Sayona Mining Ltd. Acquisition of Advanced Lithium Deposit in Canada

Brisbane, Australia - Sayona Mining Ltd. (ASX:SYA) ("Sayona" or the "Company") is pleased to announce it has signed a binding term sheet, subject to completion of a 60-day due diligence, to acquire 100 per cent of the Authier lithium deposit in Quebec, Canada.


Attractions of the Authier acquisition, include:

- Extensively drilled - mineralisation hosted in a spodumene-bearing pegmatite intrusion with more than 15,000 metres of drilling in 123 holes;

- Simple deposit - 825 metres long with an average thickness of 25 metres dipping at 40 degrees, amenable to low-cost, open-cut mining techniques;

- Defined resources - foreign measured and indicated resources totalling 74,000 tonnes of contained Li20, with demonstrated economic viability. Additional inferred resources total 14,899 tonnes Li20 - see Table 1 for details and cautionary statement;

- Simple metallurgy - extensive metallurgical testing and flowsheet designed to produce a 5-6% Li20 concentrate at an 85% metallurgical recovery;

- Well studied - a NI43-101 Technical Report - Preliminary Economic Assessment

- completed in 2013, demonstrated the technical and commercial viability of developing the deposit, and selling lithium concentrates;

- Excellent infrastructure - situated 45 kilometres from mining support services, and links to road and rail networks, including the Quebec export port; and

- Large sunk cost - significant investment in drilling, geophysics and development studies.


The Company's strategy at the completion of the transaction, includes:

- Exploration and further drilling to target expanding the existing mineral resources;

- Identifying other resources in the tenement package and in the surrounding district to potentially expand the scale of the project; and

- Studying options for improving the project economics including, metallurgical optimisation and downstream processing options.

The Company believes the acquisition of Authier represents an excellent fit with the Company's capabilities and strategy of sourcing the raw materials required to produce lithium-ion batteries. Authier is a near-term development project and cashflow generation opportunity, being acquired at a very attractive valuation. The Company believes it will create significant share value-uplift potential for shareholders as the project is advanced towards development.


Authier Project Overview

Ownership and mineral rights

The Authier project is owned by TSX-V listed company, Glen Eagle Resources Inc. (CVE:GER) ("Glen Eagle"). The project area comprises 19 mineral claims totalling 653 hectares, and extends 3.4 kilometres in an east-west, and 3.1 kilometres in a north-south direction, respectively. The mineral claims are located over Crown Lands.


Location

The Authier project is situated 45 kilometres northwest of the city of Val d'Or, a major mining service centre in the, Province of Quebec. Val d'Or is located approximately 466 kilometres north-east of Montreal. The project is easily accessed by a rural road network connecting to a national highway a few kilometres east of the project site.


Regional infrastructure

Val d'Or and other nearby cities have experienced mining work forces and other mining related support services. Regional support services, include:

- 5 kilometres by dirt road to a sealed highway connecting to Val d'Or;

- 2.5 kilometres from an electricity grid supplied by hydro-electric power; and

- 20 kilometres to rail facilities connecting to an export port.


Mineralisation

The deposit is hosted in a spodumene-bearing pegmatite intrusion. The deposit is 825 metres long, striking east-west, with an average thickness of 25 metres, minimum 4 metres and maximum 55 metres, dipping at 40 degrees to the north. The deposit is modelled down to 200 metres depth.


Historical drilling

The project has more than 15,000 metres of drilling in 123 diamond holes, and 2,143 assay samples. The project was initially drilled between 1991 and 1999, and then by Glen Eagle between 2010 and 2012.


Metallurgical

The project has been subject to two metallurgical test work programs in 1999 and 2012. Bumigeme Inc, processing consultants, conducted metallurgical testing on a 40 tonne sample and produced Li20 concentrate grades between 5.78% and 5.89% at metallurgical recoveries between 67.52% and 70.19%, with an average head assay of 1.14%Li20. At an average head grade of 1.35%Li20, test work demonstrated a recovery of 75% and a concentrate grade of 5.96% Li20. In 2012, Glen Eagle completed further metallurgical testing and designed a flow sheet based on the concept of producing a 5-6% Li20 concentrate at an 85% recovery rate using conventional processing routes.


Environment/cultural

There are not expected to be any environmental or cultural issues associated with a future project development.


Economic

Glen Eagle produced a NI43-101 Technical Report - Preliminary Economic Assessment - in 2013, demonstrating the technical and commercial viability of developing the deposit. The fundamentals for lithium have improved significantly since 2013 and this is being reflected in much higher prices for lithium than contemplated in the Glen Eagle NI43-101. Australian lithium concentrate producer, Galaxy Resources Ltd. (ASX:GXY), announced in its March 2016 quarterly report that is had sold 60,000 tonnes of concentrate at US$600/t (FOB, min 5.5%Li20).


Mineral resources

The Authier global mineral resource estimated was sourced from Glen Eagle Resources Inc., NI43-101 Technical Report, Preliminary Economic Assessment Report, effective date 22 January 2013. The report is available from the Glen Eagle Resources Inc. website. The NI43-101 report was prepared by SGS Canada Inc and Burnigeme Inc for Glen Eagle.

Authier contains 73,999 tonnes of contained Li20 in the measured and indicated resource categories, and 14,899 tonnes of contained Li20 in the inferred category - Table 1, see link below.


Sayona's Project Development Strategy

The Company's strategy is to develop Authier in a staged approach, including:

- Converting the inferred mineral resources to measured and indicated through further drilling;

- Converting the mineral resources to reserves;

- Exploring for extensions to the existing mineral resources and other potential mineralisation within the tenement package;

- Consolidating other potential resources/mineralisation in the district;

- Studying options for improving the project economics, including:

-- operating and capital cost reductions (e.g. leasing and purchasing of second hand equipment);
-- metallurgical optimisation using latest technologies available like photometric sorting;
-- downstream processing options including the production of high-value lithium carbonate;

- Completion of an Environmental Impact Statement and Bankable Feasibility Study;

- Negotiating production off-take agreements; and

- Sourcing development finance and constructing the project.

Transaction Value Proposition

The Company believes the acquisition of Authier represents an excellent opportunity to create value-uplift potential for Sayona shareholders as the project is advanced towards development.


Key attractions of the acquisition, include:

- Large sunk cost in terms of exploration, drilling, metallurgical testing, and other economic studies;

- The price outlook for lithium is very strong. Lithium is a high-value product which is anticipated to be in tight supply as the demand for lithium-ion batteries continues to experience transformational growth due to use in the new green technology sectors;

- The Company becomes less exposed to the outcomes of early-stage exploration; and

- There is significant value-uplift potential for the Company when compared to the Australian Securities Exchange (ASX:ASX) listed lithium explorers and producers when benchmarked by market capitalisations - Figure 1, see link below. The Company is also acquiring Authier at a very attractive enterprise value per tonne of contained lithium multiple when compared to the trading multiples of the ASX peer group companies with resources.


Acquisition Terms

The Company has a signed a Binding Term Sheet with Glen Eagle to acquire the Authier project for CAD$4 million. The agreement is subject to Sayona's satisfactory completion of a 60-day due diligence period. The Company has paid Glen Eagle CAD$50,000 for full exclusivity to the Authier project during the due diligence period.

During the due diligence period, the Company will confirm the tenure is in good standing, there are no major environmental or cultural issues, and complete independent technicalreviews of the drilling and resource, and metallurgical test work.

The Company will investigate a number of different financing options to fund the acquisition price, including strategic investment in the project by potential product offtakers, equity, and royalty streams.

To view tables and figures, please visit:
http://abnnewswire.net/lnk/L6JF83LD


About Sayona Mining Ltd:

Sayona Mining Ltd. (ASX:SYA) is an Australian, ASX-listed, company focused on sourcing and developing high purity flake graphite for use in the rapidly growing new technology sectors and industrial sectors.



Contact:

Sayona Mining Ltd.
Corey Nolan, Chief Executive Officer
Phone: +61-7-3369-7058
Email: info@sayonamining.com.au www.sayonamining.com.au