Nov 9 2017
Pure Energy Minerals Limited is pleased to announce that it has entered into an asset purchase agreement with Advantage Lithium Corp. (“Advantage”) and Nevada Sunrise Gold Corporation (“Nevada Sunrise”, together, the “Vendors”) to acquire the Clayton NE claim blocks located in Esmeralda County, Nevada (the “Acquired Claims”).
The Acquired Claims are contiguous with the northern portion of the Company’s Clayton Valley Project (“CV Project”) and to Albemarle Corporation’s (“Albemarle”) Silver Peak Operations, the only producing lithium brine mine in North America. Upon completion of the acquisition of the new claims, Pure Energy’s CV Project will cover approximately 26,050 acres (10,542 hectares). The acquisition is expected to close on or before November 30, 2017.
Highlights of the Transaction
- Pure Energy to acquire 1,450 acres (587 hectares) of unpatented claims.
- Advantage drilled 6 boreholes on the Clayton NE project during 2016 and 2017 over a strike length of 5.6 kilometers (3.5 miles), ranging in depth from 348 to 610 meters (1,142 to 2,000 feet).
- Drilling encountered several brine aquifer systems having average lithium grades of over 204 mg/L lithium, including samples as high as 322 mg/L lithium.
- The Vendors to convey 100% interest in the Acquired Claims, subject to a 3% gross over-riding royalty in favour of a prior owner.
- Pure Energy to issue a total of 7 million common shares (the “Consideration Shares”), 4.9 million to Advantage and 2.1 million to Nevada Sunrise.
- Vendors agree to restrict trading of the Consideration Shares for 18 months from closing, followed by quarterly releases of 25% at a time.
- Vendors further agree to vote in favour of all matters proposed by Pure Energy management before the shareholders for a period of 24 months from closing.
Patrick Highsmith, President and CEO of the Company, commented on the acquisition, “We are excited to add this high grade brine project onto Pure Energy’s exceptional land position surrounding North America’s only producing lithium mine. This land package is a natural fit with our current holdings. Based on Advantage’s excellent exploration results to date, the property holds great promise to add to our existing brine resource in the near-term. We also welcome Advantage and Nevada Sunrise as shareholders of our company. We believe this acquisition is a clear example of the growth potential that remains in Clayton Valley for Pure Energy. Soon the exploration drill will return to the project and we shall continue on our way toward validating the fastest, greenest, most efficient lithium process in the world.”
Pure Energy’s Vice President, Walter Weinig, remarked on the lithium content of the newly acquired properties, “The Advantage drilling encountered generally increasing lithium content with depth in the lower aquifer systems. In fact, the presence of over 260 mg/L lithium in the interpreted lower gravel aquifer is very consistent with the deep gravel aquifer system we see in our existing resource. What we are most excited about is that these results affirm the tendency for higher grades on the eastern side of the project as we prepare to test the new geophysical anomalies on the North Valley targets. ”
Summary of the Agreement
Pursuant to the Agreement, Pure Energy will issue to the Vendors an aggregate of 7,000,000 common shares (the “Consideration Shares”), with 4,900,000 Consideration Shares issuable to Advantage and 2,100,000 Consideration Shares issuable to Nevada Sunrise. In addition, in respect of certain of the Acquired Claims, Pure Energy has agreed to assume a 3.0% gross over-riding royalty granted in favour of a prior owner.
In addition to the statutory four-month hold period required, the Agreement further requires that the Vendors will not, directly or indirectly, sell or transfer any of the Consideration Shares except in accordance with a release schedule whereby 25% of the Consideration Shares may be sold after 18 months from closing, and a further 25% each 3 months thereafter. The Vendors have also agreed to vote the Consideration Shares at the Company’s shareholder meetings in favour of the certain matters recommended by management for a period of 24 months.
Completion of the acquisition of the Acquired Claims is subject to a number of conditions, including: completion of closing by November 30, 2017; and receipt of the approval of the TSX Venture Exchange on behalf of the Company and each of the Vendors. The Company and each of the Vendors are at arm’s length. No finder’s fees are payable in connection with the transaction.
Quality Assurance
Patrick Highsmith, Certified Professional Geologist (AIPG CPG # 11702), is a qualified person as defined by NI 43-101, and has supervised the preparation of the scientific and technical information in this news release. Mr. Highsmith is not independent of the Company as he is an officer and director.