Canada Lithium Corp. has signed a five-year lithium carbonate offtake agreement with Tewoo-ERDC (Tianjin Products and Energy Resources Development Co. Ltd.), one of China’s larger commodities traders, for a minimum annual commitment of 12,000 metric tons (mt) of battery-grade lithium carbonate. The five-year agreement also includes a provision for the formation of a Sino-Canadian marketing joint venture (SFJV) to be incorporated as Tewoo Québec Lithium Co. Ltd. The agreement calls for Canada Lithium to deliver lithium carbonate FOB to the Port of Vancouver or Port of Prince Rupert, B.C., beginning March 2013.

Delivery of the first 12,000 mt is scheduled to occur over the course of calendar year 2013. Following 2013 and for the four years thereafter, Tewoo has committed to import a minimum 12,000 mt/y with a provision to increase the offtake volumes by as much as 20% per year over the previous year’s deliveries. In the event Tewoo triggers the 20% clause in 2014, Canada Lithium could deliver up to a maximum 14,400 mt during calendar year 2014. Prices will be adjusted quarterly based on actual market prices. Canada Lithium’s mine and processing plant near Val d’Or, Québec, currently approaching the end of construction and scheduled to enter the commissioning phase late this year, will have an annual capacity to produce approximately 20,000 mt of lithium carbonate.

“The agreement with Tewoo secures a market for a significant portion of our annual production and demonstrates that China is the fastest growing consumer of lithium carbonate products. Having a long- term, strategic partnership with the Tewoo group will provide significant support for our product sales and distribution in China,” said Canada Lithium CEO and President Peter Secker. “Negotiations with other parties for additional lithium carbonate tonnages are ongoing.”

The lithium markets remain robust with the current China spot price at approximately $6,600/mt, according to Asian Metal, a global commodities information company. The registration of the SFJV remains subject to government approvals in China.

The project continues to meet its budget and schedule milestones for commissioning of the spodumene circuit by the end of 2012. Pre-commissioning tests on the larger mechanical and electrical equipment have started. Pre-stripping of the deposit and construction of the first phase of the Tailings Management Facility are ongoing as scheduled.