Sayona Mining Ltd: Half Yearly Report

Brisbane, Australia - Sayona Mining Ltd. (ASX:SYA) (OTCMKTS:DMNXF) present their report of the Company and its controlled entities for the half-year ended 31 December 2018.

AUTHIER LITHIUM PROJECT, CANADA

The Company's primary focus during the half-year has been on completing work required to commence the development of the project, including the definitive feasibility study, community consultation and permitting. Authier is a near-term development project and cash-flow generation opportunity. The Company believes it will create significant share value-uplift potential for shareholders as the project advances towards development.

Authier is a hard rock spodumene lithium deposit scheduled for development as an open cut mine, initially producing a 6% spodumene concentrate. Production is planned to commence in 2020.

Definitive Feasibility Study

On 24 September 2018, the Company announced a positive DFS for the flagship Authier project. The DFS confirmed the project's potential to deliver a profitable and sustainable new lithium mine that will provide new jobs, investment and other benefits for all stakeholders.

Key findings of the DFS include:

- Pre-tax net present value (NPV) of C$184.8m (AUD $194.0m), pre-tax internal rate of return (IRR) of 33.7% and estimated payback of 2.6 years

- Annual average concentrate production of 87,400 tonnes at 6% Li2O;

- Average annual revenue of C$80 million;

- Mine gate cash costs of C$416/t and FOB Port cash costs of C$482/t (US$366/t);

- Initial capital expenditure of C$89.9 million;

- Updated Ore Reserve of 12.10 Mt @ 1.00% Li2O (Proven Reserve 6.10Mt @ 0.99% Li2O and Probable Reserve 6.00 Mt @ 1.02% Li2O) delivers a mine life of 18 years.

Permitting Process

The Authier project has been designed to access the permitting route under Section 22 of the Quebec Environmental Quality Act. This requires the project to remain under a maximum production threshold of 2,000 tonnes per day (tpd). Under this mechanism, environmental studies and public consultation is undertaken by the Company in accordance with Mining Act specifications.

On 20 December 2018, Sayona lodged a mining lease application for the Authier deposit. A mining lease grants rights of access and use of the surface for mining purposes. Supporting documentation included:

- rehabilitation plan;

- definitive feasibility study; and

- certified report describing the nature and extent of the deposit and its probable value.

Sayona also filed an application to the Ministry of the Environment for initial overburden stripping and the construction of an overburden stockpile, water management facilities, an access road and other minor related infrastructure. The application included an updated Environmental and Social Evaluation (ESE) study. The update of the ESE reflects the company's commitment to comply with, or exceed, all Provincial and municipal regulatory requirements for the mine development. This application triggers the review process of the Authier project within the Ministry of the Environment.

Subsequent to the end of the period, the Quebec Environment Minister advised that the Authier project would be subject to the environmental impact assessment and review procedures under the BAPE (bureau d'audiences publiques en environnement). This is an extended permitting process. The Company continues reviewing options to take the project forward to development.

Community Consultation

On 18 August 2018, the Company ended its three month consultation period. Sayona held three public consultation sessions with different stakeholders located near the Project (La Motte, Pikogan and Amos). The purpose of these meetings was to present the results of the environmental studies, the progress of the project and to take into account the concerns of people in relation to the project. Communication channels continue to be maintained with stakeholders to ensure full transparency with local partners.

During the period, Sayona opened an office in La Motte, which is north-west of Montreal and the seat of the municipal council region where Authier is located. This will become the new head office for the Sayona team in Quebec. The office is also open to the community to access information about the Authier project.

Subsequent to period end, the company also announced the appointment of Serge Rouillier as Manager for Sustainable Development. Serge is an experienced executive with a sound background in the mining industry.

Marketing and Finance

The Company's strategy is to initially develop Authier and sell lithium concentrate while it completes the test work and feasibility study for a downstream processing facility producing lithium carbonate and/or hydroxide. The strategy is analogous to other lithium developers in Quebec including Nemaska and North American Lithium.

During the period, the Company has actively engaged with a number of potential product off-takers. Strong interest has been received from Chinese concentrate converters interested in purchasing Authier concentrates or value-adding in country. The Company has undertaken marketing roadshows in China and Asia. The Company plans on building on this work to secure binding off-take contracts for the Authier production.

In addition, the Company is engaged with a number of parties interested in financing the Authier project. Potential financing strategies include royalties, concentrate pre-sales and convertible notes. The objective of the financing strategy it to minimise dilution to shareholders.

Tansim Exploration Project

Tansim is situated 82 kilometres south-west of the Authier project in Quebec. It comprises 65 mineral claims of approximately 12,000 hectares, and is prospective for lithium, tantalum and beryllium.

During the period large spodumene crystals were identified in an initial reconnaissance visit to the site. Mapping and sampling programs were undertaken to define drill targets.

Selective sampling was undertaken at priority prospects, Viau-Dallaire, Viau and Gauthier with a total of 21 samples taken over exposed pegmatites.

Encouraging assay results include:

- Viau-Dallaire : 14 grab selective samples ranging from 0.96% Li20 to 2.47% Li2O

- Viau: 4 grab selective samples ranging from 0.22% Li2O to 4.5% Li2O

- Gauthier: 3 grab selective samples that did not return significant Li2O% grade

In all cases high-grade lithium results were associated with albite-spodumene pegmatite with coarse grain spodumene crystals up to 30 centimetres in length. The assays reported were all very low in iron content (averaging 0.63%).

A drilling program to follow up identified targets is scheduled to commence in February 2019. Exploration is being closely co-ordinated with the local First Nations Group, Long Point First Nation, who will provide support services for work programs.

WESTERN AUSTRALIAN PROJECTS

Western Australia is a premium lithium province with world-class, high-grade lithium deposits associated with rare metal pegmatites.

Sayona's leases In the Pilbara region cover some 1,898km2 and are centred in the world class Pilgangoora lithium district. Exploration during the half-year included RC drilling at the Mallina project, where three zones of spodumene pegmatite were targeted. Other work included the collection of 260 rock and 619 soil geochemical samples during reconnaissance over regional tenure as well as detailed soil geochemistry and pegmatite mapping at Tabba Tabba.

At the Tabba Tabba project, new pegmatites were identified in the north of the project area. These are tantalum rich and returned up to 352ppm Li2O and 581ppm tantalum (not same sample). At Moolyella pegmatite in the southern project area returned up to 1.40% Li2O.

These encouraging results require further systematic exploration.

Great Sandy Option

In December 2018, the Company made the final option payment to Great Sandy Pty Ltd ("Great Sandy") to acquire an 80% interest in a package of 6 tenements covering 694 km2 in the Pilgangoora lithium district of Western Australia.

In January 2019, the Company entered into an agreement with Great Sandy to acquire the remaining 20% interest for $100,000. Settlement was made through the issue of new shares in Sayona. The Company now holds a 100% interest in the tenement package.

To view the full report, please visit:
http://abnnewswire.net/lnk/6DB2FK4R

About Sayona Mining Ltd:

Sayona Mining Ltd. (ASX:SYA) (OTCMKTS:DMNXF) is an Australian, ASX-listed (SYA) company focused on sourcing and developing the raw materials required to construct lithium-ion batteries for use in the rapidly growing new and green technology sectors.

Please visit us as at www.sayonamining.com.au

Source:

Sayona Mining Ltd.

Contact:

Dan O Neill Managing Director Phone: +61-7-3369-7058 Email: info@sayonamining.com.au www.sayonamining.com.au