Desert Lion Energy Announces Maiden Mineral Resource Estimate Establishing a Significant Lithium (Lepidolite) Project

TORONTO, Oct. 12, 2018  /CNW/ - Desert Lion Energy Inc. (TSXV: DLI) (OTCQB: DSLEF) ("Desert Lion" or the "Company") is pleased to announce its maiden Mineral Resource estimate ("MRE") completed for its Namibian Lithium project. The MRE was prepared by independent consultants The MSA Group (Pty) Ltd. ("MSA") of South Africa.

Highlights:

• 3.0 Million tons at a grade of 0.63% Li₂O in the Indicated category at a 0.20% Li₂O cut-off
• 5.8 Million tons at a grade of 0.53% Li₂O in the Inferred category at a 0.20% Li₂O cut-off
• Rubicon deposit remains open downdip, and there is significant potential to delineate additional deposits within the Mining and Exploration licenses.
• Estimate based on 264 holes, totaling 21,400 meters of drilling, 49 pits totaling 104m and 65 channel samples
• Results expected to enhance and support robust economics due to the Project's proximity to high quality existing infrastructure and low-cost operating environment in Namibia
• With the positive results of the MRE, the Company intends to issue its Preliminary Economic Assessment prior to the end of October 2018

"We are very pleased with the maiden Mineral Resource estimate as the results show the potential for the Company to establish a significant pegmatite-hosted lepidolite lithium project," commented Tim Johnston, CEO of Desert Lion. The Project's at or near surface mineralization, proximity to high quality existing infrastructure and the low-cost operating environment in Namibia provide significant advantages as we continue to develop the project towards completion of the Preliminary Economic Assessment." 

Geology and Mineralisation

The Project is located in the southern Central Zone of the Damara Belt in which other deposits have been discovered and exploited. Included amongst these deposits are Li-Be, Sn and tourmaline-bearing Lithium Cesium Tantalite (LCT) type family pegmatites and U-bearing Niobium Yttrium Fluorine family pegmatitic leucogranites, which have been intruded into the tightly folded supracrustal rocks of the Damara Supergroup.

The pegmatites of the Damara Orogen occur in five major belts with those in the Southern Tin and Karibib Pegmatite Belts containing large, well zoned Li-Be- gem tourmaline bearing LCT type. The Karibib Pegmatite Belt contains numerous LCT occurrences and workings, with the Rubicon and Helikon pegmatites being classic examples of highly fractionated and well zoned LCT type pegmatites. 

At Rubicon a series of stacked sub parallel pegmatites intrude a variable dioritic and pegmatitic granite sequence with the Rubicon Main pegmatite body forming a prominent ridge which strikes approximately 1,200m northwest and dips between 20° and 65° to the northeast; with dips averaging 45° near surface but flattening to about 18-25° at depth.

The Rubicon Main pegmatite (Figure 1) consists of two ellipsoidal well zoned, Li-mineralised bodies developed around two quartz cores and surrounded by a zone of quartz-feldspathic pegmatite. At Rubicon, the main lithium minerals present are lepidolite and petalite. Historical mining has also produced waste dumps and slimes dumps that contain lithium mineralisation predominantly hosted in lepidolite, with minor petalite and tantalite.

The historical Helikon workings expose a a series of stacked, sub parallel LCT type pegmatites that have been intruded into marbles and calc silicates of  the Karibib Formation. The five pegmatites (Helikon 1-5) that form part of the MRE have in the past been exploited for lithium bearing minerals (lepidolite, petalite and amblygonite), tantalite as well as beryl. Helikon 1, located 750m to the south of Helikon 2 – 5, is the largest exposed pegmatite at the Project with a strike length of 350m, an average thickness of 65m and dips 70° to the north. The Helikon 2 – 5 pegmatites define a discontinuous strike length of some 1,700m with steep but variable dips and thicknesses.

Mineral Resource Estimate

The maiden Mineral Resource estimate comprising the Rubicon, Rubicon Slimes, Helikon 1, Helikon 2, Helikon 3, Helikon 4 and Helikon 5 deposits was based on assay and geological/mineralogical data generated from three phases of channel, pitting, diamond and reverse circulation drilling completed by the Company since 2017.

The Mineral Resource was estimated using The Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Best Practice Guidelines (2003) and is reported in accordance with the 2014 CIM Definition Standards, which have been incorporated by reference into National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). The Mineral Resource is classified into Inferred and Indicated categories. Both hard rock and slimes Mineral Resources are reported with an effective date of 01 October 2018

The hard rock Mineral Resource is based on a cut-off grade of 0.2% Li₂O. High-level cost and revenue assumptions have been used, the QP considers that the mineralisation at this cut-off grade will satisfy reasonable prospects for eventual economic extraction (RPEEE).

The Mineral Resource for the hard rock deposits is stated as follows:

In addition to the hard rock deposits, a Mineral Resource is reported for the Rubicon Slimes. The Mineral Resource is reported for the total slimes deposit. The Li₂O block estimates are all greater than 0.20% Li₂O, which MSA considers has reasonable prospects for eventual economic extraction, particularly given the bulk mining, non-selective nature of slimes reclamation. The Mineral Resource is classified into the Inferred and Indicated categories.

The Mineral Resource for the slimes deposit is stated as follows:

Rubicon

A total of 142 DD and RC holes were drilled on a general 50m x 50m grid totaling over 10,000m, including 35 channel samples. The Rubicon Main pegmatite has been delineated over a strike length of 1,200m and to a modelled downdip extent of 280m from surface. The deposit remains open down dip to the north east.

The Rubicon Slimes, comprising of tailings residue from previous operations was estimated through a total of 36 pits totaling 54.3m, 8 RC drill holes totaling 42m and 5 trenches totaling 7.2m (Figure 1).

Helikon 1

DD and RC holes were drilled on a staggered 40m x 20m grid where 50 holes were drilled for a total of 3,760m including 36 channel samples. Drilling has delineated the Main Helikon 1 pegmatite for a strike length of approximately 450m and to a modelled downdip extent of 70m from surface (Figure 2).

Helikon 2 – 5

Helikon 2, 3, 4 and 5 represent a series of semi continuous, sub parallel pegmatites that exhibit steep, but variable dips. Diamond drilling was completed on broad 40m centers along strike with step out holes being located where possible. A total of 71 DD holes were drilled totaling 7,700m, and included 28 channel samples taken Helikon 2, 3 and 4.

Estimation Methodology

Rubicon
A geological model of the Rubicon Main pegmatite was constructed by MSA in Leapfrog Geo. Internal pegmatite domains were interpreted based on geological logging which was further refined from assay data. The pegmatite and internal domains were imported into Datamine Studio 3 for block model construction and estimation. Grades were estimated into the pegmatite and internal domains by means of ordinary kriging (depending on the availability of data and semi-variogram stability) or inverse distance weighting.

Specific gravity (SG) determinations have been carried out on Rubicon diamond drill core. The majority of these were completed on fresh pegmatite material by utilizing the Archimedes principal of weighing samples in air and then again following submersion in water. An average SG was estimated for each of the modelled domains and assigned in the block model for tonnage calculations.

The Mineral Resource is classified as Indicated where geological continuity is assumed between drill holes, and where blocks have been estimated within the first search volume (derived from the Li₂O% semi-variogram range), are within a drill hole spacing of 50 m by 50 m and are not extrapolated more than 25 m beyond assay data. Inferred Mineral Resources are defined as those blocks in which geological continuity is implied but cannot be verified, due to drill hole spacing beyond the 50 m grid and beyond the semi-variogram range. Blocks extrapolated beyond 25 m from data are classified as Inferred Mineral Resources.

A volume model of the Rubicon Slimes was constructed by MSA in Leapfrog Geo. The volume model was imported into Datamine for block model construction and estimation. Grades were estimated into the volume by means of inverse distance weighting. A constant SG value of 1.53 was applied for the estimation of tonnages.

Areas where the slimes were drilled at a spacing of closer than 20 m by 20 m were classified as Indicated Mineral Resources, the remaining area of the model within the drilling grid was classified as Inferred Mineral Resources. Inferred Mineral Resources were extrapolated for a maximum distance of 50 m from the nearest hole intersection.

Helikon 1
A geological model of the Helikon 1 pegmatite was constructed by MSA in Leapfrog Geo. Internal pegmatite domains were interpreted based on geological logging which was further refined from assay data. The pegmatite and internal domains were imported into Datamine Studio RM for block model construction and estimation. Grades were estimated into the pegmatite and internal domains by means of inverse distance weighting as the data did not support the calculation and modelling of stable semi-variograms for use in estimation.

Specific gravity (SG) determinations were carried out on drill core utilizing the Archimedes principal. An average SG was estimated for each of the modelled domains and assigned in the block model for tonnage calculations.

The Mineral Resource is classified as Inferred as there are insufficient data to model spatial continuity. The spacing of data is sufficient to imply, but not verify, geological continuity and some mineralized zones are informed by only a single drill hole.

Helikon 2 – 5
Geological models of the Helikon 2-5 pegmatites were constructed by MSA in Leapfrog Geo. Internal pegmatite domains were interpreted based on logging which was further refined from assay data. The pegmatite and internal domains were imported into Datamine Studio RM for block model construction and estimation. Grades were estimated into the pegmatite and internal domains by means of inverse distance weighting as the data did not support the calculation and modelling of stable semi-variograms for use in estimation.

Specific gravity (SG) determinations were carried out on drill core utilizing the Archimedes principal. Average SG values were estimated for each of the modelled domains and assigned in the block models for tonnage calculations.

The Mineral Resources are all classified as Inferred as there are insufficient data to model spatial continuity. The spacing of data is sufficient to imply, but not verify, geological continuity and some mineralized zones are informed by only a single drill hole.

MSA recommends that the next phase of exploration includes infill drilling at both Rubicon and Helikon 1-5 in order to increase geological confidence with an aim of reporting Measured Mineral Resources and possibly upgrading portions of the Inferred Mineral Resources, as well as extending the Rubicon Mineral Resource at depth. The potential to discover and delineate additional LCT type pegmatites within the company's Mining License and surrounding licenses is considered high following progress made to date by the Company's exploration team (please refer to DLI Press Release 15 August 2018 "Desert Lion identifies prospective LCT pegmatite corridor and provides update on exploration activities".)

Mineralogy
In order to better quantify the proportions of lepidolite and other lithium bearing minerals, the Company took a total of 481 samples from all deposits and completed assay validated X Ray Diffraction ("XRD"); comprising 121 samples from Rubicon and 360 samples from the Helikon 1-5 core samples. The lithium minerals identified by the XRD are lepidolite, petalite, cookeite, with traces of amblygonite at Helikon and traces of spodumene at Rubicon. The cookeite is only present in samples containing petalite and its content is directly proportional to the petalite content and is interpreted as an alteration product of the petalite.

Rubicon
Figure 6 plots the lithium mineral proportions normalized to 100% and shows the relative increase in the proportion of lepidolite relative to other lithium minerals with increasing Li₂O content. The high petalite contents from in the last two high grade samples were from pure petalite zones which tend to form small discontinuous patches within the pegmatite.

Figure 7 below shows the relative proportions of the lithium minerals for samples containing greater than 0.2% Li₂O with lepidolite (82%) being the dominant lithium mineral, followed by petalite (12%), cookeite (6%) and traces of spodumene.

Helikon 1-5
Figure 8 plots of the lithium mineral proportions normalized to 100% and shows the relative increase in the proportion of lepidolite relative to other lithium minerals with increasing Li₂O content; amblygonite present in some samples at higher Li₂O contents.

Figure 9 below shows the relative proportions of the lithium minerals in the samples containing greater than 0.2% Li₂O with lepidolite (85%) being the dominant lithium mineral, followed by petalite (10%), cookeite (4%) and traces of amblygonite.

Quality Control

Desert Lion has used four internationally accredited analytical laboratories for the preparation and analyses for the samples used in the Mineral Resource estimation: ALSChemex (Canada), SetPoint Laboratories (Johannesburg), Scientific Services (Cape Town) and ACT Laboratories (Canada), each of which is independent of Desert Lion. Over and above the laboratory quality assurance quality control ("QA/QC") routinely implemented by all labs using pulp duplicate analysis, Desert Lion has developed an internal QA/QC protocol which utilizes Certified Reference Materials ("CRMs"), blanks and coarse crush duplicates on a systematic basis with the samples shipped to the analytical laboratories, as follows: 1 standard, 1 duplicate and 1 blank are inserted every 30 samples (giving an average of c.10%). ALSChemex was used as a check lab for SetPoint analyses, and the results show an acceptable correlation to support the accuracy of the SetPoint results.

In the QP's opinion the results of the QAQC program are acceptable and the data therefore suitable for Mineral Resource estimation and reporting according to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).

Qualified Persons

The MRE inputs were prepared by The MSA Group, a company independent from Desert Lion. Anton Geldenhuys, Pr.Sci.Nat and Michael Cronwright, Pr.Sci.Nat, both from MSA are independent Qualified Persons as defined by National Instrument 43-101. Mr. Geldenhuys and Mr. Cronwright have reviewed and approved the technical information pertaining to the Mineral Resource estimate and the geology in this news release.

The effective date of the MRE is 1 October 2018 and the supporting technical report prepared in accordance with the National Instrument 43-101 Standards of Disclosure for Mineral Projects, which supports the MRE, will be filed on SEDAR within 45 days from this date.

About Desert Lion Energy

Desert Lion Energy is an emerging lithium development company focused on building Namibia's first large-scale lithium mine to be located approximately 210 km from the nation's capital of Windhoek and 220 km from the Port of Walvis Bay. The Company's Rubicon and Helikon mines are located within a 301 km² prospective land package, with known lithium bearing pegmatitic mineralization. The project site is accessible year-round by road and has access to power, water, rail, port, airport and communication infrastructure.

Cautionary Note Regarding Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget" "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved." Forward-looking information includes but is not limited to statements and expectations regarding: the targeted additional deposits within the Company's mining and exploration licences; the potential for the results to support an economical project; the timing for completion of the Preliminary Economic Assessment; and the Company's planned work program for the Project and its exploration and development schedule and timetable. ; Forward-looking information is based on certain factors and assumptions management believes to be reasonable  at the time such statements are made, including but not limited to, continued exploration activities, lithium and other metal prices, the estimation of initial and sustaining capital requirements, the estimation of labour and production costs, the estimation of mineral resources, assumptions with respect to currency fluctuations, the timing and amount of future exploration and development expenditures, receipt of required regulatory approvals, the availability of necessary financing for the Project, permitting and such other assumptions and factors as set out herein.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks related to changes in lithium prices; sources and cost of power and water for the Project; the estimation of initial capital requirements; the lack of historical operations; the estimation of labour and operating costs; general global markets and economic conditions; risks associated with exploration, development and operations of mineral deposits; the estimation of initial targeted mineral resource tonnage and grade for the Project; risks associated with uninsurable risks arising during the course of exploration, development and production; risks associated with currency fluctuations; environmental risks; competition faced in securing experienced personnel; access to adequate infrastructure to support exploration activities; risks associated with changes in the mining regulatory regime governing the Company and the Project; completion of the environmental assessment process; risks related to regulatory and permitting delays; risks related to potential conflicts of interest; the reliance on key personnel; financing, capitalization and liquidity risks including the risk that the financing necessary to fund continued exploration and development activities at the Project may not be available on satisfactory terms, or at all; the risk of potential dilution through the issuance of additional common shares of the Company; the risk of litigation.

Although the Company has attempted to identify important factors that cause results not to be as anticipated, estimated or intended, there can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this presentation and the Company does not undertake to update or revise any forward-looking information this is included herein, except in accordance with applicable securities laws.

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of Mineral Resources will be converted to Mineral Reserves.

Inferred Mineral Resources are based on limited drilling which suggests the greatest uncertainty for a resource estimate and that geological continuity is only implied. Additional drilling will be required to verify geological and mineralization continuity and there is no certainty that all of the Inferred Resources will be converted to Measured and Indicated Resources.

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SOURCE Desert Lion Energy