Under the deal, Lithium will receive an initial payment of $1.25m, and 500,000 common shares of Pathion stock at the closing.
Pathion will hold $1m in escrow and pay it to Lithium on the first anniversary of the closing of the deal.
The transaction is expected to be completed by the end of September 2014.
Pathion CEO Michael Liddle said: "PATHION’s control and eventual use of these strategic North American based assets will help to ensure a steady supply of these precursors for use in our advanced energy chemistries including our lithium-rich anti-perovskite (LiRAP) solid-state electrolyte.
"We look forward to working with the esteemed Lithium Corporation geologists on the development of these claims and the identification of additional prospects for energetic materials."
Located within the Shushwap Metamorphic Complex in British Columbia, Canada, the BC Sugar property is said to be in a geological environment favorable for the formation of flake graphite deposits.
Lithium plans to continue to progress its assessment of the Mount Heimdal graphite property, and 25% interest in Nevada-based Summa.
