Enters Into Option Agreement to Acquire 100% of Fox Creek Lithium Brine Project,
posted on Feb 24, 2009 08:38AM
Exploration For A New Generation
|February 24, 2009|
Channel Resources Enters Into Option Agreement to Acquire 100% of Fox Creek Lithium Brine Project, Alberta
NI 43-101 Technical Report Preparation Underway
|VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 24, 2009) - Channel Resources Ltd. ("Channel" or the "Company") (TSX VENTURE:CHU) announces that it has entered into an exclusive option agreement (the "Agreement") with Polaris Capital Ltd. ("Polaris"), a private company, for the acquisition of a 100% interest in the Fox Creek Lithium Brine Project ("Fox Creek"), located approximately 200 kilometres west of Edmonton, Alberta.
The Fox Creek permit encompasses 276 square kilometres over aquifers identified, through a Government of Alberta study(1) (the "Study") on formation water geochemistry, to have potentially economic concentrations of lithium. The Study indicates that formation waters with lithium concentrations comparable to those of brines found at Clayton Valley, Nevada, which has been in production since the 1960s, are contained in Devonian age rocks at depths of approximately 3,200 metres at Fox Creek.
The Beaverhill Lake aquifer, over which the Fox Creek permit is centered, is considered in the Study to have the best blend of lithium concentration and reservoir characteristics, derived from 113 wells, over 14,800 core analyses and 32 permeability measurements in drill stem tests.
On the basis of a letter of intent signed in November 2008 the Company has carried-out a due diligence program on the project. A review of the brine composition as presented in the Study indicates that there are no apparent technical barriers to the recovery of lithium carbonate using similar processing methods to those used at Clayton Valley, NV and at the world's largest producers in Chile and Argentina. Furthermore, potash (KCl), elemental bromine and boric acid are potential by-products from the Fox Creek brine.
Conclusions based on the Study and a broader-based review of the aquifer, the growth prospects of the market for lithium carbonate and the potential of new processing technologies has led Channel to proceed with the execution of the Agreement to acquire Fox Creek and continue the assessment of the lithium resource and potential development scenarios. The Company has commissioned a NI43-101 technical report to integrate available data and guide further work on the project.
The Agreement with Polaris grants to Channel the right to acquire a 100% interest in the project, subject to a purchasable 2% gross sales proceeds (GSP) royalty. The major terms in the Agreement have been agreed to include:
- Payment of $10,000 and 1,000,000 common shares of Channel to Polaris upon execution;
- Payment of $10,000 and 1,000,000 common shares of Channel to Polaris on or before each of the first four anniversary dates of the Agreement;
- Following full exercise of the purchase option, the 2% GSP royalty may be purchased at Channel's discretion at any time for consideration of C$2,000,000.
This Agreement is subject to the approval of the TSX Venture Exchange.
Lithium is a component or is used in the production of a wide variety of products including glass, ceramics, aluminum, lubricants, pharmaceuticals and batteries, especially those used in consumer and industrial electronics. Demand for the metal is projected to increase significantly as lithium-ion batteries are further applied to electric and hybrid-electric vehicles.
The above information has been prepared under the supervision of Colin H. McAleenan, P.Geo, who is the Company's "Qualified Person" under the definition of NI 43-101.
(1)Hitchon, B., Bachu, S., Underschultz, J.R., and Yuan, L.P. (1995): Industrial Mineral Potential of Alberta Formation Waters; Alberta Research Council Bulletin No. 62
Filing of First Quarter Financial Report
The Company also announces that it has filed its unaudited financial statements for the first quarter ended December 31, 2008 on the SEDAR system, together with its management discussion and analysis (MD&A) for the same period. The statements and MD&A are also available from the Company's website, at www.channelresources.ca.
Some of the statements contained herein are forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the price of minerals, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise. Further disclosure on risk factors is available in the Company's various corporate filings at www.sedar.com.