Lithium X Energy Corp. (TSX-V: LIX) (OTCQB: LIXXF) announced today that the Company’s 50% owned subsidiary Potasio y Litio de Argentina SA, which owns 100% of the Sal de los Angeles lithium-potash brine project in Argentina, has entered into a definitive Union Transitoria agreement (“JV Agreement”) with Salta Exploraciones SA for the development of a pilot lithium production facility at the Project. Lithium X has the option to acquire up to 80% of PLASA.
The JV Agreement sets out the terms of a Joint Venture for the construction, operation, production and sales of a pilot facility, designed to produce up to 5,000 tonnes per annum (“tpa”) of lithium carbonate equivalent (“LCE”). SESA is a consortium of Argentina-based engineering and construction firms with extensive experience in the design, construction and operation of lithium brine facilities in Argentina’s Puna region, where Sal de los Angeles is located.
Under the terms of the JV Agreement, in order to earn a 50% stake in the JV Company, SESA must contribute an estimated US$6 million or the required amount for the construction and operation of an initial 2,500 tpa LCE ponding facility by incurring all construction costs, including one full year of post-construction operation. PLASA shall contribute US$3.3 million for a 30% contributing participation in the JV Company and the right to commercialize the lithium products. In addition, PLASA is also fully carried for the remaining 20% for contributing brine from existing wells on the Project, including a free-flowing artesian well that is estimated to supply the operation during the initial years.
The JV Company shall have the option to increase its operating facilities to 5,000 tpa LCE upon completing a full 12-month period of cash flow positive operations on an after-tax basis. SESA shall be the operator of the JV Company under the direction of an evenly balanced Operating Committee. The JV Company ponding facility is restricted to 100 hectares (approximately 1%) of the 8,156 hectares that comprise the Sal de los Angeles property.
“This JV Agreement is a major accomplishment for Lithium X,” stated Paul Matysek, Executive Chairman of Lithium X. “It represents an important step towards full scale lithium production. The agreement also secures both the financial contribution, know-how and operation of several engineering and construction groups that have been involved in the design, build and/or operation of three construction and development-stage lithium brine projects in Argentina over the last five years.”
“We are delighted to have reached an agreement and feel certain that the complimentary skill sets and strong relationship of cooperation between the parties will lead to many benefits for the respective shareholders and the local communities,” commented Diego Pestaña, President of SESA.
“This is a major vote of confidence for the outstanding quality of the Sal de los Angeles project from a group that has worked on and/or evaluated most lithium brine projects in Argentina,” added Lithium X CEO Brian Paes-Braga. “This agreement does not encumber further production on the property, leaving 99 percent of the Project available for development.”
The Sal de los Angeles Project covers more than 95% of the Salar de Diablillos property located in Salta province at an average elevation of approximately 4,050 metres above sea level. The Project includes 32 mining claims covering approximately 8,156 hectares and is located near FMC Corp.’s Salar de Hombre Muerto lithium deposit, one of the world’s largest lithium operations.
