Cinovec Lithium Project - Update

RNS Number : 7592O

Rare Earth Minerals PLC

11 February 2016

 

Rare Earth Minerals Plc.

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

Cinovec Lithium Project - Higher Grade, Shallow Lithium Zones Defined 

Rare Earth Mineral Plc (AIM: REM) advises that European Metals Holding Limited ("European Metals"), a company that REM holds a 11.87% equity interest in, has announced that that as part of its development of the Cinovec lithium / tin deposit, it has completed a detailed geological model which has identified shallow, higher grade lithium zones. This geological model will be used, along with recent drill results to update the current mineral resource model and allow the company to investigate targeting these areas in the early years of development. The full European Metals news release dated 11 February 2016 is available at:

http://europeanmet.com/assets/11_February_2016_-_EMH_Geological_Model_-_Final.pdf

Key Points from the announcement:

·      The geological model shows that higher grade lithium mineralisation is hosted preferentially in greisens.

·      The most substantial greisens are developed on the western side of the deposit and have a gentle plunge from surface to the south

·      The geological model will be used to:

§ refine/constrain the existing block model for the Li, Sn and W resource

§ allow for the likely conversion of a greater part of the Cinovec resource from Inferred to Indicated category under JORC guidelines.

§ allow for initial mine planning and scheduling as the Company progresses the project along the development curve.

·      Assay results for next two drill holes due imminently

REM's Chief Executive Officer, Kiran Morzaria, commented: 

"The identification of shallow higher grade material at the Cinovec deposit, we believe, is important for the long term development plan of the project. Scheduling these early within the potential mine plan would have a positive effect on the economics of the project. We look forward to updating the market as this project develops, and with the previously published Scoping Study revealing a potential production cost of approximately $800 per tonne of lithium carbonate, including tin and tungsten credits, the Cinovec deposit represents a potential low-cost producer of lithium carbonate in a strategic location proximate to the downstream market."

Geological Structure of the Cinovec Deposit

The Cinovec deposit has been studied and explored for over 100 years and is relatively well understood.  The lithium-tin-tungsten mineralisation is hosted by a small granite cupola that is sealed off by a competent rhyolite. The deposit formed during late stage magma crystallisation of the granite, when incompatible ore metals remained in vapor-fluid phases that eventually altered the granite into a greisen that contains most of the ore minerals.  The greisens form elongated stacked bodies subparallel with the granite-rhyolite contact.  Because the contact sealed off the fluids, all metals precipitated during cooling in the apical part of the granite, in a zone about 200m wide starting just below the granite-rhyolite contact.

The average grade for the greisen (a quartz-mica-topaz rock completely replacing the original granite) is significantly higher than the surrounding greisenised granite.  A lower degree of alteration produced large volumes of this greisenised granite, where hydrothermal minerals, in particular lithium mica zinnwaldite, replaced some of the originally magmatic minerals.  This volumetrically extensive unit forms most of the upper part of the granite cupola surrounding the greisen bodies.  The greisenised granite is also mineralised in lithium although to a lower degree and in more localised fashion.  The greisens and the greisenised granite are locally cut by quartz veins (usually subparallel with the contact but sometimes steeply dipping) that contain coarse tin and tungsten minerals, cassiterite and wolframite.

ABOUT THE PROJECT

Cinovec is a globally significant lithium and tin deposit with the potential to be a very low cost producer of lithium carbonate.

Key Points

·     One of the largest lithium deposits in Europe

·     Positive Scoping Study completed

·     Potential to be the lowest cost lithium carbonate producer

·     Centrally located to major European end-users

PROJECT OVERVIEW

Cinovec Lithium/Tin Project

European Metals owns 100% of the Exploration Rights to the Cinovec lithium-tin deposit in the Czech Republic. Cinovec is an historic mine incorporating a significant undeveloped lithium-tin resource with by-product potential including tungsten, rubidium, scandium, niobium and tantalum. Cinovec hosts a globally significant hard rock lithium deposit with a total Inferred Mineral Resource of 514.8Mt @ 0.43% Li₂O. Within this resource lies one of the largest undeveloped tin deposits in the world, with total Indicated and Inferred Mineral Resources of 79.7Mt grading 0.23% Sn for 183kt of contained tin. The Mineral Resource estimates are based primarily on over 83,000m of historic drilling and 21.5km of historic underground exploration drifting completed by the Czechoslovakian Government from the 1960s through to the 1980s. The deposit has previously had over 400,000 tonnes trial mined as a sub-level open stope underground mining operation.

A Scoping Study conducted by specialist independent consultants indicates the deposit could be amenable to bulk underground mining. Metallurgical testwork has produced both battery grade lithium carbonate and high grade tin concentrate at excellent recoveries with the Scoping Study revealing a potential production cost of approximately $800 per tonne of lithium carbonate including tin and tungsten credits. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed road adjacent to the deposit, rail lines located 5km north and 8km south of the deposit and an active 22kV transmission line running to the historic mine. As the deposit lies in an active mining region, it has strong community support.

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).

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 as a per cent. lithium oxide (Li₂O) content or per cent. lithium carbonate (Li₂CO₃) content.

Lithium carbonate equivalent ("LCE") is the industry standard terminology for, and is equivalent to, Li₂CO₃. Use of LCE is to provide data comparable with industry reports and is the total equivalent amount of lithium carbonate, 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.

The standard conversion factors are set out in the table below:

Table: 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

- Ends -

For further information please contact: 

Rare Earth Minerals plc                                                                                 [phone]

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)                                                [phone]

James Joyce

Mark Leonard

Square1 Consulting                                                                                        [phone]

David Bick

Mark Longson                                             

 

END

 

 

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