Bacanora Minerals Interim Results Released

RNS Number : 6316Q

Rare Earth Minerals PLC

01 March 2016

 

Rare Earth Minerals Plc.

("Rare Earth Minerals", "REM" or "the Company")

Bacanora Minerals Interim Results Released

Rare Earth Mineral Plc (AIM: REM) is pleased to announce that Bacanora Minerals Ltd ("Bacanora") the lithium company which is developing the Sonora Lithium  Project in northern Mexico, has today announced its interim results for the six months ended 31 December 2015. The full news release is available at:

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/12717673.html

REM owns a direct interest of 17.19% of Bacanora, and 30% of the Mexalit and Megalit companies which hold various concessions. Further details of REM's ownership of Bacanora and the Sonora Lithium Project are detailed below.

Highlights of the Bacanora release include:

·      Pre-feasibility study ("PFS") focused on designing a plant potentially capable of delivering up to 35,000 tonnes per annum of lithium carbonate at Sonora Lithium Project - on course to be completed in the near term.

·      Subject to successful PFS Bacnanora will commence definative feasibility study ("DFS").

·      337% increase in the Indicated portion of the Mineral Resource Estimate ('MRE') at Sonora to 5.0 million tonnes ("Mt") lithium carbonate equivalent ("LCE") contained in 364 Mt of clay, at a Li grade of 2,600 ppm compared to previous Indicated resource of 1.14 Mt LCE contained in 95 Mt of clay, at a Li grade of 2,200 ppm

·      Major positive implications for mine planning and life of mine

·      Latest MRE upgrade follows a 19 hole infill drilling programme (approximately 4,000 metres) which was completed during the period and forms part of the ongoing PFS

·      Completion of a private placement financing of approximately CAD$17.8 million (£8.8 million) to fully fund, lithium engineering designs, pilot plant upgrade, DFS project work and metallurgical testwork during 2016.

·      Cash balance at the end of the period CAD$23.2 million (£11.5 million).

The Sonora Lithium Project and Details of REM's ownership:

REM owns a direct interest of 17.19% of Bacanora. The Sonora Lithium Project is comprised of the following lithium properties:

·      La Ventana, La Ventana 1, and Megalit concessions, which are 100 per cent. owned by Minera Sonora Borax S.A. de C.V.("MSB"), a wholly-owned subsidiary of Bacanora; REM, through its direct interest of 17.19% of Bacanora, has an indirect interest in these concessions of 17.19%.

·      El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions, which are held by Mexilit S.A. de C.V. ("Mexilit"). REM has a 30% direct interest in Mexalit through its Joint Venture with Bacanora, and when combined with REM's direct interest of 17.19% in Bacanora, has a total economic interest in Mexalit of 42.04%.

·      The Buenavista, and San Gabriel concessions, which are held by Megalit S.A de C.V ("Megalit"). REM has a 30% direct interest in Megalit through its Joint Venture with Bacanora, and when combined with REM's direct interest of 17.19% in Bacanora, has a total economic interest in Megalit of 42.04%.

Qualified Person:

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

- Ends -

For further information please contact: 

Rare Earth Minerals plc                                                                       [phone]

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)                                                [phone]

James Joyce

Mark Leonard

Square1 Consulting                                                                             [phone]

David Bick

Brain Alexander

Glossary:

"deposit"	coherent geological body such as a mineralised body
"exploration"	method by which ore deposits are evaluated
"definitive feasibility study"	A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production."
"grade"	relative quantity or the percentage of ore mineral or metal content in an ore body
"Indicated Mineral Resource" or "Indicated"	is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve. Mineralisation may be classified as an Indicated Mineral Resource when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. An Indicated Mineral Resource estimate is of sufficient quality to support a Pre-Feasibility Study which can serve as the basis for major development decisions.
"Inferred Mineral Resource" or "Inferred"	is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral Resources must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed Pre-Feasibility or Feasibility Studies, or in the life of mine plans and cash flow models of developed mines.
"Kt"	thousand tonnes
"life of mine"	number of years that an operation is planning to mine and treat ore, taken from the current mine plan.
"lithium"	a soft, silvery-white metallic element of the alkali group, the lightest of all metals, with a chemical symbol Li.
"lithium carbonate"	This is an inorganic compound, the lithium salt of carbonate with the formula Li2CO3. Lithium carbonate is an important industrial chemical. It forms low-melting fluxes with silica and other materials. Glasses derived from lithium carbonate are useful in ovenware. Lithium carbonate is a common ingredient in both low-fire and high-fire ceramic glaze. Its alkaline properties are conducive to changing the state of metal oxide colorants in glaze particularly red iron oxide (Fe2O3). When added to aluminium trifluoride, it forms LiF, which gives a superior electrolyte for the processing of aluminium. It is also used in the manufacture of most lithium-ion battery cathodes, which are made of lithium cobalt oxide.
"lithium carbonate equivalent" or "LCE"	LCE is the industry standard terminology for, and is equivalent to, Li2CO3.  1 ppm Li metal is equivalent to 5.32 ppm LCE/ Li2CO3. Use of LCE is to provide data comparable with industry reports and assumes complete conversion of lithium in clays with no recovery or process losses.
"metallurgical"	Describing the science concerned with the production, purification and properties of metals and their applications
"mine planning"	The main purpose of mine planning is to ensure the enduring sustainability of the mines mining activity whilst achieving economic profitability.  Planning incorporates a coherent set of forecast figures reflecting the key aspects of company activity and desirable and possible directions for development. These forecasts provide a comprehensive framework for establishing the company's major strategic guidelines and the resources required for their implementation. This is what the strategic and operating plan is designed to achieve. Planning is seen as a system of data indicating the future development of the company as envisaged by its senior management.
"mineral resource" or "resource"	Is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.
"mineralisation"	Process of formation and concentration of elements and their chemical compounds within a mass or body of rock
"Mt"	Million tonnes
"pit shell"	The pit shell is the outer limit or extremity of the defined area where the mining is to take place. The pit shell establishes the quality, position of the deposit, and determines the extent in three dimensions of the potential mining operation.
"ppm"	parts per million
"pre-feasibility study"	A comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established and an effective method of mineral processing has been determined, and includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, economic, social, and environmental factors and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve
"Sonora Lithium Project"	The Sonora Lithium Project is comprised of the following lithium properties: La Ventana lithium concession, which is 100 percent owned by Bacanora; El Sauz and Fleur concessions, which are held by Mexilit S.A. de C.V. ("Mexilit"); and the Megalit concession, which is held by Megalit S.A de C.V ("Megalit"). Mexilit and Megalit are owned 70 percent by Bacanora Minerals Ltd and 30 percent by REM.
"recovery"	Proportion of valuable material obtained in the processing of an ore, stated as a percentage of the material recovered compared with the total material present
"tonne"	A metric ton

Lithium Classification and Conversion Factors

Lithium grades are normally presented in percentages or parts per million (ppm). Grades of deposits are also expressed as lithium compounds in percentages, for example lithium oxide (Li₂O) content or per cent or lithium carbonate (Li₂CO₃) content or percent. Assuming the lithium content in the deposit is converted to lithium carbonate, using the conversion rates in the table included further below to get an equivalent Li₂CO₃ value in per cent. Use of LCE assumes 100% recovery and no process losses in the extraction of Li₂CO₃ from the deposit.

Lithium Mineral Resources and Reserves are usually presented in tonnes of LCE or Li. The standard conversion factors are set out in the table below:

Conversion Factors for Lithium Compounds and Minerals

Convert from		Convert to Li	Convert to Li2O	Convert to Li2CO3
Lithium	Li	1.000	2.153	5.323
Lithium Oxide	Li2O	0.464	1.000	2.473
Lithium Carbonate	Li2CO3	0.188	0.404	1.000

 

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