BRISBANE, AUSTRALIA--(Marketwire - July 27, 2011) - Intrepid Mines Limited (ASX:IAU)(News - Market indicators) (the "Company") is pleased to announce the release of its report for the quarter ended 30 June 2011 regarding development and exploration activities, as required under ASX Listing Rule 5.1.1, as well as the Company's Management Discussion and Analysis and Interim Financial Report for the quarter ended 30 June 2011.
The documents are available on the Company's website (www.intrepidmines.com), on Sedar (www.sedar.com), and can be reviewed on the ASX website (www.asx.com.au).
All dollar values are United States Dollars unless otherwise stated.
OVERVIEW
FINANCE
TUJUH BUKIT
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On 17 May 2011, the Company announced an additional forestry permit being awarded which would allow exploration activities within an additional 2,682.22 hectares within the existing Tujuh Bukit tenements.
- On 30 May 2011, the Company reported that assay results from the initial drilling at the Candrian Prospect have confirmed the discovery of a new gold-copper porphyry system, exhibiting high gold-to-copper ratios in some intervals. Results included hole CND-11-002, which intersected 138 metres at 0.8 grams per tonne (g/t) gold and .21% copper from 6 metres below surface. Candrian is located 2.2 kilometres east of the main Tumpangpitu copper gold deposit.
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On 2 June 2011, the Company announced that the technical report entitled "Preliminary Economic Assessment Tujuh Bukit Oxide Project Technical Report" ("PEA") dated 1 June 2011, had been filed on SEDAR as well as with the ASX (see the Company's news release of 20 April 2011 for a summary of the PEA). The report was prepared by independent consultants Kappes Cassidy of Reno Nevada in accordance with the JORC Code and Canadian National Instrument 43-101. Based on conservative assumptions, the PEA demonstrated a life-of-project annual average production of 143,000 recovered ounces of gold for nine years at a cash cost of US$376 per ounce, net of silver credits at US$16.50 per ounce. It detailed that the project delivers a post-tax cumulative cash flow of US$445 million, a NPV (at a 10% discount rate) of US$180 million and an IRR of 31%, at a gold price of US$1,050 per ounce (the production and financial numbers are reported on a project basis – the Company holds an 80% economic interest in the project). The study also shows the deposit has considerable leverage to metal prices. At a gold price of US$1,450 per ounce and silver price of US$38 per ounce, post-tax cumulative cash flow increases to US$942 million (a NPV (10%) of US$446 million and an IRR of 54%).
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On 22 June 2011, the Company announced that the technical report entitled "Tujuh Bukit Project Report on Mineral Resources," dated June 2011, had been filed on SEDAR as well as with the ASX (see the Company's news release of 10 May 2011 for a summary of the porphyry resource update). The report was prepared by independent consultants Hellman and Schofield Pty Ltd in accordance with the JORC Code and Canadian National Instrument 43-101. It details an updated Inferred Porphyry Resource estimate of 990 million tonnes at 0.45 g/t gold and 0.40% copper above a 0.2 g/t gold cut-off or 0.2% copper cut-off grade for 8.8 billion pounds of copper and 14 million ounces of gold within the porphyry zone of the Tumpangpitu area of the Tujuh Bukit Project in Indonesia. The report also referenced 800-850 million tonnes of additional geological potential.
- On 28 June 2011, illegal miners operating in the area disrupted drilling and caused damage to a small camp and drill rig that was situated at Gunung Manis, an epithermal gold target near the eastern border of the Tujuh Bukit project. No injuries were reported. Drilling activity is expected to recommence in the near future.
Forward-looking statements
This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.
Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
Statements relating to gold resource estimates are expressions of judgment, based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as gold prices, cut-off grades and operating costs, which may prove to be inaccurate.
Forestry Activities
The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The area of the Porphyry copper-gold resource estimate, and the Zone A, Zone B and Zone C oxide resource estimate areas fall within a protected forest area. Intrepid's Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. There is no assurance that the forestry reclassification will take place in this instance. PT IMN received an extension of the Forestry Exploration Permit dated 7 July 2010, which allows for exploration activities within forestry areas.
Qualified Person
The information in this announcement that relates to exploration results and choice of cut-off grades for porphyry resource reporting at Tujuh Bukit is based on information compiled by or under the supervision of Malcolm Norris, who is a full-time employee of Intrepid Mines Limited. Mr. Norris has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this announcement that relates to mineral resources is based on information compiled by or under the supervision of Dr. Phillip Hellman, who is an independent consultant to Intrepid Mines Limited. Dr Hellman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an Independent Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and an Independent Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Dr Hellman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Dr Hellman has undertaken independent verification sampling and assaying of drill core from the oxide gold silver mineralisation with a close agreement of results with those previously reported.
Resource Estimation Notes
For the Porphyry Resource estimate geological interpretations of the copper mineralisation provided by Intrepid were used to define a "top-of-porphyry" surface to restrict estimates to geologically reasonable limits. The block model was coded by oxidation zone and estimates were restricted to the sulphide portion of the potential porphyry zone. 6m length-weighted composites from the transitional and sulphide zones were used to estimate, via Ordinary Kriging, Cu, Au, Mo, As and SG into a 40 x 40 x 15 metre block model. Silver values within the primary mineralisation are low (eg < 5g/t).
Inferred Resources are defined on the basis of a 120m x 120m x 80m search ellipsoid using a maximum of 32 6m composites and a minimum of 12. Two more passes of 180m x 180m x 120m and 240m x 240m x 160m were used to generate "potential" blocks within and outside the constraints of the porphyry model. In general, these potential blocks define extra similar tonnages at similar grades to the quoted estimates. These, however, do not constitute "resource estimates" and there is no guarantee that they will be upgraded to resources with further drilling. Drill spacing of the deeper holes is approximately 200m x 200m. However, there are a considerable number of shallower holes that intersected copper mineralisation in transitional and primary mineralisation. Quoted resources exclude transitional mineralisation. 5279 6m composites of Cu and Au from the sulphide zone are available for estimation together with 5175 Mo, 5097 As and 2727 SG values. Composites from the porphyry zone number 4082, 4082, 3993, 4004 and 2241 for Cu, Au, Mo, As & SG, respectively.
Two different software products were used to provide estimates. Previous estimates were checked against results from a different operator. Results closely agree within the meaning of "Inferred". Cross sections of the modelled results were plotted in juxtaposition with assay and geological data to check for geological plausibility. It is noted that there is considerable scope to add to the quoted resource with most sections having significant areas that are yet to be drill tested.
Approximately 45% of the resource reports within a shell based on a preliminary pit optimisation of the September 2010 resource model (significantly smaller than the current estimates). At depths below the conceptual pit, the possibility of bulk underground mining techniques (eg block caving) remains. The resource falling above a conceptual pit shell in no way should be understood to represent "Ore Reserves".
Sample Analysis
Intrepid exercises a strict chain of sample custody in its drilling program at Tujuh Bukit. Joint Venture personnel remove core from the drill rig and deliver it to a project geologist who logs the core and marks the core into two metre sample intervals. Intrepid and Joint Venture personnel supervise the immediate splitting, sawing and bagging of samples, and packaging of groups of samples for dispatch to the laboratory. The remainder of the split core remains on site.
Samples are securely packaged, batched, and then transported under supervision to Intertek's laboratory facility in Jakarta. At the laboratory, the samples are prepared by crushing and pulverizing and a 30 gram charge is assayed for gold by conventional fire assay and/or atomic absorption methods. Multi-element ICP analysis is carried out using a multi-acid digestion process. All samples that contain silver and/or copper, lead, and zinc values that exceed the upper detection limits for ICP are re-analysed by conventional atomic absorption methods to determine the absolute values of these metals.
ABN: 11 060 156 452
