Ionic Rare Earths Limited ('IonicRE' or 'The Company') (ASX: IXR) is pleased to advise a significant 53% increase to the Makuutu Rare Earths Project reported Mineral Resource Estimate (MRE) and the initial component of Indicated Resource.

The updated resource is based on: Revision of the reporting cut-off grade using project specific factors.

Inclusion of recent infill and extension drilling data3.

Inclusion of infill drill data and additional geological information increasing resource classification confidence in a portion of the MRE

Commenting on the issue of the resource estimate, Ionic Rare Earths' Chairman, Mr Tony Rovira said: 'This outstanding result is based on a combination of in-fill and extension drilling, as well as advances the team has made in metallurgical optimisation and preliminary study activities. The team has been very effective in using the Covid19-related hiatus in the drilling program, by focusing on project development efforts which have and continue to rapidly advance.

The updated Mineral Resource Estimate further demonstrates the potential of the Makuutu Rare Earths Project to be a globally significant and strategic alternative supply of heavy and critical rare earths. The company aims to further substantively increase the Mineral Resource Estimate with further drilling that is scheduled to recommence in July, and considering the circa 900 metres of core drilling undertaken to date, the potential expansion of mineral resource size and confidence category are substantive.

Encouragingly, the resource grade is maintained at the upper end of expectations defined in the Exploration Target4. The cut-off grade changes derived from project specific inputs have been validated as consistent with peer ionic adsorption rare earth projects, further reinforcing our expectations to be a low cost REO producer.

It is particularly noteworthy that Makuutu continues to demonstrate a significantly larger mineral endowment than some peer ionic adsorption clay projects, and with a highly desirable CREO/HREO content and basket potential as recently announced to the market5.'

Cut-Off Grade Evaluation

The initial maiden Mineral Resource Estimate announced by IXR on 10th March 2020 was reported above a cut-off grade of 500ppm TREO-Ce2O3. The cut-off was derived from comparison to published documentation from a peer project. Studies by the IXR project team on project scale, mining & processing techniques, REO extraction5,6 , operating costs and commodity pricing have been ongoing as part of the Preliminary Economic Assessment (PEA) on the Project.

As a function of this increase in knowledge of these factors, the resource cut-off grade has been reduced in line with industry peer reporting to 300ppm TREO-Ce2O3. The revised cut-off grade is considered consistent with peer ionic adsorption rare earth element (REE) clay projects using similar processing technologies. The resource reported above this cut-off is considered to have reasonable prospects for eventual economic extraction in accordance with the requirements of JORC (2012) Code.

Resource Classification

Eight infill drill holes were completed in the recent COVID-19 truncated drill program. These holes were spaced 200 metres from existing (2019) 400 metre spaced drill holes within the maiden MRE area. In addition to this recent drilling, the historical RAB drilling7 geological logging has been reclassified and applied to support confidence in the regolith zone boundary definition used in the MRE model.

The resulting data has provided geological and geostatistical support for the resource grade estimation and increased the resource confidence in the drilled areas.

Resource Extension

The maiden resource has been expanded to incorporate two extension holes RRMDD055 and RRMDD056 that were drilled in April 2020.

Resource Limits

The reported Mineral Resources include only clay and saprolite regolith types with surface hardcap excluded while processing alternatives are tested for this material. The reported Mineral Resources have been assessed against a resource limiting optimisation shell using appropriate marginal cost, metallurgical recovery, and price assumptions. The shell is contiguous across most of the modelled resource and limited primarily by the extent of the model.

Summary of Material Information Used to Estimate the Mineral Resource

The following is a summary of material information used to estimate the Mineral Resource, as required by Listing Rule 5.8.1 and JORC 2012 Reporting Guidelines.

Mineral Tenement and Land Tenure Status

The Makuutu Rare Earths Project is in the Republic of Uganda. The mineral tenements comprise two (2) granted Retention Licences (RL1693 and RL0007), one (1) Exploration Licence (EL1766). All licences are in good standing with no known impediments.

The Makuutu Rare Earths Project is 100% owned by Rwenzori Rare Metals Limited ('RRM'), a Ugandan registered company. Ionic Rare Earths Limited (IXR) currently has a 31% shareholding in RRM and may increase its shareholding to 60% by meeting expenditure commitments as follows

IXR to contribute US$1,700,000 of expenditure by 1 October 2020 to earn up to a 51% staged interest in RRM as follows: IXR to fund to completion of a bankable feasibility study to earn an additional 9% interest for a cumulative 60% interest in RRM.

During the earn-in phase there are milestone payments, payable in cash or IXR shares at the election of the Vendor, as follows: US$750,000 on the Grant of Retention Licence over RL1693 which is due to expire on 1 November 2020; US$375,000 on production of 10 kg of mixed rare-earth product from pilot or demonstration plant activities and US$375,000 on conversion of existing licences to mining licences.

At any time should IXR not continue to invest in the project and project development ceases for at least two months RRM has the right to return the capital sunk by IXR and reclaim all interest earnt by IXR.

Geology

The Makuutu deposit is interpreted to be an ionic adsorption REE clay-type deposits like those in South China, Madagascar, Chile and Brazil. The mineralisation is contained within the tropical lateritic weathering profile of a basin filled with sedimentary rocks including shales, mudstones and sandstones potentially derived from the surrounding granitic rocks. These granitic rocks are considered the original source of the REE which were then accumulated in the sediments of the basin as the granites have degraded. These sediments then form the protolith that was subjected to prolonged tropical weathering.

The weathering developed a lateritic regolith with a surface indurated hardcap, followed downward by clay rich zones that grade down through saprolite and saprock to unweathered sediments. The thickness of the regolith is between 10 and 20 metres from surface. The REE mineralisation is concentrated in the weathered profile where it has dissolved from its primary mineral form, such as monazite and xenotime, then adsorbed on to fine particles of aluminosilicate clays (e.g. kaolinite, illite, smectite). This adsorbed REE is the target for extraction and production of REO.

Drilling Techniques and Hole Spacing

Drilling completed at the Makuutu Rare Earths Project and used to support the MRE includes 51 diamond core (DDH) holes for a total of 902.9 m. All diamond holes are drilled from surface and oriented vertically. Drilling used a HQ size (63.4 mm diameter) and employed triple tube techniques to maximise core recovery. Drill core was collected from a core barrel and placed in appropriately marked core trays. Down hole core run depths were measured and marked with core blocks. Core was measured for core loss and core photography and geological logging completed.

Sampling

Sample lengths were determined by geological boundaries with a maximum sample length of 1 metre applied in clay zones and up to 2 metres in laterite zones where core recovery was occasionally low. Where the core contained continuous lengths of soft clay a carving knife was used to cut the core. When the core was too hard to knife cut it was cut using an electric core saw. Using either method, core was initially cut in half then one half was further cut in half to give quarter core. Quarter core was submitted to ALS for chemical analysis using industry standard sample preparation and analytical techniques. Half core was collected for metallurgical test work. Certified reference materials (CRM), analytical blanks, and field duplicates were used as part of the QAQC procedures and were each inserted at a rate of 1:25 samples.

Sample Analysis

All DDH samples were dispatched by air freight direct to ALS laboratory Perth Australia. Sample preparation included whole sample crushing to 70% less than 2mm, Boyd rotary slitting to generate a 750g sub-sample, and pulverising to achieve better than 85% passing 75 microns. Analysis for REE suite was via Lithium Borate Fusion ICP-MS (ALS code ME-MS81), with elements analysed at ppm levels. This method is considered a total analysis.

Contact:

Brett Dickson

Tel: +61 8 9481 2555

(C) 2020 Electronic News Publishing, source ENP Newswire