Alien Metals Limited - Alien confirms confidence in silver resource

Alien Metals

Trading Symbols

AIM: UFO

FWB: I3A1

17 December 2019

Alien Metals Ltd
("Alien" or "the company")

ALIEN CONFIRMS CONFIDENCE IN SILVER RESOURCE
AT ELIZABETH HILL SILVER PROJECT

Further to Alien Metals Limited’s (“Alien Metals” or “Company”) announcement, dated 4 December 2019, that it has entered into a conditional agreement (the “Agreement”) to acquire a 100 per cent interest in the former producing Elizabeth Hill Silver Project (“Elizabeth Hill Project” or the “Project”) from Karratha Metals Group Limited (“KMG”) in Western Australia (“the Agreement”), the technical team has reviewed provisional data supplied by KMG. Completion of the acquisition remains conditional on, amongst other matters, satisfactory mutual due diligence on the Project and Alien by the parties, required regulatory approvals and approval by KMG’s shareholders for the distribution (as detailed below). This announcement is available in PDF format from www.alienmetals.uk/assets/docs/nr/nr-2019-12-17-elizabeth-hill.pdf. Details of the provisional data are set out below.

Highlights:

• Elizabeth Hill’s initial 1999 JORC Compliant Resource of 4.05 million ounce (“Moz”) silver at greater than 200 g/t silver: 46,800 tonnes grading 2,700 g/t silver (1.15 oz/t gold equivalent)(Ian Cowden, Iana Pty Ltd, Resource Estimate, Elizabeth Hill Silver Mine, November 1999)
• 1,170,000 ounces of silver mined between 1998 and 2000 at an average grade of 2,195 g/t silver (70.24 oz/t silver)
• Unique mineralisation system which has produced Australia’s largest silver nugget weighing 180 kg (see Figure 1) and many other very large specimens of native silver
• Silver resource also present in near surface material via standard open pit mining method above the existing underground workings
• Independent reports suggest potential for further high grade material within the existing mine
• Depth extension of high grade mineralisation below 100 metres (“m”) untested
• Several surface robust geophysical anomalies untested within the Mining Licence
• Alien to re-evaluate the 2011 mining scoping study on the Project
• Detailed data compilation underway and a site visit ahead of outlining the first stage of exploration

Australia’s largest native silver nugget was found at the Elizabeth Hill Silver Mine in 2000, weighing 180 kg (~6,300 oz). See figure 1:

www.alienmetals.uk/assets/img/191217_figure1.jpg

Further to Alien Metals Limited’s (“Alien Metals” or “Company”) announcement, dated 4 December 2019, that it has entered into a conditional agreement (the “Agreement”) to acquire a 100 per cent interest in the former producing Elizabeth Hill Silver Project (“Elizabeth Hill Project” or the “Project”) from Karratha Metals Group Limited (“KMG”) in Western Australia (“the Agreement”), the technical team has reviewed provisional data supplied by KMG, including historical sampling and test results, independent reports on the Project and extensive historic exploration data Completion of the acquisition is conditional on, amongst other matters, satisfactory mutual due diligence on the Project and Alien by the parties, required regulatory approvals and approval by KMG’s shareholders for the distribution (as detailed below).

A rare aspect of this deposit are the numerous silver nuggets that have been discovered to date which are highly sought after from collectors and in value terms command multiple times the actual silver content of each one due to their uniqueness.

At Elizabeth Hill, there appears to be significant unmined resources remaining based on the 1999 Resource estimation report and more recent exploration completed. Evaluating the potential of this resource will be a priority of the Company in order to determine an option to recommence a low cost mining operation considering this is an existing mining lease.

Bill Brodie Good, Technical Director of Alien, commented: 

“From an initial review of the data supplied to Alien it is clear that there has been some excellent historic exploration and resource work completed which gives Alien a great platform to work from and develop. We are very keen to review and compile in detail all the available data plus any new data, for example satellite imagery, regional exploration etc. This will provide us with the information to execute a cost effective, but highly focussed, next stage exploration plan which will add significant geological and economic information to the Project, and therefore advancing it accordingly.”

Elizabeth Hill Silver Project Overview

The Elizabeth Hill Silver Project is situated approximately 45 km south of Karratha in the 61,000 km² Achaean Pilbara Block of the Pilbara Craton.  The Project is well located, lying 40 km from the deep-water port at Dampier and eight kilometres from rail infrastructure.  Grid power and groundwater are available on site, and the area has an abundant skilled workforce nearby. 

High-grade silver was discovered during nickel-copper exploration by AGIP in 1987. Further exploration of the project by ASX-listed East Coast Minerals (now KMG) and Legend Mining Ltd (ASX-LEG) discovered a very rich silver deposit.  Mineralisation is related to shear structures to the Munni Munni Complex including the Munni Munni platinum/palladium deposit (formerly the Hunters PGE Reef, see Figure 2) lying immediately to the west.  Native silver and lesser amounts of silver sulphide minerals occur as both fine and coarse grains within a coarse-grained calcite vein stockwork.

The location of Elizabeth Hill Silver Project (M47/342) with main prospect and adjacent tenements and deposits is shown in figure 2: www.alienmetals.uk/assets/img/191217_figure2.jpg

Source: Legend Mining Ltd Annual Report (2000)

Previous Work on the Elizabeth Hill Project¹

The Elizabeth Hill Silver Project was mined between 1998 and 2000 via underground mining, primarily between the 62 m and 102 m levels.  Silver production totalled approximately 16,800 tonnes of ore grading 2,195 g/t silver (70.24 oz/t silver) generating 1,170,000 ounces, including some very large specimens of native silver. 

The initial 1999 JORC Compliant Resource of the Project contained a total and an indicated and inferred Resource of 4.05 M oz silver, as set out in Table 1 below (at a cut-off grade of 200 g/t Ag).  This Resource is based on an exceptionally high grades of 2,700 g/t silver (over 1 oz/t gold).

Table 1: 1999 JORC Compliant Resource for Elizabeth Hill Silver Deposit (Legend Mining, Department of Mines WA Annual Report 1999)

Alien will carry out a site visit and data compilation of historical information ahead of outlining an initial exploration programme on completion of this deal to ascertain the following phase of work needed to advance the project to the next stage as discussed above which could include updating the resource, testing new targets within the lease and conducting a scoping study to assess the viability of reopening the mine.

¹ Source: KMG Prospectus dated 29 June 2018 and a report prepared for KMG by an independent mining consultant dated 19 June 2018.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

For further information please visit the Company’s website at www.alienmetals.uk, or contact:

Notes to Editors

Alien Metals Ltd is a mining exploration and development company listed on AIM of the London Stock Exchange (LSE:UFO). The Company’s focus is on precious and base metal commodities.

Alien has embarked upon an acquisition-led strategy headed by a strong geological team to build a strong portfolio of diversified assets including two recent acquisitions in 2019. These include the Brockman and Hancock Ranges high grade (Direct Shipping Ore) iron ore projects and the Elizabeth Hill Silver projects both located in the Pilbara region, Western Australia.

In addition to progressing its acquisition-led strategy, and following its strategic review of its portfolio of silver and precious metals projects in Mexico, Alien has identified priority exploration targets within its 12 mining concessions which it is working to advance systematically. The Company’s silver projects are located in Zacatecas State, Mexico’s largest silver producing state which produced over 190m oz of silver in 2018 alone accounting for 45% of the total silver production of Mexico for that year.

The location of the Silver and Iron Ore projects which Alien Metals is in the process of acquiring, situated in Pilbara, Western Australia is shown in figure 3:

www.alienmetals.uk/assets/img/191217_figure3.jpg

Qualified Person

The information in this report that relates to exploration targets, exploration results, and other information of a technical nature has been reviewed by Dr Lex Lambeck Ph. D, a technical consultant to the Company. Dr Lambeck is a Member of the American Institute of Professional Geologists and a Certified Professional Geologist, CPG-11734, with over 15 years of relevant experience in exploration and assessment of resource projects.

Forward-Looking Information

This press release contains certain “forward-looking information”. All statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are deemed forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company as well as certain assumptions, including the availability of sufficient funds. Forward-looking information is subject to a number of significant risks and uncertainties and other factors that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realised or substantially realised, there can be no assurance that they will have the expected consequences to, or effects on the Company.

Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Glossary:

g/t - Gram per ton

oz/t – Ounce per ton

Ag – Silver

Munni Munni Complex – A geological sequence of particular rocks (mafic and ultramafic) intruded into the existing units that are unique to the area and are associated with various amounts of mineralisation such as silver, gold, lead, zinc and PGE metals.

PGE – Platinum Group Elements

Resource - A mineral resource is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction.

Indicated - An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.

Inferred - An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological

evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

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