Update on the Sonora Lithium Project Mexico

RNS Number : 2986G

Rare Earth Minerals PLC

06 May 2014

 



6 May 2014

Rare Earth Minerals Plc.

("Rare Earth Minerals", "REM" or "the Company")

Update on the Sonora Lithium Project, Mexico

Rare Earth Minerals Plc (LSE AIM: REM) is pleased to provide an update on recent exploration activities and technical progress on its joint ventures with Bacanora Minerals Ltd (TSX-V: BCN) on the Sonora Lithium Project in northern Mexico.

Highlights:

·     Drilling and Exploration:

o  El Sauz - Fleur Joint Venture:

§ Stage 3 drill program was recently completed on the El Sauz - Fleur concessions; and

§ Mapping and prospecting have discovered new clay exposures on the Fleur concession.

o  Megalit Joint Venture:

§ Diamond drilling has commenced on the Penasco lithium clay prospect on the Megalit concession;

§ Mapping and prospecting have discovered new clay exposures on the Megalit concession; and

§ Trenching of lithium clay surface showings on the Buenavista concession will be initiated shortly as a part of the exploration programme on Megalit.

·     Engineering and Pilot Plant:

§  After achieving lithium carbonate product with over 99.5% purity, engineering design work has been commissioned to scope and design a lithium carbonate plant with the capacity of 35,000 - 50,000 tones per year of lithium carbonate;

§  Pilot plant continues to produce lithium carbonate samples for potential buyers; and

§  Test work on the clay units from La Ventana and Sauz-Fleur areas was conducted in order to determine suitability for use in drilling mud.

David Lenigas, the Company's Chairman commented:

"Now that 99.5% battery grade lithium carbonate has been confirmed at Sonora, REM is pleased to see that engineering studies are now being initiated on a lithium carbonate plant of a size that could rank Sonora high on the list of potential significant global lithium producers. World production of lithium carbonate is currently running at over 150,000 tonnes of a year, with demand expected to double by 2020 through organic growth and growth in the Lithium-Ion battery market driven mainly by the electric vehicle industry.

"We continue to see excellent progress on both the exploration and technical fronts at Sonora. Drilling continues to better delineate the lithium deposit and we are now planning on stepping out quite significantly to test for further extensions of the deposit."

El Sauz and Fleur Concessions (Joint Venture #1) Update:

Stage 3 diamond drilling, consisting of 1,096.48 metres in 11 holes, was completed in April 2014, with analytical results having been recently received for 3 of the eleven holes.  To date, a total of 4,997.51 metres have been drilled in 41 holes by the Company on the Fleur and El Sauz concessions ("Joint Venture #1"). Results for significant lithium intercepts in Stage 3 holes for which analyses have been received varied from 1,369 ppm Li to 3,623 ppm Li  across 6.63 metres and 15.24 metres respectively in the Upper Clay unit and from 1,713 to 4,997 ppm Li across 17.37 metres and 34.14 metres respectively in the Lower Clay unit (Table 1).

Table 1. Significant Lithium Analyses Stage 3 Holes to Date

Hole	Unit	From (m)	To (m)	Length (m)	Li ppm	LCE %
ES-31	Upper Clay	17.91	27.99	10.08	1,472	0.78
	Including	22.10	27.13	5.03	2,218	1.18
	Upper Clay	43.89	59.13	15.24	3,623	1.93
	Lower Clay	69.49	103.63	34.14	4,997	2.66
ES-35	Upper Clay	93.35	99.97	6.63	1,369	0.73
	Lower Clay	106.68	124.05	17.37	1,713	0.91

Mapping and prospecting on the Joint Venture #1 lands has continued to be productive, resulting in the discovery of new lithium-bearing clay showings that have potential to significantly increase the lithium resource on the lands under joint venture. Further testing of these new zones will be undertaken as a part of the current program. In addition, trenching of surface exposures on El Sauz will be undertaken once the current drilling has finished.

San Gabriel, Buena Vista and Megalit Concessions (Joint Venture #2) Update:

Diamond drilling has commenced to test a new lithium bearing clay prospect, Penasco, located on the Megalit concession, to the south of El Sauz. In addition, a new clay occurrence, Cieneguita, to the east of the Penasco prospect will be drill tested. The seven hole, 1,500 metre diamond drill program is expected to be completed in late May with results to follow in late June.

In conjunction with the drilling, mapping and prospecting will continue on the large (94,815 hectare) Megalit concession in order to locate and sample additional exposures of the lithium-bearing clay basin.  Trenching is also planned for lithium-bearing clays exposed in a northerly striking direction along 6 kilometres on the Buenavista concession. Previous sampling by Bacanora returned lithium values ranging from 121 to 1,350 ppm Li from surface clay samples collected on Buenavista.

Engineering and Lithium Pilot Plant Update:

In conjunction with the ongoing surface work at the Sonora Lithium Project, initial engineering design work is being initiated by independent contractors for a lithium carbonate plant capable of producing between 35,000 - 50,000 tonnes per year of lithium carbonate. The combined La Ventana, El Sauz and Fleur concessions have been estimated to contain inferred lithium resources totalling 148,271,000 tonnes averaging 3,097 ppm Li, a resource potential equivalent to 2.45 million tonnes of lithium carbonate, assuming no process losses and 100% recovery of lithium from the clays. Bulk samples continue to be processed at the pilot plant in Hermosillo in order to produce lithium carbonate samples for prospective buyers.

In addition, clay samples have been submitted to Grinding Solutions Ltd, a metallurgical and mineral processing consultancy and laboratory Services Company based in the UK. Initial test work on the clays from the Sonora Lithium Project have been undertaken to determine suitability for petroleum drilling muds. Preliminary results indicate that a commercial drilling mud product could potentially be produced from the clays. Grinding Solutions has recommended further tests be carried out in order to formulate a process for the production of a marketable drilling mud product.

About REM's interests in the Sonora Lithium Project:

REM has a 30% interest in the Bacanora subsidiary that owns the contiguous El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions (the "Joint Venture #1 Lands") under joint venture with Bacanora. Inferred lithium resources for the El Sauz and Fleur concessions total 88,271,000 tonnes, averaging 3,163 ppm Li at a 2,000 ppm cut-off (1.68% lithium carbonate equivalent assuming 100% recovery and no process losses). The resource on the Joint Venture #1 Lands is open down dip to the east and to the south. For further details concerning the Company's first agreement with REM and details of Joint Venture #1, please refer to the Company's press release dated May 22, 2013. REM has a 10% interest in the Bacanora subsidiary that will hold the Buenavista, Megalit and San Gabriel concessions which are subject to an agreement (Joint Venture #2) with Bacanora in which REM has rights to acquire up to a 30% interest - for details on this agreement please refer the Company's press release dated March 13, 2014.

REM has a [6.1%] of Bacanora where Inferred resources have also been estimated for the La Ventana Lithium Deposit totaling 60 million tonnes, averaging 3,000 ppm Li (equivalent to 1.6% lithium carbonate equivalent assuming 100% recovery and no process losses).

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.

- Ends -

For further information please contact: 

Rare Earth Minerals plc                                                                   [phone]

David Lenigas

Kiran Morzaria

WH Ireland Limited (NOMAD & Joint Broker)                               [phone]

James Joyce

Nick Field

Hume Capital plc (Joint Broker)                                                     [phone]

Guy Peters

Jon Belliss

Square1 Consulting

David Bick                                                                                           [phone]

Mark Longson

 

END

 

 

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