Alara delivers Resource upgrade in Saudi Arabia

THE DRILL SERGEANT: Alara Resources (ASX:AUQ) has increased the JORC Measured and Indicated zinc and copper Resource at the company’s Khnaiguiyah zinc-copper project in Saudi Arabia.

The Measured and Indicated JORC Resource for Zones 1, 2 and 3 at Khnaiguiyah now stands at 25.33 million tonnes at 4.03 per cent zinc and 0.16 per cent copper.

Alara also released the JORC Measured and Indicated Copper Resource for a separate copper only domain, which exists within the mineralised zones.

This too has been increased and now stands at 6.67 million tonnes at 0.69 per cent copper.

This resource upgrade follows the completion of over 93 drill holes in Zone 2 and several thousand metres of new drilling in Zone 1 since the cut-off date (22 November 2011) for determination of the maiden JORC resource the company announced in February.

Alara has undertaken Whittle optimisation studies in relation to Zones 1, 2 and 3 as part of the
Khnaiguiyah Definitive Feasibility Study (DFS).

The company said these studies have indicated the current Measured and Indicated Resource will have a high likelihood of conversion to a JORC Reserve status and confirm project economics based on:

–    Lower operating cost working environment in Saudi Arabia;

–    Technical sophistication and planning backed up by extensive metallurgical test work reflected in low processing costs; and

–    Lower strip ratios than previously envisaged.

From the drilling conducted at Zone 1 Alara has delineated a mineralised zone of approximately 600m in length, up to 100m in width and an average thickness of 15m open at both ends along strike.

 

Drill hole locations in Mineralised Zones 1 to 4 at Khnaiguiyah project. Source: Company announcement

 

The new Measured and Indicated Resource has resulted in the company to make the decision to upgrade the parameters of the current DFS to reflect an increase in the Khnaiguiyah production profile from an annual throughput of 1.5 million to 2 million tonnes per annum.

“It has been an exceptionally hectic 18 months coming to grips with the geology of the deposits, over 36,000 metres of drilling, new resource models, delivering on soft issues around environmental approval and water availability as well as concurrently completing the Definitive Feasibility Study,” Alara Resources managing director Shanker Madan said in the company’s announcement to the Australian Securities Exchange.

“In the end, I believe our shareholders and partners will be satisfied that we will have delivered a sound DFS for the project.”

Alara said it anticipates this increased throughput is likely to result in an increased annualised production profile to approximately 80,000 tonnes of zinc metal and 6,000 tonnes of copper metal.

The alteration to the DFS is not expected to have any effect on the timing of release of the final DFS, which is still estimated to occur in the December quarter of this year.