Segue review upgrades Emang Resource

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THE BOURSE WHISPERER: Segue Resources (ASX:SEG) has released results of a new resource estimate compiled following a review of what had previously been announced for the company’s Emang manganese project located near Postmasburg in the Northern Cape Region of South Africa.

The key finding of the review was an error in the conversion of iron in the assay results, expressed as Fe2O3 (iron oxide), to an equivalent iron grade in the geological model, expressed as Fe (iron).

Segue explained the error in the conversion factor resulted in the iron grade contained in the original geological database and resource estimate to be lower than if the correct conversion factor was applied.

Segue’s exploration contractor, Tenure Minerals Consultants, completed a full audit of the new geological database to ensure accuracy of conversion of all minerals and to implement other improvements identified in the review.

The geological database was then interrogated by RSV GEM for data quality and integrity and found the database to be acceptable for the compilation of an inferred mineral resource under the JORC standards of mineral reporting.

The new inferred resource compiled by RSV GEM is:

–    16.5 million tonnes at 24.8 per cent manganese and 20.6 per cent iron.

This represents an increase of 19 per cent in resource tonnes, 19 per cent in contained manganese and 111 per cent in contained iron.

 


JORC Inferred Resource for Emang manganese project. Source: Company announcement

“The mineralisation at Emang is a combination of manganese and iron, which is reflected in the new resource estimate,” Segue resources managing director Steven Michael said in the company’s announcement to the Australian Securities Exchange.

“The economic potential of the Emang manganese project has been greatly enhanced with the new resource, as most of the manganese ore sold from the Postmasburg region contains a high level of iron (typically >20 per cent iron), which is attractive to Asian steel mills.

“It is unfortunate that the error in converting Fe2O3 to Fe was present in the initial resource estimate, however Segue’s best practice procedures enabled this error to be discovered quickly and rectified prior to additional drilling commencing on incorrect data.

“Also, the results of the Theo Pegram & Associates review will further increase the quality of information captured in the next phase of exploration.”

Segue said the new inferred resource will increase its ability to progress the Emang manganese project from exploration through to mine planning, development and production.

The next stage of exploration and evaluation at the project will include:

–    Completion of a LIDAR survey to generate a detailed digital terrain map, including volumetric assessment of existing stockpiles and dumps;

–    A detailed geophysical program (High Resolution Resistivity) to identify high priority targets for the next phase of drilling;

–    Extensional drilling between the resource areas to increase the overall resource size and in-fill drilling of the existing resource to establish a maiden measured and/or indicated resource;

–     Commence a scoping study to better define the project parameters, including mining rate, plant size, processing method and infrastructure requirements; and

–    Assessing the product quality requirements of various manganese ore customers.

Blackham expands Matilda to 1.4Moz

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THE BOURSE WHISPERER: Blackham Resources (ASX:BLK) has reported a Resource Estimate for the M3 deposit at the company’s Matilda gold project.

The M3 deposit is estimated to contain 755,000 tonnes at 1.7 grams per tonne gold for a total of 42,000 ounces of gold.

The combined Matilda project estimate has grown to 23 million tonnes at 1.9g/t gold for 1.4 million ounces of gold.

“The M3 deposit is crucial to unlocking the value of the Matilda project due to its strategic position between the larger deposits of M1 and M4,” Blackham Resources explained in its ASX announcement.

Blackham’s revised gold resources at the Matilda Gold Project are summarised below:

Source: Company announcement

Resources at the Matilda Mining Centre have now reached 682,500 ounces of gold, which Blackham claims has consolidated its position as the largest gold endowment within the Matilda project.

The company expects to be able to increase this further expected when the M8 deposit and other prospects are estimated.

The completion of the M3 resource has also highlighted that lodes from M1, M2, M3, M4 & M5 deposits are part of a large mineralised system (Figure 1).

 

Matilda Mining Centre showing combined resource models and drilling targets. Source: Company announcement

 

“Within this system there are a number of areas with little or no drilling that if tests prove successful, may provide additional resources as well as a positive impact on the mining economics around these deposits,” Blackham said.

“As the company shifts its focus towards development, priority will be given to improving the confidence of resources and ultimately converting resources into reserves.”

Blackham will commence a 3,000 metres RC drill program next week to focus on infill and extension zones around the M1, M3 and M4 deposits.

The company and the drilling contractor have agreed 50 per cent the drilling contract will be paid in Blackham shares.

“The company is delighted with the recent growth of the Matilda project,” Blackham said.

“In less than 12 months the resources have grown over 350 per cent.

“The Resource base is now sufficient to consider development options which would see the company become a producer in the near-term.”

New draft of JORC Code released for public comment and review

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THE BOURSE WHISPERER: The Australasian Joint Ore Reserves Committee (JORC) has released an exposure draft of a revised JORC Code (2012) for public comment.

The JORC Code (full title: Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves) is an essential facet of the reporting of exploration and Resource as it provides investors with confidence in the minerals industry in Australasia.

 “First developed as a world-leading piece of industry self-regulation in 1989, the Code is incorporated in the Listing Rules of the Australian Securities Exchange and the New Zealand Stock Exchange, making compliance mandatory for listing public companies in Australia and New Zealand,” JORC acting chair Steve Hunt said.

“The key role of the JORC Code is to ensure consistently high quality and transparent reporting of Exploration Results and reporting of estimates of Mineral Resources and Ore Reserves.

“The exposure draft represents a significant evolution of the JORC Code, and we strongly encourage people to review the draft and provide us comments.”

This draft of the JORC Code has been prepared following consultation on an issues paper that was prepared in 2011.

JORC received extensive feedback to the paper in the form of 114 written submissions as well as further direct industry feedback through various public forums and meetings, which it said had greatly assisted it in preparing the exposure draft.

The body said that the review process confirmed there is strong support for the JORC Code to remain principles based, however, there is also a need for improved disclosure standards and greater balance between the core principles of Transparency, Materiality and Competence in public reporting.

The exposure draft of The JORC Code (2012) can be found at www.jorc.org.

Comments are invited up to Friday 26th October 2012. Submissions should be emailed to jorc@ausimm.com.au.

“JORC also welcomes the parallel release of the ASX consultation paper ‘Reserves and Resources Disclosure Rules for Mining and Oil &Gas Companies: Draft ASX Listing Rules and Guidance Notes for Enhanced Disclosure’,” Hunt said.

“JORC has been working closely with the ASX and ASIC as we have developed these draft documents, and I am very pleased that we are able to consult on these related documents at the same time.”

There are a number of areas in which the exposure draft JORC Code (2012) and ASX listing rules are in close alignment in seeking to create a more transparent balanced reporting regime for Exploration Results, Mineral Resources and Ore Reserves.

JORC has urged both papers be reviewed concurrently in order to understand the accountabilities and requirements for both Competent Persons and mining companies under the new drafts.

JORC, ASX and ASIC have liaised and cooperated in an attempt to ensure the requirements are efficient and compatible.

JORC said it welcomes any comment on the compatibility of the two sets of requirements.

In addition there are a number of issues beyond the scope of the JORC Code covered only within the ASX consultation paper, specifically new guidance on the reporting of Production Targets and the public reporting of Historical and Foreign Estimates.

As these issues are not addressed within the JORC Code, the draft guidance for these issues should be reviewed and commented upon directly to the ASX.

What the JORC Code does:

Sets minimum standards for public reporting (in Australia & New Zealand) of Exploration Results,
Mineral Resources and Ore Reserves;

Provides a mandatory system for classification of tonnage/grade estimates according to geological confidence and technical/economic considerations;

Requires Public Reports to be based on work undertaken by a Competent Person; describes the qualifications and type of experience required to be a Competent Person; and

Provides extensive guidelines on the criteria to be considered when preparing reports on Exploration Results, Mineral Resources and Ore Reserves.

What the JORC Code does not do:

Regulate the procedures used by Competent Persons to estimate and classify Mineral Resources and Ore Reserves;

Regulate companies’ internal classification or reporting systems;

Deal with breaches of the Code by:

Companies (these are regulated by the ASX); or

Individuals (these are dealt with under enforceable Codes of Ethics of the Australian Institute of Geologists (AIG), The Australasian Institute of Minerals and Metallurgy (The AusIMM) or the relevant Recognised Professional Organisation.

Panax Geothermal consortium awarded research grant

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THE BOURSE WHISPERER: A consortium of industry, government and research organisations, including Panax Geothermal (ASX:PAX) has been awarded a $1.25 million grant under the Federal Government’s Emerging Renewables Program.

The University of Adelaide’s South Australian Centre for Geothermal Energy Research will receive the funding from the Australian Renewable Energy Agency (ARENA) for a study of “Reservoir Quality In Sedimentary Geothermal Resources.

The two-year study has a total cost of more than $3.5 million and is actively supported by personnel from Panax, Geodynamics Ltd, CSIRO and the South Australian Government Department for Manufacturing, Innovation, Trade, Resources and Energy.

Panax said the study would provide it with key insights into the drilling, completion and potential next steps in the Penola Trough and hot sedimentary aquifer (HSA) well Salamander 1.

Salamander 1, completed to a depth of 4,025 metres in 2010, was the first deep geothermal well in the Otway Basin and is the first well of its type to demonstrate conventional geothermal technology in Australia.

Panax is making available to the project all data, samples and testing results from Salamander 1, access to the well, plus access to and use of its company personnel.

The project will assess whether formation damage occurred as a result of drilling, devise remediation strategies for future geothermal wells in HSA settings, and help the industry understand rock-fluid interactions in hot water aquifers.

“Panax is building on its investment in deep drilling by making the well available to this project, and the results of the two-year research program will have deep implications for the viability of HSA reservoirs in Australia’s sedimentary basins,” Panax Geothermal managing director Kerry Parker said in the company’s announcement to the Australian Securities Exchange.

“By making our infrastructure, personnel and data available to this project, Panax will allow the best Australian technical minds in this field to turn their attention to our Limestone Coast geothermal project.

“We will be able to use the results and refine our strategies for progressing the project to the ultimate goal of commercialising this nationally significant, ‘under the grid’ energy resource in the heart-land of Australia.”

Parker went on to say the project would provide Panax with a much clearer idea of how to improve drilling outcomes and the success rate of geothermal wells in Australia.

“The geothermal industry in Australia has come to realise that hot water reservoirs are likely to be different to hydrocarbon reservoirs, and it is this kind of issue that this project will address,” he said.

“This project will meet our industry-based priorities such as maximising exploration and development success rates, but will also meet ARENA’s strategic priorities such as facilitating national coordination, and gathering and disseminating knowledge.”

Carrick Gold upgrades Mt Jewell Field gold Resource

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THE BOURSE WHISPERER: Carrick Gold (ASX:CRK) has calculated an upgrade to the Resource at the company’s Mt Jewell Field project.

Mt Jewell Field is one of four projects which make up the company’s KalNorth Gold Field, situated less than one hour’s drive from Kalgoorlie.

Carrick commenced drilling at the Hughes and Tregurtha deposits at the Mt Jewell Field in July 2012 to raise the category of the resource and enable the estimation of mining reserves.

 

Mt Jewell Resources Sept-2012 reported at 0.5g/t gold cut-off. Source: Company announcement

 

This has resulted in a 27 per cent increase to the Indicated and Inferred Mt Jewell Resource, based on a 0.5g/t cut off, to 8.62 million tonnes at 1.0 grams per tonne gold for 275,600 ounces of gold.

Carrick’s total Indicated and Inferred Resources now exceed 1.1 million ounces of gold.

The initial Probable Reserve comprises the pits at Kurnalpi and Lindsay’s of 1.75 million tonnes at 1.8g/t gold for 102,927 ounces of gold.

Of the total Mt Jewell Resource, 72 per cent is now catalogued in the Indicated category.

On this basis, the company indicated it expects to be able to deliver an initial mining Reserve in October 2012.

 “The Resource growth is pleasing, while the increased confidence level of the Resource to the Indicated category enables us to complete pit designs,” Carrick Gold managing director John McKinstry said in the company’s announcement to the Australian Securities Exchange.

“We are delighted that the results have delivered considerably more ore within the mineralised envelope.

“Both orebodies have demonstrated considerable opportunity for additional Resource growth.

“The pit designs, when completed in October, are expected to deliver initial Mining Reserves, making Mt Jewell the fourth of Carrick’s planned operations.”

Carrick explained the new modelling indicates the presence of considerably more mineralised material within the proposed pit limits, particularly at Hughes.

The company said this will favourably influence its plans for the mining and processing of these deposits.

A mine at Mt Jewell is expected to be the fourth of Carrick’s open pit mines in the KalNorth Gold Field.

Scoping Study supports Blackthorn’s Kitumba confidence

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THE BOURSE WHISPERER: Blackthorn Resources (ASX:BTR) has had a scoping study completed for the company’s 100 per cent-owned Kitumba project located in Zambia, which hosts the Kitumba resource.

The Study was based on a recently completed geological model by MSA Group ,which estimated 439 million tonnes of in situ ore at a 0.25 per cent copper cut-off, comprising 164 million tonnes of Indicated Mineral Resource and 275 million tonnes of Inferred Mineral Resource.

Key points to arise from the study include:

–    Support for the potential for a large open cut mine based on the recently announced Mineral Resource estimate by the MSA Group;

–    Estimated mineable ore of 84.5Mt Run of Mine (ROM) at 1.19 per cent copper and a strip ratio of 2.4:1 (tonnes of waste per ROM tonne of ore);

–    Ore production of approximately 7.5Mt per annum to produce a 30 per cent copper concentrate;

–    Copper metal production potential ranges from 55,000 tonnes per annum in early years ramping up to 75,000 tonnes per annum pa in the latter years;

–    Open cut production mine life of approximately 14 years;

–    Cash cost estimate of US$31.45 per ROM tonne ($1.49 per pound of copper);

–    Estimated start-up capital expenditure of US$377 million;

–    Pre-feasibility and underground operation studies to be initiated; and

–    Further metallurgical studies are planned, including assessment of the viability of heap leaching of oxide ore.

The open-pit development involves a series of cutbacks.

 

Proposed pit cross-section. Source: Company announcement

 

The company said this approach minimises the quantity of overburden pre-strip, and provides earlier access to higher grade ore deeper in the deposit as well as reducing the initial strip ratio to deliver a better economic outcome.

“This is a very important milestone in the history of the Kitumba deposit within the Mumbwa project. Blackthorn Resources managing director Scott Lowe said in the company’s announcement to the Australian Securities Exchange.

“While much work remains to be done, this outcome gives some indication of economic potential and gives us great encouragement and justification for further expenditure.

“We now intend to progress to prefeasibility level studies, along with further drilling to potentially extend the resource.

“We are looking forward to gathering the additional data required to increase confidence, and examining the potential benefits of underground operations.

“Mumbwa is shaping up to be a potentially valuable copper project with few rivals in the market place.”

Fortescue halts trade in shares on ASX

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THE BOURSE WHISPERER: Fortescue Metals Group (ASX:FMG) has requested the Australian Securities Exchange place its share in a trading halt effective from commencement of trading today (14 September 2012).

Asking for the halt Fortescue said it was concerned regarding continued rumours and speculation in respect of its bank related facilities.

The company said discussions with its banks had progressed significantly and that it considered it to be in the best interests of shareholders to halt trading in its shares.

 

“Fortescue re-iterates its announcement from yesterday (13 September 2012) that it is in compliance with its banking covenants and is conducting discussions with its supportive banking group,” FMG said in its request to the ASX.

“It is the company’s intention to be able to make an announcement in respect of the restructure of its bank related facilities on or before commencement of trading on Tuesday 18 September 2012.”

The ASX place a halt on the shares as requested saying, “Unless ASX decides otherwise, the securities will remain in Trading Halt Session State until the earlier of the commencement of normal trading on Tuesday, 18 September 2012, or when the announcement is released to the market.”

 

 

Breakaway delivers Sandy Creek maiden

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THE BOURSE WHISPERER: Breakaway Resources (ASX:BRW) has reported a maiden JORC Code-compliant Mineral Resource estimate for the company’s Sandy Creek copper-gold project, located south-east of Cloncurry in North Queensland.
 
The maiden Inferred Resource comprises:

–    2.06 million tonnes at 1.42 per cent copper and 0.33 grams per tonne gold containing 29,400 tonnes of copper metal and 21,900 ounces of gold.

Most of the resource (1.6Mt at 1.46 per cent copper and 0.35g/t gold) is contained within the Sandy Creek Main Zone, with the balance lying within the newly discovered Western Zone.

The Main Zone extends over a strike length of 700 metres and to a vertical depth of 200 metres, with the resource remaining open both to the north and down-plunge to the south.

 

Sandy Creek project long section showing the Main Zone resource. Source: Company announcement

 

The company has identified the down-plunge extensions to the south as its focus for the next phase of drilling due to the stronger widths and grades of mineralisation achieved from drilling in this area indicating the potential for plunging high-grade shoots typical of the mineralisation at the Eloise copper mine, which is located east of Sandy Creek.

The maiden JORC resource estimate has provided the impetus for Breakaway to plan further diamond drilling to test the down-plunge extensional potential at Sandy Creek followed by metallurgical test work on the core.

The company said the estimation of a maiden resource at Sandy Creek combined with the recently-announced Joint Venture with Sandfire Resources (ASX:SFR) has further highlighted the regional potential of the broader Eloise project.

“We are very pleased to have delivered a maiden resource for Sandy Creek which is an important milestone in our exploration of the Eloise project,” Breakaway Resources managing director Victor Rajasooriar said in the company’s announcement to the Australian Securities Exchange.

“More importantly, it gives us a clear pathway moving forward in terms of the development of the company.

“While the initial Sandy Creek resource is modest, it is shallow and potentially economic through a small open pit development.

“This potential will be assessed through a Scoping Study on completion of the next phase of drilling.”

Breakaway considers the potential for down-plunge extensions of the mineralisation, which it intends testing with its next drilling campaign, forms part of a much bigger picture at Sandy Creek.

The company said this drilling should provide a much clearer indication of the sort of project Sandy Creek is, and how it can best add value to it.
 
“At the same time, technical reviews and data interpretation will be commencing on the Broader Altia project under our recently announced $8 million farm-in joint venture with Sandfire Resources,” Rajasooriar continued.

“We are looking forward to commencing that work in conjunction with Sandfire and moving to the next stage in terms of unlocking the value of the Eloise exploration project.”

Scoping Study gives thumbs up to Platina Resources’ Owendale project

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THE BOURSE WHISPERER: Platina Resources (ASX:PGM) has received the results of a recently-completed Scoping Study at the company’s wholly-owned Owendale scandium project in New South Wales.
 
The Scoping Study has returned positive project economics for the Owendale project, including:

–    Confirmation of an economic and technical viability of a combined platinum and scandium mining operation;

–    The existing platinum and scandium Indicated Mineral Resources can support an average mining rate of 6.9 million tonnes per annum for three years. After three years the stockpiled scandium-bearing laterite will continue to be processed at rates of:

o    0.9 tonnes of platinum produced per annum for 3 years; and

o    40 tonnes of scandium oxide produced per annum for 41 years.

–    An estimated capital expenditure of AUD$222 million; and

–    An estimated annual operating costs of AUD$62 million for the first 3 years, reverting to approximately AUD$42 million once platinum processing ceases.

The Study considered different options: a standalone platinum operation, and a combined platinum and scandium operation.

The combined platinum and scandium option, which was favoured most by the company, was highlighted as being economically feasible by the Scoping Study.

Platina said this provides the impetus for the Owendale project to proceed toward a pre-feasibility study.
 
“The Study clearly shows that the current platinum and scandium Indicated Mineral Resources at Owendale would deliver an excellent cash-flow over a long life span,” Platina Resources managing director Rob Mosig said in the company’s announcement to the Australian Securities Exchange.

“I am extremely proud of achieving a maiden Mineral Resource and positive scoping study at Owendale in such a short period of time.

“Our focus now is to move Owendale into a mining operation as soon as possible.

“We’re especially pleased that significant exploration upside still exists to increase the Mineral Resources, particularly with the platinum.

“Considering the current operational difficulties in South Africa, the largest producer of platinum, we are well positioned to offer an alternative source of the metal.”

Platina said the current platinum Indicated Mineral Resource is sufficient to sustain a supply feed to the mill of just under three years and the company is confident the Indicated Resource can be increased with additional exploratory drilling.

The proposed gravity process for the recovery of platinum will produce a concentrate grading approximately 340g/t platinum.

Whilst this is already a saleable product, the company intends to conduct further metallurgical test work to determine a method for producing a concentrate grading over 1,000g/t platinum.

Platina claims Owendale to be Australia’s highest-grade scandium deposit, and one of the country’s largest scandium repositories.

Platina has conducted extensive market research into scandium and met key end-users in the fuel cell and alloy industries.

Based on these discussions, the company said it believes an annual production of 40tpa scandium oxide to be a realistic figure to use for the Scoping Study.

Should market conditions change, and scandium demand increases, the process plant nominated in the Scoping Study is able to be upgraded accordingly.

Coventry to list on TSX-Venture exchange

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THE BOURSE WHISPERER: Canada-focused Coventry Resources (ASX:CVY) is soon to be dual listed via a merger with TSX-V listed Crescent Resources Corp (TSX-V:CRC).

Coventry has entered into a definitive merger implementation agreement with Crescent.

Once the merger has been finalised the combined company will make application to have its shares listed and tradable on both the TSX Venture Exchange and the Australian Securities Exchange, which Coventry said will provide its shareholders greater exposure to the North American equity markets.

Coventry is currently working up its 1.4 million ounce Cameron gold project in Canada.

 

Cameron gold project – JORC Resource. Source: Company announcement

 

The company said it anticipates the merger will enhance its profile in the North American investment community.

“This transaction provides Coventry shareholders significant potential for value growth by gaining exposure to the North American equity market,” Coventry Resources managing director and CEO Michael Naylor said in the company’s announcement to the Australian Securities Exchange.

“Coventry continues to advance and unlock value from its Cameron and Rainy River gold projects in Canada.

“Canadian investors have shown a great level of interest in the 1.4 million ounce Cameron gold project, which is located in the mining friendly jurisdiction of Ontario, as well as Coventry’s large and highly-prospective ground holding within close proximity to the 8 million ounce Rainy River gold deposit, owned by TSX-listed Rainy River Resources, one of Canada’s most exciting discoveries in recent years.”

The tie up with Crescent makes good sense for Coventry. It is a TSX-V listed gold exploration company holding approximately C$900,000 in cash and the Uncle Sam gold project in Alaska.

Crescent is looking to raise an additional C$750,000 prior to implementation of the merger, which should it do, will result in the company having approximately C$1.6 million in cash (before costs).

The outcome of the agreement will be that Crescent will acquire Coventry by means of a court sanctioned scheme of arrangement.

Following the merger, Coventry shareholders will own 87.25 per cent of the common shares in the merged entity.

“Coventry has proven highly effective in advancing the Cameron gold project since acquiring it in 2010, and we believe this transaction presents an exciting opportunity for Crescent shareholders to gain exposure to a development stage gold project and promising exploration potential in an excellent jurisdiction.” Crescent Resources president, CEO and director Don Halliday said in the announcement.

The boards of directors of Coventry and Crescent have both unanimously approved the terms of the transaction and intend to vote in favour of the merger, in both cases in the absence of a superior proposal.