TIDMAFF
RNS Number : 8505F
Afferro Mining Inc.
30 May 2013
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION
TO US NEWS WIRE SERVICES.
30 May 2013
TSX-V: AFF
AIM: AFF
AFFERRO MINING INC.
Substantial Increase in Indicated Saprolite and Magnetite
Resource at Nkout
Afferro Mining Inc. ("Afferro" or the "Company"), the
exploration and development company focused on iron ore in
Cameroon, is pleased to announce an updated National Instrument
43-101 ("NI 43-101") compliant Mineral Resource Estimate ("MRE5")
for the Nkout Iron Ore Project ("Nkout"). This Mineral Resource
Estimate supersedes that previously announced on 29 June 2012
("MRE4").
Highlights:
- Increase of 156% of the direct shipping ore ("DSO") and
high-grade saprolite Indicated resource, which now stands at 64.3
million tonnes ("Mt") at 54.5% iron ("Fe"):
o Previously announced metallurgical test work demonstrates that
this grade material can be beneficiated to a premium grade
material
- 85.7 Mt at 39.1% Fe of oxidised banded iron formation ("BIF")
resource (Zone 130) re-classified as Indicated resource
- Magnetite BIF Indicated resource confirmed at 1.4 Bt Mt at 32.0% Fe
- Further MRE before year end targeting an Indicated resource of
225 Mt DSO/saprolite and 1.7 Bt Magnetite BIF
Table 1: Change in DSO/high-grade saprolite Indicated resource
from MRE4 to MRE5
MRE5 MRE4
Increase
Fe (Mt) Fe (%) Fe (Mt) Fe (%) in tonnage
------------------
oxidised, >55%
Zone 110 Fe 19.9 60.6 16.7 60.5 19%
oxidised, 45% to
Zone 120* 55% Fe 44.5 51.8 8.4 52.0 429%
TOTAL 64.3 54.5 25.1 57.7 156%
------------------------------- -------- ------- -------- ------- ------------
*Zone 120 covers material graded from 45% to 55% Fe in MRE5, but
only 50% to 55% Fe in MRE4
Luis da Silva, Chief Executive Officer of Afferro,
commented:
"The objective of MRE5 was to promote a substantial tonnage of
oxidised resource to the Indicated status in anticipation of the
Nkout PFS later in the year.
During the past three months, our efforts have been focused on
further improving confidence in the resource at Nkout through
in-fill drilling and extensive metallurgical test work, which
started in July last year. The increased DSO and saprolite
components of the resource, considered in conjunction with the
potential for a strategic partner to unlock port and rail
infrastructure, have further advanced Nkout and leave it well
placed as a significant asset for the Cameroon mining
industry."
Mineral Resource Estimate
MRE5 has been prepared by SRK Consulting (UK) Ltd. ("SRK") in
accordance with the provisions of NI 43-101.
The definitions of Measured, Indicated and Inferred Mineral
Resources, and Mineral Reserves as used in the report, are as
defined in the CIM Definition Standards on Mineral Resources and
Mineral Reserves adopted by the CIM Council.
SRK has conducted multiple site visits to the Nkout Project
during the course of the extensive drilling campaigns undertaken by
Afferro. This included a recent qualified person site visit a
detailed structural evaluation and a review of the Quality
Assurance/Quality Control ("QA/QC") procedures.
MRE5 is shown below and is based on a metal price of USD1.4/dry
metric tonne unit ("dmtu") for magnetite fines which is taken from
SRK's internal consensus market forecast data. It should be noted
that the results of the optimisation study undertaken to enable the
reporting of the Mineral Resource Estimate are insensitive to metal
prices down to approximately USD1.0/dmtu. Nkout is currently wholly
owned by Afferro, but subject to the Government of Cameroon having
a right to receive a 10% free carried interest in the share capital
of the project operating company, and to increase the said 10%
interest up to 30% according to mutually agreed conditions.
Table 2: Full Mineral Resource Estimate, MRE5
Zone Resource Tonnes Fe SiO2 Al(2) P % Contained
Category (Mt) % % O(3) iron
% (Mt)
------------------------- -------------- -------- ----- ----- ------ ----- ----------
Zone 110 Measured
Oxidised, >55% Fe
------------------------- -------------- -------- ----- ----- ------ ----- ----------
Indicated 19.9 60.6 5.9 3.0 0.12 12
---------------------------------------- -------- ----- ----- ------ ----- ----------
Meas. + Ind. 19.9 60.6 5.9 3.0 0.12 12
---------------------------------------- -------- ----- ----- ------ ----- ----------
Inferred 0.1 57.8 5.7 5.8 0.07 0.1
---------------------------------------- -------- ----- ----- ------ ----- ----------
Zone 120 Measured
Oxidised, 45 to 55% Fe
------------------------- -------------- -------- ----- ----- ------ ----- ----------
Indicated 44.5 51.8 14.0 5.7 0.14 23
---------------------------------------- -------- ----- ----- ------ ----- ----------
Meas. + Ind. 44.5 51.8 14.0 5.7 0.14 23
---------------------------------------- -------- ----- ----- ------ ----- ----------
Inferred 8.0 50.0 15.6 6.5 0.09 4
---------------------------------------- -------- ----- ----- ------ ----- ----------
Zone 130 Measured
Oxidised, <45% Fe
------------------------- -------------- -------- ----- ----- ------ ----- ----------
Indicated 85.7 39.1 36.0 3.6 0.06 33
---------------------------------------- -------- ----- ----- ------ ----- ----------
Meas. + Ind. 85.7 39.1 36.0 3.6 0.06 33
---------------------------------------- -------- ----- ----- ------ ----- ----------
Inferred 123.8 36.6 39.4 3.8 0.06 45
---------------------------------------- -------- ----- ----- ------ ----- ----------
Zone 210 Measured
Magnetite BIF
------------------------- -------------- -------- ----- ----- ------ ----- ----------
Indicated 1,435.0 32.0 46.6 2.4 0.05 459
---------------------------------------- -------- ----- ----- ------ ----- ----------
Meas. + Ind. 1,435.0 32.0 46.6 2.4 0.05 459
---------------------------------------- -------- ----- ----- ------ ----- ----------
Inferred 786.8 29.7 48.6 3.3 0.05 234
---------------------------------------- -------- ----- ----- ------ ----- ----------
TOTAL Measured
------------------------- -------------- -------- ----- ----- ------ ----- ----------
Indicated 1,585.0 33.3 44.6 2.6 0.05 528
---------------------------------------- -------- ----- ----- ------ ----- ----------
Meas. + Ind. 1,585.0 33.3 44.6 2.6 0.05 528
---------------------------------------- -------- ----- ----- ------ ----- ----------
Inferred 918.8 30.8 47.0 3.4 0.05 283
---------------------------------------- -------- ----- ----- ------ ----- ----------
Notes:
(1) Mineral Resources which are not Mineral Reserves have no
demonstrated economic viability
(2) The effective date of the Mineral Resource Estimate is 28
May 2013
(3) The Mineral Resource Estimate for the Nkout deposit was
constrained within lithological and grade based solids and within a
Lerchs-Grossman optimised pit shell defined by the following
assumptions; metal price of USD1.4/dmtu; slope angles of 16 and 41
in the oxide and fresh material; a mining recovery of 95.0%; a
mining dilution of 5.0%; a base case mining cost of USD1.60/t and
an incremental mine operating costs of USD0.05/t/10 m below the 80
m reference RL and USD0.05/t/10 m above the 80 m reference RL;
process operating costs of USD3.00/t crushed DSO, USD4.20/t crushed
oxide and USD5.50/t crushed BIF ore; DSO processing recovery of
75%; Oxide processing recovery of 60%; BIF processing recovery of
88% and G&A costs of USD 1.68/t, USD0.78/t and USD0.96/t
crushed DSO, oxide and BIF ore.
(4) Mineral Resources for the Nkout deposit have been classified
according to the "CIM Standards on Mineral Resources and Reserves:
Definitions and Guidelines (December 2005)" by Howard Baker
(MAusIMM(CP)), an independent Qualified Person as defined in NI
43-101.
Nkout Resource Potential
SRK recognises that there is potential to increase the Mineral
Resource Statement at Nkout through deep drilling that targets
material that falls within a Whittle pit shell generated when
including the unclassified material. This material, based on a
metal price of USD1.4/dmtu is considered by SRK to be potentially
economic, should sufficient exploration data be collected that
confirms the geometry and continuation of the mineralisation and
that enables a classified resource to be generated. SRK has
identified that an additional 500 to 1,000 Mt Fe lies below the
Whittle pit shell used for constraining the classified resources.
The potential quantity is conceptual in nature as there has been
insufficient exploration in these areas.
In addition, SRK recognises the potential for further conversion
within the Mineral Resource Statement from the Inferred category to
Indicated and or Measured Classification. On-going drill programmes
and further metallurgical testwork are in progress to this end.
Database Validation
The QA/QC programme for Nkout consists of alternating the
insertion of a blank, standard and duplicate sample on a regular
basis within the sample train. The Company uses standards with
varying grades representative of the deposit which are also
alternated. All samples have been assayed at the accredited ALS
Minerals in Ireland and Johannesburg. SRK found that the results of
the above described QA/QC programme indicate that Nkout's assay
databases were appropriate for mineral resource estimation.
Data Verification
Howard Baker as the Qualified Person completed the verification
of data on which MRE5 is based. This verification included an
assessment of QA/QC data, sample preparation and assay
methodologies, density data, data inputs and survey data used in
the estimate. Data was validated by using field checks, statistical
methods and evaluating the Company's protocols.
MRE5 Drilling
A 3D geological model based on a total of 459 diamond drill
holes for 45,680 metres ("m") has been used to develop the model
used in MRE5. This includes 16,489 iron assays from project
inception up to the cut-off date of 12 March 2013. MRE5 includes an
additional 197 diamond drill holes or 12,583m of drilling in
comparison to MRE4.
Reference to MRE4 can be found at:
http://afferro-mining.com/investors/news/increase-of-indicated-and-inferred-resources-at-nkout
The additional drilling included a contribution from the
magnetic anomaly target drilling zone D8, from the south-west
extension of Nkout Centre and expansion of the high grade zone in
the west of Nkout East.
Geological Modelling, Resource Estimation Assumptions,
Parameters and Methods
Nkout Centre, Nkout East, Nkout West and D8, cover a 12
kilometre ("km") portion of a larger 20 km strike length magnetic
anomaly, forms an east-west trending magnetite BIF with an oxidised
cap of dominantly haematite mineralisation. Oxide mineralisation
consists of friable to weakly indurated haematite rich saprolite
which becomes increasingly magnetite rich at depth and towards the
base of oxidation. Fresh mineralisation is comprised of laminated
to bedded magnetite rich BIF horizons and metamorphosed,
recrystallized coarse grained, weakly foliated aggregates of
magnetite hosted within granular quartz rich meta-sediments.
Basement footwall to mineralisation consists of coarse grained mica
bearing gneiss. The hanging wall is comprised of feldspathic,
biotite and sericite rich intercalated meta-sediments.
SRK created a geological model based on the lithological
logging, assay and magnetic susceptibility data, enabling the
hanging wall and footwall contacts of the BIF unit to be modelled
and a three dimensional solid model to be created. The oxide cap
was modelled using statistical grade boundaries, the magnetic
susceptibility data and Loss on Ignition values to determine the
base of oxidation.
A 5m composite file was used in a geostatistical study
(variography and Quantitative Kriging Neighbourhood Analysis,
"QKNA") that enabled Ordinary Kriging ("OK") to be used as the main
grade interpolation method. The interpolation used an elliptical
search following the predominant dip and dip direction of the
geological domains. The results of the variography and the QKNA
were utilised to determine the most appropriate search and
estimation parameters.
The interpolated block model was validated through visual checks
and a comparison of the mean input composite and output model
grades. SRK is confident that the interpolated block grades are a
reasonable reflection of the available sample data.
The NI 43-101 compliant technical report will be filed on
www.sedar.comwithin 45 days of the date of this announcement.
Bulk Density Measurements
In April 2013, Afferro, in conjunction with SRK, initiated a
series of in-situ bulk density measurements to provide confidence
to the existing density dataset of friable to weakly indurated
oxide zones previously calculated from the diamond drill core. One
hundred and two (102) samples with an average mass of approximately
eighty kilogrammes were used to provide a statistically acceptable
population and calculate, with respect to grade, revised oxide
densities for the near surface mineralisation. The results show an
increase in bulk density of approximately 10% from within the high
grade DSO material and the oxidised BIF or saprolite material.
These latest bulk density figures have been used in the MRE5
resource estimation.
Pre-Feasibility Study Mineral Resource Estimate
MRE6 is expected in Q4 2013, to be used as the basis for the
PFS, due to begin immediately after. Afferro is targeting 225 Mt
DSO/saprolite and 1.7 Bt Magnetite BIF for the Indicated or
Measured classification in the overall resource.
Exploration work continues primarily with in-fill drilling at
Nkout West, to provide increased confidence in the Inferred
resource component declared in MRE4. In addition, in-fill drilling
yet to be included in the model has been conducted at the
south-western extension of Nkout Centre and the potential DSO zone
to the west of Nkout East. There will also be a full structural
evaluation of existing drill core and associated data.
For further information please contact one of the following:
Afferro Mining Inc.
Luis da Silva / Jeremy Cave
Tel: +44 (0) 20 7010 7680
Investec
Nominated Adviser: Neil Elliot
Corporate Broker: Chris Sim
Tel: +44 (0) 20 7597 5970
RBC Capital Markets
Joint Broker: Martin Eales / Richard Hughes
Tel: +44 (0) 20 7653 4000
Pelham Bell Pottinger
Daniel Thöle / James MacFarlane
Tel: +44 (0) 20 7861 3232
About Afferro Mining Inc.
Afferro is an established exploration and development company
listed on the TSX-V (AFF) and AIM (AFF). Afferro's portfolio
includes the 100% owned Nkout, Ntem and Akonolinga iron ore
projects. It also holds a 70% interest in the Ngoa project, an
exploration target bordering Nkout. All projects are subject to
government rights. Nkout has a National Instrument 43-101 ("NI
43-101") compliant Indicated Mineral Resource Estimate of 1.6Bt at
33.3% Fe and an Inferred Mineral Resource Estimate of 0.9Bt at
30.8% Fe. In addition Nkout has a NI 43-101 compliant Preliminary
Economic Assessment ("PEA") which indicates that the project is
economically viable. Ntem comprises a NI 43-101 compliant Indicated
Mineral Resource Estimate of 39.1Mt at 34.0% Fe and an Inferred
Mineral Resource Estimate of 76.4Mt at 34.2% Fe. The Company had
cash, cash equivalents and short-term deposits totalling $84m on
the 31 March 2013 and is fully funded for at least the next two
years.
Qualified Person
Howard Baker (MAusIMM(CP)) has 19 years' experience in the
mining industry and 11 years' experience in the exploration,
definition and mining of iron ore mineral resources. Mr Baker is a
full-time employee of SRK Consulting (UK) Ltd., an independent
consultancy, and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration,
and to the type of activity which he is undertaking to qualify as a
Qualified Person in accordance with NI 43-101 and a Competent
Person as defined in the June 2009 Edition of the AIM Note for
Mining and Oil & Gas Companies. Howard Baker consents to the
inclusion in the announcement of the matters based on their
information in the form and context in which it appears and
confirms that this information is accurate and not false or
misleading.
Forward-looking Statements
This announcement includes certain forward-looking statements.
All statements, other than statements of historical fact, included
herein are forward-looking statements that involve various known
and unknown risks and uncertainties as well as other factors. Such
forward looking statements are subject to a number of risks and
uncertainties that may cause actual results or events to differ
materially from current expectations, including delays in obtaining
or failure to obtain required regulatory approvals. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements.
Information about the risks and uncertainties of the Company's
business is provided in its disclosure materials, including its
Annual Information Form and the MD&A for the 12 months ended 31
December 2012, available under the Company's profile on SEDAR at
www.sedar.com. Although the Company has attempted to identify
important factors that could cause actions, events or results to
differ materially from those described in forward looking
information, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended. There
can be no assurance that forward looking information will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking
information. The forward-looking information contained herein,
speaks only as of the date hereof (unless stated otherwise) and,
except as may be required by applicable law, Afferro disclaims any
obligation to update or modify such forward-looking statements,
either as a result of new information, future events or for any
other reason.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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