ORM.L Regulatory News (ORM)

20 Nov 2006 07:01

Ormonde Mining PLC20 November 2006 Ormonde Mining plc New Zinc Resource at La Zarza Drilling Update DUBLIN & LONDON: 20 November 2006 - Ormonde Mining plc ("Ormonde" or "theCompany") reports a JORC-compliant Mineral Resource estimate for zinc containedin the Massive Sulphide unit at its La Zarza Project in southwest Spain. Thisis in addition to the existing copper and gold resources within the Silicatadounit reported in April 2006, and represents a significant increase in theProject's resource inventory. Ormonde is currently working towards a Bankable Feasibility Study ("BFS") at theProject, where it is earning a 70% interest. The Company recently completed apositive pre-feasibility Scoping Study based on an underground mining operationproducing 450,000 tonnes per year over a 10 year mine life. HIGHLIGHTS • At a cut-off grade of 4.0% zinc, this new Massive Sulphide resource isestimated at 2.9 million tonnes grading 4.5% zinc, for a total of 130,300 tonnesof contained zinc; at a cut-off grade of 3.5% zinc, this rises to 261,400 tonnesof contained zinc • The grades of other metals in this resource are 0.5% copper, 1.0%lead, 33 g/t silver and 0.8 g/t gold • This zinc resource will be included with the Silicatado resources inthe Bankable Feasibility Study • The infill drilling programme has been completed with a total of 53holes now drilled; latest assay results are reported below Kerr Anderson, Managing Director, said today, "The addition of this significant polymetallic resource could enhance theeconomics of the La Zarza project quite considerably. The extra tonnagepotentially extends mine life, maximizing returns on capital investment inprocessing plant and underground development, and serves to highlight furtherresource potential." MASSIVE SULPHIDE ZINC RESOURCE The La Zarza Deposit contains two mineralized units, the Silicatado unit and theMassive Sulphide unit. Copper and gold resources reported in April 2006 wereestimated entirely within the Silicatado unit, and no Massive Sulphide resourceshave previously been reported. The Massive Sulphide unit occurs as a steeply dipping body immediately adjacentto the Silicatado. Ormonde's drilling programmes have confirmed that theMassive Sulphide contains significant concentrations of zinc and other metalsthat could feasibly be exploited by an extension to the proposed undergroundmining operation - Ormonde's positive pre-feasibility study published inSeptember '06 was based on Silicatado resources only. The current Massive Sulphide zinc resource is based on data from Ormonde'sdrilling programmes and a database of previous operator drilling. The thicknessof the zinc-rich zone typically ranges from 8 to 25 metres. The resourcecurrently extends from near-surface to 500 metres depth and is stated usingdifferent cut-off grades as follows (see Note 1): Massive Sulphide Zinc Resource Estimate Category Cut-off Tonnes Zn % Pb % Cu % Ag g/t Au g/t (Zn%) (millions) Inferred 4.0 2.9 4.5 1.0 0.5 32.6 0.8 3.5 6.5 4.0 1.0 0.5 32.7 0.9 3.0 10.1 3.8 1.0 0.6 33.2 0.9 The corresponding contained metal totals are as follows: Cut-off Contained Contained Pb Contained Contained Contained (Zn%) Zn (t) (t) Cu (t) Ag (Moz) Au (oz) 4.0 130,300 29,000 15,400 3.0 78,000 3.5 261,400 65,000 34,400 6.8 180,000 3.0 378,700 97,400 57,300 10.7 286,900 In this initial Massive Sulphide zinc resource estimate, all resources have beenclassified in the Inferred resource category (JORC, 2004). This approach hasbeen adopted as not all assay results from the Company's Phase 3 drillingprogramme have yet been received. This resource is based on data from 57 drillholes. The Company intends to carry out a revised Mineral Resource estimate forthe entire project in Q1 2007, and believes that at that time a high proportionof the Massive Sulphide zinc resource will be upgraded to the Indicatedcategory. Metallurgical testwork on representative samples of the Massive Sulphide zincresource will be carried out as part of the ongoing BFS programme. However, inother massive sulphide deposits in the Pyrite Belt area zinc and other metalshave been extracted from ore by conventional flotation to concentrates. If theLa Zarza Massive Sulphide zinc material behaves in a similar way, thenprocessing would be by a similar flotation process to that already proposed forthe Silicatado copper and gold resources. PHASE 3 DRILLING UPDATE The Company reports that its Phase 3 infill drilling programme is now completed. Twenty-eight diamond holes were drilled in the programme (ORM-26 to ORM-53)for a total of 6,656 metres. Ormonde has drilled a total of 14,000 metres onthe La Zarza Project. Significant results received to-date from the Phase 3 programme are as follows: Hole Zone From (m) Width (m) Cu % Zn % Pb % Au g/t Ag g/t ORM-26 CU 270.0 8.0 2.3 0.1 0.1 0.4 78.6 ORM-27 ZN 401.0 20.0 0.5 3.5 1.2 1.5 55.7 ORM-28 CU 324.0 4.0 2.8 0.1 0.2 1.3* 59.8 ZN 376.0 20.0 0.7 4.6 1.2 1.7* 48.8 ORM-29 ZN 281.0 7.1 0.5 5.7 2.0 0.9* 41.8 ORM-30 CU 281.0 7.0 2.8 2.9 0.8 0.5 37.0 ZN 350.0 10.0 0.5 5.0 0.3 0.4 15.4 ORM-31 551.0 13.0 0.9 4.5 2.2 2.6 43.2includes CU 551.0 3.0 2.5 3.4 0.7 0.4 42.3 and AU 559.0 5.0 0.3 3.8 2.5 5.8 38.2 ORM-32 ZN 260.0 7.7 0.5 3.8 1.3 1.7 44.9 Zone codes: CU - Copper Silicatado; AU - Gold Silicatado; ZN - Massive SulphideZinc * = Gold assays subject to finalization Assays for all remaining holes are expected by the end of January 2007,following which a revised Mineral Resource estimate will be carried out. As aresult of the infill drilling, Ormonde expects a high proportion of theresources to be classified in the Indicated category. Enquiries to: Kerr Anderson, Managing Director, Ormonde Mining plc Tel: +353 (0)46 9073623 Fraser Gardiner, Director, Ormonde Mining plc Tel: +353 (0)86 3931178 Simon Rothschild, Bankside Consultants Tel: +44 (0)20 7367 8871 Mob: +44 (0)7703 167065 NOTE 1 Mineral Resources are reported in compliance with the standards set out in theJORC Code (2004). Resources have been modelled and estimated using the Dataminesoftware package by Prehenita, S.L., a consultant to Ormonde, and have beenapproved by Kerr Anderson PhD EurGeol PGeo, Managing Director of Ormonde. Dr.Anderson is a member of the Institute of Geologists of Ireland. He hassufficient experience which is relevant to the style of mineralization and typeof deposit under consideration to qualify as a Competent Person as defined inthe 2004 Edition of the JORC Code and a qualified person as defined in theGuidance Note for Mining, Oil and Gas Companies, March 2006, of the London StockExchange. Further details on the Mineral Resources can be found in the Technical Notessection at the end of this announcement. A glossary of terms is also appended. About La Zarza The La Zarza Copper-Gold Project comprises a group of Mining Concessionscovering a total of 13 square kilometres in the Iberian Pyrite Belt miningdistrict of southwest Spain, some 50 kilometres north of Huelva and 90kilometres northwest of Seville. In September 2006, Ormonde published a positive pre-feasibility study for theProject and work towards completion of a Bankable Feasibility Study is currentlyin progress. The Project benefits from existing road, rail, power and waterinfrastructure in the immediate proximity, a local skilled workforce andavailable contractors in this historic mining area, and appropriate regulatoryand investment regimes. About Ormonde Ormonde Mining plc is quoted on the AIM in London and the IEX in Dublin. TheCompany's objective is to enhance shareholder value by developing miningprojects in Spain and taking them into production. Ormonde has a strong localSpanish management team, supported by a Board with extensive mine developmentand exploration experience. For more information please visit www.ormondemining.com. GLOSSARY TERM DEFINITION Competent Person A person who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy, or of the Australian Institute of Geoscientists, or of a ' Recognised Overseas Professional Organisation' ('ROPO') included in a list promulgated from time to time. A 'Competent Person' must have a minimum of five years experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which that person is undertaking. Cut-off grade The grade of material below which mining is uneconomic. g/t Grams per tonne. Indicated Mineral Resource 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. Inferred Mineral Resource 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. JORC Code (2004) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves "The JORC Code" 2004 Edition. Mineral Resource A concentration or occurrence 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. oz / Moz Ounce / million ounces. t Tonne (1,000 kg). TECHNICAL NOTES DATA USED The Mineral Resource estimation is based on drilling data from Ormonde's PhaseOne and Phase Two drilling programmes, results to-date from Phase Threedrilling, and the database of historical drilling by SEIEMSA and other previousoperators. Historical drill holes which were not considered to be reliable wereremoved from the Mineral Resource dataset. Underground channel samples reportedby SEIEMSA and used for their 1997 resource estimation could not be verified andare therefore not included in Ormonde's Mineral Resource dataset. SAMPLING, LABORATORIES AND QUALITY CONTROL MEASURES All drilling on the project has been core drilling. All Ormonde's drilling hasbeen with either HQ or NQ core diameter. All Ormonde's holes have hadappropriate collar surveys by an independent licensed Spanish surveyor, and downhole surveys. All core has been routinely logged, including records of corerecovery, by an experienced geologist. Relevant core intervals were split inhalf by diamond saw, with half being sent for assay and the other half beingretained in the core boxes for reference. Samples are analysed at ALS Chemex, Vancouver and ASA-OMAC Laboratories,Ireland. Initial sample preparation involving crushing of the half core to 85%passing 2mm is carried out at a local sample preparation facility. A onekilogram split of the -2mm material is then sent directly to the laboratory forpulverising and assay by appropriate methods. Reference samples which includeblanks, internationally accredited standards and duplicates are routinelyincluded in each sample batch as quality control measures. ESTIMATION METHODOLOGY The Mineral Resource estimate has been carried out using the Datamine softwarepackage by Spanish consultancy company, Prehenita, S.L.. Prehenita geologistJose Manuel Prada is a mine geologist with 20 years of experience including 12years in the field of resource estimation. He is an expert in the use ofDatamine having carried out several resource and reserve estimation projects.He is highly experienced in the geology of the Iberian Pyrite Belt and asProject Geologist for La Zarza since June 2004 he is appropriately qualified toconduct the Mineral Resource estimate. Geological & Block Model Development Ormonde logging data, historical drill logs and historical cross sections andunderground level plans have been used to develop a 3-dimensional wireframemodel for the main mineralized units which comprise the La Zarza deposit. TheMassive Sulphide zinc resource estimate was carried out entirely within theMassive Sulphide unit. A block model was created constrained by the known boundaries of the MassiveSulphide unit. The blocks have dimensions of 10 x 10 x 10 metres. Determination of Block Density A Specific Gravity of 4.5 has been assumed for all blocks. This is based onexperience in other massive sulphide deposits in the Pyrite Belt, andmeasurements on La Zarza drill core. Estimation Methods The resource estimation process used can be summarized as follows: • Compositing of individual assay intervals to 2 metrecomposites, followed by statistical analysis of the composite dataset • Construction of multi-directional variograms and determinationof appropriate search ellipses • Estimation of metal grades in the block model using OrdinaryKriging, with cross-validation by Indicator and Point Kriging Resource Categorization The Massive Sulphide zinc resource is currently classed entirely in the Inferredresource category of The JORC Code (2004). See the Glossary for definitions ofthe JORC resource categories. 20 November 2006 This information is provided by RNS The company news service from the London Stock Exchange