Mining & Resources Update
30 Maio 2007 - 5:55AM
UK Regulatory
RNS Number:4053X
Zeehan Zinc Limited
30 May 2007
News Release
30th May 2007
Zeehan Zinc Limited
Mining and Reserves/Resources Update
Zeehan Zinc Limited ("Zeehan Zinc" or the "Company") announces update of Gravity
Plant, resources update, new appointments, mining and resources & application
for Mariposa Mining Lease (increased area) on the West Coast of Tasmania,
Australia.
*The primary crushing circuit at the Comstock Gravity Plant has been
commissioned
*Oceana Resources have been increased from 1.6 million tonnes at 3.7%
lead, 1.7% zinc and 21.9ppm silver to 2.1 million tonnes at 5.2% lead, 1.6%
zinc and 46.4ppm silver (see additional notes for Zeehan Zinc's 2006
resource inventory).
*Board and management changes includes the promotion of Ralph Rossouw from
Mine Manager to Chief Operating Officer, Michael McIntyre as new Chief
Financial Officer replacing the interim CFO, Stuart Lloyd, who retires from
this position as well as board member and the retirement of Keith Laing as a
board member
*The application for a new mining lease over the Mariposa deposit
1. Operations at the Comstock Mine
Zeehan Zinc is pleased to announce that it has commenced mining an independently
estimated 6.9 million tonne resource containing silver, lead and zinc reported
and compliant to JORC (Joint Ore Reserves Committee) and has started to
stockpile ore, which will be crushed and processed to create an international
saleable product.
Mining production commenced on Wednesday 30th May 2007, with overburden
stripping and ore material will be added to the newly established mine
stockpiles. On Tuesday 29th May 2007 the Company drilled and fired the first
phase and added 3,000 tonnes to the stockpile and this high grade ore will be
processed by the plant in the next three weeks.
A volume of high grade ore, consisting of Galena (lead sulphide, containing
silver) & Sphalerite (zinc sulphide) will be crushed and mechanically sorted in
preparation for further processing and shipping. The directors believe that over
5,000 tonnes of high grade ore may be extracted from Main Lode & Allison's Lode
for processing within the next 90 days, resulting in a saleable product
acceptable to the international market. Lead and zinc remain at or near world
record prices, as at 29th May 2007 US$2,155 & US$3,605 per tonne respectively
(source: London Metal Exchange).
Mr Paul Heath, Senior Geologist said, "Even though we have a relatively small
volume of high grade lenses within 300 metres proximity to the Gravity Plant, we
are selectively mining these resources to create initial cash flow. These high
grade lenses are readily available and economic to mine".
The commissioning of the primary crushing circuit marks the completion of the
first stage of development completion of the Gravity Separation Plant which is
expected to be fully operational by the end of June as previously announced.
Community spokesperson, and local sporting personality, David Foster, formally
initiated proceedings at a ribbon cutting ceremony on 30th May 2007, the
traditional inauguration of the operation of the primary crushing circuit.
Engineering and capital works including the installation of re-furbished jigs
and an upgraded water management system will be completed within the next month,
in anticipation of pre-concentrate production commencing early in Q3 of 2007.
Ralph Rossouw, the recently appointed Chief Operating Officer, said "I am
extremely pleased with the progress we have made towards completing the
commissioning of the first phase of the Gravity Plant. Today's event is an
important step towards establishing fully integrated operations. Furthermore the
majority of the equipment required for the Floatation plant has now been
refurbished and I expect will be delivered to site within the next two months".
2. Resource Increase at Oceana
Zeehan Zinc announces an update of the Mineral Resources at the Oceana Deposit
located near the town of Zeehan, on the West Coast of Tasmania, Australia.
A summary of resource estimates based on a geological assessment of the 2006
drilling results from the Oceana lead-zinc deposit is reported in accordance
with the JORC (Joint Ore Reserves Committee) Code (2004). This has been prepared
by a Competent Person from independent consultants, Hellman & Schofield Pty Ltd.
The resources at Oceana comprise two main lead-rich deposits:
1. Resource A occurring as a wide body of mineralisation in the north of the
prospect (known previously as the potential Open Pit mineralisation) and
2. Resource B occurring as a narrow, lode system to the south, part of which was
an operation in the late 1950s when 132,000 tonnes of lead ore at 11% Pb and
132g/t Ag was extracted (potential open pit and underground mineralisation).
The resource tonnage, containing zinc, lead and silver, has increased from 1.6
million tonnes to 2.1 million tonnes (Table 1) and consists of resources
potentially accessible by open pit and underground mining methods.
Table 1. Total Oceana Resources
Deposit Status Tonnes t Pb % Zn % Ag ppm
Resource A Indicated 383,014 2.97 1.49 17.0
Resource A Inferred 1,155,426 4.12 2.07 28.2
Sub-total 1,538,440 3.83 1.93 25.4
Resource B Indicated 227,430 9.23 0.81 104.2
Resource B Inferred 379,169 8.49 0.90 97.1
Sub-total 606,599 8.76 0.87 99.8
Grand Total 2,145,038 5.22 1.63 46.4
Resource A density 3.05t/m3; Resource B density 3.35t/m3 . Resources are defined
by an approximately 1%Pb wire-frame shape (+/-Zn). Extracted material from
previous mining not included in Resource B.
The amount of Indicated Resource for Resource A has decreased due to a redesign
of the mineralised shape based on the recent drilling, the application of a more
sophisticated resource estimation technique and more stringent resource
classification parameters. Resource B represents the unmined material associated
with the old Oceana Mine.
The total Oceana resource tonnage has increased by 34%, mainly due to the
addition of Resource B. The increased tonnage is reflected in the following
increases of contained metal within the deposits, with lead up 89%, zinc up 28%
and silver up 184% (Table 2).
Table 2 Metal Content for the Oceana Resources
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
| Deposit | Status |Tonnes t | Pb % | Zn % |Ag ppm | Pb | Zn | Ag |
| | | | | | |Metal t|Metal t| Metal |
| | | | | | | | | oz |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
|Resource |Indicated| 383,014| 2.97 | 1.49 | 17 | 11376| 5707| 230079|
| A | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
|Resource |Inferred |1,155,426| 4.12 | 2.07 | 28.2 | 47604| 23917|1151343|
| A | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
|Sub-total| |1,538,440| 3.83 | 1.93 | 25.4 | 58922| 29692|1380791|
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
| | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
|Resource |Indicated| 227,430| 9.23 | 0.81 | 104.2 | 20992| 1842| 837392|
| B | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
|Resource |Inferred | 379,169| 8.49 | 0.9 | 97.1 | 32191| 3413|1300965|
| B | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
|Sub-total| | 606,599| 8.76 | 0.87 | 99.8 | 53138| 5277|2139172|
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
| | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
| Grand | |2,145,038| 5.22 | 1.63 | 46.4 | 112060| 34969|3519963|
| Total | | | | | | | | |
+---------+---------+---------+-------+-------+-------+-------+-------+-------+
Metal contents may not sum exactly due to round off errors
The resources identified consist of two parallel, sub-vertical, stratabound
lodes with locally massive galena and sphalerite replacement mineralisation
hosted by sideritised carbonates of the Ordovician-aged Gordon Limestone.
Mineralisation is bounded in the north by the Oceana Fault, whilst the Oceana
Mine Fault separates Resource A from Resource B, located within the north and
south of the area respectively.
According to the Hellman and Schofield report, "There is potential for the
discovery of an additional 1.2 - 1.4 million tonnes of mineralisation below the
1,000 metre Relative Level along the whole strike, 400m, of the deposit". They
also state that there is the opportunity for "minor incremental increases of
mineralisation (that) could be anticipated on the margins of the current
resources where there is a lack of drilling".
Further infill drilling, mineralogical testing for base metals and metallurgical
test work will be planned around the resources to confirm the ease of
economically extracting metal from the potential material.
3. New Appointments.
Zeehan Zinc announces the promotion of Ralph Rossouw from Mine Manager to the
Chief Operating Officer of the Company. Zeehan Zinc also announces the
appointment of Michael McIntyre as the new Chief Financial Officer based at the
company's Head Office in Hobart, Tasmania, who is a Fellow with CPA Australia,
with a strong financial and accounting background. This planned addition to the
executive management team enables Stuart Lloyd, Senior Partner of Astims
Chartered Accounting Firm (Sydney, NSW), to step down from this position as well
as a board member, which he has been holding on an interim basis. The company is
very grateful to Mr Lloyd for his valuable contribution during the extremely
demanding process of securing its AIM listing.
Mr Keith Laing, aged 71, has announced that he will retire from the Board having
played a key role in its development over the past year. Mr Laing is an
extremely knowledgeable and experienced engineer who has contributed
significantly to the design and installation of key components of the company's
plant and infrastructure. As the plant is nearing completion, Mr Laing has
completed the major contribution for which his expertise was sought.
The company wishes to thank Stuart Lloyd and Keith Laing for their significant
efforts and wishes them well for the future.
4. Mining Lease Application, Mariposa (extended area)
Zeehan Zinc Limited's wholly owned subsidiary, ZZ Exploration Pty Ltd has
applied for a new mining lease 7M/2007 over the Mariposa deposit which extends
over a 180 hectare area for category 1 (metallic) and category 3 minerals to
mine lead, zinc and silver minerals from open cut workings and under ground. The
application is based on a development & mining plan extending over a 10 year
mine life based on positive indicative results from recent exploration
activities. At present, 513,899 tonnes of Inferred Resources have been estimated
and reported to JORC (Joint Ore Reserves Committee) as disclosed within the
Competent Persons Report Summary of Reserves and Resources by Status disclosed
in the company's Placing and Admission document dated 27th February 2007 to
trading on AIM (Alternative Investment Market).
Contacts:
Zeehan Zinc c/o Bankside Consultants
Michael Roberts, Chairman Tel: 0207 367 8888
John Pollard, Chief Executive Officer
Libertas Capital Tel: 0207 569 9650
Jakob Kinde/Aamir Quraishi
Bankside Consultants Tel: 0207 367 8888
Simon Rothschild/Oliver Winters
The data in this report that relates to Exploration Results and Mineral
Resources for the Oceana Lead deposit is based on information evaluated by Mr
Simon Tear who is a Member of The Australasian Institute of Mining and
Metallurgy (MAusIMM) and who has sufficient experience 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 2004
Edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the "JORC Code"). Mr Tear is a full-time employee of
Hellman & Schofield Pty Ltd and he gives his consent to the inclusion in this
report of the Mineral Resource in the form and context in which they appear.
Additional Notes
The resources were estimated from drilling and trenching work completed by
numerous explorers including ZZ over the last 60 years. The initial work was by
Zeehan Mines (a Broken Hill North and South JV) with follow on work by ASARCO,
Cyprus and Pasminco (now Zinifex).
The data has been provided to H&S by Zeehan Zinc and has been accepted in good
faith. Data verification has included comparison of database with original hard
copy logs for assays and geological information.
Drillhole locations were mainly based on local grid coordinates which indicated
a maximum error of 5m locally. Recent Zeehan Zinc aircore holes and some older
surface holes were accurately surveyed in by a qualified surveyor. All
underground hole coordinates were from geological logs in the original local
grid, this was converted to the AMOCO local grid on which all recent resource
work has been completed.
Geological interpretation for both deposits was based on designing potential
mineral shapes based on a notional 1% Pb (+/- Zn) cut off with a low grade halo
wireframe of 0.2% Pb (+/-Zn). In addition, siderite alteration, where
discernible, was used to help define mineralisation shapes.
The estimation for Resource A was based on 938 1m composited samples from 10
diamond holes, 20 aircore holes and 6 trenches. These are from a mixture of
diamond and aircore drilling and surface trenching, at roughly 20m spacing, with
the samples extracted from the drillhole database and constrained by the
relevant mineral wireframes. Resource B is based on 307 1m composited samples
from 31 diamond holes and 2 trenches derived from similarly spaced diamond
drilling (both surface and underground). Voids were assigned a zero value.
Sample quality for both diamond and aircore drilling was variable with zones of
good recovery interspersed with occasional zones of poor recovery. Mineralised
material was generally more competent with depth. There is no QA/QC associated
with the historical drilling; recent QA/QC with Zeehan Zinc drilling indicated
some localised under-reporting of lead grade (currently under review). There are
no reports of the analytical method associated with the pre-1960 historical
drilling. Latter assaying was completed by commercial laboratories.
Sample quality for both diamond and aircore drilling was variable with zones of
good recovery interspersed with occasional zones of poor recovery. Mineralised
material was generally more competent with depth. There is no QA/QC associated
with the historical drilling; recent QA/QC with the Zeehan Zinc drilling e.g.
inserted anomalous standards and blanks, indicated some localised
under-reporting of lead grade (currently under review by Zeehan Zinc. There are
no reports of the analytical method associated with the pre-1960 historical
drilling. Later assaying was completed by commercial laboratories.
The bulk density measurements used in the resource estimation are average values
based on a series of measurements (>200) made on historical core detailed in a
previous Zeehan Zinc commissioned report.
Modelling methods consisted of Ordinary Kriging and Inverse Distance Squared (as
a check method), with a predominant search direction parallel to the bedding
i.e. rotated 20o east of grid north, dipping 80o to the east. Search parameters
for estimates that can be categorised as Indicated are25 to 30 metres in the
plane of mineralisation and 5 - 7 metres orthogonal to the plane of
mineralisation. Inferred estimates vary from 33 to 54 metres in the plane of
mineralisation and 9 to 13 metre orthogonal to the plane. A maximum number of 32
1m composites were used for estimates and a minimum of 16 for Indicated and 8
for Inferred.
Modelled data was imported into a Surpac block model for resource reporting
purposes. Resource estimates for the Ordinary Kriged block model are reported
within the >1% Pb shape and above the 1000mRL. The southern Resource B is a
remnant sulphide deposit left behind from previous mining. No distinction was
made for any oxide mineralisation as its extent is unknown.
Resources are initially classified according to the search strategy (see above).
H&S in-house software, GS3 (see below), was used for estimation. Final
confidence categories assigned to the estimates are based on distance of
searches and a consideration of geological knowledge. The lack of any Measured
Resource is due in part of the doubt introduced by the Zeehan Zinc QA/QC
programme and the lack of such for historical data. In addition the localised
areas of bad recovery and the lack of a more representative distribution of
density have also impacted on the resource classification and have increased the
uncertainty.
The wire-frame shape for each lode was used to constrain the resource reporting.
In some instances there was insufficient data to fill all the blocks within the
wire-frame. The modelling process was then repeated with a larger search ellipse
to estimate grades for a larger spread of blocks. The second search block grades
were appended to the first search such that the original blocks were preserved
with additional peripheral blocks filled with a grade value. However, this
method can still leave blocks with no assigned grade within the wire-frame.
These blocks are allocated an average grade of the appropriate resource and then
added to the Inferred Resource category in the reporting process.
The GS3 software that performs the Ordinary Kriging modelling allocates a
ranking to each block grade based on its success in locating the required number
of samples as specified in the search parameters. These rankings were used to
assign a resource classification.
Zeehan Zinc's Resource Inventory 2006
6.9 million tonnes JORC reported resource (2006):
+-----------------------+----------+---------+---------+---------+---------+
|Category | Tonnes | Grade % | Grade % |Grade % g|Contained|
| |(millions)| Zn | Pb | /t Ag | Metal |
+-----------------------+----------+---------+---------+---------+---------+
| | | | | | |
+-----------------------+----------+---------+---------+---------+---------+
|Probable | | | | | |
+-----------------------+----------+---------+---------+---------+---------+
| Allison's (1)| 0.099| 5.7| 1.7| 42| 0.0076|
+-----------------------+----------+---------+---------+---------+---------+
|Measured | | | | | |
+-----------------------+----------+---------+---------+---------+---------+
|Main Lode/West Lode (2)| 0.005| 4.1| 3.2| 40| 0.0004|
+-----------------------+----------+---------+---------+---------+---------+
|Indicated | | | | | |
+-----------------------+----------+---------+---------+---------+---------+
| Oceana (4)| 0.666| 2.3| 5.2| 30| 0.0518|
+-----------------------+----------+---------+---------+---------+---------+
|Inferred | | | | | |
+-----------------------+----------+---------+---------+---------+---------+
| Allison's (3)| 0.004| 2.3| 0.7| 17| 0.0001|
+-----------------------+----------+---------+---------+---------+---------+
| Main Lode (including| 0.013| 4.3| 1.7| 24| 0.0008|
| West Lode)(2)| | | | | |
+-----------------------+----------+---------+---------+---------+---------+
| Balstrup (2)| 4.6| 5.7| 3.3| 35| 0.4301|
+-----------------------+----------+---------+---------+---------+---------+
| Oceana(4)| 0.938| 1.2| 2.6| 16| 0.0372|
+-----------------------+----------+---------+---------+---------+---------+
| Mariposa(5)| 0.574| 1.9| 5.1| 60| 0.0407|
+-----------------------+----------+---------+---------+---------+---------+
| Resources Sub-total| 6.8| 4.4| 3.5| 34| 0.5418|
+-----------------------+----------+---------+---------+---------+---------+
| Resources and Reserves| 6.899| 4.4| 3.5| 34| 0.5491|
| Total| | | | | |
+-----------------------+----------+---------+---------+---------+---------+
| | | | | | |
+-----------------------+----------+---------+---------+---------+---------+
Extracted from: Zeehan Zinc Limited Summary of Ore Reserves and Resources by
Status
(Competent Person's Report and Independent Technical Valuation of the Mineral
Assets of Zeehan Zinc Limited in Western Tasmania Australia, 29th January 2007,
Anderson & Schwab Australia)
1) Allison's lode, reserve statement, Minserve - January 2006 (includes measured
and indicated resources).
2) Zeehan Zinc Limited resources, estimation and classification update, Cottle
Co., Pty Ltd, September 2005.
3) JORC resource statement for the Allison's lode- November 2005, SMG
Consultants Pty Ltd
4) Oceana Pit; resource review, Zeehan West Tasmania, February 2006 SMG
Consultants Pty Ltd
5) Block model report for the Mariposa Deposit, January 2006, SMG Consultants
Pty Ltd
This information is provided by RNS
The company news service from the London Stock Exchange
END
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