MAJOR RESOURCE BOOST FOR QUEENSLAND NICKEL PROJECT

Transcription

1 ASX RELEASE January, MAJOR RESOURCE BOOST FOR QUEENSLAND NICKEL PROJECT First resource estimate for rd NORNICO deposit Total combined total resource % higher A maiden resource of. million tonnes has been announced by Metallica Minerals Limited (ASX coded: MLM ) for one of the key deposits within the Company s flagship nickel and cobalt project in north Queensland. The JORC estimate is the first for the Kokomo nickel cobalt deposit which lies centrally within Metallica s NORNICO project area, northwest of Townsville, see figure. Combined with existing resource estimates for the project s nearby Bell Creek and Minnamoolka deposits, the new Kokomo contribution has lifted NORNICO s total resource estimate to. million tonnes, (see Table & ). The Kokomo resource estimate identified an Inferred and mineral resource of. % Ni and.% Co, (using a.% Ni Eq ¹ ² cut-off grade Table ). The resource is based on results from drill holes, with the mineralised zone interpreted around the drill holes, digitized and a wire-frame model constructed. The wire-frame model was filled with m x m x m blocks, and values for the blocks estimated by Ordinary Kriging, (OK). Of the resource Ni and. % Co is classified as with. Ni and. % Co as Inferred, see Table. The Kokomo resource was completed independently by Golder Associates Pty Ltd of Brisbane and has been prepared using JORC guidelines. Within the resource are higher grade nickel - cobalt zones which are expected to be amenable to selective mining. All of the nickel and cobalt resource is within m from surface. Table shows the Kokomo resource at various cut-off grades (COG). Figure NORNICO project setting

2 Kokomo Drilling Program Metallica completed a hole drilling programme at the Kokomo deposit in October, the data from this drilling and previous drilling by Metallica was used in a maiden resource study for the deposit. The resource study used data from drill holes comprising approximately,m of drilling and predominantly sampled at m intervals. The drilling was completed on a nominal m east-west by m north-south grid with infill drilling to m by m completed over some parts of the deposit. Where infill drilling has been completed, the resource has been classified as, (Figure & depicts the mineralised envelope at Kokomo in plan, the distribution of the different resource categories is in Figure, and Figures and show sections through the deposit). Metallurgical testwork has been initiated on high grade nickel-cobalt material from Kokomo at HRL in Brisbane. Due to higher iron contents and a significantly higher cobalt content of the Kokomo material compared to Bell Creek and Minnamoolka ore types, a separate processing route is being investigated, such as heated atmospheric leaching to achieve high recoveries of nickel and particularly cobalt. Metallica plans to complete further infill drilling in the zones of higher grade nickel cobalt mineralisation to improve Kokomo s resource categories from the current Inferred and to and Measured. Drilling is also planned for the central and western part of the Kokomo Plateau where zones of high grade mineralisation remain open. This work is planned for July August. NORNICO PROJECT RESOURCE UPDATE SUMMARY The inclusion of the Kokomo resource as part of the total NORNICO resource statement gives a new combined resource estimate Ni and % Co, (see Tables - for a breakdown of the resource by deposit and category). This has resulted in a % increase in NORNICO s nickel metal resource, a more than % increase in the cobalt resource and a % increase in resource tonnage. Photo Drilling on Kokomo Central Plateau red laterite soils.

3 Table : NORNICO Nickel Resource Inventory Measured, and inferred Nickel Deposit Tonnes Resource Category Mt Bell Creek South (BCS) Ni Co Fe Mg Ni metal In-situ Co metal ,,,. Bell Creek Northwest (BCNW). Minnamoolka. Inferred.. The Neck - between BCS and BCN.. The Pod #- west of BCS Inferred.. Kokomo.. Inferred....,,...,,.....,,,..,...,.. Fe Mg,,,, Ni.. Co In-situ Ni metal,,,, In-situ Co Metal,,,, Measured.. Bell Creek North (BCN) Totals Measured Inferred Overall total Tonnes (Mt).... In-situ Notes:. Above categories all calculated using a.% Ni cut-off grade-with the exception of Kokomo which was estimated using a.% Ni Eq cog(ni + Co). Block models for the above resources (with exception of The Pod) estimates were constructed by filling wire frame surfaces representing nickel laterite mineralization boundary with m by m by m blocks. Nickel (Ni) grades were estimated by ordinary kriging using various search radius, depending on the drill spacing of the deposit. A minimum of and a maximum of composites were used to estimate each block, with a maximum of composites from any drill hole. Therefore, at least drill holes were used to estimate block grade values. At Bell Creek South, Minnamoolka and Kokomo a nominal.% Ni mineralised envelope was used as a hard boundary for Ni and Co block grade estimation. Hard boundaries were also used between the laterite and basement zones.. Variations due to rounding factors. Iron (Fe) and magnesium (Mg) are included to indicate the overall ore quality, as both metals influence acid consumption as well as dissolved Fe, Mg and other metals, which are contaminants to nickel loaded pregnant solution which is treated to produce a marketable nickel and cobalt intermediate product. As a rule, the lower the Fe and Mg in the laterite ore the better metallurgy and the ore is more suited to heap leach processing. # The Pod Inferred resource was estimated using an arithmetic mean cross sectional (polygonal) method, a.%ni external cut-off grade and a minimum assumed mining width of m was applied. (ASX Release CP Patrick Smith)

4 Table : Resource Total for each of the NORNICO Deposits (Meas+Ind+Inf) Nickel Deposit Million Insitu Insitu Ni Co Fe Mg Tonnes Contained Contained (Mt) Ni metal Co metal Bell Creek South....,, Bell Creek North...,, Bell Creek Northwest....,, The Neck...., The Pod.....,. Minnamoolka....,,. Kokomo#..,, Totals....,, # The above resources have been calculated using a.% Ni cut-off grade(cog) with the exception of Kokomo which was estimated using a.% Ni Eq (Ni + Co) COG. Table : Kokomo and Inferred Ni-Co Resource at different COG s Ni Eq COG ¹ Tonnes (Mt) Ni Co Ni Eq Fe Mg Mn Ni equivalent value obtained using Ni + Co and is based on recent nickel and cobalt prices of around $ / lb for nickel and a cobalt price of $ / lb. A higher cut-off grade has been applied to the Kokomo Resource than the other NORNICO resources as the expected metal extraction process will be different and may require trucking of ore or transporting acid from Bell Creek located km to the north. This Mineral Resource estimate is based upon and accurately reflects data compiled, validated or supervised by Mr John Horton, Principal Geologist, who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of Golder Associates Pty Ltd. Mr Horton has sufficient experience that is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Horton consents to the inclusion of this information in the form and context in which it appears in this document. Details of the methodology used to estimate the Kokomo resource are included at the end of this release. For Further Information Mr Andrew Gillies Managing Director, Metallica Minerals Ltd Ph: (), Mob: Mr Kevin Skinner Field Public Relations Ph: (), Mob: Technical information and exploration results contained in this report has been compiled by Metallica Minerals Ltd full time employees Andrew Gillies in the position of Managing Director and Metallica Minerals Ltd Exploration Manager, Mr Pat Smith MSc. B.Sc (Hons),. Mr Gillies and Mr Smith are members of the Australasian Institute of Mining and Metallurgy and have relevant experience to the mineralisation being reported on to qualify as Competent Persons as defined by the Australasian Code for Reporting of Minerals Resources and Reserves. Mr Gillies and Mr Smith consent to the inclusion in this report of the matters based on the information in the form and context in which it appears

5 Figure Kokomo Drilled limit of Ni-Co Mineralisation on land surface

6 Figure - Kokomo Idealised Long Section showing Mineralisation & Drilling S F Ni,.% Co Ni,.% Co Ni,.% Co F Ni,.% Co K K K K K K N Ni,.% Co Ni,.% Co Ni,.% Co Ni,.% Co Ni,.% Co Ni,.% Co Kokomo - Central Plateau Long Section metres kilometre Scale Ni,.% Co Ni,.% Co Figure Kokomo Resource Ni,.% Co Ni,.% Co m.% Ni,.% Co Ni,.% Co K K - Ni,.% Co High Grade Ni/Co Envelope Based on Drill Hole Projected onto one plane (Not all Drill Holes Shown) Significant Ni/Co Mineralisation Ni,.% Co Ni,.% Co Ni,.% Co Ni,.% Co Ni,.% Co

7 Figure Kokomo Cross Sections

8 KOKOMO RESOURCE ESTIMATE DETAILS Key features of the resource estimate completed by Golder Associates Pty Ltd (Golder) include: Topography was provided as m contours and m by m spot heights with a stated accuracy of ±. m based on a detailed airborne survey by Schlencker Mapping Surveys Pty Ltd. Collars of holes drilled by Metallica were surveyed by Rowlands Surveys using a differential GPS with a stated accuracy of ± mm. All but two of drill holes used for resource estimation were drilled vertically. Down-hole surveying was not carried out. Visual inspection of drill holes indicated no significant down-hole deviations. Due to the shallow nature of the drilling (dominantly < m) it is unlikely that material drill hole deviations would have occurred. All drilling used for resource estimation was by face-sample RC. Sample recovery in the mineralised zone is believed to be good to excellent. The drill holes were sampled predominantly over m intervals by spearing. The integrity of spear sampling was evaluated by a riffle splitting validation program, which indicated the sampling procedure is appropriate. Australian Laboratory Services (ALS) and SGS Laboratories (SGS) in Townsville were used for assaying. Both ALS and SGS used a four acid digest method with an ICP finish. The QAQC program for Metallica drilling involved external standards for part of the drilling program and blind field duplicates. Internal standards, blanks and duplicates taken by SGS and ALS were provided to Metallica and deemed satisfactory. The QAQC results indicated that the assays for the Metallica drilling program were satisfactory for resource estimation purposes. The mineralisation has a surface expression that was observed in places during a field visit by Mr Horton from Golder. Golder completed an exhaustive database assay audit. Drill hole data was composited to m, which was the dominant sample interval. Appropriate high -grade cuts to Ni and Co outlier values were applied on a zone by zone basis. A wireframe of the paleo-laterite (enrichment) horizon between drill holes was constructed based on sectional interpretations. A nominal.% Ni was the underlying basis of the mineralised wireframe, however, logged geology and Co, Fe, Mg and Mn assays were also considered. Some deeper isolated drill intercepts of Ni >.% were estimated separately. The mineralised envelope wireframe included a nominal m (maximum m) horizontal extrapolation from the drill holes at the margins of the mineralised zone. A computer block model was constructed by filling the mineralised wireframe with m by m by m blocks. Additional blocks to base of drilling and peripheral to mineralisation were included to permit future open pit optimisation. Sub-blocking was not employed, with whole blocks assigned to geological domains on a maximum proportion basis. Grades of Ni, Co, Fe, Mg and Mn were estimated by ordinary kriging using a three pass search strategy including: o Pass m (major) by m (semi -major) by. m (minor) and a minimum of and maximum of composites o Pass m (major) by m (semi-major) by. m (minor) and a minimum of and maximum of composites o Pass m (major) by m (semi-major) by m (minor) and a minimum of and maximum of composites A maximum of composites were selected from any one drill hole. Therefore, at least drill holes were used to estimate block grade values during the st pass and drill holes during the nd pass. Hard boundaries were used between the mineralized envelope and the peripheral zone. Unfolding methods were employed during variogram analysis and block grade estimation to represent the paleo-laterite (enrichment) horizon between drill holes. Validation included visual observation, statistical checks, swath plots, and evaluation of smoothing. Internal dilution has been accounted for, but not dilution at the margins of the mineralised wireframe. Drilling was mostly on a reasonably regular pattern of m (NS) by m (EW) for Mineral Resources, with some infill holes. Inferred Mineral Resources were mostly drilled on a reasonably regular pattern of m (NS) by m (EW), with some small areas at larger spacings. Dry bulk densities were assigned to blocks according to nearest neighbour estimates of lithology and from the average measured dry bulk density for each lithology. Measurements were collected by three techniques, including two from drill core by sand replacement or caliper volume measurement and one from shallow test pits using sand replacement.