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Tawana acquires second lithium project
Tawana Resources NL
(Incorporated in Australia)
(Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW
JSE ISIN: AU0000TAWDA9
Share code on the Australian Securities Exchange Limited: TAW
ASX ISIN: AU000000TAW7
(“the Company” or “Tawana”)
PLEASE NOTE: ALL GRAPHICS HAVE BEEN REMOVED FOR SENS PURPOSES. PLEASE REFER TO
TAWANA WEBSITE FOR THE COMPLETE ANNOUNCEMENT.
Tawana Resources NL (“Tawana” or the “Company”) is pleased to announce it has entered into an
agreement to acquire mining rights to the giant Uis pegmatite tailings stockpile (“Uis Project” or
“Project”) in Namibia.
Highlights
The Uis Project is a unique opportunity representing an estimated 20Mt of tailings stockpile derived
from one of the largest pegmatite tin mines in the world.
The Project meets Tawana’s lithium selection criteria of:
- Jurisdiction – Namibia is ranked fourth in Africa on the 2015 Investment Attractiveness Index by
the Fraser Institute and ninth in the World for Mining Investment in 2014 by Behre Dolbear.
- Potential Size – the stockpile is estimated to be about 20 million tonnes.
- Lithium grade – limited sampling to date indicates potentially attractive
lithium grades.
- Drill ready and known target – initial drilling of the tailings stockpile will test the lithium grade and
is expected to commence in October 2016.
- Low cost to test – initial drilling and metallurgical test-work is expected to cost less than
A$200,000. Namibia is a relatively low-cost country with a currency linked to the South African Rand.
- Location – only 220km from port with excellent road access.
- Infrastructure – the Uis area has excellent infrastructure for power, water, accommodation and
local workforce.
- Short term production potential – subject to grade, engineering simplicity and environmental
certification the brown-fields Uis Project could be taken to production within a relatively short time.
- Low Capex – with no mining or crushing required, the level of infrastructure and location,
development capex would be expected to be significantly reduced.
- Staged entry – the terms of the Agreement are linked to achieving success with certain project
milestones, thus allowing Tawana to balance risk/project entry costs with potential reward.
Tawana’s CEO Mark Calderwood stated: “The Uis project represents a unique and exciting
opportunity to assess one of the world’s largest stockpiles of crushed pegmatites containing lithium
minerals.
The low-cost first drilling program and metallurgy test work should give an excellent understanding
of the potential of the project to produce a lithium concentrate in a short period of time.”
Consideration
Tawana has entered into an agreement to purchase all the shares in Lithium Africa No 1 (“LA1”),
which has rights (via an option agreement) to acquire mining rights to the Uis pegmatite tailings
stockpile in Namibia.
The consideration for LA1 is as follows:
- 5,000,000 Tawana shares and $100,000 in cash;
- Deferred consideration as follows:
a) 5,000,000 Tawana shares on successful completion of drilling, analysing and metallurgical test
work (to Tawana’s satisfaction) by 30 June 2017; and
b) 5,000,000 Tawana shares on a decision to mine on or before 31 December 2018.
Uis Project
The Uis Project located in Namibia comprises large coarse and fine tailings stockpiles from the Uis tin
mine which operated between 1924 and 1990. The Project is located close to the former mining
town of Uis some 165km NNE of the coast city of Swakopmund, 270km NW of the capital Windhoek.
Geology and Mineralogy
The Stockpiles comprise unweathered pegmatite material that was mined by open cut, hauled to a
processing plant where the ore was crushed and ground and cassiterite (tin concentrate) was
extracted by gravity. The main plant operated between 1953 and 1990 at a nominal rate of about
120 tonnes per hour (1mtpa) between 1968 and 1990. The mine produced about 33,000 tonnes of
cassiterite concentrate after 1953. Detailed production records have been lost though based on
reported head grades and recoveries total ore processed is calculated at between 20Mt and 30Mt.
The most common lithium minerals reported from the unzoned albite rich Uis pegmatites are:
- Amblygonite (Li,Na)AlPO4(F,OH), contains 7.3-10.0% Li2O;
- Petalite LiAlSi4O10, contains 3.4-4.9% Li2O; and
- Spodumene LiAl (SiO3)2, contains 8% Li2O.
The pegmatites contain less than 5% mica and apparently little or no lepidolite. The pegmatites
contain significant quantities of tantalum minerals much of which is believed to remain in the
Stockpile along with about 30% of the original contained cassiterite.
The Stockpiles have been surveyed, however there are no records of the ground surface below the
stockpiles so preliminary volumes have been estimated assuming a planer surface between survey
points from the intersection of the stockpile surface and ground level and by cross section
methodology.
Stockpile Type Surveyor estimate Check Minimum Check Maximum
Sands 8.0M m3 (14.4Mt) 7.6M m3 9.4M m3
Fines 3.0M m3 (6.9Mt) Not estimated
Total 11.0M m3 (21.3Mt)
Based on survey data it is calculated that about 60-65% of the stockpile is coarse (“Sands”) ranges
from 0.25 to 5mm and appears to average about 1-2mm. About 30-35% of the stockpiles is fine
(“Fines”) nominally below 0.25mm or 250 microns. The Sands occur as free standing dumps up to
60m high whilst the Fines were deposited separately into dams.
Four shallow auger drill holes were recently completed, samples were assayed for lithium only
Fines Hole 1 0-1m 1-2m 2-3m
Li2O 0.71% 0.85% 0.92
Fines Hole 2 0-1m 1-2m 2-3m
Li2O 0.80% 0.89% 0.95%
Sands Hole1 0-1m 1-2m 2-2.5m
Li2O 0.50% 0.43% 0.43%
Sands Hole 2 0-1m 1-2m 2-3m
Li2O 0.54% 0.62% 0.62%
Because ore at Uis was mined from several different pegmatite bodies lithium grades are expected
to vary in the dumps. Unlike hard rock operations, re-treatment of tailings stockpiles is significantly
less expensive and requires much lower economic cut-off grades of recoverable minerals to be
profitable, subject to complexity of retreatment process and available infrastructure.
Access and Infrastructure
The project is located 220km by road NNE of Namibia’s main port of Walvis Bay. The travel time
from Walvis Bay to Uis is about two and half hours and includes 106km of sealed roads and 114km
of high quality unsealed roads. Walvis Bay in Namibia’s largest commercial port, receiving
approximately 3,000 vessel calls each year and handling about 5 million tonnes of cargo. Windhoek,
the capital of Namibia is located 335km by road from the Project.
Uis is connected to the State power grid and a 66/11kV substation is situated near the stockpile.
Namibia is part of the Southern African Power Pool (“SAPP”) and is a net importer of power. The
country is working towards self-sufficiency with gas/steam, solar and wind projects to support
supply from the large Ruacana Hydroelectric Station in the north of the country.
Rainfall is low however there is significant quantities brackish ground water available at about 25m.
The water is not potable but would be suitable for mining and processing. The old open pits are used
for small scale fish farming.
The area has 2G cell phone coverage.
Uis is a small town with a local council, the town is bisected by the old tin mine, the two sections
(East and West) of the town have populations of about 3000 and 250 respectively. The East part is
mainly comprised of former mineworkers and their families who have since settled in the area and
the West section is geared towards the tourist industry, here there is good motel accommodation as
well as a grocery shop, fuel, restaurants etc. A significant portion in this part of town is made up
houses owned by seasonal European visitors. The town also has an airstrip.
Project Potential
The project was selected on the basis that it comprises an already defined large tonnage of mined
and partly processed (fine crushed) unweathered lithium bearing pegmatite stockpile.
Significant uncertainty exists with recoverable lithium grade and potential by-product tin and
tantalum and likely treatment method, however with limited expenditure an understanding of grade
and metallurgy can be attained. For this reason, the terms of the Agreement are linked to achieving
success with certain project milestones, thus allowing Tawana to balance risk/project entry costs
with potential reward.
The project is well located, Namibia is a stable, mining friendly jurisdiction with an excellent
international reputation. The Project is located close to port linked by good roads, has grid power,
water, a town and local workforce.
Close links between Namibia and neighbouring South Africa is currently very beneficial to industry
with the weak Rand and Namibian Dollar (against the USD) significantly reducing costs of equipment
fabrication and construction in this part of Southern Africa. In addition, the operating costs are
expected to be significantly more competitive than other parts of Africa.
Should drilling and metallurgical test-work confirm an acceptable recoverable grade Tawana sees
the potential for a low capex/opex operation because:
- No mining required – mining normally represents 30-60% of the operating cost of a mine and can
be a significant capital cost with mobilisation and pre-strip;
- No ore haulage required – simple feed straight into final plant feed-bin;
- No crushing required – saves a significant capital and operating cost components;
- Limited (if any) additional grinding likely to be required – overall the stockpiles averages about
>80% passing 2mm reducing significantly the size of mills if at required;
- Power and Water – power requirements would likely to be modest and is expected to attainable
off the grid, Namibian grid power reliability is good, a sample from a bore water close to the project
site contained TDS of 6,171 is not potable but acceptable for processing;
- Workforce – given the mining history of the area and the lack of local competing industry it is
envisaged that a semi-skilled workforce can be obtained from the local population. High-skill
workforce may be available locally or from Namibia and/or South Africa. Given no drilling, blasting,
mining, ore hauling or crushing would be required the workforce number should be limited; and
- Accommodation – given the level and quality of housing in West Uis it is anticipated that sufficient
rental hotel and housing can be obtained for the limited sized skilled workforce requirements for
both construction and operations. The saving on capital and operating overhead costs could be
significant.
Proposed Work
An Air-Core rig is expected to arrive on site in October 2016. Air core drilling is considered
appropriate as it minimises or eliminates contamination as it is effectively Reverse Circulation
drilling. A total of 21 deeper holes and 45 shallow holes are planned totalling about 1500m. Samples
will be assayed at Swakopmund. Subject to the results composite samples will be sent to Australia
from mineralogical and metallurgical characterisation test-work.
Consideration for the Purchase of Lithium Africa No 1
Tawana has entered into an agreement to purchase all the shares in Lithium Africa No 1 (“LA1”),
which has rights (via an option agreement) to acquire mining rights to the Uis pegmatite tailings
stockpile in Namibia.
The consideration for LA1 is as follows:
- 5,000,000 Tawana shares and $100,000 in cash;
- Deferred consideration as follows:
a) 5,000,000 Tawana shares on successful completion of drilling, analysing and metallurgical test
work (to Tawana’s satisfaction) by 30 June 2017; and
b) 5,000,000 Tawana shares on a decision to mine on or before 31 December 2018.
The deferred consideration will be subject to shareholder approval, and if Tawana’s shareholders do
not approve the deferred consideration shares, cash consideration to the value of the shares at the
date the milestone was achieved (based on a VWAP) will be paid.
Terms of the Option Agreement to Acquire the Uis Pegmatite Tailings Stockpile Under the terms of
the existing agreement between LA1 and Namibia Silica CC (being the current owner of the Uis
pegmatite tailings stockpile) (Namibia Silica), LA1 is required to pay US$1,375,000 together with a
(5%) net profit interest royalty.
The cash payments are to be made on a staged basis as follows:
- US$275,000 upon completion of drilling, analysing and metallurgical test work;
- US$250,000 upon completion of an environmental impact study and associated clearance;
- US$350,000 upon completion of a definitive feasibility study and receipt of key approvals; and
- US$500,000 upon commencement of commercial production.
Tawana will assume these payment obligations.
In addition there is another party which indirectly owns 5% of the Uis pegmatite tailings stockpile
which can be purchased by LA1 for US$500,000. This person is a local Namibian and not a related
party of the Company.
For further information, please contact:
Mark Calderwood Nathan Ryan
Chief Executive Officer Investor Relations
Tawana Resources NL NWR Communications
T: +61 8 9489 2600 E: T: +61 407 440 882
mark.calderwdood@tawana.com.au E: Nathan.ryan@nwrcommunications.com.au
Competent Persons Statement
The information in this news release that relates to Exploration Results is based on and fairly
represents information and supporting documentation compiled by Mr Mark Calderwood, an
employee of the Company. Mr Calderwood is a member of The Australasian Institute of Mining and
Metallurgy. Mr Calderwood has sufficient experience relevant to the style of mineralisation under
consideration and to the activity which they are undertaking to qualify as a Competent Person as
defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Calderwood consents to the inclusion in this report of the matters
based on their information in the form and context in which it appears.
Forward Looking Statement
This report may contain certain forward looking statements and projections regarding estimated,
resources and reserves; planned production and operating costs profiles; planned capital
requirements; and planned strategies and corporate objectives. Such forward looking
statements/projections are estimates for discussion purposes only and should not be relied upon.
They are not guarantees of future performance and involve known and unknown risks, uncertainties
and other factors many of which are beyond the control of Tawana Resources NL. The forward
looking statements/projections are inherently uncertain and may therefore differ materially from
results ultimately achieved.
Tawana Resources NL does not make any representations and provides no warranties concerning
the accuracy of the projections, and disclaims any obligation to update or revise any forward looking
statements/projects based on new information, future events or otherwise except to the extent
required by applicable laws. While the information contained in this report has been prepared in
good faith, neither TAW or any of its directors, officers, agents, employees or advisors give any
representation or warranty, express or implied, as to the fairness, accuracy, completeness or
correctness of the information, opinions and conclusions contained in this presentation. Accordingly,
to the maximum extent permitted by law, none of TAW, its directors, employees or agents, advisers,
nor any other person accepts any liability whether direct or indirect, express or limited, contractual,
tortuous, statutory or otherwise, in respect of, the accuracy or completeness of the information or
for any of the opinions contained in this presentation or for any errors, omissions or misstatements
or for any loss, howsoever arising, from the use of this presentation.
Appendix 1
Section 1 Sampling Techniques and Data
Criteria JORC Code Explanation Commentary
Sampling techniques Nature and quality of sampling (e.g. cut Relevant sampling with the Uis
channels, random chips, or specific Project area is limited to four
specialised industry standard measurement Auger drill holes totalling
tools appropriate to the minerals under 11.5m.
investigation, such as down hole gamma
sondes, or handheld XRF instruments, etc.).
These examples should not be taken as
limiting the broad meaning of sampling.
Include reference to measures taken to Based on available data, there
ensure sample representivity and the is nothing to indicate that
appropriate calibration of any measurement drilling practices were not to
tools or systems used. normal industry standards for
the type of drilling.
Aspects of the determination of Given the purpose of first pass
mineralisation that are Material to the Public exploration work, sampling
Report. In cases where ‘industry standard’ practices were normal industry
work has been done this would be relatively standard and appropriate.
simple (e.g. ‘reverse circulation drilling was None of the drilling sampling is
used to obtain 1 m samples from which 3 kg appropriate or was or is
was pulverised to produce a 30 g charge for intended to be used for
fire assay’). In other cases more explanation Resource estimates.
may be required, such as where there is
coarse gold that has inherent sampling
problems. Unusual commodities or
mineralisation types (e.g. submarine nodules)
may warrant disclosure of detailed
information.
Drilling techniques Drill type (e.g. core, reverse circulation, The four shallow holes
openhole hammer, rotary air blast, auger, completed were drilled using
Bangka, sonic, etc.) and details (e.g. core hand held mechanical auger
diameter, triple or standard tube, depth of equipped with spiral rods.
diamond tails, facesampling bit or other type, No drill holes have been
whether core is oriented and if so, by what surveyed, they have been
method, etc.). located using hand held GPS
Drill sample Method of recording and assessing core and There are no records of sample
recovery chip sample recoveries and results assessed. recovery.
Measures taken to maximise sample recovery There are no records of drill
and ensure representative nature of the sample quality or potential
samples. contamination
Whether a relationship exists between There are no records for
sample recovery and grade and whether sample recovery for the
sample bias may have occurred due to various types of previous
preferential loss/gain of fine/coarse material. drilling conducted.
Consequently, it is not possible
to review grade bias in relation
to sample recovery.
Logging Whether core and chip samples have been Logging was not undertaken
geologically and geotechnically logged to a however all samples were
level of detail to support appropriate Mineral from stockpile material
Resource estimation, mining studies and
metallurgical studies. No resources estimates were
calculated
Whether logging is qualitative or quantitative Not applicable
in nature. Core (or costean, channel, etc.)
photography
The total length and percentage of the Not applicable
relevant intersections logged.
Sub-sampling If core, whether cut or sawn and whether No core drilling has been
techniques and quarter, half or all core taken. undertaken.
sample preparation
If non-core, whether riffled, tube sampled, Sampling was by grab sampling
rotary split, etc. and whether sampled wet or of drill cuttings at 1m (or part
dry. thereof) intervals
For all sample types, the nature, quality and Auger samples were bagged,
appropriateness of the sample preparation no splitting or composting was
technique. undertaken. Given the purpose
of first pass exploration work,
the sampling technique were
appropriate
Quality control procedures adopted for all no QAQC procedures were
subsampling stages to maximise adopted.
representivity of samples.
Measures taken to ensure that the sampling No duplicate sampling was
is representative of the in situ material undertaken
collected, including for instance results for
field duplicate/second-half sampling.
Whether sample sizes are appropriate to the The sampling method was
grain size of the material being sampled. likely appropriate for the
material being sampled given
the purpose of sampling.
Quality of assay The nature, quality and appropriateness of A total of 12 drill samples were
data and the assaying and laboratory procedures used assayed by Bureau Veritas
laboratory tests
and whether the technique is considered Namibia Pty Ltd in
partial or total. Swakopmund. The samples
have been split with a riffle
splitter and a portion then
dried and pulverised in a
vibrating pulveriser. The
samples were digested with a
mixture of acids including
Hydrofluoric, Nitric,
Hydrochloric and Perchloric
acids. Li was determined by
ICP Optical Emission
Spectrometry.
For geophysical tools, spectrometers, Not applicable
handheld XRF instruments, etc., the
parameters used in determining the analysis
including instrument make and model,
reading times, calibrations factors applied
and their derivation, etc.
Nature of quality control procedures adopted No QAQC procedures were
(e.g. standards, blanks, duplicates, external adopted apart from ‘inhouse’
laboratory checks) and whether acceptable laboratory repeats and
levels of accuracy (i.e. lack of bias) and standards
precision have been established.
Verification of The verification of significant intersections by No verification exploration
sampling and assaying either independent or alternative company work has been undertaken.
personnel.
The use of twinned holes. No twin holes were drilled
Documentation of primary data, data entry The assay data from the
procedures, data verification, data storage drilling was presented in digital
(physical and electronic) protocols. and hard copy formats.
Discuss any adjustment to assay data No data has been adjusted
Location of data Accuracy and quality of surveys used to Drill hole locations are
points locate drill holes (collar and down-hole considered approximate
surveys), trenches, mine workings and other though sufficiently accurate
locations used in Mineral Resource given the wide spaced nature
estimation. of programmes. The holes
were located using a handheld
GPS.
Specification of the grid system used. WGS 84/ Zone 33 south.
Quality and adequacy of topographic control. No survey of drill holes
appears to have been
undertaken
Data spacing and Data spacing for reporting of Exploration Not applicable
distribution Results.
Whether the data spacing and distribution is Not applicable
sufficient to establish the degree of
geological and grade continuity appropriate
for the Mineral Resource and Ore Reserve
estimation procedure(s) and classifications
applied.
Whether sample compositing has been No samples were composited
applied.
Orientation of Whether the orientation of sampling Not applicable
data in relation to achieves unbiased sampling of possible
geological structure
structures and the extent to which this is
known, considering the deposit type.
If the relationship between the drilling There is no apparent bias in
orientation and the orientation of key the drilling orientation used.
mineralised structures is considered to have
introduced a sampling bias, this should be
assessed and reported if material.
Sample security The measures taken to ensure sample Not applicable.
security.
Audits or reviews The results of any audits or reviews of The historic drill data were not
sampling techniques and data. independently audited
Section 2 Reporting of Exploration Results
Criteria Explanation Commentary
Mineral Type, reference name/number, The tailings stockpile is no covered by a specific
tenement and location and ownership including licence. The right to process the stockpiles is
agreements or material issues covered by various contractual agreements.
land tenure with third parties such as joint
status ventures, partnerships, overriding
royalties, native title interests,
historical sites, wilderness or
national park and environmental
settings.
The security of the tenure held at See above, no other known impediments to
the time of reporting along with undertaking exploration work
any known impediments to
obtaining a licence to operate in
the area.
Exploration Acknowledgment and appraisal There is no available sample data available from
done by other of exploration by other parties. the stockpile.
parties
A detailed survey of the stockpiles was
undertaken by Strydom & Associates, licenced
land surveyors in February 2010. A total of
4,250 spot survey shots were taken to create a
detailed topographical survey over about 90
hectares. Volume calculations were undertaken
using ReGIS software to produce sections at a
30m interval. Several assumptions were
applied to estimate the base of the stockpile.
Until drilling is completed the volume estimate
is considered preliminary. Density of the
stockpiles were assumed to be 1,800kg/m3 for
sands and 2,296kg/m3 for fines stockpiles.
Geology Deposit type, geological setting The Project comprises a large +/- 20Mt crushed
and style of mineralisation. tailings stockpile comprising pegmatite material
containing minerals of lithium, tin and
tantalum.
Drill hole A summary of all information Location of 2016 Auger Drill holes
Information material to the understanding of
the exploration results including a
tabulation of the following Ref East North
information for all Material drill
holes: 48667 765210
AF01 6 1
• easting and northing of
the drill hole collar 48698 765205
AF02 8 9
Criteria Explanation Commentary
• elevation or RL (Reduced 48767 765291
Level – elevation above sea level AS01 5 0
in metres) of the drill hole collar
48741 765290
• dip and azimuth of the AS02 5 5
hole
• down hole length and
interception depth
• hole length.
If the exclusion of this information No material information was excluded.
is justified on the basis that the
information is not Material and
this exclusion does not detract
from the understanding of the
report, the Competent Person
should clearly explain why this is
the case.
Data In reporting Exploration Results, Not applicable
aggregation weighting averaging techniques,
methods maximum and/or minimum grade
truncations (e.g. cutting of high
grades) and cut-off grades are
usually Material and should be
stated.
Where aggregate intercepts Not applicable
incorporate short lengths of high
grade results and longer lengths
of low grade results, the
procedure used for such
aggregation should be stated and
some typical examples of such
aggregations should be shown in
detail.
The assumptions used for any Not applicable
reporting of metal equivalent
values should be clearly stated.
Relationship These relationships are None of the shallow holes came close to
between particularly important in the reaching the base of the stockpiles.
mineralisation reporting of Exploration Results.
widths and
Criteria Explanation Commentary
intercept If the geometry of the
lengths mineralisation with respect to the
drill hole angle is known, its
nature should be reported
If it is not known and only the Not applicable
down hole lengths are reported,
there should be a clear statement
to this effect (e.g. ‘down hole
length, true width not known’).
Diagrams Appropriate maps and sections Figures 2 show the locations of the four auger
(with scales) and tabulations of holes and the outline of the stockpiles.
intercepts should be included for
any significant discovery being
reported These should include,
but not be limited to a plan view
of drill hole collar locations and
appropriate sectional views.
Balanced Where comprehensive reporting All results have been included.
reporting of all Exploration Results is not
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.
Other Other exploration data, if There is no other exploration data which is
substantive meaningful and material, should considered material to the results or
exploration be reported including (but not statements reported in this announcement.
data limited to): geological
observations; geophysical survey
results; geochemical survey
results; bulk samples – size and
method of treatment;
metallurgical test results; bulk
density, groundwater,
geotechnical and rock
characteristics; potential
deleterious or contaminating
substances.
Further work The nature and scale of planned Further work will include aircore drilling of the
further work (e.g. tests for lateral stockpiles and metallurgical test-work.
extensions or depth extensions or
large-scale step-out drilling).
Criteria Explanation Commentary
Diagrams clearly highlighting the Figure 3 Shows proposed drill hole layout
areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
not commercially sensitive.
23 September 2016
Sponsor
PricewaterhouseCoopers Corporate finance (Pty) Ltd
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