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Dear Fellow Shareholder,
I wanted to take this opportunity to provide you with an update of our recent activities and upcoming milestones. There have been a number of significant developments since my last letter in April 2018, specifically pertaining to permitting, project developments, and corporate updates.
On the permitting front, the Chilean Mining Ministry has confirmed that Minera Salar Blanco (the joint-venture company which holds the Maricunga lithium project) can now formally request a Special Lithium Operations Contract or “CEOL” be granted over its new code mining concessions. If you recall, we previously were awarded the CChen (Chilean Nuclear Comission) production and exploitation permit for our grandfathered or old code concessions this past March. We plan on submitting our application for the CEOL this August and based on the positive letter received from the Mining Ministry, we anticipate to receive this within four to six months.
For our environmental permit, we are in the final stages of completing our Environmental Impact Assessment (EIA) and undergoing a final internal review prior to submission this quarter. While the exact timing of the permit is unknown, other EIA applications typically for projects in Chile have taken an average of 280 days from submission to award and we hope to fall within this timeline. The EIA is an extensive and comprehensive document that has been prepared by international engineering company, MWH. The lithium production permits, the CChen and CEOL combined, in conjunction with environmental permit, are the material permits we would require to commence construction and production.
The Maricunga project continues to advance rapidly, with the lithium process optimization carried out by two major global equipment manufacturers and developers, GEA in Germany and Veolia in the USA. While both companies independently produced battery-grade lithium carbonate up to 99.9% purity, GEA has been selected as the final equipment supplier for the Definitive Feasibility Study (DFS). The DFS is being led by global engineering contractor WorleyParsons and remains on track for completion by the end of this year (Q4/18).
Lastly, there have been a few notable corporate developments that I wanted to address. Firstly, we are exercising our pro-rata right to acquire additional interest in the Maricunga project. Our private partner, Minera Salar Blanco SpA, is selling 1.35% of it’s interest in the project of which we are acquiring an additional 0.35% with Lithium Power International (LPI) acquiring 1%. Following this, we have increased our project interest from 17.67% to 18.02% at a cost of A$0.5 million (~$0.5 million). It’s important to note that the control of the joint-venture project company remains unchanged given the board composition remains unchanged. Our decision to increase interest in the project reflects our commitment to the Maricunga project and belief that it represents the most advanced and highest-grade pre-production lithium projects globally. Secondly, the financing we announced for $2.0 million was over subscribed and now expect to raise $2.5 million, of which we have already closed an initial tranche of over $2.4 million. The purpose of this financing was to ensure that our treasury remains strong to meet any unanticipated expenditures and weather the markets until the project can be monetized or advanced to a construction decision. The joint-venture is currently funded through to the completion of the DFS at year-end with US$4.9 million in the project company at June 30th, 2018 and any contributions that Bearing may make will be after that has been expended.
The migration towards electric vehicles only continues to gain momentum, as even the traditional fossil fuel suppliers have started to make inroads into charging stations. Notable highlights include British Petroleum (BP)’s takeover of Chargemaster this June, which includes 6,500 charging stations within the UK and reaffirmation of “supporting the successful adoption of electric vehicles”. Royal Dutch Shell also recently unveiled its development plans of smart charging for electric cars, which follows on from its acquisition of New Motion last year which operates one of Europe’s largest EV charging networks.
In closing, I would like to thank you for your continued support and shared vision of both the potential of the Maricunga project and of the broader battery revolution.
Sincerely,
/s/ Jeremy Poirier
President & CEO Bearing Lithium Corp.
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