Dan Smith, Chairman of Alien commented: “This is an extremely exciting opportunity for the Company. Over the last 6 months the Board has been reviewing a range of potential opportunities and these projects are surrounded by major iron ore mines owned by global mining companies and there has already been significant interest in these projects given their prospectivity and resurging iron ore price.
Acquiring 51% interest in two iron ore projects in the Pilbara, Western Australia
Alien Metals Limited (“Alien” or the “Company”), the AIM-quoted mineral exploration and development company, is pleased to announce it has entered into a binding option agreement with Windfield Metals Pty Ltd (“Windfield”) to acquire a 51% interest in two exploration licences (the “Licenses”) prospective for Direct Shipping Ore (“DSO”) iron ore in the Pilbara region of Western Australia. Entering into this agreement is a significant step towards the delivery of Alien’s strategy of building a portfolio of mining projects which demonstrate development upside in global jurisdictions with an established infrastructure and mining codes, where strong operational controls can be assured.
Alien is currently exploring for silver and gold in Mexico’s richest silver mining belt, with the option agreement with Windfield allowing Alien to diversify its assets base in a tier one mining jurisdiction. The Company will continue to assess various precious and base metal projects and expand its asset base over the coming year.
Highlights
· Exclusive option acquired over majority stake in two prospective iron ore projects in the Pilbara region of Western Australia
· Western Australia is the largest iron ore producer and exporter in the world with production of around 800 million tonnes of DSO dominated by Rio Tinto, BHP and Fortescue Metals
· Historic exploration undertaken by mining majors demonstrates high-grade, DSO iron ore potential
· Hancock Ranges Iron Ore Project
Project on-strike to Brockman Mining Limited’s (“Brockman”) Sirius Deposit which has a JORC inferred and indicated mineral resource estimate of 124MT @ 60.32% Iron (Fe) (see Figure 2)
One of four historic drill holes returned 126m @ 60.28% Fe from surface (Hole 14SERC004)
Surface results taken from an approximate 4km outcropping on strike mineralised ridge in the north west of the project area returned assay results of up to 68.7% Fe
· Brockman Iron Ore Project
Contains part of the historic BHP deposit 20, with surface sample grades averaging 62% Fe
The tenement geology is dominated by the Brockman Iron Formation, which hosts nearby commercial operations
The tenement remains underexplored for iron mineralisation, despite being held by numerous companies over a long period of time
· Alien to undertake first pass exploration programmes to further test the potential of the iron ore projects
· Company will continue to advance Mexican project portfolio and review other opportunities in the precious and base metals sector
Dan Smith, Chairman of Alien commented: “This is an extremely exciting opportunity for the Company. Over the last 6 months the Board has been reviewing a range of potential opportunities and these projects are surrounded by major iron ore mines owned by global mining companies and there has already been significant interest in these projects given their prospectivity and resurging iron ore price.
These iron ore licences are in the heart of the most prolific iron ore region in the world, with first class transport links and associated infrastructure. This represents a real opportunity for the Company to unlock shareholder value as iron ore focused companies have delivered significant returns to investors this year. We are excited to commence fieldwork in Q4 2019 and will update the market on our progress in this regard.”
Further Information
The Company has entered into a binding option agreement to acquire a 51% interest in the Licenses prospective for iron ore in the Pilbara region of Western Australia. The binding agreement with Windfield, gives Alien 45 days in which to carry out legal and technical due diligence, and to exercise its option to acquire the interest in the Licenses (the full terms of the transaction are set out below). The Company has engaged expert consultants in Australia, who together with Technical Director Bill Brodie Good, will assist with the technical due diligence and future exploration programs.
Project Summary
Pilbara Iron Ore Projects, Australia
The locations of the iron ore projects within the Pilbara region of Western Australia are set out in figure 1: www.alienmetals.uk/assets/img/190920_figure1.jpg
Hancock Ranges Iron Ore Project (E47/3954)
The Hancock Ranges Iron Ore Project (E47/3954), is within 20kms of the Newman township and borders licences held by Fortescue Metals Group, Hancock Prospecting, BHP Billiton (Mount Whaleback), Hope Downs and Brockman Mining.
The Licenses have been subject to historical exploration by Rio Tinto plc, BHP Group plc, and more recently Volta Mining Limited (“Volta”). In 2013, Volta undertook reconnaissance mapping and surface rock chip sampling and drilled 4 drill holes for a total of 475m which confirmed an economic strike extension of the Sirius Iron Ore deposit hosted in the Brockman Iron Formation including 126m @ 60.28% Fe from surface (Hole 14SERC004), with surface sampling further along strike supporting the strike extension. This work outlined two areas of potential high-grade iron ore mineralisation: the Sirius Extension Prospect and the Kalgan Prospect. Further information regarding the work carried out by Volta is described in Volta’s announcement dated 27 August 2014, which is currently available from the ASX website.
Figure 2 shows the location of the Sirius Deposit strike extension into the north-eastern part of the Hancock Ranges Iron Ore Project (source: Volta Mining Ltd, 2014): www.alienmetals.uk/assets/img/190920_figure2.jpg
In the north-western area of the tenement, historic exploration has identified mineralisation at surface in the Kalgan prospect, with Volta having reported in their 2013 annual report, eight rock chip samples containing up to 68.7% Fe in the prospect area.
Surface sample results from the Kalgan prospect in the Hancock Ranges Iron Ore Project are set out in Figure 3 at www.alienmetals.uk/assets/img/190920_figure3.jpg (source: Volta’s announcement dated 27 August 2014, which is currently available from the ASX website):
Brockman Iron Ore Project, E47/3953
This tenement hosts part of the historic BHP Deposit 20 iron ore target and the historic BHP Deposit 19 Fe target sits on the south-eastern boundary.
This tenement is dominated by the Brockman Iron Formation which underlies the majority of the tenement area. Recent alluvial cover is prevalent and covers the indicated Brockman Iron Formation.
The Mount Sylvia Formation has been mapped by the Geological Survey of Western Australia (GSWA) in the southern part of the tenement.
Structurally, the tenement is in the northern area which is thought to be relatively undeformed. A northwest trending folding can be inferred from the geology. This may correspond to the Ophthalmian age folds commonly seen in the south eastern part of the Hamersley Iron Province which have proven iron ore resources already defined.
The location of BHP deposits 19 and 20 in relation to the Brockman Project tenement over regional geology is set out in Figure 4: www.alienmetals.uk/assets/img/190920_figure4.jpg:
BHP, as part of their much larger regional programme, identified these two ‘deposits’ from a combination of mapping and surface rock chip sampling. This sampling was undertaken by BHP at both the 19 and 20 prospects and the samples were analysed for a standard suit of iron ore related elements. The average iron content of four rock-chip samples from prospect 19 was 62.8% Fe and the average for four samples from prospect 20 was 62% Fe (Source: Broken Hill Proprietary Company Limited Australia 1973, Mount Farquhar Project, Non-statutory Report: Final Report for the year ending 31/12/1972, TR70/5556H: WAMEX Report A3796 (obtained from MINDEX, 2019).
BHP reportedly used generalised outcrop dimensions and average grade of rock-chip sampling to calculate the estimated Fe tonnage per vertical feet.
This tenement remains under explored for iron mineralisation, despite being held by numerous companies over a long period of time. More detailed mapping has been recommended as a priority to determine if any structural complexities in the way of steep folding and/or faulting occurs anywhere on the tenement. Should the mapping confirm the currently identified area of steep folding/mineralisation and/or identify other areas of structural complexity or mineralisation in the Brockman Iron Formation, a broad Reverse Circulation (“RC”) drilling programme will be considered.
The underlying geological units also have the potential to host anomalous iron ore deposits, as reported by BHP.
Transaction Terms
The key terms of the binding term sheet are as follows:
(a) A$25,000 non-refundable option fee, which grants Alien a 45-day exclusive option over the Licenses (“Option”); and
(b) Subject to satisfactory due diligence and exercising of the Option, the consideration for acquiring a 51% interest in the Licenses shall be as follows:
i. 200,000,000 UFO shares issued at a Deemed Issue Price of 0.11p;
ii. 66,666,666 share purchase warrants, exercisable at an 80% premium to the Deemed Issue Price;
iii. £100,000 payable 12 months from Completion of the acquisition;
iv. 100,000,000 performance shares, to be issued at the Deemed Issue Price in two tranches upon achievement of the following performance hurdles:
10,000,000 tonne JORC inferred resource at greater than 54% Fe (Hurdle 1); and
20,000,0000 tonne JORC inferred resource at greater than 54% Fe (Hurdle 2).
Additionally, following the exercise of the option, Alien would be required to maintain the Licenses in good standing and sole-fund the first two years of minimum commitments, estimated at A$45,000; thereafter, the parties will fund pro-rata to their respective interests.
The upfront Consideration Shares will be subject to a 6-month lock in period.
2019 Alien Work Programme
Alien’s technical consultants, will carry out a site visit to the Hancock Ranges and Brockman projects in September/October 2019 to confirm geological interpretation, project access, and provisionally visit and sample iron-mineralised outcrops, as part of the technical due diligence. Results will be released to the market as and when available.
In the event the findings from the legal and technical due diligence are acceptable to Alien, it is intended that the option would be exercised and an initial work stream be commenced to carry out detailed surface mapping and sampling on each of the projects to close in and inform the next stage of exploration planning including drill target definition.
