Option secured over Royal project hosting lepidolite-rich pegmatites
CORPORATE
On 30 May 2016 the Company held a General Meeting at which shareholders approved the terms for the acquisition of 100% of lithium company Lepidico Ltd by the issue of 750,000,000 Platypus shares, at a deemed issue price of 0.6 cents each, to the Lepidico shareholders in exchange for all of their Lepidico shares.
The transaction was finalised on 8 June 2016. As per agreed terms, these shares are subject to voluntary escrow, with 691,729,647 shares escrowed for six months until 3 December 2016, and the balance 58,270,353 shares escrowed for three months until 3 September 2016.
Further, as agreed, on completion of the acquisition on 9 June 2016, Lepidico chairman, Mr Gary Johnson, was appointed to the Board of Platypus as Non-executive Chairman, while outgoing Chairman Laurie Ziatas resigned from the Board.
Consequent on successful completion of the acquisition of Lepidico, the Company undertook a 3 for 5 non-renounceable rights issue at 1.0 c, raising $3,672,904 before costs. The Offer Document relating to the rights issue was dispatched on 8 June 2016 to shareholders registered on the Record Date, being 3 June 2016.
The rights issue opened on 8 June 2016 and closed on 21 June 2016. The Offer was fully underwritten by Kslcorp Pty Ltd.
Under the Offer, eligible shareholders lodged valid applications for 272,260,621 New Shares, being 74.13% of the Offer and raising $2,722,606. Applications were received from 1,115 shareholders, confirming the strong level of support for the Company's move into the lithium sector.
The Offer did not include a provision for application for shares additional to entitlements.
The Shortfall of the Offer of 95,029,856 New Shares, representing a further approximately $950,298, was placed by the Underwriter. The Shortfall shares were issued on 29 June 2016.
The Directors of Platypus gratefully acknowledge the support of shareholders and the Underwriter in making the Offer such a success.
The acquisition of Lepidico provides Platypus with exposure to the full spectrum of the lithium sector, including prospective ground in Canada, Brazil and Australia and ownership of the L-Max® technology, thus giving the Company a valuable point of difference.
During the quarter, the Company raised an additional $281,415 through the exercise of 27,666,668 options at 1.0 cents each, and 135,707 options at 3.5 cents each.
Funds from the rights issue were received subsequent to quarter end and are therefore not shown in the respective Appendix 5B. The Company's current cash position stands at $3.77 million.
OPERATIONS
LITHIUM
Lemare Project, Quebec, Canada
On 6 May 2016, following completion of its due diligence over the Lemare lithium project in Quebec, Canada, Platypus directed Lepidico to proceed with exercise of the Lemare Option.
On 11 February 2016 Lepidico entered into a binding option agreement to acquire up to 75% of the Lemare lithium project from TSX-V-listed Critical Elements Corporation (TSXV:CRE)("Critical Elements"). The agreement was formalised on 30 June 2016 as the Lemare Option Agreement.
As per the terms of the Lemare Option Agreement, and consequent on shareholder approval in general meeting on 30 May 2016, Platypus issued 18,514,939 Ordinary Shares to Critical Elements Corporation, being C$500,000-worth of Platypus shares at a C$:A$ exchange rate of 0.9524 and at the 5 day VWAP post 31 May 2016 of 2.8355 cents per Ordinary Share.
To earn its initial 50% interest in the Lemare project, Lepidico must make a cash payment to Critical Elements of C$35,000 by 9 September2016 and sole fund exploration of C$800,000 by 31 December 2016 and a further C$1.2 million by 31 December 2017.
The Company can then proceed to earn an additional 25% interest in Lemare by paying to Critical Elements C$2,500,000 and delivering a definitive feasibility study and environmental study by 30 June 2020.
Lemare comprises approximately 74 km2 of tenements in the James Bay region of Quebec, Canada. This region hosts several advanced lithium projects, including the Whabouchi deposit (Nemaska Lithium), the Cyr deposit (Galaxy Resources) and Critical Elements' own Rose deposit.
The project contains a spodumene pegmatite discovered in 2012 and subsequently confirmed by channel sampling to extend over at least a 200 m strike, with an average width of 10.25 m and an averagegrade of 1.44% Li2O.The Lemare pegmatite was fortuitously discovered during the course of exploration for nickel and gold. As such, there is ample scope for the discovery of additional pegmatites through targeted lithium exploration as pegmatites rarely occur in isolation, but instead typically occur in 'swarms.'
Platypus is currently working in conjunction with Critical Elements to prepare for a field campaign at Lemare comprising a mapping/prospecting program in conjunction with Diamond drilling of approximately 4,000 m with an aim to define an Inferred Resource at Lemare by 31 December 2016.
Figure 1. Advanced lithium deposits and location of the Lemare project claims (deep pink) in the James Bay area, Quebec, Canada (after Critical Elements Corporation, 2016).
Lepidico JV with Crusader Resources, Brazil
On 3 February 2016, the Company advised that Lepidico had increased its exposure to the lithium sector by signing a memorandum of understanding with ASX-listed Crusader Resources Limited ("ASX:CAS; "Crusader") under which the two companies would seek to exploit lithium opportunities in Brazil through a 50:50 joint venture.
On 19 April 2016, the Company advised that Lepidico and Crusader had executed a Shareholders Agreement to establish a 50:50 joint venture company, Third Element Metals Pty Ltd ("Third Element Metals" or JV Company").
Third Element Metals will: