[The Ashburton claims in Whabouchi are close to NMX. Good news
Nemaska Lithium and Johnson Matthey Battery Materials Sign Definitive Agreement for the $12M UpFront Payment for the Phase 1 Plant and Signs Commercial Offtake Agreement for Lithium Salts
Quebec, May 11, 2016. Nemaska Lithium Inc. and its wholly owned subsidiaries (“Nemaska Lithium” or the “Corporation”) (TSX-V: NMX) (OTC: NMKEF) and Johnson Matthey Battery Materials Ltd (JMBM) of Candiac, Quebec, a wholly owned subsidiary of Johnson Matthey Plc (LSE: JMAT) (www.matthey.com) announced today the signing of the final agreements contemplated in the collaboration, financial support and lithium salt supply MOU previously announced in the press release dated November 19, 2015. A first agreement (the deposit agreement) contemplates an up-front payment of CDN$12M by JMBM in exchange for services and products of the same value from the Nemaska Lithium Phase 1 Plant. At completion, the total amount of $12M will be deposited in an escrow account and will be disbursed to Nemaska Lithium according to certain milestones.
A second agreement provides for a long term supply relationship for lithium salts between Nemaska Lithium and JMBM. This is Nemaska Lithium’s first commercial offtake agreement.
The closing of the JMBM agreement completes the financing of the Phase 1 Plant. The total budget to build and operate the Phase 1 Plant for two years is $38M, of which $12M comes from JMBM up-front payment, $13M from a grant from Sustainable Development Technologies Canada (SDTC), $3M grant from Technoclimat program through the Bureau de l’efficacit et de l’innovation nergtiques of the Ministre de l’nergie et des Ressources naturelles and finally a $10M equity investment by Ressources Qubec Inc. To date, progress payments have been received from SDTC and Technoclimat for a total of $2.85M. With today’s closing Nemaska Lithium will receive a further installment of $2.1M from SDTC.
Commenting, Neil Collins, Managing Director of Johnson Matthey’s global Battery Materials business said: “We are delighted to have signed these agreements today with Nemaska Lithium; securing the long term supply of lithium salts is an important part of our strategy as we continue to grow our Battery Materials business.”
“We are very pleased to be moving forward with our Phase 1 Plant and to having negotiated our first commercial offtake agreement with JMBM,” commented Guy Bourassa, President and CEO of Nemaska Lithium. “To date, we have made significant progress on the detailed engineering of the Phase 1 Plant and have ordered some of the long-lead items, including the core electrolysis stacks and rectifiers. We expect to complete construction of the Phase 1 plant by the end of 2016 and to be engaging potential clients with commercial samples of lithium hydroxide as early as Q2 2017. This strategy of engaging customers with commercial samples from the Phase 1 Plant is intended to save us time and money as we expect to shorten the time it typically takes to qualify lithium products with customers. We are currently in discussions with other potential customers and we will update shareholders on future commercial offtake agreements as they are negotiated and signed.
