BEARING SIGNS BINDING LETTER OF INTENT FOR THE ACQUISITION OF INTEREST IN ADVANCED PRE-PRODUCTION LITHIUM PROJECT IN CHILE
Following initial negotiations and due diligence reviews, Bearing Resources Ltd. (BXR.V) and Li3 Energy Inc. have signed a binding letter of intent with respect to the previously announced proposed acquisition by the company of Li3's interest in the Maricunga lithium brine project located in Chile.
Li3, a Nevada public company with shares quoted on the OTCQB, holds its interest in the Maricunga project through a 17.67-per-cent shareholding in Minera Salar Blanco SA, a Chilean company formed to create a joint venture among Li3, Minera Salar Blanco SpA (MSB) and Lithium Power International Ltd. with respect to the Maricunga project. MSB and Lithium Power hold a 32.33-per-cent and 50-per-cent interest in the joint venture, respectively. Under the terms of the joint venture, Lithium Power has agreed to finance exploration and development costs with both Li3 and MSB having a free carry until the completion of a definitive feasibility study.
The Maricunga project is regarded as the highest-quality preproduction lithium project in Chile, with characteristics comparable with the world-leading Atacama lithium brine deposit (which sits at the bottom of the global lithium cost curve). The salar is located 170 kilometres northeast of the mining town of Copiapo and 250 km from the Chilean coast. In addition, it is adjacent to International Highway 31, which connects northern Chile and Argentina.
Pursuant to the terms of the letter of intent, the purchase price for the Li3 interest is proposed to comprise a total of 16 million Bearing common shares and the assumption by the company of debts and liabilities of Li3 in an aggregate amount not to exceed $2.2-million (U.S.).
Completion of the acquisition is subject to a number of conditions, including successful negotiation and entry into a definitive transaction agreement, satisfactory completion of due diligence reviews, board and shareholder approvals, receipt of TSX Venture Exchange acceptance and applicable third party consents, the absence of a material adverse change with respect to the Maricunga project, as well as other conditions customary for transactions of this nature.
Jeremy Poirier, Bearing's president and chief executive officer, commented: "We are excited to come to a binding agreement on this transaction. I am happy to be pairing up with the Li3 team and look forward to working with their partners on the Maricunga project, we expect to deliver significant value to our shareholders developing this world-class asset. Assets of this quality are very hard to come by and the exposure to Maricunga will allow us to benefit from the continuous interest in the lithium market."
About Bearing Resources
Bearing is an exploration and development company that has entered into a binding LOI agreement with Li3 Energy to acquire the advanced-stage Maricunga project located in Chile, which represents one of the highest-grade development opportunities in the Americas. Assuming completion of the transactions contemplated by the binding LOI, Bearing will have an undivided 17.7-per-cent interest in the project with all expenditures through to the delivery of a definitive feasibility study fully financed by its joint venture partners. The Maricunga project has had in excess of $25-million (U.S.) of exploration to date.