Lithos Takes an Industrial Turn and Reintegrates its Subsidiary Limtech
QUEBEC, QUEBEC--The directors of Lithos Corporation and Limtech
are proud to announce that, due to the significant progress of its
lithium project and the confirmation by different research groups
on the quality of its lithium carbonate, its competitive return
price and the market growth, Limtech has been awarded two non
refundable grants: $750,000 from the Quebec Government through the
"Fonds developpement industriel du Quebec" and $350,000 from the
"Conseil National de Recherche du Canada".
Moreover, Limtech has signed a private placement agreement of
$650,000 at $2.00 per share of Limtech with CapiTech, a 100
percent subsidiary of Hydro-Quebec. CapiTech will also benefit
from an option to buy 200,000 shares of Limtech at $2.00 per share
for a period of four (4) months. The agreement signed between
both parties is subject to approval by CapiTech's board of
directors which will be held on October 24th.
Convinced of the potential of the lithium project, the "Societe
Generale de Financement (SGF)" ordered and paid, at the cost of
$125,000, a world wide market study of lithium carbonate as well
as a detailed business plan. The market study was completed by
Kline & Company, an independent firm specialized in the
realization of studies on high technology products. Firstly, this
study foresees, for the next ten (10) years, a market growth rate
of high purity lithium carbonate in the order of 21.5 percent
composed annually. Please note that this study does not take into
account the substantial demand increase of high purity lithium
carbonate by the lithium battery market destined to electric
vehicles and the existing market of lithium metal. Secondly, the
study shows the following sale prices for lithium carbonate:
/T/
Purity of the LiCO3 Sale price
99,999 percent 55 $ US / kg
99,99 percent 38 $ US / kg
99,9 percent 5 $ US / kg
/T/
Taking into consideration these sale prices and according to the
compilation by the LTEE (Laboratoire des technologies
electrochimiques et des electrotechnologies d'Hydro-Quebec) of the
overall costs of production measured at the pilot plant in
Shawinigan, the calculated benefit margins give Limtech a
strategic competitiveness on the international market. Please
keep in mind that the patents are the exclusive property of
Limtech and thus gives them a technological advantage on the
competition.
The business plan, produced by an independent consultant
recognized by the SGF, demonstrates, based on the data collected
within the pilot plant which was verified by the LTEE in
Shawinigan, an appreciable profitability which meets the norms and
investment criteria of the SGF.
Furthermore, the lithium carbonate pilot plant of high purity
(99.999 percent) operational in a continuous mode for the last
three months has increased its production rate to 30 tons per year
instead of 18 tons per year as announced in our August 4th press
release.
Considering these encouraging results, the respective directors of
Lithos Corporation and Limtech have agreed to fully reintegrate
the assets of the lithium project in Lithos Corporation. This
decision was based on production results of the pilot plant in
continuous mode, on the expected results of the market study and
business plan as well as the decision by the board to undertake an
industrial turn.
In this sense, being the majority shareholder (approximately 75
percent) of Limtech and of its lithium assets, Lithos Corporation
considers necessary and strategic to issue in favor of its
minority shareholders (approximately 25 percent) of Limtech three
(3) shares of Lithos for one (1) share of Limtech already owned.
The buy-back by Lithos of this participation and the
redistribution ratio of Lithos shares to Limtech's minority
shareholders is under evaluation "fairness value" by Wood Gundy.
This buy-back will allow Lithos shareholders to fully enhance
their participation in the lithium project while respecting the
proportion owned by Limtech's minority shareholders. The whole of
the transaction is subject to regulatory approval.
On the other hand, considering that Lithos' gold assets remain a
priority, the board is studying different scenarios in order to
revive its gold-bearing activities, principally in Guinea and
Quebec. One of the scenarios that is being contemplated is the
creation of a new entity (spin-off) into which the gold assets
would be transferred. Under the actual market conditions, Lithos
could pay a dividend in the form of shares minimizing fiscal
impact for the shareholders. The directors of Lithos consider
more advantageous to offer their shareholders two investment
vehicles in two independent fields that could grow individually.
Regarding this transaction no date has been fixed.
Finally, the directors of Lithos Corporation are happy to announce
the nomination of Mr. Louis Lessard as vice-president finance and
communication. Mr. Lessard is well known for his implication in
the construction field and domiciliary development. As energetic
businessman, Mr. Lessard also has many years of experience in
insurance and financial services.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Lithos Corporation
Gilles Dupuis
President
(418) 570-2300
or
Lithos Corporation
Louis Lessard
Vice-president finance & communication
(418) 834-5099
or
Lithos Corporation
Frederic Dugre
Investor relations
(418) 688-9799
|
