NVLH completed acquisition of 100% Bonnie Claire project from ICM on Monday. NVLH has USD $5.9B NPV at current LCE price for only 30,000t LCE pa.
Vancouver, British Columbia – July 10, 2023 – Nevada Lithium Resources Inc. ("Nevada Lithium") (CSE: NVLH) (OTCQB: NVLHF) (FSE: 87K) and Iconic Minerals Ltd. ("Iconic") (TSXV: ICM) (OTCQB: BVTEF) (FSE: YQGB) are pleased to announce that they have completed the previously announced plan of arrangement under the Business Corporations Act (British Columbia) (the "BCBCA"), whereby Nevada Lithium acquired Iconic's 50% interest in the Bonnie Claire lithium project (the "Bonnie Claire Project") located in Nye County, Nevada (the "Arrangement"). Upon completion of the Arrangement, Nevada Lithium now holds a 100% interest in the Bonnie Claire Project. In connection with the completion of the Arrangement Nevada Lithium will receive the gross proceeds from the Concurrent Offerings (as defined below) totalling $11,320,998, which included participation from several investors.
Stephen Rentschler, Chief Executive Officer of Nevada Lithium, stated: "We are pleased to announce the completion of the previously announced transaction with Iconic resulting in 100% ownership of the Bonnie Claire lithium deposit by Nevada Lithium, and welcome the new shareholders who have been created as a result of this transaction. Nevada Lithium is currently engaged in Pre-Feasibility Study work, as well as strategic dialog with lithium end-users. Consolidation of asset ownership has been one of the key factors in discussions, and we are confident that this transaction will be instrumental in unlocking shareholder value."
Richard Kern, President/CEO of Ionic and Chief Operating Officer and director of Nevada Lithium, added: "The Bonnie Claire lithium deposit has developed into a resource of potential global significance with its size, grade and location in Nevada, USA. Consolidation of 100% ownership within Nevada Lithium will provide a more efficient and effective structure for the continued advancement of the Bonnie Claire Project and allow Iconic shareholders to continue to participate in future value creation as shareholders of Nevada Lithium."
Mr. Rentschler continued, "Lithium Carbonate Equivalent (LCE) prices are now many times higher than the assumed prices used in our robust Preliminary Economic Assessment, where at a base case pricing assumption of $13,400 USD / tonne LCE the Bonnie Claire Project returned an NPV of $1.5 Billion USD (ATAX 8%). Recent 2022 drill program results have also returned the highest lithium values ever recorded at the Bonnie Claire Project, including 3,201 ppm Li over 520 ft (158 m) within a wider interval of 1,315 ppm Li over 2,000 ft (610 m). With a projected annual production rate of over 30,000 tonnes of LCE, and a resource base that indicates the ability to upsize potential production further, the Bonnie Claire Project has the potential to play a significant role in meeting global lithium needs."
The Bonnie Claire Project is located within Sarcobatus Valley, which is approximately 30 km (19 miles) long and 20 km (12 miles) wide. Quartz-rich volcanic tuffs containing anomalous amounts of lithium occur within and adjacent to the valley. Drill results from the salt flat include 2,054 ppm Li over 67.1 m (220 ft) as well as a 475 m (1560 ft) vertical intercept averaging 1153 ppm Li. Bonnie Claire is one the largest lithium resources in North America with a current NI 43-101 inferred mineral resource of 3,407 million tonnes (Mt) grading 1,013 ppm Li for 18,372 million kilograms of contained lithium carbonate equivalent (LCE), at a cut-off grade of 700 ppm Li. Mineral resources are not mineral reserves as they do not have demonstrated economic viability.
Nevada Lithium's 2022 NI 43-101 Preliminary Economic Assessment shows attractive investment metrics even at low LCE prices. At $13,400 USD per tonne LCE, the Net Present Value of the Project is $1.5 Billion USD (after tax) using an eight percent (8%) discount rate and the Bonnie Claire Project has after tax IRR of 23.8%. With an LCE price of $30,000 USD per tonne, the Net Present Value (8%) of the Bonnie Claire Project is $5.9 Billion USD and the IRR is 60.3% (after tax).
The gravity low that characterizes the valley is approximately 20 km (12 miles) long, and the current estimates of depth to basement rocks range from 600 to 1,200 meters (2,000 to 4,000 feet). The current claim block covers an area of 74 km2 (28.6 mi2) with potential for brine systems and further sediment resources.
206,739,493 SOI x 30c SP = CAD $62M MC = AUD $68.63M - AUD $16.55M cash = AUD $52.08M EV / 18.372Mt LCE = AUD $2.83 EV per tonne LCE which is still the lowest globally behind JRL with $4.62 EV per tonne LCE. Should rise when offtake partners are announced.
We missed a great opportunity to end up with free NVLH shares by buying ICM shares prior to the merger then selling them when merger was completed.
For $10k could buy 106,269 ICM shares @ CAD 8.5c in mid June. SP got as low as CAD 7c for a few days so could have bought at a lower price.
ICM holders were issued 0.4082576248 NVLH shares per 1 ICM share x 106,269 ICM shares = 43,385 NVLH shares.
Merger was completed on Monday 10/7/2023 & the ICM shares could have been sold by Wednesday for same as purchase price resulting in 43,385 NVLH shares for free x CAD 30c SP = CAD $13,015 = AUD $14,401.
I calculated ICM holders would receive about 0.4 NVLH shares per ICM share but it was very messy with the merger, CR, options, warrants & SOI so I was not 100% confident with my calculations as it appeared too good to be true. Also was not sure how much ICM shares would fall following the merger. ICM SP ran up from CAD 7c to 12.5c & has now dropped back to CAD 7c following completion of the merger.
LLI Price at posting:
32.0¢ Sentiment: Buy Disclosure: Held
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