TORONTO, April 25, 2018 /CNW/ - Namibian lithium developer and emerging lithium concentrate producer Desert Lion Energy Inc. (TSXV: DLI) ("Desert Lion" or the "Company") is pleased to announce that it has delivered the first shipment of lithium concentrate product to the port of Walvis Bay in Namibia in accordance with the terms of its offtake agreement (the "Offtake Agreement") with Chinese lepidolite converter and offtake partner Jiangxi Jinhui Lithium Co. Limited ("Jinhui"). The first shipment is expected to be approximately 30,000 tonnes (t) of lithium concentrate material, which will generate gross revenues of approximately $3.8 million for the Company.
Under the terms of the Offtake Agreement Jinhui is required to purchase all lithium concentrate product from Phase 1 of the Company's production plan, which the Company estimates to be approximately 150,000t – 160,000t of lithium concentrate for the 12 to 18 month period.
Payment for this shipment has been collateralized by the delivery of an irrevocable and unconditional letter of credit by Jinhui in favour of Desert Lion in an amount equal to 110% of the purchase price of the shipment.
"The delivery of the first shipment of lithium concentrate represents a significant milestone for Desert Lion, which demonstrates the production chain is operational from reclaiming, sorting and processing all the way through to delivery of product to our offtake partner at the port of Walvis Bay," commented Tim Johnston, President and Chief Executive Officer of Desert Lion. "We look forward to continuing to execute this phase of production, while moving towards the production of higher value products and large-scale mining in the second half of 2018/2019."
The Company plans to publish a mineral resource estimate and preliminary economic assessment in respect of the Company's lithium project in Namibia (the "Project") in the second quarter of 2018.
Qualified Persons Consent
Tim Johnston, CPEng, President and Chief Executive Officer of the Company, and a Qualified Person as defined by National Instrument 43-101 has reviewed and approved the scientific and technical information contained in this news release and was responsible for verifying the data herein.
About Desert Lion Energy
Desert Lion Energy is an emerging lithium development company focused on building Namibia's first large-scale lithium mine to be located approximately 210 km from the nation's capital of Windhoek. The Company's Rubicon and Helikon mines are located within a 301 km2 prospective land package, with known lithium bearing pegmatitic mineralization and the Company is currently in Phase 1 of its production plan, producing and exporting lithium concentrate from stockpiled material. The project site is accessible year-round by road and has access to power, water, rail, port, airport and communication infrastructure.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget" "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved." Forward-looking information includes, but is not limited to: statements and expectations regarding the size of the initial shipment under the Offtake Agreement, the exercise of the conversion option by Jinuui pursuant to the Offtake Agreement, the anticipated timeline for publication of the mineral resource estimate and preliminary economic assessment; and the Company's planned work program for the Project and its exploration and development schedule and timetable.
Forward-looking information is based on certain factors and assumptions management believes to be reasonable at the time such statements are made, including but not limited to, continued exploration activities, lithium and other metal prices, the estimation of initial and sustaining capital requirements, the estimation of labour and production costs, the estimation of mineral reserves and resources, assumptions with respect to currency fluctuations, the timing and amount of future exploration and development expenditures, receipt of required regulatory approvals, the availability of necessary financing for the Project, permitting and such other assumptions and factors as set out herein.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks related to changes in lithium prices; sources and cost of power and water for the Project; the estimation of initial capital requirements; the lack of historical operations; the estimation of labour and operating costs; general global markets and economic conditions; risks associated with exploration, development and operations of mineral deposits; the estimation of initial targeted mineral resource tonnage and grade for the Project; risks associated with uninsurable risks arising during the course of exploration, development and production; risks associated with currency fluctuations; environmental risks; competition faced in securing experienced personnel; access to adequate infrastructure to support exploration activities; risks associated with changes in the mining regulatory regime governing the Company and the Project; completion of the environmental assessment process; risks related to regulatory and permitting delays; risks related to potential conflicts of interest; the reliance on key personnel; financing, capitalization and liquidity risks including the risk that the financing necessary to fund continued exploration and development activities at the Project may not be available on satisfactory terms, or at all; the risk of potential dilution through the issuance of additional common shares of the Company; the risk of litigation.
Although the Company has attempted to identify important factors that cause results not to be as anticipated, estimated or intended, there can be no assurance that such 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 should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this presentation and the Company does not undertake to update or revise any forward-looking information this is included herein, except in accordance with applicable securities laws.
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 Note Regarding Potential Quantity of Stockpiled Material
The potential quantity of stockpiled material located on the property as disclosed herein is an estimate only and is conceptual in nature; there has been insufficient exploration to define a mineral resource and it is uncertain if further work will result in this estimate being delineated as a mineral resource. Estimates provided are based on initial prospecting work completed by the Company.
SOURCE Desert Lion Energy
For further information: Desert Lion Energy Inc., Tim Johnston, President & CEO, Salisha Ilyas, VP, Investor Relations, Tel: (416) 309-2953, Email: [email protected]