Ultra Lithium Inc announced that it has signed a binding term sheet to sell its Laguna Verde lithium-brine project in Argentina to Australian Stock Exchange-listed Power Minerals Limited, in consideration for up to 50 million Power Minerals shares.
The exploration and development company said the term sheet, which is subject to 21 days of technical and financial due diligence, would involve Power Minerals issuing 25 million of its ordinary shares to Ultra Lithium plus 25 million performance rights that are convertible into Power Minerals ordinary shares.
The company noted the performance rights are subject to the definition of a JORC Mineral Resource of two million tonnes at greater than or equal to 350 parts per million (ppm) lithium carbonate equivalent (LCE) at the Laguna Verde properties within six months, and based on drilling results already conducted by Ultra Lithium in late 2022 and early 2023.
“We look forward to jointly exploring and developing the Laguna Verde project with Power Minerals,” Ultra Lithium CEO Weiguo Lang said in a statement.
“It is the best solution for the company to develop its lithium brine projects under the current geopolitical conditions.”
The company added that shares issued to Ultra Lithium from both tranches will be subject to a one-year voluntary escrow.
As well, Power Minerals will provide a secured convertible loan for working capital, secured by Ultra Lithium’s Argentinian lithium-brine projects, in the amount of A$1.13 million to facilitate the transaction, the company said.
Ultra Lithium noted that the principal amount of the loan is convertible, at the option of Power Minerals, to common shares of Ultra Lithium at the lowest price per share allowable under the rules of the TSX Venture Exchange.
Furthermore, the company stated that the outstanding loan balance may also be deducted from the number of shares to be issued to Ultra Lithium as consideration for the Laguna Verde properties at a deemed price of $0.35 per share.
In the event the proposed transaction does not proceed, the loan will be fully repayable to Power Minerals on demand, Ultra Lithium said.
The Laguna Verde brine lithium properties cover 8,168 hectares of mines and about 260,000 hectares of other exploration claims in Catamarca Province of Argentina, located in the Lithium Triangle, which hosts the world’s largest lithium brine operations.
Ultra Lithium is an exploration and development company with a focus on the acquisition and development of lithium, gold, and copper assets.
The company holds a brine lithium property in Argentina, hard rock spodumene type lithium properties at the Georgia Lake/Forgan Lake area in northwestern Ontario, and a brine lithium property in the Big Smoky Valley, Nevada. Ultra Lithium also holds other gold and base metals properties in Argentina.
Contact Sean at sean@proactiveinvestors.com