Consolidated Lithium Metals Inc. [TSXV: CLM; FRA: Z36] has entered into a non-binding letter of intent, effective July 31, 2025, with Soquem Inc., a wholly owned subsidiary of Investissement Quebec, pursuant to which (subject to completion of several conditions precedent) the company may acquire an option to earn up to an 80% interest in the Kwyjibo rare earth project, located 125 km northeast of the city of Sept-Iles, in the Cote-Nord region of Quebec.
Proposed transaction summary – Phase 1: Under the terms of the LOI, Consolidated Lithium may earn a 60% interest in the project and be appointed as its operator in exchange for payments and issuances of common shares of the company totalling an aggregate of $23.15 million within five years following the closing date of the proposed transaction, allocated as follows (in each case subject to and in accordance with the rules and policies of the TSX Venture Exchange): $5.65 million in cash to Soquem; $5.50 million payable to Soquem in common shares of the company, at a deemed price per share to be mutually agreed by the parties; and $12.00 million invested in the project to advance the following key stages of the project’s development: negotiation and ratification of an impact and benefit agreement with the Innu of Takuaikan Uashat mak Mani-utenam; metallurgical study to confirm environmental viability of extraction and processing of rare earth in the region of the project; environmental permitting from the Bureau d’acceleration de projects; initiation of at least a 5,000-metre drilling campaign for potential expansion of project’s resources; and initiation of a bankable feasibility study to evaluate the technical and economic viability of the project.
Phase 2: Consolidated Lithium to acquire an additional 20% undivided interest in the project, for a total of 80%.
Following completion of phase 1, Consolidated Lithium may earn an additional 20% interest in the project (for a total of 80%) in exchange for payments or issuances of common shares of the company totalling an aggregate of an additional $22.00 million within three years following completion of the phase 1 term, allocated as follows (in each case subject to and in accordance with the rules and policies of the TSX Venture Exchange): $4.50 million in cash to Soquem; $4.50 million payable to Soquem in common shares of the company, at a deemed price per share to be mutually agreed by the parties; and $13.00 million invested in the project to advance the following project milestones: completion of the feasibility study; access road construction; electrical transmission line construction; underground mine construction; and processing facility construction.
The LOI also contemplates the following: Soquem has granted Consolidated Lithium a legally binding exclusivity period respecting the project, ending on October 31, 2025.
Consolidated Lithium will be entitled to enter into discussions with Soquem and Investissement Quebec to acquire the remaining 20% interest in the project.
Consolidated Lithium anticipates financing the proposed transaction through a combination of internal and external project financing resources, the support of existing shareholders, and the assistance of financial advisers.
Throughout phases 1 and 2, Consolidated Lithium expects to act as project operator in collaboration with Soquem. Consolidated Lithium anticipates that the definitive agreement respecting the proposed transaction shall be negotiated and executed by the end of the exclusivity period, being October 31, 2025.
The project consists of mining claims, applications, leases or other forms of mineral rights hosting an iron oxide copper/gold style mineral system with significant rare earth enrichment, particularly neodymium, praseodymium, dysprosium, yttrium and terbium.
The project is located near established infrastructure, including the QNS&L rail line and the Port of Sept-Iles, and the company believes it can benefit from access to Quebec’s hydroelectric power grid.
Soquem has conducted extensive exploration, geophysics and metallurgical testwork to date, which the company believes establishes a foundation for the advancement toward feasibility.
Richard Quesnel, CEO of Consolidated Lithium, commented: “This LOI with Soquem represents a unique opportunity to potentially partner with a Quebec-government-backed entity on what we believe to be one of the province’s most strategically important rare earth assets. With a forecasted demand increase for NdPr and heavy rare earths, we anticipate that the project positions CLM as a potential key supplier to North American and European supply chains. The phased earn-in structure described in the LOI ensures disciplined capital allocation as we advance this project toward development.”
