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BURRO CREEK LITHIUM PROJECT – ARIZONA, USA (Zenith Option to acquire 100%, Bradda Head Ltd earning initial 55%)

·         Large scale lithium (Li) clay target under exclusive option in Arizona, USA;

·         Follow-up surface sampling returned high-grade lithium results of widths up to 33.6m metres at 980 ppm Li, and 15m @ 1427 ppm Li.  These results are comparable to competitor lithium clay projects in USA and Mexico that are subject to feasibility studies and trial processing plants respectively;

·         Recent geological mapping and seismic geophysical surveys confirm extensive zones of shallow dipping lithium bearing clay with true thickness up to 50 metres;

·         Based on the positive outcomes of work completed during the initial due diligence period Zenith has resolved to exercise its option to proceed with the project; and

·         Metallurgical testwork ongoing to assess ease of extracting lithium. Drilling planned.

 

 

 

On the 10th November the Company announced that it had secured an exclusive option to acquire a 100% interest in the Burro Creek lithium clay project located in central western Arizona, USA.  Located in an active mining district, Freeport McMoRan’s operating Bagdad porphyry copper mine is located 10km from the Burro Creek project.

Initial surface sampling by the Company of the lithium clay exposures (reported 10th November 2016) returned results including: 20m @ 818ppm Li, 5m @ 1090ppm Li and 15m @ 930ppm Li & 50m @ 785 ppm Li. 

Follow-up sampling was completed during the quarter with results received shortly after the quarter and announced to the market on the 13th January 2017.  New results from that follow-up program returned generally higher-grade lithium results over greater widths (Figure 1). 

·     Results from composite channel sampling of zones where the full clay thickness is exposed in the field included: 33.6m @ 980ppm Li; whilst,

·   Zones where lithium bearing clay zones are not fully exposed and are locally obscured by transported rubble and alluvium included: 15m @ 1427ppm Li and 15m @ 920ppm Li; 2.5m @ 1300ppm Li, 3.5m @ 1120ppm Li and 1.5m @ 1210ppm Li.  These results represent only a portion of the lithium clay horizon and drilling or trenching is required to test the full thickness of the lithium bearing units; and

·     Grab samples of relict drill spoil from shallow holes drilled during a small, historical program to test the clay for industrial purposes returned results including: 1650ppm Li and 1290ppm Li.  Encouragingly these are among the highest grades returned from Zenith’s sampling to date and may indicate that surface sampling is understating the true lithium grade.  True widths for these zones are unknown and follow-up drilling is required.

·      A trial geophysical survey using passive seismic technique supports Zenith’s geological interpretation of extensive flat lying, near surface lithium bearing clays (Figure 2).

The lithium bearing clay zone is a near surface, flat lying horizon extending over 1700m by 1000m within the eastern project leases and a further 800m by 600m within the western lease areas.  Observations from mapping and sampling programs indicate that the clay horizon generally has a true thickness greater than 30 m where it is exposed in gullies within gently undulating, poorly vegetated hills that comprise the eastern project area.  Previous drilling to test the clay quality for industrial uses intersected clay units over thicknesses up to 20m in the western half of the project area, notwithstanding that drilling did not penetrate the full thickness of those clay beds which are up to 50 m thick in outcrop in the eastern area. The Company therefore concludes that there is excellent potential for large tonnages of lithium bearing clay within the Burro Creek project.

 
 Figure 1. Burro Creek Sample Location and Results Map

 (Enlargement - East Burro Creek Sample Results)

 
 

Figure 2: Burro Creek 3D View of Passive Seismic pseudo-sections looking northeast

(Location of Geological Cross Section A-A’ as marked)

 

 Planned Activities

Initial metallurgical testwork is currently in progress at a facility in Colorado, USA, comprising a bulk clay sample taken from the Burro Creek project area. Testwork will focus on the lithium solubility using various techniques documented at other lithium clay projects such as at Bacanora Minerals Limited’s Sonora lithium clay project in Mexico, which is currently at the feasibility stage. If metallurgical testwork on the Burro Creek bulk sample is acceptable then the Company considers that initial trenching and wide-spaced drill testing would likely lead towards rapid resource definition. Trench and drill program designs have been completed and permits will be submitted to the State of Arizona in early 2017.