AHG1) (otcqb:HMGLF) (the “Company” or “Pure Energy“) is pleased to announce that the Company has entered into an agreement with Tesla Motors Inc.
Tesla’s $5 billion “gigafactory” is anticipated to be the world’s largest lithium battery production facility in the world, and was conceived by Tesla CEO Elon Musk as the solution to bringing the cost of batteries for Tesla automobiles down to a price level that will make the high-tech electric vehicles more affordable. The supplied lithium will be used in the battery cell manufacturing process of Tesla’s rapidly growing electric vehicle and stationary storage units.
The company owns an expanse of lithium brine in that area, which would supply the lithium hydroxide that Tesla needs to produce its batteries if the mining company meets its milestones for development. Pure Energy says it will be conducting a mining study to determine if the site is technically feasible and also viable economically.
To secure this essential commodity, it made a deal this week with Vancouver-based Pure Energy Minerals to obtain lithium from a project in Nevada. “We think the project; its Nevada location and Pure Energy’s green, clean, innovative development model provide a unique opportunity as a domestic lithium source”.
A mockup of Tesla’s Gigafactory 1, in Nevada.
If Pure Energy Minerals’ preliminary assessment is positive, Tesla has agreed to purchase a set amount of lithium for five years at a predetermined price below current market rates.
Certain information relating to future pricing formula and forecasted deliveries has been omitted on the basis of confidentiality and on the basis that the Agreement is subject to various conditions in relation to project execution, product quality, pricing and timing of delivery.
The Company is in the process of developing the mineral properties comprising the Project. The Clayton Valley project boasts 816,000 metric tonnes lithium carbonate equivalent (LCE) inferred resource according to a July 2015 NI 43-101 report.
The company hopes to complete a preliminary economic assessment in the second quarter of 2016.
This deal comes on the heels of an announcement by Montreal-based Critical Elements Corporation (TSX.V:CRE) for an off-take agreement by an unnamed entity to purchase $200 million worth of lithium products from the company’s Rose project in central Quebec.
The project is located next to Albemarle’s (NYSE:ALB) Silver Peak lithium brine mine, the only producing lithium operation in the country which is undergoing expansion. Mr. Jacob, P.Geo is not independent of the Company as he is a director.