Rare Earth Minerals PLC: £4.6 Million Conditional Placing to Fund Expansion of Mexican Lithium Interests
February 12, 2014 (Source: Rare Earth Minerals PLC) — Rare Earth Minerals (AIM: REM) announces that it has conditionally raised £4.6 million gross at 0.4 pence per share, subject, inter alia, to shareholder approvals at a General Meeting scheduled for the 3rd March 2014.
A circular convening the General Meeting is being sent to Shareholders, and a copy will be available shortly on the Company’s website www.rareearthmineralsplc.com.
REM has itself conditionally raised £1.394 million in direct subscriptions from investors and Hume Capital Securities plc has, through a conditional placing on behalf of REM, raised £3.206 million from institutional and private client investors.
The additional funds will allow REM to both continue to fund the development of its joint venture projects and also to look to increase REM’s exposure to the wider Sonora Lithium Project in northern Mexico , which contains not only Bacanora’s La Ventana Lithium Project but REM’s joint venture interests in the Fleur-El Sauz and Megalit concessions, through potential additional purchases of Bacanora shares
On 10 February 2014, REM announced that it had completed the 2nd stage drilling programme on the Fleur-El Sauz Lithium concession. The joint venture partners (REM and Bacanora Minerals Limited “Bacanora”) are confident that the final results from this drilling will prove successful ahead of a pre-feasibility study commencing within the coming months.
It was also announced that drilling would continue in order to increase the resource as it is open at strike and depth at both ends of the concession. It was further announced that a metallurgical pilot plant is to be commissioned within the next 6 weeks as the joint venture partners are optimistic of achieving battery grade Lithium Carbonate.
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Finally, it was also reported on 10 February 2014 that drilling would commence to test the new Megalit concession to the south of Fleur-El Sauz.
REM has sufficient funds to meet its current commitments in Mexico, and those for its Greenland and Australian projects during 2014.
REM currently owns a direct 30% interest in the Mexican Fleur-El Sauz Lithium Project, with an NI 43-101 compliant resource of 1.5 million tonnes of Lithium Carbonate identified from Stage 1 drilling, plus a 3.17% shareholding in its joint venture partner, Bacanora.
David Lenigas, The Company’s Chairman commented;
“This funding puts REM in a stronger financial position and will enable the Company to be able to increase its interests in the mexican joint venture and Sonora Lithium Project.”
“REM will seek to increase both its direct holding in the existing Fleur-El Sauz joint venture, where REM have a first right of refusal to move from 30% to 49.9% of this joint venture and we will also be looking to increase our holding directly in Bacanora.”
“Previously published resources at the Fleur-El Sauz Project have already defined a compliant resource of 1.5 million tonnes of contained Lithium Carbonate and the 2nd stage and current drilling is expected to add significantly to this resource over the coming months.”
“We are becoming increasingly excited by the results that are being achieved on the Mexican concessions. Not only are high grades being returned consistently, but the resource is close to and cropping at surface in many places over a long strike length with the associated implications this carries for eventual production costs.”
“Given the pace at which progress is being made on this project we expect to be updating shareholders regularly in immediate period ahead.”
About the Sonora Lithium Project:
The Sonora Lithium Project in northern Mexico consists of:
The La Ventana, La Ventana 1 and the San Gabriel, Buenavista and Megalit concessions, which are owned 100% by Bacanora, with declared inferred resources for the La Ventana Lithium Deposit totaling 60 million tonnes, averaging 3,000 ppm Li (equivalent to 1.6% lithium carbonate equivalent (“LCE”) assuming 100% recovery and no process losses) or 930,000 tonnes of LCE. These resources were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). REM owns 3.17% of Bacanora.
Bacanora have published a Preliminary Economic Assessment on the La Ventana Deposit with the following summary:
· 35,000 tonnes per annum of battery grade LCE. (Assuming $6,000 per tonne of LCE)
· Capital expenditure US$114 million.
· 20 year open pit mine life.
· Internal Rate of Return of 138%.
· 1.9 year payback on cost of capital.
· Operational expenditure – US$ 1,958 per tonne LCE
· Net Present Value (8% discount rate) of US$848 million.
The contiguous El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions (the “Joint Venture #1 Lands”) are owned 70% by Bacanora and 30% by REM under Joint Venture #1. Inferred resources for the El Sauz and Fleur concessions (prepared to NI 43-101 standards) total 88,271,000 tonnes, averaging 3,163 ppm Li at a 2,000 ppm cut-off (1.68% lithium carbonate equivalent assuming 100% recovery and no process losses) or 1,483 million tonnes of LCE.
The Buenavista, Megalit and San Gabriel concessions are subject to a Memorandum of Understanding (“Joint Venture #2”) between Bacanora and REM – that covers the new discoveries and increased the size of the concessions under both the joint ventures from 5,325 hectares to 100,140 hectares.
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