Update on the Sonora Lithium Project, Mexico

RNS Number : 1902C

Rare Earth Minerals PLC

13 March 2014

 



13 March 2014

Rare Earth Minerals Plc.

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

Update on the Sonora Lithium Project, Mexico

Rare Earth Minerals Plc (LSE AIM: REM)) announces that further to the announcement on 5 December 2013, the definitive joint venture agreement with Bacanora Minerals Limited ("Bacanora") on the 94,814 hectare Megalit Concession that surrounds the Sonora Lithium Project in northern Mexico has now been signed. A new 3,000 metre drilling programme will commence on the Project in the coming weeks with half the metres designed to upgrade the Lithium resources from the inferred resource category to the indicated resource category and increase the resource, and half designed to test new Lithium targets along strike..

Highlights:

·     The concessions held under joint venture interests in the Mexican Sonora Lithium Project have now formally increased to 100,140 hectares (247,451 acres) with the signing of the Megalit joint venture.

·     A 1,500 metre drill program for the Penasco Lithium Prospect on the Megalit concession.

·     A new 1,500 metre Stage 3 drill program will be initiated on the Fleur and El Sauz concessions with the objective of upgrading the lithium resource from the inferred resource category to the indicated resource category.

David Lenigas, the Company's Chairman commented:

"In addition to REM owning 5.45% of Bacanora, the Company has now secured joint ventures on nearly a quarter of a million acres associated with Sonora Lithium Project in northern Mexico. The new concessions cover strategic ground that encompasses the entire Lithium Project, where lithium-bearing clay units have now been identified at surface in 4 parallel north-westerly trending sequences that are estimated to extend for at least 40 kilometres in strike length."

"Only 10km of the strike length of one of these sequences has been drilled to date and the new drilling will start testing for additional Lithium resources along strike.  Drilling will be done in parallel whilst metallurgical studies are completed on the Lithium clays, publishing of an updated resource estimate and completion of the preliminary economic studies on the Fleur-El Sauz deposit."

"With the Company's recently enhanced balance sheet, REM is now focused on increasing its exposure to the Sonora Lithium Project and will be working collaboratively with our joint venture partner to seek to increasethe size of the deposit whilst in parallel completing the necessary economic studies required to advancing the Sonora Lithium Project to potential production status."

Terms of the Megalit Concession Joint Venture

·     REM has the option to acquire an initial 10% interest in the San Gabriel, Buenavista and Megalit concessions by virtue of REM paying Bacanora an upfront cash consideration of $250,000 and spending $500,000 on exploration and drilling on the Joint Venture #2 concessions over a 6 month period.

·     REM has the option to increase its interest to 30% by virtue of an additional cash consideration of $500,000 and committing to a further $1,000,000 in expenditures for exploration and drilling on the same concessions over 1 year.

·     REM will have the right to advance these payments and acquire the 30% on an accelerated basis.

·     REM will then have a right of first refusal (until December 2015) to negotiate terms to increase from a 30% interest to a maximum of 49.9%.

El Sauz and Fleur Concessions (Joint Venture #1) Update

Stage 2 diamond drilling, consisting of 2,384.76 metres in 19 holes, was completed in January 2014, with analytical results having been recently received.  To date, a total of 3,804.22 metres have been drilled in 29 holes by the Company on the Fleur and El Sauz concessions ("Joint Venture #1").  Results from the last holes of the Stage 2 drilling varied from 150 ppm Li to 2,011 ppm Li (1.07% LCE ) across 36.58 metres in the upper clay unit and from 41 to 5,351 ppm Li (2.85% LCE) across 25 metres in the lower clay unit.

A new stage 3 drilling program, consisting of approximately 1,500 metres in 10 holes, is expected to commence in the next few weeks. The objectives of this program will be to provide further definition of the extent of the clay units on Fleur and El Sauz and to provide sufficient data to upgrade the Li resources from the inferred resource category to the indicated resource category (though there can be no assurance at this stage that such an upgrade will be declared), as well as to provide data for a PEA of the Lithium resources on the Joint Venture #1 concessions.

San Gabriel, Buena Vista and Megalit Concessions (Joint Venture #2) Update

The Company plans to test a new lithium bearing clay prospect, Penasco, located on the Megalit concession, to the south of El Sauz, with a five hole-diamond drill program.  In addition, a clay occurrence to the east of the Penasco prospect will be drill tested. The initial drill program is expected to start as soon as a rig can get to site and will be in the order of 1,500 metres in 7 holes.

In conjunction with the drilling, mapping and prospecting will continue on the large (94,815 hectare) Megalit concession in order to locate and sample additional exposures of the lithium-bearing clay basin.  In addition, trenching of surface exposures on lithium-bearing clays striking northerly along 6 kilometres on the Buenavista concession will be undertaken. Previous sampling by Bacanora returned lithium values ranging from 121 to 1,350 ppm Li (0.72% LCE) from surface clay samples collected on Buenavista.

New Sonora Concession ownership details:

The Sonora Lithium Project now consists of 10 contiguous concessions, two of which (La Ventana and La Ventana 1) are owned 100% by Bacanora. REM owns 5.45% of Bacanora.  Another five concessions (El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1) form the lands under Bacanora's Joint Venture #1 with REM, pursuant to which REM has a 30% interest (with Bacanora holding the remaining 70%).  Lastly, three concessions (San Gabriel, Buenavista and Megalit) form the lands under Bacanora's Joint Venture 2 with REM (in respect of which REM has an option to earn up to a 309% interest and a right of first refusal to negotiate up to 49.9%t").

Qualified Person's Statement:

Information in this announcement relates to information compiled by Carl G Verley, P.Geo, a consultant to the Company, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia and is a Qualified Person with respect to the information disclosed herein.

- Ends -

For further information please contact: 

Rare Earth Minerals plc                                                                 [phone]

David Lenigas

Kiran Morzaria

WH Ireland Limited (NOMAD & Joint Broker)                             [phone]

James Joyce

Nick Field

Hume Capital plc (Joint Broker)                                                   [phone]

Guy Peters

Jon Belliss

Square1 Consulting

David Bick                                                                                         [phone]

Mark Longson

 

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