Bacanora Minerals Ltd.
TSX VENTURE : BCN
AIM : BCN

Bacanora Minerals Ltd.

May 13, 2015 16:06 ET

Bacanora Announces Update in Lithium Resources for the Sonora Lithium Project, Mexico

CALGARY, ALBERTA--(Marketwired - May 13, 2015) - BACANORA MINERALS LTD. ("Bacanora" or the "Company"), the Canadian and London listed (TSX VENTURE:BCN)(AIM:BCN) lithium and borates company focussed on Mexico, is pleased to announce that it has updated the Mineral Resource Estimate ("MRE") for its lithium properties, consisting of its 100 percent owned La Ventana lithium concessions, El Sauz and Fleur concessions which are held by Mexilit S.A. de C.V. ("Mexilit") and the Megalit concession, which is held by Megalit S.A de C.V ("Megalit"). Mexilit and Megalit are owned 70 percent by Bacanora and 30 percent by Rare Earth Minerals PLC ("REM") (AIM:REM). The MRE was carried out by SRK Consulting (UK) Limited ("SRK"), an independent consultant.

Highlights:

  • Indicated portion of the MRE is 1.12 million tonnes ("Mt") lithium carbonate equivalent ("LCE")(1) contained in 95 Mt of clay, at lithium ("Li") grade of 2,200 ppm;(2)
  • Inferred portion of the MRE is 6.3 Mt LCE contained in 500 Mt of clay at a Li grade of 2,300 ppm;
  • This updated MRE has been developed using a 3D geological model and Kriged grade estimates. The indicated portion of the MRE will be used for initial open pit mine design while we further develop the inferred portion of the MRE.
  • Conceptual extensions within current pit shell have the potential to add 2.4 to 4.6 Mt LCE contained in 300 to 350 Mt of clay at a Li grade of approximately 1,500 to 2,500 ppm;(3)
  • This MRE (which has been prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101")) does not include identified grade and tonnages contained within the Buenavista concession, as further metallurgical testing is required on this deposit; and
  • Update is in line with Bacanora's strategy to demonstrate the world class potential of the project, which benefits from high grades and scalability.

Colin Orr-Ewing, Chairman of Bacanora, commented: "The updated MRE underpins the potential of the Sonora Lithium Project in terms of scale and grade. Importantly, SRK's report also highlights additional conceptual extensions to potentially further expand upon this MRE. Importantly, with Sonora's close proximity to infrastructure, its location in a supportive jurisdiction and the increasing role of lithium products in industry, we believe that our Company is well placed to capitalize on world demand as it strengthens and to build value for our shareholders."

(1) LCE is the industry standard terminology for, and is equivalent to, Li2CO3. 1 ppm Li metal is equivalent to 5.32 ppm LCE / Li2CO3. Use of LCE is to provide data comparable with industry reports and assumes complete conversion of lithium in clays with no recovery or process losses.
(2) For reference to the Company's previously announced resource estimate on the La Ventana, El Sauz and Fleur concessions, please refer to the Company's news release dated 3 June 2014, together with the Company's technical report dated 24 June 2014. Each of the foregoing items is available under the Company's profile at www.sedar.com.
(3) It must be noted that the potential quantity and grade of this target is conceptual in nature, that there has been insufficient exploration todefine a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Mineral Resource Statement:

The Sonora Lithium Project has been explored and sampled using appropriate methods and is sufficiently well understood to support the estimation of Indicated and Inferred Mineral Resources. Table 1 shows the Mineral Resource Statement for the Sonora Lithium Project with an effective date of 12 May 2015. The statement has been classified in accordance with the terminology, definitions and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards for Mineral Resources and Mineral Reserves (May 2014) and has been reported in accordance with NI 43-101, by the Qualified Person, Mr. Martin Pittuck (MSc., C.Eng., MIMMM). Mr. Pittuck is an engineering consultant who is independent of Bacanora.

The updated MRE of the Sonora Lithium Project, using a cut off of 450 ppm lithium is comprised of an Indicated portion estimated at 95 Mt, averaging 2,200 ppm Li, for 1.12 Mt of LCE, in addition to an Inferred portion estimated at 500 Mt averaging 2,300 ppm Li, for 6.30 Mt of LCE.

In addition to the MRE, a further conceptual target of 300 to 350 Mt, at a grade of Li of approximately 1,500 to 2,500 ppm within the current pit shell is considered worthy of further exploration. If these figures were converted to a Mineral Resource via successful drilling and exploration, it is estimated that this could represent an additional 2.4 to 4.6 Mt of LCE at the Sonora Lithium Project. It must be noted however, that the potential quantity and grade of this target is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Although the first stage of drilling has been completed on the Buenavista concessions (announced 14 January 2015), further metallurgical test work is required in order to determine the processing methodology of the ore and refinement of LCE.

The updated MRE is based on assay results from drilling and trenching made available to SRK on 16 April 2015 including geological information but not assay results from the 9 holes that were announced on 24 March 2015. A technical report in respect of this updated MRE will be filed on SEDAR within 45 days from today.

Table 1: Mineral Resource Statement for the Sonora Lithium Project as of 12 May 2015

Classification Owner Concession
Name
Geological
Unit
Mt
Clay
Clay
Grade
(Li ppm)
Contained
Li (Kt)
Contained
LCE
(1)(Kt)
Contained LCE
attributable
to Bacanora
(Kt)
Indicated Ventana La Ventana & Ventana 1 Upper Clay 35 1,400 50 280 280
Ventana La Ventana & Ventana 1 Lower Clay 35 3,250 120 610 610
Mexilit El Sauz, Sauz 1, Sauz 2, Fleur & Fleur 1 Upper Clay 10 1,150 10 50 35
Mexilit El Sauz, Sauz 1, Sauz 2, Fleur & Fleur 1 Lower Clay 15 2,450 30 180 125
Megalit Megalit Upper Clay 0 - - - -
Megalit Megalit Lower Clay 0 - - - -
Total Indicated 95 2,200 210 1,120 1,050
Inferred Ventana Ventana & Ventana 1 Upper Clay 100 1,700 150 800 800
Ventana Ventana & Ventana 1 Lower Clay 25 3,650 100 500 500
Mexilit El Sauz, Sauz 1, Sauz 2, Fleur & Fleur 1 Upper Clay 150 1,350 200 1,100 770
Mexilit El Sauz, Sauz 1, Sauz 2, Fleur & Fleur 1 Lower Clay 175 3,100 575 3,000 2100
Megalit Megalit Upper Clay 25 1,700 75 300 210
Megalit Megalit Lower Clay 25 4,300 100 600 420
Total Inferred 500 2,300 1,200 6,300 4,800

Notes:

  1. LCE is the industry standard terminology for, and is equivalent to, Li2CO3. 1 ppm Li metal is equivalent to 5.32 ppm LCE / Li2CO3. Use of LCE is to provide data comparable with industry reports and assumes complete conversion of lithium in clays with no recovery or process losses.
  2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, SRK does not consider them to be material.
  3. The reporting standard adopted for the reporting of the MRE uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014) as required by NI 43-101 and JORC.
  4. The MRE is reported on 100 percent basis for all project areas.
  5. SRK assumes the Sonora Lithium deposit to be amenable to surface mining methods. Using results from initial metallurgical test work, suitable surface mining and processing costs, and forecast LCE price SRK has reported the Mineral Resource at a cut-off 450 ppm Li (2,400 ppm LCE).
  6. SRK completed a site inspection of the deposit by Mr. Martin Pittuck, MSc, C.Eng, MIMMM, an appropriate "independent qualified person" as such term is defined in NI 43-101.

Qualified Person: Martin Pittuck, MSc., C.Eng., MIMMM of SRK Consulting (UK) Ltd., is a Qualified Person pursuant to NI 43-101 and the AIM Note for Mining and Oil and Gas Companies who has reviewed and approved the technical contents of this news release.

Further Details on Mineral Resource Statement:

SRK has visited the Sonora Lithium Project and inspected drillcore, geological outcrop and drill rigs. Field and laboratory data have since been reviewed and analysed such that the scale and nature of the geology and the quality of data upon which this resource relies is well understood. Data has been gathered using industry standard methods and assays have a basic level of quality control sufficient to underpin the confidence SRK has in this resource.

SRK has worked with the drilling results, mapping data, aerial photography and detailed topographic survey provided by Bacanora to develop a 3D geological model of the lithium bearing Upper and Lower Clay units. In many areas the continuity of the clay units is established to the level required for input to project finance studies (Indicated). In other areas a combination of wide spaced drilling, extrapolation beyond drilling, absence of mapped outcrop and uncertainty around fault presence and location means that confidence in the model is lower (Inferred) and further work will be required to feed into such studies. Parts of the model that are further way from geological information are unclassified have therefore been excluded from Mineral Resource (Exploration Target).

SRK's block model is some 10 km long and 5 km wide covering the La Ventana in the north and the Fleur - El Sauz concessions in the south. The drillhole grades have been averaged for each drillhole intersection of each clay unit and then these composite values have been interpolated to provide block grade estimates in their respective clay units. Drillhole spacing is variable, achieving approximately 200 m by 200 m in several places; the blocks measure 50 x 50 x 10 m and the model covers the majority of the drilled area except for the far southeast where a couple of isolated drillholes achieved low grade intersections.

Density has been assigned based on drill core samples; a value of 2.3 has been applied to the clay units and a value of 2.7 has been applied to the overlying capping basalt. A Mineral Resource has been reported after due consideration of the reasonableness of eventual economic extraction. Processing methods, efficiencies, rates and costs have been provided by Bacanora. The configuration of the deposit lends itself to open pit mining and SRK has used mining costs provided by Bacanora and has assumed a 45 degree overall pit slope angle. Revenue to the project is expected to be derived from sales of battery grade (99.5 percent pure) LCE. Geological samples were assayed for Lithium metal; every 1 ppm Li metal is equivalent to 5.32 ppm LCE.

Whilst no detailed review of market forecast prices has been undertaken, SRK considers a price of USD 6,500 per tonne of LCE to be reasonable given general reported view in the public domain; for the purpose of limiting the Mineral Resource to that part considered to have reasonable prospects of eventual economic extraction; SRK applied a 30 percent uplift to the commodity price and derived a cut-off grade using anticipated technical-economic parameters associated with mining, processing and selling the product. SRK derived a marginal cut-off grade based on Bacanora's unit cost of USD 14 per tonne fed to the processing plant and a 90 percent recovery of product from the feed; on this basis the cut-off grade is 450 ppm Li (2,400 ppm LCE). A basic open pit shell ensures mining costs of USD 2.5 per tonne mined are applied giving consideration to topography driven waste stripping; in conjunction with metal deportment in the deposit, this limits the Mineral Resource to a defendable depth and lateral extent.

The current MRE differs from the previous polygonal resource estimate announced in June 2014. The main drivers for this difference are the development by SRK of a new 3D geological model and Kriged grade estimate, in addition to further drilling that has occurred during the intervening period. The 3D geological model and Kriged grade estimate allow extrapolation of grade data over greater distances than was done previously. This model has also identified some areas that may require more mapping and/or drilling to confirm fault and deposit geometry in order to increase the Indicated Mineral Resource.

ABOUT BACANORA:

Bacanora is a Canadian and London listed minerals explorer (TSX VENTURE:BCN)(AIM:BCN). The Company explores and develops industrial mineral projects, with a primary focus on lithium and borates. The Company's operations are based in Hermosillo in northern Mexico and it currently has two significant projects under development in the state of Sonora. The two main assets of Bacanora are:

  • The Sonora Lithium Project, which consists of ten mining concession areas covering approximately 100 thousand hectares in the northeast of Sonora State. The Company, through drilling and exploration work to date, has established an NI 43-101 compliant Indicated Mineral Resource of 1.12 Mt LCE contained in 95 Mt of clay at a Li grade of 2,200 ppm and an Inferred Mineral Resource of 6.3 Mt LCE contained in 500 Mt of clay at a Li grade of 2,300 ppm.
  • The Magdalena Borate Project, covering 16,503 hectares in Sonora state, Mexico, where the Company's main borate zone, El Cajon, has an NI 43-101 compliant Indicated Resource of 1.17 Mt of B2O3, at an eight percent cut-off grade. The Company has completed a number of measures to determine the geological and commercial potential of the project and is undertaking a prefeasibility exercise to determine the economic benefit of developing the mine and constructing a processing plant on site in order to become a supplier of boric acid.

Reader Advisory

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to: the estimation of resources and the filing of a technical report in connection therewith; estimated additional resources arising at a further conceptual target; and the Company's ongoing pre-feasibility process. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in Canada, the United States, Mexico and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Bacanora Minerals Ltd.
    Shane Shircliff
    Chief Executive Officer
    (403) 237-6122

    Bacanora Minerals Ltd.
    Martin Vidal
    President
    (+52 662) 210-0767
    www.bacanoraminerals.com