Canada Lithium Corp. Project Update; Drilling Intersects 66.3 Metres Grading 1.29% Li2O

Toronto, July 5, 2010 — Canada Lithium Corp. (TSX: CLQ; U.S. OTCQX: CLQMF) announced today that the major components of the definitive Feasibility Study (FS) for the re-development of the Quebec Lithium mine are now under way and on schedule for completion in the First Quarter 2011.

The major components of the FS are as follows:

Resource Drilling Program:
The program, aimed primarily at testing extensions of the known resource both at depth and along strike, also includes some infill drilling for increased resource definition within the initial pit design. The program was initiated in late April and 49 holes totalling 6,724 meters have been completed to date. The assay results for the program will be completed by August 2010 and an updated NI-43-101 resource report will be available in October 2010.

Some highlights of the assay results received to date are as follows: http://www.canadalithium.com/

Western Lithium is developing the Kings Valley, Nevada lithium deposit into potentially one of the world’s largest strategic, scalable and reliable sources of high quality lithium carbonate.  The Company is positioning itself as a major U.S.-based supplier to support the rising global demand for lithium carbonate that is expected from the increased use of mobile electronics and hybrid/electric vehicles.
One of the world’s largest knownlithium deposits
•Located in the U.S.
•Cost Competitive
•Excellent infrastructure
•Experienced team of mine builders
•Development stage project to coincide with rising demand
•Scalable project that can grow to meet market demand
•Focused lithium investment

Today, even though lithium products are widely used in households, factories and laboratories, lithium’s presence often goes unrecognized. Lithium may be as close to the average person as a medicine chest, a television, a swimming pool, or a calculator. Lithium is found in minerals, clays, and brines located in various parts of the world. High-grade lithium ores and brines are the present sources for all commercial lithium operations. Economical brine sources of lithium were rare until several salars in the Andes Mountains of South America were discovered to contain significant deposits of lithium salts.

The salars are large, dry lakebeds where the brines are located just under a layer of crusted salt deposits. The areas are remote and inhospitable. To make them productive requires a considerable investment in research, exploration, and transportation of personnel and materials. However, the concentrations of lithium in these brine deposits range from 200 to 2000 ppm and can be further concentrated using solar evaporation. Contributing to efficient solar evaporation and concentration of the brines are the low rainfall and humidity, high winds and elevations, and relatively warm days in the area of the salars. When such conditions are present, highly concentrated brines can be produced at reasonable cost and used as feed stock for a plant making lithium carbonate.

In 1995, two important breakthroughs took place in the development of a brine-based resource for lithium. While still mining spodumene from its North Carolina mine, FMC Lithium purchased the Salar del Hombre Muerto, an Argentine salar containing high uniform concentrations of lithium with low levels of other contaminants. Concurrently, FMC perfected and commercialized a selective purification process which extracts lithium chloride from the salar brine in a nearly pure form with minimal processing.

The Salar del Hombre Muerto is located in the high Andes at about 13,200 feet above sea level, about 850 miles northwest of Buenos Aires. The location is convenient to major rail lines and seaports. Covering a smaller area than most salars of the region, it contains lithium brines at depths much greater than its neighbors. Lithium reserves are sufficient for well over 75 years. The Salar del Hombre Muerto area also contains plentiful fresh water needed by the selective purification process.

Selective purification uses low-cost raw materials housed in modular units. FMC has installed production facilities for both lithium chloride and lithium carbonate from the Salar del Hombre Muerto.

For further information please visit http://www.fmc.com/ or http://www.fmclithium.com/

Salar de Uyuni is the world’s largest salt flat exceptionally rich in lithium. This deposit contains 35% of the world’s lithium reserves, which has yet to be extracted. It is located in Bolivia. It will take around 100 years or more to extract the ore.  There are other deposits in Bolivia that could increase this figure to 50% of the world’s reserves but this figure still has to be confirmed.