Advantage Lithium Corp. (TSXV:AAL) is pleased to announce it has entered into a letter of intent (“LOI”) with Orocobre Limited (“Orocobre”) – one of Argentina’s leading lithium producers – to acquire up to 75% of Orocobre’s Cauchari project and a 100% interest in five other lithium brine projects (the “Acquisition).
Advantage Lithium Corp. (TSXV:AAL) is pleased to announce it has entered into a letter of intent (“LOI”) with Orocobre Limited (“Orocobre”) – one of Argentina’s leading lithium producers – to acquire up to 75% of Orocobre’s Cauchari project and a 100% interest in five other lithium brine projects (the “Acquisition). This portfolio of projects, comprising a total of 85,543 ha, are located in the northern provinces of Jujuy, Salta and Catamarca in Argentina’s lithium triangle. Following completion of the Acquisition, Orocobre will own 40,622,200 common shares of the Company, with a minimum ownership of 31.12% of the outstanding common shares of Advantage Lithium (calculated on a fully-diluted basis post capital raising). Advantage Lithium will be the operator of the projects. Furthermore, a joint venture will be formed between Advantage Lithium and Orocobre for the Cauchari project, which hosts an inferred resource of 470,000 tonnes of lithium carbonate equivalent (LCE)* and 1.62 million tonnes of potash (KCL)* from the combined northern and southern resource (from 230 million cubic metres of brine at ~380 mg/l Li and 3,700 mg/l K and a large exploration target of 5.6mt to 0.25Mt of LCE and 19mt to 0.9 of KCL(1). Cauchari is located just 10-20 km south Orocobre’s flagship Olaroz Lithium Facility.
- Orocobre to own over 31% of Advantage Lithium, with share lock-up to apply post-closing. Upon closing, Orocobre will own approximately 31.1% of Advantage Lithium (on a fully-diluted basis post capital raising). A pooling agreement will be entered into between Orocobre and the Advantage Lithium insiders, pursuant to which the parties will agree not to sell their shares of Advantage Lithium for specified periods post-closing (subject to customary exceptions).
- Up to 75% Interest in Cauchari project, host to a significant lithium potash resource. Advantage Lithium will acquire an immediate initial 50% interest in the Cauchari project, with the option to increase to a 75% interest, upon incurring exploration expenditure of US$5m over 3 years or completion of a NI 43-101 feasibility study in that period.
- Joint Venture Partnership on Cauchari project, which lies just 20km from Orocobre production plant
- Potential for Offtake agreement. Orocobre will retain a 1% royalty on the Cauchari properties, and will have rights of first refusal on brine production (and may enter into an offtake agreement in respect of such brine production).
- 100% interest in five additional projects. Full portfolio comprises 85,543 ha land package in Argentina. Advantage Lithium will acquire Orocobre’s interest, and will be the Operator, in six lithium brine projects constituting 85,543 ha.in the northern provinces of Jujuy, Salta and Catamarca.
- Award-winning technical team. Advantage Lithium Technical team will be led by multiple award-winning geologist, Ross McElroy, together with, Callum Grant P. Eng, will work closely with Orocobre’s in-country team
- Advantage Lithium Financing: The Company will conduct an equity financing to raise gross proceeds of not less than US$15,000,000 to a maximum of US$25,000,000 to maintain and advance the projects.
- Upon closing, Orocobre will have the right to nominate two nominees to the Board of Advantage Lithium, which will then be comprised of six members.
David Sidoo, President and CEO, of Advantage Lithium, commented, “This agreement creates an exploration company in Argentina without peer. Argentina is part of the Lithium Triangle, home to over 70 percent of the world’s known reserves and Orocobre is not only one of the country’s leading producers, it is one of the largest producers in the world. The deal will combine our technical excellence and ability to raise capital, with access to Orocobre’s large in-country operations team. For Advantage Lithium shareholders, this agreement represents incredible value, including an unrivalled project portfolio and a genuine partnership with one of the world’s top lithium producers.”
Richard Seville, CEO and Managing Director, of Orocobre, said, “Partnering with Advantage Lithium will see the high potential assets in our exploration portfolio developed and advanced without the need for any further capital from Orocobre shareholders. In addition, this will allow Orocobre’s management and technical teams to focus on the optimization and further expansion of our Olaroz lithium production facility. Our decision to enter this agreement speaks to the high regard with which we hold the Advantage Lithium team at both the Board and technical level and we look forward to working closely with them.“
Read the full press release.
Connect with Advantage Lithium Corp. (TSXV:AAL) to receive an Investor Presentation.