quarterly activities report · 4/29/2019 · quarterly activities report . march 2019 ......

Level 2, 23 Barrack Street Perth WA 6000

PO Box Z5369 St. George’s Terrace WA 6831

T +61 8 9488 5100 F +61 8 9488 5199

[email protected] alturamining.com

Altura Mining Limited ABN 39 093 391 774

ASX ANNOUNCEMENT | 29 April 2019 QUARTERLY ACTIVITIES REPORT March 2019

■ Completion of commissioning of Stage 1 at the Altura Lithium Mine, and declaration of commercial lithium production

■ Process plant improvement throughout the quarter has resulted in consistent production of ~14,000 tonnes per month of spodumene, with weekly periods nearing nameplate targets

■ Altura shipped two (2) cargoes totalling 14,770 dmt to Chinese based converters with a third cargo of approximately 8,000 dmt loaded in the first week of April (following delays at the port due to Severe Tropical Cyclone Veronica) with all cargoes meeting contractual specifications

■ Placement to institutional and sophisticated investors raised A$24.5 million before issue costs ■ Securities Purchase Plan (SPP) Offer to existing eligible shareholders received strong support,

raising $A14 million ■ Continuing commitment to safety with low recordable injury numbers, and zero Lost Time

Injuries (LTI)

The fully-operational Altura Lithium Mine showing processing plant and product stockpiles

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Altura Mining Limited – Quarterly Activities Report March 2019

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Production of Concentrate Jan-Mar 19 with tonnes lost to TC Veronica

Total Concentrate Coarse Concentrate Fines Concentrate Linear (Total Concentrate)

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LITHIUM ALTURA LITHIUM OPERATIONS – Pilgangoora (Western Australia - 100% AJM) The Company’s focus during the quarter was to complete the ramp-up of production and stabilise process throughput with the fines plant. As disclosed in the previous quarterly report, a full review of the tailings thickener was undertaken by the designers and vendors of the equipment. The review led to substantial modifications to the thickener to reduce the amount of slimes material reporting and to increase the overflow and underflow pipe and pumps. These changes resulted in an immediate improvement in output and product grade from the fines plant. Continued increases and stability in daily production volumes ultimately enabled the Company to declare commercial production at the Altura Lithium Project by mid-March 2019.

Area / Description Units Sept Qtr 2018

Dec Qtr 2018

Mar Qtr 2019

Ore mined wmt 323,539 350,099 404,087

Waste mined wmt 1,512,840 1,491,011 1,426,256

Total material mined bcm 625,881 625,008 622,929

Ore processed wmt 98,135 256,931 251,200

Ore mined – grade Li2O % 1.21 1.19 1.16

Lithium concentrate produced wmt 7,379 25,794^ 29,627

Lithium concentrate shipped wmt - 24,419 14,770 ^ Includes 6,427 tonnes of low-grade material produced during commissioning

Lithium Concentrate ready for export in the Qube Wedgefield Storage Shed

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Commercial Production On 13 March 2019 the Company formally declared commercial production from its 100% owned Altura Lithium Mine. The decision follows the delivery of significant increases in the lithium concentrate output and overall metal recovery from both the coarse (Dense Medium Separation) and fines (flotation) plants in the weeks preceding the declaration. The declaration also considered industry benchmarks for commercial production markers, which included achieving sufficient output, recovery and consistency of product for the confirmation of commercial production. Mining In the March quarter, ore mined increased by 15% on the December quarter with 404kt mined. The open pit mining areas have now opened up to an area large enough to permit efficient load and haul activities. Mining targets were achieved for the quarter despite the time lost to Severe Tropical Cyclone Veronica, which caused some disruption in late March and resulted in a loss of approximately 2,750 tonnes of production. The mined grade for the March quarter was positive with an average grade of 1.16% Li2O.

Ore stocks as at 31 March 2019^ Stocks > 1.2% Li2O All Stocks

(wmt) Li2O% (wmt) Li2O%

ROM Stockpiles 208,764 1.2 355,815 0.97

Crushed Ore 26,291 1.2 71,625 1.03

TOTAL 235,055 1.2 427,440 0.98 ^ All stocks measured by internal survey

Production Production of concentrate through the quarter was boosted by the ramp up of the fines concentrate plant which was commissioned through December 2018. A 26% contribution of fines to overall concentrate in January rose to a 47% contribution in March with an overall 38% contribution for the quarter. Design expectations were for a 45-50% contribution of fines to the overall blend. Following fines plant commissioning in December it was noted that there were issues with the fines plant thickeners. Some modifications to achieve design requirements were carried out after consultation with suppliers Roytec. Fines production stepped up significantly following these modifications. Processing The process plant continued to produce consistent results and excellent product grade during the quarter. February production was 55% higher than January, and March production (with cyclone losses removed) would have seen a 29% improvement on February. The cyclone-related loss however resulted in March being marginally higher at 7% than February.

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The crushing and screening throughput resulted in capacities below design levels with structural rectification works by supplier Weir/Trio Crushing. Despite the lower than forecast availability and performance of this crushing package, Altura has continued a program of rectification which it is confident will remedy remaining performance issues in the next quarter. Additional crushed stocks were produced in the previous quarter utilising a mobile crushing plant and this has provided sufficient buffer stocks to remove any downstream risk. The quarterly performance of the crusher was in line with the previous quarter at 222,707 tonnes crushed.

The high pressure grinds roller (HPGR) which feeds both coarse and fines circuits continued to perform well during the quarter. The HPGR is one of the more critical components of the processing plant and it continues to show excellent availability and throughput.

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31/01/2019 28/02/2019 31/03/2019Monthly Tonnes 79671 62258 80778

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31/01/2019 28/02/2019 31/03/2019Monthly Tonnes 81415 84055 85730

HPGR Production Jan-Mar 2019

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Coarse concentrate production from the Dense Medium Separation (DMS) plant was consistent with the primary and secondary DMS continuing to demonstrate excellent reliability and throughput. Coarse concentrate production is somewhat governed by the performance of the fines plant, but modifications carried out in April (now complete) will partially decouple the coarse and fines circuits such that the DMS plants can be operated at higher throughputs without impacting the fines circuit.

Commissioning of the milling and flotation circuit was completed in December 2018 and after some modifications to the thickener tanks during January, in consultation with supplier Roytec, fines concentrate production has increased month on month. Fines production in February was 115% higher than January, and March was 40% higher than February. Further refinement of the flotation chemistry and thickener tanks will continue to deliver additional increases in fines concentrate production through the next quarter. Product output has continued to grow during the last quarter, with positive increases each month. Total production completed during the quarter was 29,627 wmt, with the contribution of fines product concentrate increasing each month. The ability to increase the throughput of the coarse concentrate plant due to the addition of a larger dewatering screen will result in additional coarse concentrate production in the next quarter. Haulage Qube Bulk is the designated logistics contractor and has responsibility of loading spodumene concentrate from the mine to the purpose built storage shed at Port Hedland. Subsequently cargoes are assembled by Qube and loaded to the vessels at the port of Port Hedland. During the quarter Qube hauled 26,155 tonnes to the storage facility from the mine site and loaded 14,770 tonnes to the (2) two cargo vessels for dispatch to China.

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31/01/2019 28/02/2019 31/03/2019Monthly Tonnes 45484 50394 51856tph 44 47 50Mass Yield 12 14 12Recovery 31 35 36

DMS Performance Jan-Mar 2019

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Marketing and Shipping In the three months to 31 March 2019, Altura shipped two (2) cargoes totalling 14,770 dry metric tonnes (dmt) to Chinese based converters under existing offtake agreements. All cargo has been in line with or exceeded customer expectation, with a weighted average of 5.9% Li2O, 1.5% Fe2O3, 1.1% Mica and 5.8% moisture. The average pricing received for these cargoes was US$601 per dmt. Altura was ready to load a third shipment at the end of March, however the vessel loading was delayed due to Severe Tropical Cyclone Veronica. Altura’s third shipment for 2019 of approximately 8,000 dmt was subsequently loaded in the first week of April. The aggregate details for all shipments made during the June quarter 2019 will be provided in the next quarterly activities report. Importantly from this year’s first shipment onwards, fines product has been included with all cargoes, a major achievement for the processing plant and lithium recovery rate. Altura is currently blending at a 30:70 ratio (fines:coarse) and this ratio will trend towards 45:55 as the ramp-up to nameplate volume and grade nears completion. Altura’s blend ratio is driven by a continued focus on delivering a premium product that is high in lithium but low in Fe2O3, low in Mica and at a specified moisture, all of which deliver increased value to Altura’s customers. Further with the recent improvements in production volumes, Altura plans to dispatch a minimum of two (2) shipments of 8,000 dmt per month for the remainder of the 2019 calendar year. Cargoes continue to be sold under standard shipping terms via an irrevocable letter of credit with Altura receiving funds upon presentation of vessel loading documents. Health, Safety and Environment (HSE) Overall the safety record was excellent during the quarter with zero lost time injuries. The Company continues to remain vigilant on safety and continues to foster a safe operating culture.

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EXPLORATION ACTIVITIES Details of exploration activities undertaken during the March quarter included the following: Cleopatra Prospect (E45/2363) The Cleopatra Prospect is located within Altura’s E45/2363 tenement, approximately 3.5 kilometres southeast of the Altura Lithium Mine. Dipole-Dipole Induced Polarisation (DDIP) surveying was carried out in September 2018 over wide spaced lines at the Cleopatra Prospect. The purpose of the geophysical survey was to detect and delineate potential responses associated with known gold anomalies discovered from surface sampling banded quartz veins and breccias. The results showed the area was dominated by conductive weathered overburden. Nine (9) near surface anomalies were identified and required further investigation. In February 2019 an initial round of twelve (12) reverse circulation (RC) drill holes totalling 684m were completed within the Cleopatra Prospect. These holes were geologically logged by Altura’s Geologists and the quartz vein intersections were sampled and assayed. The assay results from the drill holes did not indicate the presence of significant gold mineralisation in any of the completed RC drill holes, despite there being strong evidence of epidotic, carbonate and chloritic alteration within the intermediate (or mafic) volcanic host rock. Altura proposes to undertake a broader soil sampling program that will target those IP anomalies and mapped horizons that indicate gold mineralisation zones. A further drilling program will follow based on the soil sampling results. Hazelby Prospect (E45/2363) The Hazelby Prospect is also located within the E45/2363 tenement and is approximately 4km east of the Altura Lithium Mine. Previous work on the Hazelby Prospect has identified mineralisation within pyritic quartzite and cherts in the nose of a plunging fold. Dated at 3.5 billion years old, it is reputably one of the oldest known prospects in the Pilbara region. Abundant malachite, a copper carbonate mineral, green-blue in colour was observed by Altura Geologists during a field survey near old workings. Three rock chip samples were collected from the old workings and submitted for analysis. The sample assay results are shown in the table below.

Sample Number Cu % Au g/t Ag g/t CA0001 4.70 0.83 80.0

CA0002 5.37 0.63 80.5

CA0003 9.86 0.80 84.6 Altura is encouraged by the potential of the Hazelby Prospect and intends to conduct further data research and field exploration work this year. For further information on the Cleopatra and Hazelby Prospects, please refer to the ASX announcement on 26 April 2019.

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CORPORATE Capital Raising – Placement and SPP Offer During the quarter Altura undertook a capital raising comprising both a Placement and an SPP Offer that has raised a combined total of A$38.5 million before issue costs. The initial raising on 14 February 2019 was a Placement of A$24.5 million to international institutions and sophisticated investors. The Placement was conducted at a price of 13 cents per share and included one (1) free attaching listed option for every two (2) fully paid ordinary shares issued. The options have an exercise price of 20 cents, with a term of three (3) years to expire on 28 February 2022. In addition, Altura conducted a Securities Purchase Plan (SPP) Offer to provide eligible shareholders with the opportunity to acquire shares and options on the same terms as the Placement. The size of the SPP Offer was initially set at A$5 million, however in response to strong demand from shareholders the offer was increased in two stages to A$14 million (being the maximum amount permitted under the ASX placement capacity rule). At the close of the offer period, Altura had received applications greater than the A$14 million limit which resulted in a scale-back of individual applications greater than A$10,000. The funds from these capital raisings are being used for the commissioning and ramp-up costs associated with the production and sale of lithium concentrate, development costs, interest payments under the loan note facility and working capital purposes. Listing of Options Following the issuing of the options for both the Placement and the SPP on Wednesday 20 March 2019, Altura sought and obtained approval from the ASX for official quotation having met the requirements for holder distribution and marketable parcels. The options commenced trading on Monday 25 March 2019 and have been assigned the ASX code AJMOB. General Meeting Altura held an extraordinary general meeting on 22 March 2019 seeking shareholder approval to allow certain directors to acquire shares and options (on the same terms and conditions as the Placement) and to ratify the issue of securities under the Placement and the SPP Offer. All six (6) resolutions received strong proxy voting support and were passed by the meeting.

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SCHEDULE OF MINING TENEMENTS The following mining tenements were held by the Company at the end of the quarter:

Location Tenement Interest Pilbara, Western Australia E 45/2287 100% E 45/2363 100% E 45/3488 100% E 45/4894 100% E 45/5136 100% E 45/5137 100% E 45/5280 100% E 45/5347 100% E 45/5348 100% E 45/5416 100% M 45/1230 100% M 45/1231 100% M 45/1260 100% L 45/400 100% L 45/401 100% L 45/404 100% L 45/409 100% L 45/416 100% L 45/448 100% L 45/484 100% L 45/485 100% L 45/492 100% L 45/496 100% L 45/517 100% L 45/518 100% Tanami, Northern Territory EL 26626 10% ELA 26627 10% EL 26628 10% EL 29828 10% Tabalong, South Kalimantan PT Suryaraya Permata Khatulistiwa 70% PT Suryaraya Cahaya Cemerlang 70% PT Suryaraya Pusaka 70% PT Kodio Multicom 56% PT Marangkayu Bara Makarti 56% Catanduanes, Philippines COC 182 (Area 3) – Catanduanes 100% Albay region, Philippines COC 200 (Area 4) – Rapu-Rapu 100% Bislig region, Philippines COC 202 (Area 17) – Surigao del Sur 100%

The following mining tenements were acquired during the quarter:

Location Tenement Interest Pilbara, Western Australia L 45/517 100% L 45/518 100%

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The following mining tenement was relinquished during the quarter:

Location Tenement Interest Pilbara, Western Australia E 45/2277 100%

Competent Person Statement The information in this report that relates to Exploration Results is based on information compiled by Mr Stephen Barber. Mr Barber is a Member of the Australasian Institute of Mining and Metallurgy. Mr Barber is the Exploration Manager at Altura Mining Limited and has sufficient experience that is relevant to the style of mineralisation under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Barber consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. About Altura Mining Limited (ASX: AJM) Altura is a key player in the global lithium market and is leveraging increasing demand for raw materials for manufacturing lithium ion batteries for electric vehicles and static storage uses. Altura owns and operates the world-class Altura Lithium Project at Pilgangoora in WA’s Pilbara, which has a production capacity of 220,000tpa of quality spodumene concentrate. The Company has completed a Definitive Feasibility Study on a potential Stage 2 expansion, with a Final Investment Decision due following a review of the Stage 1 operations and ramp-up to nameplate production. For further information: James Brown, Managing Director (+ 61 427 988 898) Paul Mantell, Executive Director on (+61 418 727 460) Media Michael Weir (+61 402 347 032) / Cameron Gilenko (+61 466 984 953) Citadel-MAGNUS

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quarterly activities report · 4/29/2019 · quarterly activities report . march 2019 ......

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