- 60% jump in Otjo manganese resources to 10.7mt (1.52 MB)
Shaw River Manganese Limited (ASX: SRR – “Shaw River” or “the Company”) is pleased to report a 60 per cent increase in the Mineral Resource for its 75.5%-owned Otjozondu Manganese Project (“Otjo”) in Namibia to 10.7 million tonnes, providing a strong foundation for its plans to become a manganese producer.
The Otjo resource is already comparable to some of the larger manganese deposits found globally. The favourable logistics of Otjo, including access to road and rail infrastructure, as well as port capacity at Walvis Bay in mining friendly Namibia (Figure 1), puts Shaw River in an excellent position to progress its mine development plans.
An additional attraction of the manganese resources discovered to date at the Otjo Project is that they are accessible directly from surface using open cut methods. Shaw River is currently focussing on building resources from surface to approximately 50 metres depth. This characteristic makes the Otjo Project considerably attractive compared to other world-class potential manganese deposits which are extremely deep and often infrastructure constrained.
The updated resource inventory includes a maiden Indicated Resource of 3.8 million tonnes located within the existing mining lease at Otjo which will underpin Shaw River’s production aspirations.
The ongoing Feasibility Study is being extended to complete later in 2012, targeting initial production of up to 500,000tpa. The resource upgrade also provides a strong platform for the next round of exploration and resource drilling at Otjo, which is set to commence in April 2012. This drilling will target a further increase in the resource inventory to approximately 20 million tonnes by the 3rd Quarter of calendar 2012 by targeting strike extensions of the known deposits. Drilling will target 7.5km of known manganese outcrop and 10 geophysical targets which have no current drilling.
Shaw River plans to continue drilling at Otjo to convert the Exploration Target1 of 30Mt-50Mt grading 23% - 27% Mn to JORC compliant resources.
The current resource update follows the completion of a drill program comprising 6,205m of RC drilling and 1,718m of diamond drilling in 2011. Drilling at the Bosrand, Labusrus and North Bosrand deposits resulted in the estimation of the JORC Indicated Category Resources.
The conversion ratio of Inferred to Indicated Resources at these deposits was 80%, indicating a high level of confidence in the Inferred category. Independent Consultants Cube Consulting and AEMCO were used to estimate and classify the resources.
Shaw River’s Managing Director, Vincent Algar, said the resource increase and upgrade gives the Company huge confidence in proceeding with its plans to develop a new manganese mine at Otjo, with the upgrade boosting the resource past the key 10 million tonne threshold, considered to be a significant milestone in the global manganese industry.
“What is even more exciting is the fact that there is outstanding potential to further grow resources, and to do so rapidly by targeting immediate extensions to the existing deposits,” Mr Algar said.
“Further resource drilling will commence in April this year. This drilling will be designed to boost resources in the short term to around 20 million tonnes and, in the longer term, to convert the Project Exploration Target1 of 30-50Mt,” he continued. “The achievement of this target would further validate the world-class potential of the Otjo Project.”
“Our Feasibility Studies which are ongoing and are being extended to the 3rd Quarter of calendar 2012 to investigate a larger operation, suggest that Otjo has the potential to enjoy lower mining costs, as most the deposits outcrop and the open pits will be relatively shallow. Additional drilling will further expand the Project resource inventory, while also improving our understanding its potential economics, whilst focusing on near-surface opportunities within 50 metres of the surface.”
“With our resource update now complete, we are continuing our feasibility studies focused on infrastructure, beneficiation and developing and optimising a mine plan to develop this Project in the shortest possible timeframe.”
These deposit areas have been previously drilled and have been the subject of field investigation, review and verification over the past months. A review of the drill samples and data has resulted in these areas being included in the current Mineral Resource inventory. The resources at Ouparakane and Ongorussengo lie within the current Mining Lease, while East Otjozondu and Ebenezer lie on granted Exploration Licences adjacent to the Mining Lease (Figure 2).
The in-fill drilling conducted by Shaw River at Otjo in 2011 increased the confidence in the resource category to the more stringent Indicated category on part of three deposits, being:
Bosrand – 2.5Mt at 21.8% Mn
Labusrus – 0.6Mt at 22.6% Mn
North Bosrand – 0.7Mt at 21.8% Mn
The criteria to report this level of resource requires a higher level of geological continuity and sampling detail as well as a higher drill density of intersections. These additional requirements improve the certainty in the resource and reserve estimation, allowing economic modelling to be undertaken with greater confidence. The criteria used for the classification of the Indicated Resources were independently verified by Cube Consulting (see Appendix 1).
The estimation of 3.8Mt of Indicated Resources, representing an 80% conversion from Inferred Resources at Bosrand, Labusrus and North Bosrand Deposits.
The addition of four new Inferred resources at East Otjozondu, Ouparakane, Ongorussengo and Ebenezer deposits, amounting to 3.2Mt.
The identification of high grade zones in drilling (+40%) at Labusrus and Bosrand
Mineral Resources were modelled, estimated and classified by Cube Consulting (“Cube”) except at East Otjozondu, Ongorussengo, Ebenezer and Utikomst, where models were created by Shaw River Geologists using Surpac software and reviewed and classified by AEMCO consultants, who have over 10 years experience in the Otjozondu manganese field.
Mineral resources were modelled and estimated using either geological boundaries or a 15% Mn cut-off grade. Mineral resources are reported using a 15% Mn cut-off grade. Tonnages are rounded to the nearest 100,000t and percent manganese grade quoted to one decimal place.
Estimates are based on relevant geological logging and sampling information drawn from a total of 41,000m of diamond and RC drilling conducted on the project thus far.
Appendix 1 and 2 contain a summary of resource estimation parameters used by Cube and SRR, AEMCO in their respective estimations.
Focus on resource growth - 2012 Exploration Plans
The Company will spend the majority of 2012 focusing on resource growth across its three manganese projects – Otjo in Namibia, Baramine in the Pilbara and Butre in Ghana.
A comprehensive drill campaign is planned for Otjo during calendar 2012. The objective of the drilling program is to further extend the resource base to underpin a mine life of more than 10 years of ore feed (which is equivalent to 1.5Mtpa of ore to a beneficiation plant, delivering 500,000t of final ore product). The initial objective of the drilling is to increase the resource base to above 20Mt.
A drill program comprising 11,000m of RC drilling is planned to start by April 2012, with first results available in June 2012. Ongoing resource upgrades will be delivered through the course of the program.
The nature of the manganese deposits at Otjo is that they occur either in folded or in linear forms and have a strong correlation with outcropping manganese and manganese nodule beds (either exposed or hidden under shallow cover). Drilling has so far tested less than 15 per cent of the total 144km strike potential within the Company’s licences. Drilling will focus on at least 7.5km of known manganese outcrop and 10 identified geophysical targets which have not yet been drilled.
The planned drilling program will focus on testing the strike extension of known deposits, converting as much as possible of the Project Exploration Target Resource1 of 30Mt-50Mt grading 23%- 27%Mn for the overall field to JORC compliant resources.
Regional Exploration at Otjo
As part of the ongoing focus on exploration and resource development at Otjo, Shaw River’s team has commenced regional soil sampling programs over a range of high priority magnetic and EM targets on its northern exploration leases. Figure 3 shows the licence areas and underlying geophysics as well as the current targets being assessed by soil sampling and mapping.
Orientation work and early results indicate that the manganese horizons can be detected under shallow cover and the extensive work program is likely to generate a large number of follow-up targets for further shallow drilling and trenching over the coming months.
Edited by: Creamer Media Reporter
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