Sable Mining Africa Regulatory News (SBLM)

Sable Mining Africa Ltd/ Index: AIM / Epic: SBLM / Sector: Natural Resources

5 April 2011

Sable Mining Africa Limited ('Sable Mining' or 'the Company')

Acquires 206.75 sq km Bagla Hills Iron Ore Project in Sierra Leone

Sable Mining Africa Ltd, the AIM listed resource company, has acquired an 80% interest in Red Rock Mining (SL) Limited, a Sierra Leone company which holds a 50 year lease over 206.75 sq km covering the Bagla Hills, Tonkia Kingdom iron ore deposit ('Bagla Hills') in south-east Sierra Leone, near the Liberian border where banded iron formation horizons have previously been identified. 

Overview:

·; Bagla Hills deposit in Sierra Leone has a historical resource estimate of 838Mt at 32% iron ('Fe')

·; Historical drill intersections and magnetic surveying defined two main zones of iron formation that coincide with the two main topographic ridges, the East and West Ridges

·; East and West Ridges potentially part of a major fold - presents the possibility for large tonnages of iron ore being present in depth along the keel of the fold axis 

·; Located 80km from the coast and 12km from a disused railhead at Kongo in Liberia - strategic asset with multiple possible transport routes to export product

·; Deposit believed to be an extension of the 'Western Cluster' iron ore deposits in Liberia - requisite infrastructure in place for development and production stages

·; Exploratory drilling campaign to be initiated to detail mineral potential and to publish a JORC resource

Sable Mining CEO Andrew Groves said, "The Bagla Hills project has world class potential with existing reports already indicating a resource estimate of 838Mt at 32% Fe. The geology clearly indicates the possibility for a much bigger project with large tonnages of iron ore being present covering the two ridges and at depth along the keel of the fold axis. Importantly it appears to be an extension of the Western Cluster just across the border in Liberia, which not only underpins the regional prospectivity but will ensure the relevant infrastructure needed for the development and production stages is in place. Our aim is to initiate a drilling programme to expand the existing historical resource and upgrade it to JORC status."

Bagla Hills

Bagla Hills is about 52km SSE of Kenema, south-east Sierra Leone, forming a continuation of long-known Western Cluster iron-ore deposits across the border with Liberia, represented by Mano River, Bomi Hills and Bea Mountain. The lease covers 206.75 sq km and is held by Red Rock Mining (SL) Limited and succeeds an earlier Exploration Prospecting Lease, EPL 10/2005.

Historic reconnaissance geological survey mapping and pitting discovered NE-SW trending iron formation horizons. Between 1973 and 1975 Bethlehem Steel Mining Company ('Bethlehem') carried out geological mapping, a ground magnetic survey and drilling and sampling, applying rigorous logging and sampling protocols, to outline iron resources for pellet production. 6,600m of drilling in 29 holes was completed at a spacing of 200 to 300m along a strike length of 1.5 to 2.5 km and over widths of 100 to 500m, probing to about 200m depth from surface. Geological mapping and structural interpretation by Bethlehem indicates that the foliation in the rocks, which occur as two prominent ridges, is steeply dipping and that the East and West ridges may be part of a synclinal fold opening up a possibility for large tonnages of iron ore being present at depth along the keel of the fold.

Analyses of major elements and oxides were coupled with Davis Tube analyses to determine the contents of magnetic iron. Rock-density measurements were also carried out on core. Applying a cut-off grade of 22% Fe and a mean rock density of 3.55, a subsequent resource estimate, applying Gemcom geological modelling software on the analytical results in 2007, gave 838Mt of iron formation grading 32% Fe and 22% magnetic iron ('MagFe').

Using Whittle® pit optimisation software, conceptual pit outlines were developed indicating that at no cut-off grade, within the optimised pit shells, the mineral inventory was 776Mt of iron formation at a grade of 32.2% Fe and 22.0% MagFe, with 1,205Mt of waste material (339 M m3), giving a stripping ratio of 1.55 t:t or 0.44 m3:t. Taking into account data derived from testwork by Bethlehem on surface and core bulk samples, 289Mt of pellets might be produced at an assumed grade of 65% Fe.

The resources are historical and are not JORC compliant. An exploration drilling programme is therefore required to detail mineral resources with confirmatory test-work on representative bulk samples, to provide a basis for a scoping study on mine development and beneficiation plant design. It is estimated that this work could be phased, with an initial programme costing about $1.5 million, followed by a scoping study and further drilling at a cost of about $2.5 million to reach a pre-feasibility stage.

Bagla Hills is 80 km from the coast and only 12 km from a disused railhead at Kongo in Liberia giving two possible transport routes for product to reach a port, added to the possibility of slurry pipeline transport if output tonnages justify that route. Kongo is at the abandoned Mano River iron mine, one of the three prolific Liberian Western Cluster iron-ore deposits, which are the object of current re-opening negotiations. The iron-ore deposit at Bagla Hills, as presently known, lies within a forest reserve, but the Board believe that processing facilities and accommodation outside the reserve limits can be built thereby minimising the impact on the reserve.

On the southern portion of Bagla Hills there is currently a moratorium and prohibition on conducting mining and other exploration activities imposed by the Government of Sierra Leone. The Company is already working with the existing shareholders of Red Rock Mining (SL) Limited to have this moratorium lifted and secure the grant to Red Rock Mining (SL) Limited of a valid mining lease and licence for the entire Bagla Hills area.

Behre Dolbear has reviewed expert reports on work undertaken on this project, but has not visited the site. The opinion formed by them and which forms the basis of the information published in this release, is that the positive infrastructural background and significant mineral inventory, with potential for resource expansion, makes Bagla Hills a highly attractive opportunity to produce a marketable iron-ore product.

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