Empire Metals Limited / LON: EEE / Sector: Natural Resources

27 March 2024

Empire Metals Limited

("Empire" or "the Company")

Development Plan Highlights Simple, Expedited Route to Commercialisation

Additional Senior Appointments Strengthen Development Team

Empire Metals Limited (LON: EEE), the AIM-quoted resource exploration and development company, is pleased to advise the market of the key milestones expected over the next twelve months, as Empire advances the Pitfield Project ('Pitfield'), located in Western Australia, towards commercialisation. In line with this objective, the Company is also pleased to announce the addition of two experienced mining industry specialists to the development team.

Highlights

·   Diamond Core drilling focused on confirming the continuation of near surface, high-grade titanium mineralisation identified by previous drilling and surface sampling now complete. Logging and sampling of the drill core is ongoing.

·   Third phase of Reverse Circulation ('RC') drilling is well underway with two RC rigs on site at Pitfield, this 40-hole programme focussed on testing and delineating the two known zones of high-grade, bedded mineralisation.

·    The Company is working towards commencing the design and construction of a Demonstration Plant in 2025, and in parallel advancing all aspects of the project development plan, which includes a number of key milestones over the next 6-12 months. The achievement of each of these milestones will incrementally de-risk the project and together will unlock significant value.

·    These milestones include:

o  Definitive mineralogical characterisation studies of titanium mineralisation and related host alteration mineral assemblages to further aid both on-going metallurgical studies and exploration targeting of high-grade zones;

o  Definitive metallurgical characterisation studies to establish ore character, beneficiation steps to separate titanium bearing minerals from gangue minerals, titanium minerals leachability and solution chemistry, and final TiO₂ product assessment;

o  Finalising a process flowsheet and Demonstration Plant design that will establish, confirm and provide valuation metrics for an economic process and resultant high-value saleable product;

o  Definition of a maiden JORC-compliant Mineral Resource Estimate that will provide the basis for a mining option study and eventual ore reserves;

o  Completion of a Mining Option Study that will form the basis for a conceptual mine plan;

o  Permitting and government funding review to establish permitting routes for the Demonstration Plant and subsequent mine operations and sources of government funding and support along the way.

·    The project development team has been bolstered by the appointments of an Environmental Manager and a Commercial Manager, who will jointly manage many critical project related activities including government liaison for project permitting and funding, commercial and legal compliance, land access management and community stakeholder relations, including landowners, indigenous groups and local government agencies.

Shaun Bunn, Managing Director, said: "I am pleased to provide an update on our development plans, which are aimed at progressing Pitfield from maiden discovery to a commercial mining operation as quickly and smoothly as practicable.  We recently reported (5 March 2024) the results of our preliminary technical studies, which show favourable mineralogy and metallurgy in the high-grade titanium samples drilled at Pitfield; giving us confidence that a highly concentrated titanium product can be delivered by a relatively simple processing facility which can be located at site. The Company has rapidly moved from an early exploration phase to project development, largely thanks to the extremely large yet very simple, consistent and continuous nature of this giant bedded titanium-rich mineral system, not unlike other basin-hosted, bedded soft-rock type mineral deposits, such as potash.

"I am particularly pleased to announce further appointments to our small but talented development team. Our recently appointed Commercial Manager, Mr David Parker, and our Environmental Manager Ms Carrie Pritchard (who arrives 20 April 2024) bring additional invaluable industry development experience to the team as we push Pitfield towards commercialisation. We will continue to build up our in-house skills so that we retain responsibility for, and ownership of, the project activities inclusive of building important stakeholder relationships and retaining intellectual property developed along the way."

Pitfield Project Development Plan

Empire has introduced a 2024-25 project development plan (the Development Plan) for Pitfield that identifies a number of key milestones, the achievement of each will incrementally de-risk the project and together will create significant value. The objectives are to jointly define the mineral resource, mining options and process flowsheet and to commence design and construction of a Demonstration Plant in 2025.  Many of the elements of this plan are already well underway.

The Company has rapidly moved from an early exploration phase to project development, largely thanks to the very large yet very simple nature of this giant bedded titanium-rich mineral system.  Preliminary studies show favourable mineralogy and metallurgy in the high-grade titanium samples drilled at Pitfield, giving confidence that a highly concentrated titanium product can be delivered by a relatively simple on-site processing facility.  A metallurgical bulk sample has already been generated from drill core which will provide the source samples for further mineralogical and metallurgical characterisation work, specifically investigating a range of known and emerging beneficiation and hydrometallurgical processing steps to determine the process flowsheet. 

As part of the next phase of mineralogical assessment the Company will be working with leading geoscience institutions such as Curtin University and the CSIRO in order to better characterise the titanium mineralisation and related hydrothermal alteration assemblages which will aid exploration vectoring towards higher grade Ti mineralization as well as provide further ore characterisation that will help optimise metallurgy. 

As the next step in a definitive mineral resource development process, formal Exploration Target estimates for two distinct, near-surface, bedded sandstone-hosted zones of high-grade titanium mineralization (the subject of the current Diamond Core and Reverse Circulation drilling programmes announced 29 February 2024), are expected once these programmes are completed in June.

Empire will aim to continue drilling in order to provide a Mineral Resource Estimate (MRE) once the Exploration Target estimates are confirmed and to this end has already conducted extensive geological mapping and geophysical assessment, both of which are key components of an MRE.  Once the current drilling programme is complete the Company will have drilled over 100 RC holes for a total of around 15,000m as well as seven diamond core holes for a total of around 2,000m. The Development Plan provides for an additional 36,000m of RC drilling and 2,000m of diamond core drilling commencing Q4 2024.  The Company will assess a number of different mining options, considering the various processing techniques and production rates under review. Studies on hydrology and hydrogeology, geotechnical assessment, and various mining techniques are expected to commence in late 2024.

Key Milestones for 2024-25

Mineralogical Characterisation Studies

The Company announced the preliminary results from its on-going mineralogical and metallurgical studies on 5 March 2024. To date the Company has submitted 29 samples for petrographic analysis and 16 samples for Tescan Integrated Mineral Analyzer ("TIMA") analysis; the samples being collected from both RC and diamond drill holes. Results of these mineralogical studies confirm that titanite, a calcium titanium silicate mineral (CaTiSiO5), is the most abundant titanium mineral followed by Ti-bearing iron oxides, ilmenite and then rutile group minerals.

As part of the next phase of mineralogical characterisation studies the Company is engaging with leading geoscience institutions such as Curtin University and the CSIRO to establish a more advanced understanding of the character of the titanium mineralisation and related hydrothermal alteration mineral assemblages, as well as the formational conditions on mineralisation, the controls on higher grades and how mineralisation changes across the basin. We expect to initiate this work over the next few weeks and expect the first phase of research to run for approximately six months with the aim of providing answers by Q4 2024.

Metallurgical Characterisation Studies

From Empire's preliminary metallurgical studies, it is anticipated that Pitfield ore will be amenable to conventional leaching under atmospheric conditions to liberate the titanium. There is a considerable amount of metallurgical research work that demonstrates the successful leaching of titanite, using low temperature sulphuric acid or hydrochloric acid to dissolve the titanite and liberate the Ti into a liquid phase.

An initial concept for the process flowsheet was announced 5 March 2024, which indicated a potential process for extraction of the titanium from the Pitfield ores. The process development programme will test this and other favourable options for processing the titanium ore and then optimise the flowsheet to make a high-value, saleable titanium product. The process development programme will focus on four key study areas in parallel, all towards expediting the design of a flowsheet and establishing the operating conditions for a Demonstration Plant.

The key aspects of the programme are:

1.    Ore Characterisation

Developing a fundamental understanding of the ore across the project. This includes geochemistry, mineralogy, grain size, breakage properties, hardness, and leachability;

2.    Beneficiation

Testing of physical and chemical unit processes that can separate out gangue minerals from Ti-bearing minerals. This programme of work will assess multiple unit processes and combinations that can be used on the Pitfield ore to separate the Ti-bearing minerals from non-value containing minerals. This programme will assess comminution options for optimised breakage and liberation of the Ti-bearing minerals from other minerals in the ore. Separation processes to be assessed include gravity separation, at both a coarse and fine scale; magnetic separation, froth flotation and others.

3.    Hydrometallurgy

Testing of leach response of both Ti-bearing and gangue minerals, initially focused on the process required to bring the titanium into solution, then optimising the leach solution chemistry and process steps for product finishing.  This programme will assess acid type and usage, options for reagent recycling, impurity management and options for producing a final titanium product.

4.    Final product assessment

A high-grade TiO₂ product has been identified as the likely final on-site product for the project. The proposed process chemistry provides optionality for the selection of a high-value TiO₂ product amongst many, including those designed for the pigment industry.  The programme is designed to assess these options and select one optimal product.

Demonstration Plant - Process Flowsheet Design

The final output of the process development programme will be a detailed flowsheet and inputs for a Demonstration Plant design, and most importantly the confirmation of successful extraction of titanium within an economic process that can produce a high-value product on-site. The Demonstration Plant operation will collect data for full-scale design, allow optimisation of the process flowsheet in continuous operation mode, and provide data for definitive economic assessment of the mining and processing steps.

One of the key differences between the processing options being considered for the Pitfield ore and those commonly found in the ilmenite industry is that a low temperature acid leach process is likely all that is needed to extract the titanium and produce a high-quality product.  No energy-intensive smelting is required and a higher value product can be produced on-site. This simplifies the process flowsheet and hence the design and construction of a Demonstration Plant.

Exploration Target for Resource Development

As according to the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC) code, an Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.

Empire expects to provide JORC-code Exploration Target estimates for two distinct high-grade, near-surface bedded sandstone zones that are the subject of the current Diamond Core and Reverse Circulation drilling once these programmes are completed in June (refer Figure 1).

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Figure 1. Grey-scale magnetics map overlain by airborne gravity data showing location of Diamond and RC holes currently being drilled, highlighting the shallow, high-grade bedded sandstone zones being targeted for advanced project work.

JORC-compliant Mineral Resource Estimate

A Mineral Resource Estimate ("MRE") is a measure of a body of mineralisation that in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction.  Based upon an MRE an assessment of its potential economic value can be made. There are several key components that combined will allow the Company to complete an MRE, being:

·    Geological and Geophysical Mapping: Required to establish the geological characteristics and anatomy of a deposit, such as its shape, rock types, stratigraphy and structure. Based on these characteristics, geologists can estimate the location, form, size and continuity of mineralised zones;

·    Geostatistics: Statistical methods to analyse geological data and create models of the distribution of mineralization within a deposit. This method considers the spatial relationships between the different data points generated by drilling and surface sampling, and can be used to estimate the grade and tonnage of mineralisation; and

·    Block Modelling: A method of dividing a deposit into a grid system of blocks and estimating the grade and tonnage of mineralization within each block. This method can consider multiple data sources, such as drilling data and geological maps, and can be used to create 3D models of the deposit.

Empire is well on its way to being able to provide a maiden MRE at Pitfield, having already conducted extensive geological and geophysical mapping that has been tested and refined by drilling and consequent drill sample analyses.  Once the current drilling programme is complete the Company will have drilled over 100 RC holes for a total of around 15,000m as well as seven diamond core holes for a total of around 2,000m. The Development Plan provides for an additional 36,000m of RC and 2,000m of Diamond Core drilling commencing Q4 2024 which will provide the additional data needed to complete a JORC-compliant MRE.

Mining Option Study

As part of the planned development the Company will assess a number of different mining options, considering the various processing techniques and production rates under review at the time.  The Development Plan provides for studies covering hydrology and hydrogeology, geotechnical assessment, and various mining techniques and these are expected to commence in late 2024.  The objective here is to narrow down the options before investing further funds in more detailed studies.

Environmental & Social Impact Assessment

Environmental and social impacts are the positive or negative effects that our business activities have on the natural environment and the people affected by them. These can include impacts on biodiversity, climate change, water quality, human health, community development, amongst others.

The establishment of a Demonstration Plant will allow many of these important elements to be assessed under actual operating conditions albeit at a smaller production scale.  Importantly there are preliminary studies and permitting requirements to be put into place ahead of the construction of a Demonstration Plant which will allow the Company to interface with key stakeholders in a timely and efficient manner.  To this end the Company has appointed an Environmental Manager (refer to section Additional Key Appointments below) to execute these studies and manage the stakeholder interface.

It is important to note that the Company has strong existing relationships with local land holders in the area, with several land access agreements in place as well as an ongoing community engagement programme and a preference to utilise local suppliers where possible.  The Company is also pleased to work with the local Yamatji Southern Regional Corporation, the regional entity responsible for implementing the Indigenous Land Use Agreement (ILUA) on behalf of the Yamatji Nation.

Infrastructure, Services and Supply Chain

The Company has initiated a review of local infrastructure, services and the required supply chain as part of preparation for the Demonstration Plant and subsequent proposed transition to mine development.  The mid-west region has extensive infrastructure and the review will highlight relevant providers and identify any access and planning issues that need addressing.  The local supply chain will also be reviewed in relation to requirements for the Demonstration Plant and mining stages.

Permitting & Government Funding

The Company has initiated a review of relevant permitting issues for the operation of a Demonstration Plant and potentially the commercial mining operations.   The Company has identified a small-scale mining permit that may be suitable for the Demonstration Plant stage.  Once the results of the current drill programme are in hand, a review of the location of the Demonstration Plant and small-scale open-cut pit will be completed prior to engagement with local stakeholders and landowners.

The Company has also initiated engagement with relevant government authorities in relation to research and development rebates, grants and funding.  There are significant government grants aimed at developing the critical minerals industry in Australia. This is highlighted by the Australian Federal Government committing $1.25 billion in funding via a low-cost, non-recourse loan to support the Iluka Resource Ltd Eneabba refinery (30km southwest of the Pitfield Project) in Western Australia through Export Finance Australia (EFA) from its Critical Minerals Facility   (https://www.exportfinance.gov.au/newsroom/transforming-australia-s-critical-minerals-sector/).

Additional Key Appointments

The Company recently announced (6 February 2024) the appointment of Narelle Marriott as the Company's Process Development Manager effective 11 March 2024. Ms. Marriott leads a small but very experienced team of metallurgists and engineers and is responsible for managing the ongoing development of the process design for the Project. Coinciding with this pivotal appointment Empire secured the services of two senior titanium industry consultants, Dr. Trevor Nicholson and Mr. Eugene Dardengo, who together have over 72 years of experience in the titanium processing and extraction industry. The Company continues to seek out experienced and talented professionals to join the development team and is pleased to announce the following appointments.

Environmental Manager

The Company has appointed Ms. Carrie Pritchard as Environmental Manager and she will be joining the Company as of 20 April 2024. Ms Pritchard, an honours graduate from the University of Western Australia (B.Sc. Natural Resource Management) has over 20 years' experience in the mining/processing industry and has managed projects through feasibility, environmental impact assessment construction and commissioning, including establishing compliance and environmental management systems.

Ms Pritchard was the Senior Environmental Scientist with e3Scientific Limited in Aotearoa, New Zealand (2013 - 2023) and has worked with Australian mining company's such as Apex Minerals Pty Ltd as Environmental Manager (2007-2012), Windimurra Vanadium Ltd. as Environmental Superintendent (2006-2007) and LionOre NL as Environmental Coordinator (2001-2006). Ms. Pritchard's most recent appointment was with Newmont Corporation as Senior Advisor - Closure Planning for the Telfer Mine.

Ms Pritchard's key areas of responsibility include the execution of environmental, cultural and social studies, which includes the supervision of a small team of environmental consultants and contractors who will provide input into the development of a metallurgical flowsheet for mineral beneficiation and subsequent metal extraction. Importantly Ms. Pritchard will monitor compliance and report on environmental activities in accordance with requirements of the Western Australian Department of Mines, Industry Regulation and Safety and will assist with the management of land access and community consultations, including landowners, indigenous groups and local government agencies.

Commercial Manager

The Company has appointed Mr. David Parker as Commercial Manager. Mr. Parker holds a bachelor's degree of Commerce from Curtin University, and a Graduate Diploma of Applied Corporate Governance from the Governance Institute of Australia. Mr. Parker is also a licensed investment advisor having originally completed the required units set out by the Securities Institute of Australia in 2003.

Mr. Parker has extensive project management, commercial, investment, financial and corporate services experience. He is an experienced investment and corporate advisor and has acted as Director & Company Secretary for various ASX listed and private companies.

Mr. Parker also has over 20 years' experience in equity capital markets focused on emerging companies in the mining, industrial and technology sectors. As the principal at Cobblestones Advisory, he has provided company secretarial and advisory services to pre-IPO and ASX Listed clients. He also worked with Alto Capital where he acted as corporate advisor and managed several ASX IPOs as Lead Manager, primarily for companies in the resources, technology and industrial sectors.

Mr. Parker's key areas of responsibility include government liaison with respect to permitting and funding, commercial and legal compliance, management of land access and community consultations, including landowners, indigenous groups and local government agencies and importantly will be able to provide commercial advice and guidance to senior management and company employees, including exploration, project development, environmental and marketing staff and consultants.

The Pitfield Titanium Project

Located within the Mid-West region of Western Australia, near the northern wheatbelt town of Three Springs, Pitfield lies 313km north of Perth and 156km south of Geraldton, the Mid West region's capital and major port.

Western Australia is ranked as one of the top mining jurisdictions in the world according to the Fraser Institute's Investment Attractiveness Index published in 2023, and has mining-friendly policies, stable government, transparency, and advanced technology expertise. Pitifled has existing connections to port (both road & rail), HV power substations, and is nearby to natural gas pipelines as well as a green energy hydrogen fuel hub, which is under planning and development (refer Figure 2).

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Figure 2. Pitfield Project Location showing the Mid-West Region Infrastructure and Services

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, as incorporated into UK law by the European Union (Withdrawal) Act 2018, until the release of this announcement.

**ENDS**

For further information please visit www.empiremetals.co.uk  or contact:

About Empire Metals Limited

Empire Metals is an AIM-listed (LON: EEE) exploration and resource development company with a project portfolio comprising copper, titanium and gold interests in Australia and Austria.

The Company's strategy is to develop a pipeline of projects at different stages in the development curve. Its current focus is on the Pitfield Project in Western Australia, which has demonstrated to contain a newly recognised giant titanium-rich mineral system that hosts a globally significant titanium discovery.

The Company also has three further exploration projects in Australia; the Eclipse Project and the Walton Project in Western Australia, and the Stavely Project in the Stavely Arc region of Victoria, in addition to three precious metals projects located in a historically high-grade gold producing region of Austria.