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Lithium Chile Inc
Symbol LITH
Shares Issued 139,462,359
Close 2022-03-08 C$ 0.93
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Monumental to acquire Laguna interest from Li Chile

2022-03-09 12:01 ET - News Release

See News Release (C-MNRL) Monumental Minerals Corp

Mr. Jamil Sader reports

MONUMENTAL MINERALS CORP. SIGNS LETTER OF INTENT TO ACQUIRE UP TO 75% OF THE DRILL READY SALAR DE LAGUNA BLANCA, CHILE CESIUM SALT-LITHIUM BRINE PROJECT FROM LITHIUM CHILE INC.

Monumental Minerals Corp. has entered into an arm's-length letter of intent (LOI) with Lithium Chile Inc. to acquire up to 75 per cent of the 5,200-hectare Salar De Laguna Blanca project located near the town of San Pedro de Atacama, Chile.

The Laguna project is located within the prolific lithium triangle, a zone within the central Andes high desert that includes Chile, Argentina and Bolivia. This zone is estimated to contain more than half of the world's lithium supply beneath the many salt flats, also known as salars, that are common to the region. The Laguna Blanca property consists of 23 exploration concessions totalling 5,200 hectares, 100 per cent owned by Lithium Chile through its wholly owned Chilean subsidiary Minera Kairos Chile Limitada. The Laguna project includes both active and paleo salar brines and salts.

The Laguna project is an early exploration-stage project that is accessible from the town of San Pedro de Atacama, 80 kilometres to the west via the paved road 27CH to the north end of Salar de Aguas Calientes then a truck-accessible trail heading north to the interior of the property. Travel time from San Pedro de Atacama to the property is approximately one hour and 30 minutes.

Between April, 2018, and June, 2021, Minera Kairos completed preliminary reconnaissance and detailed geochemical and geophysical surveys:

  • Lithium Chile reported the results of a program of follow-up sediment geochemical and surface water surveys covered the bulk of the active salar-laguna complex and adjacent paleo salts and sediments. Laboratory analysis of the sediment samples range from 75 to 692 parts per million cesium and 250 to 1,450 ppm lithium. The results outline a large area of cesium enrichment of about nine square km, which is open to the northeast and southeast. Water samples taken from the surface lagunas and subsurface samples from shallow 0.5 metre to 1.3 metres deep, hand auger holes range from 20 to 40 milligrams per litre cesium plus 780 to 1,230 mg/l lithium;
  • A 13-line-kilometre reconnaissance TEM geophysical survey covers the active salar-laguna complex and its adjacent southwest flank. This survey identified a 10 square km high conductivity TEM anomaly having 100 to 200 m modelled thickness that underlies the southwest flank of the lithium-cesium anomaly;
  • Bulk brine samples are currently being tested for lithium extraction.

The company and its qualified persons have been unable to verify the historical sample collection methodology or analytical results reported by Lithium Chile, but believe the historical results are relevant and reliable. Future work by Monumental is planned, including a site visit, and verification sampling is required to verify the historical results.

Jamil Sader, Monumental's chief executive officer and a director, comments:

"The Laguna Blanca lithium asset is a strategic acquisition for Monumental Minerals and has the potential to become a significant cesium-lithium deposit in the region. Lithium grades determined to date are consistent with those from mines currently in production in the region, and it has the added benefit of potentially economic cesium, a critical metal necessary for 5G communication. The project is complementary to the company's flagship Jemi heavy rare earth element project in Coahuila, Mexico, and the strength of these two assets well position Monumental to take advantage of the global shift of decarbonization, and to add significant value for shareholders."

About cesium

Currently, almost the entire global cesium supply comes from the Tanco mine, a hard rock deposit in Manitoba, Canada. The largest consumer of cesium is the oil and gas exploration sector. Cesium formate is added to drilling fluids to lubricate drill bits, to bring rock cuttings to the surface and to prevent blowouts in high-pressure wells. Cesium is also critical in the 5G communication revolution, as it is critical in atomic clocks that keep vast communication networks in sync for Internet of things (IoT) functions.

About lithium

Over the past year, the spot price for lithium has increased by over 550 per cent. The price of the metal has outpaced every other metal. The only other commodities with a similar price appreciation trajectory are rare earth elements used in the production of high-performance magnets for electric motors (neodymium (Nd), praseodymium (Pr), dysprosium (Dy) and terbium (Tb)). The driver for the lithium price explosion is widely believed to be due to increases in demand for the manufacturing of electric vehicle batteries, as automakers transition their fleets to EVs. According to Adamas Intelligence, a record 25,921 tonnes of lithium carbonate equivalent (LCE) were used to manufacture EV batteries for passenger vehicles globally in December, 2021.

About critical metals

The United States government has identified lithium and select rare earth elements (REEs) as critical metals, and there is currently a strong push to curtail the U.S. reliance of these metals from sources that are not politically friendly. On Feb. 22, 2022, U.S. President Joe Biden announced government financial incentives for both lithium and REE producers to develop downstream processing and refining of REEs and lithium. Additionally, a bipartisan U.S. Senate bill recently passed, which would make it illegal for U.S. defence contractors to procure REEs from China. Monumental Minerals is positioned to play a significant role in lithium and REE stability and sustainability in the Americas.

Terms of the proposed transaction

Subject to the execution of a definitive agreement, Monumental will have the option to earn in up to a 75-per-cent interest in the Laguna project by issuing to Lithium Chile that number of common shares of Monumental that would result in Lithium Chile holding, on a non-diluted basis (after any potential financing in connection with or related to this potential transaction), 9.9 per cent of the issue and outstanding common shares of Monumental. In addition, Monumental must make certain staged cash payments to Lithium Chile and incur exploration expenditures on the Laguna project as follows:

  1. Make cash payments of an aggregate of $1.5-million according to the following schedule:
    1. $200,000 within 15 days of final TSX Venture Exchange approval of this proposed transaction;
    2. $250,000 on or before the 18-month anniversary of the acceptance date;
    3. $300,000 on or before the second anniversary of the acceptance date;
    4. $750,000 on or before the third anniversary of the acceptance date;
  2. Incur minimum expenditures on the Laguna project of not less than an aggregate of $1.5-million according to the following schedule:
    1. $200,000 on or before the first anniversary of the acceptance date;
    2. $500,000 on or before the second anniversary of the acceptance date;
    3. $800,000 on or before the third anniversary of the acceptance date.

Subject to the exercise of the option to acquire 75 per cent of the Laguna project, Lithium Chile would retain a 1-per-cent net smelter returns royalty payable upon the commercial production of the Laguna project. In addition to the statutory hold period of four months and a day from the date of issuance, the payment shares will be subject to a 12-month voluntary hold period from the date of issuance. Upon Monumental earning a 75-per-cent interest in the Laguna project, Monumental and Lithium Chile will use commercially reasonable efforts to negotiate and execute a joint venture agreement for the purpose of jointly carrying out exploration, evaluation and development of the Laguna project.

Further details regarding the proposed transaction with Lithium Chile will be provided in a comprehensive news release if, and when, the parties enter into the definitive agreement. The proposed transaction between Monumental and Lithium Chile is subject to, among other things, the execution of the definitive agreement and TSX Venture Exchange approval.

Methodology and quality assurance/quality control

All samples were reportedly collected by Lithium Chile staff. Each salt and sediment sample consisted of one to 1.5 kilograms of unconsolidated material taken from 0.5 to 1.2 m deep holes using a hand-held auger that were bagged and sealed on site. All samples were delivered by Lithium Chile's staff to the ALS prep lab in La Serena for processing. ALS subsequently shipped a 30-gram subsample to its laboratory in Lima, Peru, where they were analyzed for 51 elements, including two lithium and cesium, by the ICP-MS (Inductively coupled plasma mass spectrometry) technique following agua regia digestion. Overlimit (over 500 ppm Cs) samples were rerun using the ICP-MS81 technique following lithium borate fusion. ALS is an ISO-IEC 17025:2017- and ISO 9001:2015-accredited geoanalytical laboratory and is independent of Monumental Minerals, Lithium Chile, Minera Kairos and the qualified person.

The company and its qualified persons have been unable to verify the historical sample collection methodology or analytical results, but believe the historical results are relevant. Future work by Monumental is planned, including a site visit, and verification sampling is required to verify the historical results.

Qualified person

The scientific and technical information contained in this news release has been reviewed and approved by Kristopher J. Raffle, PGeo (British Columbia), principal and consultant of Apex Geoscience Ltd. of Edmonton, Alta., a director of the company and a qualified person as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

About Monumental Minerals Corp.

Monumental Minerals is a mineral exploration company focused on the acquisition, exploration and development of mineral resource properties in the critical and electric metals sector. The company's flagship asset is the Jemi HREE project located in Coahuila, Mexico, near the Texas, U.S., border which the company has an option to acquire 100 per cent of the 3,650-hectare project. The company has an option to acquire a 100-per-cent interest and title to the Weyman property located in the Kamloops and Nicola mining divisions and in the Thompson Nicola regional district, British Columbia.

We seek Safe Harbor.

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