LIMA, PERU, May 9, 2011 /PRNewswire/ -- Li3 Energy, Inc., (OTC.BB. LIEG) ("Li3", "Li3 Energy" or the "Company"), a US-listed and Peruvian-based global exploration company in the lithium and minerals sector is pleased to announce that it has executed an exploratory Memorandum of Understanding (MOU) with POSCO, (NYSE: PKX), a Republic of South Korea multinational global leader. POSCO is a diversified company, with operations in energy, chemicals and materials. POSCO is one of the largest steel manufacturers in the world with $56 billion in annual revenues and invests in numerous global resource development projects and has been actively evaluating and pursuing leading lithium projects globally. The MOU was formally executed in a ceremony led by Joon-Yang Chung, POSCO's Chairman and Chief Executive Officer, Ohjoon Kwon, POSCO's Chief Technology Officer, and Luis Saenz, Li3's Chief Executive Officer on Friday, May 6th, 2011 in Copiapo, Chile as part of a visit to the Project.
Li3 believes that, if production of hybrid vehicles increases and transitions to pure electric vehicles over the next decade, then global requirements for lithium used in the production of batteries may increase substantially. Numerous Fortune 500 companies, along with battery and auto makers in Korea and Japan have responded and partnered with lithium exploration companies in an effort to ensure a consistent, steady and reliable source of their own lithium. The government of the Republic of South Korea, one of the world's leading lithium battery producing nations has mandated to invest $12.5 billion over the next ten years in lithium resource projects and deemed lithium a "strategic commodity."
Li3, with its pending acquisition of a 60% controlling interest in the Maricunga property, (ranked by SignumBOX as one of the top ten lithium projects in the world) and its substantial strategic lithium holdings, is focused on the acquisition and development of highly prospective lithium brine properties in the Americas. The key terms of the MOU include:
- An agreement to explore and evaluate a joint business opportunity utilizing brine, including but not limited to the extraction of lithium and other useful resources from brine;
- The evaluation of establishing a pilot plant in Korea and or in Chile, in which POSCO may invest capital in exchange for equity in Li3;
- Subject to the results of the Pilot Plant evaluation, establishment of a full-scale commercial plant to produce lithium carbonate products and other useful by-products in which POSCO may also invest capital in exchange for equity in Li3;
- The establishment of a joint technical committee as both parties deem necessary and proper;
- In connection with the financing of the commercial plant, granting to POSCO rights to purchase the lithium carbonate and other by-products from the commercial plant during the period of its operation on a pro-rata basis;
- Li3 has granted to POSCO (or any affiliate POSCO may designate), an option exercisable until June 30th, 2011 to purchase for $0.27 per unit, up to $25 million dollars of units of Li3's restricted securities, with each unit consisting of one share of common stock and a three-year warrant to purchase one-half of one share of common stock for $0.40 per whole share.
Luis Saenz, Chief Executive Officer of Li3 Energy, stated: "I am extremely honored and humbled to have had the opportunity to spend time with such accomplished and visionary executives and very much look forward to future collaboration. We at Li3 Energy are pleased to have executed this MOU with POSCO as a sign of this shared view. Being evaluated and chosen as a potential strategic lithium and other minerals project as well as having the opportunity to explore financial, technical, and commercial opportunities with a global strategic partner of this magnitude speaks to the strength of our plans as we move towards commercializing Maricunga. We look forward to working through this evaluation stage together with POSCO which could further align our companies in a mutually beneficial manner."
As Li3 has reported, the independent evaluation recently conducted by SignumBOX concluded that the Maricunga lithium project in its currents state is among the top ten lithium projects in the world and has the potential to become the leading lithium based salar in brine-bearing deposits. Among other items, including securing financing, this report concluded that securing a multinational strategic off-take partner was one of the criteria missing that could elevate the project even further. While Li3 is confident about the potential of this strategic MOU, it gives no assurances that this MOU will advance beyond the exploratory stage which has a defined period, can be mutually extended and currently expires on the 30th of June, 2011.
POSCO engages in the manufacture and sale of various steel products in South Korea and internationally. It offers steel for general structures and welded structures used in steel structures, bridges, ships and automobiles; atmospheric corrosion resistant steel for use in the production of containers, special vehicles and buildings, hot rolled steel used in automobile frames and wheels; and hot rolled steel for special applications. The company also provides cold rolled sheets used in cold-rolled products, such as CR, GU and color plates; steel for structural pipes, general pipes, special pipes, and carbon steel pipes for machines; steel used in high-pressure gas containers; steel for oil well pipes; and steel for pipelines. The company was founded in 1968 and is based in Seoul, South Korea.
About Li3 Energy, Inc.
Li3 Energy, Inc. is a developmental stage public company in the lithium mining and energy sector focused on the identification and acquisition of properties in Peru, Argentina and Chile and the United States. Li3 Energy aims to acquire a significant portfolio of lithium brine deposits in the Americas for the purpose of development and production in order to meet growing market demand and to support the clean energy and green energy initiatives being implemented globally.
Additional information regarding the company can be found in our recent current filings (Forms 8k, 10Q and 10K) with the SEC as well as the information maintained on our website www.li3energy.com).
All statements other than statements of historical facts included in this news release including, without limitation, statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates," "projects," "potential," "target," "goal," "plans," "objective," "should" or similar expressions or variations on such expressions are forward-looking statements. The Company can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause the Company's actual results to differ materially from the forward-looking statements, including, but not limited to: the Company's ability to successfully receive committed funds and close on the additional subscription agreements that have been executed in the Offering; the Company's ability to timely close on the acquisition of interests in the Maricunga Project; the results of initial exploration, and the determination by Li3 and POSCO whether to pursue any of the transactions contemplated by the MOU; the Company's ability to identify appropriate corporate acquisition and/or joint venture opportunities in the lithium mining sector and to establish the technical and managerial infrastructure, and to raise the required capital, to take advantage of, and successfully participate in such opportunities; future economic conditions; political stability; and lithium prices. For further information about certain risks faced by the Company, see "Risk Factors" in Part I, Item 1A of Amendment No. 1 to our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on November 5, 2010. The Company disclaims any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this news release to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
SOURCE Li3 Energy, Inc.