New Energy Metals Announces Signing of Definitive Option to Purchase Agreement to Acquire Exploradora North Project (Chile)
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#2300 – 1177 West Hastings Street, Vancouver, BC, Canada, V6E 2K3
Phone: 604-484-1232 / Fax: 604-408-7499
NEW ENERGY METALS ANNOUNCES SIGNING OF DEFINITIVE OPTION TO
PURCHASE AGREEMENT TO ACQUIRE EXPLORADORA NORTH PROJECT
(CHILE)
NR19-09 July 2, 2019
Vancouver, B.C. – New Energy Metals Corp. ("New Energy Metals" or the "Company")
(TSX.V:ENRG) (OTC:NEMCF) announces that, further to its news re lease dated June 6, 2019
and subject to acceptance for filing by the TSX Venture Exchang e (the "TSXV"), it has entered
into definitive option to purchase agreements (the " Option Agreements ") with certain arm's
length vendors (the " Vendors"), whereby New Energy Metals has been granted the exclusive
right and option (the " Option") to acquire an initial 70% royalty-free interest in (the " Stage 1
Interest") and to certain exploration a nd exploitation mineral concessi ons (the " Concessions")
comprising the Carmen, Elvira, Gran Elbita and Nevenka projects located in the II and III
Regions of Northern Chile along the prolific West Fissure fault system, having a combined area
of approximately 84,750 hectares, collectively referred to as t he "Exploradora North project"
("Exploradora North" or the "Project").
New Energy Metals President and CEO, César López, stated, "Expl oradora North is located in
one of the world's most prolific copper districts. In addition , it is within close proximity of
Codelco's current deep-drilling project. With that in mind, th e signing of these definitive option
agreements for Exploradora North is a major milestone for the C ompany and an active step
towards our goal of serving the green energy market.
By structuring the option earn-in on the Project as a series of independently vesting earn-in
interests, the Company is able to retain its earned ownership i nterest in the Project even if it
elects not to exercise the Option in full."
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 (see Figu r e 1 ) . T o d a t e , t h e c l u s t e r o f
porphyry copper (plus/minus gold and molybdenum) and skarn occu rrences have only been
explored to shallow depths (mostly to less than 600 meters), mo st recently by BHP Billiton
approximately 10 years ago. In its 2018 Annual Report, CODELCO reported that its exploration
activities conducted at Explorador a (CODELCO) were its most sig nificant activity of the year,
with primarily deep drill holes (with unpublished results) bein g carried out (see CODELCO's
2018 Annual Report, page 104). Recently, CODELCO has also been drilling along the common
boundary of the Exploradora (CODELCO) and Exploradora North (Ne w Energy Metals) land
positions.
NR19-09 Continued 2 July 2, 2019
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Figure 1 – Location of Project and Surrounding Properties
Mineral deposits on adjacent or similar prope rties, and any production therefore or economics
with respect thereto, are not in any way indicative of mineral deposits on New Energy Metals'
properties or the potential productio n from or cost or economics of , any future mining of any of
New Energy Metals' mineral properties.
NR19-09 Continued 3 July 2, 2019
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Commercial Terms
In order to earn the Stage 1 Interest, being an initial 70% int erest in the Project, New Energy
Metals will be required to: (i) incur exploration expenditures on the Project of at least
USD 15,000,000 within 48 months of the Effective Date (the " Option Period"), (ii) make cash
payments to the Vendors in the aggregate amount of USD $8,500,0 00, and (iii) deliver to the
Vendors an aggregate amount of 11,500,000 common shares of New Energy Metals, to be
incurred, paid and delivered as set out below. Pursuant to the terms of the Option Agreements,
the Company will earn the Stage 1 Interest in a series of stepp ed earn-ins on the Project, as set
out below. This stepped earn-in allows the Company to retain any interests it has in the
Project, even if only a portion of the Option is exercised by the Company.
Date
Cash
(USD)
New Energy
Metals Common
Shares (#)
Exploration
Expenditures
(USD)
Earned Interest
(%)
Within 5 days of
TSXV approval after
signing of the Option
Agreements
(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 -- 10%
18 months from
Effective Date
$1,000,000 1,250,000 shares -- --
24 months from
Effective Date
$1,500,000 1,500,000 shares -- Additional 15%
(total of 25%)
30 months from
Effective Date
$2,000,000 2,500,000 shares -- Additional 15%
(total of 40%)
36 months from
Effective Date
$2,500,000 4,000,000 shares -- --
48 months from
Effective Date
-- -- $15,000,000 Additional 30%
(total of 70%)
Total: $8,500,000 11,500,000 shares $15,000,000(1) 7 0 %
(1) The earn-in of the 10%, 25% and 40% interests in the Projec t have no exploration expenditure requirements,
which are only applicable to the 70% interest earn-in that requ ires that USD $15 million have been spent on the
Project within 48 months of the Effective Date.
With the exception of the initial cash payment of USD $500,000 and the initial issuance of
500,000 common shares of the New Energy Metal to the Vendors, a ll of the foregoing
exploration expenditures, payment s and share issuances are opti onal and New Energy Metals
will not be obligated to make any such expenditures, payments or share issuances.
NR19-09 Continued 4 July 2, 2019
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There are no annual or monthly requirements in respect of explo ration expenditures, provided
that an aggregate amount of USD $15,000,000 in exploration expe nditures must be incurred by
New Energy Metals within 48 months of the Effective Date to com plete the earn-in of the
Stage 1 Interest, and New Energy Metals will be responsible for maintaining the Concessions in
good standing and paying all fees and assessments during the Op tion Period. All shares of New
Energy Metals issued in connection with the Option will be subject to a hold period in Canada of
4 months and one day from the date of issuance. In connection with entry into the Option
Agreement and in accordance with TSXV policies, the Company has agreed to issue to Asesorías
y Servicios ZT Partners SpA, an arm's length party, 500,000 com mon shares in the capital of the
Company, which shares will be issued as fully paid and non-asse ssable, as a finder's fee (the
"Finder's Fee").
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.
Relinquishment of Properties
The Company also announces that it has relinquished its options to acquire the Victoria and Tres
Salares cobalt properties. The Victoria and Tres Salares prope rties no longer align with the
Company's strategic plan for its mineral asset portfolio. By r elinquishing the options to such
properties, New Energy will not be not subject to any further o bligations in respect of either
property, allowing the Company to focus its resources on other value generating projects.
The Company's interests in the Victoria and Tres Salares proper ties were acquired in 2018,
subject to TSXV acceptance, pursuant to separate assignment agr eements. In determining to
relinquish the properties, the Company has elected not to compl ete its application to the TSXV
for final acceptance for the acquisition of such 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.
NR19-09 Continued 5 July 2, 2019
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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, without limitation, 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 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 identifie d 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 stat ements in this news rele ase, 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 obtain TSXV acceptance for the filing of the Option Agreements, market
fundamentals will result in sustained precious metals, cobalt and copp er demand and prices , the receipt of any
necessary permits, licenses and regulatory approvals in co nnection with the future development of the Company's
Chilean mineral projects in a timely manner, the availab ility of financing on suitable terms for the development,
construction and continued operation of the Company's projects and the Company's ability to comply with
environmental, health and safety laws.
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 Agreements and the Finder's Fees), 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 a nd 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.
NR19-09 Continued 6 July 2, 2019
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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.