logo-loader

Barisan Gold set to acquire prime lithium properties and complete consolidation and fundraise

Last updated: 12:58 01 May 2017 BST, First published: 07:58 01 May 2017 BST

Nevada-1303617_1920
The Railroad Valley lithium property is in Nevada - a lithium hotspot

Barisan Gold Corporation (CVE:BG) told investors it would tomorrow (May 2) complete its acquisition of two prime lithium properties from operator DG Resource Management.

It will also complete the previously announced 1:5 share consolidation, and a $750,000 private placing to fund exploration there.

As revealed last July, the firm, which is changing its name to Lithion Energy Corp (CVE:LNC), said the Railroad Valley lithium property consists of 199 placer claims across 9,835 acres which together could make up a substantial lithium brine deposit analogous to the ones in nearby Clayton Valley in Nevada.

Clayton Valley has become a major area of activity in speculative lithium developments, given that it hosts the USA’s only producing mine, the Silver Peak mine owned by Albemarle Corp (NYSE:ALB).

The second project is the Black Canyon lithium property in Arizona which covers a lithium clay exploration target adjacent to an existing clay mine centred around the Lyles Hectorite deposit.

The clays produced from this deposit are reported to have high lithium content of 5,300 parts per million (ppm) Li2O with anomalous lithium values documented to the north and south.

Under the terms, Barisan will pay US$100,000 in cash and issue just under 21 mln shares to DG Resource Management. DG will retain a 2% net smelter royalty on both properties.

The group's share consolidation is on the basis of one postconsolidation share for every five preconsolidation shares and is aimed at increasing interest in a wider investor audience and better position it to obtain financing and pursue acquisitions.

Meanwhile, the placing sees the group issue 7.5 million units, on a postconsolidated basis, at 10 cents each for gross proceeds of $750,000.

Each unit consists of one share and one share purchase warrant, exercisable to acquire one share for two years at a postconsolidated price of 15 cents per warrant.

The company shall pay a finder's fee of $800 in connection with the private placement.

Shares fell over 16% to $0.025.