Copper, Zinc, Gold, Silver

Property description

The Bourier Property is composed of one block totaling 228 claims covering an area of 11,579 ha for some 30 kilometers in length. It is located just along the east side of the new Rupert hydroelectric complex.

The Bourier project offers strong lithium potential in a well-established area. The lithium pegmatites tend to occur in swarms in the volcano-sedimentary units. The Bourier property covers a large part of the regional volcano-sedimentary unit, a favourable unit that hosts Nemaska Lithium's Wabouchi deposit and the Lemarre showing.

Located in the northeastern part of the Superior geological province, and more specifically in the northeastern part of the Lac des Montagnes Formation, the Lac des Montagnes volcano-sedimentary belt is a sequence of aluminous metasediments and amphibolites containing basalts and ultramafic sills.

These rocks are highly sheared and cut by 20% late granitoids (leucogranite and biotite pegmatite).

On April 28, 2016 the Company and Lomiko has entered into an option agreement ("Agreement") that gives the right to Lomiko to acquire up to a 70% interest in the Bourier project.

 

Terms of the transaction

Under the Agreement, Lomiko will earn its interest in Bourier by way of a farm-in arrangement. The key terms of the Agreement are detailed in the below:

 

Grant of first option

Critical Elements grants to Lomiko the exclusive right and option to acquire, on or before December 31, 2017, an initial 49% Earned Interest in the Property Bourier by issuing to Critical Elements an aggregate of 5,000,000 common shares of Lomiko, by paying to Critical Elements $10,000 cash and by incurring or funding Exploration Expenditures for a total amount of $750,000 on the Property, as follows:

  • paying to Critical Elements $10,000 cash within a delay of fifteen (15) days following the execution of this Agreement (non-refundable);
  • issuing to Critical Elements 2,500,000 common shares immediately following the receipt of the required approvals from the Exchange, and issuing and additional 2,500,000 common shares on or before December 31, 2016; and
  • incurring or funding Exploration Expenditures aggregating not less than $750,000 on the Property, of which an amount of $350,000 must be incurred or funded before December 31, 2016 and an amount of $400,000 before December 31, 2017.

Grant of second option

Subject to Lomiko having exercised the First Option, Critical Elements will also grant to Lomiko the exclusive right and option to increase its undivided interest in and to the Bourier Property from 49% to 70% by paying to Critical Elements an additional amount of $250,000, by incurring or funding additional Exploration Expenditures for an amount of $1,250,000 and by delivering a NI 43-101 compliant resource estimate on the Property prepared by a Qualified Person independent of Lomiko and Critical Elements, for a period commencing on the delivery of the First Option Exercise Notice and ending December 31, 2018, as follows:

  • paying to Critical Elements an amount of $250,000, in cash or in common shares of Lomiko at the sole discretion of Lomiko, on or before the date of delivery of the First Option Exercise Notice;
  • incurring or funding additional Exploration Expenditures for an amount of $1,250,000 on or before December 31, 2018; and
  • delivering the Resource Estimate to Critical Elements on or before December 31, 2018.

Milestone Payments

Subject to Lomiko's right to withdraw from and terminate the First Option, Lomiko agrees to pay the following milestones payments to Critical Elements, payable at any time following the exercise of the First Option upon the occurrence of the following:

  • On the estimation of a drilled defined resource (NI 43-101 compliant) of 5,000,000 tonnes at a cut-off grade of 0.6% Li2O (all categories) a payment of Cad $500,000, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko;
  • On the estimation of a drilled defined resource (NI 43-101 compliant) of 10,000,000 tonnes at a cut-off grade of 0.6% Li2O (all categories) a payment of Cad $750,000, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko;
  • On the estimation of a drilled defined resource (Ni 43-101 compliant) of 15,000,000 tonnes at a cut-off grade of 0.6% Li2O (all categories) a payment of Cad $1,000,000, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko; and
  • On the estimation of a drilled defined resource (NI 43-101 compliant) of 20,000,000 tonnes at a cut-off grade of 0.6% Li2O (all categories) a payment of Cad $1,500,000, payable in cash or in common shares of Lomiko at the sole discretion of Lomiko.

 

Royalty

Following the exercise of the First Option by Lomiko, and in addition to the amounts paid, common shares issued and Exploration Expenditures incurred or funded by Lomiko under the First Option and thereafter under the Second Option, as applicable, Critical Elements shall receive a royalty equal to 2% net smelter returns resulting from the extraction and production of any Minerals on the Property.

The Royalty including the right of Lomiko to purchase a portion thereof (1%).

Geology

The Lac des Montagnes volcano-sedimentary formation crosses the Bourier Property in a NE direction. It is composed of paragneiss, amphibolites and granitic intrusions. To the North of the Lac des Montagnes Formation, mainly orthogneiss formed of metamorphosed granite has been observed, while the South area of this formation is composed mainly of paragneiss, also intruded by granites.

Mineralization

In the Bourier Lake area, what has been identified as an exhalative massive sulphide horizon in felsic rocks was discovered during fieldwork conducted North of Bourier Lake in summer 2010 and 2011. Soil samples taken over an 8 km strike length of this horizon returned anomalous values for Ni, Cu, Zn and Pb. Some channel samples and other grab samples returned anomalous values for Au, As, Ni and Cu. This exhalative horizon in felsic rocks is now known to extend for more than 25 km over the property.

Technical Report

NI 43-101 (Lac Arques - November 8, 2010)