Western Lithium Announces Post-Merger Integration and Organization Update
November 16, 2015 (Source: Marketwired) — Appoints New Executive Team and New Director
Western Lithium USA Corporation (“Western Lithium”, the “Company”) (TSX:WLC)(OTCQX:WLCDF) is pleased to provide an organization and integration update on its recent merger with Lithium Americas Corp. which closed on September 4th, 2015.
After a comprehensive review of the newly combined businesses, the Board of Directors has announced a restructuring of the senior management team aimed at accelerating development of the Company’s large lithium resources in Argentina and the U.S. to support the rising global demand of lithium-ion battery storage applications for growth markets such as electric/hybrid vehicles and renewable energy.
Thomas Hodgson, with more than 30 years of senior executive experience and a director of Western Lithium, will lead the team as the Company’s new CEO. John Kanellitsas, an experienced business executive and former CEO of Lithium Americas has been appointed Vice Chairman. Jay Chmelauskas will remain as President of Western Lithium, and Franco Mignacco will continue as President of the Argentina-based subsidiary Minera Exar S.A., which controls the Company’s Cauchari-Olaroz brine project. The changes are effective immediately.
Newly-appointed CEO Tom Hodgson commented: “Jay was the architect of the merger and we will continue to rely on his passion, energy and vision as a key member of our senior team. Over the past seven years Jay has driven the development of the massive lithium-rich, clay-based resource in Kings Valley, Nevada, a US state which is rapidly becoming a major manufacturing location for lithium-ion batteries and energy storage technologies. The Demonstration Plant in Weimar, Germany, for the Kings Valley project is currently running lithium and potassium production campaigns that are expected to result in the final design criteria required to initiate Environmental Impact Statement (“EIS”) permitting and a Definitive Feasibility Study. In addition to the lithium project, the Nevada-based Hectatone business is developing several new rheology products to target growth markets outside of the energy industry. Jay will continue to focus his efforts on managing these important efforts in Nevada.”
Mr. Hodgson added: “I am also delighted with John Kanellitsas’ appointment as Vice Chairman. John’s efforts at developing our relationships with Korea-based POSCO and other potential strategic partners will be particularly helpful as we advance towards commercialization of our Cauchari project. John, Franco and I worked very closely and very effectively together at Lithium Americas, and we will continue to do that at Western Lithium alongside Jay and the rest of the very talented team throughout the Western Lithium organization.”
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Jay Chmelauskas, the Company’s President, commented: “The objective of our merger was to create a company with significant scale and that is a geographically diversified, multi-national and multi-resource supplier of lithium and rheology products. We are now in a position to rapidly advance an aggressive production timeline for our project in Argentina while continuing to develop our assets in Nevada.”
The Company is also pleased to announce that George R. Ireland, a well-respected geologist and the President and CEO of Geologic Resource Partners LLC (“Geologic”), and the Company’s largest shareholder, has agreed to join the Board of Directors. George will fill the vacancy created by the recent untimely passing of Ed Flood, also a geologist and investment manager, and one of the founders of Western Lithium.
John Macken, Chairman commented: “I would like to welcome George Ireland to the Board. Geologic was one of the earliest and largest investors in a very successful lithium development business, Talison Lithium, for which Rockwood and Tianqi Lithium paid nearly $1 billion just two years ago. We will all benefit from his experience and perspective as we proceed along our project development paths.”
In addition, the Company is pleased to announce that Geologic Resource Partners has signed a Letter of Intent to lead a small group of investors to provide Western Lithium with a US$5 million Line of Credit. The Line of Credit will have a standby fee of 1.5% payable annually, and to the extent that it is drawn, a drawdown fee of 1.25%, and a monthly interest rate of 1.25%. It will not carry a conversion feature into the Company’s common shares. The Line of Credit is subject to completion of definitive documentation and other conditions.
George Ireland commented: “Geologic has been a long-term investor in Lithium Americas in the belief that Cauchari’s fully-permitted, low-cost, high-margin project in the heart of the South American lithium triangle was well positioned to become a near-term lithium producer. The Company’s partnership with POSCO and the recent success of its demonstration plant efforts, along with the strong pricing conditions and accelerating demand for lithium products, has validated our investment thesis. Geologic is pleased to support Western Lithium with a Line of Credit as it finalizes its joint venture discussions with POSCO and other strategic investors. I am excited to join the Western Lithium board at this transformational time for the Company.”
Tom Hodgson commented: “We very much appreciate the strong support reflected by Geologic Resource Partners. This facility is non-dilutive to current shareholders, and provides the comfort to the Company that it will not be forced into a capital raise while it is in the midst of completing business discussions with potential strategic partners. Long-term and committed investment partners and shareholders such as Geologic and Bangchak PCL represent an important competitive advantage for our Company.”
Western Lithium expects to introduce re-branding initiatives in early 2016 that will result in a change to its corporate name to more appropriately reflect the scope and future of its new asset and business base.
About Western Lithium
Western Lithium is positioning itself as a major U.S. and Argentinian based supplier to support the rising global demand for lithium that is expected from the increased use of hybrid/electric vehicles, consumer electronics, and consumer and industrial lithium battery storage applications.
At the Cauchari-Olaroz lithium project, located in Jujuy province, Argentina, a major lithium brine reserve has been defined and a definitive feasibility study has been completed. In addition, and as previously announced on August 27, 2015, a Heads of Agreement has been signed with POSCO regarding the commercialization of that project using their own proprietary technology.
The Kings Valley lithium project is being developed into a strategic, scalable and reliable source of high quality lithium products. In addition, Western Lithium is pursuing the opportunity to be a supplier of specialty drilling additives, Hectatone™ and potentially other organoclays for the oil and gas and other industries.
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation, and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to as “forward-looking information“). All statements, other than statements of historical fact, may be forward-looking information. Forward looking information can be identified by the use of statements that include words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “propose”, “potential”, “targeting”, “scheduled”, “implementing”, “intend”, “could”, “might”, “should”, “believe” and similar words or expressions. Information provided in this news release is necessarily summarized and may not contain all available material information.
Forward-looking information in this news release includes, but is not limited to: the development and commercialization of the Cauchari and Kings Valley lithium project; potential joint venture with POSCO; the growth of the Hectatone business and completion and grant of a Line of Credit.
Forward-looking information expresses, as at the date of this news release, plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results. All such forward-looking information is based on certain assumptions, estimates, expectations, analyses and opinions made by management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Assumptions upon which such forward-looking information is based include, without limitation: no significant event occurring outside of the ordinary course of business of Western Lithium ; legislative and regulatory environment; impact of increasing competition; current technological trends; prices of lithium and potash; costs of development and production; anticipated results of exploration and development activities; Western Lithium’s ability to operate in a safe and effective manner; and ability to obtain financing on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive.
Western Lithium’s actual results, programs and financial position could differ materially from those anticipated in such forward-looking information as a result of numerous factors, risks and uncertainties, many of which are beyond Western Lithium’s control. These include, but are not limited to: possible variations in mineral resource and reserve estimates; grade/concentration or recovery rates; lithium or potash prices; operating or capital costs; changes in project parameters as plans continue to be refined; legislative changes that impact the operations in which Western Lithium conduct business; results of exploration activities and development of mineral properties; interpretation of geological data; receipt and security of mineral property titles; failure of plant, equipment or processes to operate as anticipated; accidents; labour disputes; the inability to obtain key personnel and parts related to operations; receipt of licenses to conduct mining activities; country and political risks; civil unrest; community relations; timing and possible outcome of pending litigation; liabilities and risks, including environmental liabilities and risks inherent in the development and production of Western Lithium’s properties; cost overruns or unanticipated costs and expenses; the availability of funds; currency fluctuations; general market and industry conditions; competition; the business of the companies not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; the results of demonstration plant testing for the Kings Valley Project; failure of Western Lithium to enter into an agreement with POSCO to put the Cauchari-Olaroz project into commercial production using POSCO’s proprietary lithium and potash extraction technology; the fact that POSCO’s extraction technology tested at the Cauchari-Olaroz project is secret and proprietary to POSCO and not subject to any independent economic study; and delays in obtaining governmental and regulatory approvals, as well as those factors more fully described under the heading “Risk Factors” in Western Lithium’s annual information form and most recently filed management discussion & analysis, and described under the heading “Risk Factors” in Lithium America’s annual information form, available on SEDAR. There is no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. Western Lithium does not intend, and expressly disclaims any obligation to, update any forward-looking information whether as a result of new information, future events or otherwise, except as, and to the extent required by, applicable securities laws.