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TAWANA RESOURCES NL - Bald Hill Operations and Optimisation Study Update

Release Date: 06/09/2018 08:58:00      Code(s): TAW       PDF(s):  
Bald Hill Operations and Optimisation Study Update

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”)

Bald Hill Operations and Optimisation Study Update
Joint venture partners Tawana Resources NL (TAW:ASX) (Tawana) and Alliance Mineral Assets
Limited (SGX:40F) (AMAL) (together the JV parties) are pleased to provide an update for the
Bald Hill Lithium and Tantalum Mine (Bald Hill Mine) located in the eastern goldfields of
Western Australia.


    -    Total of 21,975 wmt (wet metric tonnes) of spodumene (lithium) concentrate produced
         in July and August
    -    Lithium concentrate produced is of a high quality – low levels of Fe, Na, K and mica
    -    18,855 dmt (dry metric tonnes) of lithium concentrate shipped during July and August
    -    Lithium concentrate stockpiles of approximately 12,300 wmt as of 31 August
    -    13.2 wmt tantalum pentoxide in concentrate produced
    -    Total of 243,182 tonnes of ore processed during July and August at an average
         throughput of 211 tph (tonnes per hour)
    -    Fines optimisation study well-advanced, targeting increased combined throughput to
The JV parties are targeting production of 60,000 to 75,000 tonnes of lithium concentrate
during the 6 months between July and December 2018.

Tawana Managing Director Mark Calderwood said “the Bald Hill JV is continuing to make
excellent progress at the Bald Hill Mine and we are on track for our targeted production of
concentrate by calendar year end. We remain fully focused on getting the project operating to its
optimum level as soon as possible, and with the optimisation studies currently underway we
anticipate making further significant gains in throughput increases.”

Mining for the months of July and August is estimated at 1.53Mm3 (million cubic metres) including
250,000 tonnes of lithium ore and 90,000 tonnes of tantalum ore at a strip ratio of approximately
10.9:1. Final numbers will available upon completion of the August monthly survey.
Waste mining is currently below budget; however, ore movements are above budget.

July and August processing reached 243,182 tonnes at 0.83% Li2O head grade and 280 ppm Ta2O5 at
an average throughput rate of 211tph with a plant net utilisation rate of 77%. Total lithium
concentrate production was 21,975 wmt and a total of 18,855 dmt was shipped during the 2-month
period. Estimated lithium recovery for July and August was 63% due to higher than expected
quantity of fines.
A total of 13.2 wmt of tantalum pentoxide extracted from lithium fines was recovered to
Lithium and Tantalum Product Quality
The Bald Hill Mine is establishing a reputation for high quality lithium concentrates with low levels of
deleterious elements and minerals such as Fe, Na, K, F and mica. The grade of lithia in concentrates
is generally managed in a range of between 5.5% and 6.5% Li2O, with production to date averaging
Bald Hill Mine produces a premium +30% tantalum pentoxide concentrate that has notably low
levels of U, Th, As and Sb.

Operating Costs
Mining cash costs1 for July 2018 were AUD$10/m3 or AUD$3.80/t for all material types including
grade control costs. Mining cash costs equated to AUD$57/t of ore processed while crushing and
processing cash costs1 came in at AUD$27/t of ore processed.
Total mining and processing cash costs1 per tonne of spodumene concentrate produced in July were
approximately US$575/t or AUD$785/t.
Site administration, haulage and other cash costs1 were approximately AUD$1.1M or AUD$8.8/t of
ore processed, which equates to the approximate value of the tantalum pentoxide produced during
the month of July 2018.

Optimisation Studies
A metallurgical and engineering review to add a fines circuit and significantly increase throughput
from the existing Dense Media Separation (DMS) plant, is nearing completion. At this time, the
preferred option is to modify the existing DMS circuit from a 2-stream circuit processing a 1-10mm
feed range to a 3-stream circuit processing a 0.5mm to 12mm feed range through the addition of
cyclones, screens and pumps. A 3-stream DMS circuit provides maximum operational flexibility for
Bald Hill’s feed. It is proposed that +2mm feed would be processed through the existing DMS plant
streams and the ‘Fines’ stream would treat an additional 20% of feed in the 2mm and 0.5mm size
range. The plant throughput rate with the addition of the fines stream is expected to increase from
the current nominal 200tph to 300tph with increased total DMS recovery rates, providing a
significant concentrate production increase. The capital cost estimate for the fines circuit addition is
still pending, however, it is expected to be significantly less than a second full DMS plant.

    Cash costs are a non-IFRS measure of the direct costs incurred and are included to assist investors to better understand
performance of the business.
Commencement of the Commissioning of the Burwill & Jiangte JV Lithium Convertor
In its June Quarterly Activities Report released on 31 July 2018, Tawana reported that, in June 2018,
management of Tawana had visited the Jiangte Special Electric Motor Co (Jiangte) lithium
conversion facility under construction in Yichun, in China’s Jiangxi Province. The spodumene
conversion facility has two production lines, one of which is a joint venture between Burwill Holdings
Limited (Burwill) – the holding company of the Bald Hill Mine lithium offtake partner and Jiangte.
The JV parties are pleased to note the announcement released by Burwill on The Stock Exchange of
Hong Kong on 28 August 2018, which advised the kiln in the production line under the joint venture
between Jiangte and Burwill had been ignited and that commissioning of the equipment is expected
to be completed within a few months to reach design production capacity of 15,000tpa of lithium
carbonate. The kiln is expected to be fed by spodumene concentrate from the Bald Hill Mine.

About the Bald Hill Mine
The Bald Hill Mine is in the southeast of the Goldfields-Esperance Region of Western Australia,
approximately 105km south-southeast of Kalgoorlie. Kalgoorlie is the main hub in the region
providing access to the Mine which can be accessed from Perth by air, rail and road.
The principal road access to the Mine is via the (sealed) Coolgardie-Esperance Highway (National
Highway 94), and then the Binneringie Road from Widgiemooltha, a distance of 65km of unsealed
shire road. The Mine is approximately 350km by road from the Port of Esperance.
The Bald Hill Mine currently consists of an open pit, a Dense Media Separation and Spiral Circuits,
waste rock dumps, stores, a camp (including administrative and living quarters) and associated
infrastructure. Lithium concentrate is hauled via Binneringie Road to the Port of Esperance.
Tawana and AMAL executed separate offtake agreements in April 2017 (and subsequent variations
thereto) for the supply of lithium concentrate from Bald Hill Mine over a five-year term with pricing
for 2018 and 2019 of US$880/t (A$1,173) (FOB Esperance) for 6% Li2O concentrates. The offtake
agreement provides for an attractive fixed price in US dollars per dry metric tonne for the first 2
years of production, and shipping costs are borne by the offtake party. Refer to ASX announcement
of 26 April 2017 and SGX announcement of 4 May 2017.

Forward Looking Statements

All statements other than statements of historical facts included in this announcement are or may be forward-looking
statements. Forward-looking statements include but are not limited to those using words such as “aim”, “seek” , “expect”,
“anticipate” , “estimate” , “believe” , “intend” , “project” , “plan” , “strategy” , “forecast” and similar expressions or future
or conditional verbs such as “will” , “would” , “should” , “could” , “may” and “might”. These statements reflect the AMAL
and Tawana’s current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of
currently available information. Such forward-looking statements are not guarantees of future performance or events and
involve known and unknown risks and uncertainties. Accordingly, actual results may differ materially from those described
in such forward-looking statements. Shareholders should not place undue reliance on such forward-looking statements,
and neither AMAL nor Tawana guarantees any future performance or event or assumes any obligation to update publicly
or revise any forward-looking statement.

Neither Tawana nor AMAL provide any financial or investment 'advice' as that term is defined in the South African Financial
Advisory and Intermediary Services Act, 37 of 2002.
Investors should exercise caution when dealing in the securities of Tawana and AMAL. In the case of any doubt, they should seek
their own professional advice and consult with their own bank manager, stockbroker, solicitor, accountant, tax adviser or other
professional adviser.

06 September 2018

PricewaterhouseCoopers Corporate Finance (Pty) Ltd

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