ASX Code: historic lithium mine, initiated field review of ... · PDF fileregistered in name of joint venture partner) ... is based in Belgium and ... Preliminary analysis of the ore

4th Quarter Activities Report 2015/2016

Fast Facts ASX Code: HNR

Capital Structure Shares on issue: 999.9m

Market cap: $22.9M (at 2.3c)

Management Managing Director: Damian Hicks

Exploration Manager: Amanda Scott

Finance & Compliance Manager: Mindy Ku

Non-Executive Directors Olof Forslund

Markus Bachmann

Jonathan Murray

Key Projects

Sole Funded

Varuträsk (Lithium)

Lannavaara & Rakkurijoki (Iron)

Free-Carried Interest

Pahtohavare (Copper-Gold)

Forrestania (Nickel & Gold)

Lake Johnston (Nickel)

QVR (Nickel)

During the 4th Quarter (April – June 2016) Hannans:

Exploration & Business Development

Lithium (Sweden) – continued review of data on 100% owned Varuträsk permits which host Sweden’s most well-known historic lithium mine, initiated field review of additional lithium opportunities in Sweden

Lithium (Australia) – monitored activities of lithium companies with ground adjacent to Hannans’ Forrestania and Lake Johnston Projects with view to initiating lithium review (project registered in name of joint venture partner)

Nickel (Australia) – completed geochemical and geophysical surveys at Forrestania Project targeting massive nickel sulphide mineralisation (managed and funded by joint venture partner)

Copper-Gold (Sweden) – continued environmental and metallurgical test work programs prior to lodgement of mining lease application late 2016 (managed and funded by joint venture partner)

Corporate

Capital Raising – completed $1.49 million capital raising via placements and underwritten Share Purchase Plan

Strategic Collaboration with Neometals – prepared documentation for ASIC and ASX review

Discovery Zone – set aside statutory demand served by Avalon Minerals Ltd at which time Court ordered that Avalon pay Hannans’ costs, subsequently received Writ from Avalon

During the 1st Quarter (July – September 2016) Hannans aims to:

Exploration & Business Development

Lithium (Sweden) – lodge work plans to drill test Varuträsk Lithium Project and secure additional lithium permits

Lithium (Australia) – complete field review of pegmatites prospective for lithium mineralisation

Nickel (Australia) – monitor core drilling program in progress, designed to test for massive nickel sulphide mineralisation 10km north of two world class nickel mines (managed by joint venture partner)

Corporate

Strategic collaboration with Neometals – hold meeting of shareholders to vote on Neometals transaction

Lithium, Copper & Gold in Sweden – complete in-specie distribution to Hannans shareholders and seek listing of new company on securities exchange

Discovery Zone – seek Court order to dismiss Writ

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HANNANS 4th QUARTER ACTIVITIES REPORT 2015/2016 2

EXPLORATION LITHIUM IN SWEDEN Hannans’ lithium strategy is to aggregate the most prospective lithium projects in Sweden for the least cost and fast track their development towards lodgement of mining lease applications and environmental permit applications. Ultimately Hannans’ goal is to own a significant equity interest in a mine and processing facility producing lithium hydroxide for end users in Europe.

Sweden is optimally positioned to benefit from the surge in demand for technology metals (including lithium) due to its proximity to the European market for high technology devices. Notably one of the largest lithium chemical buyers in the world (Umicore) is based in Belgium and one of the primary countries transitioning the world to renewables and energy storage is Germany.

Sweden has inherent prospectivity for lithium deposits and its abundant supply of fresh water and low power costs are critical for processing hard rock lithium bearing minerals cost effectively.

Hannans owns one brownfields lithium project (Varuträsk) and a number of greenfields lithium prospects in Västerbotten County, northern Sweden. The Company is actively searching for additional prospects that have the potential to host economic lithium deposits.

Varuträsk, located in northern Sweden, is a well-known pegmatite district. Scandinavian Resources AB owns 100% of the exploration permit that covers the historic Varuträsk mine and the majority of the prospective pegmatites in the Varuträsk Pegmatite Field (VPF).

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Varuträsk Lithium-Caesium-Tantalum (LCT) - Exploring down dip, along strike and beneath the historic Varuträsk lithium mine

Varuträsk is located less than 10kms from Skellefteå (a city with a population of ~35,000) and less than 30kms from a major port. The permits that comprise the Varuträsk Lithium Project are registered in Hannans wholly owned subsidiary company Scandinavian Resources AB (SRAB). SRAB has a 100% interest in the permits. SRAB will lodge drilling work plans for approval by the Mining Inspector with the aim of drilling down dip, along strike and underneath Varuträsk next Quarter to determine the extent of lithium mineralisation within close proximity to the historic mine.

Lithium was mined at Varuträsk by Boliden1 during the period 1936-46 through open cut and underground mining. Caesium minerals and occurrences of niobium minerals were also reported from Varuträsk. The deepest lithium focussed drilling within the lithium mine was limited to less than 35m from surface. The full potential of the original pegmatite and the additional lens discovered in 1983-84 remains unanswered (for example, it does not appear that deeper drilling was ever conducted to determine the potential for economic occurrences of lithium beneath the lowest mined level). Varuträsk and its surrounding area clearly warrant further exploration for economic deposits of lithium and caesium minerals.

Figure 2: Location map showing the Varuträsk Lithium Project, Sweden.

1 Refer boliden.com

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Figure 3: Location of Varuträsk Lithium Project

Diamond drill core from the Varuträsk LCT mine, was viewed in the Geological Survey of Sweden (SGU) core archive in Malå, Västerbotten County. Drill core from two profiles across the deposit were cut and sent for analysis by ALS in Piteå, Sweden. The profiles were selected based on visual identification of lithium mineralisation within the historic holes that were available within the core archive. Refer Figures 5 & 6 on page 5 for cross-sections of the two profiles and Appendix B on page 12 for full assay details.

A site visit was completed of the historic shallow underground mine and a 3kg sample of ore was taken

and sent for metallurgical analysis to ANZAPLAN in Germany.

Preliminary analysis of the ore was completed and subsequently a proposal for physical processing has been received requiring an additional 100kg sample of raw material from Varuträsk. This sample will be collected during the first drill program scheduled for next Quarter.

Stakeholder meetings were held with the Skellefteå Kommun and the owners of the adventure park that lease land and buildings at Varuträsk from the Kommun.

A-A’

B-B’

Figure 4: Location and geological map of the Varuträsk lithium deposit. Cross-section profile locations shown in blue. F

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Figure 5: Drillhole cross-section A – A’ showing lithium mineralisation at the Varuträsk Lithium Project, Sweden.

Figure 6: Drillhole cross-section B – B’ showing lithium mineralisation at the Varuträsk Lithium Project, Sweden

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LITHIUM IN WESTERN AUSTRALIA (FORRESTANIA) Subsequent to the end of the Quarter, the Forrestania Region, located south of Southern Cross in Western Australia was recognised as having outstanding lithium potential.

A number of companies, large and small are now targeting the Forrestania Region for lithium (in addition to nickel and gold). Most notable was the strong rise in price and volume of shares traded in gold and lithium company Kidman Resources Ltd (ASX:KDR) and their announcement titled, “Mount Holland emerges as significant lithium discovery”2 and “Review highlights Mt Holland’s outstanding lithium potential”.3 The lithium potential of the Forrestania Region has also been recognised by Western Areas Ltd (ASX:WSA)4 and Marindi Metals Ltd (ASX:MZN)5.

Hannans and joint venture partner, lithium mining company Neometals Ltd have recently commenced a field review of pegmatites within the project area that have the potential to host lithium mineralisation. Hannans will make a separate announcement should the field review, assays and interpretation warrant further disclosure.

Figure 7: Location and geological map of the Forrestania Project.

2 Refer Kidman ASX release dated 15 July 2016 3 Refer Kidman ASX release dated 5 July 2016 4 Refer Western Areas ASX release dated 22 April 2016 5 Refer Marindi ASX releases dated 18 July 2016 and 14 June 2016

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NICKEL IN WESTERN AUSTRALIA (FORRESTANIA) Subsequent to the end of the Quarter, drill testing of two discrete nickel sulphide targets commenced within the Forrestania Nickel Project, located south of Southern Cross in Western Australia. The nickel targets are within the Stormbreaker Prospect which is considered underexplored for the existence of high grade massive nickel sulphide deposits at depth.

The targets have been generated following extensive geological, geochemical and geophysical surveys and interpretations completed over the last eighteen months6. The two discrete targets will be tested with (diamond) core drilling to depths of approximately 400m. Drilling will continue for 2 to 3 weeks, samples will be submitted to the laboratory for analysis and results released to the ASX once an interpretation of the results has been completed.7

Figure 8: Location and geological map of the Stormbreaker Nickel Prospect, Forrestania Project. Figure shows PGE geochemistry anomalism.

6 The targets have been generated by the Neometals Ltd Exploration Team comprising Gordon Kelly and Richard Stuart. The Forrestania

Nickel Project is registered in the name of Neometals’ wholly owned subsidiary Reed Exploration Pty Ltd. Subject to receipt of shareholder approval at a meeting to be convened by Hannans this Quarter, Hannans will acquire a 100% interest in REX.

7 Refer Hannans ASX release dated 27 July 2016

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COPPER-GOLD IN SWEDEN (PAHTOHAVARE) The Pahtohavare Copper-Gold Project is located approximately 8km south-west of Kiruna, northern Sweden. Joint venture partner Lovisagruvan AB (lovisagruvan.se) is funding the costs of exploration and is collating information required to lodge a mining lease application late 2016.

After lodgement of the mining lease Lovisagruvan will be responsible for preparing and lodging an environmental permit application. Preliminary studies into environmental matters have commenced.

If Lovisagruvan AB continues funding the joint venture through to grant of a mining lease and environmental permit and completion of a bankable feasibility study Hannans will retain a 25% interest in the project.

Figure 9: Location map showing the Pahtohavare Cu-Au Project, Sweden.

Continued…

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CORPORATE

STRATEGIC COLLABORATION WITH NEOMETALS LTD During the Quarter Hannans met a number of the conditions required to successfully complete the strategic collaboration with Neometals Ltd. 8 One major condition precedent was completion of a minimum $1.25M capital raising. Thanks to the support of Hannans existing and new shareholders, Hannans completed a $1.49M capital raising.

Subsequent to the end of the Quarter, Hannans lodged the Notice of Meeting (NOM) and Independent Expert’s Report (IER) with the ASIC and ASX for review. There has been one change to the original Terms Sheet, the obligation on Hannans to consolidate its capital structure has been removed.

It is anticipated that the NOM and IER will be dispatched to Shareholders in August, and approval from Hannans’ Shareholders for the transaction will be sought at a general meeting to be held in September. Settlement of the transaction is on track to be completed this Quarter.

A second major condition precedent is the requirement to spin-out the portfolio of Swedish lithium, copper-gold and iron projects into new company. The spin-out company has been called Critical Metals Ltd (CML) and the pro-rata free share allocation will be distributed to Hannans’ Shareholders after the general meeting in September9.

Hannans’ Directors are investigating opportunities to list CML on a securities exchange as soon as practicably possible in order to distribute listed tradeable shares to shareholders and improve access to capital to fund: the lithium exploration program, an expansion of the lithium portfolio, lodgement of the Rakkurijoki iron mining lease; an expansion of the copper-gold portfolio and working capital.

CML has a lithium technical knowledge sharing agreement with Neometals Ltd which provides credibility in the market following the success of Neometals relationship with Jiangxi Ganfeng Lithium Co Ltd (Ganfeng) and ownership of the proprietary Eli Process. Neometals will be CML’s largest shareholder holding a 13.5% equity interest.

DISCOVERY ZONE COPPER PROJECT, SWEDEN During the Quarter the Supreme Court of Western Australia set aside a statutory demand served on Hannans by Avalon Minerals Ltd (ASX:AVI). The Court ordered Avalon to pay Hannans costs.

On 8 June 2016 Avalon Minerals Ltd served Hannans with a Writ issued out of the Supreme Court of Western Australia numbered CIV 1945 of 2016 claiming $1M pursuant to an agreement entered into by Hannans, its wholly owned subsidiary Kiruna Iron AB, Avalon Minerals Limited and its wholly owned subsidiary Avalon Minerals Adak AB. On 4 July 2016 Hannans filed and served Avalon with a Defence and Counterclaim for $9M and a Summary Judgement Application in respect of Avalon’s claim. The Summary Judgement Application is expected to be heard in either September / October 2016. These matters are referred to as the 'Avalon Matter'.

Pursuant to the agreement entered into between Hannans and Neometals the rights and obligations associated with the Avalon Matter will be retained by Kiruna Iron AB. If the In-Specie distribution is approved by Hannans Shareholders, the rights and obligations of the Avalon Matter will be retained by Kiruna Iron AB which will be a wholly owned subsidiary of CML. There is no certainty that this matter will be resolved promptly or in favour of Hannans or Kiruna Iron AB.

8 Refer ASX release dated 4 March 2016 for full details. 9 Please refer to the Notice of Meeting for full details once released on the ASX platform

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ASX ANNOUNCEMENTS FOR 4th QUARTER 2015/2016

Date Announcement

24 June Exercise of Options

17 June Change in substantial holding

10 June Change in substantial holding from NMT & ERI

10 June Becoming a substantial holder

9 June Response to ASX Price Query

7 June Updated capital structure

26 May Updated capital structure

23 May Placement and SPP raises $1.43M

19 May Voting results from General Meeting

16 May Purchase HNR shares at 20% discount

29 April 3rd Quarter Activities Report

29 April 3rd Quarter Cashflow Report

14 April Notice of General Meeting

14 April Share Purchase Plan (SPP) Documentation

11 April Placement, Underwritten SPP and Preferred Contract

Table 1: ASX Announcements for 4th Quarter 2015/2016

CONTACTS

For further information, please contact:

Damian Hicks Managing Director +61 419 930 087 [email protected]

Amanda Scott Exploration Manager +46 703 221 497 [email protected]

Tel: +61 8 9324 3388 Web: www.hannansreward.com Email: [email protected] Twitter: @hannansreward Facebook: Hannans Reward

COMPLIANCE STATEMENTS

The information in this document that relates to exploration results is based on information compiled by Amanda Scott, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy (Membership No.990895). Amanda Scott is consultant to Hannans Reward Ltd and its subsidiary companies. Amanda Scott has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been 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 (JORC Code). Amanda Scott consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

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APPENDIX A – TENEMENT STATUS FOR 4th QUARTER 2015/2016

CURRENT TENEMENTS

Tenement number Interest 3rd

Quarter 2015/2016

Note Tenement number Interest 3rd

Quarter 2015/2016

Note

Start End Start End

KIRUNA IRON AB

Location: Norrbotten, Sweden

Altavaara Norra 100% 100% Piedjastjåkko nr 6 100% 100%

Ekströmsberg nr 4 100% 100% Rakkurijärvi nr 2 100% 100%

Ekströmsberg nr 5 100% 100% Harrejaure nr 1 75% 75% 2

Pahtohavare nr 2 80% 65% 1 Laukujärvi nr 3 75% 75% 2

Pahtohavare nr 4 80% 65% 1 Vieto nr 1 75% 75% 2

SCANDINAVIAN RESOURCES AB

Location: Norrbotten, Sweden

Lannavaara nr 8 100% 100% Paljasjärvi nr 2 100% 100%

Location: Västerbotten, Sweden

Hällberg nr 1 0% 100% Tvärliden nr 1 100% 100%

Hällberg nr 1 0% 100% Varuträsk nr 1 100% 100%

Klöverfors nr 1 0% 100% Varuträsk nr 2 0% 100%

Nide nr 1 0% 100%

HANNANS LTD

Location: Lake Johnston, Australia

E63/1365 20% 20% 3

Note: 1 Kiruna Iron AB holds 65% interest and Lovisagruvan AB holds 35% interest. 2 Kiruna Iron AB holds 75% interest and Tasman Metals AB holds 25% interest. 3 Hannans Ltd holds 20% interest and Reed Exploration Pty Ltd holds 80% interest.

TENEMENTS UNDER APPLICATION

Tenement number Interest 3rd

Quarter 2015/2016

Note Tenement number Interest 3rd

Quarter 2015/2016

Note

Start End Start End

KIRUNA IRON AB SCANDINAVIAN RESOURCES AB

Location: Norrbotten, Sweden Location: Västerbotten, Sweden

Rakkurijärvi nr 5 0% 0% Kågedalen nr 1 0% 0%

Kågedalen nr 2 0% 0%



RELINQUISHED, REDUCED OR LAPSED TENEMENTS

None

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APPENDIX B – ASSAY DETAILS FOR VARUTRÄSK CROSS SECTIONS

Hole ID Northing

(SWEREF99) Easting

(SWEREF99) Azimuth Dip EOH (m)

Drillhole Profile

VAC10 7198620 772423 - -90 26.14 A-A’

VAC18 7198618 772427 - -90 20.45 A-A’

VAC23 7198617 772429 - -90 19.41 A-A’

VAC19 7198617 772430 - -90 16.68 A-A’

VAC20 7198615 772434 - -90 14.78 A-A’

VAC21 7198614 772438 - -90 15.02 A-A’

VAC22 7198611 772445 - -90 13.06 A-A’

VAC32 7198676 772445 - -90 32.16 B-B’

VAC38 7198672 772454 - -90 31.69 B-B’

VAC30 7198668 772464 - -90 29.05 B-B’

VAC45 7198665 772473 - -90 24.91 B-B’

VAC31 7198661 772482 - -90 17.00 B-B’ Table 2: Diamond drillhole collar summary for drill profiles A-A’ and B-B’ from the Varuträsk Lithium Deposit, Sweden. All coordinates are in Swedish coordinate system SWEREF 99.

Hole ID Drillhole Profile

From (m) To (m) Downhole Intercept

(m)

Li2O (%) Sample Type

VAC10 A-A’ 15.04 26.14 11.1 0.31 Quarter Core



Inc. A-A’ 3.01 5.32 2.31 1.4 Quarter Core









VAC32 B-B’ 7.76 32.16 24.4 0.29 Quarter Core


Inc. B-B’ 22.2 25.84 3.64 0.8 Quarter Core





VAC31 B-B’ 0.88 17 16.12 0.72 Quarter Core

Inc. B-B’ 7.08 11.99 4.97 1.23 Quarter Core Table 3: Significant Li2O intercepts from drill profiles A-A’ and B-B’ from the Varuträsk Lithium Deposit, Sweden. Reported using a 0.12% cut-off. Samples submitted to ALS Global (Piteå) for ME-MS61, Li-OG63 (lithium over limits), ME-CON02 (cesium over limits) and ME-MS85 (tantalum over limits).

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Hole ID From To Interval Li2O (ppm) Cs2O (ppm) Rb2O (ppm) Ta2O5 (ppm) VAC10 15.04 17.11 2.07 1873 115 667 23 VAC10 17.11 17.82 0.71 700 44 174 139 VAC10 17.82 20.48 2.66 2540 128 1061 23 VAC10 20.48 22.51 2.03 1550 91 481 78 VAC10 22.51 24.18 1.67 6092 497 2428 685 VAC10 24.18 26.02 1.84 5253 439 1914 413 VAC10 26.02 26.14 0.12 5511 2014 2242 297

VAC18 0 2.86 2.86 512 472 5720 0 VAC18 2.86 5.5 2.64 3660 636 3051 28 VAC18 5.5 8.69 3.19 4887 490 5173 21 VAC18 8.69 10.43 1.74 4155 216 1979 9 VAC18 10.43 14.06 3.63 1808 148 984 79 VAC18 14.06 20.45 6.39 5253 954 1739 337

VAC23 0 3.01 3.01 769 848 4101 19 VAC23 3.01 5.32 2.31 13734 1484 3084 16 VAC23 5.32 8.48 3.16 3035 471 5566 33 VAC23 8.48 10.46 1.98 2110 311 2778 19 VAC23 10.46 15.45 4.99 7233 636 4232 68 VAC23 15.45 18.2 2.75 3724 288 1564 502 VAC23 18.2 19.41 1.21 2389 480 514 636

VAC19 0 3.02 3.02 344 519 2078 0 VAC19 3.02 6.27 3.25 222 188 930 0 VAC19 6.27 9.79 3.52 10807 530 2351 255 VAC19 9.79 14.6 4.81 9859 636 3762 563 VAC19 14.6 16.68 2.08 3380 338 984 731

VAC20 0 2.38 2.38 200 9 23 1 VAC20 2.38 5.57 3.19 5339 742 4320 45 VAC20 5.57 8.45 2.88 11732 530 4659 53 VAC20 8.45 11.08 2.63 2820 233 2526 17 VAC20 11.08 13.45 2.37 2239 183 1072 122 VAC20 13.45 14.78 1.33 4284 636 1203 68

VAC21 0 3.17 3.17 98 3 3 BD VAC21 3.17 6.28 3.11 193 65 311 0 VAC21 6.28 9.85 3.57 9149 742 3292 564 VAC21 9.85 13.65 3.8 4499 434 2636 58 VAC21 13.65 15.02 1.37 4348 422 1258 419

VAC22 0 2.98 2.98 170 11 6 0 VAC22 2.98 5.9 2.92 9450 848 4254 66 VAC22 5.9 8.93 3.03 7793 523 2996 45 VAC22 8.93 13.06 4.13 3186 145 1269 28

VAC32 1.9 4.19 2.29 691 12 7 1 VAC32 4.19 7.76 3.57 1184 158 591 5 VAC32 7.76 9.83 2.07 4542 436 2001 43 VAC32 9.83 13.82 3.99 2799 305 1695 72 VAC32 13.82 16.8 2.98 1119 269 2329 11 VAC32 16.8 19.25 2.45 542 275 2778 12 VAC32 19.25 22.44 3.19 1292 116 930 9

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Hole ID From To Interval Li2O (ppm) Cs2O (ppm) Rb2O (ppm) Ta2O5 (ppm) VAC32 22.44 24.62 2.18 4004 485 1509 63 VAC32 24.62 27.72 3.1 3746 272 1476 70 VAC32 27.72 30.66 2.94 4456 416 1258 63 VAC32 30.66 32.16 1.5 6092 4135 1323 72

VAC38 1.09 3.86 2.77 2389 290 2045 14 VAC38 3.86 5.9 2.04 6781 530 2362 227 VAC38 5.9 8.03 2.13 8912 848 3161 180 VAC38 8.03 11.04 3.01 7750 954 2942 105 VAC38 11.04 13.39 2.35 1270 400 2887 44 VAC38 13.39 15.89 2.5 771 405 3379 7 VAC38 15.89 17.2 1.31 990 80 375 15 VAC38 17.2 19.67 2.47 2433 302 1662 11 VAC38 19.67 22.2 2.53 206 101 382 0 VAC38 22.2 25.84 3.64 7987 178 930 43 VAC38 25.84 27.79 1.95 5425 530 2297 87 VAC38 27.79 29.49 1.7 3057 212 973 386 VAC38 29.49 31.69 2.2 3681 2969 1214 421

VAC30 1.19 4.71 3.52 5468 39864 2734 46 VAC30 4.71 6.63 1.92 2454 268 2231 22 VAC30 6.63 11.22 4.59 1787 519 2964 44 VAC30 11.22 14.18 2.96 4069 516 1881 45 VAC30 14.18 16.42 2.24 753 14207 623 0 VAC30 16.42 19.9 3.48 28954 50147 1684 24 VAC30 19.9 23.49 3.59 10032 1060 2406 87 VAC30 23.49 24.74 1.25 5705 636 1859 510 VAC30 24.74 27.55 2.81 2411 224 700 175 VAC30 27.55 29.05 1.5 2734 381 689 54

VAC45 1.2 4.6 3.4 2110 184 1968 11 VAC45 4.6 6.98 2.38 728 530 3981 12 VAC45 6.98 9.64 2.66 4844 636 2450 50 VAC45 9.64 11.56 1.92 8030 636 3390 26 VAC45 11.56 14.84 3.28 13540 954 4877 184 VAC45 14.84 16.24 1.4 1313 332 3467 16 VAC45 16.24 18.26 2.02 5425 493 2100 43 VAC45 18.26 21.6 3.34 4973 495 1859 43 VAC45 21.6 23.09 1.49 1636 137 591 86 VAC45 23.09 24.91 1.82 2906 207 319 166

VAC31 0.88 2.97 2.09 5080 473 2909 927 VAC31 2.97 4.85 1.88 7750 1060 3456 294 VAC31 4.85 7.08 2.23 6673 636 3007 285 VAC31 7.08 9.08 2 14724 848 5796 99 VAC31 9.08 11.99 2.91 10656 636 4243 108 VAC31 11.99 13.5 1.51 3573 489 3871 36 VAC31 13.5 15.19 1.69 2691 314 908 152 VAC31 15.19 17 1.81 2755 181 623 40

Table 4: Detailed re-assaying results for drillhole profiles A-A’ and B-B’ at the Varuträsk Lithium Deposit, Sweden. Note assay results in this table are reported in ppm. Samples submitted to ALS Global (Piteå) for ME-MS61, Li-OG63 (lithium over limits), ME-CON02 (cesium over limits) and ME-MS85 (tantalum over limits).

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JORC Code, 2012 Edition

Table 1, Section 1-Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as downhole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample “representivity” and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report.

In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

Sampling method is quarter-core sampling of 32mm historic diamond drill core.

Sampling was carried out under Hannans’ sampling protocols and QAQC procedures as per industry best practice.

Diamond drilling completed using unknown coring equipment. Current sampling has been completed using the original sampling intervals which were on appropriate geological intervals. All samples have been crushed, dried and pulverised (total prep) to produce a sub sample for multi-element analysis by four acid digest with ICPMS.

Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).

Diamond drilling completed by unknown contractor in 1936.

Diamond drilling completed using unknown coring equipment.

No core orientations have been taken. Downhole surveying was not completed.

All holes were <40m in depth and drilled vertically so drillhole deviation is not considered to be materially significant.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Core recoveries were not recorded but visual inspection and measurements completed by Hannans’ Exploration Manager did not observe any major core recovery issues.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

All drillcore that has been re-assayed is stored in the SGU Core Archive located in Malå.

Geological logging has been completed on the entire length of all holes by Amanda Scott, Hannans’ Exploration Manager.

The lithological, alteration and structural

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The total length and percentage of the relevant intersections logged.

characteristic of the core has been logged in digital format and following established procedures.

All data is subsequently imported into Hannans’ Datashed database located in Perth.

All drillholes have been photographed. Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representative nature to the samples.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.

All samples delivered to ALS Global in Malå where the core was re-cut and sampled.

All samples are quarter-core. The sample preparation follows industry

best practice sample preparation; the samples are finely crushed with 70% passing <2mm then reduced in a splitter whereby a reject sample and a 250g sample is produced. The 250g sample is then pulverised with 85% passing <75 microns which completely homogenises the sample. A sub-sample of pulp is taken for digestion in a four acid digest.

Duplicate sampling has not been completed by Hannans due to the lack of available material for assaying. Laboratory duplicate assays were all within acceptable limits.

Certified reference material standards have not been inserted by Hannans. Laboratory inserted certified reference material standards were all within acceptable limits.

The sample sizes are considered appropriate for the type of mineralisation (pegmatite-hosted lithium, cesium tantalum mineralisation) under consideration.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

All samples are assayed using a four acid digest multi-element suite with an ICPMS finish. The acids used are hydrofluoric, nitric, hydrochloric and perchloric with the method approaching near total digest for most elements. Over limit lithium assays were completed using the ALS method LiOG63, over limit cesium assays were completed using ALS method ME-CON02 and over limit tantalum assays were completed using ALS method ME-MS85.

The analytical methods are considered appropriate for this style of mineralisation.

No geophysical tools or handheld instruments were utilised in the preparation of this release.

Laboratory QAQC methods include the insertion of certified reference material standards, blanks, and duplicates all of

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which were within acceptable limits.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The use of twinned holes. Documentation of primary data, data

entry procedures, data verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

Determination of the reported downhole interval of mineralisation has not been verified by either independent or alternative company personnel in person. but has been reviewed by independent geologist Mr Bryan Smith via electronic photographic data.

None of the drillholes referred to in this release have been twinned to date.

All geological and location data is currently stored in Hannans’ Excel database files. Data entry has been by manual input and validation of the small amount of data has been done by checking input on screen prior to saving. All data will be forwarded to the database administrator in Perth for loading and validation into Hannans’ Datashed database.

All assays were originally reported in elemental format; the lithium, cesium, tantalum and rubidium values reported in this release are in the oxide format. The following element to oxide ratios have been used: Li to Li2O (2.1527), Cs to Cs2O (1.0602), Ta to Ta2O5 (1.2211) and Rb to Rb2O (1.0936). The lithium oxide values reported in Table 3 have been converted from ppm to percent.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used. Quality and adequacy of topographic

control.

The drillholes at Varuträsk were drilled in 1936 and consequently pre-dated any modern GPS equipment.

The mine workings have been visited by Hannans’ Exploration Manager and several historical drillhole collars at Varuträsk have been confirmed using a Garmin handheld GPS unit with an accuracy of +/- 1m.

Formal DGPS surveying of the historic drillhole collars and mine workings will be completed by Hannans as part of future exploration work at the project.

Downhole surveys have not been completed. All holes were <40m in depth and drilled vertically so drillhole deviation is not considered to be materially significant

The grid system used in this release is Swedish Coordinate system SWEREF99.

No topographical control has yet been completed by Hannans.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

The current data spacing or drill profile separation is approximately 20m, hole spacing is typically 10m between holes within a drill profile.

The data spacing and distribution is considered sufficient to establish a degree of geological and grade continuity.

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Whether sample compositing has been applied.

No sample compositing has been applied.

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

All drillholes reported in this release have been drilled perpendicular to the strike of the Varuträsk pegmatite.

The reported mineralised intercepts reported in this release are downhole widths; as the holes are vertical and the pegmatite horizontal they are also true widths.

Sample security

The measures taken to ensure sample security.

All drill core logging has been completed by Amanda Scott, Hannans’ Exploration Manager. All holes are stored in a locked facility.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

No external audits or reviews of the sampling techniques and data have been completed.

Section 2-Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)


Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Varuträsk Lithium deposit is located on exploration permit Varuträsk nr 1 owned 100% by Hannans’ fully owned Swedish subsidiary Scandinavian Resources AB. The permit is located approximately 8km to the northwest of the town of Skellefteå, northern Sweden.

Exploration permit Varuträsk nr 1 is in good standing with the local mining authority, Bergsstaten.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

All historical diamond drilling and mining at Varuträsk was completed by Swedish company Boliden during the period 1936-1946. During the 1980’s work (diamond drilling and trenching) along strike of the mine at Varuträsk was completed by Swedish company SGAB on behalf of Boliden.

Geology Deposit type, geological setting and style of mineralisation.

The lithium mineralisation at the Varuträsk Lithium Deposit is hosted in a classic LCT-pegmatite. The Varuträsk pegmatite forms a trough-like to tabular body, striking NNE-SSW. In the eastern wing the dip is about 30° WNW, whereas the western wing lies all but horizontal. The exposed outcrops are about 200 m in length. The thickness varies from some 3m to 30m. The Varuträsk pegmatite displays a characteristic zonation including a border zone, a wall zone, an intermediate zone and a core zone. The mineralisation at Varuträsk is dominated by the lithium minerals

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spodumene, amblygonite, petalite and lepidolite and significant amounts of the cesium mineral pollucite.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northing of the drill hole

collar elevation or RL (Reduced Level –

elevation above sea level in metres) of the drill hole collar

dip and azimuth of the hole down hole length and interception

depth hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Refer to Tables 2 - 4 of this release for a summary of all appropriate drillhole information.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

Higher-grade significant intercepts in this release are based on lithium oxide grades generally over 1% but also grades of down to 0.7% to show the continuity of the higher grade lens within the main pegmatite.

The lower-grade, wider significant intercepts in this report are based on a 0.12% Li2O lower cut-off grade.

No high-grade cut-off has been used in this report.

Length-weighted averaging has been used to calculate all intercepts in this report. Length-weighted averaging has been used given that sampling intervals were determined geologically and not always nominally.

No metal equivalents have been used in this report.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralisation with respect to the drillhole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

The reported mineralisation intercepts are considered to be true widths given the vertical drillholes and the horizontal nature of the Varuträsk pegmatite.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view

Appropriate maps, drillhole cross-sections tabulations are included in the main body of this release.

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of drill hole collar locations and appropriate sectional views.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

The release provides the total information available to date and is considered to represent a balanced release.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

No other exploration data is considered material at this stage.

Further work The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

An initial drilling programme to test the depth extent of the pegmatite below the current known depth of approximately 40m is planned for late 2016 subject to funding.

Metallurgical testwork of the drill material obtained from the planned drilling is also planned.

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Documents

ASX Code: historic lithium mine, initiated field review of ... · PDF fileregistered in name of joint venture partner) ... is based in Belgium and ... Preliminary analysis of the ore