Emerging lithium producer Sayona Mining Limited (
Under an agreement with Lithium Royalty Corp. (LRC), Sayona will acquire LRC's right to purchase the 60% interest in the Moblan project (Moblan Interest) held by Guo Ao Lithium Ltd (Guo Ao) and will acquire the Moblan Interest from Guo Ao for a consideration of US$86.5 million. SOQUEM Inc., a wholly owned subsidiary of Investissement Quebec and a 40% partner in the project, has waived its right of first refusal in connection with Sayona's acquisition of the Moblan Interest.
Sayona's Managing Director, Brett Lynch commented: "We are delighted to be extending our relationship with Investissement Quebec, which has invested billions of dollars in lithium and other resources projects across Quebec, including North American Lithium (NAL), Moblan and Nemaska Lithium.
"The recent rise in lithium prices reflects the importance of securing quality supply and there is no better place to be than Quebec as we develop a lithium resource base to supply North America's fast-growing electric vehicle and battery industry."
Located about 130km north-west of Chibougamau, Moblan is host to high-grade spodumene mineralisation, with a Mineral Resource Foreign Estimate of 12.03Mt @ 1.4% Li2O (refer Table 1* below and Cautionary Statement). It is hosted in a well-studied deposit, with previous exploration work comprising 132 diamond drill holes for more than 17,559m, establishing a 1.5km strike.
The broad thickness of mineralisation, typically 20-30m width, combined with a shallow 30-35 degree dip results in a favourable mining geometry, with a low waste to ore strip ratio of 2.9 to 1.
Sayona has identified the opportunity for a potential expansion of the resource, including following up previous geotechnical drilling which intersected up to 29.1m of continuous spodumene-bearing pegmatites outside the resource envelope.
The project is located in a proven lithium mining province, Eeyou-Istchee James Bay, which hosts proven world-class lithium resources including Nemaska Lithium's Whabouchi mine. It is well serviced by key infrastructure and transport and has access to low-cost, environmentally friendly hydro power.
Mr Lynch added: "Moblan is a tier-one project comparable to any of the region's top hard rock lithium mines. It has potential for further expansion and will be an important asset for Sayona's future growth.
"We have been monitoring opportunities for further expansion in Quebec and this ticks all the right boxes. There is a huge opportunity here for Sayona to develop a new lithium asset base in Northern Quebec, adding to our Abitibi lithium hub.
"This will further drive our transformation into the leading lithium producer in North America, supplying its accelerating demand for this key battery metal."
Consistent with the Company's focus on sustainable development, Sayona will engage in ongoing community consultation to ensure maximum benefits flow to the local community, including First Nations and other key stakeholders.
Guo Ao's 60% interest in the project includes certain mineral claims, technical data and studies as well as the rights of Guo Ao in the joint venture formed with SOQUEM, Guo Ao's 40% partner. The purchase price in consideration for Guo Ao's 60% interest is payable by Sayona on closing of the transaction, expected on or prior to 15 October 2021, subject to financing and other customary conditions.
In consideration for the assignment by LRC of its rights to acquire the Moblan Interest, Sayona has agreed to the following terms with LRC:
a) in consideration for a US$5 million payment by LRC, the grant by Sayona to LRC of a Gross Overriding Revenue (GOR) Royalty on the Moblan Interest, calculated as follows:
(i) 2.5% for the first 1 million tonnes (Mt) of ore per annum produced from the Moblan Project;
(ii) 1.5% for any tonne of ore per annum produced from the Moblan Project in excess of the first 1 Mt.
b) in consideration for a US$3 million payment by LRC, Sayona will cause the transfer to LRC of the 2% Net Smelter Return (NSR) Royalty currently owned by Quebec Precious Metals Inc. on the Tansim project;
c) in consideration for a US$500,000 payment by LRC, the grant by Sayona to LRC of a 1.5% GOR Royalty on Sayona's Mallina Project in Western Australia;
d) Sayona and LRC have also agreed to enter into an offtake agreement with respect to the Moblan Project on the following key terms:
(i) 10% of Sayona's ownership participation in the Moblan Project of the annual production for life of mine;
(ii) price at a 5% discount to the prevailing market terms; and
e) Payment by Sayona to LRC of a US$1 million structuring fee on closing of the acquisition of LRC's rights to acquire the Moblan Interest.
Moblan Project Outline
The Moblan Project is host to high-grade spodumene mineralisation intruding a gabbro sequence in the Frotet-Evans greenstone terrane. Lithium was first discovered in the property during the 1970s, with first drilling conducted in 2007. A total of 132 diamond drill holes for 17,559m have been completed to date.
Resources and Reserves Foreign Estimates
In 2019, DRA/Met-Chem completed a Feasibility Study on the Moblan lithium project for Guo Ao. The report dated 24 August 2019 detailed a Mineral Resource Estimate and a Mineral Reserve Estimate which are reported in the Table below as Foreign Estimates (refer Tables 1* below and Table 2* at the end of this report for study parameters).
- Tonnages have been rounded to the nearest 0.01 Mt to reflect their approximate nature.
- Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. The quantity and grade of reported Inferred resources in this Mineral Resource Estimate are uncertain in nature and there has been insufficient exploration to define these Inferred resources as Indicated or Measured, and it is uncertain if further exploration will result in upgrading them to these categories.
Sayona regards the Moblan acquisition as a significant transaction based on the known high-grade mineralisation and opportunity for expansion of the resource base.
Key attributes include:
- Premium high-grade lithium mineralisation of 1.40% Li2O.
- Low stripping ratio of waste rock to ore of 2.9 to 1.
- Typically hosted in a single thick, tabular pegmatite with true width commonly 20 - 30m (see Figure 1* below).
Significant opportunity to expand Moblan's lithium resource base has been identified. The resource mineralisation is open to the east and at depth, with planning for step-back and extensional drilling underway.
Subsequent to the resource calculation, 10 geotechnical holes were drilled in November 2018. One of the holes, GD-18-03, intersected 21.9m of continuous spodumene-bearing pegmatite to the north of the eastern resource area, indicating a potential for the expansion of the resource extents.
A number of subparallel footwall dykes are mapped on surface to the immediate south of the resource and which remain untested by drilling. Also, to the east, offset spodumene pegmatites have returned economic grades and remain to be drill tested. Similarly to the west, faulting has offset the main pegmatite with no drilling carried out to test for the offset extension.
In addition, Guo Ao drilled condemnation hole CD-18-08 to sterilise a proposed tailing dam on the western adjacent property. This intersected 26.45m of continuous spodumene mineralisation, indicating the high prospectivity of the project area for new discoveries, even when pegmatite does not crop out at surface.
Exploration drill planning is underway and will focus on the search for additional high-grade pegmatite mineralisation. This includes step out drilling from the resource area as well as three priority targets in parallel bodies to the south and to the east and west of the resource area (see Figure 2* below).
The Moblan property is located approximately 130km to the north-west of the town of Chibougamau and 600km north of Montreal. Access is via Highway 167 onto the all-weather Route du Nord road and then via gravel roads to the project.
The project is located in the western Superior Province, within the eastern segment of the Frotet-Evans greenstone belt (FEGB), which extends over some 250km from Lac Mistassini to the Nottaway River.
The main spodumene pegmatite dyke (Main Dyke) has an east-west strike of 1,500m length, a dip of 35deg to the north and widths ranging between 20 to 30m (Figure 1* and 2), with the spodumene content commonly present as coarsely grained crystals, accompanied by quartz, feldspar and muscovite.
A swarm of Li-spodumene and barren pegmatite dykes outcrop on the north and the south of the Main dyke, in the Gabbro sill. One narrow, parallel dyke occurs on the footwall of the Main dyke ("Footwall dyke"). North to south oriented pegmatite dykes are present at the Moblan East prospect, with outcrops of 150m strike length and widths of around 10m.
Sayona continues to expand its Quebec lithium assets, having recently announced the potential for a significant resource expansion at its newly acquired North American Lithium (NAL) mine (refer ASX announcement 13 September 2021).
Recent drilling conducted at the Company's nearby Authier Lithium Project also has the potential to increase its lithium resource, together with planned drilling at the emerging Tansim Lithium Project.
Sayona's moves to strengthen its asset base follow accelerating lithium demand in North America, with lithium prices recently hitting three-year highs amid an upsurge in sales of electric vehicles and following multi-billion dollar investments by North American automakers and governments.
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About Sayona Mining Ltd
Sayona Mining Limited (ASX:SYA) (OTCMKTS:SYAXF) is an Australian, ASX-listed (SYA) 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. The Company has lithium projects in Quebec, Canada and in Western Australia.
Please visit us as at www.sayonamining.com.au
Phone: +61 (7) 3369 7058