Last checked at 14 Feb 2013 07:00
14 February 2013
Rare Earth Minerals Plc
("REM" or the "Company")
REM signs Lithium farm-in deal in Northern Mexico
REM advises that it has signed an agreement with listed Canadian company Bacanora Minerals Ltd ("Bacanora") to participate in drilling and project evaluation of the extensions of its new 60 million tonne La Ventana high grade Lithium discovery in northern Mexico. The farm-in licences cover the 34 square kilometre El Sauz and Fleur concessions adjacent to and along strike from Bacanora's La Ventana discovery. The La Ventana discovery is stated by Bacanora to contain 930,000 tonnes of Lithium Carbonate Equivalent (LCE) in the 60 Million Tonnes of ore.
David Lenigas, REM's Executive Chairman stated:
"This is an exciting opportunity for REM, as the Board see Lithium as a metal in global demand over the coming years with an anticipated increase for Lithium batteries. Bacanora are making plans to mobilise the drill rig over the next few weeks and work has already started on the ground to prepare ahead of the commencement of the drilling programme."
"The geology is similar to that of the La Ventana deposit which has Lithium grades of up to 7,220 ppm and Cesium (a Rare Earth element) up to 500 ppm having already been assayed at surface on El Sauz."
"The intention of the farm-in is to progress drilling with the view of establishing a Lithium resource over the coming 12 months."
The El Sauz property consists of a continuous 120+ metre thick volcano-sedimentary section exposed in an area that covers 1,200 X 400 metres in several outcrops. This section is composed of altered tuffs, white and green clays and silica layers similar in style to Bacanora's La Ventana Lithium deposit. The section is gently dipping to the NE in the northern outcrops and to the SE in the southern portion and would have a low stripping ratio for potential mining operations, since the lithium-bearing clays are exposed on the surface.
Lithium is the lightest of the alkali metals and has unique electrochemical properties that make it the element of choice in batteries of high energy storage capacity as well as a host of other industrial and health applications.
Bacanora announced on 25 January 2013 the results of a positive Preliminary Economic Assessment ("PEA") on its adjacent La Ventana Lithium Project in Sonora, Mexico. In addition, Bacanora announced a total estimated inferred resource for the La Ventana Project of 60 million tonnes averaging 3,000 ppm Li (1.6% Lithium Carbonate Equivalent ('LCE') or 930,000 tonnes LCE . The Net present value ("NPV") of that Project, at an 8% discount rate, was $US848 million, assuming an output of 35,000 tonnes of battery grade Lithium Carbonate over a 20 year open pit life with an average Lithium Carbonate price of $US6,000/tonne for the life of the mine.
The key terms of the Binding Memorandum of Understanding are:
·; REM is to acquire an initial 10% interest in the El Sauz and Fleur Concessions from Bacanora by paying Bacanora $250,000 upfront and spending $500,000 on exploration and drilling over a 6month period.
·; After the first 6 month period, REM then has the right, at its election, to increase that interest to 30% by paying Bacanora another $500,000 and spending a further $1,000,000 on drilling and exploration over a further 6 month period
·; REM will then have an exclusive right of first refusal to further negotiate terms to increase that interest in the Concession to a maximum of 49.9%, provided the terms comply with the Company's stated investment strategy.
Background on the full Bacanora release in relation to its adjacent La Ventana property made to the Canadian Exchange on the 25 January 2013 can be found on its website www.bacanoraminerals.com
Qualified Person
David Lenigas B.Sc. (Mining Engineering), has reviewed and approved the information contained in this announcement. David holds a Mining Engineering Degree from the Kalgoorlie School of Mines (Curtin University) in Western Australia. He holds a Western Australian First Class Mine Manager's ticket. David is the Executive Chairman of Rare Earth Minerals Plc.
Enquiries:
Rare Earth Minerals Plc
David Lenigas +44 (0) 207 440 0640
W.H. Ireland
James Joyce +44 (0) 207 220 1666
Nick Field
Pelham Bell Pottinger
James MacFarlan +44 (0) 207 861 3864
Marcin Zydowicz