REG - Alien Metals Limited - Acquisition of 100% of the Vivash Gorge Project

Alien MetalsAnnouncement

30/05/2022 07:15

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RNS Number : 1640N  Alien Metals Limited  30 May 2022

 

Trading Symbols

AIM: UFO

FWB: I3A1

30 May 2022

 

Alien Metals Ltd

("Alien" or "the Company")

 

Strategic Acquisition of 100% of the Vivash Gorge Iron Ore Project, Western
Australia

 

Follow the link to view the announcement in full including all figures:

http://www.rns-pdf.londonstockexchange.com/rns/1640N_1-2022-5-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1640N_1-2022-5-29.pdf)

 

 

Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development
company, is pleased to update the market that it has entered into a Binding
Heads of Agreement with ASX-listed Zenith Minerals Ltd (ASX:ZNC) (Zenith) to
acquire, subject to the satisfaction of certain conditions, 100% of the Vivash
Gorge Iron Ore Project in the Pilbara region of Western Australia.

 

Highlights:

·    The Company considers Vivash Gorge as a strategic acquisition to add
to the IOCA portfolio of DSO iron ore projects within the Pilbara Region

·    Vivash Gorge (E47/3071) covers ~47km(2) and is strategically located
60km south of the Company's Brockman project and only 80km from Tom Price

·    Fortescue Mining Group (FMG) has defined a high grade Iron Ore
Mineral Resource of 28Mt @ 58.8% Fe (1) over neighbouring ground (the "Vivash
SW Resource"), which abuts the eastern central boundary of the Vivash Gorge
tenement

(·     ) FMG has historically drilled up to the Vivash tenement
boundary, returning high grade results such as 70m @ 60.5% Fe from surface
(hole VV0111) (1)

o  Based on the geological mapping and proximity and strike of the Vivash SW
Resource, Alien considers that the Vivash SW Resource continues into the
Vivash Gorge tenement, providing a 'walk up' drill target

o  Several identical geological targets on strike within Vivash Gorge
tenement also remain untested

·    Programme of Work (POW) for drilling of up to 150 RC holes of a
maximum of 200m each has been granted to Zenith already, which will allow
Alien immediate access

·    With Vivash Gorge, the Company will have three strategically located
iron ore projects within the Pilbara region (combined tenement package of 108
km(2)), each surrounded by the iron ore majors and with significant
development opportunities

·    Transaction consideration split between upfront consideration of GBP
56,500 (to be satisfied through the issue of Alien shares at the 10-day VWAP
prior to completion) and deferred condition subject to certain milestones
being reached

 

(1.) Source: Mineralisation Report 29 September 2020 in support of application
for mining lease, section 49 conversion of prospecting licence 47/1672 by FMG
Pilbara Pty Ltd (within the Vivash South Iron Ore Project, Pilbara)

 

Bill Brodie Good, CEO & Technical Director of Alien Metals, commented:
"The potential acquisition of the Vivash Gorge iron ore project from Zenith
Minerals will be a great addition to our growing iron ore portfolio. Given the
adjacent DSO grade deposits defined by iron ore major Fortescue Metals Group,
coupled with what we believe to be the tenement's highly prospective yet
untested geology, Vivash Gorge provides Alien with a third strategically
located high grade iron ore project within the Pilbara region.

 

"With drilling approvals already in place, we see the immediate potential to
get on the ground and test the numerous targets that are on strike from
Fortescue's Vivash SW deposit."

 

 

Project Location

The Vivash Gorge project (Exploration Licence E47/3071) is located
approximately 80km west of the Tom Price Township in the southern section of
the Brockman Syncline. Access to the area is via the Nanutarra-Wittenoom road,
station tracks, and purpose built exploration tracks (Figure 2).

 

 

Local Geology

The major Brockman Syncline to the north controls the general strike of the
rocks in the Tenement to a NE-SW direction and with a moderate dip of 20-30
degrees. Folding in the region exists as both kilometre scale F2 folds
striking E-W and smaller (metre to hundreds of metre wavelength) open to tight
folds E-W (F2) or NW-SE (F3) striking axial surfaces. Three major NW striking
faults exist within the Tenement, which have a horizontal displacement of up
to 2.5km. (Source: Rio Tinto Exploration Pty Limited ANNUAL REPORT, For the
Period 5 October 2019 to 4 October 2020 Mineral Exploration Annual Report for
Vivash Gorge E47/3071).

 

Previous exploration

Previous exploration work undertaken by Rio Tinto Ltd (RIO) between 2018 and
2020 included geological mapping followed by limited drilling of targets in
the north and south of the tenement through an exploration and option
agreement with Zenith. The Company estimates, following a review of the
available data, that the areas drilled were of a lower priority than the
central east west trending untested zone over which the current POW is
granted. RIO completed 9 RC drill holes in the north eastern area, with the 4
RC holes drilled in the south eastern corner with the best intersection
returning 8m @ 53.8% Fe from surface (Source: Rio Tinto Exploration Pty
Limited ANNUAL REPORT, For the Period 5 October 2019 to 4 October 2020 Mineral
Exploration Annual Report for Vivash Gorge E47/3071).

 

Zenith carried out a limited rock chip sampling programme in the tenement's
south eastern area, which returned a high of 55.4% Fe. Detailed geological
mapping has been completed by previous explorers, providing Alien with good
base geological maps to build on. No work has been conducted on the central
area of the tenement, which will focus on the Company's exploration once the
acquisition is complete.

 

The limited exploration by RIO and Zenith showed the presence of 55% iron ore
within the tenement to date. At the same time, significantly, FMG on the
eastern boundary has defined a JORC resource of 28Mt @ 58.8% Fe. Of interest
to Alien is FMG's hole VV0111, which returned 70m @ 60.5% Fe from the surface,
which was drilled only 60m east of the Vivash Gorge tenement boundary.

 

The existing POW granted to Zenith in October 2021 (valid for four years from
the date of grant) covers the area of the tenement where the Brockman Iron
Formation is situated and allows for 150 RC drill holes of a maximum of 200m
per hole to be drilled within its outline (see Fig 5 below) providing a
significant area for the Company to be able to work with initially.

 

FMG's DSO grade resource at Vivash Gorge SW appears likely to continue into
the Vivash Gorge tenement (see figure 3 above). Therefore, the Company
believes that the area has the potential to host high grade iron ore.

 

There is good existing track access to the central eastern area due to the
historic drilling by RIO. The granted POW allows for up to 70km of additional
tracks to be made across the initial area of interest for the Company.

 

Key Terms of the Vivash Gorge Heads of Agreement (HOA)

 

Alien has the ability to acquire a 100% interest in the Vivash Gorge iron ore
project from Zenith through a mixture of upfront and performance based
considerations as follows:

 

·    At completion, Alien will issue Zenith with A$100,000 (GBP56,500) of
new Common Shares in Alien at a deemed price equal to the VWAP of the
Company's Common Shares in the ten trading days prior to the date of
Completion ("Consideration Shares"); and

§ The issue of the following number of New Common Shares to Zenith as
deferred consideration (Deferred Consideration Shares), subject to the
satisfaction of the following milestones (each, a Milestone):

i.      That number of New Common Shares equal to the value of A$50,000
at a deemed price equal to the VWAP of Common Shares in the ten trading days
prior to the release of an announcement confirming an initial, economic direct
shipping ore (DSO) resource being defined at the area covered by the Vivash
Gorge tenement, reported in accordance with the JORC Code and estimated (or
based on documentation prepared) by a Competent Person as defined by the JORC
Code (Milestone 1);

ii.     That number of New Common Shares equal to the value of A$100,00 at
a deemed price equal to the VWAP of the Common Shares in the ten trading days
prior to the release of an announcement on the London Stock Exchange (LSE)
confirming the conversion of the Licence from an exploration licence to a
mining licence (Milestone 2); and

iii.    That number of New Common Shares equal to the value of A$200,000 at
a deemed price equal to the VWAP of the Common Shares in the ten trading days
prior to the release of an announcement on the LSE confirming an economic,
> 10Mt DSO resource, reported in accordance with the JORC Code and
estimated (or based on documentation prepared) by a Competent Person as
defined by the JORC Code (Milestone 3)

·    Subject to the satisfaction of the relevant Milestone, the Company
will issue the relevant number of Deferred Consideration Shares within seven
days of each announcement being released on the London Stock Exchange

 

In addition to the Consideration, Alien agrees to grant Zenith an ongoing
royalty payment whilst in production of $1.00/dwt (Dry Wet Tonnes) of the
quantity of shipped ore derived from the area within the boundaries of the
Licence, as those boundaries exist at Completion (Royalty).

 

Completion of the Acquisition is conditional upon the satisfaction (or waiver)
of the following conditions precedent:

i)             Completion of technical, financial and legal due
diligence by Alien on the Sale Assets, within 14 days of the date of execution
of the HOA (Execution Date), with the results of those due diligence enquiries
being satisfactory to the Purchaser in its sole and absolute discretion;

ii)            There being no Material Adverse Effect in respect of
Alien on or before the date of satisfaction or waiver of the other Conditions
Precedent;

iii)           Alien applying to the LSE for, and obtaining all
required approvals for, the issue and quotation of the Consideration Shares
and Deferred Consideration Shares;

iv)           Zenith and Alien entering into the Royalty Deed;

v)            The Parties having obtained all necessary
shareholder, third party, FIRB and regulatory approvals required under the
Corporations Act, listing rules of the LSE or any applicable law which is
required to be obtained to allow the Parties to lawfully complete the
Acquisition;

vi)           If requested by Alien, Zenith procuring any statutory
licences, approvals, consents, authorisations, rights or permits relating to
the Licence from the Department or other similar government department or
agency, in so far as they may be transferred by Zenith; and

vii)          The Parties entering into a deed of covenant with FMG
pursuant to the Access Deed,

 

(together, the Conditions Precedent).

 

The HOA otherwise contains standard terms, such as representations and
warranties, as customary for a transaction of this nature.

 

Figure 1: Location of Vivash Gorge Project, Pilbara, Western Australia, May
2022

 

Figure 2: Vivash Gorge Tenement in relation to local access and facilities
over satellite image, May 2022

 

Figure 3: Summary of historic drilling and sampling in and around Vivash Gorge
Project, May 2022 (Source - Zenith Minerals Ltd)

 

 

Figure 4: Schematic cross section showing potential continuation of DSO grade
material into Vivash Gorge licence, (Line A - A' in centre of figure 2 above)

(Source - Zenith Minerals Ltd)

 

Figure 5: Vivash Gorge Tenement with location of valid POW, May 2022

(Source: Zenith Mining Ltd)

 

 

For further information please visit the Company's website at
www.alienmetals.uk, or contact:

 

 

Alien Metals Limited

Bill Brodie Good, CEO & Technical Director

Tel: +44 (0) 203 811 2144

 

Beaumont Cornish Limited (Nomad)

James Biddle / Roland Cornish

www.beaumontcornish.com

Tel: +44 (0) 207 628 3396

 

Turner Pope Investments (TPI) Limited (Joint Broker)

Andrew Thacker / James Pope

Tel: +44 (0) 20 3657 0050

 

WH Ireland Ltd (Joint Broker)

Harry Ansell / Katy Mitchell

Tel +44 (0) 207 220 1666

 

Yellow Jersey PR (Financial PR)

Sarah Hollins / Annabel Atkins / James Lingfield

alienmetals@yellowjerseypr.com

Tel: +44 (0) 20 3004 9512

 

Competent Person

 

The information in this announcement which relates to Exploration Targets,
Exploration Results and the Scoping Study has been approved by Mr. Allen
Maynard, who is a Member of the Australian Institute of Geosciences ("AIG"), a
Corporate Member of the Australasian Institute of Mining & Metallurgy
("AusIMM") and independent consultant to the Company. Mr. Maynard is the
Director and principal geologist of Al Maynard & Associates Pty Ltd and
has over 40 continuous years of exploration and mining experience in a variety
of mineral deposit styles. Mr. Maynard has sufficient experience which is
relevant to the style of mineralisation and type of deposit 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, Exploration Targets, Mineral Resources and
Ore Reserves" (JORC Code). Mr. Maynard consents to inclusion in the
announcement of the matters based on this information in the form and context
in which it appears.

 

Notes to Editors

 

Alien Metals Ltd is a mining exploration and development company listed on the
AIM market of the London Stock Exchange (LSE: UFO). The Company's focus is on
precious and base metal commodities, with its operations located in proven
mining jurisdictions and it has embarked upon an acquisition-led strategy
headed by a high-quality geological team to build a strong portfolio of
diversified assets. In 2019, the Company acquired 51% of the Brockman and
Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects and with a
conditional agreement to increase its interest to 90% in May 2021 also being
put in place.

The Company acquired 100% of the Elizabeth Hill Silver Project, which consists
of the Elizabeth Hill Historic Silver Mine Mining Lease and the 115km(2)
exploration tenement around the mine. The Company also holds two silver
projects, San Celso and Los Campos, located in Zacatecas State, Mexico,
Mexico's largest silver producing state, which produced over 190m Oz of silver
in 2018 alone, accounting for 45% of the total silver production of Mexico for
that year. The Company also holds a Copper Gold project in the same region,
Donovan 2.

In March 2022 the Company acquired 100% of the former joint venture interest
in the Munni Munni Platinum Group Metals and Gold Project in the West Pilbara,
Western Australia, one of Australia's major underexplored PGE and base metals
projects. Munni Munni holds a historic deposit containing 2.2Moz 4E PGM:
Palladium, Platinum, Gold, Rhodium.

 

Glossary

 

Mineral Resource - A concentration or occurrence of solid or liquid material
of economic interest in or on the Earth's crust in such form, grade (or
quality), and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade (or quality), continuity
and other geological characteristics of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge,
including sampling. Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured categories.

 

Inferred Mineral Resource - that part of a Mineral Resource for which quantity
and grade (or quality) are estimated on the basis of limited geological
evidence and sampling. Geological evidence is sufficient to imply but not
verify geological grade (or quality) continuity. It is based on exploration,
sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes. An
inferred Mineral Resource has a lower level of confidence that that applying
to an Indicated Mineral Resources and must not be converted to an Ore Reserve.
It is reasonably expected that the majority of Inferred Mineral Resources
could be upgraded to Indicated Mineral Resources with continued exploration.

 

Reverse Circulation Drilling - Often referred to as RC drilling, is a method
of drilling which uses dual wall drill rods that consist of an outer drill rod
with an inner tube. These hollow inner tubes allow the drill cuttings to be
transported back to the surface in a continuous, steady flow. Drill results
using this method with adequate QA/QC can be used in Mineral Resource
Calculations

 

DSO - Direct Shipping Ore

 

Deleterious Elements - Elements that can be detrimental to the overall
product, such as

Phosphorus.

 

Green Iron Ore - High Grade > 60% Iron Ore needing lease processing for
manufacture of steel

 

Fe - Iron

 

Al - Aluminium

 

Ca - Calcium

 

K - Potassium

 

Mg - Magnesium

 

Mn - Manganese

 

Na - Sodium

 

P - Phosphorus

 

S - Sulphur

 

Si2O3 - Silica

 

Mt - Million Tonnes

 

BIF - Banded Iron Formation

 

 

 

 

 

 

 

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