Ultra Lithium Inc revealed that it has successfully closed the sale of a 60% interest in the company’s Georgia Lake and Forgan Lake properties in northern Ontario to Yahua International Investment and Development Company Limited as a follow-up to the sale and joint venture (JV) agreement first announced on April 20 this year.
Under the agreement, Ultra Lithium received payments totaling $5 million from Yahua for a 60% interest in the company’s subsidiary which holds the northern Ontario properties. The Vancouver-based exploration and development company also said the JV, with Yahua holding a 60% and Ultra Lithium holding a 40% interest, has been formed.
In a statement, Ultra Lithium CEO Dr Weiguo Lang said: “We are very excited about this agreement which will not only provide financial strength to the company but also will bring opportunities for the northwestern Ontario lithium exploration projects.”
READ: Ultra Lithium enters joint venture with Yahua and announces private placement
He added: “We want to closely work with the local communities to develop the Georgia Lake/Forgan Lake properties with financial backing of a large lithium producer. Now that Yahua’s acquisition of a 60% interest in the northern Ontario properties has been completed Yahua will invest $3 million into the JV company for exploration expenditures. The company looks forward to embarking on its spring/summer 2022 exploration program.”
The Joint Venture
Under the agreement, Ultra Lithium will continue to pursue acquisition opportunities to increase high-quality hard-rock lithium resources with lithium-bearing pegmatites and continue to explore and discover more lithium resources in Canada for the JV company.
The JV’s board will have five members, three of whom will be nominated by Yahua and two by Ultra Lithium. The JV senior executives will be appointed by the board and the JV will run in line with the terms of the Shareholders Agreement, said the company.
According to the firm, the parties must retain their equity positions in the JV which prohibits dilution until the start of commercial production. International Lithium Corp (TSX-V:ILC). will retain its 1.5% Net Smelter Return (NSR) on the Forgan Lake claims.
Forgan Lake
The Forgan Lake property consists of 256 hectares in 20 mining claims located in the Thunder Bay Mining District in northwestern Ontario. It is adjacent to the north of Ultra Lithium’s Lucky Lake claim block comprised of 15 mining claims. The firm plans to start a summer 2022 work program on Forgan Lake which will include surface sampling and ground geophysical surveying. A drill program will start as soon as permitting and community consultation is completed, said the company.
Highlights
- Lithium mineralization is comprised of six spodumene-bearing pegmatites
- Three 2019 grab samples showed lithium values of 6.93% Li2O, 6.90% Li2O and 4.88% Li2O
- Historical exploration in the 1950s included 39 drill holes, aggregating 10,561 feet
Georgia Lake
The Georgia Lake property consists of 88 mining claims in the Thunder Bay Mining Division, in northwestern Ontario. The company is planning a 2,000-meter (m) drill program at Georgia Lake to kick off in late May. The company said it is in the process of engaging a drilling contractor.
Highlights
- Drilling permit has been received
- Geophysical survey completed in winter 2021
- Trenching completed winter 2021
Founded in 1952, the Yahua group is one of the earliest chemical companies established after the founding of the People’s Republic of China.
Ultra Lithium is focused on the acquisition and development of lithium, gold, and copper assets. It holds a brine lithium property in Argentina, lithium properties in northwestern Ontario and a brine lithium property in the Big Smoky Valley, in Nevada. It also holds gold and base metals properties in Argentina.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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