Edison Lithium
Spin-Out of Cobalt
Assets
Vancouver, British Columbia, Canada -- May 19,
2022 -- InvestorsHub NewsWire
-- Edison
Lithium Corp. (TSXV: EDDY, OTCQB: EDDYF; FSE:
VV00) ("Edison" or
the "Company") is
pleased to announce that its Board
of Directors has unanimously approved a proposed spinout of its
cobalt assets in northeastern Ontario, referred to as the Kittson
Cobalt Property (the "Spin-Out"), into a newly
incorporated subsidiary ("SpinCo"). The Company will
continue to hold its interest in the Antofalla Salar and Pipanaco
Salar lithium projects in Argentina.
It is
proposed that the Spin-Out will be carried out by way of statutory
plan of arrangement (the "Arrangement") pursuant to
the Business Corporations
Act (British Columbia). Common shares of SpinCo (the
"SpinCo
Shares") will be distributed to shareholders of
Edison on the basis of one SpinCo Share for every one common share
of Edison held. There will be no change in Edison shareholders'
holdings in the Company as a result of the Spin-Out. If the
Spin-Out is completed, shareholders will own shares in both
companies - Edison, which will be focused on its Argentinian
lithium brine projects, and SpinCo, which will be focused on cobalt
exploration in Canada. The Company expects the Spin-Out will
increase shareholder value by allowing capital markets to ascribe
value to the Kittson Cobalt Property independent of the Company's
lithium properties and by providing management focus and
concentration.
The
proposed Spin-Out will be subject to the terms of an arrangement
agreement between Edison and SpinCo, the approval of shareholders
at a meeting of Edison shareholders, the approval of the British
Columbia Supreme Court and the approval of the TSX Venture Exchange
(the "Exchange").
The
Company intends to seek a listing of the SpinCo Shares on the
Exchange but no assurance can be provided that such a listing will
be obtained. Listing will be subject to SpinCo fulfilling all of
the requirements of the Exchange.
Nathan Rotstein, Chief Executive Officer of Edison comments,
"It is our intention to build shareholder value by providing
investors with an ownership stake in two separate specialized
companies. Both companies will be in the hot battery metals sector.
Each company will operate as a separate entity and will enjoy
distinction in the exponential growth of the EV market."
In
connection with the Spin-Out, the Company intends to undertake a
private placement ("Private
Placement") of up to 60,000,000 subscription
receipts ("Subscription
Receipts", and each a "Subscription Receipt") priced at
$0.05 per Subscription Receipt in order to raise gross proceeds of
up to $3,000,000 (the "Escrowed Proceeds"), which will
be held in escrow subject to the satisfaction or waiver of certain
customary escrow release conditions (the "Escrow Release Conditions"). Each
Subscription Receipt will entitle the holder thereof to receive,
upon conversion and without any further action on the part of such
holder or payment of any additional consideration, one unit of
SpinCo (a "Unit"), with each Unit comprised
of one (1) SpinCo Share and one common share purchase warrant
(each, a "Warrant"). Each Warrant shall be
exercisable into one (1) SpinCo Share at an anticipated exercise
price of $0.08 per SpinCo Share, for an exercise period of two
years. The conversion of the Subscription Receipts will be subject
to the satisfaction or the Escrow Release Conditions, including the
closing of the Arrangement and the listing of the SpinCo Shares on
the Exchange, on or prior to a date to be determined (the
"Outside
Date"). Upon the satisfaction or waiver of the
Escrow Release Conditions, the Escrowed Proceeds would be released
to SpinCo. Upon receipt thereof, SpinCo is expected to use the
Escrowed Proceeds to fund exploration of the Kittson Cobalt
Property and for general working capital, including, potential
future acquisitions. In the event that the Escrow Release
Conditions are not satisfied prior to the Outside Date, the
Escrowed Proceeds would be returned pro rata to each holder of
Subscription Receipts, and the Subscription Receipts will be
automatically cancelled, void and of no value or effect. The
Subscription Receipts and the SpinCo Shares and Warrants issuable
in exchange for the Subscription Receipts will be subject to a
four-month statutory hold period expiring four months and one day
from the closing date of the Private Placement.
Further details of the Spin-Out and the related Private
Placement will follow by additional press releases. Timing of the
Spin-Out and Private Placement will be based on prevailing market
conditions. The particulars of the Spin-Out and related Private
Placement are not yet final and shareholders are cautioned that
there can be no assurance that the Spin-Out and Private Placement
will be completed on the terms described herein or at
all.
About the Kittson Cobalt
Property
The Kittson Cobalt Property includes three historical
producing Co-Ag mines, namely the Kittson-Cobalt Mine, Shakt-Davis
and Edison (also known as Darby) Mine. These mines, unlike those in
the nearby Cobalt silver camp, were developed primarily for their
cobalt content, and interestingly possessed significant gold
content (locally >1 oz/ton).
To view the National Instrument 43-101 compliant technical
report titled "Technical Report on the Kittson-Cobalt Property"
with a report date of June 9, 2021, and an effective date of July
16, 2021, as prepared by SGS Geological Service and GeoVector
Management Inc. (the "Technical Report"), please visit
Edison's website at www.edisonlithium.com.
The Technical Report is also available under the Company's profile
on SEDAR (www.sedar.com).
About the Antofalla Salar and
Pipanaco Salar Lithium Projects
In
2021, Edison acquired Resource
Ventures S.A., an Argentinian corporation that owns or controls the
rights to over 148,000 hectares (365,708 acres) of prospective
lithium brine claims in the province of Catamarca, Argentina. The
claims are principally located in the two geological basins known
as the Antofalla Salar and the Pipanaco Salar in South America's
famed Lithium Triangle.
The Antofalla
Salar hosts one of the largest lithium-bearing basins in the
region. It is over 130 km long and varies between 5 km and 20 km
across. The Company's assets in and around the Antofalla Salar are
made up of approximately 107,000 hectares (264,397 acres) of
semi-contiguous claims in the northern and southern parts of this
salar.
The Company's
claims in the Pipanaco Salar consist of over 41,000 hectares
(101,311 acres) of core areas in this salar. These properties are
in the very early stages of exploration with minimal surface
samples having been collected to date.
About Edison Lithium
Corp.
Edison Lithium Corp.
is a Canadian-based
junior mining exploration
company focused on
the procurement, exploration and development of
cobalt, lithium, and other energy metal properties. The Company's
acquisition strategy is
based on acquiring
affordable, cost-effective,
and highly regarded
mineral properties in areas with proven
geological potential. Edison is building a portfolio of quality
assets capable of supplying critical materials to the battery
industry and intends to capitalize on and have its shareholders
benefit from the renewed interest in the battery metals
space.
On behalf of
the Board of Directors:
"Nathan Rotstein"
Nathan Rotstein
Chief Executive Officer
and Director
For more information
please contact
Nathan Rotstein:
Tel: 416-526-3217
Email: info@edisonlithium.com
Website: www.edisonlithium.com
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Forward-Looking
Disclaimer:
This news release
contains certain
forward-looking statements.
Statements that are not historical facts, including
statements about Edison's beliefs and expectations, are forward-
looking statements. Forward-looking statements involve inherent
risks and uncertainties and a number of factors could cause actual
results to differ materially from those contained in any
forward-looking statement. In some
cases, forward-looking
statements can be
identified by words
or phrases such
as "may," "will," "will be", "expect,"
"anticipate," "target," "aim," "estimate," "intend," "plan,"
"believe," "potential," "continue,", "proposes", "contemplates",
"is/are likely to" or other similar expressions. All information
provided in this news release is as of the date of this news, and
the Company undertakes no duty to update such information, except
as required under applicable law.
Forward-looking statements in this press release relate to,
among other things: the incorporation of SpinCo, completion of the
proposed Spin-Out, the completion of the proposed Private
Placement, the Company maintaining its interest in the Antofalla
Salar and Pipanaco Salar properties, distribution of SpinCo Shares
to Edison shareholders and the basis of such distribution, no
changes occurring to Edison shareholders' holdings, the receipt of
required shareholder, court, stock exchange and regulatory
approvals for the Spin-Out and Private Placement, listing of the
SpinCo Shares on the Exchange, increases to shareholder value as a
result of the Spin-Out, the timing of the Spin-Out and related
Private Placement transactions, and the timing of additional
details concerning the Spin-Out and 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 of management 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: determination of
acceptable terms for the proposed Spin-Out, receipt of all required
shareholder, court, stock exchange and regulatory approvals for the
Spin-Out; changes in the value of the Kittson Cobalt, Antofalla
Salar, and Pipanaco Salar properties; fluctuations in the
securities markets, commodity pricing and the market price of the
Company's common shares and CSE approval for listing of the SpinCo
Shares. 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, the
Company 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.
We seek Safe Harbour.
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