Canada Lithium Corp.

Canada Lithium Corp.

January 11, 2011 08:16 ET

Canada Lithium Announces $110 Million "Bought Deal" Financing

TORONTO, ONTARIO--(Marketwire - Jan. 11, 2011) -


Canada Lithium Corp. ("Canada Lithium" or the "Company") (TSX:CLQ)(OTCQX:CLQMF) is pleased to announce that it has entered into an agreement with a syndicate of underwriters co-led by Scotia Capital Inc. and Macquarie Capital Markets Canada Ltd., and including Jacob Securities Inc., Casimir Capital Ltd., Cormark Securities Inc. and Dundee Securities Corporation (collectively, the "Underwriters"), which have agreed to purchase, on a bought deal basis, 73,350,000 common shares of Canada Lithium at a price of $1.50 per common share (the "Offering Price"), for aggregate gross proceeds of approximately $110 million.  In addition, the Company has granted the Underwriters an option to purchase up to an additional 11,002,500 common shares at the Offering Price exercisable within 30 days after the closing of the offering for additional gross proceeds of up to approximately $16.5 million. Canada Lithium plans to use the net proceeds of the offering to partially fund the construction of an open-pit mine and processing plant at its 100%-owned Quebec Lithium Project near Val d'Or and for working capital and general corporate purposes.

The offering is scheduled to close on or about January 31, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.

On December 17, 2010, Canada Lithium announced the results of its National Instrument 43-101-compliant Feasibility Study (FS) for the development of a mine and lithium carbonate processing facility at its Quebec Lithium Project near Val d'Or, Quebec. Initial construction is planned to commence in mid-2011, commissioning is currently scheduled to be under way by the end of 2012, with full production expected in 2013, subject to financing and final permitting. Initial capital costs are estimated to be US$202.0 million.

As stated in the December 17, 2010 press release, for the Stage 1 development, cash flows are based on a 100% equity basis and the base-case economic analysis indicates a pre-tax Net Present Value (NPV), discounted at 8%, of US$270.0 million, at a US$2.67/lb (US$5,875/t) price for lithium carbonate (99.5%), as reported by Roskill Information Services in a study on lithium carbonate pricing done for the Quebec Lithium Project. The projected pre-tax Internal Rate of Return (IRR) is 24% (a C$/US$ exchange rate of 1:1 has been used for the 2011 and 2012 construction phase of the project and 1.1:1 over the remaining life of the mine). Life-of-Mine revenue for Stage 1 is estimated at US$1.78 billion, with earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$1.0 billion.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Canada Lithium Corp.

Canada Lithium Corp. is a Canadian-based "clean tech" mine developer trading under the symbol CLQ on the TSX and on the U.S. OTCQX market under the symbol CLQMF. The Company has completed a definitive Feasibility Study (FS) on its Quebec Lithium Project near Val d'Or, the geographical heart of the Quebec mining industry. The Company has an agreement with Japanese metals trading firm, Mitsui and Co. Ltd., to market a portion of the Company's product in China, Korea and Japan. Metallurgical tests from deposit samples have produced 99.9% battery-grade lithium carbonate.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained herein constitute forward-looking statements, including statements concerning the anticipated size of the offering and the anticipated use of proceeds. The Company believes that the expectations reflected in the forward-looking statements are reasonable but no assurance can be given that such expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. Closing could be delayed if the Company cannot obtain necessary regulatory approvals within anticipated timelines and will not be completed unless certain conditions customary for transactions of this kind are satisfied. The forward-looking statements included in this press release are made as of the date of this press release and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.

Contact Information