CHIMATA GOLD CORP ENTERS INTO A SHARE EXCHANGE AGREEMENT WITH ZIMBABWE LITHIUM COMPANY
LIMITED WITH RESPECT TO DEVELOPMENT RIGHTS FOR THE KAMATIVI LITHIUM TAILINGS DEPOSIT IN
Chimata Gold Corp. has entered into a definitive share exchange agreement with Zimbabwe Lithium
Company (Mauritius) Ltd. (ZIM), a privately held company incorporated under
the laws of Mauritius, which indirectly owns, through a wholly owned subsidiary, a 60-per-cent interest in a
joint venture entity that was granted exclusive development rights for the Kamativi lithium tailings deposit at the Kamativi tin mine in Matabeleland North Province, Zimbabwe.
As per the terms of the agreement, Chimata shall, pursuant to the first phase of the contemplated transaction,
issue to ZIM shareholders an amount of 9,185,039 common shares from its share capital, representing an
aggregate of 19 per cent of the current issued and outstanding share capital of Chimata, and, in
return, ZIM shall issue to Chimata 755 ZIM shares, representing an aggregate of 19 per cent of the
current issued and outstanding share capital of ZIM.
The second phase of the contemplated transaction has now been triggered with the production of the resource
estimate by ZIM in respect of the Kamativi tailings published on Sept. 20, 2018. The results of this resource estimate, in combination
with the financing referenced herein, will determine the ultimate resulting shareholding of ZIM shareholders in
Chimata, which will be between 70 per cent and 80 per cent. Concurrently, the second phase of the transaction will result in ZIM
becoming a wholly owned subsidiary of Chimata and Chimata will then be entitled, through the joint venture
entity, to the exclusive development rights for the Kamativi tailings. Final acceptance of the transaction is
subject to regulatory and Canadian Securities Exchange approval.
As part of the contemplated transaction, Chimata also undertakes to complete two separate financings
comprising: (i) a debenture financing consisting of up to $2-million aggregate principal amount of 12 per cent
convertible unsecured subordinated debentures due on the maturity date, being five years from the date of
issuance, the principal amount of each debenture, will be convertible, at the option of the
holder, into common shares of Chimata at a price of 10 cents per common share; and
(ii) an equity financing for gross proceeds of up to $200,000 consisting of units of the company issued at a price of 10 cents per unit, with each unit comprising of one common share of the company and one
common share purchase warrant, with each whole warrant entitling its holder to purchase one
common share at a price of 20 cents for a period of 24 months from the closing date.
In commenting about the transaction, Richard Groome, chairman of Chimata, said: "We are encouraged and excited
by the recent changes in Zimbabwe. We believe these changes signal an important investment opportunity and
the beginning of a marked turnaround in the acceptance of Zimbabwe as a nation the world wishes to transact
with. We look forward to working with the Zimbabwe government, ZMDC and our operating partners at ZIM in
building a rapidly emerging capital-efficient lithium supplier to the world."
John McTaggart, managing director of Zimbabwe Lithium, commented: "We are very pleased to have on
board a partner in Chimata. In particular, during this very important and dynamic transition period in Zimbabwe,
we would like to thank the government of Zimbabwe, the Honourable Minister of Mines and Mining Development,
our partners at ZMDC, and all stakeholders that have worked with us to bring this project to its current stage."
About the Kamativi mining assets
The Kamativi tailings lithium project is located outside the village of Kamativi in Matabeleland
North Province, Zimbabwe. The project, which is identified as a 26.32-million-tonne tailings deposit with an
indicated resource grade of 0.58 per cent Li2O (lithium oxide), with spodumene being the dominant mineralization. The tailings
deposit is associated with the disused Kamativi tin mine and is located approximately 185 kilometres east-southeast of Victoria Falls, approximately 84 kilometres by tar road east of Hwange and approximately 310 kilometres northwest of
Bulawayo. Further information on the maiden mineral resource estimate and mineralogy can be found from
the company's press releases.
Alain Moreau, a qualified person as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects, has
approved the scientific and technical disclosure in this press release.
We seek Safe Harbor.
© 2018 Canjex Publishing Ltd. All rights reserved.