eEnergy Group Regulatory News (EAAS)

2 March 2017

Alexander Mining plc

("Alexander" or the "Company")

Lithium Research and Development Joint Venture

· New lithium processing technology research and development project

· Opportunity to earn up to 80% licence rights in any intellectual property created

· Complementary to existing AmmLeach® potential for cobalt production for use in lithium batteries

Alexander is pleased to announce a significant new research and development joint venture project ("JV") for the recovery of lithium from hard rock sources. The JV is between the Company and Dr. Nicholas Welham, Alexander's Principal Technology Consultant for ammoniacal and hypochlorous acid leaching.

Martin Rosser, CEO, said: "As an acknowledged expert in lithium and hydrometallurgy, working with Dr. Welham on this project offers the exciting potential to develop new lithium processing intellectual property in a sector of major interest. Moreover, it is complementary to our existing cobalt recovery technology as cobalt is an essential component in lithium batteries."

Dr. Welham said: "I am delighted to be working in partnership with Alexander, which has a belief that novel technology will change the mining industrial landscape. Its on‑going support for AmmLeach® and HyperLeach™ has been considerable, and I look forward to continuing working with their professional management team in bringing this opportunity to fruition."

Research and Development Joint Venture

The JV is to investigate the potential recovery of lithium from lithium bearing minerals. The JV parties believe that the only realistic sources of lithium to supply the rapidly expanding demand is from hard rock resources. Brine deposits are primarily in South America (Bolivia, Argentina and Chile) and China and historically these countries have a moderate sovereign risk. Brine deposits are concentrated by solar evaporation from large ponds and can only realistically occur in extremely arid areas. It is hard to fast track production from brine as the process to obtain lithium typically takes 18-24 months from commissioning to first product. Hard rock resources are a more viable proposition for rapid development as the time from commissioning to first concentrate can be a matter of a few weeks.

The spodumene (LiAlSi2O6) concentrate is typically sold to Chinese producers of lithium carbonate, who use a combined pyrometallurgical-hydrometallurgical ("pyro-hydro") flowsheet to produce a lithium carbonate (or hydroxide) product. The high cost of the pyro‑hydro process remains the significant obstacle to the low cost production of lithium carbonate (or hydroxide) from spodumene.

Dr. Welham has found what appears to be a promising route to the direct dissolution of spodumene under ambient temperature and pressure conditions. Further work is required to confirm these initial results and to expand the database for subsequent optimisation. At this stage, heap leaching appears the most likely mode of operation given the slow apparent rate of dissolution. If this is confirmed, it will open up a significant number of opportunities with companies with lithium resources. The novel process will allow processing of lower grade ore potentially increasing resources considerably. Tailings from existing operations are also expected to be treatable.

Joint Venture Terms

Alexander will be entitled to be the initial sole funder of the JV in return for an economic interest of up to 80 per cent. in a worldwide exclusive licence ("Licence") to commercialise the new technology(ies). The JV will be in stages, with stage 1, proof of concept, budgeted to cost US$10,000 and expected to take approximately three to four months. Thereafter, if stage 1 is favourable, Alexander may agree to fund part or all of the next stages, including a mini pilot plant, budgeted for an additional US$240,000 and to take 12-18 months.

In the event that Alexander does not wish to proceed Dr. Welham has the right to seek further developmental funding from other new partner(s) ("New Partners") on the same terms as Alexander.

The majority shareholder in the Licence, unless it is agreed otherwise amongst the Partners, will be entitled to become the Technology Manager of the licence. The Technology Manager will be free to market the commercial use of the Project Intellectual Property Rights and agree with potential third party users any commercial licensing agreement of its choosing. This may include, but is not limited to, advance entry fee, royalty, project equity etc.

Of the net licensing revenue received by the Technology Manager, 20 per cent. will be paid to Dr. Welham and the remaining 80 per cent. will be divided amongst the Licence holders in proportion to their Licence ownership equity interest.

Complementary to AmmLeach® technology for cobalt recovery

The new lithium R&D programme is complementary to the Company's existing AmmLeach® and HyperLeach™ processing technologies for the recovery of cobalt. Alexander is actively looking for commercial opportunities to utilise these patented technologies for the recovery of cobalt compounds (or metal) at the mine site. This is an especially interesting opportunity given the strong growth forecast for electric vehicles sales and the batteries they need. Many of the preferred batteries used, as well needing lithium, also require significant quantities of cobalt. There is an industry problem in obtaining cobalt using ethical production methods, in particular from countries such as the Democratic Republic of the Congo ("DRC"). With such a restriction, the key challenge, given the DRC's dominance of world cobalt production and reserves (circa over 50% for each), will be securing supply from other acceptable sources.

This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

ENDS

For further information, please contact:

Background on Lithium

Source, January 2017: US Geological Survey

https://minerals.usgs.gov/minerals/pubs/commodity/lithium/mcs-2017-lithi.pdf

Worldwide lithium production increased by an estimated 12% in 2016 in response to increased lithium demand for battery applications. Worldwide lithium production capacity was reported to be 49,400 tonnes ("t") in 2015; capacity utilization was estimated to be 64% in 2015 and 71% in 2016. Based on average projections by producers and industry analysts of about 14% growth worldwide, consumption of lithium in 2016 is projected to be about 37,800t, up from 33,300t in 2015.

Two brine operations in Chile and a spodumene operation in Australia accounted for the majority of world lithium production. The two lithium producers in Chile and the leading lithium producer in Argentina each announced plans to further expand lithium hydroxide production capacity to meet increasing demand from the electric vehicle industry. The long lead time to achieve production from brine makes product from these expansions available sometime in the early‑2020s. The joint owners of the leading spodumene operation in Australia announced plans to increase capacity and one owner began construction of a lithium hydroxide plant in Australia. To diversify supply, Chile's two lithium producers each announced planned joint ventures with companies in Argentina.

Lithium supply security has become a top priority for technology companies in the United States and Asia. Strategic alliances and joint ventures between technology companies and exploration companies continue to be established to ensure a reliable, diversified supply of lithium for battery suppliers and vehicle manufacturers. Brine operations were under development in Argentina, Bolivia, Chile, China, and the United States; spodumene mining operations were under development in Australia, Canada, China, and Finland; a jadarite mining operation was under development in Serbia; and a lithium-clay mining operation was under development in Mexico.

Background on Dr. Nicholas Welham 

Dr. Nicholas Welham graduated from Leeds University in 1986 with B.Eng (Hons) and from the Royal School of Mines at Imperial College with a PhD in 1993. He then moved to Australia to work at the Parker Centre for Hydrometallurgy, the Australian National University, Murdoch University and the University of Ballarat (now Federation University). Dr. Welham has over 80 professional journal publications and is inventor on around 50 international patents which have been granted for novel hydrometallurgical technologies.

Dr. Welham has undertaken a large number of industrially orientated minerals projects, primarily in the hydrometallurgy area. His international standing was enhanced by being an Editor-in-Chief of the Elsevier journal "Hydrometallurgy" for ten years. He has been Alexander Mining's Principal Technological Consultant since 2007 and has been the principal developer of the patented AmmLeach® and HyperLeach™ technologies. Since 2012, Dr. Welham has been an independent consultant specialising in developing novel hydrometallurgical processes for a range of clients.

Dr. Welham also offers a wide range of industry training courses, including the only professional course on Lithium Ore Processing. This course is scheduled to run as part of the MetPlant 2017 conference run by the Australasian Institute of Mining and Metallurgy in September. Negotiations are underway for the course to be run in London and Canada in mid-2017.