Commences Tailings Construction and Pre-stripping at Quebec Lithium Project

.

cnw






TSX: CLQ; U.S. OTC: CLQMF


TORONTO, Oct. 29, 2012 /CNW/ - Canada Lithium Corp. (TSX: CLQ) (U.S.
OTC: CLQMF), a 'clean-tech' mine developer, announced today it has
completed the first drawdown on October 26, 2012 of $35 million under
its previously announced $75-million, five-year credit facility with
The Bank of Nova Scotia, as Administrative Agent and Lead Arranger;
Commonwealth Bank of Australia, as Documentation Agent; and Caterpillar
Financial Services, as Lender and core lease provider (see press
release dated February 13, 2012).


The project continues to meet its budget and scheduled milestones for
commissioning of the spodumene circuit by the end of 2012. During the
past few weeks, pre-stripping of the deposit and construction of the
first phase of the Tailings Management Facility (TMF) have been under
way. Last week, the Company began mining operations in a series of
blasts that excavated about 80,000 tonnes of waste rock to expose the
lithium-bearing deposit and provide material for the TMF containment
berms, mine-haulage roadbed and crusher access ramp. Over the next six
weeks, the Company anticipates excavating more than 600,000 tonnes of
waste rock in order to undertake the initial phase of mining and
spodumene plant commissioning scheduled for December, 2012.


In the process plant area, the main high-voltage power line from Hydro
Quebec has been completed and connected to the plant electrical
sub-station. The plant's 120-kV transmission line was connected to the
grid this past weekend. The pyrometallurgical kiln (approximately 30
metres in length and weighing 200 tonnes) has been installed. The
hydrometallurgical tanks and associated process equipment for the
production of battery-grade lithium carbonate are now being put into
place. (The link to the Photo Gallery and images of the mine and
process plant construction is provided below.)


Global lithium markets, meanwhile, continue to display the price
strength that characterized the industry in 2011 and early 2012 when
major producers such as SQM, FMC Lithium and Rockwood (Chemetal)
increased prices by 10% to 20%. Rockwood and FMC Lithium both announced
butyllithium price increases between 4% and 8% on October 15, 2012. FMC
also noted that its lithium metal prices were being increased by 10%.


In connection with the financial close of the credit facility and in
consideration of the partial financial guarantee from Investissement
Quebec, four million Common Share purchase warrants were issued to
Investissement Quebec. As previously announced, each warrant entitles
the holder to purchase one Common Share at a purchase price of $1.50
per Common Share and is exercisable at any time from the 25th month through the 60th month following the coming into force of the financial guarantee from
Investissement Quebec and in limited other circumstances.


About Canada Lithium Corp.


The Company holds a 100% interest in the Quebec Lithium Project near Val
d'Or, the geographical heart of the Quebec mining industry. It is in
the midst of building an open-pit mine and processing plant on-site
with estimated capacity to produce approximately 20,000 tonnes of
battery-grade lithium carbonate annually. Metallurgical tests have
produced battery-grade lithium carbonate samples. Lithium carbonate is
used in lithium-ion batteries that power consumer electronics (laptops,
tablets, etc.) power-grid storage facilities and electric and hybrid
vehicles. The Company trades under the symbol CLQ on the TSX and on
the U.S. OTCQX under the symbol CLQMF.