08:39:28 EDT Mon 03 Oct 2022
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Lithium Chile Inc
Symbol LITH
Shares Issued 139,462,359
Close 2022-03-31 C$ 0.93
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Monumental, Lithium Chile firm up Laguna option deal

2022-03-31 11:08 ET - News Release

See News Release (C-MNRL) Monumental Minerals Corp

Mr. Jamil Sader of Monumental reports


Monumental Minerals Corp. has entered into an arm's-length definitive option agreement dated March 30, 2022, 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 (see news release dated March 9, 2022).

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.

Jamil Sader, Monumental's chief executive officer, comments: "The Laguna Blanca lithium asset has the potential to become a significant cesium-lithium deposit in the region. 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 will position Monumental to take advantage of the global shift of decarbonization, and to add significant value for shareholders. Certain members of the company's team are currently in Chile conducting a site visit and will be on the Jemi project in Mexico shortly thereafter."

About critical metals

The U.S. 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, the U.S. government 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 sustainably in the Americas.

Terms of the option agreement

In order to exercise the option to acquire a 75-per-cent interest in the Laguna project, Monumental must issue common shares, 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 30 days of final TSX Venture Exchange approval of this 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.
  3. Within 30 days of the acceptance date, issue 3,401,874 common shares of Monumental to Lithium Chile. The number of payment shares will be reduced if required by the exchange.

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 return 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.

In connection with the option agreement, Monumental has entered into a finder's fee agreement with Blackhill Consulting Corp., an arm's-length party, in consideration for services in transaction advisory services and introducing the company to Lithium Chile, pursuant to which Blackhill shall receive consideration of 194,515 common shares of Monumental if the option agreement is approved by the exchange. The finder's agreement and the issuance of the finder's shares are subject to exchange approval and will be subject to a four-month hold period.

The transaction between Monumental and Lithium Chile is subject to exchange approval.

Private placement financing

Monumental intends to complete a non-brokered private placement for aggregate gross proceeds of up to $5-million. The private placement will consist of units at a price of 45 cents per unit. Each unit will consist of one common share of the company and one-half of one transferable common share purchase warrant of the company. Each whole warrant will entitle the holder to acquire one share at a price of 65 cents per share for a period of two years following the closing of the private placement.

The company intends to use the net proceeds raised from the private placement for: cash payments related to the option agreement; to finance its maintenance and exploration expenses on its properties (including the Laguna project, the Jemi project and the Weyman project); and for general corporate purposes and working capital.

The private placement is subject to exchange approval and all securities issued are subject to a four-month hold period. Finder's fees may be payable in connection with the private placement, all in accordance with the policies of the exchange and applicable securities laws.

Qualified person

The scientific and technical information contained in this news release has been reviewed and approved by Kristopher J. Raffle, PGeo (B.C.), 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 (heavy rare earth elements) project located in Coahuila, Mexico, near the Texas, United States, 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.

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