LITHIUM X ENERGY C COM NPV (OTCMKTS:LIXXF)
LITHIUM X ENERGY C COM NPV (OTCMKTS:LIXXF) has announced entering into a Definitive Agreements with Pure Energy Minerals Inc that will see the company sell off its interests in Nevada. In addition, Lithium will also subscribe to 3.571 million shares of Pure Energy at C$0.56.The total cost for the subscription will amount to C$2 million.
Each unit will be made up of one common share of Pure Energy plus half of a common share of purchase warrant. Each full warrant will be exercisable at a price of C$0.75. The proceeds from the subscription will be used to develop the Nevada asset. Lithium X CEO, Brian Paes-Braga, said the partnership will allow the company to consolidate its projects and assets in Clayton Valley.
Under the terms of the sale, Lithium X will transfer all its interests in Nevada to Pure Energy. These will consist of options in Calyton Valley Lithium Inc plus stakes in Clayton Valley South Expansion. The company’s interest in Nevada, when put together with Pure Energy’s Clayton Valley South lithium brine project, will lead to a Clayton Valley project of over 10,500 hectares.
LITHIUM X ENERGY C COM NPV (OTCMKTS:LIXXF) will receive C$20.038 million which will be paid in form of common shares of Pure Energy plus an additional C$2.022 million worth of share purchase warrants. After the completion of the transaction Lithium X will have the majority stake in Pure Energy with a 19.99% ownership of all the Pure Energy the outstanding common shares.
As part of the transaction, both companies will sign an investor rights agreement. Under this agreement, for two years after completing the transaction, Lithium X will be subjected to some restrictions regarding the deposition of its common share in Pure Energy. LITHIUM X ENERGY C COM NPV (OTCMKTS:LIXXF) will also be required to vote on its Pure Energy common shares as directed by the management of Pure Energy. Additionally, Lithium X will be entitled to place one director on Pure Energy’s board as long as it maintains a 5% or more stake in Pure Energy.
The transaction is expected to be completed by the end of May and is subject to normal statutory closing conditions including securing all the required regulatory approvals. While commenting on the transaction, Pure Energy CEO, Patrick Highsmith, said it is an important opportunity and will offer Pure Energy a chance to consolidate the only productive lithium brine district in North America. He added that the partnership with Lithium X will enable his company leverage its business together with benefiting from the expertise in Clayton Valley.
LITHIUM X ENERGY C COM NPV (OTCMKTS:LIXXF) ended Tuesday trading session having shed 0.30% in market value to end the day at $1.62 a share.
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About the author: Liam is a retired civil engineer with a passion for stock analysis. Living in Helena, MT, Liam keeps busy by tying flies for fisherman and discovering stocks that normally go un-noticed.