Published: January 17, 2024 |

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Grounded Lithium Corp. (GLC) has entered into a definitive agreement with Denison Mines where Denison has the option to earn up to a 75 percent working interest in the Kindersley Lithium Project (KLP) by funding in aggregate up to $15.150 million comprised of both cash payments to GLC of up to $3.150 million and funding project expenditures of up to $12 million through a structured earn-in option agreement.

The agreement is expected to provide more than sufficient funding for a field pilot for the KLP which both the company and Denison plan to advance on a priority basis. Beyond the pilot, Denison may also provide further capital during the earn-in period to fund other activities as necessary to drive the overall KLP value such as further technical evaluations and studies, drilling, sampling, and expenditures to maintain the KLP lands in good standing.

The company also sold a 5 percent gross overriding royalty (GORR) on the KLP to Denison in accordance with the terms of a royalty agreement for a cash payment of $800,000. The GORR drops to 2 percent upon the receipt of all approvals, inclusive of GLC shareholder approval of the agreement. The GORR is eliminated in its entirety on the date that is fifteen (15) months after the closing of the earn-in agreement unless Denison elects to forfeit its rights to exercise an earn-in option.

“Grounded remains steadfast in our vision to economically produce battery grade lithium with a focus on low-cost operations and this strategic investment from Denison is a major step in that regard,” said Gregg Smith, president and CEO of Grounded Lithium.

“Denison has a considerable operating footprint in Saskatchewan as well as an excellent reputation within the Province, and we continue to be impressed with the diligence and professionalism of the Denison team. We look forward to working together to unlock the full value potential of the KLP for the benefit of our respective shareholders,” added Smith.

“Further, the strategic investment from Denison in both GLC and the KLP eliminates many perceived or distinct risks in our anticipated path to commercial production,” concluded Smith.

“Denison is excited to acquire a royalty and enter into an earn-in agreement with GLC that supports the further assessment of the KLP in Saskatchewan. Denison has developed a unique platform for the de-risking of mine development projects in the Province with its innovative and highly skilled Saskatoon-based technical, regulatory, and operations teams,” said David Cates, president and CEO of Denison.

“Lithium is a complementary mineral to Denison’s core uranium business, with both identified as critical minerals needed to support the clean energy transition. Brine extraction also has many similarities to the in-situ recovery mining method that the company has successfully validated for use at its flagship Wheeler River uranium project in northern Saskatchewan. Combining our deep local technical capabilities with the Grounded team’s experience on KLP has the potential to create an incredible environment to incubate the KLP to emerge as a premier lithium project in a top mining jurisdiction,” added Cates.

“The transaction with Denison is a great outcome for both parties. Denison gains exposure to a high-potential lithium brine project in Saskatchewan with similarities to its impressive uranium project development portfolio in the Province while Grounded receives immediate funding and partners with a strategic investor with a much lower cost of capital to advance the KLP without incurring dilution at the corporate level,” said Greg Phaneuf, senior vice president Corporate Development and CFO of Grounded Lithium.

The agreement is subject to the regulatory approval of the TSX Venture Exchange and is subject to receipt of shareholder approval by way of the written consent of shareholders holding more than 50 percent of the current issued and outstanding shares of the company.

Grounded Lithium is a publicly traded, Alberta-headquartered lithium resource company focused on supplying lithium into the rapidly developing electricity-powered economy. Within the accelerating energy transition industry, lithium is a critical metal in the manufacturing of electric vehicle batteries. They focus on lithium extraction from the production of subsurface brines, where Western Canada’s potential remains undeveloped. The Grounded Lithium team is dedicated to generating value through a balanced model of exploration, production, and strategic acquisitions of formations bearing lithium-rich brines in Western Canada.

Denison Mines is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. The company has an effective 95 percent interest in its flagship Wheeler River Uranium Project, which is the largest undeveloped uranium project in the infrastructure rich eastern portion of the Athabasca Basin region of northern Saskatchewan. Denison’s interests in Saskatchewan also include a 22.5 percent ownership interest in the McClean Lake joint venture, which owns several uranium deposits and the McClean Lake uranium mill, contracted to process the ore from the Cigar Lake mine under a toll milling agreement, plus a 25.17 percent interest in the Midwest Main and Midwest A deposits, and a 67.41 percent interest in the THT and Huskie deposits on the Waterbury Lake property.

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