Cassini and OZ Kick Off West Musgrave Project JV

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THE INSIDE STORY: Having finalised a Joint Venture to develop the West Musgrave project (WMP), Cassini Resources (ASX: CZI) and OZ Minerals (ASX: OZL) were quick out of the blocks to get drilling.

Cassini Resources acquired the WMP in 2014, and has since progressed the company’s geological and technical understanding of the project.

Cassini completed a positive Scoping Study in April 2015, which was further optimised in April 2016, with results demonstrating the WMP’s strong potential to become a low cost (first quartile) nickel-copper operation with an initial mine life of over 15 years.

The results attracted the attention of OZ Minerals, which was announced as a Joint Venture partner in August, to earn up to a 70 per cent interest in WMP by sole funding a minimum of $36 million on development and exploration, including completion of a Definitive Feasibility Study (DFS).

Cassini will remain as operator of the project until the DFS stage.

The agreement includes funding for continued studies on the Nebo-Babel deposit to progress to a ‘Decision to Mine’, as well as a regional exploration spend of up to $8 million to assist in identifying additional value adding opportunities.

The Joint Venture grants OZ Minerals the right to farm-in to the WMP via a three stage process.

First up, Oz Minerals is sole funding an initial minimum spend of $3 million within a maximum 12 month period to further progress scoping studies on the WMP, as well as providing two full-time technical employees to work under the instruction of Cassini while the commitments of this stage are met.

Stage 1 of the farm-in agreement then kicks in, under which OZ Minerals may earn a 51 per cent interest in the WMP by sole funding an additional $15 million within an 18 month period towards completion of a Pre-Feasibility Study (PFS) and (DFS) in addition to sole funding at least $4 million within the same 18 month period on regional exploration.

Once this has been achieved the deal moves into the Stage 2 farm-in, at which time a Joint Venture will be formed between Cassini and OZ Minerals, allowing the latter to earn an additional 19 per cent interest.

The 70 per cent prize will belong to Oz Minerals after sole funding of a further $10 million within a 12 month period towards completion of a DFS, plus sole funding at least another $4 million within the same 12 month period on regional exploration.

Should OZ Minerals attain 70 per cent JV interest, Cassini will have the right to maintain its 30 per cent interest by contributing to ongoing expenditure on a pro-rata basis or dilute under standard industry terms.

“To attract a Joint Venture partner of the calibre of OZ Minerals is a clear endorsement of the potential of the West Musgrave project,” Cassini Resources managing director Richard Bevan told The Resources Roadhouse.

“A deal such as this is of great importance to a company like Cassini, as it provides funding of exploration and development activities.

“It also provides access to the significant technical capabilities of OZ Minerals, a company with considerable base metal project development expertise.

“It allows us immediate access to a substantial level of funding to progress the project, which will give us a clear line of sight on a decision to mine and subsequently, potential cash flow for the company.”

Cassini has identified Babylon as having the potential to host massive sulphides and in particular, nickel sulphides, beneath the existing copper-dominant resource.

The Babylon drill hole will target a wide intersection of the interpreted sub-vertical mineralised zone for a further 260 metres to 350 metres below the current maximum depth of downhole electromagnetic investigation.

It will drill to 230m to 590m vertically below mineralisation intersected by previous hole WMN4023 (1.96 per cent nickel, 0.13 per cent copper, 1.2g/t Pt+Pd).

The work already completed by Cassini on Babylon has demonstrated this mineralisation to occur as massive sulphide xenoliths that have been remobilised in a late-stage dolerite dyke.

The company has interpreted this to imply the presence of nickel-rich massive sulphides at depth.

Further drilling has been scheduled for the One Tree Hill prospect, located about 13 kilometres southwest of the Babel deposit.

One Tree Hill emerged as a target from work carried out by Cassini in 2015, which involved the remodelling of down-hole electromagnetic (DHEM) data from historical drilling.

As a result the, previously poorly defined EM conductor was drill tested by hole CZD0008, which intersected two chalcopyrite-rich veins that returned:

0.3 metres at 10.1 per cent copper from 193.8m; and
0.4m at 4.48 per cent copper from 250.9m.

Subsequent DHEM confirmed that CZD0008 failed to intersect the original target but there was an off-hole conductor, 30m by 30m at 350m with an extremely high modelled conductance suggesting the existence of pyrrhotite-rich massive sulphide mineralisation.

This conductor is to be the subject of the upcoming drilling.

Cassini will also be concentrating much time and effort into the company’s flagship Nebo-Babel project.

Nebo-Babel currently hosts a JORC 2012 compliant Resource of 203 million tonnes at 0.41 per cent nickel and 0.42 per cent copper for 830,000 tonnes of contained nickel and 860,000 tonnes of contained copper.

There are areas of the existing Nebo-Babel resource that remain open, including zones of higher grade massive sulphide. Cassini is targeting a number of these zones in its resource extension drilling program, especially those which are likely to be used early in the mining schedule. The Company is confident that there are opportunities to increase the size of the existing resource, especially the high-grade domains within the deposits.

This confidence is demonstrated by massive sulphide zones at Nebo, extensions to the Startmeup Shoot at Babel and definition of the rollover zone at Babel, which has produced a hit of:


CZC0129
18m at 1.5 per cent nickel and 1.52 per cent copper.

“All of these targets have significant potential to impact project economics if further high-grade mineralisation can be found,” Bevan said.

“Once we have a better understanding of the possible extensions of the high-grade domains we will be better equipped to determine a number of Project parameters, such as processing throughput that will be required during the PFS.

The Nebo-Babel RC program will comprise approximately 2,000 metres of drilling and is anticipated to commence at the start of the 2017 field season.

Cassini will also follow up on metallurgical results from the 2015 Scoping Study that used a split flotation flowsheet to produce separate nickel and copper concentrates on five composite samples, each from different higher-grade Nebo-Babel ores.

The Further Scoping Studies (FSS), will target geological units (domains) containing the bulk of the metal tonnes and domains critical to early stages of the mine schedule.

Objectives of the FSS include:

Improving scoping study nickel and copper concentrate grades and recoveries; and

Testing samples at appropriate nickel and copper grades likely to be mined in a 4mtp-plus size operation;

Approximately twenty whole ore and composite samples will satisfy the purposes of FSS, to be taken from existing core samples as well as drilling of approximately four new PQ diamond holes.

Cassini considers the construction of a new geometallurgical domain model a critical step in this phase of testwork.

Cassini Resources Limited (ASX: CZI)
…The Short Story

HEAD OFFICE
10 Richardson Street
West Perth WA 6005

Phone: +61 8 6164 8900

Email: admin@cassiniresources.com.au
Web: www.cassiniresources.com.au

DIRECTORS
Mike Young, Richard Bevan, Dr Jon Hronsky, Phil Warren, Greg Miles

Blackham opens Matilda with focus fixed on future

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THE INSIDE STORY: Blackham Resources (ASX: BLK) recently celebrated the official opening of the company’s Matilda and Wiluna gold operation, near Wiluna in Western Australia.

The celebrations recognised the achievements Blackham has accomplished in just 16 short months, leading to the pouring of the project’s first gold bar.

“The pouring of the first gold from the Matilda project was extremely satisfying from a company perspective, but it was also satisfying to be able to achieve such a major milestone with the participation of so many other groups,” Blackham Resources managing director Bryan Dixon told The Resources Roadhouse.

“It would not have happened so quickly if we hadn’t have received such loyal support from our shareholders, employees, contractors, the Wiluna Martu people, and community stakeholders”.

“The town of Wiluna has a long and significant mining history and we are proud to be leading the charge in the latest chapter of that history with the development of the Matilda and Wiluna gold project.”

With that achievement under its belt, Blackham Resources is now looking forwards and following a recent $25 million raising through a placement at $1 per share, the company has taken its cash position to $33.1 million.

Blackham will use the placement proceeds to expand the oxide and free milling resources and reserves at Matilda and to grow the project’s sulphide open pit and underground mine plan and reserves.

The funds will also enable the company to fast track a plant expansion study and sulphide circuit refurbishment.

Blackham also recently mitigated against any gold price risk by forward selling a further 34,250 ounces of gold at an average price of $1,774 per ounce taking its total gold hedge commitments to 35 per cent of forecast production over the next 18-month period.

What Blackham Resources has achieved, and is currently producing, has been well-documented during this recent phase.

Now, however, is time to focus on what the future has in store and how the company intends maintaining the momentum it has built to keep the re-commissioned facility turning over.

Resources at the Matilda and Wiluna gold operation currently stand at 48 million tonnes at 3.3 grams per tonne for 5.1 million ounces of gold.

Measured and Indicated Resources now total 22 million tonnes at 3.4g/t gold for 2.4 million ounces of gold.

The company anticipates to upgrade these soon with a re-estimate currently underway to include drilling undertaken since June 2016.

The stated objective at Matilda was to commence gold production at a rate of 100,000 ounces per annum and eventually ramp that up to around 230,000 ounces per annum.

Production commenced in October this year and is currently ramping to full commercial production, which Blackham hopes to achieve by years’ end.

An expansion study targeted this production goal within two years mainly through the treatment of the, previously maligned, Wiluna sulphides, which have current Measured, Indicated and Inferred Resources of 3.5 million ounces at 5.8g/t gold.

For Blackham, unlocking the value of these sulphides is crucial to its strategy, which involves increasing mining output and the capacity of the mill by running the sulphide circuit in conjunction with the current operating free milling circuit.

During Stage Two of the project, Blackham intends bringing additional resources into the mine plan from sources surrounding the mill, having determined potential exists to reduce operating costs should those resources justify a mill expansion.

Exploration drilling at Matilda on the M1 and M5 pits indicated potential mineralisation may be continuous between the two pits.

Infill and extensional drilling at M6 North confirmed plunging shoots along strike of the M6 pit.

The mining optimisation study confirmed favourable economics for the M6 pit to come into the mine plan.

Recent drilling undertaken to support the mill expansion study at the Wiluna mine defined mineralisation along strike and beneath existing pits, highlighting potential for cutbacks at several pits.

Drilling of the East and West Pits northern extensions delivered:

WURD0005
23m at 3.74 grams per tonne gold from 119m;

WURC0047
6m at 7.65g/t gold from 175m and 5m at 2.01g/t gold from 195m;

WURC0103
6m at 8.75g/t gold from 88m; and

WURC0083
7m at 3.17g/t gold from 38m

The East and West Lodes at Wiluna are former working mines, historically producing over 1.5 million ounces of gold – predominately from underground mining.

Mineralisation has been intersected below and along strike from the East and West pits with results to date from the East Lode indicating continuity of mineralisation between the East and North Pits.

Blackham is of the opinion the continuity of mineralisation between the historical East and North Pits increases the likelihood of the planned North and East pits merging together, which would improve mining economics from a lower stripping ratio.

The northern extensions of the East and West Lode mineralisation are likely to result in further oxide mineralisation for the Stage 1 operation as the base of oxidisation is approximately 50m deep in this area.

Drilling on the Gap Pit – between the Happy Jack and Bulletin open pits – confirmed extensions to the Bulletin deposit along Eastern Shear, including:

WURC0104
10m at 2.03g/t gold from 79m and 19m at 2.74g/t gold from 158m;

WURC0108
9m at 4.08g/t gold from 106m and 10m at 2.37g/t gold from 131m; and

WURC0106
19m at 2.66g/t gold from 6m.

A re-interpretation based on recent underground drilling at Bulletin led Blackham to consider the Bulletin Lode and the eastern Gap Lode may be the same mineralised structure.

Drilling already carried out to test the Gap lode identified extensive mineralisation in three separate lodes beneath and along strike from the Gap pit.

This drilling has also revealed how the limited depth of historical drilling has constrained the pit optimisation.

Drilling at the Golden Age North pit has indicated more high-grade free milling reef mineralisation that could be amendable to open pit mining.

Results include:

WURC0126
11m at 5.87g/t gold from 50m; and

WURC0114
7m at 4.9g/t gold from 109m.

The recent drilling at the Golden Age pit encountered mineralisation associated with quartz, which has been interpreted to represent a continuation of the Golden Age quartz vein.

The Golden Age orebody is currently being mined as an underground operation and is hosted within higher grade free milling quartz veins.

The two drillholes cited above, WURC0126 and WURC0114, intercepted the Golden Age structure 200m and 350m north of the historical Golden Age pit, leading Blackham to upgrade the mining potential in this area.

The company has completed a review of historical data, which suggests Golden Age may be wrapping into the Gap pit (Eastern Shear), in a similar fashion to what the company is encountering in the underground at 400m depths.

WURC0114 was drilled just 100m from the historical Gap pit and encouraging opinion that the Bulletin, Gap and Golden Age North pits may merge which will have a favourable effect on the mining economics in these areas.

“The latest Wiluna extensional drilling collaborated what we already considered the project to have, which is considerable potential to add significant base load open pit mining feed,” Dixon said.

“We anticipate the updated Wiluna open pit resources to complement the drilling success we achieved when we recently extended the Bulletin underground mineralisation.

“Both feed sources will be heavy contributors to the Wiluna expansion study we currently have underway.”


Blackham Resources Limited (ASX: BLK)
… The Short Story

HEAD OFFICE
Level 2, 38 Richardson St
West Perth WA 6005

Ph: +61 8 9322 6418

Email: info@blackhamresources.com.au
Web: www.blackhamresources.com.au 

DIRECTORS
Milan Jerkovic, Bryan Dixon, Alan Thom, Greg Miles, Peter Rozenauers,

Rox Resources cashed up and ready for action

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THE INSIDE STORY: One element that often deters investors getting involved with junior exploration companies is the concern that a share-diluting fund raising may be just around the corner.

Rox Resources (ASX: RXL) recently removed any such fund-raising angst by selling off its interest in the Reward zinc project in the Northern Territory, for $20.6 million.

A bidding war for Reward kicked off earlier this year when Rox Resources received a series of offers, with from Marindi Metals (ASX: MZN) being ultimately successful.

However, under the terms of the Earn-in and Joint Venture Agreement between Rox Resources and Teck Australia, the latter retained a pre-emptive right over Rox’s interest in the project, which meant Rox was obliged to offer to sell its interest in the Reward project to Teck on the same terms and conditions.

After a bit of to-and-froing between all parties, Teck finally confirmed it would exercise its pre-emptive right to purchase Rox’s minority interest, on the following terms:

Cash of $8 million;

Immediately tradeable, un-escrowed shares in any ASX or TSX-listed company to a value of $3.6 million or, alternatively $2.6 million cash;

A three year promissory note with a face value of $5.25 million and an interest rate of 10%; and

A deferred payment of $3.75 million, payable on completion of a bankable feasibility study, or the expiry of six years, whichever comes first.

“The obvious benefit of the sale of the Reward project is that we won’t have to go back to our shareholders to raise money for quite some time,” Rox Resources managing director Ian Mullholland told The Resources Roadhouse.

“People criticise juniors for raising money all the time – we won’t have to do that.

“We are set to receive somewhere in the vicinity of $10 to $12 million upfront, consisting $8 million in cash and shares that will be readily tradeable.

“Three years later we get a convertible note for $5.25 million (with a 10% interest rate) and then three years after that we will be due $3.75 million.

“That’s a considerable amount of cash coming in over a period of six years.

“If we use that money wisely, there should be no reason for us to go back to the market and raise more money.”

The ink on the contract had barely dried when Rox announced it was to acquire 100 per cent of the Collurabbie nickel gold project tenements, located 500 kilometres north of Kalgoorlie in Western Australia from Falcon Minerals (ASX: FCN).

The announcement caught many market watchers and industry players on the hop as the project is one many recognised from its historic exploration success, but had fallen off many radar screens.

The new deal transpired to be a good fit for Rox and at a purchase price of $25,000 cash and 7,500,000 shares in the company, well within its now very healthy financial position.

The Collurabbie project tenements are situated a short distance of just 70km due east of Rox’s Fisher East nickel sulphide and Mt Fisher gold projects.

The Fisher East nickel project has always held the number one position on Rox’s development table, and for good reason.

Rox has discovered four deposits on Fisher East – Camelwood, Cannonball, Musket and Sabre, across which it has established a total Mineral Resource of 4.2 million tonnes at 1.9 per cent nickel for 78,000 tonnes of nickel

Collurabbie comprises exploration licences E38/2009 and E38/2912, covering 63.1 square kilometres with most of the known nickel sulphide mineralisation located on E38/2009.

Rox Resources has also applied for adjoining tenement areas covering over 59sqkm, for a total project area of 122.5sqkm.

“We picked up Collurabbie, because we consider it to be a completely underdone project with a great deal of potential,” Mulholland said.

“One thing over the years we have demonstrated to the market, is that we are good at identifying and realising value from distressed, or unloved, projects.

“The Reward project is a perfect example – when we first acquired it the project had some historic drill results, we did some drilling, added some tenements – one of which hosted the Teena deposit, attracted Teck as a JV partner, and the rest is history.

“We turned the company’s $2 million exploration investment in the project into a $20 million windfall.”

The Collurabbie project hosts the Olympia nickel sulphide deposit, where historical drilling returned results that made everybody stand up and take notice, including 5.8 metres at 3 per cent nickel, 2 per cent copper and 5.3 grams per tonne PGE.

Rox believes Collurabbie has potential to add value to the Fisher East project, especially should both projects achieve production status, as ore from Collurabbie could be trucked to a processing plant at Fisher East.

“That is another aspect about Collurabbie that appealed to us, as that option just hasn’t existed for this project before,” Mulholland said.

“Most of the mineralisation was encountered at the project’s Olympia deposits.

“Beyond Olympia, however, there are a number of strong prospects, such as Agora, Leros, Paros and Rhodes (East and West) where indications of mineralisation were identified by previous exploration, but never really received the attention we feel they deserve.”

Due to a number of corporate factors, the Collurabbie project area was subjected to what can be best described as sporadic exploration after its initial discovery.

There was much activity on the discovery between 2004 and 2005 and a smaller campaign carried out from 2010-2011, but since then no exploration of substance has been conducted on the tenement package.

Rox has signalled its intentions to remedy this situation with plans to apply the same exploration techniques at Collurabbie it has implemented with success at Fisher East.

“The last phase of exploration was five to six years ago, so we believe there is considerable scope for new discoveries,” Mulholland said.

“The GFC was responsible for an exploration slow-down across any number of projects and Collurabbie was one to suffer that same fate.

“The Collurabbie discovery was the talk of the town a few years ago for good reason and we believe the opportunity to define more extensive mineralisation there is still extremely attractive.

“In addition there’s the gold aspect which really hasn’t been looked at.”

The previous Collurabbie project drilling also demonstrated its potential to host gold mineralisation with a number of intercepts from the Navos project showing positive signs, including:

2m at 5.2g/t gold from 30m
2m at 2.4g/t gold from 60m; and
2m at 2.47g/t gold from 70m.

Gold exploration carried out in the 1990s focused on the northern part of the tenements, however there has been no further work since 2000.

Having consolidated its cash position with the sale of the Reward project, Rox will now fully-focus on the Fisher East and Collurabbie projects with the intention of moving both projects forward.

The deal has bought Rox one of the most valuable assets it can have at a time when it and other nickel explorers wait for the nickel price to improve.

“We would like to continue to add quality projects to our portfolio,” Mulholland indicated.

“With such a large amount of cash behind us we can afford to sit back and have a look for other opportunities.

“We may not find any, but we are certainly willing to have a look.”


Rox Resources Limited (ASX: RXL)
…The Short Story

HEAD OFFICE
Level 1, 34 Colin Street
West Perth WA 6005

Ph: +61 8 9226 0044

Email: admin@roxresources.com.au
Web: www.roxresources.com.au

DIRECTORS
Stephen Dennis, Ian Mulholland, Brett Dickson

Mt Alexander draws an interested crowd for St George Mining

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THE INSIDE STORY: St George Mining (ASX: SGQ) is gaining plenty of attention with results from its nickel sulphide and gold projects, located in the Yilgarn Craton of Western Australia.

St George completed an oversubscribed raising of $6.47 million in August, largely on the back of its high-grade shallow massive nickel-copper sulphide discoveries at the Mt Alexander project.

“The greatest way for a mining company to deliver shareholder growth is to make a greenfields discovery,” St George Mining executive chairman John Prineas told The Resources Roadhouse.

“We’ve been very lucky this year to do exactly that at Mt Alexander.”

St George is following in the footsteps of BHP Billiton, which first discovered massive nickel-copper sulphides at Mt Alexander in 2008.

Not much attention was paid to Mt Alexander after that initial breakthrough, until St George acquired the project in 2016 and set about consolidating its now dominant tenement package.

The Mt Alexander project is located 120 kilometres south‐southwest of the Agnew‐Wiluna belt, an area synonymous with nickel exploration that hosts numerous world-class nickel deposits.

The project comprises four granted exploration licences – E29/638, E29/548, E29/962 and E29/954.

St George’s recent drilling focused on the Cathedrals, Stricklands and Investigators nickel‐copper discoveries, which are located on E29/638.

This License is held in Joint Venture by Western Areas Limited (ASX: WSA) (25%) and St George (75%) as manager.

Recent work at Mt Alexander included a second drill program, which maintained the company’s 100 per cent strike rate of encountering massive nickel-copper sulphide mineralisation when testing electromagnetic (EM) anomalies.

“One of the most consistent aspects has been our reliable EM testing with every conductor we have drilled intersecting nickel-copper sulphide mineralisation,” Prineas said.

“There has been no false positive anomaly, no barren sulphides – every conductor we test is nickel-copper sulphide mineralisation and that’s a huge bonus in exploration targeting.

“We started with 400 metres of mineralisation along the Cathedrals Belt and that has now been extended to over 3.5 kilometres of recurrent mineralisation.”

A recent sixteen hole program included follow‐up targets at the Cathedrals and Stricklands prospects, where St George intersected massive nickel‐copper sulphides in its maiden drill program earlier this year.

The program also included first ever drilling at the Investigators prospect, kicking off a whole new adventure.

“The Investigators prospect was completely unexplored at the start of the year,” Prineas said.

“In a short space of time, we generated priority targets and drilling has now confirmed the presence of an extensive shallow nickel‐copper system with high grades that compare favourably with established WA nickel mines.

“The first holes drilled into Investigators tell us strong exploration upside exists to extend and discover further mineralisation.”

The drilling discovered massive nickel‐copper sulphides at Investigators returning multiple intersections of high-grade mineralisation over a strike length of 1.3km.

This was supplemented with the discovery of further high-grade nickel‐copper sulphides at the Cathedrals and Stricklands prospects.

These prospects are within the Cathedrals Belt, which runs on an east-northeast orientation, which is relatively unique amongst WA nickel sulphide deposits that generally occur in greenstone belts oriented northwest-southeast.

“We have established recurrent high grade mineralisation over a strike length of 3.5 kilometres of the Cathedrals Belt within the Joint Venture tenement E29/638,” Prineas said.

“We believe this mineralised belt extends to the northeast into our newly granted tenement E29/954 with potential to double the strike length of mineralisation.

“We own the new tenement 100 per cent and it has never been explored.

“We are excited about the potential here and have commenced geophysical surveys to generate drill targets.”

Meanwhile, laboratory assays just received for the most recent drilling at Investigators confirmed thick intervals of sulphide mineralisation with a number of high grade intersections.

These included:

MAD31
Over 5m of nickel-copper sulphide mineralisation, including a high-grade interval of:
1.57 metres at 6.26 per cent nickel, 2.71 per cent copper, 0.18 per cent cobalt and 4.91 grams per tonne total PGEs from 111.67m, including 1.01m at 7.98 per cent nickel, 3.13 per cent copper, 0.22 per cent cobalt and 5.9g/t total PGEs from 112.08m.

MAD32
Over 9m of mineralisation including a high-grade interval of:
1.92m at 4.58 per cent nickel, 1.52 per cent copper, 0.14 per cent cobalt and 3.83g/t total PGEs from 51.6m, including 0.77m at 7.82 per cent nickel, 2.5 per cent copper, 0.24 per cent cobalt and 6.31g/t total PGEs from 52.75m.

MAD33:
Over 10m of mineralisation including a high-grade interval of:
1.01m at 5.81 per cent nickel, 2.33 per cent copper, 0.22 per cent cobalt and 4.32g/t total PGEs from 96.48m.

MAD37:
Over 13.5m of mineralisation including a high-grade interval of:
1.27m at 5.63 per cent nickel, 2.16 per cent copper, 0.17 per cent cobalt and 3.86g/t total PGEs from 122m, including 0.72m at 7.93 per cent nickel, 2.75 per cent copper, 0.23 per cent cobalt and 4.81g/t total PGEs from 122.6m.

“Intersecting multiple intersections of massive sulphides in the maiden drilling at Investigators clearly demonstrated Mt Alexander is an under‐explored nickel‐copper system that is growing with every drill program we complete,” Prineas said.

“The latest discoveries at Investigators reinforce the status of Mt Alexander as a significant nickel sulphide project in Western Australia.”

The good news from the drilling results was boosted further with successful metallurgical flotation test work on a sample of massive nickel‐copper sulphide mineralisation from the Cathedrals prospect.

This preliminary test work, carried out by Strategic Metallurgy, generated separate copper and nickel sulphide concentrates and assed any smelter credits from the PGEs and cobalt.

The results were very encouraging, achieving selective separate flotation of copper and nickel concentrates.

Of note was the recovery of nickel and copper to bulk concentrate, which exceeded 99 per cent, demonstrating the exceptional amenability of the Mt Alexander massive sulphide to a flotation process.

The test work also returned nickel recovery of 89.4 per cent, producing an 18 per cent nickel concentrate, which is impressive when production of anything greater than 13 per cent nickel is considered saleable concentrate.

Copper recovery of 85.8 per cent with a 32 per cent copper concentrate produced, well within saleable concentrate grades of above 24 per cent.

Copper not recovered into the copper concentrate is recovered into the nickel concentrate resulting in an overall copper recovery of 99.7 per cent.

Cobalt in the nickel concentrate grading 0.55 per cent cobalt would attract smelter credits, as would the recoveries of Platinum Group Elements (PGEs) at 3.2g/t PGEs plus gold in the copper concentrate and 13.5g/t PGEs plus gold in the nickel concentrate.

“The metallurgical testwork confirms the mineralisation is very amenable to commercial processing and is likely to produce a high value, smelter‐friendly concentrate, supporting the favourable economics of a potential mining operation at Mt Alexander,” Prineas said.

St George has just commenced a deep penetrating fixed loop electromagnetic (FLEM) survey across the defined Cathedrals Belt mineralised strike using the SAMSON system, penetrating to depths below 500m to identify mineralisation at depth and extensions of mineralisation identified to date.

“With every conductor drilled in this Belt so far confirmed as nickel‐copper sulphides, we know it’s a highly mineralised Belt where EM targeting works,” Prineas said.

“The deep search survey is exploring areas of the Belt not yet tested and has the potential to deliver another important exploration breakthrough.”


St George Mining Ltd. (ASX: SGQ)
… The Short Story

HEAD OFFICE
Level 1
115 Cambridge Street
West Leederville WA 6901

Ph: + 61 8 9322 6600

Email: info@stgm.com.au

Web: www.stgm.com.au

DIRECTORS
John Prineas, Tim Hronsky, Sarah Shipway

Trump Election Uncertainty Replaced by Inauguration Anticipation

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THE CONFERENCE CALLER: Uncertainty has ruled the airwaves and markets in recent times, thanks in no small part to global political machinations.

The Brexit secession and the election of Donald Trump did their best to scare the pants off the global investment community, but – as we have seen – not badly enough to keep everybody away for too long.

The Brexit vote resulted in a big tumble of world markets, yet this was recovered in a relatively brief time – compared to other recent global financial disasters – once the dust settled and everybody realised that the sun would rise the next day and the moon would sometimes be bigger than usual.

Of course, the election of The Don (Trump not Bradman), was also unexpected, and it was the moment of uncertainty as the votes were counted that saw the Australian market poo its collective trousers.

“The ASX reaction to Trump being elected was quite fascinating,” BDO partner, corporate finance Adam Myers told the Low Emission and Technology Minerals Conference in Perth.

“The ASX 200 fell to a low of 5052 on Wednesday and the rebounded to 5370 by the end of the week.

“Interestingly, looking at the everyday trading – it wasn’t the point where Trump secured victory, rather the point in time where it looked as though he was likely to win that the market collapsed.

“It was that uncertainty the market didn’t like.”

The fascination with the market Trump-effect has not ended, however, as we are now in the transitional phase leading up to his inauguration in January 2017.

The Don campaigned on a number of key platforms, those of which that received most coverage were those most likely to have a major economic impact.

These were cuts in the corporate and personal tax rates, increased infrastructure spending, and a raising of the minimum wage.

“All these policies that he really hit the headlines with are expansionary and are likely to fuel global trade,” Myers said.

“However, he also came out with a lot of headline grabbing protectionist policies – taxes on China’s imports to the US at significant levels that would really disrupt global trade.

“If the protectionist policies prove to be political bluff and campaign-speak, then we could see a boost to global growth – it could be a real shot in the arm for the world economy.

“Naturally Australia would benefit from this with the US being a significant source of capital flow into the country in terms of investment, and also with China being a major trading partner with the US.

“China is our number one export destination, so any increase in the US-China relationship is a positive for us and is likely to flow-on to commodity prices.”

Myers suggested that should Trump’s policy agenda turn out to be of a protectionist nature and does have an impact, it is likely that China will bear the significant brunt of those policies.

This, he said, could see the giant Asian dragon turn nasty and return fire by introducing similar protectionist policies as it attempts economic stimulus internally.

“Whilst that may lead to some commodity price weaknesses, Australia is likely to be less impacted by the way China could respond,” he said.

“We are quite lucky in that we do have that direct link to China.

“If China does go to an internal infrastructure-driven approach to try to keep their local economy going, we may be cushioned from that a little bit.” 

Myers said a key factor the Australian government will have to deal with should the situation arise, will be how it manages relations with both nations.

“It is important that we don’t try to push towards one rather than the other…it’s important that we court both governments and we try to smooth the relationship between the two,” he said.

“The free trade that our government negotiated in recent times looms large as something that will be a real benefit for us.”

Technology Minerals Capturing Market Imagination

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THE CONFERENCE CALLER: From an equity market perspective, compared to previous years, 2016 has been reasonably kind to the resources industry.

Opening the 2016 Low Emissions and Technology Minerals Conference in Perth, Argonaut analyst, metals, mining & energy research Matthew Keane identified the performance of small resources equities to have improved during the current calendar year.

He described the performance of small resources to have been, “relatively lacklustre over the past three years,” adding that had anybody invested money in 2014, they would have ended that year basically even.

This year things have been pleasingly different with a revival lead by commodities that are traditional favourites and some new kids on the block creating renewed interest.

“Of course the stand out has been gold, which has had a massive run,” Keane said.

“A snapshot of 2016 shows gold still strong again being the highest performer in the sector, but small resources are up 65 per cent, which is a really fantastic result.”

Keane put this down to the impression that resources had managed to drop off a lot of the perceived risk that has haunted the sector since the GFC, and that there was evidence of money returning to the junior space of the resources industry.

“This is also reflected in terms of the money that we have been able to raise in the sector,” he said.

“This year, to date, we have raised $2.6 billion in terms of Equity Offerings and that is up from the previous year of $2.2 billion.

“Almost half of that money has been raised in the gold sector, but there has also been a substantial amount of money in the lithium sector, for example, Pilbara Minerals raising $100 million and Syrah Resources in the graphite space raising $194 million mid-year.”

Although there has been a renaissance in M&A activity this has been mostly generated in the lithium sector with uranium and rare earths lagging somewhat due mainly to low prices.

“M& A activity has been lacklustre in the uranium space, except for one major transaction in Canada,’ Keane explained. 

“In terms of actual transactions done this year, we are down quite significantly, and I think that is an obvious reflection of just where we are in the cycle.”

Fortunately for those investors who were first movers into the lithium crusade there has been some affirmative action within its sphere.

“In terms of transactions a very high number of companies claiming to have a lithium deposit and that is reflected by a lot of transactions at the asset level as well as the equity level,” Keane said.

“There has been a phenomenal rise in the lithium price over the past 18 months – even though it has dropped back slightly in recent months.

“This is a reflection of it being a new growth commodity for electric vehicles and batteries.”

Keane indicated that many analysts are predicting the lithium price is likely to be a price bubble, but he questioned how much bigger can that bubble grow?

Lithium, he said, is not rare, however the amount of global defined Resources are just catching-up to demand.

The growth of the electric vehicle market is often quoted as being the main game for lithium, but Keane suggested the higher demand will come from technological advancements from Germany and China.

Sileach passes pilot plant with flying colours

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THE INSIDE STORY: Lithium Australia’s (ASX: LIT) trademarked Sileach process is a radical disruptive processing technology.

Sileach is a halogen based hydrometallurgical method of recovering lithium from spodumene, currently the primary source of hard-rock lithium production. The process is rapid and flexible and capable of being applied to all lithium bearing silicate minerals.

Lithium Australia has demonstrated the Sileach process has the potential to reduce the cost of producing lithium chemicals by recovering lithium without the need for roasting, the cost of which in current processes makes many low-grade lithium deposits uneconomic. 

“The first advantage is a very low energy footprint,” Lithium Australia managing director Adrian Griffin told The Resources Roadhouse.

“Another advantage is that all metals in the material put through the Sileach process can be extracted in the aqueous phase, releasing a range of metals to be available for the production of valuable by-products.

“The reduced energy costs and significant by-product credits can potentially drive the operating cost, to produce lithium chemicals, way down, resulting in lithium chemicals, produced from hard-rock possibly being amongst the cheapest in the industry.”

In August, LIT commenced pilot plant testing of the Sileach at ANSTO Minerals’ (a division of the Australian Nuclear Science and Technology Organisation) Lucas Heights testing facility, located on the outskirts of Sydney, New South Wales.

LIT is working in partnership with ANSTO Minerals to pilot test the Sileach process.

The partnership has gained assistance in the form of two Innovations Connections Grants under the Entrepreneur’s Programme run by the Australian federal government’s Department of Industry and Science.

The pilot plant was fed continuously for six days, treating approximately 650 kilograms of ore from LIT’s Lepidolite Hill deposit in Western Australia.

Extraction of lithium using the Sileach process in this first pilot plant run exceeded 95 per cent in the leach circuit, validating both the overall extraction and accelerated rate of extraction of lithium originally achieved laboratory test work.

This first campaign produced a purified lithium-containing liquor, devoid of impurities, which became the subject of a second pilot campaign in October, producing lithium carbonate and potassium sulphate (fertiliser) on a continuous basis.

Once again the pilot plant behaved in line with expectations, producing six kilograms of approximately 99 per cent purity lithium carbonate concentrate.

“The performance of the pilot plant testing could not have been better,” Griffin said.

“The results clearly demonstrated we can achieve exceptional lithium extractions.

“The material that was processed in the initial test was not subjected to pre-concentration, but still achieved outstanding performance with minimal feed preparation.

“We are intentionally concentrating on the lower-grade, hard rock products, from which no other processes can recover lithium commercially.”

Lithium solutions recovered from the ANSTO pilot plant are being evaluated by Murdoch University to maximize the potential revenue stream generated from by-product credits and to optimise impurity deportment.

The work being carried out by Murdoch is supported by the Western Australian Government via a Minerals Research Institute of Western Australia (MRIWA) research grant.

Although the recent test work has utilised ore from LIT’s Lepidolite Hill deposit, the company is also working closely with Pilbara Minerals (ASX: PLS) to commercialise Sileach for use on that company’s Pilgangoora project.

To that end, Pilbara Minerals is supplying feed material for pilot testing at ANSTO and sharing initial operating costs.

Subject to a successful outcome, LIT will commit to capital expenditure for a larger scale pilot plant with Pilbara Minerals supplying the spodumene concentrate.

A positive result may lead to a 50/50 Joint Venture production facility to process spodumene from Pilgangoora with the ultimate outcome being the establishment of a lithium chemical processing plant in Port Hedland.

Apart from its Lepodilite Hill deposit and the agreement with Pilbara Minerals, LIT has taken positions in many of the major lithium provinces around the globe.

This includes a number of projects currently being assessed in Western Australia as well as overseas with exploration recently kicking off in Mexico.

The bulk of LIT’s current portfolio is situated within Western Australia.

Still in the emerging Pilgangoora region, it has struck the Pilgangoora Memorandum of Understanding with Venus Metals (ASX: VMC) where the companies have an agreement to assess the commercial potential of Sileach on ground held by Venus.

Elsewhere it has forged the Goldfields Lithium Alliance with Cazaly Resources (ASX: CAZ) and Focus Minerals (ASX: FML) an exploration JV split 50/50 between LIT and Cazaly within a radius of 100 kilometres of Kalgoorlie with Focus Minerals free carried in the Coolgardie area.

Under the Seabrook Rare Metals Venture, Tungsten Mining (ASX: TGN) is 20 per cent free carried on a project focused on lithium pegmatites north of Southern Cross.

At the 100 per cent-owned Lake Johnston project, lithium mineralisation was recently identified during reconnaissance exploration.

LIT announced a consolidation of lithium rights at Lake Johnston in October, which includes lithium rights on two tenements held by Lefroy Exploration (ASX: LEX) and close to Poseidon Nickel’s (ASX: POS) recently announced discoveries.

The 100 per cent-owned Ravensthorpe project has shown to host a generous supply of lithium pegmatites in the same geological sequence as the Mt Cattlin mine.

The name of the Greenbushes project (80 per cent LIT) says it all with a large area hosting abundant pegmatites adjacent to the world’s largest producing lithium mine.

The Gascoyne project (100 per cent LIT) is located in a sparsely explored pegmatite province in the North West of WA.

In the Northern Territory, the company’s 100 per cent-owned Bynoe project is again heavily-populated with pegmatites, located close to Darwin and flanked to the north and south by recent high-grade lithium discoveries at the Finniss project of Core Exploration (ASX: CXO).

In Queensland the 100 per cent-owned Cape York exploration licence applications over ground prospective for fertile granitic intrusions and pegmatites.

Lithium Australia’s international investments include an interest in MetalsTech Ltd, which has lithium pegmatites in Quebec, Canada and is soon to be floated on the ASX.

The company has also landed in Mexico, adjacent to the world’s largest identified lithium clay deposit, Bacanora’s Sonora project where it is earning up to 65 per cent of the Electra project from Toronto-listed Alix Resources Corp.

Sampling undertaking at the Electra project earlier this year yielded values as high as 246ppm lithium, confirming a target sedimentary assemblage with potential to host economic lithium-bearing, clay-rich horizons.

LIT has now consolidated its involvement at the Electra project having already earned 25 per cent equity in the project.

Following Alix Resources new discovery, Agua Fria, which is now part of the Electra project, a drilling program is currently underway, being funded by LIT to take its interest in the project to 49 per cent.

“Drilling near-surface mineralisation like this is an opportunity not to be missed and will also be a significant part of our global exploration efforts,” Griffin said.

“However, it is the application of the Sileach processing technology to materials not viable with other processing regimes that is our major focus, as it may provide a strong commercial opportunity in most of the hard-rock lithium provinces around the world.

“This can be achieved by applying Sileach to otherwise uncommercial ores and feeding central processing facilities to maximise capital efficiency, making lithium chemical production much more attractive for a wider range of industry particpants.”

Lithium Australia NL (ASX: LIT)
… the short story

HEAD OFFICE
Level 1
675 Murray Street,
West Perth WA 6005

Ph: +61 8 6145 0288

Email: info@lithium-au.com
Web: www.lithium-au.com 

DIRECTORS
Adrian Griffin, Bryan Dixon, George Bauk

Metalicity advancing world class zinc and lithium projects

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THE INSIDE STORY: Metalicity Limited (ASX: MCT) is commence a Pre-Feasiblity Study on its large scale, long life zinc-lead deposit at Admiral Bay, and set to commence drilling in the world class emerging lithium district in the Pilbara.

Metalicity is progressing talks to introduce a Joint Venture partner to its 100 per cent-owned Admiral Bay zinc project, located in the Kimberley region of WA.

The introduction of a partner is intended to support the PFS that will build on the successful outcomes of a Scoping Study completed in mid-2016.

The Scoping Study was carried out by leading technical consultant SRK Consulting and confirmed the Admiral Bay deposit is capable of delivering a large scale, long life, zinc/lead/silver operation with low operating costs.

Admiral Bay is Australia’s largest undeveloped zinc deposit – the fourth largest in the world – and contains 7 million tonnes of zinc, 4.6 million tonnes of lead and 137 million ounces of silver over a strike length of 15 kilometres within a 130 kilometre mineralised corridor controlled by Metalicity.

The project is located 140km south of Broome and favourably placed in terms of existing power, port and transport infrastructure.

“Our initial evaluation of the mineralisation at Admiral Bay leads us to believe it will be amenable to low cost, automated mining techniques so that will be a key focus of the early stages of a Pre-Feasibility Study underway,” Metalicity managing director Matt Gauci told The Resources Roadhouse.

“In parallel, we’re in discussions with potential Joint Venture partners to participate in the PFS and allow acceleration of the targeted Admiral Bay development timeline.

“We are confident there will be strong interest in securing exposure to what is one of the only truly significant zinc deposits in a first-world jurisdiction at a time when the zinc market is forecast to be moving into deficit.”

In conjunction with progressing Admiral Bay, Metalicity is poised to capitalise on its first mover status in the world-class Pilgangoora/Wodgina lithium district in Western Australia’s Pilbara where it commands one of the largest lithium-focussed landholdings.

Earlier this year the company completed detailed mapping and sampling across several of its project areas as part of a systematic program to prioritise drill targets areas with potential for major pegmatite-hosted lithium deposits.

This work represented the first phase of Metalicity’s accelerated $1 million exploration program across its WA lithium projects, which also includes ground adjacent to the Ball Hill and Greenbushes Lithium Operations.

“The team has made great strides in our lithium strategy in the past 12 months and we’re champing at the bit to have a drill rig turning at Pilgangoora South by the end of November,” Gauci said.

The Pilgangoora South project comprises more than 143 square kilometres of tenure in the Wodgina/Pilgangoora lithium region, home to Pilbara Minerals’ (ASX: PLS) Pilgangoora lithium project (128.6 million tonnes at 1.22 per cent lithium oxide), Altura Mining’s (ASX: AJM) Pilgangoora lithium project (39.2 million tonnes at 1.02 per cent lithium oxide) and Mineral Resources’ Wodgina lithium/tantalum operation.

Two prospective targets were prioritised by Metalicity after initial field work at Pilgangoora South, the Stannum and Turner River North prospects.

Stannum will be the first target drilled by Metalicity, following on from an analysis of hyperspectral data and detailed mapping.

This work identified five key pegmatites with the potential to host rare metal mineralisation and three will be drilled in Metalicity’s initial program.

“The program will consist of vertically oriented RC drill holes that will allow investigation of the subsurface expression of the ‘stacked’ flat-lying pegmatite bodies we had previously observed in mapping,” Gauci said.

“The targets are ideally located close to existing infrastructure and proposed downstream lithium processing facilities so we believe there is the potential for considerable value creation for our shareholders.”

As well as a lot of activity happening on its tenements in the north of WA, Metalicity is also busy in the Goldfields region of the state at its Lake Cowan lithium project.

Metalicity has just kicked off a raft of exploration activities at Lake Cowan having executed Heritage Agreements with the Ngadju Traditional Owners and receiving a subsequent grant of Exploration Licences E15/1502 and E15/1503 by the Department of Mines and Petroleum.

The Lake Cowan lithium project is located immediately south and east of the Bald Hill lithium operations owned and operated by Alliance Mineral Assets.

As is happening in the Pilgangoora region in the north, there is also a lot of lithium interest in the south of WA.

Tawana Resources (ASX: TAW) recently acquired Options over the right to earn up a 50% interest in the lithium rights at Bald Hill and 50 per cent of mineral rights, processing plant and infrastructure at the Bald Hill operation.

Metalicity is prospective geology of the area is dominated by Archaean Mt Belches Formation metasedimentary units, intruded by granites and pegmatites. The main structure of interest is the Mt Belches-Bald Hill pegmatite belt, which strikes southwest into Metalicity’s Lake Cowan project.

“The continuation of this belt gives us a target area approximately 10 kilometres long and four kilometres wide which gives us a big opportunity to define lithium mineralisation in this rapidly emerging lithium district,” Gauci said.

As with its Pilbara projects, Metalicity is undertaking a program of field work and a detailed review of historical results while the tenements are in the process of being granted.

This will be quickly followed by a new program of comprehensive grid of surface and auger geochemical sampling to further refine target areas for subsequent reverse-circulation drilling.

At its Greenbushes lithium project, Metalicity controls 870sqkm within 35km of the world’s highest grade spodumene deposit, the Greenbushes mine.

The company’s project area covers a similar geological setting to the world-class mine and outcropping pegmatites have been identified in recent fieldwork.

Data analysis is continuing ahead of a maiden drill program following granting of the tenements.

To complement its lithium portfolio, Metalicity has continued its opportunistic and value-driven business development strategy through a low cost acquisition of a cobalt project.

The Kyarra cobalt project lies within the Proterozoic Yerrida Basin on the northern margin of the Yilgarn Craton, again in WA.
 
Like the company’s lithium projects, the Kyarra project is in a hot neighbourhood for the commodity it is chasing.

The project adjoins Dragon Energy’s (ASX: DLE) Tabac cobalt-gold project where substantial intersections of cobalt have been reported including: 80m at 0.77 per cent cobalt.

The location and stratigraphic position of the observed cobalt anomalism at Kyarra has been previously interpreted to have numerous similarities to the mineralisation model of the significant copper-cobalt deposits of the Zambian Copper Belt.

The three Exploration Licence Areas give Metalicity a dominant land holding in the Yerrida Basin district.

“The sovereign risk associated with sources of cobalt supply and the lithium-ion battery demand drivers meant the opportunity to acquire an opportunity like Kyarra earlier this year was compelling,” Gauci said.

“Field exploration work and a detailed review of historical exploration and geophysical data is well advanced and we are developing priority areas for drilling once the Kyarra tenements are granted, expected in the first half of 2017.”

Metalicity Limited (ASX: MCT)
…The Short Story

HEAD OFFICE
6 Outram Street
West Perth WA 6005

Ph: + 61 8 9324 1053

Email: info@metalicity.com.au
Website: www.metalicity.com.au

DIRECTORS
Andrew Daley, Matthew Gauci, Chris Bain, Mathew Longworth

Vimy Resources smoothly progressing Mulga Rock DFS

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THE INSIDE STORY: Vimy Resources (ASX: VMY) is determined to bring Australia’s third largest undeveloped uranium resource, the Mulga Rock uranium project into production.

The Mulga Rock uranium project is located about 240 kilometres northeast of Kalgoorlie in Western Australia and is ranked the second largest in Western Australia.

Although it doesn’t receive the coverage of many of the other WA mining industry favourites such as gold or iron ore, uranium regularly punches above its weight division.

Many people would be surprised to learn Australia is the third largest uranium producer in the world, exporting 8,291 tonnes of uranium oxide concentrate in 2012–13valued at more than $800 million.

As of February 2014, Western Australia has known deposits of about 226,000 tonnes of uranium.

What would also surprise many is that uranium mining in Australia is no new phenomenon with uranium mined from the 1950s to early 1970s at sites around the country, including Radium Hill and Mary Kathleen in Queensland, Rum Jungle in the Northern Territory, and in the South Alligator Valley, also in the NT.

In 1973, Australia signed on to be part of the Treaty on the Non-Proliferation of Nuclear Weapons, enabling the country to supply uranium for peaceful purposes such as civil nuclear power and nuclear medicine.

It was the development of civil nuclear power internationally that pushed the Australian industry along, by accelerating nuclear energy demand.

From this Australia became the world’s second largest uranium producer from the mid-1990s to 2007 with production reaching an all-time peak of 10,064 tonnes in 2004-05.

Since then, things have slowed somewhat with Kazakhstan’s uranium industry taking the front running, however Australian uranium production has remained consistent and reliable over the past decade in response to export demand.

The Mulga Rock project is made up of two distinct zones:

Mulga Rock West, containing the Emperor and Shogun deposits; and

Mulga Rock East, hosting the Princess and Ambassador deposits.

Earlier this year, Vimy reported a JORC Code 2012-compliant resources for Mulga Rock of 75 million pounds uranium, including Reserves of 22.1 million pounds uranium, supporting an initial six-year mine life.

This was followed by a Resource upgrade on the Ambassador deposit, resulting in a modest increase of the total Resource to 66.6 million tonnes at 520ppm uranium for 76.2 million tonnes uranium.

“A key aspect from that update was that it also provided a rise in the confidence level for the Mulga Rock project,” Vimy Resources managing director Mike Young told The Resources Roadhouse.

“It results in 44 per cent of the total resource sitting in the Indicated category at an aggregate grade of 720ppm uranium.

“As we progress the Definitive Feasibility Study we currently have underway, we anticipate there will be further resource updates for the Shogun and Emperor deposits, which should grow the Indicated resource inventory further.

“You only have to look at the high conversion rate of Indicated resources we achieved from the March 2016 maiden reserve to recognise there is potential for a significant Reserve upgrade as we move toward completion of its DFS.”

Assay results on material from test pit bulk sampling completed at the Ambassador deposit confirmed more than what the company was expecting, demonstrating high-grade uranium occurs immediately below the reduction-oxidation boundary.

Although earlier drilling did suggest this to be the case, Vimy approached the trial mining with a conservative approach and was surprised by the high-grade tenor of the mineralisation it actually encountered in the bulk sample, which was above expectations it had based on the resource model.

Vimy is currently undertaking a program of closed-spaced diamond drilling with the aim of improving interpretations of the orebody and grade distribution, the outcomes from which it is confident will potentially increase in the grade profile of current Resources and Reserves.

The company has received no surprises from the work completed in relation to the DFS to date with the study achieving advances on a number of fronts, including areas of geological modelling and resource estimation, mine optimisation, mine design, mining tenders, and equipment selection, and metallurgical test work.

Pit optimisation studies, mine design and scheduling have progressed using the updated Resource announced in June and, based on previous work, Vimy expects a very good conversion from Indicated Resources to Probable Ore Reserve to provide strong support the DFS mine design.

“The current Indicated Resources and Probable Ore Reserves already show excellent continuity along the entire length of the PFS Ambassador optimised pit shell,” Young said.

“This is a fairly important characteristic given continuous strip mining is being proposed at Mulga Rock.”

Vimy Resources attained an important milestone for Mulga Rock when the Environmental Protection Authority (EPA) recommended approval of the project.

The EPA completed an assessment of the company’s proposal and prepared an Assessment Report to be sent to the Minister as required under the Western Australian Environmental Protection Act.

The Assessment Report recommends the proposal may be implemented and specifies the conditions and procedures to which implementation should be subject as required by the EP Act.

This is just one of a number of environmental boxes to be ticked as the project is also being assessed under an Assessment Bilateral Agreement between the Commonwealth of Australia and Western Australia made under the Environment Protection and Biodiversity Conservation.

Under this process the Commonwealth Minister for the Environment takes the environmental impact assessment processes of WA into account when assessing actions under the EPBC Act.

In other words, the Assessment Report will form the basis of the Commonwealth Minister’s assessment and subsequent decision.

Due to the nature of the commodity it proposes mining, Vimy expects there will be appeals, however it also is aware the Appeals Convenor aims to have 80 per cent of appeal reports submitted to the Minister within 60 days of receiving final responses.

Should that schedule be maintained, the Minister could arrive at a final decision and subsequently publish a statement setting out the implementation decision before the end of this year.

“We’re pretty happy with this outcome, which demonstrates the EPA completed an exhaustive, very efficient and thorough assessment to conclude our project should be implemented,” Young said.

“With such a result, we’re very confident there can be no reason why the State and Federal Ministers would not agree with that assessment.

“This is a project which results in no significant residual impacts to the environment and now we have a positive recommendation with conditions that require us to do what we said we would do – and of course we will do everything we can to ensure we exceed those expectations.”

Vimy Resources delivered further good news by announcing the grant of two new Mining Leases to progress the development of the Mulga Rock project.

The new Mining Leases M39/1104 and M39/1105 replace previous Mining Leases M39/1080 and M39/1081, which had been originally granted in July 2012, and had since been conditionally surrendered and were no longer active.

“The new Mining Leases were an important pick up for the project as they provide security of tenure for all proposed mining areas and post-mine landforms for the life-of-mine of the project,” Young explained.

“The extra ground provides greater operational flexibility to the mining crews and will help deliver optimal environmental and engineering outcomes.”

Vimy Resources Limited (ASX: VMY)
…The Short Story

HEAD OFFICE
Ground Floor,
10 Richardson Street,
West Perth 6005

Ph: +61 8 9389 2700

Email: info@vimyresources.com.au
Web: www.vimyresources.com.au

DIRECTORS
The Hon. Cheryl Edwardes, Mike Young, Julian Tapp, David Cornell, Andy Haslam, Mal James

Superior Study habits yield outstanding results

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THE INSIDE STORY: Dual-listed lithium developer, European Metals Holdings (ASX & AIM: EMH) recently accomplished an important milestone at the company’s 100 per cent-owned Cinovec lithium-tin deposit in the Czech Republic.

European Metals Holdings successfully produced highly-improved recoveries of lithium concentrate at the Cinovec project using a wet magnetic separation (WMS) process on coarse grind samples as part of an ongoing pre-feasibility study (PFS) at the Cinovec project.

The latest testwork results demonstrated the combination of lower operating costs of WMS versus the use of a flotation circuit, conducted as part of an earlier scoping study, will substantially boost the economics of the project.

The Scoping Study determined the deposit could be amenable to bulk underground mining.

Metallurgical test work, carried out as part of the Scoping Study, produced both battery grade lithium carbonate and high-grade tin concentrate at excellent recoveries.

The Study also demonstrated Cinovec to have potential to be a very low cost producer of lithium carbonate, net of by-product credits.

Further financial inputs for the Scoping Study are imminent, with results to date pointing to a substantial downward revision in estimated pre-construction capital costs.

As the PFS continues, the company will focus on metallurgy work, especially on the lithium carbonate processing plant, with the aim of maximising both lithium and tin recoveries.

“We recently achieved successful wet magnetic separation of the Cinovec ore, demonstrating it to be an inexpensive and very effective technique for separating lithium mica,” European Metals Holdings managing director Keith Coughlan told The Resources Roadhouse.

“This was an extremely important outcome for us to have achieved in the development of the Cinovec lithium-tin deposit.

“That the process delivers near-pure lithium mica recoveries on such a scale is excellent, however it also delivers on two other fronts, firstly by improving the project’s environmental performance, and secondly by lowering operating costs compared to the previously considered flotation process.”

Cinovec is an historic mine incorporating a significant undeveloped lithium-tin resource with by-product potential including tungsten, rubidium, scandium, niobium tantalum and potash.

Cinovec hosts a large hard rock lithium deposit with a total Indicated Mineral Resource of 49.1 million tonnes at 0.43 per cent lithium dioxide (Li2O) and an Inferred Mineral Resource of 482 million tonnes at 0.43 per cent Li2O containing a combined 5.7 million tonnes Lithium Carbonate Equivalent.

This makes Cinovec the largest lithium deposit in Europe and the fourth largest non-brine deposit in the world.

Within this resource lies one of the largest undeveloped tin deposits in the world, with total Indicated Mineral Resource of 15.7 million tonnes at 0.26 per cent tin and an Inferred Mineral Resources of 59.7 million tonnes at 0.21 per cent tin for a combined total of 178,000 tonnes of contained tin.

Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed road adjacent to the deposit, rail lines located five kilometres north and 8km south of the deposit and an active 22 kilovolt transmission line running to the historic mine.

As the deposit lies in an active mining region, it also has strong community support.

European Metals currently has a Pre-Feasibility Study underway, expected to be completed late 2016 to early 2017, that is aimed at producing 20,000 tonnes per annum of lithium carbonate with associated tin/tungsten and other by products.

The company is currently drilling ahead at Cinovec with three diamond rigs operating.

Recent announcements have highlighted considerable pre-production capital costs savings in the vicinity of US$85 million in addition to greatly improved recoveries.

“The combination of these developments significantly improve the economics of the project,” Coughlan explained.

“The Cinovec mineralogy possesses characteristics that provide a major beneficiation advantage over competing hard rock lithium deposits.

“We’re extremely confident that combination of these factors will result, in not only industry leading recoveries, but lower capital and operating costs, which will be incorporated in the on-going pre-feasibility study.”

European Metals Holdings Limited (ASX: EMH)
…The Short Story

HEAD OFFICE
Suite 12, Level 1
11 Ventnor Avenue 
West Perth, WA 6005

Ph: +61 (8) 6141 3500

Email: keith@europeanmet.com
Website: www.europeanmet.com

DIRECTORS
David Reeves, Keith Coughlan, Dr Pavel Reichl, kiran Morzaria