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TAWANA RESOURCES NL - Construction Commences on Lithium Plant at the Bald Hill Mine

Release Date: 15/08/2017 08:42:00      Code(s): TAW       PDF(s):  
Construction Commences on Lithium Plant at the Bald Hill Mine

Tawana Resources NL
(Incorporated in Australia)
(Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW
Share code on the Australian Securities Exchange Limited: TAW
(“the Company” or “Tawana”)


Construction Commences on Lithium Plant at the Bald Hill Mine


-   Engineering, Procurement and Construction (EPC) agreement executed,
    enabling construction to commence at the1.2Mtpa Dense Media Separation
    (DMS) process plant and associated infrastructure at Bald Hill.
-   Primero Group mobilised to the Bald Hill Mine.
-   Construction work has commenced with bulk earthworks completed and initial
    cement foundations being poured.
-   Detailed design is well-advanced, long-lead items have been ordered, and
    fabrication packages awarded.
-   Commissioning on track for the first quarter of 2018.

Tawana Resources NL (ASX:TAW) (Tawana) and Alliance Mineral Assets
Limited (SGX:AMA)(AMAL) (together “the Parties”) are pleased to announce the
execution of an Engineering, Procurement and Construction (EPC) contract with
Primero Group to build a 1.2 million tonne per annum Dense Media Separation
(DMS) circuit at the Bald Hill Lithium and Tantalum Mine (the Project).
The EPC contract is a “lump sum, fixed price” contract valued at A$30 million.
Primero was chosen for their expertise in lithium projects, having recently
commissioned a DMS lithium plant in Western Australia and their involvement in
several significant lithium projects globally.

It is anticipated that almost 200 people will be on site during the peak
construction period at Bald Hill.

Tawana Managing Director Mark Calderwood commented:

“This is another key milestone for the Project. We welcome Primero as an
important partner of Tawana and AMAL and look forward to updating the
market on the progress of the DMS plant. In addition, associated site works and
construction has commenced and we remain committed and focussed on
delivering lithium concentrate during the first quarter of 2018.”

Primero Managing Director Cameron Henry said:

“We are pleased to be working with Tawana and AMAL on this project and to be
recognised for our complete turnkey design and construction capability and
expertise in the lithium industry. Our team has been working closely with
Tawana from the first testwork, through feasibility and now into project
execution phase, providing a complete end to end service. The project
development schedule for the Bald Hill Project remains on track to commence
commissioning in the first quarter of 2018.”

Tawana and AMAL will be releasing Project updates monthly.

About the Bald Hill Project

The Bald Hill Lithium and Tantalum Mine (Bald Hill Mine or the Project) is
owned by Singapore Exchange-listed Alliance Mineral Assets Limited (AMAL),
with ASX-listed Tawana Resources NL (Tawana) holding 50% of the lithium
rights. The project is subject to a 50% earn-in to existing infrastructure and
tantalum rights by Tawana through the expenditure of A$12.5m on
development costs.

A Pre-Feasibility Study (PFS) finalised in July 2017 confirmed the technical
and financial viability of a low capital cost 1.2Mtpa lithium Dense Media
Separation circuit (DMS) adjacent to the existing tantalum processing facility
(TPF) at Bald Hill. Key findings from the study included an IRR of 185% and
EBITDA ofA$83M from initial annual production of 155,000tpa of spodumene
concentrate from the DMS, and 260,000Lbs of tantalum pentoxide from the
TPF. Further feasibility work is being undertaken on a lithium fines circuit
(LFC) to treat stockpiled fines and middlings which has potential to add
significantly to production and reduce costs.

The first shipment of lithium concentrate is scheduled for March 2018.
EPC Group Primero mobilised to the Bald Hill Mine in July 2017 and
construction work commenced, with bulk earthworks completed and initial
cement foundations being poured.

Each of Tawana and AMAL executed an offtake agreement in April 2017 for the
supply of lithium concentrate from Bald Hill over a five-year term with pricing
for 2018 and 2019 of US$880/t (FOB Esperance) for 6% Li2O. The
prepayments from the aforesaid offtake agreement will be used towards the
capital costs of the Project.
The Project is located 50km south east of Kambalda in the Eastern Goldfields
of Western Australia. It is located approximately 75km south east of the
400ktpa Mt Marion Lithium project. Refer Figure 1.
The Project comprises four mining leases, one mining lease application, twelve
exploration licenses, eight prospecting licenses and one general purpose lease
totalling 790.1km.
A Maiden Indicated and Inferred lithium Mineral Resource of 12.8 million
tonnes at 1.18% Li2O, and 158ppm Ta205 at a 0.5% Li20 cut-off for the Project
was calculated by CSA Global Pty Ltd and announced in June 2017.1 The
Project remains significantly underexplored as highlighted by significant
exploration drill results post the June resource statement.


Since the award of the early works, Primero has made significant inroads into
the construction of the DMS, with the following key highlights achieved:

       - Site mobilisation and commencement of site works.
       - Zero injuries and positive lead Key Performance Indicators
       - Temporary      construction    offices   setup   inclusive of full
       - Plant Site – 100% cleared and detailed earthworks in progress
       - Concrete works in progress and plant feed preparation area
         proceeding on schedule
       - Approximately 50% design completed in accordance with the project
       - Award of all major procurement packages
       - Fabrication packages awarded and progressed

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 as representation or warranty, express or implied, of Tawana Resources NL and/or
Alliance Mineral Assets Limited. 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 and/or Alliance Mineral Assets Limited. The forward looking
statements/projections are inherently uncertain and may therefore differ materially from
results ultimately achieved.

Tawana Resources NL and/or Alliance Mineral Assets Limited 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 Tawana
Resources NL and/or Alliance Mineral Assets Limited or any of their 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
Tawana Resources NL and/or Alliance Mineral Assets Limited, their 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 announcement or
for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of
this announcement.

End Notes
    1.   All material assumptions and technical parameters underpinning the Mineral Resource
         estimates in the ASX announcement dated 14 June 2017 / SGX announcement dated 13
         June 2017 continue to apply and have not materially changed since it was last reported.

15 August 2017

PricewaterhouseCoopers Corporate Finance (Pty) Ltd

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