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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wolf Minerals | LSE:WLFE | London | Ordinary Share | AU000000WLF3 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMWLFE
RNS Number : 3956I
Wolf Minerals Limited
25 March 2015
25 March 2015
Wolf Minerals Limited
Wolf Minerals Announces 34% Increase in Ore Reserves at Hemerdon Tungsten and Tin Project
Wolf Minerals reports 2012 JORC compliant Ore Reserves and Mineral Resource Estimate.
Specialty metals development company, Wolf Minerals Limited (ASX: WLF, AIM: WLFE) ("Wolf" or "the Company") is pleased to announce details of a major increase in the Ore Reserves at its wholly owned Hemerdon tungsten and tin project ("the Project") in Devon, in southwest England.
The new Ore Reserve is 35.7Mt at 0.18% WO(3) and 0.03% Sn (reported above a 0.05% W (0.063% WO(3) ) cut-off), and is a 34% increase on the previous Ore Reserve reported in the Definitive Feasibility Study ("DFS") in 2011. It comes as a result of a six hole geotechnical drilling program which targeted the perimeter of the open pit, completed in Q4, 2014 (refer announcement dated 1 December 2014).
Consistent with Wolf's expansion plans for the Project, the drilling program was designed to better understand the strength of the wall rocks with a view to steepening the final pit slope, resulting in a deeper open pit and increased Ore Reserves.
The program has been successful and concluded that the pit walls can be steepened. This has resulted in a new pit design that takes the pit floor approximately 65 metres deeper, increasing the Ore Reserves by 34% (detailed in Table 1 below). This equates to a 34% increase in mine life or around three years (assuming a five and a half day working week).
Table 1 - Table showing 2015 Ore Reserves compared to the previous 2011 DFS Ore Reserves
Hot Features
Premium
Reserve Tonnage WO(3) Sn
Category (Mt) (%) (%)
---------- -------- ------ -----
2011 DFS Proved 23.5 0.19 0.03
-------------
Probable 3.2 0.18 0.03
Total 26.7 0.19 0.03
------------------------ -------- ------ -----
2015 Update Proved 27.9 0.19 0.03
-------------
Probable 7.8 0.15 0.02
Total 35.7 0.18 0.03
------------------------ -------- ------ -----
Commenting on the increased Ore Reserves, Russell Clark, Managing Director of Wolf, said:
"This is very pleasing news. A 34% increase in the Ore Reserves, which has resulted from steepening the open pit walls within the existing planning permission boundary, is effectively an increase in mine life of 34% or around three years, assuming a five and a half day working week. This is the next stage of optimising the Drakelands Mine, and comes ahead of commencing operations at the new process plant. The Project remains on schedule and is fully funded and commissioning of some of the installed equipment has commenced, with a view to introducing ore into the plant in July 2015."
The geotechnical report was prepared by Mr Ricky Collins of SLR Consultants. SLR has particular expertise in the geotechnical investigation, analysis and design of rock slopes of mines, tips, landfills and dams. Mr Collins is a Technical Director of SLR with over 25 years' experience with mine waste management and geotechnics, focusing on the stability analysis of both soil and rock slopes.
A typical cross section of the open pit may be viewed on the company's website (www.wolfminerals.com.au), and shows the increased Ore Reserve that has resulted from steepening the pit walls.
The increase in pit depth is such that it extends into Inferred material below the bottom of the majority of the drill holes in the deposit. As such the current pit design includes granite mineralisation that cannot be reported as Ore Reserves under JORC 2012 guidelines. However, Wolf intends to undertake additional work to increase the confidence of the resource at depth, resulting in the potential to further increase the 2015 Ore Reserves detailed in Table 1 above and further extend the mine life.
The 2015 revised Ore Reserve is based on work done by Mr Rick Taylor, who is a Chartered Professional Member of The Australasian Institute of Mining and Metallurgy. Mr Taylor is a full time employee of Wolf Minerals Limited, and takes responsibility for the Ore Reserves. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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" (JORC, 2012). Mr Taylor consents to the inclusion of Table 1 based on his information in the form and context in which it appears.
Summary of Information to Support Ore Reserve Estimates
Ore Reserve Estimate upgrades for the Hemerdon Project are supported by the JORC Table 1 (Section 4) document provided in Appendix 1 of this announcement and located at www.wolfminerals.com.au. The following summary of information for Ore Reserve Estimates is provided in accordance with Chapter 5.9 of ASX Listing Rules.
Economic assumptions
Economic viability is indicated by cash flow modelling for the full operation over the life of the mine that shows positive net present value with positive annual cash flows during production years. In some scenarios, cash flows may be negative over short periods when capital investments are planned which lead to increasing the net present value. Revenues are forecasted from scheduled tungsten and tin concentrate production, expected prices and anticipated foreign exchange rates.
Forecasted costs include mining and processing as well as all aspects of site support and corporate overhead including marketing and mine closure. A schedule of planned capital investment is also included for ongoing mine development and for sustaining the operation and its assets. Taxation modelling reflects applicable current tax laws including the treatment of capital investment and asset depreciation.
Criteria used for classification
The stated Proved and Probable Ore Reserves are derived from the Measured and Indicated Mineral Resources respectively, after consideration of all mining, metallurgical, social, environmental and financial aspects of the project. There are no Inferred Resources or unclassified materials included in the stated reserve numbers.
Mining method and mining assumptions, including mining recovery and mining dilution factors
The Ore Reserves have been calculated using a detailed final pit design derived from the results of an open pit optimisation study. These include the latest geotechnical pit slope angles, operational costs, processing data and marketing information. The open pit mining method was defined in the DFS and is still applicable. The orebody outcrops on surface over its entire strike length and within the current planning permission boundary (mining lease). No pre-strip or waste mining is necessary other than for infrastructure construction purposes.
No additional mining dilution or mining recovery factors have been applied to the pit optimisation as these are largely accounted in the Uniform Conditioning recoverable resource methodology used in the formulation of the current resource model.
Cut-off grades
Cut-off grades have been calculated based upon current and forecast revenue, costs and modifying factors predicted for a period of three years. The cut-off calculation includes all operating costs associated with the extraction, processing and marketing of ore material. Individual cut-off grades have been calculated for both weathered granite and fresh granite mineralised zones. In both cases a tungsten (W) cut-off has been applied which has been calculated by inclusion of tin credits.
Processing methods selected and other processing assumptions
The concentration of the granite ore is by traditional crushing, milling, dense medium separation and floatation processes. The plant design is based upon previous metallurgical test work and assumptions detailed in the DFS. The following metallurgical recovery factors have been applied:
Weathered granite: WO(3) - 57.6%, Sn - 65.0%
Fresh granite: WO(3) - 65.7%, Sn - 55.1%
The current grade control drilling has shown deleterious elements to be minimal in the granite ore but present along the granite contact. Provision has been included in the processing plant design for the removal of contaminants as required to produce concentrates to the required specification.
Estimation methodology
The resource model used for pit optimisation was developed by SRK Consulting (Perth Office) in 2010. This model is still current and forms the basis of the 2015 Mineral Resource Estimate stated below. The processing plant recovery and cost assumptions are taken from the DFS and are still applicable. Processing is due to commence in the 3(rd) quarter of 2015. Mining costs have been revised in line with the current mining services contract that has been in place since site construction commenced at the start of 2014. The US$:GBP exchange rate and the W and Sn metals prices were updated in line with the three year forecast. Grade control costs are actuals from the current grade control programme on site. Selling costs, marketing costs and royalties used in the optimisation have been agreed contractually. A discount rate of 8% has been used in this update for cash flow calculation purposes.
Material modifying factors
The material modifying factors applicable to mining are the mining dilution and metallurgical recovery detailed above. Excavation in the pit and geological mapping are supporting the validity of the resource model to a high degree of confidence.
The Project is in compliance with all its environmental and other regulatory requirements.
Minerals Resource Estimate - JORC 2012 Compliant
Wolf also provides a new Mineral Resource Estimate for the Hemerdon project. The previous Mineral Resource Estimate (401.4 million tonnes at 0.13% WO(3) , 0.02% Sn), reported in the DFS of 2011, was compliant with the JORC 2004 code. The JORC code was updated in 2012 and Wolf now provides this revised Mineral Resource Estimate, compliant with the new code.
The revised Mineral Resource Estimate is detailed in Table 2 below:
Table 2 - Hemerdon Project Mineral Resource Estimate, JORC 2012
Mineral Resources Tonnage WO(3) Sn
(Mt) Grade Grade
(%) (%)
Measured 39.9 0.18 0.02
Indicated 18.7 0.16 0.02
Subtotal: Measured + Indicated 58.6 0.17 0.02
Inferred 86.6 0.14 0.02
-------------------------------- -------- ------- -------
Total: Measured + Indicated
+ Inferred 145.2 0.15 0.02
-------------------------------- -------- ------- -------
It is reported above a 0.05% W (0.063% WO(3) ) cut-off and is based on work done by Mr Daniel Guibal, who is a Chartered Professional Fellow of The Australasian Institute of Mining and Metallurgy. Mr Guibal is employed by SRK Consulting and takes responsibility for the Mineral Resource Estimate. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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" (JORC, 2012). Mr Guibal consents to the inclusion of Table 2 based on his information in the form and context in which it appears.
There has been no new data relevant to the resource since the 2010 estimation and the broader mineral inventory remains unchanged.
In order to establish the conformity of the current resource with JORC Code 2012, SRK prepared the Table 1 of the Code (Checklist of Assessment and Reporting Criteria), which shows that all aspects of the resource estimation were covered in 2010.
The reduction in resources is related to the "prospect for eventual economic extraction". The historic metallurgical testwork indicated that recovery of tungsten within the Killas (the meta-sedimentary rocks surrounding the granite body) was possible. However, no further testwork has been completed at this time. Accordingly, Wolf currently considers it prudent to exclude the Killas hosted mineralisation from the resources, to be revisited in the future. Therefore only the granite portion of the resource has been considered.
Once the mine is operational Wolf will look at the metallurgical opportunities available with the Killas, such that it may be available to be included in future Mineral Resource Estimates.
Summary of Information to Support Mineral Resource Estimates
Mineral Resource Estimate upgrades for the Hemerdon Project are supported by the JORC Table 1 (Sections 1 to 3) document provided in Appendix 1 of this announcement and also located at www.wolfminerals.com.au.The following summary of information for Mineral Resource Estimates is provided in accordance with Chapter 5.8 of ASX Listing Rules.
Geology and geological interpretation
The geology of the Hemerdon deposit comprises of a granite intruded into a series of weakly metamorphosed siltstones, locally called Killas. Associated with the intrusion of the granite are a series of greisen veins (quartz and mica) which contain cassiterite and wolframite. Although principally in the granite these veins also occur in the host Killas. Surficial weathering of the granite has altered the primary quartz, feldspar, muscovite assemblage to clay minerals, mainly kaolinite, and remnant quartz (weathered granite).
The 2010 geological model used a geological map and two geological sections from the 1980 feasibility study by AMAX combined with reviewed survey data, AMAX original logging from 45 diamond holes as well as the results of the 2008 drilling campaign.
A different geological interpretation, if used in the resource estimate, may affect the results of the resource estimate slightly, however, changes in interpretation are likely to translate into only small changes in the geological model (local changes in the contacts between lithologies).
Drilling techniques
The original AMAX drilling was completed in 5 phases and included diamond drilling (single tube and wireline), reverse circulation drilling and air-flush percussion drilling. There were 416 percussion holes (8,022 m), 39 Reverse Circulation holes (3,596 m) and 77 HQ diamond drillholes (13,782m), that is a total of 532 holes for 25,400 m. The holes were drilled on a 50 m x 50 m pattern orientated with respect to the mineralised sheeted vein system. Hole inclination was in general -60deg. Most of the DD holes were drilled to a maximum of 20 -30 m below sea level.
In 2008, Wolf Minerals drilled 6 inclined diamond drillholes (1,064 m), dipping -60deg and targeting essentially the contact granite-sediments (killas). This drilling confirmed results from the earlier Amax work.
Sampling and sample analysis method
The historical AMAX sampling and sample preparation procedures were under the direction and control of Professor. Michel David, a very reputable geostatistician,
Sample preparation for the diamond drill cores included the following steps: 3m long samples are cut in half, with one half retained, the other crushed to -1/2". The sample is further crushed down to 1.7-3.0mm before being riffle split to 1kg. Coarse rejects are retained. The next step is milling in a Tema Mill down to 850 u. The sample is then coned and quartered to a 250 -300 g subsample which is milled (Tema Mill) to 250 u. After this, the sample is split into 3 packets of about 80 g each for analysis. The main assay techniques used were atomic absorption and X-ray fluorescence.
The check samples from the retained 1/2 cores taken by SRK Exploration in 2007 were prepared with the same protocol, with the exception of the final milling which was 100 u instead of 250 u. Assaying was performed by SGS Laboratories.
Wolf undertook a limited amount of drilling (6 diamond holes) in 2008. Half 3m cores were used for bulk density measurements, sampled and sent for assaying to Stewart Group OMAC Laboratories in Loughrea (Ireland) and the other half was sent to Australia for metallurgical testing. The preparation of the samples included the following steps; sample reduction to -2 mm by jaw crusher, riffle splitting followed by milling to 100 u, XRF assaying.
Criteria used for classification
The process used for classification is automatic. All 25 x 25 x 10 m blocks with regression slopes Z|Z* greater than 0.7 were classified as well estimated (S1). The classification is based on larger groups of blocks (125mX by 125mY by 30mZ) corresponding to meaningful production units.
A mathematical closing of S1 was performed: this was the basis of the definition of Measured + Indicated Resources (S1c). The results were manually edited to eliminate isolated blocks, as well as all blocks below RL -100 m. Blocks not classified as Measured or Indicated were classified Inferred.
Then within S1c, the blocks with a regression slope greater than 0.9 are chosen and smoothed through the same closing operation. After cleaning the resulting blocks are classified as Measured. The Indicated blocks are the ones belonging to S1c which are not classified as Measured.
Estimation methodology
The estimation technique for W is Uniform Conditioning using the specialised geostatistical software, Isatis. For Sn, Ordinary Kriging is used.
The various steps of the estimation are the following:
1) 309 drillholes are used, with 4,765 5 m composites, flagged by geology and weathering.
2) Declustering by 75 m x 75 m x 10 m cells. No top-cuts used, but restricted neighbourhood to limit impact of high values.
3) Variography of W and Sn within the three geological domains (granite, soft granite, killas). The continuity is generally good particularly in the granite, with maximum range around 500 m. Nevertheless nugget effect + short range structure represent over 60% of the total variability.
4) Block model based on 25 m x 25 m x 10 m panels. The panel sizes are chosen in relation to the average drilling density.
5) Ordinary Kriging estimation of panels, after neighbourhood analysis to optimise quality of kriging. Two kriging runs are used to fill the block model. In the first run up to 48 composites are used to estimate a panel, a topcut of 1% W (0.6% in the Killas) is applied to composites distant by over 8 m from the centroid of the panel being estimated.
6) Validation of Kriging results through statistics and swath plots. Quality of estimation of estimated panels measured by the slope of regression.
7) Uniform conditioning (UC) for 12.5 m x 12.5m x 5 m Selective Mining Units (SMU) for an open pit operation.
Currently there are no geostatistical estimations made on deleterious elements,
Cut off grades
Grade-tonnage curves were provided for a range of cut-offs. Optimal cut-off is determined from the mining studies.
Material modifying factors
The Drakelands Mine will be mined by open pit. The estimation method used (UC) takes into account the mining selectivity, based on an assumption of a 12.5 m x 12.5m x 5 m SMU. As a result the mining dilution and loss is incorporated in the resource.
Metallurgical tests by AMAX and in 2009 by GR Engineering Services indicate that a tungsten recovery of 57.6% can be achieved in the weathered granite and 65.7% for the fresh granite.
The mine is located within an environmentally sensitive area. Wolf engaged the Devon County Council early to update the existing 1986 planning permission. A modification order in January 2011 aligns the planning permission conditions to current ecological and environmental legislation. The project is in compliance with all its environmental and other regulatory requirements.
Definitions and Glossary
"DFS" the definitive feasibility study relating to the Hemerdon Tungsten and Tin Project, the findings of which were published by the Company on 16 May 2011 and available for review at www.wolfminerals.com.au
"JORC Code 2012" the Australasia Code for Reporting of Mineral Resources and Ore Reserves 2012 Edition which sets out the minimum standards, recommendations and guidelines for the Public Reporting of Exploration Results, Mineral Resources and Ore Reserves in Australasia.
"Inferred" as defined in the JORC Code 2012, is that part of a mineral resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
"Indicated" as defined in the JORC Code 2012, is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.
"Measured" defined in the JORC Code 2012, as that part of a measured Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.
"Proved & Probable" the economically mineable part of a Measured or Indicated mineral resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could be reasonably justified. Ore reserves are sub-divided in order of increasing confidence into Probable and Proved.
Competent Persons Statement
The information in this report that relates to Mineral Resources is based on information compiled by Mr Daniel Guibal, who is a Chartered Professional Fellow of The Australasian Institute of Mining and Metallurgy. Mr Guibal is employed by SRK Consulting and takes responsibility for the Mineral Resource Estimate. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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" (JORC, 2012). Mr Guibal consents to the inclusion of his information in the form and context in which it appears.
The 2015 revised Ore Reserve is based on work done by Mr Rick Taylor, who is a Chartered Professional Member of The Australasian Institute of Mining and Metallurgy. Mr Taylor is a full time employee of Wolf Minerals Limited, and takes responsibility for the Ore Reserves. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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" (JORC, 2012). Mr Taylor consents to the inclusion of his information in the form and context in which it appears.
ENDS
Russell Clark, Managing Director
Email: managingdirector@wolfminerals.com.au
The Company's web site has time lapse photography showing both the processing plant site and mine site which can be seen at:
http://www.wolfminerals.com.au/hemerdon-tungsten-and-tin-project/live-stream
Wolf Minerals Limited Russell Clark +61 8 6364 3776 Numis Securities John Prior/James Black/Paul Gillam +44(0)20 7260 1000 Newgate Tim Thompson / Adam Lloyd / Ed Treadwell / Helena Bogle +44 (0) 20 7653 9840
About Wolf Minerals
Wolf Minerals is a dual listed ("ASX: WLF", "AIM: WLFE") specialty metals company. With global demand for tungsten rising and future global production expected to be constrained, Wolf Minerals is developing the third largest global tungsten resource at its Hemerdon project, located in southwest England. The Company has strong cornerstone investors and project finance and environmental permitting is in place. Wolf has also secured all major contracts for the project, with GR Engineering appointed as the EPC contractor and CA Blackwell being awarded the Mining contract. Production is expected to commence in mid-2015.
APPENDIX 1 - JORC Code, 2012 Edition - Table 1 Report - Hemerdon Tungsten Deposit
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary
Sampling
techniques * Nature and quality of sampling (eg cut channels, * The historical AMAX samples taken during the
random chips, or specific specialised industry 1976-1980 period were assayed essentially by three
standard measurement tools appropriate to the analytical companies: Robertson Research
minerals under investigation, such as down hole gamma International, Huntings Technical Surveys Ltd and
sondes, or handheld XRF instruments, etc). These Alfred H. Knight Ltd. Most of the diamond drill core
examples should not be taken as limiting the broad assaying was done by Alfred H. Knight.
meaning of sampling.
* Sampling and sample preparation procedures were under
* Include reference to measures taken to ensure sample the direction and control of Prof. Michel David, a
representivity and the appropriate calibration of any very reputable geostatistician,
measurement tools or systems used.
* Sample preparation for the diamond drill cores
* Aspects of the determination of mineralisation that included the following steps: 3m long samples are cut
are Material to the Public Report. in half, with one half retained, the other crushed to
-1/2". The sample is further crushed down to
1.7-3.0mm before being riffle split to 1kg. Coarse
* In cases where 'industry standard' work has been done rejects are retained. The next step is milling in a
this would be relatively simple (eg 'reverse Tema Mill down to 850 u. The sample is then coned and
circulation drilling was used to obtain 1 m samples quartered to a 250 -300 g subsample which is milled
from which 3 kg was pulverised to produce a 30 g (Tema Mill) to 250 u. After this, the sample is split
charge for fire assay'). In other cases more into 3 packets of about 80 g each for analysis.
explanation may be required, such as where there is
coarse gold that has inherent sampling problems.
Unusual commodities or mineralisation types (eg * Main assay techniques are atomic absorption and X-ray
submarine nodules) may warrant disclosure of detailed fluorescence.
information.
* The check samples from the retained 1/2 cores taken
by SRK Exploration in 2007 were prepared with the
same protocol, with the exception of the final
milling which was 100 u instead of 250 u. Assaying
was performed by SGS Laboratories.
* Wolf Minerals undertook a limited amount of drilling
(6 diamond holes) in 2008. Half 3m cores were used
for bulk density measurements, sampled and sent for
assaying to Stewart Group OMAC Laboratories in
Loughrea (Ireland) and the other half was sent to
Australia for metallurgical testing. The preparation
of the samples included the following steps; sample
reduction to -2 mm by jaw crusher, riffle splitting
followed by milling to 100 u, XRF assaying.
Drilling
techniques * Drill type (eg core, reverse circulation, open-hole * AMAX drilling was done in 5 phases and included
hammer, rotary air blast, auger, Bangka, sonic, etc) diamond drilling (single tube and wireline), reverse
and details (eg core diameter, triple or standard circulation drilling and air-flush percussion
tube, depth of diamond tails, face-sampling bit or drilling. There were 416 percussion holes (8022 m),
other type, whether core is oriented and if so, by 39 Reverse Circulation holes (3596 m) and 77 HQ
what method, etc). diamond drillholes (13782m), i.e a total of 532 holes
for 25400m. The holes were drilled on a 50 m x 50 m
pattern orientated with respect to the mineralised
sheeted vein system. Hole inclination was in general
-60deg. Most of the DD holes were drilled to a
maximum of 20 -30 m below sea level
* As indicated above, in 2008, Wolf Minerals drilled
through the local contractor Hydrock 6 inclined
diamond drillholes (1064 m), dipping -60deg and
targeting essentially the contact granite-sediments
(killas).
* The holes do not appear to have been orientated
* A trenching programme took place starting in 1978, to
investigate the structure and the geometry of the
sheeted vein system, Sixteen trenches were dug across
the granite outcrop.
Drill sample
recovery * Method of recording and assessing core and chip * For the AMAX samples no recovery information is
sample recoveries and results assessed. available, but 1/2 cores of the diamond drilling were
generally stored and are available for inspection.
They are in variable condition after 30 years'
storage, and were reviewed by SRK Exploration in
2007. The upper part of the granite is heavily
kaolinised ("soft granite") and crumbling, but the
use of relatively large diameter holes helped the
* Measures taken to maximise sample recovery and ensure recovery.
representative nature of the samples.
* In the 2008 drilling, one of the drill rigs (track
mounted Casagrande C6) used a large diameter (102 mm)
Geobore S core-barrel to improve recovery in the
weathered kaolinised section of the orebody.
* Whether a relationship exists between sample recovery
and grade and whether sample bias may have occurred
due to preferential loss/gain of fine/coarse * Recovery was excellent in the fresh material.
material.
* The AMAX documentation as well as the 2008 drilling
do not suggest any relationship between sample
recovery and grade. There is no indication of bias
due to recovery issues.
Logging
* Whether core and chip samples have been geologically * The exploration work by AMAX was conducted to a high
and geotechnically logged to a level of detail to standard, and paper logs were created for most holes.
support appropriate Mineral Resource estimation, SRK Exploration relogged the diamond drillholes in
mining studies and metallurgical studies. 2007, at a time where the original AMAX logs were not
available, and found no major issue. The original and
revised logs were used to build the geological model,
essentially by allowing to model the contacts between
the relevant lithologies (granite/soft
granite/killas).
* Whether logging is qualitative or quantitative in
nature. Core (or costean, channel, etc) photography.
* The original logging was essentially qualitative, so
was the logging of the 2008 campaign
* The total length and percentage of the relevant
intersections logged.
* In general, the holes were logged in their totality
Sub-sampling
techniques * If core, whether cut or sawn and whether quarter, * Sampling and sample preparation was described above
and sample half or all core taken. under 'sampling techniques'.
preparation
* If non-core, whether riffled, tube sampled, rotary * Samples were dried before splitting.
split, etc and whether sampled wet or dry.
* For all sample types, the nature, quality and
appropriateness of the sample preparation technique. * It is considered that all sub-sampling and lab
preparations are satisfactory for the intended
purpose.
* Quality control procedures adopted for all
sub-sampling stages to maximise representivity of * The AMAX sampling procedures were under the control
samples. of an expert geostatistician Prof Michel David and
are considered as adequate for the purpose.
* Measures taken to ensure that the sampling is * Details of the QA/QC procedures are described in the
representative of the in situ material collected, next paragraph.
including for instance results for field
duplicate/second-half sampling.
* The sample size (3m for the diamond drillholes) is
considered as appropriate for the type of material
* Whether sample sizes are appropriate to the grain being sampled.
size of the material being sampled.
Quality
of assay * The nature, quality and appropriateness of the * The assaying techniques were described above under
data and assaying and laboratory procedures used and whether 'sampling techniques'
laboratory the technique is considered partial or total.
tests
* For geophysical tools, spectrometers, handheld XRF * SRK did not have access to the parameters used by the
instruments, etc, the parameters used in determining laboratories, but the QA/QC programme results show
the analysis including instrument make and model, that there was no major issue.
reading times, calibrations factors applied and their
derivation, etc.
* Quality control procedures for AMAX included
* Nature of quality control procedures adopted (eg standards ("Worldwide controls) in each batch and 1
standards, blanks, duplicates, external laboratory in 20 samples was re-assayed ("check sample")
checks) and whether acceptable levels of accuracy (ie
lack of bias) and precision have been established.
* The 2007 resampling program of SRK exploration (891
samples) used the following QA/QC procedures:
Ø Standards: 2 certified Canadian
Reference Materials obtained from
the Canada centre for Mineral and
Energy Technology were used: BH-1
with a nominal value of 0.422% W
and MP-2 with nominal values of
0.65% W and 0.043%Sn. The results
indicate a problem with BH-1. They
are consistently lower than the
nominal value 0.422% W, which suggests
that this nominal value is wrong
and more likely close to 0.414%.
Another, less likely explanation
(because of the consistency of the
results) is that there is a systematic
bias of about 2.5% in the laboratory.
The variability of the results is
quite acceptable, higher for field
submissions than for laboratory
ones, as expected. As for MP-2,
for W, the results are mixed. While
the precision looks reasonable for
both Field and Laboratory standards,
there might be a bias of about 1.5%
in the laboratory results (The Field
results are on average correct).
For Sn, the accuracy looks reasonable,
the precision is not as good as
for W, with a number of values outside
the 2 standard deviations interval.
This may simply be a consequence
of the low grade of the standard.
Ø Pulp and coarse duplicates:
around 1 in 10 samples, either after
initial crushing (coarse duplicates)
or at the laboratory (pulp duplicates).
The results are good for both duplicates,
better for pulp duplicates as expected:
no bias is apparent, and the precision
is reasonable.
* The 2008 programme used the same QA/QC procedures as
the 2007 one with satisfactory results for both
standards and duplicates. In addition, 1 in 50
samples was used for screen testing with over 90%
passing 100 u.
Verification
of sampling * The verification of significant intersections by * In 2007, as already mentioned, SRK Exploration
and assaying either independent or alternative company personnel. undertook a programme of relogging of all the AMAX
diamond drillholes. 10 to 15% of the re-logged holes
(891 samples taken from the remaining half cores of
16 drillholes) were then re-sampled and assayed. The
re-sampled drillholes were selected so that all
existing sections were represented if possible (i.e
half cores could be found and were usable). The
selected drillholes are:
DDH1011 DDH1015 DDH1019 DDH1026
DDH1027 DDH1034 DDH1035 DDH1037
DDH1040 DDH1042 DDH1043 DDH1060
DDH1063 DDH1064 DDH1066 DDH1068
The sample preparation was similar
to the original AMAX one with the
exception of the final crushing
to 100 u instead of 250 u.
* Comparisons between the original AMAX assay results
and the re-assays show poor correlation, particularly
for higher grade values. The divergence in the higher
grade data was confirmed by considering only grades
less than 1% WO(3) , which improved the correlation.
A plausible explanation is that over time the higher
grade remaining sections of the cores were taken for
use as examples, so called niche sampling. Most of
this is undocumented which means that these high
grade samples are no longer accessible.
* The use of twinned holes.
* In order to get some more insight into the issue, it
was decided to make comparisons by geological domain.
To that effect, the original mostly 3m samples were
composited downhole into 5m composites and
* Documentation of primary data, data entry procedures, comparisons between AMAX assays and re-assays were
data verification, data storage (physical and carried out within each geological domain. The
electronic) protocols. composites show lower bias than the 3m samples,
probably due to the smoothing of the high grades.
Arbitrarily removing the 5% highest original
composites for all geological domains, the bias is
either reduced or reversed. For the Granite, where
* Discuss any adjustment to assay data. most of the resource can be found, the bias of the
new composites changed from -5.6% to +2.1%.
* It is therefore reasonable to accept that the new
data are probably biased low, in particular where the
original samples were high-grade. "Niche" sampling
seems to have played a significant role in this
result.
* In conclusion, the logical course of action for the
resource estimation was to ignore the new assay
results and to work with the original values
exclusively.
* No holes were twinned.(the re-logging and re-sampling
of existing holes was considered a better approach at
the time)
* The AMAX and 2008 data are well documented, and
stored in electronic format. The original AMAX data
procedures are not known, but AMAX was a very
reputable company.
* No adjustment was made to assay data.
Location
of data * Accuracy and quality of surveys used to locate drill * The original survey data by AMAX are available, so
points holes (collar and down-hole surveys), trenches, mine are the checks made by AMAX
workings and other locations used in Mineral Resource
estimation.
* In 2008, the drillhole collar survey was conducted by
Paul Fassam Geomatics (chartered land surveyor). They
validated the site datum using GPS, recorded the
collar locations of the new exploration holes as well
as the dip and dip direction of the holes. There was
doubt about the reliability of the survey on one hole
(WDD001), and for that reason this hole was not used
* Specification of the grid system used. in the resource estimation.
* The project survey uses the National Grid and the
Ordnance Datum Newlyn near Penzance in Cornwall. The
AMAX study and design was based on a local grid. The
data was transformed to the national Grid by Expedio,
* Quality and adequacy of topographic control. a geo-science information management company. The
transformation was created by comparing known points
in the local grid and the National Grid rather than
relying on AMAX definitions of the local grid.
* The topographic data appear adequate and reliable.
Data spacing
and * Data spacing for reporting of Exploration Results. * No exploration results, resource drilling only.
distribution
* Whether the data spacing and distribution is * The data spacing and distribution (diamond drilling
sufficient to establish the degree of geological and grids on average of 50m x 50 m) has been considered
grade continuity appropriate for the Mineral Resource appropriate for the Mineral Resource estimation
and Ore Reserve estimation procedure(s) and procedures and classifications applied to this
classifications applied. Hemerdon estimation by the external consultant doing
the resource. See below in resource section for
further information.
* Whether sample compositing has been applied.
* Sample compositing to 5 m composites has been applied
to the mostly 3 m samples, because 5 m is the assumed
bench height in the study and the Selective Mining
Units considered are 5 m high.
Orientation
of data * Whether the orientation of sampling achieves unbiased * The drillhole orientation is such that the majority
in relation sampling of possible structures and the extent to of veins are intersected at approximately right
to which this is known, considering the deposit type. angles, so no bias is likely to generated by the
geological drilling
structure
* If the relationship between the drilling orientation
and the orientation of key mineralised structures is * As indicated, the drillhole orientation is such that
considered to have introduced a sampling bias, this no sampling bias is generated by the drilling.
should be assessed and reported if material.
Sample
security * The measures taken to ensure sample security. * For the historical data, sample security is not
documented, but AMAX is a very reputable company, and
there is no reason for suspecting security issues.
Audits
or reviews * The results of any audits or reviews of sampling * SRK Exploration reviewed the AMAX drilling in 2007,
techniques and data. and found no major issues.
============= =============================================================== =================================================================
Section 2 Reporting of Exploration Results
NOT APPLICABLE TO THIS RESOURCE UPDATE
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Database
integrity * Measures taken to ensure that data has not been * The database of the AMAX drilling was compiled from
corrupted by, for example, transcription or keying the written records and thoroughly checked for
errors, between its initial collection and its use transcription errors.
for Mineral Resource estimation purposes
* More recent drilling data were captured
electronically, and checked carefully.
* Data validation procedures used.
* SRK Exploration did a thorough review of the logging
data as well as the historical assays. The final
database itself was checked routinely for overlapping
samples, survey errors, transcription problems, etc
Site visits
* Comment on any site visits undertaken by the * SRK Exploration did a significant amount of work at
Competent Person and the outcome of those visits. Hemerdon, so that the competent person responsible
for the resource estimate, Daniel Guibal, did not
require a site visit, relying on the work of his SRK
* If no site visits have been undertaken indicate why Exploration colleagues for the geological aspects of
this is the case. the resource estimation.
Geological
interpretation * The use of geology in guiding and controlling Mineral * The original 2008 model was essentially based on the
Resource estimation. simple geological map and two geological sections
from the 1980 feasibility study by AMAX, combined
with lithological logging information from 45 diamond
holes
* The geology of the Hemerdon deposit comprises of a
granite intruded into a series of weakly
metamorphosed siltstones, locally called Killas.
Associated with the intrusion of the granite are a
series of greisen veins (quartz and mica) which
contain cassiterite and wolframite. Although
principally in the granite these veins also occur in
the host Killas. Surficial weathering of the granite
has altered the primary quartz, feldspar, muscovite
assemblage to clay minerals, mainly kaolinite, and
remnant quartz. The geological modelling aimed to
delimit the boundary of the granite and the depth of
weathering (locally the weathered material is called
soft granite). It was not considered viable to model
individual greisen veins. Georeferencing of the
geology plan and sections was completed in gOcad. The
plan had coordinates marked on which were assumed to
be the local Ordinance Survey (GB) grid. The sections
has RL marked on but their lateral position and angle
was estimated from drillhole positions marked on the
sections. Granite-Killas contacts and Hard
Granite-Soft Granite contacts were digitised from the
sections and extracted from existing logging. These
data were combined to form surfaces for the east and
west granite contacts and base of weathering.
* The final 2010 geological model used reviewed survey
data, AMAX original logging as well as the results of
the 2008 drilling campaign.
* Confidence in (or conversely, the uncertainty of) the
geological interpretation of the mineral deposit.
* Granite contacts: The east and west granite contacts
are well logged in the drilling. Each pierce point
was digitised in LeapfrogTM. A series of interpretive
data was also digitised to control the surfaces away
from the data. Both data were then merged and a
* Nature of the data used and of any assumptions made. surface created. These surfaces were then snapped to
the pierce points. A granite solid was created using
the domain function and the resulting wireframe
exported.
* The effect, if any, of alternative interpretations on
Mineral Resource estimation.
* Hard - Soft granite: Inspection of the logging
suggested this contact was highly complex. However,
it appears that in capturing the original AMAX
logging, any mention of kaolin resulted in a KGR
logging code. In practice the hard - soft boundary
* The factors affecting continuity both of grade and represents the transition from completely kaolinised
geology. (i.e. crumbles in your hand) to more competent
granite, even if the feldspars are partially
kaolinised. It was decided to use the previous
surface as a guide as this did not use the summary
AMAX logging. The surface was constructed in the same
way as the granite contacts and suitable domains
created.
* Weathering: To assist in mine planning two weathering
surfaces were built. In a similar way to the
kaolinised boundary the logging of weathering was
highly subjective and therefore quite variable. A
'smoothing' approach was taken to these surfaces.
Where contacts appear reasonable they were used,
otherwise interpretive boundaries were digitised.
Surfaces for 'Base of Completely Oxidised' and 'Base
of moderate Weathering' were created. No surface for
'top of fresh' was created as significant numbers of
holes ended in 'slightly weathered'. The created
surfaces were used to construct solids for the
purposes of flagging the block model.
* The current geological model appears fairly robust,
as the contacts are generally well defined, the limit
between soft and hard granite being the more subject
to interpretation.
* See above
* A different geological interpretation, if used in the
resource estimate, may affect the results of the
resource estimate slightly, however, changes in
interpretation are likely to translate into only
small changes in the geological model (local changes
in the contacts between lithologies).
* Grade Continuity can be affected by numerous factors,
including drilling density, which is about 50 m x 50
m, nugget effect, itself linked to the
sampling/assaying procedures and geological
continuity, which is reasonably established at
Hemerdon.
Dimensions
* The extent and variability of the Mineral Resource * The Hemerdon deposit extends over 1 km along strike,
expressed as length (along strike or otherwise), plan 600 m across and about 500m vertically
width, and depth below surface to the upper and lower
limits of the Mineral Resource.
Estimation
and modelling * The nature and appropriateness of the estimation * The estimation technique for W is Uniform
techniques technique(s) applied and key assumptions, including Conditioning using the specialised geostatistical
treatment of extreme grade values, domaining, software, Isatis. For Sn, Ordinary Kriging is used.
interpolation parameters and maximum distance of The various steps of the estimation are the
extrapolation from data points. If a computer following:
assisted estimation method was chosen include a
description of computer software and parameters used.
1) 309 drillholes are used, with
4765 5 m composites, flagged by
geology and weathering
2) Declustering by 75 m x 75 m x
10 m cells. No top-cuts used, but
restricted neighbourhood to limit
impact of high values.
3) Variography of W and Sn within
the three geological domainjs (granite,
soft granite, killas). The continuity
is generally good particularly in
the granite, with maximum range
around 500 m. Nevertheless nugget
effect + short range structure represent
over 60% of the total variability
4) Block model based on 25 m x 25
m x 10 m panels. The panel sizes
are chosen in relation to the average
* The availability of check estimates, previous drilling density
estimates and/or mine production records and whether 5) Ordinary Kriging estimation of
the Mineral Resource estimate takes appropriate panels, after neighbourhood analysis
account of such data. to optimise quality of kriging.
Two kriging runs are used to fill
the block model. In the first run
up to 48 composites are used to
* The assumptions made regarding recovery of estimate a panel, a topcut of 1%
by-products. W (0.6% in the Killas) is applied
to composites distant by over 8
m from the centroid of the panel
being estimated
* Estimation of deleterious elements or other non-grade 6) Validation of Kriging results
variables of economic significance (eg sulphur for through statistics and swath plots.
acid mine drainage characterisation). Quality of estimation of estimated
panels measured by the slope of
regression
7) Uniform conditioning (UC) for
* In the case of block model interpolation, the block 12.5 m x 12.5m x 5 m Selective Mining
size in relation to the average sample spacing and Units (SMU), which is a realistic
the search employed. assumption for a future Open Pit
operation.
.
* Previous resource estimates were performed in 2008 by
* Any assumptions behind modelling of selective mining SRK - Mr Daniel Guibal
units.
* Both W and Sn grades are estimated
* Any assumptions about correlation between variables.
* Description of how the geological interpretation was * Currently there are no geostatistical estimations
used to control the resource estimates. made on deleterious elements,
* Discussion of basis for using or not using grade
cutting or capping. * See above
* The process of validation, the checking process used,
the comparison of model data to drill hole data, and * See above
use of reconciliation data if available.
* The correlation between W and Sn is poor
* See above
* See above
* See above
Moisture
* Whether the tonnages are estimated on a dry basis or * The tonnage are estimated using a constant dry
with natural moisture, and the method of density per lithology, based on the average value of
determination of the moisture content. existing measurements: 2.50 for granite, 2.15 for
soft granite and 2.85 for Killas
Cut-off
parameters * The basis of the adopted cut-off grade(s) or quality * Grade-tonnage curve are provided for a range of
parameters applied. cut-offs. Optimal cut-off is determined from the
mining studies.
Mining
factors * Assumptions made regarding possible mining methods, * Hemerdon will be mined by open pit
or assumptions minimum mining dimensions and internal (or, if
applicable, external) mining dilution. It is always
necessary as part of the process of determining * The estimation method used (UC) takes into account
reasonable prospects for eventual economic extraction the mining selectivity, based on an assumption of a
to consider potential mining methods, but the 12.5 m x 12.5m x 5 m SMU. As a result a large part of
assumptions made regarding mining methods and the mining dilution and loss is incorporated in the
parameters when estimating Mineral Resources may not resource. Further dilution, not taken into account,
always be rigorous. Where this is the case, this would be due to the mining method itself: the
should be reported with an explanation of the basis geometry of the blocks is never perfectly regular,
of the mining assumptions made. occasioning some mixing with the surrounding waste.
Metallurgical
factors * The basis for assumptions or predictions regarding * Metallurgical tests by AMAX and in 2009 by GR
or assumptions metallurgical amenability. It is always necessary as Engineering Services indicate that a tungsten
part of the process of determining reasonable recovery of 58% can be achieved in the soft granite
prospects for eventual economic extraction to and 66% for the granite.
consider potential metallurgical methods, but the
assumptions regarding metallurgical treatment
processes and parameters made when reporting Mineral * Results of the metallurgical tests indicate that
Resources may not always be rigorous. Where this is recovery of W in the Killas is very low (4%), which
the case, this should be reported with an explanation explains why the killas are excluded from the
of the basis of the metallurgical assumptions made. resources.
Environmental
factors * Assumptions made regarding possible waste and process * The future mine is located within an environment
or assumptions residue disposal options. It is always necessary as sensitive area. Wolf Minerals engaged the Devon
part of the process of determining reasonable County Council early to update the existing 1986
prospects for eventual economic extraction to planning permission. A modification order in January
consider the potential environmental impacts of the 2011 aligns the planning permission conditions to
mining and processing operation. While at this stage current ecological and environmental legislation.
the determination of potential environmental impacts,
particularly for a greenfields project, may not
always be well advanced, the status of early * Important aspects to be considered are noise, dust,
consideration of these potential environmental vibration, discharge of surplus water, rainfall
impacts should be reported. Where these aspects have runoff, management of traffic movement and community
not been considered this should be reported with an consultation.
explanation of the environmental assumptions made.
Bulk density
* Whether assumed or determined. If assumed, the basis * Density measured by immersion methods on all the
for the assumptions. If determined, the method used, samples collected in the 2008 drilling campaign.
whether wet or dry, the frequency of the measurements,
the nature, size and representativeness of the
samples.
* The bulk density for bulk material must have been
measured by methods that adequately account for void
spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones within
the deposit.
* Discuss assumptions for bulk density estimates used
in the evaluation process of the different materials.
Classification
* The basis for the classification of the Mineral * The process used for classification is automatic.
Resources into varying confidence categories. Firstly, all 25 x 25 x 10 m blocks with regression
slopes Z|Z* greater than 0.7 were classified as well
estimated (S1). This limit is somewhat arbitrary, but
* Whether appropriate account has been taken of all a Z|Z* greater than 0.7 indicates little conditional
relevant factors (ie relative confidence in bias, thus a reasonable estimate, in SRK's opinion.
tonnage/grade estimations, reliability of input data,
confidence in continuity of geology and metal values,
quality, quantity and distribution of the data). * A classification based on individual blocks is
nonsensical (potentially producing the "spotted dog
effect" (Stephenson et al, 2006). The classification
* Whether the result appropriately reflects the is based on larger groups of blocks (125mX by 125mY
Competent Person's view of the deposit. by 30mZ) corresponding to meaningful production
units.
* A mathematical closing of S1 was performed: this was
the basis of the definition of Measured + Indicated
Resources (S1c). The results were manually edited to
eliminate isolated blocks, as well as all blocks
below RL -100 m. Blocks not classified as Measured or
Indicated were classified Inferred.
* Then within S1c, the blocks with a regression slope
greater than 0.9 are chosen and smoothed through the
same closing operation. After cleaning the resulting
blocks are classified as Measured. The Indicated
blocks are the ones belonging to S1c which are not
classified as Measured.
Audits
or reviews * The results of any audits or reviews of Mineral * There has been no external audit of this mineral
Resource estimates. resource estimate by SRK.
Discussion
of relative * Where appropriate a statement of the relative * As mentioned, the classification is essentially based
accuracy/ accuracy and confidence level in the Mineral Resource on the quality of kriging.
confidence estimate using an approach or procedure deemed
appropriate by the Competent Person. For example, the
application of statistical or geostatistical * There is clearly more uncertainty at the individual
procedures to quantify the relative accuracy of the panel level.
resource within stated confidence limits, or, if such
an approach is not deemed appropriate, a qualitative
discussion of the factors that could affect the * As current W recovery for the Killas is very low,
relative accuracy and confidence of the estimate. there is a case for excluding the Killas from the
resources, based on the "prospect for eventual
economic extraction".
* The statement should specify whether it relates to
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation
should include assumptions made and the procedures
used. * No production statistics available - not an operating
mine.
* These statements of relative accuracy and confidence
of the estimate should be compared with production
data, where available.
=============== =============================================================== =======================================================================
Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral
Resource * Description of the Mineral Resource estimate used as * The Ore Reserves estimate is based upon the Mineral
estimate a basis for the conversion to an Ore Reserve. Resource estimate carried out by Mr Daniel Guibal of
for conversion SRK Consulting (Perth) in March 2015.
to Ore
Reserves
* Clear statement as to whether the Mineral Resources * The Mineral Resources are reported inclusive of the
are reported additional to, or inclusive of, the Ore Ore Reserves.
Reserves.
Site visits
* Comment on any site visits undertaken by the * The Competent Person is a full time employee of Wolf
Competent Person and the outcome of those visits. Minerals and is based permanently on site.
* If no site visits have been undertaken indicate why
this is the case.
Study status
* The type and level of study undertaken to enable * Definitive Feasibility Study. The Mine infrastructure
Mineral Resources to be converted to Ore Reserves. and Mill is currently under construction. Excavation
of the open pit is underway.
* The Code requires that a study to at least
Pre-Feasibility Study level has been undertaken to
convert Mineral Resources to Ore Reserves. Such
studies will have been carried out and will have
determined a mine plan that is technically achievable
and economically viable, and that material Modifying
Factors have been considered.
Cut-off
parameters * The basis of the cut-off grade(s) or quality * Cut-off grades have been calculated based upon
parameters applied. current and forecast revenue, costs and modifying
factors predicted for a period of three years.
* The cut-off calculation includes all operating costs
associated with the extraction, processing and
marketing or ore material.
* Individual cut-off grades have been calculated for
both weathered granite and fresh granite mineralised
zones.
* In both cases a tungsten (W) cut-off has been applied
which has been calculated by inclusion of tin
credits.
Mining
factors * The method and assumptions used as reported in the * Ore reserves have been calculated using a detailed
or assumptions Pre-Feasibility or Feasibility Study to convert the final pit design derived from the results of an open
Mineral Resource to an Ore Reserve (i.e. either by pit optimisation study. The input parameters to the
application of appropriate factors by optimisation or optimiser were updated from the Definitive
by preliminary or detailed design). Feasibility Study during January 2015. These include
the latest geotechnical pit slope angles, operational
costs, processing data and marketing information.
* The choice, nature and appropriateness of the * The mining method (open pit) was defined in the
selected mining method(s) and other mining parameters Definitive Feasibility Study and is still applicable.
including associated design issues such as pre-strip, The orebody outcrops on surface over its entire
access, etc. strike length and within the current planning
permission boundary (mining lease). No pre-strip or
waste mining is necessary other than for
infrastructure construction purposes.
* The assumptions made regarding geotechnical
parameters (e.g. pit slopes, stope sizes, etc.), * The pit rim is constrained by the current planning
grade control and pre-production drilling. permission boundary. Recent pit optimisation
scenarios show that the optimal pit shell is confined
by this boundary and that the pit would grow beyond
the current planned size if this limitation were
removed.
* SLR consultants completed a six month geotechnical
study in February 2015. This recommended a set of
domained pit wall configurations falling within an
acceptable factor of safety. These have been used in
the recent pit optimisation study and as the basis
for detail pit design. Mining benches are 5m down to
* The major assumptions made and Mineral Resource model 20m below surface followed by 10m benches to 40m
used for pit and stope optimisation (if appropriate). below surface. From 40m down the benches will be 15m.
* An on-going grade control programme is currently
underway with the first 4.5Mt of ore currently
drilled out on a 12.5m x 12.5m grid and assays
composited over 5m vertical intervals. To date, grade
and lithological correlation with both the resource
model and the original exploration drilling programme
has been very good.
* The resource model used for pit optimisation was
* The mining dilution factors used. developed by SRK Consulting (Perth Office) in 2010.
This model is still current and forms the basis of
the 2015 Resource Statement issued by Mr Daniel
* The mining recovery factors used. Guibal of SRK Consulting (Perth Office).
* The processing plant recovery and cost assumptions
are taken from the Definitive Feasibility Study and
* Any minimum mining widths used. are still applicable. Processing is due to commence
in the 3(rd) quarter of 2015. Mining costs have been
revised in line with the current mining services
contract that has been in place since site
construction commenced at the start of 2014. The
* The manner in which Inferred Mineral Resources are US$:GBP exchange rate and the W and Sn metals prices
utilised in mining studies and the sensitivity of the were updated in January 2015 in line with the three
outcome to their inclusion. year forecast. Grade control costs are actuals from
the current grade control programme on site. Selling
costs, marketing costs, and royalties used in the
optimisation have been agreed contractually. A
discount rate of 8% has been used in this update for
cash flow calculation purposes.
* The infrastructure requirements of the selected
mining methods.
* No additional mining dilution or mining recovery
factors have been applied to the pit optimisation as
these are largely accounted in the Uniform
Conditioning (UC) recoverable resource methodology
used in the formulation of the current resource
model.
* A single "starter" pit and a final pit shell are
planned. A minimum bench mining width of 50m has been
used to optimise the size and shape of the Stage 1
pit.
* The inferred resource material contained within the
February 2015 detailed final pit design accounts for
only 2.1% of the mineable ore. The financial
viability of the project is not sensitive to the
exclusion of such a small percentage of inferred
material and for the purposes of this Ore Reserve
Statement this material has been considered waste.
* Infrastructure for the mining method is currently
installed or being installed and has been accounted
for in the project costing.
Metallurgical
factors * The metallurgical process proposed and the * The concentration of the granite ore is by
or assumptions appropriateness of that process to the style of traditional tried and tested crushing, milling, dense
mineralisation. medium separation and floatation processes. Arsenic
and Iron contaminants are removed from the
pre-concentrates by roasting and magnetic separation.
* Whether the metallurgical process is well-tested A separate WO3 and Sn concentrate will be produced.
technology or novel in nature.
* The mill has been designed and is currently being
constructed by GR Engineering Services. The design is
* The nature, amount and representativeness of based upon previous metallurgical test work and
metallurgical test work undertaken, the nature of the assumptions detailed in the DFS report and associated
metallurgical domaining applied and the corresponding appendices. The following metallurgical recovery
metallurgical recovery factors applied. factors have been applied: Weathered granite: WO3 -
57.6%, Sn - 65.0%; Fresh granite: WO3 - 65.7%, Sn -
55.1%.
* Grade control drilling has shown deleterious elements
to be minimal in the granite ore but present along
* Any assumptions or allowances made for deleterious the granite contact. Arsenic and iron introduced to
elements. the mill in the form of mining dilution from this
contact zone will be blended out to a minimum in the
ROM feed and then, if required, removed by a roaster
and magnetic separator.
* The existence of any bulk sample or pilot scale test * A full scale processing plant has been designed by GR
work and the degree to which such samples are Engineering and is currently under construction on
considered representative of the orebody as a whole. site.
* For minerals that are defined by a specification, has * Provision has been included in the processing plant
the ore reserve estimation been based on the design for the removal of contaminants as required to
appropriate mineralogy to meet the specifications? produce concentrates to the required specification.
Environmental
* The status of studies of potential environmental * Wolf Minerals have attained the required permits and
impacts of the mining and processing operation. planning permission to effectively operate the
Details of waste rock characterisation and the Drakelands Mine in accordance with its environmental
consideration of potential sites, status of design assessment.
options considered and, where applicable, the status
of approvals for process residue storage and waste
dumps should be reported. * Permits have been attained for protected species
disturbance, discharge of mine dewater, impoundment
and abstraction of water, mineral processing and the
construction and operation of the mine waste
facility. The comprehensive design of the mine waste
facility is regulated and incorporates material
characterisation and hydrogeological assessments.
* To the best of the competent person's knowledge all
sites for waste rock and process tailings are
compliant and their design and construction have
complied with all environmental regulations, permits
and recommendations.
Infrastructure
* The existence of appropriate infrastructure: * All infrastructure required for the processing and
availability of land for plant development, power, mining of ore is either in place or is currently
water, transportation (particularly for bulk under construction.
commodities), labour, accommodation; or the ease with
which the infrastructure can be provided, or
accessed.
Costs
* The derivation of, or assumptions made, regarding * All costs used in the generation of the Ore Reserve
projected capital costs in the study. have been based upon current modeling of the life of
mine plan and latest financial modeling.
* The methodology used to estimate operating costs. * Mining operating costs are based upon the current
mining services contract. Processing costs were taken
from the DFS having been developed by GR Engineering
Services who are currently constructing the process
plant on site.
* Allowances made for the content of deleterious
elements.
* Allowances for the cost of removing deleterious
elements are included in the plant operating costs.
* The derivation of assumptions made of metal or
commodity price(s), for the principal minerals and
co- products.
* Exchange rates used have been sourced from current
financial modeling data.
* The source of exchange rates used in the study.
* A revenue reduction factor for tungsten and tin has
* Derivation of transportation charges. been applied which includes all transport costs and
charges applicable to current marketing and off take
agreements.
* The basis for forecasting or source of treatment and
refining charges, penalties for failure to meet
specification, etc. * A revenue reduction factor of 4% of NSR has been
applied to account for all royalties payable to
investors and local land owners.
* The allowances made for royalties payable, both
Government and private.
Revenue
factors * The derivation of, or assumptions made regarding * Head grades have been directly derived from the 2015
revenue factors including head grade, metal or SRK Mineral Resource Estimate.
commodity price(s) exchange rates, transportation and
treatment charges, penalties, net smelter returns,
etc. * Revenue has been based upon a WO3 price of US$350/mtu
and a Sn price of US$20,000/t. A USD:GBP exchange
rate of 1.55 has been used. These figures are
* The derivation of assumptions made of metal or representative of available economic forecasts for
commodity price(s), for the principal metals, the period considered.
minerals and co-products.
Market
assessment * The demand, supply and stock situation for the * World tungsten production is required to grow by
particular commodity, consumption trends and factors around 3% per annum, rising from 80,000 tons in 2014
likely to affect supply and demand into the future. to 94,000 tonnes by 2019.
* A customer and competitor analysis along with the * Production in China is expected to remain flat or
identification of likely market windows for the drop slightly as domestic supply is constrained by
product. production quotas and increased control over illegal
mining.
* Price and volume forecasts and the basis for these
forecasts. * World tungsten demand is expected to increase by
around 4% per annum to around 95,000 tonnes by 2019.
The market is expected to be relatively balanced
* For industrial minerals the customer specification, between 2015 and 2018, but forecasting a transition
testing and acceptance requirements prior to a supply to a growing deficit from 2019. Prices are expected
contract. to strengthen during this period.
* Global Tungsten & Powders (GTP) and Wolfram Bergbau
und Hutten (WBH) have signed offtake agreements
accounting for 80% of tungsten production from the
Drakelands Mine. These offtake agreements run for
five years from September 2015 until November 2020.
* Considerable interest has been shown for the
remaining 20% of the tungsten concentrate from the
existing off-takers and from potential new customers.
* Test work has shown that the concentration of penalty
elements such as sulphur, arsenic and antimony will
all be within threshold limits.
* Traxys Corporation has signed an agreement to
purchase 100% of the tin concentrate. This agreement
runs for five years from the date of first delivery
of the concentrate and accounts for the entire annual
production.
* Pricing for the tin concentrate will be based upon
the LME cash price at the time of release of final
assay results.
Economic
* The inputs to the economic analysis to produce the * No separate NPVs have been generated as part of the
net present value (NPV) in the study, the source and Ore Reserves determination, however all material
confidence of these economic inputs including contained within the reserve is deemed to generate
estimated inflation, discount rate, etc. positive cash flow based on the economic input
parameters.
* NPV ranges and sensitivity to variations in the
significant assumptions and inputs. * A life of mine plan has been generated from the 2015
pit design. Analysis of the LOM physicals within the
current Wolf financial model has been shown to yield
a net positive NPV.
Social
* The status of agreements with key stakeholders and * To the best of the Competent Persons knowledge all
matters leading to social license to operate. agreements with the Devon County Council and local
landowners are in place and are current with all key
stakeholders.
Other
* To the extent relevant, the impact of the following * Wolf Minerals is currently compliant with all legal
on the project and/or on the estimation and and regulatory requirements. To the best of the
classification of the Ore Reserves: Competent Persons knowledge, there is no reason to
assume any government or local council permits,
licenses, or statutory approvals will not be granted
* Any identified material naturally occurring risks. prior to the scheduled commencement of production
operations.
* The status of material legal agreements and marketing
arrangements.
* The status of governmental agreements and approvals
critical to the viability of the project, such as
mineral tenement status, and government and statutory
approvals. There must be reasonable grounds to expect
that all necessary Government approvals will be
received within the timeframes anticipated in the
Pre-Feasibility or Feasibility study. Highlight and
discuss the materiality of any unresolved matter that
is dependent on a third party on which extraction of
the reserve is contingent.
Classification
* The basis for the classification of the Ore Reserves * The Ore Reserves have been broken down into Proved
into varying confidence categories. and Probable categories as per JORC 2012 guidelines.
* Whether the result appropriately reflects the * It is the Competent Persons' opinion that the Ore
Competent Person's view of the deposit. Reserves reflect the deposit accurately given the
current level of geological and geotechnical
knowledge. This view is supported by recent grade
control drilling results.
* The proportion of Probable Ore Reserves that have
been derived from Measured Mineral Resources (if
any). * No Measured material has been converted into Probable
Ore Reserves. Only Indicated material has been
converted to Probable category.
Audits
or reviews * The results of any audits or reviews of Ore Reserve * The Ore Reserve has been peer reviewed internally and
estimates. is in line with current industry standards.
Discussion
of relative * Where appropriate a statement of the relative * The Ore Reserve has been completed to a DFS standard
accuracy/ accuracy and confidence level in the Ore Reserve and as such, confidence in the resultant figures is
confidence estimate using an approach or procedure deemed high.
appropriate by the Competent Person. For example, the
application of statistical or geostatistical
procedures to quantify the relative accuracy of the * The Drakelands Mine is well into the construction
reserve within stated confidence limits, or, if such phase and is due to enter full production in the
an approach is not deemed appropriate, a qualitative 3(rd) quarter of 2015.
discussion of the factors which could affect the
relative accuracy and confidence of the estimate.
* Mining costs are as per the current mining services
contract that is currently in place.
* The statement should specify whether it relates to
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to * Project capital costs are fully understood and well
technical and economic evaluation. Documentation managed.
should include assumptions made and the procedures
used.
* The difference between geostatistical methods used by
SRK in the formulation of the 2015 Mineral Resource
* Accuracy and confidence discussions should extend to Estimate, namely Uniform Conditioning with an
specific discussions of any applied Modifying Factors Information Effect, and Ordinary Kriging, differ in
that may have a material impact on Ore Reserve total grade and tonnage by approximately 1%. This is
viability, or for which there are remaining areas of deemed an acceptable level of localised variation.
uncertainty at the current study stage.
* The current ongoing grade control programme has
* It is recognised that this may not be possible or yielded good correlation between assay results and
appropriate in all circumstances. These statements of both existing exploration drilling logs and the SRK
relative accuracy and confidence of the estimate resource model on an individual SMU basis.
should be compared with production data, where
available.
* All modifying factors have been applied to the pit
design and Ore Reserves calculation on a global scale
as current local knowledge and data reflects the
global assumptions.
* Excavation in the pit and geological mapping are
supporting the validity of the resource model to a
high degree of confidence.
=============== =============================================================== ===============================================================
Section 5 Estimation and Reporting of Diamonds and Other Gemstones
NOT APPLICABLE
This information is provided by RNS
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