For personal use only - InvestorIntel · 2018. 1. 31. · Sayona Mining Limited (ASX: SYA) ("Sayona" or the "Company") is pleased to announce the activities report for the quarter,

31 JANUARY 2018

DECEMBER 2017 QUARTERLY REPORT

Hig hlig hts

� Authie r JORC Mine ra l Re sourc e s a nd Ore Re se rve s upg ra de d

� Optimise d PFS Comple te d - Pre - ta x NPV8 of C$221m (AUD$227m), Pre - Ta x IRR of

56% a nd c a pita l pa yba c k 2.5 ye a rs

� MOU sig ne d with Cha ng yua n for pote ntia l Authie r off- ta ke a nd downstre a m

proc e ssing

� Authie r pe rmitting a nd e nvironme nta l studie s a dva nc ing towa rds c omple tion in

2018

� Authie r De finitive Fe a sibility Study a nd Pha se 3 drilling prog ra m c omme nc e s

� $4.9 million re nounc e a ble rig hts offe ring suc c e ssfully c omple te d

Sa yona Mining Limite d (ASX: SYA) ("Sa yona " or the "Compa ny") is p le a se d to

a nno unc e the a c tivitie s re p o rt fo r the q ua rte r, inc lud ing :

� Authie r, Ca na d a – ma jo r fo c us o n c o mp le tio n o f the o p timisa tio n p ro g ra ms fo r

the Authie r Op timise d Pre -Fe a sib ility Stud y a nd c o mme nc e me nt o f the De finitive

Fe a sib ility Stud y;

� We ste rn Austra lia n Lithium, Austra lia – ro c k c hip a nd so il sa mp ling p ro g ra ms

c o mp le te d a t Ma llina a nd De e p We ll; a nd

� Ca p ita l ra ising – a $4.9 millio n c a p ita l ra ising to fund c o mp le tio n o f the Authie r

De finitive Fe a sib ility Stud y, Authie r p ilo t me ta llurg ic a l te sting p ro g ra m a nd

c o rp o ra te c o sts wa s c o mp le te d .

Authie r

The Co mp a ny’ s p rima ry stra te g y is to fo c us o n c o mp le ting the stud ie s re q uire d to

c o mme nc e the d e ve lo p me nt o f the p ro je c t, inc lud ing the De finitive Fe a sib ility Stud y.

Authie r is a ne a r-te rm d e ve lo p me nt p ro je c t a nd c a sh-flo w g e ne ra tio n o p p o rtunity.

The Co mp a ny b e lie ve s it will c re a te sig nific a nt sha re va lue -up lift p o te ntia l fo r

sha re ho ld e rs a s the p ro je c t is a dva nc e d to wa rd s d e ve lo p me nt.

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MOU Sig ne d for Authie r Off- Ta ke a nd Downstre a m Va lue Adding

Opportunitie s

During the q ua rte r, the Co mp a ny sig ne d a no n-b ind ing Me mo ra nd um o f

Und e rsta nd ing (“MO U”) with le a d ing China b a se d b a tte ry ma nufa c ture r, Hua n

Cha ng yua n Lic o Co Ltd (“Cha ng yua n” ).

Cha ng yua n, a sub sid ia ry o f the Fo rtune 500 Co mp a ny, China Minme ta ls Gro up , is a

b a tte ry re se a rc h, d e ve lo p me nt, a nd p ro d uc tio n c o mp a ny. In 2016, the c o mp a ny

p ro d uc e d mo re tha n 16,000 to nne s o f b a tte ry c a tho d e ma te ria ls a nd is e xpa nd ing

its p ro d uc tio n c a p a c ity to 36,000 to nne s in 2018. The ma in p ro d uc ts p ro d uc e d

inc lud e , lithium c o b a lt o xid e a nd lithium ma ng a ne se o xid e b a tte rie s, a nd te rna ry

c o mp o site lithium-io n c a tho d e ma te ria ls.

The MO U p a ve s the wa y fo r a d va nc ing d isc ussio ns to fa c ilita te a d e ve lo p me nt

a llia nc e e xp lo ring ma rke ting , te c hnic a l a nd fina nc ia l o p p o rtunitie s fo r the Authie r

p ro je c t, inc lud ing :

� Cha ng yua n p urc ha sing up to 100,000 to nne s o f sp o d ume ne c o nc e ntra te

p e r a nnum;

� De ve lo p me nt p a rtne rship s fo r the va lue -a d d ing o f the c o nc e ntra te s into

lithium c a rb o na te a nd / o r lithium hyd ro xid e in e ithe r China o r Ca na d a ; a nd

� Fund ing a nd inve stme nt o p p o rtunitie s fo r Sa yo na a nd the Authie r p ro je c t.

JORC Mine ra l Re sourc e s Upg ra de

In June 2017, the Co mp a ny re p o rte d a JORC 2012 c o mp lia nt Mine ra l Re so urc e

fo llo wing the Pha se 2 d rilling p ro g ra m1. During the q ua rte r, the Mine ra l Re so urc e wa s

up d a te d to inc lud e the No rthe rn Pe g ma tite whic h wa s no t p re vio usly inc o rp o ra te d

in the Mine ra l Re so urc e . In a d d itio n, the Authie r Ma in p e g ma tite ha s b e e n inc re a se d

d ue to re fine me nt o f the lithium so lid s mo d e l fo r the ma in p e g ma tite . The Authie r

d e p o sit ha s 20,183 me tre s o f d ia mo nd d rilling in 150 ho le s.

Ta ble 1 – Authie r JORC Mine ra l Re sourc e s Estima te (0.45% Li20 c ut- off g ra de )

Ca te g ory Tonne s (Mt) Gra de s % Li20 Conta ine d Li20

Me a sure d 5.86 1.01% 59,186

Indic a te d 10.19 1.03% 104,957

Infe rre d 2.30 0.99% 22,810

Tota l 18.35 1.02% 186,953

Authie r Optimise d Pre - Fe a sibility Study

During the q ua rte r, the Co mp a ny c o mp le te d the Op timise d Pre -Fe a sib ility Stud y

(“ PFS” ). The PFS inc o rp o ra te s the ne w e xp a nd e d JORC Mine ra l Re so urc e , re sults fro m

1 Se e ASX re le a se , “Authie r JORC Re so urc e Inc re a se d , 14 June 2017

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a numb e r o f te c hnic a l o p timisa tio n p ro g ra ms, a nd re a lig nme nt o f p ric ing to re fle c t a

c o nc e ntra te g ra d e o f 6% Li2O a nd mo re re c e nt ind ustry fo re c a sts. The PFS c o nfirms

the te c hnic a l a nd fina nc ia l via b ility o f c o nstruc ting a simp le , lo w-strip ra tio , o p e n-c ut

mining o pe ra tio n a nd p ro c e ssing fa c ility p ro d uc ing sp o d ume ne c o nc e ntra te . The

p o sitive PFS d e mo nstra te s the o p po rtunity to c re a te sub sta ntia l lo ng -te rm susta ina b le

sha re ho ld e r va lue a t a lo w c a p ita l c o st.

Ke y find ing s o f the PFS, inc lud e :

� Pre -ta x NPV8 o f C$221 millio n a nd IRR 56% (re a l te rms a t 8% d isc o unt ra te );

� Annua l a ve ra g e c o nc e ntra te p ro d uc tio n o f 96,000 to nne s a t 6% Li20;

� Ave ra g e a nnua l re ve nue o f C$73 millio n a nd EBITDA o f C$35 millio n;

� Mine g a te c a sh c o sts o f C$370/ t a nd FOB Po rt c a sh c o sts o f C$430/ t (US$327/ t);

a nd

� Initia l c a p ita l e xp e nd iture o f C$64 millio n a nd C$110 millio n o ve r the life -o f-

mine .

The Fe b rua ry 2017 PFS ha s b e e n up d a te d to inc o rp o ra te the fo llo wing ne w

info rma tio n:

� JORC Re so urc e up g ra d e fo llo wing the Pha se 2 d rilling p ro g ra m;

� Ge o te c hnic a l a nd d ilutio n stud ie s;

� Imp ro ve d me ta llurg ic a l o utc o me s fro m the la te st te sting p ro g ra ms;

� Re a lig nme nt o f sp o d ume ne p ric ing to re fle c t c urre nt ind ustry fo re c a sts; a nd

� Re vie w o f o p e ra ting a nd c a p ita l c o sts.

Ba se d o n the re sults o f the ne w info rma tio n, a ne w Pro ve n a nd Pro b a b le Ore Re se rve

e stima te o f 11.66Mt @ 1.03% Li20 a t a 0.45% Li20 c ut-o ff g ra d e (Ta b le 1) ha s b e e n

d e fine d .

Ta ble 2– Authie r JORC Ore Re se rve Estima te (0.45% Li20 c ut- off g ra de )

Ca te g ory Tonne s (Mt) Gra de s (% Li20) Conta ine d Li20

Prove n Re se rve 5.59 0.99 55,341

Proba ble Re se rve 6.07 1.06 64,363

Tota l Re se rve s 11.66 1.03 120,098

No te : The Ore Re se rve e stima te is b a se d o n the d e ta ils pub lishe d in a se p a ra te ASX re le a se

“Authie r JORC Ore Re se rve ” , 11 De c e mb e r 2017. The Ore Re se rve Estima te is inc lusive o f 2%

d ilutio n a nd 5% o re lo ss

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Summa ry PFS fina nc ia l a nd o p e ra ting hig hlig hts a re summa rise d in Ta b le 3 a nd

4.re spe c tive ly.

Ta ble 3– Authie r Lithium Proje c t PFS Hig hlig hts

De sc ription CAD$ US$ AUD$

Ave ra g e Spodume ne Pric e 807 614 831

Initia l De ve lopme nt Capita l Costs 64 48 65

Tota l Life of Mine Ca pita l Costs 110 84 113

Tota l Ne t Re ve nue (re a l te rms) 1,322 1,004 1,361

Tota l Proje c t EBITDA (re a l te rms) 624 474 642

Ave ra g e Life of Mine Ca sh Costs (Mine - g a te ) 370 281 381

Ave ra g e Life of Mine Ca sh Costs (Montre a l Port FOB

ba sis) 430 326 442

Ne t Pre se nt Va lue (re a l te rms @ 8% disc ount ra te ) 221 167 227

Pre - Ta x Inte rna l Ra te of Re turn 56

Proje c t Pa yba c k Pe riod 2.5

No te s: CAD$:US$ 0.76 a nd CAD$:AUD$ 1.03

Ta ble 4– Authie r Lithium Proje c t PFS Ope ra ting Hig hlig hts

De sc ription Unit Re sults

Ave ra g e Annua l Ore Fe e d to the Plant to nne s 686,000

Annua l Ave ra g e Spodume ne Produc tion to nne s 96,000

Life - of- Mine ye a rs 17

Life - of- Mine Strip Ra tio wa ste to o re 6.95:1

Authie r De finitive Fe a sibility Study

The Co mp a ny a wa rd e d the ma in c o mp o ne nts o f Authie r De finitive Fe a sib ility Stud y

(“ DFS” ) inc lud ing , the mining , p ro c e ssing a nd infra struc ture to BBA.

BBA is a n ind e p e nd e nt Ca na d ia n c o nsulting e ng ine e ring firm o p e ra ting

inte rna tio na lly. Its te a m is c o mp o se d o f hig hly-q ua lifie d e xp e rts in se ve ra l e ng ine e ring

d isc ip line s inc lud ing e le c tric a l, c ivil, me c ha nic a l, ind ustria l d a ta p ro c e ssing , mining ,

me ta llurg ic a l p ro c e sse s, a uto ma tio n, a nd c o nstruc tio n ma na g e me nt. BBA ha ve

e xte nsive e xp e rie nc e in the Ca na d ia n mining industry a nd ha ve b e e n a c tive ly

invo lve d in Fe a sib ility Stud ie s fo r Que b e c lithium p ro je c ts inc lud ing , Ne ma ska a nd the

No rth Ame ric a n Lithium p ro je c t.

A numb e r o f o the r DFS wo rk p ro g ra ms inc lud ing g e o te c hnic a l, tra nsp o rt a nd

e nviro nme nta l ha ve b e e n o utso urc e d to sp e c ia list c o ntra c to rs a re und e rwa y.

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The c o mp a ny is ta rg e ting c o mp le tio n o f the DFS in the se c o nd q ua rte r c a le nd a r

2018.

Authie r Pha se 3 Drilling Progra m

The Co mp a ny c o mme nc e d a Pha se 3 d rilling p ro g ra m a t Authie r to c o lle c t a b ulk

sa mp le fo r a p ilo t me ta llurg ic a l p ro g ra m, a nd furthe r e xp a nsio n a nd o p timisa tio n o f

the re so urc e .

Pilot Pla nt Sa mple

The initia l pha se o f the p ro g ra m wa s a ime d a t c o lle c ting 5 to nne s o f d rill c o re fo r a

p ilo t me ta llurg ic a l te sting p ro g ra m. The p ilo t p ro g ra m d a ta will b e use d fo r inp uts into

the p ro c e ss p la nt d e sig n in the DFS. The sa mp le wa s suc c e ssfully c o lle c te d b y the

e nd o f De c e mb e r.

Re sourc e e xpa nsion

Sub se q ue nt to the e nd o f the q ua rte r, the d rilling p ro g ra m re -c o mme nc e d in e a rly

Ja nua ry 2018. The o b je c tive o f the d ia mo nd d rilling is to e xp a nd a nd o p timise , the

re so urc e a nd re se rve p o sitio n fo r inc o rp o ra tio n into the DFS, inc lud ing :

� Drilling a t d e p th a nd within the e a ste rn a nd we ste rn se c to rs a t sha llo w le ve ls to

p ro vid e b e tte r d e finitio n a nd p o te ntia l e xp a nsio n o f the o re b o d y - se e Fig ure 2;

� Po te ntia l e xp a nsio n o f the no rthe rn p e g ma tite zo ne whe re a sma ll JORC

Mine ra l Re so urc e s wa s d e fine d a s p a rt o f the Op timise d Pre -Fe a sib ility Stud y

(se e ASX re le a se , Authie r JORC Mine ra l Re so urc e Up d a te , 11th De c e mb e r 2017)

– se e Fig ure 3;

� Infill d e finitio n d rilling within the ma in re so urc e zo ne whe re the mine ra lisa tio n is

no t a s we ll d e fine d a nd is c urre ntly tre a te d a s wa ste fo r the Ore Re se rve

e stima tio n; a nd

� Co nve rting infe rre d re so urc e s into a hig he r re so urc e c la ssific a tio ns b y furthe r

hig he r d e nsity d rilling (re so urc e a re a s sho wn in b lue in Fig ure 2).

The Co mp a ny ha s suc c e ssfully inc re a se d the size o f the re so urc e a nd re se rve

thro ug h p re vio us d rilling p ro g ra ms. Any furthe r inc re a se s ha ve the p o te ntia l to

e nha nc e the p o sitive e c o no mic s d e mo nstra te d in the re c e ntly a nno unc e d

Op timise d Pre -Fe a sib ility Stud y. The ne w d rilling d a ta will b e inc o rp o ra te d into the

re so urc e mo d e ls fo r the DFS whic h is e xp e c te d to b e c o mp le te d in the se c o nd

q ua rte r o f 2018.

The Co mp a ny will a lso b e lo o king to d rill e xte nsio ns o f the ma jo r struc tura l e a st-we st

tre nd whic h is hig hlig hte d fro m histo ric a l g e o p hysic s - se e Fig ure 3. The fo c us o f the

d rilling is to ta rg e t ne w p e g ma tite syste ms no t o utc ro p p ing o n the surfa c e . During the

Pha se 2 d rilling p ro g ra m, the Co mp a ny d isc o ve ry o f the No rthe rn Pe g ma tite whic h

d o e sn’ t o utc ro p a t the surfa c e . The a re a s in the we st ha ve no t b e e n e xte nsive ly

e xp lo re d a nd the Co mp a ny b e lie ve s the re is p o te ntia l to id e ntify ne w syste ms.

The Co mp a ny will a lso c o mp le te so me c o nd e mna tio n d rilling to ste rilise a re a s

re q uire d fo r the p ro c e ss p la nt, a nd c o mb ine d wa ste a nd ta iling s sto ra g e a re a s.

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Fig ure 1: Pote ntia l a re a s to e xpa nd the Authie r re sourc e

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Fig ure 2: Ma in Authie r de posit (le ft) a nd Authie r North (rig ht) lithium solids mode l a t

0.45% Li20

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Fig ure 3: Ma in struc tura l tre nd hig hlig hte d by historic a l g e ophysic s

Environme nta l a nd Pe rmitting Work Prog ra ms

Hydrog e olog ic a l Surve y

A te n-ho le d rilling p ro g ra m fo r the hyd ro g e o lo g y stud y ha s no w b e e n c o mp le te d . The

d rill ho le s will b e use d to a sse ss hyd ro g e o lo g ic a l c o nd itio ns p re va iling in the p ro je c t a re a .

The info rma tio n will b e use d to a sse ss the c urre nt q ua lity o f the g ro und wa te r a nd to

ma ke the a sse ssme nt o f the p o te ntia l p ro je c ts imp a c t o n the g ro und wa te r re g ime a nd

q ua lity in the a re a .

In a d d itio n, the d a ta will b e use d to p la n the p ump ing a c tivitie s fo r the mine , a nd to

p ro vid e info rma tio n fo r the g e o te c hnic a l e ng ine e ring a nd g e o -me c ha nic s o f the

p ro je c t. The p ro g ra m will imp ro ve the und e rsta nd ing o f the p ro je c t g ro und wa te r

e nviro nme nt a nd is e xp e c te d to mitig a te the e nviro nme nta l risks a ttrib uta b le to the

o p e ra tio n.

Environme nta l Surve y Upda te

The a utumn flo ra a nd fa una fie ld surve y ha s no w b e e n c o mp le te d . The surve y inc lud e d :

� Cre a ting a ve g e ta tio n inve nto ry, inc lud ing we tla nd s a nd sp e c ie s with

sp e c ia l sta tus;

� Inve nto ry o f fish a nd fish ha b ita t;

� Inve nto rie s o f wild life sp e c ie s with sp e c ia l sta tus; a nd

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� Asse ssme nt o f surfa c e wa te r q ua lity.

No ma jo r issue s ha ve b e e n id e ntifie d . Fina l e nviro nme nta l re p o rts will b e c o mp le te d b y

the first q ua rte r o f 2018.

Mining Le a se Applic a tion Proc e ss

The Co mp a ny ha s no w c o mp le te d the p ro je c t surve y whic h is re q uire d fo r the Mining

Le a se a p p ro va l p ro c e ss. The fina l fo ur ste p s re q uire d to c o mp le te the Mining Le a se

a p p lic a tio n inc lud e , c o mp le tio n o f De finitive Fe a sib ility Stud y, p ub lic c o nsulta tio ns, b a se

line e nviro nme nta l wo rk a nd re ha b ilita tio n p la n. This is la rg e ly c o mp le te o r in p ro g re ss.

Sta ke holde r Eng a g e me nt

The Co mp a ny is a c tive ly p ro g re ssing the lo c a l c o mmunity a nd First Na tio ns sta ke ho ld e r

e ng a g e me nt p ro g ra ms. The p ro g ra m a ims to e nsure a ll e nviro nme nta l, so c ia l a nd

e c o no mic c o nc e rns ra ise d b y sta ke ho ld e rs a re inte g ra te d into the p ro je c t d e ve lo p me nt.

Ea rly d isc ussio ns with the lo c a l La Mo tte c o unc il ha ve no t fla g g e d a ny ma jo r issue s a nd

the c o unc il is lo o king fo rwa rd to ne w inve stme nt a nd jo b c re a tio n fo r the re g io n.

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We ste rn Austra lia n Proje c ts

Exp lo ra tio n te nure in We ste rn Austra lia inc lud e s le a se s c o ve ring so me 1780km2 in the

wo rld c la ss Pilg a ng o o ra lithium d istric t. The 141km2 Ma llina p ro je c t, E47/ 2983, ha s b e e n

the ma in fo c us o f wo rk d uring 2017 a nd thre e ne w zo ne s o f sp o d ume ne p e g ma tite ha ve

b e e n id e ntifie d , inc lud ing the re c e nt Are a C p ro sp e c t d isc o ve ry. A p o te ntia l fo r g o ld

mine ra lisa tio n ha s a lso b e e n re c o g nise d a t the De e p We ll a nd Frie nd ly Cre e k a re a s.

Pilb a ra te nure is d isp la ye d in the fig ure b e lo w.

Fig ure 4: Sa yona Lithium Te ne me nts in We ste rn Austra lia

Ma llina Proje c t

Exp lo ra tio n a t Ma llina c o ntinue d within a 6x3 kilo me tre zo ne whe re thre e g ro up s o f

sp o d ume ne p e g ma tite s ha ve b e e n id e ntifie d to d a te . Wo rk wa s fo c usse d a t the Are a C

p ro sp e c t whe re sp o d ume ne p e g ma tite s we re first id e ntifie d la st q ua rte r. Ad d itio na l ro c k

sa mp ling ha s c o nfirme d the p re se nc e o f stro ng lithium mine ra lisa tio n, with a ma ximum

4.27% Li2O re turne d in p e g ma tite with visua l sp o d ume ne . So il sa mp ling (354 sa mp le s)

re turne d a stro ng , c o he re nt lithium a no ma ly a s we ll a s d e fining une xp la ine d lithium

a no ma lie s in the mo re re g io na l sa mp ling . Re sults a re d isp la ye d in the fig ure b e lo w.

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Fig ure 5 Ma llina Pe g ma tite s a nd Ne w Are a C Prospe c t Ge oc he mistry

Re sults a re c o nsid e re d e nc o ura g ing . The infill so il sa mp ling a t Are a C re turne d up to

1399p p m Li2O , a nd using a 150p p m Li2O thre sho ld (d isp la ye d b y g re e n ha tc h in the

fig ure b e lo w), re sults d e fine a c o he re nt a no ma ly o ve r 1200m in strike e xte nt. This

a no ma ly is c e ntre d o ve r va ria b ly o utc ro p p ing p e g ma tite up to 15m in surfa c e wid th

(true wid th no t kno wn).

Sta tuto ry re q uire me nts to a llo w d rilling a t the Are a C p ro sp e c t ha ve b e e n lo d g e d a nd

a p p ro ve d . Pla nning fo r d rill te sting the Are a C p ro sp e c t a nd o the r ta rg e t a re a s within the

Ma llina te ne me nt is we ll a d va nc e d .

Re g iona l Lithium Proje c ts

During the q ua rte r, re c o nna issa nc e wa s ma d e a t the We st Wo d g ina te ne me nt,

E45/ 4726. Twe nty o ne ro c k sa mp le s we re c o lle c te d o f g ra nite a nd p e g ma tite to id e ntify

fra c tio na tio n tre nd s a nd he lp d e fine the g e ne ra l p ro sp e c tivity o f the a re a . Re sults

inc lud e e le va te d lithium a nd tin, ind ic a ting se ve ra l a re a s fo r fo llo w up sa mp ling in the

2018 fie ld se a so n.

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Fig ure 6 Are a C Prospe c t Soil Ge oc he mistry a nd Se le c te d Roc k a ssa y Re sults

Gre a t Sa ndy Option

During the q ua rte r, the Co mp a ny ma d e the first sta g e o p tio n pa yme nt to G re a t Sa nd y

Pty Ltd (“G re a t Sa nd y”) to a c q uire a 694 km2 p a c ka g e o f 6 te ne me nts in the wo rld -c la ss

Pilg a ng o o ra lithium d istric t o f We ste rn Austra lia (se e Fig ure 4).

The G re a t Sa nd y p urc ha se te rms inc lud e a n o p tio n to a c q uire a n 80% inte re st in a ll the

te ne me nts b y ma king sta g e d p a yme nts in c a sh o r sha re s a t Gre a t Sa nd y’ s e le c tio n o f

$300,000 (c urre nt p a yme nt) within 12 mo nths a nd $300,000 within 24 mo nths a nd fre e

c a rrying Gra nt Sa nd y to De c isio n to Mine . At the De c isio n to Mine , Gre a t Sa nd y c a n

e ithe r e le c t to d ilute o r c o ntrib ute to o ng o ing e xp e nd iture c o mmitme nts o r c o nve rt the

20% inte re st to a 2% g ro ss sme lte r ro ya lty.

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De e p We ll Proje c t

The De e p We ll te ne me nt a p p lic a tio n c o ve rs 119km2 o f a p o o rly o utc ro p p ing se q ue nc e

o f Ma llina Fo rma tio n se d ime nts, intrud e d to the e a st b y ne ste d p luto ns o f the Po rtre e

g ra nite . Vo lc a nic ro c ks o f the Fo rte sc ue a g e d Mt Ro e Ba sa lt in the we ste rn te ne me nt

re g io n a re ma rg ine d e a stwa rd s b y p o o rly o utc ro p p ing , hig hly we a the re d se d ime nts with

lo c a l p yrite a nd c o ng lo me ra te te xture s (se e fig ure b e lo w). The a g e o r o rig in o f the se

c o ng lo me ra te s is unc e rta in, a nd ma p p ing ha s no t b e e n a b le to id e ntify se d ime nta ry

units o r ho rizo ns tha t c a n b e tra c e d a lo ng strike . The g e o lo g ic a l se tting o f the te ne me nt

ho we ve r ind ic a te s a p o te ntia l fo r c o ng lo me ra te ho ste d g o ld mine ra lisa tio n, whic h ha s

re c e ntly b e e n id e ntifie d a t se ve ra l ne a rb y a re a s.

Fig ure 7 De e p We ll Te ne me nt, Forte sc ue Group a nd Ne a rby Gold Prospe c ts

Wo rk in the q ua rte r inc lud e d c o mme nc e me nt o f o rie nta tio n g e o c he mistry with 147 so il

a nd 22 ro c k sa mp le s c o lle c te d . Re sults fo r the first sa mp le b a tc h o f c o a rse so il ma te ria l

(59 sa mp le s) re turne d sub d ue d a ssa y re sults up to 2.5p p b g o ld . Re sults fro m the fine r

sa mp le fra c tio ns a re p e nd ing .

Pyrite c ub e s a re lo c a lly a b und a nt in se ve ra l a re a s o f the b e d ro c k se d ime nts, p ro vid ing

e nc o ura g e me nt tha t hig h e ne rg y se d ime nta ry p ro c e sse s ma y ha ve o c c urre d d uring

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d e p o sitio n. To he lp ide ntify p o te ntia l he a vy mine ra l a sse mb la g e s (ma g ne tite , ura nium,

a nd c hro mite e tc ), whic h ma y b e a sso c ia te d with g o ld mine ra lisa tio n, a sma ll numb e r o f

stre a m se d ime nt a nd lo a m sa mp le s we re c o lle c te d . The se we re c o nc e ntra te d b y

p a nning to g ive a he a vy mine ra l c o nc e ntra te . Re a d ing s o f ma g ne tic susc e p tib ility a nd

ra d io a c tivity (sc intillo me te r re a d ing s o f c o unts p e r se c o nd ) ha ve a lso b e e n c o lle c te d

a lo ng tra ve rse a nd sa mp le line s. Inte rp re ta tio n o f the se re sults is o n-g o ing .

Furthe r wo rk is p la nne d , to e xp a nd the g e o c he mic a l a nd g e o p hysic a l p ro g ra mme s a nd

c a rry o ut furthe r g e o lo g ic a l ma p p ing .

Othe r Proje c t Are a s

No e xp lo ra tio n wa s c a rrie d o ut a t e ithe r the Mt Ed o n Lithium p ro je c t o r the Ea st

Kimb e rle y Gra p hite pro je c t d uring the q ua rte r.

Corpora te Ac tivitie s

Ca pita l Ra ising

During the q ua rte r, the c o mp a ny c o mp le te d a p ro ra ta re no unc e a b le rig hts issue ,

c o mp rising a n o ffe r o n the b a sis o f o ne (1) ne w sha re fo r e ve ry two (2) e xisting sha re s

he ld a t a n issue p ric e o f 1 c e nt ($0.01) p e r sha re . Und e r the Rig hts Issue , 487,409,777 ne w

sha re s we re issue d ra ising $4,874,097 b e fo re the c o sts o f the o ffe r. The Rig hts Issue is

p a rtia lly und e rwritte n up to $2.0 millio n b y Pa te rso ns Se c uritie s Limite d , who a lso a c ting a s

the le a d ma na g e r to the issue .

For more informa tion, ple a se c onta c t:

Co re y No la n

Chie f Exe c utive Offic e r

Pho ne : +61 (7) 3369 7058

Ema il: info @ sa yo na mining .c o m.a u

Sa yo na Mining Limite d is a n Austra lia n, ASX-liste d (SYA) c o mp a ny fo c use d o n so urc ing

a nd d e ve lo p ing the ra w ma te ria ls re q uire d to c o nstruc t lithium-io n b a tte rie s fo r use in the

ra p id ly g ro wing ne w a nd g re e n te c hno lo g y se c to rs. Ple a se visit us a s a t

www.sa yo na mining .c o m.a u

Re fe re nc e to Pre vious ASX Re le a se s for Authie r, Ca na da

This p re se nta tio n re fe rs to the fo llo wing p re vio us ASX re le a se s:

� Authie r JORC Re so urc e Exp a nd e d , 11 De c e mb e r 2017

� Authie r Ma id e n JORC Ore Re se rve , 11 De c e mb e r 2017

� Authie r PFS, 11 De c e mb e r 2017

The Co mp a ny c o nfirms tha t it is no t a wa re o f a ny ne w info rma tio n o r d a ta tha t ma te ria lly

a ffe c ts the info rma tio n inc lud e d in the o rig ina l ma rke t a nno unc e me nt a nd a ll ma te ria l

a ssump tio ns a nd te c hnic a l p a ra me te rs c o ntinue to a p p ly a nd ha ve no t ma te ria lly

c ha ng e d . The Co mp a ny c o nfirms tha t the fo rm a nd c o nte xt in whic h the Co mp e te nt

Pe rso n’ s find ing s a re p re se nte d ha ve no t b e e n ma te ria lly mo d ifie d fro m the o rig ina l

ma rke t a nno unc e me nts.

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Compe te nt Pe rson Sta te me nt

The info rma tio n in this re p o rt re la ting to p ro je c ts o n We ste rn Austra lia is b a se d o n

info rma tio n c o mp ile d b y Mr. Simo n Attwe ll, a Co mp e te nt Pe rso n, a nd who is a

Me mb e r o f The Austra la sia n Institute o f Mining a nd Me ta llurg y. Mr. Attwe ll is a n

e mp lo ye e o f Attg o ld Pty Ltd (“ Attg o ld ” ) whic h p ro vid e s g e o lo g ic a l se rvic e s to

Sa yo na .

Mr. Attwe ll ha s suffic ie nt e xp e rie nc e tha t is re le va nt to the style o f mine ra lisa tio n a nd

typ e o f d e p o sit und e r c o nsid e ra tio n a nd to the a c tivity b e ing und e rta ke n to q ua lify

a s a Co mp e te nt Pe rso n a s d e fine d in the 2012 Ed itio n o f the ‘ Austra la sia n Co d e fo r

Re p o rting o f Exp lo ra tio n Re sults, Mine ra l Re so urc e s a nd Ore Re se rve s’ . Mr. Attwe ll

c o nse nts to the inc lusio n in the re p o rt o f the ma tte rs b a se d o n his info rma tio n in the

fo rm a nd c o nte xt in whic h it a p p e a rs.

Te ne me nt Sc he dule

Austra lia n Te ne me nt Sc he dule

Te ne me nt Na me Sta tus Inte re st a t Sta rt of

Qua rte r

Inte re st a t e nd of

Qua rte r

E59/ 2092 Mt Ed o n G ra nte d 80%, with rig hts to 100%

o f p e g ma tite mine ra ls*

80%, with rig hts to 100%

o f p e g ma tite mine ra ls*

E59/ 2055 Mt Ed o n We st Gra nte d 100% (p e g ma tite

mine ra ls)

100% (p e g ma tite

mine ra ls)

E45/ 2364 Ta b b a Ta b b a Gra nte d Rig hts to 100% o f

p e g ma tite mine ra ls*

Rig hts to 100% o f

p e g ma tite mine ra ls*

E45/ 4703 Ta b b a Ta b b a Ea st Gra nte d 100% 100%

E45/ 4716 Re d Ro c k Gra nte d 100% 100%

E45/ 4726 We st Wo d g ina G ra nte d 100% 100%

E45/ 4738 Co o g le g o ng G ra nte d 100% 100%

E45/ 4775 Ca rlind ie Gra nte d 100% 100%

E80/ 4511 We ste rn Iro n Gra nte d 100% 100%

E80/ 4949 Co rkwo o d Gra nte d 100% 100%

ELA80/ 4968 Ke lle r Ap p lic a tio n 100% 100%

ELA47/ 3802 Frie nd ly Cre e k Ap p lic a tio n 100% 100%

ELA47/ 3829 De e p We ll Ap p lic a tio n 100% 100%

Gre a t Sa ndy Pty Ltd Option

E47/ 2983 Ma llina Gra nte d Op tio n Rig hts to 80% Op tio n Rig hts to 80%

E46/ 1103 Do rring to ns Gra nte d Op tio n Rig hts to 80% Op tio n Rig hts to 80%

E45/ 4687 White Sp ring s Gra nte d Op tio n Rig hts to 80% Op tio n Rig hts to 80%

E45/ 4721 Mt Ed g a r Gra nte d Op tio n Rig hts to 80% Op tio n Rig hts to 80%



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Ca na dia n Te ne me nt Sc he dule

Cla im Numbe r Re g iste re d holde r Re g istra tion Expira tion Are a

Da te Da te (he c t)

2116146 Sa yo na Mining Limite d 8/ 8/ 2007 7/ 8/ 2019 43.24







2187652 Sa yo na Mining Limite d 39853 43474 21.29










2240227 Sa yo na Mining Limite d 40428 43319 42.71



JORC Code , 2012 e dition – Ta ble 1 (se c tion 1; Sa mpling Te c hnique s a nd Da ta )

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report.

In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling

Geochemical samples have been collected as a first pass assessment and orientation of the project area. The samples have an irregular spacing reflecting the reconnaissance nature of the assessment.

Samples are grab samples.

The presence or absence of mineralisation was initially determined visually by the field geologist.

The type of geochemical sampling is a standard approach during the initial style reconnaissance that has been carried out. F

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problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

Not applicable, no drilling has been carried out

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.


Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

The total length and percentage of the relevant intersections logged.

Not applicable, no drilling has been carried out. This information is of insufficient detail to support any Mineral Resource Estimation.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.


No measures have been taken to ensure sampling is statistically representative of the in situ sampled material. The collection methodology is considered appropriate for this early stage assessment of the project.

The sample size is considered appropriate to the early stage of exploration carried out.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias)

Analysis was carried out by ALS, Brisbane which is a certified laboratory in compliance with AS/NZS-9001:2000. Analysis, of a 48 element suite, was determined by mixed acid digest followed by ICP-MS61. Six samples which reported high Li values by this method were re-assayed by peroxide fusion, method ME-ICP89, to give a high precision result. For samples collected at the Deep Well project low level gold determination by ST43 super trace aqua regia extraction and ICPMS finish was carried out. This is considered a

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and precision have been established. total digest appropriate to the samples submitted.

Not used

No additional quality control measures beyond that of the Laboratory QA/QC were implemented.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The use of twinned holes.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

The results are considered acceptable and have been reviewed by multiple geologists. The company conducts internal data verification protocols which have been followed.

Li has been converted to Li20 for the purposes of

reporting. The conversion used was Li20 = Li x 2.153. No other adjustments to assay data has been undertaken

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

Samples were located during collection by handheld GPS

The grid system used is Australian Geodetic MGA Zone 50 (GDA94).

The level of topographic control offered by the handheld GPS is considered sufficient for the work undertaken

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

There was no predetermined grid spacing to the rock sampling program.

The data spacing and distribution is not sufficient to establish the degree of geological and grade continuity appropriate for Mineral Resource estimation procedures.

Samples have not been composited.

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

Sampling was carried out over small areas of the project and it is not known if they are representative.


Sample security The measures taken to ensure sample security. Industry standard sample collection and storage have been reported by the vendor geologist.

Audits or reviews The results of any audits or reviews of sampling techniques and data.

No audits or reviews of the data have been conducted at this stage

JORC Co d e , 2012 e d itio n – Se c tio n 2 Re p o rting o f Exp lo ra tio n Re sults

(Crite ria liste d in the p re c e d ing se c tio n a lso a p p ly to this se c tio n.)


Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The Mallina project, E47/2983 is part of a larger tenement portfolio held under Option Agreement with Great Sandy Pty Ltd. The Option terms and tenement details have been previously reported, for example in 21st December 2016 ASX release titled ‘Option to Acquire

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The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

New Pilbara Spodumene Discovery’.

The Deep Well project is application E47/3829 which is pending grant and which has no known reasons why this should not proceed to grant.

There are no impediments that have been identified for operating in the project areas

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

At Mallina past exploration has focused on the gold and base metal potential of the area.

Together with government data provided by GSWA past information has allowed recognition of the projects potential.

Geology Deposit type, geological setting and style of mineralisation. Lithium is being targeted within rare metal pegmatites which represent the most fractionated and evolved pegmatite type. Sayona’s main focus is in discovery of albite-spodumene pegmatite types which host high grade lithium mineralisation. Rare metal pegmatites are uncommon, typically hosted in greenstone rocks near to granite intrusion. The Deep Well project is being explored to determine if gold mineralisation associated with heavy minerals which accumulated during deposition in the late Archaean is present.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Drilling has not been carried out.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

No variation to laboratory reported assays has been made.

Relationship between mineralisation

These relationships are particularly important in the reporting of Exploration Results.

Exploration is at an early stage and information contains insufficient data points to allow these relationships to be

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widths and intercept lengths

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

reported

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Sample plans are attached

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

All relevant assay results are reported herein.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

The exploration reported herein is at a very early stage but results are consistent with geological and other data

Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Further mapping and follow up sampling is required to define lithium targets and mineralisation for drill testing

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Documents

For personal use only - InvestorIntel · 2018. 1. 31. · Sayona Mining Limited (ASX: SYA) ("Sayona" or the "Company") is pleased to announce the activities report for the quarter,