Quarterly Activities Report

 

TIDMNSN 
 
RNS Number : 0870V 
Natasa Mining Limited 
27 October 2010 
 

                                NATASA MINING LTD 
                          ("Natasa" or the "Company") 
                          Quarterly Activities Report 
The following is the Company's Quarterly Activities Report for the period ended 
30 September 2010. 
Enquires: 
Chrisilios Kyriakou, Chief Executive Officer 
Natasa Mining Limited 
Telephone: [phone] 
 
Angela Peace 
Strand Hanson Limited 
Telephone: [phone] 
 
 
Quarterly Activities Report for the period to 30 September 2010 
 
 
Kazakhstan Gold Properties 
 
In December 2009, Natasa (through a subsidiary) entered an Agreement with a 
vendor group, Vostok Mining, to acquire an 85% interest in two prospective 
gold-bearing properties (Pustenoye and Karienoye) in central-eastern Kazakhstan. 
 Originally, the Agreement was subject to due diligence to be carried out by 
Natasa prior to 30 March 2010 but this period was subsequently extended to 31 
December 2010. 
 
Initially, the due diligence involved the hiring of engineering and geological 
support staff in Kazakhstan and reviewing, validating and digitising the 
substantial data gathered by Vostok Mining.  This was followed by retaining AMC 
Consultants Pty Ltd, international mining consultants, to conduct a site visit, 
review all data, assess the resource potential and recommend a first phase 
drilling and metallurgical program. 
 
The subsequent recommendations from AMC Consultants resulted in Natasa planning 
seven RC drill holes, totaling approx. 1,000 metres to: 
1.         collect enough mineralized sample for metallurgical tests, including 
Gravity, Flotation, Cyanidation of Flotation Tails, and BIOX treatment of 
sulphides 
2.         collect sufficient sample to determine comminution parameters 
relevant to crushing and milling 
3.         have sample available to be stored for future additional tests, and 
4.         compare and validate assays and geology from a number of historical 
drill holes. 
 
Six RC drill holes tested the Pustenoye deposit, PNM1 to PNM6, and one drill 
hole, KNM1, the Karienoye deposit.  All drill holes were located within 
Kazakhstan State balance listed reserves of C1 and C2 category soviet resources 
at Pustenoye and beneath the C2 oxide resource at Karienoye.  The RC drill 
program aim was to collect enough fresh rock (sulphide) gold mineralised sample 
for metallurgical testwork and secondly to confirm the widths and gold grades of 
historical NQ diamond drill results within the soviet type resource areas. 
Three of the four interpreted orebodies were tested which were Orebody 1 - 
Western, Orebody 2 - Eastern, Orebody 3 - Central.  The Western Orebody was not 
tested as it is low-grade, discontinuous and not well defined by drilling.  The 
final drill program was revised from the original planned program due to 
unseasonal late snow in March with the subsequent spring/summer melt which 
replenished the shallow (oxide zone) water table preventing drilling within the 
base of the open pit, with the exception of one drill hole PNM5, which was 
drilled from the base of the pit (40 metres below surface) after increasing the 
pumping capacity long enough to keep the open pit dry for the duration of only 
this one drill hole. 
 
The RC drill rig attempted to drill into the heap leach pad from the top at 
around 40 metres above the topographical surface.  The rig penetrated only four 
metres deep before being abandoned.  The drilling attempt was unsuccessful as 
the size of the rock particles on the upper lift of the pad appear to be mostly 
of a size that do not fit through the holes of the drill hammer.  The rock 
particles blocked these hammer receiving holes and as a result there was no 
sample return.  Secondly, the rock particles are not large enough and are packed 
too loosely to be able to be pulverised.  A 10kg sample was taken for assay and 
minor metallurgical testing. 
 
Surveying of all of the historical resource drill hole collars at Karienoye has 
shown that drill hole coordinates in the digital database are recorded as 
planned hole collars and have not been adjusted to the topographical surface 
therefore were not resurveyed after drilling.  Some holes appear to be up to 15 
metres horizontal difference from the actual drill hole located in the field 
(illustrated by drill holes surveyed in positions that would have been 
impossible to drill on the side of a hill).  Geology from Russian geologists is 
being translated and the database is being validated.  New drill hole collar 
positions are yet to be surveyed with approximate co-ordinates for holes.  All 
seven drill holes were down hole surveyed. 
 
All new drill holes obtained gold intersections, at the expected or better gold 
grades and intervals, except PNM6 which failed to intersect significant 
mineralisation above detection limit of 0.05ppm gold.  PNM6 tested a northwest 
extension to orebody 1 and was located outside of the open pit on the natural 
surface while the other five RC drill holes were drilled within the open pit. 
Three of the four new RC drill holes, which could be directly compared to 
historical drilling, exhibit an increase in both width of mineralisation and 
gold grade at the Pustenoye Deposit.  The width in drill hole PNM2 is 
significantly larger because the drill hole was vertical and not drilled at -70° 
dip like the historical drill holes.  The Karienoye Deposit drill hole contains 
a higher gold grade to an adjacent drill hole but failed to exit the orebody so 
could not be easily compared to adjacent historical drill holes.  PNM01 could 
also not be compared to historical drilling because it was drilled down the dip 
of orebody 1. 
 
The RC drilling re-established the magnitude of gold grades from soviet style 
categories of resources (C1 and C2), as listed on the GKZ Kazakhstan state 
balance and global average gold grades in a resource estimate subsequently 
confirmed by an internal company IDW2 (inverse distance weighted squared) block 
model "JORC Inferred" resource estimate.  The following inferences that can be 
made from the new drilling: 
 
-           Pustenoye orebody 2 eastern is the highest grade orebody although it 
currently contains only around 10% of the tonnage in the total Pustenoye 
resource.  Drilling found that the orebody is open towards the southeast so has 
the potential to significantly increase the grade of the total Pustenoye 
resource and is especially attractive if shallower extensions to the orebody are 
discovered, not only extensions at depth. 
 
-           Pustenoye orebody 1 western is a lower grade orebody than orebody 2 
eastern but contains the majority of the tonnage in the resource estimate.  The 
orebody is open at depth and drilling confirmed that there is continuity down 
the easterly dip as principally a drill hole drilled down the dip was 
consistently mineralised and did not exit the orebody. 
 
-           Karienoye Deposit is the lowest grade orebody but has the largest 
drill intersection of mineralisation with virtually the entire drill hole being 
mineralised (the drill hole did not exit the orebody at depth).  Drilling 
highlights that high grade shoots in the deposit appear to dip shallowly towards 
the northwest, as observed in a surface adit into a hill adjacent to the hole 
where 5-20cm wide quartz veins have been mined and sampled. 
 
Throughout the due diligence period, the Company, its management and its lawyers 
have, in addition to expending substantial moneys on the properties, carried out 
extensive negotiations with Kazakhstan Government officials in order to obtain 
the many State approvals as to titles to enable us to make a decision to 
exercise our right to acquire the interest in the properties. 
 
Unfortunately, to date we have been unable to achieve our objectives so we have 
decided to enter a conditional contract with a Kazakhstan registered company to 
dispose of our rights to the properties.  This agreement is subject to a number 
of conditions precedent and the closing date is no later than 12 November 2010. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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