SHAREHOLDER UPDATE
ASX Announcement 25 March 2019
I am pleased to provide this briefing both as an introduction to myself and as a summary of the next stages of the Company’s development. I write this with particular concern for the Company’s share price performance over the last 18 months, its market capitalisation and to reiterate our commitment to present and future shareholders.
Having previously worked as a geologist and in the field of technology commercialisation followed by my tenure at Extract Resources and Stonehenge Metals, I intend to lead Peninsula in becoming a prominent part of the Korean battery industry.
Since my appointment on January 14th, I have visited Korea with the Company’s recently appointed non-executive Director, Young Yu and met with the 5 members of staff that are core to our operations there. With them and Danny Noonan, our executive director and head of geology, we have reviewed all our projects in Korea and assessed their viability with regard to our business strategy.
The new PSM Board will continue the focus on defining the exploration targets at Gapyeong and Yongwon as well as other tenements with the clear objective of developing a natural resource base on the Korean peninsula. This will enable the Company to work downstream with Korea’s most advanced technology companies – particularly those companies that are involved in the production of batteries and energy storage systems. With the Korean experience of Young Yu and myself, we will work with our Korean Directors, shareholders and staff to build relationships with Korean end-users which will be essential once PSM is in a position to move on to the resource development phase.
To this end, PSM will focus immediately on the known areas of graphite occurrence and will investigate other areas on the Korean peninsula that offer the opportunity to engage with the Electric Vehicle (EV) and battery market. This will be by exploration, merger or acquisition to expand our capabilities in both the upstream and downstream stages of battery manufacture.
With regard to our other projects, lithium, base metals and gold – it is unlikely that these will incur major investment from the Company, and partners will be actively pursued to ‘farm-in’ to what are seen as projects that have good upside potential but do not fit into the present strategy.
The Korean peninsula offers an extremely lucrative target for Western companies that can deliver world renowned industry expertise and excellence. In particular Australian companies are welcome there because of their mining experience and their acknowledged best practice in exploration, mining, environmental management and community consultation. The Korean quest to extend innovation, commercialisation and technological development is a perfect fit in respect of working alongside foreign companies that understand their business and cultural background and ambition.
In many ways, this culture is not fully understood by Western companies; and often Korea as an investment destination is ignored as a consequence. I believe that PSM now has the Directors and management that can embrace and be inclusive in this culture.
As the company develops, we look forward to welcoming Korean individuals and companies that will choose to invest in, and assist with, the future direction of PSM.
Peninsula’s Board of Directors would like to reiterate our commitment to our long-term vision of becoming a key strategic provider of both upstream supply and downstream processing in the Korean Peninsula’s battery industry.
QUARTERLY ACTIVITIES REPORT TO 31 DECEMBER 2018
ASX Announcement 31 January 2019
HIGHLIGHTS:
Peninsula Mines Limited (“Peninsula” or “the Company”) continues to pursue its strategy to develop a flakegraphite mining and processing business in South Korea to supply the South Korean lithium-ion battery manufacturing industry.
To this end, a significant milestone was achieved with the signing of a Memorandum of Understanding (“MOU”) with Tera Technos Co. Ltd (“Tera Technos”, or “TTCL”), announced post year-end D3 . The MOU sets in place the groundwork for establishing an offtake agreement prioritising graphite supply from PSM’s wholly owned subsidiary, Korea Graphite Co. Ltd (“KGCL” or “Korea Graphite”), to TTCL D3 .
Furthermore, the completion of the initial, six diamond drill hole programme for 458m at the Gapyeong FlakeGraphite Project, with significant flake graphite mineralisation intersected in all holes, including 10.63m at 11.6% total graphitic carbon (TGC) from 61.9m in holeGPD0005, confirming the continuation of grade and thickness, as anticipated from the geological synform model. Metallurgical analysis of fresh core is underway.
Other significant highlights included:
- Two diamond drill holes for 321m intersected the Palgong West gold-silver mineralised structure at the Osu Project and confirmed the continuation of mineralisation below historical underground workings. High grade intersections included 0.31m at 22.2g/t Au and 182g/t Ag from 157.79mD5 .
- A successful capital raising and the completion of the sale of the Daehwa Molybdenum-Tungsten Project in November 2018 D6,10,11
- Encouraging ground magnetic targets along extensions to the known, historically mined, zinc-leadcopper skarn mineralisation at the Ilweol Zinc-lead-Copper Prospect, Ubeong Project (see Figure 1 for location).
- Mr Richard Henning was appointed Managing Director, effective 14 January 2019, and his Korean, Australian and global management experience will take Peninsula forward with its development strategy.
- The corporate restructure boosted Korean interests in the Company with the appointment of Mr Young Yu as Non-Executive Director to the Peninsula Board. Mr Yu’s previous government appointments representing Australia in South Korea stand him in good stead to ensure that Peninsula gains exposure to further Korean offtake and investment opportunities
Figure 1: Peninsula Mine’s South Korean Project Locations Gapyeong Flake Graphite Project
Peninsula’s flagship Gapyeong Project secures flake-graphite mineralised units striking north-south over 1km. The units have been defined by ground electromagnetic (EM) surveys, surface mapping and sampling, as well as drilling and trenching during the fourth Quarter 2018.
During the Quarter, Peninsula completed six diamond drill holes acrossthe southern EM anomaly on two eastwest section lines for 458m, to intersect the graphite in the geologically interpreted synform fold at depth. Significant LECO assay results from the drill core included:
GPD0001: 6.55m (5.1m True width (TW)) @ 7.9% TGC from 39.6m incl. 2.47m (2.1m TW) @ 11.9% TGC
GPD0002: 10.56mm (6.7m TW) @ 7.1% TGC from 70.91m including 5.44m (3.0m TW) @ 10.0% TGC, and, 1.81m (1.14m TW) @ 10.7% TGC from 86.95m
GPD0004: 6.45m (5.1m TW) @ 4.6% TGC from 15.22m and 2.64m (2.5m TW) @ 7.7% TGC from 38.13m
GPD0005: 10.63mm (7.4m TW) @ 11.6% TGC from 61.9m including 8.63m (6.0m TW) @ 12.1% TGC D4
These results confirm the anticipated continuity and thickness of the graphitic units at depth, particularly in the eastern fold limb and fold hinge. Trenching results received post Quarter-end have extended the mineralised strike length to 400m along the southern EM anomaly, open to the south. Results include:
GC0004: 9.69m @ 9.7% TGC, including 7.21m @ 10.6% TGC (400mN) and
GC0003: 3.97m @ 9.8% TGC and 5.62 @ 6.0% TGC (680mN) D1
GAPYEONG GRAPHITE CHANNEL INTERSECTIONS EXTEND TARGET
ASX Announcement 21 January 2019
- New channel sampling intersections including 9.69m @ 9.7% Total Graphitic Carbon (TGC) with 7.21m @ 10.6% TGC have extended the high-grade drilling target to over 400m strike length, open to the south
- Petrography indicates presence of large graphite flakes with some interstitial sulphides
- Additional metallurgy initiated targeting a fresh rock, >95% TGC, concentrate and to generate samples for further test-work, including for spherical graphite with new technology partner, Tera TechnosD13
Peninsula Mines Ltd (ASX:PSM) has produced additional high-grade graphite channel sampling intersections including
GC0004: 9.69m @ 9.7% TGC, including 7.21m @ 10.6% TGC (400mN) and
GC0003: 3.97m @ 9.8% TGC and 5.62 @ 6.0% TGC (680mN)
These results extend the high-grade drilling target to 400m strike length at the Gapyeong Graphite Project, located 50km east of Seoul in South Korea (see Figure 1, inset, for location).
This follows the encouraging drilling results including
GPD0005: 10.63mm (7.4m True Width (TW)) @ 11.6% TGC from 61.9m including 8.63m (6.0m TW) @ 12.1% TGCD1 from six initial diamond drill holes for 458m on two 80m spaced cross sections across the highconductivity electromagnetic (EM) anomaly that corresponds with the graphitic unitsD1 (see Figure 1).
Additional analyses for diamond drill hole GPD0001 have also been received, providing a second intercept
GPD0001: 4.15m (3.8m TW) @ 5.1% TGC in addition to the previously announced 6.55m (5.6m TW) @ 7.9% TGC incl. 2.47m (2.5m TW) @ 11.9% TGC.
The trenching, channel sampling, intersections are in addition to previous channelsampling intersections that include
GC0002: 13.1m @ 12.3% TGC including 6.66m @ 17.2% TGC on section 4,180,600mN and
GC0001: 12.5m @ 10.6% TGC including 2.6m @ 14.5% TGC on section 4,180,500mND5 .
The trenching results indicate that the grade of the Gapyeong graphitic unit may be higher to the south of the current drilling.
Peninsula’s Managing Director, Richard Henning said: “We continue to be encouraged by the high-grade intercepts from the Gapyeong graphitic unit and will now do further metallurgical testing prior to further resource drilling, with the objective of defining a maiden flake-graphite mineral resource in South Korea. It should be noted that due to the winter season in Korea, ground conditions are such that further groundwork is unlikely until the Spring.”
Petrographic work on Gapyeong drill-core (GPD0001) hasidentified large flakes with interstitial and associated sulphides, dominantly pyrite and pyrrhotite with trace chalcopyrite and sphalerite (Photomicrographs 1 & 2). The matrix is composed of a mix of quartz and feldspars. The presence of strong sulphide mineralisation was not evident in previous channel sampling and was most likely oxidised and leached at surface.
Further metallurgical testing has been initiated on the fresh-rock drilling samples to confirm that a >95% TGC concentrate can be generated from the sulphide bearing graphitic material. Previous testing on surface trenching samples produced high-purity metallurgical concentrate of 95.4% TGCD7.
Subject to achieving the requisite concentrate grade, the Company will look to generate a five-kilogram graphite concentrate sample for spherical graphite testwork with the objective of reaching 99.95% TGC purity spherical graphite product to meet the specifications of South Korean Lithium-ion battery anode manufacturers.
Figure 1: Gapyeong channel and drill hole locations and intersections on EM imagery, 400m zone
