ARSMF - Ares Strategic Mining Completes Sale of Drill-Ready Lithium Project in Nevada to USHA Resources Ltd.
(TheNewswire)
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Ares locates well-funded publicly trading company readyto start imminent exploration.
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Ares will become a large shareholder of USHA during hotlithium market.
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Ares to support USHA Resources through close workingrelationship and as shareholders.
Vancouver, B.C. - TheNewswire - March 31 st , 2022 - Ares Strategic MiningInc. (the “Company”) (CSE:ARS) (CNSX:ARS.CN) (OTC:ARSMF) (FRA: N8I1), is pleased to announce that it has enteredinto a mineral property option agreement (the “ Option Agreement ” or “ Transaction ”) with USHA ResourcesLtd. (the “ Purchaser ”) ofVancouver, British Columbia, whereby the Company has been granted theexclusive option to acquire a 100% interest in 140 mineral claimslocated at Jackpot Lake, Clark County, Nevada (the “ Property ”).
The Property is located within Clark County, 35kilometers northeast of Las Vegas, Nevada, and is comprised of 140mineral claims that total 2,800 acres. Theproject is a “playa”, an internally drained brine deposit in whichsediments from lithium-rich surrounding source rocks accumulate andfill the deposit leading to a potential concentration of lithium brinedue to successive evaporation and concentration events, a similargeologic model as Albemarle’s Silver Peak Nevada Lithium Mine whichhas operated continuously since 1966, and Iconic Mineral’s BonnieClaire Project, which recently released a Preliminary EconomicAssessment report (PEA) that indicates 40-year mine with an after-taxNPV 8% of 1.5 billion.
Figure 1 - Left, location ofJackpot Lake. Right, aerial image of the "playa".
The project is considered to be “drill-ready” basedon the following work which has successfully delineated a 5 x 2 kilometre anomaly within aclosed basin that suggests the presence of a highly concentratedbrine:
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129 core samples collected by the USGS with an averagelithium value of 175 ppm with a high of 550 ppm and spectrographic andatomic-absorption analyses of 135 stream sediment samples confirmingthe potential for lithium mineral deposits.
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Gravitational surveying which has identified a closedbasin, critical for ensuring brines remain within the basin withoutdilution from external water sources.
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Geophysical modelling based upon gravitational andcontrolled source audio magnetotellurics/magnetotellurics (CSAMT/MT)surveys has provided evidence of highly concentrated brines which arerelatively near the surface. The CSAMT survey results of the JackpotLake Project demonstrate a large consistent body of very lowresistivity – consistent with highly concentrated lithium brinebehavior – throughout the property, predominantly above bedrockdepths of 625 meters.
The CSAMT Survey and report was conducted and preparedby Hasbrouck Geophysics, who has extensive experience of bothsurveying and data processing for brine-bearing basin environmentsacross the southwestern U.S.
Figure 2 - Left, gravitationalsurveying outlined the footprint of the Jackpot lithium brine anomaly.Right, CSMAT survey slices showing a cross-section of the anomalyillustrating the highly enriched brines throughout the property inred.
Based on the above, the Purchaser intends on completingan aggressive exploration program by drilling both shallow and deepholes to test the targets outlined by the CSAMT Survey at possiblehigher concentration brine zones with the goal of completing a 43-101resource estimate by Q4 of 2022.
James Walker, CEO of Ares Strategic Mining, stated," We are pleased to haveUSHA as a partner for Jackpot. Our goal was to find a well-structuredand capitalized company that could move the project forward and lookforward to supporting USHA as shareholders and strategic partners.Ares is busy building the Utah fluorspar operation, and know USHA havethe capacity and resources to invest in this lithium project which wecannot provide due to our own commitments. We have huge confidencethat USHA can successfully develop this project, especially at a timewhen lithium is so in demand.”
Deepak Varshney, CEO of Usha Resources, stated," We are thrilled to addJackpot Lake to our growing portfolio of “green” projects andthank Ares for partnering with us to move this project forward. Ourgoal is to identify high-quality projects that are near or drill-readywith high-upside that can be achieved through the completion ofrelatively inexpensive work programs. Lithium brine deposits have asignificant cost advantage over lithium clay deposits in that lithiummineralization is much less difficult and expensive to process. Theycan also be explored through smaller drilling programs that can resultin the Company identifying resource estimates much more economically. The addition ofJackpot means that 2022 will be an extremely active period for USHAwith three planned drill programs giving our shareholders a number ofpotential catalysts across our various projects. ”
The Transaction
Under the terms of the Transaction, USHA will be ableto acquire a 100% interest in the Property in exchange for thefollowing consideration:
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$75,000 payable within five days from receivingapproval from the TSX Venture Exchange (the Exchange ”).
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$500,000 payable in common shares (the Shares ”) of theCompany within five days from the date of Exchange approval, to beissued at a deemed value at the greater of the 10-day VWAP orDiscounted Market Price;
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$225,000 payable through a combination of cash orShares of the Company (at the discretion of the Company), up to amaximum of 1,500,000 Shares, on the six-month anniversary date, to beissued at a deemed value at the greater of the 10-day VWAP orDiscounted Market Price; and
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$225,000 payable through a combination of cash orShares of the Company (at the discretion of the Company), up to amaximum of 1,500,000 Shares, on the twelve-month anniversary date, tobe issued at a deemed value at the greater of the 10-day VWAP orDiscounted Market Price.
Additionally, the Company will be required to completeno less than $1,000,000 worth of Expenditures on the Claims within twoyears unless the Option has been exercised in full. The Vendor will return a 1% Gross Overriding Royalty (the“ GORR ”), subject to a buyback provision by the Company, wherebythe Company may acquire, at any time, one-half of the GORR for$1,000,000. The Option Agreement and the transactions contemplatedtherein, including the issuance of the Shares, is subject to theapproval of the Exchange. All securities issued in connection with theTransaction will be subject to a four-month-and-one-day statutory holdperiod.
At this time the Company would also like to announcethat its Director and Chairman, Karl Marek, will be leaving the Aresboard after completing a move to Ireland from Canada, to pursue newbusiness opportunities. Karl played an instrumental part in foundingAres in 2020 and has been a great asset to the company these previousyears. We would very like to thank him very muchfor all the time and effort he has invested, and of course wish himevery success in his new endeavors in Ireland.
Ares also announced that it intends to settle anoutstanding accounts payable for $17,916.81, owing to certain creditorwishing to settle through shares, through the issuance of 41,667common shares of the Company at a deemed price of $0.43 per commonshare. The Debt was accrued pursuant to a SEO services invoicesubmitted on November 2021.
ON BEHALF OF THE BOARD OF DIRECTORS OF
ARES STRATEGIC MINING INC.
James Walker
Chief Executive Officer and President
For further information, please contact James Walker byphone at 604-345-1576 or by email at jwalker@aresmining.com
DISCLOSURE AND FORWARD-LOOKINGSTATEMENTS:
Companies typically rely oncomprehensive feasibility reports on mineral reserve estimates toreduce the risks and uncertainties associated with a productiondecision. Historically, situations where the issuer decides to put amineral project into production without first establishing mineralreserves supported by a technical report and completing a feasibilitystudy have a higher risk of economic or technical failure, though someindustrial mineral ventures are relatively simple operations with lowlevels of investment and risk, where the operating entity hasdetermined that a formal prefeasibility or feasibility study inconformance with NI 43-101 and 43-101 CP is not required for aproduction decision. Based on historical engineering work, geologicalreports, historical production data and current engineering workcompleted or in the process by Ares, the Company intends to moveforward with the development of its Utah asset.
Certain information in this newsrelease may contain forward-looking statements that involvesubstantial known and unknown risks and uncertainties. Forward-lookingstatements are often identified by terms such as “will”,“may”, “should”, “anticipate”, “expects” and similarexpressions. All statements other than statements of historical factincluded in this news release are forward-looking statements thatinvolve risks and uncertainties. There can be no assurance that suchstatements will prove to be accurate and actual results and futureevents could differ materially from those anticipated in such statements. Important factorsthat could cause actual results to differ materially from theCompany’s expectations include the failure to satisfy the conditionsof the relevant securities exchange(s) and other risks detailed fromtime to time in the filings made by the Company with securitiesregulations. The reader is cautioned that assumptions used in thepreparation of any forward-looking information may prove to beincorrect. Events or circumstances may cause actual results to differmaterially from those predicted, as a result of numerous known andunknown risks, uncertainties, and other factors, many of which arebeyond the control of the Company. The reader is cautioned not toplace undue reliance on any forward-looking information. Suchinformation, although considered reasonable by management at the timeof preparation, may prove to be incorrect and actual results maydiffer materially from those anticipated. Forward-looking statementscontained in this news release are expressly qualified by thiscautionary statement. The forward-looking statements contained in thisnews release are made as of the date of this news release and theCompany disclaims any intention or obligation to update or revise suchinformation, except as required by applicable law.
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