REG - Alien Metals Limited - IOCA Update

Alien MetalsAnnouncement

24/10/2022 08:15

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RNS Number : 8458D  Alien Metals Limited  24 October 2022

 

 

Trading Symbols

AIM: UFO

FWB: I3A1

24th October 2022

 

Alien Metals Ltd

("Alien" or "the Company")

 

IOCA update: progressing towards becoming an Iron Ore miner

 

Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development
Company, is pleased to provide an update on its wholly-owned subsidiary Iron
Ore Company of Australia Pty Ltd ("IOCA"), including progress on the Company's
flagship project, the Hancock Iron Ore Project ("Hancock" or the "Project"),
which is anticipated to start production in 2023. This follows on from
management's recent site visits to all the Company's Australian projects and
the first under new Chairman, Roderick McIllree

 

Highlights:

·    Signed exclusive agreement with Anglo American to finalise a US$15
million funding package and 100% of offtake ahead of the commencement of
production in 2023

·    Updated terms of the option to acquire a 90% interest in the Hancock
and Brockman tenements

·    Metallurgical test work programme completed with optimised and simple
flow sheet identified

·    Heritage clearance expected in Q4 2022

·    Mining licence expected to be granted in Q1 2023

·    Tenders received for mining, crushing, screening and transport
logistics with preferred party contract selection due in Q4 2022

·    Department of main roads approval for construction of mine road
intersection with the Great Northern Highway

·    Expected availability at Port Headland's Utah Point ship loading
facilities indicated to coincide with mining

·    Approval to get tenement ELA47/3752 granted started, initial CP for
acquisition from Mallina already completed

·    Discussions ongoing with several strategic partners on the Company's
other iron assets

·    Appointment of highly experienced management team for IOCA in process

·    Large potential for mine life beyond the initial expected current
life of mine at Hancock still to be tested

·    Rationalisation of the Company's portfolio ongoing

 

Roderick McIllree, Chairman of Alien Metals, commented: "The Company continues
to move from strength to strength as evidenced by each of the recent
agreements and deals completed for IOCA. We remain focussed on delivering a
socially and environmentally sustainable iron export operation from Hancock
during 2023. Importantly the Company has two other significant iron assets
that appear not only commercial but have strategic value to several larger
groups within the region and I am confident that future deals will be done on
these in due course. Alien's portfolio of high-grade direct shipping ore
("DSO") iron projects is a standout in the small cap space, and we are excited
by the potential to be the next iron ore producer to emerge in the Pilbara in
Western Australia, one of the world's most stable mining jurisdictions.

 

"Making the transition from explorer to producer will mark a major inflection
point in the Company's evolution and represent, I believe, a huge value
transition for shareholders. The longer-term strategy for the Company is to
deliver on multiple DSO iron mines in the Pilbara and we are currently working
hard to build the team that will deliver this.

 

"The Company looks forward to updating the market in the coming months on the
progress of this key Project and continues to be on track to be shovel ready
during 2023."

 

Having now completed site visits to all the Australian assets and undertaken a
detailed review with the Alien team and consultants what I have seen gives me
great confidence regarding the future of the Company.

 

Hancock Project Overview:

Hancock hosts a maiden JORC compliant Inferred Mineral Resource of 10.4
million tonnes ("Mt") at 60.4% iron ("Fe") (Announcement: 22 September 2021)
and from previous exploration (Annoucement:30 March 2022) over 3km strike
length of new drill targets were identified from surface rock chip sampling
with still well over 50% of the tenement not even visited. A further 141 rock
chip samples were also collected in a recent field mapping program in the
southwest area of Hancock with geological identification of further areas of
DSO style iron ore and these samples will be tested with the Company's
handheld XRF unit ('pXRF) to what is hoped to add even more drill targets to
the current 3km in the western sector of the tenement. Based on this and being
able to view the full extent of the outcropping ridges from the air the
Company believes the project may be capable of supporting a much longer mining
operation than has already been identified with this untapped and untested
potential in the pipeline which continues to make the project more attractive
to the Company.

 

                               Figure 1:
Location of Hancock Iron Ore Project, Western Australia

The high grade, low impurity nature of the DSO material from Hancock means the
Company is highly confident that the product will be highly sought-after and
expected to receive a market premium.

Table 1: Mineral Resource Statement, Hancock Iron Ore Project, Alien Metals,
September 2021

                  Area             Mass               Average Value

                                   (Million tonnes)
 Classification                    Fe                       SiO(2)  Al(2)O(3)  P     LOI  MnO

 Category
                                   %                        %       %          %     %    %
 Inferred        Sirius Extension  7.8                60.1  4.1     3.72       0.17  5.2  0.05
                 Ridge E           1.5                61.2  4.8     3.38       0.13  3.5  0.02
                 Ridge C           1.1                61.9  4.4     2.93       0.12  3.5  0.03
 Total                             10.4               60.4  4.2     3.6        0.16  4.8  0.04

 

                  Figure 2: Rock chip sampling programme,
Hancock Iron Ore Project, March 2022

 

The high-grade DSO nature of the iron ore, with low impurities, as evidenced
in the Bulk Sample and Metallurgical test work to date (Announcement: 4
February 2022), gives the Company every confidence in the high quality of the
iron ore and encourages the Company to continue its current strategy to bring
this project into production in 2023. Furthermore, with the high probability
of discovering further DSO grade iron ore in mineable deposits on the tenement
as per the above, the Company is confident of an operation that may be capable
of operating continuously well beyond the initial expected current life of
mine as is illustrated in Figure 2 and Table 2.

 

Table 2: Bulk Sample grab sample assay results, Hancock Project, February 2022

                Fe %    Al2O3%  Mn %   P %    SiO2 %  LOI %
 AM21BLK_C_003  63.03   2.86    0.015  0.078  3.96    2.31
 AM21BLK_C_004  62      3.15    0.016  0.091  4.5     2.89
 AM21BLK_C_005  62.25   2.81    0.015  0.092  4.15    2.84
 AM21BLK_C_006  64.31   1.94    0.01   0.096  3.23    2.18
 AM21BLK_C_007  63.97   2.23    0.011  0.101  3.2     2.29
 AM21BLK_C_008  62.78   2.82    0.013  0.108  3.85    2.66
 AM21BLK_C_009  61.57   3.31    0.012  0.106  4.4     3.12
 AVERAGE        62.23%  2.76%   0.01%  0.09%  4.19%   2.82%

Hancock Project Economics:

 

The Scoping Study for Hancock (Announcement: 19 October 2021) completed by
independent consultant Mining Plus confirmed the following:

 

·    Exceptionally strong returns are possible from a potential
development

·    High grade deposit >60% Fe

·    Low CAPEX with existing surrounding infrastructure and using 3(rd)
party contractors to mine the project

·    Low OPEX  60% Iron Ore needing least 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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