Azimut, SOQUEM to sell 75% of Galinee to Li-FT

Executive Summary

• Azimut Exploration Inc. and SOQUEM Inc. have signed a non-binding letter of intent (LOI) to consolidate their Galinee-Adina lithium district in Quebec by selling a 75% aggregate interest in the Galinee property to Li-FT Power Ltd.
• The transaction involves Li-FT acquiring a 50% interest from Azimut and a 25% interest from SOQUEM in exchange for equity shares, aiming to create an unconstrained property package for lithium development.
• Azimut will retain a 1.4% NSR royalty and a $1.5 million deferred payment, while SOQUEM retains a 25% undivided interest via a new joint venture with Li-FT.

Key Details

• Transaction Structure: Li-FT Power Ltd. will acquire a total 75% interest in the Galinee property from Azimut (50%) and SOQUEM (25%).
• Consideration for Azimut: Azimut receives 2,000,000 shares of Li-FT.
• Consideration for SOQUEM: SOQUEM receives 1,000,000 shares of Li-FT.
• Retained Interests/Royalties:
  • Azimut retains a 1.4% NSR (Net Smelter Return) royalty on the Galinee property.
  • SOQUEM retains a 25% undivided interest in the property via a joint venture with Li-FT.
• Deferred Payment: Azimut is entitled to a $1.5 million deferred payment, payable in cash or shares (subject to definitive agreement conditions), at the earlier of:
  • Completion of a preliminary economic study (PES) on the property.
  • 18 months from the LOI date.
• Property Details (Galinee):
  • Located in the Eeyou Istchee James Bay region of Quebec.
  • Size: 649 claims, 335 square kilometres.
  • Location: ~50 km NNW of Renard diamond mine; ~60 km south of Trans-Taiga Road.
  • Status: 50/50 joint venture between Azimut and SOQUEM, operated by Azimut.
• Historical Drilling Results (Galinee):
  • 1.62% Li2O over 158.0 metres.
  • 2.48% Li2O over 72.7 metres.
  • 2.68% Li2O over 54.6 metres.
• Strategic Context: The consolidation allows Li-FT to advance the district unconstrained by the Galinee-Adina boundary. Li-FT is concurrently acquiring Winsome Resources Ltd. (owner of the adjacent Adina property) to further consolidate the district.
• Regulatory/Conditions: The LOI is non-binding. Closing is subject to definitive agreements, shareholder approvals, and TSX-V approval.

Notable Quotes

• Dr. Jean-Marc Lulin (Azimut President and CEO): "The consolidation of this district would allow Li-FT to advance a strengthened property package unconstrained by the Galinee-Adina boundary. The proposed transaction aligns with Azimut's objective to focus on its flagship assets while maintaining exposure to emerging lithium districts through equity ownerships and retained royalties."