Western Lithium Finalizes Agreement for Purchase of Royalties and Mineral Property Titles From Western Uranium
February 07 2011 - 6:58PM
Marketwired
Western Lithium USA Corporation (TSX: WLC)(OTCQX: WLCDF) ("Western
Lithium" or "WLC") and Western Uranium Corporation (TSX VENTURE:
WUC)(PINK SHEETS: WURNF) ("Western Uranium" or "WUC") have entered
into a definitive agreement for the sale by WUC to WLC, of the
royalties and titles constituting substantially all of the Kings
Valley mineral property holdings in Nevada, initially announced
December 15, 2010.
The transaction transfers all of the lithium properties out of
WUC's portfolio and eliminates the existing lease and royalty
arrangements between the two companies on the Kings Valley
property, including a Net Smelter Return of 1.5% and Net Profits
Royalty of 3.5% on any lithium and related byproducts. WLC gains
full control of the Kings Valley property claims, excluding the
Albisu gold exploration target noted below and a proposed royalty
to be granted to Cameco Global Exploration II Ltd. ("Cameco")
solely in respect of uranium, also as described below.
Details of the Transaction
-- The definitive agreement structures the transaction as an asset
purchase, whereby WLC will purchase all unpatented minerals claims that
constitute the property, thereby acquiring all of WUC's direct and
indirect interest in the Kings Valley mineral property, including
mineral titles, leases, data and royalties. The Albisu gold property,
located at the northern end of the Kings Valley property is excluded
from the transaction; however WLC retains lithium development rights on
these claims and a right of first refusal on any future disposition by
WUC of these claims.
-- The purchase price will be Cdn$6.85 million, to be paid through the
issue by WLC of 5,855,000 WLC common shares at a deemed price of
Cdn$1.17.
-- WUC's Strategic Alliance with Cameco, related to the exploration and
development of uranium properties, will be concluded as a related part
of the transaction, for consideration of Cdn$2.5 million to be paid by
WUC to Cameco and the grant to Cameco of a 20% gross overriding royalty
over the Kings Valley mineral property solely in respect of uranium.
-- As part of the transaction, WUC has agreed to dispose, in due course, of
its common shares in the capital of WLC following completion of the
transaction in one or more block trades or off-market transactions until
it is no longer an insider (ie. holds less than 10% of outstanding
shares), and until it completes such disposition to refrain from voting
against management nominees to the WLC board of directors and to not
vote against any arm's length third party transaction proposed by WLC's
management.
The transaction is subject to stock exchange approvals and other
conditions, and is expected to close by the end of February.
Western Lithium is developing the Kings Valley, Nevada lithium
deposit into potentially one of the world's largest(1) strategic,
scalable and reliable sources of high quality lithium carbonate.
The Company is positioning itself as a major U.S.-based supplier to
support the rising global demand for lithium carbonate that is
expected from the increased use of hybrid/electric vehicles.
Western Uranium Corporation is a mineral exploration company
with properties in Argentina, Nevada, and New Mexico and an earn-in
agreement with Renaissance Gold Inc. (formerly AuEx Ventures, Inc.)
for the Baza gold-copper project in Spain. The Company has its head
office in Vancouver, Canada; its executive management team is based
in Reno, Nevada.
(1) Western Lithium has completed National Instrument 43-101 resource
estimates on two portions of the property, one of which is envisioned
for the initial stage of mine development. These resources cover part of
the mineralization from a historical estimate of 11 million tonnes of
lithium carbonate equivalent (LCE) prepared by Chevron Resources Corp.
in the 1980s that encompasses all of the King's Valley lithium lens
deposits identified to date, and ranks in size behind deposits in
Bolivia (47 million tonnes LCE), Chile (37 million tonnes LCE), North
Carolina (14 million tonnes LCE) and the DRC (12 million tonnes LCE).
Source: R. Keith Evans, 2010; Roskill Information Services Ltd., 2009;
and Company disclosures. A qualified person has not done sufficient work
to classify the historical estimate as current mineral resources under
National Instrument 43-101. The Company is not treating the historical
estimate as current mineral resources and the historical estimate should
not be relied upon.
Forward-Looking Statements
Certain of the statements made and information contained herein
is "forward-looking information" within the meaning of the Ontario
Securities Act, including the completion of the transaction noted
above and settling of all other outstanding conditions for
completion of the transaction. Forward-looking information is
subject to a variety of risks and uncertainties which could cause
actual events or results to differ from those reflected in the
forward-looking information, including obtaining regulatory
approval, and other risks and uncertainties, including those
described in each management discussion and analysis.
Forward-looking information is in addition based on various
assumptions including, without limitation, the expectations and
beliefs of management. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in the forward-looking information. Accordingly, readers are
advised not to place undue reliance on forward-looking information.
The companies do not have a policy of updating forward-looking
information, except to the extent required by applicable securities
laws.
The TSX Venture Exchange has neither approved nor disapproved of
the contents of this press release. 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 press
release.
Contacts: Western Lithium USA Corporation Cindy Burnett Investor
Relations +1-604-331-9842 info@westernlithium.com
www.westernlithium.com Western Uranium Corporation Richard Roy
Investor Relations +1-604-669-6446 +1-604-488-0319 (FAX)
info@westernuranium.com www.westernuraniumcorp.com
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