Prosper One enters MOU to spend $3M to earn 55% of Lithium Chile's Pintadas Norte project TSX Venture Exchange: "LITH"
Prosper One enters MOU to spend $3M to earn
55% of Lithium Chile's Pintadas Norte project
TSX Venture Exchange: "LITH"
OTC-QB: LTMCF
CALGARY
,
June 13, 2018
/CNW/ - Lithium Chile Inc. ("
Lithium
Chile
" or the "
Company
") is
pleased to announce that it has entered into a memorandum of understanding ("
MOU
") with Prosper
One International Holdings Company Limited ("
Prosper One
"), a Hong Kong Stock Exchange listed
company.
MOU Highlights
Prosper One and Lithium Chile will enter into a joint venture agreement ("
Joint Venture
Agreement
") whereby Prosper One may earn a 55% interest in Lithium Chile's Pintadas Norte
project in
Chile
by incurring
$3,000,000
of staged exploration expenditures on or before
December 31, 2021
; and
Prosper One to make a
$1,000,000
equity investment in Lithium Chile at a minimum price of
$1.00
per share; and
Lithium
Chile
will operate the exploration programs for the Pintadas Norte project and as
operator, Lithium Chile will receive a management fee from Prosper One equal to 17.5% of the
funds expended on the Pintadas Norte exploration programs; and
A
$250,000
break fee will be payable by Prosper One to Lithium Chile should a definitive
agreement not be signed.
Steve Cochrane
, President and CEO of Lithium Chile, commented, "
We are pleased to have
reached this agreement with Prosper One which accelerates our ability to unlock the potential of
our dominant land package in
Chile
. Essentially, we are combining our technical expertise and
Chilean experience with Prosper One's financial acumen and support to explore our highly
prospective Pintadas Norte project in the coastal region of
Chile
. We look forward to a mutually
rewarding working relationship
."
The MOU contemplates that Prosper One will make an equity investment of
CDN$1,000,000
(equivalent to approximately
HK$6,000,000
) into Lithium Chile which is to be completed within 60
days from the signing of the formal Joint Venture Agreement. The shares being issued to Prosper
One will be done at a price determined on the date of this press release in accordance with the TSX
Venture Exchange ("
TSXV
") Policies involving an allowable discounted market price subject to a
minimum price of
CDN$1.00
per Lithium Chile common share ("
LC Share
"). The equity investment
will be done on a unit basis to be made up of one LC Share and one-half of one warrant. Each
whole warrant will be exercisable into one LC Share at a price of
CDN$1.50
for a period of two
years from the date of completion of the equity investment.
The MOU contemplates the Pintadas Norte exploration program will have a term of three years
involving an annual financial commitment of
CDN$1,000,000
to be paid by Prosper One. The first
annual financial commitment is payable within 60 days from the date of the completion of the equity
investment by Prosper One into Lithium Chile. Prosper One has no obligation to complete the
second or third year financial commitment whereupon it will surrender its interest. Upon completion
of the Pintadas Norte exploration program, Prosper One will have earned a 55% working interest in
the Pintadas Norte property. Further, the Joint Venture Agreement will include a provision allowing
Prosper One to earn an additional 20% working interest in the Pintadas Norte property upon
completion of a pre-feasibility study. Lithium Chile will operate the Pintadas Norte exploration
program on behalf of the joint venture for which it will receive a management fee equal to 17.5% of
the funds expended under the Pintadas Norte exploration programs. The Joint Venture Agreement
will provide that Prosper One will be entitled to nominate a representative to the Joint Venture
operating committee and provides each party the ability to complete a due diligence review.
Except for provisions relating to governing law, confidentiality, securities trading restriction, costs
and expenses, binding effect, exclusivity and termination, the MOU does not constitute a legally
binding commitment on any of the parties to the MOU in relation to the transactions contemplated.
Further, the Joint Venture Agreement will include a three year right of first refusal for Prosper One
to enter into a joint venture agreement for exploration of Pintadas Sur, the southern extension to
Pintadas Norte. If the Joint Venture Agreement is not entered into, Prosper One will pay to Lithium
Chile a break fee of
CDN$250,000
.
The Joint Venture Agreement, including the equity investment, remains subject to regulatory
approval.
About Prosper One International Holdings Company Limited
Prosper One is an investment holding company listed on the Hong Kong Stock Exchange under the
stock code 1470 and is engaged in the sale and trading of fertilisers, raw materials and related
fertiliser products, and public consumption products.
About Lithium Chile
Lithium
Chile
is advancing a lithium property portfolio consisting of 152,900 hectares covering
sections of 14 salars and 1 laguna complex in Chile. The properties include 64 square kilometres on
the Salar de Atacama which hosts the world's highest concentration lithium brine production and is
currently the source of approximately 30% of the world's lithium production. Lithium Chile's common
shares are listed on the TSX-V under the symbol "
LITH
" and on the OTC-QB under the symbol
"
LTMCF
".
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.
Forward Looking Statements
This news release may contain certain forward-looking information and forward-looking statements
within the meaning of applicable securities legislation (collectively "
forward-looking statements
").
Generally, forward-looking information can be identified by the use of forward-looking terminology
such as "expects", "believes", "aims to", "plans to" or "intends to" or variations of such words and
phrases or statements that certain actions, events or results "will" occur. In particular, this news
release contains forward-looking statements relating to, among other things, regulatory approval of
the Joint Venture Agreement and equity investment, the satisfactory completion of the due diligence
review, and the entering into of definitive agreements including the Joint Venture Agreement.
You are cautioned that the following list of material factors and assumptions is not exhaustive.
Specific material factors and assumptions include, but are not limited to: the general stability of the
economic and political environment in which the Company operates; the timely receipt of required
regulatory approvals; the ability of the Company to obtain future financing on acceptable terms;
currency, exchange and interest rates; operating costs; and the success the Company will have in
exploring its prospects and the results from such prospects. Accordingly, readers should not place
undue reliance on forward-looking statements. The Company does not undertake to update any
forward-looking statements herein, except as required by applicable securities laws. All forward-
looking statements contained in this press release are expressly qualified by this cautionary
statement.
SOURCE
Lithium Chile Inc.
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For further information:
To find out more about Lithium Chile Inc., please contact Steven
Cochrane, President & CEO at [email protected] or Jeremy Ross, VP Business Development, at
(604) 537-7556 or via email: [email protected].
CO: Lithium Chile Inc.
CNW 07:00e 13-JUN-18