REG - Critical Mineral - High grade silver option and successful funding

Critical Mineral ResourcesAnnouncement

17/07/2024 07:00

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RNS Number : 6698W  Critical Mineral Resources PLC  17 July 2024

17 July 2024

Critical Mineral Resources PLC

('CMR' or the 'Company')

Option to acquire high grade silver project, successful £750,000 funding and
new strategic investor

Critical Mineral Resources PLC ('CMR' or the 'Company'), the exploration and
development company focused on critical metals and minerals in Morocco is
pleased to announce it has signed an exclusive option to acquire the Igli
Project (or 'Igli'), a high grade silver and copper project in the Anti-Atlas
which has returned grades of up to 912g/t silver and 2.97% copper.

 

The option for such a prominent asset represents a significant milestone for
the Company. It underscores its considerable momentum in Morocco, where it
has become the partner of choice for development assets after accumulating an
extensive Morrocan portfolio with multiple commodities critical for Western
economies and the energy transition.

 

Concurrently the Company has also raised £750,000 through the issue of a
convertible loan note to fund the Company's working capital and capital
expenditure requirements including for exploration programmes at Igli. A
significant proportion of this investment will come from Prism Group AG, a
Swiss and UAE based private investment office with a long-term and patient
investment approach. Separately, today the Company has announced the move of
Dominic Traynor, currently Non-Executive Chairman, to Executive Chairman.

 

Igli highlights

·    Igli Project (or 'Igli') is a strategically located, silver and
copper project, on the same structural corridor as the Tiouit (or 'Tiwit')
Mine and Imiter Mine - one of the highest grade and largest silver mines in
the world.

·   CMR has secured a sixteen (16) month exclusive option to carry out
geochem, geophysics and drilling before main acquisition payment.

·   Very encouraging initial sampling at Igli. Grades acquired by CMR
channel sampling and sampling of stockpiles include 912g/t silver and 2.97%
copper, 496g/t silver and 3.34% copper, 741g/t silver and 3.21% copper.

·    Regional geology suggests three potential targets at Igli (1) higher
grade sub-vertical shear zones (2) lower grade basalt formation (3) deeper
basement hosted shear zones, as found at the Tiwit and Imiter mines 6.5km and
25km along strike.

·    Igli's combination of high grade mineralisation within the shear
zones and lower grade mineralisation in the basalt formation is very
encouraging for a successful exploration project.

·    Igli Project consists of a 10.04km(2) Mining License and an adjacent
5.96km(2) exploration permit (Permis de Recherche) for 16km(2) in total.

 

Charlie Long, Chief Executive Officer of CMR PLC, commented:

"We are very pleased to have secured exclusivity and an option over the Igli
Project as one of the highest grade prospects we have seen over the last 12
months. Its location, directly along strike from Tiwit and Imiter adds to its
prospectivity, as does the fact that this part of the Saghro Massif has seen
relatively limited exploration and even less drilling or geophysics work over
the years. We are also encouraged by the multiple targets at Igli namely the
vertical shear zones which should have depth extension and the mineralised
basalt formation which has the potential to be widespread."

Guy Rothschild, Chief Operating Officer of Prism Group, commented:

"We are delighted to become CMR's main strategic investor. CMR has a fantastic
opportunity in Morocco, and potentially further afield, thanks to management's
blend of skills, sector experience and deal flow. The silver-copper option
announced today is very exciting and reflects this Moroccan expertise.
Although Prism's largest investment is in the financials sector, our
shareholders have extensive mining experience, and we also have a strong
mining network, including potential co-investors across the GCC and north
Africa. We envisage working closely with CMR and, to that end, strongly
support Dominic's move to an executive role and his increased involvement."

 

Transaction summary

CMR expects to acquire 90% of the Igli Project based on the following terms:

1.   US$12,000 Exclusivity Payment in cash granting CMR approximately two
months exclusivity (until 13(th) September 2024) to undertake legal due
diligence of the Property.

2.   US$80,000 exclusive Option Payment granting CMR 14 months from 13(th)
September 2024 to acquire a 90% interest in the Property in return for a 90%
Cash Payment of US$560,000. This can be exercised at any time.

3.   Seven months following 13th September 2024, if the exclusive Option has
not yet been exercised and therefore the US$560,000 not been paid, a US$60,000
Option Maintenance Fee is payable to maintain the exclusive Option for a
further 7 months. This US$60,000 is deductible from the US$560,000 90% Cash
Payment.

4.    A Final Payment of US$150,000 is due 6 months following the 90% Cash
Payment in either cash or equity at the vendor's discretion.

5.    CMR has the right to acquire the final 10% of the Igli Project for
US$500,000 in cash.

Not including the initial US$12,000 Exclusivity Payment, the total acquisition
cost is US$790,000 for 90% of the Property and US$1,290,000 for 100% of the
Property.

 

Convertible Loan Note

The Company has raised £750,000 through the issue of unsecured convertible
loan notes (the 'CLNs'), the proceeds of which shall be used to fund the
Company's working capital and capital expenditure requirements including for
exploration programmes at Igli.

 

The main terms of the CLNs are as follows:

·    Issue Date: July 16(th) 2024

·    Drawdown Period: August 16(th) 2024

·    Maturity Date: 12 months after the Issue Date

·    Conversion: any time after the Issue Date but prior to the Maturity
Date

·    Conversion Price: 1.1p

·    Interest: 5% coupon

·   Stock warrants: attached to the CLNs and issued on the Issue Date,
with a ratio of one warrant for every two shares representing the principal
amount of the CLNs

·    Warrant Exercise Price: 1.30p

 

Dominic Traynor, the Company's Executive Chairman, is a director of Prism
Group AG. As such, the Prism CLN investment is considered to be a related
party transaction. The independent directors of CMR confirm that having
exercised reasonable care, skill and diligence, the related party transaction
is fair and reasonable insofar as the shareholders of Critical Mineral
Resources are concerned and was entered into on arms' length terms.

 

Igli Project summary

Initial technical due diligence at Igli has identified multiple mineralised
shear structures with high grades of silver, copper oxide and copper sulphide
mineralisation. The structures sit within a basalt formation, which is also
mineralised, although the lateral extent of the basalt-hosted mineralisation
is unknown. A previous owner of Igli constructed a 28km road to site and
initiated the construction of a mining camp. The journey time to site is
approximately 2 hours from the nearest large town, and a small village 3km
from the property is able to provide certain services.

 

Igli assay results - silver up to 912g/t

Channel sampling and stockpile sampling carried out by the CMR team in January
and confirmed in July produced the following results, demonstrating the grade
potential of the project. Note that the highest grade rock appears to be
located in silicified basalts in fault zones.

 

Table 1: Assay results table

 Sample  Copper  Silver   Notes
 01/01   2.97%   912 g/t  Channel sample
 01/02   3.34%   496 g/t  Channel sample
 01/03   1.09%   296 g/t  Stockpile
 01/04   0.12%   12 g/t   Stockpile
 07/01   1.05%   146 g/t  Stockpile
 07/02   1.98%   237 g/t  Channel sample
 07/03   2.40%   250 g/t  Stockpile
 07/04   0.84%   187 g/t  Stockpile
 07/05   2.82%   258 g/t  Stockpile
 07/06   0.87%   154 g/t  Stockpile
 07/07   3.21%   741 g/t  Stockpile

Source: Tests were carried out by AFRILAB in Marrakech, accredited by the
Candaian Association for Laboratory Accreditation (CALA) and the Comité
Français d'Accréditation (COFRAC).

 

Fig 1: Ifri Project mineralisation in basalt

Source: Critical Mineral Resources PLC

 

Igli mineralisation

Silver-copper mineralisation at Igli is predominantly found in the outcropping
basalt formation, but has also been recorded in basalt-sandstone contact zones
and in ignimbrites (a rock type formed by volcanic pyroclastic flows).

Macroscopic field and laboratory observations of the samples collected confirm
the following series of mineralized phases: chalcocite, covelline, malachite
and pyrite, then quartz and calcite, as well as galena and chalcopyrite.
Sphalerite and hornblende are present but rare.

In the western part as well as in the eastern part of the basalt outcrop we
note the abundance of copper sulphides and oxides in the form of veneer or
small grains in hematite-cemented quartz-carbonate breccias. These areas are
interpreted as shear zones and are associated with higher silver and copper
grades than the rest of the basalt formation.

Disseminated and massive silver and copper mineralisation in the basalt
suggests that mineralisation was present when the basalt formation was first
emplaced (see Fig 1). Mineralisation was latterly concentrated in the shear
zones where silicified basalt, breccias and the highest metal assays were
reported . This geological model will evolve as more fieldwork and laboratory
work is completed over the coming months.

 

Fig 2: Ifri Project map showing location of road and small scale mining area

Source: Critical Mineral Resources PLC

 

Fig 3: Igli's location and regional fault map

Source: Critical Mineral Resources PLC

 

Saghro Massif prospectivity

This agreement provides CMR with exposure to a potentially high grade silver
and copper project in an underexplored but important mining belt in Morocco's
Eastern Anti-Atlas, in a geological terrain known as the Saghro Massif or Jbel
Saghro. The Saghro Massif is a relatively small area of old (Precambrian)
igneous rocks that hosts multiple past-producing mines, operational mines, and
development projects.

Within 25km of Igli are two of the most important mines of the region, the
Imiter Silver Mine, one of the largest and highest grade silver mines in the
world, and Tiwit (Tiouit), a gold, silver and copper mine which has been
operating on and off since the 1950's. These mines are related to the
Hercynian tectonic event and NE-SW fault structures, as seen in Figure 3
above.

 

Geological model

The current geological model is based on initial fieldwork and the Company's
knowledge of the region. One of the significant features of Igli is that
mineralisation is found primarily in basalts, both in silicified shear zones
and parts of the basalt formation. Mineralisation has also been viewed in
sandstones and ignimbrites, albeit these rocks have not been sampled for
assaying as yet.

 

The current theory is that when emplaced, the basalts were weakly mineralised,
potentially due to scavenging silver and copper from the underlying rhyolite
basement rocks. During later phases including the Hercynian tectonic event,
faulting and hydrothermal fluid activity further concentrated the silver and
copper mineralisation in faults and shear zones.

 

Importantly, this model also supports targeting the deeper basement for
silver, copper and potentially gold hydrothermal quartz carbonate vein
deposits, as seen in the nearby Tiwit and Imiter mines. Both these mines are
found in the basement rocks which are known to sit below the basalts,
sandstones and conglomerates that outcrop at Igli. Note that the highest grade
silver zones at Imiter are associated with Ediacaran aged black shales within
the Saghro Group.

 

Fig 4: Igli Project potential geological model

Source: Critical Mineral Resources PLC

 

 

 Critical Mineral Resources PLC           info@cmrplc.com (mailto:info@cmrplc.com)

 Charles Long, Chief Executive Officer
 Novum Securities                         +44 (0) 20 7399 9425

 Jon Belliss
 Hudson Sandler (Financial PR)            +44 (0) 207 796 4133

 Charlie Jack

 

Notes To Editors

Critical Mineral Resources (CMR) PLC is an exploration and development company
focused on developing assets that produce key commodities for the global
economy including those essential for electrification and the clean energy
revolution. Many of these commodities are widely recognised as being at the
start of a supply and demand supercycle.

CMR is building a diversified portfolio of high-quality metals exploration and
development projects in Morocco, focusing on copper, manganese and potentially
other critical minerals and metals. CMR identified Morocco as an ideal
mining-friendly jurisdiction that meets its acquisition and operational
criteria. The country is perfectly located to supply raw materials to Europe
and possesses excellent prospective geology, good infrastructure and
attractive permitting, tax and royalty conditions. In 2023, the Company
acquired an 80% stake in leading Moroccan exploration and geological services
company Atlantic Research Minerals SARL.

Since taking over the CMR in 2022, the current management has completed a
comprehensive strategic review and restructuring of the business and
implemented its clear strategy to maximise exploration and resource
development opportunities for the benefit of all stakeholders. The Company is
listed on the London Stock Exchange (CMRS.L). More information regarding the
Company can be found at www.cmrplc.com (http://www.cmrplc.com)

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