POTENTIALLY SIGNIFICANT LCT PEGMATITE CORRIDOR … · 2020-02-19 · tantalite a tantalum mineral Competent Person Statement The information in this announcement that relates to exploration

Cowan Lithium Ltd | ACN 625 128 770 [email protected] | www.cowanlithium.com.au

COMPANY ANNOUNCEMENT 19 February 2020

EXPLORATION UPDATE

POTENTIALLY SIGNIFICANT LCT PEGMATITE CORRIDOR DISCOVERY

Cowan Lithium (Cowan or the Company) is pleased to provide the following exploration update on:

- Its 100%-owned Cowan Lithium & Tantalum Project (Cowan Project); and

- Newly acquired Serendipity JV option (Serendipity Project), adjoining and to the north of the Cowan Project, in the Eastern Goldfields region of Western Australia.

HIGHLIGHTS

• Mapping and rock chip sampling have identified highly fractionated, tin and tantalum-bearing pegmatites at Cowan’s Cowarna exploration target.

• Results indicate the discovery of an extensive new lithium caesium tantalum type (LCT) pegmatite belt extending for at least 26km along strike by >8km at its widest known extent.

• The Cowarna LCT belt is potentially more extensive than the Bald Hill LCT belt, however rock outcrops are less common due to transported soil cover and remnant Eocene sediments.

• Company’s Cowan Project tenement holding to increase with new tenement application.

• Company signs an option over the Serendipity Project comprising 551.5 sq km.

MINERALISED PEGMATITES DISCOVERED DURING MAPPING AT COWARNA FAULT TARGET

Field mapping, along with rock chip sampling, in an area of sparse outcrop has identified numerous highly fractionated, tantalum-bearing pegmatites on E28/2702 at the Cowarna exploration target.

From 35 samples collected from E28/2702, 17 returned grades in excess of 100 ppm Ta2O5, with these samples averaging 317 ppm Ta2O5 and 471 ppm SnO2. An additional 5 samples contained anomalous lithium and/or beryllium. A total of 6 samples contained in excess of 400ppm of combined Ta2O5 and/or 1,000ppm SnO2, indicating that the pegmatites are not only highly fractionated LCT pegmatites, but also particularly high grade in Ta, Sn and similar to the tantalum pegmatites mined at Bald Hill, located 20km to the WSW.

Executive Chairman Mark Calderwood commented: Its early days for exploration of the Cowarna LCT pegmatite belt however based on the vast area and the high ratio of highly fractionated Ta, Sn, Cs mineralised pegmatites, the belt is particularly prospective for tantalum and lithium. Though the area is extensively covered by transported regolith, bedrock generally occurs within several metres. The key is to locate more sub-horizontal pegmatites which are expected to be wider, less fractioned and more prospective for lithium. Cowan Lithium dominates the tenure over the known extent of the Bald Hill-Mt Belches and Cowarna LCT pegmatites belts.


Although rock outcrops are rare, follow-up field mapping between these two areas has identified visible tantalite and cassiterite (shown in Figures 1 and 2) in multiple pegmatites. Pegmatite exposures are up to 100m long at surface and appear to be stacked.

Subsequent to the discovery of the Cowarna LCT pegmatites on E28/2702, the Company signed an option over the Serendipity Project totalling 551.5 sq km (details below). Limited mapping and sampling was undertaken in November, with a total of 15 pegmatite samples collected of which 8 returned grades in excess of 100 ppm Ta2O5. An additional 3 samples were anomalous in lithium and caesium.

Figure 3– Sub-horizontal LCT pegmatite on edge of salt pan (E28/2582-I Serendipity Project).

The mineralised pegmatites are situated parallel to the Cowarna fault zone which bounds the eastern margin of the Randall Dome (Error! Reference source not found.4). Alita Resources’ (ASX: A40) Bald Hill lithium and

Figure 1 – Abundant tantalite and cassiterite (black minerals) in albite from near sample CR0069

Figure 2 – Coarse tantalite (>50% Ta2O5) from single crystal cluster obtained from weathered pegmatite near samples BHRK0528


tantalum deposit is located on the western side of the dome, along the Mt Monger-Randall fault zone (

Figure 5 - Cowarna exploration target (LCT Belt) showing proximity to Bald Hill Mine). These results may indicate that Cowan has discovered a new LCT pegmatite corridor, mirroring the Mount Belches-Bald Hill LCT pegmatite belt. The belt appears to have an open strike of at least 26km and is at least 8.5km wide at its widest know area.

Lithium assay results from rock chip sampling to date have been modest, this is not unexpected given the levels of weathering at surface and the fact most LCT pegmatites located to date are the narrow vertical feeder type not the larger sub-horizontal type which contain most of the lithium at Bald Hill.

COWAN PROJECT TO GROW WITH NEW TENEMENT APPLICATION

A new tenement application has been made over vacant ground to secure further prospective tenure around the Cowarna exploration target. The application will secure an additional 102km2, resulting in the company holding a total area of 822 km2.

Upon granting, the Company plans to commence field mapping, rock chip sampling and surface geochemistry to define further mineralised pegmatites.

SERENDIPITY JV OPTION


The Company through its wholly owned subsidiary Mount Belches Pty Ltd (Mount Belches) signed an option agreement with Serendipity Resources Pty Ltd over E28/2581-I, 2582-I, 2583-I and 2650-I totalling 551.5 Sq Km providing a period for due diligence and recognisance sampling during November and December. Due to the successful discovery of LCT pegmatites the option was exercised on the following terms.

1. Option fee of $10,000 was paid;

2. Mount Belches can acquire 51% of the tenements by:

a. spending $60,000 on the tenements;

b. refund local rents and rates of up to a maximum $15,000; and

c. issuing 400,000 shares in Cowan Lithium.

3. Mount Belches can earn an aggregate participating interest of 80% (Earn-in Interest) if it directly or indirectly incurs at least $800,000 in expenditure over a 3 years period;

4. Mount Belches will also have the right to purchase the Serendipity’s remaining 20% participating interest in the Joint Venture after a positive decision to mine has been made for the lesser of:

a. the fair market value in cash, which shall be determined by an independent valuer to be appointed by agreement between the Parties (the costs of such determination will be shared by the Parties equally); and

b. $6,000,000 in cash,

plus refund any Seller joint venture contributions which are made by the Seller after a decision to mine, and a 1% net smelter return royalty. In the event the Seller’s remaining participating interest is less than 20%, the purchase price of $6,000,000 in cash with be reduced on a pro rata basis but the 1% net smelter royalty will remain the same.

The licences are also prospective for gold with several drill ready targets identified.


Figure 4– LCT pegmatites along the Cowarna fault zone.


Figure 5 - Cowarna exploration target (LCT Belt) showing proximity to Bald Hill Mine and LCT Belt.

Extends 12km Further north

Bald Hill Mine


For more Information

Media

Nathan Ryan NRW Communications +61 (0) 420 582 887 Cowan Lithium Limited

Mark Calderwood Executive Chairman Glossary

The following abbreviations and terms are used in this announcement.

Li2O lithium oxide Ta2O5 tantalum pentoxide tantalite a tantalum mineral

Competent Person Statement

The information in this announcement that relates to exploration results and exploration target that have been reported for the first time is based on and fairly represents information and supporting documentation prepared by Mr Mark Calderwood, a part-time employee of the Company. Mr Calderwood is a member of the Australasian Institute of Mining and Metallurgy. Mr Calderwood has sufficient experience relevant to the style of mineralisation under consideration and to the activity which he is undertaking 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” (JORC Code). Mr Calderwood consents to the inclusion in this announcement of the matters based on his information and supporting documents in the form and context in which it appears.

Mr Calderwood is a shareholder and Executive Director of the Company. Mr Calderwood and Cowan do not consider these relationships to constitute a potential conflict of interest to his role as Competent Person due to the overarching director and employee duties he owes to the Company. Mr Calderwood is not aware of any other relationship with Cowan which could constitute a potential for a conflict of interest.

Forward Looking Statements

This announcement may contain forward looking statements and projections including regarding estimated resources and reserves, production and operating costs profiles, capital requirements and strategies and corporate objectives. Such forward looking statements/projections are estimates for discussion purposes only and should not be relied upon as representation or warranty, express or implied, of the Company. They are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors many of which are beyond the control of the Company. The forward looking statements/projections are inherently uncertain and may therefore differ materially from results ultimately achieved. While the information contained in this announcement has been prepared in good faith, neither the Company, nor any of its directors, officers, agents, employees or advisors make any representation or give any warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information, forward looking statement, opinions and conclusions contained in this announcement. Accordingly, to the maximum extent permitted by law, none of the Company, nor any of its directors, officers, employees, agents or advisers, nor any other person accepts any liability whether direct or indirect, express or limited, contractual, tortious, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in this presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this presentation. The Company disclaims any obligation to update or revise any forward looking statements based on new information, future events or otherwise except to the extent required by applicable laws.


Table 1 | Cowan Project Rock Chip Results E28/2702

Sample Easting Northing Li2O Ta2O5 SnO2 Cs Be Rb Nb U

ID m m ppm ppm ppm ppm ppm ppm ppm ppm

BHRK0524 444,434 6,531,441 40 5 66 18 6 727 10 2

BHRK0526 435,990 6,518,190 100 100 70 28 73 579 65 2

BHRK0527 438,114 6,513,948 60 177 24 8 17 104 95 1.5

BHRK0528 439,777 6,515,483 150 22 19 41 2 228 <5 1.5

BHRK0529 439,784 6,515,482 130 812 274 199 8 1800 50 1

BHRK0530 438,089 6,513,935 70 159 5 5 32 22 40 3

BHRK0531 438,078 6,513,910 130 201 71 56 53 923 80 2.5

BHRK0532 437,646 6,518,779 80 116 103 38 31 1174 70 2.5

BHRK0611 444,261 6,528,648 630 42 58 50 126 1399 60 1.5

BHRK0612 444,260 6,528,651 410 96 52 82 171 1943 70 1.5

BHRK0613 444,254 6,528,647 390 93 42 28 351 289 75 1.5

BHRK0616 443,509 6,525,870 150 26 113 74 67 1208 25 2

BHRK0617 443,496 6,525,885 130 39 72 29 8 461 55 3

CR0020 441,668 6,519,507 90 6 9 60 3 1487 20 <1

CR0022 443,484 6,519,322 70 186 2108 54 38 991 125 1

CR0023 443,425 6,519,333 140 274 334 104 43 1580 90 3

CR0024 444,245 6,519,965 310 31 110 20 6 691 110 4

CR0025 443,777 6,518,756 70 414 188 142 12 1380 125 2

CR0026 443,844 6,518,768 90 266 89 46 45 581 135 1

CR0027 443,852 6,518,772 80 60 8 3 5 40 40 <1

CR0028 446,513 6,515,550 151 28 79 59 15 441 20 7

CR0064 441,629 6,519,548 90 1 28 127 5 3327 <5 <1

CR0065 441,641 6,519,531 80 10 11 119 5 3088 15 2

CR0068 443,504 6,519,312 100 797 2747 148 14 1842 120 6

CR0069 443,511 6,519,317 140 200 197 59 11 1097 95 8

CR0070 443,480 6,519,350 190 285 135 236 15 3080 75 5

CR0072 443,752 6,520,517 624 28 180 147 4 1078 25 1

CR0074 446,574 6,515,581 151 117 481 40 7 306 20 2

CR0075 437,581 6,518,431 237 49 47 49 134 1383 50 3

CR0076 437,610 6,518,430 409 77 77 40 78 1143 80 3

CR0077 437,619 6,518,413 258 62 44 28 10 932 40 3

CR0078 437,788 6,518,451 172 73 66 33 38 921 80 1

CR0079 437,419 6,517,352 323 117 50 48 35 1052 70 2

CR0080 438,146 6,513,691 151 686 124 135 6 2103 145 3

CR0081 439,740 6,516,041 108 554 905 93 4 1076 65 4


Table 2 | Serendipity Rock Chip Results E28/2581-I and E28/2582-I

Sample Easting Northing Li2O Ta2O5 SnO2 Cs Be Rb Nb U

ID m m ppm ppm ppm ppm ppm ppm ppm ppm

CR0030 444,200 6,532,624 1055 15 33 301 48 2717 15 2

CR0031 441,168 6,533,405 108 2 52 23 27 409 <5 6

CR0034 442,713 6,541,226 194 267 66 255 113 2768 95 5

CR0035 442,728 6,541,178 129 281 57 61 136 450 55 <1

CR0036 442,707 6,541,238 129 230 62 290 18 3044 40 3

CR0037 442,663 6,540,671 129 165 37 274 6 3191 60 1

CR0038 442,625 6,540,765 215 176 25 176 51 1712 35 2

CR0083 444,196 6,532,446 495 68 79 138 115 1389 55 3

CR0084 444,179 6,532,669 129 49 13 36 18 661 60 4

CR0085 441,340 6,533,369 344 5 66 34 82 795 5 4

CR0086 4413,07 6,533,381 280 7 53 64 23 1352 5 2

CR0088 442,702 6,541,312 129 145 56 210 30 1957 30 1

CR0089 442,688 6,541,362 194 363 52 109 40 928 65 5

CR0090 442,587 6,540,791 194 79 27 285 82 3475 35 <1

CR0091 442,570 6,540,889 280 222 104 97 58 1006 75 2

Appendix A

Section 1 Sampling Techniques and Data

Criteria JORC Code Explanation Commentary

Sampling techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample representativity and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

Rock chip sampling (composite samples)

Samples jaw crushed and riffle split to 2-2.5kg for pulverizing to 80% passing 75 microns.

Prepared samples are fused with sodium peroxide and digested in dilute hydrochloric acid. The resultant solution is analysed by ICP, by Nagrom Laboratory.



Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).

No drilling involved.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Recovery not relevant

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography

The total length and percentage of the relevant intersections logged.

Rock chip samples: photographed and lithology logged

Logging is qualitative

All sample sites were described

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Measures taken to ensure that the sampling is

representative of the in situ material collected, including for

instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of

the material being sampled.

Rock chip samples were presented to the laboratory ‘as is’

No sub-sampling undertaken

Rock chips: composite sampling was utilised which is considered appropriate for this style of mineralisation

Sampling is in line with general industry sampling practices.

Standards, laboratory standards and laboratory repeats are used to monitor analyses.

Rock chip samples: 500g to 2kg are considered fir for the purpose.



Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

The assay technique is considered to be robust as the method used (see above) offers total dissolution of the sample and is useful for mineral matrices that may resist acid digestions.

Standards were submitted in varying frequency throughout the exploration campaign and internal laboratory standards, duplicates and replicates are used for verification

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The use of twinned holes.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

Not at this stage of the project development.

No duplicate rock chip samples were taken

Field data is recorded directly into QField and in field notebooks

The Company uses consultants to maintain a digital SQL database, loading and validate data, and appraising quality control samples.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

No drilling was undertaken.

Rock chip samples were located using a handheld GPS.

All locations are surveyed using GDA 94 Zone 51.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

Rock chips: Random based on outcrop locations depending on geology.

The data spacing and distribution is not sufficient for Mineral Resource and Ore Reserve estimation.

There has been no sample compositing.



Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

Rock chip geochemistry: May give an indication of the strike direction of anomalies.

Sample security

The measures taken to ensure sample security. The rock chip samples are taken from the field by experienced personnel and stored securely and transported to the laboratory by a registered courier and handed over by signature.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

Rock chip samples are collected using industry standard practices appropriate for LCT pegmatites.

Section 2 Reporting of Exploration Results

Criteria Explanation Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Exploration Target area referred to in this announcement is

a) located on E28/2702, 60km east of Kambalda,

WA, owned 100% by the Company and its

subsidiaries. The tenement is in good

standing. This tenement is currently not

subject to any royalties, other than State

Government royalty.

b) Located on E28/2851-I and E28/2852-I) 60km

east of Kambalda, WA. The Company has the

right to earn and purchase up to 100% equity

subject to a 1% Net Smelter royalty over and

above the State Government royalty.

The exploration licences are within an area of land determined as having non-exclusive Native Title in favour of the Ngadju People.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

This report refers to data generated by Cowan Lithium Limited.

Geology Deposit type, geological setting and style of mineralisation.

The Project area is underlain by generally north-striking, steeply dipping Archaean metasediments (schists and greywackes) and granitoids.

Felsic porphyries and pegmatite sheets and veins have intruded the Archaean rocks. Generally, the pegmatites cross cut the regional foliation, occurring as gently dipping sheets and as steeply dipping veins.

The pegmatites vary in width and are generally comprised quartz-albite- muscovite-spodumene in



varying amounts. Late-stage albitisation in the central part of the main outcrop area has resulted in fine- grained, banded, sugary pegmatites with visible fine-grained, disseminated tantalite. A thin hornfels characterised by needle hornblende crystals is often observed in adjacent country rocks to the pegmatite.

Tantalite generally occurs as fine disseminated crystals commonly associated with fine-grained albite zones, or as coarse crystals associated with cleavelandite.

Weathering of the pegmatites yields secondary mineralised accumulations in alluvial/eluvial deposits.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

• easting and northing of the drill hole collar

• elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

• dip and azimuth of the hole

• down hole length and interception depth

• hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

No drilling was undertaken.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

Rock chips: Each sample has individual assays reported with elements reported in Table 1. Ta results have been converted to Ta2O5 by multiplying by 1.2211.

Assays are reported as pure elements such as Li, Ta, Nb, Sn and converted to oxides using atomic formulas.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).

Rock chip samples are a point sample and do not provide drilling widths or intercept lengths.



Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Rock chip locations are shown on Error! Reference source not found. and 4 of this release.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Not relevant to rock chip sampling.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

All relevant and material exploration data has been reported.

Further work The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Further mapping, rock chip sampling and soil sampling is warranted across the tenements to explore for additional pegmatites to improve the understanding of the mineralisation.

Documents

POTENTIALLY SIGNIFICANT LCT PEGMATITE CORRIDOR … · 2020-02-19 · tantalite a tantalum mineral Competent Person Statement The information in this announcement that relates to exploration