Kemin Resources Regulatory News (KEM)

14 Mar 2005 07:01

GMA Resources PLC13 March 2005 GMA RESOURCES Plc NEWS RELEASE FOR IMMEDIATE RELEASELondon, 14 March 2005 SIGNIFICANT MINING OPPORTUNITY IDENTIFIED FOR NEW PROJECT AT AMESMESSA GMA Resources Plc (the "Company"), the gold mining company, is pleased toannounce the development of a new, open cut mining strategy for the majormineralised zone (Veins 8 and 9) at Amesmessa. Based on recent drilling results,and the re-interpretation of historical drilling and underground samplingpreviously performed by L'Office National de Recherche Geologique et Miniere(ORGM), the Company has concluded that the majority of the explored area withinthis deposit can be mined using conventional open cut techniques. This development is strategically important in that it allows the Company toachieve its desired expanded production capacity at a lower capital investmentcost and with a significantly reduced mining risk than had the Company continuedto develop this zone as an underground mine only. These findings differ from the original geological interpretations prepared byORGM and by Behre Dolbear and Company, Inc. in the mining study they prepared in2002. The findings are based on the recent interpretation of the results of boththe reverse circulation ("RC") and diamond drilling performed by GMA Resourcesin 2004, and a re-interpretation of the historical geological data and maps,produced by ORGM. This work has determined that the gold mineralisation is notsimply confined to the quartz vein and immediate adjacent beresite as seen todate at Tirek, but extends throughout a much wider mineralised and altered shearzone, up to and exceeding 10 metres in width in places. Of the initial 68 RCholes drilled at Veins 8 and 9 by the Company, 35 produced mineralisedintercepts with widths greater that 5 metres. Inspection of the core fromduplicate diamond drill holes has confirmed the presence of disseminatedsulphides and sulphide stringers throughout the altered shear zone. As a result of these recent findings, the Company chose to carry out a thoroughvalidation exercise on the original ORGM drill hole and trenching data. This hasnecessitated the re-survey of the remaining ORGM drill holes and trenches, aswell as assay checks on available sample pulps stored at ORGM's offices inTamanrasset. This validation process has taken several months and is nowvirtually complete. The results will allow the conversion of the preliminarygeological models that have been developed by RSG Global as part of theFeasibility Study, into a JORC compliant resource and reserve statement. TheCompany expects the statement to be available later this month. The Company has used the time delay in completing the resource models and mineplans to further refine the engineering design and capital and operating costestimates for the new processing plant and associated infrastructure atAmesmessa. The Company has confirmed that the investment costs are in line withprevious expectations and expects to be able to complete the construction of thenew 300,000 tpa Amesmessa treatment plant and associated infrastructure withintwelve months of contract award, at a capital cost of less than US$30 million.It is expected that the new plant will treat ore grades of 13 g/t gold or betterand that the ore feed for the new plant will be mainly sourced from the new opencut mine to be established at Veins 8 and 9. The Company has also commencednegotiations with a number of Open Pit mining contractors as part of an OwnerMining versus Contractor Mining Study, and a decision on the mining fleet isexpected to be made in April 2005. Furthermore, as the veins at Amesmessa are hosted in an altered mylonite zone,as opposed to a gabbroic host rock at Tirek (Area B), the geological findingsalso have a significant impact on the future exploration and mine planningprogramme. A recent review of gold mineralisation within mylonite hosted veinsat Tirek (Area C) identified an interesting target at Vein XX. Mining hascommenced at surface on this vein and grade control sampling has confirmed that: • At Vein XX, four mineralised quartz veins are present over a width of approximately 10 metres. The middling material was noted to contain a significant development of quartz veinlets and thin veins within the altered mylonitic host rock. These quartz veinlets are of the favourable grey facies associated with mineralisation. Traditionally this material would have been handled as waste as the mining focus is on wider mineralised quartz veins. • As a result of the favourable quartz facies and good development of quartz veinlets in the altered zone at Vein XX, this material was stockpiled as marginal ore and subsequently grab sampled. The mineralised nature of this " veinlet ore" was confirmed by the assay results (average grade of 24.5g/t). This stockpile will be processed during February and March 2005 and the grade monitored to confirm the accuracy of the grab sampling. As a result of the above, the Company intends to focus the exploration effort onsimilar targets at Amesmessa and Tirek, as well as the 60 kilometre longintermediate zone (ZITA) that lies between the two locations. It should be notedthat up to now the justification for proceeding with the 300,000 tpa plant atAmesmessa has been predicated on the major explored veins at Amesmessa (Veins 8and 9) and at Tirek (Veins XIV and XV and Veins II and III) only. The Companyremains confident that there is significant potential to increase the availableresources once it has the opportunity to complete further explorationactivities. The exploration plan for 2005 will include surface trenching of theremaining major veins already identified at Amesmessa and ZITA, followed byfurther drilling to define additional open cut resources. Given the exciting opportunity presented by the new open cut mining strategy,the Company has decided to engage Barclays Capital, out of London, as theCompany's financial advisers. ENDS For further information contact:GMA Resources Tel: + 33 678 636 518Colin Ikin, Chief Executive 4C Communications Tel: + 44 (0)20 7907 4761Carina Corbett Website: www.gmaresources.plc.uk This information is provided by RNS The company news service from the London Stock Exchange