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Press Release by SQM
Santiago, Chile. August 13, 2018.- Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) informs that together with its subsidiary SQM Potasio S.A. (SQM Potasio) it has signed a contract (the "Contract") with Minera Exar (Exar), Lithium Americas (TSX: LAC; NYSE: LAC) and GFL International Co. Ltd. (Ganfeng).
Pursuant to this Contract, (i) SQM Potasio will sell to Ganfeng its entire stake and irrevocable contributions in Exar, company which owns Caucharí-Olaroz lithium project in the Jujuy province of Argentina (the "Project"), (ii) Exar will prepay the total amount of the loans received from SQM Potasio; and (iii) Exar will pay SQM for the services it provided to Exar during the development of the Project.
According to the Contract, SQM and SQM Potasio will receive an approximate amount of US$87.5 million. The Contract is subject to certain conditions and should close during the fourth quarter of this year. In addition, SQM Potasio and a subsidiary of Ganfeng will sign an agreement in which a deferred amount of US$50 million will be paid to SQM Potasio, subject to compliance with certain product sales targets of the Project.
SQM's CEO, Patricio de Solminihac, commented: "We expect the lithium market to continue its strong growth, and SQM wants to take advantage of this opportunity to develop projects on a large scale. For this reason, we will focus our efforts on our expansions in Chile, where we expect to almost quadruple our capacity in the coming years. We will also focus our efforts in Australia, where we see significant production potential given the size of the existing resources."
He continued, "We believe that Ganfeng joining the Project is good news. Ganfeng is a well-known player in the industry, and will contribute positively to the Project. We maintain our good opinion about the Project, and will continue our involvement in it, not only because of the future payment involved with this transaction, but also to support LAC and Ganfeng with the continuity of the Project."
Finally, he said, "We would like to thank our partner LAC, the employees and the management team of Exar, the communities, the suppliers, and especially the authorities of Jujuy Province, the government of Argentina and all stakeholders, with whom we worked over the past two years. Their reception and support have always been very important for the development of the Project."