In this segment of The Ellis Martin Report we speak with Keith Henderson, CEO of Latin Metals Inc (TSX-V:LMS) (OTC:LMSQF) as the company agrees to sell its El Quemado Lithium Project in Argentina. Details as follows:
Latin Metals Inc. announces that it has entered into an agreement with South American Lithium Ltd. pursuant to which SAL will purchase from Latin Metals a 100% interest in the El Quemado lithium project, located in the Province of Salta, Argentina, for total consideration of $900,000. Latin Metals will retain a 2% net smelter returns royalty on the Project. Unless otherwise specified, all references to dollars are to amounts in Canadian dollars.
Under the terms of the Agreement, within ten days of signing the Agreement, SAL will make a cash payment of $400,000 and issue 1,000,000 units to Latin Metals. Each unit will consist of 1,000,000 common shares in the capital of SAL (issued at a deemed price of $0.50) and 1,000,000 share purchase warrants (exercisable for an equal number of common shares at $1.00 per share for a period of 5 years).
Latin Metals will retain the 2% NSR Royalty from future production on the Project, half of which 2% NSR Royalty (1.0%) can be repurchased by SAL from Latin Metals at any time prior to production for US$3,000,000 cash.
“This transaction is consistent with Latin Metals’ strategy to monetize non-core assets, like El Quemado, while retaining a royalty interest, in this case, the 2.0% NSR Royalty on future production from the Project,” stated Keith Henderson, Latin Metals’ President and CEO. “Consideration of $900,000 provides the Company with $400,000 of non-dilutive cash as well as $500,000 in securities which provides Latin Metals with exposure to the project’s future success.”
Mr. Henderson continues, “South American Lithium is a private Canadian company which is currently finalizing a going-public transaction. The royalty-focused structure of this transaction reflects our view that SAL has significant technical and management experience in Argentina, and we would like to wish SAL’s management team every success in moving the Project forward.”
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We acknowledge the [financial] support of the Government of Canada.