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LOYAL METALS LTD — M&A Activity 2023
Apr 11, 2023
65244_rns_2023-04-11_535fe4eb-b05b-4300-b19f-89fc24ce8501.pdf
M&A Activity
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ASX Announcement | 12 April 2023
Transformational Acquisition of Advanced, High-Grade Hidden Lake Lithium Project in Yellowknife, Northwest Territories, Canada
Overview:
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Loyal Lithium to acquire a controlling majority stake in the advanced, high-grade Hidden Lake Lithium Project in Yellowknife, Northwest Territories, Canada
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Acquisition includes a 2,500-hectare land position across 6 contiguous claims containing 14 mapped lithium spodumene bearing pegmatite outcrops - with the 4 drill tested spanning a cumulative strike length of 2,250m
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Significant scope to expand the known mineralisation along strike and at depth with multiple outcropping lithium spodumene bearing pegmatites yet to be drill tested
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Acquisition formalises a Joint Venture arrangement between Loyal Lithium and Patriot Battery Metals (ASX:PMT, TSXV:PMET) – minority owner of 5 of the claims
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Drilling in 2018 targeted 4 spodumene rich pegmatites to a limited depth of 30-50m vertical with all 10 drill holes intercepting high-grade spodumene of up to 1.81% Li2O[1,2]
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Metallurgical testwork indicates consistency across spodumene rich dykes with very simple mineralogy of predominantly course grained spodumene, quartz, and feldspars, with low impurities (<0.25% FeO)
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Dense Media Separation (DMS) pilot plant produced a high-grade concentrate of 6.11% Li2O from a 400kg bulk sample with minimal loss to tailings
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The Project is strategically located 45km east of Yellowknife, the capital of Northwest Territories, and is located within the emerging Yellowknife Lithium District between an allweather highway to the south and Li-FT Power’s (CSE: LIFT; FSE: WS0) properties to the North
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In November 2022, Li-FT Power (CSE: LIFT; FSE: WS0) acquired a portfolio of 14 spodumene pegmatites in the Yellowknife region in an all-scrip deal valued at ~CAD$155m[4]
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Yellowknife has a proud history of mining with well-established services and a workforce supporting numerous active mines, including Rio Tinto’s (ASX:RIO) Diavik Diamond Mine and Vital Metals’ (ASX:VML) Nechalacho REE Mine
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Notable infrastructure connects the Project to the rest of Canada with a domestic airport located 65km from the Project with daily connections to Calgary, Vancouver and Edmonton, an all-weather highway to the Project and heavy rail terminal and seaport facilities within trucking distance
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Loyal Lithium is fully-funded to complete the proposed acquisition and undertake exploration and feasibility workstreams into CY2025 utilising existing cash reserves of A$6.573 million (see Table 6)
A: 5/10 Johnston St, Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ASX Code: LLI
ACN : 644 564 241 www.loyallithium.com
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Transaction Overview
Loyal Lithium Limited ( ASX: LLI , Loyal or the Company ) is pleased to announce that it has entered into binding agreements with two independent parties to secure the controlling interest in the Hidden Lake Lithium Project ( Project ), located 45km east of Yellowknife, Northwest Territories, Canada ( Acquisition Binding agreements have been executed with:
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Youssa Pty Ltd (ACN 009 231 467) ( Vendor ), dated 28 March 2023 ( Agreement ) to acquire a 60% interest in 1,660 hectares (5 contiguous claims) of the Project, and
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DG Resource Management Ltd ( DGRM ) ( Vendor ), dated 28 March 2023 ( Agreement ) to acquire a 100% interest in 841 hectares (1 claim) of the Project.
Patriot Battery Metals (ASX:PMT, TSXV:PMET) will retain 40% of 5 contiguous claims (1,660 hectares) with a Joint Venture ( JV ) arrangement to be formed with Loyal Lithium.
If completed, the Acquisition will result in a formal change of nature for the Company, from a gold exploration company to a lithium exploration and development company. Accordingly, in order to effect the Acquisition, the Company will, inter alia, be required to re-comply with the requirements of Chapters 1 and 2 of the Listing Rules. A Prospectus will be issued to assist the Company to re-comply with those requirements. To satisfy the Listing Rules, the Company will be required to seek shareholder approval for the Acquisition and demonstrate investor spread via a small capital raising. Details of the Acquisition, the effect of the Acquisition on the Company and other important information for the benefit of investors are detailed throughout this announcement.
Loyal Lithium’s Managing Director, Adam Ritchie, commented:
"The acquisition of the Hidden Lake Lithium Project is a game-changer for Loyal Lithium. We are delighted to collaborate with our new joint venture partner, Patriot Battery Metals, and bring a fresh approach to this remarkable spodumene project.”
"The Yellowknife region has a proud history of lithium exploration, dating back to the 1950’s. However, the district has been relatively overlooked in recent times until Li-FT Power secured its potentially world-class Yellowknife Lithium Project in late 2022. Yellowknife is a well-established mining city with experienced mining services and workforce. Loyal Lithium is looking forward to fostering relationships with the local stakeholders and becoming an important part of this emerging lithium district."
“The exploration work conducted to-date has been very encouraging with all of the spodumene rich dykes remaining open along strike and at depth. Additionally, the metallurgical pilot plant performance to date is exceptional and is a direct product of the consistency and purity of the Hidden Lake ore. I have no doubt that Hidden Lake will provide desired feedstock to many potential downstream partners.”
“In partnership with the Yellowknife community, we intend to responsibly explore and develop this project further through the utilisation of innovative exploration techniques and utilising our extensive lithium mining and processing expertise.”
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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Hidden Lake Project Overview
The Hidden Lake Lithium Project consists of 6 contiguous claims, totalling 2,500 hectares and is located approximately 45km east of Yellowknife, Northwest Territories, Canada - just north of Highway 4.
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Figure 1 - Hidden Lake Lithium Project: Yellowknife, Northwest Territories, Canada
A: 5/10 Johnston St,
ASX Code: LLI
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ACN : 644 564 241 www.loyallithium.com
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From Yellowknife, the Project can be accessed by travelling east on the all-weather Highway 4/Ingraham Trail for approximately 65km. From there, a pre-existing ATV trail trends northward toward the historic Hidden Lake Mine and crosses portions of the Project (Figure 2). Alternatively, the Property can be accessed using a helicopter or float plane based out of Yellowknife.
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Figure 2 - Hidden Lake Lithium Project: Yellowknife, Northwest Territories, Canada
Yellowknife has a proud history of mining with a well-established workforce supporting numerous active regional mines including Rio Tinto’s (ASX:RIO) Diavik Diamond Mine and Vital Metals’ (ASX:VML) Nechalacho REE Mine. Notable infrastructure connects Yellowknife to the rest of Canada:
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Domestic Airport - daily connections to Calgary, Vancouver and Edmonton
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All weather roads - south into Alberta and British Colombia
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Heavy rail terminal and seaport - Hay River
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Hydroelectric power network – 2030 plans to extend to the Lithium Belt
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Figure 3 - Hidden Lake Lithium Project: Yellowknife, Northwest Territories,
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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Project Details
The Project has 14 individually identified lithium spodumene bearing pegmatite dykes, with seven confirmed to be spodumene rich. Each individual discrete dyke is inferred from aligned parallel NNE striking extensive resistive outcrops. Although there are extensive resistive outcrops on the property, there has only been very limited field mapping conducted. There may be additional pegmatites on the property, as it contains marshes, lakes, and forests, all of which are known to conceal pegmatite dyke connections and extensions.
The four most significant pegmatites (D12, HL1, HL3 and HL4) have been extensively channel sampled and confirmed to a minimum depth of 30-50m by diamond drilling. Three additional spodumenebearing pegmatite dykes, HL6, HL8 and HL13, have also been located on the property and explored to varying degrees. The seven spodumene rich pegmatites have a cumulative strike length of 2,660m with the most significant pegmatites exposed at surface over lengths of up 800m and widths up to 11.58m. There is significant scope to expand the known mineralisation along strike and at depth with multiple outcropping lithium spodumene bearing pegmatites yet to be drill tested.
| Pegmatite Dyke Number of Channels Number of Drillholes |
Surface Exposure | Downhole Intersection |
|---|---|---|
| Length (m) Max Width (m) |
Min Length (m) Max Length (m) |
|
| D12 15 3 HL1 16 2 HL3 15 2 HL4 15 3 HL6 8 - HL8 2 - HL13 - - |
350 11.58 700 8.72 800 9.64 400 8.02 180 5.2 30 5.1 200 4 |
7.37 11.12 3.42 7.59 7.68 8.68 5.62 7.72 - - - - - - |
| Table 1 - Surface Expressional | and Downhole Intersections of Hidden Lake Pegmatites |
Seven spodumene rich dykes were identified during 4 early-stage exploration programs and have spodumene rich zones visible in fresh rock outcrop shown in images 1, 2 and 3.
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Image 1 - Large spodumene crystal in pegmatite outcrop from D-12 dyke
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Image 2 - Channel sampling - spodumene crystal shown from the outcrop
A: 5/10 Johnston St, Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ASX Code: LLI
ACN : 644 564 241 www.loyallithium.com
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Image 3 – Large spodumene crystal in pegmatite outcrop from D-12 dyke outcrop sampled
Importantly, the four most significant pegmatite outcrops align laterally and are inferred to be discrete continuous to sub-continuous units. The four dykes have a cumulative total strike of 2,250m and have undergone 29 rock chip sample assays and 341 rock saw channels sample assays before drill testing confirmed vertical continuity of subsurface spodumene mineralisation.
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Figure 4 – Hidden Lake Lithium Project – 4 most significant dykes channel sample results
A: 5/10 Johnston St,
ASX Code: LLI
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ACN : 644 564 241 www.loyallithium.com
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The other 10 dykes have a cumulative total strike of 1,700m which require further sampling and drill testing to determine the distribution of spodumene within each dyke (two have had some channel sampling; HL6, HL8). The extensive lateral extent of all pegmatite dykes appears to be a feature of the Yellowknife Lithium Belt.
In 2018[1,2] Foremost Lithium conducted an exploration program to test the vertical continuity of subsurface spodumene mineralisation. The program consisted of 10 NQ core drill holes for 1,079.37 m on the four most significant pegmatite dykes. All 10 NQ diamond drill holes recording high-grade intercepts and confirmed mineralisation to a minimum vertical depth of 30 to 50m from surface, but all dykes remain open at depth.
A total of 197 core samples were collected and submitted for assaying at SGS Mineral Services Lakefield facility.
| Pegmatite Dyke | Hole/Channel ID |
# of Samples | Length(m) | Li2O (%) | Ta2O5 (ppm) |
|---|---|---|---|---|---|
| HL18-001 | 11 | 11.03 | 1.27 | 55.5 | |
| D12 | HL18-002 | 8 | 7.37 | 1.26 | 78.2 |
| HL18-003 | 13 | 11.12 | 1.32 | 61.6 | |
| HL18-004 | 9 | 7.59 | 1.42 | 36.1 | |
| HL1 | |||||
| HL18-005 | 5 | 3.42 | 0.74 | 81.8 | |
| HL18-009 | 10 | 8.68 | 0.58 | 17.3 | |
| HL3 | |||||
| HL18-010 | 8 | 7.68 | 0.99 | 23.5 | |
| HL18-006 | 8 | 7.72 | 1.31 | 51.3 | |
| HL4 | HL18-007 | 6 | 5.98 | 1.83 | 55 |
| HL18-008 | 6 | 5.62 | 0.96 | 98.8 |
Table 2 - Hidden Lake Pegmatites Drillhole Intersection Summary
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Image 4 - Spodumene mineral crystals in drill core hole HL18-003 from 38.80-49.86m
Composite channel samples were produced to conduct a series of metallurgical tests. The testing proved that the mineralogy responded well to typical spodumene beneficiation processes such as Dense Media Separation (DMS) and floatation. These composite samples were also evaluated using QEMSCAN and Electron Probe Micro Analysis to conclude that the four main pegmatite dykes possessed
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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similar liberation and mineralogical characteristics. Namely, a simple mineralogy of predominantly course grained spodumene, quartz, plagioclase and K-feldspar with comparatively low impurities. Iron content for all four composite samples was low, averaging 0.22% FeO (SGS, 2017).
| HL1 | HL3 | HL4 | D12 | |
|---|---|---|---|---|
| Mineral | Composite | Composite | Composite | Composite |
| Spodumene | 15.8 | 16.1 | 14.2 | 14.5 |
| Quartz | 27.9 | 26.5 | 28.5 | 27.3 |
| Plagioclase | 38.5 | 36.2 | 39.8 | 39.3 |
| K-Feldspar | 8.66 | 14 | 9.16 | 9.66 |
| Muscovite | 4.86 | 4.2 | 4.48 | 4.03 |
| Biotite | 0.02 | 0.03 | 0.01 | 0.01 |
| Clays | 1.09 | 0.91 | 0.93 | 1.07 |
| Apatite | 0.28 | 0.26 | 0.34 | 0.3 |
| Montebrasite | 2.68 | 1.54 | 2.36 | 3.69 |
| Other | 0.2 | 0.27 | 0.22 | 0.17 |
| Total | 100 | 100 | 100 | 100 |
Table 3 - Hidden Lake Modal Mineralogy (wt%) of Composite Samples from D12, HL1, HL3 and HL4 Pegmatite
A single composite sample was created for subsequent metallurgical testwork which included a DMS pilot plant that produced a high-grade concentrate of 6.11% Li2O from a 400kg bulk sample with minimal loss to tailings – validating HLS testwork that produced a concentrate of 6.3% Li2O.
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Image 5 - Hidden Lake - marketable Spodumene concentrate sample (6.11% Li2O)
A: 5/10 Johnston St,
ASX Code: LLI
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ACN : 644 564 241 www.loyallithium.com
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Project History
The 5 contiguous claims (HID1 to HID5) of the Project were discovered by DG Resource Management Ltd., who vended the Project into Patriot Battery Metals (TSXV:PMET, ASX:PMT)(previously 92 Resources) in 2016. The Project was transitioned to an earn in Joint Venture with Foremost Lithium (CSE:FAT)(previously Far Resources) in 2018.
In 2019 Foremost Lithium ceased the remaining earn-in for the Project which resulted in the immediate constitution of a 60/40 Joint Venture agreement. In November 2022, Foremost Lithium sold their 60% interest to Youssa Pty Ltd, who in-turn have now entered a binding agreement with Loyal Lithium for the controlling 60% ownership on the Project. A Joint Venture agreement will therefore exist between Loyal Lithium ( Optionee ) and Patriot Battery Metals ( Optionor ).
Under the Hidden Lake ‘Material Joint Venture Terms’ the following key terms have been extracted:
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The Optionee will be the initial operator (the JV Operator ) under the Joint Venture and will remain as JV Operator unless its interest is reduced below 50% or the Optionee resigns, in which event the Optionor shall become JV Operator.
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The Optionee shall be responsible for funding 100% of the first CAD$1,000,000 in Joint Venture expenditures pursuant to one or more approved Exploration Programs (as defined below), such that the Optionor’s interest is a carried interest respecting such amount. Thereafter, each Party will contribute its proportionate share to the Joint Venture. At present the Optionee’s spend is approximately ~CAD$50,000.
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The JV Operator must keep the Project in good standing and free from encumbrances (save for the DGRM Royalty), comply with applicable laws, maintain proper books and accounts and adequate insurance with respect to the Joint Venture.
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The JV Operator shall be entitled to receive a management fee equal to 5% of the Exploration Expenditures of the Joint Venture in consideration for its efforts and services as JV Operator.
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Each Party to the Joint Venture shall be responsible for its proportionate share of the costs and expenses of the Joint Venture including, but not limited to, any lease, purchase and/or royalty payments (including the DGRM Royalty) and other monies due to arm’s length third parties including, but not limited to, DGRM.
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If a Party elects not to participate in an Exploration Program for any calendar year during the joint venture period, or elects to participate in an Exploration Program but subsequently fails to pay in full for its proportionate share of the costs thereof, the interest of the non-participating or defaulting Party, as the case may be, shall be subject to dilution in accordance with agreement.
The most eastern contiguous claim (HID6) of the Project was founded by DGRM in December 2022. DGRM has entered into a binding agreement with Loyal Lithium for 100% ownership on the Project. A 2% NSR royalty is held by DGRM for all 6 contiguous claims of the Project.
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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Mineral Tenure
The Project consists of 6 contiguous claims, totalling 2,500.29 hectares. The first three claims (HID 1 to 3) were staked and recorded in February 2016. HID 4 and 5 were staked and recorded in June 2016. HID 6 was staked and recorded in December 2022.
| Claim Number Claim Name |
Size (ha) Issue Date Anniversary Date Required Spending |
Total Expenditure To date |
|---|---|---|
| K19925 HID 1 K19926 HID 2 K19927 HID 3 K06903 HID 4 K06959 HID 5 M12265 HID 6 |
410.14 2/29/2016 2/29/2026 $20,507 692.15 2/29/2016 2/29/2026 $34,607 500 2/29/2016 2/29/2026 $25,000 48 6/29/2016 6/29/2026 $2,400 9 6/29/2016 6/29/2026 $450 841 14/12/2022 14/12/2024 $16,820 |
requirement met requirement met requirement met requirement met requirement met $0 |
Table 4 - Mineral Tenure and Expenditures
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Figure 5 – Hidden Lake Lithium Project – Mineral Tenure
Resource Classification and information regarding the resource at the Project
Due to the sparseness of exploration data, no JORC compliant resource classification study has been determined or commissioned for the Project.
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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Details of the Vendors
Youssa Pty Ltd ( Youssa ) is a Western Australia based Australian private company. Active since 1987, Youssa is the parent company for several businesses and investments across mining, industrial and commercial sectors with a particular focus on the mining services industry.
DG Resource Management ( DGRM ) is a Canadian private company. DGRM are geological project generators with a unique perspective on mineral exploration that has resulted in numerous grass roots discoveries across multiple commodities, including lithium, REE’s, uranium and specialty metals. DGRM identified, acquired and vended the potentially world-class Corvette Lithium Project for Patriot Battery Metals.
Details of the Acquisition
Terms of the Agreement with Youssa Pty Ltd
The Company entered into the Agreement on 28 March 2023. A summary of the material terms of the Agreement are set out below:
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(i) Parties : the Company entered into the Agreement with the Vendor, Youssa Pty Ltd, who holds the 60% interest in 5 claims associated with the Project;
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(ii) Material terms :
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a. Cash Consideration: At Settlement, the Company will pay the Vendor (and/or its nominees) A$250,000 cash;
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b. LLI Shares Consideration: At Settlement, the Company will issue the Vendor (and/or its nominees) 14,000,000 LLI Shares;
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c. Escrow: Shares issued by the Company to the Vendor for consideration will be subject to an escrow period to be determined by the ASX;
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d. LLI Options Consideration: At Settlement, the Company will issue the Vendor (and/or its nominees) 4,000,000 LLI Options at an exercise price of $0.60. Each Option will expire 3 years from the date of issue;
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e. Royalty: The Company acknowledges the existing 2% net smelter royalty payable in respect of the claims; and
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f. Representations and warranties : each party makes representations and warranties standard for an agreement of this nature.
Terms of the Agreement with DGRM
The Company entered into the Agreement on 28 March 2023. A summary of the material terms of the Agreement are set out below:
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(i) Parties : the Company entered into the Agreement with the Vendor, DGRM, who holds the 100% interest in 1 claim associated with the Project;
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(ii) Material terms :
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a. Cash Consideration: At Settlement, the Company will pay the Vendor (and/or its nominees) $35,000 cash (Canadian dollars);
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b. LLI Shares Consideration: At Settlement, the Company will issue the Vendor (and/or its nominees) 2,000,000 Loyal Ordinary Shares (ASX: LLI);
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c. Escrow: Shares issued by the Company to the Vendor for consideration will be subject to an escrow period to be determined by the ASX; and
A: 5/10 Johnston St,
ASX Code: LLI
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ACN : 644 564 241 www.loyallithium.com
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d. Royalty: A 2% net smelter royalty is payable to the Vendor in respect of the claim; and
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e. Representations and warranties : each party makes representations and warranties standard for an agreement of this nature.
The Agreements are conditional, among other things, on the Company receiving conditional approval from the ASX that the Company has met the requirements in Chapters 1 and 2 of the Listing Rules as if the Company were applying for admission to the Official List and the Company obtains all necessary shareholder and regulatory approvals under the Listing Rules and the Corporations Act.
Capital Raising – re-compliance
As part of the Acquisition, the Company is proposing to undertake a capital raising to raise up to a maximum of $1,500,000 to satisfy the Listing Rules and to demonstrate investor spread of a minimum of 300 non-affiliated shareholders ( Capital Raising ).
The Company has been advised by the ASX that if an existing shareholder were to invest a minimum of $2,000 in the Capital Raising, that shareholder could be counted towards the spread requirements.
Investors will therefore be able to apply for a minimum of $2,000 worth of Shares each and up to a maximum of $5,000 worth of Shares each.
The Company is yet to determine the method by way of which it will conduct the Capital Raising. As at the date of the announcement, the Company is proposing to conduct a general offer, which is open to the wider market, with a priority offer to be offered to existing shareholders that are on the Company’s register at a record date to be determined.
The Company has engaged Canaccord Genuity (Canaccord) as Lead Manager for the Capital Raising. Canaccord will charge the Company a fee of 6% on funds raised through the proposed Capital Raising. The Capital Raising will not be underwritten.
The price of the Shares under the proposed Capital Raising is yet to be determined, however for the purposes of calculating the effect of the Capital Raising on the Company’s capital structure an issue price of $0.30 (being the deemed issue price of the Shares to be issued to the Vendors under the Acquisition) has been used.
Table 5 details the manner in which the funds raised under the Capital Raising will be applied. Details of the effect of the Capital Raising on the Company are detailed in Table 6 of this Announcement.
Proposed Use of Funds
The Company intends to apply the funds raised under the Capital Raising, together with its existing cash reserves, over the two years following re-admission of the Company to the Official List of the ASX as follows:
| Drill Exploration | 1 April 2023/24 |
1 April 2024/25 |
|---|---|---|
| Wages, commercial travel, deposit modelling, misc. transport and supplies |
$190,476 | $50,000 |
| Accommodations, food, fuel | $104,286 | $40,000 |
A: 5/10 Johnston St,
ASX Code: LLI
Peppermint Grove WA, 6011 P: (08) 6245 2490
ACN : 644 564 241 www.loyallithium.com
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| Charter aircraft - helicopter | $108,254 | $20,000 |
|---|---|---|
| 3,331 m core drilling (NQ), core boxes, immediate support |
$721,429 | $278,000 |
| Sample Analysis and Mineralogy | $55,233 | $25,000 |
| Surface Exploration | ||
| Wages, commercial travel, misc. supplies | $30,079 | $0 |
| Prospecting, rock sampling, mapping | $40,800 | $0 |
| Geophysics - IP-Resistivity | $44,048 | $0 |
| Sample analysis and mineralogy (380 samples at 75$per sample) |
$28,500 | $0 |
| Airborne Survey | ||
| Lidar and Ortho-imagerysurvey | $12,024 | $0 |
| Metallurgical Testing | ||
| Flowsheet development to spodumene concentrate | $43,301 | $0 |
| Subtotal | $1,378,429 | $413,000 |
| Contingency (5%) | $68,921 | $20,650 |
| TOTAL PROGRAM COST | $1,447,350 | $433,650 |
Table 5 – Hidden Lake 24 Month Exploration Budget
The above table is a statement of current intentions as of the date of this announcement. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied.
The Board reserves the right to alter the manner in which the funds are ultimately applied on this basis.
Unaudited Pro-forma Consolidated Statement of Financial Position
The effect of the Acquisition on the Company’s consolidated statement of financial position is set out below assuming a successful Capital Raising.
The principal effects on the Company’s consolidated statement of financial position will be:
| Prior to Proposed Transaction & Capital Raise |
Effect of Proposed Transaction & Capital Raise |
Post Proposed Transaction & Capital Raise |
|
|---|---|---|---|
| Total Consolidated Assets | 17,921,657 $ |
6,526,250 $ |
24,447,907 $ |
| Total Equity | 17,404,460 $ |
6,526,250 $ |
23,930,710 $ |
| Cash in Bank (1) | 6,573,000 $ |
1,121,500 $ |
7,694,500 $ |
| Consolidated EBITDA | 142 $ |
N/A | N/A |
| Exploration Budget | 1,675,289 $ |
1,881,000 $ |
3,556,289 $ |
Table 6 – Loyal Lithium Consolidated Statement of Financial Position
Note 1: Cash in bank prior to proposed transaction & capital raise is Dec 2022 end of quarter cash in bank figure. Cash in bank effect of proposed transaction & capital raise does not include operation expenditure for the March 2023 quarter.
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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Capital Structure and Effect of the Acquisition on the Company
The capital structure of the Company before the Acquisition and the indicative capital structure after the Acquisition is set out below:
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Prior to Proposed Effect of Proposed Post Proposed
Class of Securities Transaction & Capital Raise Transaction & Capital Raise Transaction & Capital Raise
Shares (1,2,3) 62,990,001 21,000,000 83,990,001
Options (4) 31,300,000 4,000,000 35,300,000
Performance Rights 7,700,000 - 7,700,000
Number of shares on a fully
101,990,001 25,000,000 126,990,001
diluted basis
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Table 7 – Loyal Lithium Capital Structure
Note 1: This number of Shares includes 3,000,001 Shares that are subject to escrow restrictions (which expire on 6 July 2023). Note 2: This number of Shares includes 500,000 Shares proposed to be issued to Osisko Development Corporation that were approved on 12 December 2022, but are yet to be issued.
Note 3: This table includes the securities that have been issued in the previous 6 months, namely, as announced to the ASX on 27 October 2022 the institutional placement. The institutional placement was undertaken in two-tranches. Securities issued under Tranche One were issued on 1 November 2022 and the securities issued under Tranche Two were issued on 12 December 2022. The institutional placement was undertaken by domestic and offshore institutional, sophisticated and professional investors. The shares were issued at $0.40 per share. Proceeds were for exploration field works at the Brisk and Trieste Lithium Projects, potential additional acquisitions, drilling at the Scotty Lithium Project and general working capital.
Note 4: 900,000 Options have an exercise price of $0.30 and expire on 6 July 2024, 500,000 Options have an exercise price of $0.45 and expire on 2 May 2025, 1,000,000 Options have an exercise price of $0.35 and expire on 25 July 2025, 2,000,000 Options have an exercise price of $0.60 and expire on 16 January 2026, 3,500,000 Options have an exercise price of $0.50 and expire on 20 February 2026, 2,000,000 Options have an exercise price of $0.60 and expire on 31 March 2026, 21,400,000 Options expire on 6 July 2024 and are subject to escrow restrictions (which expire on 6 July 2023).
No shareholder will acquire control of 20% or more of the Company as a result of the Acquisition. There will be no changes to the board or senior management as part of the Acquisition.
Indicative timetable
The anticipated timetable for the Acquisition and associated events under the Listing Rules is set out below:
| Action | Date |
|---|---|
| Date of announcement of Acquisition | 12 April 2023 |
| Despatch of the Notice of Annual General Meeting | 26 April 2023 |
| Lodge Prospectus with ASIC | 1 May 2023 |
| Exposure Period commences | 2 May 2023 |
A: 5/10 Johnston St,
ASX Code: LLI
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ACN : 644 564 241 www.loyallithium.com
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ASX:LLI
ASX:LLI
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| Action | Date |
|---|---|
| Opening Date of Priority Offer | 9 May 2023 |
| Opening Date of General Offer | 9 May 2023 |
| 2023 Annual General Meeting to approve the Acquisition | 24 May 2023 |
| Closing Date of Priority Offer | 31 May 2023 |
| Closing Date of General Offer | 31 May 2023 |
| Securities issued under the General and Priority Offer | 1 June 2023 |
| Despatch of holding statements | 2 June 2023 |
| Settlement of the Acquisition | 7 June 2023 |
| Expected Re-quotation Date on ASX | 14 June 2023 |
Table 8 – Hidden Lake Acquisition Indicative timetable
The above timetable is indicative only and has not been endorsed by ASX.
Actual dates will be subject to the Corporations Act 2001 (Cth) and the Listing Rules, and the Company reserves the right to vary any and all of the above dates without notice.
ASX waivers and confirmations
The Company does not require any waivers or confirmations from ASX with respect to the Acquisition.
Fees paid or payable in connection with the Acquisition
Other than as disclosed in this announcement, there are no fees payable to any person in connection with finding, arranging, or facilitating the Acquisition or Capital Raising.
The Company currently expects to pay fees to advisers in connection with its Capital Raising and readmission to ASX.
Risks
The Company is unaware of any additional significant factors or risks that may affect access, title, or the right to perform work on the Hidden Lake Property. Inquiries have been made directly with both the Mackenzie Valley Land and Water Board and the Northwest Territories mining recorder's office, and confirmation was provided that no extraordinary circumstances exist that would affect permitting or executing work on the project.
Further details of key risks will be included in the Company’s Notice of Meeting and Prospectus.
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
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ASX:LLI
ASX:LLI
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Regulatory requirements generally
On 17 February 2023, the Company received favourable in-principle advice from the ASX that, subject to certain factors, the ASX is not aware of other reasons, other than those factors, that would cause the Company not to have a structure and operations suitable for a listed entity.
The Company notes that pursuant to the Listing Rules:
-
(i) the issue of the securities under the Acquisition Agreements requires shareholder approval and therefore may not proceed if such approval is not forthcoming;
-
(ii) the Company is required, inter alia, to re-comply with ASX’s requirements for admission and quotation and therefore the Acquisition may not proceed if those requirements are not met; and
-
(iii) ASX has an absolute discretion in deciding whether or not to re-admit the Company to the Official List and to quote its securities and therefore the Acquisition may not proceed if ASX exercises that discretion.
Investors should take account of these uncertainties in deciding whether or not to buy or sell the Company’s securities.
Furthermore, the Company:
-
(i) notes that ASX takes no responsibility for the contents of this announcement; and
-
(ii) confirms that it is in compliance with its continuous disclosure obligations under Listing Rule 3.1.
Shareholder approvals
Shareholder approval for the resolutions required to give effect to the Acquisition will be sought at the Company’s Annual General Meeting to be held in May 2023.Shareholder approval will be sought for the following matters, among other, in respect of the Acquisition:
-
(i) approval for the issue of the shares under the Prospectus (as required); and
-
(ii) approval for the issue of the securities to the vendors under the Acquisition Agreements.
Due diligence
The Company has undertaken appropriate enquiries and will undertake further due diligence into the assets and liabilities, financial position and performance, profits and losses, and prospects of the Project to enable the Board to be satisfied that the Acquisition is in the interests of the Company and its shareholders.
The release of this announcement has been authorised by the Board of Loyal Lithium Limited.
A: 5/10 Johnston St, Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
ASX Code: LLI
ACN : 644 564 241 www.loyallithium.com
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ASX:LLI
ASX:LLI
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For more information:
Adam Ritchie
Managing Director [email protected] +61 (0) 403 462 383
Jane Morgan
Investor & Media Relations [email protected] + 61 (0) 405 555 618
About Loyal Lithium
Loyal Lithium Limited (ASX: LLI) is a well-structured listed resource exploration company with projects in Tier 1 North American mining jurisdictions in Nevada, USA and the James Bay Lithium District in Quebec, Canada. Through the systematic exploration of its projects, the Company aims to delineate JORC compliant resources, creating value for its shareholders.
References
1. June 27, 2018 Foremost Lithium Resource & Technology Ltd. (Formerly Far Resources Ltd.) Far Resources Completes Drill Program at its High-Grade Hidden Lake Lithium Project, NWT and Confirms Spodumene Mineralised Pegmatite in Every Hole. https://www.sedar.com/. The technical content of this news release has been reviewed and approved by Mark Fedikow P.Geo., a qualified person as defined under NI 43-101.
2. September 10, 2018 Foremost Lithium Resource & Technology Ltd. (Formerly Far Resources Ltd.) Far Resources Earns First Option and Receives Drilling Results for its Hidden Lake Project, NT, Including Numerous High-Grade Intercepts of up to 1.6% Li2O over 9.2 metres. https://www.sedar.com/, The technical content of this news release has been reviewed and approved by Mark Fedikow P.Geo., a qualified person as defined under NI 43-101.
3. NWT Geoscience Detailed Showing Report ID 085INW0042.
4. November 23, 2022 Li-FT Li-FT Power Ltd. (CSE: LIFT): Li-FT to Acquire the Yellowknife Lithium Project, a Portfolio of 14 Significant Spodumene Pegmatites
A: 5/10 Johnston St,
ASX Code: LLI ACN : 644 564 241 www.loyallithium.com
Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]
- – Annexure 1 JORC Code, 2012 Edition ASX:LLI Table 1
- Section 1 Sampling Techniques and Data
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| Sampling | • Nature and quality of sampling (e.g. cut | •In 2016, 60 channel cuts were completed resulting in 308 roughly 1 m channel samples |
| techniques | channels, random chips, or specific specialized industry standard measurement |
collected. •In 2017, 10 channel cuts were completed resulting in 33 ~1 m channel samples collected. |
| tools appropriate to the minerals under | •Channel samples from 2016 to 2017 were sent to Activation Laboratories (“Actlabs”) | |
| investigation, such as downhole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as |
Ltd. in Kamloops, BC, Canada, for analysis. •In 2018, a total of 1,079.37 m of NQ core was recovered and 159 half-core samples collected. Mineralized core was sampled at ~1 m lengths and unmineralized core at a maximum of ~1.5 m. |
|
| limiting the broad meaning of sampling. | •Half-core samples along with 38 QAQC samples made up of ¼ NQ core duplicates, | |
| • Include reference to measures taken to | certified reference materials (CRMs) and quartz blanks were sent to SGS Canada | |
| ensure sample representivity and the | Inc. Laboratories in Lakefield, Ontario for analysis. | |
| 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 (eg | ||
| '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 | ||
| (eg submarine nodules) may warrant | ||
| disclosure of detailed information. |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
ASX:LLI Commentary |
|---|---|---|---|
| Drilling | • Drill type (eg core, reverse circulation, open- | • | A portable gas-powered diamond-bladed saw was utilized for channel cuts. |
| techniques | hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, |
• • |
A Boyles 27A diamond drill was used for drilling. All diamond drill holes were drilled by standard tube wireline methods. All holes are collared using NW casing and drilled with NQ rods. |
| triple or standard tube, depth of diamond | • | Core was not oriented. | |
| tails, face-sampling bit or other type, whether | |||
| core is oriented and if so, by what method, | |||
| _etc). _ | |||
| Drill sample | • Method of recording and assessing core and | • | Channel cuts only sampled visually mineralized rock. Overburden resulted in gaps in |
| recovery | chip sample recoveries and results assessed. | channel cuts. | |
| • Measures taken to maximise sample recovery and ensure representative nature of the samples. • Whether a relationship exists between |
• • |
Drill core recoveries were measured after each drill run, comparing length of core recovered vs. drill depth. Core recoveries were good due to the competent nature of the rock, averaging 97% over all 10 drillholes Mineralized rock in drillholes was sampled at smaller sample lengths (~1 m) than unmineralized rock (~1.5 m) |
|
| sample recovery and grade and whether | • | There is no observed relationship between core recovery and grade. | |
| sample bias may have occurred due to | |||
| preferential loss/gain of fine/coarse material. | |||
| Logging | • Whether core and chip samples have been | • | Channel cuts were geologically logged in the field qualitatively with pen and paper as |
| geologically and geotechnically logged to a | they were collected. The records are available only in physical form. | ||
| 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) |
• • • • |
Photos were taken of the channel cuts after the channel sample was removed. Drill core was all geologically and geotechnically logged using an industry-standard logging scheme. Logged intervals were based on geological boundaries. The geological log incorporates geotechnical parameters, lithology, weathering, alteration, and veining. Geological logging was based on both qualitative identifications of geological |
|
| photography. | characteristics and semi-quantitative estimates of mineral abundance. Geotechnical | ||
| • The total length and percentage of the | logging uses standard semi-quantitative definitions for estimating rock strength and | ||
| relevant intersections logged. | fracture density. | ||
| • | A digital photographic record was maintained for all drill core. | ||
| • | Electronic geological logs were created using a Microsoft Excel logging template on | ||
| laptop computers. |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
|---|---|---|
| Sub-sampling | • If core, whether cut or sawn and whether |
•Channel cuts roughly 5 cm thick were made with a handheld gas-powered diamond- |
| techniques and sample |
quarter, half or all core taken. • If non-core, whether riffled, tube sampled, |
bladed saw. •The channel samples were removed with a hammer and chisel, and the entire channel cut was sampled at ~1 m intervals. |
| preparation | rotary split, etc and whether sampled wet or | •All channel samples were sent to Actlabs in Kamloops, BC, for standard sample |
| dry. • For all sample types, the nature, quality and appropriateness of the sample preparation |
preparation (Code RX1), which includes crushing up to 80% passing 2 mm, riffle splitting (250 g) and pulverizing to 95% passing 105 µm. •Drill core was cut in half with an electric diamond-bladed saw. Quarter-cut duplicates were made periodically for QAQC. |
|
| technique. | •The Author have no other direct knowledge of other sampling method details | |
| • Quality control procedures adopted for all sub-sampling stages to maximise |
undertaken during the drill campaign but have no reason to believe the operators did not follow industry standard practices. •Sizes were appropriate for the grain size of the material sampled in both the channel |
|
| representivity of samples. | cuts and drill core samples. | |
| • Measures taken to ensure that the sampling | •Channels were cut perpendicular to vein strike and spaced regularly ( generally < 50 | |
| is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. |
m). •All core samples collected were shipped to SGS Canada’s laboratory in Lakefield, ON, for standard sample preparation (code PRP89) which includes drying at 105°C, crushing to 75% passing 2 mm, riffle splitting 250 g, and pulverizing to 85% passing 75 |
|
| • Whether sample sizes are appropriate to the | microns | |
| grain size of the material being sampled. | ||
| Quality of assay data and |
• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is |
•All channel samples were analyzed by Actlabs in Kamloops, B.C., for analysis using packages UT7 (55 elements ICP-MS after sodium peroxide fusion) and 2017 samples were also analyzed with code 1A2-ICP (Au by Fire Assay). Overlimit Li values were analyzed with code 8 Li |
| laboratory | considered partial or total. | •No certified reference materials were submitted with the channel samples for analysis |
| tests | • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis |
due to the preliminary nature of the fieldwork, with the operator relying on the laboratory's internal QA/QC. •Analytical procedures are considered adequate for the early-stage nature of the programs. |
| including instrument make and model, | •All drill core samples were submitted to SGS Canada in Lakefield, Ontario, for analysis | |
| reading times, calibrations factors applied and their derivation, etc. |
with packages GE ICM90A (55 elements ICP-AES after sodium peroxide fusion) and GE FAA313 (Au by Fire Assay). •In addition to the ½ NQ core samples, ¼ NQ core duplicates, pulp duplicates, certified |
|
| • Nature of quality control procedures adopted | reference materials (CRMs) and quartz blanks were inserted into the sample stream at |
|
| (eg standards, blanks, duplicates, external | systematic intervals for QA/QC. • QA/QC samples comprised14% oftotaldrillcore samples submittedforanalysis. |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
|---|---|---|
| laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. |
•Both Actlabs and SGS Canada are ISO 17025 certified laboratories and implement routine Quality Assurance and Quality Control (QA/QC) protocols during the analytical process. The procedures include using pulp duplicates and internally certified reference materials. |
|
| The Competent Person considers the sample and analytical procedures acceptable | ||
| for an early-stage project. | ||
| Verification of sampling and assaying |
• The verification of significant intersections by either independent or alternative company personnel. |
•A 43-101 report was published in 2016 that verified the 2016 channel sampling procedure and confirmed lithium-bearing pegmatites on the Property. •No additional verification or testing was completed during this evaluation. •No holes have been twinned. |
| • The use of twinned holes. | •All original assay data is stored in a database in an as-received basis with no | |
| • Documentation of primary data, data entry | adjustment to the returned data. | |
| procedures, data verification, data storage (physical and electronic) protocols. |
•2016 and 2017 channel samples are recorded in physical books that have been photographed. All other data is stored electronically in databases. |
|
| • Discuss any adjustment to assay data. | ||
| Location of | • Accuracy and quality of surveys used to | •Data is stored in UTM NAD 83 Zone 12N projection format. |
| data points | locate drill holes (collar and down-hole surveys), trenches, mine workings and other |
•Historical surface mapping points were georeferenced and validated against topography. •2016 and 2017 channel sample location data was obtained using handheld GPS, with |
| locations used in Mineral Resource | azimuth measurements collected using a compass. | |
| estimation. | •Data points were generally well-constrained for X-Y coordinates but less reliable for Z | |
| • Specification of the grid system used. • Quality and adequacy of topographic |
coordinates for channel samples. Channel locations were verified against topography. •Drill hole collars were surveyed using a Topcon RTK differential GPS system, and are well-constrained in the X, Y and Z directions. |
|
| control. | •Drillholes were surveyed using a Reflex EZ-Gyro. Single shots were taken every 10 m | |
| down the entire length of the hole with multi-shots taken at the top, middle and bottom | ||
| of the hole to optimize the collected orientation data. | ||
| •Topographic control is from open-sourced High-Resolution Digital Elevation Model | ||
| (HRDEM) from Natural Resources Canada (NRCAN). | ||
| Data spacing | • Data spacing for reporting of Exploration | •A geological model was constructed using a database of 10 drillholes and 70 channels |
| and distribution |
Results. • Whether the data spacing and distribution is |
totalling 1,411.82 m. •Geological mapping shows continuity along strike of pegmatite outcrops. •Channels are spaced between 25 to 50 m over six different pegmatite surficial |
| sufficient to establish the degree of | showings. |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
|---|---|---|
| geological and grade continuity appropriate | •Drillholes are spaced between approximately 70 m to 150 m apart on four different | |
| for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications |
pegmatite showings with two drillholes completed on the HL4 and D12 pegmatites and three drillholes completed on the HL1 and HL3 pegmatites. •Pegmatite intersections from all drillholes are less than 50 m vertical depth from |
|
| applied. | surface, resulting in high concentrations of data at shallower depths. | |
| • Whether sample compositing has been | •No compositing of samples was applied prior to assaying. | |
| applied. | ||
| Orientation of data in |
• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, |
•Drill holes were designed to intersect known mineralized features in a nominally perpendicular orientation as much as is practicable given the availability of drill pads. •Channel cuts were perpendicular to strike of the mineralized feature. |
| relation to | considering the deposit type. | |
| geological structure |
• 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. | ||
| Sample | • The measures taken to ensure sample | •Site employees were the only personnel with access to samples. |
| security | security. | •Logging, sampling and core cutting for the 2018 drilling program were performed in a secure yard in Yellowknife, NWT. |
| •Samples were given a unique sample number that was provided for analysis. Each | ||
| sample tag listed the project name, drillhole, top and base of sample interval, and | ||
| sample number. | ||
| •Laboratory services were in secure compounds. | ||
| Audits or | • The results of any audits or reviews of | •The channel sampling and mapping were verified in the 2016 NI 43-101 report. |
| reviews | sampling techniques and data. |
Section 2 Reporting of Exploration Results
| Criteria | JORC Code explanation | Commentary | ||
|---|---|---|---|---|
| Mineral tenement and land |
• Type, reference name/number, location and ownership including agreements or |
•The Hidden Lake Property is located 45 km east of Yellowknife, NWT, Canada. The Property consists of 6 contiguous claims (grouping number GC2129), located on NTS sheets 085I11 and 085I12, totalling 2.500.29 ha. Claims HID 1 to 3 were issued on March 1, 2016, and HID 4 and 5 were issued on June 30, 2016. Claim MON-1 was issued on December 14, 2022. Claims HID 1-3 have March 1, 2026 |
||
| tenure status | material issues with third | anniversary dates and claims | HID 4-5 have June 30, 2026 anniversary dates. Claim MON-1 has an | |
| parties such as joint ventures, partnerships, overriding royalties, native title interests, |
anniversary date of December 14, 2024. •A 21-year mining lease is required after these anniversary dates. •In January 2018, the HID1-5 claims that made up the Hidden Lake Property at the time were acquired by Patriot Battery Metals (previously 92 Resources Corp.). |
|||
| historical sites, wilderness or | •In January 2018, Patriot Battery Metals signed an earn-in agreement with Foremost Lithium Resources | |||
| national park and environmental settings. |
and Technology (previously FAR Resources) for a 60% stake in the Hidden Lake Property. •On November 24, 2022, Foremost Lithium entered into an option agreement with Youssa Pty Ltd. to sell 60% interest in the five (5) HID 1-5 contiguous mineral exploration claims that make up the Hidden Lake |
|||
| • The security of the tenure held | Property. | |||
| at the time of reporting along with any known impediments |
•The HID 1-5 claims are currently held in the name of Patriot Battery Metals and are in good standing. Claims HID 1-3 have an anniversary date of March 1, 2026, and claims HID 4-5 have an anniversary date of June 30, 2026. |
|||
| to obtaining a licence to | •The MON-1 claim was staked on December 14, 2022, is owned by DGRM, and currently in the name of | |||
| operate in the area. | Jordan Pearson. The MON-1 claim is currently in good standing and has an anniversary date of | |||
| December 14, 2024. | ||||
| •Loyal Lithium is in the process of acquiring the 60% ownership stake in HID 1-5 previously held by | ||||
| Foremost Lithium and currently resides in the name of Youssa Pty Ltd as well as 100% interest in the | ||||
| MON-1 claim that is currently owned by DGRM. Loyal is also in the process of entering a Joint Venture | ||||
| arrangement with Patriot Battery Metals who currently owns the other 40% ownership of the HID 1-5 | ||||
| claims. | ||||
| •The Property is surrounded by | land withdrawals to the north and other claims to the south and west. No | |||
| claims or land withdrawals are | to the east. | |||
| •Consultation and engagement | are required for 8 stakeholders in the area, consisting of local Indigenous | |||
| Groups and land users, which | include | |||
oThe Akaitcho Dene First Nation |
||||
oThe Yellowknives Dene First Nation |
||||
oThe Lutsel K'e Dene First Nation |
||||
oThe Deninu Kue First Nation |
||||
oThe North Slave Métis Alliance |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
|---|---|---|
oThe Fort Resolution Métis Council |
||
oThe Northwest Territories Métis Nation |
||
oThe Tlicho Government |
||
| •A previous archaeological study of the area in 2018 found no archaeological findings in the Property area | ||
| and that a winter drill program would not require an archaeological impact assessment due to low | ||
| anticipated disturbance. | ||
| •An archaeological assessment may be warranted in the future should further exploration or camp | ||
| development occur in high-potential areas or occur under summer conditions. | ||
| • ALand Permit from the Mackenzie Valley Land and Water Board may be required under certain | ||
| conditions, including drill programs and the use of any heavy equipment. No impediments to obtaining | ||
| this Permit are anticipated. | ||
| Exploration | • Acknowledgment and | •The most significant historical exploration work on the Property has been completed on the D12 |
| done by other parties |
appraisal of exploration by other parties. |
pegmatite, first discovered by the Geological Survey of Canada in 1947. •Lithium-bearing pegmatite dykes in the Hidden Lake area were first staked by General Lithium Corp Ltd. in 1955. |
| •In July 1975, pegmatites in the area were staked by Canadian Superior Exploration Ltd., as the LU | ||
| claims; they later completed a large exploration program in 1978. | ||
| •In the late 1980s, the northern parts of the Property were staked by the Continental Pacific Resources | ||
| as part of the Shorty 1 Project, however much of the historical work completed was on pegmatites outside | ||
| of the current Property boundary with the exception of pegmatite D12. | ||
| •In 2016, 92 Resources Corp. conducted a prospecting and sampling program; 10 rock samples were | ||
| collected initially. A follow-up program the same year resulted in a total of 308 channel samples collected | ||
| from 60 channels across the D12, HL1, HL3, and HL4 dykes and 10 grab samples from other pegmatites | ||
| on the Property. | ||
| •In 2017 92 Resources collected 33 samples from 10 channels on dykes HL6 and HL8, with an additional | ||
| 24 grab samples from the south end of the Property. | ||
| •In 2018 a 10-hole, 1,079.37 m diamond drilling campaign yielded a combined 159 half-core samples | ||
| from dykes D12, HL1, HL3, and HL4. | ||
| Geology | • Deposit type, geological setting | •The Hidden Lake Property lies within the southern Archean Slave Craton of the Canadian Shield, which |
| and style of mineralisation. | comprises Mesoarchean gneissic basement covered by a Neoarchean supracrustal assemblage known as the Yellowknife Supergroup. The Yellowknife Supergroup consists of a thick sequence of |
|
| metavolcanics and metasedimentary rocks, and within the Property area, this assemblage is dominated | ||
| by the Burwash Formation. | ||
| •The large Neoarchean granitic plutons which intrude the Burwash Formation include the two-mica | ||
| granites oftheProsperous Suite and the biotite± hornblende tonalite to granodiorite oftheDefeat Suite. |
| Criteria JORC Code explanation |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
|---|---|---|---|---|---|---|---|---|
| •The Prosperous Suite consists of several S-type biotite-muscovite leucogranite plutons that are spatially associated with granitic pegmatites. These pegmatites, some of which are rareelement- bearing, intrude the surrounding Burwash Formation and the granitic plutons, forming the Yellowknife pegmatite field. •These lithium-bearing pegmatites are the target for exploration on the Property and fall under the "LCT", lithium-cesium-tantalum, pegmatite deposit type. •The lithium-bearing pegmatites on the Property are recorded as long, discontinuous, NNE-SSW trending bodies with sharp contacts with the metasediments. They are measured at up to 800 m long and 11.5 m wide, with spodumene and lesser montebrasite being the primary lithium-bearing minerals. |
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| 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: o easting and northing of thedrill hole collar o elevation or RL (ReducedLevel – elevation above sea level in metres) of the drill hole collar o dip and azimuth of the holeo down hole length andinterception depth o 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 |
•Detailed drillhole information and lithium pegmatite intersections were compiled from the Hidden Lake Property to develop the geological model. The drillhole attributes and pegmatite intersection summary are presented in the following tables. 2018 Drillhole Summary Hole ID Easting (m) Northing (m) Elevation (m) Azimuth (°) Dip (°) DDH Depth (m) Hole Diameter HL18-001 374934. 7 6936971 250.34 145 45 109 NQ HL18-002 375022. 6 6937090 248.55 145 45 101.34 NQ HL18-003 374892. 8 6936899 247.35 145 45 108.94 NQ HL18-004 373748. 2 6936978 249.42 145 45 106.19 NQ HL18-005 373702. 2 6936886 251.34 145 45 108.82 NQ HL18-006 373440 6937524 259.75 145 45 108.94 NQ HL18-007 373407. 1 6937465 258.9 145 45 109 NQ HL18-008 373361. 2 6937389 256.82 145 45 108.94 NQ HL18-009 373363. 9 6937097 253.43 145 45 109.2 NQ HL18-010 373305. 9 6937011 254.77 145 45 109 NQ Drillhole and Channel Intersection Summary |
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| Hole ID | Easting (m) |
Northing (m) |
Elevation (m) |
Azimuth (°) |
Dip (°) | DDH Depth (m) |
Hole Diameter |
|
| HL18-001 | 374934. 7 |
6936971 | 250.34 | 145 | 45 | 109 | NQ | |
| HL18-002 | 375022. 6 |
6937090 | 248.55 | 145 | 45 | 101.34 | NQ | |
| HL18-003 | 374892. 8 |
6936899 | 247.35 | 145 | 45 | 108.94 | NQ | |
| HL18-004 | 373748. 2 |
6936978 | 249.42 | 145 | 45 | 106.19 | NQ | |
| HL18-005 | 373702. 2 |
6936886 | 251.34 | 145 | 45 | 108.82 | NQ | |
| HL18-006 | 373440 | 6937524 | 259.75 | 145 | 45 | 108.94 | NQ | |
| HL18-007 | 373407. 1 |
6937465 | 258.9 | 145 | 45 | 109 | NQ | |
| HL18-008 | 373361. 2 |
6937389 | 256.82 | 145 | 45 | 108.94 | NQ | |
| HL18-009 | 373363. 9 |
6937097 | 253.43 | 145 | 45 | 109.2 | NQ | |
| HL18-010 | 373305. 9 |
6937011 | 254.77 | 145 | 45 | 109 | NQ | |
| Drillhole and Channel Intersection Summary |
| Criteria JORC Code explanation |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
ASX:LLI Commentary |
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|---|---|---|---|---|---|---|---|---|---|
| clearly explain why this is the case. |
Pegmatite Dyke |
Number of Channels |
Number of Drillholes |
Surface Exposure | Downhole | Intersection | |||
| Length (m) |
Minimum Width (m) |
Maximum Width (m) |
Minimum Length (m) |
Maximum Length (m) |
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| D12 | 15 | 3 | 350 | 2.25 | 11.58 | 7.37 | 11.12 | ||
| HL1 | 16 | 2 | 700 | 1 | 8.72 | 3.42 | 7.59 | ||
| HL3 | 15 | 2 | 800 | 1.63 | 9.64 | 7.68 | 8.68 | ||
| HL4 | 15 | 3 | 400 | 2.48 | 8.02 | 5.62 | 7.72 | ||
| HL6 | 8 | - | 180 | 2.13 | 5.2 | - | - | ||
| HL8 | 2 | - | 30 | 1.8 | 5.1 | - | - | ||
| HL13 | - | - | 200 | 1 | 4 | - | - | ||
| Data aggregation methods • In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg 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. |
•Exploration results are reported within distinct geological boundaries, typically the contact between pegmatite and metaturbidite. •Lithium-bearing pegmatite intersections were generally sampled at ~1 m lengths. •The grades are compiled using length weighting with no top cutting. •No metal equivalent values were used. |
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| Relationship between • These relationships are particularly important in the |
•Drill holes were designed to intersect known mineralized features in a nominally perpendicular orientation as much as is practicable given the availability of drill pads. • Channelcutswere perpendicularto strike ofthemineralizedfeature. |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
|
|---|---|---|---|
| mineralisatio | reporting of Exploration Results. | •Drill intercepts are reported as | apparent thickness. Unless otherwise specified, all thicknesses within this |
| n widths and intercept |
• If the geometry of the mineralisation with respect to |
document are apparent thicknesses. The geological modelling software combines drillhole orientation and intercepts from downhole logs with known and extrapolated surface mapping to project the geometry of pegmatite dykes. |
|
| lengths | 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 | |||
| (eg 'down hole length, true | |||
| _width not known'). _ | |||
| Diagrams | • Appropriate maps and | •See Figure 2-1 through Figure | 4-5 in Geologists Report |
| sections (with scales) and | •All values presented within Figures are reported as length-weighted averages | ||
| 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. | |||
| Balanced | • Where comprehensive | •There is no preferential reporting of results. The current Hidden Lake Property geological model is a tool | |
| reporting | reporting of all Exploration Results is not practicable, |
for targeting future exploration. Data has been validated against raw records, no material has been excluded, and the outputs from the model honour data inputs. |
|
| representative reporting of | |||
| both low and high grades | |||
| and/or widths should be | |||
| practiced to avoid misleading | |||
| reporting of Exploration Results. |
| Criteria | JORC Code explanation | ASX:LLI Commentary |
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|---|---|---|---|---|---|
| Other | • Other exploration data, if | • | Historical mapping on the Property has been used to constrain the surficial expression of the mineralized | ||
| substantive exploration data |
meaningful and material, should be reported including (but not limited to): geological |
~~•~~ • |
pegmatites. Density information was collected at roughly 5 m intervals within mineralized pegmatite and approximately 30 m intervals outside of pegmatite using the dry volumetric method. A metallurgical program was initiated for the Hidden Lake Property following the completion of the 2016 |
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| observations; geophysical | channel sampling program with the primary objective of determining the amenability of pegmatite material | ||||
| survey results; geochemical | to | be processed for a potentially marketable concentrate. | |||
| survey results; bulk samples – | |||||
| size and method of treatment; | |||||
| metallurgical test results; bulk | |||||
| density, groundwater, | |||||
| geotechnical and rock | |||||
| characteristics; potential | |||||
| deleterious or contaminating | |||||
| substances. | |||||
| Further work | • The nature and scale of | • | Recommended follow-up work includes: | ||
| planned further work (eg tests for lateral extensions or depth |
oo |
High-resolution LiDAR survey is flown for the entirety of the Hidden Lake Project Follow-up surface exploration to run concurrently with drilling. Utilizing newly developed targets from new aerial image surveys, systematic Property wide prospecting should be |
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| extensions or large-scale step- | completed to identify new showings and/or mineralized boulders. | ||||
| out drilling). • Diagrams clearly highlighting the areas of possible |
oo |
Geophysical IP survey A drill exploration program totalling 3,300m, with a focus on further delineating the four main pegmatite dykes on the Property. A systematic approach to drilling should be conducted to fully understand the orientation of the mineralized bodies: |
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| extensions, including the main | ▪ The northeast and southwest extents of the pegmatites beyond the surficial |
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| geological interpretations and | expressions should be drill tested to determine the extent along strike | ||||
| future drilling areas, provided | ▪ Drilling should step out from 2018 drill holes to intersect the pegmatite bodies at |
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| this information is | greater depths below surface and develop an understanding of orientation at depth | ||||
| • not commercially sensitive. | o |
Explore emerging non-invasive technologies to aid in defining pegmatite bodies at depth. Recent trials from Fleet Technologies ambient noise tomography (ANT) surveys from |
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| similar projects have produced encouraging results and should be evaluated for use on the | |||||
| Hidden Lake Property | |||||
| • | 2023 and 2024 Hidden Lake Proposed Exploration Budget |
| Criteria JORC Code explanation |
ASX:LLI Commentary |
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|---|---|---|---|---|---|---|
| Drill Exploration | 1st April 2023/24 | 1st April 2024/25 | ||||
| Wages, commercial travel, deposit modelling, misc. transport and supplies |
$190,476 | $50,000 | ||||
| Accommodations,food,fuel | $104,286 | $40,000 | ||||
| Charter aircraft - helicopter | $108,254 | $20,000 | ||||
| 3,300 m core drilling (NQ), core boxes, immediate support |
$721,429 | $278,000 | ||||
| Sample Analysis and Mineralogy | $55,233 | $25,000 | ||||
| Surface Exploration | ||||||
| Wages,commercial travel,misc. supplies | $30,079 | $0 | ||||
| Prospecting,rock sampling,mapping | $40,800 | $0 | ||||
| Geophysics - IP-Resistivity | $44,048 | $0 | ||||
| Sample analysis and mineralogy (380 samples at 75$ per sample) | $28,500 | $0 | ||||
| Airborne Survey | ||||||
| Lidar and Ortho-imagerysurvey | $12,024 | $0 | ||||
| Metallurgical Testing | ||||||
| Flowsheet development to spodumene concentrate | $43,301 | $0 | ||||
| Subtotal | $1,378,429 | $413,000 | ||||
| Contingency (5%) | $68,921 | $20,650 | ||||
| TOTAL PROGRAM COST | $1,447,350 | $433,650 | ||||