TNR Gold creates lithium-rare metals company

After scooping up some lithium and rare metals projects in Ontario and Nevada recently, TNR Gold (TNR-V) is spinning out its new found assets into a subsidiary company to be called International Lithium.

TNR president and CEO, Gary Schellenberg, says the subsidiary will be marketed as a focused and dominant player in the lithium and rare metals business. The company sees a growing market for rare earths and lithium, needed for high-powered portable devices like cell phones and laptops, hybrid cars and lithium batteries, which are thought of as a greener alternative.

“We believe it will provide the necessary visibility and efficiency that potential joint venture partners are looking for,” Schellenberg said in a statement.

TNR says it will distribute up to 75% of the securities of International Lithium to TNR shareholders. TNR will also apply to have the new company listed on the TSX Venture Exchange.

It’s expected that present TNR shareholders will be entitled to receive one share and one full tradable warrant of International Lithium for every four shares held of TNR. Warrants will be exercisable at a price equal to a 50% premium to the company’s listing price for a two-year period.

In March TNR staked the Forgan Lake and Niemi properties near Thunder Bay, Ont.

Forgan Lake was explored for lithium and rare earths in the 1950s. There are four pegmatites there, known as No.1, 2, 3, and 4. Pegmatite is a coarse-grained igneous rock that can host economic amounts of lithium amongst rare metals.

Niemi is located about 27 km southeast of Forgan. Drilling in the 1950s traced pegmatite for 128 metres and historic drilling has shown grades of lithium.

In April, TNR acquired another lithium property but this time in Nevada, just 34 km from Chemetall-Foote’s Silver Peak mine, which is the only lithium brine producer in North America. The company has staked the Fish Lake Valley property, which has geological features similar to those which have acted as a trap for lithium brines in Clayton Valley.

Fish Lake Valley was drilled by the US geological society in 1979 as a part of a lithium study. It was determined that the level of lithium in the water there was similar to that in Clayton Valley.

TNR’s gold projects are located in Argentina and Alaska. The company’s primary focus is Argentina where it’s developing three key projects: Eureka, El Salto and El Tapau.

TNR shares were trading at 12¢ in Toronto today, up half a penny from yesterday, on a trading volume of 187,800 shares. The company has nearly 78 million shares outstanding and a 52-week trading range between 3¢ and 33¢.