New Energy Metals Announces Letter of Intent to Acquire Exploradora North Project (Chile) and Stock Option Grant
#2300 – 1177 West Hastings Street, Vancouver, BC, Canada, V6E 2K3
Phone: 604-484-1232 / Fax: 604-408-7499
NEW ENERGY METALS ANNOUNCES LETTER OF INTENT
TO ACQUIRE EXPLORADORA NORTH PROJECT (CHILE)
AND STOCK OPTION GRANT
NR19-07 June 6, 2019
Vancouver, B.C. – New Energy Metals Corp. ("New Energy Metals" or the "Company")
(TSX.V:ENRG) (OTC:NEMCF) announces that it has entered into a l etter of intent dated
June 3, 2019 with certain arm's length vendors (the " Vendors"), whereby New Energy Metals
will be granted the exclusive right and option (the " Option") to acquire an initial 70% royalty-
free interest in and to certain exploration and exploitation mi neral concessions
(the "Concessions") referred to as the "Exploradora North project" (" Exploradora North " or
the "Project"). The Project has a total area of approximately 84,750 hecta res (40 km in length
north-south) and is located in the II and III Regions of Northe rn Chile along the prolific West
Fissure fault system between the open-pit Escondida mine, the l argest copper mine in the world,
to the north of the Exploradora district and CODELCO's El Salva dor underground copper mine,
approximately 60 km to the south of the district ("El Salvador (CODELCO)").
Exploradora North Details
Exploradora North is located immediately north and east of the current Exploradora deep drilling
project of CODELCO (" Exploradora (CODELCO) ") within a cluster of porphyry copper
deposits and prospects first dis covered in the 1990's. To date , the cluster of porphyry copper
(plus/minus gold and molybdenum) and skarn occurrences have onl y been explored to shallow
depths (mostly to less than 600 meters), most recently by BHP B illiton approximately 10 years
ago. In its 2018 Annual Report, CODELCO reported that its expl oration activities conducted at
Exploradora (CODELCO) were its most significant activity of the year, with primarily deep drill
holes (with unpublished results) be ing carried out (see CODELCO 's 2018 Annual Report,
page 104). A previous near-surface resource for Exploradora (C ODELCO) reported 100 Mt of
0.3 Cu and 0.2 g/t gold (Society of Economist Geologists, Speci al Publication 11, 2004, pages
97-111). Recently, CODELCO has also been drilling along the co mmon boundary of the
Exploradora (CODELCO) and Exploradora North (New Energy Metals) land positions.
The land positions of New Energy Metals are surrounded by most of the major copper
corporations of the world (see Figure 1 below). Minera Activa, a private Chilean company,
recently announced positive results in the Exploradora district , and VALE is also actively
drilling to the west of Explorad ora North. Another large porphy ry system has also been
recognized in the nearby Juncal district.
NR19-07 Continued 2 June 6, 2019
Figure 1 – Location of Project and Surrounding Properties
NR19-07 Continued 3 June 6, 2019
Exploradora North contains several porphyry copper system oppor tunities, some exhibiting
lithocaps, possibly above a deeply concealed porphyry system; more than 50% of these prospects
are covered with post-mineral gravels and volcanic rocks. Deep -seeking induced polarization
(IP), metal earth magnetotellurics (MT) and magnetics are plann ed to be initiated by New
Energy Metals to help define initial drill targets, with initia l drilling proposed to start in August
or September, 2019.
The Company believes that a comparable model for the Project in the Exploradora district is
El Salvador (CODELCO). A reconstructed model of El Salvador (C ODELCO) shows that the
secondary blanket started about 600 meters below the original u neroded surface. The original
underground reserves at El Salvad or (CODELCO), which began oper ation in 1959, were
approximately 300 MT of 1.6% copper, mostly secondarily enriched ore (Economic Geology and
the Bulletin of the Society of Economist Geologists, Vol. 70, No. 5 August 1975, page 857-912).
Commercial Terms
Subject to satisfactory completion of due diligence, New Energy Metals, through a wholly-
owned Chilean subsidiary, intends to enter into a formal option to purchase agreement (the
"Option Agreement ") with the Vendors, whereby the Vendors would grant to New Ene rgy
Metals the exclusive option (the " S t a g e 1 O p t i o n") to purchase from the Vendors 70% of the
right, title and interest of the Vendors in and to the Concessi ons, free and clear of all liens,
charges and encumbrances, in consideration of (i) exploration e xpenditures on the Project of at
least USD 15,000,000 within 48 months of the Effective Date (th e " Option Period "), (ii) the
payment of the sum of USD 8,500,000 and (iii) the delivery of a n aggregate of 11,500,000
common shares of New Energy Metals, to be incurred, paid and delivered as follows:
Date Cash (USD)
New Energy Metals
Common Shares
Exploration
Expenditures
(USD)
Within 5 days of TSXV approval
after signing of the Option
Agreement (the "Effective Date")
$500,000 500,000 shares --
6 months from Effective Date -- 750,000 shares --
12 months from Effective Date $1,000,000 1,000,000 shares --
18 months from Effective Date $1,000,000 1,250,000 shares --
18 months from Effective Date $1,500,000 1,500,000 shares --
24 months from Effective Date $2,000,000 2,500,000 shares --
36 months from Effective Date $2,500,000 4,000,000 shares --
48 months from Effective Date -- -- $15,000,000
Total: $8,500,000 11,500,000 shares $15,000,000(1)
Note:
(1) There are no annual or monthly requirements in respect of t he exploration expenditures, provided that the total
USD $15,000,000 in exploration expenditures must be incurred by New Energy Metals within the Option Period.
NR19-07 Continued 4 June 6, 2019
Upon the exercise of the Stage 1 Option by New Energy Metals, N ew Energy Metals and the
Vendors would be deemed to have formed a joint venture (the " Joint Venture ") for the
continued exploration and development of Exploradora North and w i l l f o r m a j o i n t v e n t u r e
company, in which the initial participating interests of the pa rties will be 70% for New Energy
Metals and 30% for the Vendors. The Vendors will also grant to New Energy Metals the first
right of refusal (the " Right of First Refusal ") to acquire up to an additional 30% of the right,
title and interest of the Vendors in and to the Concessions. P ursuant to the Right of First
Refusal, if at any time during the 36 months following the exer cise of the Stage 1 Option, the
Vendors receive a bona fide offer from a third party to purchase all or part of their part icipating
interest in the Joint Venture (the "Subject Interest") that they intend to accept, then the Vendors
must notify New Energy Metals of the terms of any proposed sale. New Energy Metals will then
have 30 days to decide whether it wishes to purchase such Subject Interest at the price and on the
terms set forth in the notice provided by the Vendors.
During the Option Period, New En ergy Metals will be responsible for maintaining the
Concessions in good standing and paying all fees and assessment s, and for taking such other
steps required in order to do so, including making the 2019 ann ual license payments for the
Concessions that were due on or before June 3, 2019 in the appr oximate amount of USD
$162,000. There will be no other work commitments, and any wor k carried out on the
Concessions will be at the sole discretion of New Energy Metals . All New Energy Metals’
common shares issued in connection with the Option will be subj ect to a hold period in Canada
of 4 months and one day from the date of issuance. In connecti on with entry into the Option
Agreement, the Company has agreed to issue to Asesorías y Servi cios ZT Partners SpA, an arm's
length party, 500,000 common shares in the capital of the Compa ny, which shares will be issued
as fully paid and non-assessable, as a finder's fee (the "Finder's Fee").
The Option Agreement and the payment of the Finder's Fee in con nection therewith are subject
to the acceptance for filing thereof by the TSX Venture Exchange (the "TSXV").
Option Grant and Cancellation
Pursuant to the Company's 2018 Incentive Stock Option Plan, the Company has granted
incentive stock options to directors, officers, employees, cons ultants and advisors of the
Company and its affiliates to purchase up to an aggregate of 2, 100,000 common shares in the
capital of the Company. The op tions all 100% vested on grant a nd are exercisable on or before
June 5, 2022 at a price of $0.24 per common share.
The Company also announces that it has cancelled an aggregate o f 226,250 previously granted
incentive stock options.
Cautionary Note Regarding Adjacent Properties
Exploradora (CODELCO) and Exploradora North are adjacent properties, located approximately
60 km north of El Salvador (CODELCO). The Company has no inter est in or right to acquire
any interest in either Explora dora (CODELCO) or El Salvador (CO DELCO). Mineral deposits
on adjacent or similar properties, and any production therefore or economics with respect
thereto, are not in any way indicative of mineral deposits on N ew Energy Metals' properties or
NR19-07 Continued 5 June 6, 2019
the potential production from or cost or economics of, any futu re mining of any of New Energy
Metals' mineral properties.
Qualified Person
Dr. Thomas A. Henricksen, a qualified person as defined by Nati onal Instrument 43-101 has
reviewed the scientific and technical information that forms th e basis of this news release and
has approved the disclosure herei n. Dr. Henricksen is not inde pendent of the Company as he is
the Company's chief geologist and holds incentive stock options of the Company.
About the Company
New Energy Metals is focused on the exploration and development of energy metals in Chile.
The Company's assets include several prospective cobalt project s in Chile's past producing San
Juan cobalt district.
On behalf of New Energy Metals Corp.
César López, President & CEO
T: 604.484-1232
W: www.newenergymetals.ca
Neither the TSX Venture Exchange nor its Regulation Services Pr ovider (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-
looking statements") within the meaning of applicable Canadian and U.S. securities legislation, including the
United States Private Securities Litigation Reform Act of 1995 . All statements, other than statements of historical
fact, included herein including, withou t limitation, the entry into of the Option Agreement, the earn-in and exercise
by the Company of the Option (including the Stage 1 Option, the formation of the Joint Venture and subsequent
Right of First Refusal), the payment of the Finder's Fee, the expectation the Company will be able to enter into the
Option Agreement or exercise the Option, commencement of exploration activities on the Project, the anticipated
exploration program results from exploration activities on the Company's mineral projects, the discovery and
delineation of mineral deposits/resources/reserves, and the anticipated business plans and timing of future activities
of the Company, are forward-looking statements. Although the Company believes that such statements are
reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements
are typically identified by words such as: "believes", "will", "expects", "anticipates", "intends", "estimates", "plans",
"may", "should", "potential", "scheduled", or variations of such words and phrases and similar expressions, which,
by their nature, refer to future events or results that may, could, would, might or will occur or be taken or achieved.
In making the forward-looking statements in this ne ws release, the Company has applied several material
assumptions, including without limitation, that: it will successfully conclude its due diligence on the Project and the
Vendors, it will be able to successfully negotiate and ente r into the Option Agreement and that it will obtain TSXV
acceptance for the filing of sa me, market fundamentals will result in su stained precious metals, cobalt and copper
demand and prices, the receipt of any necessary permits, licenses and regulatory approvals in connection with the
future development of the Co mpany's Chilean mineral projects in a timel y manner, the availa bility of financing on
suitable terms for the development, construction and c ontinued operation of the Company's projects and the
Company's ability to comply with environmental, health and safety laws.
NR19-07 Continued 6 June 6, 2019
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to differ materially from any future results,
performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors
include, among others, results from the Company's due diligence on the Project and the Vendors, actual results of
exploration activities, the fact that the Company's interests in its mineral properties (including the Project) are only
options and there is no guarantee that th e interests, if earned, will be certain, requirements for additional capital,
future prices of precious metals, cobalt and copper, changes in general economic conditions, changes in the
financial markets and in the demand an d market price for commodities, other risks of the mining industry, the
inability to obtain any necessary governmenta l and regulatory approval s (including TSXV acceptance for filing of
the Option Agreement and the Finder's Fee), changes in laws, regulations and policies affecting mining operations,
hedging practices and currency fluctuations, as well as those factors discussed under the heading "Risks and
Uncertainties" in the Company's most recent management's discussion and analysis and other filings of the
Company with the Canadian Securities Authorities, copies of which can be found under the Company's profile on
the SEDAR website at www.sedar.com.
Readers are cautioned not to place undue reliance on forward-looking statements. Except as otherwise required by
law, the Company undertakes no obligation to update any of the forward-looking information in this news release or
incorporated by reference herein.