Rare Earth Minerals PLC “Rapid progress continues to be made” Kiran Morzaria, CEO

Kiran Morzaria, Chief Executive Officer of Rare Earth Minerals PLC LON:REM, commented: “Rapid progress continues to be made in advancing the Sonora Project, both regarding preparation for production and in discussions with offtake partners. This progress along with the excellent economics, re-affirm that the Sonora Project’s emergence as low cost, market leading lithium asset. The filing of the PFS has also allowed us to identify the significant value to REM and its shareholders of both its indirect holdings in the joint ventures and its direct holding in Bacanora.”

 

Rare Earth Minerals Plc (LON:REM; OTC: REMMY) reports that Bacanora Minerals Ltd has provided a detailed update on the Sonora Lithium Project in northern Mexico. The full news release from Bacanora is available at http://web.tmxmoney.com/article.php?newsid=84294447&qm_symbol=BCN.

REM holds an interest in the Project though its 17.19% holding in Bacanora and the joint venture interests of 30% in each of Mexalit S.A. de CV and Megalit S.A. de CV (“Megalit”) and as fully described below. The Project update, Pre-Feasibility Study, and amended Mineral Resource Estimate do not cover the Megalit joint venture

Highlights:

   --     Pre-Feasibility Study ("PFS") and amended Mineral Resource Estimate ("MRE") filed

— Discussions are ongoing with various offtake partners, banks, debt providers and strategic investors. The focus is on developing a project financing strategy as well as producing further battery grade lithium carbonate samples for distribution to potential partners in Asia, in Q3 this year:

– Extensive trenching of the deposit undertaken – over 80 tonnes of mineralised material extracted for processing at the pilot plant in Hermosillo and at external facilities

– There are plans to have offtake and project financing strategies finalised as part of the completion of the Feasibility Study in the first quarter of next year.

— The Feasibility Study (“FS”), which is fully funded, has commenced with the following activities undertaken:

– Drilling contractor mobilised to conduct infill reserve drilling – scheduled to start in this quarter and intended for completion in Q3 this year

– Process commenced to appoint international engineering and technical consultants to undertake the geological resource modelling, metallurgical test work, mine designs and process engineering

– Process commenced to recruit additional technical personnel with lithium development and operating expertise

— Amended Mineral Resource Estimate (“MRE”) incorporates results from metallurgical test work conducted in the previous quarter which highlighted that a potassium product can be recovered as a by-product

– Following this test work, SRK Consulting (UK) Limited (“SRK”) interpolated grades of potassium (“K”) into the block model

   -     Amended MRE being reported using a cut-off grade of 1,000 ppm lithium (previously 450 ppm)

– Amended MRE comprises an Indicated Mineral Resource estimated at 259 Mt averaging 3,200 ppm Li for 4.5 Mt of LCE, in addition to an Inferred Mineral Resource estimated at 160 Mt averaging 3,200 ppm Li for 2.7 Mt of LCE

– Amended MRE does not impact the attractive economics highlighted in the Pre-Feasibility Study.

 

Further Information:

The NI-43-101 compliant PFS and amended MRE are available on the Sedar website; http://sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00027876

Amended NI-43-101 Mineral Resource Estimate for Sonora

The amended report for Sonora, which has been prepared in accordance with NI 43-101, is entitled, Amended Mineral Resource Estimate for the Sonora Lithium Project, Mexico, April 2016. The lead author of the amended report is Mr. Martin Pittuck (MSc., C.Eng., FGS, MIMMM) of SRK, who is a “qualified person” within the meaning of NI 43-101 and is independent of the Company. The amended report has been filed on SEDAR and will also be made available for download on the Company’s website.

This report provides an amendment to the Mineral Resource Statement given in REM’s announcement dated 3 March 2016 (as the Li cut-off grade has since changed) and supersedes the previous technical report for Sonora that was released and filed in January 2016. This amended report incorporates the results of the metallurgical test work conducted, which also highlighted that a potassium product can be recovered as a by-product from lithium carbonate production, along with updated operating cost estimates in early 2016 (subsequent to the release of the January 2016 MRE). Following this test work, SRK interpolated grades of potassium into the block model and was requested to produce an amended MRE that includes K results. SRK has not received any further drilling data since the January 2016 MRE.

Since the 3 March 2016 announcement, SRK has amended the MRE to reflect the economic parameters contained within the PFS, including slightly lower projected lithium prices and increased processing costs. This has resulted in an amended MRE being reported using a cut-off grade of 1,000 ppm lithium (previously 450 ppm), which is confined to a resource pit shell based on updated reasonable optimisation parameters and lithium selling prices.

The amended MRE comprises an Indicated Mineral Resource estimated at 259 Mt averaging 3,200 ppm Li for 4.5 Mt of LCE, in addition to an Inferred Mineral Resource estimated at 160 Mt averaging 3,200 ppm Li for 2.7 Mt of LCE. Mineral Resources are stated inclusive of Mineral Reserves.

Table 1 SRK Amended Mineral Resource Statement as of 12 April 2016

 
 Classification    Clay Tonnes    Clay Grade      Contained Metal 
                       (Mt) 
----------------  ------------  -------------  -------------------- 
                                 Li ppm   K %   Kt     Kt      Kt 
                                                 Li    LCE      K 
----------------  ------------  -------  ----  ----  ------  ------ 
    Indicated          259       3,200    1.4   839   4,463   3,555 
----------------  ------------  -------  ----  ----  ------  ------ 
    Inferred           160       3,200    1.3   515   2,740   2,130
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