Sirocco and Canada Lithium combining to form strategic international competitor in growth-oriented industrial minerals sector

Sirocco and Canada Lithium combining to form strategic international 
competitor in growth-oriented industrial minerals sector 
TORONTO, Dec. 4, 2013 /CNW Telbec/ - Sirocco Mining Inc. ("Sirocco") (TSX: 
SIM) and Canada Lithium Corp. ("Canada Lithium") (TSX: CLQ) (U.S. OTC: CLQMF) 
jointly announce that their respective boards of directors have approved, and 
that they have entered into, a definitive agreement (the "Arrangement 
Agreement") pursuant to which they will complete a business combination by way 
of a statutory Plan of Arrangement (the "Arrangement") under the Canada 
Business Corporations Act. Following the completion of the Arrangement, the 
current Canada Lithium shareholders will hold approximately 58% of the 
combined company, while current shareholders of Sirocco will hold 
approximately 42%. 
Highlights of the Arrangement Include: 


    --  The business combination of Sirocco with its established Aguas
        Blancas iodine mine in Chile and Canada Lithium with its
        commissioning-stage lithium project in Quebec will create a
        significant industrial minerals producer in both the iodine and
        lithium markets. It is anticipated the combined company will
        provide significant market and growth synergies and over-all
        cost reduction.
    --  Sirocco's balance sheet and cash flow de-risk the production
        ramp-up of Canada Lithium'sproject. In addition, the combined
        company with its stronger balance sheet will offer greater cash
        resources.
    --  Anticipated ongoing growth in the automotive and electronics
        sector will continue to drive demand for lithium products,
        while anticipated increasing applications for X-ray media in
        Asia will continue to support iodine consumption. This allows
        for diversification of revenue and market risks. In the short
        to medium term, there is potential for downstream, value-added
        growth into lithium metal, potassium and sodium nitrates,
        sodium sulphate and lithium hydroxide.
    --  New and continued developments in the lithium battery sector,
        specifically lithium-iodine technology, which demonstrates
        higher energy levels and increased battery performance over
        current lithium battery technologies, may provide the combined
        company increased market opportunities as uptake of these new
        battery applications increases.
    --  The combination of Canada Lithium and Sirocco results in only
        one of two public companies, the other being SQM of Chile,
        producing both iodine and lithium.
    --  Following the closing of the Arrangement, the current Sirocco
        management team will be appointed as officers of the combined
        company: Richard P. Clark, as Chief Executive Officer,
        Alessandro Bitelli, as Chief Financial Officer, Kevin Ross, as
        Chief Operating Officer and Hugh Stuart, as Vice President of
        Exploration. This is the core team that contributed to the
        growth of Red Back Mining's operations, which was acquired by
        Kinross Gold Corporation for $9.2 billion.
    --  Sirocco shareholders will receive 1.175 common shares (on a
        pre-consolidated basis) in the capital of Canada Lithium for
        each outstanding Sirocco common share. Pursuant to the
        transaction, Canada Lithium expects to issue approximately 294
        million common shares (on a pre-consolidation and non-diluted
        basis).
    --  The Arrangement values each Sirocco share at C$0.48
        representing a premium of approximately 23% to the 20-day
        volume weighted average price of the Sirocco common shares on
        the Toronto Stock Exchange as of December 3, 2013.
    --  The Arrangement has been approved by the board of directors of
        both companies. Following the closing of the Arrangement, the
        board of the combined company will be comprised of nine
        individuals. Four of the nine will be Canada Lithium nominees,
        with the remaining five individuals to be nominated by Sirocco.
    --  In connection with the Arrangement, Canada Lithium will
        consolidate its common shares on the basis of one
        post-consolidation common share for each three existing Canada
        Lithium common shares.

"We're delighted to be joining forces with the Sirocco team. They have an 
exceptional track record in identifying growth opportunities, establishing 
sound operations and building wealth for shareholders," said Canada Lithium 
CEO Peter Secker.

Commenting on the transaction, Sirocco CEO Richard Clark said: "We have been 
looking for growth opportunities in the industrial minerals sector and this 
combination provides an excellent opportunity for geographic and product 
diversification while at the same time aligning two products with potential 
future complementary applications."

At a full annualized production rate, Canada Lithium would produce 
approximately 20,000 tonnes of battery-grade lithium carbonate, which 
represents about 12% of the world's output. The commodity, an essential 
component in lithium-ion batteries, powers the vast and growing field of 
consumer electronics, electric and hybrid vehicles and grid storage units. 
Sirocco's iodine operation in Chile will produce approximately 1,400 tonnes of 
iodine in 2013, with plans to produce 1,000 tonnes in 2014. Upon completion of 
the installation of a semi-autogenous grinding (SAG) mill, annual capacity 
will increase to over 2,000 tonnes per annum.

Under the Arrangement, as noted above, shareholders of Sirocco will receive 
1.175 common shares (on a pre-consolidation basis) in the capital of Canada 
Lithium for each outstanding Sirocco common share, representing a premium of 
approximately 23% to the 20-day volume weighted average price of the Sirocco 
common shares on the Toronto Stock Exchange as of December 3, 2013. The total 
consideration payable pursuant to the Arrangement values Sirocco's equity at 
approximately C$120 million. Pursuant to the transaction, Canada Lithium 
expects to issue approximately 294 million common shares (on a 
pre-consolidation and non-diluted basis).

The transaction will be carried out by way of a court-approved plan of 
arrangement and will require the approval of at least 66 2/3% of the votes 
cast by the securityholders of Sirocco at a special meeting of Sirocco 
shareholders expected to take place in January 2014. It is expected that the 
transaction will be exempt from the registration requirements of the U.S. 
Securities Act of 1933, as amended. The transaction is also subject to 
obtaining the approval of at least a majority of the votes cast by the 
shareholders of Canada Lithium approving the issuance of the shares in 
connection with the Arrangement and approval of at least 66 2/3% of the votes 
cast by the shareholders of Canada Lithium approving the consolidation of the 
shares of Canada Lithium on 3-for-1 basis, at a special meeting of Canada 
Lithium shareholders expected to take place the same date as the Sirocco 
meeting. In addition to securityholder and court approvals, the transaction is 
subject to applicable regulatory approvals, including the TSX, and the 
satisfaction of certain other closing conditions as is customary in 
transactions of this nature.

Canada Lithium's financial advisor, Primary Capital Inc. has provided an 
opinion to the Canada Lithium board of directors that the transaction is fair, 
from a financial point of view, to Canada Lithium's shareholders (other than 
Sirocco). The financial advisor for Sirocco, Scotia Capital Inc., has provided 
an opinion to the Sirocco board of directors that the consideration to be 
received by the Sirocco shareholders under the transaction is fair, from a 
financial point of view, to the Sirocco shareholders. Canada Lithium's legal 
counsel is Cassels Brock & Blackwell LLP and Sirocco's legal counsel is Blake, 
Cassels & Graydon LLP. Kingsdale Shareholder Services Inc. has been retained 
as proxy solicitors and information agent.

The Arrangement Agreement includes a commitment by each of Sirocco and Canada 
Lithium not to solicit alternative transactions to the proposed Arrangement. 
In certain circumstances, if a party terminates the definitive agreement to 
enter into an agreement to effect a superior proposal that is different from 
the Arrangement, then such party is obligated to pay to the other party as a 
termination payment of C$4 million, subject to a right by each party to match 
a competing superior proposal in question.

In connection with the Arrangement Agreement, Sirocco has also agreed to 
provide a bridge loan of up to $10 million to Canada Lithium. The loan will be 
due and payable on the earliest of the following: (a)thirty days after the 
completion of a superior proposal transaction by Canada Lithium or (b)six 
months following a demand notice from Sirocco. The bridge loan is subject to, 
among other things, receipt of TSX approval and certain other closing 
conditions. The loan may be converted, at the option of Sirocco, into common 
shares of Canada Lithium at a conversion price of $0.399 per common share, at 
any time after the termination of the Arrangement Agreement.

Further information regarding the transaction will be contained in an 
information circular that each of Canada Lithium and Sirocco will prepare, 
file and mail in due course to their respective shareholders in connection 
with the special meetings of each of the Canada Lithium and Sirocco 
shareholders to be held to consider the transaction. All shareholders are 
urged to carefully read the information circulars once they become available 
as they will contain additional important information concerning the 
transaction.

Details regarding these and other terms of the transaction are set out in the 
Arrangement Agreement, which is available on SEDAR at www.sedar.com.

The information agent for the Arrangement is Kingsdale Shareholder Services 
Inc. ("Kingsdale"). Questions and requests for assistance, including requests 
for additional information may be directed to Kingsdale at 1-866-581-0510 or 
by email at: contactus@kingsdaleshareholder.com.

About Sirocco

Sirocco Mining Inc. is a Canadian company which produces iodine from its Aguas 
Blancas mine in northern Chile. In addition, Sirocco has exploration interests 
in West Africa and is actively assessing other opportunities in the resource 
sector. For more information regarding Sirocco, please refer to Sirocco's 
public filings available at www.sedar.com and www.siroccomining.com including, 
in particular, Sirocco's Management's Discussion and Analysis for the year 
ended December 31, 2012 and its Annual Information Form for the year ended 
December 31, 2012 and the Management's Discussion and Analysis for the 
three-month and nine-month periods ended September 30, 2013.

About Canada Lithium

Canada Lithium holds a 100% interest in the Québec Lithium Project near Val 
d'Or, the geographical heart of the Québec mining industry. It has completed 
construction and is in the commissioning phase of an open-pit mine and on-site 
processing plant with estimated capacity to produce approximately 20,000 
tonnes of battery-grade lithium carbonate annually. For more information 
regarding Canada Lithium, please refer to Canada Lithium's public filings 
available at www.sedar.com and www.canadalithium.com including, in particular, 
Canada Lithium's Management's Discussion and Analysis for the year ended 
December 31, 2012 and its Annual Information Form for the year ended December 
31, 2012 and the Management's Discussion and Analysis for the three-month and 
nine-month periods ended September 30, 2013.

Forward-Looking Statements

Certain information contained in this news release, including any information 
relating to the proposed transaction (the "Transaction") and each issuer's 
future financial or operating performance may be deemed "forward-looking". 
These statements relate to future events or future performance and reflect 
each issuer's expectations regarding the Transaction, and the future growth, 
results of operations, business prospects and opportunities of Sirocco, Canada 
Lithium and the combined company. These forward-looking statements also 
reflect each issuer's current internal projections, expectations or beliefs 
and are based on information currently available to Sirocco or Canada Lithium, 
respectively. In some cases forward-looking information can be identified by 
terminology such as "may", "will", "should", "expect", "intend", "plan", 
"anticipate", "believe", "estimate", "projects", "potential", "scheduled", 
"forecast", "budget" or the negative of those terms or other comparable 
terminology. Assumptions upon which such forward looking information regarding 
completion of the Transaction are based include that Sirocco and Canada 
Lithium will be able to satisfy the conditions to the Transaction, that the 
required approvals will be obtained from the shareholders and optionholders of 
each issuer, as applicable, that all third party regulatory and governmental 
approvals to the Transaction will be obtained and all other conditions to 
completion of the Transaction will be satisfied or waived. Although Sirocco 
and Canada Lithium believe that the forward-looking information contained in 
this news release is based on reasonable assumptions, readers cannot be 
assured that actual results will be consistent with such statements. 
Accordingly, readers are cautioned against placing undue reliance on 
forward-looking information. Sirocco and Canada Lithium expressly disclaim any 
intention or obligation to update or revise any forward-looking information, 
whether as a result of new information, events or otherwise, except in 
accordance with applicable securities laws.



SOURCE  Canada Lithium Corp. 
Sophia Shane Sirocco Mining Inc. Tel: (604) 689-7842 
Website:www.siroccomining.com 
Olav Svela Director, Investor Relations Canada Lithium Corp. Tel: (416) 
479-4355 osvela@canadalithium.com 
Laurence A. Lachance, Renmark Financial Communications Inc. (416) 644-2020 
orllachance@renmarkfinancial.com 
The Information Agent: Kingsdale Shareholder Services Inc. 1-866-581-0510 
contactus@kingsdaleshareholder.com 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/December2013/04/c7490.html 
CO: Canada Lithium Corp.
ST: Ontario
NI: MNG VNT  
-0- Dec/04/2013 11:45 GMT
 
 
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