Aberdeen Closes Agreement to Sell 50% of the Sal De Los Angeles Lithium Project for 8 Million Lithium X Shares
Aberdeen's Lithium X shares currently worth more than $15 million
TORONTO, ONTARIO--(Marketwired - April 21, 2016) - Aberdeen International Inc. ("Aberdeen", or the "Company") (TSX:AAB) announces that it has closed on the agreement to sell 50% of Potasio y Litio de Argentina SA ("PLASA") to Lithium X (TSX VENTURE:LIX). PLASA owns 100% of the Sal de los Angeles lithium brine project ("Sal de los Angeles Project", or the "Project", formerly known as the Diablillos Project) in Argentina. Lithium X has an option to acquire up to 80% of PLASA by fulfilling certain conditions described below. All dollar figures are quoted in Canadian dollars.
David Stein, President and CEO of Aberdeen, commented: "The Aberdeen and Lithium X teams have worked hard over the past few months to finalize and close this new partnership arrangement and we are now excited to get started. We are very pleased to see the market recognize the growth potential in Lithium X and note that as we close this deal, our holdings in Lithium X are worth more than $15 million or approximately $0.16 per Aberdeen share. This is almost equal to Aberdeen's total market capitalization and we still have the potential to earn an additional $5 million in Lithium X stock under the option agreement. With our remaining stake in the Sal de los Angeles Project, our large stake in African Thunder Platinum as well as our other assets, we see excellent potential for our company going forward."
The Sal De Los Angeles Project
The Sal de Los Angeles Project covers more than 95% of the Salar de Diablillos property located in Salta province at an average elevation of approximately 4,050 metres above sea level. The Project includes 32 mining claims covering approximately 8,156 hectares and is located near FMC Corp.'s Salar de Hombre Muerto lithium deposit, one of the world's largest lithium operations.
Approximately $19 million has been invested in the property by previous operators, including $16.2 million in work completed at Sal de los Angeles between 2010 to 2015. Work included extensive exploration and definition drilling, pump tests, seismic & gravity geophysical surveys, basin and solute transport models, evaporation and metallurgical testing, and running a continuous pilot ponding plant on-site.
Lithium X Agreement with Aberdeen
Lithium X will issue 8,000,000 common shares to Aberdeen International for a 50% interest in the Project and has committed to $3,000,000 in exploration and development expenditures over a two-year period and to complete a feasibility study on the Project. Upon completing a feasibility study and its expenditure commitment Lithium X has the option (the "Option") to acquire an additional 30% interest by issuing common shares worth $5,000,000 based on a 10% discount to the 20-day volume-weighted average price of its common shares at the date of exercise to Aberdeen. As part of the agreement, Lithium X will be entitled to indirectly appoint the initial operator of the project for as long as the Company maintains an interest greater than or equal to 50% in the Joint Venture.
If Lithium X elects not to exercise the Option, Aberdeen has the right following the option expiry for a 30-day period to acquire a 1% interest in PLASA back from Lithium X for C$166,000 in cash. In the event that Lithium X does not meet the expenditure commitment or complete the feasibility study within two years, Lithium X must transfer 20% of the PLASA shares back to Aberdeen, resulting in Aberdeen holding 70% of the outstanding PLASA shares.
Board Nominations and Pooling Agreement
Lithium X has agreed to increase its Board of Directors to seven members at its next annual general meeting, at which time Aberdeen has the right to nominate two members to the Board for a period of one year. Aberdeen reserves the right to appoint two directors at future AGMs as long as it owns more than 15% of the outstanding shares of Lithium X. If Aberdeen owns more than 10% of outstanding shares of Lithium X but less than 15%, Aberdeen has the right to nominate one member to the Board. Aberdeen also has a pro rata right to participate in any future equity financings as long as it holds a minimum of 8,000,000 Lithium X common shares and 10% of the outstanding shares.
Half of the common shares issued to Aberdeen are subject to a pooling agreement pursuant to which the Aberdeen shares and common shares held by Paul Matysek, Brian Paes-Braga and Frank Giustra are subject to a one-year voluntary pool. All remaining shares are subject to a 4 month holding period
Cautionary Notes
Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding, proceeds to be received on closing or subsequently, the ability of the Company to generate additional value for shareholders as a result of such transactions, past success as an indicator of future success; net asset value of the Company; the potential of investee companies and the appreciation of their share price; the Company's plan of business operations; industry opportunities and dynamics and anticipated returns. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, competition, financing risks, acquisition risks, risks inherent in the mining industry, and regulatory risks. Most of these factors are beyond the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Contact
Rob Hopkins
Manager, Investor Relations
Aberdeen International Inc.
info@aberdeeninternational.ca
+1 416-861-5899
David Stein
President and Chief Executive Officer
Aberdeen International Inc.
dstein@aberdeeninternational.ca
+1 416-861-5812
