Lithic Resources Ltd.: Positive Testwork Supports Co-production of Iron Concentrates at West Desert Zinc-Copper Project
May 21 2013 - 8:15AM
Marketwired Canada
Lithic Resources Ltd. (TSX VENTURE:LTH) (the "Company") is pleased to announce
that it has received the results of metallurgical testwork in support of an
ongoing Preliminary Economic Assessment (PEA) for its 100% owned West Desert
zinc-copper-silver-gold-iron project in Utah (the "Project"). The West Desert
project hosts significant zinc-copper resources with associated massive,
high-grade iron (magnetite) mineralization.
"Today's results indicate that magnetite in the West Desert project could be
recovered as a co-product of zinc-copper production through a cost effective and
conventional process into a marketable, high-quality iron concentrate. Simply
stated, a large proportion of the material mined and processed in order to
extract zinc and copper, which was given no value in previous studies and was
directed to tailings, now has the potential to provide a significant additional
source of revenue for the West Desert project," stated Chris Staargaard,
President and CEO. "The option of co-producing iron concentrates offers a
variety of positive implications, including the potential for:
a. a significant increase in Project revenue resulting in lower cost zinc
production,
b. a smaller, lower cost tailings facility due to the diversion of a
significant volume of magnetite,
c. increased flexibility in scaling and mining, and
d. an increase in the resource base through the addition of iron
(magnetite) mineralization.
The possibility of adding high grade iron as yet another saleable commodity from
West Desert in addition to zinc, copper, silver, gold and indium is an exciting
and constructive development for the Project and the Company", he added.
2013 Metallurgical Testwork
Based on the suggestion in previous studies (2010) that iron could contribute to
the project economics, additional metallurgical test work was commissioned in
February 2013 at ALS Metallurgy in Kamloops, B.C. The work focused on the
potential production of an iron (magnetite) concentrate concurrent with the
processing of sulphide mineralization to produce copper and zinc concentrates
and was supervised on the Company's behalf by Mr. Jeffrey Austin, P.Eng.
A new inventory of drill core was selected to incorporate a more wide ranging
representation of the iron mineralization at West Desert. Thirty-one samples of
core were blended to form a single composite (150 kg) of mineralization that was
used in metallurgical testwork. Metallurgical testing followed a very
traditional process simulation including primary grinding, magnetic separation
to produce a rough iron concentrate and subsequent re-grinding and magnetic
separation to produce a high-grade iron concentrate.
The results of the 2013 testwork showed that:
a. A marketable, high-grade iron (magnetite) concentrate grading 63% iron
can potentially be produced with a traditional process flowsheet using
known processing techniques. The recovery of iron was very high in the
process testwork at levels above 95%. Minor amounts of diluents are
present in the concentrate. Levels of potential deleterious elements are
low.
b. The iron up-grading process is effective at removing copper and zinc and
insignificant levels of these metals remained in the iron concentrate.
It is expected that base metal values such as copper and zinc and any
associated silver, gold and indium, will be recovered separately into
flotation concentrates.
Significant levels of magnetite have been shown to be present in all
metallurgical composite samples of sulphide-based zinc-copper mineralization
used in the testwork carried out by the Company to date, as seen in the table
below. The positive testwork results suggest that a large proportion of this
magnetite has the potential to be recovered and sold.
Summary of Estimated Magnetite Content - Copper-Zinc Metallurgical Test
Composites
----------------------------------------------------------------------------
Laboratory Test Sample % Magnetite
----------------------------------------------------------------------------
G&T Metallurgical (2010) Cu-Zn Composite 18
G&T Metallurgical (2010) High Zinc Composite 25
G&T Metallurgical (2010) Low Zinc Composite 39
ALS Metallurgy (May 2013)(i) High Iron Composite 74
----------------------------------------------------------------------------
(i) formerly G&T Metallurgical
In addition to iron (magnetite) production derived from the processing of
sulphide resources, large volumes of massive magnetite with varying grades of
zinc and copper are present within and around the existing resource. Although no
formal resource estimate including iron values has been made to date, this
mineralization will be studied for its potential to add to the Project resource
base.
About the West Desert Project
The road-accessable West Desert project is located approximately 160 kilometres
southwest of Salt Lake City, Utah. It is approximately 75 kilometres from a
railhead and is serviced by grid electricity. The project comprises a large,
undeveloped sulphide resource along with associated near surface oxide
resources, based on approximately 40,000 metres of diamond drilling (November
19, 2009 news release). Mineralization is open in several directions with good
potential to expand existing resources and very good potential for the discovery
of new zones beyond these extensions. The Project is fully permitted and bonded
for future exploration.
West Desert Project Resources (2009)
----------------------------------------------------------------------------
Zinc Zinc Copper
Tonnes Equivalent Zinc Copper Indium (million (million Indium
Category (million) (%) (%) (%) (g/t) lbs) lbs) (kg)
----------------------------------------------------------------------------
Sulphide
----------------------------------------------------------------------------
Indicated 5.8 6.60 4.44 0.31 49 568 39 283,100
Inferred 13.8 6.83 4.84 0.37 37 1,472 113 516,400
----------------------------------------------------------------------------
Oxide
----------------------------------------------------------------------------
Indicated 1.1 5.48 4.54 0.26 10 111 6 11,500
Inferred 4.6 4.45 3.73 0.16 13 382 17 58,300
----------------------------------------------------------------------------
Note: Based on a 3% Zinc-equivalent (ZnEq) cutoff grade for the Sulphide
resource and a 1% ZnEq cutoff grade for the Oxide resource. Zinc-equivalent
grade was calculated using a zinc price of US$0.80/lb, a copper price of
US$2/lb and an indium price of US$500/kg. Zinc equivalent grades do not
include significant recoverable gold and silver demonstrated to be present
in subsequent metallurgical testwork.
An earlier PEA (August 5, 2010 news release) contemplated an underground-only
production model based on the sulphide resource. It evaluated the mining and
processing of 1.2 million tonnes per year and generated annual payable metal
production of 90 million pounds zinc, 7.1 million pounds copper, 1.1 million
ounces of silver and 7,000 ounces gold over an 11 year mine life. The 2010 model
utilized long term metal prices of US$1.10/lb zinc, US$2.00/lb copper, US$12/oz
silver, US$850/oz gold and an indium price of US$500/kg.
Metallurgical studies completed at the time indicated good recoveries from
sulphide mineralization to produce separate zinc and copper concentrates using
conventional flotation processing. The "clean" concentrates (absent of mercury,
arsenic, selenium, iron sulphide) contained important levels of gold, silver and
indium and produced significant byproduct iron in the form of magnetite. The
2010 PEA concluded that there is good potential to expand the existing resources
and improve the economics of the Project and furthermore identified the
processing of oxide resources and separation of a magnetite concentrate as
future opportunities.
In January 2013, the Company commissioned a new PEA from Mine Development
Associates in Reno, Nevada, on the basis of a number of factors and
opportunities, including:
a. Improved base and precious metal prices and lower smelter fees since the
2010 PEA.
b. Potential optimization of underground mining operations and refinement
of capital requirements.
c. Potential open pit mining of near surface oxide resources.
d. Potential revenue capture from significant amounts of by-product iron
generated from the processing of sulphide resources.
The technical information in this news release has been prepared in accordance
with Canadian regulatory requirements as set out in NI43-101 and was reviewed by
C.F. Staargaard, P.Geo., a Qualified Person as defined in NI43-101. Mr. Jeffrey
B. Austin, P.Eng., President of International Metallurgical and Environmental
Inc., is supervising the metallurgical studies for the PEA. Mr. Austin has
extensive experience in the commissioning of new mines and has supported several
hundred project studies over the last 25 years.
Technical reports concerning the West Desert project may be found at
www.lithicresources.com or on www.sedar.com.
LITHIC RESOURCES LTD.
C.F. Staargaard, President and CEO
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking
information (collectively, "forward-looking statements") within the meaning of
applicable Canadian and US securities legislation. All statements, other than
statements of historical fact, included herein including, without limitation,
statements regarding the potential of the Company's mineral projects and the
Company's planned drilling and exploration programs. Although the Company
believes that such statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Forward-looking statements are typically
identified by words such as: believe, expect, anticipate, intend, estimate,
postulate and similar expressions, or are those, which, by their nature, refer
to future events. The Company cautions investors that any forward-looking
statements by the Company are not guarantees of future results, performance, or
actions and that actual results and actions may differ materially from those in
forward-looking statements as a result of various factors, including, but not
limited to, those risks and uncertainties disclosed in the Company's Management
Discussion and Analysis for the year ended December 31, 2012 filed with certain
securities commissions in Canada and other information released by the Company
and filed with the appropriate regulatory agencies. All of the Company's
Canadian public disclosure filings may be accessed via www.sedar.com and readers
are urged to review these materials, including the technical reports filed with
respect to the Company's mineral properties.
FOR FURTHER INFORMATION PLEASE CONTACT:
Lihtic Resources Ltd.
Joyce Musial
Corporate Communications
(604) 687-7211
joyce@lithicresources.com
www.ithicresources.com
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