September 21, 2016 / Vancouver, BC / NRG Metals Inc. (the “Company”) (TSX-V: NGZ) (OTC Pink GPOFF) (Frankfurt OGPN) has entered into an arm’s length Letter of Intent executed on September 14, 2016 to acquire 100% (subject to terms outlined below) of two contiguous lithium projects (Project 1 and Project 2, and together, the “Projects”) in Catamarca province, Argentina, subject to TSX Venture.
Exchange (the “Exchange”) approval and other conditions (the “Transaction”). The project area is strategically located within the Lithium Triangle, in close proximity to one of the largest known lithium deposits in Argentina, and within the Puna Region, an elevated plateau which lies on the eastern side of the Andes Mountains. This region contains a number of highly mineralized salars including the lithium producing salars Hombre Muerto, operated by FMC Corp. and Galaxy Resources, and Olaroz operated by Orocobre Ltd. Further negotiations are ongoing for additional projects in the area, and at this time, the Company chooses to await the outcome of those negotiations before providing further details.
This Transaction is deemed to constitute a Fundamental Acquisition as defined in Policy 5.3(1) of the Exchange Policy and Procedures Manual (the “Policy”), and as such, will be subject to the terms and conditions acceptable to the Exchange for the completion of such transactions.
After completion of a 90 day due diligence period, the Company can acquire a 100% interest in the Projects for the following payments to the owners:
Project 1: A four year purchase agreement, with a USD $120,000 payment on execution of the definitive exploration with purchase option agreement; USD $200,000 at the end of year one, USD $200,000 in year two, USD $200,000 in year three, and a final payment of USD $600,000 at the end of year four, subject to a 1% Net Smelter Royalty which may be purchased for USD $1,000,000.
Project 2: A four year purchase agreement, with a USD $160,000 payment on execution of the definitive agreement; USD $100,000 at the end of year one, USD $100,000 in year two, USD $250,000 in year three, and a final payment of USD $625,000 at the end of year four, subject to a 1% Net Smelter Royalty which may be purchased for USD $1,000,000.
A finder’s fee equal to the maximum finder’s fee permitted under the Policy will be paid to parties involved in this Transaction.
Concurrent Private Placement Financing
The Company also announces a proposed non-brokered private placement to fund the exploration and acquisition of the Projects, subject to Exchange approval. The Company proposes to issue up to a total of 10 million units at a price of $0.10 per unit. Each unit will comprise one common share and one transferable common share purchase warrant exercisable for a period of two years at an exercise price of $0.20 per share, provided that in the event that the closing price of the Company’s common shares on the Exchange is $0.40 or greater per common share during any 20 consecutive trading day period at any time subsequent to four months and one day after the closing date, the warrants will expire at 4:00 p.m. (Vancouver time) on the 30th day after the date on which the Company provides notice of such accelerated expiry to the warrantholders, and the warrantholders will have no further rights to acquire any common shares of the Company under the warrant.
A finder’s fee equal to 10% will be payable on a portion of the financing in accordance with Exchange Policy. All securities issued in connection with the private placement are subject to a 4-month hold period in Canada.
We seek Safe Harbor.
On Behalf of the Board of Directors,
Adrian Hobkirk, President, CEO and Director
The TSX Venture Exchange has not reviewed the content of this news release and therefore does not accept responsibility or liability for the adequacy or accuracy of the contents of this news release.
This news release contains certain “forward- looking statements” within the meaning of Section 21E of the United States Securities and Exchange Act of 1934, as amended. Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward- looking statements. Forward-looking statements are based upon opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors which could cause actual results to differ materially from those projected in the forward looking statements. The reader is cautioned not to place undue reliance on forward-looking statements. The transaction described in this news release is subject to a variety of conditions and risks which include but are not limited to: regulatory approval, shareholder approval, market conditions, legal due diligence for claim validity, financing, political risk, security risks at the property locations and other risks. As such, the reader is cautioned that there can be no guarantee that this transaction will complete as described in this news release. We seek safe harbor.