Metals Exploration Regulatory News (MTL)

2 Nov 2007 07:01

Metals Exploration PLC02 November 2007 Metals Exploration PLC Runruno Resource Update 02 November 2007 RESOURCE UPGRADED TO INDICATED & INFERRED - 2Moz GOLD & 40Mlb MOLYBDENUM Metals Exploration PLC ("the Company"), the natural resources exploration anddevelopment company with assets in the Pacific Rim region, is pleased to reportthat it has completed Phase 1 of an infill drilling programme and technicalreview of the 100% controlled Runruno gold-molybdenum deposit in thePhilippines. Phase 1 has resulted in a contained metal total at Runruno of 2.05 millionounces of gold of which 0.409 million ounces is Indicated and 39.5 millionpounds of molybdenum of which 10 million pounds is Indicated. This is a slightincrease of 0.8% in total gold and significant increase of 14.8% in totalmolybdenum from the previous estimation. The grade shown for the Indicatedsection of the molybdenum resource has risen by over 60%. The Company has estimated a JORC-compliant Indicated & Inferred Mineral Resourceof 28Mt at 2.27% gold per tonne (g/t) and a 0.06% grade of molybdenum,comprising of: • Indicated Resource of 5.45Mt at 2.33 g/t gold & 0.09% molybdenum• Inferred Resource of 22.6Mt at 2.26 g/t gold & 0.06% molybdenum Jonathan Beardsworth, Chief Executive of Metals Exploration Plc, commented: "We are pleased to have upgraded and increased resource status of thegold-molybdenum deposit from Inferred to Indicated & Inferred furtherdemonstrating the potential of Runruno. The size of the gold resource was notincreased due to the recent drilling intersecting a non-mineralised dyke in anarea of limited drilling where we had previously inferred a resource. The highmolybdenum grades of 0.09% in the Indicated category and the move from Inferredto Indicated has resulted in a 60% rise in the grade, which would make theproject a substantial producer of molybdenum in its own right. As we now control 100% of Runruno, additional drilling has been planned, bothwithin the immediate resource area and the wider volcanic complex, where anumber of prospective targets have already identified. We have strong confidencethat the resource status will improve further and we expect to have drillingresults out by the end of Q1 2008. ENQUIRIES: Jonathan Beardsworth Metals Exploration +44 (0) 20 7927 6690 +44 (0) 7747101552Adrian Hadden Collins Stewart Europe Limited +44 (0) 207 523 8350Charles Vivian Pelham Public Relations +44 (0) 20 7743 6672Klara Kaczmarek Pelham Public Relations +44 (0) 20 3159 4395 RUNRUNO PROJECT Drilling Programme Since November 2005, the Company has drilled 76 diamond drill holes (12,345metres) and 68 RC drillholes (9,700 metres) on a 100m x 100m grid spacing forthe total resource area and recently approximately 20% of that area was infilldrilled on a 50m x 25m grid spacing. The resource lies from surface to maximumdepth of 150 metres over a surface area of approximately 1,800 metres x 900metres. The mineralisation envelope is predominantly 100 metres in thicknesswith higher grade zones at the hangingwall and footwall margins. The mineralisation remains open to the south and north and consequently theCompany believes the resource has the potential to increase further in size. Resource Update The resource was estimated by Company and consulting geologists using avalidated database, and computer modelling using Micromine. The revisedJORC-compliant Indicated & Inferred Mineral Resource was calculated from theresults of the Company's RC and diamond core drilling programmes since November2005, (144 drillholes, 22,045 metres) combined with Greenwater's 2000-01 diamonddrill holes (4 drillholes, 568 metres) to arrive at a total combined Indicatedand Inferred Mineral Resource of 28.04 million tonnes at an average grade of2.27 grams per tonne gold and 0.064% molybdenum. An additional 91 drill holes for 13,794 metres have made added since the lastresource estimation was published in December 2006. A summary of the resource estimations carried out for the Runruno deposit, sincethe Company acquired the Runruno Project, is shown below in Table 1. Table 1. Runruno Deposit - Previous Mineral Resource Estimations - 2006. Inferred Tonnes Gold MolybdenumResource g/t ounces % pounds 11-May-06 23M 2.30 1.7M 0.07 34M06-Dec-06 28.3M 2.23 2.03M 0.06 34.4M The current resource statement, in compliance with the AIM Guidance for MiningCompanies, is shown below in Table 2. Table 2. Runruno Deposit - Gross Resources - 28 October 2007. Resource Tonnes Gold MolybdenumCategory g/t ounces % pounds Indicated 5.455M 2.33 0.409M 0.089 10.765MInferred 22.58M 2.26 1.637M 0.058 28.771,MTOTAL 28.04M 2.27 2.046M 0.064 39.536M Notes: 1. Metals Exploration currently holds 85% of the project, with an option to purchase the remaining 15%. Therefore current net attributable resources is 85%. 2. No high/top cut off applied to gold grades - preliminary statistical analyses of gold assays indicate that there is negligible 'nugget effect'. 3. Cut off grade of 0.7g/t gold applied to the model. 4. No high/top cut or low cut off grades applied to molybdenum grades. 5. Average bulk density of 2.5. Some assays are still outstanding and it is expected that the last of the assayresults will be received within the next three weeks, although they are notexpected to significantly affect the size and grade of the resource. Discussion The infill drilling programme was carried out over approximately 20% of theresource area. In this area the resource conversion of the gold from Inferred toIndicated was in the order of 100% of the Inferred Mineral Resource to IndicatedMineral Resource category. This gives the Company confidence that futureconversion from Inferred to Indicated will be of the similar order. During the later stages of this drilling programme the Company intersected across-cutting phonolite dyke which effectively blanked out a major part of theinferred extension to the current resource. As a result the overall tonnage ofthe resource was unable to be increased significantly from the previousresource. However the increase in the molybdenum content combined with theincrease in gold grade has effectively increased the resource by the equivalentvalue of approximately 230,000 ounces of gold (at a $780/oz gold and $32.5/lbmolybdenum). The more closely spaced drilling also highlighted several new structuralcontrols on the mineralisation. A structural review of the geology of thedeposit and its surrounds is being initiated, to assist in further drilling ofthe resource and exploration of the wider area. Other Activities Higher than expected molybdenum grades in the Indicated Resource confirms thatthe current metallurgical work attempting to increase the molybdenum recoveryrate are important and should continue. Recent metallurgical tests have shown arecovery of 50% of contained molybdenum rising from an initial 35% recovery. The Company is continuing with other activities such as metallurgical testwork,social and environmental studies as part of a feasibility study into theeconomics of the Runruno deposit. Results will be announced as they are receivedfrom the Company's consultants. There have been recent media articles regarding the Secretary of the Departmentof Environment and Natural Resources reviewing mining companies activities andtheir mining permits in the Nueva Vizcaya province. The Company's communityrelations and environmental protection policies are of a high standard and thelocal communities have given written resolutions giving their full support andendorsement to the Company and to the development of the Runruno project. Theexploration permit is valid and we have no reason to believe that the permitwill be revoked. Analytical Techniques Gold Gold analysis is by classical 'Screen Fire Assay' technique that involves sieving a 900-1,000 gram sample to 200 mesh (75microns). The entire oversize and duplicate undersize fractions are fire assayed and the weighted average gold grade calculated. This is one of the most appropriate methods for determining gold content if there is a 'coarse gold' component to the mineralisation. Molybdenum The sample is dissolved in Aqua Regia (3:1 HCl:HNO3) and analysis is carried out by Inductively Coupled Plasma - Optical Emission Spectrometry (ICP-OES) method. Glossary of Terms JORC The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2004 (the 'JORC Code' or 'the Code'). The Code sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The definitions in the JORC Code are either identical to, or not materially different from, those similar codes, guidelines and standards published and adopted by the relevant professional bodies in Australia, Canada, South Africa, USA, UK, Ireland and many countries in Europe. Mineral Resource is a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories when reporting under JORC. Inferred Mineral Resource is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability. Indicated Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed. Measured Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity. Cut off Grade The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification. High/Top cut The value assigned to individual samples shown to have a grade so high that they are not truly representative of the overall grade in the deposit. In a resource estimate these high values may also be referred to as being due to the "Nugget Effect". They are downgraded to prevent over estimation of the total resource as they exert an undue statistical weight. Au chemical symbol for goldMo chemical symbol for molybdenumHCl chemical symbol for Hydrochloric Acid HNO3 chemical symbol for Nitric Acidg gramt tonne (= 1 million grams)g/t grams per tonne, equivalent to parts per million (g/t Au = grams of gold per tonne)% percent (1% = 10,000 parts per million)lb avoirdupois pound (= 453.59237 grams)oz troy ounce (= 31.103477 grams)micron A unit of length (= one thousandth of a millimetre or one millionth of a metre).200 mesh the number of openings (200) in one linear inch of screen mesh (200 mesh approximately equals 75 microns) QUALIFIED/COMPETENT PERSONS Gary Powell (a Director of the Company) has been involved in the mining andexploration industry for more than 23 years. He has a Bachelor of AppliedScience degree in geology and is a member of the Australasian Institute ofMining and Metallurgy and the Australasian Institute of Geoscientists. He hascompiled, read and approved the technical disclosure in this regulatoryannouncement. The information in the report to which this statement is attached that relatesto Exploration Results, Mineral Resources or Ore Reserves is based oninformation compiled by Mr Brian Lueck, who is a Member of the Association ofProfessional Engineers and Geoscientists of British Columbia, Canada (Lic. No.21298). Mr. Brian Lueck is employed as a technical consultant to the Company andhas sufficient experience which is relevant to the style of mineralisation andtype of deposit under consideration and to the activity which he is undertakingto qualify as a Competent Person as defined in the 2004 Edition of the'Australasian Code for Reporting of Exploration Results, Mineral Resources andOre Reserves'. Mr. Brian Lueck consents to the inclusion in the report of thematters based on his information in the form and context in which it appears. This information is provided by RNS The company news service from the London Stock Exchange