drilling update & gold in soils anomaly ... - lithium · (au). the dimensions of the anomaly...

Cowan Lithium Ltd | ACN 625 128 770 [email protected] | www.cowanlithium.com.au

COMPANY ANNOUNCEMENT 24 October 2019

EXPLORATION UPDATE DRILLING UPDATE & GOLD IN SOILS ANOMALY IDENTIFIED AT

COWAN PROJECT

Cowan Lithium (Company or Cowan) is pleased to advise that recently completed reconnaissance drilling has highlighted the potential for flat-lying, mineralised pegmatites on its 100%-owned Cowan lithium and tantalum project in Western Australia (Cowan Project). Recently received soil sampling results have also identified a new large gold anomaly at the Lake Cowan exploration target. HIGHLIGHTS:

• Reconnaissance drilling on the Bald Hill North target intercepted pegmatites in two of three drill holes.

• TRC0190 returned 4m at 1.27% Li2O from 91m, and TRC0191 intersected the interpreted extension of a shallow, flat-lying, mineralised pegmatite from Alita Resources’ tenure.

• New large >15 ppb gold in soil anomaly (5,200m x 600m) defined at margin of Lake Cowan East palaeochannel gold target.

BALD HILL NORTH RECONNAISANCE DRILLING Reconnaissance drilling was completed in September 2019 at the Bald Hill North exploration target (E15/1377), with three holes drilled for 500m, testing for blind pegmatite extensions from neighbouring Alita Resources’ (Alita) tenure.

Results were positive, with drill hole TRC0190 intersecting an 8m pegmatite containing 4m at 1.27% Li2O from 91m (see Figures 1 and 2). The intercept is interpreted as a single flat-lying pegmatite body extending from Alita’s tenure to the north, as reported in Alita drill hole KCBPB05 (Refer Alita Resources announcement 2 August 20171).

The southern extension of a separate shallow, flat-lying, mineralised pegmatite from Alita’s tenure was also intersected in drill hole TRC0191, with a 5m pegmatite intercepted ~40m below surface. While lithium and tantalum grades were below cut-off, it is likely that follow-up drilling to the west of TRC0191 would encounter mineralisation, similar to that on Alita ground (Refer Alita Resources announcements 27 January and 3 March 20171 for drilling intercepts).

It is thought that these flat-lying pegmatites may be a shallower extension of Alita’s ‘Pegmatite 3’ target, intercepted 2.9km to the south, extending along the Mount Belches-Bald Hill pegmatite corridor (see Figure 3). Alita announced an Exploration Target for Pegmatite 3 of 17Mt to 24Mt grading 1.25% to 1.40% Li2O and 150 to 180ppm Ta2O5 (refer Alita Resources announcement 10 May 2019).

Drilling completed in 2016 by Alita along this corridor was likely too shallow, and therefore a phase of deeper drilling across this target will commence in early 2020 to test this model.

Drilling intercepts from the 2019 program are summarised in Tables 1 and 2 overleaf.

1 A Scheme of Arrangement (“Scheme”) between Alliance Mineral Assets Limited (Alliance) and Tawana Resources NL (Tawana) whereby Alliance acquired 100% of the ordinary shares in Tawana became effective in December 2018. This announcement refers to certain ASX announcements made by Tawana prior to the completion of the Scheme. Alliance Mineral Assets Limited changed its name to Alita Resources Limited effective 16 July 2019.


Figure 1 - Bald Hill North reconnaissance drilling intercepts

Figure 2 - 2019 Cowan drilling (TRC) with 2016 Alita drilling (LRC & KCBPB)


Figure 3 - Bald Hill North Exploration Target

LAKE COWAN GOLD IN SOILS ANOMALY Results from the first pass phase of soil sampling at the Lake Cowan East palaeochannel gold target have defined the apparent southern margin of a large east-west gold in soil anomaly greater than 15 ppb gold (Au). The dimensions of the anomaly are approximately 5,200 east-west x 600m north-south, but the anomaly remains open to the north (see Figure 4).

Soil sampling was conducted on a wide spaced 200 x 200m grid as part of a dual commodity (lithium and gold) regional greenfields exploration program.

Anomalous samples range between 10 and 30 ppb Au, with four highly anomalous samples, peaking at 70 ppb Au. All anomalous results above 15 ppb Au are situated on the four northernmost sample lines, with the anomaly open to the north and extending east and west, parallel to Lake Cowan, within the Company’s tenure.

The anomaly is thought to sit above the southern margin of the broad east-west striking Lake Cowan palaeovalley, situated within the Mount Belches formation. Historical exploration for gold within Lake Cowan


on the Company’s ground is extremely limited, however previous explorers have found alluvial gold to the northwest of the anomaly, at the base of a palaeochannel, in air core drilling programs.

Soil sampling was successful in locating the Challenge Swordsman paleochannel gold deposits at Higginsville on the west side of Lake Cowan with values as low as 5ppb Au being anomalous.

The next phase of exploration planned at the Lake Cowan East target is additional soil/auger sampling to the north of the anomaly, to better define the size and distribution of gold across the area. Infill soil grids will also be completed along the northern portion of the phase one program, decreasing spacing to 100 x 100m, to increase resolution of the anomaly. Following this, passive seismic will be used to define the palaeochannel geometry, determining a depth to basement over the area. An air core drilling program will likely follow to test the anomaly at depth.

Figure 4 - Lake Cowan gold in soil anomaly on 500k geology


For more Information Media Nathan Ryan NRW Communications +61 (0) 420 582 887 Cowan Lithium Mark Calderwood Managing Director Glossary

The following abbreviations and terms are used in this announcement.

Li2O lithium oxide Ta2O5 tantalum pentoxide tantalite a tantalum mineral RC reverse Circulation drilling Au gold ppm parts per millions ppb parts per billion m meter g/t grams per tonne

Competent Person Statement

The information in this announcement that relates to exploration results and exploration target that have been reported for the first time is based on and fairly represents information and supporting documentation prepared by Mr Mark Calderwood, an employee of the Company. Mr Calderwood is a member of the Australasian Institute of Mining and Metallurgy. Mr Calderwood has sufficient experience relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Calderwood consents to the inclusion in this announcement of the matters based on his information and supporting documents in the form and context in which it appears. Mr Calderwood is a shareholder and Director of the Company. Mr Calderwood and Cowan do not consider these relationships to constitute a potential conflict of interest to his role as Competent Person due to the overarching director and employee duties he owes to the Company. Mr Calderwood is not aware of any other relationship with Cowan which could constitute a potential for a conflict of interest. Forward Looking Statements

This announcement may contain forward looking statements and projections including regarding estimated resources and reserves, production and operating costs profiles, capital requirements and strategies and corporate objectives. Such forward looking statements/projections are estimates for discussion purposes only and should not be relied upon as representation or warranty, express or implied, of the Company. They are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors many of which are beyond the control of the Company. The forward-looking statements/projections are inherently uncertain and may therefore differ materially from results ultimately achieved. While the information contained in this announcement has been prepared in good faith, neither the Company, nor any of its directors, officers, agents, employees or advisors make any representation or give any warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information, forward looking statement, opinions and conclusions contained in this announcement. Accordingly, to the maximum extent permitted by law, none of the Company, nor any of its directors, officers, employees, agents or advisers, nor any other person accepts any liability whether direct or indirect, express or limited, contractual, tortious, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in this presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this presentation. The Company disclaims any obligation to update or revise any forward-looking statements based on new information, future events or otherwise except to the extent required by applicable laws.


Table 1| Reconnaissance Drilling Intercepts

Hole ID Easting Northing RL Depth

Azm.

Dec.

Type

From To Width Pegmatite

m m m m m m m Type

TRC0190 420700 6516330 317 198 270 -60 RC 91 95 8 Li

TRC0191 420500 6516290 319 180 270 -60 RC 45 50 5 barren

TRC0192 420270 6517501 324 122 270 -60 RC - - - - Notes 1) The true width of pegmatites are generally considered 80-95% of the intercept width. 2) Only pegmatite intercepts of 1m or more in width are included.

Table 2 | Significant Exploration Drill Intercepts

Hole ID From To Interval Li2O Ta2O5 Nb2O5 SnO2

(m) (m) (m) % ppm ppm ppm

TRC0190 91 95 4 1.27 20 27 71

Incl. 93 94 1 3.36 7 14 169 Notes 1) The true width of pegmatites are generally considered 80-95% of the intercept width. 2) Only pegmatite intercepts of 1m or more in width are included.


Appendix A

Section 1 Sampling Techniques and Data

Criteria JORC Code Explanation Commentary Sampling techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling. Include reference to measures taken to ensure sample representativity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

Reverse Circulation Drilling: 1m samples collected Soil Sampling: 250g samples collected from ~0.3m below surface. Samples jaw crushed and riffle split to 2-2.5kg for pulverizing to 80% passing 75 microns. RC: Prepared samples are fused with sodium peroxide and digested in dilute hydrochloric acid. The resultant solution is analysed by ICP, by Nagrom Laboratory. Soil Sampling samples are digested in hydrochloric acid and nitric acid over heat. The resultant solution is analysed by ICP, by Nagrom Laboratory. Certified standards. Field duplicates submitted at irregular intervals at the rate of approximately 1:10.

Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).

RC drilling conducted in line with general industry standards. RC drill holes are angled and vertical.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Chip recovery or weights for RC drilling were not conducted. Each metre of drill sample recovery and moisture content is visually estimated and recorded. Opportunity for sample bias is considered negligible for dry samples.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography The total length and percentage of the relevant intersections logged.

Geological logs exist for all drill holes with lithological codes via an established reference legend. Drill holes have been geologically logged in their entirety. Where logging was detailed the subjective indications of mineral content (spodumene, tantalite) have been recorded. Assays have generally only been submitted through and adjacent to the pegmatites. Soil samples were lithology logged, sample sites described and sample depths recorded. Logging is qualitative.


Criteria JORC Code Explanation Commentary Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance, results for field duplicate/second-half sampling. Whether sample sizes are appropriate to the grain size of the material being sampled.

RC samples were collected at 1m intervals and riffle or cone split on-site to produce a subsample less than 5kg. Soil samples were sieved and the -2mm component collected. The RC drilling samples are considered robust for sampling the spodumene and tantalite mineralisation. Most samples were dry. Sampling is in line with general industry sampling practices. Field duplicates (RC only), standards, laboratory standards and laboratory repeats are used to monitor analyses. Sample size is considered appropriate.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

The assay technique is considered to be robust as the method used (see above) offers total dissolution of the sample and is useful for mineral matrices that may resist acid digestions. Standards and duplicates were submitted in varying frequency throughout the exploration campaign and internal laboratory standards, duplicates and replicates are used for verification

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data.

No twinning of holes has been undertaken to date. The Ta and Li assays show a marked correlation with the pegmatite intersections via elevated downhole grades. Drill logs exist for all holes as electronic files and/or hardcopy (since 2017 logging has been input directly to field logging computers). Digital log sheets have been created with inbuilt validations to reduce potential for data entry errors. Soil Sampling: Sample locations are stored on GPS, with sample IDs handwritten on sample bags. All drilling and soil sampling data has been loaded to a database and validated prior to use.


Criteria JORC Code Explanation Commentary Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Specification of the grid system used. Quality and adequacy of topographic control.

Collar and soil sample surveys have been initially conducted using handheld GPS. Hole collars have been preserved until completion of survey. No downhole surveys have been completed. The data spacing and distribution is not sufficient for Mineral Resource and Ore Reserve estimation. All collars are surveyed using MGA Z51.

Data spacing and distribution

Data spacing for reporting of Exploration Results. Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Whether sample compositing has been applied.

Reconnaissance drilling locations is based on exploration targets and therefore there is no uniform drilling spacing.

Soil sampling was completed utilising a 200 x 200m sample grid. The spacing of holes is not considered of sufficient density to provide an ‘Indicated’ or ‘Inferred’ Mineral Resource estimation and classification. There has been no sample compositing.

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

Approximately 2/3 of drilling is angled. Vertical holes have been drilled in areas where pegmatites are interpreted to be flat lying. The lithium tantalite-bearing pegmatites are generally flat to shallowly dipping in nature. The true width of pegmatites are generally considered 80-95% of the intercept width, with minimal opportunity for sample bias. Soil Sampling: May give an indication of the strike direction of an anomaly.

Sample security

The measures taken to ensure sample security. The RC and soil samples are taken from the rig/field by experienced personnel and stored securely and transported to the laboratory by a registered courier and handed over by signature.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

RC and soil samples are collected using industry standard practices appropriate for LCT pegmatites and gold.

Section 2 Reporting of Exploration Results

Criteria Explanation Commentary Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Exploration Target area referred to in this announcement is located on E15/1377 and E15/1502, owned 100% by the Company and its subsidiaries. The tenements are in good standing. E15/1377 is due for renewal in mid-October 2019. The tenements are currently not subject to any royalties, other than State Government royalty.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Alluvial tantalite has been mined periodically from the early 1970s. Gwalia Consolidated Limited undertook exploration for tantalite-bearing pegmatites from 1983-1998. Work


Criteria Explanation Commentary

included mapping, costeaning, and several phases of drilling using RAB, RC, and diamond methods. The work identified mineral resources that were considered uneconomic at the time. Haddington entered agreement to develop the resource and: • Mining commenced in 2001 and continued until

2005. • Haddington continued with exploration until 2009.

Living Waters acquired the project in 2009 and continued with limited exploration to the north of the main pit area. Murchison Resources Pty Ltd completed air core drilling in 2011 within Lake Cowan for gold.

Geology Deposit type, geological setting and style of mineralisation.

The Project area is underlain by generally north-striking, steeply dipping Archaean metasediments (schists and greywackes) and granitoids. Felsic porphyries and pegmatite sheets and veins have intruded the Archaean rocks. Generally, the pegmatites cross cut the regional foliation, occurring as gently dipping sheets and as steeply dipping veins. The pegmatites vary in width and are generally comprised quartz-albite- muscovite-spodumene in varying amounts. Late-stage albitisation in the central part of the main outcrop area has resulted in fine- grained, banded, sugary pegmatites with visible fine-grained, disseminated tantalite. A thin hornfels characterised by needle hornblende crystals is often observed in adjacent country rocks to the pegmatite. Tantalite generally occurs as fine disseminated crystals commonly associated with fine-grained albite zones, or as coarse crystals associated with cleavelandite. Weathering of the pegmatites yields secondary mineralised accumulations in alluvial/eluvial deposits. The Lake Cowan palaeochannel contains up to 100m of sediment derived from runoff from the Mount Belches Formation and nearby terrains. Alluvial gold can collect at the base of the palaeochannel in gravels and sands.


Criteria Explanation Commentary Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

• easting and northing of the drill hole collar • elevation or RL (Reduced Level – elevation

above sea level in metres) of the drill hole collar • dip and azimuth of the hole • down hole length and interception depth • hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Only results for RC drill holes that have intercepted lithium and or tantalum pegmatites of 1m or more in width that have been assayed for lithium and tantalum have been included in the release. All drill hole details are contained in Tables 1 and 2 of the release.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated.

No cutting to intercept grades has been undertaken. Assays are report as pure elements such as Li, Ta, Nb, Sn, Au and converted to oxides (if required) using atomic formulas. Reported intervals in Table 1 and 2 represent the aggregation of the intercepts containing samples of at least 0.5% Li2O and/or 200ppm Ta2O5, lower grade zones are included adjacent to higher grade zones where the grade varies significantly from the average of the entire width of the mineralised pegmatite. Only lithium, tin, niobium and tantalum oxide results are tabled, other potential by-products are currently considered to be insignificant in economic importance.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).

Approximately 2/3rds of drilling is angled. Vertical holes have been drilled in areas where pegmatites are interpreted to be flat lying. The lithium tantalite-bearing pegmatites are generally flat to shallowly dipping in nature. The true width of pegmatites are generally considered 85-95% of the intercept width, with minimal opportunity for sample bias. Soil samples are a point sample and do not provide drilling widths or intercept lengths.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Drilling locations are shown on Figure 1 of the release. Figure 2 shows a cross section through the drilling area with an envelope 20m south and 130m north. Soil sample locations are shown in Figure 4.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Results for all drill holes that have intercepted lithium pegmatites that have been assayed for lithium have been included in the release. Results for all soil samples that have been assayed have been included in the release.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk

All relevant and material exploration data has been reported.


Criteria Explanation Commentary density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Further work The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Further RC drilling is warranted at the Bald Hill North target and soil/auger/air core sampling/drilling at the Lake Cowan target to explore for additional resources and improve the understanding of the current resources prior to mining.

drilling update & gold in soils anomaly ... - lithium · (au). the dimensions of the anomaly...

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