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Wealth Minerals (WML.V) to Acquire 24.5% Interest in Chilean Seven Salars Lithium Project

08/01/2017
By Steven Ralston, CFA

TSX:WML.V
OTC:WMLLF

Today, Wealth Minerals Ltd. (TSX:WML.V) (OTC:WMLLF) announced the execution of a binding Letter Agreement which grants the option to acquire 49% of the outstanding shares of San Antonio Sociedad Contractual Minera. As a result, Wealth Minerals has the option to acquire a 24.5% beneficial interest in the 39,400-hectare Seven Salars Project, which currently is held in a 50/50 JV by Talison Lithium and San Antonio. 

Upon the completion of due diligence, Wealth Minerals can exercise its option to acquire 49% of the issued and outstanding shares of San Antonio by issuing 4,104,545 shares of WML.V at closing and the payment of US$11,760,000 over the ensuing eight months.  

The Seven Salars Project is comprised of Salar de La Isla (16,500 hectares), Salar de Aquilar (8,800), Salar de Las Parinas (5,400), Salar Grande (4,000), Salar Agua Amerga (3,100), Salar de Piedra Parada (1,500) and Maricunga Salar (104) - all located Chile’s Region III.

The salars have had varying degrees of historical exploratory work. Highlights include surface brine sampling with a maximum value of 1,080 mg/l Li at Salar de La Isla, a maximum lithium concentration of 480 mg/l (average of 331 mg/l) in a drill program at Salar de Las Parinas and brine samples ranging from 257 mg/l to 337 mg/l at Salar de Aquilar.

Concerning the other JV partner of the Seven Salars Project, Talison is a leading global producer of lithium. Talison’s Greenbushes Project in Western Australia produces lithium concentrate, which accounts for roughly 40% of global lithium production. Talison acquired its 50% interest in the Seven Salars Project through the acquisition of Salares Lithium Ltd. in 2010. Talison Lithium, itself, is jointly owned by Tianqi Lithium (51%) and Albemarle Corporation (49%), the latter being the one of the two current lithium producers in Chile with production from Salar de Atacama Salar and the operator of the Greenbushes Project. 

Management has recognized the increasing interest in lithium brines located with the Lithium Triangle, especially Chile. Rising prices of the lithium compounds, especially lithium carbonate, appeared to be forerunner of an expected potential future supply shortage of high-grade lithium to feed the demand being generated by Electric Vehicle (EV) manufacturers and builders of battery gigafactories. The company’s business plan is comprised of acquiring greenfield lithium concessions, advancing the properties through exploratory studies (brine sampling, geophysics and drilling) to an extent that they appear technically feasibility and economically viable and then developing these properties into revenue generating operations. 

Management is positioning the company to benefit from the upcoming expected growth of demand in the lithium space and continues to seek the acquisition of additional interests in prospective concessions.

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