REG - Andrada Mining Ltd - First Bulk Lithium Production and Funding Update

Andrada MiningAnnouncement

22/05/2023 07:00

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RNS Number : 1672A  Andrada Mining Limited  22 May 2023

22 May 2023

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information
is now considered to be in the public domain.

Andrada Mining Limited

("Andrada" or the "Company")

Production of the First Bulk Lithium Concentrate from the Pilot Test Programme
and Progress Update on Debt Funding

Andrada Mining Limited (AIM: ATM), an African technology metals mining company
with a portfolio of mining and exploration assets in Namibia, announces that
it has produced lithium concentrate in the form of a high purity petalite
concentrate. The concentrate was produced as part of the Company's off-site
pilot test programme to investigate the metallurgical potential of the
pegmatites from its mineral license areas around the town of Uis in Namibia.

HIGHLIGHTS:

Saleable lithium concentrate

·      First bulk lithium concentrate produced from the off-site pilot
test programme using dense medium separation ("DMS"), consisting of 0.5 tonnes
of petalite.

·      The 85% pure petalite concentrate assayed 4.16 % Li(2)O.

·      Potential offtakers have indicated that this concentrate
composition represents a desirable lithium product.

·      The concentrate will be used to conduct test work with potential
offtakers, including petalite conversion to lithium carbonate and lithium
hydroxide.

Lithium bulk-sampling pilot plant

·      Construction of an on-site lithium pilot plant is on schedule
with completion due during June 2023, and commissioning expected to commence
in July 2023.

·      The pilot plant will enable the Company to expedite bulk pilot
test work and increase pilot production of lithium concentrate.

Funding update

·      Senior debt facility from Development bank of Namibia ("DBN")
expected to reach contractual close at the end of May 2023 with potential
first drawdown in June 2023.

·      The conclusion of the Orion Global Resource facility ("Orion") is
contingent on an intercreditor agreement between the Orion and the senior
lenders Development bank of Namibia ("DBN") and Standard Bank.

Anthony Viljoen (CEO) commented:

"We are extremely pleased to announce the production of our first saleable
bulk lithium concentrate. This milestone follows the previously reported
successful laboratory scale test work and we believe it moves us one step
closer to full-scale lithium production. With the completion of the on-site
pilot plant imminent, we intend to expedite bulk pilot test work on all our
mineral licenses. Simultaneously, we plan to increase pilot-scale production
of lithium concentrate for testing with potential offtakers to achieve initial
lithium sales.

We believe that this represents a huge step towards realising the value of our
mineral assets in Namibia and we look forward to updating the market in due
course."

FIRST BULK LITHIUM CONCENTRATE FROM THE BOND EQUIPMENT TESTING FACILITY

Andrada commenced its pilot test programme for lithium during the first
quarter of the 2023 calendar year (see announcement dated 20 March 2023),
consisting of bulk sampling and pilot processing.  DMS processing of bulk
samples from the Company's Nai Nais (ML133) licence is currently being
conducted by Bond Equipment ("Bond"), a specialist in mineral processing
solutions and a test work provider in South Africa. The first concentrate of
0.5 tonnes of high purity petalite (lithium), as in the images below (Figure
1), is from these bulk samples. Offsite pilot DMS processing at Bond is
ongoing, and the Company expects to produce more than ten tonnes of
concentrate from these samples.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf)

Figure 1: Andrada Mining CEO, Anthony Viljoen, with the petalite concentrate
(left), and the DMS test plant at Bond Equipment (right).

The concentrate grade achieved from the first concentrate of 0.5 tonnes is
detailed in Table 1. The iron (Fe(2)O(3)) in the concentrate is believed to be
a product of the ferrosilicon used in the DMS process and there is potential
to reduce this contaminant further through magnetic separation.  The Company
believes that the concentrate may be suitable for both the industrial market
(glassware & ceramics), as well as feedstock for lithium refineries
producing lithium carbonate or lithium hydroxide. The bulk sample for this
pilot test had a head grade of 1.50% Li(2)O.

Table 1: Petalite concentrate assay.

 Li(2)O  Fe(2)O(3)  K(2)O  TiO(2)  CaO    MgO   MnO   P
 4.16%   0.14%      0.97%  0.002%  0.12%  0.07  0.01  0.21

 

Nai Nais bulk samples were prioritised because the currently accessible Uis
resource is weathered thereby impacting grades. Higher grades are expected in
the slightly deeper Uis resource which will be accessible after the present
push-back. Nonetheless, the ML133, ML134 (Uis) and ML129 (B1C1) pegmatites
display similar styles of mineralisation. Therefore, based on exploration and
sampling results, Andrada regards this Nai Nais sample as representative of
the higher grade petalite portions of the Uis ore body (ML134).

Preparation of the sample material entailed initially crushing it to a top
size of 8 mm at the Uis Mine circuit. Thereafter, it was transported to the
Bond test facility where it was deslimed at 0.5 mm and then screened into
coarse and fine size fractions at 2mm. The above results were produced from
the coarse size fraction and processing of finer size fractions will be
subsequently piloted. The petalite concentrate will be used to conduct test
work with potential offtakers, including petalite conversion to lithium
carbonate or lithium hydroxide.

ON-SITE LITHIUM PILOT PLANT CONSTRUCTION UPDATE

Construction of the on-site lithium bulk-sampling pilot plant is on schedule
and on budget to be completed in June 2023. The pilot plant consists of a
crushing, screening, DMS and a gravity separation circuit (Figure 3).
Following completion of construction, the on-site pilot bulk processing for
lithium is expected to expedite Andrada's bulk pilot test work and increase
lithium concentrate production. The pilot plant processing capacity will be 20
tonnes per hour with minimum annual production targeted at 2,400 tonnes and an
upper annual production target of 10,000 tonnes. This facility could generate
annual revenues of between US$5million to US$20 million at the upper levels of
production assuming an average grade of 4.0% Li(2)O and an average petalite
price of US$2,000. It is intended that a pilot lithium flotation and
sensor-based ore sorting circuit will be added in the near-future to provide
additional optionality in the treatment of lithium ores.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf)

Figure 2: Three-dimensional model of the lithium pilot plant.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf)

Figure 3: Lithium pilot plant construction: May 2023

OVERVIEW OF LITHIUM METALLURGICAL TEST WORK

Andrada's mining licenses ML134, ML133 and ML129 are located within a 40 km
radius of the town of Uis (Figure 3). They all contain prolific pegmatite
occurrences, containing lithium, tin, and tantalum mineralisation. The ore
minerals all tend to be present in the same pegmatite rock, thereby providing
potential opportunity for producing multiple technology metals from the same
ore body. Petalite and spodumene appear to be the dominant lithium minerals
present in the mineralised pegmatites. Metallurgical test work to date has
focussed on the concentration of petalite due to its prevalence in the current
mining area on ML134. However, spodumene beneficiation has been included in
the future work programme, in response to the discovery of spodumene
occurrences on ML133 and ML129.

DMS technology

Petalite test work included three different beneficiation technologies, namely
DMS, froth flotation and sensor-based ore sorting. DMS technology exploits
differences in mineral densities to separate lithium minerals from the host
rock. The petalite mineral has a lower density than many of its associated
gangue minerals, allowing it to be separated at a cut density of approximately
2.45 g.cm(-3). Test work has indicated that it may be possible to upgrade
higher grade ore of more than 1.0% Li(2)O to a saleable concentrate through
DMS alone.

Flotation technology

Froth flotation has also been confirmed as a successful method for
concentrating petalite from a host rock. The flotation process operates with a
particle size range of between 20 and 250 microns, requiring milling of the
feed material. It is anticipated that flotation of petalite may be necessary
in sections of the ore body that display a lithium grade of less than 1.0%
Li(2)O, as well as for areas where milling is required for optimal petalite
liberation. Flotation test campaigns conducted at independent test facilities
have demonstrated the plausibility of flotation as a means of upgrading DMS
pre-concentrated material to a saleable lithium concentrate.

Sensor-based ore sorting technology

Andrada is simultaneously investigating sensor-based ore sorting process as an
alternative or complementary technology for beneficiating lithium ore. Bulk
ore sorting test campaigns by OEMs (Original Equipment Manufacturers) using
near - infrared sensor technology have demonstrated the potential for petalite
to be pre-concentrated at a relatively coarse top size of approximately 60 mm.
This provides the Company with additional processing options for consideration
for its planned lithium expansion.

http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1672A_1-2023-5-22.pdf)

Figure 4: Andrada's mineral licenses in the Erongo Region of Namibia. ML134,
ML133 and ML129 occur within a 40 km radius of the town of Uis.

 

FUNDING UPDATE

The Company is pleased to confirm that the senior debt facility for USD 5,5
million (N$100 million) with the Development Bank of Namibia, as detailed in
the announcement of 5 July 2022 ("DBN Facility") is now on track for
contractual closure at the end of May 2023, with initial drawdown in June
2023. A further update will be provided in the next few weeks.

However, the conclusion of the US$25m funding facility with Orion Global
Resource Fund, detailed in the announcement dated 15 September 2022 (the
"Orion Funding Facility") remains subject to the finalisation of an
intercreditor agreement between Orion and the senior lenders DBN and Standard
Bank. Further updates will be provided in due course.

 

 Andrada Mining Limited                       +27 (11) 268 6555

 Anthony Viljoen, CEO

 Sakhile Ndlovu, Head of Investor Relations
 Nominated Adviser
 WH Ireland Limited                           +44 (0) 207 220 1666

 Katy Mitchell/Andrew de Andrade
 Corporate Advisor and Joint Broker
 H&P Advisory Limited                         +44 (0) 20 7907 8500

 Andrew Chubb

 Jay Ashfield

 Matt Hanson
 Stifel Nicolaus Europe Limited               +44 (0) 20 7710 7600

 Ashton Clanfield

 Callum Stewart

 Varun Talwar
 Tavistock Financial PR (United Kingdom)      +44 (0) 207 920 3150

 Emily Moss

 Catherine Drummond

 Adam Baynes

 

About Andrada Mining Limited

Notes to editors

Andrada Mining Limited is a London-listed technology metals mining company
with a vision to create a portfolio of globally significant, conflict-free,
production and exploration assets. The Company's flagship asset is the Uis
Mine in Namibia, formerly the world's largest hard-rock open cast tin mine.

 

Lithium laboratory test work completed during the 2022 calendar year indicated
a high-grade, ultra-low iron lithium petalite concentrate. The test work to
convert lithium petalite concentrate to battery-grade lithium hydroxide was
initiated with Nagrom, a leading Australian processing company, and commercial
engagements with lithium petalite concentrate off - takers are on-going.

 

An exploration drilling programme is currently underway with the aim of
expanding the tin resource over the fourteen additional, historically mined
pegmatites, all of which occur within a 5 km radius of the current processing
plant. The Company has set a mineral resource target of 200 Mt to be
delineated within the next 5 years. The substantial mineral resource potential
allows the Company to consider economies of scale.

 

Andrada is managed by a board of directors with extensive industry knowledge
and a management team with deep commercial and technical skills. Furthermore,
the Company is committed to the sustainable development of its operations and
the growth of its business. This is demonstrated by the way the leadership
team places significant emphasis on creating value for the wider community,
investors, and other key stakeholders. Andrada has established an
environmental, social and governance system which has been implemented at all
levels of the Company and aligns with international standards.

 

-END-

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