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Savannah Resources - Significant Maiden Co-Product Resource Estimate

RNS Number : 5458N
Savannah Resources PLC
25 September 2019
 

 

 

25 September 2019

 

Savannah Resources Plc

 

Significant Maiden Co-Product Mineral Resource Estimate

Grandao Lithium Deposit

 

Highlights

·    Co-product Mineral Resource estimates completed at Grandao with an initial resource of 14.4Mt containing 4.79Mt of quartz and 6.11Mt of feldspar

·    Grandao forms part of Savannah's Mina do Barroso Lithium Project, located in northern Portugal, and the Company's flagship asset and Europe's most significant spodumene lithium deposit, with a Mineral Resource Estimate currently standing at 27Mt @ 1.06% Li20

·    Metallurgical test work demonstrates successful recovery of saleable products used in the local ceramic and glass industries

·    Co-product Mineral Resources are wholly contained within existing lithium Mineral Resource model

·    The Mineral Resource is expected to expand once calculations for the NOA, Reservatorio, Pinheiro and Aldeia deposits are also included

·    By-products have the potential to provide a significant additional income stream to add to that generated from the sale of lithium spodumene concentrates

·    Marketing studies concluded that prices for Mina do Barroso co-products could be significantly higher than reported in the 2018 Scoping Study, with feldspar at US$65-100/t vs. US$39/t, quartz at US$60-100/t vs. US$33/t and a bulk tail at US$40-45/t

·    Glass and ceramics are two of the biggest global markets for feldspar and quartz and Mina do Barroso is geographically well positioned to supply markets in Portugal, Spain and other European countries

 

Savannah Resources plc (AIM: SAV, FWB: SAV and SWB: SAV) ('Savannah' or 'the Company'), the resource development company, is pleased to announce a Mineral Resource estimate for co-products (quartz and feldspar) from the spodumene bearing pegmatites at the Mina do Barroso Lithium Project ('Mina do Barroso' or the 'Project').  The co-product Mineral Resource estimate is based on the same geological models used in the recent resource estimate for lithium of 27.0Mt @ 1.06% Li20 announced 31 May 2019.  The resource estimate was completed by an independent consultant and is based on normative mineralogy assessments and is reported in accordance with the JORC code 2012 edition (Figure 1 and Table 1).  To view the press release with the illustrative maps and diagrams please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/5458N_1-2019-9-24.pdf

 

Savannah's CEO, David Archer, said: "Today's Mineral Resource Estimate for co-products is another important milestone achievement for Savannah and further enhances the commercial appeal and robustness of the Mina do Barroso Lithium Project, which is leading the way as Europe's most immediate producer of high quality, lithium feedstocks and has the ability to anchor the fast growing battery and Electric Vehicle industries of the continent with a supply of this strategic battery metal.

 

"The co-products will be produced in a region where quarrying of feldspar and quartz is a traditional industry supplying vibrant ceramic and glass industries locally, nationally and more widely in the EU. They will not only help our bottom line but will help to reduce the volumes of materials that will need to be emplaced as waste on site thereby reducing our environmental footprint and costs. Discussions are underway with potential offtake and JV partners to advance the co-product opportunity."

 

 

Mineral Resource Summary

 

Table 1. Co-product Mineral Resource Estimation Summary

Deposit

Resource
Classification

Tonnes

Quartz

Feldspar

Mt

Grade %

Mt

Grade %

Mt

Grandao

 

Measured

7.1

32.6

2.32

42.8

3.05

Indicated

6.3

34.6

2.17

42.6

2.67

Inferred

1.0

30.9

0.30

40.3

0.39

Total

14.4

33.4

4.79

42.6

6.11

 

Figure 1. Mina do Barroso Project Summary Map showing key deposits and drilling completed to date

 

 

 

Co-product Opportunity

 

As part of the planned production of the spodumene concentrate from pegmatite rock at Mina do Barroso, there will be a number of potential industrial mineral co-products that can be produced and marketed to supply the glass and ceramic producers in Portugal and Spain.  Mina do Barroso is geographically well positioned to supply these markets with suitable pegmatite material available for the duration of the project (currently expected to be in the range of 10-15yrs).

 

It is envisaged that the majority of co-products will be recovered from the tailings stream of the proposed lithium production. However, it is also likely that bulk pegmatite products can also be marketed from material that is not processed for lithium production. This is currently occurring on a small scale at the Aldeia and NOA deposits.

 

A flow sheet for tailings processing developed by Nagrom Laboratory in Perth WA, has been able to demonstrate that by using conventional flotation techniques, Savannah's pegmatite material can produce four feldspar and quartz products which are suitable for use in a range of both glass and ceramic applications.  The product specifications that can be produced are:

 

·    Fine Grade Feldspar: Bulk tailings product from the process of concentrating spodumene bearing pegmatites and for use in ceramics; glass; paints; polymers and welding rods.

·    High Grade Feldspar: Superior quality sodium, potassium feldspar refined from pegmatite tailings for use in ceramics; glass; paints; polymers and welding rods.

·    Coarse Grade Feldspar: Feldspathic pegmatite produced by traditional blasting and crushing techniques sold as bulk rock for use in Flux for ceramics (tiles, earthenware, sanitaryware, glaze).

·    Fine Quartz: High quality quartz refined from Portuguese pegmatite tailings for use in ceramics; glass; paints and polymers.

 

Methodology

 

There are a number of methods which can be used to establish the mineral composition of the pegmatites.  Savannah has used a combination of methods to produce a cost-effective procedure to determine the quantity and grade of material that would be available for co-product marketing.  Geological logging and quantitative x-ray diffraction ("XRD") analysis has demonstrated that the pegmatite bodies at Mina do Barroso are comprised largely of silicate minerals with an overall average composition of albite (38%), quartz (27%), spodumene (12%), muscovite (12%) and microcline (10%). Undetermined minerals accounted for 1.5% of the rock mass.

 

While XRD analysis is the most accurate method for mineral determination, it is cost prohibitive to complete XRD analysis on the required number of samples needed for resource estimation.  In certain circumstances it is possible to calculate mineral content in a sample from the elemental or oxide analyses ("normative mineralogy") using oxide multipliers to calculate the mineral content, if that element is present only in that particular mineral.  In the case of the Mina do Barroso spodumene pegmatites, Sodium (Na) occurs only in albite and Li occurs only in spodumene, so these elemental assays can be used to calculate the content of those minerals. Muscovite and microcline have similar chemical composition but are the only minerals that contain potassium (K) in the composition so the K assay can provide a limit to the total muscovite and microcline assemblage, but is only of limited use in defining the proportion of each of those minerals.  All minerals in the pegmatite contain silica (Si), so the SiO2 assay cannot be used to define quartz content.

 

SAV has conducted two programmes of multi-element analysis of drilling samples using x-ray florescence ("XRF") analysis to quantify oxide concentrations within the Grandao pegmatite.  A total of 127 individual drilling samples were re-assayed using XRF. In addition, 141 sample composites (representing 2,020m of drilling) were prepared and analysed to provide multi-element data throughout the pegmatite. The results of these various samples have been used to prepare normative mineralogy calculations to determine the mineral composition of the samples.

 

To calibrate the results from the normative mineralogy, the results from the quantitative XRD analysis were used to apply regression formulas and correction factors.  The methodology for deriving mineral compositions from assay data for the main pegmatite minerals is summarised as follows and shown in Table 2:

 

·    Spodumene - excellent correlation of spodumene with assayed Li2O allows the proportion of spodumene to be accurately determined by normative mineralogy based on Li2O analysis;

·    Albite - good correlation of albite with assayed Na2O although the normative calculation underestimates albite content (likely due to presence of Ca or Mg in feldspar lattice) so a positive correction factor (+17%) has been derived from XRD comparisons;

·    Microcline - Regression of XRD results shows good correlation of microcline with K2O assay. Regression formula can be applied to K2O analyses to determine microcline content;

·    Muscovite - reasonable correlation between muscovite and microcline in XRD has allowed a ratio of microcline to muscovite to be determined;

·    Muscovite and microcline - factor applied to limit total microcline+muscovite content to match available K2O in assays so a small negative correction factor (-4%) has been applied;

·    Other minerals - XRD shows 1.5% of rock mass to be other undetermined minerals;

·    Quartz - the proportion of the rock mass calculated by subtracting the other elements from the total mass.

 

 

Table 2: Normative Mineralogy for Grandao

Mineral

Deposit Composition

Spodumene

11.5%

Albite (Feldspar)

34.3%

Microcline (Feldspar)

8.3%

Muscovite (mica)

10.8%

Quartz

33.6%

 

The results of QEMSCAN analysis were available for five samples. These were used as a further check on the normative mineralogy and were found to support the calculated data.

 

Mineral Resource Estimate

 

The Mineral Resource Estimate of Co-products for the Grandao Lithium Deposit has been completed by Payne Geological Services Pty Ltd, an external and independent mining consultancy - http://www.paynegeo.com.au. The Grandao deposit forms part of Savannah's Mina do Barroso Lithium Project, located in northern Portugal.   

 

The Mineral Resource Estimate has been classified as Measured, Indicated and Inferred Mineral Resource in accordance with the JORC Code, 2012 Edition and is summarised in Appendix 1.

 

Table 3.  Co-product Mineral Resource Summary (rounding discrepancies may occur)

Deposit

Resource
Classification

Tonnes

Quartz

Feldspar

Mt

Grade

%

Mt

Grade %

Mt

Grandao

Measured

7.1

32.6

2.32

42.8

3.05

Indicated

6.3

34.6

2.17

42.6

2.67

Inferred

1.0

30.9

0.30

40.3

0.39

Total

14.4

33.4

4.79

42.6

6.11

 

The Grandao deposit comprises two main pegmatite intrusions.  The upper part of the deposit occurs within a broad, shallow dipping pegmatite body with a typical thickness of 20m-40m. The lower portion is a steep dipping dyke, which is 15m-20m in true width striking north south. In addition, minor parallel lenses of pegmatite are also included in the Mineral Resource Estimate.  Both main pegmatite zones remain open either along strike or down plunge.

 

Geology

 

At Mina do Barroso, lithium mineralisation occurs predominantly in the form of spodumene-bearing pegmatites, which are hosted in metapelitic and mica schists, and occasionally carbonate schists of upper Ordovician to lower Devonian age. The main Grandao pegmatite is a flat-lying, tabular zone defined over an area of 600m north-south and 980m east-west and varies in thickness from 10m-60m. It is very close to surface and is visible in outcrop over a significant area. A lower zone of mineralisation is also present at Grandao, hosted in a north-south trending steep-dipping, tabular pegmatite dyke 15m-20m in true width (Figure 2).

 

Figure 2. Simplified Geological Cross section through the Grandao deposit

 

At the Project, lithium is present in most pegmatite compositions and laboratory test work confirms that the lithium is almost exclusively within spodumene. Distinct lithium grade zonation occurs within the pegmatites, with weakly mineralised zones often evident at the margins of the dykes. Minor xenoliths and inliers of schist are observed within the main pegmatite. Where these have sufficient continuity, they have been separately modelled and excluded from the estimate.

 

The weathering profile at Grandao comprises a shallow, surficial zone of weak to moderate oxidation, particularly of the schistose country rock. A zone of deeper weathering exists on the western side of the Grandao Deposit with moderate oxidation to a depth of up to 50m.

 

Drilling

 

A total of 92 RC drill holes, 31 diamond holes and 25 RC holes with diamond tails define the Mineral Resource. All holes were completed by Savannah between 2017 and 2019. The holes were drilled on an approximate grid spacing of 20m-60m with a number of closer spaced holes in the shallow part of the deposit. Of the 148 holes that intersect the Mineral Resource, 79 holes had oxide analyses for estimating the co-products.

 

Drill collar locations are recorded in Universal Traverse Mercator ("UTM") coordinates using differential GPS. All Savannah drilling has been down-hole surveyed using a gyroscopic tool.

 

Sampling and Sub-Sampling Techniques

 

For the Savannah RC drilling, a face-sampling hammer was used with samples collected at 1m intervals from pegmatite zones with composite sampling of typically 4m in the surrounding schists in early drilling. In recent drilling the schist 5m either side of the pegmatite was sampled at 1m intervals with the rest of schist remaining unsampled. The 1m samples were collected through a rig-mounted riffle splitter and were 4kg-6kg in weight. The 4m composites were collected by spear sampling of the 1m intervals. Samples were weighed to assess the sample recovery which was determined to be satisfactory.

 

Core was PQ and HQ in size and sampled to geological boundaries. Core was cut using a diamond saw, and for the majority of holes, half core was collected for assay. A number of diamond holes were sampled for metallurgical test work. For those holes, quarter core was submitted for assay.

 

Samples for XRF analysis were collected from the remaining pulp material stored at the ALS preparation facility in Seville.  Samples for the 127 individual 1m intervals were collected direct from the pulp storage bags.  The 141 composite samples were collected by combining the pulp material from the individual samples into a single "composite" for analysis.  The composite samples were created by pouring 10g of pulp sample into the middle of a flat square plastic sheet. Each corner of the sheet is subsequently drawn past the centre to the opposite corner, and then returned to its original location. This process is repeated about 50 times to ensure complete homogenization.

 

The composite lengths varied from 4m to 28m with an average length of 14m and represented 79 holes and 2,080m of drilling.  The composites were evenly spaced throughout the deposit at 40m to 60m hole spacings.

 

The composites were assayed for a multi-element suite using XRF. The composites were not analysed for Li2O. Li2O values were assigned to the composites by preparing length-weighted averages of Li2O in the individual drilling samples that made up each composite.

 

Sample Analysis Method

 

For all Savannah drilling, whole samples were crushed then riffle split to produce a 250g split for pulverising and analysis.

 

The samples were analysed using ALS laboratories ME-MS89L Super Trace method which combines a sodium peroxide fusion with ICP-MS analysis and a multi-element suite was analysed.  Samples and composites analysed for oxides by x-ray florescence ('XRF') were completed by ALS laboratories using the MEXRF26 whole rock fusion method.

 

QAQC protocols were in place for the drilling programmes and included the used of blanks, standards and field duplicates. The data has confirmed the quality of the sampling and assaying for use in Mineral Resource estimation.

 

Estimation Methodology

 

A methodology for the estimation of the co-product mineral composition in the Mineral Resource block models has been derived using normative mineralogy based on estimated oxide values. Where sufficient oxide assay data is available (currently only the Grandao deposit) this involves interpolation of oxide values using the oxide data followed by normative mineralogy calculations in the block model. This is considered to give a reliable estimate of the pegmatite mineralogy.

 

Interpretation of the pegmatite dykes was completed using detailed geological logging and Fe geochemistry as part of the lithium Mineral Resource estimate. Wireframes of the pegmatites were prepared and within those the sample data was extracted and analysed.  In addition to the two main pegmatite bodies, several small pegmatites were also interpreted. Zones of unmineralised schist within the pegmatite body were selectively wireframed and excluded from the estimate.

 

Additional attributes of Quartz, Spodumene, Muscovite, Microcline and Albite were added to the block model used for the Grandao May 2019 estimate.  XRF sample data was composited into 5m intervals then the composites used to estimate block model grades for Potassium (K2O) and Sodium (Na2O) using inverse distance squared ("ID2") grade interpolation for all pegmatite zones.  A first pass search range of 300m was used and oriented to match the dip and strike of the mineralisation. A minimum of 1 sample and a maximum of 4 samples were used to estimate each block.

 

The normative mineralogy formulas define in Table 2 were then applied to the model oxide grades and the mineral contents estimated. As Li2O had already been estimated from the detailed drilling data at Grandao, that value was used to determine the spodumene contentThe Albite and Microcline concentrations have been summed to determine the total feldspar content. 

 

Cut-off Grades

 

The economic extraction of co-product minerals is contingent on the economic extraction of the lithium mineral resources at the project.  The co-product Mineral Resource has been limited to all pegmatite material located inside the pit design being developed as part of the ongoing feasibility study assessment.  This pit is based on a Whittle Optimisation using a revenue factor of US$685/t for a 6% Li2O spodumene concentrate.  No lithium cutoff grade has been applied to co-product mineral resource as the marketability of the pegmatite materials is not dependent on an in situ grade. 

 

Pegmatite material located outside the pit design has not been reported in the Mineral Resource estimate.

 

Mining Methods

 

The shallow natu

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