Lithium One Inc.
TSX VENTURE : LI

Lithium One Inc.

February 15, 2011 11:40 ET

Lithium One Finalizes James Bay Earn-In Agreement With Galaxy

Highlights

- Lithium One and Galaxy sign a Definitive Earn-in and Joint Venture Agreement for the James Bay Project

- Galaxy to pay C$3 million in cash to acquire an initial 20% interest in James Bay Project and can earn up to a 70% interest by completing a Definitive Feasibility Study within 24 months

- Lithium One now has two lithium projects funded by third parties through the feasibility stage

VANCOUVER, CANADA--(Marketwire - Feb. 15, 2011) - Lithium One Inc. (the "Company" or "Lithium One") (TSX VENTURE:LI), is pleased to report that, further to its news release dated December 9, 2010, it has signed the definitive earn-in and joint venture agreement ("the Agreement") with Galaxy Resources Limited (ASX:GXY) of Australia ("Galaxy"), under which Galaxy can acquire up to a 70% interest in the Company's James Bay lithium pegmatite project in Quebec. 

Under the terms of the Agreement, Galaxy will make a cash payment of C$3 million to acquire an initial 20% interest in the James Bay Project. Galaxy will have the option to increase its interest in the James Bay Project to 70% through the completion of a definitive feasibility study on the project within a 24 month period, including a further investment of at least C$3 million in the next 12 months.

The initial payment of C$3 million remains subject to conditions involving the transfer of certain claims to Lithium One. The Company has made payment in full to the optionor of those claims and expects the transfer to be completed in the near future. For additional details about the terms of the Agreement and Galaxy, please refer to the Company's news release dated December 9th, 2010.

James Bay Lithium Pegmatite Project

The James Bay Project hosts a significant spodumene pegmatite deposit at surface in northwestern Quebec. In 2010, Lithium One announced a NI 43-101 compliant mineral resource including 11.75 million tonnes at 1.30% lithium oxide in the indicated category, and 10.47 million tonnes at 1.20% lithium oxide in the inferred category, at a 0.75% lithium oxide cutoff grade. The resource was described by SRK as likely amenable to open pit extraction and as having potential for an increase in both tonnes and grade with further drilling. (See Company news release dated November 18, 2010). 

The James Bay Project has comparable geology and physical characteristics to Galaxy's Mt. Cattlin operating lithium mine in Western Australia, creating similarities and synergies that should assist Galaxy with fast tracking the feasibility study. 

For additional details on the James Bay Lithium Project, please visit the Company's website: www.lithium1.com.

The technical contents of this news release have been reviewed and approved by Mr. A. James McCann. Mr. McCann is a licensed Professional Geologist in Quebec P.Geo (OGQ#332) and a qualified person as defined by NI 43-101.

About Lithium One:

Lithium One Inc. is a Canadian-based explorer and developer of mineral properties with a specific focus on lithium. The Company has two major lithium projects funded through feasibility by earn-in partners: the brownfields Sal de Vida lithium brine project in Argentina partnered with KORES, LG International and GS Caltex; and the James Bay bulk tonnage spodumene project in Quebec, partnered with Galaxy Resources Limited. If both option agreements proceed through feasibility as contemplated, Lithium One will retain 70% ownership of the Sal de Vida lithium brine project and 30% ownership of the James Bay lithium pegmatite project. Having both projects funded through feasibility is an indication of the strength of these two projects. Lithium One will now focus its efforts on developing Sal de Vida into a high quality, low-cost lithium producer, while assisting Galaxy in maximizing the value of the James Bay Project.

ON BEHALF OF THE BOARD OF DIRECTORS,

Patrick Highsmith, M.Sc., President and Chief Executive Officer

Lithium One Inc.
1238-200 Granville Street
Vancouver, BC V6C 1S4 Canada
Email: info@lithium1.com
 
Website: www.lithium1.com

Forward-Looking Statements

This document may contain "forward-looking information" within the meaning of Canadian securities legislation (hereinafter referred to as "forward-looking statements"). All statements, other than statements of historical fact, included herein including, without limitation statements relating to; the satisfaction of the conditions to the Agreement, the completion of Feasibility Studies, securing of debt for future project construction, purchase of future mine production, and other matters related to the exploration and development of the Company's projects, are forward-looking statements. These forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements. Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include unsuccessful exploration results, changes in metals prices, changes in the availability of funding for mineral exploration, unanticipated changes in key management personnel and general economic conditions, title disputes as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.

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.

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