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Strategic Minerals - Leigh Creek Production and Resource Update

Thu, 11th Apr 2019 07:00

RNS Number : 8395V
Strategic Minerals PLC
11 April 2019
 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

11 April 2019

Strategic Minerals plc

("Strategic Minerals", "SML" or the "Company")

Leigh Creek Copper Mine Recommences Heap Leach Operations at the Mountain of Light

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, is pleased to announce that its Leigh Creek Copper Mine ("LCCM") operations have recommenced copper production at the Mountain of Light processing facility and has, as a result of drilling, upgraded the estimated JORC copper resource at Paltridge North by 46% to 10,800 copper metal tonnes. The recommencement of production has been achieved with the completion of the plant refurbishment and the trial reactivation of the existing processing plant and heap leach pads.  

Highlights:-

 

·    First tonne of copper production in a cement product (approximately 70% Cu) completed at the Mountain of Light processing plant.

·    Reactivation of existing heap leach pads with the completion of turning over of the pad material, irrigation with diluted sulphuric acid, and successful activation of the copper sulphate solution with iron through the twin Kennecott cones.

·     Targeting to be Australia's largest copper cement producer by mid-2020.

·     Reactivation of the existing heap leach pads fully covered under existing permits.

·     Resource update for the Paltridge North deposit completed resulting in a 46% uplift.

Indicated Resource:                  909,000 tonnes @ 0.80% Cu

Inferred Resource:                     514,000 tonnes @ 0.68% Cu

Total Resources:                      1,423,000 tonnes @ 0.76% Cu.

·     The feasibility study for the commencement of full-scale production from Paltridge North and Rosmann East, and submissions associated with government approvals for mining these areas, are well advanced and scheduled to be completed in Q3 2019.

Commenting, John Peters, Managing Director, Strategic Minerals, said:

 

"The production of the first tonne of high grade copper concentrate, in the form of cement, is a major milestone in the development of LCCM.  At acquisition, in March 2018, a strategic plan was adopted that set out a low capital cost to re-start operations, an ambitious time frame to initial cash flows, high operating margins and upside potential for the copper resources within the existing Mining Leases.

"The restart of production in 13 months from acquisition has reinforced the Board's confidence that the acquisition of LCCM will prove to be a major value added asset for the Company and will provide significant on-going after tax cash flows from 2020.

"The Board of SML thanks the LCCM team and our engineering contractors (PPM Global) for the excellent work they have conducted in restarting production at the Mountain of Light facility."  

 

Refurbishment of the Mountain of Light Processing Plant and Reactivation of the Heap Leach Pads

 

The refurbishment and recommissioning of the Mountain of Light processing facility has been successfully completed with the first tonne of copper cement concentrate being produced in the second week of April 2019.  The restart of operations at the Mountain of Light has focussed on:

·     Repairs to pipework, pumps, storage ponds and Kennecott cones, which had all remained idle since 2012

·     Drilling of existing heap leach pads to test for remnant copper

·     Reactivation of the existing heap leach pads with turning over the pad materials and reinstalling irrigation lines

·     Purchase of key reagents, namely sulphuric acid and scrap steel

·     Improving of safely walkways and access stairs

The Mountain of Light ("MoL") processing facility is a copper heap leach and cementation plant that was last operated in 2012.  This was purchased by SML in March 2018as part of the LCCM acquisition.  The MoL plant includes three historic heap leach pads, pregnant liquor ponds, two Kennecott cones and a filter press, as well as complete supporting infrastructure (power, water, communications, access) and is designed to produce a high-grade copper concentrate (~70% Cu) known as a copper cement.  Copper is extracted from the leach solution as a copper cement by reaction with scrap iron within the Kennecott cones.

LCCM's engineering partners, PPM Global, have successfully refurbished and recommissioned the MoL processing plant and re-activated the existing copper heap leach pads as a trial for later full-scale production. The irrigation of the heap leach pads commenced on 8 April 2019 with initial copper cement production occurring on the same day. 

The trial re-activation of the heap leach pads, including the commissioning of the processing plant, provides the basis for production from unmined resources, including the Paltridge North and Rosmann East deposits.  Recent drilling at these sites have resulted in a resource estimate update (see below). Associated metallurgical analysis and feasibility studies have been completed, details of which were announced by SML on 7 March 2019. 

Paltridge North Resource Upgrade

A new resource estimation has been completed for Paltridge North including all the latest drilling data and is summarised in Table 1. The resource estimation was undertaken in accordance with the JORC (2012) guidelines.

The new resource estimate includes a significant increase in tonnes (from 0.92Mt to 1.42Mt) and contained copper (from 7,400 t to 10,800 t) from previous estimates.  Almost all of the increase is in the Inferred category (from 200 t to 3,500 t), which is a result of improved geological understanding of the mineralisation and judicious use of older (1970's) drilling data to refine and extend the resource boundaries into areas not tested by more recent drilling.

 

 

Category

Mineralisation Type

Tonnes

Grade   % Cu

Tonnes of Contained Cu

Indicated

Oxide Zone

633,000

0.75

4,700

Indicated

Chalcocite Zone

276,000

0.92

2,500

Inferred

Oxide Zone

114,000

0.63

700

Inferred

Chalcocite Zone

400,000

0.69

2,800

Total Indicated

 

909,000

0.80

7,300

Total Inferred

 

514,000

0.68

3,500

Grand Total

 

1,423,000

0.76

10,800

Table 1 - Paltridge North Resource (0.3% Cu cut-off)

[1] Minor rounding errors may occur

 

The Paltridge North deposit is a shallow, relatively flat tabular deposit hosted in a fine-grained siltstone.  Approximately 90% of the total resource occurs within 55m of the surface.

Oxide mineralisation occurs as the carbonate minerals malachite and azurite in the upper levels of the deposit to a depth of about 30m, where it has a relatively sharp contact with secondary chalcocite zone mineralisation, dominated by chalcocite with minor native copper. 

Rosmann East Drilling

Assay results from six of the seven PQ3 diamond holes drilled at Rosmann East in January 2019 are now available. The holes were drilled to test for extensions to existing copper oxide and chalcocite mineralisation zones beneath the existing open pit.  A total of 675.2m was completed.  The drilling is also designed to provide metallurgical samples and geotechnical information for a feasibility study on the Rosmann East deposit.  The shallow nature and proximity to the Mountain of Light processing plant makes mineralisation from Rosmann East an attractive ore source for initial production.

Results

Assay results for the holes RED18-01 to RED19-06 are now available and are presented in Table 2. The seventh holes (RED19-07) is being retained intact to provide reference material for mining and geotechnical studies.

The holes all intersected broad zones of low-grade chalcocite mineralisation (with pyrite, chalcopyrite and bornite) to 30m below the previously defined mineralisation at Rosmann East and 60m below the existing pit floor. Together with the existing drilling information, the latest assay results and geological interpretation has provided an improved understanding of the nature and extent of the Rosmann East mineralisation, which will enable a new, JORC 2012 compatible, resource estimation to be undertaken.  

Hole ID

 

Depth From (m)

Depth To (m)

Interval (m)

Copper Grade (% Cu)

RED18-01

Total

11

80

69

0.37

 

Including

11

17

6.0

0.35

 

Including

31

49

18

0.50

 

Including

53

70.2

17.2

0.42

 

Including

72

80

8

0.47

RED18-02

Total

8

19

11

0.39

 

Including

9

15

6

0.52

 

and

25

77.95

52.95

0.18

 

Including

29

41.5

12.5

0.44

RED19-03

Total

37.5

73.1

35.6

0.23

 

Including

38.5

55

16.5

0.34

RED19-04

Total

39.2

64

24.8

0.30

 

Including

44.75

64

19.25

0.34

 

and

71

87

16

0.23

 

Including

83.1

86.15

3.05

0.41

RED19-05

Total

49.2

88

38.8

0.36

 

Including

55

63

8

0.44

 

Including

69

88

19

0.47

RED19-06

Total

64

114

50

0.16

 

including

104

112

8

0.26

Table 2 - Assay Results from Rosmann East Diamond Drilling

Note:       All intervals are downhole.

                RED19-07 has not been assayed in order to provide typical core for viewing and assessment by potential mining contractors and for ongoing mining and geotechnical studies

 

Further Work

The new Paltridge North resource model will be used for ongoing feasibility and mine design studies. Metallurgical testwork on the samples obtained from the 2018 diamond drilling is ongoing.

A new resource model for Rosmann East is currently in progress.

 

Competent Person's Statement

The exploration results in this announcement are based on information compiled by Mr. David Larsen, who is a Member of the Australian Institute of Geoscientists.  Mr Larsen is the Principal of D&J Larsen Consulting Pty Ltd and is a consultant to the Company. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person, as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and a qualified person as defined in the AIM Note for Mining and Oil & Gas Companies dated June 2009.  Mr Larsen has over 35 years' Australia and international experience in exploration, mining geology and resource estimation for gold, base metals and iron ore deposits.

 

Forward Looking Statements

This report contains "forward-looking information" that is based on the Company's expectations, estimates and forecasts as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to the Company's business strategy, plans, objectives, performance, outlook, growth, cash flow, earnings per share and shareholder value, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, commodity prices and demand, and currency exchange rates. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as "outlook", "anticipate", "project", "target", "likely", "believe", "estimate", "expect", "intend", "may", "would", "could", "should", "scheduled", "will", "plan", "forecast" and similar expressions. The forward-looking information is not factual but rather represents only expectations, estimates and/or forecasts about the future and therefore need to be read bearing in mind the risks and uncertainties concerning future events generally.

 

For further information, please contact:

 

 

 

Strategic Minerals plc

+61 (0) 414 727 965

John Peters

 

Managing Director

 

www.strategicminerals.net

 

 

 

Follow Strategic Minerals on:

 

Vox Markets:

https://www.voxmarkets.co.uk/company/SML/

Twitter:

@SML_Minerals

LinkedIn:

https://www.linkedin.com/company/strategic-minerals-plc

Facebook:

https://www.facebook.com/Strategic-Minerals-PLC-296612634111414/

 

 

SP Angel Corporate Finance LLP

+44 (0) 20 3470 0470

Nominated Adviser and Broker

 

Ewan Leggat

 

Laura Harrison

 

     

 

Notes to Editors

Strategic Minerals Plc is an AIM-quoted, operating minerals company actively developing projects prospective for battery materials. It has an operation in the United States of America and development projects in the UK and Australia. The Company is focused on utilising its operating cash flows, along with capital raisings, to develop high quality projects aimed at supplying the metals and minerals being sought in the burgeoning electric vehicle/battery market.

In September 2011, Strategic Minerals acquired the distribution rights to the Cobre magnetite tailings dam project in New Mexico, USA, a cash-generating asset, which it brought into production in 2012 and which continues to provide a revenue stream for the Company. This operating revenue stream is utilised to cover company overheads and invest in development projects orientated to supplying the burgeoning electric vehicle/battery market.

In January 2016, the portfolio was expanded with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia and the Northern Territory that are prospective for cobalt, gold, nickel sulphides and rare earth elements. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd. In September 2018, the Company entered contracts for the sale of certain CARE tenements that have been identified as gold targets.

In May 2016, the Company entered into an agreement with New Age Exploration Limited and, in February 2017, acquired 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. The bulk of the funds from the Company's investment were utilised to complete a drilling programme that year. The drilling programme resulted in a significant upgrade of the resource. The 12-hole 2018 drilling programme has now been completed and the resource update that resulted was announced in February 2019. In March 2019, the Company entered into arrangements to acquire the balance of the Redmoor Tin/Tungsten project in Cornwall, UK.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and is currently working to bring this into operation in 2019.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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