Western Lithium to Purchase Royalties and Mineral Property Titles From Western Uranium
15 Diciembre 2010 - 8:20AM
Marketwired
Western Lithium USA Corporation ("Western Lithium" or "WLC") (TSX
VENTURE: WLC)(PINKSHEETS: WLCDF) and Western Uranium Corporation
("Western Uranium" or "WUC") (TSX VENTURE: WUC)(PINKSHEETS: WURNF)
have reached an agreement in principle for the purchase, by WLC, of
Western Energy Development Corporation ("WEDC"), a wholly-owned
subsidiary of WUC that holds royalties and titles for substantially
all of the Kings Valley mineral property holdings in Nevada. The
parties have agreed that WLC will pay to WUC Cdn$6.85 million in
WLC shares as consideration for the transfer of WEDC.
The transaction is designed to transfer all of the lithium
properties out of WUC's portfolio, and represents the culmination
of a spin-out process that started when WLC was initially formed as
a subsidiary of WUC. WUC will now be able to focus more fully on
growth through acquisitions and mergers, investments, and
exploration globally and with more of a diversified commodities
approach.
As a result of this transaction, the existing lease and royalty
arrangements between the two companies on the King's Valley
property, including a Net Smelter Return of 1.5% and Net Profits
Royalty of 3.5% on any lithium project that WLC developed, are
eliminated. 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 as described below,
thereby improving the corporate structure for WLC to develop its
Stage I lithium deposit. The agreement also eliminates the need for
continuing future lease payments by WLC of US$4 million.
Details of the Transaction
-- WLC will purchase 100% of the issued and outstanding shares of WEDC,
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, and the Treeline Uranium exploration project,
located in New Mexico, both of which are currently held by WEDC, will be
transferred out of WEDC before completion of the transaction.
-- 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 with WLC, 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 vote in
favour of any arm's length third party change of control transaction
proposed by WLC's management.
The transaction is subject to negotiation and settlement of
definitive agreements, the termination of the Strategic Alliance
Agreement, completion of due diligence by WLC and all requisite
third party approvals, including stock exchange and securities
approvals.
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 definitive agreements
governing 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, the relevant parties settling all
terms and conditions for applicable definitive agreements 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 Vice
President, Investor Relations +1-604-331-9842
info@westernlithium.com www.westernlithium.com Western Uranium
Corporation Pamela Klessig Chief Executive Officer +1-775-827-3311
info@westernuranium.com www.westernuraniumcorp.com
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