By:Staff writer
Osino Resources Corp. on Friday provided an update on its majority-owned Omaruru Lithium Project in central Namibia following the completion of a Phase 1 Reverse Circulation drill programme by Prospect Resources Limited.
Osino entered into an Earn-In and Shareholder Agreement with Prospect in Q4 2022 whereby Prospect can earn up to 51% and potentially up to 85% interest in the Project.
Omaruru is located 20km southeast of Osino’s Twin Hills Gold Project for which a DFS is anticipated to be delivered in Q2 2023. Located east of Karibib and spanning 175km2 Omaruru is situated near several historical and current lithium mining operations, including Lepidico’s Karibib Lithium Project located about 10km to the southwest.
Heye Daun, Osino’s President and CEO, commented: “We are excited to receive excellent results generated by Prospect Resources’ team at the Omaruru Lithium Project. The Phase 1 drilling results confirm and expand the success of the early exploration and drilling programmes completed by Osino between 2019-2021 and set the stage for a significant, maiden JORC-compliant resource to be delineated at Omaruru later this year. Prospect is a world-class group with a track record for exploring and developing African lithium projects, evidenced by the team’s previous success selling the Arcadia lithium project in Zimbabwe for approximately US$378M cash in 2022. Our Earn-In agreement provides Osino shareholders with continued exposure to the growing scope and excellent upside potential of the Omaruru Lithium Project.”
Omaruru contains more than 65 known and mostly zoned pegmatites which belong to the Lithium-Caesium-Tantalum (LCT) family of rare-element pegmatites. These pegmatites occur within an area known as the Karibib Pegmatite Belt, one of five major pegmatite districts in the Damara Belt.
A number of pegmatites within the Karibib Pegmatite Belt have produced lithium in the past, including Lepidico’s Karibib Lithium Project which is focused on the Rubicon and Helikon pegmatites.
Historically, small-scale production from the Karlsbrunn and Brockmans pegmatites located on the Project produced lithium minerals (mainly lepidolite, petalite, amblygonite and spodumene), as well as beryl. Exploration in the vicinity of the Project has generally been for gold, and companies such as Anglo American and Helio Resources Corp. explored the area intermittently prior to 2015.
Osino undertook an initial evaluation of the lithium potential of the Project from 2019-2021. This work included mapping, rock grab sampling and a 16 hole (1,942m) RC drill program in 2020. The drilling highlighted remaining potential at the Karlsbrunn pegmatite in particular, with a number of intersections of 5m or more at grades in the range of 1-1.2% of Li2O. Other drilling and surface sampling indicated lithium mineralization associated with most of the other pegmatites on the Project.
Karlsbrunn Deposit Phase 1 Drilling Programme
Significant intersections returned from Prospect’s Phase 1 Drilling Programme at the Karlsbrunn deposit include:
• 8m @ 0.99% Li2O from 6m
• 11m @ 0.95% Li2O from 51m
• 10m @ 0.88% Li2O from 35m
• 10m @ 0.82% Li2O from 15m
• 11m @ 0.80% Li2O from 35m
These results show robust lithium grades and pegmatite widths across the deposit and are broadly in line with the initial drilling at Karlsbrunn completed by Osino in 2020.
Prospect also completed detailed sampling of several extensive underground adits at Karlsbrunn which pass laterally through the deposit at several locations. The adits were developed historically to extract petalite and gemstones from the pegmatite, including beryl. Assays from sampling of these adits are pending. These pending results, along with the surface RC drilling results outlined above, are expected to contribute to the estimation of a maiden JORC-compliant Mineral Resource for the Karlsbrunn deposit later this year.
Brockmans Deposit Phase 1 Drilling Programme
Prospect completed its maiden drilling at the Brockmans deposit, which is located just over 4km northeast of the Karlsbrunn deposit. Assay results are highly encouraging with two adjacent holes completed in the southern zone evidencing a new discovery of continuous lithium mineralisation.
Significant intersections returned from Prospect’s Phase 1 Drilling Program at Brockmans include:
• 6m @ 1.30% Li2O from 13m within 14m @ 0.79% Li2O from 13m
• 7m @ 0.90% Li2O from 17m and 8m @ 0.60% Li2O from 28m
The results from this new drilling at Brockmans indicate a significant thickening of the pegmatite in the south, which is considered a key aspect for the zoning of lithium mineralisation in the Karibib District (e.g. Karlsbrunn). Importantly, the limited drilling undertaken at Brockmans indicates significant prospectivity and scope for identifying larger tonnages of higher-grade lithium mineralisation within the Omaruru Project
Metallurgical Sampling
Prospect recently collected three, 50kg bulk samples of identified lithium mineralization from the Karlsbrunn, Brockmans and Hillside deposits. These samples are set to undergo early stage metallurgical test work and evaluation in South Africa.
Geochemical Soil Sampling
Prospect completed detailed soil geochemical sampling at Omaruru over eight separate grids in January. Most assays for this work remain outstanding and will be reported separately once all data is received and interpreted.
Prospect’s Upcoming Omaruru Exploration Programmes
Prospect expects to complete its Phase 1 earn-in to Omaruru during Q2 2023. Upcoming programs during this period are expected to encompass infill and extensional RC drilling at the Brockmans deposit, limited diamond drilling for metallurgical test work purposes at Karlsbrunn, and potentially first-pass, short-hole, RC drilling of regional exploration targets identified from any cohesive geochemical and soil anomalies associated with LCT mineralisation characteristics across the region (i.e. elevated lithium-caesium-rubidium-beryllium values).
Earn-in Agreement Terms
Under the Agreement, Prospect may earn-in to up to 40% interest in the Project with a US$1M (N$17.7 million) investment and a further 11% interest through a US$560,000 (N$9.93 million) investment, totalling a 51% ownership in the Project.
Phase 1 consists of a US$560,000 (N$9.93 million) cash payment to acquire 20%, and a commitment to spend a further US$440,000 (N$7.8 million) on the Project with a 12-month period, to earn an additional 20%. Upon the completion of Phase 1, Prospect may commit to a further US$560,000 (N$9.93 million) within a 12-month period for in-ground exploration to reach 51% ownership.
Upon the completion of Phase 2 and having earned 51%, development funds are to be contributed on a pro-rata basis. If one party fails to contribute their pro rata share, their shareholding will be diluted. The minority shareholder will be diluted down to 15%, at which point their interest shall be free carried until the completion of the DFS.
If Prospect chooses not to proceed after Phase 1 or does not reach more than 50% by the end of a 24-month period (or as extended by mutual consent) Osino will have the right to repurchase Prospect’s interest for an agreed sum.
During the next phase of the Agreement (“Phase 3″), if Prospect’s spending does not reach a minimum of US$500,000 (N$8.9 million) within the 12-month period following Phase 2, either party will have the option to purchase the other party’s interest for an agreed sum.
Osino will benefit from ongoing exposure to the significant potential of the Omaruru Project while remaining focused on the fast-tracked development of our wholly owned Twin Hills Gold Project and Ondundu Gold Project in Namibia.