Lithium Energy Products is a Canadian junior exploration firm that has publicly traded on the Venture Exchange. The firm recently announced that it has signed a Binding Letter of Intention with American Strategic Minerals to purchase hundred percent of its assets, which includes the Lost Sheep mine established in Utah.
As per the deal, the firm will go ahead with a Definitive Agreement after the accomplishment of its Due Diligence on the project. Lithium Energy Products has settled with American Strategic Minerals that if both of them go ahead with a Definitive Agreement, all the American Strategic Minerals’ claims, equipment, property, assets, and permits will be transferred to LEP. After which, Lithium Energy Products will give American Strategic Minerals LEP’s 1 common share for every two shares of ASM. Additionally, LEP also approves to allot ASM, a half warrant for each LEP share given to ASM, which is valued at $0.16. The issued warrant is applicable for 2 years following the closing date.
The purchase will cover six hundred and forty acres of State land and fifty-one claims of US federal land, encompassing a complete land area of around 1,660 acres. Moreover, ASM has started putting more packages of land that the firm will acquire after the purchase. Other things that will be acquired by Lithium Energy Products are ASM’s mining equipment, a working plant, and processing and the bagging facility, so the firm can carry on with the operation of fluorite.
In recent news, the US government stated that fluorite falls under the list of top thirty-five minerals that is important to the national and economy security. Fluorite is primarily used to produce steel, which as per the USGS, United States at present buys mainly from Vietnam, South Africa, and Mexico. Moreover, China is also facing fluorite’s shortage for use in their industry of steel.
LEP’S Chief Executive Officer James Walker stated it is a brilliant opportunity for the firm. It is an operational mine and one of the only fluorite mines present in the US. After the completion of their Due Diligence, the firm’s plan is to improve the mine’s equipment, increase the labor, and upgrade the mine’s plant. A customer base already exists, with established requests for orders and also a huge market of steel competent of using all the fluorite that mine can generate.
The firm’s manufacturing decision is not depended on mineral reserves feasibility study showing the technical and economic capability of the project. Such projects have raised the level of uncertainty and also the danger of technical and economic failure related to the decision of manufacturing.