consists of 334 mineral claims covering approximately 6,000 acres that contain eight historic oil and gas drill holes. The Paradox Property exists over an area with historic fluid analysis ranging from 81 to 1,700 ppm lithium in saturated minerals brines, which was previously disclosed by Voltaic Minerals Corp.'s press release of February 18, 2016. Well No.1 Long Canyon returned 500 ppm lithium. This well is located within 400 feet of the Paradox Property and is fully enclosed by the boundary ("Concentrated Subsurface Brines in the Moab Region, Utah", Utah Geological and Mineralogical Survey, June 1965). The brine was discovered in the 1960s when over pressurized oil exploration wells encountered blowouts upon drilling.
The Paradox Basin area is a semi-desert region with an average of over 300 days of sunshine per year, existing infrastructure, and year-round access to road and rail.
The Paradox Property is located approximately 4 kilometres northwest of Intrepid Potash's Cane Creek Operation and is contiguous to the north of Voltaic Minerals Corp.'s "Green Energy" lithium property. As disclosed in Intrepid Potash's 2015 Annual Report, the Cane Creek Operation produced 93,000 tonnes of potash in 2015 through solution mining and solar evaporation ponds. The Property is approximately 530 miles east of Tesla's Gigafactory in Nevada.
STM's President Brian Kirwin states: "We believe the Paradox Property could prove to be a substantial lithium asset with minimal work expenditures and substantial cost savings due to the extensive existing historic drill holes. Multiple historic high grade lithium results in the area are extremely encouraging. We will continue our review of recent and historic well logs, along with chemical analysis with the intention of reprocessing the seismic data focusing on mineral brine. Evaluation of reservoir potential will be done in preparation for the re-entry of shut-in wells located throughout the Paradox Property."
STM Director Wayne Tisdale states: "Our corporate strategy is focused on acquiring underexplored lithium basins with extensive historic drilling already completed and existing fluid analysis as evidence of the presence of high grade lithium in the mineral brine. We are currently evaluating multiple additional opportunities in the lithium space for potential acquisition."
Approximately eight wells have been drilled on the Paradox Property with approximately 25 historic wells in the immediate area. Of these 25 historic wells, five near the Paradox Property have analytical data for lithium and are concurrent with a zone determined by the USGS to contain greater than 40% total dissolved solids in oil field brines. Lithium occurs at the basin in oversaturated mineral brine (40 per cent minerals, 60 per cent water) and was discovered during oil exploration when drill wells intercepted the main brine zone (clastic break 31) of the Paradox formation. The main brine zone is approximately 6,000 feet deep, and consists of 28 feet of shale, anhydrite and dolomite; the bed is not part of any oil reservoir. The fractured clastic zones form an excellent reservoir for brines derived from underlying evaporate units. The fracturing is caused by salt flowage, and it is possible that, when brine is removed from the zones, salt will flow into voids assisting to maintain the high reservoir pressure and high recovery of brine ("Concentrated Subsurface Brines in the Moab Region, Utah", Utah Geological and Mineralogical Survey, June 1965).
The Company has not undertaken any independent investigation of the drill results, fluid analysis or other information contained in this press release nor has it independently analyzed the results of the previous exploration work in order to verify the accuracy of the information or whether the information was prepared in accordance with the requirements of National Instrument 43-101 ("NI 43-101"). The Company believes that the historical drill results, fluid analysis and other information contained in this press release are relevant to continuing exploration on the Paradox Property. The Company intends to conduct a review of recent and historic well logs, along with chemical analysis in the area and reprocessing of seismic data focusing on mineral brine. Evaluation of reservoir potential will be done in preparation for the re-entry of shut-in wells.
In consideration for the acquisition of a 100-per-cent interest in the Paradox Property, STM will make a cash payment of $65,000.00 USD and issue 4,500,000 common shares to the vendor on the closing date and will make an additional payment of $65,000 USD within 30 days of the closing date. The completion of the acquisition of the Paradox Property is subject to a number of conditions precedent including, without limitation, the parties having received all necessary regulatory, court and third party consents, orders (both interim and final), approvals, waivers and authorizations as may be required in respect of the acquisition (including the approval of the TSX Venture Exchange). In addition, each party shall have completed their due diligence of the other party to their satisfaction including, without limitation, STM being satisfied that it will acquire good and valid title to the Paradox Property, free and clear of any and all liabilities and encumbrances.
Mr. Garry Clark, P. Geo., of Clark Exploration Consulting, is the "qualified person" as defined in NI 43-101, who has reviewed and approved the technical content in this press release.
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