Based on the Pre-Feasibility Study announced March 22, development capital costs for the project are in the order of US$148 million. Operating costs to produce battery grade lithium carbonate on site are approximately US$2,815/tonne (US$1.27/lb) of Li2CO3.
"A major portion of our capital requirements will be drawn from non-equity sources for the construction of our lithium carbonate mine and processing plant near Val d’Or, Quebec," said Canada Lithium President and CEO Peter Secker.
"We are keenly aware of the dilutive effects on shareholders of any major common-share issue and that is the primary rationale for engaging the proven expertise of Endeavour Financial," Mr. Secker noted.
In 2009, during extremely challenging financial market conditions, Endeavour closed six separate debt transactions for natural resources companies for in excess of US$800 million and over the past twenty years has established a proven track record in raising debt financing for metals that are not exchange-traded.
Neil Woodyer, Chief Executive Officer of Endeavour commented that "Endeavour will work with Canada Lithium to meet its strategies of first production from the mine in late 2012 and maximizing the amount of third party finance available."
Under the terms of the agreement, Endeavour will identify and implement various financing options, such as conventional project, corporate or convertible debt, mezzanine financings and off-take agreements. For its services, Endeavour will be paid a combination of work fees and, when applicable, success fees. The Company will also, subject to the approval of the TSX Venture Exchange, grant to Endeavour 1,000,000 share purchase warrants, each warrant giving the right to acquire one common share of the Company at an exercise price of $0.50 per common share for a period of five years.
Demand for high-grade lithium used in rechargeable batteries could soar by as much as 150 per cent over the next six years if projections for electric vehicle sales are correct, says the CEO of Canada Lithium Corp. A study by the Massachusetts Institute of Technology predicted 10 million electric vehicles will be sold globally by 2016. Demand for the low-emission vehicles will be propelled by government investments, rising gas prices and consumer demand for environmentally friendly products.
"Current demand is about 100,000 tonnes of lithium carbonate a year, and if you believe the 10 million number, then supply will have to increase to about 200,000 to 250,000 tonnes per year to meet that."
A pre-feasibility study for its Quebec Lithium project near Val-d’Or last week indicates the mine could be producing more than 19,000 tonnes of high-grade lithium carbonate per year beginning in 2012. "As electric vehicles start to ramp up over the next two to three years, there’s going to be significant demand that we believe can’t be met by existing producers," Secker said.
Endeavour Financial Corporation is an independent merchant banking company focused on the global natural resources sector. The Corporation offers advisory services in project, corporate and debt capital markets; equity financings; mergers and acquisitions; and strategic business development. Endeavour also has a gold-focused investment strategy and seeks maximum returns by identifying, investing in and consolidating junior gold companies. Endeavour Financial Corporation is listed on the Toronto Stock Exchange, symbol EDV.
Canada Lithium Corp. is a Canadian-based resource and exploration company trading under the symbol CLQ on the TSX-V. The Company is currently preparing a Definitive Feasibility Study on the Quebec Lithium Project, which will include environmental, metallurgical, geological and engineering studies. It has an agreement with Japanese metals trading firm, Mitsui and Co. Ltd., to market a portion of Canada Lithium Corp.’s product in China, Korea and Japan. Metallurgical tests have produced battery-grade lithium from deposit samples.