Tuesday, April 12, 2011

TNR Gold: Strategic Investor Selects International Lithium Corp. Proposed Spin-off From TNR Gold Corp. Proceeding tnr.v, czx.v, li.v, ore.ax, gxy.ax, sqm, fmc, clq.c, rm.v, lmr.v, ree. mcp, lma.to, grc.to, ngq.to, rvm.to, mgn, auy, slw, cuu.v, lun.to, gbn.v, btt.v, mxr.v, ktn.v, epz.v, bva.v, bvg.v, ura.v, abn.v, laq.v,

  At long last! Our top pick in Lithium and Rare Earths is getting on the radar screens. It was a very long journey for TNR Gold and now we know why...
  TNR Gold has secured Strategic Investor from Asia and put the the delay to the sheer amount of time-leeching negotiations it had to carry out with this investor and regulators from different jurisdictions. Our guess is that the name of the Asian Strategic Investor will be disclosed upon listing of International Lithium. 
  Now, the company should announce the record date for closing, maybe after the Strategic Investor's board approval. To sum it all up, all shareholders of TNR Gold before that record date will receive units of International lithium which  consists of one share and one warrant valid for two years at 0.375CAD. 4 shares in TNR Gold entitle you to receive 1 unit in International Lithium. This is the very easy way to participate in Lithium developer IPO now with the backing from Strategic Investor. TNR Gold will hold 30% in International lithium after spin-off and has other properties in Rare Earths, Gold and Copper.

  Now we have the indication of this company potential - a "prominent Asian-based company specializing in the research, development, manufacturing and sale of lithium products worldwide" was making DD on the company and its properties for the good 6 to 9 months. TNR Gold first announced about Asian interest last Fall. 

  The deal reassuringly looks to be very comprehensive: The Strategic Investor takes the maximum amount allowed by TSX rules in the International Lithium (9.9% will give just under 20% on partially diluted basis accounted for warrants). The major shareholder and controlling person in TNR Gold Kirill Klip will participate in this financing as well. The Strategic Investor will have the ability to maintain and increase its stake in the company - International lithium will have the financing source now in place at the company's call.
  Implied financing from the warrants being in the money above 0.375CAD will give the company another 22.5 mil in financing.
  Strategic Investor will have some sort of the offtake agreement as well - International Lithium will have the guaranteed demand for the part of its lithium production in the future.

  The closest comparison in the lithium market place will be Rodinia Lithium and it is trading now at 30 mil CAD market cap. International Lithium is going out with 15 mil CAD valuation. While International Lithium does has a way to go with its exploration on Mariana in Argentina to catch up on Rodinia Lithium advance, it does has a portfolio of hard rock mining properties in Canada and Ireland in plus to Mariana and Nevada Lithium Brine projects.
  Resource Capital Research has run very interesting valuations in the Lithium development sector.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.

"Mainstream media is jumping now on the the Rare Earths story. Japan tragedy will bring more attention to the Energy Transition, Peak Oil situation and realisation that Alternative Energy requires state-based initiatives which will create necessary infrastructure - like Internet was developed first as a military application or Chinese 12th 5 year plan, which put now Electric Cars as Strategic Industry.
 Nuclear Power will be under microscope for quite a while now and other forms of renewable energy will receive finally proper attention. At the heart of this transition into New Energy, including Wind and Solar power generation are Strategic Commodities: Lithium and Rare Earths."

Vancouver B.C.: TNR Gold Corp. ("TNR") and wholly-owned International Lithium Corp. ("ILC") (jointly the "Company") are providing an update regarding the plan of arrangement to spin-off of TNR's rare metal projects into International Lithium Corp. and are pleased to announce that an Asian-based strategic investor has agreed, subject to approval by its board of directors, to an initial investment representing a 9.9% equity stake in International Lithium Corp.

Key Highlights:

- Prominent Asian Lithium product manufacturer selects ILC as investment;

- Initial 9.9% equity stake in ILC;

- Strategic investor brings significant future project development assistance capability;

- Strategic Relationship Agreement among the investor and ILC provides for certain Marketing and Offtake rights; and

- Company focused on closing of financing and the listing of ILC.

"The involvement of a strategic investor from the outset has been the goal that we have diligently worked towards since first announcing the spin-out of ILC" states Gary Schellenberg, CEO - TNR Gold Corp. "The strategic investor offers significant support in our future endeavours and ILC will complement the relationship through our exploration technical strengths and ability to source out, identify and acquire opportunities."

Strategic Investor

Over the course of the last year, Company executives have travelled abroad to develop strong relationships with potential investors and end product users that would bring significant assistance to ILC and the advancement of ILC's projects. The effort has culminated in ILC entering into a strategic relationship agreement with a prominent Asian-based company specializing in the research, development, manufacturing and sale of lithium products worldwide. The strategic investor has committed to an initial 9.9% equity share in ILC through participating in the Financing (as described below) and intends to provide instrumental future support towards the development of ILC's projects from a financial and technical perspective. The strategic investor's participation is subject to certain conditions, including approval of its board of directors, completion of the Financing for gross proceeds of at least $2.5 million (including the strategic investor's subscription) and approval for the listing of the shares and warrants on the TSX Venture Exchange.

The strategic relationship agreement provides for, among other things, the ability of the strategic investor to maintain and increase its percentage ownership in ILC and grants certain marketing and offtake rights to the strategic investor. In conjunction, a voting trust agreement has been entered into among the investor and certain insiders of ILC and affiliates.

Company executives will focus on the completion of the Financing as well as providing final materials for the approval of the listing of ILC.

Plan of Arrangement - ILC Financing

In order to complete the plan of arrangement, the Company intends to raise a minimum of $2.5 million to provide International Lithium with sufficient operating and administration funds to satisfy Exchange requirements for listing (the "Financing"). The proposed Financing will entail the offering of a minimum of 10 million units in ILC priced at $0.25 per unit. Each unit consists of one common share and one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of ILC at a price of $0.375 for a period of two years from the date of closing. Certain fees may be payable on a portion of the placement, in compliance with Exchange requirements.

TNR and Non-Executive Chairman Kirill Klip plan to participate in the Financing.

Upon closing of the financing the Company will file the required final paperwork with the applicable regulatory bodies in order to complete the listing process of ILC.

TNR is a diversified international metals exploration company focusing on the continued advancement of existing properties and identifying and acquiring new prospective projects. TNR has a portfolio of 18 active projects, of which 9 rare metals projects, including Mariana, will be held or optioned to TNR's wholly owned subsidiary ILC upon completion of the proposed plan of arrangement.
The objective of the proposed plan of arrangement is to spin-out TNR's rare metals property interests into a separate public company, ILC. This proposed plan of arrangement has been approved by TNR's shareholders and the courts of British Columbia. TNR will now proceed with the spin-out and will provide updates on the progress of the spin-out in further news releases. For further details of the spin-out, please visit International Lithium's website and TNR's information circular dated May 10, 2010 which is available on the SEDAR website at www.sedar.com.
The recent acquisition of lithium, other rare metals and rare-earth elements projects in Argentina, Canada, USA and Ireland confirms the combined companies' commitments to generating projects, diversifying its markets, and building shareholder value.
On behalf of the board,
Gary Schellenberg
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