Ultra Lithium Enters Joint Venture Agreement With Yahua And Announces Private Placement

April 20, 2020

Vancouver, BC – Ultra Lithium Inc. (TSX-V:ULT, OTCQB: ULTXF and Frankfurt: QFB) (“Ultra Lithium” or the “Company”) is pleased to announce it has entered into a Purchase, Sale and Joint Venture Agreement (the “Agreement”) with Yahua International Investment and Development Co., Ltd. (“Yahua”) to sell a 60% interest in the Company’s Georgia Lake and Forgan Lake properties (the “Northern Ontario Properties”) and enter into a joint venture (the ”JV”).

The Company also announces a non-brokered private placement (the “Offering”) for aggregate gross proceeds to the Company of up to C$7,003,000 from the sale of the 29,800,000 units of the Company (the “Units”) at a price of $0.235 per Unit. As part of the Offering, Yahua intends to make a strategic investment of C$5 million in Units.

Purchase and Sale

Under the terms of the Agreement Yahua will invest C$8 million to acquire a 60% interest in the wholly-owned subsidiary of Ultra Lithium (the “JV Co.”) which holds the Company’s Northern Ontario Properties.

Investment Schedule:

  1. Yahua will pay C$5 million to Ultra Lithium as consideration for the 60% equity interest in the JV Co. on the following installment schedule:
    1. C$1 million within 15 working days after signing the Agreement.
    2. C$1 million within 5 working days after the hard rock lithium exploration permits are placed into the subsidiary.
    3. C$3 million within 5 working days after the transfer of the 60% equity interest in the subsidiary to Yahua is completed.
  2. Upon completion of the above consideration payments, the JV with Yahua holding a 60% and Ultra Lithium holding a 40% interest will be formed. Yahua will invest $3 million into the JV Co. for exploration expenditures.

Dr. Weiguo Lang, CEO of Ultra Lithium, stated, “We are very pleased to enter this strategic partnership with Yahua as one of the major producers and suppliers of battery grade lithium products in the world. Yahua brings world class expertise in the hard rock lithium space and a long-term perspective to the Company. Ultra Lithium looks forward to a robust exploration program for the hard rock lithium properties in Northern Ontario in 2022.”

Joint Venture

Under the terms of the agreement, Ultra Lithium will continue to pursue acquisition opportunities to increase high-quality hard-rock lithium resources with lithium-bearing pegmatites and continue to explore and discover more lithium resources in Canada for the JV Co.

Corporate Governance

The Board of Directors of the JV will have five members, three of whom will be nominated by Yahua International and two by Ultra Lithium. The senior executives of the JV will be nominated and appointed by the Board of Directors. The Parties shall operate and manage the JV in accordance with the terms of the Shareholders Agreement of the Joint Venture.

Prohibition of Dilution

The Parties shall retain their equity positions in the JV and prohibit dilution until commencement of commercial production. International Lithium Corp. will retain its 1.5% NSR on the Forgan Lake claims.

Regulatory Approval

The agreement is subject to receipt of all necessary regulatory approvals including the TSX Venture Exchange.

Private Placement

Each Unit will be comprised of one common share of the Company (each, a “Unit Share”) and one half of one common share purchase warrant (each whole warrant, a “Warrant”) will entitle the holder thereof to purchase one common share of the Company (each, a “Warrant Share”) at a price of C$0.30 for a period of 12 months following the closing date of the Offering.

The net proceeds from the sale of Units will be used to fund the exploration of the Company’s properties in Argentina, Ontario and Nevada and for general working capital purposes.

The Offering is subject to receipt of all necessary regulatory approvals including the TSX Venture Exchange. The Unit Shares, Warrant Shares and any common shares of the Company that are issuable from any finder’s warrants will be subject to a hold period of four months and one day in accordance with applicable securities laws.  Finder’s fees will be payable in accordance with the policies of the TSX Venture Exchange.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor in any other jurisdiction.

Forgan Lake Property

The Forgan Lake property consists of approximately 256 hectares land in 20 mining claims located in the Thunder Bay Mining District in Northwestern Ontario, Canada. It is located adjacent to the north of Ultra Lithium’s Lucky Lake claim block comprised of 15 mining claims. The Company intends to start a summer 2022 work program on Forgan Lake which will include surface sampling and ground geophysical surveying. A drill program will commence as soon as permitting and community consultation is completed.

Forgan Lake Highlights

  • Lithium mineralization is comprised of six spodumene-bearing pegmatites
  • Three 2019 grab samples showed lithium values of 6.93% Li2O, 6.90% Li2O and 4.88% Li2O
  • Historical exploration included 39 drill holes, aggregating 10,561 feet
  • Three historical channel cut samples returned average 2.57% Li2O over a width of 21 feet (6.4 m)
  • Two historical channel cut samples averaged 4.23% Li2O over 24.5 feet (7.46m)

Georgia Lake Property

The Georgia Lake property consists of 88 mining claims in the Thunder Bay Mining Division, Northwestern Ontario. The Company is planning a 2000-meter drill program at Georgia Lake to commence in late May after the spring breakup. The Company is in the process of engaging a drilling contractor.

Georgia Lake Highlights

  • Drilling permit has been received
  • Geophysical survey completed winter 2021
  • Trenching completed winter 2021

CAUTIONARY NOTE: The historical results presented above are taken from from the Ontario Department of Mines Geological Report No. 31 titled, “Geology and Lithium Deposits of Georgia Lake Area”, by E.G. Pye, (1965), and 2009 Assessment work Report by TNR Gold Corp. A qualified person has not done sufficient work to verify the results; therefore, they should not be relied upon and are presented for informational purposes only.

About the Yahua Group  

Founded in 1952, Yahua Group is one of the earliest chemical companies established after the founding of the People’s Republic of China, currently has two main businesses, lithium industry and civil explosive industry. Yahua is a public company listed in Shenzhen Stock Exchange with the market cap of 34 billion RMB (approximately C$7 billion). It has more than 70 wholly-owned and holding subsidiaries, which are distributed throughout China, Hong Kong, New Zealand, Australia and other countries.

Yahua Lithium is one of the major suppliers of lithium salt products in the world and one of the largest lithium hydroxide suppliers for TESLA. It is specialized in the R&D, manufacturing, and trading of lithium products, with the capacity of 43,000 tons of lithium hydroxide and lithium carbonate. The products are widely used in battery, medicine, metallurgy, petrochemical, glass, nuclear industry and other industries. It has established long-term sales and purchase relationship with Zhenhua Materials, BTR, Xiamen Xiawu, BYD, Beijing Easpring Material Technology Co., Ltd, Ronbay Technology Battery and other domestic cathode materials leading enterprises, as well as Japan and South Korea’s well-known cathode materials enterprises, and supply indirectly through industrial chain to BMW, Volkswagen, Weilai and other global new energy automobile enterprises.

Qualified Person

The technical information contained in this news release has been reviewed and approved by Afzaal Pirzada, P.Geo., a qualified person, as defined by NI 43-101 who works as Vice President Exploration of the Company.

About Ultra Lithium Inc.

Ultra Lithium Inc. is an exploration and development company with a focus on the acquisition and development of lithium, gold, and copper assets. The Company holds a brine lithium property in Argentina, and hard rock spodumene type lithium properties at the Georgia Lake / Forgan Lake area in northwestern Ontario, Canada, and a brine lithium property in the Big Smoky Valley, Nevada, USA. The Company also holds other gold and base metals properties in Argentina.

On behalf of the Board of Directors
Kiki Smith, CFO

For further information, please contact:
Kiki Smith, CFO
T: +1-778-968-1176
E: kiki@ultralithium.com
W: www.ultralithium.com
Or view the Company’s filings at www.sedar.com

Cautionary Statement Regarding “Forward-Looking” Information
Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as “plans”, “expects”, “intends”, “is expected”, “potential”, “suggests” or variations of such words or phrases, or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond the Company’s control. Actual results and developments are likely to differ and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.

Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.