Canada Lithium Signs Five-year Offtake Agreement and Joint Venture with a unit of Tewoo Group
Canada Lithium Corp., has signed a five-year lithium carbonate offtake agreement with Tewoo-ERDC (Tianjin Products and Energy Resources Development Co., Ltd.), one of China's larger commodities traders, for a minimum annual commitment of 12,000 tonnes of battery-grade lithium carbonate. The five-year agreement also includes a provision for the formation of a Sino-Canadian marketing joint venture (SFJV) to be incorporated as Tewoo Québec Lithium CO., LTD. The agreement calls for Canada Lithium to deliver lithium carbonate FOB to the Port of Vancouver or Port of Prince Rupert, B.C., beginning March 2013. Tewoo-ERDC is a wholly-owned subsidiary of Tewoo Group, one of the world's top 500 companies in terms of revenue, according to a Fortune Magazine 2012 ranking.
Delivery of the first 12,000 tonnes is scheduled to occur over the course of calendar year 2013. Following 2013 and for the four years thereafter, Tewoo has committed to import a minimum 12,000 tonnes per year with a provision to increase the offtake volumes by as much as 20% per year over the previous year's deliveries. In the event Tewoo triggers the 20% clause in 2014, Canada Lithium could deliver up to a maximum 14,400 tonnes during calendar year 2014. Prices will be adjusted quarterly based on actual market prices. Canada Lithium's mine and processing plant near Val d'Or, Québec, currently approaching the end of construction and scheduled to enter the commissioning phase late this year, will have an annual capacity to produce approximately 20,000 tonnes of lithium carbonate.
"The agreement with Tewoo secures a market for a significant portion of our annual production and demonstrates that China is the fastest growing consumer of lithium carbonate products. Having a long- term, strategic partnership with the Tewoo group will provide significant support for our product sales and distribution in China," said Canada Lithium CEO and President Peter Secker. "Negotiations with other parties for additional lithium carbonate tonnages are ongoing."
The lithium markets remain robust with the current China spot price at approximately $6,600 per tonne, according to Asian Metal, a global commodities information company. The registration of the SFJV remains subject to government approvals in China.
The project continues to meet its budget and schedule milestones for commissioning of the spodumene circuit by the end of 2012. Pre-commissioning tests on the larger mechanical and electrical equipment have started. Pre-stripping of the deposit and construction of the first phase of the Tailings Management Facility (TMF) are ongoing as scheduled.
About Canada Lithium Corp.
The Company holds a 100% interest in the Québec Lithium Project near Val d'Or, the geographical heart of the Québec mining industry. It is in the midst of building an open-pit mine and processing plant on-site with estimated capacity to produce approximately 20,000 tonnes of battery-grade lithium carbonate annually. Metallurgical tests have produced battery-grade lithium carbonate samples. Lithium carbonate is used in lithium-ion batteries that power consumer electronics (laptops, tablets, etc.) power-grid storage facilities and electric and hybrid vehicles. The Company trades under the symbol CLQ on the TSX and on the U.S. OTCQX under the symbol CLQMF.