Lynas Corporation Limited : Significant Increase in Ore Reserves at Mount Weld
09/20/2012| 08:27pm US/Eastern
Recommend:
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Corporate Office
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Telephone:
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+61 2 8259 7100
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Level 7
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Facsimile:
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+61 2 8259 7199
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56 Pitt Street
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Website:
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www.lynascorp.com
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Sydney NSW 2000
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ACN:
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009 066 648
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AUSTRALIA
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21 September 2012
Significant Increase in Ore Reserves at Mount Weld
Highlights
• The Ore Reserves at the Central Lanthanide Deposit
are now 9.7 million tonnes, at an average grade of 11.7% REO,
for a total of 1.14 million tonnes of contained REO. This
represents a 362% increase in Ore Reserves and a 260%
increase in contained REO compared with the prior Ore
Reserves contained in the 2005 Feasibility Study.
• The Ore Reserves represent more than 25 years mine
life based on current production plans (22,000 tonnes per
annum REO)
• Ore Reserves will provide the basis for expanded
operations at Mount Weld
Lynas Corporation Limited (ASX:LYC, OTC:LYSDY) is pleased to
announce a significant upgrade of the Ore Reserves at Mount
Weld. The new Ore Reserves are based on a mining study that
re- optimised the pit design using the updated Mineral
Resources estimate that was announced to the ASX on 18
January 2012.
The new Ore Reserves at the Central Lanthanide Deposit (CLD),
using a cut-off grades ranging from 4 to 7% depending on the
type of ore, are 9.7 million tonnes at an average grade of
11.7% REO for a total of 1.14 million tonnes of contained
REO. The Ore Reserves estimate for the CLD is 362% higher
compared with the 2005 estimate and the contained REO in the
Ore Reserves is
260% higher than the 2005 estimate.
TABLE 1: CLASSIFICATION OF
ORE RESERVES FOR THE
CENTRAL LANTHANIDE
DEPOSIT
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Ore Reserves Within Designed Pit
Category
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Million tonnes
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REO (%) *
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Contained REO
('000 tonnes)
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Proved
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4.9
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12.7
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622
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Probable
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4.1
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10.0
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410
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Designed Pit Total
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9.0
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11.5
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1,032
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Ore Reserves On Stockpiles
Category
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|
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Proved
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0.7
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15.2
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106
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Probable
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0.0
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0.0
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0
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Stockpiles Total
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0.7
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15.2
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106
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Total Ore Reserves
Category
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Proved
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5.6
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13.0
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728
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Probable
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4.1
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10.0
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410
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Total
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9.7
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11.7
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1,138
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* REO (%) includes all the lanthanide elements plus Yttrium
Page 1 of 4 R:LYNAS CORPORATIONADMINISTRATIONCOMPANY
SECRETARYASX MEDIA ANNOUNCEMENTSASX ANNOUNCEMENTS 2012Mt
Weld Reserve Upgrade Sep12_final.docx
|
Corporate Office
|
Telephone:
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+61 2 8259 7100
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|
Level 7
|
Facsimile:
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+61 2 8259 7199
|
|
56 Pitt Street
|
Website:
|
www.lynascorp.com
|
|
Sydney NSW 2000
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ACN:
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009 066 648
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|
AUSTRALIA
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In announcing the latest Ore Reserves, Lynas Executive
Chairman, Nicholas Curtis, said "the upgraded Ore Reserves
confirm Mount Weld's status as one of the richest rare earths
deposits in the world. Mount Weld Ore Reserves now support
our current production plans for more than 25 years. With the
Temporary Operating Licence for the Lynas Advanced Materials
Plant now in hand we look forward to supplying these critical
rare earths products to our customers for many years to
come".
TABLE 2: COMPARISON OF 2012
ORE RESERVES ESTIMATE
TO PRIOR ESTIMATE
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Ore Reserve Estimate
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Million tonnes
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REO (%)
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Contained REO
'000 tonnes
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2012 Ore Reserve Estimate
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9.7
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11.8
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1,138
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2005 Ore Reserve Estimate
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2.1
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15.2
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316
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Figure 1 outlines the development of the Mount Weld pit
design following the upgrade of the Ore
Reserves.
FIGURE 1: OVERVIEW OF
PIT DESIGN FOR ORE
RESERVE EXPANSION
New Pit Design
Ore Blocks
2005 Ore Reserve Pit Design
Current Pit
Page 2 of 4 R:LYNAS CORPORATIONADMINISTRATIONCOMPANY
SECRETARYASX MEDIA ANNOUNCEMENTSASX ANNOUNCEMENTS 2012Mt
Weld Reserve Upgrade Sep12_final.docx
|
Corporate Office
|
Telephone:
|
+61 2 8259 7100
|
|
Level 7
|
Facsimile:
|
+61 2 8259 7199
|
|
56 Pitt Street
|
Website:
|
www.lynascorp.com
|
|
Sydney NSW 2000
|
ACN:
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009 066 648
|
|
AUSTRALIA
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Criteria
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Comments
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Mineral Resource Estimate for Conversion to Ore
Reserves
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The Mineral Resource model for the Mt Weld Project was
developed by Lynas with the latest Resources announced
on 18 January 2012. The Ore Reserves are based on a
mining study that re- optimised the pit using the
updated Resources with the latest cost estimates and
pricing data.
The Mineral Resource announced on 18 January 2012 is
inclusive of the Ore Reserve.
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Study Status
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A Feasibility Study was completed in March 2005.
Operations at the mine have stockpiled 0.7 Mt of ROM
ore. The concentrate plant at Mt Weld started
production in 2011 and has a nominal capacity of 11
kt/a REO . The Advanced Material Plant in Malaysia
which will separate the concentrate into saleable
products is complete and all licensing in place.
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Cut-off
Parameters
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A cut-off grade was based on a positive net value of
each block after considering the revenue for the
saleable products and costs to process and recover
them. On top of this a minimum cut-off of
4% REO was also applied for the CZ and LI material and
a cut-off grade of 7% REO was applied to the AP
material. At present only the Central Lanthanide
Deposit has been included in the Ore Reserves.
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Mining Factors or Assumptions
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A dilution of 4% at zero grade with a 2% ore loss was
assumed.
The Ore Reserves are reported within a pit design which
is based on a Whittle open pit optimisation. The
optimisation was carried out including Measured and
Indicated Resources only. The optimisation used a
weighted average product price of $51/kg.
The overall pit slopes used for the design are based on
geotechnical studies by Golder Associates.
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Metallurgical Factors or Assumptions
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The initial processing is carried out at the Mt Weld
concentration plant where an REO concentrate is
produced by flotation. This should recover about 70% of
the REO and produce a 40% REO product that is to be
shipped to the Lynas Advanced Materials Plant (LAMP) in
Malaysia where the concentrate will be separated into a
series of saleable rare earth products. The Mt Weld
concentrator is operating and experience is already
being obtained on flotation recoveries.
Experience and metallurgical test-work has been used to
develop a series of regressions to determine the
overall product recovery percentage for each separate
rare earth oxide product based on REO input grade.
Phase 1 of the project is planned to handle 121 kt of
ROM yearly to produce about 33 kt of concentrate with
11 kt of separated rare earth products from the LAMP.
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Cost and Revenue Factors
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Mt Weld concentrator operating cost is based on
experience.
Revenue is based on estimated recovery and market price
for each individual product. For the optimisation work
a weighted average price of approximately A$52/kg was
used.
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Market
Assessment
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Macroeconomic conditions in China, the largest consumer
of rare earths are relatively subdued.
Japan which is the largest export market for rare
earths has seen a weakening of demand in a number of
areas. This has led to rare earth consumers running on
reduced inventories.
This process has been shown in the drop in prices. The
price uses for these ore reserves are the lowest China
FOB prices since 2010.
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Other
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The project is well advanced with mining have already
stockpile 0.7 Mt of ore and the
concentration plant operating to create REO
concentrate. The LAMP construction is completed and now
that the Temporary Operating License has been obtained
it is planned to start operating in
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Page 3 of 4 R:LYNAS CORPORATIONADMINISTRATIONCOMPANY
SECRETARYASX MEDIA ANNOUNCEMENTSASX ANNOUNCEMENTS 2012Mt
Weld Reserve Upgrade Sep12_final.docx
|
Corporate Office
|
Telephone:
|
+61 2 8259 7100
|
|
Level 7
|
Facsimile:
|
+61 2 8259 7199
|
|
56 Pitt Street
|
Website:
|
www.lynascorp.com
|
|
Sydney NSW 2000
|
ACN:
|
009 066 648
|
|
AUSTRALIA
|
|
|
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Criteria
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Comments
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October 2012.
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Classification
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There is Measured, Indicated and Inferred Resources
within the model. The Measured and Indicated Resources
within the designed pits have been converted to Proved
and Probable Ore Reserves (Measured to Proved,
Indicated to Probable). The stockpiled ROM material is
considered as Proved.
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Audit/Previous
Studies
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Previous Ore Reserves estimate (Lynas, 2003).
Feasibility Study 2005.
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For further information
please contact Alistair Reid or Liz Whiteway on +61 2 8259
7100 or visit www.lynascorp.com
For all media enquires please contact Michael Vaughan from
FTI Consulting on +61 2 8298
6100
COMPLIANCE WITH THE JORC CODE ASSESSMENT CRITERIA
The Ore Reserves statement has been compiled in accordance
with the guidelines defined in the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves (The JORC Code - 2004 Edition). The Ore Reserves
have been compiled by Ross Bertinshaw of Golder Associates,
who is a fellow of Australasian Institute of Mining and
Metallurgy and a Chartered Professional (Mining). Mr
Bertinshaw has had sufficient experience in Ore Reserve
estimation relevant to the style of mineralisation and type
of deposit under consideration to qualify as Competent Person
as defined in the 2004 Edition of the "Australasian Code for
Reporting of Mineral Resources and Ore Reserves". Mr
Bertinshaw consents to the inclusion in this report of the
matters based on his information in the form and context in
which it appears.
The Mineral Resource model used for the Ore Reserve Estimate
has been compiled by Brendan Shand, who is a member of The
Australasian Institute of Mining and Metallurgy. Brendan
Shand is an employee of Lynas Corporation Limited. Brendan
Shand has sufficient experience which is 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'. Brendan Shand
consents to the inclusion in the report of the matters based
on his information in the form and context in which it
appears.
Page 4 of 4 R:LYNAS CORPORATIONADMINISTRATIONCOMPANY
SECRETARYASX MEDIA ANNOUNCEMENTSASX ANNOUNCEMENTS 2012Mt
Weld Reserve Upgrade Sep12_final.docx
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