LiCo Energy Metals Shareholder Update
May 14, 2018: Vancouver, British Columbia; - LiCo Energy Metals Inc. (“the Company” or LiCo”) TSX-V: LIC, OTCQB: WCTXF would like to provide its shareholders with additional information regarding the May 8, 2018 announcement of the signing of an option agreement for a 60% interest in the Teledyne and Glencore Bucke cobalt properties (the “Properties”) with Surge Exploration Inc.
Since the completion of LiCo’s Phase 1 diamond drilling programs at the end of the 2017 calendar year, Company management has been reviewing various financing options that will allow it to continue to move forward its promising lithium projects in Nevada and Chile, as well as, its cobalt projects (Teledyne Cobalt and Glencore Bucke) in Canada.
The Company’s working capital, although sufficient to maintain operations, was inadequate to allow the Company to undertake five separate exploration programs in three countries on two different continents at the same time. Therefore, the Company sought various financing strategies that would allow it to continue to explore its properties and increase the value of its mineral assets for both calendar 2018 and 2019. The goal of each financing strategy was to provide the resources to fund the Company’s disclosed exploration programs, realizing that each of these strategies may either dilute the Company’s shareholders through a private placement, or in the alternative, reduce the Company’s interest in a single project going forward by entering into a property option agreement that funds the Company’s stated 2018 and 2019 exploration programs.
Given the continued softening / deterioration of junior mining equity financing markets and the relatively large number of Company common shares already issued and outstanding, management believed that seeking project specific option agreements would be the Company’s most readily available financing strategy option. On April 3, 2018 the Company announced the acceleration of payments for the Teledyne property in order to increase the property’s value with the aim of attracting further interest in the property. During this time, the Company received unsolicited expressions of interest for optioning and joint venturing its various mining assets. Each of these expressions of interest were deficient and ultimately rejected by management. At this point, LiCo was introduced to Surge Exploration Inc., through the common director. Surge Exploration Inc. had recently completed a financing and was looking for a suitable mining exploration project. After a due diligence period, an option agreement was successfully negotiated and ultimately signed by the respective company directors, with the common director abstaining from each vote. The agreement remains subject to TSX Venture Exchange approval.
This negotiated agreement not only provides LiCo with valuable cash (CAD $240,000) and equity consideration (1,000,000 common shares in a publicly traded company), but also completes the funding required for the Company’s 2018 and 2019 exploration programs on both the Teledyne and Glencore Bucke properties and funds 60% of all future expenditures on these properties. The stated goal of the 2018 and 2019 exploration programs are to define an underground cobalt resource on the property, which management believes is extremely valuable to both LiCo and its shareholders. It is this reason, along with the need for additional working capital and exploration funds, that management believes that LiCo shareholders will ultimately gain from the funding agreement and association with Surge Exploration Inc.
