May 12th, 2014, Vancouver, BC – Pure Energy Minerals Limited (the “Company”) (TSX-V: PE) announces that it has entered into an option agreement (the “Option Agreement”) dated April 30, 2014 (the “Effective Date”) with GeoXplor Corp. (“GeoXplor”) whereby the Company may earn a 100% interest in certain association placer mineral claims comprised in a property located in Esmeralda County, Nevada (the “Property”). Under terms of the Option Agreement, subject to TSX Venture Exchange approval, the Company has the option to earn a 100% interest in the Property by making cash payments to GeoXplor totaling US$1,100,000, issuing GeoXplor an aggregate 1,707,648 common shares, completing an aggregate US$3,750,000 in mineral exploration and development testing on the Property, over the next four years, in the stages set out below, and either (i) preparing or delivering to GeoXplor a “pre-feasibility study” (as that term is defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects adopted by the Canadian Securities Administrators (“NI 43-101”)) in respect of the Property, or (ii) commencing commercial production on the Property within four years from the Effective Date.
|Date||Cash Payment||Share Issuance||Expenditure Requirement|
|On the Effective Date||US$100,000||1,000,000||n/a|
|On or before the date which is one year from the Effective Date||US$250,000||176,912||US$750,000|
|On or before the date which is two years from the Effective Date||US$250,000||176,912||US$1,000,000|
|On or before the date which is three years from the Effective Date||US$250,000||176,912||US$2,000,000|
|On or before the date which is four years from the Effective Date||US$250,000||176,912||Pre-feasibility study or commercial production|
If, at any time, the Company, its assignee, or its third party joint venturer prepares a positive “feasibility study” (as that term is defined in NI 43-101), or a permit to commence commercial production on the Property is issued by the Bureau of Land Management, the Company will pay to GeoXplor an additional US$2,000,000 which amount will be paid in cash or common shares of the Company at the election of GeoXplor (the “Additional Payment”). If GeoXplor elects to receive shares, the number of shares to be issued will be determined by dividing US$2,000,000 by either the volume-weighted average market price per share of the Company’s shares for the five trading days preceding the date of issuance if the Shares are listed and trading on a stock exchange/quotation system; in the event that the shares are not listed and trading on a stock exchange/quotation system at the relevant time, the price per share shall be determined by an independent valuator chosen by the parties.
Upon the Company acquiring a 100% interest in the Property, GeoXplor will be entitled to a royalty equal to 5% of revenues (the “Royalty“) derived from the sale of lithium concentrate and all other ores or minerals mined or extracted from the Property, without any deduction of any kind or nature whatsoever. The Company may elect to purchase from GeoXplor at any time 50% of the Royalty (being 2.5%), upon the payment to GeoXplor of $7,000,000.
The Company will pay to GeoXplor as a minimum annual advance royalty commencing on or before the date which is five years from the Effective Date of the Option Agreement and on or before each subsequent anniversary date of the Effective Date, the sum of $250,000 (the “Advance Royalty Payments”). All such Advance Royalty Payments paid by the Company will be credited towards the Royalty due to GeoXplor.
If, within four years from the Effective Date, the Company sells, options, assigns, disposes or otherwise alienates, in whole or in part, its interest in the Option Agreement and the Property to a third party, or enters into a joint venture in respect of the Property with a third party that is acceptable to GeoXplor and, if such sale, option, assignment, disposition or other alienation or joint venture arrangement involves the issuance of such third party’s shares and/or the payment of cash to the Company, GeoXplor will be entitled to receive 10% of the number of such shares to be issued to Company and 10% of the amount of cash to be paid to the Company, on the same terms and conditions that have been negotiated by the Company and such third party.
The 5000 acre Property is located in Esmeralda County, Nevada, and is contiguous with Rockwood Lithium’s Silver Peak mine. In 2010 previous exploration drilling confirmed extended lithium enriched brines at depth on the Property. Two reverse circulation drill holes, 2.3 km spaced, intersected the anticipated target horizon at 145 m depth up to 317 m drilled depth with respect to lithium values larger than 100 mg/L in 2010. Their sample results showed values of lithium (“Li”) ranging from 100 mg/L to 400 mg/L with Li values of 370 mg/L over 30 m , and Li values averaging of 285 mg/L over 145m of intersection. The mineralized zone is immediately south of the current lithium producing property in Silver Peak, NV. (source: http://rodinialithium.com/news/index.php?&content_id=130 http://rodinialithium.com/news/index.php?&content_id=99).
A deeper situated second horizon is expected below the above mentioned zone, however it has not been drill tested yet.
On neighboring properties to the West and North West, controlled by Rockwood Lithium Corporation, lithium is economically produced from deep seated lithium brines, assumingly the same horizon, since 1966 with average grades ranging from 100 – 300 mg/L.
With the addition of the CV and DB claims the Company has expanded its opportunity in Nevada to over 7,000 acres. In 2012 a geophysical survey by the Company on their Alkali Flats (“AF”) claims indicated similar drill targets. The Company plans to drill test all the potential zones in their upcoming exploration program.
GeoXplor will be the operator of all exploration and development work on the Property to be funded by the Company in accordance with the terms of the Option Agreement.
Gerhard Jacob, a Qualified Person under NI 43-101, has reviewed and approved the scientific and technical information in this press release.
ON BEHALF OF THE BOARD
PURE ENERGY MINERALS LIMITED
Chief Executive Officer
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