Provides Update on Spin-Out of Copper Subsidiary
Wealth Minerals Ltd. (the “Company” or “Wealth”) – (TSXV:WML; OTCQX:WMLLF; SSE:WMLCL; Frankfurt:EJZN) announces a conference call with management to discuss the Company’s current operations, recently announced news on Atacama and the National Mining Company of Chile (“ENAMI”), and future development plans.
The call will be hosted by Hendrik Van Alphen (CEO) and Tim McCutcheon (President) on Tuesday, April 9th, 2019 at 1:15 pm Pacific Standard Time (4:15 pm Eastern Standard time). Dial‑in numbers are as follows:
Dial-In (Toll-Free US & Canada): +1 866-373-3402
Dial-In (International): +1 201-689-7825
There is no access code.
Webcast URL (archived for 6 months):
Copper Spin-out Update
Wealth previously announced the spin-out of its newly-formed copper subsidiary (see news release dated December 4, 2018). As initially announced, Wealth intended to spin-out to shareholders its ownership interest in a wholly-owned, British Columbia subsidiary, Wealth Copper Inc. (“Wealth Copper”) in the spring of 2019, with the intent of listing Wealth Copper on the TSX Venture Exchange (the “TSXV”). Wealth’s management has subsequently determined that it is in the best interests of the Company to delay the spin-out of Wealth Copper to a future date for various reasons, including the time and expense of obtaining the requisite court approval for the proposed arrangement needed to distribute the shares of Wealth Copper to shareholders of the Company in the United States.
Henk Van Alphen, Wealth’s CEO, said, “When initially proposed, the copper spin-out opportunity was identified as having tremendous potential to provide value to shareholders. Given the cost and time involved, management is now of the opinion that greater value to shareholders can be achieved by Wealth maintaining an interest in Wealth Copper and participating in the future exploration and possible development of the Escalones and Cristal projects.”
In connection with the decision to delay the spin-out of Wealth Copper, Wealth has entered into an amended and restated letter of intent (the “Amended TMI LOI”) with TriMetals Mining Inc. (“TMI”) that replaces a previous letter of intent dated November 30, 2018. Under the terms of the Amended TMI LOI, Wealth, through Wealth Copper, would acquire 100% of TMI’s interest in and to the mineral exploitation and exploration concessions and related assets and liabilities that comprise the Escalones copper-gold porphyry project (the “Escalones Project”) covering an area of 161 km2 located 97 km southeast of Santiago, Chile (the “Escalones Transaction”). As consideration, Wealth Copper would deliver 25 million common shares in the capital of Wealth Copper (each, a “Wealth Copper Share”) to TMI and make certain cash payments to TMI. The 25 million Wealth Copper Shares held by TMI, together with the 25 million shares that Wealth would hold, would collectively represent 100% of the issued and outstanding Wealth Copper Shares (a total of 50 million), excluding any Wealth Copper Shares issued in connection with the Concurrent Financing (as defined below). The parties have agreed that TMI’s ownership interest in the Resulting Issuer will not be less than 30% immediately after giving effect to the Going-Public Transaction and the Concurrent Financing.
It is a condition of the closing of the Escalones Transaction that Wealth Copper will have entered into a letter of intent with a TSXV listed issuer (“ListedCo”; and after the closing of the Going-Public Transaction, the “Resulting Issuer”) in respect of a reverse takeover transaction (the “Going-Public Transaction”), whereby ListedCo will acquire all of the issued and outstanding Wealth Copper Shares by way of amalgamation, share exchange, arrangement or similar transaction and continue the business of Wealth Copper in exchange for the issuance of common shares in the capital of ListedCo to the Wealth Copper shareholders on a one (1) for one (1) basis. It is also the intention of the parties that concurrently with or prior to the closing of the Going-Public Transaction, private placement financings by either Wealth Copper and/or ListedCo will be completed in the aggregate amount of at least CAD $5,000,000 (the “Concurrent Financing”).
Under the terms of the Amended TMI LOI, Wealth Copper would be required to make the remaining payments outlined below to exercise an option on 19 exploitation concessions that comprise 46 km2 of the Escalones Project which are the subject of an option agreement dated February 26, 2004, as amended on June 23, 2017, entered into by a wholly-owned subsidiary of TMI (“TMI Chile”), with a third party vendor for a 100% interest in and to the concessions as follows:
|June 30, 2019||$400,000|
|June 30, 2020||$500,000|
|June 30, 2021||$500,000|
|June 30, 2022||$3,000,000|
|Total Remaining Payments||$4,400,000|
In addition to the CAD $150,000 deposit paid to TMI under the initial letter of intent, Wealth Copper would be required to make cash payments to TMI of CAD $350,000 upon the closing of the Concurrent Financing; and make an additional cash payment of CAD $500,000 at the 12-month anniversary of the closing of the Concurrent Financing. TMI will also be granted the right to participate in certain future equity financings to allow TMI to maintain its pro rata ownership interest in the equity capital of the Resulting Issuer. Additionally, for so long as Wealth and TMI holds at least 20% of the issued and outstanding shares of the Resulting Issuer, each of Wealth and TMI will have the right to nominate one (1) director to the board of directors of the Resulting Issuer.
The Escalones Transaction is subject to certain conditions, including (i) the completion of the Concurrent Financing, (ii) satisfactory completion of due diligence by Wealth and TMI, (iii) the approval of the Toronto Stock Exchange (the “TSX”) and the TSXV, as applicable, and (iv) the approval of the board of directors of each of Wealth and TMI and their Chilean subsidiaries.
Wealth also announces that, through Wealth Copper, it has entered into a definitive assignment and assumption agreement (the “Assignment Agreement”) with New Energy Metals Corp. (“ENRG”), whereby ENRG and its wholly-owned Chilean subsidiary (“ENRG Chile”) will assign and transfer to Wealth Copper all of its rights, title, benefit and interest in and to a unilateral option to purchase mining concessions agreement dated August 4, 2017 (the “Cristal Option Agreement”) and the option thereunder (the “Cristal Option”) to acquire a 100% interest in and to the mineral exploitation concessions comprising the Cristal copper project, located in Region XV of Arica and Parinacota, Chile (the “Cristal Project”). In consideration for the assignment under the Assignment Agreement, Wealth Copper will deliver to ENRG 50,000 fully-paid and non-assessable common shares in the capital of Wealth and if Wealth Copper exercises the option under the Cristal Option Agreement, grant to ENRG Chile an initial 30% participating interest in the Cristal Project (and the resulting joint venture), with Wealth Copper holding the remaining 70% interest in the Cristal Project. Pursuant to the Assignment Agreement, Wealth Copper has also agreed to assume the obligations and liabilities of ENRG under the Cristal Option Agreement, including making the remaining payments outlined below to exercise the Cristal Option for the Cristal Project in full:
|February 4, 2019||$50,000 (paid)|
|August 4, 2019||$200,000|
|August 4, 2020||$500,000|
|August 4, 2021||$700,000|
|August 4, 2022||$3,000,000|
|Total Remaining Payments||$4,450,000|
Wealth will be responsible for all exploration costs and activities during the Cristal Option period. There are no minimum exploration commitments during the Cristal Option period. ENRG has agreed to deal exclusively with Wealth during the due diligence period. The underlying owner of the Cristal Project retains a 3% net smelter returns (“NSR”) royalty, in respect of which Wealth Chile would have the right of first offer to buy 2% of the NSR royalty for the price of at least USD $2 million per percent point, if the underlying owner decided to sell, assign, transfer or dispose of the NSR royalty by. In addition, there is also an existing 1% NSR royalty in favour of Condor Resources Inc. that can be repurchased in its entirety upon a payment of USD $1,000,000.
About Wealth Minerals Ltd.
Wealth is a mineral resource company with interests in Canada, Mexico, Peru and Chile. The Company’s main focus is the acquisition and development of lithium projects in South America. To date, the Company has positioned itself to develop the Atacama Project alongside existing producers in the prolific Atacama region, where the Company has a substantial licenses package. The Company has also positioned itself to play a role in asset consolidation in Chile with various lithium properties throughout the country.
Lithium market dynamics and a rapidly increasing metal price are the result of profound structural issues with the industry meeting anticipated future demand. Wealth is positioning itself to be a major beneficiary of this future mismatch of supply and demand. The Company also maintains and continues to evaluate a portfolio of precious and base metal exploration-stage projects.
On Behalf of the Board of Directors of
WEALTH MINERALS LTD.
“Hendrik van Alphen”
Hendrik van Alphen
Chief Executive Officer
|For further information, please contact:||Marla Ritchie|
|Phone: 604-331-0096 Ext. 3886 or 604-638-3886|
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 news release.
Cautionary Note Regarding Forward-Looking Statements
This news release and the investor conference call contains or will contain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian and U.S. securities legislation, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein or in the investor conference call including, without limitation, anticipated exploration program results from exploration activities, the Company’s expectation that it and Wealth Copper will be able to complete the Escalones Transaction and the Going-Public Transaction or enter into agreements to acquire interests in additional mineral properties, including the definitive agreements with respect to the Amended TMI LOI, anticipated future dealings with ENAMI, the discovery and delineation of mineral deposits/resources/reserves, the closing and amount of the Concurrent Financing, and the anticipated business plans and timing of future activities of the Company and Wealth Copper, are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: “believes”, “expects”, “anticipates”, “intends”, “estimates”, “plans”, “may”, “should”, “would”, “will”, “potential”, “scheduled” or variations of such words and phrases and similar expressions, which, by their nature, refer to future events or results that may, could, would, might or will occur or be taken or achieved. In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, that it will be able to negotiate and enter into the definitive agreements for the acquisition of the Escalones Project and the Going-Public Transaction, and that it will obtain TSX and TSXV acceptance and the required corporate approvals of same, that there will be investor interest in the Concurrent Financing, market fundamentals will result in sustained lithium, vanadium and precious metals demand and prices, the receipt of any necessary permits, licenses and regulatory approvals in connection with the future development of the Company’s Chilean projects in a timely manner, the availability of financing on suitable terms for the development, construction and continued operation of the Company’s projects and the Company’s ability to comply with environmental, health and safety laws.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and Wealth Copper to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Such risks and other factors include, among others, operating and technical difficulties in connection with mineral exploration and development activities, actual results of exploration activities, including on the Escalones Project and the Cristal Project, the estimation or realization of mineral reserves and mineral resources, the fact that all or some of the Company’s interests in the Escalones Project and the Cristal Project are only options and there is no guarantee that such interests, if earned, will be certain, the timing and amount of estimated future production, the costs of production, capital expenditures, the costs and timing of the development of new deposits, requirements for additional capital, future prices of lithium and copper, changes in general economic conditions, changes in the financial markets and in the demand and market price for commodities, lack of investor interest in the Concurrent Financing, accidents, labour disputes and other risks of the mining industry, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, changes in laws, regulations and policies affecting mining operations, title disputes, the inability of the Company, Wealth Copper, TMI, ListedCo and ENRG as applicable, to obtain any necessary permits, consents, approvals or authorizations, including acceptance by the TSX and TSXV, as applicable, required for the filing of the definitive agreements for the Escalones Transaction, the Concurrent Financing, the Going-Public Transaction and the Assignment Agreement, the timing and possible outcome of any pending litigation, environmental issues and liabilities, and risks related to joint venture operations, and other risks and uncertainties disclosed in the Company’s latest interim Managements’ Discussion and Analysis and filed with the Canadian Securities Authorities. All of the Company’s Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company’s mineral properties.
Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to update any of the forward-looking statements in this news release or incorporated by reference herein, except as otherwise required by law.