Keras Res Regulatory News (KRS)

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

11 July 2019

Keras Resources plc ('Keras' or the 'Company')

Nayega Manganese Metallurgical Testwork Results

Keras Resources plc, the AIM listed mineral resource company, is pleased to announce results from the metallurgical testwork on the 10,000-tonne bulk sample collected at its flagship asset, the Nayega Manganese ('Mn') Project, in northern Togo ('Nayega' or 'the Project'). Testwork undertaken included production chemical analysis to prove up the on-site beneficiation circuit, metallurgical testwork to prove the suitability of the ore in the manganese alloys industry, and leach testwork to assess whether the ore has the potential to be a source of high grade manganese in lithium-ion batteries to supply the growing Electric Vehicle ('EV') market.

Highlights

· Testwork assessing the potential to supply Nayega manganese to the steel industry:

o On-site processing using dry screening and wet scrubbing to produce a beneficiated ore averaged 38.88% Mn, 6.28% Fe and 11.5% SiO2

o Nayega ore is best suited to production of silico-manganese alloy

o Discussions remain ongoing with potential off-takers to provide both development funding to expand the existing 6,500 saleable tonnes per month operational infrastructure and for an off-take agreement for future ore produced at Nayega

· Testwork assessing the potential to supply Nayega manganese to the battery and/or agriculture sectors:

o Sighter leaching testwork completed on samples obtained from the transitional and deeper Saprolitic zones within the Nayega orebody

o Leaching results have been encouraging with in excess of 90% recovery being achieved in less than two hours from both ore samples

o Nayega manganese is an oxide ore which leaches more favourably compared with South African carbonate ores

o Solutions produced contained minimal concentrations of impurities, indicating a reduced risk of issues in downstream processing

o Significant growth potential for manganese as a replacement for cobalt in lithium-ion batteries as producers look to secure cost competitive, responsibly mined long term raw material supply

o Potential to de-risk Nayega's exposure to the volatile steel market by diversifying into the growing EV market

Russell Lamming, Chief Executive Officer of Keras, commented, "We are exceptionally pleased that the bulk sample from Nayega was successfully delivered on time, within budget and has been underpinned by encouraging chemical analysis which further consolidates the commercial viability of the Nayega mine. The bulk sample produced higher than expected manganese content and, due to the expected relatively high silica content, it has been determined that the ore is better suited to the production of silico-manganese rather than the production of ferro-manganese. The bulk sample results comprehensively proved up the Project from mine to market and we look forward to moving forward following receipt of the Exploitation Permit which is currently outstanding.

"In addition, with the inherently volatile nature of the downstream manganese alloy market and the growing demand for a cost effective, responsibly mined replacement for cobalt in the production of lithium-ion batteries, we have started additional leach testwork on the Transitional and Saprolitic zones of the Nayega orebody that were not tested in the bulk sample. It is widely understood that reductive leaching is not always amenable to all manganese minerals, let alone able to selectively dissolve the manganese content of the ore, so the initial testwork results are a very encouraging first step. It is our intention to follow up this work with a further detailed testwork programme aimed at optimising the leaching conditions and studying the purification processes required to ensure the production of a battery grade of manganese. I look forward to updating our shareholders when practicable."

Findings of the Metallurgical Testwork Programme

Having commenced in August 2018, Keras concluded its role in the bulk sampling metallurgical testwork programme on 26 March 2019 with the successful shipping of the manganese ore. The programme was fully funded by a major producer of manganese-based alloys.

Nominally, a +6mm lump manganese was produced from the Detrital and Laterite horizons of the Nayega geological sequence through an in-field dry screening unit and a purpose-built 25 tonne per hour wet scrubbing circuit. On-site production analysis was achieved using an Olympus hand-held X-Ray Fluorescence ('XRF') analyser, and final outturn shipping analysis was conducted by independent laboratory, SGS Togo SA in Lomé.

Ore shipped to the third-party producer was introduced into a silico-manganese furnace at a range of ratios (Nayega ore to total ore feed) to understand its chemical, physical and smelting characteristics within a blend of alternative feed ores. A feed rate of 340kg/t (34%) was determined to be peak feed ratio for the furnace selected. Ongoing optimisation of Nayega ore to improve resource utilisation will focus on product sizing which will enable the production of a +10mm lump product for direct smelter feed, and a fine -10+1mm product better suited for sinter plant feed. Current proposed planning, subject to the award of an exploitation license, is to double current production capacity from 6,500tpm to 13,000tpm of saleable ore through a plant upgrade which will include a downstream screening circuit to produce these size fractions. The plant as currently configured is capable of producing some 75,000 tons per annum, which would result in a substantial profit for Keras. However, on receipt of the exploitation licence Keras expects to expand and improve the plant to add more value as well as increasing production. The Company intends this to be financed in conjunction with an offtake agreement rather than equity funding.

Findings of the Leach Testwork Programme

The objective of the leach test programme was to assess whether the manganese in the ore could be extracted by sulphur dioxide leaching. Samples of the underlying Transitional and Saprolitic geological horizons were tested in Perth, Australia by Simulus (Pty) Ltd in Welshpool, with the exception of mineralogical analysis by X-Ray Diffusion ('XRD'), which was performed by ALS Metallurgy Services. Analysis indicated that the dominant manganese minerals detected were in oxide materials in the form of Cryptomelane and Birnessite (with Quartz and Kaolinite being the two major gangue minerals), suggesting that the samples are likely amenable to sulphur dioxide leaching. Sulphur dioxide leaching of the samples achieved extractions of 96% and >99% for the Transitional and Saprolitic samples respectively within 2 hours.

A longer leach time and/or more efficient residue washing would likely lead to further manganese extraction from the Transitional ore. The second stage of the programme will be to optimise manganese leaching to both improve extraction from the transitional ore, study of options for separation of the leached manganese from the gangue metals prior to crystallization and the economic analysis of any flowsheet options

Additional Information

The mine is currently on care and maintenance pending the granting of an Exploitation Permit at which point operations will recommence at a rate of approximately 6,500 tonnes per month of saleable +38% Mn ore.

Discussions are ongoing with potential off-takers to provide both development funding to expand the existing operational infrastructure and for an off-take agreement for future ore produced at Nayega.

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

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes

Keras Resources plc is focused on building a strategic portfolio of resource assets. The Company provides investors with exposure to a portfolio of development assets, including manganese, cobalt and nickel in Togo, West Africa. It also has a significant interest in Calidus Resources Limited ('Calidus'), a highly prospective gold exploration and development company in Australia, which is currently undertaking a Pre-Feasibility Study at its Warrawoona gold project. Keras benefits from a highly skilled management team, which has extensive operational experience in Africa and Australia and proven success in advancing assets up the value curve.