Maricunga Lithium Project
Bearing Lithium has entered into a definitive agreement with Li3 Energy Inc. (“Li3”) for the acquisition
of its 17.67% interest in the Maricunga Lithium Project described below (the “Transaction”). Completion of the Transaction remains subject
to numerous conditions, including but not limited to: (i) approval of the shareholders of both Bearing and Li3; (ii) satisfactory settlements
with certain creditors of Li3; (iii) completion of satisfactory due diligence on the Project; (iv) the receipt of all required third party
approvals, and specifically the approval of the TSX Venture Exchange, among others. Although Bearing believes that its expectation that the
Transaction will close as contemplated is reasonable, there can be no assurance that such expectation will prove to be correct. Closing of
the Transaction will also be subject to additional risks and uncertainties that may cause actual results, performance or developments to differ
materially from those contained in any statements regarding the Transaction or the Maricunga Lithium Project. The information provided below
is expressly qualified by this cautionary statement.
Bearing Maricunga - One page summary (1300 KB)
Technical Report on the Maricunga Lithium Project (9108 KB)
Bearing Lithium & Li3 Energy Highlights:
- Bearing Lithium (TSXV:BRZ) entered into a definitive agreement with Li3 Energy (OTCQB:LIEG) to acquire it for consideration of 16 million shares.
- Li3 Energy's primary asset is a 17.7% interest in the Maricunga lithium project in Chile, which is free-carried to the delivery of a definitive
feasibility study (DFS) by the projects’ partner.
- The Maricunga lithium project is one of the highest grade, undeveloped lithium salars (brine) in the Americas. It is second in grade only to
the Salar de Atacama, which accounts for 100% of Chile’s lithium production and about 40% of global production.
- Over US$30 million has been invested in the project to date and has led to a NI 43-101 Measured resource of 0.60 Mt LCE plus an inferred resource
of 0.06 Mt LCE, both of which are at an average grade of 1,250 mg/L lithium.
- The project is comprised of a number of tenements totaling 4,463 hectares, of which some are grandfathered under a previous mining code which
allows for the immediate exploitation of lithium.
- A significant exploration and development program is underway to de-risk the project, with US$22 million to be expended by property partners
to culminate in the delivery of a Definitive Feasibility Study (DFS) in 2018. Near-term catalysts include exploration results from 16 wells,
pump tests from two production wells, an updated resource estimate in H1/17, the construction and operation of evaporation ponds and a
About the Project
The Maricunga project is located 170 kilometres northeast of Copiapo in the III Region of Atacama in northern Chile at an elevation of 3,800 metres
above sea level (masl). The project is comprised of a number of tenements totalling 4,463 hectares.
The Maricunga project has seen significant past exploration, with over US$30 million expended to date.
Location of the Salar de Maricunga
NI 43-101 Compliant Resource Estimate
The Maricunga project has a NI 43-101 Measured resource of 107,850 tonnes of lithium plus an Inferred resource of 10,590 tonnes of lithium, both
of which are at an average grade of 1,250 mg/L lithium. A potassium resource was also defined with 776,250 tonnes in the Measured category
and 76,320 tonnes in the Inferred category, both of which are at an average grade of 8,970 mg/L potassium. a historical resource that includes
a measured resource of 574,064 tonnes of lithium carbonate and 1,482,638 tonnes of potash plus an inferred resource of 56,368 tonnes of lithium
carbonate and 145,771 tonnes of potash.
The resource mentioned above indicates magnesium-to-lithium ratios of 6.6:1 and a potassium-to-lithium ratio of 7.2:1. For comparative purposes,
these grades and ratios are presented in comparison with other producing and development brine projects in Chile and Argentina in the following
Resource Summary: Contained Compounds (upper) and Average Concentrations (lower)
Comparison of Various Brine Projects
All existing lithium currently being mined is sourced either from brines, for which Chile and Argentina dominate global production, or hard
rock conventional mines, for which Australia dominates global production. In comparison of the two, brines typically are easier and less capital
intensive to explore and delineate resources, can have shorter timeframes to develop, and have lower operating costs once in production. For
the aforementioned reasons, brine projects are typically towards the lower end of the cost curve as seen below.
The Maricunga Joint-Venture Agreement
- The newly formed joint-venture agreement (c.f. September 13th, 2016) outlines a 50% interest for Lithium Power International Ltd
(ASX:LPI), a 32.3% interest for Minera Salar Blanco (MSB; private co) and a 17.7% interest for Li3 Energy (OTCQB:LIEG). Bearing Lithium
is acquiring Li3 Energy and it's underlying interest in the project.
- Under the agreement, Lithium Power International will fund a US$22 million 2-phase exploration and development program, culminating in the
delivery of a Definitive Feasibility Study (DFS) in 2018. The work program will include the drilling of 16 exploration wells, 2 pump test
wells, an updated JORC-compliant resources, the construction of a lithium and potash pilot plant, evaporation ponds, and other associated
infrastructure, plus an Environmental Impact Assessment (EIA).
- The Board and Technical Committee for the joint-venture holding company will be split between LPI, MSB and Bearing Lithium based on each company’s
respective shareholding in the Maricunga JV.
Maricunga Joint Venture Ownership Structure
Maricunga JV Development Timeline
Chilean Mining Law & Pathway Forward
- In Chile, lithium is considered “strategic” and therefore under the current mining law, it is a non-concessible substance.
- Only mining exploitation concessions initiated before 1979 are authorized for the exploitation of lithium. The Cocina, San Fransisco, Salamina,
and Despreciada mining concessions fall under this category (referred herein as “old code” tenements / claims) and will be the focus of
initial exploration and development efforts. The Historical Resource falls within adjacent, non-grandfathered, Litio concessions.
- The Chilean government acknowledges that it is time to redefine the strategic categorization of lithium and new government has lithium as a
- In June 2014, the government established the National Lithium Commission to recommend a new State Policy for the exploitation of lithium and
promotion and development of new projects.
- The recent announcements by the Chilean government provide positive steps for the lithium industry in Chile. The Government is committed to
provide mechanisms for non-grandfathered lithium claims to advance their projects and Chilean President directly instructed Codelco to
move forward with its Maricunga and Pedernales lithium claims to promote new lithium production.
- Government strategy fits well Bearing/MSB plan to advance “old code” claims as a starter project.
- Government initiatives bring Chile to the forefront to advance lithium production in one of the best jurisdictions worldwide, attracting world
class strategic partners.
- Government recently granted Albemarle (NYSE:ALB) an amendment of it’s lithium production rights with the Chilean Economic Development Agency
(CORFO) to expand its quota to 80,000 million tonnes annually of technical and battery grade lithium sales over the next 27 years.
Current Projects and Opportunities
Fish Lake Valley
HY / Jay