21 Jan 2013 13:30
MINCO COMMENCES EXPLORATION DRILLING AT THE WOODSTOCK MANAGNESE PROJECT IN NEW BRUNSWICK, CANADA
Dublin, 21 January 2013 - Minco Plc (AIM - "MIO") (the "Company") announced today that it has commenced drilling on its newly optioned Woodstock manganese project located in New Brunswick, Canada.
The drilling program comprising approximately 4,000 metres in 15 drill holes will be focused on the Plymouth deposit on the Woodstock property and is estimated to take about six weeks to complete.
In October 2012, following completion of a six-month review, Minco entered into an option agreement with Buchans Minerals Corp to further explore and develop the Woodstock manganese property. Under the terms of the option agreement Minco has the right to earn up to a 50% interest in the Woodstock project and, in the first stage, has agreed to spend $1.25 million on exploration and resource definition drilling and metallurgical test work to estimate and assess an inferred mineral resource at the Plymouth deposit on the Woodstock property.
The Woodstock property hosts three deposits of sediment-hosted manganese-iron mineralization. These deposits include the Plymouth and two Hartford deposits (North & South), located 5 kilometres west of the town of Woodstock. The Plymouth deposit is believed to extend from surface to a minimum depth of 150 metres and has been reported to host a historic, uncategorized resource estimate of 51.2 million tons (46.5 million tonnes) averaging 10.9% Mn (manganese) and 13.3% Fe (iron). The historical reports indicate that the Plymouth resource estimate was compiled from data acquired from a total of 17,388 feet (5,300 metres) of drilling. The quoted historical resource estimate for the Plymouth deposit is not NI 43-101 compliant and should not be relied upon.
During 2011, Buchans Minerals completed a drilling program of five holes that successfully intersected manganese mineralization at the Plymouth deposit. Hole 11-010 of this initial test program contained two intersections including an upper intercept averaging 11.27% Mn over 101.0 metres (from 10m to 111m) and a lower intercept averaging 11.67% Mn over 78.0 metres (from 153m to 231m). Other results from Hole 11-009 included an upper intercept of 8.61% Mn over 44.0 metres (from 10m to 54m) and a lower intercept of 12.51% Mn over 78.0 metres (from 69m to 147m). - See Buchans Minerals Press Release dated September 26, 2011.
Minco's drilling program is designed to confirm and extend the mineralization and assess the grade and continuity with a view to defining an inferred mineral resource on the Plymouth deposit. Assays are expected to be released as they are received and a map showing the location of the proposed holes in relation to the Plymouth deposit is available on Minco's website at http://www.minco.ie/pdf/Plym_mp.
WOODSTOCK MANGANESE PROJECT
The 5,800 hectare Woodstock Manganese property has excellent infrastructure, including railway lines (16 km west) as well as the TransCanada Highway and major electrical transmission lines located less that 5 kilometres to the east. The Plymouth deposit is located less than 10 kilometres east of the US border and Highway Route 95 (an extension of US Interstate 95) passes less than a kilometre south of the deposit.
Minco's evaluation work to date has been directed at assessing the development potential of the Woodstock manganese deposits in light of the long term outlook for the manganese markets. Minco undertook a technical overview of the Woodstock manganese deposits including a review of all available information on the project, especially with respect to more recent metallurgical test work. The programs completed by Minco included a review of the historical geological information, and the more recent drilling by Buchan's in 2011, to assess the grades and the continuity.
Minco also reviewed the bench scale metallurgical test work carried out by Thibault & Associates Inc., Chemical Engineering Consultants, of Fredericton, N.B. which indicates that the Plymouth deposit may be amenable to processing via hydro metallurgical methods to produce high purity manganese products such as electrolytic manganese metal (EMM), electrolytic manganese dioxide (EMD) and manganese carbonate. Minco also retained Thibault & Associates Inc. to complete a preliminary review of the environmental and regulatory requirements for the development of the Woodstock property which concluded that no readily apparent roadblocks have been identified that would prevent the project from proceeding.
There are two types of manganese ores in the global manganese market: manganese oxide ores that generally grade 35%-44% Mn; and manganese carbonate ores that grade 10%-20% Mn. The Plymouth deposit is believed to be primarily a manganese carbonate deposit with an average grade of about 11%. The important characteristic of these two ore types is that they typically produce entirely different products.
Oxide ores are processed by physical concentration techniques to produce manganese concentrates that grade about 50% Mn. These concentrates are sold primarily to produce 60-77% silicomanganese and 65-80% ferromanganese for production of flat and long steel.
Carbonate hosted ores are processed using hydrometallurgical leaching and electro winning techniques to produce high purity > 99% electrolytic manganese metal (EMM) that is primarily used in the production of stainless steel, specialty steels and high purity alloys, or electrolytic manganese dioxide (EMD) that is used primarily in the manufacture of electric batteries.
Minco evaluated a conceptual economic model for the development of the Plymouth deposit with an EMM or EMD production facility with a capacity of either 50,000 tonnes per year or 100,000 tonnes per year. At the average 2011 selling price of EMM of approximately US$1.50 per pound, the output of such a production facility would generate annual gross revenues of US$175 million or US$350 million per year, respectively.
The review carried out by Minco to date indicates that the Woodstock manganese project has the potential to be developed into a significant long-term, mine and processing facility capable of producing high purity Electrolytic Manganese Metal (EMM) or Electrolytic Manganese Dioxide (EMD).
MINCO OPTION AGREEMENT
Under the terms of the option agreement dated October 31, 2012, Minco will earn a 10% interest in Canadian Manganese Company Inc. ("CMC"), a wholly owned subsidiary of Buchans Minerals that owns 100% of the Woodstock manganese property, by spending $1.250 million on exploration and development which includes the current drilling program, an inferred resource estimation and hydrometallurgical test work.
Following its initial expenditure of $1.250 million, Minco will have 30 days to elect to continue with further expenditures of $750,000 over a period of six months (second phase expenditures) to complete a preliminary economic assessment ("PEA") on the Plymouth deposit to earn a further 10% interest in CMC. If Minco does not elect to proceed with the second phase of expenditures, Buchans Minerals will have a 90-day option to buy back Minco's 10% interest in CMC back for $1.250 million.
Upon completion of the PEA, Minco will have an exclusive 3 month option to elect to earn a further 30% interest in CMC by completing an NI 43-101 compliant pre-feasibility report on the Plymouth deposit within two years (the budget to be determined at that time).
QUALIFIED PERSONS
The drilling program will be managed by Buchans Minerals Corporation under the direction of Paul Moore, MSc, P.Geo. (NL), Vice-President Exploration for Buchans Minerals Corporation, a Qualified Person in compliance with National Instrument 43-101 of the Canadian Securities Administrators.
Benjamin Batson, P. Geo., Vice President (Exploration - North America) of Centrerock Mining Limited (a wholly owned subsidiary of Minco plc), a Qualified Person within the meaning of National Instrument 43-101 of the Canadian Securities Administrators, has reviewed the contents of this release for accuracy.
Terence N McKillen, B.A. (MOD), M.A., M.Sc., P.Geo, Chief Executive Officer, is Minco's Competent Person for the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies dated March 2006. Mr. McKillen is a graduate in Natural Sciences (Geology) from Trinity College Dublin and holds a Master of Science degree in Mineral Exploration and Mining Geology from the University of Leicester. He has over 40 years of exploration experience in Ireland and internationally.
ABOUT MINCO
Minco Plc, registered in the Republic of Ireland and listed on the AIM Alternative Investment Market of the London Stock Exchange ("MIO"), is an exploration and development company, currently engaged in zinc-lead exploration in the United Kingdom, Ireland and Canada and in evaluating a manganese project in New Brunswick, Canada and with investments in zinc‐silver projects in Mexico through holding 30 million shares (approximately 29%) in Xtierra Inc. listed on the TSX Venture Exchange (TSX.V-"XAG").
Minco holds 15.4 million shares (approximately 10%) in Buchans Minerals Corporation also listed on the TSX.V ("BMC").
Minco also holds a 2% NSR royalty on the Curraghinalt gold property in Northern Ireland which is being explored by Dalradian Resources Inc. (TSX-"DNA").
Minco currently holds approximately US$15 million in cash and is also evaluating a number of other investment opportunities in the minerals industry in North America and Europe.
For further information of Minco refer to Minco's website at www.minco.ie.
For further information, www.minco.ie or contact:
John Kearney: Executive Chairman +1 416 362 6686
Terence McKillen: Chief Executive +1 416 362 8243
Danesh Varma: CFO & Company Secretary +44 (0) 8452 606 034
Peter McParland: Director - Ireland +353 (0)46 907-3709
John Frain/Fergal Meegan: (NOMAD) Davy +353 (0)1 6796363
Chris Rourke/ Guy Wheatley: (Corporate Advisor| Broker)
Beaufort International, London +44 (0)20 7382 8387