LIMA, Peru, Dec. 1, 2010 /PRNewswire-FirstCall/ -- Li3 Energy, Inc. (OTC Bulletin Board: LIEG; "Li3") is pleased to announce it has signed a non-binding exclusive letter of intent with Sociedades Legales de Minerales de LITIO 1 a 6 de la Sierra Hoyada de Maricunga, a group of private companies (the "Companies") to acquire 51% ownership of the Companies, which collectively own the Maricunga Project ("Maricunga") in northern Chile. Li3 has retained CIBC World Markets Inc. as its exclusive financial advisor and agent for the transaction.
The Maricunga property, covers an area of approximately 3,553 acres (1,438 hectares), comprising six concessions, and is located in the northeast section of the Salar de Maricunga in Region III of Atacama in northern Chile.
A sampling program on the 8,000 hectare Salar de Maricunga has been performed by CORFO, the economic development agency of the Republic of Chile, and calculated a mineral resource of 224,300 tonnes of lithium carbonate (Li2CO3) and 3.27 million tonnes of potash (KCl).
In exchange for the 51% ownership interest in the Companies, Li3 will pay US$5.1 million and issue a number of shares of Li3 common stock to the Companies equal to 26% of the outstanding Li3 stock on a post-transaction basis. Li3 will issue additional shares to the Companies upon exercise of any options and warrants outstanding at the time of closing, in proportion to their percentage ownership as of closing.
Luis Saenz, Chief Executive Officer of Li3, stated: "The Maricunga Project acquisition is a major transaction on a property that has had advanced work performed in the past in a district that has historically proven to be as attractive as the Atacama producing region. It would also create several synergies with our Alfredo nitrate iodine project near Pozo Almonte, Chile. Potash from Maricunga can be reacted with sodium nitrate from Alfredo in order to produce a value-added potassium nitrate, while the sulfate produced from Alfredo can be used as a low cost raw material for lithium processing at Maricunga. As we move forward, we believe this strategy will help position Li3 as one of the lowest cost producing companies in the lithium sector. We are very excited to take the first large step into becoming an important player within the industry."
In addition, Li3 will be committing to invest a total of up to US$5 million in work programs on exploration and studies to advance Maricunga towards the feasibility study stage. All work is to be performed to NI 43-101 standards.
Closing of the Maricunga acquisition is subject to satisfactory completion of due diligence, financing of the cash purchase price and work commitment by Li3 and other customary conditions. The letter of intent will expire in 90 days if the acquisition has not been completed.
About Li3 Energy, Inc.
Li3 Energy, Inc. is an early stage, U.S. public company pursuing a strategy in the lithium mining and energy sector in the Americas, with a focus on identifying and acquiring opportunities in Peru, Argentina and Chile. Li3 Energy's goal is 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.
Certain statements in this news release are forward-looking. 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," "may," "would" or similar expressions or variations on such expressions are forward- looking statements. Li3 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 Li3's actual results to differ materially from the forward-looking statements including, but not limited to, Li3's ability to identify appropriate corporate acquisition and/or joint venture opportunities in the lithium mining sector, Li3's ability to establish technical and managerial infrastructure, Li3's ability to raise the required capital to take advantage of and successfully participate in any such opportunities, and future economic conditions, political stability and lithium prices. Descriptions of some of the risks and uncertainties that could cause Li3's actual results to differ materially from those described by the forward-looking statements in this news release appear in Li3's filings with the U.S. Securities and Exchange Commission (the "SEC") including, without limitation, in the section captioned "Risk Factors" in Li3's Annual Report on Form 10-K for the fiscal year ended June 30, 2010. Li3 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.