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Canada: Canada Lithium on Target For 2013 Production; To Be First Canadian Lithium Producer

Canada Lithium Corp. (TSX:CLQ)(OTCQX:CLQMF) is on its way to begin lithium carbonate production in 2013, with full annual production totaling 20,000 metric tons, making it Canada’s first lithium producer.

“We’re going to be the only lithium producer in Canada,” Peter Secker, president and chief executive officer said. “There is no other lithium producer in Canada so it’s fairly unique.”

With 20,000 metric tons of lithium carbonate produced annually, Canada Lithium will represent an important chunk of global lithium supply.

“Twenty thousand metric tons a year makes us a significant player, probably 12-13% of the world’s supply,” Secker said. “We’ll start with that and then see how the market grows … if it grows enough we’ll look into expanding in the future.”

The company recently completed a C$75-million five-year debt facility to finance Canada Lithium’s Quebec Lithium open pit mine and process plant in the province’s Val d’Or region – C$60 million of which has been underwritten by Scotiabank, the company said.

Canada Lithium said the remaining C$15-million will be provided by Cat Financial and supported by a partial financial guarantee from Investissement Quebec, a Quebec government agency established to foster economic development.

The Quebec government guarantee applies only to the C$60 million underwritten by Scotia Bank, not CAT’s C$15 million.

Cat Financial has also completed credit approvals to provide up to US$17 million in equipment lease financing for the main components of the mining equipment fleet. The equipment lease is subject to fulfillment of standard conditions precedent to funding, the company said.

Along with strong financial backing, the Quebec Lithium open pit mine is on schedule in terms of commissioning and construction.

“We’re probably around 20% complete in terms of the project itself,” Secker said. “We will be commissioning the Quebec Lithium open pit mine project at the end of 2012.”

Harsh Quebec winters usually have an impact on construction but with a fairly tame winter, plans have gone off without issue.

“We’ve been extremely lucky with the Quebec winter,” Secker said. “It’s been less severe than normal so construction has proceeded extremely well.”

The company increased its mineral resource estimate in early December, with total measured and indicated tonnage reaching 33.2 million metric tons at a lithium oxide grade of 1.19%. Inferred resources totaled 13.7 million metric tons at a lithium oxide grade of 1.21%. The mine life is expected to be 15 years.
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