VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 2, 2017) - Power Metals Corp. ("Power Metals Corp." or the "Company") (TSX VENTURE:PWM)(FRANKFURT:OAA1) is pleased to announce it has entered into a Binding Letter of Intent (the "LOI") with MGX Minerals Inc. ("XMG"), dated July 27th, 2017 to acquire certain interests held by the Company in exchange for common shares in the capital of XMG (the "Proposed Transaction").
The Proposed Transaction terms are as follows:
- XMG will acquire all of the Company's current U.S. Petrolithium Brine assets (listed below).
- XMG will take a 20 percent working interest in all of the Company's current hard rock assets (listed below) and any future assets that the Company acquires for the following 36 months.
- XMG will have the right to purchase an additional 15 percent working interest of the Company's hard rock assets for a period of 36 months for a total of C$10,000,000.
- XMG will receive a call option to purchase up to 10,000,000 common shares of PWM at a price of C$0.65 per share for a period of 36 months.
- XMG will pay to PWM 3,000,000 common shares of XMG. These shares will be restricted and subject to a 1/3 release every 5 months from the signing of the definitive agreement.
The Transaction terms are subject to amendment based on tax and legal advice, and that the Parties agree to work together in good faith to negotiate and settle the final terms of the Transaction to be incorporated into the Definitive Agreements.
The LOI provides for an exclusive dealing period (the "Exclusivity Period") commencing on acceptance of the LOI and ending on the date of closing of the Definitive Agreements, unless otherwise extended by the Parties. During the Exclusivity Period: (i) the Parties will continue their due diligence investigations in respect of each other, as applicable, and their respective businesses, operations, assets, financial condition and affairs; (ii) the Parties will proceed with the negotiation and settlement of the terms of the binding Definitive Agreements in respect of the Transaction; and, (iii) the Parties will cooperate in making application and providing all necessary information to the TSX Venture Exchange ("TSXV") and the Canadian Securities Exchange in order to obtain pre-clearance of the Transaction and all matters related thereto.
Johnathan More, Chairman of Power Metals states, "We are pleased to have signed this deal with MGX Minerals, unquestionably the leader in the petrolithium space. Aligning ourselves to participate in the evolution of the new energy industry, our shareholders will be best served with our asset package being shepherded by MGX. At the technical forefront of the lithium industry, MGX's drive and domain expertise have the potential to drive value for related participants. This partnership allows PWM to focus on its marquee Case Lake hard rock pegmatite asset with drilling commencing in the coming days followed by metallurgy work by MGX using its new technology applied to our lithium hard rock prospect. Additionally, our shareholders will continue to benefit and see potential upside in these petrolithium assets being run by MGX through the large share position PWM will own in their company."
PWM U.S. Petrolithium Properties:
Paradox Basin, Utah
PWM has an executed joint venture with American Potash Corp., ("AMP") to explore and develop lithium brines totaling 13,520 acres of prime ground. AMP's US Federal lithium claims and Utah state lithium leases cover known brine-hosting clastic stratigraphy in the Paradox Formation.
Coyote Project - Lisbon Valley, Utah
The Project includes 150 placer mineral claims covering an area of 3,000 acres and inclusive of lithium brine mineral rights, on trend and adjoining to the north, the Lisbon Valley oil and gas field, where historic lithium brine content has been reported as high as 730 parts per million lithium (Superior Oil 88-21P). The Lisbon Valley oil and gas field is located approximately 40 miles southeast of Moab, Utah in the salt anticline belt on the southwest edge of the Paradox Basin in San Juan county. The oilfield was first discovered by Pure Oil Company in 1960. The Lisbon field produces oil and gas from the southwest flank of a faulted anticlinal trap in the Devonian sandstones and Mississippian limestones (Segal et al., 1986).