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Pure Energy picks up Lithium X's Nevada assets, combines 10 500 ha landholdings

Pure Energy picks up Lithium X's Nevada assets, combines 10 500 ha landholdings

Photo by Lithium X

12th May 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – Lithium explorer and project developer Lithium X has agreed to sell its Nevada-based assets to Pure Energy Minerals and become the largest shareholder of the company as it develops the package of Clayton Valley projects surrounding Albemarle's Silver Peak lithium mine, in Nevada.

The partners have signed a definitive contract outlining Lithium X subscribing for 3.57-million units of Pure Energy at a price of C$0.56 for a total subscription cost of C$2-million. 

Each unit comprises one Pure Energy common share and one half of a common share purchase warrant, with each whole warrant exercisable at a strike price of C$0.75. The unit price represents a 9.8% premium to Wednesday’s closing price of Pure Energy’s common shares.

Lithium X advised that the subscription proceeds are expected to be spent entirely on the development of the Nevada assets.

"I have a lot of respect for what [Pure Energy director and CEO Patrick Highsmith] and his team have accomplished in Nevada, and their success helped inspire the founding of Lithium X. Lithium X is pleased to become Pure Energy's largest shareholder, and participate in the tremendous upside at Clayton Valley, which hosts North America's only primary producing lithium brine,” Lithium X CEO and a director Brian Paes-Braga stated.

Under the terms of the sale accord, Lithium X will transfer its option from Clayton Valley Lithium to acquire the Clayton Valley North project, and its claims comprising the Clayton Valley South Expansion. The company's Nevada interests, when combined with Pure Energy's Clayton Valley South lithium brine project that has a compliant inferred resource of 816 000 t of lithium carbonate equivalent, will create a combined Clayton Valley project consisting of more than 10 500 ha.

Under the sale, the Lithium X will receive 20.04-million Pure Energy common shares and 2.02-million share purchase warrants as payment for its Nevada interests. 

The transactions will result in Lithium X becoming the largest shareholder of Pure Energy, holding 19.99% of the outstanding common shares, which, together with share purchase warrants that, if exercised immediately, would increase its interest to 22.5%.

Lithium X will be able to nominate one director to Pure Energy’s board as long as it owns at least 5% of Pure Energy.

The transactions are expected to close at the end of May, but are subject to usual closing conditions, including receipt of all required regulatory and other approvals.

Meanwhile, Lithium X reported that the first hole drilled as part of its Phase 1 exploration programme, led by GeoXplor at its Clayton Valley North lithium project, was drilled to a depth of 371 m and intersected the targeted basal gravel aquifer at about 286 m below surface, over a total vertical thickness of about 79 m.

The campaign also intersected other aquifers above the basal gravel layer, including the main ash layer that is believed to be one of the targeted production horizons of the neighbouring Silver Peak mine wells. The team intersected brines at various horizons, with maximum lithium values of 61 mg/ℓ encountered in the basal gravel aquifer.

Pure Energy has been working with global technology and mining services provider Tenova Bateman Technologies (TBT) at the process testing, engineering, and design stage on the Clayton Valley South project. Early indications at the lab scale and beyond, are that the TBT process may outperform conventional evaporative and other alternative technologies for lithium recovery from certain brines. Preliminary results reported by Pure Energy, in 2015 and 2016, suggested that the TBT technology has the potential for significant advantages over conventional technology.

Pure Energy’s TSX-V-listed stock rallied on the news, gaining 9.8% to close at C$0.56 a share.

Edited by Creamer Media Reporter

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