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Canada Lithium Completes Initial Debt Drawdown; Commences Tailings Construction and Pre-stripping at Quebec Lithium Project

October 29, 2012

TSX: CLQ; U.S. OTC: CLQMF

TORONTO, Oct. 29, 2012 /CNW/ – Canada Lithium Corp. (TSX: CLQ) (U.S.
OTC: CLQMF), a ‘clean-tech’ mine developer, announced today it has
completed the first drawdown on October 26, 2012 of $35 million under
its previously announced $75-million, five-year credit facility with
The Bank of Nova Scotia, as Administrative Agent and Lead Arranger;
Commonwealth Bank of Australia, as Documentation Agent; and Caterpillar
Financial Services, as Lender and core lease provider (see press
release dated February 13, 2012).

The project continues to meet its budget and scheduled milestones for
commissioning of the spodumene circuit by the end of 2012. During the
past few weeks, pre-stripping of the deposit and construction of the
first phase of the Tailings Management Facility (TMF) have been under
way.  Last week, the Company began mining operations in a series of
blasts that excavated about 80,000 tonnes of waste rock to expose the
lithium-bearing deposit and provide material for the TMF containment
berms, mine-haulage roadbed and crusher access ramp. Over the next six
weeks, the Company anticipates excavating more than 600,000 tonnes of
waste rock in order to undertake the initial phase of mining and
spodumene plant commissioning scheduled for December, 2012.

In the process plant area, the main high-voltage power line from Hydro
Québec has been completed and connected to the plant electrical
sub-station.  The plant’s 120-kV transmission line was connected to the
grid this past weekend. The pyrometallurgical kiln (approximately 30
metres in length and weighing 200 tonnes) has been installed. The
hydrometallurgical tanks and associated process equipment for the
production of battery-grade lithium carbonate are now being put into
place. (The link to the Photo Gallery and images of the mine and
process plant construction is provided below.)

Global lithium markets, meanwhile, continue to display the price
strength that characterized the industry in 2011 and early 2012 when
major producers such as SQM, FMC Lithium and Rockwood (Chemetal)
increased prices by 10% to 20%. Rockwood and FMC Lithium both announced
butyllithium price increases between 4% and 8% on October 15, 2012. FMC
also noted that its lithium metal prices were being increased by 10%.

In connection with the financial close of the credit facility and in
consideration of the partial financial guarantee from Investissement
Québec, four million Common Share purchase warrants were issued to
Investissement Québec.  As previously announced, each warrant entitles
the holder to purchase one Common Share at a purchase price of $1.50
per Common Share and is exercisable at any time from the 25(th) month through the 60(th) month following the coming into force of the financial guarantee from
Investissement Québec and in limited other circumstances.

About Canada Lithium Corp.

The Company holds a 100% interest in the Québec Lithium Project near Val
d’Or, the geographical heart of the Québec mining industry. It is in
the midst of building an open-pit mine and processing plant on-site
with estimated capacity to produce approximately 20,000 tonnes of
battery-grade lithium carbonate annually. Metallurgical tests have
produced battery-grade lithium carbonate samples. Lithium carbonate is
used in lithium-ion batteries that power consumer electronics (laptops,
tablets, etc.) power-grid storage facilities and electric and hybrid
vehicles.  The Company trades under the symbol CLQ on the TSX and on
the U.S. OTCQX under the symbol CLQMF.

Cautionary Statement Regarding Forward-Looking Information

This press release contains “forward-looking information” within the
meaning of Canadian securities legislation. Forward-looking information
is based upon the Company’s beliefs, estimates and opinions as at the
date of this press release, which the Company believes are reasonable,
but no assurance can be given that these will prove to be correct.
Furthermore, the Company undertakes no obligation to update or revise
forward-looking information contained herein if these beliefs,
estimates and opinions or other circumstances should change, except as
otherwise required by applicable law.

Forward-looking information relates to future events or to future
conditions, performance or results of operations and reflects current
expectations or beliefs regarding such matters including, but not
limited to, information or statements with respect to: (i) the amount
of mineral resources; (ii) exploration, development and production
activities, including information regarding the potential
mineralization and resources; (iii) the amount of future output over
any period; (iv) net present value and internal rates of return of the
mining operation; (v) assumptions relating to capital costs, operating
costs and other cost metrics; (vi) assumptions relating to gross
revenues, operating cash flow and other revenue metrics; (vii)
assumptions relating to future price and demand for lithium and other
macroeconomic metrics; (viii) exploration and development plans,
including anticipated costs and timing thereof, time frames for
completion, and anticipated time to production; (ix) mine potential and
expected mine life; and * sources of and anticipated financing
requirements.

All information other than matters of historical fact may be
forward-looking information. In some cases, forward-looking information
can be identified by the use of words such as “seek”, “expect”,
“anticipate”, “budget”, “plan”, “project”, “estimate”, “assume”,
“continue”, “forecast”, “intend”, “believe”, “predict”, “potential”,
“target”, “strategy”, “goal”, “may”, “could”, “would”, “might”, or
“will” and similar words or phrases (including negative variations)
suggesting future outcomes or statements regarding an outlook.

Forward-looking information is based upon certain assumptions by the
Company or its consultants and other important factors that, if untrue,
could cause the actual results, performances or achievements of the
Company to be materially different from future results, performances or
achievements expressed or implied by such information. Such information
is based on numerous assumptions regarding present and future business
strategies and the environment in which the Company will operate in the
future, including the price of lithium, anticipated costs and ability
to achieve goals. Certain important factors that could cause actual
results, performances or achievements to differ materially from those
in the forward-looking information include, but are not limited to: (i)
required capital investment and estimated workforce requirements; (ii)
estimates of net present value and internal rates of return; (iii)
future demand and market prices for lithium; (iv) receipt of regulatory
approvals on acceptable terms within commonly experienced time frames;
(v) anticipated timelines for the commencement of production; (vi)
anticipated timelines for community consultations and the impact of
those consultations on the regulatory approval process; and (vii)
future exploration plans and objectives.

By its nature, forward-looking information involves known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements, or industry results, to differ materially
from those expressed or implied by such forward-looking information.
Some of the risks and other factors that could cause actual results to
differ materially from those expressed in the forward-looking
information contained in this press release include, but are not
limited to, risks and uncertainties relating to: (i) the interpretation
of drill results, the geology, grade and continuity of mineral deposits
and conclusions of economic evaluations; (ii) results of feasibility
studies, and the possibility that future exploration, development or
mining results will not be consistent with the Company’s expectations,
(iii) the outcome of litigation in which the Company is or may in the
future become involved; (iv) risks relating to possible variations in
reserves, grade, planned mining dilution and ore loss, or recovery
rates and changes in project parameters as plans continue to be
refined; (v) mining and development risks, including risks related to
accidents, equipment breakdowns, labor disputes (including work
stoppages and strikes) or other unanticipated difficulties with or
interruptions in exploration and development; (vi) risks related to the
inherent uncertainty of production and cost estimates and the potential
for unexpected costs and expenses; (vii) risks related to future
commodity demand and price and foreign exchange rate fluctuations;
(viii) the uncertainty of profitability based upon the cyclical nature
of the industry in which the Company operates; (ix) risks related to
failure to obtain adequate financing on a timely basis and on
acceptable terms or delays in obtaining governmental approvals or in
the completion of development or construction activities; * risks
related to environmental regulation and liability; (xi) political and
regulatory risks associated with mining and exploration; (xii) risks
related to the uncertain global economic environment; and (xiii) other
risks and uncertainties related to the Company’s prospects, properties
and business strategy. Although the Company has attempted to identify
important factors that could cause actual results or events to differ
materially from those described in the forward-looking information,
readers are cautioned that this list is not exhaustive and there may be
other factors that the Company has not identified. Readers are
cautioned not to place undue reliance on forward-looking information
contained in this press release. All forward-looking information
contained in this press release or incorporated by reference herein is
expressly qualified by this cautionary note.

SOURCE CANADA LITHIUM CORP.


Source: PR Newswire