keliber mineral resource reserve statements final

7/27/2019 Keliber Mineral Resource Reserve Statements Final

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REPORT Keliber

Pekka Lovn, Markku Merilinen 8.December 2011 1 (20)

Outotec OyjRiihitontuntie 7 C, PO Box 86

FI-02201 Espoo, FinlandTel. +358 20 529 211, Fax +358 20 529 2200

www.outotec.com Domicile Espoo, Finland

Business ID 0828105-4, VAT FI08281054

MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF

LNTT AND OUTOVESI LITHIUM DEPOSITS

FOR

KELIBER OY


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Introduction and summary

This report is not a comprehensive Minerals Experts Report but is intended to be apart of the Keliber Litium Project pre-feasibility study.

The following sections describe the methodology used by Outotec (Finland) Oy inestimating the Mineral Resources and Ore Reserves of the Lntt and OutovesiLithium projects.

Markku Merilainen, MAusIMM and Pekka Lovn MAusIMM(CP) of Outotec (Finland)Oy, both Competent Persons as defined by J oint Ore Reserves Committee (J ORC)

prepared the Lntt and Outovesi project mineral resource and ore reserveestimates.

Markku Merilainen visited the project area 19.20.8.2010.

The estimates comply with recommendations in the Australasian Code forReporting of Mineral Resources and Ore Reserves (J oint Ore Reserve Committee J ORC-code).

The Li2O grade cut-off used to determine the mineral resources is 0.5 %.

The tables below summarize the Mineral Resources of the Lntt and the Outovesi

[email protected]%Li2Ocutoff

ResourceClass Tonnage

Li2O

%

Measured 433000 1.12

Indicated 868000 1.06

Measured+Indicated 1301000 1.08

[email protected]%Li2Ocutoff

ResourceClass

Tonnage

Li2O

%

Measured 0 0.00



The Ore Reserve estimates of the Lntt and Outovesi are given in the tablesbelow.


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Ore Reserves are not additional to Mineral resources.

Lntt Ore Reserve @ 0.5% Li2O cut-offReserve Class Tonnage Li2O %

Proven Reserve 472000 0.98

Probable Reserve 513000 0.96

Total Ore Reserve 985 000 0.97

Waste/Ore ratio 6.9

Ore reserve tonnage and grade include 95% mining recovery and 15% waste rock dilution at 0% Li2O grade

Outovesi Ore Reserve @ 0.5% Li2O cut-off

Reserve Class Tonnage Li2O %




Waste/Ore ratio 6.0

Ore reserve tonnage and grade include 95% mining recovery and 25% waste rock dilution at 0% Li2O grade


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MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF LNTTGeology

Deposit Geology

The Lntt mining licence area (as also Outovesi) is located on thePohjanmaa schist belt between the Central Finland Granite Complex and theVaasa Migmatite Complex. The schist belt is composed of mica schists andgreywackes with some sulphide bearing black schists and volcanic rocks.

The Lntt veins represent an example of homogenous albite-spodumene

pegmatite. The deposit consists of two, partly boudinage veins, withmaximum vein width of about ten meters. Also small parallel veins exist inconnection to these main veins. The host rock is mainly intermediate-maficvolcanic rock with some mica schist. The vein strike is SW-NE and dip 70 toSE with close to vertical lineation.

Overburden averages 4 m at Lntt varying from almost 0 to 7 m and isalmost totally till with some peat on the surface.

DataDrill Hole Database

The drill hole database was obtained from Keliber as Excel spreadsheets and wastransferred into Microsoft Access for use in Surpac software.

The Lntt database contains information on 54 drill holes with a total length of5691.4m. The number of assayed intervals is 553. Assay file contains the fields forLi2O, Na2O, Al2O3, SiO2, K2O, CaO, Fe2O3, Rb, Nb, Be, Li, Ta, BeEO, Ta2O5,ROCKCODE, DENSITY.

The database contains 111 density records with constant value of 2.7. The densityof 2,7 tonne/m3 was used throughout the estimates.

Only about half of the drillholes have been downhole surveyed for azimuth and dip.The rest of drillholes have only collar azimuth and dip. Unsurveyed holes are quiteshort and all the holes have a good matching with the very straightforwardpegmatite vein model.

Outotec (Finland) Oy has not validated the database against the original drill logsbut is in opinion that the database integrity is good and sufficient for the purpose.


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Resource Estimate

Orebody Model

The resource outlines were constructed on cross sections at intervals of 5 -30 m based on the lithological and assayed intervals. The nominal cutoffgrade used was 0.5% Li2O. In some occasion it was necessary to includematerial below the cutoff in order to maintain the continuity of the structure.

The 3D model was continued only about 5 m from the last drilled crosssection in the northwestern and southeastern ending of the deposit.Downward the model was also continued some 5 m from the lowermost drill

hole information, where the grade was above the cutoff. The modeled dikesquite probably continue outside of the modeled area.

Three separate, parallel veins, which dimensions were sufficient for mining,were modeled. The mineralized envelopes with blockmodel are shown in theFigure 1. Each of the resource wireframe was used as a hard boundary forgrade interpolation.

Figure 1. Top view of the Lntt deposit.


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Basic StatisticsThe assay data was coded using the wireframes of the mineralized zones todefine the resource intersections. The intersection codes were used toextract samples for statistical analysis and for compositing the data for gradeinterpolation. Compositing of drill hole samples is carried out in order tostandardize the database for further statistical evaluation. This step eliminates anyeffect relating to the sample length, which may exist in the data.

The summary of basic summary statistics of the composites is presented in thetable below.

Table 1. Basic statistics of the composites data used in the grade estimations

The data sets show low Coefficient of Variation which indicates that there is noneed for any top cutting the high grade assays.

Trisolation 5 7 8

Variable Li2O Li2O Li2O

Numberofsamples 6 84 122

Minimumvalue 0.71 0.25 0.00

Maximumvalue 1.98 2.05 2.11

Mean 1.06 1.20 1.03

Median 0.79 1.26 1.08

Variance 0.22 0.15 0.23

StandardDeviation 0.47 0.38 0.48

Coefficientofvariation 0.44 0.32 0.47

Composites


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Block ModelThe resource block model was created using Surpac software. The parentblock size of 10m x 5m x 5m with sub-blocking to 5m x 2.5m x 5m wasselected partly on a basis of the drilling density and partly to honor thegeometry of the mineralized lenses. The summary of the block modelparameters is in the table 2.

Table 2. Lntt resource blockmodel parameters.

Grade Interpolation

Prior to the grade interpolation the assay data was composited to 2m downholecomposites honoring the mineralised lens boundaries. The composite length waschosen on the basis of the average length of the samples inside the mineralizedenvelopes of 1.8m rounded up to nearest full meter.

Inverse Distance squared method was used to interpolate the Li2O grade into theblocks. Each domain was estimated separately using the composites belonging tothe estimated domain.

The blocks inside each wireframe were filled maximum search distances of 60 m.The search ellipsoids were aligned to honor the main continuity directions of the orelenses. A minimum of 3 and a maximum of 20 composites were used to estimatethe grades into the blocks.

Northing Easting Elevation

MinimumCoordinates 7057700 2506900 100

MaximumCoordinates 7058400 2507450 125

UserBlockSize 10 5 5

Min.Block

Size 5 2.5 5

Rotation 45 0 0

AttributeName Type Decimals Backgrou Description

avgdst Float 1 1

class Integer 3 1=measured,2=indicated,3=inferred

dst2ns Float 1 1

li2o Float 3 0

material Integer 2 1=ovb,2=waste,3=ore

ns Integer 0

nsr Calculate li2o*145


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rock veins between the drilling profiles. The magnetic survey results match well withthe information got from the diamond drilling and the trenching. Detailed geologicalsurface mapping was completed during 2010. The results confirm the continuities,the quality of the pegmatite veins and the nature of contacts against hostingvolcanic rock and mica shist (Sandberg, E., 2011, Overburden stripping at Lntt in2010, Keliber Oy).

As Measured Mineral Resource are classified the parts of the veins which arelocated directly below the detailed mapped area to the depth of 70 85 m. In thisarea also the drilling density is the highest one. The rest of the modeled veins areclassified as Indicated Mineral Resource.

Inferred Mineral Resource classification is not used at all. The veins are known tocontinue outside of the modeled area, but there are indications that the veins arethinner and lower grade than in the modeled area.

Narrow veins (usually less than 1 m) around the two main veins are not includedinto the Outotec model and resource classification. Part of these narrow veins maybe minable, especially inside the potential open pit.

Figure 2. Mineral Resource classification. Yellow=Measured, Green=Indicated.


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Ore Reserve Estimate

The Lntt deposit is amenable for conventional open pit mining. In the moremature state of the project also underground mining possibilities should beconsidered.

The ore reserve estimate of Lntt is based on the open pit optimization (floatingcone algorithm) followed by the open pit design of the highest profit pit shell.

The pit optimization parameters are presented in the following table.

Table 5. Open pit optimization parameters.

The open pit design criteria is presented in the table 6 below.

Table 6. Open pit design criteria.

The open pit stripping ratio is 6.9. The mining modifying factors are:

Mining recovery 95%,

Dilution 15%.

The table 7 summarizes the Lntt ore reserves at 0.5% Li2O cut off.

Licarbonateprice 10000 Us$/t

Biproduct

credit 7

%

Exchangerate 1.30 :Us$

Flotationrecovery% 80%

Conversionrecovery% 90%

Wasteminingcost 1.4 /t

Oreminingcost 1.7 /t

Processingandotheropex 45.0 /t

Overallslopeangle(rock) 50.0 dec

Slopeangle(soil) 20.0 dec

Batterangle 80 dec

Interrampangle 65 dec

Overallslopeangle 55 dec

Roadgradient 10 %

Roadwidth 9 m

Bermwidth 8 m


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Table 7.Lntt Ore Reserve as of 30.11.2011.

The ore reserve is not additional to the mineral resource.

Figure 3. Lntt open pit.

Lntt Ore Reserve @ 0.5% Li2O cut-offReserve Class Tonnage Li2O %





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MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF OUTOVESIGeology

Deposit Geology

The Outovesi claim area is located on the Pohjanmaa Schist Belt as Lntt.The vein represents an example of homogenous albite-spodumenepegmatite. The vein is SSW-NNE orientated and dipping about 60 to WNW.

The total length is 300 m and the vein is partly open to depth. The host rockon both sides is homogenous mica schist including some graphitic schist,greywacke or small greenish skarn interlayers.

The overburden (till) thickness is about ten meter.

The vein width is up to ten meter and it cuts hosting mica schist beddingalmost perpendicularly. Neither smaller parallel spodumene pegmatite veins(as in Lntt) nor mica schist inclusions in pegmatite were discovered. Themain minerals are albite, quartz, potassium feldspar and spodumene.Spodumene is light green in color and the crystal thickness is quite uniform,usually 8-10 mm. The long axis of spodumene crystals is orientated typicallyalmost perpendicular to the vein contact. Spodumene is altered to muscovitein places at vein contacts and at narrow (usually < 2 m) ends of the veinspodumene is totally altered.

DataDrill Hole Database

The drill hole database was obtained from Keliber as Excel spreadsheets andwas transferred into Microsoft Access for use in Surpac software.

The Outovesi database contains information on 20 drill holes with a totallength of 1499 m. The number of assayed intervals is 404. Assay file containsthe fields for Li2O, Cl, RQD (Rock Quality Designation) and lithology.

The database doesnt contain any density determination results. The densityof 2,7 ton/m3 was used throughout the estimates.

Drill hole collar coordinates were surveyed using differential GPS method. Alldrillholes have been downhole surveyed for dip. Collar azimuths weresurveyed using GPS methods. It is considered that incomplete downholesurvey does not cause any significant bias in resource estimation becausethe geological frame work is very simple and the most of the holes are lessthan one hundred meters long.


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Outotec (Finland) Oy has not validated the database against the original drilllogs but is in opinion that the database integrity is good and sufficient for thepurpose.

Resource Estimate

Orebody Model

The resource outlines were constructed on cross sections at intervals of 40mbased on the lithological and assayed intervals. The cutoff grade used was0.5% Li2O. The 3D model was continued about 15 m from the last drilledcross section in the northwestern and southeastern ending of the deposit.Downward the model was continued some 5 - 15 m from the lowermost drillhole information.

The resource block model inside the mineralized envelopes is shown in theFigure 1. Each of the resource wireframe was used as a hard boundary forgrade interpolation.

Figure 4. Top view of the Outovesi deposit.


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Basic StatisticsThe assay data was coded using the wireframe of the mineralized zone todefine the resource intersections. The intersection codes were used toextract samples for statistical analysis and for compositing the data for gradeinterpolation. Compositing of drill hole samples is carried out in order tostandardize the database for further statistical evaluation. This step eliminates anyeffect relating to the sample length, which may exist in the data.

The summary of basic summary statistics of the composites is presented in thetable below.

Table 8. Basic statistics of the composites data used in the grade estimations

The data sets show low Coefficient of Variation which indicates that the data is ofgood quality and there is no need for any top cutting the high grade assays.

Variable li2o

Numberofsamples 39Minimumvalue 0.32Maximumvalue 2.11Mean 1.45

Median 1.54

GeometricMean 1.36Variance 0.18

StandardDeviation 0.42Coefficientofvariation 0.29


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Block ModelThe resource block model was created using Surpac software. The parentblock size of 10m x 5m x 5m with sub-blocking to 5m x 2.5m x 5m wasselected partly on a basis of the drilling density and partly to honor thegeometry of the mineralized lens. The summary of the block modelparameters is in the table 9.

Table 9. Outovesi resource blockmodel parameters.

Grade Interpolation

Prior to the grade interpolation the assay data was composited to 2m downholecomposites honoring the mineralised lens boundaries. The composite length waschosen on the basis of the average length of the samples inside the mineralizedenvelopes and above 0.5%Li2O grade of 1.2m rounded up to nearest full meter.

Inverse Distance squared method was used to interpolate the Li2O grade into the

blocks.

The blocks inside each wireframe were filled maximum search distances of 60 m.The search ellipsoids were aligned to honor the main continuity directions of the orelenses. A minimum of 3 and a maximum of 20 composites were used to estimatethe grades into the blocks.

Type Y X Z

MinimumCoordinates 7066600 3338350 25

MaximumCoordinates 7067350 3338650 95

UserBlockSize 10 5 5

Min.Block

Size 5 2.5 5

Rotation 30 0 0

AttributeName Type Decimals Backgrou Description

avgdst Float 1 1

dst2ns Float 1 1

li2o Float 2 0

material Integer 2 1=ovb,2=waste,3=ore

ns Integer 0

nsr Calculated li2o*146


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Blockmodel validation

The block model validation includes visual inspection and comparing the meanbetween the composited and estimated data. The visual inspection did not showany unusual problem when compared with drill hole grade across sections andstatistical comparisons of global block mean and median grades and correspondingcomposite grades showed expected correlation.

Table 10. Basic statistics of the blockmodel and composites used to estimate the blockgrade.

Mineral Resource Classification

According to Outotec, Outovesi Mineral Resource is classified as Indicated MineralResource. The classification is based on the drilling density and a very simplegeological frame work. All the core logging, sampling and assaying have been doneaccording to the procedures of Keliber (Sandberg E., 2011, Methods and results of

the Keliber drilling programme on the Kaustinen area from Sep 2010 to J an 2011,Keliber Oy).

Inferred Mineral Resource classification is not used at all, because it seems quiteobvious that the spodumene containing mineralization is mainly changed tomuscovite downwards and along the strike to NE and SW at least in the thinnerparts of the vein.

Composites Blockmodel

Variable li2o li2o

Numberofsamples 39 691

Minimumvalue 0.32 0.00

Maximumvalue 2.11 1.95

Mean 1.45 1.47

Median 1.54 1.51

GeometricMean 1.36 NotCalculated

Variance 0.18 0.07

StandardDeviation 0.42 0.27

Coefficientofvariation 0.29 0.18


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Mineral Resource Statement

The table below summarizes the mineral resources calculated by Outotec (Finland)Oy. The mineral resource has been calculated using 0.5% Li2O cut off.

Table 11.Outovesi Mineral Resource as of 30.11.2011.

[email protected]%Li2Ocutof

ResourceClass Tonnage Li2O%

Measured 0 0.00




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Ore Reserve Estimate

The Outovesi deposit is amenable for conventional open pit mining.

The ore reserve estimate of Outovesi is based on the open pit optimization (floatingcone algorithm) followed by the open pit design of the highest profit pit shell.

The pit optimization parameters are presented in the following table.

Table 12. Open pit optimization parameters.

The open pit design criteria are provides in the table 13 below.

Table 13. Open pit design criteria.

The open pit stripping ratio is 6.0. The mining modifying factors are:

Mining recovery 95%,

Dilution 25%.

The table 14 summarizes the Outovesi ore reserves at 0.5% Li2O cut off.

Licarbonateprice 10000 Us$/t

Biproductcredit 7%

Exchangerate 1.30 :Us$

Flotationrecovery

% 80

%

Conversionrecovery% 90%

Wasteminingcost 1.4 /t

Oreminingcost 1.7 /t

Processingandotheropex 45.0 /t

Overallslopeangle(rock) 50.0 dec

Slopeangle(soil) 20.0 dec

Batterangle 80 dec

Interrampangle 65 dec

Overallslopeangle 55 dec

Roadgradient 10 %

Roadwidth 9 m

Bermwidth 8 m


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Table 14.Outovesi Ore Reserve as of 30.11.2011.

The ore reserve is not additional to the mineral resource.

Figure 5. Outovesi open pit

Outovesi Ore Reserve @ 0.5% Li2O cut-offReserve Class Tonnage Li2O %




keliber mineral resource reserve statements final

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