TIDMNRRP
RNS Number : 8332K
North River Resources Plc
30 June 2014
North River Resources plc / Ticker: NRRP / Index: AIM / Sector:
Mining
30 June 2014
North River Resources plc
("North River" or the "Company")
Namib Project - Mine Development Plan
North River is pleased to announce the completion of the Mine
Development Plan ("MDP") for its Namib Lead and Zinc Project ("the
Project") in Namibia, a copy of which can be viewed on the
Company's website. The MDP demonstrates that the Project has good
economics based on the current Mineral Resource.
The current Mineral Resource has yet to be converted to reserves
and is not adequate to complete a feasibility study compliant with
JORC 2012 guidelines. Accordingly, at the Company's request, the
MDP has been prepared to the same standards as a feasibility study
(i.e. +/-15% of costs) based on a Mineral Inventory, incorporating
both Indicated Resource and portions of the Inferred Resource, and
provides a good indication of the economics of developing the
mine.
The MDP sets out an estimated payback on the Project for a 250
kilo tonnes (kt) per annum plant of just 1.4 years, based on a
Mineral Inventory of 425 kt of Indicated Resource, and 234 kt of
Inferred Resource.
The MDP also includes an updated Mineral Resource statement as
at March 2014, which shows a small increase over the December 2013
estimate announced previously, as shown in the table below.
Drilling underground has been delayed by a series of mechanical
breakdowns of the larger of the two drills. However, the resource
expansion programme has now been accelerated by mobilizing a third
drill. An exploration tunnel is also being excavated 150 meters
below surface, under the Northern lodes, to provide additional
drill pad locations. In due course the Company anticipates
announcing an updated Mineral Resource, which together with this
Mine Development Plan will produce a JORC compliant feasibility
study.
Tonnes and Grade at 1% Pb + Zn Cut-off Grade
-----------------------------------------------------------------------------
Class Area *Tonnes Density Pb Zn Ag
(t/m(3) (%) (%) (g/t)
)
----------- -------------------- -------- --------- ----- ----- -------
Northern Extension 529,000 3.45 2.8 5.4 48.2
-------------------------------- -------- --------- ----- ----- -------
Indicated South Mine 139,000 3.45 2.0 4.3 42.4
----------- -------------------- -------- --------- ----- ----- -------
Northern Extension 253,000 3.45 1.8 7.2 39.0
-------------------------------- -------- --------- ----- ----- -------
Inferred South Mine 7,000 3.45 2.2 3.5 53.4
----------- -------------------- -------- --------- ----- ----- -------
Total 928,000 3.45 2.4 5.7 44.9
--------------------------------- -------- --------- ----- ----- -------
* Tonnages have been rounded to the nearest 1,000t to reflect an
estimate
As announced previously, the completion of the feasibility study
had also been delayed by lock-cycle metallurgical testing, which
most accurately simulates the plant process. This work has now been
completed. A Zinc recovery of 78% was attained at a grade of 51%
and Lead recovery of 82% was attained at a grade of 54%.
Highlights of the MDP
Based on 660 kt of ore mined based on the current estimate of
life of mine, the cash flow model generated the following (after
tax) financial statistics:
Pre-Production Capex USD Million 25.2
Revenue USD Million 93. 8
Cash Outflow USD Million 75.2
Net Cash Flow USD Million 18.6
NPV(8%) USD Million 12.4
IRR % 38
Payback Years 1.4
Pre-Production Capital Cost Estimate
Capital Item USD Million
Process Plant 14.540
EPCM 2.687
Contingency (12%) 2.055
Ventilation 0.385
Mining infrastructure 3.998
Mine development 1.559
Total 25.224
Project Development
The Project's location benefits from ready access to existing
infrastructure, which means the mine can be constructed with a low
capital cost. The Company hopes to make further reductions in both
the Capex and time-lines for the Project.
Ore will be accessed via the two existing declines. High-grade
ore is ready to be mined with minimal capital development required.
The mine will be developed and ore extracted using hand held
techniques, with simple technologies being utilized to keep both
capital and operating costs down. Southern Africa in general has a
long and successful history of mining using hand held equipment. A
skilled, low cost workforce with the necessary expertise is readily
available.
The MDP illustrates mining and processing a total of 250 kt of
lead, zinc and silver bearing ore per annum. Due to the nature of
the ore and host rocks, the process plant flow sheet has been
designed with simplicity in mind. The flow sheet consists of single
stage crushing, followed by a 450kW ball mill, feeding into a
sequential lead and zinc flotation circuit. No thickening of the
concentrates is required, with the flotation circuit feeding
directly into the filters.
The concentrates will be transported 70km by road or rail to
Namibia's main port of Walvis Bay for export. The port facility has
a bulk concentrate ship loading facility available.
A tailings dam, constructed at the site in the mid-1990s, will
be refurbished at minimal cost. The dam has been designed to
accommodate 1.5 million tonnes of tailings material, equivalent to
around seven years life of mine.
Minor refurbishment is required to the existing 22kV power line,
which connects the operation to the national grid. Water supply is
available from the local water authority. A new small diameter 7km
water line will be installed.
No camp is required, as the workforce will be housed in the
local town of Swakopmund, 30km from the operation from where staff
will be transported to site by bus. The towns of Swakopmund and
nearby Walvis Bay are already servicing multiple mining operations
(Husab, Langer Heinrich, Rossing). In addition, the port of Walvis
Bay is utilized for the import and export of all supplies and
products, for the majority of mines in Namibia. All the necessary
services for the Project are well catered for.
The Resource expansion programme is being accelerated. The
Project currently has three diamond drills operating on site.
Drilling is targeting the deeper untested zones beneath the
Southern and Northern lodes, which, the Directors believe, show
potential to add to overall Resources. The Company's smaller Kempe
drill is being used for converting existing Inferred Resources to a
higher resource classification.
Following the completion of the scheduled drilling in progress,
an updated Mineral Resource will be estimated. North River is
confident that significant increases to its Resources will be
forthcoming. These increases will further enhance the economics of
the Project.
A copy of the full Mine Development Plan has been posted on the
Company's website: www.northriverresources.com, under "operations"
and then "Namib Lead Zinc". The home page of the website also has a
"virtual site visit" video which provides a project overview.
The files located on the website consist of following
documents
Mine Development Plan Snowden Group
Underground Mining Summary
Geotechnical Study
Ventilation Study
Mining Infrastructure and Utilities
Financial Analysis
Appendices
Processing Study Tenova Bateman.
Volume 1 - Study Documents
NRR Opportunity Statement
Martin French Managing Director of North River Resources said,
"The Mine Development Plan is a Feasibility Study standard document
with the exception that it does not include reserves. Much of the
inferred resources used in the MDP's Mineral Inventory, are
currently being drilled with the objective of up-grading them to
indicated resources, which can then be converted into reserves and
hence a full Feasibility Study. The 1.4 year payback provides a
good indication the Namib project can quickly become profitable. It
provides encouraging economics, especially if the mine life can be
extended over time with deeper drilling and near-mine exploration.
Planning is well advanced to bring Namib back into production and
the Company is now turning its focus to project funding."
**ENDS**
For further information please visit www.northriverresources.com
or contact:
Martin French North River Resources Plc Tel: +44 (0) 20 7930
6966
------------------ -------------------------- ---------------------
Andrew Emmott Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
------------------ -------------------------- ---------------------
Will Slack Pareto Securities Limited Tel: +44 (0) 20 7786
4370
------------------ -------------------------- ---------------------
Andrew Monk VSA Capital Limited Tel: +44 (0) 20 3005
Andrew Raca 5000
------------------ -------------------------- ---------------------
Susie Geliher St Brides Media & Finance Tel: +44 (0) 20 7236
Elisabeth Cowell Ltd 1177
------------------ -------------------------- ---------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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