MEDIA RELEASE 15
April 2008
India Resources secures future copper production base
Diversified minerals developer and
producer India Resources (ASX:IRL) has identified mining blocks at the Surda
copper project sufficient to meet the six years production target at an
increased production rate.
Chairman
Andrew Simpson said the Company had
reviewed and analysed all of the project’s historical
geological data, generated from past operations by Hindustan Copper Limited
(HCL), with the results supporting IRL’s increased production targets.
“The review shows that there
is seven million tonnes of mineralisation at a grade of 1.2% already developed
and that is enough to feed future production for six years,” Mr Simpson
said.
The
Company is aiming to double the current target production of 450,000 tonnes of
ore per annum.
With
seven million tonnes of developed mineralisation identified, the Company
remains on track toward its ultimate production target of 9,000 tonnes of
copper in concentrate (the concentrate grade from the Mosaboni plant is 25%).
The deposit remains open down dip and along strike, giving further potential
for expansion.
The
identified mining blocks form part of a historical “geological ore
reserve” (not JORC standard) estimate in July 2004 by mine owners HCL of
26.1 million tonnes at 1.2% Cu.
Mr Simpson said IRL is currently
undertaking a feasibility study into the development of a decline between the
two existing mine shafts which would eventually access additional mineralisation.
IRL has made significant progress in
the development of Surda, since the Company listed on the ASX in June 2007.
Following commencement of mining in December 2007, IRL commenced its first sales
of copper concentrate in January.
Mine production at Surda achieved
the targeted levels of 10,700 tonnes in January,
12,700 tonnes in February and 16,000 tonnes in March.
IRL is also set to continue to ramp
up production with the recent commissioning of a second ball mill, which has
achieved monthly mill capacity of 35,000 tonnes.
Andrew
Simpson Eoin
Rothery Warrick Hazeldine
Chairman Managing
Director Purple Communications
Tel: +61 (0) 8 9450 8822 Tel:
+61 (0) 8 9324 7009 Tel:
+61 (0) 8 9485 1254
Mob:
+61 (0)420 904 332 Mob:
+61 (0)417 944 616
Specific commentary with regard to ASX requirements:
IRL is
mining at the Surda project from previously identified mining blocks, part of a
historic reserve estimate by Hindustan Copper Limited (HCL). The Company has
released the estimate in order to keep the market informed, as the Company is
currently mining based on the estimate. As the estimate is non-JORC compliant,
IRL has applied for and obtained a waiver from the ASX of Listing Rule 5.6 in
order to allow it to report the non-JORC compliant estimates. In order to
obtain the waiver, IRL is required to inform the market of the following
matters:
1 The
HCL reserve estimate is not reported in accordance with the JORC Code and it is
uncertain that following evaluation and further exploration that the reserve
estimates set out in this announcement will ever be reported in accordance with
the JORC Code. ASX has granted IRL a waiver of Listing Rule 5.6 to allow it to
report the historical estimates.
2 HCL
published reserves for all of the mines on the Singbhum Copper Belt while they
were in operation; the latest is the 2004 report “Ore Reserve of the ICC
Group of Mines”. This reserve has been previously externally published,
for example in a report by A.F. Ferguson entitled “Preliminary
Information Memorandum, Hindustan Copper Limited” published by the Indian
Government Department of Disinvestment in April 2002.
3 The
reserve is the most recent published estimate, and is relevant for the
following reasons:
(i) it
is being used in mine planning and operations;
(ii) production
has been in accordance with the estimate;
(iii) it
provides necessary background for the planned JORC Code compliant estimate to
be announced later in the year; and
(iv) the
Surda project is the Company’s main asset, and the only mine currently in
production.
4 All
previous drilling at Surda is diamond drilling, surface and underground and so
is regarded as quite reliable, with reasonable recoveries. However, as is
common practice in India,
the core has not been preserved in any systematic way and much of it is
lost. An on-site lab at the Mosaboni concentrator plant was used for all
of the drill and grade control sampling. The lab was abandoned in 2004
and records were essentially lost of any quality control programs that may have
been carried out. Drive sampling was by way of channel rock chip sampling
across the backs and walls of the drives. The sheer number of samples
(12,334) makes up a very comprehensive volume of information on the grade of
the deposit and its variation. Locations are considered
reasonably accurate as diamond holes and workings were surveyed by the on-site
mine survey team at the time. However, very few down hole survey readings
were recorded.
From a
data spacing point of view the number of surface holes (83) is considered on
the low side; spacings of up to 210m in strike and 300m down dip were allowed
for inclusion in the category of “possible ore”. However the
number of underground holes (3,058) gives greater confidence in the mining
block numbers presented here. A density of 2.88 has been used in line
with previous HCL experience in mining the deposit since 1952. No audits have been
encountered in a review of the HCL work.
5 The
HCL historic estimate is material to IRL as IRL is now mining in many of the
areas estimated above. IRL is evaluating these estimates essentially by
bulk mining from these blocks - mining is currently being carried out from
Blocks 7, 14, 18, 30, 32, 37 and production is in line with the estimates
presented here. IRL is currently conducting a surface diamond drilling
program to verify the estimates. IRL is also investigating lab
calibration and specific gravities.
IRL has
been engaged in a modern survey of the old workings: to date 90% of the
accessible areas have been surveyed and the survey is expected to be completed
by the end of April 2008.
The
evaluation is being funded from the capital raising IRL undertook in November
2007, and there is no impact of the cost of this evaluation on IRL’s
exploration projects.
6
The HCL estimate is called a “Reserve” and reported in six
categories:
Reserves
|
Block Reserve (MT)
|
Block Grade
(%Cu)
|
Drill Reserve (MT)
|
Drill Grade (%Cu)
|
Total Reserve
(MT)
|
Grade
(%Cu)
|
Proved
|
4.93
|
1.20
|
3.30
|
1.30
|
8.23
|
1.24
|
Probable
|
3.66
|
1.20
|
2.38
|
1.29
|
6.04
|
1.24
|
Possible
|
10.71
|
1.14
|
1.08
|
1.27
|
11.79
|
1.15
|
Total
|
19.30
|
1.17
|
6.79
|
1.29
|
26.09
|
1.20
|
The
“Block Reserves” are calculated in the area of current workings and
are divided into “Proved”, “Probable”,
“Possible” on the basis of their location in relation to the 2
haulage shafts. “Proved” Blocks lie mainly between levels 1
and 8, “Probable” Blocks lie mainly between levels 6 and 11, while
“Possible” blocks are mainly below level 9. “Drill
Reserves” are estimated on the basis of surface drilling and are divided
on the basis of hole spacing – up to 100m of dip extent for a single hole
as “Proven”, 150m as “Probable” and 175m as
“Possible”. Strike extents are less – 60m for an
individual hole as “Proven”, 90m as “Probable” and 105m
as “Possible”. There is no direct comparison between this HCL
estimate and a JORC standard estimate. The categories are substantially
different and would be completely overhauled in a JORC estimate. Much of
the “Drill Reserve” would certainly be reclassified as
“Inferred Resource” or discounted. However, much of the
“Block Reserve” could be classified as “Probable” or
“Proved” Ore Reserves given that these blocks are delineated by
underground drilling and drives above and below, with stope outlines defined in
a mining plan.
7 The
most recent estimate available to the Company is in the form of the individual
mining blocks presented below. This breaks down much of the HCL
“Block Reserves” into individual mining areas, showing individual
locations and allows a greater degree of confidence. This information has
been extracted from the overall HCL “Reserve” estimate.
8 IRL
is continuing to work on gathering the information necessary for estimating a
JORC standard Resource and Reserve for the Surda operation, however due to the
complexity of the workings and records this is still some way off. We now
estimate that a JORC estimate will be completed sometime in the 3rd
quarter of 2008, to be reported in October this year.
9 The
information presented here is consistent with the ASX Companies Updates 11/07,
and 05/04.
10 A
Statement by a Competent Person is included below.
The geological and
assay statements and commentary in the above update are based on information
compiled by Eoin Rothery who is a member of the Australian Institute of
Geoscientists. Mr Rothery has reviewed the information and has satisfied
himself that the values quoted and the parameters used in the study are
reasonable and accurately reflect the operations involved. Mr. Rothery is a
full-time employee of India
Resources Ltd and holds the position of Managing Director. Mr. Rothery
has sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration to quality as a Competent Person as defined
in the 2004 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”. Mr. Rothery consents to
the inclusion in the report of the matters based on his information in the form
and context in which it appears.
Surda
Mining Blocks and Conceptual Decline
The
diagram shows the Surda mine in long section looking from the east north
east. Shafts are shown as green angled lines, while levels are shown as
the horizontal lines. Several unmined or partly mined blocks have been
identified from the Hindustan Copper Limited records and are shown on the
diagram as orange blocks, numbered 1 – 39. Three further blocks
have been identified and estimated in a similar fashion. A mining block
is classified as such if it has been developed with both a footwall drive and a
hanging wall drive. Width and grade come from drive samples and
underground and surface drilling. The deposit dips at 30 to 35 degrees
towards the viewer, and so the blocks appear shorter than their real
dimension. There is 35m between levels.
The
mining blocks presented here have been extracted from a Hindustan Copper
Limited “geological ore reserve” estimate in July 2004 for the
whole mine area of 26.1 million tonnes at 1.2% Cu. The tonnage and grade
estimates here are historic estimates from previous mine records and should be
regarded as the centre point of a range from 90% to 110% of the true value that
might appear in a JORC standard ore reserve. The use of the term
“ore” in this release does not imply that these are JORC standard
numbers, but reflects the mining history of this deposit from which 8.9 million
tonnes of copper ore at 0.95% Cu has been extracted from neighbouring mining
blocks estimated by the same methodology since production started in 1956.
Nevertheless, as these tonnages and grades are not JORC standard there is an
uncertainty over the numbers and whether they reflect the true values; the
reader should bear this in mind when assessing the project.
Block_ID
|
Length
(m)
|
Width
(m)
|
Height
(m)
|
Tonnes
|
Cu_Grade
(%)
|
1
|
170
|
20
|
4
|
38,000
|
1.01
|
2
|
85
|
8
|
62
|
118,000
|
1.12
|
3
|
70
|
8
|
62
|
97,200
|
1.08
|
4
|
100
|
8
|
62
|
138,800
|
1.1
|
5
|
63
|
8
|
62
|
87,400
|
1.07
|
6
|
280
|
15
|
62
|
729,100
|
1.08
|
7
|
235
|
20
|
10
|
131,600
|
1.16
|
8
|
90
|
9
|
62
|
140,600
|
1.1
|
9
|
40
|
9
|
62
|
62,400
|
1.3
|
10
|
10
|
8
|
62
|
13,800
|
1.1
|
11
|
95
|
8
|
62
|
76,300
|
1.07
|
12
|
80
|
8
|
62
|
110,000
|
1.125
|
13
|
210
|
15
|
62
|
546,800
|
1.08
|
14
|
135
|
20
|
15
|
113,400
|
1.25
|
15
|
50
|
7
|
62
|
60,700
|
1.09
|
16
|
17
|
7
|
62
|
20,600
|
1.22
|
17
|
110
|
8
|
62
|
152,700
|
1.18
|
18
|
210
|
15
|
14
|
123,400
|
1.12
|
19
|
55
|
8
|
62
|
76,300
|
1.17
|
20
|
100
|
20
|
62
|
347,200
|
1.09
|
23
|
210
|
10
|
2.4
|
14,100
|
1.2
|
24
|
85
|
7
|
62
|
103,200
|
1.12
|
25
|
65
|
7
|
62
|
78,900
|
1.05
|
26
|
90
|
9
|
62
|
140,600
|
1.01
|
27
|
150
|
20
|
62
|
520,800
|
1.38
|
28
|
90
|
8
|
62
|
124,900
|
1.32
|
29
|
155
|
15
|
14
|
123,400
|
1.08
|
30
|
310
|
10
|
62
|
538,100
|
1.16
|
31 & 32
|
190
|
20
|
62
|
659,600
|
1.17
|
33
|
20
|
10
|
62
|
34,700
|
1.1
|
34
|
25
|
10
|
62
|
43,400
|
1.2
|
35
|
275
|
10
|
62
|
477,400
|
1.24
|
36
|
20
|
7
|
62
|
24,300
|
1.04
|
37
|
160
|
20
|
10
|
89,600
|
1.03
|
38
|
170
|
6
|
62
|
170,000
|
1.16
|
39
|
100
|
6
|
62
|
100,000
|
0.73
|
G101*
|
130
|
3
|
160
|
150,000
|
1.1
|
G102*
|
75
|
3
|
120
|
75,000
|
1.1
|
M100*
|
400
|
4
|
150
|
500,000
|
1.2
|
Total
|
|
|
|
7,152,300
|
1.15
|
The
block dimensions presented here are averaged; each block is given a more
detailed volume estimate based on its individual geometry.
About India
Resources
IRL is
headquartered in Perth, Western Australia with the primary objective
to maximize shareholder wealth by capital growth and dividend through the
discovery of economic mineral deposits and the development of profitable mining
operations. IRL’s head office is located at 989 Wellington St., West Perth,
WA 6005.
IRL is
applying Australian exploration expertise and cost effective mining techniques to
project in India,
to capitalise on country huge growth and market opportunities. The
Company’s portfolio of assets comprises:
Hindustan
Copper Limited - Surda Mine
The
Company has the benefit of an alliance with Hindustan Copper Limited (HCL - a
Government of India enterprise) with the initial focus on identifying existing
operations and areas where large-scale mineralisation has been proven. HCL is
the sole integrated producer of primary copper in India
and is listed on the Mumbai, Delhi, Kolkata and Madras exchanges. IRL,
in alliance with HCL, has re-opened the Surda Mine with an initial objective of
delivering annual production of 4,500 tonnes of copper metal in concentrate.
Hindustan
Copper Limited – Exploration MOU
IRL has
the benefit of a Memorandum of Understanding (MOU) for general exploration on
HCL’s various leases including tenure around HCL’s current
operations at Malanjkhand and Khetri. IRL will undertake detailed evaluation of
exploration areas to be determined in consultation with HCL.
Askot
Project
IRL has
taken a placement comprising about 17% of the share capital of Pebble Creek
Mining Ltd. (TSX-V – PEB), a Canadian company listed on the Toronto
Venture Exchange. Pebble Creek’s main asset is the Askot Project: a
VMS deposit of copper, lead, zinc, gold and silver mineralisation in northern India.
Pebble Creek is currently compiling a resource estimation.
Aravalli
Project
The
Company has acquired two Reconnaissance Permits (RPs) in Rajasthan (north
western India).
The Aravalli Proterozoic metamorphic belt is prospective for copper, lead, zinc
as well as gold. IRL has recently completed a reconnaissance drilling program
with positive results.
Diamonds
The
Company’s diamond initiative focuses on the Bhandara Diamond Project
which currently consists of five granted RPs in Orissa, as well as three RP
applications in Chhattisgarh, located in the region of several kimberlite fields.
In addition bulk sampling is planned at two diamondiferous kimberlites on
IRL’s granted PLs of the Dharwar Project in Andhra Pradesh.
Coal, Iron Ore
As has
happened in China, India’s
rapidly growing economy is driving a surge in demand for power and steel. IRL
is currently seeking suitable projects for rights to explore and develop coal
or iron ore in India.
Visit: www.indiaresources.com.au
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