Although we have no new information to report at this time, we are publishing this latest Q&A with ILC President, Kirill Klip to address questions we have received pertaining to our latest announcement.
1. What do the latest series of announcements concerning ILC’s strategic partner GFL International mean for the company?
Having a partner that has developed technology to process the raw materials that we aim to produce and has an expanding customer base for their finished products gives ILC security in the market and materials processing side of future feasibility studies. It also gives ILC confidence in moving the projects forward as our partner is actively pursuing vertical integration within their business model. It is becoming increasing important for the lithium product manufacturers to control the quality of feed material in their operations. We expect that our relationship with Ganfeng Lithium will only grow from here on in.
The announcements are testament of the commitment to drive the next stage of growth with Ganfeng Lithium. ILC has successfully secured the means to advance our joint venture projects and continue the exploration on the Blackstairs, Ireland and Mariana, Argentina projects.
Two key agreements have been reached with Ganfeng Lithium:
- GFL has pledged to invest US $10M in the Blackstairs project in order to acquire an additional 24% in the property. (for details see the April 04 2014 news release).
- The companies entered into a loan conversion and investment agreement on the Mariana Lithium brine project (for details see the April 04 2014 news release)
Ganfeng Lithium recently commissioned a new facility in China adding 500mt/y Li metal to its current 1000mt/y Li production capacity. The company exports and produces over 20 specialized lithium products for various applications worldwide. This includes Li metal batteries for which GFL has developed a breakthrough technology that shortens the industry standard production process. With working capital now available, we can concentrate our efforts on completing the resource definition and economic assessment on our projects.
2. How does this new project ownership structure benefit ILC?
These transactions have allowed us to cancel approximately US $3.3M in loans plus interest indebted to GFL, and most importantly allowed us to maintain shareholder value by advancing our projects without the need for dilutive equity financings at depressed share prices.
3. What does ILC expect to retain?
We expect the terms to be finalized at 49% ILC/ 51% GFL on Blackstairs and 20% ILC/ 80% GFL on Mariana. In addition to securing the means to advance the exploration on the properties we have also aligned ILC with a company that has the capabilities and technologies to extract and process Lithium into a final user-friendly product that is currently in high demand – in the long run potentially saving us significant additional processing costs and external consulting fees.
4. What are the next steps for the company?
ILC and GFL are now in the budget approval process for the Blackstairs exploration program. Furthermore, we are finalizing our Joint Venture Agreement on the Mariana property after which we will begin the planning process for a follow-up exploration program later in the season.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this document. Statements in this document other than purely historical information, historical estimates should not be relied upon, including statements relating to the Company’s future plans and objectives or expected results, are forward-looking statements. This document contains certain “Forward-Looking Statements” within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.