Snow Lake Provides Further Update #6

Snow Lake Provides Further Update #6 150 150 Snow Lake Resources
Suite 2905, 77 King St W, Toronto, ON M5K 1A2

SNOW LAKE RESOURCES PROVIDES FURTHER UPDATE

Highlights

  • Exploration, metallurgical test work and PEA commenced
  • Building the Snow Lake team
  • Proposed interim financing
  • Current financial position
  • Capital markets strategy and proposed financing
  • Presentation updated and available online
  • Industry news

October 19, 2020, TORONTO, ONT. – SNOW LAKE RESOURCES LTD. (“Snow Lake”, “SNOW” or the “Company”)  is pleased to provide the following operational and corporate update:

Exploration, metallurgical test work and PEA commenced

With the current funds and the proposed fundraising described below, the Company intends to complete the Phase 2 ore sorting study which began in August 2020, as well as complete the UAV Drone survey described in our news release of October 13th, 2020. Most importantly the funds will allow the company to move the Thompson Brothers Lithium property towards PEA with phase 2 metallurgical studies commenced and Engineering, Procurement and Construction groups shortlisted.
To this end, the Company has engaged ABH Engineering’s Brent Hilscher to oversee the work.

Below is a list of technical activities that are planned for 2020-2021

Activity 1: Phase 2 Ore Sorting Study (ABH Engineering) – 2020
Activity 2: Metallurgy Test Program and Mill Design  (ABH Engineering) – 2020
Activity 3: NI43-101 Technical Report – PEA (ABH Engineering) – 2021
Activity 4: UAV Detailed Magnetometry (EarthEx) – 2021
Activity 5: Resource Drilling – 4000 metres – 2021 (Winter)
Activity 6: Prospecting/Mapping (Snow Lake Resources) – 2021
Activity 7: 43-101 Technical Report – PFS (ABH Engineering) – 2021
Activity 8: Anomaly Diamond Drilling – 4000 metres – 2021 (Fall)

Changes to management

The Board of Snow Lake advises that Mr. Derek Knight will be stepping down from his role as CEO and will assist in business development through this transformational period as further described later in this update.
The Board wishes to extend its sincere thanks to Derek, who led the Company through a challenging period in the lithium market and a difficult operating environment. Importantly, Derek led a process that achieved a favourable restructure that has put Snow Lake in the position to now capitalise on the fundamental shift to Lithium in the North American market.
The company will be providing further updates as we finalise the appointments of the incoming CEO and COO. The board is seeking officers that it believes will be the best fit for the Company in its current stage with a focus on achieving  a NASDAQ listing and simultaneously advancing the project to production.

Presentation
The presentation has been updated and is available to be viewed at http://snowlakeresources.com/presentation/

Current Financial Position

As of business close October 16, 2020 the Company’s cash position was;
Cash – $65,116.24
Liabilities – $288,819.05 (These debts are from persons and other company’s friendly to the Company.  Some of the debt is to be settled during the next equity financing, whereas ~$206,000 is a result of the company formation and are not currently requested to be repaid.  All of the debt is interest free.)

Current shares OS – 65,040,072
Warrants (@30c – 45c) – 2,679,650
Options (@ 50c) – 3,300,000

Capital Markets Strategy and Proposed Financing

Following a comprehensive analysis and discussion, the Snow Lake board has decided to bypass the TSX and CSE in favour of listing the Company directly onto NASDAQ. Our reasoning behind this decision was multi-faceted, but the key determinants were:

  • Valuation: the board believes that Snow Lake would command a higher valuation at IPO on NASDAQ vs. TSX and CSE, resulting in significantly less dilution, and potentially a more favourable outcome for shareholders. This view is supported by the superior forward multiples existing on NASDAQ (PE and EV/EBITDA).

 

  • Further supporting the above, Snow Lake will gain maximum market advantage by positioning itself as a technology materials provider with a secure supply chain, as opposed to a miner. NASDAQ connotes “technology” and immediately reflects this proposition. This would provide Snow Lake with a differential advantage in North American markets.

 

  • Consolidation in this sector is a very real possibility for Snow Lake, but this requires a platform offering universal appeal. A NASDAQ listing affords Snow Lake the opportunity to target a global investor base and immediately establish significant US liquidity; necessary to target companies and asset owners interested in an equity based takeout.

 

  • Snow Lake’s assets are in North America and many of its potential customers are based in the US. The US Markets provide natural proximity to our asset base and potential supply chain partners.

 

  • The TSX and CSE have seen a profusion of small cap “battery mineral” companies, This dynamic does not presently exist on NASDAQ, which provides us the opportunity to be one of a handful “pure play” lithium companies.

Snow Lake is currently in discussion with investment bankers who have expressed interest in working with Snow Lake on its NASDAQ listing.

Separately, Snow Lake is currently raising a bridge note in the amount of $500,000. The note will be an unsecured convertible note led by one of the existing investors. The round will be open to eligible current shareholders, and will potentially include one or two strategic institutional investors.
Shareholders who would like to participate are encouraged to reach out via email to derek@snowlakeresources.com before November 15, 2020.

The basic terms of the note will be as follows
Raise amount – ~$500,000
Loan type – Convertible Unsecured loan
Conversion price – 20% below the next qualified offering price.
Interest – the greater of 12% p.a. or WSJ prime +7% payable upon maturity
Maturity – 24 months
Eligibility – Accredited Investors or Investors who meet an exemption status.
Minimum investment – $25,000

Exciting times lay ahead for Snow Lake, not only with respect to the NASDAQ listing, but also in relation to our strategy to supply lithium to the North American market.

It is our intention to conduct a series of investor presentations in coming weeks and to provide further updates to investors. Please do not hesitate to contact derek@snowlakeresources.com should you wish to discuss any aspect of the above.

Industry news

Snow Lake Resources is strategically located along a rail route, and accessible to the major Automobile Manufacturers in North America.
The Canadian Government has announced plans to establish an entire industrial chain, from mining to battery manufacturing and production of EVs, as part of its post‐pandemic economic recovery strategy.

Already, the Canadian and Ontario governments have reached agreements to partner with Ford Motor Co. to invest C$1.95 billion in its Oakville and Windsor plants, with the deal including C$1.8 billion dedicated to the production of five EVs as well as battery assembly.

“Today, the discussion starts about how we use our lithium in Québec; our nickel in Sudbury; our cobalt in northern Ontario; our aluminum from Québec and British Columbia – to put Canadians to work,” Unifor President Jerry Dias said Tuesday.

Among the world’s top 10 vehicle producers, Canada produced more than 1.3 million vehicles in 2016, employing 130,000 workers, according to the Canadian Vehicle Manufacturers’ Association.

The announcement by the Canadian Government has highlighted the potential for the nation to play a leading role in the EV revolution, requiring secure supplies of key battery materials such as lithium from within its own borders.

Meanwhile in Québec, Economy Minister Pierre Fitzgibbon has stated the province is ready to invest up to C$1.4 billion to establish its battery sector, with projections of total investment exceeding C$7 billion.   “Once and for all, we are going to take our natural resources and transform them into a value‐added product,” Mr Fitzgibbon told Le Journal de Québec.

These government moves follow the Tesla ‘Battery Day,’ in which the leading EV maker emphasized its plans to source its clean and green lithium supply from North America. Benchmark Mineral Intelligence has estimated Tesla’s 3 terawatt‐hour battery capacity target alone would require an additional 2 million tonnes per annum of lithium by 2030.

Tesla recently announced plans to invest in lithium mining.
https://financialpost.com/commodities/mining/tesla-aims-to-mine-its-own-lithium-in-nevada-after-dropping-plan-to-buy-miner
Tesla signs a five-year deal to have access to up to 1/3rd of Piedmonts lithium supply
https://www.juniorminingnetwork.com/junior-miner-news/press-releases/2224-nasdaq/pll/85255-piedmont-lithium-signs-sales-agreement-with-tesla.html

ON BEHALF OF THE BOARD

Signed “Derek Knight”
Derek Knight
Interim CEO

For further information, please contact:
Derek Knight
Derek@SnowLakeResources.com

Forward-Looking Statements:
Certain statements in this document are or maybe “forward-looking statements” and represent Snow Lake’s intentions, projections, expectations or beliefs concerning among other things, future exploration activities. The projections, estimates and beliefs contained in such forward looking statements necessarily involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Snow Lake Resources Ltd, and which may cause Snow Lake’s actual performance in future periods to differ materially from any express or implied estimates or projections. Nothing in this document is a promise or representation as to the future. Statements or assumptions in this document as to future matters may prove to be incorrect and differences may be material. Snow Lake Resources Ltd does not make any representation or warranty as to the accuracy of such statements or assumptions.