AMN - BOTSWANA: K.Hill manganese resource updated

Giyani Metals Corp has filed an updated and amended NI 43-101 compliant technical report on its K.Hill manganese project in Botswana. This report includes an updated mineral resource statement of 1.24 million tonnes grading 27.3% manganese oxide at a cut-off grade of 8.9%, up from the previous estimate of 1.10 million tonnes at 31.2%.

A 10% reduction has been applied to the resource tonnage to account for moisture content. Tonnages can, therefore, be considered dry.

The resource estimate is constrained within grade based solids and within a Lerchs-Grossman optimised pit shell based on an HPEMM price of US$4,700/tonne and the following parameters: Mining cost - US$3.46/tonne rock; processing cost - US$276.45/tonne ore; selling cost - G&A US$20/tonne ore; discount rate - 10%; processing recovery - 87.5%; mining recovery -; mining dilution - 5%; Geotechnical Slope Angle - 45 degrees.

The updated report is a result of a review by staff of the Ontario Securities Commission (OSC). Staff of the OSC noted that the technical report filed by the company on September 25, 2019, regarding K.Hill was incomplete and did not address all of the disclosure items required of a technical report under NI 43-101.

Giyani Metals Corp CEO Robin Birchall said: "I am delighted that in the Amended Technical Report we have had the opportunity to increase our mineral resource and update the preliminary economic assessment at K.Hill.

"In doing so the project economics continue to be robust, with a small increase in mine life and tonnage.

"Despite the various national lockdowns in place, we are continuing to advance the K.Hill feasibility study, which we still plan to deliver on schedule."

Consequently, the preliminary economic assessment was also adjusted as a result of the update to the mineral resource estimate. The following are highlights of the updated PEA:

Highlights:

• 10-year potential project operating life producing 236,000 tonnes of high-purity electrolytic manganese metal (HPEMM);
• Pre-tax NPV of C$496 million (US$357 million) and after-tax NPV of C$382 million (US$275 million), using a 10% discount rate;
• Estimated C$150.6 million (US$108.5 million) in pre-production capital, C$13.7 million (US$9.9 million) in sustaining capital, C$24.7 million (US$17.8 million) in contingency at 15%, and C$6.9 million (US$5 million) closure costs for a total project capital of C$196 million (US$141.3 million); and
• After-tax IRR of 82.1% and a 3-year payback period.

The economics are based on a projected average price of US$4,700/tonne for HPEMM of 99.9% manganese over the project life.

The PEA is considered preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves. And accordingly, there is no certainty that the preliminary economic assessment will be realised.

The expected accuracy of costs in the PEA is within a -35% to +45% level of confidence, as is appropriate for the level of study and accuracy of the input data provided.

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