All dollar amounts are in U.S. dollars unless otherwise indicated .
TORONTO, March 29, 2017 /CNW/ - LSC Lithium Corporation
(the "Company" or "LSC") (TSXV: LSC) is pleased to announce that it has entered into two strategic agreements with
lithium producer Orocobre Limited ("Orocobre") and lithium explorer and developer Advantage Lithium Corporation
("Advantage") to increase its land package on the Salinas Grandes Salar bringing LSC's portfolio of lithium brine salars
to approximately 295,000 hectares, which represents extensive lithium prospective salar holdings in Argentina.
LSC's Salinas Grandes tenements will total approximately 79,031 hectares and cover 87% in the centre of the
Salinas Grandes Salar in the Salta province and 45% in the Jujuy province, pending completion of the transactions.
LSC will control approximately 295,000 hectares of lithium bearing tenements making it one of the leaders in
lithium exploration and development in its progression as an important emerging lithium producer in Argentina.
LSC has entered into the following agreements:
- An agreement made on March 28, 2017 (the "LSC-Orocobre Agreement") among LSC, its
Argentine subsidiary, Orocobre, South American Salars SA ("SAS") and Borax Argentina SA ("BA") pursuant to which
LSC will acquire all tenements and other mineral rights held by Orocobre, SAS and BA (collectively, the "Orocobre
Group") located in the Salinas Grandes Salar, in Salta and Jujuy provinces, Argentina,
covering approximately 32,727 hectares (subject to reduction in certain circumstances described below); and
- An agreement made on March 28, 2017 (the "LSC-Advantage Agreement") between LSC and
Advantage pursuant to which LSC will be granted the right to purchase Advantage's option over the 1,471 hectare Stella Marys
Project located in the Salinas Grandes Salar in Salta province, Argentina.
Upon completion of the Orocobre and Advantage transactions, together with LSC's existing tenements, LSC will control
approximately 79,031 hectares, which cover 87% in the centre of the Salar in Salta province and 45% of the centre of the Salar in
Jujuy province. In the Jujuy province, a large portion of the Salar is also controlled by the cooperatives.
LSC's portfolio of properties are in close proximity to Enirgi Group Corporation's ("Enirgi Group") planned future
Regional Processing Facility at Salar del Rincón. LSC and Enirgi Group are strategically cooperating on lithium development in
Northern Argentina pursuant to a Relationship Agreement whereby, among other things, the parties
will examine the most economic solution to process LSC's brines which may include supplying LSC's brines for processing at Enirgi
Group's planned facility. LSC anticipates brine samples from the various projects will be available for initial
metallurgical test work at Enirgi Group's demonstration plant on the Salar del Rincón, following its anticipated commissioning.
LSC has a significant advantage as a result of its relationship with Enirgi Group in that its capital requirements would be
significantly lower than other operators requiring capital intensive solar evaporation ponds.
ACQUISITION OF SALINAS GRANDES LITHIUM SALAR TENEMENTS
Following the closing of the acquisition of approximately 34,198 hectares from Orocobre and Advantage, LSC will control
approximately 79,031 hectares in the centre of the Salar and alluvial fans of the very important high grade lithium Salinas
Grandes Salar in both Salta and Jujuy provinces.
As a result of the acquisition, LSC plans to conduct two separate exploration and development programmes both in Salta and
Jujuy provinces as each province has its own regulatory framework.
On the Salta side, LSC will hold tenements covering approximately 46,881 hectares in the centre of and in the alluvial fans of
the Salar covering approximately 12,262 hectares in the centre of the Salar which gives LSC control of 87% of the Salta side of
the Salar surface.
On the Jujuy side, LSC will hold tenements covering approximately 32,150 hectares in the centre of and in the alluvial fans of
the Salar covering approximately 6,100 hectares in the centre of the Salar which gives LSC control of 45% of the Jujuy side of
the Salar surface.
(Refer to Figure 1: LSC Tenements in Salinas Grandes Salar)
![Figure 1: LSC Tenements in Salinas Grandes Salar (CNW Group/LSC Lithium Corporation)](https://mma.prnewswire.com/media/483777/LSC_Lithium_Corporation_LSC_Lithium_to_acquire_strategic_tenemen.jpg)
Since it will be the largest owner of tenements in Salinas Grandes, LSC anticipates that once approvals have been given to
explore and exploit the very large lithium deposits in Salinas Grandes that it will be positioned to become the sole operator.
Subject to having successfully passed through the necessary consultation process, LSC intends to deploy different exploration
works, including geophysics to understand the main features of the basin and aquifers, complete shallow auger sampling, and
perform pump tests from trenches in order to evaluate the performance of the higher 15 m of the Salar surface. Controlling the
vast majority of the Salar's surface allows this work to be possible. The initial exploration program for tenements on the Salta
side of Salinas Grandes is budgeted at $750,000 over the next 12 months. The budget for the initial
exploration work on the Jujuy side of Salinas Grandes is estimated at $600,000, also over the next
12 months. The timing and budget for follow-on work programs will be developed based on the results of the initial phase of
exploration. LSC has sufficient funds on hand to support the planned exploration activities.
Community issues are critical in the Salinas Grandes Salar and LSC will work closely with the communities and the respective
Governments. LSC intends to go through the necessary consultation processes, obtain approval and cooperation for the proper
development of the Salar with minimal environmental impact, and to provide assurances to the local communities that salt
harvesting and borates production will not be affected.
LSC sees the Salinas Grandes Salar as a very important strategic asset as it continues to consolidate the highly fractured
ownership of tenements in this very large lithium rich basin which straddles both Salta and Jujuy provinces each with their own
development criteria. LSC anticipates that Salinas Grandes will be a core developmental asset of LSC along with its tenements in
the Salars of Pozuelos, Pastos Grandes, Rio Grande and Jama.
TERMS OF LSC ACQUISITION OF SALINAS GRANDES TENEMENTS
Pursuant to the LSC-Orocobre Agreement, LSC will acquire (a) all tenements held by the Orocobre Group located in the Salinas
Grandes Salar, in Salta and Jujuy provinces, Argentina, (the "Salinas Grandes Tenements")
and (b) certain cateos covering approximately 19,946 hectares located in JuJuy province, as well as (c) a royalty held by
Orocobre in certain tenements located on the Salar de Pozuelos in Salta province owned by LitheA Inc. (which company is being
acquired by LSC as disclosed in its news release dated March 15, 2017), and (d) certain usufruct rights to extract borates
located in Salinas Grandes Salar.
As consideration, LSC will:
- transfer to Orocobre 3 tenements owned by LSC in the Salar de Olaroz located in Jujuy province covering approximately
3,821 hectares;
- pay to Orocobre $4 million at closing;
- pay to Orocobre $1 million on each of the 1st, 2nd and 3rd anniversaries of closing; and
- grant to Orocobre a 2% royalty on the brine concentrate produced from Salinas Grandes Tenements, calculated using the
same methodology applied by Orocobre and its affiliates for the calculation of the royalties paid by Orocobre or its
affiliates to the provincial government of Jujuy for Orocobre's last two fiscal years (the "Salinas Grandes Royalty")
regardless of any retroactive or future changes to such methodology made after December 31,
2016.
The cash consideration may be subject to reduction of up to $1 million in the event that valid
title to certain mineral interests covering up to 3,439 hectares cannot be transferred to LSC within three years following
closing.
In addition, the Orocobre Group will agree to: (a) a 10 year exclusion area covering the 10 km area from the external
perimeter of any of the Salinas Grandes Tenements, and (b) a 10 year non-interference zone respecting all properties held by LSC
located south of Río Las Burras.
TERMS OF THE ACQUISITION OF STELLA MARYS PROJECT
Pursuant to the LSC-Advantage Agreement, LSC has agreed to acquire from Advantage its option over the 1,471 hectare Stella
Marys Project located in the Salinas Grandes Salar, in Salta province, Argentina (the "MSR
Option"). Advantage currently holds the MSR Option pursuant to an agreement with Minera Santa Rita SRL ("MSR") dated
October 27, 2016 (the "MSR Option Agreement").
LSC will acquire the MSR Option by:
- making aggregate cash payments of approximately $740,000 to Advantage in reimbursement of
option payments and related expenses previously paid by Advantage pursuant to the MSR Option Agreement;
- issuing 256,520 LSC common shares to Advantage as reimbursement for the 600,000 Advantage shares issued by Advantage to
MSR.
LSC will thereafter have the right to acquire the Stella Marys Project pursuant to the exercise of the MSR Option prior to
Setpember 21, 2017 by:
- making a cash payment of $650,000 to MSR;
- issuing to Advantage a number of LSC common shares (calculated on the basis of the proportionate closing prices of the
LSC common shares and Advantage common shares on the trading day preceding the date of closing of the MSR Option
exercise), as reimbursement for the issuance by Advantage of the 900,000 Advantage common shares to MSR in connection with
the exercise of the MSR Option; and
- entering into a royalty agreement with Advantage with respect to a 2% royalty on the brine concentrate produced from the
Stella Marys Project that will be granted by LSC to Advantage, calculated using the same methodology as used for the Salinas
Grandes Royalty.
In addition, Advantage has agreed to: (a) a 10 year exclusion area covering the 10 km area from the external perimeter of any
of the Salinas Grandes Tenements, and (b) a 10 year non-interference zone respecting all properties held by LSC located south of
Rio Las Barros.
The completion of this transaction is subject to the approval of the TSXV.
Closing of Transactions
The closings of the transactions with Orocobre and Advantage are at arm's length and are subject to satisfaction of various
conditions precedent, which are typical of transactions of this nature, as well as the simultaneous closing of each transaction.
These closings are scheduled for completion on or about April 30, 2017.
Qualified Person/Data Verification
The scientific and technical information included in this press release related to LSC tenements 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, Orocobre and Advantage. No Qualified Person has reviewed
or verified any information in this press release related to the Orocobre tenements to be acquired by LSC.
ABOUT LSC LITHIUM CORPORATION:
LSC Lithium is an emerging lithium producer that has amassed a large portfolio of prospective lithium rich salars. LSC is
focused on developing its tenements located in five salars: Pozuelos (subject to completion of previously announced transaction),
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. Pending the completion of announced
transactions, LSC Lithium will have a land package portfolio totaling over 295,000 hectares, which represents extensive lithium
prospective salar holdings in Argentina.
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: the future closing and timing of acquisition of the
Orocobre and Advantage Lithium tenements, the future consideration payable to acquire the tenements, the amount of hectares and
expected control by LSC of the tenements on Salinas Grande after closing of the acquisitions, the ability to become the sole
operator on Salinas Grande, the ability to secure necessary community approvals and support for exploration and
development, the timing and ability to advance the Salinas Grandes tenements to feasibility study level, the timing for testing
brines at Enirgi Group's Salar del Rincón demonstration plant, the definition of any mineral resources or mineral reserve
estimates pursuant to NI 43-101 on our properties, the timing for potential future production at our properties, the use and
application of Enirgi Group's Direct Xtraction Process Technology at our properties, completion of work programs on our
properties, and the ongoing strategic relationship with Enirgi Group. 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:
title of the Orocobre and Advantage Lithium tenements and their ability to be transferred on closing; exploration and the
establishment of resources and reserves on the Salinas Grande tenements or other LSC properties; the application and future
licensing of new technologies; successful commissioning of the Salar del Rincón demonstration plant; 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; securing necessary community group
support and approval; 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
To view the original version on PR Newswire, visit: http://www.newswire.ca/en/releases/archive/March2017/29/c6054.html