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Maiden Lead-Zinc-Silver JORC mineral resource estimate for the Toral project, Spain
FERRUM CRESCENT LIMITED
(Incorporated and registered in Australia and registered as an external company
in the Republic of South Africa)
(Registration number A.C.N. 097 532 137)
(External company registration number 2011/116305/10)
Share code on the ASX: FCR
Share code on AIM: FCR
Share code on the JSE: FCR
Australian ISIN: AU000000WRL8
South African ISIN: AU000000FCR2
30 January 2018
Ferrum Crescent Limited
(“FCR”, the “Company” or the “Group”)(ASX, AIM, JSE: FCR)
Maiden Lead-Zinc-Silver JORC Mineral Resource Estimate
for the Toral Project, Spain
FCR, the European lead-zinc explorer, is pleased to announce a maiden independent Mineral
Resource Estimate completed in accordance with JORC (2012) in respect of the Company’s 100%
owned Toral lead-zinc project, located in the Province of Le?n, Spain.
• 16Mt @ 6.9% Zn Equivalent (including Pb credits) and 25g/t Ag
• 670,000 tonnes of Zinc, 540,000 tonnes of Lead and 13 million ounces of Silver
• Deposit open along strike to the east and down dip
• This initial resource positions Toral as a potential “world class” lead/zinc project
Commenting today, Laurence Read, Executive Director of FCR, said:
“Following our strategic review and subsequent restructuring during 2017, the Company has now
delivered a maiden JORC 2012 resource estimate for its promising Toral lead, zinc and silver
project. By pursuing a systematic data review process and engaging an experienced independent
consultant, this important maiden resource has been established which includes new silver credits
not previously factored into the historic block models.
“Our immediate objective now is to build on this maiden JORC resource estimate and increase its
size and thereafter carry out a preliminary economic assessment. Having said that, I have no doubt
that our project is well positioned against its peer group with the clear potential to become a future
mining operation.
“During the coming months we intend to carry out review work and present this project to our
shareholders, major mining companies and the general zinc-trade sector in order to maximise
exposure to what is a potential new major zinc-lead opportunity.”
Commenting today, Myles Campion, Executive Director of FCR, said:
“This maiden resource estimate is an outstanding result for the Company and provides us with a
strong platform to rapidly progress the project. The addition of silver represents a significant
potential contribution to the overall project economics and as we progress our work I am sure its
presence will impact favourably on financial models.
“The work carried out independently by Addison Mining Services has resulted in an improvement in
our overall geological understanding as well as directing our ongoing activities to further define and
expand the project’s resources.
“The amount of historic data available for this exercise was immense and I am pleased that
collectively with AMS we were able to interrogate the raw data package and extract maximum
benefit from it. “I look forward to the next phase of resource definition and project expansion.”
JORC 2012 Maiden Inferred Resource Estimate
FCR commissioned a maiden mineral resource estimate in late 2017 from Addison Mining
Services Limited (“AMS”) based on all the available historical data from three drill campaigns
conducted on the 15.199 licence area (the 1972 - 1984 Peñarroya-Adaro campaign, the 2006 -
2008 Lundin Mining campaign and the 2016 - 2017 FCR campaign), along with underground
channel sampling results from the numerous adits.
The maiden mineral resource estimate has been reported in accordance with the guidelines of the
Joint Ore Reserve Committee (JORC) 2012 code.
A new block model combined with an initial digital geological model has increased the level of
understanding of the mineralogical and geological controls at Toral and the Company is therefore
confident of being able to enhance and potentially expand the resource going forwards, subject to
undertaking additional drilling and exploration activities.
Block Model
The Inferred resource for the Toral Pb-Zn-Ag mineralisation located on the Toral property has been
estimated at various cut-offs (see Table 1 below). The Company reviewed the new model along
with its appointed geological consultants, AMS, and concluded that a 4% cut-off was appropriate
utilising estimated mining parameters typical for similar types of projects and mineralogy, and an
historical three-year trailing average for metal prices, which, although conservative, was deemed
appropriate at this stage in the project’s development.
Zn Price Used: US$2,400/t US$c/lb1.09
Pb Price Used: US$2,000/t US$c/lb0.91
Ag Price Used: US$17/oz
The maiden resource has identified potentially economic mineralisation ranging from surface to
approximately 1,100m below surface. The block model currently extends for a strike length of
3,300m and is still open to the east along strike and also at depth where it has not yet been closed
off.
Cut Off Contained Contained Ag Troy
Tonnes Zn_Eq Zn Eq Zn Pb Ag
Zn Eq Density Zn Tonnes Pb Tonnes Oz
(Millions) (Pb)% (PbAg)% % % g/t
(PbAg)% (000s) (000s) (Millions)
6.0 9 2.65 8.8 9.5 5.0 4.3 31 470 400 9
5.0 12 2.57 7.8 8.4 4.6 3.7 28 580 470 11
4.0 16 2.52 6.9 7.5 4.0 3.3 25 670 540 13
3.0 20 2.50 6.2 6.7 3.7 2.9 23 750 600 15
Table 1: Summary of Inferred mineral resources for the Toral property reported at a 4.0% Zn
equivalent cut-off grade and estimated grade and tonnages at the various cut off grades.
Figure 1 showing AMS’ resource block model for Toral as a 3D view looking north is available the
Company’s website: http://www.ferrumcrescent.com
The AMS Resource Statement is available on the Company’s website:
http://www.ferrumcrescent.com
Competent Persons Statement
The Toral maiden resource estimate was prepared by Mr J.N. Hogg, MSc. MAIG Principal
Geologist for AMS, who is an independent Competent Person within the meaning of the JORC
(2012) code and meets the criteria of a qualified person under the AIM guidance mote for mining
and oil & gas companies. The maiden resource estimate was aided by Mr R. J. Siddle, MSc, MAIG
Senior Resource Geologist for AMS, under the guidance of the competent person. Mr Hogg has
reviewed and verified the technical information that forms the basis of, and has been used in the
preparation of, the current mineral resource estimate and this announcement, including all
analytical data, diamond drill hole logs, QA/QC data, density measurements, and sampling,
diamond drilling and analytical techniques. Mr Hogg consents to the inclusion in this
announcement of the matters based on the information, in the form and context in which it
appears. Mr Hogg has also reviewed and approved the technical information in his capacity as a
qualified person under the AIM Rules.
For further information on the Company, please visit www.fcrexploration.com or www.ferrumcrescent.com or
contact:
Ferrum Crescent Limited
Dan Smith, Non-Executive Director and Company Secretary (Australia)
T: +61 417 978 955
Laurence Read, Executive Director (UK)
T: + 44 (0)20 3289 9923
Strand Hanson Limited (Nominated Adviser)
Rory Murphy / Matthew Chandler
T: +44 (0)20 7409 3494
Peterhouse Corporate Finance Limited (Broker)
Lucy Williams / Duncan Vasey / Heena Karani
T: +44 (0)20 7469 0930
Beaufort Securities Limited (Broker)
Elliot Hance
T: +44 (0)20 7382 8300
Bravura Capital (Pty) Ltd (JSE Sponsor)
Melanie De Nysschen
T (direct): +27 11 459 5052
The information contained within this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Glossary of technical terms:
“Ag” silver;
“g” grammes;
“g/t” grammes per tonne;
“Inferred Resource” that part of a Mineral Resource for which quantity and grade (or quality) are
estimated on the basis of limited geological evidence and sampling. Geological
evidence is sufficient to imply but not verify geological and grade (or quality)
continuity. It is based on exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes;
“JORC” the Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves, as published by the Joint Ore Reserves Committee of The
Australasian Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia;
“JORC (2012)” the 2012 edition of the JORC code;
“m” metre;
“Mineral Resource” a concentration or occurrence of material of economic interest in or on the
earth's crust in such form and quantity that there are reasonable and realistic
prospects for eventual economic extraction. The location, quantity, grade,
continuity, and other geological characteristics of a Mineral Resource are known,
estimated from specific geological evidence and knowledge, or interpreted from
a well-constrained and portrayed geological model;
“Mt” million tonnes;
“oz” troy ounce;
“Pb” lead;
“QA/QC” quality assurance/quality control;
“Zn” zinc.
APPENDIX: Table 1 Appendix 5A ASX Listing Rules (JORC 2012)
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary
Sampling • Nature and quality of sampling (e.g. cut Historic and recent diamond drill core and underground cut
techniques channels, random chips, or specific specialised channel sampling. Three main phases of exploration drilling
industry standard measurement tools and sampling:
appropriate to the minerals under investigation, 1972 - 1984 Peñarroya – Adaro. Diamond drill core method
such as down hole gamma sondes, or handheld was used to obtain samples for geological logging and
XRF instruments, etc). These examples should sampling. Geological and analytical data is recorded on
not be taken as limiting the broad meaning of hardcopy. Selective sampling method was employed around
sampling. areas of interest. Sampling intervals measure approx. 1m, half
• Include reference to measures taken to ensure core sent for analysis, with half core retained for reference.
sample representivity and the appropriate Exact details on core processing, sampling techniques and
calibration of any measurement tools or systems analytical methods are unclear, however subsequent explorers
used. Lundin Mining sent the majority of Peñarroya core pulp reject
• Aspects of the determination of mineralisation samples to ALS Chemex for multi element re-analysis by ICP.
that are Material to the Public Report. 2006 - 2008 Lundin Mining. Diamond drill core method was
• In cases where ‘industry standard’ work has used. Core logging completed on paper. Selective sampling
been done this would be relatively simple (e.g. method was employed around areas of interest. Sampling
‘reverse circulation drilling was used to obtain 1 intervals measure approx. 1m, half core sent for analysis, with
m samples from which 3 kg was pulverised to half core retained for reference. Samples typically 1m half
Criteria JORC Code explanation Commentary
produce a 30 g charge for fire assay’). In other core, with samples prepared at the then Lundin Laboratory in
cases more explanation may be required, such Suecia, then shipped to ALS Chemex Vancouver for multi-
as where there is coarse gold that has inherent element analysis by ICP. Half core samples reduced to -400
sampling problems. Unusual commodities or microns and 100g sub-sample taken for analysis. Multi-
mineralisation types (e.g. submarine nodules) element re-analysis of available Peñarroya ddh pulp reject
may warrant disclosure of detailed information. samples completed at ALS Chemex Vancouver using ICP.
2016 - 2017 Ferrum Crescent. Diamond drill core and
underground cut channel sampling methods used to obtain
samples for geological logging and sampling. Geological and
analytical data is recorded on hardcopy. Selective sampling
method was employed around areas of interest. Sampling
intervals measure approx. 1m, half core sent for analysis, with
half core retained for reference. Samples sent to ALS Seville
for preparation and multi-element analysis by ICP. Half core
samples reduced to -400 microns and 100 g sub-sample taken
for analysis.
Drilling • Drill type (e.g. core, reverse circulation, open- A total of 92 diamond drill holes (inc. wedges) for 45,000
techniques hole hammer, rotary air blast, auger, Bangka, metres, and 19 underground channels for 18.75 metres were
sonic, etc) and details (e.g. core diameter, triple used as the input database for geological modelling and
or standard tube, depth of diamond tails, face- resource estimation.
sampling bit or other type, whether core is Drill core diameter was PQ, HQ and NQ depending upon
oriented and if so, by what method, etc). depth. Tube type is unknown for Peñarroya driling, triple tube
method was used for Lundin and FCR campaigns.
No orientation has been done on drill core.
Drill sample • Method of recording and assessing core and Recovery data was recorded for selected intervals in 23
recovery chip sample recoveries and results assessed. drillholes (11 Peñarroya, 6 Lundin and 6 FCR).
• Measures taken to maximise sample recovery A total of 332 core recovery measurements exist in the
and ensure representative nature of the database with average recovery of 83%. 109 core recovery
samples. measurements occur within the interpreted mineralised zone.
• Whether a relationship exists between sample Core recovery was measured over lengths often
recovery and grade and whether sample bias corresponding to sample length.
may have occurred due to preferential loss/gain Recoveries average 80% within the mineralised zone, ranging
of fine/coarse material. from 100% down to 19% within areas of broken ground
conditions, intense fracturing and alteration.
Statistical assessment suggests a possible slight bias exists
between recovery and grades, with higher recovery returning
slightly higher average grades. However, due to limited
samples findings are currently inconclusive and additional
recovery data and investigatioin is required to draw
conclusions.
Logging • Whether core and chip samples have been Selected intervals representing areas of interest were logged
geologically and geotechnically logged to a level in the Penarroya drill holes. All Lundin and FCR holes were
of detail to support appropriate Mineral Resource logged in their entirety.
estimation, mining studies and metallurgical Core logging was recorded on paper logs, using a combination
studies. of printed graphic log templates (Peñarroya, Lundin), and plain
• Whether logging is qualitative or quantitative in paper (FCR).
nature. Core (or costean, channel, etc) DH lithology, alteration, mineralisation and structural
photography. observations were recorded by variable interval based on
• The total length and percentage of the relevant charactristical similarities and change boundaries.
intersections logged. Summary interval information was input to Excel, comprising
single code field and codes to describe logged lithology,
alteration, mineralisation and major structure for the interval.
Graphic and schematic logs were produced for all drilling.
Lundin and FCR core was routinely photographed.
Drill core logging is considered satisfactory for the level of
study and resource class.
Sub- • If core, whether cut or sawn and whether The sub-sampling techniques and sample preparation details
sampling quarter, half or all core taken. are not known for the Peñarroya drill core.
techniques • If non-core, whether riffled, tube sampled, rotary Lundin and FCR core was cut by core saw and half core
and sample split, etc and whether sampled wet or dry. submitted for analysis.
preparation • For all sample types, the nature, quality and Underground channels were cut by angle grinder/circular saw.
appropriateness of the sample preparation A channel approximately 7 cm wide and 5 cm deep to obtain
technique. 2-3 kg sample.
• Quality control procedures adopted for all sub- Sample collection, sample size, preparation and analysis are
sampling stages to maximise representivity of considered appropriate for the mineralogy and deposit type.
samples. Samples are considered representative of the in-situ material
• Measures taken to ensure that the sampling is collected.
representative of the in situ material collected, QAQC sample insertion procedures were not employed during
including for instance results for field the historical Peñarroya drill campaigns.
duplicate/second-half sampling. Lundin Mining completed limited quarter core field duplicate
• Whether sample sizes are appropriate to the insertion and selected pulp re-assay by external lab.
grain size of the material being sampled. FCR conducted a QC program of inserting quarter core field
Criteria JORC Code explanation Commentary
duplicates, course blank and pulp blank material, external
standards, selected pulp repeats and submission of pulp
rejects for umpire lab analysis.
ALS internal QC exists for Peñarroya re-analysis, Lundin and
FCR sample batches.
Quality of • The nature, quality and appropriateness of the Historical Peñarroya assaying and laboratory procedures are
assay data assaying and laboratory procedures used and unknown.
and whether the technique is considered partial or Commercial laboratories ALS Chemex Vancouver and ALS
laboratory total. Seville (ISO9001:2008) were used for Lundin and FCR drill
tests • For geophysical tools, spectrometers, handheld core respectively and FCR underground channel sample
XRF instruments, etc, the parameters used in analysis.
determining the analysis including instrument Multi-element analysis, including Pb, Zn, Cu, Ag by ICP-MS
make and model, reading times, calibrations were completed on all samples.
factors applied and their derivation, etc. Over limits samples were re-analysed using ore grade
• Nature of quality control procedures adopted methods of determination.
(e.g. standards, blanks, duplicates, external Sample analytical techniques are considered in line with
laboratory checks) and whether acceptable industry standard for this style of mineralisation.
levels of accuracy (i.e. lack of bias) and QAQC sample insertion procedures were not employed during
precision have been established. the historical Peñarroya drill campaigns. However, Lundin re-
analysis of Peñarroya drill core pulp rejects does allow for
comparison of original and pulp duplicate analysis results for
verification purposes.
Lundin Mining completed limited quarter core field duplicate
insertion and pulp reject re-analysis. No external standards.
FCR conducted a QC programme of inserting quarter core
field duplicates, course blank and pulp blank material,
standards, selection of pulp repeats and submission of pulp
rejects for umpire lab re-analysis.
ALS Chemex and ALS Seville internal QC exists for the
Peñarroya Lundin re-analysis, Lundin core and FCR core and
channel sample batches.
No significant issues or fatal flaws were identified from the
assessment of QA data.
The nature and quantity of QAQC data, procedures employed,
level of accuracy and precision are considered acceptable for
the assigned resource classification. The quality of assay data
and laboratory tests is acceptable for the resource
classification for this deposit.
No geophysical tools, spectrometers or handheld XRF
instruments were used in the exploration and resource work.
Verification • The verification of significant intersections by Paper recorded drill hole logging data is transferred to Excel,
of sampling either independent or alternative company imported in to Mapinfo for viewing and imported to Micromine
and personnel. 3D geological modelling software for validation.
assaying • The use of twinned holes. DGPS collar and survey excel data, and lab analytical data
• Documentation of primary data, data entry transferred from lab.csv, to Excel and imported to Micromine
procedures, data verification, data storage 3D geological modelling software.
(physical and electronic) protocols. Geological data from gallery is observed and reported by
• Discuss any adjustment to assay data. geologists and mining engineers.
All analytical data generated from Lundin re-analysis and
Lundin core samples, FCR core and channel samples for use
as input to estimation have been verified by cross reference
against lab assay certificates, re-import and re-building of the
project analytical database.
No adjustment to the analytical data was considered
necessary, other than conversion to zinc equivalents for
reporting purposes, following industry best practice. Raw
analytical data remained unchanged.
Location of • Accuracy and quality of surveys used to locate Lundin and FCR drill collars were surveyed using a Geomax
data points drill holes (collar and down-hole surveys), 35 high-precision DGPS device Accuracy +/-3cm. Downhole
trenches, mine workings and other locations survey measurements taken using Reflex Maxibore downhole
used in Mineral Resource estimation. survey tool.
• Specification of the grid system used. Peñaroyya drill hole collar locations were measured off plans
• Quality and adequacy of topographic control. and sections, located on the ground and picked up using
Geomax 35 high-precision DGPS device. Accuracy +/-5 m.
Peñarroya drill hole dip and azimuth measured from historical
plans, cross sections and longitudinal section. Accuracy +/-
5 m.
Old workings were surveyed using Lieca Disto tmx310 survey
device.
Co-ordinate grid system used is European Terrestrial
Reference System 1989 UTM Zone 29.
Topographic DTM taken from 5 m resolution Lidar data
MDT05-Lidar, from government mapping and survey
association Plan Nacional de Ortofotografía Aérea (PNOA).
Criteria JORC Code explanation Commentary
Data • Data spacing for reporting of Exploration The distribution of drillholes is sufficient to establish the degree
spacing and Results. of geological and grade continuity appropriate for JORC (2012)
distribution • Whether the data spacing and distribution is Inferred classification of resources.
sufficient to establish the degree of geological Intervals were not composited at the sampling stage. Grade
and grade continuity appropriate for the Mineral compositing was done for domain interpretation and modelling,
Resource and Ore Reserve estimation and 2 m length compositing done for grade interpolation.
procedure(s) and classifications applied.
• Whether sample compositing has been applied.
Orientation • Whether the orientation of sampling achieves Drilling is angled to intercept mineralised structures at high
of data in unbiased sampling of possible structures and the angle, as close to perpendicular to dip and strike as
relation to extent to which this is known, considering the practicable.
geological deposit type. No sample bias is introduced by drilling orientation.
structure • If the relationship between the drilling orientation
and the orientation of key mineralised structures
is considered to have introduced a sampling
bias, this should be assessed and reported if
material.
Sample • The measures taken to ensure sample security. Historical Peñarroya sample security protocols are not
security available.
Lundin/FCR drill core is transported from site to logging facility
in securely covered core boxes by the Lundin/FCR geologists.
Core logged and sampled in secure facility.
Samples are bagged in plastic bags and labelled with
individual sample numbers, sample name and sample location.
Each bag is sealed to avoid loss and contamination. Plastic
bags are placed in dry weave bags.
Samples are delivered to laboratory by courier in secured
boxes.
Audits or • The results of any audits or reviews of sampling Competent Person’s review and discussion of sampling
reviews techniques and data. techniques and data took place prior to and during consultant
site visit between Nov 20th and 22nd, 2017. Findings were
satisfactory and considered appropriate for the JORC (2012)
resource classification.
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral tenement • Type, reference name/number, location Toral exploration permit number 15.199 (also referred to as
and land tenure and ownership including agreements or Permiso de Investigacion), is located approximately 400 km
status material issues with third parties such as northwest of Madrid, within the Province of León, Autonomous
joint ventures, partnerships, overriding Community of Castile and Le?n.
royalties, native title interests, historical Licence 15.199 covers an area of 24 km².
sites, wilderness or national park and Exploration licence 15.199 is owned by Goldquest Iberica,
environmental settings. S.L., a wholly owned subsidiary of Ferrum Crescent Limited.
• The security of the tenure held at the time The licence was renewed on November 14th 2017 for a period
of reporting along with any known of 3 years.
impediments to obtaining a licence to
operate in the area.
Exploration done • Acknowledgment and appraisal of 1972-1984 – Peñarroya-Adaro. 55 drill holes, 36 wedge drill
by other parties exploration by other parties. holes.
1992-1995 – Geominera. Data re-evaluation.
2005-2008 – Lundin Mining. 7 drill holes.
2009-2011 – Goldquest Mining. Soil and rock geochemistry.
Historic gallery mapping. Data evaluation. NI43-101 Mineral
Resource Estimate
2012-2015 – Portex Mining Corporation. Geological mapping.
Data re-evaluation.
2015-2016 – Goldquest Iberica S.L. Soil and rock
geochemistry. Geological mapping.
2016-2017 – Goldquest Iberica S.L. (Ferrum Crescent
Limited). 6 drill holes. Historic gallery mapping and sampling.
Data re-evaluation and interpretation.
Geology • Deposit type, geological setting and style The Toral project is located in the Southwestern part of the
of mineralisation. regional West Asturian Leonese Zone (WALZ), a major
tectono-stratigraphic unit of the Hercynian Orogeny.
The mineralisation at Toral is considered as structurally
Criteria JORC Code explanation Commentary
controlled carbonate hosted Pb-Zn type. Shear and thrust
fault controlled mineralisation within favourable carbonate
lithology and favourable contrasting contacts between
carbonates and shales.
Styles of mineralisation are boudinage drusy quartz vein,
replacement breccia, disseminated clots associated with silica,
carbonate and chlorite alteration.
Main metallic minerals are Sphalerite, Galena, Pyrite,
Chalcopyrite and silver.
Drill hole • A summary of all information material to Drilling:
Information the understanding of the exploration Number of drillholes used: 92
results including a tabulation of the Collar East: 679962mE - 684702mE
following information for all Material drill Collar North: 4708653mN - 4710598mN
holes: Collar RL: 410mRL - 753mRL
o easting and northing of the drill hole Azimuth: 007° - 345º
collar Dip: -87° - -40°
o elevation or RL (Reduced Level – Length: 82.3m – 1,285.3m
elevation above sea level in metres) Interception depth: 578mRL – -405mRL
of the drill hole collar UG Channels:
o dip and azimuth of the hole Number of channels: 19
o down hole length and interception Collar East: 680917mE – 682607mE
depth Collar North: 4709161mN – 4709996mN
o hole length. Collar RL: 447mRL – 693mRL
• If the exclusion of this information is Azimuth: 010° - 313°
justified on the basis that the information Dip: -24° - 19°
is not Material and this exclusion does not Length: 0.25m – 4.25m
detract from the understanding of the
report, the Competent Person should
clearly explain why this is the case.
Data aggregation • In reporting Exploration Results, No top cuts were applied to the Zn and Pb data. However,
methods weighting averaging techniques, Lundin and FCR samples were limited to analytical method
maximum and/or minimum grade upper detection limits of 30% for Zn, Pb,
truncations (e.g. cutting of high grades) A top cut of 200 ppm was applied to Ag assay data.
and cut-off grades are usually Material Data aggregation or Grade Compositing rules for the reporting
and should be stated. of exploration drill and channel significant results were
• Where aggregate intercepts incorporate minimum width 1m, minimum average grade 0.5% ZnEq,
short lengths of high grade results and maximum allowable internal waste of 2m.
longer lengths of low grade results, the Zn equivalent calculations were based on 3 year trailing
procedure used for such aggregation average price statistics obtained from the London Metal
should be stated and some typical Exchange and London Bullion Market Association giving an
examples of such aggregations should be average Zn price of US$2,400/t, Pb price of US$2,000/t and
shown in detail. Ag price of US$17/tOz. Recovery and selling factors were
• The assumptions used for any reporting incorporated into the calculation of Zn Eq values. It is the
of metal equivalent values should be Company’s opinion that all the elements included in the metal
clearly stated. equivalents calculation (Zinc, Lead and Silver) have a
reasonable potential to be recovered and sold.
Relationship • These relationships are particularly Mineralisation is interpreted as sub-vertical to steeply dipping
between important in the reporting of Exploration to the NE.
mineralisation Results. Angled drilling is sub-perpendicular to +/- 20º oblique to
widths and • If the geometry of the mineralisation with mineralisation.
intercept lengths respect to the drill hole angle is known, its True thickness of mineralisation ranges from approximately
nature should be reported. 90%-60% downhole interval length.
• If it is not known and only the down hole
lengths are reported, there should be a
clear statement to this effect (e.g. ‘down
hole length, true width not known’).
Diagrams • Appropriate maps and sections (with Appropriate scaled diagrams are included within the AMS
scales) and tabulations of intercepts Toral JORC (2012) Resource Statament and Technical
should be included for any significant Report.
discovery being reported. These should
include, but not be limited to a plan view
of drill hole collar locations and
appropriate sectional views.
Balanced • Where comprehensive reporting of all All available exploration data for the Toral deposit area has
reporting Exploration Results is not practicable, been collected and reported. Representative data from all
representative reporting of both low and drillings have been reported.
high grades and/or widths should be
practiced to avoid misleading reporting of
Criteria JORC Code explanation Commentary
Exploration Results.
Other substantive • Other exploration data, if meaningful and No geophysical works have been completed.
exploration data material, should be reported including Geological mapping and solid geology map generation
(but not limited to): geological completed.
observations; geophysical survey results; Structural interpretation and 3D modelling completed.
geochemical survey results; bulk samples Soil geochemical surveys demonstrate strong coherent Zn in
– size and method of treatment; soil anomalism coincident with interpreted controlling
metallurgical test results; bulk density, structures.
groundwater, geotechnical and rock No geotechnical, metallurgical or bulk sample test work
characteristics; potential deleterious or completed to date.
contaminating substances.
Further work • The nature and scale of planned further Surface drilling and trenching works testing open strike extent
work (e.g. tests for lateral extensions or to the SE and infill drilling within current resource limits to
depth extensions or large-scale step-out increase confidence and resource class.
drilling). Underground cut-channel sampling and mapping.
• Diagrams clearly highlighting the areas of Systematic bulk density measurement work.
possible extensions, including the main Preliminary metallurgical testwork.
geological interpretations and future
drilling areas, provided this information is
not commercially sensitive.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Database • Measures taken to ensure that data has The databases (geological and analytical) are maintained by
integrity not been corrupted by, for example, the geologist.
transcription or keying errors, between its The database for use as input to mineral resource modelling
initial collection and its use for Mineral and estimation has been validated and verified by AMS and
Resource estimation purposes. the Competent Person.
• Data validation procedures used. Micromine 3D geological modelling and estimation software
used for import, validation and QAQC verification assessment.
Data checks include checks for overlapping and missing
intervals, dh trace errors, missing survey data, litho and
collars.
Site visits • Comment on any site visits undertaken by Competent Person for structurally controlled carbonate hosted
the Competent Person and the outcome Pb-Zn resource estimation is Mr. James Hogg who has a
of those visits. Master Degree of Science in Mineral Exploration and is a
• If no site visits have been undertaken member of the Australian Institute of Geoscientists.
indicate why this is the case. Site visits were completed between 20th and 22nd November
2017.
Geological • Confidence in (or conversely, the Based upon the level of available information, geological and
interpretation uncertainty of) the geological deposit complexity, interpretation of the main lithological
interpretation of the mineral deposit. boundaries and controls to mineralisation are considered
• Nature of the data used and of any satisfactory and appropriate for the assigned resource class.
assumptions made. Drillhole lithological and analytical information, prospect scale
• The effect, if any, of alternative surface geological mapping, underground mapping and
interpretations on Mineral Resource sampling, location of underground workings were used in
estimation. geological interpretation.
• The use of geology in guiding and Alternative interpretations infer potential thrust repeats and
controlling Mineral Resource estimation. potential for additional parallel mineralised zones. However, at
• The factors affecting continuity both of the level of information this interpretation remains unsupported
grade and geology. by drill data and conceptual in nature.
Geological model was used to guide the interpretation and
continuity of Zn-Pb mineralised domains.
Post mineralisation transfer faults are interpreted to affect
continuity by minor offset.
Dimensions • The extent and variability of the Mineral Mineralisation is encountered at surface and based on current
Resource expressed as length (along testing, extends to approximately 1,100 m below the surface.
strike or otherwise), plan width, and depth Mineralisation is currently tested across a 3,300 m strike
below surface to the upper and lower length, the orientation of mineralisation zone is approximately
limits of the Mineral Resource. 110 degrees, averaging approximately 3 m in thickness.
Estimation and • The nature and appropriateness of the Wireframe solid models were created for each domain based
modelling estimation technique(s) applied and key on a mineralisation threshold of approximately 0.2% for Zn and
techniques assumptions, including treatment of Pb (approximately 0.4% Zn+Pb). Analysis of Zn and Pb grades
extreme grade values, domaining, in cross section and in scatter plots showed a strong
interpolation parameters and maximum relationship and no requirement to model Zn and Pb
separately was identified. Ag showed a strong correlation with
Criteria JORC Code explanation Commentary
distance of extrapolation from data points. Pb and was estimated within the Zn/Pb mineralised domain.
If a computer assisted estimation method Interpretation of the mineralised domains were guided by
was chosen include a description of geological interpretation of the deposit incorporating structural
computer software and parameters used. and lithological boundaries.
• The availability of check estimates,
previous estimates and/or mine All samples contained within the mineralised wireframe were
production records and whether the composited to a standard length for geostatistical analysis and
Mineral Resource estimate takes interpolation. Variography was performed on the assay data
appropriate account of such data. within the primary mineralised wireframe to generate a series
of directional semi-variograms for Zn, Pb and Ag. These
• The assumptions made regarding
variograms were used in the Ordinary Kriging process where
recovery of by-products.
Zn, Pb and Ag were interpolated and extrapolated using the
• Estimation of deleterious elements or
corresponding variograms on a domain by domain basis. A
other non-grade variables of economic
single pass search was applied to minimise conditional bias,
significance (e.g. sulphur for acid mine
the number of input data in each block estimate were restricted
drainage characterisation).
to prevent over smoothing of the estimates.
• In the case of block model interpolation,
the block size in relation to the average The block model used uniform cell size of 50x2x50 m to best
sample spacing and the search suit the orientation of the mineralisation and sample spacing.
employed. The block model was rotated by 20° in plan view to best match
• Any assumptions behind modelling of the trend of mineralisation. Sub cells were applied to better fit
selective mining units. the wireframe solid models and preserve accurate volume as
• Any assumptions about correlation much as possible. Cells were interpolated at the parent block
between variables. scale using an Ordinary Kriged interpolation technique with a
• Description of how the geological single search ellipsoid orientated to the interpreted strike, dip
interpretation was used to control the and pitch of mineralisation.
resource estimates.
• Discussion of basis for using or not using No top cutting was applied to Zn or Pb grades due to the upper
grade cutting or capping. detection limit of the data being 30%. High-grade outlier values
• The process of validation, the checking for Ag were capped (‘top-cut’) at 200 ppm (g/t) based on the
process used, the comparison of model data distribution and statistics.
data to drill hole data, and use of The current maiden resource completed by AMS on the Toral
reconciliation data if available. project compares well with the historic 2011 NI43-101 reported
resource which stated resources at 4% cut off of 18Mt @ 8.4%
(Pb+Zn), 27g/t Ag. An AMS audit of the historic resource has
identified a number of errors and issues in regard to input data,
estimation methodology, assumptions and reporting of metal
equivalents, and considers the historic resource inaccurate
and unreliable.
The data was continually validated throughout drilling and at
the resource stage. Data was validated both visually and in
Micromine. No significant errors were detected and the data
set is considered robust and compliant with JORC 2012
reporting standards.
A comparison between the volume and tonnage of the block
model and the volume and tonnage of the wireframe which
represents all mineral domains. The volumes of the wireframe
and block model agree within acceptable limits.
Moisture • Whether the tonnages are estimated on a Tonnages are estimated on a dry basis.
dry basis or with natural moisture, and the
method of determination of the moisture
content.
Cut-off • The basis of the adopted cut-off grade(s) Zn equivalent calculations were based on 3 year trailing
parameters or quality parameters applied. average price statistics obtained from the London Metal
Exchange and London Bullion Market Association giving an
average Zn price of US$2,400/t, Pb price of US$2,000/t and
Ag price of US$17/tOz. Recovery and selling factors were
incorporated into thecalculation of Zn Eq values. It is the
Company’s opinion that all the elements included in the metal
equivalents calculation (Zinc, Lead and Silver) have a
reasonable potential to be recovered and sold.
Zn Eq (PbAg)% is the calculated Zn equivalent incorporating
silver credits as well as lead and is the parameter used to
define the cut-off grade used for reporting resources (Zn Eq
(PbAg)% = Zn + Pb*0.863 + Ag*0.022).
Zn Eq (Pb)% is the calculated Zn equivalent using lead credits
and does not include silver credits. It is displayed here for
comparison purposes (Zn Eq (Pb)% = Zn + Pb*0.863).
Mining factors or • Assumptions made regarding possible Assumed mining methods are based upon a review of
assumptions mining methods, minimum mining methods of extraction, cost and performance on similar type
dimensions and internal (or, if applicable, deposits.
external) mining dilution. It is always
necessary as part of the process of Summary of mining and processing costs used in
Criteria JORC Code explanation Commentary
determining reasonable prospects for determination of economic cut off. Assumed 90% sub level
eventual economic extraction to consider open stoping and 10% shrinkage mining techniques.
potential mining methods, but the
assumptions made regarding mining Description $/t Weighting Weighted Cost / t
methods and parameters when
Mining - Sub-level OS 25 0.9 22.5
estimating Mineral Resources may not
always be rigorous. Where this is the Mining post fill 8 1 8
case, this should be reported with an
explanation of the basis of the mining Mining - shrinkage 80 0.1 8
assumptions made.
Weighted average mining cost 38.5
Flotation 2 products 17 1 17
G&A 10 1 10
Total per tonne milled 65.5
Metallurgical • The basis for assumptions or predictions Assumed processing methods are based upon a review of
factors or regarding metallurgical amenability. It is methods of extraction, cost and performance of similar type
assumptions always necessary as part of the process deposits.
of determining reasonable prospects for
eventual economic extraction to consider Summary of recovery and selling factors used in the
potential metallurgical methods, but the determination of economic cut off and equivalents. Assumed
assumptions regarding metallurgical 90% sub level open stoping and 10% shrinkage mining
treatment processes and parameters techniques with 90% and 95% mining recoveries respectively.
made when reporting Mineral Resources Discounted factor for selling concentrate product applied to
may not always be rigorous. Where this is metal prices. Metal Recoveries and Concentrate Selling
the case, this should be reported with an Factors are taken into account in Zn Eq calculation.
explanation of the basis of the
metallurgical assumptions made. Zn %
Conc
Equivale Mining Process
Metal Selling Metal
nt Recovery Recovery
Metal price Factor Contributio
Conversi Factor Factor
US$ (CONC n Factor
on (MRECF) (PRECF)
F)
Factor
Zn 2400 /t 1 0.905 0.93 0.85 0.55
0.863
Pb 2000 /t 0.905 0.89 0.92 0.38
(x % Pb)
0.022
Ag 17 /Oz (x g/t 0.905 0.80 0.95 0.07
Ag)
Zn Eq
0.905 0.905 0.884
Weighted
Environmen-tal • Assumptions made regarding possible No assumptions are made on environmental factors other than
factors or waste and process residue disposal the cost to back fill waste tailings.
assumptions options. It is always necessary as part of
the process of determining reasonable
prospects for eventual economic
extraction to consider the potential
environmental impacts of the mining and
processing operation. While at this stage
the determination of potential
environmental impacts, particularly for a
greenfields project, may not always be
well advanced, the status of early
consideration of these potential
environmental impacts should be
reported. Where these aspects have not
been considered this should be reported
with an explanation of the environmental
assumptions made.
Bulk density • Whether assumed or determined. If Bulk density was determined using waxed core samples and
assumed, the basis for the assumptions. weight in air vs weight in water measurement method.
If determined, the method used, whether BD samples were taken from FCR and Lundin drill core, and
wet or dry, the frequency of the flagged within the mineralised wireframe.
measurements, the nature, size and A total of 36 measurements were used.
representativeness of the samples.
• The bulk density for bulk material must
have been measured by methods that
adequately account for void spaces
(vugs, porosity, etc), moisture and
differences between rock and alteration
zones within the deposit.
• Discuss assumptions for bulk density
estimates used in the evaluation process
Criteria JORC Code explanation Commentary
of the different materials.
Classification • The basis for the classification of the The Inferred mineral resource category for the Toral zinc-lead-
Mineral Resources into varying silver project (at cut-off grades >4% Zn Equivalent) comply
confidence categories. with the resource definitions as described in Australasian Code
• Whether appropriate account has been for Reporting of Exploration Results, Mineral Resources and
taken of all relevant factors (i.e. relative Ore Reserves. The JORC Code, 2012 Edition. Prepared by:
confidence in tonnage/grade estimations, The Joint Ore Reserves Committee of The Australasian
reliability of input data, confidence in Institute of Mining and Metallurgy, Australian Institute of
continuity of geology and metal values, Geoscientists and Minerals Council of Australia (JORC).
quality, quantity and distribution of the
data). The result reflects the quality and quantity of data,
• Whether the result appropriately reflects geostatistical analysis of correlation and relationship between
the Competent Person’s view of the mineralised samples (semi-variography) and the Competent
deposit. Person’s view of the deposit. The semi-variography reflects the
sample density.
Audits or reviews • The results of any audits or reviews of There has been one historical resource estimate performed on
Mineral Resource estimates. the deposit, completed in 2013 and reported in compliance
with NI43-101. A review of the NI43-101 report and available
models has raised some concerns on the validity of input data
used, modelling and estimation methodologies and resulting
reliability of reported resources.
The AMS 2018 resource report has not been audited.
Discussion of • Where appropriate a statement of the It is the CP’s opinion that the resource model and estimations
relative accuracy/ relative accuracy and confidence level in are accurate given the quantity and quality of data, and
confidence the Mineral Resource estimate using an reported in accordance with JORC 2012 guidelines.
approach or procedure deemed
appropriate by the Competent Person. The level of confidence is consistent with the level of Inferred
For example, the application of statistical categorised mineral resource.
or geostatistical procedures to quantify There were sufficient statistical and geostatistical procedures
the relative accuracy of the resource to quantify the accuracy of the mineral resource.
within stated confidence limits, or, if such
an approach is not deemed appropriate, a There are no historical production records from the deposit.
qualitative discussion of the factors that
could affect the relative accuracy and
confidence of the estimate.
• The statement should specify whether it
relates to global or local estimates, and, if
local, state the relevant tonnages, which
should be relevant to technical and
economic evaluation. Documentation
should include assumptions made and
the procedures used.
• These statements of relative accuracy
and confidence of the estimate should be
compared with production data, where
available.
Date: 30/01/2018 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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