Critical Elements Crystallizes Nisk -1P Roject Value BY Signing Option Agreement with Chilean Metals
PRESS RELEASE
CRITICAL ELEMENTS CRYSTALLIZES NISK -1P ROJECT VALUE BY SIGNING OPTION
AGREEMENT WITH CHILEAN METALS
December 23, 2020 – Montréal, Québec – Critical Elements Lithium Corporation
(the “Corporation ” or “Critical Elements ”) (TSX-V: CRE) (US OTCQX: CRECF) (FSE: F12) is
pleased to announce that it has entered into an agr eement with Chilean Metals Inc. (the
“Optionee”) (TSX-V: CMX) to option up to 80% of the Nisk nickel-copper-PGE project (the
“Property” or "Nisk-1"), in Quebec’s Eeyou Istchee James Bay territory in Quebec.
Critical Elements’ CEO, Jean-Sébastien Lavallée, noted that Critical Elements’ vision is to create
a large, responsible producer of lithium to supply the flourishing electric vehicle and energy storage
systems industries. “Our focus remains firmly on ad vancing and de-risking the Rose lithium-
tantalum project ("Rose"), one of the highest purit y undeveloped lithium projects globally and the
Corporation’s first. Beyond Rose and Nisk-1, Critical Elements retains 100% ownership in a highly
prospective land position of over 700 km 2 with demonstrable lithium mineralization.”
Option Terms:
GRANT OF FIRST OPTION
The Corporation grants to the Optionee the exclusive right and option to acquire, on or before the
date that is three (3) years from the TSX.V approva l (the "Effective Date") (the “ First Option
Period ”), an initial 50% Earned Interest in the Property (the “First Option ”), free and clear of all
Encumbrances other than the Permitted Encumbrances and the Royalty, subject to the terms and
conditions in this Agreement.
Requirements to Exercise the First Option
In order to acquire the 50% Earned Interest under the First Option, the Optionee must:
(a) make cash payments totalling $500,000 to the Co rporation (the “Cash Payments ”) on or
before the dates set out below:
(i) a non-refundable amount of $25,000 on the date of execution of the agreement;
(ii) an amount of $225,000 within a delay of five ( 5) Business Days following the
Effective Date; and
(iii) an amount $250,000 within a delay of six (6) months from the Effective Date;
(b) issue to the Corporation within a delay of five (5) Business Days following the Effective
Date, 12,051,770 Shares (the “Share Payment ”) of the Optionee. The Shares issued will
be issued as fully paid and non-assessable free and clear of all liens, charges and
Encumbrances, and subject only to such resale restr ictions and hold periods as may be
imposed by applicable Securities Laws and the policies of the TSXV;
(c) incur an aggregate of $2,800,000 of Work Expend itures on the Property on or before the
dates set out below:
(i) $500,000 in Work Expenditures on or before the date that is one (1) year from
Effective Date;
(ii) $800,000 in Work Expenditures on or before the date that is two (2) years from
Effective Date; and
(iii) $1,500,000 in Work Expenditures on or before the date that is three (3) years from
Effective Date; and
Upon the Optionee having completed the Cash Payment s, the Share Payment and incurred or
funded the Work Expenditures on or before the expiry of the First Option Period, the Optionee may
exercise the First Option by delivering notice to C ritical Elements to that effect and confirming
exercise of the First Option (the “ First Option Exercise Notice ”). Upon delivery of the First Option
Exercise Notice, the Optionee shall have earned a 50% Earned Interest in the Property.
GRANT OF SECOND OPTION
Subject to the Optionee having exercised the First Option, the Corporation hereby also grants to
the Optionee the exclusive right and option (the “ Second Option ”) to increase its Earned Interest
in and to the Property from 50% to 80% by incurring or funding additional Work Expenditures for
an amount of $2,200,000, including the delivery of a Resource Estimate, for a period commencing
on the delivery of the First Option Exercise Notice and ending on the date that is four (4) years from
Effective Date (the “Second Option Period”).
Following the exercise of the Second Option, until such time as a definitive Feasibility Study (the
“Definitive Feasibility Study ”) regarding extraction and production activities o n the Property is
delivered to the Joint Venture, Critical Elements s hall maintain a 20% non-dilutive interest in the
Joint Venture and shall not contribute to any Joint Venture costs.
OPERATORSHIP
During the currency of the Agreement, except as oth erwise contemplated under the Agreement,
Chilean shall act as the operator (the “ Operator ”), and as such, shall be responsible for carrying
out and administering the Work Expenditures on the Property, in accordance with work programs
(the “ Programs ”) approved by the Technical Committee. The Operator shall be entitled to receive
a management fee equal to 10% of the amount of Work Expenditures incurred on internal work and
equal to 5% of the amount of Work Expenditures incu rred on contract work carried by third party
contractors or consultants.
In the event Chilean exercises the First Option and subsequently elects not to exercise the Second
Option, or in the event the Second Option is terminated, whichever the case, Chilean’s right to act
as Operator shall immediately terminate and Critica l Elements shall become the Operator for the
future conduct of Work Expenditures and Programs on the Property.
ROYALTY
Following the exercise of the First Option by Chile an, and in addition to the obligations of Chilean
under the First and Second Option, if applicable, C ritical Elements shall receive, in the event of a
Lithium discovery, a royalty equal to 2% net smelte r returns (the “ Royalty ”) resulting from the
extraction and production of Lithium products, incl uding Lithium ore, concentrate and chemical,
resulting from the extraction and production activities on the Property, including transformation into
chemical products. Chilean shall have the right at any time to purchase 50% of the Royalty and
thereby reduce the Royalty to 1% by paying to Critical Elements a total cash amount of $2,000,000.
LITHIUM MARKETING RIGHTS
In the event of a Lithium discovery, Critical Eleme nts will retain Lithium Marketing Rights meaning
the exclusive right of Critical Elements to market and act as selling agent for any and all Lithium
products, including Lithium ore, concentrate and ch emical, resulting from the extraction and
production activities on the Property, including transformation into chemical products.
Nisk-1 Ni-Cu-PGE Deposit
Nisk is composed of two blocks totaling 90 claims covering an area of 45.9 km 2 and a length of over
20 km. The Route du Nord from Chibougamau runs inside the south border of the Property. Nisk-
1 is also traversed in a NE direction by a Hydro-Québec power line and a road that heads north to
the Eastmain River and beyond to the La Grande River area.
Figure 1: Property location
Nisk-1 is currently known for its magmatic nickel-c opper sulphide deposits associated with
ultramafic intrusion potential. It notably hosts the Nisk-1 Ni-Cu-PGE deposit.
Nisk-1 is hosted in an elongated body of serpentini zed ultramafic rocks that intrude the Lac des
Montagnes paragneiss and amphibolite sequence. The ultramafic rock intrusion is a sill bordered
by paragneisses and amphibolites. Quite similar on either side of the ultramafic sill, they still can
be subdivided into a lower paragneiss sequence to t he NW of the sill (stratigraphically older) and
an upper paragneiss sequence to the SE of the sill (stratigraphically younger).
The ultramafic sill is not a single intrusion. At l east two distinct lithological units can be identif ied.
The first, a grey serpentinized peridotite with mag netite veinlets, does not contain any sulphide
minerals. The second is a black serpentinized peridotite .The Ni-Cu-Co-Fe sulphide mineralization
is invariably associated with this black serpentinite.
Nisk-1 is the only mineralized zone with estimated resources on the property. An NI 43-101
resource estimate was delivered in 2009. (The resource estimation was completed by RSW INC.
by Pierre Trudel Ph.D., P.Eng. and is detailed in th eir report entitled Resource Estimate for the
NISK-1 Deposit, Lac Levac Property, Nemiscau, Quebe c, dated December 2009. The 2009
resource estimation is considered to be a "Historical Estimate" as defined by National Instrument
43-101 Standards of disclosure for mineral projects):
Measured resource: 1,255,000 tonnes at 1.09% Ni; 0 .56% Cu; 0.07% Co; 1.11 g/t Pd and
0.20 g/t Pt
Indicated resource: 783,000 tonnes at 1.00% Ni; 0.53% Cu; 0.06% Co; 0.91 g/t Pd and 0.29
g/t Pt
Inferred resource: 1,053,000 tonnes at 0.81% Ni; 0.32% Cu; 0.06% Co; 1.06 g/t Pd and 0.50
g/t Pt
Figure 2 : Magnetic map of property
Qualified persons
Paul Bonneville, Mining Eng., Project Manager of the Corporation, is the qualified person that has
reviewed and approved the technical contents of this news release on behalf of the Corporation.
ABOUT CRITICAL ELEMENTS LITHIUM CORPORATION
Primero Group recently completed the first phase of its Early Contractor Involvement agreement
with the Corporation and provided a Guaranteed Maximum Price for the engineering, procurement
and construction of the wholly-owned Rose Lithium-Tantalum project on a lump sum turnkey basis
that is in line with the Project’s feasibility study published November 29, 2017. The project feasibility
study is based on price forecasts of US $750/tonne f or chemical-grade lithium concentrate (5%
Li2O), US $1,500/tonne for technical-grade lithium con centrate (6% Li 2O) and US $130/kg for
Ta2O5 in tantalite concentrate, and an exchange rate of US $0.75/CA $. The internal rate of return
(“IRR”) for the Rose Lithium-Tantalum project is estimated at 34.9% after tax, and net present value
(“NPV”) is estimated at CA $726 million at an 8% di scount rate. The estimated payback period is
2.8 years. The pre-tax IRR for the Rose Lithium-Tan talum Project is estimated at 48.2% and the
pre-tax NPV at CA $1,257 million at an 8% discount rate (see press release dated September 6,
2017). The financial analysis is based on the Indic ated mineral resource. An Indicated mineral
resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a le vel of confidence sufficient to allow the
appropriate application of technical and economic p arameters, to support mine planning and
evaluation of the economic viability of the deposit . The life-of-mine (LOM) plan provides for the
extraction of 26.8 million tonnes of ore, 182.4 mil lion tonnes of waste, and 11.0 million tonnes of
overburden for a total of 220.2 million tonnes of material. The average stripping ratio is 7.2 tonnes
per tonne of ore. The nominal production rate is es timated at 4,600 tonnes per day, with 350
operating days per year. The open pit mining schedule allows for a 17-year mine life. The mine will
produce a total of 26.8 million tonnes of ore grading an average of 0.85% Li2O and 133 ppm Ta2O5,
including dilution. The mill will process 1.61 mill ion tonnes of ore per year to produce an annual
average of 236,532 tonnes of technical and chemical grade spodumene concentrate and 429
tonnes of tantalite concentrate.
FOR MORE INFORMATION:
Jean-Sébastien Lavallée, P.Geo.
Chief Executive Officer
819-354-5146
www.cecorp.ca
Neither the TSX Venture Exchange 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.