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May 2, 2016, VANCOUVER, B.C. – ASHBURTON VENTURES INC. (ABR-TSX:V) (ARB-FRANKFURT) (“Ashburton” or the "Company”) is pleased to announce that it has signed a Definitive Agreement with Strider Resources Ltd (“Strider”) to acquire an Option over the Thompson Bros. Lithium Property in Wekusko Lake, Manitoba (the “Property”), and simultaneously signed a Binding Heads of Agreement with Manitoba Minerals Pty Ltd (“MMPL”) to finance all payments and obligations relating to the Option over the Property.
About the Thompson Bros. Lithium Property
The Thompson Bros. Lithium Property is located in Wekusko Lake, 20km east of the mining community of Snow Lake, Manitoba. The main highway to Thompson and Flin Flon, plus the railway to the Winnipeg and the seaport of Churchill passes 40 km south of the property.
The property consists of 18 contiguous claims covering 1829 hectares. Manitoba is one of the top rated mining jurisdictions in the world and electricity costs are amongst the lowest in North America.
The lithium deposit is a spodumene rich pegmatite dike with a near vertical dip and a strike length of over 800 meters. The dike was originally drilled in 1956 by Combined Developments Limited, with three additional holes drilled by Carta Resources Limited in 1997; for a total of 30 drill holes. A resource calculation made by B. Ainsworth, P. Eng. in 1998, resulted in an "undiluted drill indicated mineral resource" of 3,968,000 tonnes with a weighted average value grade of 1.29% LiO2 to the 130 meter level, and an average width of 10 meters. A further 337,000 tonnes is indicated by the deepest hole (D.H. Car-97-2), to the 380 m level, which is over 200 meters from the nearest hole, and which cut a horizontal width of 8 m of 1.3% LiO2. Thus, Ainsworth suggests a total drill indicated and possible total resource calculation of 4,305,000 tonnes of 1.3% LiO2 for the deposit (NON 43-101 Compliant), open to depth and along strike. The 1998 resource calculation is historical and not National Instrument 43-101 compliant as it was completed prior to the implementation of these requirements, and thus cannot be relied upon.
A metallurgical evaluation of the spodumene deposit by Dr. W. Dressler of Laurentian University indicated that simple floatation would recover 92% of the spodumene and produce a concentrate grading 6.6% LiO2 or 89.2% spodumene. Carta Resources completed a business plan to develop the Thompson Bros. Lithium Deposit for the production of lithium carbonate, but a decline in lithium carbonate prices stalled the project in 1998.
Definitive Agreement to Acquire Option over the Thompson Bros. Lithium Property - Terms
Terms of the Option, as set forth in the Definitive Agreement with ABR and Strider over the Property are as follows:
A cash payment of $25,000 within seven (7) days of the signing of the Definitive Agreement, and
As well as making the cash and share based payments to Strider listed above, ABR agrees to incur the following Expenditures on the Property by the following dates:
Furthermore, following its exercise of the First Option and up to the date of Commencement of Commercial Production, ABR has the right to buy back fifty per cent of the overriding 2% NSR from Strider on the property by making cash payment of $1,000,000.
Binding Heads of Agreement to Finance Option Obligations over the Thompson Bros. Lithium Property - Terms
ABR has simultaneously entered into a Binding Heads of Agreement with Manitoba Minerals Pty Ltd (“MMPL”), a private resource finance entity associated with corporate finance group RM Capital, to finance all ABRs obligations relating to exercising the Option. The total of this financing package is in excess of $2,000,000 over the 5 year Option period. The finance agreement with MMPL allows ABR to be exposed to the upside of the Option over the Project without creating excessive dilution to its shareholders to finance the Option exercise.
In return for financing the Option, once exercised, MMPL will have the right to back-in to an 80% ownership of the Property from ABR after satisfying the terms as follows:
1. Funding ABR’s obligations relating to the Option as set forth in the Definitive Agreement, between ABR and Strider, specifically:
(a) Paying all cash payments due in relation to the Option, up to $500,000 over 60 months; and
(b) Funding the work program for a minimum of $1,500,000 of expenditure, over 60 months;
(c) Funding payments in relation to the purchase of the NSR of $1,000,000.
2. Cash Reimbursement of $150,000 from MMPL to ABR, for ABR’s share based payments made to Strider relating to the Option.
3. MMPL will manage all activities relating to the work program for the Option on behalf of ABR.
4. ABR will retain a free carried interest over their 20% holding in the Project, up to completion of a Pre-Feasibility Study (the “PFS”). Following Exercise of the Option by ABR and upon completion of a PFS, the Parties will enter into a joint venture agreement (the “Joint Venture Agreement”), with contribution reflective of each party’s ownership interest.
5. MMPL will also have the right to acquire a further fifteen per cent holding (15%) in the Project from ABR for cash consideration of $1,000,000, at any time following Exercise of the Option and up to the entering of the Joint Venture Agreement.
6. Should MMPL fail to make any of the payments due by it to ABR under the Option Financing Agreement, ABR will immediately notify MMPL of the breach. MMPL has 15 days from the date of notification to rectify the breach or ABR will have the right, at its discretion, to continue sole funding the Option payments. Upon this election MMPL has no further rights under the Option Financing Agreement.
Ashburton Ventures Inc. (“Ashburton” or “ABR”) further announces it has entered into a Private Placement Agreement (“the Private Placement”) with Manitoba Minerals Pty Ltd (“MMPL”) as compensation to ABR for the share based payments to Strider Resources Ltd (“Strider”).
MMPL has agreed to subscribe for 3,000,000 Ashburton common shares at an issue price of $0.05 per share, for total funds to ABR of $150,000 under the Private Placement.
These shares will be used to satisfy the share based payment component as set forth in the Definitive Agreement between ABR and Strider for the Option over the Thompson Bros. Lithium Property in Snow Lake, Manitoba.
The Definitive Agreement, Private Placement and Binding Heads of Agreement are subject to, among other things, Exchange approval, and, with respect to the Binding Heads of Agreement, the execution of a formal agreement.
The technical contents of this release were approved by Michel Boily, PhD, P.Geo a Qualified Person as defined by National Instrument 43-101. The properties have not been the subject of a National Instrument 43-101 report.
ON BEHALF OF THE BOARD
Signed “Michael England”
Michael England, President
FOR FURTHER INFORMATION PLEASE CONTACT:
Telephone: 1-604-683-3995; Toll Free: 1-888-945-4770; www.ashburtonventures.com
Some of the statements in this news release contain forward-looking information that involves inherent risk and uncertainty affecting the business of Ashburton Ventures Inc. Actual results may differ materially from those currently anticipated in such statements. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.