TORONTO, ONTARIO--(Marketwired - May 12, 2016) -Aberdeen International Inc.('Aberdeen', or the 'Company') (TSX:AAB) is pleased to announce that its 50% owned investee company, Potasio y Litio de Argentina SA ('PLASA'), which owns 100% of the Sal de los Angeles lithium brine project ('Sal de los Angeles Project', or the 'Project') in Argentina, has entered into a joint venture agreement ('JV Agreement') with Salta Exploraciones SA ('SESA') for the development of a pilot lithium production facility at the Project. SESA is a consortium of Argentina-based engineering and construction firms with extensive experience in the design, construction and operation of lithium brine facilities in Argentina's Puna region, where Sal de los Angeles is located.
The JV Agreement establishes a joint venture for the construction and operation of a pilot facility, which will be initially designed to produce approximately 2,500 tonnes per annum ('tpa') of lithium carbonate equivalent ('LCE'). The Project has not been the subject of a feasibility study and there is no guarantee the pilot plant will successfully produce a commercial product on a profitable basis or at all.
Under the terms of the JV Agreement, in order to earn a 50% stake in the joint venture, SESA must contribute an estimated US$6 million or the required amount for the construction and operation of an initial 2,500 tpa LCE ponding facility by incurring all construction and overrun costs, including the costs associated with one full year of post-construction operation. PLASA must contribute US$3.3 million over the next twelve months, with an initial contribution of US$200,000 to be made within 30 days of receiving all necessary permits, in consideration for a 30% contributing participation in the joint venture and the right to sell any lithium products. PLASA will also be fully carried for the remaining 20% of the joint venture in consideration for contributing brine from existing wells on the Project. The agreement has a 25-year term.
SESA will be the operator of the joint venture and will report to an operating committee, which will be comprised of four members, two of whom will be appointed by PLASA and two will represent SESA. SESA shall submit detailed engineering plans within 60 days of signing for review and approval by the operating committee. The JV Company shall have the option to increase its operating facilities to 5,000 tpa LCE if certain financial and operational conditions are met.
PLASA's US$3.3 million contribution will be made by Lithium X Energy Corp. ('Lithium X') on behalf of PLASA. This contribution falls outside of the required minimum expenditure commitment on the project previously disclosed, however Aberdeen will be required to contribute its proportional share of the costs after the expenditure commitment has been made and Lithium X has made the decision whether or not to exercise its option on PLASA, or be diluted in the joint venture.
David Stein, Aberdeen's President and CEO stated, 'We have been pleased to work with Lithium X on taking this initial step to construct a pilot plant at the Project, partnering with local firms with experience operating in Salta Province and the Puna Region of Northwestern Argentina. To meet rapidly growing lithium demand, we now have the opportunity to de-risk some of the technical aspects of the Project, while developing the Project at a pilot scale.'
The Sal de los Angeles Project covers more than 95% of the Salar de Diablillos property located in Salta province at an average elevation of approximately 4,050 metres above sea level. The Project includes 32 mining claims covering approximately 8,156 hectares and is located near FMC Corp.'s Salar de Hombre Muerto lithium deposit, one of the world's largest lithium operations. The JV Company ponding facility is restricted to 100 hectares (1%) of the 8,156 hectares that comprise the Sal de los Angeles property.
The ponding facility shall be designed to operate using conventional evaporation-based processing with the objective of producing, initially, a greater than 30 percent lithium chloride concentrate.
PLASA must obtain the necessary permits to construct and operate the pilot facility, including the Environmental Impact Assessment, which is in the final stages of preparation. Construction of the ponds will commence once permits have been received. Current works will focus on well construction, pumping and piping facilities.
Lithium X has the option to acquire up to 80% of PLASA exercisable after making a minimum expenditure of CDN$3 million on the Project and completing a feasibility study, the 'expenditure commitment'. The option can be exercised by paying Aberdeen CDN$5 million in Lithium X stock at a 10% discount to the 20-day volume weighted average share price.
The technical information contained in this news release has been reviewed and approved by William Randall, P.Geo, who is a Qualified Person as defined under NI 43-101.
ABOUT ABERDEEN INTERNATIONAL
Aberdeen International is a global resource investment company and merchant bank focused on small capitalization companies in the mining and metals sector. African Thunder Platinum, Aberdeen's premiere investment, is a lower-cost platinum group metals project in South Africa's well-known Bushveld Complex. Aberdeen has further enhanced its investment holdings with its holding of 50% of Potasio y Litio de Argentina SA, which holds the Sal de los Angeles lithium project in Argentina.
For additional information, please visit our website at www.aberdeeninternational.ca and follow us on Facebook, Twitter, Linkedin and check out Aberdeen's YouTube Channel.
Cautionary Notes
Except for statements of historical fact contained herein, the information in this press release constitutes 'forward-looking information' within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as 'plans', 'proposes', 'estimates', 'intends', 'expects', 'believes', 'may', 'will' and include without limitation, statements regarding, the construction and operation of the pilot facility, the budget and timetable for construction; partners' obligation and their ability to meet those obligations; the possible commercial nature of any products; joint venture and operating committee operations and decisions; the ability of the Company to generate additional value for shareholders as a result of such transactions, past success as an indicator of future success; net asset value of the Company; industry opportunities, lithium pricing and dynamics and anticipated returns. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, competition, financing risks, acquisition risks, risks inherent in the mining industry, and regulatory risks. Most of these factors are beyond the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.