Canada Lithium Announces C$75-million Debt and US$17-million Mine Fleet Financing; Project Construction on Schedule
Toronto, ON – February 13, 2012 – Canada Lithium Corp. (TSX: CLQ) (OTCQX: CLQMF) is pleased to announce that The Bank of Nova Scotia (“Scotiabank”) and Caterpillar Financial (“CAT”) have provided credit-approved commitments to Canada Lithium Corp. to provide a C$75-million, five-year debt facility to finance Canada Lithium’s Québec Lithium open pit mine and process plant near Val d’Or, Québec. The debt facility will be supported by a financial guarantee from Investissement Québec. In addition to the debt facility, CAT will provide up to US$17-million lease financing for the mobile mining equipment.
Construction of the Québec Lithium Project began in August 2011 and is progressing on schedule and on budget. Commissioning of the US$207-million project will commence in late 2012, and the Company is in advanced discussions in respect of lithium carbonate off-take agreements with a number of potential domestic and international customers. Sales of battery-grade lithium carbonate to a global market heavily focused on battery makers in South Korea, China and Japan are anticipated to begin in the first quarter of 2013. At full production, the Québec Lithium Project would produce in excess of 20,000 tonnes of battery-grade lithium carbonate per year destined for export abroad and for markets in Quebec.
Investissement Québec Guarantee, Scotia Underwriting Commitment, Funding Timetable
The C$75-million debt financing, C$60 million of which has been underwritten by Scotiabank as Mandated Lead Arranger, with the C$15-million remainder to be provided by CAT, will be supported by a partial financial guarantee from Investissement Québec, a Québec government agency established to foster economic development. The debt facility will be secured by the assets of the Québec Lithium Project and contains normal commercial terms including a fee for the Investissement Québec guarantee. The facility is credit-approved subject to standard project financing conditions, including permitting requirements, legal documentation and completion of the final project funding requirement of approximately C$25 million. The Company is in discussions with a number of financial institutions and third parties regarding completion of the additional funding. Initial drawdown of the debt facility is expected in the second quarter of 2012.
In addition to its participation in the project debt facility, CAT has completed credit approvals to provide up to US$17 million in equipment lease financing for the main components of the mining equipment fleet.
At the end of December 2011, Canada Lithium had a cash balance of approximately C$100 million, based on un-audited management accounts.
Project Update – Construction on Schedule and on Budget
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