Issue: Mar 2011


Canada Lithium Provides Background Information on the Quebec Lithium Project



by Jon Knox

In reference to its Feb. 28, 2011, press release announcing the appointment of Roscoe Postle and Associates (RPA) to undertake a preliminary mineral resource review, Canada Lithium Corp. (TSX: CLQ; U.S. OTC: CLQMF) (the "Company") today provided additional background information on its Quebec Lithium Project.

The Quebec Lithium Mine operated from 1955 to 1965 as an underground mine and processing plant that produced spodumene, lithium carbonate and lithium hydroxide monohydrate. In 1974, Surveyer, Nenninger et Chenevert Inc. ("SNC") was contracted by Sullivan Mining Group to write a feasibility report on the rehabilitation of the former Quebec Lithium mine. SNC calculated a "historical" reserve estimate of 15,736,938 tonnes grading 1.14% Li2O. This estimate is not compliant with National Instrument 43-101 ("NI 43-101") standards.

In May 2008, Canada Lithium Corp. acquired the property from IAMGOLD Corporation. The acquisition was based primarily on the existence of the historical reserve referenced above. The acquisition included data from previous exploration work on the property, including 81 surface holes and 412 underground holes.

Historic mine data was digitized by Caracle Creek International Consulting Inc. ("CCIC") in 2009. The 3D extent of the underground workings in the Quebec Lithium Project was constructed based on this information and mining widths cited in historic reports. The collars of all available historic drill holes were digitized and basic lithology and hole orientation information compiled from the associated drill logs and plans. The resulting database for use in the 3D modelling included the 493 historical surface and underground drill holes.

A confirmatory drill program designed by CCIC included the twinning of several of the historical drill holes to confirm the grade and thickness of the deposit. Holes were also drilled to test some of the spodumene dykes at depth and at a distance to the historic mine. The spodumene mineralisation is hosted within a number of steeply dipping pegmatite dykes ranging between 10 and 50 metres in width over a strike length of up to 1,500 metres.

Confirmatory drilling commenced on October 13, 2009 and was completed December 19, 2009. A total of 9,646 metres were drilled. Six main spodumene-bearing dykes were tested and their locations confirmed. Assays for the new holes were higher typically by 0.1% to 0.4% Li2O than historical values, and were checked using an appropriate Quality Assurance/Quality Control (QA/QC) procedure. Enough information was obtained in the 2009 drill program to support the historic resource estimate, the geological model and a conceptual target of approximately 29-30 million tonnes.

On March 4, 2010, the Company announced a NI 43-101-compliant mineral resource estimate. The mineral resource estimate undertaken by CCIC used all data available from the historic exploration and mining, as well as the results from the 2009 drill program to complete a detailed 3D polygonal model of the spodumene-bearing dykes using Surpac, a geological modeling and resource estimation software package. Data was drawn from a total of 506 drill holes (39 from the 2009 program, and 410 and 57 historic underground and surface drill holes, respectively).

On March 22, 2010, the Company announced completion of a Pre-Feasibility Study showing that, based on the above resource, a 2,950-tonne-per-day (one-million-tonnes-per-annum) mine and processing plant could produce 19,300 tonnes of Li2CO3 for an initial mine life of 14.8 years.

Between April and July, 2010, a second-resource drilling program comprising 45 holes (6,938 metres) of diamond drilling was completed. This program focused on drill targets that extended the strike length of the known deposit and on infill drilling to increase the level of confidence in the mineral resources.

An updated NI 43-101 mineral resource, utilizing an Inverse Distance Squared geostatistical estimation method, was undertaken by Michelle Stone (a Qualified Person as defined by NI 43-101), who had previously completed the resource modelling for CCIC in March 2010. This mineral resource update included the information from the 2010 drill program and was released on October 28, 2010. The following table sets forth the estimated mineral resources for the Quebec Lithium Project as of October 28, 2010.


Core samples from the 2010 drilling program were analyzed for Li2O at ALS Laboratory Group in Vancouver. Duplicate pulp samples were sent to Agat Laboratory in Mississauga for check analyses. All sample results were monitored with an appropriate QA/QC program and passed the quality checks.

In May 2010, Canada Lithium appointed Montreal-based engineering group BBA Inc. to conduct a Feasibility Study. In mid-December 2010, a Feasibility Study was announced for a mine and plant capable of processing one million tonnes of ore per year and producing 20,000 tonnes of Li2CO3. Mine and plant construction was estimated at a capital cost of US$202 million.

On January 24, 2011, the Company announced the awarding of a contract to GENIVAR Inc. for the engineering, procurement, construction and management of its planned 14.8-year open-pit mine and processing plant.

In mid-February 2011, the Company asked Michelle Stone, the author of the Company's Oct. 28, 2010, NI-43-101-compliant report, to undertake additional analysis for potential future long-term debt, project equity or product off-take investment. As a result of this review, on February 28, 2011, the Company announced that RPA, as noted above, had been appointed as an independent consultant to conduct a preliminary review.

The Company anticipates that the independent review could be completed within two weeks. A detailed audit, if required, would take a number of months.

The Measured, Indicated and Inferred Mineral Resource and Proven and Probable Mineral Reserve estimates in this press release were prepared in accordance with the CIM "Definition Standards on Mineral Resources and Mineral Reserves" adopted by the CIM Council on Dec. 11, 2005, and the CIM "Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines," adopted by CIM Council on Nov. 23, 2003, in compliance with NI 43-101 guidelines, using inverse distance squared for the mineral resources announced October 28, 2010 and a detailed 3D polygonal method on the March 4, 2010 mineral resource estimate.

Michelle Stone, Ph.D., P.Geo., is a consulting geologist to the Company and the Qualified Person for the 2010 resource estimate for the Quebec Lithium Project in accordance with NI 43-101. She has supervised the preparation of the information that forms the basis of this press release and approved the contents of this press release.

About Canada Lithium Corp.

Canada Lithium Corp., a "clean-tech" mine develope, has completed a definitive Feasibility Study (FS) on its Quebec Lithium Project near Val d'Or, the geographical heart of the Quebec mining industry. The Company plans to build an open-pit mine and processing plant on-site. Metallurgical tests have produced battery-grade lithium carbonate from deposit samples. The Company trades under the symbol CLQ on the TSX and on the U.S. OTCQX under the symbol CLQMF.

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