LITHIUM EXPLORATION GROUP DISTRIBUTES AUGUST 2017 UPDATE 2 OF 2
15 August 2017 - 1:15PM
InvestorsHub NewsWire
August 15, 2017 -- Phoenix, AZ / Lithium Exploration Group Inc.
(OTCPINK: LEXG) CEO Alex Walsh
updates shareholders on company activities.
Dear Shareholders,
I want to thank all of you for your emails and voicemails over the
past few weeks. We have a lot going on right now and I hope
this second installment is helpful in understanding how far we have
come and where we are headed:
White Top:
Royalty – Our investment in the White Top project in
Louisiana was made as an opportunity to take a financial interest
in a field where we are planning to deploy a commercially
operational SonCav Oil Unit. The investment was made as a
convertible debt to White Top to fund a seismic shoot, which
garnered them an option to purchase the field before May, 15,
2018. Once the seismic shoot is complete and White Top
exercises the option, we may have our investment returned to us or
convert the option into a 3% royalty on gross revenues for the life
of the field.
Internal projections from White Top predict that the total revenue
from this royalty could be between $15 and $18 million over the
next ten years. We have received an independent report
regarding the field as it sits today, which would put that royalty
revenue around $1.5 million. In their report, the geologists
suggest that the proven reserve number could go up significantly
after the seismic shoot has been processed to define more clearly
subsurface structures. We are comfortable with our present
position because we still control the destiny of our long-term
investment and, if our independent geological team does not feel
that the reasonable reserves will generate substantial returns for
LEXG, we can simply take our money back and move on.
Seismic Shoot – The aforementioned seismic shoot is
underway with the drilling of 1000 ‘shot holes’ that will be used
to generate the seismic vibrations that generate the data we are
going to collect. Barring delays due to inclement weather,
all of the data collection will be complete in August, with the
processing and mapping delivered to White Top in October.
Financing Efforts - As I have reported, White Top has been
in the process of raising drilling dollars for the past few months
to initiate the further development of the field while the seismic
is being completed, but it is important to provide clarification on
these efforts. The team at White Top has six shallow drilling
targets that will not change with the delivery of the seismic
data. These targets have been very well defined with the
existing seismic and using other well logs that are already in
place. They have the option but no obligation to drill these
wells. The goal is to drill them to prove up more reserves
and provide more cash flow to support the acquisition, but this is
not a do-or-die effort.
They are still working with a group out of Oklahoma who provided an
LOI in July, and continue to work with another group out of Los
Angeles who is also interested in providing drilling and
acquisition financing. We are not obligated to participate in
that financing as our convertible debt is already set in stone and
will not be diluted regardless of the size of the raise or the
terms. Our only interest and concern is ensuring that the
acquisition is completed before next May, because, until that takes
place, we cannot convert our debt and start receiving royalty
payments. We feel very comfortable with the positioning of
the asset and execution by our partners at White Top.
Ultimately, we look at this project as a great way to generate cash
flow long-term to support our ongoing efforts as a company and
improving our balance sheet.
SonCav Update:
Oil Unit Testing Completion – As you may recall, a year
ago we initiated testing on the SonCav Oil Unit. That testing
took place through March of this year. We were able to
collect hours of useful operational data and test for a number of
different flow rates, temperatures, etc. While we were
testing the operational capabilities, we interviewed many industry
experts (including the team at White Top) to get feedback on their
potential uses for the technology’s many applications. We
were able to quantify present technologies that are able to heat
and circulate oil and have put together a presentation that can be
found on the technology page of our website.
Oil Unit Deployment at White Top – As we completed the
testing, we had identified one of the White Top fields as an ideal
first commercial deployment. They benefit from heating their
sale oil tanks to reduce the risk of paraffin wax build up with
which the SonCav unit is capable of assisting. The goal today
is to have SonCav build a customized unit that can handle the
circulation of oil through a series of tanks at White Top. We will
also be able to collect field data and use it as a show room of
sorts for other interested parties from Canada.
Oil Unit Distribution Efforts – We have initiated outbound
sales efforts to Canadian companies that have the same need for
heating and circulating crude oil at their operations, with the
intent of having more sales that can be executed upon as soon as
the first commercial unit is put into operations. There is no
timetable for this today, but we are certainly hoping to have the
White Top unit put in the field before the end of this
year.
We have come a long way in the last year in cleaning up our balance
sheet and making investments in technology and oil fields that will
have a positive long-term impact. The is a lot of excitement
internally about where we have come and where we are heading and I
hope that these updates are helpful in understanding our vision for
the future and how we plan to build LEXG into a multidimensional
small cap company.
Sincerely,
Alex Walsh
CEO
Lithium Exploration Group
About Lithium Exploration Group
Lithium Exploration Group is a US-based exploration and development
company focused on the acquisition and development potential of
lithium brines and other precious metals that demonstrate high
probability for near-term production. Currently the company is
focused testing its SonCav Technology and the acquisition of oil
and gas related assets. Lithium Exploration Group is traded on the
OTCPINK under the symbol LEXG. Website: www.lithiumexplorationgroup.com.
Safe Harbor Statement
This news release contains "forward-looking statements". Statements
in this press release that are not purely historical are
forward-looking statements and include any statements regarding
beliefs, plans, expectations or intentions regarding the future
testing of the ultrasonic technology.
Actual results could differ from those projected in any
forward-looking statements due to numerous factors. Such factors
include, among others, the inherent uncertainties associated with
mineral exploration and difficulties associated with obtaining
financing on acceptable terms. We are not in control of lithium
prices and these could vary to make development uneconomic. These
forward-looking statements are made as of the date of this news
release, and we assume no obligation to update the forward-looking
statements, or to update the reasons why actual results could
differ from those projected in the forward-looking statements.
Although we believe that the beliefs, plans, expectations and
intentions contained in this press release are reasonable, there
can be no assurance that such beliefs, plans, expectations or
intentions will prove to be accurate. Investors should consult all
of the information set forth herein and should also refer to the
risk factors disclosure outlined in our most recent annual report
for our last fiscal year, our quarterly reports, and other periodic
reports filed from time-to-time with the Securities and Exchange
Commission.
Contact Info
Shanon Chilson
480-641-4790
info@lithiumexplorationgroup.com