Power Metals Corp. and Mgx Minerals Inc. Form Accretive Partnership over Lithium Portfolio
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POWER METALS CORP. AND MGX MINERALS INC. FORM ACCRETIVE
PARTNERSHIP OVER LITHIUM PORTFOLIO
VANCOUVER, BRITISH COLUMBIA – (August 2nd, 2017) ‐ Power Metals Corp. ("Power Metals
Corp." or the "Company") (TSX VENTURE:PWM)(FRANKFURT:OAA1) is pleased to announce it
has entered into a Binding Letter of Intent (the “LOI”) with MGX Minerals Inc. (“XMG”), dated
July 27th, 2017 to acquire certain interests held by the Company in exchange for common
shares in the capital of XMG (the “Proposed Transaction”).
The Proposed Transaction terms are as follows:
XMG will acquire all of the Company's current U.S. Petrolithium Brine assets (listed below).
XMG will take a 20 percent working interest in all of the Company's current hard rock assets (listed below)
and any future assets that the Company acquires for the following 36 months.
XMG will have the right to purchase an additional 15 percent working interest of the Company’s hard rock
assets for a period of 36 months for a total of C$10,000,000.
XMG will receive a call option to purchase up to 10,000,000 common shares of PWM at a price of C$0.65
per share for a period of 36 months.
XMG will pay to PWM 3,000,000 common shares of XMG. These shares will be restricted and subject to a
1/3 release every 5 months from the signing of the definitive agreement.
The Transaction terms are subject to amendment based on tax and legal advice, and that the
Parties agree to work together in good faith to negotiate and settle the final terms of the
Transaction to be incorporated into the Definitive Agreements.
The LOI provides for an exclusive dealing period (the “Exclusivity Period”) commencing on
acceptance of the LOI and ending on the date of closing of the Definitive Agreements, unless
otherwise extended by the Parties. During the Exclusivity Period: (i) the Parties will continue
their due diligence investigations in respect of each other, as applicable, and their respective
businesses, operations, assets, financial condition and affairs; (ii) the Parties will proceed with
the negotiation and settlement of the terms of the binding Definitive Agreements in respect of
the Transaction; and, (iii) the Parties will cooperate in making application and providing all
necessary information to the TSX Venture Exchange (“TSXV”) and the Canadian Securities
Exchange in order to obtain pre‐clearance of the Transaction and all matters related thereto.
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Johnathan More, Chairman of Power Metals states, "We are pleased to have signed this deal
with MGX Minerals, unquestionably the leader in the petrolithium space. Aligning ourselves to
participate in the evolution of the new energy industry, our shareholders will be best served
with our asset package being shepherded by MGX. At the technical forefront of the lithium
industry, MGX’s drive and domain expertise have the potential to drive value for related
participants. This partnership allows PWM to focus on its marquee Case Lake hard rock
pegmatite asset with drilling commencing in the coming days followed by metallurgy work by
MGX using its new technology applied to our lithium hard rock prospect. Additionally, our
shareholders will continue to benefit and see potential upside in these petrolithium assets being
run by MGX through the large share position PWM will own in their company".
PWM U.S. Petrolithium Properties:
Paradox Basin, Utah
PWM has an executed joint venture with American Potash Corp., ("AMP") to explore and
develop lithium brines totaling 13,520 acres of prime ground. AMP’s US Federal lithium claims
and Utah state lithium leases cover known brine‐hosting clastic stratigraphy in the Paradox
Formation.
Coyote Project – Lisbon Valley, Utah
The Project includes 150 placer mineral claims covering an area of 3,000 acres and inclusive of
lithium brine mineral rights, on trend and adjoining to the north, the Lisbon Valley oil and gas
field, where historic lithium brine content has been reported as high as 730 parts per million
lithium (Superior Oil 88‐21P). The Lisbon Valley oil and gas field is located approximately 40
miles southeast of Moab, Utah in the salt anticline belt on the southwest edge of the Paradox
Basin in San Juan county. The oilfield was first discovered by Pure Oil Company in 1960. The
Lisbon field produces oil and gas from the southwest flank of a faulted anticlinal trap in the
Devonian sandstones and Mississippian limestones (Segal et al., 1986).
PWM Hard Rock Properties:
Case Lake
Case Lake spodumene pegmatite swarm is located 80 km east of Cochrane, northeastern
Ontario. Case pegmatite swarm consists of five dykes exposed on surface: North, Main, South,
East and Northeast Dyke. North, Main and Northeast Dykes contain spodumene. North Dyke
has > 100 m strike length, Main Dyke has > 350 m strike length and the Northeast Dyke has > 75
m strike length. Power Metals summer 2017 exploration program on the Case Lake Property
will consist of ~6000 m of drilling of approximately 30 drill holes. The drilling will target the
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North and Main Dykes to define the pegmatite and lithium mineralization and to extend the
dykes to the east and west along strike and down dip. There is 100 m of surface exposed strike
length for the Main Dyke that has not yet been drill tested. The Company will also test the
possibility that the Main Dyke is actually two parallel pegmatite dykes not just one dyke. Since
the pegmatite dykes within the Case Lake pegmatite swarm are parallel to each other, there is
potential to find additional buried dykes at depth.
Paterson Lake
The Paterson Lake Property is located 75 km north of Kenora, northwestern Ontario in Paterson
Lake. The Property is composed of 7 mining claims, 68 claim units totaling 1088 ha and is
approximately 7 km by 2.5 km in size. The project is proximal to Avalon's Big Whopper
pegmatite which is located about 3 km west of the western claim block. The mineralization has
a strike length of 600m to a maximum vertical depth of 250m.
Gullwing ‐ Tot Lake
The Gullwing ‐ Tot Lake Property is located 30 km northeast of Dryden, northwestern Ontario in
Webb and Drope townships. The Property is composed of 10 mining claims, 103 claim units
totaling 1648 ha and is approximately 10 km by 1.5 km in size. The Gullwing ‐ Tot Lake
pegmatites are located 13 km northeast of International Lithium Corp's Mavis Lake ‐ Fairservice
pegmatites. International Lithium's partner Pioneer Resource Limited completed 12 drill holes
totaling 1,305 m on March 2, 2017 on the Mavis Lake Property with drill highlights of 1.47 %
Li2O over 17.9 m and 1.70 % Li2O over 26.3 m (International Lithium, press release dated April
11, 2017).
Larder River
Larder River is hosted by the same South Mountain Batholith as Brazil Lake (Larder is in the
center of this batholith and Brazil Lake is at the south end). Larder River has, at surface,
extrusion of light coloured granite rock just like Brazil Lake. These granites host pegmatite dikes
at Brazil Lake which contain high grade Lithium, Tantalum and Rubidium. A core drilling
program of 28 holes in 2011 at Brazil Lake encountered extensive Li2Omineralization.
Completion of the Proposed Transaction is subject to a number of conditions including, but not
limited to completion of satisfactory due diligence, the negotiation and execution of a definitive
agreement and the receipt of applicable regulatory approvals, including the approval of the
Canadian Securities Exchange (“CSE”) and the TSX Venture Exchange (“TSXV”).
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Qualified Person
Julie Selway, Ph.D., P.Geo. supervised the preparation of the scientific and technical disclosure
in this news release. Dr. Selway is a Qualified Person ("QP") as defined by National Instrument
43‐101. Dr. Selway is supervising the exploration program at Case Lake and has previously
worked on the Paterson Lake and Gullwing‐Tot Lake pegmatites. Dr. Selway completed a Ph.D.
on granitic pegmatites in 1999 and worked for about 3 years as a pegmatite geoscientist for the
Ontario Geological Survey. Dr. Selway also has twenty‐three scientific journal articles on
pegmatites. National Instrument 43‐101 reports have not been prepared on these properties
with the exception of the Case Lake property filed July 18, 2017.
About Power Metals Corp.
Power Metals Corp. is a diversified Canadian mining company with a mandate to explore,
develop and acquire high quality mining projects for minerals contributing to power. We are
committed to building an arsenal of projects in both lithium other and clean power fuels. We
see an unprecedented opportunity to supply the staggering growth of the lithium battery
industry. Learn more at www.powermetalscorp.com
ON BEHALF OF THE BOARD,
Johnathan More
Johnathan More, Chairman
None of the TSX Venture Exchange, the CSE nor their Regulation Service Providers (as that term
is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or
accuracy of this release. No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
Power Metals Corp.
Johnathan More
Chairman
646‐661‐0409
Cautionary Note Regarding Forward‐Looking Information
This press release contains projections and forward‐looking information that involve various risks and uncertainties
regarding future events. Such forward‐looking information can include without limitation statements based on
current expectations involving a number of risks and uncertainties and are not guarantees of future performance
of Power Metals such as that the transaction described in the LOI will be completed. There are numerous risks and
uncertainties that could cause actual results and Power Metals’ plans and objectives to differ materially from those
expressed in the forward‐looking information, including other factors beyond Power Metals’ control. Actual results
and future events could differ materially from those anticipated in such information. These and all subsequent
written and oral forward‐looking information are based on estimates and opinions of management on the dates
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they are made and are expressly qualified in their entirety by this notice. Except as required by law, Power Metals
assumes no obligation to update forward‐looking information should circumstances or management’s estimates or
opinions change.