13 February 2023

Future Metals NL

Mining and Processing Breakthrough at Panton

Highlights

§  Flotation repeatability established with consistent metallurgical PGM recoveries averaging 78% at concentrate grades averaging 286g/t PGM_3E from the high-grade PGM chromitite ore which makes up 2.9Moz of the 5.0Moz PGM_3E contained in the JORC Resource at Panton

§  Achieved through conventional crushing, grinding and flotation processing techniques

§  Results from bulk ore sorting test work demonstrate 97% recovery of high-grade PGM bearing ore and rejection of low-grade material and waste, improving mill feed grade by 11% and reducing mass by 13%

§  Amenability to ore sorting and consistency of flotation performance significantly de-risk Panton's future development

§  Scoping Study well advanced and to be expanded to incorporate the positive impacts of the ore sorting results which include:

o  Mitigation of the impact of mining dilution

o  Increases in the processed head grade, reducing capital and operating costs

o  Improves consistency of processed ore, enhancing flotation performance

§  Expanded Scoping Study to include concentrate production along with potential value add through downstream processing as an option, to produce high payability, low emission upgraded metal products, with test work demonstrating +99% metal recoveries

§  Panton contains the highest grade PGM resource in Australia allowing for a low-capital, high margin operation to be progressed, with expansion potential

§  Recent drilling and analysis have shown the potential for multiple mineralisation styles within the high-grade reef and improved the geological understanding of the deposit

§  Targeting completion of Scoping Study in H2 2023 to enable all recent positive developments to be incorporated

Future Metals NL ("Future Metals" or the "Company", ASX | AIM: FME), is pleased to announce the results of its bulk ore sorting and flotation optimisation and repeatability test work for its Panton Project ("Panton" or the "Project"). The results demonstrate a significant de-risking for the future mining and processing of the Company's 6.9Moz PdEq JORC Resource and provide a credible path towards developing a low capital, high margin PGM-Ni operation.

The Company has also commenced scoping study and test work evaluation with PGM downstream processing technology providers. Previous test work on Panton concentrate has demonstrated recoveries of 99%+ for a majority of metals contained in the concentrate. These processes produce upgraded metals products for direct sale to refineries, or refining on site, improving payabilities, reducing logistics costs and reducing emissions relative to the smelting process route. Initial assessment of the Lifezone Metals Ltd ("Lifezone") hydrometallurgy ("hydromet") technology suggests that this would be a low capital flow sheet addition with significant operating and economic benefits.

Mr Jardee Kininmonth, Managing Director of Future Metals, commented:

"We have now demonstrated a credible metallurgical solution which places Panton firmly on the development pathway. Panton is the highest grade PGM deposit in Australia, enabling us to progress a low capital and high margin operation with significant growth upside.

Optimisation and variability flotation test work has demonstrated highly repeatable results with strong recoveries at high concentrate grades. The ore sorting results are significant, as it is the key to increasing mineable tonnes while ensuring the ore reporting to the mill is high grade. This allows for increased economies of scale within the mine, utilising conventional underground mining methods, while decreasing processing plant capital costs by increasing the grade of the mill feed, with negligible losses of high-grade ore.

Additionally, we have been progressing discussions with potential technology partners to assess a low-capital downstream integration option at Panton. Downstream integration enables the production of high margin metals products while also significantly decreasing the emissions profile associated with those products, thereby differentiating Panton from the majority of South African and Russia producers which use coal-fired power and generate other emissions such as sulphur dioxide. Downstream processing also closely aligns Panton with the Australian Government's critical minerals strategy which incentivises onshore upgrading and development of strategically important deposits such as Panton."

Pre-concentration via Ore Sorting

Future Metals has been investigating options to de-risk and improve the Panton development economics through innovation and recent technological improvements. One such pathway is the rejection of waste early in the comminution process via ore sorting. Ore sorting technology has been used in the PGM and chromite mining industry for over ten years. The technology classifies and separates individual rocks by their physical and chemical properties. By removing gangue and low-grade ore, the size of the crushing, milling and flotation equipment can be optimised.  Reducing the process plant throughput rate while increasing grade provides direct savings in capital and operating costs. Ore sorting also reduces the impact of dilution allowing for the use of conventional mining equipment, further driving down operating costs. Reductions in mining & process operating costs allows the mining cut-off grade to be optimised and the viable mining inventory to be potentially increased.

The Company has performed sighter and bulk test work with Steinert Sorting Solutions ("Steinert"). The sighter test work involved a three-stage separation process applied to a mixed feed of chromitite, magnesite and dunite. Greater than 95% chromitite recovery was achieved during the first pass, using an x-ray transmission ("XRT") 3D-laser combination sort programme, due to the chromitite being substantially higher in atomic density. 100% of the magnesite was recovered during the second pass, using both an XRT-3D combination (due to the lower atomic density of magnesite) and laser brightness (due to the high colour contrast between magnesite and the other materials).

Following the success of the sighter test work, a bulk test was completed. The bulk test work involved compositing separate chromitite and dunite samples to replicate the expected feed mix from a mine stope. The chromitite and dunite were crushed and screened into to three size fractions; +25mm, +10mm, and -10mm. Each of these size fractions were assayed prior to preparation of two composites; -75mm to +25mm & -25mm to +10mm, which were processed using the same XRT 3D-laser combination sort program used in the sighter test work. The fine -10 mm fraction is considered to be below the capability of the ore sorting units and was not tested.

The bulk ore sort test work validated the sighter test work on multiple size fractions, demonstrating 96.7% recovery of high-grade ore and rejection of low-grade and waste, increasing the PGM grade of the potential mill feed by 10.7% and reducing the throughput volume by 12.7%. This is a very positive result early into the test work process. Further information on the bulk ore sort test work can be found in Appendix 1.

The Company is currently planning follow up work which will involve further optimisation, variability, and repeatability testing.

Table 1: Bulk Ore Sorting Test Results

Figure 1: Steinert KSS XT CLI Ore Sorter

Figure 2: Ore Sorting Schema

*Dimensions and grades are for illustrative purposes only

Flotation Test Work Results

As previously noted in the Company's announcement on 7 July 2021 'Above 80% PGM Recovery to High Grade PGM Concentrate', flotation test work carried out in 2015 on Panton chromitite ore achieved a technical breakthrough for the Panton Project. It was shown that a combination of fine grinding (P₈₀ 38μm), conditioning with sodium dithionite as a reducing agent, and use of nitrogen gas improved flotation results significantly. The best result achieved (test HL1279) was 81.4% recovery (PGM_3E) at a 2.5% mass pull for a 272 g/t PGM_3E concentrate grade with a rapid 14 minutes of flotation time. Whilst the 2015 test work achieved dramatic improvements in the flotation performance, repeatability of HL1279 was not established and there was minimal follow up optimisation work.

As detailed in the Company's announcement on 21 June 2022 'Independent Resource Estimate of 6.9Moz PdEq', Future Metals undertook further flotation test work in early 2022 on both low-grade composites (~2.3g/t PGM_3E) and high-grade composites (~7.6g/t PGM_3E), using a single stage rougher-scavenger test. Results yielded PGM_3E recoveries of up to 68% and 71% respectively (with higher Pd recovery relative to the Pt recovery) with concentrate grades of ~130g/t PGM_3E for the high-grade composite and up to 17g/t PGM_3E for the low-grade composite.

Following this initial test work the Company embarked on a systematic programme of optimisation and variability test work with Independent Metallurgical Operations Pty Ltd ("IMO").

New flotation results from this latest programme of optimisation and variability test work yielded positive results on the high-grade chromitite samples with PGM_3E recoveries of 75.7% to 81.4% with concentrate grades from 167 g/t to 387 g/t PGM_3E with an average of 286g/t PGM_3E. These results were achieved over six consecutive tests, demonstrating strong repeatability of the flotation regime. A key factor to these consistent results is controlling potential through the flotation cycle and ensuring a reducing environment is maintained. Other physical parameters have also been optimised such as froth collection rates, number of flotation stages and flotation retention time. Table 2 details these latest flotation results.

Table 2: Optimisation and Variability Flotation Test Programme - Concentrate Grades

The Company considers the head grade of the flotation tests to be within an acceptable range of potential mill feed grade when factoring mined grade of the Upper Reef following upgrading through ore sorting.

Table 3 sets out the range of achieved recoveries, concentrate grades and head grades for by-products in the flotation tests on chromitite ore samples:

Table 3: By-product Recoveries

*Only FT017 was assayed for Co

In addition, the Company has completed multiple flotation tests on a low-grade (~1 g/t PGM_3E) dunite sample. The flotation regime utilised is similar to that used on the chromitite sample. The Company has been able to achieve recoveries >75%, however it has not yet been able to achieve concentrate grades which would support direct sale to the global smelter market. Additional ongoing test work and analysis is examining how to improve flotation results, as well as the potential to utilise flotation and physical separation as an intermediate step to onsite hydrometallurgical processing. The Company is additionally looking at various leaching methods to extract metals directly from both high-grade and low-grade ore, without flotation.

Ongoing Test Work

The results to date indicate that a very high grade PGM_3E concentrate is achievable from Panton chromitite ore feed. Now that a consistent baseline flotation regime has been established, there is significant potential for further optimisation through the study process. This includes introducing a cleaner circuit, concentrate regrind, and further exploratory testing of reagents to improve recoveries, including the recoveries of base metals in feed. The Company will continue to test for further improvements, as well as testing the variability of flotation response from samples throughout the Panton orebody.

Panton's concentrate will likely be marketed as a bulk Ni-PGM_3E concentrate. Additional optimisation, planning and marketing work is required in relation to the chrome content of the concentrate, given it is a deleterious element. However, the very high PGM_3E grade of the concentrate is expected make the Panton Ni-PGM_3E concentrate attractive to smelters despite the chrome content. Mine planning and blending strategies will also be utilised to ensure a consistent, valuable Ni-PGM_3E concentrate is produced.

Furthermore, test work has demonstrated that a metallurgical grade chromite concentrate can be produced from the Panton flotation tails (from chromitite ore) through Wet High Intensity Magnetic Separation ("WHIMS"). Chromite concentrate represents a potentially valuable co-product, which is sold into the ferrochrome industry, an input into stainless steel. The Company will continue optimisation and marketing work and assess the inclusion of a WHIMS circuit in the Scoping Study.

Downstream Processing - Hydrometallurgy

In addition to the flotation test work, the Company is also exploring the potential to further process the high-grade concentrate utilising a hydrometallurgical process to produce upgraded metal products. The potential benefits from hydrometallurgical processing including improved payabilities, reduced logistics costs, and significantly less sensitivity to many elements deleterious to smelters, such as chrome. These benefits have resultant benefits in mine planning and mine inventory.  

Future Metals has engaged with Lifezone as a technology partner to further explore the amenability of utilising their hydrometallurgical technology for further upgrading of Panton concentrate. The Lifezone hydromet process replaces the smelting process, extracting contained metals in concentrate through hydrometallurgical processes to produce a suite of metals products suitable for direct sale to refiners. Hydrometallurgical processing has a range of benefits relative to smelting including[1]:

§ 65-80% lower capital costs

§ 35-50% lower operating costs

§ 50-85% lower electricity consumption

§ Up to 80% lower CO₂ emissions and no SO₂ emissions

§ Fewer constraints on concentrate quality than smelting

The upgrading of concentrate to metals products also materially increases revenue per tonne as payabilities for these products is much higher relative to smelters payment terms for metals in concentrate.

The Company's view is that a low emission upgraded PGM product from Australia will be highly sought after by potential customers in the hydrogen and automotive industry, who are sensitive to accumulated emissions through the supply chain, as well as other ESG considerations.

Lifezone's hydromet technology is at various stages of development globally.

Panton's very high grade PGM_3E concentrate would allow for a small, low-capital process plant employing Lifezone's hydromet technology, which would potentially significantly enhance the economics of the Panton project.

Test work has previously been undertaken on the Panton concentrate utilising Lifezone's hydromet process with concentrate specifications and metal recoveries shown below.

Table 4: Panton Concentrate Head Assays and Metal Recoveries

The Company is also undertaking test work with SGS Canada Inc., utilising their Platsol process.

Scoping Study Update

The Company is pleased with the progress made to date, with ore sorting and flotation test work significantly de-risking the development of Panton. The ore sorting results have a material impact on mine design and enable a reduction in the size of milling and flotation equipment, tailings storage, electricity requirements and water consumption which will therefore reduce estimated capital and operating costs. These have positive flow-on effects to cut-off grades used for mine design, improving mineable inventory. Following positive pre-scoping assessment and prior test work of the Lifezone's hydromet process, the Company is also assessing the potential of downstream integration as part of its scoping study. Additionally, Company has an improved geological model for Panton which will be used to inform an updated JORC Mineral Resource estimate to be incorporated into the Scoping Study. Lastly, the Company continues to progress potential processing pathways for its significant low-grade Resource and will incorporate this into study activities once a metallurgical solution is in place.

Consequently, the Company expects an updated Scoping Study, incorporating these improvements, to be completed in H2 2023.  

For further information, please contact:

Competent Person's Statement

The information in this announcement that relates to metallurgical test work managed by Independent Metallurgical Operations Pty Ltd ("IMO") is based on, and fairly represents, information and supporting documentation reviewed by Mr Peter Adamini, BSc (Mineral Science and Chemistry), who is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Adamini is a full-time employee of IMO, who has been engaged by Future Metals NL to provide metallurgical consulting services. Mr Adamini has approved and consented to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law pursuant to the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.

Notes to Editors:

About the Panton PGM-Ni Project

The 100% owned Panton PGM-Ni Project is located 60kms north of the town of Halls Creek in the eastern Kimberly region of Western Australia, a tier one mining jurisdiction. The project is located on three granted mining licences and situated just 1km off the Great North Highway which accesses the Port of Wyndham (refer to Figure Three).

The Project hosts an independent JORC Code (2012) MRE had increased to 129Mt @ 1.20g/t PGM3E1, 0.19% Ni, 0.04% Cu and 154ppm Co (1.66g/t PdEq2) at a cut-off grade of 0.90g/t PdEq2 for contained metal of 5.0Moz PGM3E1, 239kt Ni, 48kt Cu and 20kt Co (6.9Moz PdEq2). The MRE includes a high-grade reef of 25Mt @ 3.57g/t PGM3E1, 0.24% Ni, 0.07% Cu and 192ppm Co (3.86g/t PdEq2) for contained metal of 2.9Moz PGM3E1, 60kt Ni, 18kt Cu and 5kt Co (3.2Moz PdEq2).

PGM-Ni mineralisation occurs within a layered, differentiated mafic-ultramafic intrusion referred to as the Panton intrusive which is a 12km long and 3km wide, south-west plunging synclinal intrusion. PGM mineralisation is hosted within a series of stratiform chromitite reefs as well as a surrounding zone of mineralised dunite within the ultramafic package.

Figure Three | Panton PGM Project Location

About Platinum Group Metals (PGMs)

PGMs are a group of six precious metals being Platinum (Pt), palladium (Pd), iridium (Ir), osmium (Os), rhodium (Rh), and ruthenium (Ru). Exceptionally rare, they have similar physical and chemical properties and tend to occur, in varying proportions, together in the same geological deposit. The usefulness of PGMs is determined by their unique and specific shared chemical and physical properties.

PGMs have many desirable properties and as such have a wide variety of applications. Most notably, they are used as auto-catalysts (pollution control devices for ICE vehicles), but are also used in jewellery, electronics, hydrogen production / purification and in hydrogen fuel cells.  The unique properties of PGMs help convert harmful exhaust pollutant emissions to harmless compounds, improving air quality and thereby enhancing health and wellbeing.

JORC Code (2012) Edition Table 1

Section 1 Sampling Techniques and Data

Section 2 Reporting of Exploration Results