The Mavis Lake Project – project sold on 5 January 2022
The Mavis Lake project with the Fairservice Lithium properties when sold consisted of contiguous mining claims totalling 2,544 ha and 6 contiguous mining leases totalling 88.4 ha within the Brownridge Township, Ontario. The Project is located approximately 19 km east-northeast of Dryden in northwestern Ontario.
On January 5, 2022 the Company completed the sale of its remaining 49% stake in the Mavis Lake project to Critical Resources Ltd. The sale was in line with the announcement made on October 25, 2021 whereby CRR had bought an option to buy 100% of the claims from the Company and its partner Essential Metals Ltd (ASX:ESS).
- Upon completion of the Mavis Lake sale, ILC has received AUD$ 0.75m (CAD$ 0.69m) and share consideration of 34,000,000 shares in Critical Resources Ltd (ASX:CRR) at a deemed value of AUD$ 0.75m calculated at a share price of AUD$ 0.022 per share.
- At CRR’s closing share price on January 4, 2022 of AUD$ 0.041, ILC’s stake in CRR had a market value of about AUD$ 1.39m (approximately CAD$ 1.28m).
- Further payments of upto AUD$ 1.5m (approximately CAD$ 1.38m) are payable to ILC depending on the achievement by CRR or any successor company of certain resource milestones at Mavis Lake.
- In the event of achievement of Mavis Lake resource milestones, ILC will receive
- AUD$ 0.75m in cash following the definition of a Mineral Resource Estimate (as defined in the JORC Code 2012) for the Project with a volume of not less than 5.0 million tonnes containing not less than 50,000 tonnes of Li2O using a cut-off grade of not less than 0.4% Li2O
- a further AUD$ 0.75m in cash following the definition of a Mineral Resource Estimate (as defined in the JORC Code 2012) for the Project with a volume of not less than 10.0 million tonnes containing not less than 100,000 tonnes of Li2O using a cut-off grade of not less than 0.4% Li2O
- A royalty obligation of ILC and its partner Essential Metals to Rich Resource Investments Ltd in respect of the Fairservice claims at Mavis Lake was assumed by CRR, and ILC in turn agreed to give up the NSR which it had on Mavis Lake.
History of ILC’s ownership
June 22, 2016, the Company announced that Pioneer Resources now renamed Essential Metals (ASX: ESS)) had entered into an option agreement (the “Option Agreement”) to advance an exploration program on the Company’s Mavis Lake lithium project (the “Project”) (see Company news releases dated March 14, 2016 and April 20, 2016). Under the terms of the Option Agreement, Essential Metals could earn up to an 80% interest in ILC’s Mavis Lake lithium project.
On August 29, 2018 the Company concluded an agreement with Essential Metals with the effect that Essential Metals is deemed to have achieved the conditions for the first earn-in under the Mavis Lake joint venture agreement by issuing 2,500,000 shares to the Company and as a result owned 51% of Mavis Lake, with the Company retaining 49%. In addition, the Company was to receive a 1.5% NSR on Mavis Lake. Essential Metals retained, if a second option whereby it could have earned an additional 29% by spending CAD$8.5 million within seven years (total $10 million over ten years).
On October 25, 2021 the Company and Essential Metals announced that for AUD$ 175,000 they had granted an option until January 4, 2022 to Critical Resources Limited (ASX:CRR) to buy 100% of the Mavis Lake claims and leases. The total sale price is AUD$ 3.0m plus a further AUD$ 3.0m in the event of certain resource estimate targets being met. The proceeds will be split 50:50 by the Company and Essential Metals. This option was exercised on January 5, 2022.
The Mavis Lake Project is situated 19 kilometres east of the town of Dryden, Ontario. The Project is ideally situated in close vicinity to the Trans-Canada highway and rail transportation arteries linking larger cities such as Thunder Bay, Ontario, to the southeast and Winnipeg, Manitoba, to the west.
The property consists of the Fairservice prospect that includes the Pegmatite 6 target, and the Mavis prospect which includes several pegmatite targets.
The Fairservice prospect had seen several periods of exploration since its discovery.
Pegmatite 6 Target
Essential Metals had defined a new target through drilling at Fairservice, Pegmatite 6.
Plan View of the Essential Metals 2018 drill hole collar locations and hole traces summarising lithium mineralisation at the Fairservice Pegmatite 6 Prospect. The plan shows the north-dipping pegmatite where it outcrops at surface (425m RL) and the intersected pegmatite (dashed pink) at approximately 100m below surface (i.e. 425m R.L.)(Essential Metals).**
East-West Long Section through the Fairservice Pegmatite 6 Prospect. The section shows 2018 drilling intersections in red with annotated grades. Mineralisation was intersected between 100 and 140m (approximately 325m +- 30mRL) below surface (Essential Metals).**
Staging for a drilling campaign in 2018 at Mavis Lake (Essential Metals).
|Fairservice Pegmatite 6 Prospect: Significant Drilling intersections**|
* All reported widths are drill hole intersection widths and have not been converted to true width. True width is unknown at this time.
** See Company news release dated April 9, 2018.