IronRidge Resources Limited Additional Lithium License Secured in Ghana (0056N)

TIDMIRR

RNS Number : 0056N

IronRidge Resources Limited

20 October 2016

20 October 2016

Additional Highly Prospective Lithium Tenement Secured in Ghana, West Africa

IronRidge Resources Limited (AIM: IRR, 'IronRidge' or the 'Company') is pleased to announce the acquisition of an additional highly prospective 'hard-rock' lithium pegmatite license in Ghana, West Africa.

HIGHLIGHTS:

Ø Highly prospective license covering multiple lithium bearing pegmatite vein swarms secured.

Ø License is adjacent to the Company's existing lithium project portfolio.

Ø License covers a 76km(2) area of highly prospective geology with outcropping lithium bearing pegmatites.

Ø Historic reports of eight (8) lithium bearing pegmatites within the license area between 350ft to 560ft strike length, 30ft to 80ft width and 0.5- 2.2% Li(2) O grade from mapping and bulk sampling by the Ghana Geological Survey.

Ø Multiple untested pegmatite occurrences identified including lithium, tin, tantalum, niobium and beryllium targets throughout the license and project area.

Ø License adjacent to the coast and within 100km of the capital city Accra; excellent infrastructure, logistics and services support for potential rapid development.

Ø Global demand for lithium is increasing at an unprecedented rate.

Reference to figures and tables relate to the version of this release on the Company's website (www.ironridgeresources.com.au) or visible in PDF format by clicking the link below:

http://www.rns-pdf.londonstockexchange.com/rns/0056N_-2016-10-20.pdf

Commenting on the Company's latest progress, Vincent Mascolo, Chief Executive Officer of IronRidge, said:

"This acquisition further consolidates our West African lithium portfolio and strategy.

"We see enormous potential in supplying the growing energy industry with lithium. Securing the remaining area of interest directly complements our recent acquisition activity in this space in Ghana.

"The asset presents a strategic opportunity that consolidates and covers resource scale potential, simple mineralogy and proximity to infrastructure in a mining-friendly jurisdiction of Ghana. We believe this endorses the potential for the project(s) success as a first quartile cost producer, with low capital expenditure requirements and a simple mining and treatment process."

Project Area and Geology

The project area is located on the southern margin of the Cape Coast Batholith, a major 100km x 200km granitic intrusive complex occurring along the southern-central coastline of Ghana and part of the West African shield. A window of older Birimian metasediments is surrounded by the batholith and occurs along the intrusive contact; possibly representing a roof pendent of older metasediments underlain by granitic intrusives.

Smaller kilometre scale, more fractionated granitic intrusive bosses occur within the metasediments and are spatially associated with pegmatitic vein swarms. These intrusive bodies are believed to be the more fractionated end-members, and accordingly represent more prospective zones for lithium rich pegmatites.

The outcropping pegmatites are characterised by coarse crystalline spodumene (a lithium rich pyroxene mineral and the preferred feedstock of hard-rock lithium mining projects) in addition to lepidolite (a lithium rich mica mineral), from which lithium may be leached to precipitate a lithium carbonate product. In addition to lithium, the licenses are also prospective for tin, tantalum, niobium, beryllium and gold which occur as accessory minerals within the pegmatites and host formations.

Historic work completed by the Ghana Geological Survey during the late 80's and early 90's, identified eight (8) lithium bearing pegmatites within the license area. Mapping and bulk sampling completed by the Ghana Geological Survey indicates the pegmatites are between 350ft to 560ft strike, 30ft to 80ft width and average 0.5% to 2.2% Li(2) O grade.

Pegmatites appear to be associated with kilometre scale microgranite bosses within the license area. Significant exploration potential exists along strike, within the pegmatite vein swarm trend.

Key Financial Terms

The Company has entered into an Agreement with Barari Developments Limited ("BDL") of Ghana, West Africa, under which IronRidge can acquire up to 100% of the project through staged earn-in arrangements and expenditure to Feasibility Study within a 4-year period. Barari Developments Limited will retain a Net Smelter Return Royalty ("NSR") of 2% of which 50% may be acquired for US$2m at any stage. Funding will be used to undertake further exploration work and, pending results, define a maiden resource and complete project studies.

Completion of the Investment is subject to certain conditions being met by the Company and Barari Developments Limited, principally in relation to completion of satisfactory Due Diligence by IronRidge over the next three months.

IronRidge shall be responsible for maintaining the Properties during this agreement and up to the completion of the Feasibility Study.

Summary of Key Earn-in and Joint Venture Terms

   --    IronRidge to establish a Special Purpose Vehicle (SPV), IronRidge (100%). 
   --    Satisfied completion of Due Diligence - US$50,000 to BDL by IronRidge. 
   --    Asset Transfer Fee - US$50,000, BDL earn 20% of the SPV by IronRidge. 
   --    Commencement of a Scoping Study Fee - US$50,000, IronRidge earn to 85% total of the SPV. 
   --    Commencement of Pre-Feasibility Study - US$150,000, IronRidge earn to 90% total of the SPV. 

-- Commencement of Feasibility Study - US$200,000 IronRidge earn to 95% total of the SPV at this point BDL can either co-contribute or dilute down to a NSR of 2% at which time IronRidge will have earned 100% of the SPV.

Lithium Outlook

Global demand for lithium is increasing at an unprecedented rate since the emergence of consumer electronics, the electric vehicle and energy storage markets, driven by a desire to reduce carbon emissions and improve efficiencies.

In its purified form, lithium (Li) possesses some unique characteristics. It is the lightest of all metals, has a high electrochemical potential with an exceptionally small ionic radius and therefore exceptionally high charge to radius ratio. These unique characteristics make it ideal for use in lightweight, rechargeable batteries currently seeing rampant growth in global demand.

Lithium and its compounds have several industrial, medicinal and biological applications, including heat-resistant glass and ceramics, lithium grease lubricants, flux additives for iron, steel and aluminum production, lithium and lithium-ion batteries, mental health treatment and bacteriostatic properties. These uses consume more than three quarters of lithium production.

Commentary from industry experts suggests lithium consumption will increase significantly over the coming years, especially due to increasing global battery demand.

The Board is delighted with the progress that the Company has made in 2016 and looks forward to keeping shareholders updated as further news becomes available.

For any further information please contact:

 
IronRidge Resources Limited 
Vincent Mascolo (Chief       Tel: [phone] 
 Executive Officer)           0610 
Nicholas Mather (Executive   Tel: [phone] 
 Chairman)                    0610 
 
SP Angel Corporate Finance   Tel: +44 (0)20 
 LLP                          3470 0470 
Nominated Adviser and 
 Broker 
Jeff Keating 
 
 Yellow Jersey PR Limited 
 Dominic Barretto              Tel: [phone] 
 Aidan Stanley                 537 739 
 

Notes to Editors:

IronRidge Resources is an AIM listed mineral exploration company with frontier assets in both Australia and West Africa, with two province scale projects in Gabon and promising and advanced titanium and bauxite projects in Queensland Australia. IronRidge's corporate strategy is to create and sustain shareholder value through the discovery of world-class and globally demanded commodities.

Australia

Monogorilby is prospective for province scale titania and bauxite with an initial maiden resource of 54.9MT of premium DSO bauxite Monogorilby is located in central Queensland, within a short trucking distance of the rail system leading north to the Port of Bundaberg. It is also located within close proximity of the active Queensland Rail network heading south towards the Port of Brisbane.

May Queen is located in Central Queensland within its wholly owned Monogorilby license package and is highly prospective for gold with drill ready targets defined. Historic drilling completed during the 1980s intersected multiple high-grade gold intervals including 2m @ 73.4 g/t Au (including 1m at 145g/t), 4m @ 38.8g/t Au (at end of hole) and 3m @ 18.9g/t Au, over an approximate 100m strike hosting numerous parallel vein systems, open to the north-west and south-east.

Wholly owned Quaggy contains highly anomalous platinum, palladium, nickel, cobalt and copper exploration targets and is located in Central Queensland within a short trucking distance of the dormant rail system to the Port of Bundaberg. It is also located within close proximity of the active Queensland Rail network heading south towards the Port of Brisbane.

Gabon

Tchibanga is located in south-western Gabon, in the Nyanga Province, within 10-60km of the Atlantic coastline. This project comprises two exploration licenses, Tchibanga and Tchibanga Nord, which cover a combined area of 3,396km(2) and include over 90km of prospective lithologies and the historic Mont Pele iron occurrence.

Belinga Sud is Located in the north east of Gabon in the Ogooue-Ivindo Province, approximately 400km east of the capital city of Libreville. IRR's licence lies between the main Belinga Iron Ore Deposit, believed to be one of the world's largest untapped reserves of iron ore with an estimated 1bt of iron ore at a grade >60% Fe, and the route of the Trans Gabonese railway, which currently carries manganese ore and timber from Franceville to the Port of Owendo in Libreville.

Chad

The Company entered into an agreement with Tekton Minerals Pte Ltd of Singapore concerning its portfolio covering 1,400km(2) of highly prospective gold and other mineral projects in Chad, Central Africa. Under the terms of the agreement, IronRidge will acquire an initial 60% of Tekton, including its projects and team, to advance the Dorothe, Echbara and Am Ouchar licenses, which host multiple, potentially nation-building gold projects. Initial trenching results at Dorothe, including 14.12g/t Au over 4m, 34.1g/t over 2m and 63.2g/t over 1m, have defined significant gold mineralised quartz veining over a confirmed 1km strike at an average of 2m and up to 5m true width across multiple stacked vein zones up to 200m wide with new hard-rock artisanal workings potentially extending strike to >3km.

Ghana

The Company entered into a joint venture arrangement with Obotan Minerals Limited and Merlink Resources Limited of Ghana, West Africa, securing the first access rights to acquire the historical Egyasimanku Hill spodumene rich lithium resource estimate to be in the order of 1.48Mt at 1.67% Li(2) O. The portfolio covers some 238km(2) with a further identified 10km pegmatite swarmed veins, tenure package is also highly prospective for tin, tantalum, niobium and gold which occur as accessory minerals within the pegmatites and host formations.

Ivory Coast

The Company entered into a joint venture arrangement with Enchi ProCI SA of the Ivory Coast, West Africa, securing the first access to highly prospective multiple untested pegmatite occurrences. The project area covers some 400km(2) with further identified outcrops some 25km apart along the interpreted trend. The project is well located within 75km of the capital Abidjan and has excellent infrastructure, logistics and services support for potential rapid development.

Corporate

IronRidge made its AIM debut in February 2015, successfully securing strategic alliances with three international companies; Assore Limited of South Africa, Sumitomo Corporation of Japan and DGR Global Limited of Australia. Assore is a high-grade iron, chrome and manganese mining specialist. Sumitomo Corporation is a global resources, mining marketing and trading conglomerate. DGR Global is a project generation and exploration specialist.

The Board of Directors is represented by mining industry professionals with a broad range of corporate, exploration, production, contracting and capital markets experience. The Company was admitted to the London Stock Exchange on 12 February 2015 (Ticker Code IRR) and currently has 236,612,203 shares and 14,770,000 unlisted options on issue.

This information is provided by RNS

The company news service from the London Stock Exchange

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October 20, 2016 02:00 ET (06:00 GMT)