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ELEVRA LITHIUM LIMITED Interim / Quarterly Report 2019

Apr 29, 2019

64838_rns_2019-04-29_11e0f3b2-bc72-4e02-ba82-2b80309cf4da.pdf

Interim / Quarterly Report

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30 April 2019

QUARTERLY REPORT – MARCH QUARTER 2019

Highlights

  • Production rate for Authier Lithium Project, Quebec to increase under revised mining lease application as development plans continue for sustainable and profitable new mine

  • Positive drilling results boost prospects for new lithium deposit at Tansim Lithium Project, Quebec; project expands further with Lac Simard acquisition

  • Agreement to acquire 100% of Great Sandy Option in WA finalised, in world‐class Pilgangoora lithium district.

Emerging lithium miner Sayona Mining Limited (ASX: SYA) announced today its quarterly report for the March quarter 2019, as it continues to advance its lithium projects in Canada and Australia amid growing demand for the metal of the 21[st] century and constrained supply.

Authier Project

Authier is a hard rock spodumene lithium deposit scheduled for development as an open cut mine producing a 6% spodumene concentrate. Construction is planned to commence in 2020.

The new mine could create 150 jobs in construction and up to 160 jobs in operation, with the Company giving priority to local employment and suppliers. Sayona is targeting a number of potential markets for its product, which is in increasing demand due to the role of lithium‐ion battery technology in the clean energy revolution for cars and electricity.

In December 2018, the Company announced its participation in a joint study on the development of a lithium‐ ion battery industry in Quebec

The study, which will be carried out with the financial support of the Quebec Ministry of Economy and Innovation and other partners, represents a major step forward by Quebec in the fast‐growing lithium‐ion battery industry for energy and transport.

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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It will assess how Quebec can leverage its competitive advantages, including low‐cost hydro‐electric power and access to major markets, to ensure the province is strategically positioned to benefit from the clean energy revolution that is driving demand for lithium‐ion battery technology.

Permitting

On March 5, the Quebec Environment Minister announced that the Authier project the project would be subject to the environmental impact assessment and review procedures under the BAPE (bureau d'audiences publiques en environnement). (Refer ASX announcements 6 March and 28 March, 2019). The minister said the process would enable Sayona to “present the environmental protection measures likely to ensure the acceptability of its project, both socially and environmentally as well as economically.”

Following the announcement, Sayona decided to undertake further community engagement and environmental studies, including an Environmental Impact Assessment (EIA) as per Article 31.1 of the Environment Quality Act. Sayona has already completed an Environmental Assessment Study for the project, which showed it would have no impact on the water quality of the Esker Saint‐Mathieu‐ Berry.

Sayona will now seek approval, based on a sustainable development approach, to process in the order of 2,600 tonnes per day, providing for an approximate mine life of 14 years and estimated annual average spodumene concentrate production of around 115,000 tonnes (at 6% Li2O).

In September 2018, a Definitive Feasibility Study was completed, confirming the project’s potential to deliver a profitable and sustainable new lithium mine, with an estimated pre‐tax net present value of C$184.8 Million and initial capital expenditure of C$89.9 million (ref ASX announcement 24 September 2018). This study will now be revised in accordance with the new parameters, and will be based on an optimised final production level.

Other permitting items are currently ongoing. Sayona’s team has begun the preparation of the documents related to the prerequisites of the Environmental Assessment Study. Fieldwork is planned to be undertaken during the June and September quarters.

Test Work

During the quarter, further process engineering and test work studies were undertaken on site at Authier.

Three process studies were completed as part of Ausenco's bridging engineering mandate:

  • 1) Flotation circuit sizing review,

  • 2) Spodumene conditioning review,

  • 3) Grinding circuit review.

Ausenco's mandate was completed on March 27th and Ausenco delivered a data package with all documentation from the bridging phase.

The SGS testwork from the bridging phase is complete (magnetic separation, spodumene conditioning and flotation kinetics tests) and data files have been issued. The Company is now awaiting the final report for the testwork.

Also, McGill University delivered their final report in February on flotation studies using alternate flotation reagents (Arrmaz products) on a low‐grade sample (pilot plant commissioning sample).

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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Tansim Prospect

Tansim is situated 82 kilometres south‐west of the Authier lithium project in Quebec. The project comprises 139 mineral claims covering 8,500 hectares, and is prospective for lithium, tantalum, and beryllium.

Mineralisation is hosted within spodumene‐bearing pegmatite intrusions striking east‐west, dipping to the north and hosted by metasedimentary – metavolcanic rocks of the Pontiac sub‐province. The main prospects are Viau‐Dallaire, Viau and Vezina.

In February, Sayona completed the Phase 1 diamond drilling program at Viau‐Dallaire outcrop comprising 11 NQ diameter holes for 1,219m. The program had the following objectives:

  • Testing the outcropping spodumene bearing pegmatite at Viau Dallaire prospect along strike and to depth;

  • Exploring for other potential mineralised dykes within the prospect; and

  • Starting the collection of data for further metallurgical test work.

In early April, subsequent to period end, positive results were announced from the Tansim drilling program. These results are summarised in Table 1 (ref ASX announcement 9 April 2019).

Six drill holes successfully tested the outcropping Viau‐Dallaire pegmatite at near‐surface levels, while five step back drill holes tested the vertical extension of the shallow dyke.

Four of the latter intercepted a second non‐outcropping deeper pegmatite dyke 40 to 50m wide and sub‐parallel to the shallow one. The system is open in all directions with potential for additional sub‐ parallel hidden pegmatites.

These results confirm the prospects of an additional lithium deposit in close proximity to Authier.

Table 1 – Drill hole collar location and intercept information (downhole Intersections in metres)

Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres)
Drill
Hole
East North RL Azimuth Dip Depth From
(m)
To (m) Thickness
(m)
Grade
(%Li2O)
VD19‐00 670812.9 5285796.2 309.7 180 ‐45 72 19 22 3 0.95
19 20 1 1.33
VD19‐01 670772.2 5285780.1 311.7 180 ‐45 72 3.9 10.2 6.3 1.28
including 6 8 2 1.66
13.5 20 6.5 1.28
including 13.5 17 3.5 1.78
VD19‐02 670731.3 5285783.0 309.8 180 ‐45 75 10 20 10 0.71
including 15 16 1 1.64
including 22 25 3 0.85
VD19‐03 670720.6 5285817.5 307.2 180 ‐50 99 46 54 8 1.17
including 46 47 1 2.03
including 50 54 4 1.38
VD19‐04 670683.0 5285771.0 308.5 180 ‐45 72 13.9 18 4.1 1.37
including 13.9 15 1.1 2.22
21 30 9 0.95
including 24 27 3 1.6

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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Table 1 – Drill hole collar location and intercept information (downhole Intersections in metres)

Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres) Table 1 – Drill hole collar location and intercept information(downhole Intersections in metres)
Drill
Hole
East North RL Azimuth Dip Depth From
(m)
To (m) Thickness
(m)
Grade
(%Li2O)
VD19‐05 670628.0 5285758.8 304.9 180 ‐45 81 4 16.35 12.35 1.29
including 4 6.1 2.1 1.61
And 5 6.1 1.1 2.24
including 9 14 5 1.63
And 12 14 2 2.02
VD19‐06 670573.3 5285749.9 300.8 180 ‐45 75 3.85 5.9 2.05 0.89
including 3.85 4.9 1.05 1.08
12 14.8 2.8 0.76
20.2 24.45 4.25 0.87
including 22 23 1 1.2
VD19‐07 670627.7 5285813.5 296.3 180 ‐50 172 42.75 46.0 3.25 1.25
49 58 9 0.95
including 51 53 2 2.02
109.5 115.0 5.5 0.77
including 112 113 1.0 1.38
134.0 141.0 7.0 1.35
including 135 136 1.0 2.15
VD19‐08 670627.5 5285816.4 296.2 180 ‐75 174.1 67 77.25 10.25 1.05
including 67 69 2 1.55
including 72 75 3 1.22
119 126.1 7.7 0.67
including 124 126.1 2.1 1.09
142 149.8 7.8 1.04
including 146 149.8 3.8 1.54
155 163.5 8.5 0.91
including 155 156 1 1.98
including 158 162 4 1.16
VD19‐09 670576.6 5285795.4 297.4 180 ‐55 162 43.8 51.25 7.45 1.05
including 49.95 51.25 1.3 2.17
110.35 119.55 9.2 0.72
including 118.25 119.55 1.3 1.25
124.75 127.4 2.65 1.44
VD19‐10 670528.3 5285788.0 295.7 180 ‐55 165 45.5 58.8 13.3 1.04
including 48.15 49.75 1.6 2.13
including 55.4 56.45 1.05 2.00
108.2 151.9 43.7 0.82
including 135.8 151.9 16.1 1.26

Note: Downhole widths are not true widths.

Follow‐up drilling at Viau‐Dallaire prospect to extend existing pegmatite dyke and test for additional sub‐parallel dykes is being planned, in addition to further exploration at the Viau prospect and metallurgical test work.

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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Also, in April, Sayona announced an agreement for an option to acquire 100% of the Lac Simard lithium prospect from Exiro Minerals Corporation (ref ASX announcement 15 April 2019). The Lac Simard prospect is immediately adjacent to the existing Tansim claims and will increase the project size. The acquisition will increase the company’s potential to supply the growing lithium battery industry in Quebec.

Under the terms of the agreement Sayona can acquire a 100% interest by making cash and share payments, and undertaking work on the property over a three‐year period.

Western Australian Projects

Western Australia is a premium lithium province with world‐class, high‐grade lithium deposits associated with rare metal pegmatites.

Sayona’s leases In the Pilbara region cover some 1806km[2] and are centred in the world class Pilgangoora lithium district.

During the quarter exploration data was assessed following the 100% acquisition of the Great Sandy Option tenement package in December 2018. Work focussed on geochemical data to vector into areas of fractionated pegmatite systems with potential to host spodumene pegmatites. Sayona has developed an algorithm using seven elements, including LCT pegmatite indicators including cesium and tantalum as well as others such as thallium and gallium. A large number of areas have been selected for detailed exploration within other tenement areas.

The White Springs tenement was surrendered during the period due to downgraded perspectivity. No field exploration was carried out in the Pilbara during the quarter.

Mallina Project

Of the Pilbara tenements, the Mallina project is the most advanced with multiple zones of spodumene pegmatite identified within a 25km[2] zone.

No activities were undertaken at the Mallina project during the quarter.

Tabba Tabba Project

The Tabba Tabba project comprises six tenements covering 588km[2] , located 40km to the north of the Pilgangoora. The main Tabba Tabba tenement, E45/2364, is centred in an area of historic tin and tantalum mining.

No activities were undertaken on the project during the quarter.

Moolyella and Other Pilbara Project Areas

The Moolyella project is located to the east of Marble Bar in an area of historic tin and tantalum mining. Mineralisation is associated with the nearby Moolyella monzogranite and spodumene pegmatites have been identified by other workers in the area.

Within Sayona’s tenure (three tenements covering 334km[2] ) a number of lithium‐cesium‐tantalum (LCT) albite pegmatites have been identified. These fringe the Moolyella monzogranite and other similar fertile intrusions. Fifteen rock samples were collected from the northern portion of E45/4700. Three returned above 0.1% Li2O with the highest, sample, SP555945, assaying 1.40% Li2O

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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with elevated tin (198ppm) and rubidium. All the samples were of mica rich pegmatite. Project geology is displayed in the figure below.

Further exploration is being planned to follow up theses encouraging results and to test more broadly the prospective margins of the source intrusions.

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Figure 1: Sayona Lithium Tenements in Western Australia

East Kimberley Graphite Exploration

The Corkwood project secures a 24km strike length of graphitic sediments of the Tickalara Metamorphics, a known host to high purity, coarse flake graphite deposits in the region.

No work was carried out at the Corkwood graphite project during the quarter. A review of recent rock results and airborne electromagnetics (VTEM) data was commenced to identify potentially high grade graphite targets.

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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Figure 2 East Kimberley Graphite Project, Results and VTEM Imagery

Mt Edon Project

The Mt Edon project secures pegmatite rights over some 80km2 in the South Murchison province, Western Australia. The project hosts a large number of pegmatites which invade the Paynes Find greenstone belt. Past small scale mining of eluvial tantalum indicates the areas prospectivity to host LCT pegmatites. Past rock sampling has identified up to 1.57% Li2O in lepidolite bearing pegmatite.

A sampling programme at the Mt Edon project commenced during the quarter. Work was focussed over the western portion of the pegmatite field where results indicate the pegmatites become progressively more fractionated. A total of 59 rock samples were collected. Assay results are awaited.

Other Project Areas

No further work was carried out at the company’s Deep Well Gold project during the quarter.

Corporate Activities

During the quarter, the Company settled the final option payment to Great Sandy Pty Ltd to acquire an 80% interest in six tenements covering 871 km[2] in the world‐class Pilgangoora lithium district.

The Company also reached agreement to acquire the remaining 20% of the tenure to give Sayona a 100% unencumbered interest in the tenement package. The acquisition was settled through the issue of 5,235,602 fully paid ordinary shares in Sayona with an aggregate value 0f $100,000.

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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For more information, please contact:

Dan O’Neill, Managing Director Phone: +61 (7) 3369 7058 Email: [email protected]

Sayona Mining Limited is an Australian, 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. Please visit us as at www.sayonamining.com.au

Reference to Previous ASX Releases

This report refers to the following previous ASX releases:

  • Step up of engagement following Quebec regulatory decision – 6 March 2019

  • Authier project update – 28 March 2019

  • Drilling boosts prospects for new lithium deposit at Tansim – 9 April 2019

  • Sayona expands Tansim project with new acquisition – 15 April 2019

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and all material assumptions and technical parameters continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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Tenement Schedules

Australian Tenement Schedule Australian Tenement Schedule Australian Tenement Schedule
Tenement Name Status Interest at Beginning
of Quarter
Interest at end of
Quarter
E59/2092 Mt Edon Granted 80%, with rights to 100% of
pegmatite minerals*
80%, with rights to 100% of
pegmatite minerals*
E59/2055 Mt Edon West Granted 100% (pegmatite minerals) 100% (pegmatite minerals)
E45/2364 Tabba Tabba Granted 100% (pegmatite minerals) 100% (pegmatite minerals)
E45/4703 Tabba Tabba East Granted 100% 100%
E45/4716 Red Rock Granted 100% 100%
E45/4726 West Wodgina Granted 100% 100%
E45/4738 Cooglegong Granted 100% 100%
E45/4775 Carlindie Granted 100% 100%
E80/4511 Western Iron Granted 100% 100%
E80/4949 Corkwood Granted 100% 100%
ELA47/3802 Friendly Creek Granted 100% 100%0
ELA47/3829 Deep Well Application 100% 100%
ELA47/3950 Mt Dove Granted 100% 100%
E45/5288 Strelley Application 100% 100%
E45/5289 Strelley West Application 100% 100%
Great Sandy Pty Ltd Option
E47/2983 Mallina Granted 100% 100%
E46/1103 Dorringtons Granted 100% 100%
E45/4687 White Springs Granted 100% 0%
E45/4721 Moolyella Granted 100% 100%
E45/4727 Moolyella Granted 100% 100%
E45/4700 Moolyella Granted 100% 100%

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au

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Canadian Tenement Schedule Canadian Tenement Schedule Canadian Tenement Schedule
Claim Number Registered holder Registration Expiration Area
Date Date (hect)
2116146 Sayona Mining Limited 8/8/2007 7/8/2019 43.24
2116154 Sayona Mining Limited 8/8/2007 7/8/2019 42.88
2116155 Sayona Mining Limited 8/8/2007 7/8/2019 42.87
2116156 Sayona Mining Limited 8/8/2007 7/8/2019 42.86
2183454 Sayona Mining Limited 2/6/2009 1/6/2019 42.85
2183455 Sayona Mining Limited 2/6/2009 1/6/2019 42.84
2187651 Sayona Mining Limited 2/9/2009 1/9/2019 21.39
2187652 Sayona Mining Limited 39853 43474 21.29
2192470 Sayona Mining Limited 22/10/2009 21/10/2019 21.08
2192471 Sayona Mining Limited 22/10/2009 21/10/2019 21.39
2194819 Sayona Mining Limited 19/11/2009 18/11/2019 42.82
2195725 Sayona Mining Limited 27/11/2009 26/11/2019 29.03
2219206 Sayona Mining Limited 22/04/2010 21/04/2018 5.51
2219207 Sayona Mining Limited 22/04/2010 21/04/2018 17.06
2219208 Sayona Mining Limited 22/04/2010 21/04/2018 55.96
2219209 Sayona Mining Limited 22/04/2010 21/04/2018 42.71
2240226 Sayona Mining Limited 9/7/2010 8/7/2018 42.71
2240227 Sayona Mining Limited 40428 43319 42.71
2247100 Sayona Mining Limited 23/08/2010 22/08/2018 42.75
2247101 Sayona Mining Limited 23/08/2010 22/08/2018 53.77

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SAYONA MINING LIMITED P +61 7 3369 7058 E [email protected] A Suite 68, 283 Given Tce, Paddington QLD

sayonamining.com.au