November 3, 2016, Vancouver, B.C. – Southern Lithium Corp. (the “Company”) (TSX-V: SNL) announced that it has entered into a letter of intent (the “LOI”) with Proyecto Pastos Grandes S.A. (“PPG SA”), a wholly owned subsidiary of Millennial Lithium (TSX- V: ML), to be granted an option to acquire an eighty percent (80%) interest in the PPG SA’s Cruz property in the Pocitos salar basin in Salta Province, Argentina. The transaction remains subject to certain conditions, including the negotiation and execution of a formal option agreement (a “Definitive Agreement”) and the Company obtaining all necessary approvals from the TSX Venture Exchange.
The terms of the LOI:
The LOI has an effective date of November 2nd, 2016 and requires PPG SA and the Company to enter into the Definitive Agreement by November 10, 2016.
In order for the Company to acquire a seventy percent (70%) interest in the Cruz Property, the Company must:
- a) Pay a non-refundable deposit of US$150,000 to PPG SA. This payment has already been completed.
- b) Pay an additional US$50,000 non-refundable deposit to PPG SA upon the execution of the Definitive Agreement.
- c) Issue US$100,000 worth of common shares of Southern Lithium to PPG SA or Millennial at the same price as the announced private placement offering, upon closing of the Definitive Agreement.
- d) On closing of the first tranche of the Private Placement or November 18, 2016 (whichever is earlier) place in a joint exploration account the sum of US$500,000 (the “Exploration Funds”).
- e) Make US$500,000 of exploration expenditures (the “Exploration Expenditures”) on or before October 1, 2017
- f) Pay to PPG SA the sum of US$1,000,000 on or before October 1, 2017; and
- g) Pay to PPG SA the sum of US$1,000,000 on or before October 1, 2018.
((a)-(g) being, collectively, the “Option Exercise Price”).
To earn the additional 10% interest (for an aggregate total 80% interest) in the Property, the Company must, prior to that date which is 6 months after the third anniversary of the Definitive Agreement, complete a bankable feasibility study on the Property.