It is reported in the United States Geological Survey (“USGS”) Open-File Report 82-415 (1982) that a historical drill-hole (CV-5) is located on the property. CV-5 was drilled to a depth of 479 feet and encountered lithium values in ground water ranging from 24 parts per million (“ppm”) to 110 ppm, averaging 69.3 ppm for a group of 11 samples, and averaging 65.75 ppm for another group of 12 samples, analyzed both in the laboratory and in the field. The hole was part of a 1977 regional drilling program carried out by the USGS. The Advantage Lithium JV believes that drilling deeper holes at Clayton NE could intersect additional aquifers potentially hosting brines of similar or better contents of lithium than were encountered in the relatively shallow historical hole.
A 1.5 mile (2.25 kilometer) area of interest applies to Clayton NE and the property is subject to a 3.0% gross overriding royalty (“GOR”). On the 3rd anniversary of the signing of the definitive agreement for Clayton NE, Advantage Lithium’s partner, Nevada Sunrise would have the right to purchase 1.0% of the GOR for US$1,000,000.