REG - Celsius Resources Ld - Quarterly Activities Report - period ended 30 June

Celsius ResourcesAnnouncement

28/07/2023 09:30

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RNS Number : 5476H  Celsius Resources Limited  28 July 2023

 

 

 

28 july 2023

 

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2023

 

mcb project advances permitting requirements

HIGHLIGHTS

· Substantial progress on key activities to develop the MCB Copper-Gold
project including:

o  Undertaking hydrogeological and geotechnical studies that would feed into
a more detailed mine plan.

o  Completion of Environmental and Community Development Program commitments.

o  Securing government approvals on environmental and mine closure plans and
programs.

· Closing cash as of 30 June 2023 of A$5.5 million

 

Celsius Resources Limited ("Celsius" or the "Company") (ASX: CLA) is pleased
to provide the following summary of the Company's activities for the quarter
ended 30 June 2023.

 

Projects

Maalinao-Caigutan-Biyog Copper-Gold Project ("MCB Project"),

Philippines (40%)

Makilala Mining Company Inc. (MMCI), Celsius' Philippine subsidiary, completed
the remaining commitments under its Environmental and Community Development
Programs while progressing its permitting requirements and preparing for the
pre-development phase of the MCB Project in the Cordillera Administrative
region, approximately 320km north of Manila.

 

Forward Work

 

Hydrogeological and Geotechnical studies are underway to support and firm up
the mine design and surface infrastructure. These include:

 

1) Collection and monitoring of data from vibrating wire piezometer and water
levels from holes drilled in 2021 to 2022; and

 

2) Procedural testing and calibration of equipment in preparation for the
upcoming hydrogeological and geotechnical drilling for additional ground
stability.

 

Additional detailed mapping was also conducted on the geology, alteration, and
mineralisation of the recently exposed rocks with extensive porphyry-related
mineralisation to come up with an updated surface geologic map and reports.
This resulted in an extension of the mapped surface exposure of the intrusive
tonalite in the southern portion of the MCB ore body. Data will be used to
further support and correlate the recent drilling results which was able to
delineate a near surface mineralisation at the eastern segment of the MCB ore
body. Previous cross-sections of drilling results were also being
re-interpreted in conjunction with the new surface data.

 

 

Data retrieval from vibrating wire piezometers (left) and water level reading
of completed drill holes (right)

 

 

 

Surface mapping of outcrops near proposed drill sites (left) and Pasil River
and Mt. Mines (right)

 

The Company has issued to the contracting market an Engineering, Procurement,
and Construction (EPC) scope required for advancing the MCB Mining Project
into operations. This is being undertaken in anticipation of the early works,
which is currently scheduled to commence towards the end of 2023.

 

 

Environmental Program

 

Rehabilitation and revegetation of drill sites were completed not only to
restore but also improve the land to its pre-drilling conditions. Tree
planting activities were also implemented along access trails to fulfill the
commitments under the National Greening Program and Mining Forest Program.

 

 MMCI employees and locals participate in the tree planting activity in support
 to the National Greening Program

  at MCB in Pasil, Kalinga in May 2023

 

 

Community Development

 

Physical and financial commitments under the approved Community Development
Program have been completed for the period. These have been achieved in
partnership with the Balatoc host community through the leadership and
guidance of the Tribal Council of Elders and the Barangay, Municipal, and
Provincial Government leaders. Social, economic, cultural, and institutional
capacity building interventions will continue as we transition to the
implementation of the Social Development and Management Plan once the Mineral
Production and Sharing Agreement (MPSA) for the MCB Mining Project is issued.

 

 

Social, Environmental Licenses and Government Approvals

 

Government approvals have been secured on mandatory documents and/or
certifications to progress permitting requirements to develop and operate the
MCB Project. These include the issuance of an Environmental Compliance
Certificate (ECC), and Certificate of Approval for the Environmental
Protection and Enhancement Program (EPEP) and Final Mine Rehabilitation and/or
Decommissioning Plan (FMRDP).

 

The issuance of an ECC signifies that MMCI has satisfactorily passed the
national government's scrutiny over the Environmental Impact Statement (EIS)
for the MCB Project.  It also certifies the Company's commitment to
implementing a national government-approved environmental management plan
aimed to protect and mitigate the anticipated social, cultural, and
environmental impacts in all phases and aspects of the MCB Project (see CLA
ASX Announcement dated 31 May 2023).

 

The Certificate of Approval for the EPEP and FMRDP indicates that the Company
has instituted the necessary environmental and socio-economic sustainability
measures prior to the commencement of construction and mining operations for
the life of the mine. Among the terms and conditions of the said certificate,
is the establishment of a financial fund to ensure satisfactory compliance
with the commitments and performance of the activities stipulated in the
EPEP-FMRDP (see CLA ASX Announcement dated 18 July 2023).

 

The approval of these key requirements is another step closer in the
permitting process of achieving the MPSA mining permit which the Company
envisages to receive by the end of August 2023.

 

Opuwo Cobalt Project, Namibia (95%)

 

The Opuwo Cobalt Project is one of the largest undeveloped Cobalt projects
outside of the Democratic Republic of Congo. It has a JORC Mineral Resource of
225.5 million tonnes at a grade of 0.12% cobalt, 0.43% copper, and 0.54% zinc
(See CLA ASX Announcement dated 1 July 2021).

 

The tenement permit EL4346 expired during March 2023, as such the Company has
lodged the necessary documentation to have the permits renewed with favourable
feedback from the Ministry of Mines.  The tenement remains active until such
time that it is renewed by the Ministry of Mines.

 

It is the Company's view that all permit obligations have been met during the
existing permit tenure, and therefore the permit renewal is expected for a
period of 2 years.

 

 

 

Metallurgical Test Work

 

Metallurgical test work is ongoing to further refine the cobalt and copper
recoveries, with the end view to improve overall metal recoveries.

 

Maelgawyn Laboratories in South Africa was engaged to test various collectors
on floatation tests and a total of 7 tests were undertaken. Results of these
are expected to be reported in the next quarter.

 

Mintek completed 5 sets of roasting and 10 subsequent leaching tests during
the quarter. The objectives of these were to optimise retention times,
operating temperatures, and reagent consumptions.  Results for these tests
are expected to be reported during next quarter.

 

The above metallurgical test results will be utilised as input criteria to
develop a processing flowsheet, which will be the basis of an Economic Scoping
Study planned later during 2023.

 

The Company has received strong interest from parties interested in partnering
on the Opuwo Project; a data room has been established with a number of
non-disclosure agreements being signed.

 

SAGAY Copper-Gold Project, Philippines (100%)

Celsius Resources' Philippine subsidiary, Tambuli Mining Company, Inc., on the
island of Negros, continues to focus on carrying out additional desktop
studies of all drilling results and exploration data. Results of the desktop
studies and the resource estimation suggested the necessity to shift its focus
on the shallow high-grade supergene chalcocite zone. With this, a test pitting
activity was conducted to collect representative samples for metallurgical
test work. The test results are intended to provide a thorough process flow
for the extraction of copper in pregnant solution as the eventual production
of copper precipitate (Cu hydroxide), which will also serve as one of the
empirical bases for the mine plan, process flow sheet, and financial studies
which are critical components of the project's economic viability.

 

Implementation of activities under the Environmental and Community Development
Program have also ramped up, in partnership with key stakeholders.

 

The Company has initiated the studies to assess the technical and financial
viability of the Sagay Project for a Phased Approach development, where Phase
1 will develop the shallow chalcocite zone (900SG) with a low CAPEX model,
small scale operation, and Phase 2 will develop the large-scale copper
mineralisation at deeper levels using the cashflow from Phase 1.

 

The preliminary metallurgical test work commenced in June 2023 using the fresh
samples collected from the chalcocite zone. The test work aims to determine
the amenability of copper mineralisation to VAT leaching. A positive result
will trigger additional shallow resource drilling to support the mining study,
mineral resource conversion to reserve, and metallurgical test work
optimisation.

 

Upon positive results of the planned development approach, the Company will
proceed with preparing the mandatory requirements for a Declaration of Mining
Project Feasibility (DMPF) application which is anticipated to be submitted by
December 2023.

 

Cullarin West Project, NSW (100%)

The Company will now assess the viability of the opportunity and gauge
interest from other possible partners. No development activities were
conducted during the quarter.

 

Corporate and Expenditure

On 5 May 2023, the Company issued Lind a notice of its intention to repay 100%
of the Advance Payment Credit outstanding in cash and has subsequently repaid
A$882,500 which satisfies the Company's obligations under the Agreement in
full ("Repayment"). Upon Repayment, the Agreement was terminated. No further
funds will be advanced, no additional shares will be issued and Celsius no
longer has to issue 38,235,294 options (previously approved by Celsius
shareholders for the purposes of Listing Rule 7.1 at the Company's general
meeting held on 5 April 2023) (See CLA ASX Announcement dated 12 May 2023).

 

The Company signed a non-binding agreement with Silvercorp Metals on 15 May
2023. Pursuant to the Subscription Agreement, Silvercorp agreed to subscribe
for 333,333,333 new Celsius shares (Subscription Shares) at a subscription
price of A$0.015 (GBP0.0081) per Subscription Share to raise A$5,000,000
(before costs) (See CLA ASX Announcement dated 15 May 2023).

 

In addition to the subscription and as part of the non-binding agreement,
Silvercorp intends to acquire Celsius in a 90% scrip and 10% cash transaction
that will be implemented by an Australian scheme of arrangement under the
Corporations Act 2001 (Cth) ("Scheme").

 

The parties have been working towards the execution of a binding scheme
implementation agreement to implement the Scheme ("Definitive Agreement").

Simultaneous to the completion of the Scheme, should it proceed, Celsius
intends to spin out its Sagay Project (100% Celsius) and Opuwo Cobalt Project
(95% Celsius) ("Spin-Out Projects") into a new ASX or AIM listed SpinCo via a
demerger, subject to Celsius obtaining the necessary shareholder, ASX/AIM and
regulatory approvals ("Demerger").

 

Under the Scheme and Demerger (together, the "Proposed Transaction"), if
implemented, it is anticipated that each Celsius share will be exchanged for
such fractional Silvercorp shares equivalent to A$0.027 plus A$0.003 in cash,
with such fractional Silvercorp share having a fair market value determined
based on the volume weighted average trading price of the Silvercorp shares on
the TSX/NYSE for the 20 business days ending on (and including) the scheme of
record date (the "SVM Exchange Ratio"), and 1/10th of a SpinCo share (the
"SpinCo Exchange Ratio").

 

Silvercorp has agreed, under the non-binding term sheet, to invest A$4 million
in SpinCo, valued at a post-financed market capitalisation of A$30 million.
Implementation of the Proposed Transaction will be contingent on the
completion of successful due diligence by each party (such as Silvercorp
demonstrating its financial capacity to the satisfaction of Celsius and
Silvercorp being satisfied with the legal titles of Celsius' assets in the
Philippines), other documentation and regulatory and shareholder approvals.
The Celsius Board believes the Proposed Transaction, if implemented, could
provide significant benefits to Celsius' shareholders.

 

At the end of the quarter, the Company held approximately A$5.538 million in
cash reserves. Approximately A$1.177 million was spent on exploration
expenditure, with $877k primarily relating to the development of the MCB
project.

 

A$93k in payments were made to related parties of the Company and their
associates during the quarter, for Director and consultancy fees.

This announcement has been authorised by the Board of Directors of Celsius
Resources Limited.

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 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018.

 
For further information contact:
 Celsius Resources Limited
 Peter Hume                               P: +61 8 9482 0500

                                          E: info@celsiusresources.com.au (mailto:info@celsiusresources.com.au)

                                          W: www.celsiusresources.com (http://www.celsiusresources.com)

 Multiplier Media

 (Australian Media Contact)
 Jon Cuthbert                             M: +61 402 075 707

                                          E: jon.cuthbert@multiplier.com.au (mailto:jon.cuthbert@multiplier.com.au)

 Tavistock Communications                                                         +44 (0) 207 628 3396

 (UK Media and Investor Relations)
 Charles Vivian                                                                   M: 0044 7977297903

                                                                                  E: charles.vivian@tavistock.co.uk

 Tara Vivian-Neal                                                                 M: 0044 7394408654

                                                                                  E: tara.vivian-neal@tavistock.co.uk

 Beaumont Cornish Limited

 (Nominated Adviser)

 Roland Cornish/Andrew Price              +44 (0) 207 628 3396

 SP Angel Corporate Finance LLP (Broker)
 Ewan Leggat                              +44(0) 203 470 0470

 

 

Tenement Table: ASX Listing Rule 5.3.3 Mining tenement interests held at the
end of the quarter and their location

 

 PERMIT                   PERMIT            REGISTERED HOLDER / APPLICANT  PERMIT STATUS                                                            PERMIT EXPIRY                                   INTEREST / CONTRACTUAL RIGHT

NAME
NUMBER
 Western Australia
 Cullarin West            EL 8996           Cullarin Metals Pty Ltd        Granted                                                                  17/08/2026                                      100%
 Namibia
                          EL 4346*          Gecko Cobalt Holdings          Permit application, pending approval                                     TBA                                             95%

 Philippines
 Maalinao-Caigutan-Biyog  EP-003-2006-CAR   Makilala Mining Company Inc.   Granted                                                                  Extended until the issuance of a mining permit  40%
 Colayo                   EXPA-073-CAR      Makilala Mining Company Inc.   Permit application, approved in principle awaiting formal documentation  TBA                                             40%
 Panaon                   EXPA-000127-VIII  PDEP, Inc.                     Complying with further permitting requirements                           TBA                                             100%
 Sagay                    EP-000003-VI      Tambuli Mining Company Inc.    Granted                                                                  10/02/2024                                      100%

 

*Tenement expired on 7 March 2023 and a permit application is pending
approval. The tenement remains active until such time that it is renewed by
the Ministry of Mines.

It is the Company's view that all permit obligations have been met during the
existing permit tenure, and therefore the permit renewal is expected for a
period of 2 years.

 

The Maalinao-Caigutan-Biyog (MCB) project has gained an automatic extension as
all documentation has been submitted to the Philippine National Government for
the awarding of a MPSA Mining permit.

 

The mining tenement interests acquired during the quarter and their location:

Nil.

 

Beneficial percentage interests held in farm-in or farm-out agreements at the
end of the quarter:

Not applicable.

 

Beneficial percentage interests in farm-in or farm-out agreements acquired or
disposed of during the quarter:

Nil.

 
Competent Persons Statement

Information in this report relating to Exploration Results and Mineral
Resources for the MCB Project is based on information compiled, reviewed and
assessed by Mr. Steven Olsen, who is a Member of the Australasian Institute of
Mining and Metallurgy and the Australian Institute of Geoscientists. Mr. Olsen
is a consultant to Celsius Resources and 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 by the 2012 Edition of the Australasian Code for
reporting of Exploration Results, Mineral Resources and Ore Reserves.  Mr.
Olsen consents to the inclusion of the data in the form and context in which
it appears.

 

The information in this Report that relates to the estimate of Mineral
Resources for the Opuwo Project is based upon, and fairly represents,
information and supporting documentation compiled by Mr Kerry Griffin, a
Competent Person, who is a Member of the Australian Institute of Geoscientists
(AIG). Mr Griffin is a Principal Geology Consultant at Mining Plus Pty Ltd and
an independent consultant engaged by Celsius Resources Pty Ltd for this work
and has sufficient experience that is relevant to the style of mineralisation
and type of deposit under consideration and to the activity being undertaken
to qualify as a Competent Person as defined in the 2012 edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (the JORC Code). Mr Griffin consents to the inclusion in this
announcement of matters based on his information in the form and context in
which it appears.

 

The Company confirms that it is not aware of any new information or data that
materially affects the Mineral Resource for the MCB Project or the Opuwo
Project. The Company also confirms that all material assumptions and
parameters underpinning the Mineral Resource estimate continue to apply and
have not materially changed. Please refer to the ASX Announcement of 28
February 2023.

 

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