Bearing Enters into Letter of Intent to Negotiate Acquisition of the Most Advanced Pre-Production Lithium Project in Chile and Announces Private Placement Financing
Vancouver, British Columbia--(Newsfile Corp. - November 28, 2016) - Bearing Resources Ltd. (TSXV: BRZ) ("Bearing" or the "Company") announces that it has entered into a letter of intent (the "LOI") with Li3 Energy Inc. ("Li3") which provides Bearing with the exclusive right to negotiate in good faith, for a period of 15 business days (the "Exclusivity Period"), an agreement to acquire Li3 or its assets (the "Proposed Transaction"). Under the terms of the LOI, the anticipated consideration to be paid by Bearing would be the issuance of 16,000,000 common shares of Bearing and the assumption of the debts and liabilities of Li3 in an aggregate amount not to exceed US$1.7 million. Other than the right to negotiate exclusively with Li3 during the Exclusivity Period, the LOI is non-binding. Completion of the Proposed Transaction remains subject to a number of conditions, as detailed below.
About Li3 Energy, Inc.
Li3 is a public company incorporated under the laws of Nevada with its shares quoted on the OTCQB. Li3's principal asset is a 17.7% interest in a joint venture company (the "JV Company") which in turn holds the Maricunga lithium brine project located in Chile (the "Maricunga Project"). The other partners in the JV Company are Minera Salar Blanco ("MSB"), as to 32.3%, and Lithium Power International Limited (ASX: LPI) ("Lithium Power"), as to 50%. Under the terms of the joint venture, Lithium Power has agreed to fund exploration and development costs with both Li3 and MSB having a free carry until the completion of a definitive feasibility study.
The Maricunga Project is regarded as the highest quality pre-production lithium project in Chile, with characteristics comparable to the world-leading Atacama lithium brine deposit (which sits at the bottom of the global lithium cost curve). The salar is located 170km north-east of the mining town of Copiapo and 250km from the Chilean coast. In addition, it is adjacent to International Highway 31, which connects northern Chile and Argentina.
The Proposed Transaction
The LOI provides that Li3 shall work exclusively and in good faith with Bearing until December 14, 2016 towards satisfactory completion of due diligence and negotiation of a definitive agreement (the "Definitive Agreement") for the Proposed Transaction. Completion of the Proposed Transaction is subject to a number of conditions precedent, including: the negotiation and execution of a Definitive Agreement, completion of satisfactory due diligence by the parties, the absence of a material adverse change with respect to the Maricunga Project, approval of the Proposed Transaction by the boards of directors of Bearing and Li3, receipt of applicable regulatory and shareholder approvals including approval of the TSX Venture Exchange.
Jeremy Poirier, Bearing's President and CEO, commented, "We are excited about the execution of this LOI and working with Li3 to negotiate and execute a definitive agreement for the transaction. We believe the Maricunga Project, and particularly the terms of the joint venture with Li3 having a full carry to the completion a definitive feasibility study, offers an excellent opportunity for our shareholders."
Luis Saenz, CEO of Li3 Energy Inc., stated: "We are delighted to enter into this transaction with Bearing Resources. It has been a key objective of Li3 to be listed in a recognized exchange where the significant potential of lithium has attracted interest. The Bearing team is well positioned to grow from Li3's shareholding in the Maricunga project to provide value to our shareholders."
The Proposed Transaction described herein cannot close until all of the conditions have been satisfied and there can be no certainty that the Proposed Transaction will be completed, either as presently proposed, or at all.
The Company also announces a non-brokered private placement (the "Private Placement") offering of up to 2,500,000 units (the "Units") at a price of $0.40 per Unit for gross proceeds of up to $1,000,000. Each Unit will consist of one common share in the capital of the Company and one half of one share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.80 for a period of twelve months from the closing of the Private Placement. The net proceeds of the Private Placement will be used to fund costs incurred in connection with the Proposed Transaction and, assuming closing of the Proposed Transaction, the repayment of certain of the debt held by Li3 which will be assumed by the Company. Completion of the Private Placement remains subject to approval of the TSX Venture Exchange.
About Bearing Resources Ltd.
Bearing Resources Ltd. is a Canadian based company focused on exploration for precious and base metals in North America. The Company's strategy is to identify, explore and develop mineral deposits with a magnitude of size and grade to be of interest to mid-sized and larger mining companies. The Company will carry out all aspects of exploration and development from grass roots prospecting to feasibility studies. Projects will be acquired through both staking and acquisition. From time to time, the Company may option projects to external exploration companies in an effort to focus both financial and human capital on other internal projects.
ON BEHALF OF THE BOARD
Signed "Jeremy Poirier"
Jeremy Poirier, Director President and CEO
FOR FURTHER INFORMATION PLEASE CONTACT:
Jeremy Poirier-- President and CEO Bearing Resources - Telephone: 1- 604-722-9842
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.
Cautionary Statements Regarding Forward Looking Information
This press release includes certain "forward-looking information" and "forward-looking statements"(collectively "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein, without limitation, statements relating the future operating or financial performance of the Company, are forward-looking statements.
Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements in this press release relate to, among other things: the execution of a Definitive Agreement for the Proposed Transaction, the completion of the Proposed Transaction, the benefits of the Proposed Transaction to shareholders of Bearing and the completion of the Private Placement. Actual future results may differ materially. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made and are based upon a number of assumptions and estimates that, while considered reasonable by the respective parties, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements and the parties have made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: completion of satisfactory due diligence by each of Bearing and Li3, negotiation and execution of a Definitive Agreement, approval of a Definitive Agreement by both Bearing and Li3's boards of directors, the absence of a material adverse change in the Maricunga Property, receipt of all necessary regulatory and shareholder approvals and the ability to find suitable investors for the Private Placement. Readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these times. Except as required by law, Bearing does not assume any obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.