TIDMAMC
RNS Number : 5503W
Amur Minerals Corporation
10 February 2017
10 February 2017
AMUR MINERALS CORPORATION
(AIM: AMC)
Kun-Manie Resource Exceeds 100 Million Tonnes at 1.03% Nickel
Equivalent
Amur Minerals Corporation ("Amur" or the "Company"), the
nickel-copper sulphide mineral exploration and resource development
company focused on the far east of Russia, is pleased to announce
that Runge, Pincock, Minarco ("RPM") has completed a comprehensive
resource update. The results show an increase on the Mineral
Resource Estimate ("MRE") for the four largest nickel-copper
sulphide deposits located within the Kun-Manie mining licence.
Highlights:
-- The global Kun-Manie resource is 101.3 million ore tonnes
having a nickel equivalent ("Ni Eq") grade of 1.03% equating to a
total of 1.04 million equivalent tonnes of nickel based on 1
February 2017 metal pricing with a total in-situ value estimated to
be US$10.5 billion.
-- The newly reported global MRE has been increased by an
additional 31.7 million tonnes (45.6% increase) of new ore, an
additional 210,500 tonnes (37.8% increase) of new nickel, and
62,500 (43.5% increase) new tonnes of copper.
-- The global average grade of nickel is 0.76%, copper is 0.20%,
cobalt is 0.015%, platinum is 0.17 g/t and palladium is 0.18
g/t.
-- By JORC resource categories, more than 80% (81.2 million ore
tonnes) is classified as Measured and Indicated and is therefore
available for conversion to a Mining Ore Reserves ("MOR") for
inclusion in a mine plan.
-- The new MRE's have been calculated using a higher cutoff
grade ("COG") of 0.4% nickel and allow for the determination of
Mining Ore Reserves ("MOR") using a combination of open pit and
underground mining options.
-- Use of the 0.4% COG and a metallurgical recovery of 80%
(Gipronickel Institute results), the Company projects the breakeven
nickel price to range from US$3.40 to US$5.70 per pound.
The newly derived MRE represents a substantial and material
improvement from previously reported estimates of the resource.
Previously focused on open pit production, the emphasis has now
shifted to a combined mining scenario of open pit production
transitioning to underground production. Using a higher cutoff
grade ("COG") of 0.4% nickel to define the MRE, sub-economic
mineralisation is no longer included in the global resource
inventory thereby increasing the average estimated grades of the
global resource being available to conversion to a MOR. This update
therefore provides a resource statement that is more reflective of
the production potential at Kun-Manie.
The global Kun-Manie resource is 101.3 million ore tonnes having
a Ni Eq grade of 1.03%. This equates to a total of 1.04 million
equivalent tonnes of nickel based on 1 February 2017 metal pricing.
The total in situ value is estimated to be US$10.5 billion, with
the global average grade of nickel is 0.76%, copper is 0.20%,
cobalt is 0.015%, platinum is 0.17 g/t and palladium is 0.18 g/t.
By JORC resource categories, more than 80% (81.2 million ore
tonnes) is classified as Measured and Indicated and is therefore
available for conversion to a MOR for inclusion in a mine plan.
Globally, the RPM MRE is substantially greater when compared to the
previous estimates (H1 2016) at the COG of 0.4% nickel. The newly
reported global MRE has been increased by an additional 31.7
million tonnes (45.6%) of new ore, an additional 210,500 tonnes
(37.8%) of new nickel, and 62,500 new tonnes (43.5%) of copper.
The largest deposit is Maly Kurumkon / Flangovy ("MKF") which,
including the 2016 drill results, has a resource containing 60.9
million tonnes at an average Ni Eq grade of 1.05% equating to
639,000 equivalent tonnes of nickel. MKF has an in-situ value
estimated at US$6.39 billion with the average grade of nickel of
0.78%, copper is 0.22%, cobalt is 0.015%, platinum is 0.15 g/t and
palladium is 0.16 g/t. At the 0.4% COG, the MKF resource tonnage
has been increased by 27.7 million ore tonnes (83%) with increases
of 196,600 nickel tonnes (70%) and an additional 58,000 copper
tonnes (79%). More than 94% of the MKF resource is classified as
Measured and Indicated.
The new MRE has also increased the estimated resource at the
deposits of Ikenskoe / Sobolevsky ("IKEN"), Kubuk ("KUB") and
Vodorazdelny ("VOD"). These deposits contain a combined total of
40.4 million tonnes (an increase of 11%) with a Ni Eq grade of
1.00% equating to 405,000 equivalent tonnes of nickel. The in-situ
value is estimated at US$4.11 billion with an average grade for
nickel of 0.73%, copper is 0.19%.
Given the size of the newly defined resource and substantially
higher grades, the previously projected annual production of nickel
and copper at Kun-Manie could be increased by as much as 68% for
nickel and 54% for copper. Using the 0.4% COG and a metallurgical
recovery of 80%, the Company projects the breakeven nickel price to
range from US$3.40 to US$5.70 per pound with the lower price based
on Russian costs whilst the higher price is based on current
Australian mining costs.
Robin Young, CEO of Amur Minerals, commented:
"The substantial increase in the total Mineral Resource Estimate
is primarily due to the highly successful 2016 drill season at Maly
Kurumkon / Flangovy. The updated results now make it possible to
identify the Mining Ore Reserves available to open pit and
underground production.
"With more than 80 million ore tonnes of the 101.3 million
resource tonnes classified as Measured and Indicated resource, we
anticipate having two thirds of our Life of Mine reserve defined.
It is rare to see a junior resource company have such a large asset
with so much of it drilled to such a high level of confidence.
Reserve definition is the next stage which will include an audit of
our mining costs. Based on this information, production of 40,000
to 60,000 nickel tonnes per annum to concentrate is anticipated and
would place Amur in the top ten producers of nickel in the world,
ranking around Number 8."
Company Nomad and Broker Public Relations
Amur Minerals S.P. Angel Corporate Yellow Jersey
Corp. Finance LLP
Robin Young Ewan Leggat Charles Goodwin
CEO Laura Harrison Harriet Jackson
+7 (4212) 75
56 15 +44(0)2034700470 +44(0)7544275882
For additional information, visit the Company's website,
www.amurminerals.com.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Notes to Editors
The information contained in this announcement has been reviewed
and approved by the CEO of Amur, Mr. Robin Young. Mr. Young is a
Geological Engineer (cum laude), a Professional Geologist licensed
by the Utah Division of Occupational and Professional Licensing,
and is a Qualified Professional Geologist, as defined by the
Toronto and Vancouver Stock Exchanges. An employee of Amur for 12
years, previously Mr. Young was employed as an independent
consultant with Fluor Engineers, Fluor Australia and Western
Services Engineering, Inc. during which time his responsibilities
included the independent compilation of resources and reserves in
accordance with JORC standards. In addition, he was the lead
engineer and participant of numerous studies and projects requiring
the compilation of independent Bankable Studies utilised to finance
small to large scale projects located worldwide. Mr. Young is
responsible for the content of this announcement which includes
information derived by SRK, RPM, Gipronickel Institute and ASL.
For further information, see the Company website at
www.amurminerals.com.
Mineral Resource Statements - Competent Persons
Amur Minerals Corporation reports resources based on JORC 2012
standards. This requires that the Mineral Resource Estimates
("MRE") be independently compiled from information attained using
best practices.
Runge, Pincock Minarco ("RPM") have conducted a site visit and
audited the field procedures, sample handling and preparation
techniques, analytical results and Quality Control systems (check
assaying). It has confirmed best practices have been and are being
used by the Company. Based on the information, updated MRE's for
the Maly Kurumkon / Flangovy ("MKF"), Ikenskoe / Sobolevsky
("IKEN"), Kubuk ("KUB"), and Vodorazdelny ("VOD") deposits have
been compiled. RPM is the qualified company responsible for the
statement of resources and future reserve estimates ("MOR") derived
from the MRE's.
Material Considerations in Compilation of the Mineral Resource
Estimates
The updated MRE's significantly differ from those previously
reported. Modelling of the mineralisation now includes
consideration of the following:
-- Recent mining trade-off studies indicate a substantial
portion of the mined ores will be extracted using underground
mining methods with the remainder being recovered using open pit
methods. For this reason, a 0.4% nickel COG will allow the Company
to derive an optimised production schedule using both the mining
methods at higher grades than previously anticipated.
-- The increase in the COG also allows for lower nickel pricing
to be taken into consideration. By increasing the COG, the MRE's
used to define reserves may well provide the Company with the
ability to establish reserves suitable for mining at substantially
lower metal prices.
-- The Company's focus remains on the identification of
mineralisation that can be extracted at a profit. Presently,
limited drilling at Gorny (possibly an extension of the MKF
deposit) has defined an average grade of 0.31% nickel containing
23,900 tonnes of nickel. Further drilling is required between the
eastern limit of MKF and specifically at Gorny. The MRE for Gorny
was not updated and is presently excluded from the statement of
resources at Kun-Manie. Future drilling may result in its addition
to the MRE.
The inclusion of these considerations allows for the MRE's of
the four largest deposits to provide a more robust representation
of the mineralisation for mine method optimisation and the
definition of MOR statements.
Summary of the RPM Mineral Resource Estimates
The global MRE statement has been derived based on a 0.4% COG
with individual statements being generated for the deposits of MKF,
IKEN, VOD and KUB. Each MRE statement reports the content for
nickel, copper, cobalt, platinum, palladium and a nickel
equivalent. Gold and silver have not been calculated.
RPM Ordinary Kriging Mineral Resource Estimates
February 2017
0.4% Nickel Cutoff Grade
Resource Ore Ni Cu Co Pt Pd Eq Contained Metal (t)
Classification Mt % % % g/t g/t Ni
(%)
---------------- ------ ----- ----- ------ ----- ----- ----- ---------------------------------------------------------
Ni Cu Co Pt Pd Eq
(1000's) (1000's) (1000's) (t) (t) Ni
(1000's)
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
MKF
------------------------------------------------------------------------------------------------------------------------------
Measured
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Indicated 57.5 0.77 0.22 0.015 0.15 0.16 1.05 445 124 8.9 8.8 9.3 602.5
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
M+I 57.5 0.77 0.22 0.015 0.15 0.16 1.05 445 124 8.9 8.8 9.3 602.5
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Inferred 3.4 0.80 0.22 0.017 0.16 0.15 1.06 27 7 0.6 0.5 0.5 36.2
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
MKF TOTAL 60.9 0.78 0.22 0.015 0.15 0.16 1.05 472 131 9.5 9.3 9.8 639.3
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
IKEN
------------------------------------------------------------------------------------------------------------------------------
Measured 10.1 0.66 0.18 0.011 0.21 0.25 0.94 67 18 1.1 2.1 2.5 94.6
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Indicated 6.3 0.61 0.14 0.011 0.20 0.25 0.87 39 9 0.7 1.2 1.6 54.7
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
M+I 16.4 0.65 0.17 0.011 0.20 0.25 0.91 106 27 1.8 3.3 4.1 149.3
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Inferred 4.7 0.84 0.20 0.016 0.19 0.23 1.14 40 9 0.8 0.9 1.1 53.9
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
IKEN TOTAL 21.1 0.69 0.17 0.012 0.20 0.25 0.96 146 36 2.6 4.2 5.2 201.8
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
KUB
------------------------------------------------------------------------------------------------------------------------------
Measured -
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Indicated 3.6 0.87 0.21 0.016 0.18 0.19 1.17 31 8 0.6 0.6 0.7 41.6
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
M+I 3.6 0.87 0.21 0.16 0.18 0.20 1.17 31 8 0.6 0.6 0.7 41.6
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Inferred 10.9 0.74 0.20 0.015 0.16 0.14 1.00 81 22 1.7 1.7 1.5 109.5
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
KUB TOTAL 14.5 0.77 0.20 0.016 0.16 0.15 1.04 112 30 2.3 2.3 2.2 149.5
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
VOD
------------------------------------------------------------------------------------------------------------------------------
Measured 0.6 0.74 0.22 0.012 0.29 0.32 1.16 5 1 0.1 0.2 0.2 7.1
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Indicated 3.2 0.85 0.21 0.017 0.16 0.16 1.13 27 7 0.5 0.5 0.5 35.8
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
M+I 3.8 0.85 0.21 0.016 0.20 0.19 1.13 32 8 0.6 0.7 0.7 42.9
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Inferred 1.0 0.81 0.22 0.016 0.17 0.16 1.07 8 2 0.2 0.2 0.2 11.1
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
VOD TOTAL 4.8 0.83 0.21 0.016 0.18 0.18 1.12 40 10 0.8 0.9 0.9 54.0
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
TOTAL
------------------------------------------------------------------------------------------------------------------------------
Measured 10.7 0.67 0.18 0.011 0.21 0.25 0.95 72 19 1.2 2.3 2.7 101.7
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Indicated 70.5 0.77 0.21 0.015 0.16 0.17 1.04 542 148 10.7 11.1 12.1 734.6
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
M+I 81.2 0.76 0.21 0.015 0.17 0.18 1.03 614 167 11.9 13.4 14.8 836.3
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Inferred 20.1 0.77 0.20 0.016 0.17 0.16 1.05 156 40 3.3 3.3 3.3 210.6
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
TOTAL 101.3 0.76 0.20 0.015 0.17 0.18 1.03 770 207 15.2 16.7 18.1 1,044.5
---------------- ------ ----- ----- ------ ----- ----- ----- --------- --------- --------- ----- ----- ----------
Numbers may not be concise due to rounding.
To allow for the determination of a nickel equivalent (NiEq)
grade, the in situ values of all metals were calculated based on 1
February 2017 prices and are reported below.
In Situ Value ($US) and Nickel Equivalent Tonnage
1 February 2017 Metal Pricing
Pricing Nickel Copper Cobalt Platinum Palladium Total Ni
US$ Eq
Value Tonnes
----------- ----------
Imperial $4.54 $2.69 $16.90 $996.00 $760.00
/ lb / lb /lb / oz /oz
---------- ---------- -------- --------- ---------- ----------- ----------
Metric $10,006 $5,929 $37,248 $32,026 $24,437
/t / t / t / kg / kg
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
Measured 720.44M 112.65M 44.70M 73.66M 65.98M 1,017.43M 101,680
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
Indicated 5,423.34M 877.46M 398.55M 355.49M 295.69M 7,350.52M 734,600
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
M+I 6,143.78M 990.10M 443.25M 429.14M 361.67M 8,367.95M 836,280
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
Inferred 1,560.96M 237.15M 122.92M 105.68M 80.64M 2,107.36M 210,606
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
TOTAL 7,694.74M 1,221.32M 558.71M 534.83M 442.32M 10,451.92M 1,044,549
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
% Value
Content 73.6% 11.7% 5.3% 5.1% 4.2% 100.0%
----------- ---------- ---------- -------- --------- ---------- ----------- ----------
Numbers may not be concise due to rounding.
Globally, the MRE results include the following:
-- The global Kun-Manie resource (all deposits and all resource
categories) totals 101.3 million tonnes averaging 0.76% nickel and
0.20% copper. The nickel tonnage is estimated to be 770,000 t with
a total of 207,000 t for copper. By-product cobalt totals 15,200
tonnes whilst the combined platinum and palladium content totals
34.8 tonnes. At current prices, the in situ value is projected to
be US$10.45 billion which equates to 1.04 million nickel equivalent
tonnes. The Ni Eq grade is 1.03%.
-- Approximately 80.1% of the global resource tonnage and
contained nickel and copper is drilled to a Measured and Indicated
resource category. At 81.2 million tonnes, the average grade is
0.76% nickel and 0.21% copper. Nickel totals 614,000 t, copper
totals 167,000 t. Cobalt is 11,900 t with 25.3 tonnes of platinum
and palladium being present. Representing 80% of the total
contained metal value, a total of 836,300 Ni Eq nickel tonnes is
present. Valued at a total of US$8.4 billion, the Ni Eq grade of
the Measured and Indicated resource is 1.03%.
-- Globally, 85% of the metal value is attributable to nickel
and copper with an in situ value of US$8.9 billion. The remaining
US$1.5 billion is associated with by-product cobalt, platinum and
palladium.
Evaluation of the individual MRE's by deposits indicates:
-- MKF is the largest deposit containing a total of 61.2% of the
resource by mineralised tonnage representing the first source of
production. At 60.9 million tonnes, its average grade is 0.78%
nickel and 0.22% copper. By-product cobalt totals 9,400 tonnes. The
combined platinum and pallidum tonnage is 19.1 tonnes. The MKF in
situ value is projected to be US$ 6.4 billion with an average NiEq
grade of 1.05%.
-- The 2016 in fill and step out drilling at MKF have been
highly successful. A total of 94.3% (57.5 million tonnes) of the
MKF resource is defined as Indicated. The average nickel grade for
the Indicated resource is 0.77% with copper being 0.22%. In situ
value for all metals within this resource category is projected to
be $US6.0 billion. The Ni Eq grade is 1.05%.
-- Updated models for IKEN, VOD and KUB indicated a combined
resource of 40.4 million tonnes to be present. The average combined
grade of these three deposits is 0.73% nickel and 0.19% copper. The
total contained nickel is 296,000 t, copper tonnes are 75,000 t.
The combined tonnage of platinum and palladium is 15.7 tonnes with
cobalt comprised of 5,600 tonnes. The combined in situ value of
US$4.1 billion providing a total NiEq tonnage of 405,200 tonnes
averaging 1.00% NiEq.
-- IKEN, VOD and KUB contain 23.7 million tonnes of Measured and
Indicated resource. Containing 169,000 tonnes of nickel and 43,000
tonnes of copper, the average nickel grade is 0.71% with copper
averaging 0.18%. Total cobalt is 3,000 tonnes with the combined
total of platinum and palladium being 10.1 tonnes. The nickel
equivalent content is 233,800 t yielding an average Ni Eq grade of
1.00%.
Sources of MRE Increases from H1 2016 Results
The comparison of the RPM February 2017 results with the H1 2016
MRE is comprised of two distinct components. The first comparison
is related to the substantial increase in the MKF resource, which
is the result of the 2016 drill results where infill drilling and
the discovery of new mineralisation was completed. The second is
related to an increase in the recalculation of resources within the
deposits of IKEN, VOD and KUK where no additional drilling has been
completed since the 1H 2016 resource update. The increase is
reported based on a comparison is of the resources using a COG of
0.4% Ni.
MKF Resource Increase
RPM's update included all drilling completed during the 2016
field season which was not available to the determination of the H1
2016 estimation. The drill programme resulted in the discovery of
new mineralisation along strike adding 900 metres of length
bringing the total length of MKF to 3,000 metres. Secondly, in-fill
drilling was completed at a spacing allowing for all newly
discovered resources and previously defined Inferred resources (1H
2016) to be upgraded to the Indicated resource category. The
in-fill drilling has resulted in a substantial increase in the
Indicated resource. A comparison of the previous and newly derived
RPM MRE's for MKF follows.
MKF Deposit
Resource Expansion Comparison
0.4% Nickel Cutoff Grade
Classification Quantity Ni Cu Co Pt Pd Contained Metal
Mt % % % g/t g/t
---------------- --------- ----- ----- ------ ----- ----- -------------------------------------------
Ni Cu Co Pt Pd
t t t kg kg
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
RPM February 2017
------------------------------------------------------------------------------------------------------------
Measured - - - - - - - - - - -
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Indicated 57.5 0.77 0.22 0.015 0.15 0.16 445,000 124,000 8,900 8,800 9,300
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
M+I 57.5 0.77 0.22 0.015 0.15 0.16 445,000 124,000 8,900 8,800 9,300
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Inferred 3.4 0.80 0.22 0.017 0.16 0.15 27,000 7,000 600 500 500
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
TOTAL 60.9 0.78 0.22 0.015 0.15 0.16 473,000 131,000 9,400 9,300 9,800
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
H1 2016
------------------------------------------------------------------------------------------------------------
Measured - - - - - - - - - - -
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Indicated 25.4 0.84 0.22 0.018 0.15 0.16 214,700 57,000 4,600 3,700 4,000
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
M+I 25.4 0.84 0.22 0.018 0.15 0.16 214,700 57,000 4,600 3,700 4,000
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Inferred 7.8 0.79 0.21 0.016 0.15 0.15 61,700 16,000 1,200 1,100 1,100
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
TOTAL 33.2 0.83 0.22 0.017 0.14 0.15 276,400 73,000 5,800 4,800 5,100
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Increase / (Decrease)
------------------------------------------------------------------------------------------------------------
Measured - - - - - - - - - - -
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Indicated 32.0 - - - - - 230,300 67,000 4,300 5,100 5,300
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
M+I 32.0 - - - - - 230,300 67,000 4,300 5,100 5,300
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Inferred (4.3) - - - - - (34,700) (9,000) (600) (600) (600)
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
TOTAL 27.7 0.71 0.21 0.013 0.16 0.17 196,600 58,000 3,600 4,500 4,700
---------------- --------- ----- ----- ------ ----- ----- --------- -------- ------ ------ ------
Numbers may not be concise due to rounding.
Specifically, the increases from the 1H 2016 MRE consist of the
following:
-- The global all resource category MKF resource has been
expanded from 33.2 million tonnes to 60.9 representing an increase
of 83.4%. Contained nickel was increased by 196,600 t (71.1%) from
276,400 t to 473,000 t. Similarly, the contained copper was
increased 58,000 tonnes (79.5%) from 73,000 t to 131,000 tonnes.
Total cobalt is now 9,400 t, up from 5,800 t. The combined tonnage
of 19.1 tonnes is now defined (an increase from 9.9 tonnes) for
platinum and palladium.
-- Approximately 94.4% (57.5 million tonnes) of the MKF resource
is now drilled to an Indicated resource category. The 2016 drill
programme successfully expanded the Indicated resource by 230,300
tonnes of nickel and 67,000 tonnes of copper. The average nickel
grade of the Indicated resource is 0.77% with copper being 0.22%.
The NiEq grade is 1.05% for the Indicated resource of MKF.
IKEN, KUB and VOD Increases
The RPM updates for the IKEN, KUB and VOD deposits were
completed using the 0.4% nickel COG. The RPM combined resource
estimates the total mineralised tonnage is 40.4 million tonnes
(11%) higher containing 296,000 tonnes of nickel and 75,000 tonnes
of copper. The RPM estimate indicates total nickel is increased by
8.6% (23,500 t) and the total copper is higher by 10.0% (6,800
t).
Current Versus H1 2016 MRE Comparison
IKEN, KUB and VOD
Nickel and Copper Only
0.4% Cutoff Grade
Classification Quantity Ni Cu Contained
Mt % % Metal
---------------- --------- ------- ------- -----------------
Ni Cu
t t
---------------- --------- ------- ------- -------- -------
RPM Resource - February 2017
----------------------------------------------------------------
IKEN 21.1 0.69 0.17 145,000 36,000
---------------- --------- ------- ------- -------- -------
KUB 14.5 0.77 0.20 111,000 29,000
---------------- --------- ------- ------- -------- -------
VOD 4.8 0.83 0.21 40,000 10,000
---------------- --------- ------- ------- -------- -------
TOTAL 40.4 0.73 0.19 296,000 75,000
---------------- --------- ------- ------- -------- -------
SRK Resource - H1 2016
----------------------------------------------------------------
IKEN 17.7 0.81 0.19 142,600 33,700
---------------- --------- ------- ------- -------- -------
KUB 13.5 0.71 0.19 95,500 25,400
---------------- --------- ------- ------- -------- -------
VOD 4.8 0.72 0.19 34,400 9,100
---------------- --------- ------- ------- -------- -------
TOTAL 36.0 0.76 0.19 272,500 68,200
---------------- --------- ------- ------- -------- -------
Increase / (Decrease)
----------------------------------------------------------------
IKEN 3.4 (0.12) (0.02) 2,400 2,300
---------------- --------- ------- ------- -------- -------
KUB 1.0 0.06 0.01 15,500 3,600
---------------- --------- ------- ------- -------- -------
VOD 0.0 0.11 0.02 5,600 900
---------------- --------- ------- ------- -------- -------
TOTAL 4.4 (0.02) (0.00) 23,500 6,800
---------------- --------- ------- ------- -------- -------
Percent
Change 12.3% 8.6% 10.0%
---------------- --------- -------- -------
Numbers may not be concise due to rounding.
Cutoff Grade Considerations
It is possible to determine a breakeven price at a series of
operating costs per tonne of ore. Assuming a Ni Eq COG grade of
0.4% nickel and the 80% Gipronickel Institutes results for
metallurgical recovery at MKF, the table below presents a series of
projected nickel prices required to cover selected operating costs
per ore tonne. It is noted that RPM's mining study used a $50.00
per tonne all in Australian based ore production cost. The Company
cost per underground produced ore tonne is projected to be
approximately US$30.00 using Russian based costs for labour, fuel /
lubricants, explosives and a 20% contingency. This indicates the
present breakeven nickel price ranges from $3.40 per pound (Russian
based costs) to $5.70 per pound (Australian based costs).
Nickel Price Versus Total Operating Cost Per Ore Tonne
0.4% Nickel Cutoff Grade
Ni Ni Cost
Price Price per
Per Per Ore
Pound Tonne tonne
------- -------- -------
$5.70 $12,560 $50.00
------- -------- -------
$5.10 $11,240 $45.00
------- -------- -------
$4.50 $9,920 $40.00
------- -------- -------
$4.00 $8,820 $35.00
------- -------- -------
$3.40 $7,490 $30.00
------- -------- -------
Alternatively, based on the 1 February 2017 nickel price of
$4.50 per pound ($9,920 per tonne), the targeted operating cost is
projected to be $40.00 per ore tonne at the COG of 0.4%. This cost
is more than that based on the Russian based operating cost per
tonne. It is also noted that open pit mining will have a lower COG
and has not been included in consideration of the information
within the table above.
Cautionary Note on Use of the Preliminary Economic
Assessment
The Preliminary Economic Assessment ("PEA") was based on MRE
estimates using a 0.2% nickel COG. The presented potential project
economics are now outdated and should not be considered in
assessing the potential of Kun-Manie. The PEA reported mining
grades averaged 0.55% nickel and 0.15% copper over the 15 year
proposed mine life. The global MRE grade is now substantially
higher at 0.76% nickel and 0.20% copper. As the Company advances
through the determination of MOR's for the four deposits, it is
anticipated that there will be a substantial increase in the
projected mined grades and total annual production of metal
significantly impacted the project economics.
Website Update
The results reported within this RNS will be updated to the
Company website. Whilst accessing our website, it is important to
examine the information closely to ensure that the 1 February 2017
results contained herein have been included. The Company is in the
process of updating the website to reflect the significant changes
reported herein.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) (www.jorc.org)
A 'Mineral Resource' is a concentration or occurrence of
material of intrinsic economic interest in or on the Earth's crust
in such form, quality and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge. Mineral Resources are
sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.
An 'Inferred Mineral Resource' is that part of a Mineral
Resource for which tonnage, grade and mineral content can be
estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes which may be limited or of uncertain
quality and reliability.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource
for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough
to confirm geological and/or grade continuity.
An 'Ore Reserve' is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials
and allowances for losses which may occur when the material is
mined. Appropriate assessments and studies have been carried out,
and include consideration of and modification by realistically
assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors. These assessments
demonstrate at the time of reporting that extraction could
reasonably be justified. Ore Reserves are sub-divided in order of
increasing confidence into Probable Ore Reserves and Proved Ore
Reserves.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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February 10, 2017 02:00 ET (07:00 GMT)
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