Millennial Lithium Corp. (TSX VENTURE:ML)(OTCQB:MLNLF)("Millennial" or the "Company") reports that its wholly owned Argentine subsidiary, Proyecto Pastos Grandes S.A. ("PPG SA") has executed a formal option agreement (the "Definitive Agreement") with Southern Lithium Corp. (TSX VENTURE:SNL) ("Southern").
In the Definitive Agreement, PPG SA grants Southern an option (the "Option") to acquire up to an 80% interest in PPG SA's Cruz property in the Pocitos salar basin in Salta province, Argentina (the "Cruz Property").
The Company previously announced that PPG SA had entered into a letter of intent with Southern. The letter of intent called for the Definitive Agreement to be signed on or before November 10, 2016.
Terms of the Definitive Agreement:
To exercise the Option and acquire a 70% interest in the Cruz Property, Southern must:
- Pay a non-refundable deposit of $150,000 (U.S.) to PPG SA. This payment has already been made;
- Pay an additional $50,000 (U.S.) non-refundable deposit to PPG SA upon the execution of the definitive agreement. This payment has already been made;
- Issue 540,000 common shares of Southern to PPG SA or Millennial at a deemed price of 25 cents, subject to Exchange approval;
- On the closing of the first tranche of Southern's recently announced private placement or Nov. 30, 2016 (whichever is earlier), place in a joint exploration account the sum of $500,000 (U.S.);
- Spend the $500,000 (U.S.) in the joint exploration account on exploration of the Cruz Property on or before Oct. 1, 2017;
- Pay to PPG SA the sum of $1-million (U.S.) on or before Oct. 1, 2017;
- Pay to PPG SA the sum of $1-million (U.S.) on or before Oct. 1, 2018.
To exercise the Option for an additional 10% interest (for a total interest of 80%) in the Cruz Property Southern must, prior to the date that is six months after the third anniversary of the Definitive Agreement, complete a bankable feasibility study on the Cruz Property.
About the Cruz Property:
The 2,500 hectare Cruz Property lies at the north end of the Pocitos salar basin in Salta Province, Argentina. The Cruz Property is at the junction of a large north-south fault system and the northwest-southeast "megastructure" along which lies the Rincon volcano, the possible source of the Rincon salar lithium brine occurrences in the Rincon salar basin immediately north of the Pocitos salar basin.
The 60 kilometre long Pocitos salar basin has been the subject of surface sampling by several groups in the past. In the 1970's a government agency made a single shallow drill hole in the Pocitos salar basin. To the Company's knowledge, that drilling is the only exploration drilling to date and the results of that drilling cannot be confirmed under NI 43-101 standards for exploration applicable today. A review by the Company of recent samplings in the Pocitos salar basin tend to show higher lithium concentration along the deep faults in the basin, leading to the possibility, which would have to be confirmed with further exploration, that the faults could be conduits for lithium-bearing fluids emitted by the northern volcanic center.
Millennial has granted an aggregate of 250,000 stock options (the "Options") to certain consultants of the Company. The Options have a term of 5 years and are exercisable at a price of $1.35 per common share. The Options are subject to the acceptance of the TSX Venture Exchange.
This news release has been reviewed by Iain Scarr, VP of Development and Exploration of the Company and a qualified person as that term is defined in National Instrument 43-101.