R&D Rebate of $2.6 million received . For personal use only · 2017-07-28 · ASX RELEASE Quarterly...

ASX RELEASE

www.rewardminerals.com

QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2017

Highlights R&D Rebate of $2.6 million received. Groundwater licence application for abstraction of 63 G/L of brine per annum

submitted to Department of Water. Completion of Process Water Borefield, Drilling and Flow Testing.

Draft Environmental Study Reports received from Environmental and Hydrogeological Consultants in preparation for Environmental Submissions.

Pilot Pond and Laboratory Seepage Trials in progress. Project Flowsheet/Mass Balance review completed. LD sufficiently dry for on-lake bore hole and long term trench pumping to

recommence.

Corporate Expenditure of $1.5 million was incurred during the quarter primarily on studies related to environmental submissions for the LD Project. Cash on hand at the end of the period was approximately $2.084 million. Shortly after the close of the period the Company received $2.6 million R&D rebate via the Australian Government R&D Incentive Program.

Lake Disappointment - LD SOP Project In the March quarter, Reward announced upgraded SOP resource data for the LD Project including:

an in situ Mineral Resource estimate of 596 million tonnes of SOP in brines within the sediments of LD;

a Drainable (extractable) Resource estimate of 153 Mt of SOP in LD brine averaging 11.35 kg SOP/m3 of brine; and

a shallow (0-6 metres) Resource of 7.48 Mt SOP in brine grading 13.4 kg SOP/m3 brine recoverable by surface trenching. See ASX release 7 February 2017.

Environmental Submissions

A. Process Water Borefield Development

For an SOP output of 400,000 TPA the LD project requires approximately 3.4 GL of low salinity Process Water per annum (100 l/sec). For Environmental Approval of a project the developer is required to demonstrate that an adequate water resource exists and that drawdown of the resource will have negligible or manageable detrimental effect on flora and fauna in the development area.

For LD and Reward, establishing the supply and hydrogeological parameters for a Process Water Supply has involved a major exploration and development program. Analysis of the data point to a viable resource being achieved. Licence applications to the DOW are now in final stage of preparation.

28 July 2017

ASX CODE RWD

SHARE PRICE $0.185

SHARES ON ISSUE 135,760,396 MARKET CAPITALISATION $25.1M (undiluted)

DIRECTORS & MANAGEMENT

Colin McCavana Chairman

Michael Ruane Managing Director

Rod Della Vedova Non-Executive Director

Daniel Tenardi Projects Director

Bianca Taveira Company Secretary

KEY PROJECT

Lake Disappointment Project

HEAD OFFICE

Reward Minerals Ltd 159 Stirling Highway Nedlands WA 6009

PO Box 1104 Nedlands WA 6909 ACN 009 173 602 ABN 50 009 173 602 T: 08 9386 4699 F: 08 9386 9473 E: [email protected] F

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Two borefields have been identified with different geology but both providing Process Water of around 3,000 mg/litre total dissolved solids (TDS) and with satisfactory chemistry for use in the final SOP crystallisation process. Detailed analysis of water samples recovered from the program is still in progress. Results will be provided as they come to hand.

Plans of the two fields are shown in Figures 1 and 2. Cory Borefield is centred around 16 km north of the LD process plant while the Northern Borefield is some 8 km further north.

Figure 1

Figure 2

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Locations, hole depths and test pumping details are provided in Tables 1 and 2.

An additional four core holes were drilled to variable depths to provide regional geological control. Logging of the cores is in progress and will be reported on when the geological model has been finalised.

Table 1

NORTHERN BOREFIELD

Hole ID Easting Northing Drilled Depth

(m) Diameter

(mm) Ream

Diameter (mm)

Ream To (m)

Casing Diameter

(mm)

Airlift Flow Rate (L/s)

Stabilized Constant

Rate During Pump

Test (L/s)

PRODUCTION BORES P26 487102 7449015 114 114 292 112 200 8 15 P31 487354 7450474 144 114 292 120 200 2 4.5 P32 488532 7450330 50 114 292 50 50 2.5 NA P50 486211 7450628 126 114 292 126 200 4 4 P54 486191 7451639 89 114 292 85 200 2.9 2.5 P60 486013 7451353 112 114 292 112 200 NA 5

LDMR0117PB 484105 7452418 125 305 NA NA 200 6 4 LDMR2017PB 484087 7453928 120 171 292 120 200 2.13 6 LDMR0817PB 484114 7451662 144 171 298 144 200 16 15

MONITORING BORES P26MB 487102 7449005 144 114 NA NA 50 6.4 NA P50MB 486257 7450643 50 114 NA NA 50 2 NA P54MB 486176 7451627 114 114 NA NA 50 NA NA P60MB 486025 7451356 120 114 NA NA 50 NA NA

LDMR0117MB 484102 7452413 126 130 NA NA 50 NA NA LDMR2017MB1 484101 7453930 120 130 NA NA 50 NA NA LDMR2017MB2 484097 7453921 114 171 NA NA 50 NA NA LDMR0817MB1 484117 7451654 54 171 NA NA 100 NA NA LDMR0817MB2 484134 7451647 144 139 NA NA 50 NA NA

EXPLORATION HOLES P12 490125 7448233 140 114 NA NA 50 0 NA

P14A 488722 7448669 126 114 NA NA 50 2 NA P15 488355 7447035 120 114 NA NA 50 0 NA P27 487893 7449418 144 114 NA NA 50 2.5 NA P28 486429 7449139 144 114 NA NA 50 5.9 NA P29 486361 7449600 140 114 NA NA 50 0 NA P30 485723 7450006 156 114 NA NA 50 3.6 NA P34 486924 7448371 150 114 NA NA 50 0.52 NA P35 486004 7448676 120 114 NA NA 50 4.5 NA P43 485278 7448939 150 114 NA NA 50 2.2 NA P56 485448 7451866 120 114 NA NA 50 2 NA

LDMR1517MB 485451 7453184 138 171 NA NA 100 0.59 NA LDMR1717MB 486950 7453176 97 171 NA NA 100 0.77 NA LDMR2617MB 488443 7453935 60 140 NA NA 50 NA NA

STYGOFAUNA MONITORING HOLES LDMR1317STYGO 484103 7453167 24 171 NA NA 100 NA NA

P56STYGO 485444 7451882 30 171 NA NA 100 NA NA

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Table 2

CORY BOREFIELD


(m) Diameter

(mm) Ream

Diameter (mm)

Ream To (m)

Casing Diameter

(mm)

Airlift Flow

Rate (L/s)

Stabilized Constant

Rate During Pump

Test (L/s) PRODUCTION BORES

LDRC1601 482684.70 7441245.00 150 114 292 120 200 4.1 6

LDRC1602 483335.19 7441999.43 120 114 292 100 200 18.0 15

EXPLORATION HOLES

LDRC1603 482211.00 7443076.00 138 127 NA NA NA 1.8 NA

LDRC1604 483561.20 7442676.39 130 127 NA NA 50 2.3 NA

LDRC1605 481924.68 7440927.37 132 127 NA NA 50 2.0 NA

MONITORING BORES

LDRC1601M 482681.00 7441240.00 120 130 NA NA 50 NA NA

LDRC1602M 483337.00 7441989.00 114 130 NA NA 50 NA NA

Table 3

GEOLOGICAL CORE HOLES - REGIONAL


(m) Diameter (mm)

Casing Diameter

(mm) LDCH1701 484261 7445441 38.1 HQ - 95mm 50

LDCH1702 484438 7448345 68.1 HQ - 95mm 50

LDCH1703 486173 7451619 110.1 HQ - 95mm 50

LDCH1704 487099 7449030 99 HQ - 95mm 50

B. LD Potash Resource – Hydrogeological Modelling

During the period, Reward received the final report from Strategic Water Management/Global Groundwater on the hydrogeological parameters associated with the proposed LD SOP operation.

Hydrogeological modelling indicated a drawdown of the brine level (Static Water Level – SWL) in LD of less than 1.7 metres associated with a brine extraction of 63 GL per annum (400,000 TPA/SOP) even assuming zero recharge over a ten year period. See Figure 3.

Assuming an average rainfall for the region of 300 mm per annum (Bureau of Meteorology) the annual recharge of water into LD via rainfall alone is 372 GL per annum or approximately six times the maximum abstraction proposed.

From an environmental viewpoint the modelling predicts that the extraction of brine by Reward from LD is unlikely to have any adverse effect on Flora and Fauna existing in the shoreline zone of LD or the Lake development area. F

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Figure 3 Numerical Model Output – 10 Years Abstraction With No Recharge

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Figure 4

Figure 5 LD Pilot Pond Site

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Figure 6A Pilot Pond 1 – First Lift – Final Wall Closure

Figure 6B Pilot Pond 1 – First Lift Trimmed

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Figure 7 Pilot Pond 4

C. Flora/Fauna Base Line Environmental Reporting

During the June quarter, Reward received draft reports from Environmental Consultants in respect of:

Level 2 Flora Identification/coverage in the Project Development Area.

Growth and Evaporative Transpiration parameters for vegetation within the Project Development area – including the LD shoreline (Tecticornia) vegetation.

Fauna Survey – Impact Assessment of Talawana Track upgrade.

Stygofauna/Troglofauna occurrence and identification in the proposed LD Process Water borefield sites.

Study of Lake Biota and Migratory bird occurrences at LD following record rainfall in January 2017.

Reward is reviewing the data contained in the respective reports prior to their compilation into the final EPA and DotEE submission documents which are due for lodgement around the end of July 2017. F

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Other Development Works

Pilot Evaporation Ponds – Seepage Trials

A key factor in development of a solar evaporation (pond) operation is in sizing the evaporation ponds required hence cost of construction.

The size of ponds is obviously related to evaporation rates, overall process recovery and to brine seepage losses from the ponds during the evaporation cycle.

Based on results of initial auger hole sampling, Reward selected an area (approximately 3,000 hectares) on the northern fringe of LD for its evaporation ponds. See Figure 4 for proposed ponds layout plan.

Geotechnical work by Pendragon Environmental in 2016 indicated a variable sedimentary matrix in the pond area with a stratified sandy gypsiferous layer from 0-1 metre (variable) underlain by a high clay layer from approximately 0.8 metres with potential to form a vertical seepage barrier acceptable for evaporation pond operations. The study also suggested that the composite material derived from trenches 0-2 metres in depth with appropriate drying and compacting would form bund walls of adequate strength and low lateral seepage parameters. However, further testwork and site trial ponds were proposed to confirm these conclusions.

Construction of an access causeway and three pilot ponds was undertaken in 2016. A further ‘lined’ pond was installed in June 2017. Several design models were to be tested including a pond with an internal plastic membrane around the bund walls to minimise lateral seepage from the pond.

The pilot program was halted by flooding in late January 2017, with Ponds 1 and 2 still requiring closure of their fourth bund wall (Figure 5). The first lift of this final wall was undertaken recently. Following compaction a new round of seepage trials will commence. Trimming of the first lift walls on Ponds 1 and 2 has taken place and the bund walls are able to support compacting equipment without problem (Figures 6A and 6B).

Pond 4 with the peripheral plastic liner has been completed and filled with brine. Seepage data for this pond is now being compiled (Figure 7).

Laboratory Seepage trials using composited site materials and LD brine have provided encouragingly low seepage data. The LD 0-2 metre matrix material has a sufficiently high clay content which should result in low brine seepage rates from the ponds when established and conditioned.

Laboratory settling tests indicated favourable (low) settling rates for the matrix material. Subsequent column trials using LD matrix material demonstrated a rapid decline in seepage rates within a two week period to below 5 mm per day and trending toward the target seepage rate of less than 1 mm per day. Follow up of these trials will commence on site shortly with the flooding of the Pilot Ponds. Data from pipe seepage trials currently in progress at a number of locations in the evaporation pond area at LD will be available shortly.

In view of the encouraging outcome of seepage mitigation trials to date and the favourable implications for reducing pond construction costs, finalisation of the capital cost of the LD Project has been delayed. Potential reduction of this cost centre is of major significance in the feasibility study for the project.

Project Flowsheet – Mass Balance

Reward has considered a number of process flowsheet options for the LD project over the recent years and has conducted numerous in house evaporation trials to evaluate these options and establish a preferred route to SOP from LD brine.

This work has been completed and a Flowsheet and Mass Balance for the total processing route has been developed. Harvest grade expected is approximately 8.8% K and overall K recovery approximately 60% allowing for assumed brine seepage and process losses.

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The Mass Balance calculations have been developed in conjunction with Elemental Engineering Pty Ltd and directly related to results of the laboratory evaporation trials undertaken by the Company.

The pilot pond trials in progress on site will provide more definitive data for the assumptions utilised in the Flowsheet/Mass Balance calculations referred to above for inclusion in the project Pre-Feasibility Study.

Michael Ruane Director on behalf of the Board

Competent Persons Statement

This information in this report that relates to Resource Estimation and hydrogeology is based on information compiled by Mr Robert Kinnell, a hydrogeologist and Competent Person who is a Member of The Australian Institute of Mining and Metallurgy and a Fellow of the Geological Society of London. Mr Kinnell is employed by Strategic Water Management and is a consultant to Reward Minerals and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being 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’. Mr Kinnell consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Metallurgical Flowsheet Design and Analyses is based on information compiled by Dr Geoff Browne, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Browne is a consultant to Reward Minerals Ltd. Dr Browne has sufficient experience that is relevant to the activity being 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’. Dr Browne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Tenement Holdings as at 30 June 2017

Tenement Status RWD Ownership at Quarter End

% Interest Acquired During the Quarter

% Interest Disposed During the Quarter

Lake Disappointment, Western Australia

E45/2801 Granted 100% - -

E45/2802 Granted 100% - -

E45/2803 Granted 100% - -

E45/3285 Granted 100% - -

E45/3286 Granted 100% - -

E45/4090 Granted 100% - -

E45/4121 Granted 100% - -

E45/4257 Granted 100% - -

E45/4258 Granted 100% - -

E45/4259 Granted 100% - -

E69/2156 Granted 100% - -

E69/2157 Granted 100% - -

E69/2158 Granted 100% - -

E69/2159 Granted 100% - -

E69/2902 Granted 100% - -

L45/302 Granted 100% - -

M45/1227 Granted 100% - -

LA46/128 Application 100% - -

Dora West, Western Australia

E45/3246 Granted 100% - -

E45/4292 Granted 100% - -

ELA45/4321 Application 100% - -

ELA45/4488 Application 100% - -

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R&D Rebate of $2.6 million received . For personal use only · 2017-07-28 · ASX RELEASE Quarterly...

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