Elemental Minerals review of operations for the quarter ended 31 December 2012

PERTH, Australia, Jan. 31, 2013 /CNW/ - Elemental Minerals Ltd. (ASX, TSX: ELM) ("Elemental" or "the Company") is pleased to provide the following quarterly update for activities at its Sintoukola Potash Project located in the Republic of Congo ("ROC").

Activities

• Successful completion of private placement and share purchase plan (SPP) for a total of US$ 17.15 million
  
  
• Successful renewal of Permis de Recherches (Exploration Permit) for Sintoukola, covering 1408 km² and valid for two years
  
  
• Completion and submission of Congolese Compliant Social and Environmental Impact Study (SEIA)
  
  
• Submission of the Mining Licence application
  
  
• Completed numerous bridging studies to investigate optimization opportunities in preparation of the start of the Feasibility Study.
  
  
• Cash on hand of US$20m

Post-quarter Activities

• Commencement of Phase 3 drilling at Kola

• Initiated modularisation studies with Amec in preparation of the start of the Feasibility studies.
  
  
• Land acquisition process
  
  
• Ongoing environmental baseline activity

Corporate Activities

The Company announced on 28 November 2012 that it had successfully placed 36.5 million shares at A$0.385 per share, while also offering a share purchase plan of up to A$5 million to Australian and New Zealand investors. A total of A$17.15 million was raised which will be used to continue the development of the Company's Sintoukola potash project including the start of the Phase 3 Kola drilling program which is targeting an extension to the Kola Upper Seam and the recently identified high grade Hangingwall Seam.

The Sintoukola exploration permit renewal was granted by the government on 27 November 2012 by decree 2012-1193 and is valid for two years. The renewed permit covers a total of 1408 km² and an outline is shown in Figure 1.

The mining lease application was officially received by the Ministry of Mines on the 17 December 2012 and the SEIA submitted on the following day. The mining lease application covers 208 km² and includes the entire Kola resource as is shown in Figure 1.

At the same time, the Company submitted its Congolese Compliant Social and Environmental Impact Assessment Study (SEIA). The International SEIA is due to be completed during the second quarter of 2013. The SEIA submission is a crucial step in the awarding of a mining licence, for which an application has recently been submitted.

Management continues to search for strategic partners for project and infrastructure development and is considering offers that are in line with shareholders' best interests.

Geology and Mineral Resources

Planning for Phase 3 Exploration:

A starter two-hole drilling programme aimed at the extension of the Upper Seam and an extension and re-classification of the HWS Mineral Resource was prepared for the north-western portion of Kola. This programme, consisting of exploration holes EK_46 and EK_47, was launched in January 2013. Figure 3 shows the location of the planned drill holes.

A programme for Dougou is also being considered for the purpose of following up on the ED_01 intersection. Discussions are underway with seismic surveying contractors in preparation for possible 2D and 3D seismic surveys in 2013.

Definitive Feasibility Study (DFS):

Field Programme:

An on-shore geotechnical programme conducted by Fugro with supervision by Egis was designed to gather data for the Feasibility Study foundation design was completed during the fourth quarter. This programme encompassed test work at the mine site, haul road corridor, employee facilities, residue storage facility, process plant site and critical points where the planned power line will cross the Kouilou River. The test campaign consisted of SPT trials, CPT probes, test pits and a borrow pit. In addition, samples from geotechnical core holes are being tested by Fugro in laboratories in both Pointe Noire and Paris. The following summarises the scope of the campaign:

• 9 geotechnical boreholes, each 20 metres deep drilled at mine shaft site
• 8 geotechnical boreholes, each 30 metres deep drilled at the RSF site
• 15 test pits excavated at the RSF site
• 2 geotechnical boreholes, one on either side of the Kouilou river crossing, each 20 metres deep drilled for the overhead line design
• 1 geotechnical borehole, 20 metres deep drilled at the employee facilities site
• 2 geotechnical boreholes, each 20 metres deep drilled for the material transport corridor
• 10 geotechnical boreholes with 20 metre depth and three holes with 30 metre depth drilled at the process plant site
• 1 large borrow pit was also excavated at the process plant site
• 6 CPT tests to a depth of 20 metres were undertaken across the project area

In parallel with the geotechnical campaign, a hydrogeological test campaign was also undertaken to confirm a fresh water source for the process plant and employee facilities. Seven pump test wells were drilled at the process plant site and pump tests were performed in December. Nine piezometers were also installed around the process plant and RSF sites. The results will be used to compile a comprehensive groundwater model, which will be used for both the Feasibility Study and the International ESIA.

A 12-month metocean survey is currently underway to define meteorological and oceanographic conditions to be used in the brine discharge modeling, the design of the marine facilities and included in the ESIA submission.

Planning proceeded during the quarter on deep shaft geotechnical and hydrogeological drilling campaign. This programme will entail two fully cored 260m deep geotechnical holes at the centre line of each of the shaft barrels. These will be supported by additional hydrogeological pump test wells. This data will provide the necessary design parameters for the shaft freeze design and the shaft sinking and support method.

Technical Studies:

A phase of bridging studies was launched at the end of the PFS to address remaining open scope items and investigate optimization opportunities before the start of the DFS. These studies being conducted by AMEC, Egis, SRK and ELM, have delivered the following positive outcomes to date:

• The method of material transport has been changed from road haulage to overland conveyor. This will produce significant social and environmental benefits as well as reduce the operating cost.
• Filtration of the insoluble process residue has been included into the design of the process flow. This will improve brine recovery and significantly reduce the Residue Storage Facility footprint.

The planning of the Feasibility Study was completed in Q4 2012 and the start of the final phase of the Feasibility Study is planned for June 2013.

Land acquisition:

A land commission was established in cooperation with the Ministry of Land Affaires. This commission facilitated the successful survey of the land corridor required by the project by the cadastral office of the Republic of Congo. This will result in the issue of a DUP (Dècret d'Utilité Publique) in January 2013.

Utilities:

Elemental Minerals is currently pursuing Memorandums of Understanding with various entities to secure power and gas to serve the project requirements.

About Elemental Minerals

Elemental Minerals Limited (ASX/TSX:ELM) is an advanced mineral exploration and development company that aims to grow shareholder value through its 93%-owned Sintoukola Potash Project. The Sintoukola project has the potential to be among the world's lowest-cost potash producers and its strategic location near the coast of Central Africa offers a transport cost advantage to key Brazilian and Asian fertilizer markets. With construction due to begin in 2014, Elemental Minerals is expected to begin initial potash production in 2017 and reach full capacity in 2018. Elemental Minerals is dual listed on the Australian Stock Exchange and the Toronto Stock Exchange under the symbol ELM. For more information, visit www.elementalminerals.com

Mineral Resource Summary - Kola Deposit of Sintoukola Project¹

• The Sintoukola Project's Kola deposit contains 1.32 billion tonnes Measured and Indicated mineral resources with an average grade of 15.65% K₂O (24.78% KCl), and Inferred Mineral Resources of 948 Mt grading 16.20% K₂O (25.64% KCl), at a 10.0% K₂O cut-off grade.
• Within the Mineral Resources, the sylvinite portion contains 573Mt with an average grade of 20.92% K₂O (33.13% KCl) within the Measured and Indicated category and 475Mt of Inferred Mineral Resources grading 20.39% K₂O (32.27% KCl).
• Four main potash mineralised seams are present within the Kola deposit and are identified in stratigraphic and chronological order as: Hangingwall Seam (HWS), Upper Seam (US), Lower Seam (LS), and the Footwall Seam (FWS). The depth to the top of the Upper Seam is within 250 to 320 metres from surface.
• Exploration at Kola has focused on the Upper Seam and Lower Seams which contain the bulk of the Mineral Resources defined to date. The Hangingwall Seam was discovered in September 2012 and contributes 47Mt at an average grade of 34.75% K₂O (55.01% KCl) to the Inferred Mineral Resources, and the Footwall Seam 225Mt grading 17.63% K₂O (27.92% KCl) also in the Inferred category.
• The Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 Edition (The JORC Code), which is consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards 2005 and hence complies with NI 43-101.

Competent Person / Qualified Person Statement:

Information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Dr. Simon Dorling, Mr. Jeff Elliott and Dr. Andrew Scogings of CSA Global Pty Ltd, the Company's geological consultants. Dr. Dorling, Mr. Elliott and Dr. Scogings are members of the Australian Institute of Geoscientists (MAIG) and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Dr. Dorling, Mr. Elliott and Dr. Scogings are also Qualified Persons for the purposes of Canadian National Instrument 43-101 and they consent to the inclusion in this report of the information, in the form and context in which it appears. Mr. Elliott or Dr. Scogings have verified the exploration data disclosed in this news release.

Further information with respect to Elemental's Sintoukola Project is contained in a technical report entitled ''NI 43-101 Technical Report, Sintoukola Potash Project, Republic of Congo'' prepared for the Company by SRK Consulting (U.S.), Inc., CSA Global Pty Ltd., EGIS International and AMEC Americas, dated September  17, 2012 with an effective date of September  17, 2012 (the "Technical Report").  The Technical Report can be accessed on the Company's profile on SEDAR.

Forward-Looking Statements

This report contains statements that are "forward-looking". Generally, the words "expect," "potential", "intend," "estimate," "will" and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, to differ materially from those expressed or implied in any of our forward-looking statements, which are not guarantees of future performance. Statements in this news release regarding the Company's business or proposed business, which are not historical facts, are "forward looking" statements that involve risks and uncertainties, such as resource estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.

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1} For a full description of the resource refer to the NI 43-101 Technical Report, dated 21 June 2012 available on SEDAR, www.sedar.com

 

Image with caption: "Figure 1. Renewed SP exploration permit (blue outline) and Mining Lease application (black outline). (CNW Group/Elemental Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20130131_C2066_PHOTO_EN_23147.jpg

Image with caption: "Figure 2: Location of Sintoukola Potash Project (CNW Group/Elemental Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20130131_C2066_PHOTO_EN_23148.jpg

Image with caption: "Figure 3: Phase 3A Programme for Kola USS and HWS and planned boreholes (CNW Group/Elemental Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20130131_C2066_PHOTO_EN_23149.jpg

SOURCE: Elemental Minerals Limited

Iain Macpherson 
Chief Executive Officer 
Tel: [phone] 
[email protected] 

Ilja Graulich 
Investor Relations Manager
Tel: [phone]
[email protected]

Johannesburg Office: [phone]