Sayona Mining Ltd.: Half Yearly Report December 2017

Brisbane- Sayona Mining Ltd. (ASX:SYA) (OTCMKTS:DMNXF) present their report of the Company and its controlled entities for the half-year ended 31 December 2017.

Authier Lithium Project, Canada

The Company's primary focus during the half-year has been on completing the studies required to commence the development of the project, including the Definitive Feasibility Study. Authier is a near-term development project and cash-flow generation opportunity. The Company believes it will create significant share value-uplift potential for shareholders as the project advances towards development.

Memorandum of Understanding Signed for Authier Off-Take and Downstream Value Adding Opportunities

During the period, the Company signed a non-binding Memorandum of Understanding ("MOU") with leading China based battery manufacturer, Huan Changyuan Lico Co Ltd ("Changyuan").

Changyuan, a subsidiary of the Fortune 500 Company, China Minmetals Group, is a battery research, development, and production company. In 2016, the company produced more than 16,000 tonnes of battery cathode materials and is expanding its production capacity to 36,000 tonnes in 2018. The main products produced include, lithium cobalt oxide and lithium manganese oxide batteries, and ternary composite lithium-ion cathode materials.

The MOU paves the way for advancing discussions to facilitate a development alliance exploring marketing, technical and financial opportunities for the Authier project, including:

- Changyuan purchasing up to 100,000 tonnes of spodumene concentrate per annum;

- Development partnerships for the value-adding of the concentrates into lithium carbonate and/or lithium hydroxide in either China or Canada; and

- Funding and investment opportunities for Sayona and the Authier project.

Based on the results of the new information, a new Proven and Probable Ore Reserve estimate of 11.66Mt @ 1.03% Li20 at a 0.45% Li20 cut-off grade (see Table 1 in link below) has been defined.

JORC Mineral Resources Upgrade

In June 2017, the Company reported a JORC 2012 compliant Mineral Resource following the Phase 2 drilling program. During the current period, the Mineral Resource was updated to include the Northern Pegmatite which was not previously incorporated in the Mineral Resource. In addition, the Authier Main pegmatite has been increased due to refinement of the lithium solids model for the main pegmatite. The Authier deposit has 20,183 metres of diamond drilling in 150 holes.

Authier Optimised Pre-Feasibility Study

During the period, the Company completed the Optimised Pre-Feasibility Study ("PFS"). The PFS incorporates the new expanded JORC Mineral Resource, results from a number of technical optimisation programs, and realignment of pricing to reflect a concentrate grade of 6% Li2O and more recent industry forecasts. The PFS confirms the technical and financial viability of constructing a simple, low-strip ratio, open-cut mining operation and processing facility producing spodumene concentrate. The positive PFS demonstrates the opportunity to create substantial long-term sustainable shareholder value at a low capital cost.

Key findings of the PFS, include:

- Pre-tax NPV8 of C$221 million and IRR 56% (real terms at 8% discount rate);

- Annual average concentrate production of 96,000 tonnes at 6% Li20;

- Average annual revenue of C$73 million and EBITDA of C$35 million;

- Mine gate cash costs of C$370/t and FOB Port cash costs of C$430/t (US$327/t); and

- Initial capital expenditure of C$64 million and C$110 million over the life-of-mine.

Authier Definitive Feasibility Study

The Company has awarded the main components of Authier Definitive Feasibility Study ("DFS") including, the mining, processing and infrastructure to BBA.

BBA is an independent Canadian consulting engineering firm operating internationally. Its team is composed of highly-qualified experts in several engineering disciplines including electrical, civil, mechanical, industrial data processing, mining, metallurgical processes, automation, and construction management. BBA have extensive experience in the Canadian mining industry and have been actively involved in Feasibility Studies for Quebec lithium projects.

A number of other DFS work programs including geotechnical, transport and environmental have been outsourced to specialist contractors are underway.

Western Australian Projects

Exploration tenure in Western Australia includes leases covering some 1780km2 in the world class Pilgangoora lithium district. The 141km2 Mallina project, E47/2983, has been the main focus of work during 2017 and three new zones of spodumene pegmatite have been identified, including the recent Area C prospect discovery. A potential for gold mineralisation has also been recognised at the Deep Well and Friendly Creek areas.

Mallina Project

Exploration at Mallina continued within a 6x3 kilometre zone where three groups of spodumene pegmatites have been identified to date. Work was focussed at the Area C prospect where spodumene pegmatites were identified. Additional rock sampling has confirmed the presence of strong lithium mineralisation, with a maximum 4.27% Li2O returned in pegmatite with visual spodumene. Soil sampling (354 samples) returned a strong, coherent lithium anomaly as well as defining unexplained lithium anomalies in the more regional sampling.

Regional Lithium Projects

During the period, reconnaissance was made at the West Wodgina tenement, E45/4726. Twenty-one rock samples were collected of granite and pegmatite to identify fractionation trends and help define the general prospectivity of the area. Results include elevated lithium and tin, indicating several areas for follow up sampling in the 2018 field season.

Great Sandy Option

During the period, the Company made the first stage option payment to Great Sandy Pty Ltd ("Great Sandy") to acquire a 694 km2 package of 6 tenements in the world-class Pilgangoora lithium district of Western Australia.

The Great Sandy purchase terms include an option to acquire an 80% interest in all the tenements by making staged payments in cash or shares at Great Sandy's election of $300,000 (current payment) within 12 months and $300,000 within 24 months and free carrying Grant Sandy to Decision to Mine. At the Decision to Mine, Great Sandy can either elect to dilute or contribute to ongoing expenditure commitments or convert the 20% interest to a 2% gross smelter royalty.

Corporate

During the period, the Company completed a pro rata renounceable rights issue, comprising an offer on the basis of one (1) new share for every two (2) existing shares held at an issue price of 1 cent ($0.01) per share. Under the Rights Issue, 487,410,061 new shares were issued raising $4,874,101 before the costs of the offer. The Company also issued 12,817,114 shares (value $440,000) and 5,000,000 options (which were exercised) in the period. At balance date, assets totalled $12,612,949, which included a cash balance of $3,452,109.

SUBSEQUENT EVENTS

In addition to advancing its Australian and Canadian exploration projects, the following matters or circumstances have arisen since balance date:

On 19 January 2018, the Company entered into an agreement for the staged acquisition of the Tansim lithium exploration project in Quebec, Canada.

The agreement provides for the Group to acquire an initial 50% interest in the property through the expenditure of CAD$105k for claim renewal costs of the property. This expenditure amount is reduced by exploration expenditure completed on the property prior to 31 January 2018 (up to CAD$65k). The Group can then earn a 100% interest in the property by completing the following milestones:

- Investing CAD$200k in exploration and pay CAD$100k in cash to Matamec Explorations Inc within the first 12 months; and

- Investing CAD$350k in exploration and pay CAD$250k in cash to Matamec Explorations Inc within 12 and 24 months of signing.

To view the full report, please visit:
http://abnnewswire.net/lnk/6KS5V270

About Sayona Mining Ltd:

Sayona Mining Ltd. (ASX:SYA) (OTCMKTS:DMNXF) is an Australian-based, ASX-listed (SYA) company focused on sourcing and developing the raw materials required to construct lithium-ion batteries for use in the rapidly growing new and green technology sectors. Sayona’s primary objective is developing the Authier lithium project in Quebec, Canada. Authier is an advanced, near term development project, construction forecast to commence in the second half of 2018 and first production in late 2019. Please visit us as at www.sayonamining.com.au



Contact:

Sayona Mining Ltd.
T: +61-7-3369-7058
E: info@sayonamining.com.au
www.sayonamining.com.au