SAN DOMINGO LITHIUM PROJECT – NEVADA USA(Zenith 45%, subject to JV partner meeting funding obligations)

During mid-2016 (16th June 2016) a wholly owned subsidiary of Zenith Minerals secured a 100% interest in a new lithium exploration project in Arizona, USA. The project covers a 9km by 1.5km lithium-bearing pegmatite dyke swarm that intrudes Proterozoic mafic gneiss host rocks that are in turn locally overlain by Tertiary age volcanic and sedimentary rocks (Figure 1).

Image module

Figure 1: San Domingo Lithium Project- Surface Rock Sampling Results

(Blue box – outline of Zenith claims and lease applications, Grey boxes – approximate area of excised claims, * indicates sample close to boundary of excised claim with poorly constrained location)

Initial mapping and sampling by Zenith’s consultants to date has identified 10 lithium bearing pegmatite dykes ranging in outcrop size up to 60m in width and up to 600m in length within the area subject to Zenith’s tenements. First phase continuous rock chip sampling conducted within the new applications has returned very encouraging results up to 5m @ 1.97% Li2O including 2.4m @ 2.49% Li2O from a 14.1m zone grading 1.02% Li2O, and sampling of Lithia King workings returned up to 1.44% Li2O over a 3 metre composite. A further 3 lithium bearing pegmatite dykes are known to occur at least partly within small claims that are believed to be excised from the land recently applied for by Zenith.

The pegmatite dykes show clear zonation, with lithium enrichment within the inner ‘’core’’ zones. Historical records refer to spodumene crystals up to 11 feet long at the Lithia King pegmatite (held by Zenith).

Lithium (as spodumene and amblygonite concentrates) along with tantalum was produced from small scale mining of the pegmatites within the district during the period 1947 – 1952, historic production of lithium from two small scale mines within Zenith’s claims produced amblygonite concentrates grading from 7.4 to 8.5% Li2O (Arizona Bureau of Mines Bulletin 1952). However the area has been subject to sparse systematic exploration for lithium. No drilling for lithium appears to have been completed since the early 1950s when diamond drilling on 4 of the pegmatite bodies and associated minor surface and underground exploration is mentioned in historical documents. Very little detail on this work has been sighted by the Company, other than partial results from one drillhole and anecdotal information mentioning “..considerable thicknesses of spodumene-bearing pegmatite..” penetrated in several other holes reported by a 3rd party. Since hole locations, sampling details and assay methodology are not known the Company considers the results not to be reportable under the JORC Code. A third party reference to a 1980-82 exploration program for tantalum and niobium does not mention lithium analyses.

As announced to the ASX on the 18th October 2017 sampling within the western San Domingo claim area returned high-grade lithium from pegmatite dykes over two zones: one 500m x 400m the other 200m x 100m in area. Results include a select grab sample that returned a very high-grade result of 8.0% Li2O from a pile of sorted ore material adjacent to a small historic mine cutting. This very high lithium result is near the theoretical maximum of lithium in pure amblygonite and confirms that the sub-surface fresh pegmatite represents a strong exploration target.

In addition selective rock chip sampling also returned a very high-grade lithium result of 5.8% Li2O from a 4 – 5m wide pegmatite dyke containing the lithium minerals amblygonite, spodumene and lepidolite that is partly covered by surface sands and gravels. This poorly exposed pegmatite lying beneath surface cover also represents a new exploration target that requires further follow-up.

Systematic composite rock chip sampling of a strongly weathered spodumene rich pegmatite returned; 2.9m @ 0.86% Li2O, 2.8m @ 0.69% Li2O, 3m at 0.71%Li2O, and 3m @ 0.56% Li2O. It’s likely that weathering has leached some of the lithium from these samples resulting in lower than expected lithium grades based on visual estimates of the spodumene contained in these samples.

The new lithium rich pegmatite zones reported above are located 5km southwest of the previously reported (31st July 2017) area of abundant known lithium bearing pegmatite dykes stretching over an area 9km by 1.5km within Zenith’s claims from which initial continuous rock chip sampling has returned very encouraging results up to 5m @ 1.97% Li2O within a 14.1m zone @ 1.02%Li2O from spodumene rich pegmatites. The Company considers these results as highly promising. The new results expand the footprint of lithium bearing dykes identified to date and increase the overall prospectivity of this exciting lithium exploration target.