ORM.L Regulatory News (ORM)

24 Jan 2008 07:01

Ormonde Mining PLC24 January 2008 24 January 2008 Ormonde Mining plc Initial Inferred Resource Estimate of 1.0 Million Tonnes at 0.7% WO3 at Barruecopardo Tungsten Project, Spain and Positive Preliminary Economic Evaluation DUBLIN & LONDON: 24 January 2008 - Ormonde Mining plc ("Ormonde" or the"Company") is pleased to report very encouraging results from the initialresource estimation and a preliminary economic evaluation study ("Order-of-Magnitude Study") on its Barruecopardo Tungsten Project in Salamanca, Spain (the "Project"). The Company also reports a further five encouraging drill hole results from the various mineralised zones. Highlights • The initial resource estimate, based on drilling results to-date, is 1.0 million tonnes at an average grade of 0.7% WO3 in the JORC Inferred Resource category; ongoing drilling aims to expand this to a minimum 1.5 million tonnes in the near-term. • Furthermore, the Company believes that the resource potential down to a depth of 350 metres is of the order of 3-4 million tonnes, based upon the deposit now being expanded from 3 to 5 mineralised tungsten zones with all zones open along strike in both directions and at depth. • The Order-of-Magnitude Study indicates that an underground production rate of 200,000 tonnes per year ("tpy") would be appropriate for start-up which could result in tungsten production of around 90,000 metric tonne units ("mtu") of WO3 per year; this production rate could be increased post start-up. • Net surplus cashflows from such an operation should be in the region of €5 million per year. • This Study indicates that the total capital costs of a 200,000 tpy mine would be in the region of €10-15 million. • The Company envisages that the evaluation-feasibility study phase of the Barruecopardo Project should be completed during 2008. Kerr Anderson, Managing Director, said: "The Order-of-Magnitude Study indicates that Barruecopardo is a high-gradetungsten resource which has the potential to generate significant cashflows atrelatively modest capital investment levels. Moreover, we are extremelyconfident that we will expand this resource to a minimum 1.5 million tonnes withour ongoing drilling programme. This will form the basis of a 200,000 tpy mineproduction study, which would rank Barruecopardo amongst the leading tungstenproducers with an estimated 10% of Western World production." Order of Magnitude Study Mineral Processing: The processing of the tungsten ore would be throughthree-stage crushing, a rod-mill for coarse grinding, a gravitypre-concentration circuit utilising a combination of jigs and spirals and afinal concentrate clean-up circuit to produce a saleable concentrate. The Studyassumes overall tungsten recoveries of 70% to 80% based upon the results ofinitial scoping testwork carried out last year and documentation relating to thehistoric open-pit operation at Barruecopardo. This would result in theproduction of around 90,000 mtu's of WO3 per year. Additional testwork isbeing carried out to facilitate detailed process plant design. Mining: The mining assumptions in the Study are for an initial production rateof 200,000 tpy, with underground access and ore transportation via a declinefrom surface. The steep dips, good ground conditions and visually distinctivemineralised zones should make for favourable mining conditions. The miningmethod is expected to be predominantly narrow-vein, mechanised long-holestoping, with occasional use of shrinkage stoping. A minimum mining width of 2metres has been assumed for the mechanised mining method. Capital Costs: The preliminary capital cost for the development of a mine atBarruecopardo is based on development of an underground decline mine,construction of a 28 tonnes per hour processing plant, together with relatedsite infrastructure and working capital. This production rate may be increasedpost start-up when exploration of the other zones is advanced and multipleaccess points have been developed to all tungsten zones. Cashflow Analysis: Based upon operating cost estimates ranging from €23 to €45per tonne and head grades varying from 0.6% to 0.7% WO3, with figures varyingdepending on the proportion of mechanised to shrinkage stoping, and assumingtungsten concentrate prices of US$180 per mtu of WO3, the proposed 200,000 tpyoperation at Barruecopardo could generate annual cashflows in the region of €5million per year. Mineral Resource Statement An Inferred Mineral Resource estimate has been prepared for the BarruecopardoTungsten Deposit: Category Cut-off (WO3%) Tonnes (millions) Grade (WO3%) Contained WO3% (MTU*) Inferred 0.3 1.0 0.7 700,000 * MTU = metric tonne unit, the standard unit of measurement for tungsten, whichis equivalent to 10 kg of WO3. 700,000 MTUs is equivalent to 7,000 tonnes. The Mineral Resource estimate has been prepared by Ormonde to a standard whichcomplies with reporting according to the JORC Code (2004) and has beenindependently audited by geological consultants CSA Australia Pty Ltd.Supporting information is provided in Note 1 and the Technical Notes suppliedbelow. In brief, the deposit is a steeply dipping, multi-vein tungsten mineralisedsystem within granite rocks. Three major zones (FM, FC and FP Zones) and otherless-defined zones have been intersected by Ormonde's drilling and are includedin the resource estimate. There are no verifiable historic data for the Project and only data fromOrmonde's drilling programmes were used to prepare the resource estimate. Datafrom 25 holes were used, including new results reported below (see TechnicalNotes for details of all holes). Drilling is ongoing in areas not included inthe current estimate, with a view to increasing resources in the near-term. Further potential The Mineral Resource does not include the full potential of the deposit andseveral opportunities exist to significantly increase the Project's resourcebase. For example, only a small part of the Filon Principal (FP) Zone has beenincluded as only limited drilling (two holes) has so far been carried out onthis zone. All zones are open at depth and along strike, and other untestedzones in the area present further potential to add significantly to the resourcebase. Continuation of the existing drill-defined zones to a depth of 350 metres wouldindicate the potential for around 2-3 million tonnes of additional mineralisedmaterial. Together with the Inferred Mineral Resource, the potential of theProject could therefore be at least of the order of 3-4 million tonnes at agrade in the range 0.5 to 0.8% WO3, with further resource additions likely asexploration of the other mineralised zones continues over the longer term. New Drilling Results Significant assay results received since the last drilling report are listedbelow. Eight of these intervals were included in the resource estimate asindicated. Hole From (m) Width (m) True Width (m) WO3% Resource BAR-02 53.0 1.0 0.8 0.7 79.0 3.0 2.5 0.3 included 110.0 1.0 0.9 0.6 125.0 3.0 2.6 0.5 included 253.0 3.0 2.6 0.7 included 295.0 1.0 0.9 1.4 includedBAR-23 131.0 1.0 0.7 0.3 included 150.0 1.0 0.7 3.0 includedBAR-24 67.0 3.0 0.9 0.7 includedBAR-25 94.0 2.0 0.7 1.4 includedBAR-26* 80.0 1.0 0.8 1.9 * This hole was abandoned due to technical difficulties before reaching the FPZone. Samples from the repeat hole, BAR-26 BIS are awaiting assay. Enquiries to: Ormonde Mining plcKerr Anderson, Managing Director,Fraser Gardiner, DirectorTel: +353 (0)46 9073623 Bankside ConsultantsSimon Rothschild / Louise Mason Tel: +44 (0)20 7367 8888 Mob: +44 (0)7703 167065 Davy (Nomad / IEX Adviser)Fergal Meegan Tel: +353 (0)1 6796363 Brewin Dolphin (UK Adviser)Gordon Culfeather Tel: +44 (0) 141 314 8121 ENDS NOTE 1 - Compliance statement on resource estimate Mineral Resources are reported in compliance with the standards set out in theJORC Code (2004). Resources have been modelled and estimated using a manualpolygonal method by Ormonde, and have been approved by Kerr Anderson PhD EurGeolPGeo, Managing Director of Ormonde. Dr. Anderson is a member of the Instituteof Geologists of Ireland. He has sufficient experience which is relevant to thestyle of mineralization and type of deposit under consideration to qualify as aCompetent Person as defined in the 2004 Edition of the JORC Code as a RecognisedOverseas Professional (ROPO) and a Qualified Person as defined in the GuidanceNote 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 Tungsten Tungsten is most frequently used as tungsten monocarbide, which has a hardnessclose to diamond, in cemented carbides. The principal tungsten applicationsinclude its use in cutting steels and in tungsten alloys, electronics, andchemical products. Prices of tungsten concentrates are expected to remain buoyant for the longterm, and are currently quoted by the Metal Bulletin in the range $160-$180 permetric tonne unit. A metric tonne unit is equal to 10kg of WO3, which equatesto 1.0% contained WO3 in the rock. About Ormonde Ormonde Mining plc is quoted on the AIM in London and the IEX in Dublin.Ormonde is a mineral development and exploration company focused on Spain, withthe objective of developing mining projects and taking them into production. For more information please visit www.ormondemining.com. TECHNICAL NOTES & DRILLING INTERVALS DATA USED There are no verifiable historic data for the Project and only data fromOrmonde's drilling programmes were used to prepare the current geologicalinterpretation and resource estimate. All holes are core drilling using HQ corediameter. Data from 25 holes were used, with the relevant intervals for eachzone set out below. Filon Maestro (FM) Zone Hole From (m) Width (m) True Width (m) WO3% BAR-01 115.7 1.0 0.8 0.5 BAR-02 253.0 3.0 2.6 0.7 BAR-03 101.5 3.4 2.5 1.0 BAR-04 122.0 0.9 0.6 1.6 BAR-05 133.7 1.7 1.5 0.4 BAR-06 245.0 1.0 0.7 0.7 BAR-09 119.0 2.0 1.5 2.1 BAR-10 125.0 2.0 1.4 1.5 BAR-11 114.0 1.0 0.7 0.3 BAR-12 128.0 2.0 1.4 1.7 BAR-13 123.0 2.0 1.4 2.4 BAR-14 Not mineralised BAR-15 122.0 2.0 1.4 0.4 BAR-16 202.0 4.0 2.9 0.6 BAR-17 125.0 2.0 1.4 0.9 BAR-18 254.0 1.0 0.7 0.3 BAR-19 268.0 2.0 1.4 0.5 BAR-21 125.0 5.0 3.7 0.5 BAR-22 132.0 4.0 2.9 0.2 BAR-23 131.0 1.0 0.7 0.3 BAR-24 67.0 3.0 0.9 0.7 BAR-25 94.0 2.0 0.7 1.4 The Filon Maestro Zone is the subject of the most detailed amount of drillingbeing intersected by 22 holes. The zone varies in width from 0.7 to 3.7 metres. In the current interpretation it extends for a total strike length of 900metres and has a depth extent of 210 metres from the base of historic surfaceworkings. The zone is open in both directions along strike, and is open atdepth. Filon Central (FC) Zone Hole From (m) Width (m) True Width (m) WO3% BAR-02 125.0 3.0 2.6 0.5 BAR-05 22.7 0.8 0.7 0.7 BAR-06 106.3 0.5 0.4 0.7 BAR-16 91.0 1.0 0.7 1.4 BAR-18 91.0 1.0 0.7 0.7 BAR-19 96.0 8.0 5.8 0.3 The Filon Central Zone is intersected by 6 holes. The zone varies in width from0.7 to 5.8 metres. In the current interpretation it extends for a total strikelength of 650 metres and has a depth extent of 140 metres from the base ofhistoric surface workings. The zone is open in both directions along strike,and is open at depth. Due to limited drilling data at the time of the resourceestimate, resources have not been estimated along its full strike extent.Infill drilling is being carried out as part of the ongoing work programme. Filon Principal (FP) Zone Hole From (m) Width (m) True Width (m) WO3% BAR-02 79.0 3.0 2.5 0.3 BAR-20 137.0 3.0 2.2 1.0 The Filon Principal Zone is intersected by 2 holes. The zone varies in widthfrom 2.2 to 2.5 metres. From historic mapping of the open pit, the zone isknown to be on average 14 metres wide at lower overall grade (0.2% WO3). In thecurrent interpretation it extends for a total strike length of at least 700metres (the length of the most recent open pit mining operation which focused onthis zone), however in the current resource estimate resources have only beenestimated along part of its strike extent. The zone has a known depth extent of100 metres from the base of the open pit. The Zone is open in both directionsalong strike, and is open at depth. Other mineralised veins Hole From (m) Width (m) True Width (m) WO3% BAR-02 295.0 1.0 0.9 1.4 BAR-04 142.5 0.6 0.4 4.5 BAR-06 181.6 1.2 0.9 0.6 BAR-23 150.0 1.0 0.7 3.0 SAMPLING, LABORATORIES AND QUALITY CONTROL MEASURES All core has been routinely logged by an experienced geologist. Relevant coreintervals were split in half by diamond saw, with half being sent for assay andthe other half being retained in the core boxes for reference. Sample preparation and analyses were performed at ALS Chemex, Vancouver andASA-OMAC Laboratories, Ireland. Reference samples are routinely included ineach sample batch as quality control measures. Check assays on selectedmineralised samples are being carried out although results were not available atthe time of preparing the Mineral Resource estimate. ESTIMATION METHODOLOGY The Mineral Resource has been estimated using a manual polygonal method. Thenecessary measurements have been taken from longitudinal projections andcross-sections derived from a geological interpretation. Combined with therelevant resource drill hole intercept data, these were used to estimatetonnages and grades for each resource polygon / panel. Geological Interpretation The geological interpretation has allowed geological continuity between drillhole intercepts to be assessed and aided the determination of which drill holeintercepts were to be included in the resource estimation for each zone. Theinterpretation has been developed as an iterative process by cross-referencinginformation plotted on cross-sections, level plans and longitudinal projections. Surface features, in particular the distribution of surface workings(previously mined mineralised zones), have also been used as a guide todetermining mineralised zone geometries and increase confidence in theinterpretation derived from drilling data. Bulk Density No bulk density measurements are available to-date. The mineralised zonescontain variable sulphide content (0% to 19%) and bulk densities will thereforevary locally. Sulphide content has been estimated for each drill hole interceptbased on multi-element assay data, and a bulk density subsequently derived foreach resource panel. Bulk densities range from 2.7 to 3.3 t/m3. RESOURCE CLASSIFICATION The Mineral Resource is classified in the Inferred resource category of The JORCCode (2004). See the Glossary for definitions of the JORC resource categories. 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. 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. MTU Metric Tonne Unit 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. WO3 Tungsten trioxide, the standard form in the minerals sector for quoting tungsten content. This information is provided by RNS The company news service from the London Stock Exchange