MOD RESOURCES LIMITED ASX RELEASE 15 APRIL 2015
MAHUMO - STAGE ONE MINERAL RESOURCE STATEMENT
MOD Resources Limited (ASX: MOD) refers to the ASX announcement of 25 March 2015.
In accordance with the requirements of Listing Rule 5.8.1 and clause 50 of the 2012 JORC Code, a Mineral
Resource Statement is attached as Appendix 1 to this announcement.
Managing Director Executive Chairman and Company Secretary
MOD Resources Limited MOD Resources Limited
Ph: (61 8) 9322 8233 Ph: (61 8) 9322 8233 jhanna@modresources.com.au mclements@modresources.com.au
MOD Resources Limited ABN 78 003 103 544 | First Floor, 1304 Hay Street, West Perth WA 6005 | PO Box 1927, West Perth WA 6872
ASX code: MOD | T +61 (8) 9322 8233 | F +61 (8) 9322 8077 | E administrator@modresources.com.au | www.modresources.com.au
MAHUMO - STAGE ONE MINERAL RESOURCE STATEMENTP a g e | 2
MAHUMO - STAGE ONE MINERAL RESOURCE STATEMENT 1. Geology and Geological Interpretation
The copper and silver mineralization which is the basis for the Mahumo Stage One Mineral Resource is interpreted to be a Proterozoic or early Palaeozoic age vein related sediment hosted occurrence similar to other known deposits and mines in the central Kalahari Copper Belt in Botswana.
The Mineral Resource has been defined along a 2.4km long strike length at Mahumo and high grade copper and silver sulphide mineralisation occurs in veins and disseminations within mudstone and siltstone host rocks. Hangingwall to the resource is generally defined by a distinctive marl unit which extends throughout the region and forms part of the D'Kar Formation. The footwall to the resource is generally defined by lower grade disseminated mineralisation either within the host rocks, or on the contact with the underlying Ngwako Pan Formation which is a coarse sandstone sequence.
Mineralisation is very continuous at Mahumo and is dominated by chalcocite and bornite copper sulphides which extend from shallow depth (~15-25m depth) to the limit of drilling at ~500m depth. Minor malachite and chrysocolla oxide mineralisation occurs near surface between approximately 10-
25m depth.
Mineralisation is conformable with the host sediments which dip approximately 70-80 degrees south east. A recent interpretation of the drilling data has defined two parallel, shallow south east plunging fold structures (Figure 1). These structures appear to influence the width of the mineralisation with wider, high Cu/Ag grades related to steeply dipping zones (extending up to 300-400m down dip) and narrower, high grade intercepts along flat surfaces which may represent offset faults.
This interpretation opens up potential for resource extensions below the current resource which is likely to be the main focus of the proposed Stage Two extension drilling.
The drilling results referred to in this release were drilled by diamond core drilling rigs. HQ3 diameter drill core was drilled for all the shallow drill holes and NQ for the deeper drill holes. Triple tube drilling was used for the shallow drill holes to maximise core recovery in oxidized sediments.
3. Sampling, Sub Sampling and Analytical Techniques
Drill core is logged, split by diamond saw and sampled on site. Samples are assayed at 1m lengths from half core, or less as dictated by lithological contacts, and assayed for Ag and Cu at Set Point laboratories in Isando, Johannesburg. Standards, blanks and duplicates are inserted into the sample stream. The remaining half portion of drill core is retained on site at MOD's core logging facility in Ghanzi, Botswana.
Samples arriving at the laboratory are crushed using a jaw crusher to a particle size less than 15 mm and then crushed to a fineness of 80% less than 2.0mm. The split for analysis is milled to achieve a fineness of
90% less than 106 µm.
Analytical techniques have been chosen to best characterize total and non-sulphide copper and silver - mineralization. Analysis for non-sulphide Copper was by method M449 and determined by sulphuric acid leach followed by ICP-OES (Inductively Coupled Plasma - Optical Emission Spectrometry) finish. Analysis for total Silver and Copper is determined by 3 acid digest (HNO3, HClO4 and HCl) followed by ICP-OES finish.
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4. Resource criteria and assumptions
The Stage One Mineral Resource estimate was classified in accordance with the Australasian Code for
Reporting of Exploration results, Mineral Resources and Ore Reserves (JORC Code, 2012).
Geological interpretation was based on drill hole lithology and grade data which was completed on 33 cross-sections using Datamine software. 3D (wireframe) geological modelling was carried out by Sphynx Consulting CC ('Sphynx') and reviewed by MOD Resources. Sphynx produced resource tables at a copper cut-off grade of 1.0% Cu (Table 1).
Total Resources @ 1.0% Cu cut-off | ||||||
JORC Category | Tonnes | Cu% | Ag g/t | CuEq% | Cu Tonnes | Ag Ounces |
Measured | 518,000 | 1.93 | 48.8 | 2.37 | 10,000 | 813,000 |
Indicated | 1,726,000 | 1.87 | 48.0 | 2.30 | 32,280 | 2,660,000 |
Inferred | 433,000 | 2.52 | 57.4 | 3.03 | 10,900 | 800,000 |
Total | 2,677,000 | 2.00 | 50.0 | 2.44 | 53,180 | 4,273,000 |
Table 1: Mahumo Stage One Mineral Resources
Note: CuEq estimate used at 25 March 2015 = Cu% + (Ag g/t * 0.009)
The Stage One Mineral Resource estimate was based on a number of factors and assumptions:
A review of the QAQC data was completed and considered satisfactory for Inferred, Indicated and
Measured Resources.
Mineralisation was defined by zones identified from downhole lithological and analytical data.
Grade domaining was applied by constructing hard boundaries at 0.5% Cu and 1.0% Cu respectively.
Using parameters derived from modelled variograms, Ordinary Kriging (OK) was used to estimate average block grades for Cu, Ag and AsCu (Acid soluble Copper).
The estimation was conducted in three passes with the search radius increasing for each pass.
The model was validated visually and statistically using swath plots and comparison to sample statistics.
Bulk densities were assigned to mineralised domains. The dry bulk densities were based on immersion measurements from 202 core samples. A median bulk density of 2.74 t/m3 was used.
The relative accuracy is reflected in the resource classification that is in line with industry acceptable standards. It is a global resource estimate with no production data available at Mahumo.
This Resource is an updated estimate based on substantial additional drilling completed after the previous estimate was announced on 24 September 2012 for Corner K deposit (renamed Mahumo).
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5. Resource Classification and drill hole spacingThe classification of Mineral Resources was completed based on the geological complexity, estimation performance, number of drill samples, drill hole spacing and sample distribution. The Competent Person is satisfied that the result appropriately reflects his view of the deposit. Continuous zones meeting the following criteria were used to define the resource class:
Measured Resource
Drill hole spacing up to 36m by 36m
Estimation performance: Weighted average below 1.66
Indicated Resource
Drill hole spacing up to approximately 50m by 100m
Estimation performance: Weighted average between 1.66 and 2.33
Inferred Resource
Drill hole spacing wider than 100m by 100m
Estimation performance: Weighted average above 2.33
Blocks estimated in the third pass
Limited number of drill holes
Greater geological complexity indicated by interpretation uncertainty in location of features like faults and folds.
The resource model is constrained by assumptions about economic cut-off grades. The mineralisation is constrained by a 0.1 % Cu cut-off and tabulated resources are based on cut-off grade starting at 0.5% Cu.
On the assumption that underground mining is likely to be considered for any future potential production at Mahumo, a cut-off grade of 1.0% Cu has been used to derive the Stage One Mineral Resource announced in this release.
MOD is proceeding with a scoping study to evaluate open pit and underground mining options and on-site processing at Mahumo. This follows previously announced results from two early studies, as follows:
On 6 August 2014, MOD announced a conceptual open pit study based on previous widely spaced drilling at Mahumo had delineated an average grade of 1.8% Cu and 47g/t Ag within two pit shells assuming 80% Cu processing recovery. The study also considered that the conceptual pits could potentially provide access for underground mining of what appears to be an extensive vein related copper/silver deposit.
This study provided encouragement for MOD to undertake a substantial resource drilling program to test for extensions to Mahumo to 400m depth and to conduct preliminary metallurgical test work.
On 29 September 2014, MOD announced results from preliminary rougher and cleaner flotation test work on composite samples of intersections between 40-60m depth from drill holes at the West Zone and East Zone at Mahumo. Based on this preliminary test work some initial conclusions were made:
Concentrate grades are exceptionally high, consistent with observed mineralogy
West Zone concentrate grade is 59% Cu and 1,900g/t Ag, at 87% Cu recovery
East Zone concentrate grade is 57% Cu and 1,550g/t Ag, at 73% Cu recovery
Further test work required to validate these results and target higher Cu recoveries
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8. Copper Equivalent Assumptions and Statement
The formula CuEq% = Cu% + (Ag g/t *0.009) has been used to estimate the copper equivalent grade of announced drill hole intersections at Mahumo. The formula assumes the following metal prices;
Cu = US$2.70/lb
Ag = US$20/oz
Metallurgical recoveries assumed equal for both Cu and Ag based on preliminary testwork
(i) Individual grades for Cu, Ag and CuEq% listed in Table 4 in the ASX announcement dated 25 March
2015.
(ii) Mineral Resource modelling, cut-off grade and estimation is undertaken using Cu% not CuEq%.
Based on preliminary test work results announced on 29 September 2014 and subject to the results of the current test work program, MOD considers that potential processing of the Mahumo sulphide mineralisation which is included in the Mineral Resource has potential to result in high metallurgical recoveries of both copper and silver and produce a saleable copper/silver concentrate.
Competent Persons' StatementsThe Competent Person responsible for the geological interpretation, Mineral Resource estimation and classification of the
Mahumo Copper/Silver Project is Mr A.I. Pretorius, who is a full-time employee of Sphynx Consulting CC and registered with SACNASP (400060/91). Mr Pretorius has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the
2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Pretorius consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.
The information in this announcement that relates to Geological Data and Exploration Results as it relates to Mineral Resource estimation and classification at the Botswana Copper Project is reviewed and approved by Mr Jacques Janse van Rensburg, BSc (Hons), General Manager Exploration (Africa) for MOD Resources Limited. He is registered as a Professional Natural Scientist with the South African Council for Natural Scientific Professions (SACNASP) No. 400101/05 and has reviewed the technical information in this report. Mr Janse van Rensburg has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity which it is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves. Mr Janse van Rensburg consents to the inclusion in this announcement of the matters based on information in the form and context in which it appears.
Information in this announcement relates to previously released exploration data disclosed under the JORC Code 2004. It has not been updated to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported and is based on and fairly represents information reviewed and approved by Mr Jacques Janse van Rensburg, BSc (Hons), General Manager Exploration (Africa) for MOD Resources Limited.
Forward Looking StatementsThis announcement may include forward-looking statements that are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of MOD Resources Limited.
Actual values, results, interpretations or events may be materially different to those expressed or implied in this announcement. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements in the announcement as they speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and ASX Listing Rules, MOD Resources Limited does not undertake any obligation to update or revise any information or any of the forward-looking statements in this announcement or any changes in events, conditions or circumstances on which any such forward-looking statement is based.
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