8 May 2013 13:30
MINCO ANNOUNCES NEW RESOURCE OF 43.7 MILLION TONNES,
ON ITS WOODSTOCK MANAGNESE PROJECT, NEW BRUNSWICK, CANADA
Dublin, May 8, 2013 - Minco plc (AIM - "MIO") (the "Company"), together with its partner, Buchans Minerals Corporation ("Buchans"), is pleased to announce a new Inferred Resource of 43.7 million tonnes, grading 9.98% manganese ("Mn"), for the Plymouth deposit located on the Woodstock Manganese Project in New Brunswick, Canada.
The new respource estimate was calculated by Mercator Geological Services of Dartmouth, Nova Scotia, Canada ("Mercator") following the drilling by Minco of 16 surface diamond drill holes completed in 2013.
The resource estimate prepared by Mercator is based on a 5% Mn cut-off value and is presented in Table 1 below. Table 1 also illustrates sensitivity of the deposit tonnage and grade to higher Mn cut-off values. Total contained manganese metal in the new Plymouth resource, at the 5% cut-off value, as shown in Table 2 below, is 9.6 Billion pounds of manganese.
Using higher cut-offs of 10% Mn and 12% Mn, Mercator has calculated inferred resources of 22.5 million tonnes grading 11.86% Mn at a 10% Mn cut-off, or 9.1 million tonnes grading 13.19% Mn at a 12% Mn cut-off, respectively, within the Plymouth deposit. In addition the Plymouth deposit remains open at depth and along strike to the north-east and south-west. The Plymouth deposit is one of three manganese deposits within the Woodstock Project area.
John Kearney, Chairman of Minco stated that "We are very pleased that Minco's drilling has validated the previous historical estimate and has confirmed a significant near surface manganese resource at Woodstock."
The completion of this new 43.7 million tonne inferred resource estimate is a significant positive development for the Woodstock Project as it enables Minco and Buchans to undertake a preliminary economic assessment to assess the project's potential for development as an open-pit mine and processing facility to produce electrolytic manganese metal (EMM), which is primarily used in the production of stainless steel, specialty steels and high purity alloys.
MINCO ACQUISITON OF BUCHANS MINERALS
Under the existing option agreement with Buchans Minerals, Minco has an option to earn up to 50% interest in the Woodstock Project.
On April 30, 2013 Minco announced that it had entered into a binding agreement to complete a business combination with Buchan's Minerals, subject to approval of Buchans shareholders, pursuant to which Minco will acquire all of the outstanding common shares of Buchans that it does not already own in exchange for shares of Minco by way of a statutory scheme of arrangement on the basis of 0.826 of a Minco shares for each share of Buchans Minerals. Upon completion of the acquisition of Buchans Minerals, Minco will hold 100% of the Woodstock Project.
ABOUT THE WOODSTOCK MANGANESE PROJECT
The Woodstock property hosts three deposits of sediment-hosted-manganese-iron mineralization discovered in 1957 by Strategic Manganese Corporation. These deposits include the Plymouth deposit located 5 kilometres west of the town of Woodstock, as well as two historic deposits known as the Hartford deposits (North & South) located 5 kilometres west of the town of Woodstock. The project possesses 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.
Minco and Buchans are evaluating the Plymouth deposit with a view to potentially producing electrolytic manganese metal ("EMM") by utilizing hydrometallurgical technologies that are currently in common use throughout the EMM industry. Fifteen (15) holes were completed during Minco's 2013 winter drill programme, achieving a total of 4,082 metres of NQ-sized drilling.
Thibault & Associates Inc. of Fredericton, New Brunswick has completed a comprehensive bench scale hydrometallurgical program on behalf of Minco and Buchans that has successfully demonstrated that, at optimum leach conditions, leach recoveries in the range of 94% to 98% can be achieved using a single stage sulphuric acid leach. Based on the results of the bench scale test program and mass balance modelling of the proposed hydrometallurgical process, the overall recovery of manganese is expected to be in the range of 85% to 90%. More recent metallurgical test work further suggests the mineralization may be amenable to improved processing efficiencies by application of conventional pre-concentration methods. (See Minco news release dated March 13, 2013).
UNDERSTANDING MANGANESE
When reviewing the global manganese market, it is important to understand that there are primarily two types of manganese ores; manganese oxide ores that generally grade 35% to 44% Mn and manganese carbonate ores that grade 10% to 20% Mn. The Plymouth deposit is primarily a manganese carbonate deposit.
The important characteristic of these two ore types is that they 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% to 77% silicomanganese and 65% to 80% ferromanganese for production of flat and long steel.
Carbonate ores on the other hand are processed using hydrometallurgical leaching, purification and electrowinning techniques to produce high purity >99% EMM which is primarily used in the production of stainless steel, specialty steels and high purity alloys.
RESOURCE ESTIMATION METHODOLOGY
The resource estimate was prepared by Michael Cullen, P. Geo. (NB) and Andrew Hilchey, P.Geo. (NB), of Mercator Geological Services Limited of Dartmouth, Nova Scotia for Buchans and Minco. Mr. Cullen is an independent third party, Chief Geologist at Mercator Geological Services Limited, and a Qualified Person as defined under National Instrument 43-101 of the Canadian Securities Administrators. The estimate was prepared in accordance with NI 43-101 Standards of Disclosure for Mineral Projects and conforms to the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Mineral Reserves.
TABLE 1: PLYMOUTH MN-FE DEPOSIT RESOURCE ESTIMATE - MAY 6TH, 2013*
Mn % Cut-off | Resource Category | Rounded Tonnes | Mn % | Fe % |
5 | Inferred | 43,710,000 | 9.98 | 14.29 |
6 | Inferred | 41,610,000 | 10.20 | 14.55 |
7 | Inferred | 38,260,000 | 10.52 | 14.91 |
8 | Inferred | 33,800,000 | 10.92 | 15.36 |
9 | Inferred | 28,830,000 | 11.34 | 15.83 |
10 | Inferred | 22,460,000 | 11.86 | 16.42 |
11 | Inferred | 15,330,000 | 12.49 | 17.12 |
12 | Inferred | 9,100,000 | 13.19 | 17.93 |
TABLE 2: TOTAL CONTAINED Mn AT THE 5% INFERRED RESOURCE STATEMENT CUTOFF VALUE
Mn % Cut-off | Category | Rounded Tonnes | Mn% | Manganese(Pounds) |
5 | Inferred | 43,710,000 | 9.98 | 9.62 Billion |
*Notes:
1. Resource tonnages have been rounded to the nearest 10,000 tonnes
2. The resource statement reflects a 5% MnO cut-off value
3. The 5% Mn cut-off reflects a reasonable expectation of economic viability for a deposit of this nature based on market conditions and open pit mining methods
4. Mineral resources that are not mineral reserves do not have demonstrated economic viability
5. This estimate of mineral resources may be materially affected by environmental permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
Mercator's mineral resource estimate is based on validated results of 27 diamond drill holes, including 16 surface diamond drill holes completed in 2013 by Minco, 6 completed by Buchans in 2011, and 5 completed in 1987 by Maritime Resource Research Limited, for a total of 5,973 metres of diamond drilling. Two trenches completed in 1987 by Maritime Resource Research Limited were also included and represented as horizontal drill holes.
Block modeling was performed using Gemcom Surpac® 6.4.1 modeling software with manganese percent, iron percent and specific gravity values interpolated using inverse distance squared (ID²) methodology and 3 m down hole assay composites. The resource model was set up with a block size of 10m (x) by 10m (y) by 10m (z) and no sub-blocking was allowed.
Metal grade assignment was peripherally constrained by two separate wire-framed solid models based on sectional geological interpretations for the Plymouth deposit and a minimum included grade of 5 % Mn over 12 down hole metres. Both resource solid models are constrained by a bedrock surface digital terrain model.
The main resource solid measures approximately 700 metres along strike (southwest-northeast), averages approximately 100 metres in width (northwest-southeast), and extends to a maximum depth of 300 metres below surface. The domain has a folded geometry with near vertical to steeply dipping eastern and western limbs, with the eastern limb demonstrating continuity for only 400 metres of strike length from southwest to the northeast.
A second resource solid was developed along the peripheral limits of the western limb of the main solid to constrain mineralization showing less continuity and lower average grades than the main resource solid. The west resource solid measures approximately 675 metres along strike (southwest-northeast), averages approximately 40 metres in thickness (northwest-southeast), and extends to a maximum depth of approximately 200 metres below surface.
Interpolation ellipsoid ranges and orientations were developed through assessment of variography combined with geological interpretations and drill hole spacing. Major axis orientations conform to the strike direction, between 20° and 30°, and are horizontal. The semi-major axes occur in the dip direction and perpendicular to the major axes, while minor axes are oriented at a high angle to stratigraphy in the down hole direction. Major, semi-major, and minor axis ranges of 150 metres, 125 metres, and 25 metres, respectively, were used for grade and specific gravity interpolation. At least 3 and a maximum of 6 contributing assay composites, with no more than 3 composites allowed from a single drill hole, were required to interpolate a valid block grade. Results from 639 separate laboratory determinations of specific gravity were composited at a 3 metre down hole support length and used to develop the interpolated specific gravity model using ID² methodology specified above.
QUALIFIED PERSONS
Michael Cullen, M. Sc., P. Geo. (NB), of Mercator Geological Services Limited is responsible for the resource estimate. Mr. Cullen is an independent third party, Chief Geologist at Mercator Geological Services Limited, and a Qualified Person as defined under National Instrument 43-101 of the Canadian Securities Administrators.
The drilling program was managed by Buchans Minerals under the direction of Paul Moore, M. Sc, 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, has reviewed the contents of this release for accuracy.
Terence McKillen, B.A. (MOD), M.A., M.Sc., P.Geo, (Director of Minco PLC) 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 a holding of 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").
ABOUT BUCHANS MINERALS
Buchans Minerals is an Atlantic Canada-based resource company that has three main assets that include its 100% owned base metal properties near Buchans in Central Newfoundland (optioned to Minco), its 100% owned manganese property located near Woodstock (optioned to Minco) in New Brunswick, and its 50% owned gold & copper Long Range property in central Newfoundland.
For further information of Minco refer to Minco's website at www.minco.ie.
For further information, www.minco.ie or contact:
John Kearney: Chairman& Chief Executive +1 416 362 6686
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:
Beaufort International, London(Broker) +44 (0)20 7382 8387