Pan American Lithium Corp. Announces Closure of Agreements to Acquire Additional Lithium Interests in Chile and Expiration of...
May 03 2012 - 8:35AM
Pan American Lithium Corp. (TSX-V:PL)
(OTCBB:PALTF)
("Pan American" or the "Company"),
www.panamericanlithium.com, today announces it has closed
agreements with Sociedad Gareste, Limitada ("Gareste") to acquire
interests in two lithium brine projects in Atacama Region III,
Chile.
The Company closed a definitive purchase agreement whereby Pan
American acquired mineral concessions totalling 4,200 hectares and
other rights at the Salar de Pedernales, and entered into a joint
venture agreement with Gareste at the Salar de Maricunga for
concessions totalling 1,220 hectares along with other rights. The
parties have put on hold negotiations for the Llanta aquifer
project also announced previously.
In connection with closing of the Pedernales acquisition, Pan
American is issuing 2 million shares of Pan American's common stock
(each, a "Share") to Gareste and is granting of a 2% NSR to
Gareste, capped at US$6 million, one-half of which can be
repurchased by Pan American for US$2 million prior to commercial
production. The proposed acquisition is between arm's length
parties and did not require shareholder approval from the
shareholders of Pan American.
The earn-in/joint venture agreement for Maricunga calls for Pan
American to perform certain tasks, issue common shares to Gareste,
and pay certain cash amounts to Gareste in order to obtain up to
80% of the project, as set forth in the following table:
MILESTONE |
CASH PAYMENT |
SHARES |
INCREMENTAL % INTEREST
EARNED |
Regulatory approval of Agreement |
|
200,000 |
|
One year from execution of
Agreement |
US$100,000 |
100,000 |
|
Two years from execution of
Agreement |
US$100,000 |
100,000 |
|
Three years from execution of
Agreement |
US$100,000 |
100,000 |
|
Delivery of scoping study |
|
100,000 |
10 |
Delivery of pre-feasibility study
("PFS") |
|
100,000 |
20 |
180 days after Delivery of PFS |
US$ 100,000 |
|
|
Delivery of bankable feasibility
study ("BFS") |
|
300,000 |
40 |
180 days after Delivery of BFS |
US$ 100,000 |
|
|
Receipt of actual funds from project
debt financing to build production facility based on BFS |
US$1 million |
1,000,000 |
10 |
TOTALS |
US$1.5 million |
2 million |
80 |
The Company can earn a 70% interest in Maricunga by delivering
the three studies, paying the first three cash payments and issuing
the Share as set out in the preceding tables. The Company has the
right to terminate the earn-in at any time at its sole discretion.
Pan American can earn a further 10% in the Maricunga project by
providing financing for the debt portion of the capital to build
the project, and an additional 6% of the project by providing
Gareste with a full carry through production. Gareste also was
granted a 2% NSR royalty capped at US$6 million, one-half of which
can be repurchased by Pan American for US$2 million prior to
commercial production. All Shares issued to Gareste will be subject
to a hold period in accordance with applicable securities laws.
Andrew Brodkey, CEO of Pan American, commented: "the Company is
pleased to close these important acquisitions of significant
properties at key salars in Chile. These transactions are part of
the Company's overall strategy to consolidate land positions at
salars with considerable potential for future brines projects. We
believe that the salars de Pedernales and Maricunga, the second and
third-largest salars in Chile, respectively, offer us this
opportunity."
In addition, the Company announces that the closing date of the
share option agreement dated December 18, 2009 with Escondidas
Internacional S.A. de C.V., a privately held Mexican corporation,
has lapsed as the parties have not signed an agreement to extend
the closing date.
In addition, the Company announces that it has terminated its
consulting agreement with Level 3 Capital Management Inc. ("Level
3"), in which Level 3 assisted the Company as a corporate finance
and strategic planning advisor.
The Company also announces, that it has retained Lexxus Capital,
Inc. ("Lexxus") through a consulting agreement under which Lexxus
will assist Pan American as a strategic planning advisor in
addition to services related to project negotiation, due diligence
and acquisitions. In consideration for these services, and
subject to approval by the TSX Venture Exchange (the "TSXV"),
the Company will pay $15,000 per month on a bi-monthly basis to
Lexxus, payable in Shares. The number of Shares to be issued to
Lexxus is determined by dividing: (a) $30,000 (for each bi-monthly
period); by (b) the closing price of the Shares on the last trading
day of each bi-monthly period, applying the maximum discount
allowable under TSXV policies. The Shares issued under the
agreement will be subject to a 4-month "Exchange Hold Period" in
accordance with the policies of the TSXV.
Pan American also announces that it has entered into a financial
consulting agreement with Zone Capital Partners, LLC ("Zone"), to
assist the Company as a financial advisor. For consideration
of these services the Company will pay $5,000 per month for the
term of this agreement and one million restricted common shares of
the Company. The Shares will be delivered to Zone on a
bi-monthly basis by dividing (a) $20,000 (for each bi-monthly
period); by (b) the closing price of the Shares on the Exchange on
the last trading day of each bi-monthly period, applying the
maximum discount allowable under TSXV policies. The Shares
issued under the agreement will be subject to a 4-month "Exchange
Hold Period" in accordance with the policies of the
TSXV.
Also, the Company has retained Sustentarse, via a consulting
agreement, as an in-country Chilean advisory. For
consideration of these services, the Company will pay $120.00 per
hour and grant fully-vested incentive stock options (the "Options")
to purchase 200,000 Shares for an exercise price of $0.07 per Share
for a period of ten years from the date of grant.
About Pan American:
Pan American has rights in ten lithium-bearing salars in Chile's
Atacama Region III covering cumulatively more than 19,000 hectares,
including the Laguna Verde surface brine lake.
On Behalf of the Board
PAN AMERICAN LITHIUM CORP.
/s/ Andrew Brodkey
Andrew A. Brodkey
President and CEO Tel: (520) 623-3090
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 the Company, such as the statements that: (i) These
transactions are part of the Company's overall strategy to
consolidate land positions at salars with considerable potential
for future brines projects and that the salars de Pedernales and
Maricunga offer us this opportunity. There are numerous risks and
uncertainties that could cause actual results and the Company's
plans and objectives to differ materially from those expressed in
the forward-looking information, including: (i) adverse market
conditions; (iii) a decrease in demand for and price of lithium;
(iv) the inability to obtain, or a change in local governmental or
regulatory approval or policies that may adversely affect the
exploration work; and (v) general uncertainties with respect to
mineral exploration in general. 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 they are made and are expressly qualified in their
entirety by this notice. Except as required by law, the Company
does not intend to update these forward-looking statements.
Neither 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.
CONTACT: Jodi Henderson, Corporate Secretary
1-520-989-0032
Email: jhenderson@kriyah.com
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