Filing of Technical Report

RNS Number : 9358K

Rare Earth Minerals PLC

06 January 2016

 



Rare Earth Minerals Plc.

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

Filing of Technical Report on Updated Mineral Resource Estimate for the Sonora Lithium Project, Mexico

Rare Earth Mineral Plc (AIM: REM) is pleased to announce that Bacanora Minerals Ltd ("Bacanora") in which REM holds 17.19%, has filed a Technical Report ("Report") in respect to the Sonora Lithium Project in Mexico (the "Project"),. The Report has been prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects and is entitled, NI 43-101 Mineral Resource Estimate for Sonora Lithium Project, Mexico, December 2015.  The lead author of the Technical Report is Mr. Martin Pittuck (MSc., C.Eng., MIMMM), who is a "Qualified Person" within the meaning of NI 43-101 and the AIM Rules for Companies, and is independent of the Company.  The Report is available for download on the Company's website.

The Report provides detail in relation to the Mineral Resource Statement ("MRE") announced by REM in its press release dated November 23, 2015.  REM holds an interest in the Sonora Lithium Project though its 17.19% holding in Bacanora Minerals Ltd ('Bacanora') and the joint ventures interest of 30% in each of Megalit S.A. de CV and Mexalit S.A. de CV as more fully described below.

The table below shows the MRE for the Sonora Lithium Project with an effective date of November 19, 2015. The statement has been classified in accordance with the terminology, definitions and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards for Mineral Resources and Mineral Reserves (May 2014) and has been reported in accordance with NI 43-101, by the Qualified Person, Mr. Martin Pittuck (MSc., C.Eng., MIMMM).

The updated Mineral Resource statement for the Sonora Lithium Project was reported using a cut-off grade of 450 ppm lithium and was contained within a pit shell based on reasonable optimisation parameters and lithium selling price agreed between SRK and Bacanora.

The updated Mineral Resource statement comprises:

·     Indicated Mineral Resource estimated at 364 Mt, averaging 2,600 ppm Li for 5.0 Mt of LCE.

·     Inferred Mineral Resource estimated at 355 Mt averaging 2,000 ppm Li for 3.9 Mt of LCE.

In addition to the Mineral Resource statement, a further conceptual target of 300 to 350 Mt, at a grade of Li of approximately 1,500 to 2,500 ppm was estimated within a pit shell run using all classified and unclassified blocks within the model. This target is considered worthy of further exploration in order to increase the quantity of classified Mineral Resource down-dip.  If these figures were converted to a Mineral Resource via successful drilling and exploration, it is estimated that this could represent an additional 2.4 to 4.6 Mt of LCE at the Sonora Lithium Project. It must be noted however, that the potential quantity and grade of this target is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the target being delineated as a Mineral Resource.

Table 1: Mineral Resource Statement for the Sonora Lithium Project as of 19 November 2015

Classification	Concession	Owner and Operator	Geological Unit		Clay Tonnes (Mt)		Clay Grade (Li ppm)		Contained Metal (Kt Li)		Contained Metal (Kt LCE)
Indicated	La Ventana	Minera Sonora Borax	Lower Clay		75		3,500		261		1,385
			Upper Clay		66		1,500		99		523
	El Sauz	Mexilit	Lower Clay		60		2,900		174		924
			Upper Clay		47		1,100		52		274
	Fleur		Lower Clay		60		4,300		258		1,365
			Upper Clay		50		1,600		81		428
	El Sauz1		Lower Clay		4		4,000		15		80
			Upper Clay		3		1,200		3		18
Indicated Total			Combined	364		2,600		943		4,997
Inferred	La Ventana	Minera Sonora Borax	Lower Clay		55		3,800		209		1,108
			Upper Clay		80		1,500		120		636
	El Sauz	Mexilit	Lower Clay		85		1,600		136		721
			Upper Clay		55		800		44		233
	Fleur		Lower Clay		20		4,200		84		445
			Upper Clay		20		1,500		30		159
	El Sauz1		Lower Clay		20		4,000		80		424
			Upper Clay		20		1,200		24		127
Inferred Total			Combined	355		2,000		727		3,853

Notes:

1.   LCE is the industry standard terminology for, and is equivalent to, Li₂CO₃.  1 ppm Li metal is equivalent to 5.32 ppm LCE / Li₂CO_3. 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.

2.   Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, SRK does not consider them to be material.

3.   The reporting standard adopted for the reporting of the MRE uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014) as required by NI 43-101 and JORC.

4.   The Mineral Resource statement is reported on 100 per cent basis for all project areas

5.   SRK assumes the Sonora Lithium deposit to be amenable to surface mining methods. Using results from initial   metallurgical test work, suitable surface mining and processing costs, and an optimistic forecast LCE price SRK has reported the Mineral Resource at a cut-off 450 ppm Li (2,400 ppm LCE).

6.   SRK completed a site inspection of the deposit by Mr. Martin Pittuck, MSc, C.Eng., MIMMM, an   appropriate "independent qualified person" as such term is defined in NI 43-101.

REM has a 30% direct interest in the Megalit and Mexilit in Joint Venture with Bacanora Minerals.  In addition, REM also owns a 17.19% direct interest in Bacanora s giving it a 17.19% indirect interest in the Mineral Resources at La Ventana and a 42.04% indirect interest in the Mineral Resources at Mexilit. These percentage interests have been used by REM to calculate its net attributable contained LCE presented in Table 2.

Table 2: Net attributable contained LCE to REM based on total economic interest.

Classification	Concession	Owner and Operator	Geological Unit	Clay Tonnes (Mt)	Clay Grade (Li ppm)	Contained Metal (Kt Li)	Contained Metal (Kt LCE)
Indicated	La Ventana	Minera Sonora Borax	Lower Clay	13	3,500	45	238
			Upper Clay	11	1,500	17	90
	El Sauz	Mexilit	Lower Clay	25	2,900	73	388
			Upper Clay	20	1,100	22	115
	Fleur		Lower Clay	25	4,300	108	574
			Upper Clay	21	1,600	34	180
	El Sauz1		Lower Clay	2	4,000	6	34
			Upper Clay	1	1,200	1	8
Indicated Total			Combined	118	2,600	307	1,627
Inferred	La Ventana	Minera Sonora Borax	Lower Clay	9	3,800	36	190
			Upper Clay	14	1,500	21	109
	El Sauz	Mexilit	Lower Clay	36	1,600	57	303
			Upper Clay	23	800	18	98
	Fleur		Lower Clay	8	4,200	35	187
			Upper Clay	8	1,500	13	67
	El Sauz1		Lower Clay	8	4,000	34	178
			Upper Clay	8	1,200	10	53
Inferred Total			Combined	116	2,000	224	1,186

Note: All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, REM does not consider them to be material.

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:

"cut-off grade"	lowest grade of mineralised material considered economic, used in the calculation of mineral resources
"deposit"	coherent geological body such as a mineralised body
"exploration"	method by which ore deposits are evaluated
"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
"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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