Consolidated Lithium signs deal for Kwyjibo option

Executive Summary

• Consolidated Lithium Metals Inc. signed a binding definitive agreement with Soquem Inc. to earn up to an 80% undivided interest in the Kwyjibo Rare Earth Project in Quebec.
• Phase I allows CLM to earn a 60% interest through $23.15 million in cash, share issuances, and project expenditures over five years.
• Phase II allows CLM to earn an additional 20% (totaling 80%) through $22 million in cash, share issuances, and project expenditures over three years following Phase I.

Key Details

• Transaction Structure: Binding definitive agreement for an earn-in option to acquire up to 80% undivided interest in the Kwyjibo Rare Earth Project.
• Counterparty: Soquem Inc., a wholly owned subsidiary of Investissement Quebec.
• Project Location: 125 km northeast of Sept-Iles, Côte-Nord region, Quebec.
• Project Assets: Mining claims, applications, leases, and mineral rights hosting an IOCG-style mineral system with significant rare earth enrichment (neodymium, praseodymium, dysprosium, terbium, and yttrium).
• Phase I Terms (Earn 60%):
  • Duration: Five-year period following signature.
  • Total Consideration: $23.15 million.
  • Cash Component: $5.65 million paid to Soquem.
  • Equity Component: C$5.50 million payable in common shares at a price equal to the greater of the discounted market price or the most recent closing price less a 10% discount.
  • Project Expenditures: $12 million invested in:
    • Negotiation/ratification of impacts and benefits agreement with the Innu of Takuaikan Uashat mak Mani-utenam.
    • Metallurgical study for environmental viability.
    • Environmental permitting from the Bureau d'acceleration des projets.
    • Initiation of at least 5,000 meters of drilling for resource expansion.
    • Initiation of a bankable feasibility study.
  • Result: Formation of a joint venture governed by customary terms.
• Phase II Terms (Earn Additional 20% for Total 80%):
  • Duration: Three-year period following expiry of Phase I.
  • Total Consideration: $22 million.
  • Cash Component: $4.5 million paid to Soquem.
  • Equity Component: $4.5 million payable in common shares at a price equal to the greater of the discounted market price or the most recent closing price less a 10% discount.
  • Project Expenditures: $13 million invested in:
    • Completion of the feasibility study.
    • Access road construction.
    • Electrical transmission line construction.
    • Underground mine construction.
    • Processing facilities construction.
• Additional Rights: CLM is entitled to enter discussions to acquire the remaining 20% interest.
• Default Clause: Failure to make payments or issuances within deadlines results in loss of the relevant option.
• Operator: Consolidated Lithium Metals acts as project operator throughout both phases.
• Regulatory/Exchange: Transaction is arm's-length; subject to TSX-V approval for share issuances. No finders' fees payable. No change of control expected.
• Qualified Person: Jean Lafleur, PGeo/Geo (OGQ, No. 833).

Notable Quotes

• "This DA with Soquem represents a unique opportunity to partner with a Quebec government-backed entity. With rising global demand for NdPr and key heavy rare earth elements, we strongly believe that the project has the potential to become a stable supplier of high-purity production for diversified North American, European and Asian supply chains." — Richard Quesnel, CEO
• "Quebec's established permitting framework -- combined with consultations with the Innu of Takuaikan Uashat mak Mani-utenam and active provincial/federal support for critical minerals development -- may provide an accelerated pathway through permitting, construction and the ramp-up to production, subject to completion of the feasibility study." — Richard Quesnel, CEO