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Tasman Metals Ltd
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Tasman to acquire two chromite projects from Kipu

2014-12-17 09:32 ET - News Release

Mr. Mark Saxon reports

TASMAN EXPANDS CRITICAL METAL PORTFOLIO WITH ACQUISITION OF TWO CHROMITE PROJECTS IN FINLAND

Tasman Metals Ltd. has entered into a letter of agreement dated Dec. 15, 2014, with Kipu Metals Corp., under which the company will acquire a 100-per-cent interest in a portfolio of stratiform chromite projects in northeastern Finland totalling 11,400 hectares in size, in exchange for the refund of costs incurred to date of $45,529 by the vendor. There is no additional consideration for the acquisition. Closing of the acquisition is subject to TSX Venture Exchange approval.

Michael Hudson, a director of the company, and Mark Saxon, the company's president, chief executive officer and a director, are also directors and shareholders of the vendor. As a result, the acquisition is a related-party transaction as such term is defined under Multilateral Instrument 61-101 protection of minority securityholders in special transactions. The acquisition is exempt from the valuation and minority shareholder approval requirements pursuant to exemptions available to the company under MI 61-101, as the total consideration being received by Mr. Hudson and Mr. Saxon does not exceed 25 per cent of Tasman's market capitalization.

Under the acquisition, Tasman has acquired two chromite projects (Akanvaara and Koitelainen) that lie approximately 75 kilometres apart in northeastern Finland. The projects are secured by 120 exploration claims and claim applications totalling 11,400 hectares in size. Northeastern Finland has been a very active exploration district, following the discovery of the large Sakati copper-nickel deposit by Anglo American, as announced in November, 2011.

Highlights:

  • The chromite portfolio includes two projects with very extensive previous drilling, metallurgical testing and historical resources. Both are easily accessible by road;
  • Projects lie along the geological trend of the producing Kemi chromite mine;
  • In addition to stratiform chromite, the projects have demonstrated potential for both platinum group elements (PGEs) and vanadium;
  • Chromite and PGEs are both defined as critical raw materials by the European Commission due to the highly concentrated current supply. Europe is a major consumer of chromite for stainless steel.

"Acquisition of this advanced chromite portfolio provides Tasman with the opportunity to broaden our reach in the critical metals arena within Europe," said Mr. Saxon. "While we maintain our focus on the exciting developments under way at our Norra Karr heavy REE project in Sweden, we remain active in the pursuit of undervalued assets that suit our current portfolio and strategy."

Based on its economic importance to European industry and a high risk of supply disruption, both chromium and PGEs are defined as "critical" raw materials within recent European Commission publications, in line with the balance of Tasman's existing project portfolio.

Chromium is an essential industrial element due in particular to its strengthening effect on steel alloys and its resistance to corrosion. Most (greater than 90 per cent) of the current global chromite production is destined for use in the metallurgical industry, in particular for stainless steel, which requires a minimum of 10.5 per cent chromium by mass to impart favourable strength and anti-corrosion properties. The remaining chromite is used in the aeronautics (for the protection of aluminum aircraft bodies), foundry, chemical and refractory sectors. Over all, demand growth for stainless steel and therefore chromium is forecasted in the range of 4 per cent to 5 per cent per year to 2020.

European stainless steel production is highly significant, second only to China in scale and accounting for approximately 20 per cent of global output. Europe's share of world chromium metal demand is equally significant, estimated by the European Commission at 1.8 million tonnes (approximately 18.5 per cent of global consumption). At present, 80 per cent of this demand is supplied from South Africa, whilst together Kazakhstan and South Africa hold greater than 85 per cent of the currently known global resources. The Kemi mine of Outokumpu in northern Finland is the European Union's only chromium supplier.

Project descriptions

The Akanvaara and Koitelainen chromite projects are of a stratiform intrusion-hosted style that together with similar deposits on the Kola Peninsula of Russia constitute one of the largest known undeveloped resources of chromite in the world. The Akanvaara and Koitelainen intrusions are part of a group of Archean/early Proterozoic mafic layered intrusions within the Fennoscandian shield, which show cumulate igneous layering similar to other large layered intrusions (Fiskenaesset, Burakovka, Bushveld), and host deposits of chromite, vanadium, titanium, PGEs and gold.

Akanvaara

The Akanvaara layered intrusion is located 140 kilometres northeast of the town of Rovaniemi, with simple vehicle access through a network of gravel logging and drill roads. The closest rail access lies approximately 40 kilometres to the south, and a commercial airport in Kemijarvi being 62 kilometres to the northeast. The Akanvaara project consists of 53 granted claims for 4,750 hectares.

The Akanvaara mafic intrusion has a known surface area of about 50 square kilometres, with a strike length along magmatic layering of 10 kilometres and a total stratigraphic thickness of approximately 3.1 kilometres. The intrusion is characterized by a persistently layered sequence of mafic and ultramafic gabbro, pyroxenite, anorthosite and chromitite (chromium enriched) above a lower chilled margin.

The Geological Survey of Finland (GTK) discovered and explored the Akanvaara intrusion from 1990 to 1999, at which point the project was offered for tender. Work completed by GTK included ground geophysical surveys (magnetic, electromagnetic, gravity); diamond drilling of 118 holes for a total of 18,136 metres; and laboratory-scale beneficiation testing on a number of mineralization styles. Twenty-three chromitite layers were discovered within the Akanvaara intrusion, each with different thickness, strike extent and potential, across a total stratigraphic thickness of 1,100 metres. Mineralized lenses vary from centimetre to tens of metres in thickness.

Following drilling, GTK completed a historic resource calculation on the three most persistent chromitite lenses and a vanadium-enriched gabbro. Cumulate layers are noted to be very strike extensive with predictable grade and thickness. Historical resource estimates are provided in the attached table and are based upon a report entitled "Akanvaaran intrusion kromi-, kromivanadiini, vanadiini- ja platinametalli- kultaesiintynay," by T. Mutatanen, 1998, on behalf of the Geological Survey of Finland.

              HISTORICAL RESOURCE ESTIMATE FOR THE AKANVAARA CHROMITE PROJECT, FINLAND
                                                   
                        Historical resources     Cr     PGE      V      
Name                         (million tonnes)    (%)   (ppm)    (%)                               Comments

Akanvaara LC (1)                        27.0   15.7    0.60   0.00
	                                                                      Reef thickness is one metre, extent
                                                                           7.9 km along strike; tonnage is
                                                                          estimated down to 300 m vertical 
                                                                             depth where the occurrence is
Akanvaara UC (1)                        18.1   22.8    0.91   0.40                          open along dip.
                                                                          The six to 13 metres thick basal
                                                                         part of the magnetite gabbro unit, 
Akanvaara ULC (1)                       10.0   15.3    0.00   0.00            with vanadium-rich magnetite.
                                                                         Twenty million tons down to 100 m
                                                                      (vertical) depth, with 0.34 per cent
                                                                     vanadium, 0.1 per cent copper and 2.5
Base of magnetic gabbro (1)             20.0   0.00    0.00   0.34                    grams per tonne gold.

(1) The data from these projects are historical in nature and was compiled prior to the implementation
of National Instrument 43-101 reporting standards. Tasman has not completed sufficient exploration
to verify the estimates, and it is not treating them as NI 43-101 defined resources or reserves
verified by a qualified person; the historical estimate should not be relied upon. 

GTK commissioned the Technical Research Centre of Finland (VTT) for preliminary mineral processing testing. Samples from the UC horizon were used for flotation tests, which yielded a chromite concentrate with 33.8 per cent chromium oxide and 0.55 per cent vanadium with recovery of 92 per cent and 88 per cent, respectively. The chromite concentrate was shown to be relatively rich in iron, low in alumina and practically devoid of magnesium. This suggests Akanvaara chromite-vanadium concentrate may have potential as a metallurgical and chemical grade raw material for production of ferrochrome, chrome-vanadium alloys and chrome chemicals.

Flotation tests completed on the ULC material gave a higher-grade concentrate of 38.3 per cent chromium oxide, with the promising recovery of 86 per cent.

A series of magnetic concentrates (approximately 10 to 12 weight per cent of the feed) was produced from the magnetic gabbro unit, which contained 1.55 to 1.59 weight per cent vanadium with up to 60 per cent recovery of vanadium. A number of copper-sulphide concentrates were also produced by flotation of this magnetic gabbro sample with a grade of 8 per cent 14 per cent copper, 1.4 grams per tonne gold, 53 grams per tonne to 57 grams per tonne silver, 0.073 gram per tonne rhodium and 0.068 gram per tonne platinum.

Subsequent to GTK's tender, the property was held by Finnish company Outokumpu, which evaluated Akanvaara for PGEs and recognized that magnetite-bearing gabbros in the uppermost section of the intrusion where little GTK drilling was complete were highly anomalous in PGEs (to 1.26 grams per tonne). Outokumpu completed five drill holes and undertook extensive surface sampling.

Koitelainen

The Koitelainen layered intrusion is located 75 kilometres northwest of Akanvaara. The nearest railway is found in Salla, 100 kilometres to the south, and the area is accessible by car through a network of gravel logging and drill roads. The Koitelainen project consists of 67 claim applications for 6,650 hectares and is totally contained within a Natura 2000 area.

The Koitelainen intrusion is a flat, oval-shaped anticline, 26 by 29 kilometres in size, with an estimated maximum thickness of around 3.2 kilometres. The interior of the anticline is made up of Archean footwall rocks to the intrusion through which the intrusion was emplaced. The intrusion is divided into an ultramafic lower zone, a gabbroic main zone and a gabbroic upper zone.

Chromite mineralization at Koitelainen was first discovered in 1977, and two principal levels of chromite mineralization are now known. The lower chromitite layers are found within a pyroxene cumulate, and are continuous in drilling over a distance of about 20 kilometres. Four to six layers each over 0.3 metre thick, with chromium oxide from 10.6 per cent to 32.2 per cent having been discovered, the thickest drill intersection being 2.9 metres. The basal contacts are generally sharp; the hanging wall contact is gradational from massive chromitite to chromite-disseminated pyroxenite. The upper chromitite layer is a distinct interval up to 2.2 metres thick containing 21 per cent chromium oxide, 0.4 per cent vanadium and 1.1 parts per million PGE. The upper chromitite is strike continuous, and compositionally and mineralogically homogeneous.

From 1973 to 1999, 131 holes for a total of 16,440 metres were drilled at a range of chromite, PGE and vanadium targets at Koitelainen. All drilling were completed on behalf of GTK, and the core remains in storage in Finland.

Using 42 drill holes, GTK undertook a resource estimate for a vanadium-enriched ilmenomagnetite unit, discovered within the upper parts of the Koitelainen-layered intrusion. Using 17 drill holes and four drill holes, GTK completed historic resource calculations on the upper and lower chromitite horizons respectively. The upper chromitite layer is 1.3 metres thick, and is noted to be very strike extensive with predictable grade and thickness. Historical resource estimates are provided in the attached table and are based upon a report entitled "Koitelaisen malmitutkimukset vuosina 1979-1989," by T. Mutatanen, 1989, on behalf of the Geological Survey of Finland.

                 HISTORICAL RESOURCE ESTIMATE FOR THE KOITELAINEN CHROMITE PROJECT, FINLAND

                        Historical resources     Cr     PGE      V      
Name                         (million tonnes)    (%)   (ppm)    (%)                                  Comments

                                                                      Fourty-two drill holes used in resource
                                                                           calculation. Four strike extensive
Magnetite gabbro (1)                    10.8    0.0     0.0  0.242        mineralized units, up to 40 m thick.
                                                                         The distinct UC layer averages 1.3 m
                                                                      thick. Resource to 500 m vertical depth.
                                                                       Seventeen drill holes used in resource
Koitelainen UC (1)                      70.0   15.7    1.10    0.0                                calculation.
                                                                       The three to six LC layers extends for
Koitelainen LC (1)                       2.0   14.4    1.38    0.4                at least 20 km along strike.

(1) The data from these projects are historical in nature and was compiled prior to the implementation
of NI 43-101 reporting standards. Tasman has not completed sufficient exploration to verify the estimates,
and it is not treating them as NI 43-101 defined resources or reserves verified by a qualified person;
the historical estimate should not be relied upon.

Metallurgical testwork from Koitelainen has been poorly recorded and appears limited to the magnetite gabbro. In 1976, it is reported that drill core was used as feed materials for weak magnetic separation testwork. Recovery of the magnetic material was approximately 90 per cent, with a concentrate grade of 50 per cent iron and 0.8 per cent to 1.2 per cent vanadium.

Tasman's qualified person, Mr. Saxon, president and CEO of Tasman and a fellow of the Australasian Institute of Mining and Metallurgy, and member of the Australian Institute of Geoscientists, has reviewed and verified the contents of this news release.

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