First Bulk Lithium Production and Funding Update

Andrada Mining Limited

22 May 2023

 

22 May 2023

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

Andrada Mining Limited

("Andrada" or the "Company")

Production of the First Bulk Lithium Concentrate from the Pilot Test Programme and Progress Update on Debt Funding

Andrada Mining Limited (AIM: ATM), an African technology metals mining company with a portfolio of mining and exploration assets in Namibia, announces that it has produced lithium concentrate in the form of a high purity petalite concentrate. The concentrate was produced as part of the Company's off-site pilot test programme to investigate the metallurgical potential of the pegmatites from its mineral license areas around the town of Uis in Namibia.

HIGHLIGHTS:

Saleable lithium concentrate

·      First bulk lithium concentrate produced from the off-site pilot test programme using dense medium separation ("DMS"), consisting of 0.5 tonnes of petalite.

·      The 85% pure petalite concentrate assayed 4.16 % Li₂O.

·      Potential offtakers have indicated that this concentrate composition represents a desirable lithium product.

·      The concentrate will be used to conduct test work with potential offtakers, including petalite conversion to lithium carbonate and lithium hydroxide.

Lithium bulk-sampling pilot plant

·      Construction of an on-site lithium pilot plant is on schedule with completion due during June 2023, and commissioning expected to commence in July 2023.

·      The pilot plant will enable the Company to expedite bulk pilot test work and increase pilot production of lithium concentrate.

Funding update

·      Senior debt facility from Development bank of Namibia ("DBN") expected to reach contractual close at the end of May 2023 with potential first drawdown in June 2023.

·      The conclusion of the Orion Global Resource facility ("Orion") is contingent on an intercreditor agreement between the Orion and the senior lenders Development bank of Namibia ("DBN") and Standard Bank.

Anthony Viljoen (CEO) commented:

"We are extremely pleased to announce the production of our first saleable bulk lithium concentrate. This milestone follows the previously reported successful laboratory scale test work and we believe it moves us one step closer to full-scale lithium production. With the completion of the on-site pilot plant imminent, we intend to expedite bulk pilot test work on all our mineral licenses. Simultaneously, we plan to increase pilot-scale production of lithium concentrate for testing with potential offtakers to achieve initial lithium sales.

We believe that this represents a huge step towards realising the value of our mineral assets in Namibia and we look forward to updating the market in due course."

FIRST BULK LITHIUM CONCENTRATE FROM THE BOND EQUIPMENT TESTING FACILITY

Andrada commenced its pilot test programme for lithium during the first quarter of the 2023 calendar year (see announcement dated 20 March 2023), consisting of bulk sampling and pilot processing.  DMS processing of bulk samples from the Company's Nai Nais (ML133) licence is currently being conducted by Bond Equipment ("Bond"), a specialist in mineral processing solutions and a test work provider in South Africa. The first concentrate of 0.5 tonnes of high purity petalite (lithium), as in the images below (Figure 1), is from these bulk samples. Offsite pilot DMS processing at Bond is ongoing, and the Company expects to produce more than ten tonnes of concentrate from these samples.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf

Figure 1: Andrada Mining CEO, Anthony Viljoen, with the petalite concentrate (left), and the DMS test plant at Bond Equipment (right).

The concentrate grade achieved from the first concentrate of 0.5 tonnes is detailed in Table 1. The iron (Fe₂O₃) in the concentrate is believed to be a product of the ferrosilicon used in the DMS process and there is potential to reduce this contaminant further through magnetic separation.  The Company believes that the concentrate may be suitable for both the industrial market (glassware & ceramics), as well as feedstock for lithium refineries producing lithium carbonate or lithium hydroxide. The bulk sample for this pilot test had a head grade of 1.50% Li₂O.

Table 1: Petalite concentrate assay.

Li2O	Fe2O3	K2O	TiO2	CaO	MgO	MnO	P
4.16%	0.14%	0.97%	0.002%	0.12%	0.07	0.01	0.21

Nai Nais bulk samples were prioritised because the currently accessible Uis resource is weathered thereby impacting grades. Higher grades are expected in the slightly deeper Uis resource which will be accessible after the present push-back. Nonetheless, the ML133, ML134 (Uis) and ML129 (B1C1) pegmatites display similar styles of mineralisation. Therefore, based on exploration and sampling results, Andrada regards this Nai Nais sample as representative of the higher grade petalite portions of the Uis ore body (ML134).

Preparation of the sample material entailed initially crushing it to a top size of 8 mm at the Uis Mine circuit. Thereafter, it was transported to the Bond test facility where it was deslimed at 0.5 mm and then screened into coarse and fine size fractions at 2mm. The above results were produced from the coarse size fraction and processing of finer size fractions will be subsequently piloted. The petalite concentrate will be used to conduct test work with potential offtakers, including petalite conversion to lithium carbonate or lithium hydroxide.

ON-SITE LITHIUM PILOT PLANT CONSTRUCTION UPDATE

Construction of the on-site lithium bulk-sampling pilot plant is on schedule and on budget to be completed in June 2023. The pilot plant consists of a crushing, screening, DMS and a gravity separation circuit (Figure 3). Following completion of construction, the on-site pilot bulk processing for lithium is expected to expedite Andrada's bulk pilot test work and increase lithium concentrate production. The pilot plant processing capacity will be 20 tonnes per hour with minimum annual production targeted at 2,400 tonnes and an upper annual production target of 10,000 tonnes. This facility could generate annual revenues of between US$5million to US$20 million at the upper levels of production assuming an average grade of 4.0% Li₂O and an average petalite price of US$2,000. It is intended that a pilot lithium flotation and sensor-based ore sorting circuit will be added in the near-future to provide additional optionality in the treatment of lithium ores.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf

Figure 2: Three-dimensional model of the lithium pilot plant.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf

Figure 3: Lithium pilot plant construction: May 2023

OVERVIEW OF LITHIUM METALLURGICAL TEST WORK

Andrada's mining licenses ML134, ML133 and ML129 are located within a 40 km radius of the town of Uis (Figure 3). They all contain prolific pegmatite occurrences, containing lithium, tin, and tantalum mineralisation. The ore minerals all tend to be present in the same pegmatite rock, thereby providing potential opportunity for producing multiple technology metals from the same ore body. Petalite and spodumene appear to be the dominant lithium minerals present in the mineralised pegmatites. Metallurgical test work to date has focussed on the concentration of petalite due to its prevalence in the current mining area on ML134. However, spodumene beneficiation has been included in the future work programme, in response to the discovery of spodumene occurrences on ML133 and ML129.

DMS technology

Petalite test work included three different beneficiation technologies, namely DMS, froth flotation and sensor-based ore sorting. DMS technology exploits differences in mineral densities to separate lithium minerals from the host rock. The petalite mineral has a lower density than many of its associated gangue minerals, allowing it to be separated at a cut density of approximately 2.45 g.cm^-3. Test work has indicated that it may be possible to upgrade higher grade ore of more than 1.0% Li₂O to a saleable concentrate through DMS alone.

Flotation technology

Froth flotation has also been confirmed as a successful method for concentrating petalite from a host rock. The flotation process operates with a particle size range of between 20 and 250 microns, requiring milling of the feed material. It is anticipated that flotation of petalite may be necessary in sections of the ore body that display a lithium grade of less than 1.0% Li₂O, as well as for areas where milling is required for optimal petalite liberation. Flotation test campaigns conducted at independent test facilities have demonstrated the plausibility of flotation as a means of upgrading DMS pre-concentrated material to a saleable lithium concentrate.

Sensor-based ore sorting technology

Andrada is simultaneously investigating sensor-based ore sorting process as an alternative or complementary technology for beneficiating lithium ore. Bulk ore sorting test campaigns by OEMs (Original Equipment Manufacturers) using near - infrared sensor technology have demonstrated the potential for petalite to be pre-concentrated at a relatively coarse top size of approximately 60 mm. This provides the Company with additional processing options for consideration for its planned lithium expansion.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf

Figure 4: Andrada's mineral licenses in the Erongo Region of Namibia. ML134, ML133 and ML129 occur within a 40 km radius of the town of Uis.

FUNDING UPDATE

The Company is pleased to confirm that the senior debt facility for USD 5,5 million (N$100 million) with the Development Bank of Namibia, as detailed in the announcement of 5 July 2022 ("DBN Facility") is now on track for contractual closure at the end of May 2023, with initial drawdown in June 2023. A further update will be provided in the next few weeks.

However, the conclusion of the US$25m funding facility with Orion Global Resource Fund, detailed in the announcement dated 15 September 2022 (the "Orion Funding Facility") remains subject to the finalisation of an intercreditor agreement between Orion and the senior lenders DBN and Standard Bank. Further updates will be provided in due course.

Andrada Mining Limited Anthony Viljoen, CEO Sakhile Ndlovu, Head of Investor Relations	[phone]
Nominated Adviser
WH Ireland Limited Katy Mitchell/Andrew de Andrade	[phone]
Corporate Advisor and Joint Broker
H&P Advisory Limited Andrew Chubb Jay Ashfield Matt Hanson	[phone]
Stifel Nicolaus Europe Limited Ashton Clanfield Callum Stewart Varun Talwar	[phone]
Tavistock Financial PR (United Kingdom) Emily Moss Catherine Drummond Adam Baynes	[phone]

About Andrada Mining Limited

Notes to editors

Andrada Mining Limited is a London-listed technology metals mining company with a vision to create a portfolio of globally significant, conflict-free, production and exploration assets. The Company's flagship asset is the Uis Mine in Namibia, formerly the world's largest hard-rock open cast tin mine.

Lithium laboratory test work completed during the 2022 calendar year indicated a high-grade, ultra-low iron lithium petalite concentrate. The test work to convert lithium petalite concentrate to battery-grade lithium hydroxide was initiated with Nagrom, a leading Australian processing company, and commercial engagements with lithium petalite concentrate off - takers are on-going.

An exploration drilling programme is currently underway with the aim of expanding the tin resource over the fourteen additional, historically mined pegmatites, all of which occur within a 5 km radius of the current processing plant. The Company has set a mineral resource target of 200 Mt to be delineated within the next 5 years. The substantial mineral resource potential allows the Company to consider economies of scale.

Andrada is managed by a board of directors with extensive industry knowledge and a management team with deep commercial and technical skills. Furthermore, the Company is committed to the sustainable development of its operations and the growth of its business. This is demonstrated by the way the leadership team places significant emphasis on creating value for the wider community, investors, and other key stakeholders. Andrada has established an environmental, social and governance system which has been implemented at all levels of the Company and aligns with international standards.

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