Last checked at 25 Mar 2013 07:00
25 mARCH 2013
Rare Earth minerals plc
("Rare Earth Minerals" or "the Company")
Field Work Commences on the Bacanora - Rare Earth Minerals Lithium Joint Venture Property, Mexico
Rare Earth Minerals PLC (AIM: REM) is pleased to announce that the Field Work programme has commenced on the El Sauz and Fleur lithium concessions ('the Concessions') that form part of the Sonora Lithium Project in northern Mexico. The Company will earn an initial interest of 10% in the Concessions with an option to earn up to 49.9% interest in the Concessions from Bacanora Minerals Ltd as announced on 14 February 2013.
Listed below are the field work activities planned at the Sonora Lithium Project.
Field Work Programme
·; First phase of exploration funded by the Company consists of geological mapping and surface rock sampling at the El Sauz concession.
·; Previous sampling by Bacanora located lithium-bearing clay units that averaged 5,537 ppm Li (2.9% LCE*) over a true thickness of 4.5 metre sampled interval at one location on El Sauz.
·; Object of the current programme is to fully delineate extent of lithium-bearing sediments and determine lithium contents of exposed clay units.
·; An estimated 230 samples will be collected; the programme is scheduled to be completed by end of March, with analytical results to follow in early April.
·; Results will be used to plan an extensive diamond drilling programme to test down dip potential of lithium surface showings.
·; Drilling is expected to commence in late April or early May in conjunction with geological mapping and rock sampling at the adjacent Fleur concession.
About the Sonora Lithium Project:
The Concessions cover 3,411 hectares out of a total of 5,786 contiguous hectares that make up the Sonora Lithium Project owned by Bacanora.
Initial rock sampling and mapping of the Project by Bacanora located the lithium-bearing clay units. Drilling by Bacanora in 2010 and 2011 located two lithium-bearing clay units (upper and lower) that average 41 and 22 m in thickness, respectively, and that are separated by an ignimbrite unit varying from 1 to 45 m in thickness. The sedimentary-volcanic sequence dips at approximately 20o to the east and crops out along 3.5 km of strike length. The exposures are in erosional windows looking through overlying basalt that covers much of the area. The lithium-bearing clay minerals have been identified as hectorite and polylithionite.
The Concessions border the La Ventana concession that is 100% owned by Bacanora in which Rare Earth Minerals has no interest.. NI 43-101 compliant inferred resources have been estimated for two clay units (referred to as the "La Ventana Lithium Deposit") on the La Ventana concession. The inferred resources for the two clay units total 60 million tonnes averaging 3,000 ppm Li (equivalent to 1.6% lithium carbonate assuming 100% recovery and no process losses). Bacanora has used the inferred resources on La Ventana for a Preliminary Economic Assessment ("PEA") of the La Ventana concession (refer to Bacanora news release dated January 25, 2013). Highlights of the PEA for a potential lithium mining and production operation with an output of 35,000 tonnes battery grade lithium carbonate per annum over a 20 year open pit mine life suggest annual revenue of $US210 million for an Internal Rate of Return ("IRR") of 138%, with a 1.9 year pay back. Capital costs are estimated at $US114 million and average operating costs at $US1,958/tonne. Net present value ("NPV") of the Project, discounted at 8%, is $US848 million, assuming an average lithium carbonate price of $US6,000/tonne.
David Lenigas, Rare Earth Minerals Chairman commented:
"The Company is very pleased to be starting work on this exciting project which has similar lithium values in clay units that are believed may be correlative to those found on the adjoining La Ventana concession. It is a tremendous opportunity to be able to begin exploring beside a property with reported resources. We are very optimistic that continued exploration of the Sonora Lithium Project may yield positive results on the Concessions."
Lithium is the lightest of the alkali metals and has unique electrochemical properties that make it the element of choice for batteries of high energy storage capacity and other energy applications as well as a host of industrial and health applications."
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*LCE = lithium carbonate (Li2CO3)Equivalent: determined by multiplying Li value in percent by 5.324 to get an equivalent Li2CO3 value in percent. Use of LCE assumes 100% recovery and no process losses in conversion of Li to Li2CO3.
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.
For further information please contact:
Rare Earth Minerals Plc .
David Lenigas, Non-Executive Director
+44 (0) 207 440 0640
NOMAD - WH Ireland
James Joyce
+44 (0) 207 220 1666
PR - Pelham Bell Pottinger
Charlie Vivian
+44 (0)20 7861 3232
Weston Macklem
+44 (0)20 7861 3232