Cypress Development Corp. ("Cypress" or the "Company") ") is pleased to announce that it has executed a definitive Option Agreement governing the Company's Clayton Valley, Nevada Project ("Cypress Property" or "the Property"), subject to TSX Venture Exchange (the "Exchange") acceptance. The new Option Agreement grants Pure Energy Minerals the right to acquire up to 70% undivided interest in the 1,520-acre package of Federal mineral claims. The Cypress Property adjoins Pure Energy's Clayton Valley South (CVS) Lithium Brine Project on the eastern side of the valley.
Pure Energy's Clayton Valley South Project & Cypress' Project, Nevada map:
Cypress' geological team has conducted considerable exploration on the Property during 2016, reporting lithium values as high as 2,600 ppm in rock samples (See Cypress news releases dated Feb. 22, May 10, 2016). The Cypress claims encompass a large area of these lithium-enriched rocks. The optioned claims also include a strip of prospective Clayton Valley basin, along a major structural zone immediately east of Pure Energy's northern resource area. Cypress has already received an approved Notice of Intent from the Bureau of Land Management (BLM) that will facilitate exploration drilling on the Property.
In order to fully exercise the two-stage option, Pure Energy is to make the following cash and share payments and associated exploration investments in the Property:
- Cash and share payments of US $75,000 and 350,000 shares within five business days of the date of Exchange acceptance for the agreement;
- Exploration expenditures of at least US $300,000 before the first anniversary;
- Cash and share payments of US $100,000 and 750,000 shares on or before the first anniversary;
- Additional exploration expenditures of US $500,000 before the second anniversary;
- Partial vesting of 51% undivided interest is reached upon satisfaction of the above;
- An additional 1 million shares and US $1 million of exploration expenditures before the fourth anniversary to complete vesting at 70%.
Donald Huston, President, Cypress Development Corp commented, "Cypress is excited and very pleased to have our land position in Clayton Valley recognized as a value add to both companies through this Option Agreement with Pure Energy Minerals. Cypress already has Federal permits in place, so the Clayton Valley Lithium Property offers an immediate opportunity to drill for additional lithium resources. Planning for the field program is well advanced, and we should see field crews mobilizing for a systematic sampling program in the next two weeks. We look forward to working with and utilizing the geological expertise of the Pure Energy team."
The Property is currently held in good standing under option by Cypress from a private party. The underlying option includes a provision for a 3% royalty on future lithium production from the Property, of which a 2% royalty may be purchased by Cypress for the sum of US$1,000,000. The parties have acknowledged in the agreement that Cypress will be responsible for meeting the share and cash requirements of that underlying option agreement. Under the Option Agreement, Cypress will act as project manager on the claims for the first year's exploration program.
Upon completion of one or both of the options, the parties shall enter into a joint venture agreement for the further exploration of the Property, and Pure Energy shall serve as Operator.
A finder's fee will be paid to Jordan Trimble in the maximum allowed under TSX Venture Exchange Policy 5.1 in connection with this transaction.
Robert Marvin, P.Geo, Exploration Manager for Cypress Development Corp. is the Qualified Person as defined by National Instrument 43-101 and has approved of the technical information in this release.