Update on Lithium Joint Venture, Mexico

RNS Number : 0976C

Rare Earth Minerals PLC

11 April 2013

 



11 April 2013

Rare Earth minerals plc

("REM" or "the Company")

Update on Lithium Joint Venture, Mexico

Rare Earth Minerals PLC (AIM: REM) is pleased to announce that it has received encouraging assay results from the El Sauz lithium concession in northern Mexico.

Highlights:

·      Surface Lithium results indicate an initial 2 kilometre strike length at El Sauz

·      Initial high-grade-results of up to 7,220 ppm Lithium (3.84% Lithium Carbonate Equivalent) encountered.

·      Potassium grades up to 3.07%.

·      First drilling due to start by the end of April 2013.

David Lenigas, the Chairman of REM commented:

"The Company is very pleased with the results to date which now merit advancing the project to the first drill testing of the lithium bearing clay units on this property."

"Should the outcropping lithium clays be found to correlate with those on Bacanora's adjoining La Ventana concession, then the sedimentary basin that hosts the lithium-rich clays is likely to extend, in a northwesterly direction, for at least 7 kilometres, based on available geological evidence, suggesting potential for a large scale, world class lithium deposit.

"Diamond drilling, initially wide spaced, is expected to start over the next three weeks and this should lead to a far better understanding of the basin and the scale of the resource on the project areas."

Update:

The Company has received the results of surface rock samples collected during the first phase of the field work programme on the El Sauz and Fleur concessions ("the Concessions") that form part of the Sonora Lithium Project in north Mexico (the "Project").

REM will earn an initial interest of 10% in the Concessions, upon delivery of certain payments to Bacanora Minerals Ltd ("Bacanora"), the owner of the Concessions, with an option to earn up to 49.9% interest in the Concessions from Bacanora Minerals Ltd as announced on 14 February 2013.

The sampling to date has focused on the El Sauz concession, where 210 samples were collected from exposures of the sedimentary-volcanic sequence that hosts lithium-bearing clay units. Geological mapping indicates that lithium-bearing clay units occur within a sedimentary-volcanic sequence that, on El Sauz, is exposed over a strike length of 2 kilometres in a window through Tertiary capping basalt. The sequence appears to be exposed in an open fold with one limb dipping gently to the northeast and the other gently to the southwest.

Rock samples were collected as channel samples, 1.5 m in length, taken across strata from surface exposures. The samples were analysed by ALS Chemex Laboratories at their facility in North Vancouver, BC. Results of the analyses indicate that lithium values range from 10 to 7,220 ppm Li (3.84% LCE*) with 10 samples greater than 2,168 ppm (0.95 percentile). The samples also have values in potassium, which range from 0.04% to 3.07%, as well as other alkali metals. High lithium values are localized in three areas which may correspond to exposures of a clay unit that correlates with the upper clay unit on the adjoining La Ventana concession owned by Bacanora Minerals Ltd.(TSX-V: BCN).

The field work programme, as outlined in the news release dated March 25, 2013, will advance to the diamond drilling stage with initial holes being placed adjacent to the exposures of the Li-bearing clay units on El Sauz in order to test the down dip continuity of the units and their Li content. Mapping and surface sampling will continue on the Fleur concession. The first drill hole is expected to be collared around the end of April.

About the Sonora Lithium Project:

The Concessions cover 3,411 hectares out of a total of 5,786 contiguous hectares that make up the Sonora Lithium Project owned by Bacanora.

Initial rock sampling and mapping of the Project by Bacanora located the lithium-bearing clay units. Drilling by Bacanora in 2010 and 2011 located two lithium-bearing clay units (upper and lower) that average 41 and 22 m in thickness, respectively, and that are separated by an ignimbrite unit varying from 1 to 45 m in thickness. The sedimentary-volcanic sequence dips at approximately 20^o to the east and crops out along 3.5 km of strike length. The exposures are in erosional windows looking through overlying basalt that covers much of the area. The lithium-bearing clay minerals have been identified as hectorite and polylithionite.

The Concessions border the La Ventana concession that is 100% owned by Bacanora in which Rare Earth Minerals has no interest.  National Instrument 43-101 compliant inferred resources have been estimated for two clay units (referred to as the "La Ventana Lithium Deposit") on the La Ventana concession. The inferred resources for the two clay units total 60 million tonnes averaging 3,000 ppm Li (equivalent to 1.6% lithium carbonate assuming 100% recovery and no process losses). Bacanora has used the inferred resources on the La Ventana Lithium Deposit for a Preliminary Economic Assessment ("PEA") of the La Ventana concession (refer to Bacanora news release dated January 25, 2013). Highlights of the PEA for a potential lithium mining and production operation with an output of 35,000 tonnes battery grade lithium carbonate per annum over a 20 year open pit mine life suggest annual revenue of $US210 million for an Internal Rate of Return ("IRR") of 138%, with a 1.9 year pay back. Capital costs are estimated at $US114 million and average operating costs at $US1,958/tonne. Net Present Value of the Project, discounted at 8%, is $US848 million, assuming an average lithium carbonate price of $US6,000/tonne.

Lithium is the lightest of the alkali metals and has unique electrochemical properties that make it the element of choice for batteries of high energy storage capacity and other energy applications as well as a host of industrial and health applications.

____________________________

*LCE = lithium carbonate (Li₂CO₃)Equivalent: determined by multiplying Li value in percent by 5.324 to get an equivalent Li₂CO₃ value in percent. Use of LCE assumes 100% recovery and no process losses in conversion of Li to Li₂CO₃.

Qualified Person's Statement:

Information in this announcement relates to information compiled by Carl G Verley, P.Geo, a consultant to the Company, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia and is a Qualified Person with respect to the information disclosed herein.

For further information please contact:     

Rare Earth Minerals Plc                                                              .

David Lenigas, Non-Executive Director                                        

[phone]                                                                

NOMAD - WH Ireland

James Joyce

Nick Field

[phone]

PR - Pelham Bell Pottinger

Charlie Vivian

[phone]

Weston Macklem

[phone]

 

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