Heron Resources Ltd. (TSX: HER; ASX: HRR) ("Heron" or the
"Company") announces its quarterly activities for the three months
ended March 31, 2017. Details of the Company's results are
contained in the filing “Heron Resources Limited Quarterly Report
March 2017” which is available on SEDAR at www.sedar.com and the
Company's website www.heronresources.com.au
March Quarter 2017 Highlights
Woodlawn Zinc-Copper Project
- Front End Engineering Design (FEED): Work with Sedgman
saw the finalisation of the plant layout design, tendering of
construction earthworks and completion of the major plant equipment
packages
- Project Readiness: Continuation of site activities focused on
the site water balance, water treatment, mine dewatering and land
subdivision for purchase
- Project Financing: Negotiations and documentation are well
advanced with debt and equity providers and the Company expects
that the financing process will be completed in the current
quarter. Significant progress was made with a number of
pre-financing activities:
- Due diligence – project financing related technical review
activities have been completed
- Veolia Cooperation Agreement – the Company entered into a new
cooperation agreement with Veolia covering the shared use of the
Woodlawn Site
- Environmental Protection Licence - NSW Environment Protection
Authority (EPA) issued Heron’s environment protection licence
(EPL)
- EPC & Offtake Contracts – contracts covering the
Engineering, Procurement and Construct of the Woodlawn processing
facility and the concentrate offtake are in their final stages with
award expected in the next month
Woodlawn Exploration
- G2 Lens: New drilling program initiated targeting an expansion
to shallow reserves as initial plant feed – drilling will focus on
the high grade G2 Lens hanging-wall zone discovered in 2016
- Kangiara Project: (90 km NW of Woodlawn): Strong soil
geochemistry anomalism provides potential for a significant
McPhillamys style greenfields gold and base-metal discovery at the
Crosby Prospect – RAB drilling to commence in May to test key
areas
Corporate
- Ardea Resources: Spin-out of the Company’s non-Woodlawn assets
into Ardea Resources resulting in a successful ASX listing on 9
February 2017, currently trading at $0.60, significant value
creation for Heron shareholders
- R&D: On 13 March 2017 the Company received the 2015/16
R&D activity refund totalling A$3.2M
- Cash: Heron held A$16.3M in cash (excluding bonds) and A$4.7M
in investments as at 31 March 2017
Woodlawn Project – Development Progress
The Company is currently focused on a number of work streams to
enable the commencement of construction immediately following the
closing of project finance arrangements. Components of this
work are also required as part of the project financing process.
The main work activity areas included:
- EPL Licence – On 29 March the NSW Environment Protection
Authority (EPA) issued Heron’s environment protection licence (EPL)
(refer below);
- Veolia – The Company entered into a new Cooperation Deed with
Veolia Environmental Services (Australia) Pty Ltd governing the
joint use of the Woodlawn Project site (refer below);
- Project Engineering – Sedgman Pty Ltd (Sedgman) progressed
front-end engineering design (FEED) for the plant and
infrastructure of the Woodlawn Project. Work completed included the
finalisation of the plant layout design, tendering of construction
earthworks and major equipment packages. Engineering design
is ongoing and approximately 20% completed;
- Mine plan –Mine re-entry planning continued during the quarter.
Work focused on planning for probe drilling to place fill into
existing workings adjacent to the landfill. This probe
drilling will commence in the current quarter and will be conducted
using a specialist geotechnical engineering company;
- Water management – Water management activities saw the
continuation of emptying Tailings Dam South in readiness for
tailings mining. This work will slow over the coming cooler
months. Mine dewatering is scheduled to commence in the
current quarter;
- Water treatment – Water treatment test work was completed
during the quarter and invitations to tender to service providers
is underway; and
- Community – The quarterly project community consultation
committee met in February with no concerns being raised. The
Company exhibited at the Tarago Show in March with strong interest
expressed in the employment opportunities the project will bring to
the local community.
Project Finance – The Company has continued to
advance negotiations and documentation with debt and equity
providers for the project development funding. These discussions
have taken longer than desired and initially anticipated; however,
they are now well advanced and the Company expects that the
financing process will be completed in the current
quarter.
- In addition to these discussions, significant progress was made
with a number of pre-financing activities:
- Due diligence – project finance related technical and
commercial review activities have been completed with strong
results;
- Veolia Cooperation Agreement – The original Cooperation Deed
with Veolia Environmental Services Australia Pty Ltd (“Veolia”) was
entered into in 2008 and reflected the project as it was understood
at that time. The project studies since this time resulted in a
number of technical changes to the profile of the project and these
factors, along with Veolia’s continued development of their
activities on site, meant a detailed review and update of the
previously agreed Cooperation Deed was required to ensure that it
remained relevant and complete. The new agreement deals with the
respective Heron and Veolia areas, rights and responsibilities
associated with the joint use of the site. Specifically the
agreement covers:
- Delineation of Heron and Veolia area of operations;
- Establishment of a committee comprising Heron and Veolia
representatives to consider site interaction aspects;
- Heron’s right to purchase the freehold lands covering its area
of operation;
- Division of site rehabilitation obligations and provision of
compost material from Veolia for mine-site rehabilitation;
- Working offset distances and controls to minimise impact on
operations;
- Management of site water with an overall principle of
maintaining a zero discharge site; and
- Commercial terms including insurance coverage, environmental
bond and the provision of a bank guarantee.
- Environment Protection Licence – On 29 March 2017 the Company
was issued its Environment Protection Licence (No. 20841) (EPL)
from the NSW Environment Protection Authority (EPA) covering
proposed construction, mining and processing activities at the
Woodlawn Project site. This is the final licensing requirement
prior to the commencement of construction activities at Woodlawn.
In relation to the Woodlawn Project the EPL covers:
- the permitted activities;
- management of site activities and their impact on the
environment;
- the setting of limits for water, noise, blasting, hours of
operation and odour;
- monitoring and recording requirements; and
- reporting obligations to the EPA.
- EPC - the Engineering, Procurement and Construct (EPC) contract
for the Woodlawn processing facility is in a final draft form with
award expected in the next month; and
- Offtake Contracts – Contracts covering the offtake for the
zinc, copper and lead concentrates are in their final stages with
award also expected in the next month.
Woodlawn Exploration - G2 Lens
Drilling
- Woodlawn exploration activities are currently focusing on
finding additional mineralisation proximal to the planned decline
and able to be accessed early in the mine schedule. In particular,
the G2 Lens, described below, shows promise in this regard.
- A drilling contract has been entered into with the program
expected to take two to three months to complete. It is important
to note that this drilling program is not a pre-requisite to
project financing and is being undertaken now to complete mine
planning stope design prior to the start of mine development.
- The G2 Lens is located to the south of the Kate Lens, and
adjacent to the planned route of the decline between 100-200m below
the surface. Drilling in 2016 targeted this area to test its
ability to add immediately to the early mine inventory.
About Woodlawn Zinc-Copper Project
Heron’s primary development project is the high grade Woodlawn
Zinc-Copper Project located 250km southwest of Sydney, New South
Wales. The project consists of both a high grade underground and a
large medium grade tailings resource. The development approach
envisages the construction of a single 1.5Mtpa processing plant
capable of treating material from both sources. Planned production
will see the generation of three separate base metal concentrates
(zinc, copper and lead) with associated precious metal credits. In
addition, the project is very well supported by excellent
infrastructure, an existing mining lease and state government
development approvals.
Woodlawn is expected to become an important Australian near term
zinc producer delivering concentrates into a market with strong
supply and demand fundamentals underpinning a strong commodity
price.
About Heron Resources
Heron’s primary focus is the development of its 100% owned, high
grade Woodlawn Zinc-Copper Project located 250km southwest of
Sydney, New South Wales, Australia.
FOR FURTHER INFORMATION, CONTACT:
Australia:
Canada:
Mr Wayne Taylor
Tel: +1 647 862 1157
(Toronto)
Managing Director and Chief Executive
Officer cmuir@heronresources.com.au
Tel: +61 2 9119 8111 or +61 8 6500 9200
www.heronresources.com.au
Email:
heron@heronresources.com.au
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable
Canadian securities laws, which are based on expectations,
estimates and projections as of the date of this news release. This
forward-looking information includes, or may be based upon, without
limitation, estimates, forecasts and statements as to management’s
expectations with respect to, among other things, the timing and
amount of funding required to execute the Company’s exploration,
development and business plans, capital and exploration
expenditures, the effect on the Company of any changes to existing
legislation or policy, government regulation of mining operations,
the length of time required to obtain permits, certifications and
approvals, the success of exploration, development and mining
activities, the geology of the Company’s properties, environmental
risks, the availability of labour, the focus of the Company in the
future, demand and market outlook for precious metals and the
prices thereof, progress in development of mineral properties, the
Company’s ability to raise funding privately or on a public market
in the future, the Company’s future growth, results of operations,
performance, and business prospects and opportunities. Wherever
possible, words such as “anticipate”, “believe”, “expect”,
“intend”, “may” and similar expressions have been used to identify
such forward-looking information. Forward-looking information is
based on the opinions and estimates of management at the date the
information is given, and on information available to management at
such time. Forward-looking information involves significant risks,
uncertainties, assumptions and other factors that could cause
actual results, performance or achievements to differ materially
from the results discussed or implied in the forward-looking
information. These factors, including, but not limited to, the
ability to implement the Woodlawn Zinc-Copper Project Feasibility
Study on time or at all, fluctuations in currency markets,
fluctuations in commodity prices, the ability of the Company to
access sufficient capital on favourable terms or at all, changes in
national and local government legislation, taxation, controls,
regulations, political or economic developments in Canada,
Australia or other countries in which the Company does business or
may carry on business in the future, operational or technical
difficulties in connection with exploration or development
activities, employee relations, the speculative nature of mineral
exploration and development, obtaining necessary licenses and
permits, diminishing quantities and grades of mineral reserves,
contests over title to properties, especially title to undeveloped
properties, the inherent risks involved in the exploration and
development of mineral properties, the uncertainties involved in
interpreting drill results and other geological data, environmental
hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins and flooding, limitations of insurance coverage
and the possibility of project cost overruns or unanticipated costs
and expenses, and should be considered carefully. Many of these
uncertainties and contingencies can affect the Company’s actual
results and could cause actual results to differ materially from
those expressed or implied in any forward-looking statements made
by, or on behalf of, the Company. Prospective investors should not
place undue reliance on any forward-looking information. Although
the forward-looking information contained in this news release is
based upon what management believes, or believed at the time, to be
reasonable assumptions, the Company cannot assure prospective
purchasers that actual results will be consistent with such
forward-looking information, as there may be other factors that
cause results not to be as anticipated, estimated or intended, and
neither the Company nor any other person assumes responsibility for
the accuracy and completeness of any such forward-looking
information. The Company does not undertake, and assumes no
obligation, to update or revise any such forward-looking statements
or forward-looking information contained herein to reflect new
events or circumstances, except as may be required by law.
No stock exchange, regulation services provider,
securities commission or other regulatory authority has approved or
disapproved the information contained in this news
release.
Australia:
Mr Wayne Taylor
Managing Director and Chief Executive Officer:
+61 2 9119 8111 or +61 8 6500 9200
Email: heron@heronresources.com.au
www.heronresources.com.au
Canada:
+1 647 862 1157 (Toronto)
cmuir@heronresources.com.au