CALGARY, ALBERTA--(Marketwired - Sept. 1, 2016) - AlkaLi3 Resources Inc., formerly Veraz Petroleum Ltd., (NEX:ALK.H) (the "Company" or "ALK") is pleased to announce that it has entered into an agreement (the "Acquisition Agreement") with VE Resources Inc. ("VE") and the sole shareholder of VE (the "Vendor") (both of whom are arm's length parties) pursuant to which the Company is expected to acquire an indirect 50% interest in the 4,060 acre Scotty's Flats group of highly prospective lithium exploration claims (the "Property") in central Nye County, Nevada (the "Acquisition").
Paul Baay, the Company's Chairman, comments "the acquisition of these claims represents an exciting step in the evolution of the Company, as we look to discover the next lithium deposit to service the world's increasing demand."
Pursuant to the Acquisition Agreement, the Company will acquire 50% of the outstanding shares of VE from the Vendor in exchange for 6,000,000 common shares of the Company ("Shares"). Pursuant to the policies of the TSX Venture Exchange ("Exchange"), the Shares will be issued at a deemed price of $0.05 per Share, which was the last trading price of the Shares prior to the execution of the Acquisition Agreement. As a result, the Company will hold a 50% interest in VE. Pursuant to the terms of the Acquisition Agreement, the Company will appoint up to two directors to VE's board at closing, which is currently comprised of two directors. The Company understands that the Vendor is currently negotiating an agreement to sell the remaining 50% of VE's outstanding shares to a third party. The Company anticipates entering into one or more agreements with such third party in respect of the governance of VE and the operation of its assets.
Completion of the Acquisition will be considered a reviewable acquisition in accordance with Exchange Policy 5.3 and is subject to a number of conditions including, but not limited to, Exchange acceptance. The Acquisition and the issuance of Shares in connection therewith are subject to receipt of all necessary regulatory approvals, including the approval of the Exchange. There can be no assurance that the Acquisition will be completed as proposed or at all.
In accordance with Exchange policies, the Company's Shares were halted from trading and are expected to resume trading today.
Scotty's Flats Property Highlights
The primary asset held by VE is the Property. In connection with the Acquisition, the Company has commissioned a National Instrument 43-101 compliant technical report entitled "Geological Report and Summary of the Field Examination, Scotty's Flats Properties, Nye County Nevada" dated July 8, 2016, as amended July 11, 2016, (the "Report") in respect of the Property. The following description of the Property is derived from the Report. The Company anticipates filing the Report on SEDAR following closing of the Acquisition.
The Property consists of 29 Association Placer claims, representing the equivalent of 203 20 acre placer claim units, which cover a total of 4,060 acres, in central Nye County, which is approximately 50 kilometers ("km") south of Goldfield, Nevada, two to six km west of the western boundary of the Nevada Military Test site and State Highway 95 and 35 km North of Beatty, Nevada. The Property is 100% controlled by the Vendor without underlying obligations or encumbrances.
The Report describes the Property as an early stage but well defined opportunity for discovery of brines with significant concentrations of lithium and other elements amenable to evaporitic concentrations from continental brines.
The Property covers a key position in the deep quaternary pull-apart basin. The United States Geological Survey ("USGS") has defined this as a closed basin with mature evaporites and excellent potential for concentration of lithium bearing brines. The source materials for the basin include the Upper Miocene Esmeralda Formation surrounding the Clayton Valley and Lida Valley, the Miocene Horse Springs Formation within the Military Test Site immediately east of the Property, and the tertiary volcanic complex in the Bullfrog Mine/Beatty Area along the south flank of the subject basin. No drilling has been undertaken to confirm the chemistry of the brines within this mature evaporite complex but published USGS results confirm the presence of anomalous lithium concentrations in a very preliminary surface sampling of clay, halite and gypsum bearing sediments in the basin. The Report states that the Property therefore offers good exploration potential in a well defined target environment.
The Report also notes that the Property is located in a geopolitical environment permissive to commercial development, and that access and infrastructure are ideal for a cost effective program of target definition and development using well defined geological, geochemical and geophysical tools and rapid advancement to the drilling stage.
The Report recommends that a two phased work program be completed, with Phase 1 of the work program budgeted at approximately $159,000 and expected to consist of: (i) orientation auger geochemical sampling for salts, clays and brines; (ii) airborne gravity, magnetic and ZTem surveys to map the basin geometry and conductive brine bearing aquafers; (iii) permitting for seismic lines; and (iv) a drilling program contingent on geophysical results from the other activities noted. The Phase 2 work program is recommended to include seismic profiles, detailed target modeling for drill planning, the completion of four drill holes and hydrogeological testing. The budget for Phase 2 of the program will be dependent on the results from Phase 1.
All scientific or technical information provided in this news release has been reviewed and approved by the author of the Report, David Bending, M.Sc., P.Geo. (BC 1992), a professional geoscientist and project manager contracted by the Company and a qualified person as defined by National Instrument 43-101. Mr. Bending has verified any data disclosed herein, including sampling, analytical and test data underlying the information or opinions contained in this news release, via multiple site visits to the Property and associated field examinations.
Application to Graduate from NEX to the TSXV
In connection with the Acquisition, the Company expects to apply to graduate from NEX to Tier 2 of the Exchange. The Company sold its oil and gas assets in 2012 and became an inactive company trading on NEX on July 30, 2012. Upon completion of the Acquisition and subject to Exchange acceptance, it is expected that the Company will become a junior mining issuer.
This news release contains certain forward-looking statements or information ("forward-looking statements") as defined by applicable securities laws that involve substantial known and unknown risks and uncertainties, many of which are beyond the Company's control. These forward-looking statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. The use of any of the words "plan", "expect", "prospective", "project", "intend", "believe", "should", "anticipate", "estimate", or other similar words or statements that certain events "may" or "will" occur are intended to identify forward-looking statements. The projections, estimates and beliefs contained in such forward-looking statements are based on management's estimates, opinions, and assumptions at the time the statements were made, including assumptions relating to: the current commodity price environment; the impact of economic conditions in North America and globally; industry conditions; changes in laws and regulations including, without limitation, the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; increased competition; the availability of qualified operating or management personnel; fluctuations in commodity prices, foreign exchange or interest rates; stock market volatility and fluctuations in market valuations of companies with respect to announced transactions and the final valuations thereof; results of sampling, exploration and testing activities; and the ability to obtain required approvals and extensions from regulatory authorities. We believe the expectations reflected in those forward-looking statements are reasonable but, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive from them. As such, undue reliance should not be placed on forward-looking statements. Forward-looking statements contained herein include, but are not limited to, statements regarding: the terms of the Acquisition and the Acquisition Agreement; receipt of all required regulatory approvals, including the Exchange; completion of the Acquisition and graduation of the Company to Tier 2 of the Exchange; the Company entering into one or more additional agreements with respect to the governance of VE and the operation of its assets; the resumption of trading of the Company's common shares; the Company's ability to explore for and recover the expected deposit types from the Property; the description of the Property described in the Report; the anticipated activities for Phase 1 and Phase 2 of the work program on the Property recommended in the Report; the proposed budget for Phase 1 of the work program on the Property recommended in the Report; and the anticipated timing for filing of the Report. The forward-looking statements contained herein are subject to numerous known and unknown risks and uncertainties that may cause the Company's actual financial results, performance or achievement in future periods to differ materially from those expressed in, or implied by, these forward-looking statements, including but not limited to, risks associated with: the Acquisition and receipt of all necessary regulatory approvals, including the Exchange; fluctuations in commodity prices, foreign exchange or interest rates; the failure to obtain required regulatory approvals or extensions; failure to secure required equipment and personnel; changes in general global economic conditions including, without limitations, the economic conditions in North America; increased competition; the availability of qualified operating or management personnel; changes in laws and regulations including, without limitation, the adoption of new environmental and tax laws and regulations and changes in how they are interpreted and enforced; the results of sampling, exploration and development activities; the ability to access sufficient capital from internal and external sources; and stock market volatility. The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking statements contained in this news release speak only as of the date hereof and the Company does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be require pursuant to applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.