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Lithium Chile Inc
Symbol LITH
Shares Issued 139,462,359
Close 2022-04-05 C$ 1.09
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Lithium Chile arranges $27.91M private placement

2022-04-05 13:19 ET - News Release

Mr. Steve Cochrane reports

LITHIUM CHILE STRATEGIC INVESTOR, CHENGXIN LITHIUM, INCREASES STAKE TO 19.86% THROUGH A $27,911,000 PRIVATE PLACEMENT

Lithium Chile Inc. plans to complete a non-brokered private placement of 29.38 million common shares of the company at a price of 95 cents per offered share, for aggregate gross proceeds of $27,911,000. The offering is to be completed by a wholly owned subsidiary of Chengxin Lithium Group Co. Ltd. In conjunction with the offering, Chengxin will be entitled to nominate two directors to the board of directors of Lithium Chile and Chengxin has agreed to provide Lithium Chile with two technical staff to aid in the exploration and development of the company's properties in Argentina.

Chengxin participated in the recent private placement completed by Lithium Chile (see news release dated Jan. 31, 2022). That private placement was for units comprising 4,285,720 common shares and 4,285,720 share purchase warrants. Completion of the proposed offering, along with the exercise of Chengxin existing warrants, will bring Chengxin's stake in the company to 19.86 per cent. This will result in total gross proceeds of $34,553,866.

Steve Cochrane, president and chief executive officer, commented: "We are thrilled to have Chengxin as a key strategic and cornerstone shareholder of our company. Chengxin supports our vision and, with their investment, we can rapidly accelerate the exploration and developments of our properties with an eye on increasing our existing resources in a very meaningful way. These additional funds will allow the company to look at opportunities we have been presented with that will result in expanding our footprint in both Argentina and Chile. Chengxin is a well-respected leader in the lithium space; their extensive experience will be valuable as our company continues to forge ahead. I note the recent investment by BYD in Chengxin gives the company a door into the whole supply chain for electric vehicles."

Chengxin recently announced a strategic co-operation agreement with BYD, China's largest electric car maker, which will provide for no more than $600-million investment for more than 5-per-cent stake in Chengxin (subject to approval). Chengxin and BYD expect that the co-operation agreement will allow them to jointly acquire and develop lithium resources and BYD will step up the procurement of lithium products for supply stability and cost advantages.

Chengxin is a publicly listed company in China with a market capitalization of 45.6 billion yuan ($9-billion (Canadian)) and, at Dec. 31, 2021, its net profit was 862 million yuan ($170-million (Canadian)) for the fiscal year. Chengxin is primarily engaged in the new energy materials business, including production from spodumene and brines, as well as manufacturing of lithium products, including lithium hydroxide and lithium carbonate.

At present, Chengxin has 70,000 tonnes (t) of lithium product capacity and ranks No. 2 in China, with another 60,000-tonne capacity under construction in Indonesia. To secure feedstock supplies, Chengxin owns upstream resource in China and overseas, including an existing asset in Argentina.

Completion of the offering is subject to regulatory approval, including, but not limited to, the approval of the TSX Venture Exchange. The offered shares issued under the offering will be subject to a four-month hold period from the date of the closing of the offering.

Pursuant to the completion of the investor relations contract with Clarkham Capital, the agreement will be terminated on April 30, 2022.

About Lithium Chile Inc.

Lithium Chile is advancing a lithium property portfolio consisting of 69,200 hectares covering sections of 10 salars and two laguna complexes in Chile and 23,300 hectares in Argentina.

We seek Safe Harbor.

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