NEOMETALS LTD: Mt Edwards - High Grade Palladium in Nickel Concentrate

HIGHLIGHTS

-          Sighter flotation test work on Armstrong mineralised sample from RC chips produces commercial grade nickel concentrate (12% Ni)

-          Material palladium grades in both sample (3 g/t) and concentrate (20 g/t) from Armstrong deposit

-          Planned locked cycle flotation tests on drill core expected to improve grade and recoveries of nickel and palladium

-          Historically less than 10% of samples from 13k+ drill hole Mt Edwards database assayed for palladium and platinum

-          At Mt Edwards less than 25% of samples with nickel assays >1% have been assayed for palladium and platinum

-          External consultants engaged to review the spatial distribution of palladium assays within Armstrong and Widgie Townsite deposits to assess the potential co-product contribution effect on mining studies currently underway

Project developer Neometals Ltd (ASX: NMT) (“Neometals” or “the Company”) is pleased to announce encouraging results from preliminary metallurgical sighter test work carried out on mineralisation from the Armstrong Mineral Resource Estimate at the Mt Edwards Project. The Armstrong deposit contains a Mineral Resource Estimate of 633,000 tonnes @ 2.1% nickel for 13,200 of contained nickel tonnes using a 1%Ni block cut-off grade. For full details refer to ASX announcement “60% Increase in Armstrong Mineral Resource” released 16 April 2020.  

Samples of mineralised drill chips were sourced from 3 Reverse Circulation “RC” drill holes completed by Neometals in December 2019 with a view to determine the amenability of nickel to upgrade into a concentrate. These samples were blended into a single composite designed to reflect a similar overall nickel grade to the Armstrong Mineral Resource, with the head grade of 2.16% Ni.

The purpose of flotation test work was to determine if the primary nickel mineralisation was amenable to flotation, with results confirming “in principle” the ability of the nickel to upgrade to acceptable concentrate levels (+12% Ni grade). The recovery and grade of palladium from the test work has been a pleasing revelation.

Points noted from test work:

-          A flotation reagent regime based on standard Kambalda Nickel Operations was utilised

-          Presence of RC drilling fluid remnants hampered testing requiring decantation and pre-flotation steps affecting recovery. Normally diamond drill core is used for float testing avoiding this issue.

-          Sample head grade noted presence of palladium and platinum grades at levels considered potentially economic.

-          Recovery to concentrate for nickel, cobalt, palladium, and platinum suggest a positive correlation may exist. It is considered likely the platinum and palladium will report to the nickel concentrate rather than be rejected to tails.

-          Concentrate grades for palladium and platinum provide significant encouragement for the potential of these minority elements to contribute to revenue, subject to further work.

A summary table outlining the results of test work is shown in table 1 below, with 48.8% recovery of nickel at a grade of 12.8%, and a 55.4% recovery of palladium with a resultant grade of 20.4 ppm (g/t).

Table 1 – Armstrong Float Test Work Results

Platinum and Palladium at Mt Edwards

The Mount Edwards project database consists of assay and geological data from more than 13,000 drill holes. Platinum (Pt) and Palladium (Pd) have been sparingly assayed in work to date at Mount Edwards. While the majority of samples are assayed for nickel or lithium, only ~10% (42,468 of 422,129) of the total samples have been assayed for either Pt or Pd. Historically Pt and Pd assays were used as an indicator element in exploration activities helping to vector in on new discoveries.

Nickel mining at the Mt Edwards project was last conducted some 13 years ago. The Armstrong Deposit is on granted mining lease (M15/99) and is currently on ‘care and maintenance’ status with the Department of Mines and Petroleum. Since this time, the price of palladium has increased markedly with a tenfold increase in value since 2008. The significance of the increased market value of palladium and platinum - coupled with a positive result from early-stage sighter metallurgical test work - now warrants further investigation to determine if these precious metals can provide an additional revenue stream for the nickel project.

Figure 1 – Historical Palladium Pricing

Forward Work

The Company has commenced a detailed geological and geometallurgical program to ascertain the potential impacts on its eleven separately defined Mineral Resources at Mt Edwards and exploration potential within its > 300 square km tenure.

The components of the geometallurgical program are:

Managing Director Chris Reed commented:

“This initial result heralds a new chapter in the advancement of the Mt Edwards project. We are thrilled to discover the presence of palladium and platinum within our already significant nickel endowment. We will pause our mining studies and focus on a geometallurgical evaluation to quantify the potential for significant co-product revenue.

Palladium at Armstrong

A review of available palladium and platinum data in drill samples at the Armstrong deposit shows that while only ~10% of all samples in the area were assayed for Pd and / or Pt, elevated grades of the PGMs are closely associated with the locations of enriched nickel.

Richard Maddocks of Auralia Mining Consulting, a consultant independent of Neometals, carried out an estimation of a Nickel Sulphide Mineral Resource in April 2020. Snowden Mining Industry Consultants Pty Ltd then conducted a review of the Mineral Resource. Palladium was outside the scope and was not considered in the April 2020 nickel estimate or review.

Work is underway to determine if there is sufficient data to estimate the amount of palladium at Armstrong, with all available samples and drill core will be assayed for Pd and Pt in coming weeks.

The review of palladium was sparked by preliminary metallurgical sighter test work carried out on nickel mineralisation from Armstrong. The report of this early-stage float test work shows good recoveries for Nickel, as well as encouraging recoveries for palladium.

Sighter metallurgical test work undertaken by Auralia Metallurgy was reviewed by Gavin Beer. 

Figure 2 - Location of the Drill Hole Collars and Drill Traces at Armstrong on M 15/99 Over Geology.

Samples with Pt or Pd assay are coloured green and red. Note only ~10% of drilling at Armstrong has been assayed for platinum and palladium

Table 2 - List of Diamond Core and RC Holes at Armstrong with Significant Pd or Pt Intercepts.  Grid used is MGA94_51S

Figure 3 - Long Section of Armstrong Deposit Looking West Showing the Mineralised Envelope, Historic Maximum Nickel Grades, and Locations of the Pierce Points. Palladium grades for the corresponding nickel intercept are displayed in the call out boxes.

Table 3 - Significant Nickel Intercepts and the Related Pd and Pt in Drilling From the Armstrong Nickel Deposit.

Note: Significant intercepts are contiguous samples with assay results greater than 1% nickel, with an average grade greater than or equal to 1% nickel. Up to 1 metre internal dilution (less than 1% nickel) may be included in the intercept. *WDD095 includes intercepts where some Pd assays reported by the lab at maximum detection limit value of 1ppm, so true grade is likely to be higher.

Background

The Mt Edwards nickel project is centred around the small township of Widgiemooltha, located 90 kilometres south of Kalgoorlie in Western Australia. The project consists of 47 granted and pending mining tenements spanning approximately 50 kilometres of strike length over and around the Widgiemooltha Dome. The Widgiemooltha Dome is a world class nickel sulphide camp that has hosted more than seven historical nickel mines with a new mine, Cassini, currently under development by Mincor Resources Ltd.

Figure 4 – Mining Tenements of the Mt Edwards Project Over Geology. The Armstrong deposit and Mining Lease M15/99 location are highlighted, and other Mineral Resources identified. Neometals holds 100% nickel, platinum and palladium rights for all live tenements shown above.

Figure 5 - Location of Drill Holes and Drill Traces with Pt and Pd Assays Across the Mt Edwards Project.  Eight of the eleven nickel deposits are shown over the geology. Samples where Pd and / or Pt has been assayed are shown in green. Drilling samples with Pd or Pt assays returned greater than 0.5 ppm are shown in red. The figure shows a good correlation of elevated Pd grades near the nickel Mineral Resources.

Table 4 - Mt Edwards Global Nickel Mineral Resource

Note 1. refer announcement on the ASX: NMT 19 April 2018 titled Mt Edwards JORC Code Mineral Resource 48,200 Nickel Tonnes

Note 2. refer announcement on the ASX: NMT 25 June 2018 titled Mt Edwards Project Mineral Resource Over 120,000 Nickel Tonnes

Note 3. refer announcement on the ASX: NMT 13 November 2019 titled Additional Nickel Mineral Resource at Mt Edwards

Note 4. refer announcement on the ASX: NMT 16 April 2020 titled 60% Increase in Armstrong Mineral Resource

Note 5. refer announcement on the ASX: NMT 26 May 2020 titled Increase in Mt Edwards Nickel Mineral Resource

Note 6. refer announcement on the ASX: NMT 6 October 2020 titled 132N Nickel Mineral Resource and Exploration Update at Mt Edwards

Note 7. refer announcement on the ASX: NMT 23 December 2021 titled Zabel Nickel Mineral Resource Update at Mt Edwards

Authorised on behalf of Neometals by Christopher Reed, Managing Director

ENDS

For further information, please contact:

Chris Reed

Managing Director

Neometals Ltd

T: +61 8 9322 1182

E: [email protected]

Jeremy Mcmanus

General Manager - Commercial and IR

Neometals Ltd

T: +61 8 9322 1182

E: [email protected]

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About Neometals Ltd 

Neometals innovatively develops opportunities in minerals and advanced materials essential for a sustainable future. With a focus on the energy storage megatrend, the strategy focuses on de-risking and developing long life projects with strong partners and integrating down the value chain to increase margins and return value to shareholders.

Neometals has four core projects with large partners that support the global transition to clean energy and span the battery value chain:

Recycling and Resource Recovery:

-          Lithium-ion Battery Recycling – a proprietary process for recovering cobalt and other valuable materials from spent and scrap lithium batteries. Pilot plant testing completed with plans well advanced to conduct demonstration scale trials with 50:50 JV partner SMS group, working towards a development decision in early 2022; and

-          Vanadium Recovery – sole funding the evaluation of a potential 50:50 joint venture with Critical Metals Ltd to recover vanadium from processing by-products (“Slag”) from leading Scandinavian Steel maker SSAB. Underpinned by a 10-year Slag supply agreement, a decision to develop sustainable European production of high-purity vanadium pentoxide is targeted for December 2022.

Downstream Advanced Materials:

-           Lithium Refinery Project – evaluating the development of India’s first lithium refinery to supply the battery cathode industry with potential 50:50 JV partner Manikaran Power, underpinned by a binding life-of-mine annual offtake option for 57,000 tonnes per annum of Mt Marion 6% spodumene concentrate, working towards a development decision in 2022.

Upstream Industrial Minerals:

Barrambie Titanium and Vanadium Project - one of the world's highest-grade hard-rock titanium-vanadium deposits, working towards a development decision in 2021 with potential 50:50 JV partner IMUMR

Competent Person Attribution

The information in this report that relates to Exploration Results is based on information compiled by Gregory Hudson, who is a member of the Australian Institute of Geoscientists.  Gregory Hudson is a full-time employee of Neometals Ltd and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and the activity being undertaken, to qualify as a Competent Person as defined in the December 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.  Gregory Hudson has consented to the inclusion of the matters in this report based on his information in the form and context in which it appears.

Information that relates to metallurgical results is based on work carried out by Auralia Metallurgy under the supervision of Gavin Beer, who is a full-time employee of Neometals Ltd, a member and Chartered Professional of the AusIMM and has sufficient experience relevant to the metallurgy and test work to qualify as a Competent Person as defined in the December 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.  Gavin has consented to the inclusion of the matters in this report based on his information in the form and context in which it appears.

The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the original market announcement.’

Compliance Statement

The information in this report that relates to Exploration Results and Mineral Resources for Neometals other than those discussed relevant to the recent metallurgical work at Armstrong are extracted from the ASX Announcements listed in the table below, which are also available on the Company’s website at www.neometals.com.au