VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 19, 2017) - Strongbow Exploration Inc. (TSX VENTURE:SBW) ("Strongbow" or the "Company") is pleased to announce that it has entered into an agreement with Cornish Lithium Limited ("CL"), a privately funded UK-based company, whereby CL has the right to explore for and potentially develop lithium in hot spring brines and associated geothermal energy on all Mineral Rights held by Strongbow through its subsidiary, Cornish Minerals Limited (Bermuda), in Cornwall, UK.
Subject to conclusion of the deal, rights secured by CL will allow CL to undertake what it believes to be the largest, single, unified mineral exploration programme in Cornwall's history.
The commercial terms of the agreement are set out below:
- Strongbow will have a 25% free carried interest in the first project to have Bankable Feasibility Study completed on it, after which Strongbow will be required to contribute its share of development costs or its interest will be diluted.
- Strongbow will have a 10% free carried interest in each subsequent project that has a Bankable Feasibility Study completed on it, after which Strongbow will be required to contribute its share of development costs or its interest will be diluted.
- Strongbow will have a 2% Gross Revenue Royalty payable from any production of metals from brines and a 2% Gross Revenue Royalty payable from any geothermal energy produced and sold to the National Grid or other system.
- CL to issue US$50,000 in shares to Strongbow after signing of the agreement, such shares to be issued at the price of the first capital raising.
- CL is entitled to renew its exploration rights on each anniversary of signing the agreement and, if it does so:
- issue US$50,000 in shares to Strongbow annually on the first, second, third and fourth anniversaries of signing the agreement.
- from the fifth anniversary of signing the agreement, make annual payments to Strongbow of US$100,000 payable in cash or shares of CL at the election of CL.
- from the tenth anniversary of signing the agreement, make annual payments to Strongbow of US$500,000 payable in cash or shares of CL at the election of CL, whereby 50% of the payment (US$250,000) will be considered advance royalty payments.
- In the event a Bankable Feasibility Study has been completed by the fifteenth anniversary of the agreement, CL will be entitled to renew its exploration rights by making annual payments to Strongbow of US$1,000,000 payable in cash or shares of CL at the election of CL, whereby 50% of the payment (US$500,000) will be considered advance royalty payments.
- If the Exploration Rights are not extended on any available opportunity under the agreement then Strongbow may terminate the agreement (unless there is a Mining Lease already in place which has not been terminated).
Richard Williams, Strongbow CEO stated:
"Cornish Lithium has developed a very promising exploration concept, which represents the first lithium exploration opportunity in the UK. Hot spring brines, often with high levels of lithium, have been recorded from tin mining operations in Cornwall since the mid-1800s. This region has great potential for the discovery of commercial quantities of lithium in such springs. We look forward to working with Cornish Lithium to realise the potential of this project and attract further investment into the resource sector in Cornwall, as we continue to independently advance work and maintain our corporate focus on our 100% owned South Crofty tin project."
Jeremy Wrathall, CEO of Cornish Lithium, commented:
"We are delighted to have signed agreements to explore for and develop lithium contained in hot spring brines with Strongbow Exploration, Mineral Exploration Limited and Tregothnan Estates. The rights secured cover the key areas of interest based on historic recordings of lithium in such springs, allowing us to further investigate these occurrences and to identify potential sites for commercial extraction facilities.
"Cornish Lithium has been set up to explore the potential for a lithium industry in the UK, which would give the country significant strategic advantages in a world increasingly focussed on zero emissions and renewable power. We believe the potential benefits of developing a lithium industry in Cornwall will be significant for the county and for the UK as a whole.
"We believe that this is a hugely exciting opportunity to put Cornwall back on the map as a mining centre as well as develop a new industry in the UK. We look forward to providing further updates as the project develops."
The presence of lithium in hot spring brines in Cornwall has been known since the mid-1800s but this was regarded as a curiosity, given there was no developed market for the metal at that time. New technology now offers the potential to extract lithium from these hot spring brines and to supply product to the rapidly growing battery market for electric cars and for power storage.
Cornish Lithium has entered into definitive mineral rights agreements with Strongbow, Mineral Exploration Limited (a private company based in Cornwall) and signed a Heads of Agreement with Tregothnan Estates, to carry out exploration for, and development of, lithium in hot spring brines within the majority of the mineral rights held by these entities.
- The rapid growth in demand for lithium-ion batteries is now centre stage globally given the dramatic switch towards electric cars. Most major vehicle manufacturers have outlined an electric car development programme with some manufacturers expecting 25 per cent of their sales to be electric vehicles by 2025. It is considered vital that new sources of lithium are developed, particularly in Europe in order that European car manufacturers can gain secure access to the lithium supply.
- The UK Government has defined lithium as a metal of strategic importance to the country.
- The majority of lithium produced today comes from South America, Australia and China.
- Mining Lithium in Cornwall
- Cornwall has a long-established mining history and offers excellent infrastructure, a knowledgeable workforce and a supportive community. CL will not be a miner in the traditional sense as the Company intends to extract lithium bearing hot spring brines via drill holes. The Company expects to draw on the abundance of technical knowledge in the County, and especially at the world-renowned Camborne School of Mines.
- CL believes that the presence of high levels of lithium in hot spring brines is due to the interaction between highly saline water from a nearby sedimentary basin and the granite under Cornwall. Some of the granite rocks in Cornwall are enriched in lithium and, over millions of years, this lithium appears to have become dissolved in highly saline waters which have interacted with the granite.
- Geothermal Energy
- CL has also secured the rights to geothermal energy contained in the hot spring brines. It is anticipated that this energy will be utilised to generate power to reduce processing costs, but also may be used for other industries in the region.
- CL's next step is to identify appropriate sources of funding. The Company's current budget contemplates a £5m spend in the exploration phase.
ON BEHALF OF THE BOARD OF DIRECTORS
Richard D. Williams, P.Geo
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.
This news release contains "forward-looking statements" including but not limited to statements with respect to Cornish Lithium's ability to successfully access financing for the lithium exploration programme to proceed, as well as statements related to Cornish Limited's ability to discover and develop lithium in hot spring brines and geothermal energy on a commercial basis.
Forward-looking statements, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to receipt of regulatory approvals and project social acceptability; risks related to general economic and market conditions; risks related to the availability of financing; the timing and content of upcoming work programs; actual results of proposed exploration activities; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; changes in national and local government regulation of mining operations, tax rules and regulations.
Although Strongbow has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such 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. Strongbow undertakes no obligation or responsibility to update forward-looking statements, except as required by law.