Mr. Kyle Hookey reports
ALLIED COPPER REPORTS ADDITIONAL FINANCIAL AND TECHNICAL INFORMATION FOR VOLT LITHIUM CORP.
Allied Copper Corp. has provided additional technical information and financial information regarding Volt Lithium Corp. As announced on Oct. 31, 2022, Allied Copper has agreed to acquire 100 per cent of the issued and outstanding shares of privately held Volt, pursuant to a share purchase agreement dated Oct. 31, 2022, among each of the shareholders of Volt (collectively, the vendors) and the company (the acquisition). Through this acquisition, Allied Copper is afforded a strategic opportunity to expand both its asset base and development focus to include a broader range of battery metals that represent key inputs supporting the global energy transition.
Rainbow Lake property
Volt has acquired a 100-per-cent minerals interest in a lithium-brine project in northwest Alberta (the Rainbow Lake property or the property), which is defined by 19 contiguous Alberta metallic and industrial mineral permits (165,062 hectares). Details of the mineral permits are summarized in Schedule B of the agreement, which has been filed on SEDAR. The Rainbow Lake property is in northwest Alberta, approximately 80 kilometres west of the town of High Level, Alta. The west-central portion of the property surrounds the town of Rainbow Lake, Alta., which region is historically famous for its substantial oil and gas reserves within the carbonate platform and reef complex portions of the Middle Devonian Elk Point Group. The property can be accessed by Provincial Highway 58, and numerous secondary all-weather and dry-weather gravel roads and tracks that are serviced year-round due to oil and gas production operations in the area.
Upper Keg River formation aquifer brine evaluation
Volt's initial exploration objective at the Rainbow Lake property was to assess stratigraphically deep (approximately negative 1,450 metres below sea level), hypersaline formation water, or brine, from oil and gas reservoirs, or aquifers, within the porous portions of the Elk Point Group's Upper Keg River formations reef complexes for its lithium-brine potential.
As per government of Alberta subsurface brine compilations, historical Upper Keg River formation lithium-brine analytical results within the boundaries of the Rainbow Lake property include nine historical lithium assays of Upper Keg River formation and Elk Point Group brines (the latter at depths that are correlative with the Upper Keg River formation). The assays yield lithium-brine values that range between 29 and 44 milligrams per litre (mg/L) lithium with an average concentration of 38.3 mg/L lithium.
To validate the historical lithium-brine assays, Volt commissioned a petrocompany leasehold owner and active hydrocarbon producer from within a portion of the property and Roy Eccles, PGeol, of APEX Geoscience Ltd. (the qualified person or QP) to complete two separate 2022 brine sampling programs at the Rainbow Lake property. The petrocompany collected two brine samples from two separate wells, one of which was not within the boundaries of the property. The samples were analyzed by Sterling Chemical Inc.'s subsidiary lab, Camber Resource Services Ltd., which is not independent of Volt.
The QP collected 25 brine samples from three oil and gas facilities and four producing wells within the Rainbow Lake property in conjunction with the petrocompany that is actively producing hydrocarbons from Upper Keg River formation reservoirs. Quality assessment-quality control samples included four duplicate samples, seven brine lab-prepared lithium-brine standards, two blank samples (containing no lithium) and two check lab samples. The QP brine samples were analyzed at independent, commercial laboratories who are accredited and experienced in analyzing petro-fluids (primary lab: AGAT Laboratories Ltd. and check lab: Bureau Veritas; both labs in Edmonton, Alta.).
The QP assessed both the petrocompany and QP-collected sample analyses, and concluded that the analytical results yield both valid and invalid Upper Keg River formation brine geochemical results. The petrocompany collected samples were removed because the samples were either from an off-property well or analyzed at a non-independent lab that returned lithium results that did not correlate well with the analytical results of the QP-collected samples. Four QP-collected sample analyses were also removed from the data set because of suspected issues with contamination or the brine geochemical results were not compatible with representative Upper Keg River formation aquifer brine. The contamination relates to high oil contents in the brine sample, or elevated iron and metal contents believed to be related to corrosiveness inhibitors used by the petrocompany at a specific well that may have precipitated metals that are not representative of the true brine. With respect to the assessment of representative brine (using the cation, sodium, as an example), genuine Upper Keg River formation samples in this data set contain between 72,200 and 156,000 mg/L sodium; however, the QP-assessed invalid samples had very low sodium (between 121 and 718 mg/L sodium).
Once the invalid brine analyses were removed from the database (n of six analyses), the QP had no further significant issues or inconsistencies that would cause one to question the validity of the data. Brine analytical results are presented in the attached table and include lithium-brine values from the three facilities (Rainbow facility 13-36-111-06W6, Rainbow battery 9-25-109-5, and Rainbow battery 13-06-111-06; n of six analyses) and two wells (8-6-110-04 W6M, 10-32-110-07 W6, n of two analyses).
With respect to the QP-collected valid Upper Keg River formation aquifer brine samples, brine from the wells yielded between 29.3 and 36.1 mg/L lithium with an average concentration of 33.0 mg/L lithium (n of four analyses and two wells). Brine from the facilities yielded between 24.5 and 37.3 mg/L lithium with an average concentration of 33.6 mg/L lithium (n of six analyses and three facilities). Collectively, the brine analyses from Volt's primary lab yielded between 30.6 mg/L and 37.3 mg/L lithium with an average concentration of 35.0 mg/L lithium (n of eight analyses).
The QP concluded that the Volt sampling program validated the historical lithium-brine analytical results: 38.3 mg/L lithium (historical; n of nine analyses) versus 35.0 mg/L lithium (Volt; n of 10 analyses). The similar lithium concentrations potentially demonstrates the chemical homogeneity of the Upper Keg River formation aquifer underlying the Rainbow Lake property. The sample program results also show that Volt could utilize the facilities for any future demonstration, or pilot direct lithium extraction testwork, which is beneficial because the facilities represent multiwell collection points with high brine volume.
Based on the results of the Rainbow Lake property brine sampling program, Volt has commissioned APEX Geoscience to prepare a technical report that will provide a geological introduction and exploration results of the Upper Keg River formation aquifer brine assessment and include recommendations to advance the lithium-brine project. The technical report will be prepared in accordance with the Canadian Mining and Metallurgy (CIM) Mineral Exploration Best Practice Guidelines (2018) and the disclosure requirements set out in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101).
There is no guarantee that Volt can successfully extract lithium from the Elk Point Group and Upper Keg River formation petroleum system in a commercial capacity. To the best of the QP's knowledge, lithium has yet to be commercially extracted from confined aquifer lithium-brine deposit types and the direct lithium extraction technology is still in the developmental stage.
Muskeg formation aquifer preliminary brine evaluation
In a more recent aquifer brine assessment, Volt conducted a preliminary brine sampling test program that collected a total of four brine samples from two Muskeg formation production wells within the Rainbow Lake property. Volt's lithium extraction agreement does not include the two Muskeg production wells sampled by Volt.
Limitations of the preliminary Muskeg formation sampling program is that brine from two separate wells was mixed in two of the samples analyzed, and no quality assurance or quality control work was conducted (for example, duplicates, blank samples and sample standards). With respect to the mixed samples (n of two samples), the quantity of brine from the two separate wells is not known, and therefore, the analytical results could be predominantly representative of Muskeg formation aquifer brine from a single well. In this case, the sample is still believed to be representative of Muskeg formation aquifer brine. Other than these limitations, the QP has no significant issues with the sample preparation, security and analytical methods of the Muskeg formation brine samples.
However, the QP has yet to evaluate the geological and hydrogeological nature of the Muskeg formation. Hence, the QP has been unable to verify the Muskeg formation information beyond the laboratory certificates. The QP has recommended completing additional geological, geophysical, hydrogeological, and brine assays/mineral processing studies and testwork in order to evaluate the Muskeg formation aquifer at the Rainbow Lake property. The QP has also stated that the Muskeg formation information is not necessarily indicative of the Upper Keg River formation lithium-brine mineralization on the property that is the subject of the pending Upper Keg River formation technical report. For example, the Muskeg formation aquifer spatial dimensions may differ to the Upper Keg River formation aquifer. The Muskeg formation, which is largely an aquitard (anhydrite-dominate lithology), reportedly forms dolomitized, porous, reservoir rocks at the margins of the Elk Point basin and/or the Upper Keg River formation reef buildups in northwest Alberta.
The preliminary Muskeg formation brine analytical results yielded significantly higher lithium, boron and zinc, in comparison with the Upper Keg River formation results. Selected analytical results include:
Lithium concentrations ranged between 90.6 and 119.0 mg/L lithium with an average of 102.9 mg/L lithium.
- Boron yielded between 582 and 847 mg/L boron with an average of 715.3 mg/L boron.
- The zinc contents were especially elevated in comparison to the Upper Keg River formation brine, and yielded between 2,160 and 4,010 mg/L zinc with an average of 2,950 mg/L zinc.
- Total dissolved solids ranged between 158,000 and 373,000 mg/L total dissolved solids with an average of 229,500 mg/L total dissolved solids.
Since the analytical results of Volt's preliminary Muskeg formation brine sampling program yielded significantly higher lithium-brine values than the Upper Keg River formation technical work conducted to date, the four Muskeg brine assays are considered material information to Volt. As such, Volt plans to conduct further evaluations to assess the Muskeg formation's lithium-brine potential in accordance with the CIM Mineral Exploration Best Practice Guidelines (2018) and NI 43-101.
Water treatment and lithium extraction agreement
Volt and the petrocompany
On Oct. 28, 2022, a water treatment and lithium extraction agreement was entered into by Volt and the petrocompany, subject to defined payments and royalties as described herein. The initial term of the lithium extraction agreement is for two years, subject to pilot operations achievement with opportunities to renew the initial term through mutual written agreement between the parties. The lithium extraction agreement allows Volt access to the petrocompany's brine, including the Elk Point Group and Upper Keg River formation brine for the purpose of experimenting with the brine, engaging in direct lithium extraction and redelivering the brine to the petrocompany for reinjection back down into the reservoir. The petrocompany remains the leasehold owner with all rights to exploration, development and production of petroleum and natural gas and other hydrocarbons, produced water, and minerals other than lithium from the petrocompany oil field. Volt remains the mineral permit holder, and is entitled to all rights of any lithium extracted from the petrocompany oil field, pursuant to the petrocompany's operations and to any lithium data generated solely by Volt. The lithium extraction agreement encompasses the production facilities/wells sampled by the company as part of the Upper Keg River formation focused brine program.
The scientific and technical information in this news release has been reviewed and approved by Roy Eccles, PGeol, of APEX Geoscience. Mr. Eccles is independent of Volt and the Rainbow Lake property, and a qualified person as defined by NI 43-101. Mr. Eccles has not reviewed the additional financial information contained in this news release.
Based on audited financial statements prepared by management of Volt, for the period from incorporation on April 6, 2022, to Aug. 31, 2022, Volt has total assets of $77,395, total liabilities of $297,476, and net loss and comprehensive loss of ($542,771). Subsequent to the year-end, accounts payable of $250,000 was settled by the issuance of 2.5 million common shares. In April, 2022, Volt entered into a technical services agreement with Sterling Chemicals Ltd. to provide services including scientific, accounting and logistics support. Under the terms of this agreement, Volt will advance $500,000 for services in the first 12 months. On Sept. 26, 2022, Volt entered into a lease agreement for the supply of water cleaning and lithium extraction equipment. The agreement is for three months, with estimated monthly costs of $200,000. On Aug. 15, 2022, Volt entered into an agreement for management consulting at the rate of $20,000 per month plus approved expenses. The agreement will require payment upon completion of a financing of no less than $1.5-million, following completion of the acquisition. Allied Copper has advanced $500,000 to Volt in the form of a secured promissory note bearing interest at 8 per cent per annum, due on Sept. 7, 2023, and a further $200,000 to Volt in the form of a second secured promissory note bearing interest at 8 per cent per annum, due on Sept. 19, 2023. The secured loan is subject to the approval of the TSX Venture Exchange. On Sept. 19, 2022, Volt entered into an overriding royalty agreement with an Alberta-based producing oil and gas company. The lands covered by the royalty agreement overlap Volt's mineral and mining rights in Northern Alberta. The royalty is calculated at 3 per cent of the production. The rate will be reduced to 2 per cent subsequent to Volt receiving 100 per cent of its original investment. Once Volt receives 300 per cent of its original investment, the royalty agreement will terminate. As part of this agreement, Volt advanced $125,000 on Sept. 19, 2022, and a second instalment of $125,000 on Nov. 1, 2022. A final instalment of $250,000 is due within five business days in the event of listing of shares of Volt on the TSX Venture Exchange. On Oct. 28, 2022, Volt also entered into a royalty amending agreement amending the terms of the original royalty agreement to reflect the terms of the lithium extraction agreement.
The acquisition is subject to standard closing conditions, including the approval of the TSX-V. In connection with the TSX-V's review of the acquisition, the TSX-V halted trading of Allied Copper shares on the TSX-V, pending the collection and dissemination of additional financial and technical information relating to Volt. Trading of Allied Copper shares on the TSX-V is expected to resume on Nov. 29, 2022, following dissemination of the additional information contained herein. Subject to receiving the approval of the TSX-V, and the satisfaction of the remaining closing conditions, the acquisition is expected to close on or about Dec. 8, 2022.
About Allied Copper
Allied Copper, headquartered in Vancouver, B.C., Canada, is a mineral exploration company focused on acquiring and developing potential long-life, scalable copper and/or gold assets in the Western United States. The company's strategy is to focus on low-cost and potential-high-growth operations in low-risk jurisdictions. Allied Copper's management is committed to operating efficiently and with transparency in all areas of the business.
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