Tawana Resources N L : Option Agreement to Earn into the Bald Hill Mine | 2,387.18 KB

288 Churchill Avenue Subiaco Perth WA 6008

Email | admin@tawana.com.au Website | www.tawana.com.au Phone | +61 8 9489 2600

• Lithco has the right to earn a 50% interest in the lithium rights at Bald Hill and, by additional expenditure, the right to earn 50% interest in all minerals and the processing plant and infrastructure at Bald Hill.

• The Project covering 791.3 km2 is owned by Australian incorporated, Singapore Exchange listed Alliance Mineral Assets Limited ("AMAL"). It is adjacent to the Company's Cowan Project.

• A number of spodumene-rich pegmatites have been discovered and partially mined for tantalum. Spodumene was not recovered during prior mining however recently AMAL produced spodumene rich by-product concentrates up to 6.73% Li2O during recommissioning of the original tantalumplant.

• Metallurgical testwork has commenced on extracting spodumene from tantalum ore. Initial results indicate high recoveries of spodumene through simple gravity process. Engineering studies for the addition of a 1mtpa spodumene circuit are about to commence, the focus will be on the speed and cost of such installation.

• Resource and exploration drilling has commenced on the main mining lease at Bald Hill.

• The Company is also currently drilling on the adjoining Cowan Project and has intercepted a number spodumene bearing pegmatites.

• Tawana has until 31 December 2016 to exercise the option to acquire Lithco.

• Subject to shareholder approval (which will include an independent experts report on the acquisition) and successful due diligence results the purchase consideration for Lithco will be the issue of 50,000,000 Tawana shares.

• Board changes include Mark Calderwood being appointed Managing Director, Rob Benussi being appointed Non-executive Chairman and Michael Bohm stepping down as a Director due to increased work commitments.

  Mark Calderwood stated, "The completion of the Lithco acquisition, could see Tawana rapidly advance towards spodumene production in joint venture with AMAL, subject to completion Reserve and plant upgrades. In addition to the active Mining Lease the combined 950km2 of the Cowan and Bald Hill tenement packages covering two very large pegmatites belts provide significant potential for further resources.

  Bald Hill is one of few West Australian mines ever to have produced high grade spodumene concentrate. Stored concentrates will provide material for detailed product assessment by interested off-take parties."

  Bald Hill Project

  The Bald Hill Project ("Project") area is located 50km south east of Kambalda in the Eastern Goldfields of Western Australia. It is located approximately 75km south east of the Mt Marion Lithium project and is adjacent to and surrounds the Company's Cowan Lithium Project. The Project comprises 4 mining leases, 8 exploration licences, 8 Prospecting licences and 5 tenement applications totalling 791.3 km2

  Figure 1 | Project Location

  Grey spodumene (>50%) in waste material

  White Spodumene (>20%)

  Production History Bald Hill

  Pre 2000, production within the Project Area was limited to a small amount of tin and/or tantalum from eluvials at Bald Hill and soft rock mining at St John.

  Between July 2001 and December 2005 Haddington Resources Limited ("Haddington") undertook shallow open pit mining of pegmatites, a total of 1.35Mt of ore was processed through a gravity plant with a throughput rate of 340,000tpa. A total 4,000t of concentrate containing 364t of tantalum pentoxide was sold and the mine was closed after the buyer Greenbushes Tin stopped taking third party concentrates. During mining it was noted, that the pegmatite ore contained varying amounts of spodumene (up to 30-50%) though lithium was not assayed for nor recovered until AMAL noted high levels of spodumene in tantalum concentrates during re- commissioning of the Haddington plant in 2015.

  Mining of Weathered Pegmatite, Boreline Extended Pit 2015. Tantalum Processing Facility

  The existing processing plant previously operated by Haddington has been re-furbished and upgraded by AMAL and successfully commissioned during late 2015 and early 2016. The plant comprises conveying, screening, crushing to -1mm and then, using a bank of spirals, separates out the heavy minerals; including tantalite, cassiterite and some of the contained spodumene into a primary concentrate. This primary concentrate is then sent to a secondary beneficiation plant to be further processed to produce a saleable 25-30% Ta2O5 final concentrate. During the secondary beneficiation the non-magnetic -1mm concentrates were shown to contain high levels of lithium in the form of spodumene. The +500µm Lithium concentrate totalling 5.9 tonnes averaged 6.73% Li2O and the 250-500µm Lithium concentrate totalling 3.5 tonnes averaged 5.75% Li2O.

  Lithium (Spodumene) Concentrate from Bald Hill

  Overview of Tantalum Processing Facility - Bald Hill Recent Work by Lithco

  Initial work has essentially been focused on extensive data review of all available exploration data for Bald Hill and metallurgical testwork.

  The first round of bulk metallurgical testwork focused on spodumene recovery has commenced with very encouraging results.

  Analysis of material crushed to 6.3mm resulted in 93.3% of contained lithium and 86.3% of tantalum reporting to +250µm fractions.

  Initial results from first pass +1mm Density Media Separation ("DMS") at both 6.3mm and 3.35mm crush sizes were very encouraging with excellent spodumene recovery and concentrate grades at a crush size of 6.3mm:

  • 93.7% of the lithium reported to DMS concentrates representing 37% of the mass at a relatively high gradeof 5.08% Li2Oand less that 0.2% mica;

  • 82.0%of the lithium reported to the high grade concentrates at an average grade of 6.08% Li2O;and

  • Only 6.3% of the lithium reported to the >SG2.7 'lights' representing 63% of the original mass.