Lithium X Energy Corp. declared newly that it has completed the previously-announced transactions with Pure Energy Minerals Limited, consisting of the sale of its interests in Nevada, and its subscription for 3.571 million Pure Energy units for at a total subscription cost of C$2 million.
The Sale and Subscription were completed on the terms previously announced by the Company on May 11, 2017. Completion of the Sale and the Subscription results in the Company participating in Nevada's Clayton Valley solely through its holding of 19.99 procent of Pure Energy's outstanding common shares and Pure Energy share purchase warrants that, if exercised immediately, would increase the Company's ownership interest to 22.5 percent.
The Company has agreed not to exercise any share purchase warrants of Pure Energy if, upon exercise, the Company would become a 'Control Person' (as such term is defined in the policies of the TSX Venture Exchange) unless Pure Energy has obtained the prior approval of its shareholders and of the TSXV, as applicable.
The Company continues to be fully funded for all current work programs, with approximately C$22.5 million in cash and no debt.
On completion of the Sale and the Subscription, the Company holds a total of 23,609,620 common shares of Pure Energy and 3,808,004 share purchase warrants, exercisable for a period of 3 years (subject to acceleration) entitling Lithium X to acquire 3,808,004 common shares of Pure Energy at a price of C$0.75 per common share. The Units (each consisting of one common share of Pure Energy and one half of a share purchase warrant) were purchased from Pure Energy's treasury at a price of C$0.56 per Unit.
The remaining 20,038,182 common shares of Pure Energy and 2,022,290 share purchase warrants were issued by Pure Energy to the Company in consideration for the sale of the Company's Nevada interests to Pure Energy. Other than the securities issued by Pure Energy under the Sale and the Subscription, the Company holds no other securities of Pure Energy, and is not acting jointly or in concert with any other person.
The Company will be holding its interest in Pure Energy solely for investment purposes. The Company has entered into an investor rights agreement (the "Investor Rights Agreement") with Pure Energy which provides that, for so long as the Company maintains a 5 percent partially-diluted interest, it shall have: (i) a right maintain its pro rata ownership interest in Pure Energy; and (ii) a right to nominate one director to Pure Energy's board.
The Investor Rights Agreement also provides that the Company will vote in favour of all matters proposed by management of Pure Energy for a period of 24 months.
The Company has also agreed to hold periods in respect of the securities it received on the Sale (all of the warrants and 50 percent of the common shares are released after one year, with an additional 12.5 percent of the common shares being released every three months thereafter). Finally, the Investor Rights Agreement contains certain restrictions on the manner of disposition of any common shares of Pure Energy held by the Company to facilitate their orderly sale.
Source: Lithium X energy Corp.
