TNR receives funding from Strategic Investor for International Lithium

2011-04-13 08:37 ET - News Release

Mr. Gary Schellenberg reports

STRATEGIC INVESTOR INVESTS IN INTERNATIONAL LITHIUM CORP., PROPOSED SPIN-OFF FROM TNR GOLD CORP. PROCEEDING

TNR Gold Corp. and wholly owned International Lithium Corp. (ILC) are providing an update regarding the plan of arrangement to spin off TNR's rare metal projects into International Lithium Corp. An Asian-based strategic investor has agreed, subject to approval by its board of directors, to an initial investment representing a 9.9-per-cent equity stake in International Lithium Corp.

Key highlights:

• Prominent Asian lithium product manufacturer selects ILC as investment;
• Initial 9.9-per-cent equity stake in ILC;
• Strategic investor brings significant future project development assistance capability;
• Strategic relationship agreement among the investor and ILC provides for certain marketing and offtake rights;
• Company focused on closing of financing and the listing of ILC.

"The involvement of a strategic investor from the outset has been the goal that we have diligently worked towards since first announcing the spin-out of ILC," states Gary Schellenberg, chief executive officer of TNR Gold. "The strategic investor offers significant support in our future endeavours and ILC will complement the relationship through our exploration technical strengths and ability to source out, identify and acquire opportunities."

Strategic investor

Over the course of the last year, company executives have travelled abroad to develop strong relationships with potential investors and end product users that would bring significant assistance to ILC and the advancement of ILC's projects. The effort has culminated in ILC entering into a strategic relationship agreement with a prominent Asian-based company specializing in the research, development, manufacturing and sale of lithium products worldwide. The strategic investor has committed to an initial 9.9-per-cent equity share in ILC through participating in the financing (as described below) and intends to provide instrumental future support toward the development of ILC's projects from a financial and technical perspective. The strategic investor's participation is subject to certain conditions, including approval of its board of directors, completion of the financing for gross proceeds of at least $2.5-million (including the strategic investor's subscription) and approval for the listing of the shares and warrants on the TSX Venture Exchange.

The strategic relationship agreement provides for, among other things, the ability of the strategic investor to maintain and increase its percentage ownership in ILC and grants certain marketing and offtake rights to the strategic investor. In conjunction, a voting trust agreement has been entered into among the investor and certain insiders of ILC and affiliates.

Company executives will focus on the completion of the financing as well as providing final materials for the approval of the listing of ILC.

Plan of arrangement -- ILC financing

In order to complete the plan of arrangement, the company intends to raise a minimum of $2.5-million to provide International Lithium with sufficient operating and administration funds to satisfy exchange requirements for listing. The proposed financing will entail the offering of a minimum of 10 million units in ILC priced at 25 cents per unit. Each unit consists of one common share and one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of ILC at a price of 37.5 cents for a period of two years from the date of closing. Certain fees may be payable on a portion of the placement, in compliance with exchange requirements.

TNR and non-executive chairman Kirill Klip plan to participate in the financing.

Upon closing of the financing the company will file the required final paperwork with the applicable regulatory bodies in order to complete the listing process of ILC.