Metminco Limited Miraflores Resource Statement (3465Z)

TIDMMNC

RNS Number : 3465Z

Metminco Limited

14 March 2017

 
   14 March 2017 
 

MIRAFLORES MINE DEVELOPMENT

UPDATED JORC 2012 MINERAL RESOURCE STATEMENT

Metminco Limited ("Metminco" or the "Company") (ASX: MNC; AIM: MNC) announces that it has received an updated and improved mineral resource estimate for the Miraflores gold deposit in Colombia prepared by Metal Mining Consultants ("MMC") based in Denver, USA, in accordance with the guidelines of the JORC Code (2012 Edition). This updated mineral resource estimate, which was undertaken to provide the basis of the detailed mine plan for the Miraflores Feasibility Study, replaces the previous JORC (2012) statement completed by MMC that was released to the market on 21 July 2016.

The new JORC 2012 Mineral Resource Estimate represents an increase in gold contained in the measured and indicated ("M&I") resource and inferred resource categories.

HIGHLIGHTS

   --     Measured Mineral Resources of 2.95Mt @ 2.98g/t Au and 2.5g/t Ag 
   --     Indicated Mineral Resources of 6.31Mt @ 2.74g/t Au and 2.9g/t Ag 
   --     Measured and Indicated Mineral Resources of 9.27Mt @ 2.82g/t Au and 2.77g/t Ag 
   --     Inferred Mineral Resources of 0.49Mt @ 2.36g/t Au and 3.64g/t Ag 

-- An increase in M&I resources of approximately 8,000ozs contained gold and inferred resources of approximately 29,000ozs contained gold

   --     Total M&I Resources contain 840,000ozs Au and 826,000ozs Ag 

The mineral resource estimate was based on 25,884 metres of drilling in 73 diamond drill holes and 236 metres of underground channel samples and using a 1.2g/t Au cut-off grade.

Mr William Howe, Managing Director, commented: "The Company, together with its engineering consultants, are making excellent progress on the feasibility study for the potential development of the Miraflores Gold Project located at Quinchia, in the Department of Risaralda, Colombia, with the date for completion of the feasibility study anticipated to be end of May 2017. GR Engineering, a Perth, Australia, based consulting engineer has been commissioned by the Company to complete the feasibility study encompassing an underground mine, processing facilities, infrastructure and tailings facility.

The Company continues to work closely with governmental authorities and the community in relation to the potential mine development. Preparation of the EIA for development is also progressing well and the Company anticipates submission of the EIA to the relevant government authorities by the end of 2017.

At these updated resource tonnages and grades Miraflores represents a high quality gold project that is on par with other Colombian gold mines coming on stream or already in production. Additionally, Miraflores will represent the first of a number of potential projects within the Quinchia portfolio. The focus remains to advance Miraflores through the remainder of this year and to further derisk the project."

Introduction

Geology

The Miraflores deposit comprises a magmatic-hydrothermal breccia pipe located within a fertile hypabyssal porphyry cluster breccia-pipe. The breccia pipe is sub-vertical and cylindrical with surface dimensions of 250m x 280m with a known vertical extent of 500m to 600m, but open` at depth, with clear contacts with the adjacent basalts of the Barroso Formation. A NNW - SSE fracturing system appears to control the formation of the breccia.

Four types of breccia have been distinguished, namely a Red Breccia, a Green Breccia, a Grey Breccia and a White Breccia. The contacts between the different types of breccias are gradational or transitional. The White Breccia occurs in irregular, elongated vertical zones or pockets, surrounded by Green or Grey breccia's, and is interpreted to have formed later than the other breccias. Furthermore, hydrothermal fluid appears to have washed out the rock flour matrix within the White Breccia, or replaced it, with deposition of gangue and sulfide minerals. Of the four breccia types, the Red Breccia contains the highest gold grades with grades of up to 429g/t gold in the vicinity of fault / vein zones.

Steeply-dipping high-grade veins are present, which represent the youngest mineralizing event at Miraflores. Three groups of veins have been identified based on strike direction, namely Group 100 comprising 3 veins with an average strike/dip of 293deg/-87deg; Group 200 comprising 5 veins with an average strike/dip of 308deg/-82deg; and Group 800 comprising 13 veins with an average strike/dip of 340deg/-82deg. Of these veins, Group 100 is the oldest, and the Group 800 is the youngest.

The main mineralization trends of the high-grade veins vary in strike from 325deg to 10deg and 280deg to 60deg, and vary in dip from being vertical to dipping 70degE. The veins are defined by a narrow mineralized core (10cm to 60cm) and a wider mineralized halo (1m to 5m). The narrow core consists of increased amounts of sphalerite, galena, pyrite, chalcopyrite, and fine clay. The wider mineralized halo is defined by weak to moderate mineralization along the margins of breccia fragments. The intensity and width of the mineralized halo is controlled by the porosity and permeability of the wall rock. Assay values as high as 429g/t Au have been reported for the veins, with numerous sample values ranging from 10g/t Au to grades exceeding 100g/t Au.

The younger sub-vertical, northeast dipping veins, that cross-cut the breccia are characterized by the development of argillized material that contains large quantities of pyrite, chalcopyrite, sphalerite and galena, with occasional visible gold. The sulfides are present as coarse particles ranging from 100 to 200<MU>m (occasionally greater than 200<MU>m). The lateral continuity of the NNW-SSE structures is important, and is clearly recognized in prior exploitation workings, where high gold grade mineralization can be followed over a strike length in excess of 150 metres (and more than 80 metres in height), with limited displacement by younger structures. Intersection points of cross-cutting structures (veins) form high gold grade 'shoots' of variable dimensions, which can be observed in the underground workings.

Mineral Resource Estimate

General

Three diamond drilling programs have been carried out at Miraflores over the period 2006 to 2013 consisting of 73 drill holes totalling 25,884m.

   --           Kedahda (4 drill holes totalling 1,415m) 
   --           B2Gold (6 drill holes totalling 2,210m) 
   --           Miraflores Compania Minera SAS (63 drill holes totalling 22,259m) 

The modelling of the Miraflores deposit has been undertaken using Vulcan(TM) and Leapfrog(TM) Software. All of the exploration sampling has been used in the geological modelling process. The drill hole database was de-surveyed, transformed and validated in the Vulcan(TM) software, which was then used for the modelling of the mineral resource.

The statistics have been completed using a combination of Vulcan(TM), Microsoft Excel(TM) and Sage(TM) 2001. Geostatistics have been completed in Vulcan(TM) and Sage(TM) 2001 and grade interpolation has been undertaken in Vulcan(TM). Compilation of the final model was undertaken in Vulcan(TM). Vulcan(TM) software is similar to other mining software systems and relies on a block modelling approach to represent deposit as a series of 3-D blocks to which grade attributes, and virtually any other attributes can be assigned. The software provides numerous means by which attributes can be assigned, and optimization routines are provided that allow block splitting, such that complex deposit outline details are not lost or smoothed out by regular size blocks.

Drill hole assays for Miraflores were composited using 2m down the hole composite lengths. A total of 13,194 two-metre composites were constructed, starting at the collar of the drill hole. Composite intervals less than 0.75m in length were merged with 2m composites however; some composites less than 2m do exist, as the composites were constrained by geological boundaries.

Basic statistics were compiled for both gold and silver grades in each mineralized lithology and all 21 veins developed within the Miraflores deposit. Capping statistics were determined using histogram and log probability plots of all gold composites in the breccia. A capping value of 45g/t was determined for the breccia, whereas it varied from 0 to 17g/t for the veins. Silver grades were not capped as the silver grades at Miraflores are very low.

Block Model

The resource model for Miraflores was constructed with Vulcan(TM) software using a block model. All of the required information about the deposit is stored in each individual block. This includes estimated characteristics of gold and silver and statistical characteristics such as number of samples used in an estimate, distances to the nearest sample and the number of drill holes used. Geological triangulations were also used to identify the rock type of each block, and these structures also controlled the sub-blocking in Vulcan(TM) along their boundaries. Geological codes stored in the block model were also used to assign the density within specific geological boundaries.

Grade Estimation

The Inverse Distanced cubed (ID3) grade estimation methodology was used to estimate gold and silver grades. For the breccia, basalt and saprolite, the variography was modelled to determine appropriate search ellipsoid orientation and search distances, whereas for the 21 veins, the search orientation varied depending on the orientation of the vein.

Density

A total of 2,100 specific gravity measurements were used to define the density of each lithological block in the model.

Mineral Resource

As of 02 April, 2013, MMC estimated a Measured and Indicated Mineral Resource of 72.6mt at a gold and silver grade of 0.78g/t and 1.52g/t respectively using a cut-off grade of 0.27 g/t gold in accordance with NI 43-101. The mineral resource was based on 25,884 m of drilling in 73 diamond drill holes and 236 metres of underground channel samples. The mineral resource estimate provided for both an open pit and an underground mining operation.

More recently, MMC were retained by Metminco to produce a mineral resource that is estimated in accordance with the guidelines of the JORC Code (2012 Edition), but which only provided for the exploitation of the Miraflores deposit via an underground mining operation, and hence a higher cut-off grade of 1.2g/t gold. This mineral resource estimate was released to the market on 21 July 2017. Further refinement of the block model included the definition of the breccia types and lithologies within the breccia pipe resulting in the assignment of specific gravity averages for each lithology defined whereas previously the specific gravity results were averaged for the entire breccia. This has resulted in an increase in tonnage, most notably in the inferred category. The inferred grade has also increased substantially from the previous estimate due to the definition of further blocks on certain of the defined veins within the breccia system. The revised mineral resource estimate is summarized in Tables 1 and 2 below.

Table 1: Mineral Resource Estimate - Miraflores Gold Project (MMC March 2017).

 
 Classification           Tonnes    Au (g/t)   Ag (g/t)    Oz Au      Oz Ag 
                          (000's)                          (000's)    (000's) 
----------------------  ---------  ---------  ---------  ---------  --------- 
 Measured                 2,958       2.98       2.49       283        237 
----------------------  ---------  ---------  ---------  ---------  --------- 
 Indicated                6,311       2.74       2.90       557        588 
----------------------  ---------  ---------  ---------  ---------  --------- 
 Measured & Indicated     9,269       2.82       2.77       840        826 
----------------------  ---------  ---------  ---------  ---------  --------- 
 Inferred                  487        2.36       3.64        37         57 
----------------------  ---------  ---------  ---------  ---------  --------- 
 

Note:

   i)          Based on a gold cut-off grade of 1.2g/t. 

ii) Rounding-off of numbers may result in minor computational errors, which are not deemed to be significant.

   iii)        Refer Appendix A - Table 1 requirement in support of the JORC Code (2012 Edition). 

Table 2: Sensitivity of Mineral Resource to varying gold cut-off grades.

 
         Measured and Indicated Mineral Resource (Breccia 
                            and Veins) 
----------------------------------------------------------------- 
  Cut-off    K Tonnes   Au (g/t)   Au (Koz)   Ag (g/t)   Ag (Koz) 
  (Au g/t) 
----------  ---------  ---------  ---------  ---------  --------- 
   0.60        23,584     1.61        1,221     2.13        1,615 
----------  ---------  ---------  ---------  ---------  --------- 
   0.70        19,095     1.83        1,123     2.27        1,394 
----------  ---------  ---------  ---------  ---------  --------- 
   0.80        15,968     2.04        1,047     2.40        1,232 
----------  ---------  ---------  ---------  ---------  --------- 
   0.90        13,663     2.24          984     2.52        1,107 
----------  ---------  ---------  ---------  ---------  --------- 
   1.00        11,848     2.44          929     2.63        1,002 
----------  ---------  ---------  ---------  ---------  --------- 
   1.10        10,440     2.63          883     2.72          913 
----------  ---------  ---------  ---------  ---------  --------- 
   1.20         9,269     2.82          840     2.77          826 
----------  ---------  ---------  ---------  ---------  --------- 
   1.30         8,414     2.98          806     2.84          768 
----------  ---------  ---------  ---------  ---------  --------- 
   1.40         7,681     3.13          773     2.90          716 
----------  ---------  ---------  ---------  ---------  --------- 
   1.50         7,030     3.29          744     2.97          671 
----------  ---------  ---------  ---------  ---------  --------- 
 
 
             Inferred Mineral Resource (Breccia only) 
----------------------------------------------------------------- 
 Cut-off     K Tonnes   Au (g/t)   Au (Koz)   Ag (g/t)   Ag (Koz) 
  (Au g/t) 
----------  ---------  ---------  ---------  ---------  --------- 
   0.60         1,904       1.12         69       3.22        197 
----------  ---------  ---------  ---------  ---------  --------- 
   0.70           766       1.82         45       3.06         75 
----------  ---------  ---------  ---------  ---------  --------- 
   0.80           670       1.98         43       3.18         68 
----------  ---------  ---------  ---------  ---------  --------- 
   0.90           598       2.12         41       3.39         65 
----------  ---------  ---------  ---------  ---------  --------- 
   1.00           547       2.22         39       3.49         61 
----------  ---------  ---------  ---------  ---------  --------- 
   1.10           527       2.27         38       3.51         59 
----------  ---------  ---------  ---------  ---------  --------- 
   1.20           487       2.36         37       3.64         57 
----------  ---------  ---------  ---------  ---------  --------- 
   1.30           466       2.41         36       3.72         56 
----------  ---------  ---------  ---------  ---------  --------- 
   1.40           340       2.80         31       2.64         29 
----------  ---------  ---------  ---------  ---------  --------- 
   1.50           267       3.17         27       2.49         21 
----------  ---------  ---------  ---------  ---------  --------- 
 

The information communicated in this announcement includes inside information for the purposes of Article 7 of Regulation 596/2014.

This announcement is an abridged version of the full announcement, including appendices which provide additional details of the updated JORC Resource estimate, is available on the Company's website at www.metminco.com.au.

William Howe

Managing Director

 
 For further information, 
  please contact: 
  METMINCO LIMITED 
 Stephen Tainton / Phil Killen     Office: +61 (0) 2 
                                    9460 1856 
 
 NOMINATED ADVISOR AND BROKER 
 RFC Ambrian 
 Australia 
 Will Souter / Nathan Forsyth      Office: +61 (0) 2 
                                    9250 0000 
 
 United Kingdom 
 Charlie Cryer                     Office: +44 (0) 20 
                                    3440 6800 
 
 JOINT BROKER 
 SP Angel Corporate Finance 
  LLP (UK) 
 Ewan Leggat                       Office: +44 (0) 20 
                                    3470 0470 
 
 PUBLIC RELATIONS 
 Camarco 
  United Kingdom 
 Gordon Poole / Tom Huddart        Office: + 44 (0) 20 
                                    3757 4997 
------------------------------    -------------------- 
 

Competent Persons Statement

Metal Mining Consultants Inc.

The information provided in this ASX Release as it relates to Exploration Results and Mineral Resources of the Miraflores Gold Project is based on information compiled by Scott Wilson, President of Metal Mining Consultants Inc. in Colorado, USA. Mr Wilson, a Qualified Person for JORC (2012 Edition) compliant statements, reviewed the technical information presented in this document.

Mr Wilson has sufficient experience that is relevant to the style of mineralisation and type of mineral deposit under consideration, and to the activity which was undertaken, to make the statements found in this report in the form and context in which they appear. Mr Wilson has consented to be named in this announcement and inclusion of information attributed to him in the form and context in which it appears herein.

Forward Looking Statement

All statements other than statements of historical fact included in this announcement including, without limitation, statements regarding future plans and objectives of Metminco are forward-looking statements. When used in this announcement, forward-looking statements can be identified by words such as "anticipate", "believe", "could", "estimate", "expect", "future", "intend", "may", "opportunity", "plan", "potential", "project", "seek", "will" and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this announcement, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, its directors and management of Metminco that could cause Metminco's actual results to differ materially from the results expressed or anticipated in these statements.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. Metminco does not undertake to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this announcement, except where required by applicable law and stock exchange listing requirements.

This information is provided by RNS

The company news service from the London Stock Exchange

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March 14, 2017 03:00 ET (07:00 GMT)