Authier Pre-Feasibility Study Demonstrates Excellent Returns and Significant Upside Potential

Brisbane, Feb 16, 2017 AEST (ABN Newswire) - Sayona Mining Limited (ASX:SYA) (OTCMKTS:DMNXF) ("Sayona" or the "Company") is pleased to announce a maiden Ore Reserve estimate based on the positive outcome of the Pre-Feasibility Study ("PFS") for the development of the Authier lithium project in Quebec, Canada.

The PFS which is the subject of a separate announcement made today, demonstrates the technical and financial viability of constructing a simple, low-strip ratio, open-cut mining operation and processing facility producing spodumene concentrate. The positive PFS demonstrates the opportunity to create substantial long-term sustainable shareholder value at a manageable capital cost.

The positive PFS is considered sufficient to determine, in accordance with the JORC Code 2012, that a subset of the Measured and Indicated Mineral Resource (please see ASX announcement "Authier Lithium Project JORC Resource Significantly Expanded", 23 November 2016) be classified as Ore Reserves - see Table 1 (see the link below).

The PFS demonstrates that a viable mining and processing operation, and the infrastructure to support this, are available to develop the project. The PFS takes into account all the modifying factors considered material to the development of the project and statement of Ore Reserves. The inputs into the economic and financial analysis were based on realistic assumptions of technical, engineering, operating and economic factors. The capital and operating cost estimates were obtained from reputable consulting groups at the appropriate level of confidence for the PFS.

The PFS recommends advancing the project to the next study phase in conjunction with a number of optimisation programs, including additional definition and expansion drilling, further geotechnical and metallurgical test-work, and consideration of other downstream value-adding opportunities.

Corey Nolan, Chief Executive Officer, commented "This Ore Reserve, along with the recently completed Pre-Feasibility Study represents a significant milestone for the Company as it transitions from explorer to developer. A drilling program has commenced with the aim of significantly expanding the project resource and reserve base, and improving the economic returns of the project".

Authier Pre-Feasibility Overview

Introduction

The Authier project area comprises 19 mineral claims totaling 653 hectares, and extends 3.4 kilometres in an east-west, and 3.1 kilometres in a north-south direction. The mineral claims are located over Crown Land. The tenure is all in good standing and there are no known impediments to obtaining a license to operate. The claims are subject to a number of underlying vendor royalties.

The Authier project is situated 45 kilometres north-west of the city of Val d'Or, a major mining service centre, situated in the Province of Quebec. Val d'Or is located approximately 466 kilometres north-east of Montreal. The project is easily accessed by a rural road network connecting to a national highway a few kilometres east of the project site.

The deposit is hosted in a spodumene-bearing pegmatite intrusion. The dimensions of the deposit drilled to date are 825 metres long, striking east-west, with an average thickness of 25 metres, ranging from 4 metres to 55 metres, dipping at 40 degrees to the north. The deposit outcrops in the eastern sector and then extends up to 10 metres under cover in the western sector. The lithium mineralisation at the Authier project is related to multiple pulses of spodumene bearing quartz-feldspar pegmatite. Higher lithium grades are related with high concentrations of mid-to-coarse spodumene crystals (up to 4cm long) in a mid-to-coarse grained pegmatite facies.

Mineral Resources

The project has more than 18,800 metres of diamond drilling in 141 holes. The project was initially drilled between 1991 and 1999 by Raymor Resources Ltd (including bulk sampling and metallurgical testing programs), by Glen Eagle between 2010 and 2012, and Sayona has recently completed 3,967 metres of HQ size diamond drilling in 18 holes. Holes were typically drilled perpendicular to the strike of the mineralised pegmatite to provide high confidence in the grade, strike and vertical extensions of the mineralisation.

On 23 November 2016, an independent JORC Mineral Resource (2012) estimate was reported incorporating the 18 diamond core holes for 3,967 metres. The estimation was based on an Inverse Distance Squared interpolation using Micromine software. The parent block dimensions used were 5 metres x 5 metres x 5 metres with sub-blocks of 2.5 metres x 2.5 metres x 2.5 metres in accordance with the drill spacing and pegmatite body geometry. The JORC compliant Mineral Resource estimate at 0.5% Li20 cut-off grade is outlined in Table 2 (see the link below).

Mineral Reserves

The Measured and Indicated Resources were used for the optimisation studies to estimate the Ore Reserves, and SGS Canada found no material flaws in the existing Mineral Resource model. All the mineralised material classified in the Inferred Resource category was considered as waste for the pit optimisation process.

SGS Canada's scope of work for the mining study, included:

- Mine planning criteria (dilution, ore losses and cut-off grade criteria);

- Open pit optimisation to determine pit shell for eventual economic extraction of the orebody;

- Mine design and scheduling;

- Mine infrastructure and layout;

- Mine production scheduling;

- Mining capital and operating cost estimation;

- Revenue and cost modelling; and

- JORC (2012) Ore Reserve reporting.

The non-mining related optimisation inputs and modifying factors utilised were derived from the PFS level assessment work, including:

- Processing costs for the plant designed by Bumigeme;

- Metallurgical recovery factor of 80% to a 5.75% Li20 concentrate by SGS Lakefield;

- Average life of mine selling price of US$515/tonne for 5.75% Li20 concentrate (source: Deutsche Bank);

- An exchange rate of 0.76 CAD:USD; and

- Concentrate handling costs provided by a logistics contractor.

As part of the 2016 drilling program, the Company drilled 18 holes totaling 3,967 metres of oriented HQ core. Geo-technical work included logging the spodumene bearing pegmatite and adjacent footwall and hanging wall rock of 18 drill holes. Two holes were fully logged and 2,681 structures were identified, and 142 point load tests were performed. The Company also collected 10 samples for uniaxial compression strength testing at the University of Montreal l which confirmed the ore as being very hard to extremely hard. The information produced was used to define the proposed pit parameters outlined in Table 3 (see the link below).

To view the full release and tables, please visit:
http://abnnewswire.net/lnk/5I8RD2CM

To view the Authier Project Pre-Feasibility Study, please visit:
http://www.abnnewswire.net/press/en/87045/SYA-PFS


About Sayona Mining Ltd

Sayona Mining LtdSayona Mining Limited (ASX:SYA) (OTCMKTS:DMNXF) is a company focused on sourcing and developing the raw materials required to construct lithium-ion batteries for use in the rapidly growing new and green technology sectors. Please visit us as at www.sayonamining.com.au

 


Contact

Corey Nolan
Chief Executive Officer
Phone: +61-7-3369-7058
Email: info@sayonamining.com.au
www.sayonamining.com.au



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