Mr. A. Paul Gill of Lomiko reports
CRITICAL ELEMENTS AND LOMIKO TO EXPLORE BOURIER LITHIUM PROPERTY IN QUEBEC FOR ELECTRIC VEHICLE MARKET
Lomiko Metals Inc. and Critical Elements Corp. have entered into an option agreement that gives Lomiko the right to acquire up to a 70-per-cent interest in the Bourier project.
"Recent consumer interest in electric vehicles has increased investor interest in lithium and graphite, two of the major components of a lithium-ion battery," stated A. Paul Gill, chief executive officer. "We are on the verge of reducing oil consumption and a creating a green economy. Quebec is in a unique position of having ample supply of both commodities and is the focus of Lomiko's mineral interests."
"This option agreement with Lomiko will allow the Bourier property to be explored in detail for a lithium pegmatite discovery. Critical Elements is currently focused on the development of its Rose lithium project. With Lomiko farming into the Bourier project, shareholders of both companies will be able to benefit from successful exploration of a highly prospective project," stated Jean-Sebastien Lavallee, president and CEO, Critical Elements.
The Bourier project consists of 228 claims for a total ground position of 11,579.28 hectares (116 square kilometres) in a region of Quebec that boasts other lithium deposits and known lithium mineralization, as shown in the attached table. The Bourier project is potentially a new lithium field in an established lithium district.
Terms of the transaction
Under the agreement, Lomiko will earn its interest in Bourier by way of a farm-in arrangement. The key terms of the agreement are detailed as attached.
Grant of first option
Critical Elements grants to Lomiko the exclusive right and option to acquire, on or before Dec. 31, 2017, an initial 49-per-cent earned interest in the property Bourier by issuing to Critical Elements an aggregate of five million common shares of Lomiko, by paying to Critical Elements $10,000 cash, and by incurring or financing exploration expenditures for a total amount of $750,000 on the property, as follows: paying to Critical Elements $10,000 cash within a delay of 15 days following the execution of this agreement (non-refundable); issuing to Critical Elements 2.5 million common shares immediately following the receipt of the required approvals from the exchange, and issuing and additional 2.5 million common shares on or before Dec. 31, 2016; and incurring or financing exploration expenditures aggregating not less than $750,000 on the property, of which an amount of $350,000 must be incurred or financed before Dec. 31, 2016, and an amount of $400,000 before Dec. 31, 2017.
Grant of second option
Subject to Lomiko having exercised the first option, Critical Elements will also grant to Lomiko the exclusive right and option to increase its undivided interest in and to the Bourier property from 49 per cent to 70 per cent by paying to Critical Elements an additional amount of $250,000, by incurring or financing additional exploration expenditures for an amount of $1.25-million and by delivering a resource prepared in compliance with NI 43-101 standards on the property prepared by a qualified person independent of Lomiko and Critical Elements, for a period commencing on the delivery of the first option exercise notice and ending Dec. 31, 2018, as follows: paying to Critical Elements an amount of $250,000, in cash or in common shares of Lomiko at the sole discretion of Lomiko, on or before the date of delivery of the first option exercise notice; incurring or financing additional exploration expenditures for an amount of $1.25-million on or before Dec. 31, 2018; and delivering the resource estimate to Critical Elements on or before Dec. 31, 2018.
Milestone payments
Subject to Lomiko's right to withdraw from and terminate the first option, Lomiko agrees to pay the following milestones payments to Critical Elements, payable at any time following the exercise of the first option upon the occurrence of the following: on the estimation of a drilled defined resource (NI 43-101 compliant) of five million tonnes at a cut-off grade of 0.6 per cent Li2O (all categories) a payment of $500,000, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko; on the estimation of a drilled defined resource (NI 43-101 compliant) of 10 million tonnes at a cut-off grade of 0.6 per cent Li2O (all categories) a payment of $750,000, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko; on the estimation of a drilled defined resource (NI 43-101 compliant) of 15 million tonnes at a cut-off grade of 0.6 per cent Li2O (all categories) a payment of $1-million, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko; and on the estimation of a drilled defined resource (NI 43-101 compliant) of 20 million tonnes at a cut-off grade of 0.6 per cent Li2O (all categories) a payment of $1.5-million, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko.
Royalty
Following the exercise of the first option by Lomiko, and in addition to the amounts paid, common shares issued and exploration expenditures incurred or financed by Lomiko under the first option and thereafter under the second option, as applicable, Critical Elements shall receive a royalty equal to 2-per-cent net smelter returns resulting from the extraction and production of any minerals on the property.
The royalty including the right of Lomiko to purchase a portion thereof (1 per cent).
Operator
During the agreement, Critical Elements shall act as the operator and as such, shall be responsible for carrying out and administering the exploration expenditures on the property, in accordance with a work programs approved by the parties regarding the property.
LITHIUM RESOURCES OF THE JAMES BAY AREA
Company Project Measured and indicated Inferred Sources
Nemaska Lithium Whabouchi 13.0 Mt measured at 1.60% Li2O 4.7 Mt at 1.51% Li2O NI 43-101 technical
and 15.0 Mt indicated at 1.54% report -- feasibility
Li2O study on the Whabouchi
lithium deposit and
hydromet plant (revised),
prepared by Met-Chem
Canada Inc., revision
date Jan. 22, 2016
Critical Elements Rose 26.5 Mt indicated at 1.30% 10.7 Mt at 1.14% Li2O Technical report and
lithium-tantalum Li2O equivalent equivalent preliminary economic
assessment on the Rose
tantalum-lithium project,
prepared by Genivar, Dec.
10, 2011
The Bourier property is located within the Opinaca Subprovince. Metagraywacke, derived migmatite and granite characterize this subprovince. Poly-deformed schists occur at the belt margins, whereas the interior portions are metamorphosed to amphibolite and granulite facies (Percival, 2007). Mineralization in the Opinaca subprovince includes rare metal occurrences within peraluminous granites and associated pegmatites.
A technical report has been performed by InnovExplo in 2012, technical report on the Bourier property (according to Regulation 43-101 and Form 43-101F1) for Monarques Resources.
The area is characterized by metasedimentary rocks, mainly biotite paragneiss containing minerals typical of regional amphibolite metamorphic facies, and amphibole-plagioclase gneisses (amphibolites) of volcanic origin (Valiquette, 1975). The northern boundary of the property is marked by intrusive pink granite. The metasedimentary rocks in the centre of the property are intruded by mafic and ultramafic rocks, granites, pegmatites, and late diabase dikes, the youngest rocks of the area. The amphibolites contain numerous lenses of ultramafic tremolite schist that follow the foliation of these amphibolites.
The biotite paragneiss crops out mainly in the low-lying ground. The paragneiss incorporates sills of mafic rock (amphibolites) and ultramafic rocks, metavolcanic layers, granite stocks and dikes, and pegmatite masses. These rocks dip on average 35 degrees to the southwest (Valiquette, 1975). The ultramafic rock in outcrop is mainly serpentinite, although narrow sills of ultramafic amphibole rocks are also present. These rocks may be crosscut by pegmatite dikes. Several granite intrusions cut the metasedimentary rocks. In some areas the granite intrudes the biotite gneisses. This granite is usually massive with very weak gneissic texture. The pegmatite dikes or sills crosscut all the other rocks with the exception of the diabase. The pegmatites occur as two sorts: pink, associated with oligoclase gneisses and granite, and white, associated with metasedimentary rocks. White pegmatites are generally fine- to coarse-grained containing muscovite, almandine garnet, black tourmaline (schorl), magnetite and biotite. Muscovite grains can be up to a few centimetres in size. The pink pegmatite ranges from fine- to a very-coarse-grained variety comprising very large microcline crystals reaching up to 30 centimetres long. Besides quartz, microcline and plagioclase, the pegmatites also contain magnetite as large crystals up to 15 cm in length. Accessory minerals are apatite and garnet with trace amounts of spodumene.
The property is adjacent to the northeast to the Lemarre lithium property option by Critical Elements to Lepidico in February, 2016 (see press release dated Feb. 11, 2016).
Lemare property
In October, 2012, Monarques collected 43 channel samples from six trenches totalling 62 metres in length across the exposed spodumene pegmatite. Of these, 11 samples returned an Li2O content superior to 2 per cent. The results of the channel sampling are shown in the table.
CHANNEL SAMPLING RESULTS FROM LEMARE (MONARQUES
RESOURCES INC.)
Channel Grade Length
Li2O % (m)
LEM(Li)-12-R1 1.61 9.5
including 2.00 6.0
LEM(Li)-12-R2 1.96 12.0
including 2.68 6.0
LEM(Li)-12-R3 1.74 10.5
LEM(Li)-12-R4 2.12 4.8
LEM(Li)-12-R5 1.18 14.2
including 1.58 10.1
LEM(Li)-12-R6 0.42 10.5
including 1.12 3.0
Initial exploration at Lemare was undertaken in 2012 by Monarques Resources Inc. which discovered a "granite pegmatite dike containing a considerable amount of spodumene." The pegmatite ranges in apparent thickness from 4.8 to 14.2 metres and was followed for close to 200 metres in length on surface. The full length of the dike remains unknown and is open in both directions. The pegmatite is undrilled so the depth extent also remains unknown.
Outside of work program completed between 2010 and 2012 for zinc-copper and gold by Resource Monarque, there has been no lithium exploration undertaken at Bourier property. Based on other lithium deposits around the world, it is a common occurrence for pegmatites to exist in "swarms."
Initial compilation of historical geological map and historical work already confirm the presence of pegmatite dike and presence of spodumene and rare metals indicator. No value has been assigned to date in the compilation work as it is preliminary work.
Jean-Sebastien Lavallee (OGQ No. 773), geologist, shareholder of both companies, the president and chief executive officer of the Critical Elements and a qualified person under NI 43-101, has reviewed and approved the technical content of this release.
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