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Feature article November 12, 2018:

 

Chimata advancing quickly toward significant cash flow on 26.3 million t 0.58% Li2O Indicated Resource stockpiled in Zimbabwe

        

"The PEA is not finished yet, however it appears this will shake-out in excess of US$300 million over 10 years coming to Chimata after splits and after taxes to the Government at the project level from this one project alone. Plus the Company now has a handle on potential for a pipeline of additional projects in the region from the team (and new major shareholders) that found this deposit."

  

Chimata Gold Corp.

(CSE CAT) (Frankfurt: 8CH)

 

Share data, Capitalization, & Corporate info

 

 Shares Outstanding:  ~35.5 million

 Share structure will change as asset is 100% vended-in, see commentary

 Recently Traded: ~CDN$0.09/share (CSE: CAT)

 52 Week High/Low: $0.15/ 0.06

 Current Market Capitalization: ~$3.2 million Canadian

 Corporate Website: www.chimatagoldcorp.com

 Flagship asset: Kamativi Lithium Deposit, Zimbabwe

 

   

Valuation Commentary: Chimata Gold Corp. (CSE: CAT) (Frankfurt: 8CH) is a Canadian-based mining company on a pathway to becoming a cash-flow powerhouse in Africa as it advances toward production a Lithium-rich spodumene deposit from the tailings dump of the shuttered Kamativi tin mine in Zimbabwe which operated for several decades (from 1938 to 1994 -- back then it was not known Li would become so valuable). Located ~185 km east-south-east of Victoria Falls, the deposit sits at surface as a remarkable tertiary-ground stockpile, hosting a maiden Mineral Resource of 26,320,000 tonnes Indicated at 0.58% Li2O, measuring ~30 m high, 1.5 km long, and 700 m wide, already mined and crushed to the right size, ready to be put through the plant. Quick to production, low capex (to be financed nearly entirely by offtake), with internal estimates showing robust high-margin economics taking shape -- the share price of CAT.C is apt to rise dramatically near-term as the reality and magnitude of what the Company possesses becomes better understood by the marketplace.

 

Figure 1. (below) - Chimata Gold Corp.'s Kamativi Tailings,

26.3 million tonnes of sand-like Lithium-rich spodumene material stockpiled and ready to be processed.

 

Production will be ramped-up/scaled-in phases, with successive phases leapfrogging off the prior in order to avoid share dilution as the Company makes a name for itself. Starting as early as Q2-2019 Chimata's new Phase 1 Dense Media Separation (DMS) plant could be operational and generating revenue, producing 6% Li2O (a saleable industry standard concentrate which currently fetches over US$800/t), with an anticipated Phase 1 production capacity of ~55,000 tonnes per annum (tpa) of concentrate. The Company is targeting production costs of under US$200/t of concentrate produced, low cost OPEX is estimated due to nature of tailings material. Concentrate will be exported via road and rail. Chimata is able to process material in Phase 1 with just the DMS Plant alone (without flotation) by screening off material at 0.5 mm, as ~50% of the material is >0.5 mm, the balance will be stockpiled for Phase 2. Chimata is currently entertaining offtake term sheet offers – it’s only a question of who they pick now. The capex of Phase 1 for the company to get into production is ~US$10M, of which it is possible to see ~90% covered via limited offtake debt that is paid back through production.

 

Phase 2, with capex of ~US$33M, will see a full-scale 400 tonnes per hour (tph) DMS and flotation plant in operation, and is expected to yield production of ~169,000 tonnes p.a. of 6% Li2O. The PEA is not finished yet, however according to our math it appears this will shake-out in excess of US$300 million over 10 years coming to Chimata after splits and after taxes to the Government at the project level from this one project alone.

 

 

Figure 2. (above) - Phase 1 DMS plant layout, capex of $10M expected to be covered by offtake agreement.

 

 

Figure 3. (above) - Dense Media Pilot Plant at Mintek Laboratories in Johannesburg where Chimata's bulk sample is being processed. The planned metallurgical recovery process is simple, yet effective.

 

Bulk sample underway: On September 18, 2018 Chimata announced that it has commenced a Dense Media Separation Metallurgical Test Work scoping program on a 7.5 tonne bulk sample grading 0.88% Li2O generated from the Kamativi Tailings Lithium Project. The sample were collected from a series of 10 pits excavated from an area within the eastern portion of the historical Tailings Storage Facility. Processing will take place at Mintek Laboratories, Mintek is the national mineral research organisation for South Africa. MinMet Projects (Pty) Ltd. and Cronimet Mining Processing SA (Pty) Ltd. have been appointed as Metallurgical and Mineral Processing consultants to provide advisory services and oversight during the test work program. Results from the program are expected to be finalised by the end of October. The test work program consists of the following stages: 1) Head Feed Classification and Bulk Feed Screening, 2) Cross Flow Classifier Test Work, 3) Pilot Scale DMS Test Work, 4) Magnetic Separation Test Work, and 5) Concentrate Production. Upon success of the test work, Chimata will engage MinMet for the design, engineering and construction of a Phase 1 DMS Plant. The area of the Kamativi deposit that the bulk sample has been taken from is running 0.88% LiO2, which is ~50% higher than the average grade of the deposit. There is ~2 million to 3 million tonnes of that type of higher-grade material in that section which Chimata can run on for a couple of years through the DMS plant alone and reap some quality returns -- an ideal starting area for Phase 1.

 

Kamativi Project ownership (60% Chimata/40% the Government): The Kamativi Lithium Project is 60% owned by a privately held Mauritius corporation called the 'Zimbabwe Lithium Company' (ZIM) which has exclusive development rights, Chimata is acquiring 100% of ZIM as a wholly-owned subsidiary, the other 40% of the project is owned by Kamativi Tin Mines (which is a subsidiary of Zimbabwe Mining Development Corporation).

 

Chimata's coming new share structure: Terms of the ZIM acquisition may be viewed here. Essentially the management group of ZIM is vending into Chimata in exchange for becoming sizeable shareholders of Chimata. The bottom line after all is 100% transacted and accounted for, we calculate the new shares outstanding (and fully diluted) for CAT.C will be ~300M. That figure is expected to see the project into significant sustainable Phase 1 production cash-flow. Near-term CAT.C only needs to raise ~$2 million in equity and be positioned to access ~$10 million of offtake debt that will take the Company to Phase 1 revenue generation.

 

Synopsis of the different phases of the ZIM/CAT transaction [not to be confused with phases of production]:

  • As set out in the LOI and LOI Amendment the Parties will now enter into Phase 1 of the Share Exchange.

  • CAT to issue 19% of the current issued and outstanding CAT Shares to ZIM.

  • Conversely ZIM will issue CAT with a respective 19% of ZIM’s Share Capital.

  • As CAT are still in the process of raising the Concurrent Financing, a second issuance of Ph 1 CAT Shares to ZIM shareholders will be calculated to maintain ZIM at 19% Shareholding of CAT following the closing of the $2M Concurrent Financing and will be based on the issued and outstanding amount of common shares of CAT at this point.

  • Phase 1 Approximate Share Issuance Estimate Range = 11 Million – 14 Million subject to regulatory approval.

  • Phase 2 of the contemplated Transaction will be triggered by Mineral Resource Estimate by ZIM.

  • Chimata issuing the additional number of CAT Shares, that will result in ZIM holding a minimum of Seventy Percent (70%) of CAT’s Shares on a Fully Diluted Basis.

  • ZIM will then issue CAT with the remaining 81% Share Capital of Mauritius to give CAT 100% of ZIM Mauritius.

  • Phase 2 Estimate Share Issuance Range = 220 Million – 228 Million subject to regulatory approval.

  • Estimate total share issuance for Ph 1 and Ph 2 range: 231 Million – 242 Million subject to regulatory approval.

  • Further detailed terms can be seen in the MD & A of the recent financial statement posted on SEDAR.

Capital Structure (June 2018) and ESTIMATE Capital Structure Post Concurrent Financing
Note: Figures are Estimates Only Subject to Change and Regulatory Approval

June 2018 Shares Outstanding: 39,152,270 CAT Concurrent Financing Share Issuance (total of CAD $1.8 Million @ $0.10) 18,000,000
June 2018 Warrants: 21,989,163 CAT Concurrent Financing Warrants 18,000,000
June 2018 Options: 3,870,000 Estimate Shares Outstanding Post $1.8 Million Financing 57,157,270
June 2018 Fully Diluted: 65,011,433 Estimate Fully Diluted Post $1.8 Million Financing 101,011 433

 

Capital Structure and ESTIMATE Shares Post Phase 1 & Phase 2
Note: Figures are Estimates Only Subject to Change and Regulatory Approval

Estimate Shares Issued Phase 1: 11,000,000 to 14,000,000
Estimate Total Shares Outstanding Post Phase 1: 68,152,163 to 71,152,270
Estimate Shares Issued for Phase 2: 220,000,000 to 228,000,000
Estimate Total Shares Outstanding Post Phase 2: 288,152,163 to 299,152,163
Estimate Fully Diluted Post Phase 2: 332,011,326 to 343,011,326

 

The ZIM management team (coming major shareholders of CAT.C) are all highly experienced mining development professionals. John McTaggart, a major player in Zimbabwe, for over two decades was one of the largest earth moving contractors in Zimbabwe, responsible for mining and delivering most of the chrome ore in the country up to 2008, and best described as "the guy on the ground' at the Kamativi Lithium Project. McTaggart’s local experience and network is critical for the development of the project. McTaggart's partner, James Arthur has a wealth of operating experience in Zimbabwe and was Executive Vice President Operations for a large mining company operating in Zimbabwe, James’ experience combined with his network of Zimbabwean professionals bring a unique skill set of experience in bringing brownfield operations back into production. Kevin MacNeill, a founding partner and a Mineral and Civil Technologist, was a Project Developer in Africa for 23 years, then started his own mineral processing company. Kevin is currently the Managing Director of CRONIMET Mining Processing SA (a company focused on the processing of tailings and stockpiles around the world). These are all well-healed individuals, intent on remaining strong-hands regarding shares of CAT.C, holding with the goal of dividends from operations -- forward discounting metrics of the revenue potential to be materialized for CAT.C mandate the share price moving upward. ZIM chose Chimata as the securities vehicle to advance Kamativi, and are not allergic to juicing more assets into the Company to increase earnings over time. They have a handle on more projects related to battery materials which they are keen on feeding in. Interesting to note is a redundant refinery in Zimbabwe, ZIM is in discussions with; ZIM is exploring retrofitting the refinery in year 3 of production at Kamativi -- with this team 'hands-on', after capex, the refinery has the potential to boost the aforementioned $300 million figure (net to Chimata shareholders after splits and after taxes to the Government) up to $700 million net for Chimata. Not wanting to get ahead of ourselves, this Mining Journal sees the opportunity in Phase 1 and 2 production at Kamativi alone as worthy of establishing a long position in CAT.C at anywhere under 60 cents/share now.

 

Below is expanded insight on Chimata Gold Corp. and its flagship Kamativi Lithium Project.

 

     Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer

  

 

Recent news releases regarding Company accomplishments and operational developments:

  

• November 2, 2018 "Chimata Gold Corp Enters into a Share Exchange Agreement with Zimbabwe Lithium Company with Respect to Development Rights for the Kamativi Lithium Tailings Deposit in Zimbabwe".

 

• September 20, 2018 "Maiden Mineral Resource Statement at Kamativi Tailings Lithium Project Shows: Indicated Resource 26,320,000 tonnes at 0.58% Li2O".

 

• September 18, 2018 "Chimata Gold Corp Commences Dense Media Separation Metallurgical Testwork on Bulk Sample From Kamativi Tailings Lithium Project".

 

• September 17, 2018 "Chimata Gold Corp Retains Questrade as Market Maker"

 

• September 13, 2018 "X-Ray Diffraction Test Work Confirms Spodumene as the Predominant Lithium Bearing Mineral at Kamativi Tailings Lithium Project"

 

• August 28, 2018 "Chimata Gold Corp. Completes Planned Drilling Activities and Announces Initial Li2O Assays at Kamativi Tailings Lithium Project"

 

  

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Region and Infrastructure

 

 

Figure 4. (above) - Map - Chimata's Kamativi Tailings Lithium Project is located in a mining-friendly, easily-accessible, area of Zimbabwe, near Victoria Falls.

 

 

Figure 5. (above) - Map - The Kamativi Tailings Lithium Project is a brownfield (previously operational) site with power, water, and roads. Access ports Maputo & Durban (~1300km and ~1900km from Dete, respectively) via rail or road for infrastructure and storage, bulk shipping vessel access. 

 

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Figure 6. (above) - Close-up image of a section of Kamativi Tailings Lithium Project.

 

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Heavy Liquid Separation (HLS) Test Work and Mineralogy

 

Figure 7. (above) - QEMSCAN and BSE maps of HLS concentrate polished thin section. EDS spectra from a spodumene grain. Scale bar = 11 mm.

 

Spodumene is well liberated in the HLS sinks fraction; ~95% of the particles are more than 80% liberated.

 
Relatively large component is also well liberated in the HLS floats fraction; ~61% of the spodumene particles characterised by liberation in excess of 80%.

 
Liberation of spodumene in the slimes fraction is poor; this fraction accounts for a relatively small percentage of the total lithium content.

 

On September 13, 2018 Chimata announced X-ray diffraction (XRD) results for selected samples from its recently completed drilling program at its flagship Kamativi Tailings Lithium Project in Zimbabwe. The aim of the analysis was to identify and quantify all minerals present with a specific focus on the lithium bearing minerals. The results confirm Spodumene as the predominant Lithium bearing mineral species. Ten composite samples, selected by MSA Resource geologists as part of their 43-101 Resource Statement process, were prepared from drill holes across the Kamativi Tailings Storage Facility (the “Tailings”) and were submitted to Geolabs Global (Pty) ltd (“Geolabs”) for X-Ray Diffraction (“XRD”) analysis.

 

 

Figure 8. (above) - Holes Selected for X-Ray Diffraction Analysis.

 

 

 

Figure 9. (above) - Concentrate Produced After HLS and Magnetic Separation (left) and Concentrate Viewed Under Loupe (right).

 

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Figure 10. (above) Kamativi Tailings Project

 

High grade Li2O intercepts include:
   Hole KT 99: Length 15.00m @ 1.07% Li2O
   Hole KT 98A: Length 21.70m @ 0.94% Li2O
   Hole KT 108: Length 14.30m @ 0.91% Li2O
   Hole KT 101: Length 24.00m @ 0.89% Li2O
   Hole KT 108A: Length 23.46m @ 0.87% Li2O
   Hole KT 101A: Length 28.50m @ 0.87% Li2O
   Hole KT 107: Length 17.40m @ 0.86% Li2O
   Hole KT 99A: Length 31.50m @ 0.86% Li2O

  

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Details of the Maiden Resource

 

Excerpt of related September 20, 2018 corporate news release regarding Maiden Mineral Resource:

 

Maiden Mineral Resource Statement at Kamativi Tailings Lithium Project Shows: Indicated Resource 26,320,000 tonnes at 0.58% Li2O

 

Vancouver, BC September 20, 2018 – Canadian strategic metals company Chimata Gold Corp. (CSE – CAT) (“Chimata” or the “Company”) announces completion of a maiden Mineral Resource Statement for the Kamativi Tailings Lithium Project (the “Kamativi Project”):

Table 1 Kamativi Tailings Lithium Project Mineral Resource for the Total Tailings, 10 September 2018

Category

Tonnes

Density

Li2O

SnO2

Ta2O5

Fe2O3

Nb2O5

(Millions)

t/m3

%

ppm

ppm

(%)

(ppm)

Indicated

26.32

1.67

0.58

493

41

1.22

65

Inferred

0.30

1.67

0.62

544

45

1.45

62

On behalf of Chimata in association with its local Zimbabwean partner Jimbata (Pvt) ltd (“Jimbata”), The MSA Group (Pty) Ltd (“MSA”) has completed a Mineral Resource Statement for the Kamativi Project. The Kamativi Project is located outside Kamativi Village in the Matabeleland North Province of Zimbabwe, approximately 185 kilometres east-southeast of Victoria Falls and approximately 310 km northwest of Bulawayo. The Kamativi Project is associated with the historical Kamativi Tin Mine, which ceased operation in 1994.

The Kamativi tailings storage facility is a man-made deposit that was created from tailings produced from processing of tin mineralisation at the Kamativi Tin Mine. The Kamativi tailings were deposited over the period 1936 to 1994 and are derived from the mining and processing of the tin-bearing (spodumene-bearing lithium-caesium-tantalum (“LCT”) pegmatites. At Kamativi, spodumene is the predominant lithium mineral present, with minor amounts of cookeite, zinnwaldite, petalite and amblygonite.

The Mineral Resource Statement was based on geochemical analyses and density measurements, attained from drilling and pitting respectively, undertaken by Jimbata between March 2018 and June 2018. A total of 115 vertical holes were drilled at Kamativi at a nominal 100 m grid spacing. Initially, drilling was by coring, and later an auger method was employed. Blank samples, certified reference materials and duplicates were included with the drill hole samples. As an additional check, 6% of the drill hole samples assayed by the primary laboratory were re-assayed by a second laboratory. The QP is satisfied that the assays are of sufficient quality for use in Mineral Resource estimation.

Seven holes were twin drilled using both drilling methods employed at Kamativi. The auger samples exhibit better recoveries than the core samples. Analyses of the twin hole data demonstrated that the core sample data are overall unbiased compared to auger data. Therefore, the core sample data was considered acceptable to use in Mineral Resource Statement, together with the auger sample data.

The volume of the dump was defined by surfaces representing the top and bottom of the dump. The top of dump surface was based on surveyed points on the dump and around the boundary of the dump, as well as drill hole collar surveys. The surface representing the bottom of the dump was based on drill hole intersection of the base of the dump, as well as survey points of the boundary of the dump. A three-dimensional block model was created between the surfaces and grades were estimated into the blocks using ordinary kriging. An average dry density was applied to derive the tonnage of the tailings.

Mr Michael Cronwright, an employee of MSA and one of the Qualified Persons for this Mineral Resource Statement, conducted site inspections to the project from the 7th to the 8th of August 2017, and from the 23rd to the 24th April 2018. The first site visit was undertaken to review the sampling of the tailings by the current owners that was carried out in order to verify sampling information collected by the previous owners. The second visit was to review the exploration processes used to provide information for the maiden Mineral Resource Statement. MSA considers that the exploration work conducted by Chimata was carried out using appropriate techniques for the style of mineralisation at Kamativi, and that the resulting database is suitable for Mineral Resource Statement.

KAMATIVI MINERAL RESOURCE STATEMENT

The Mineral Resource was estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Best Practice Guidelines and is reported in accordance with the 2014 CIM Definition Standards, which have been incorporated by reference into National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The Mineral Resource is classified into the Indicated and Inferred categories as shown in Table 1.

The Mineral Resource is reported for the total tailings’ storage facility. The lowest Li2O block estimate is 0.22% which MSA considers has reasonable prospects for eventual economic extraction, particularly given the anticipated low-cost bulk mining and non-selective nature of tailings storage facility reclamation and the outcome of initial metallurgical test work combined with the project located on a historical mine site.

Preliminary mineral processing and metallurgical test work indicates that a concentrate of a commercially acceptable specification can be produced.

Table 1 Kamativi Lithium Tailings Mineral Resource for the Total Tailings Dump, 10 September 2018

Category

Tonnes

Density

Li2O

SnO2

Ta2O5

Fe2O3

Nb2O5

(Millions)

t/m3

(%)

ppm

ppm

(%)

(ppm)

Indicated

26.32

1.67

0.58

493

41

1.22

65

Inferred

0.30

1.67

0.62

544

45

1.45

62

Notes:

  1. All tabulated data have been rounded and as a result minor computational errors may occur.
  2. Mineral Resources which are not Mineral Reserves have no demonstrated economic viability.
  3. Fe2O3 is considered a deleterious material and is reported for information purposes.

The Indicated Mineral Resource has been tabulated using a number of cut-off grades as shown in Table 2 and the Inferred Mineral Resource in Table 3.

Table 2 Kamativi Lithium Tailings Indicated Mineral Resource Grade-Tonnage Table, 10 September 2018

Cut Off

Tonnes

Density

Li2O

SnO2

Ta2O5

Fe2O3

Nb2O5

Li2O (ppm)

(Millions)

t/m3

(%)

(ppm)

(ppm)

(%)

(ppm)

2,000

26.32

1.67

0.58

493

41

1.22

65

2,500

26.27

1.67

0.58

493

40

1.22

65

3,000

25.93

1.67

0.59

493

40

1.21

65

3,500

24.65

1.67

0.60

495

40

1.21

64

4,000

22.75

1.67

0.62

499

39

1.21

62

4,500

20.33

1.67

0.64

502

38

1.22

61

5,000

17.53

1.67

0.67

505

37

1.22

59

5,500

14.63

1.67

0.70

508

36

1.22

58

6,000

11.72

1.67

0.73

508

34

1.22

56

6,500

9.11

1.67

0.76

506

33

1.21

55

7,000

6.75

1.67

0.78

503

32

1.20

53

7,500

4.10

1.67

0.82

497

32

1.19

52

8,000

2.57

1.67

0.85

498

32

1.19

52

8,500

0.98

1.67

0.90

496

32

1.18

52

9,000

0.43

1.67

0.93

505

31

1.18

53

9,500

0.11

1.67

0.96

534

29

1.16

53

10,000

0.00

1.67

1.02

625

35

1.12

60

Notes:

  1. All tabulated data have been rounded and as a result minor computational errors may occur.
  2. Mineral Resources which are not Mineral Reserves have no demonstrated economic viability.
  3. Fe2O3 is considered a deleterious material and is reported for information purposes.

Table 3 Kamativi Lithium Tailings Inferred Mineral Resource Grade-Tonnage Table, 10 September 2018

Cut Off

Tonnes

Density

Li2O

SnO2

Ta2O5

Fe2O3

Nb2O5

Li2O (ppm)

(Millions)

t/m3

(%)

(ppm)

(ppm)

(%)

(ppm)

3,500

0.30

1.67

0.62

544

45

1.45

62

4,000

0.30

1.67

0.62

544

45

1.45

62

4,500

0.29

1.67

0.62

548

45

1.46

62

5,000

0.26

1.67

0.64

553

45

1.47

62

5,500

0.21

1.67

0.67

556

46

1.48

61

6,000

0.15

1.67

0.70

545

47

1.44

60

6,500

0.12

1.67

0.71

534

46

1.42

59

7,000

0.07

1.67

0.75

525

46

1.39

58

7,500

0.03

1.67

0.77

487

43

1.26

57

8,000

0.00

1.67

0.80

451

39

1.16

54

Notes:

  1. All tabulated data have been rounded and as a result minor computational errors may occur.
  2. Mineral Resources which are not Mineral Reserves have no demonstrated economic viability.
  3. Fe2O3 is considered a deleterious material and is reported for information purposes.

 

The Mineral Resource Statement has been completed by Mrs Ipelo Gasela (BSc Hons, GDE) who is a geologist with 13 years’ experience in Mineral Resource evaluation and reporting. She is a Senior Mineral Resource Consultant for MSA (an independent consulting company), is a member in good standing with the South African Council for Natural Scientific Professions (SACNASP) and is a Member of the Geological Society of South Africa (GSSA). Mrs Gasela has the appropriate relevant qualifications and experience to be considered a “Qualified Person” for the style and type of mineralisation and activity being undertaken as defined in NI 43-101.

Michael Cronwright (M.Sc. Exploration Geology, B.Sc. Hons) is a geologist with 19 years’ experience in mineral exploration and reporting. He is a Principal Consultant for MSA and is a Fellow of the Geological Society of South Africa and registered Professional Scientist with South African Council for Natural Scientific Professions (SACNASP). Mr Cronwright has the appropriate relevant qualifications and experience to be considered a “Qualified Person” for the style and type of mineralisation and activity being undertaken as defined in NI 43-101.

checklist of assessment and reporting criteria

The attached checklist of assessment and reporting criteria summarises the pertinent criteria for this Mineral Resource in accordance with CIM guidelines and MSA’s assessment and comment on the estimates.

Drilling techniques

The drilling was undertaken by independent drilling contractors and managed by MSA. Two drilling methods were employed at the Kamativi Lithium Tailings, namely a core drilling method and an auger drilling method. The core drilling was carried out using a combination of bit sizes with internal diameters of 60 mm, 76 mm and 105 mm. The auger method was drilled with an internal diameter of 42 mm. Drill runs of 1.5 m were used.

Logging

All drill holes were geologically logged by qualified geologists. The logging was of an appropriate standard for Mineral Resource estimation.

Drill sample recovery

Recovery was acceptable (average 86.2%) for the auger method for this type of deposit. Although the recoveries were lower for the coring method (average 70%), no biases to the sample grade were apparent

Sampling methods

All the material from each drill run was collected, bagged and sealed on site.

Samples were kept on site until inspected and signed off by the Zimbabwe Ministry of Mines and then transported to a storage depot until the end of the drilling programme, after which, the samples were couriered to SGS Randfontein for assaying.

Mr M Cronwright of MSA observed the sampling procedure during the site visit and it was considered to be acceptable.

Quality of assay data and laboratory tests

All samples were sent to SGS Randfontein for sample preparation and assay. SGS Randfontein is accredited by SANAS (South African National Standard) and conforms to the requirements of ISO/IEC 17025. Mr M. Cronwright of MSA undertook a laboratory audit at SGS Randfontein in order to observe the preparation and analytical processes for the Kamativi samples.

Check assay samples were sent to the ALS laboratory, in Vancouver, for second laboratory verification assay. The ALS laboratory in Vancouver is also ISO/IEC 17025 accredited. The check assay samples were assayed by sodium peroxide fusion with an inductively coupled plasma – optical emission spectrometry finish.

At SGS, samples were dried; thereafter 3 m composite samples were created by combining equal masses of material from two successive 1.5 m samples. The laboratory prepared a composite duplicate to check that the compositing process was appropriate. The composite samples were then pulverised to 85% passing 75 microns in a carbon steel ring and puck pulveriser. A 0.2g aliquot was collected for assay. The laboratory collected pulp duplicates from the routine samples to assess the appropriateness of the sub-sampling process.

The assay methods that were employed by SGS included a sodium peroxide fusion with an inductively coupled plasma – optical emission spectrometry finish for the analyses of Li and Fe as well as Al, Ba, Ca, Cr, Cu, K, Mg, Mn, P, S, Si, Sr, Ti, V and Zn. This method has a lower detection limit of 10 ppm. Sodium peroxide fusion, with an inductively coupled plasma – mass spectrometry finish was used for assaying for Ta, Sn and Nb, as well as, Be, Bi, Cd, Ce, Co, Cs, Dy, Er, Eu, Ga, Gd, Ge, Ho, In, La, Lu, Mo, Nd, Ni, Pb, Pr, Rb, Sb, Sc, Sm, Tb, Th, Tl, Tm, U, W and Y. This method has a lower detection limit of 1 ppm. QC samples, including samples of two certified reference materials, blanks and duplicates, were routinely inserted as part of an independent QAQC process. The CRM and blank samples were inserted by MSA, while the composite and pulp duplicates were inserted by the laboratory’s preparation facility. As an additional check, 6% of the samples analysed at SGS were assayed by ALS Vancouver.

The QAQC measures revealed the following:

  • No assays plotted outside three standard deviations of the certified mean Li value of AMIS0338, which is a low grade (1,742 ppm Li) CRM. The average Li assays of this CRM showed a relative difference of 7% higher than the certified mean. The accuracy of the Li assays of AMIS0338 were considered to be of acceptable accuracy. A total of four Li assays out of 28 for the high grade AMIS0341 CRM (5,041 ppm Li) plotted outside of three standard deviations from the certified mean value of the CRM. The average Li assays of this CRM showed no bias.
  • Blank sample assays indicate that no significant contamination occurred during the programme.
  • Duplicate assays within SGS demonstrate precision levels are within reasonably expected ranges.
  • Lithium assays of the CRMs included with the second laboratory check assays were within two standard deviations of the certified mean value.
  • The second laboratory check assays for lithium were on average 6% lower than the primary laboratory assay and the tin assays were 8% higher.
  • The QP is satisfied that the assays are of sufficient quality for use in Mineral Resource estimation.

Verification of sampling and assaying

MSA was responsible for managing the drilling programme, and Mr Cronwright observed the drilling and sampling process during the site visit. Seven holes that were initially drilled with the coring method were twinned by auger drilling. The analyses of the twinned holes showed that the core samples have a higher-grade variability than the auger samples but found the mean grades of the two drilling methods to be similar and show no significant bias. In the QP’s opinion, the results of both drilling methods are appropriate to use in Mineral Resource estimation.

Location of data points

All drill hole collars and the topography, including the top of the dump as well as the boundary of the dump, were surveyed by a qualified surveyor, Mr Grabwell Fundira. The surveys were undertaken in the geodetic system of UTM Zambia Arc 1950 zone 35K.

Tonnage factors (in situ bulk densities)

A total of 60 pits were excavated at different locations over the dump to create positions for density samples. Density samples were taken at 1 m intervals from close to surface, below the loose material, to up to 6 m depth. The density samples were taken by inserting an open sided steel block with a dimension of 10 cm by10 cm by10 cm into the sidewall of the pit. The material retrieved from inside the steel block was dried and weighed to calculate a dry bulk density. A total of 214 density measurements were taken, which have an average density of 1.67 t/m3. This average density was applied throughout the dump to convert volume into tonnes.

Data density and distribution

A total of 115 vertical holes were drilled. The holes were drilled on a 100 m spaced grid orientated northwest in line with the orientation of the dump.

Database integrity

The Kamativi data is stored in an MS-Access database, managed by MSA.

Dimensions

The Kamativi tailings dump is approximately 1,900 m northwest to southeast and 580 m northeast to southwest with a maximum depth of 39 m. The total volume is approximately 16,000,000 m3.

Geological interpretation

The dump is a man-made deposit of tailings sourced from the historical Kamativi Tin Mine. The dump and below the dump intersections were clearly discernible and were logged.

The volume of the dump was defined by surfaces representing the top and bottom of the dump. The top of the dump surface was based on surveyed points on top of the dump and around the boundary of the dump as well as drill hole collar surveys. The surface representing the bottom of the dump was based on drill hole intersections of the base as well as survey points of the boundary of the dump. Not all of the drill holes penetrated the base of the dump. An additional surface was modelled representing the base of the drilling. There was one area below this surface that is considered to have lower confidence where the base of the dump has been extrapolated from short holes.

Domains

The tailings were estimated as a single domain.

Compositing

The 1.5 m drill sample lengths were composited to 3 m. Sample lengths less than 1.5m were discarded. The discarded sample lengths had a similar mean grade as the rest of the composite samples, therefore no bias was introduced.

Statistics and variography

Li2O distribution is slightly positively skewed with coefficients of variation (CV) of approximately 0.34. The distribution indicates two populations. The relatively low Li2O grades occur in the northern and southern-most part of the dump, while the middle of the dump has relatively high grades. The higher-grade population transitions into the low-grade areas and therefore they were not treated as separate estimation domains.

SnO2, Ta2O5, Fe2O3 and Nb2O5 distributions are positively skewed with CVs of approximately 0.30, 0.53, 0.27 and 0.29 respectively. All distributions show a single population except for Nb2O5. The correlations between the variables are poor.

The density distribution is negatively skewed and do not exhibit a well-defined single population. The deeper samples have the highest density.

Variograms were calculated in the horizontal plane since the tailings were deposited and settled horizontally. Variograms were modelled for Li2O, SnO2, Ta2O5, and Nb2O5 with isotropic ranges of between 200 m and 500 m in the horizontal plane and a short-ranges of between 20 m and 36 m vertically.  The Fe2Ovariogram was modelled with a major direction at 030/00 and a range of 330 m, the semi-major direction at 120/00 has a range of 180 m and the minor direction in the vertical has a range of 32 m.

Top or bottom cuts for grades

Top cuts were not applied to the composite grades of any variables, as no outliers were observed.

Data clustering

The holes were drilled on a regular 100 m grid, with closer spaced drilling between a few holes in the high-grade area to the south eastern part of the dump. The drill hole spacing in this area was observed down to 25 m.

Block size

A block model of 50 m N by 50 m E by 3 m RL was created with a minimum sub-cell of 5 m N by 5 m E by 1 m RL.

Grade estimation

Grades were estimated using ordinary kriging into parent cells.

A minimum number of 4 and a maximum of 12 three metre composites were required to estimate each variable in a single block. An elliptical search of 100 m x 100 m in the horizontal plane and 5 m in the vertical plane was used to select samples to estimate each block. The search was increased by 1.5 times the original search distance where enough samples for estimation were not found by the first search. A search of 10 times the first search was used to ensure that the entire model was estimated.

Resource Classification

In classifying the Mineral Resource, the main considerations were as follows:

  • The drill spacing is sufficient to estimate grades and model the dump framework to a reasonable degree of confidence.
  • There is acceptable confidence in the accuracy and integrity of the Kamativi data.
  • Two types of drilling were generally used in separate areas, except where twin drilling was undertaken. Comparison of the twinned holes (core and auger) showed that there is no bias between the two methods.
  • The surfaces used to define the dump are based on measured data, except for the extrapolated bottom of dump surface. Where drilling continued to the base of the dump the dump model is of high confidence.

The Mineral Resource was classified as Indicated from the top of the dump to the bottom surface of the drill hole intersections and Inferred in an area where the bottom of dump was extrapolated from short holes that did not penetrate the base of the dump.

Mining Cuts

No mining cuts were considered in the estimate. The dimension and shape of the dump and the unconsolidated nature of the material makes it amenable to low-cost bulk mining methods.

Metallurgical factors or assumptions

Preliminary mineral processing and metallurgical test work indicates that a concentrate of a commercially acceptable specification can be produced. Deleterious estimates are included in the block model.

Legal Aspects and Tenure

The Kamativi Project is a joint venture (“JV”) between the Zimbabwe Mining Development Corporation (“ZMDC”), owners of Kamativi Tin Mines which holds 40 % of the Project, and Jimbata, which holds 60 %. A JV Agreement was entered into between Lintmar (Private) Limited (“Lintmar”) and ZMDC on 2 February 2018. A letter from Jimbata, dated 16 February 2018 confirms the cession by Lintmar of its rights and interests in the Kamativi Mine Tailings Dump to Jimbata, including all aspects of the JV Agreement with ZMDC.

The JV Company (Jimbata (60%) and Kamativi Tin Mines (40%), Kamativi Tailings Company (Pvt) Limited, was incorporated on 16 February 2018 as per the Companies Act [Chapter 24:03] of Zimbabwe.

Audits, reviews and site inspection

The following review work was completed by MSA:

  • Michael Cronwright of the MSA Group and one of the Qualified Persons for this Mineral Resource visited the project from the 7th to 8th of August 2017 and again from the 23rd to the 24th April 2018, in order to review the exploration processes and the collection of information for Mineral Resource Statement.

No external reviews have been completed.

John McTaggart, Managing Director of Jimbata  commented, “The maiden resource statement marks the completion of another key milestone in the development of the Kamativi Project. The results generated confirm our belief in the project and underscore the significant potential at Kamativi. The Company now looks forward to aggressively pursuing further metallurgical test work in the planned development of the beneficiation plant for the Kamativi Project in line with the Rapid Results Initiative set out by the Government of Zimbabwe”.

...click here for full copy from source

 

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Kamativi Project 2018 Objectives - Phase1

  •  NI 43-101 resource estimate: Q3 2018.

  • Financing Overview: CAT $2M equity financing (400tph Plant feasibility funding): Q3 2018, ~$10 Million* off-take funding for Ph 1 DMS Plant: Q3/Q4 2018.

  • Ph 1 production starting Q2 2019 (revenue generation):

  •    Dense media separation (DMS) plant.

  •    Capacity of ~55,000 tpa* of concentrate.

  •    Concentrate +6% Li2O* (95%* spodumene mineralization).

  •    Concentrate export via road and rail.

  • BFS to be completed on 400 tph* DMS / Flotation Plant: Q1 2019.
     

Kamativi Project Objectives - Phase 2

  •  Phase 2 investment cost estimated at ~$33M* for a 400 tph* DMS / Flotation Plant, including infrastructure upgrades. Low estimated CAPEX due to brownfield site benefits.

  • Closing of project financing (Debt & Equity) and begin procurement of 400 tph* DMS / Flotation Plant: Q2 2019 – Q3 2019.

  • Procure, construct and commission on site 400 tph* DMS and Flotation plant to process Kamativi Tailings: Q1 – Q2 2020.

  • Q1 2020 onward: Production of ~169,000 tonnes p.a.* of 6% Li2O* concentrate planned

  •    Concentrate will be exported via road and rail

  •    Low cost OPEX estimated due to nature of tailings material

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Chimata Gold Corp.'s Governance:  Skip to top

 

Richard Groome, BA, – Chairman and Director

Mr. Groome is a Corporate Finance entrepreneur and has started two successful securities firms in Canada from scratch in the 80’s and 90’s. He has actively managed or participated in over 400 financings representing ~$4 billion of small cap deals and is very well versed in start-up and early stage ventures. Mr. Groome’s passion for innovation carried him to be known as one of the preeminent financiers in Canada of small and medium sized emerging growth companies over the last 30 plus years. Prior to forming Notre Dame Capital, he was a co-founder of Marleau Lemire Inc.; which became quickly ranked as the number 1 firm in Canada in small, mid cap financings during the late 1980’s and Groome Capital Inc. This is where he created Canada’s leading underwriter of IPO’s, Private Placements and Secondary offerings on the Internet in the 1998 to 2000 period. The firm was subsequently sold to Desjardins Group in 2001, Canada’s seventh largest financial institution. Mr. Groome was a director of the CDNX Exchange, the predecessor of the TSX Venture exchange for several years, and currently sits on the boards of directors of private and public companies. He has a BA in Economics from McGill University.

 

Robert Rosner, MBA, – CFO, Director

Mr. Rosner has significant experience as a mining industry entrepreneur and executive who, in addition to Lucky Minerals, is also a Director and CFO of Chimata Gold Corp. Early in his career he initiated the formation of a number of junior exploration mining companies, including Fortuna Silver Mines (NYSE: FSM) and Niogold Mining Corp. (TSX.V: NOX – Acquired and wholly owned by Osisko), and played instrumental roles in managing these, and other, resource ventures involved in early stage exploration, resource location, delineation, and development. He has successfully utilized his extensive experience in public and private company management for over 30 years. Mr. Rosner has acted as an officer and director of both Canadian and U.S. listed companies, providing senior management of reporting compliance, oversight and fiduciary capacities, and directing corporate activities. He also has significant experience in Initial Public Offerings, Mergers & Acquisitions, and reverse takeovers.

  

Steven Cozine, – Corporate Secretary

Mr. Cozine has over 25 years of experience in venture capital markets as an officer and director of publicly listed companies in the mining, industrial and high-tech sectors. His experience covers a wide range of corporate management duties with a focus on governance and regulatory compliance, project management, corporate finance including private funding and prospectus offerings, human resources, strategic planning and corporate operations.

 

Luis Martins, – Director

Luis Martins is a geologist with 30 years of experience in the exploration and mining sector. He graduated from the Faculty of Sciences of Lisbon (1973) and has a MsC in Economic Geology from the same faculty (1995) and also several national and international post-graduation courses. He was a former Director of the Mineral Resources Department at the Geology and Mining Institute (the Geological Survey) and a former Director of the Mines and Quarries Department at the Directorate-General of Energy and Geology (the Mining Authority). He has participated in several national and international research projects, especially in the mineral exploration, environmental geology and mining heritage fields.

   

Alain Moreau, M.Sc.A, B.Sc., P.Geo, – Director

Mr. Moreau has been a geologist entrepreneur in technology development since 1987 and has worked for numerous mining companies around the globe for the last 30 years. Mr. Moreau is a member of the Order of Quebec Geologists and a member of the Prospectors and Developers Association (PDAC). His expertise is in drone technology applied for mineral exploration (alteration mapping, boulder tracing and 3D imaging), advanced modelization of geological systems and mine targeting platforms (proprietary and non proprietary software).

 

Zimbabwe Lithium Company's Management and Directors:

 

John McTaggart, – Managing Director in Zimbabwe

Agricultural Engineer with 32 yrs mining experience. Owned and operated chrome mines from 1995, was the largest supplier of open cast chrome ore in Zim. Owned Pheobe Gold Mine, and bought and sold Golden Kopje Gold Mine from Trillion Resources. Extensive experience in mining, mine planning and company management.

 

James Arthur, – Chief Operational Officer

Over 35 yrs mining experience, including Impala Platinum (RSA), BHP Hartley Platinum (Zim), Luanshya Copper Mines (Zambia), African Copper Mines (Botswana), Mwana Africa Pty (RSA, DRC, and Zim). Over the last 6 yrs, engaged in capital raising exercises with Mwana including equity raising in excess of $50M with various investment institutions. Debt with Industrial Development Bank (RSA) $10M facility for Freda Rebecca and involved in raising a $20M Bond in Zim for the Bindura Nickel Smelter restart.

  

Kevin MacNeill, – Founding Partner

Mineral and Civil Engineering Technologist who worked 25 yrs with Etruscan Group of Companies (Mkt. Cap $700M) and raised over $200M in debt & equity. Head of project development for Etruscan Gold Operations in West Africa. Built several large scale CIL plants with over 2,500 tpd processing capacity. President & CEO of Etruscan Diamonds (3,000,000 tpa alluvial diamond mine in South Africa) until Etruscan was taken over by Endeavour Mining. Expertise includes large scale project development and corporate management.

 

Ruan Kroukamp, – Founding Partner

Over 15 yrs mining industry experience, specializing in flotation, technical solutions and capital project execution. Experience in full turnkey EPC CAPEX packages ($250M), project management through all phases of development through to project execution. Expertise in technical management, complicated extraction & metallurgy as well as supply chain management.

 

  

Note: This article is not intended to be a complete overview of Chimata Gold Corp. or a complete listing of Chimata Gold's projects. Mining MarketWatch urges the reader to contact the subject company and has identified the following sources for information:

 

For more information contact Chimata Gold Corp.'s head office at: Ph (866) 924-6484

 

Company's web site: www.chimatagoldcorp.com   SEDAR Filings: URL

 

 

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*Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer. This is a journalistic article and the author is not a registered securities advisor, and opinions expressed should not be considered as investment advice to buy or sell securities, but rather journalistic opinion only. Technical mining terms used by the writer may be used/expressed in simplified layman terms and should not be relied upon as appropriate for making investment decisions unless the reader contacts the company directly for independent verification. *Estimates of potential made by the mining analyst and journal(s) are non 43-101 and not from the Company.

 

     

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