LiCo Energy Metals FACT SHEET

FACT SHEET

LiCo Energy Metals Inc. is a dynamic, well positioned lithium & cobalt exploration company with strategic assets in mining-friendly jurisdictions: Chile, Canada and the U.S.

TSX-Venture Exchange: LIC, OTCQB: WCTXF, Frankfurt: 43W1

LiCo Energy Metals, based in Vancouver, British Columbia, has been in business for nearly twenty years. The company conducts exploration and reduces risk to the investing public by providing exposure to two highly sought after metals: Lithium and Cobalt.

These projects are being actively advanced, and multiple new prospects are under careful consideration. LiCo Energy Metals’ Management Team, Corporate & Advisory Boards are skilled in key areas including; geology, exploration, development, due diligence, funding and structuring transactions.

Projects

Main Focus: Glencore Bucke Cobalt Project, Ontario, Canada

~16.2 hectares, (40 acres) 1 claim
Description: High-grade Cobalt veins first discovered in 1981

In the early 80’s the Glencore property was explored by 36 surface diamond drill holes totaling 3,323 m. The drilling program outlined two separate vein systems hosting significant cobalt and silver values. The two zones are known as the Main Zone, measuring 152.4 m in length, and the Northwest Zone, measuring 70.0 m in length.

The Main Zone had a north-south strike, which is hypothesized as the southern extension of the #3 vein from the Cobalt Contact Mine located immediately to the north of lease #585 (Bresee, 1982). Additional work was recommended but never completed due to a downturn in cobalt prices at the time.

“We are very excited to acquire this strategic Canadian property from Glencore. The property is conveniently located adjacent to our current Teledyne Cobalt property, and this purchase agreement allows LiCo to expand upon one of Glencore’s longstanding Canadian cobalt assets. If all goes as planned, we could be selling all our cobalt produced back to Glencore in the future. It is a property sale, but we have also found a significant future customer.” Tim Fernback, LiCo’s President & CEO.

Strategically, the Glencore property consists of 16.2 hectares and sits along the west boundary of LiCo’s Teledyne Cobalt Project that covers the southern extension of the former producing 15 Vein on the past-producing Agaunico Mine Property. Historically, the Agaunico Mine produced 4,350,000 lbs. of cobalt and 980,000 oz. of silver during the mining boom of the early 1900’s (Cunningham-Dunlop, 1979).

 

Main Focus: Teledyne Cobalt Project, Ontario, Canada
~607 hectares (1,500 acres)
13 claims (5 patented / 8 unpatented)

Description: High-grade Cobalt project in a prolific past-producing Silver / Cobalt camp.

Location: The optioned Property is ~6 km east-northeast of the town of Cobalt, Ontario and consists of 5 patented and 8 unpatented mining claims covering an area of ~607 ha. It’s located within an historic mining area that was one of the world’s largest silver camps in the early 20th century. An estimated 18,000,000 kg Silver (“Ag”) and 14,000,000 kg Cobalt (“Co”) have been produced to date.

The Property adjoins the south and west boundaries of claims that hosted the Agaunico Mine. From 1905
through to 1961, Agaunico produced a total of 4,350,000 lbs. Co, and 980,000 ozs. Ag. {Cunningham-Dunlop, 1979}. A significant portion of the Cobalt produced was located along structures that extend southward towards the northern boundary of property currently under option to LiCo.

In 1955, 526,000 lbs. Co, 146,000 ozs. Ag, 117,000 lbs. nickel (“Ni”), and 81,000 lbs. copper (“Cu”) were extracted from 62,000 tons of ore (Cunningham-Dunlop, 1979). Teledyne’s diamond drilling programs conducted in 1979 and 1980 intersected significant mineralization.

CEO Tim Fernback“Cobalt prices have doubled since LiCo Acquired the Teledyne Project and prices are now ~USD $25 per lb. The property has had the benefit of considerable historical exploration and the program currently being prepared will help in assessing the future potential of the Property.”

In 1980, Teledyne completed a 3 m (10 ft.) by 4 m (13 ft.) access decline at -15 degrees, for a length of ~701 m (2,300 ft.), to reach mineralization encountered in their 1979-80 drill programs. In addition, a total of ~1,880 m (6,167 ft.) of underground drilling (22 holes) was completed.

Importantly, the drill program confirmed the extension of the Agaunico cobalt zone onto property optioned by LiCo, for a strike length of ~152 m (500 ft.). The drill program also encountered a second zone with a strike length of ~137 m (450 ft.) that included 0.644% Co over ~16.9 m (55.4 ft.), 0.74% Co over ~8.7m (28.5ft.) and 2.59% Co over ~2.4m (7.9ft.).

Review of Teledyne’s diamond drilling program suggests there remains further potential along the southern strike of the structures hosting the mineralization that Teledyne encountered in 1979-80 that led to the construction of a decline.

To this day, the area remains a mining-friendly jurisdiction with a skilled workforce as well as access to top notch mining equipment and mining services companies. An estimated $25 million (inflation- adjusted) of prior work has been completed on the Teledyne Property, resulting in valuable infrastructure including a development ramp and a modern adit that descends ~152 m (500 ft.), parallel to the vein.

This zone remains open to the south with a further ~650 m (2,133 ft.) of potential mineralized strike on the Teledyne property, representing an excellent exploration target.

 

Dixie Valley Project, Nevada, USA

~2,817 hectares, (6,960 acres) 348 Claims
Description: Early-stage lithium brine project

Location: Dixie Valley is located in west central Nevada, about 160 km east northeast of Reno, Nevada. The entire basin is about 98 km long and up to 16 km wide. The central playa Humboldt Salt Marsh is about 10 km northeast – southwest and 6 km east – west.

The geologic setting combined with the presence of lithium in both active geothermal fluids and surface salts within the Black Rock Desert property match characteristics of lithium brine deposits at Clayton Valley, NV and in South America.

US Geological Survey Open File Report 2013-1006 lays out seven characteristics of lithium brine deposits (Bradley et al 2013). The characteristics are:

  1. Arid Climate
  2. Closed Basin containing a playa or salar
  3. Tectonically driven subsidence
  4. Associated igneous or geothermal activity
  5. Suitable lithium source rocks
  6. One or more adequate aquifers
  7. Sufficient time to concentrate brine

The Dixie Valley Project is known to exhibit all seven of these characteristics. This fact alone does not mean an economically viable resource will be found, but these characteristics suggest the project is quite promising and worthy of further work.

 

Black Rock Desert Project, Nevada, USA

1,610 Hectares, (3,980 acres) 199 Claims
Description: Early-stage, conceptual lithium brine project

Location: The Black Rock Desert project is located in southwest Black Rock Desert, Washoe County, Nevada. The western arm of the Black Rock Desert covers an area of about 2,000 km2 and contains 5 of the 30 currently known Geothermal Resource areas in Nevada. The Property covers part of a playa underlain by a moderately deep basin interpreted from gravity and seismic surveys indicating a maximum thickness of valley-fill deposits of about 1,200 m (3,937 ft.). A high salt content prevents any significant vegetation from growing on the playa surface.

The geologic setting combined with the presence of lithium in both active geothermal fluids and surface salts within the Black Rock Desert property match characteristics of lithium brine deposits at Clayton Valley, Nevada and in South America. Geothermal fluids adjoining the claims are known to contain anomalous lithium values and a recently completed surface silt sampling program confirmed values containing up to 520 ppm lithium.

Although geological work has been undertaken for geothermal energy production in the area, the lithium in brine potential of the playa has not been specifically studied. Initially, the lithium target in this basin was highly conceptual, however, recent exploration results are highly encouraging and warrant a detailed exploration drilling for a Clayton Valley type brine deposit.

 

Purickuta Exploitation Concession, Salar de Atacama, Chile

160 hectares (365 acres)

Description: Advanced exploration opportunity situated in the highest-grade lithium Salar in the world.

Location: Salar de Atacama, Chile. Approximately 22 kilometers (~14 miles) from two of the largest producers of lithium, Albemarle and SQM. Collectively, they make up 100% of Chile’s lithium output and about 37% of the world’s lithium supply. The giant Salar de Atacama is a salt flat encompassing ~3,000 km2.

Parts of the Salar in the vicinity of the Purickuta Exploitation Concession (“PEC”) possess grades up to
1,840 mg/l Li and 22,630 mg/l potassium. It has the highest rate of (solar) evaporation and is one of the driest places on earth. These characteristics make Atacama’s finished lithium carbonate easier and cheaper to produce than that of global peers.

The PEC consists of 160 hectares (365 acres) and is one of just a few “exploitation concessions” controlled by a non-Major in the Salar de Atacama. The property is contained within an existing exploitation concession owned by SQM, and lies approximately 3 km north of concessions held by the Chilean Economic Development Agency (“CORFO”). SQM & Albemarle have large-scale production facilities about 22 km to the northwest, (within the CORFO concessions mentioned above). Combined, these 2 facilities produce over 62,000 tonnes of Lithium Carbonate Equivalent (“LCE”) annually. That’s 100% of Chile’s current output and about 37% of the global LCE production in 2016.

The Purickuta Project exhibits several desirable attributes, including:

  1. the possibility of both a low-cost resource definition opportunity and a relatively near-term production opportunity;
  2. the project size fits well within the capability of a junior company seeking to quickly define reserves and establish production facilities;
  3. the property is situated in the heart of the Salar de Atacama, the highest-grade lithium and potassium salar in the world;
  4. Salar de Atacama lithium brines are found within 140 feet of surface, resulting in low costs of exploration & extraction (subject to grade and purity);
  5. the Purickuta Concession lies relatively near existing pumping and solar evaporation installations;
  6. the Purickuta Concession is close to power, labor, communications, transportation and other project-critical infrastructure. 

“We are excited about the opportunity to earn a significant interest in a Lithium Concession located in the world’s most prolific lithium brine deposit, Chile’s Salar de Atacama. Having two lithium giants, SQM and Albemarle, as neighbors in the salar gives us confidence that we will be able to develop this concession alongside our Chilean partner, Durus Copper, for the benefit of our shareholders.” – Tim Fernback

Cobalt:

What is Cobalt?

Cobalt is a shiny and brittle metal that is used in the production of strong, corrosion and heat resistant alloys, permanent magnets, hard metals, and batteries. Cobalt is also one of the three naturally occurring magnetic metals on earth. Most lithium-ion batteries for portable applications are cobalt- based. An important advantage of the cobalt-based battery is its high energy density, providing longer runtime than other battery chemistries.

The industrial importance of cobalt resulted in the London Metal Exchange (LME) introducing cobalt futures contracts in 2010.

Cobalt in Batteries

Battery demand has been the dominating factor behind the increase of cobalt demand growth in the past five years. Panasonic Corporation currently manufactures nickel-cobalt-aluminum cathodes in the batteries for Tesla’s electric vehicles. They have even gone so far as to say that cobalt-based battery chemistries will be the standard for the foreseeable future. Many other automakers are beginning to follow suit, and introducing new lines of electric vehicles which use the same type of batteries that require cobalt.

Bloomberg New Energy Finance forecasts that 35% of vehicles sold in 2040 will be entirely powered by electricity. With organic growth, battery usage is expected to account for an increasing proportion of cobalt demand, exceeding 50% in 2016, compared to 28% in 2010. Analysts at the Chinese information provider Antaike say over 77% of cobalt consumed by China was used in batteries last year. To date, lithium has garnered most of the attention in the battery sector; however, cobalt has virtually zero primary production and is an integral part of the lithium battery and electric vehicle story.

Cobalt supply is largely derived from copper and nickel production as a by-product. Roughly 64% of global cobalt production came from the Democratic Republic of Congo (“DRC”) in 2012. China currently supplies roughly 62% of global refined cobalt. Almost all of China’s cobalt originates in the DRC.

According to analysts at Macquarie, it’s the highest proportion of commodity supply from a single country. In 2015, only 123,000 tons were mined globally, with total refined production at ~93,000 tons. The key takeaways to recognize are the lack of primary cobalt production globally, and the reliance on geopolitically risky jurisdictions for supply. In early 2017, the price of Cobalt set a new 8-year high.

Lithium:

What is Lithium?

Lithium is a highly reactive metal that is commonly extracted from brine solutions. These brines are essentially mixtures of elements that are contained in salt lakes found in certain parts of the world. Lithium does not occur naturally in its purist form; it must first be separated from other elements. After lithium is extracted from brine deposits, it is usually processed into lithium carbonate or lithium hydroxide. If attained at a high enough quality, lithium carbonate and lithium hydroxide can be used to make the important cathode material that is used in lithium-ion batteries.  Source: SQM

Lithium in Batteries

Due to the electrification of ground transportation, most notably Electric Vehicles (“EVs”), but also buses & industrial / commercial fleets, lithium is playing an increasingly essential role in the paradigm shift away from fossil fuels. Nearly every automaker is racing to gain market share in EVs. For example, Volkswagen has pledged to deliver thirty (30!) pure EV models to the market by 2025.

Tesla Motors opened its massive lithium-ion battery producing “Gigafactory” in Sparks, Nevada in July, 2016. They aim to reach run-rate production of half a million EVs annually by 2018. It is expected that more gigafactories from other companies will be in production soon. More than a dozen “mega” factories are known to be under construction, most of them in China.

Independent researchers such as Benchmark Mineral Intelligence investigate pricing in the lithium industry: the deficit in lithium supplies around the world continue to price the metal higher each year. High and robust pricing in this market has been due to concerns over future availability. For example, Argentina’s Orocobre Ltd.’s planned 17,500 tonnes of lithium carbonate/yr. by 2015 is now guided to be 12,500 tonnes in 2017.

Almost without exception, it seems that new hard rock and brine projects are running 12-18 months behind schedule. The handful of start-ups envisioned to commence production late this decade is rapidly dwindling, 2020-2022 is the latest timeframe. (Several large projects have been recast into multiple phases to conserve capital). These events, on top of robust demand, drove the global lithium carbonate price above US$ 20,000/tonne for much of 2h 2016.  Prices are now closer to about US$ 15,000/tonne and expected by most market participants to remain at or above US$ 10,000–US$ 12,000/tonne for years to come.

Although lithium is used in other industries such as pharmaceuticals and lubricants, the most important use of lithium is in rechargeable lithium-ion batteries for EVs, grid-scale energy storage, power tools, phones, laptops, cameras, gaming consoles and most other electronic devices.  The following lithium price graph is from Lithium Americas’ September 2017 corporate presentation. 

 

Company Management:

Tim Fernback, President & CEO

Tim has held multiple senior executive positions, including oversight of the Investment Banking and Corporate Finance Division at Wolverton Securities, formerly Western Canada’s oldest brokerage firm. He was also responsible for the consulting practice at Discovery Capital Corporation, a prominent British Columbia venture capital firm that specializes in financing and consulting. During his time at Wolverton Securities, Mr. Fernback was responsible for due diligence reviews on corporate clients and investment banking business development relationships.

He planned and opened 3 regional offices in western Canada and reviewed and analyzed over 300 corporate clients, raising over $750M. Responsible for over 50 IPOs and over 100 Reverse-Mergers on the TMX and Nasdaq, Mr. Fernback represented Wolverton nationally on various stock exchange committees and industry groups, including the Corporate Finance Advisory Group and Underwriting Groups on various Canadian exchanges.

Tim currently serves as a Director for several Canadian mining companies. He holds an Honours B.Sc. from McMaster University, and is a graduate of the Sauder School of Business at the University of British Columbia, where he completed a MBA with a concentration in Finance. He holds a Certified Professional Accounting Designation (CPA, CMA) and is an active member of many industry and trade organizations in Vancouver.

Dwayne Melrose, Director & Technical Advisory Chair

Mr. Melrose has over 30 years’ experience in the mining industry where he has been very successful in advancing three significant exploration projects towards production. Under his leadership as President/CEO of True Gold Mining Inc., True Gold progressed from an exploration company into a fully permitted and financed company in construction in just over 3 years. Mr. Melrose was instrumental in re-focusing the project from a high Capex project into a low Capex high margin, heap leach project, in addition to the company completing over $200 million in equity and debt financing.

Mr. Melrose spent over twenty years with Cameco Corporation/Centerra Gold Inc. working in a variety of different geographic locations and business environments (Canada, USA, Kyrgyzstan and Kazakhstan). Here, Mr. Melrose was directly responsible for the exploration team and its programs at the Kumtor Gold Mine where he significantly increased the reserves and resources at the mine. Mr. Melrose joined the Minco Mining Group in 2007, where the company successfully progressed from exploration into development stage and greatly increased in shareholder value. Mr. Melrose was directly responsible for defining the Fuwan silver deposit (157 million ounces).

Greg Reimer, Director

Greg Reimer is the former Executive Vice-President (EVP) of BC Hydro’s Transmission & Distribution (T&D) business group, and held the EVP position since being appointed in June 2010. In this capacity he was responsible for the planning, design, operation and maintenance of BC Hydro’s extensive transmission and distribution network located within the province of British Columbia.

A Certified Public Accountant (CPA) by profession, Greg held a number of senior leadership positions in the public sector prior to joining BC Hydro, including Deputy Minister of Provincial Revenue, Chair of the BC Oil and Gas Commission and, Deputy Minister of Energy, Mines and Petroleum Resources. Greg was also a Director of the Integrated Land Management Bureau and a member of: the Deputy Ministers’ Council; the Deputy Ministers’ Committee on First Nations Reconciliation and Recognition; and the Deputy Ministers’ Committee on Public Service.

Greg is passionate about the evolution of the global electric vehicle market and he brings a vast amount of experience to LiCo.

James Hellwarth, Advisory Board

Mr. Hellwarth of Orlando Florida has been involved in business development and strategic management of small cap companies for over 11 years. He has a firm understanding of the lithium exploration sector, and currently sits on the advisory board for Nevada Energy Metals. Mr. Hellwarth is also a managing partner at Xander Capital, where he plays a key role in establishing and developing relationships with high net worth individuals and organizations. In addition, Mr. Hellwarth has owned and operated several very successful companies of his own, along with orchestrating large roadshows across the United States.

Through his sharp businesses acumen, he has helped raise capital and create new opportunities for his clients. To date, he has participated in numerous multi-million dollar raises for private and public companies. Through his extensive network of colleagues and individuals, Mr. Hellwarth will be able to assist in potential capital raises necessary for moving the company forward. His proven track record in all aspects of business administration will prove to be a valuable asset to the company. Mr. Hellwarth’s expertise within the lithium exploration industry will help take the company to the next level.

 

At a Glance:

LiCo Energy Metals Inc: TSX Venture: LIC, OTCQB: WCTXF, Frankfurt 43U1, XETRA: A1XF20 Company Address: #1220-789 West Pender St. Vancouver BC, Canada V6C 1H2
Phone: 1-236- 521-0207
Press Releases: https://licoenergymetals.com/press/

Infographics: https://licoenergymetals.com/lico-infographic/ Company Website: https://licoenergymetals.com/
Twitter: https://twitter.com/LiCoEMetals
Facebook: https://www.facebook.com/LiCoEnergyMetals/

Share Structure:
Issued & Outstanding: 126,995,300
Options Granted: 11,100,000
Warrants: 40,859,990
Fully Diluted: 178,955,290
Market Cap as of September 19, 2017 at .105 = $18,721,005

Legal:

William L. Macdonald Attorney, Macdonald Tuskey, Barrister & Solicitor Suite 400 – 570 Granville StreetVancouver BC, Canada V6C 3P1

Auditor: James Stafford Chartered Accountants Suite 350 – 1111 Melville Street Vancouver BC, Canada V6E 3V6

 

Disclosures: The content of this FACT SHEET is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER](together, [ER]) about LiCo Energy Metalsincluding but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of LiCo Energy are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this FACT SHEET was posted, Peter Epstein owned shares in LiCo Energy and the Company was an advertiser on [ER]. Readers understand and agree that they must conduct their own due diligence above and beyond reading this FACT SHEET. While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this FACT SHEET or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.