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Watershed mine

7th November 2014

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

  

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Name: Watershed mine.

Location: The Watershed mine project is located in the Australian state of Queensland, 115 km north-west of Cairns.

Controlling Company: Vital Metals (70%) and Jogmec (30%).

Brief History: Watershed was discovered by the Utah Development Company (Utah) in 1978, as a result of a regional exploration programme for tungsten. Extensive exploration work comprising an estimated 54 024.4 m from 334 diamond and reverse circulation drill holes was undertaken on the deposit between 1980 and 2011.

The first exploration hole at the proposed mine was drilled in 1980, following intensive stream-sediment sampling, soil sampling and geological mapping. In 1984, the prospect became a joint venture (JV) between Utah and Peko Wallsend Operations Limited (Geopeko).

Exploration work continued until mid-1986, when Geopeko withdrew from the JV. At this juncture, the tungsten deposits were secured under a mineral development licence by BHP Billiton in 1986. Activities were restarted in 2005, when ownership of the mineral development licence passed to Vital Metals, through which the company embarked on a programme of exploration drilling to increase the size and confidence in the scheelite mineral resource.

Brief Description: The Watershed mine is proposed to be developed as an openpit operation, with mining conducted using excavators and trucks, based on a mining rate of 2.5-million tonnes a year. The operation is planned to have a life of ten years.

Geology/Mineralisation: The Watershed project area is dominated by arenaceous and argillaceous metamorphosed sediments of the Devonian Hodgkinson formation. The arenites form ridges with the softer argillaceous units being exposed in the valleys. Minor chert and granitic dykes have been mapped within the project area. Several major Permian granitic plutons are present around Watershed, some of which are related to tungsten mineralisation in the wider project area.

The tungsten mineralisation at Watershed is open to depth and along strike to the south, where the three tungsten prospects – Watershed South, Desailly and Desailly North – are located, which were also discovered by Utah and are currently explored by Vital.

Resources: The project has total measured, indicated and inferred mineral resources of 49.32-million tonnes at 0.14% tungsten trioxide (WO3) or 70 400 t of contained WO3 at a cutoff grade of 0.05% WO3.

Reserves: Based on the measured and indicated components of the mineral resource, the project has a maiden proved and probable ore reserve comprising 21.3-million tonnes, grading 0.15% WO3 for 31 400 t of contained WO3 and a strip ratio of 3:1 waste to ore.

Products: WO3.
Mining Method: Openpit.
Major Infrastructure and Equipment: Watershed is accessible by a 24 km, formed and graded, unsealed access road running from the state-controlled dual lane Mulligan Highway, which connects the Atherton Tablelands area to Cooktown.

A state-owned power line runs parallel to the Mulligan Highway, and the line currently has excess capacity that will meet the project’s requirements.

The major infrastructure that will be developed for the Watershed project includes a processing plant, an access road, site roads, power line connections and backup generation, an accommodation village, water storage and catchment dams, a waste-rock dump, service infrastructure, workshops, an administration area and storage areas.

Prospects: Following completion of the definitive feasibility, the next development milestone will be for Jogmec to transfer its 30% interest in the project to a Japanese company with interests in the tungsten industry.

Contact Person: Investor relations.

Contact Details:
Vital Metals,
tel +61 8 9388 7742,
fax+61 8 9388 0804, and
email vital@vitalmetals.com.au.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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