Elemental Minerals Review of Operations for the Quarter Ended 31 December 2013

PERTH, Australia, Jan. 31, 2014 /CNW/ - Elemental Minerals Ltd. (ASX: ELM) (TSX: ELM) ("Elemental" or "the Company") is pleased to provide the following quarterly update on its activities, including at its Sintoukola Potash Project located in the Republic of Congo ("RoC").

Dingyi Offer

On 11 November 2013, the offer period ("Offer Period") for the off-market takeover offer for all of the fully-paid ordinary shares of Elemental ("Dingyi Offer") by Dingyi Group Investment Limited ("Dingyi"), a company incorporated in Bermuda and listed on The Stock Exchange of Hong Kong Limited ("SEHK"), was extended by Dingyi so that it was due to close at 7.00pm (Sydney time) on 31 January 2014.

As previously announced by Elemental, the Dingyi Offer is subject to a range of conditions including the Dingyi Shareholder Approval Condition, which requires Dingyi to obtain shareholder approval of the Dingyi Offer. This condition is required because under the rules of the SEHK, transactions of listed issuers such as Dingyi are subject to various disclosure and/or shareholder approval requirements depending on the classification of the transaction, a classification which must be confirmed by the SEHK.

On 16 December 2013, Dingyi received a written decision from the SEHK advising it that the SEHK had classified the Dingyi Offer as a reverse takeover under Rule 14.06(6) of the SEHK Listing Rules ("SEHK Decision"). On 19 December 2013, Dingyi released its First Supplementary Bidder's Statement in which it outlined that, unless the SEHK changes its decision, the consequence of the SEHK Decision on the Dingyi Offer is that:

• Dingyi will not be able to satisfy the Dingyi Shareholder Approval Condition because it will not be able to obtain the clearance required from the SEHK for Dingyi to issue the documentation required to obtain the Dingyi Shareholder Approval Condition;
  
  
• the Dingyi Offer will therefore lapse at the end of the Offer Period because the Dingyi Shareholder Approval Condition will not have been satisfied; and
  
  
• all acceptances under the Dingyi Offer which have been received by Dingyi and which are not validly withdrawn will become void at the end of the Offer Period and those accepting Elemental Shareholders will retain their Elemental Shares.

On 24 December 2013, the Company announced that Dingyi had requested a review by the SEHK Listing Committee of the SEHK Decision and that it and Dingyi had agreed to certain timetable extensions to provide further time for the SEHK review process, with the Company and Dingyi also releasing a First Supplementary Target's Statement and Second Supplementary Bidder's Statement respectively.

Dingyi has since informed the Company that it is in the process of finalising its formal review submissions and expects them to be lodged with the SEHK Listing Committee in early February and announced a further extension of the Offer Period so that it is now due to close at 7.00pm (Sydney time) on 31 March 2014 (unless further extended). The Company is assisting Dingyi with the review process where possible and will keep the market informed of any material developments.

Convertible Note Facility

On 22 January 2014, Elemental announced that the Company had completed the drawdown of $10 million of the $15 million available under the secured Convertible Note Facility being provided by Dingyi. The funds will be used by the Company to continue to progress further work on its Sintoukola Project while the Dingyi Offer continues in accordance with agreed procedures for expenditure.

As part of the drawdown, Elemental issued to Dingyi 10 million convertible notes. The key commercial terms of the Convertible Note Facility and the convertible notes are summarised in the Company's original transaction announcement of 1 July 2013.

Geology and Mineral Resources

No fieldwork was undertaken during the quarter. As announced in the previous quarterly report, the capturing of borehole data from the recently acquired historic database continues. This data is being interpreted along with additional historic seismic data to guide future exploration programmes for the Hangingwall Seam Sylvinite.

No work on the preparation for the Bankable Feasibility Study was undertaken during the quarter.

About Elemental Minerals

Elemental Minerals Ltd. (ASX: ELM) (TSX: ELM) is an advanced mineral exploration and development company that aims to grow shareholder value through its 93%-owned Sintoukola Potash Project. The Sintoukola project has the potential to be among the world's lowest-cost potash producers and its strategic location near the coast of central Africa offers a transport cost advantage to key Brazilian and Asian fertilizer markets. For more information, visit www.elementalminerals.com

Mineral Resource Summary - Kola Deposit of Sintoukola Project¹

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

This information was previously prepared and disclosed on the basis of compliance with the JORC Code - 2004 Edition. The Inferred Mineral Resources have not been subsequently updated to satisfy compliance with the JORC Code - 2012 Edition as the information has not materially changed since it was last reported.

Competent Person / Qualified Person Statement:

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

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

Forward-Looking Statements

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

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

¹ For a full description of the resource refer to the NI 43-101 Technical Report, 17 September 2012 available on SEDAR, www.sedar.com

SOURCE Elemental Minerals Ltd.