Western Lithium USA Corporation (TSX:WLC)(OTCQX:WLCDF) is pleased to announce that, further to its news release of November 16, 2015, it has completed the US$5,000,000 Line of Credit Agreement with its largest shareholder, Geologic Resource Partners LLC.

Pursuant to the terms of the Line of Credit Agreement, the Lender agreed to advance a US$5,000,000 line of credit to the Company with an interest rate of 1.25% per month, payable monthly. Upon execution, the Company paid a $75,000 execution fee. The Company may draw down on the Line of Credit from time to time in increments of US$100,000, with each draw down subject to a fee of 1.25% of the amount drawn down. Any amounts disbursed, once repaid, will no longer be available for draw down. The Line of Credit also has a standby fee equal to 1.5% of any undrawn amount, payable annually. The Company may cancel the Line of Credit at any time provided there are no outstanding obligations. The balance owing matures and falls due on December 14, 2018, and maturity accelerates if the Company closes a financing of US$10,000,000 or greater. The Line of Credit does not carry a conversion feature into common shares of the Company. The funds from the Line of Credit will be used for working capital purposes.

Concurrent with execution of the Line of Credit Agreement, Geologic assigned a beneficial interest in an aggregate US$750,000 principal amount of the Line of Credit to each of John Kanellitsas, a member of the Company’s Board of Directors and Greenbrook Capital Partners Inc., a company wholly owned by Thomas Hodgson, CEO and member of the Company’s Board of Directors.

John Macken, the Company’s Chairman, commented: “We are very pleased to be able to secure the line of credit from our largest shareholder with the participation from the new executive team, reflecting their commitment to our business plan set for the next year. It also represents a non-dilutive funding to the Company at the time when discussions with strategic partners are rapidly progressing to advance our two large lithium deposits, Cauchari-Olaroz in Argentina and Kings Valley in Nevada, and while our Hectatone business is advancing towards positive cash flow in 2016.”

As a result of the fact that the Lender holds securities carrying more than 10% of the voting rights attached to the Company’s issued and outstanding common shares and that George Ireland, a member of the Company’s Board of Directors, is also CEO of the Lender, the Line of Credit is considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101”). The transaction is exempt from the requirements to obtain a formal valuation, pursuant to Section 5.5(a) of MI 61-101, and minority shareholder approval, pursuant to Section 5.7(a) of MI 61-101, as the fair market value of the Line of Credit and any consideration paid by the Company in connection with it will not exceed 25% of the Company’s market capitalization.

The Company’s Board of Directors considered and unanimously approved the Line of Credit, with the directors who have an interest in the transaction abstaining from such approval.

About Western Lithium

Western Lithium is positioning itself as a major U.S. and Argentinian based supplier to support the rising global demand for lithium that is expected from the increased use of hybrid/electric vehicles, consumer electronics, and consumer and industrial lithium battery storage applications.

At the Cauchari-Olaroz lithium project, located in Jujuy province, Argentina, a major lithium brine reserve has been defined and a definitive feasibility study has been completed. In addition, and as previously announced on August 27, 2015, a Heads of Agreement has been signed with POSCO regarding the commercialization of that project using their own proprietary technology.

The Kings Valley lithium project is being developed into a strategic, scalable and reliable source of high quality lithium products. In addition, Western Lithium is pursuing the opportunity to be a supplier of specialty drilling additives, Hectatone™ and potentially other organoclays for the oil and gas and other industries.

In addition, Western Lithium is pursuing the opportunity to be a supplier of specialty drilling additive, Hectatone™ and potentially other organoclays for the oil and gas and other industries.