AC N 0 0 8 9 8 2 4 7 4 1st Floor, 8 Parliament Place West Perth WA 6005 PO Box 1618 West Perth WA 6872 Tel: (08) 9481-7833 Fax: (08) 9481-7835 Email: [email protected] Website: www.metalsaustralia.com.au Dear Sir, MANINDI ZINC PROJECT – JORC UPGRADE KEY POINTS • The Global Resource at Manindi, at a 1% Zinc cut-off, has been upgraded to 1,354,129 tonnes @ 6.04% Zinc, 0.25% Copper, 3.4 gpt Silver & 0.25 gpt Gold • The majority of the resource has been upgraded to the ‘Measured & Indicated’ category, which now comprises 896,931 tonnes of the resource. • The 2008 JORC represents a 30% upgrade, or an addition of over 300,000 tonnes, on the resource calculated in 2000. • The resource contains over 81,000 tonnes of zinc metal, with copper, silver and gold credits in the ore. • A number of targets that are extensional to the ore bodies have been generated for further testing as a result of the recent geological and resource modelling. • Key advances have been made in the geological understanding of the mineralisation at Manindi. 25 March 2008 The Manager Company Announcements Office Australian Securities Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000 2 1. GLOBAL JORC RESOURCE The upgraded JORC resource is largely based on the drilling undertaken by Metals in the last 18 months, although drilling by previous explorers has been taken into account where the data could be checked and validated. The resource has been recalculated to allow its integration into the ongoing development study and therefore built around a mining scenario. Internal dilution (Dilution) has been factored into the resource calculations, as this material would be mined in an operational scenario. The resource has been calculated at various cut-off grades. However for the purposes of this report only the 1% cut-off grade figures have been presented. The global JORC resource, at a 1% Zinc cut-off grade, is as follows: *Internal dilution within the resource can also be categorised as measured, indicated and inferred but has been grouped for the purpose of reporting. It should be noted that the ore in the ‘Measured’ category has increased by more than 43%, or 144,618 tonnes, to 479,526 tonnes. The resource shows an upgrade from the previously calculated JORC resource in 2000. The 2008 JORC resource shows a number of variations from the previous resource, in particular: • Stricter modelling parameters, with much of the resource now in the ‘measured & inferred’ category. MANINDI Measured Indicated Inferred Dilution Total GLOBAL Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade 2008 JORC 479,526 7.57 417,405 6.67 335,142 5.06 122,056 0.51 1,354,129 6.04 Metals Australia Ltd (‘Metals’) is pleased to announce that the JORC resource modelling, based on the drilling to date, has now been completed for its Manindi Zinc project. Metals has undertaken a detailed review of the Manindi resource areas, which has included a comprehensive diamond drilling programme. The aim of the exploration programme was to: • Define existing resources. • Validate the previous explorers’ drilling data. • Upgrade the resource to predominantly ‘measured and indicated’ status. • Expand the existing resource positions where possible. The exploration programme has proved highly successful and resulted in a number of significant new target areas being defined. FRC 018 81-94m 13m @ 0.27% Zn Continuation of Zone A? MNRC 002 82-86m 4m @ 1.58% Zn NUMBAT NINGAUI BANDICOOT Massive Sulphide Intersected at depth Interpreted continuation of the Zone D stratigraphy KULTARR (Zone D Nth) KOWARI (Zone D Sth) 766,567 t @ 6.15% Zn 247,152 t @ 2.79% Zn Strike Extensions of Zone B MNRC 009 6-9m 3m @ 1.45% Zn MNRC 010 3-6m 3m @ 1.71% Zn MULGARA NORTH QUOLL WARABI (Zone A) Parallel lode to Zone A? MNRC 005 15-18m 3m @ 0.62% Zn MULGARA (Zone B) 189,822 t @ 6.20 % Zn 150,000 t @ 10.56% Zn 665000 mE 6819000 mN 665000 mE 6816000 mN 6817000 mN 6818000 mN 6819000 mN 663000 mE 664000 mE 663000 mE 664000 mE 6816000 mN 6818000 mN 6817000 mN M 57/240 M 57/533 M 57/227 Author: TSP Office: Perth Drawing: TSP Date:20/3/2008 Scale: 1:10000 Projection: AMG Zone 50 (AGD 84) 400 MANINDI ZINC PROJECT CONTOURED SURFACE GEOCHEMISTRY WITH DRILLING, RESOURCES AND PROSPECTS (FIGURE 1.) METALS AUSTRALIIA LTD 0 100 200 metres Surface Geochemistry (Zn ppm) 5,000 to 10,000 (4) 1,000 to 5,000 (61) 500 to 1,000 (94) 250 to 500 (132) 100 to 250 (230) 50 to 100 (325) 25 to 50 (587) 0 to 25 (262) 3 • Metals’ drilling has facilitated the calculation of the other metal credits in the resource, including silver & gold. The following section details the variations in the resources on an individual basis (see also Figure 1.). 2. RESOURCES AND POTENTIAL The Manindi Zinc project contains four known resources and a number of developing prospects. The resources and their potential are detailed below: 2.1 ZONE A - WARABI The resource at Warabi has increased in both size and grade, with drilling also identifying several areas around the resource that require further testing, including the southern strike extensions into the Bandicoot prospect. The Warabi JORC resource at a 1% Zinc cut-off grade, is as follows: The main changes in the Warabi resource figure come from the delineation of the highgrade northern strike extensions to the ore system, which extend up to the fault zone separating Zones A & B. The resource modelling of Zone A shows a number of areas that require further drill testing (see Figure 2): • WARABI SOUTH - BANDICOOT Modelling shows the Zone A zinc lodes extending to the south and into the ‘Bandicoot’ target area. Limited drilling in the Bandicoot area has already intersected ore grade mineralisation, with results including: MNRC 002 4m @ 1.58% Zinc from 82 metres The Bandicoot prospect will be further tested as a part of ongoing exploration. • WARABI ‘DEEPS’ A number of drill holes below the existing resource did not intersect its continuation at depth. An older hole did intersect weak mineralisation approximately 100 metres below surface and has yet to be followed up. The resource and geological modelling both showed strong potential for the repetition of the lodes at depth. 2.2 ZONE B - MULGARA The drilling of the Zone B resource has shown it to be the most geologically complex of the four resource positions, with potential for further ore in a number of positions along strike and at depth. The Mulgara JORC resource at a 1% Zinc cut-off grade is as follows: ZONE A Measured Indicated Inferred Dilution Total Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade 2008 JORC 80,263 10.58 56,823 10.56 13,502 10.46 0 0.00 150,588 10.56 FAULT ZONE OPEN AT DEPTH OPEN ALONG STRIKE ZONE A - WARABI ZONE B - MULGARA OPEN ALONG STRIKE WARABI 'DEEPS' MULGARA NORTH MULGARA 'DEEPS' WARABI SOUTH 450 mN 6818350 mE 6818400 mE 500 mN 550 mN 6818350 mE 6818400 mE 350 mN 400 mN 6818200 mE 6818250 mE 6818300 mE 6818200 mE 6818250 mE 6818300 mE 6818100 mE 6818150 mE 6818100 mE 6818150 mE 500 mN 6818050 mE 450 mN 550 mN 300 mN 6818050 mE 350 mN 400 mN MND013 MNRC007 MND049 MNRC008 MND012 FWD008 FWD001 MND011 MND004 FRC007 MND006 FRC043 FWD005 MNRC014 MND045 MND007 MND008 FWD002 MND046 FWD003 MND009 MND047 MND048 MND010 FWD004 FRC030 FRC011 FRC012 FRC013 FRC031 FRC032 FRC033 FRC034 FRC035 FRC036 FRC037 FRC044 FRC045 FRC062 FRC063 FWD010 MND014 MND015 MND016 MND017 MND018 MND019 MND021 MND022 MND023 MND050 MND052 MNRC009 MNRC012 MNRC013 Date:20/3/2008 Scale: 1:1000 Projection: Non-Earth (meters) Drawing: TSP Author: TSP Office: Perth 40 MANINDI ZINC PROJECT ZONE A & B MAIN LODES CONTOURED LONGSECTION (ZINC% METRES) FIGURE 2. METALS AUSTRALIIA LTD 0 10 20 metres Manindi LS (Zn%m) 100 to 1,000 (8) 50 to 100 (9) 25 to 50 (4) 10 to 25 (5) 5 to 10 (4) 2.5 to 5 (1) 0 to 2.5 (13) -999 to 0 (11) LEGEND TARGET AREAS FROM RESOURCE MODELLING 4 The detailed geological modelling undertaken by Metals has resulted in a more accurate resource model for Zone B. The resource tonnage at Zone B was amended due to the recognition of a zone of intense faulting between Zones A & B. This fault zone has displaced the two ore bodies, complicating the modelling of the Zone B resource (see Figure 2.). Additionally a number of pegmatites have intruded this zone and, in places, ‘stoped out’ the mineralised lodes. The resource modelling of Zone B shows a number of areas that require further drill testing (see Figure 2.): • MULGARA NORTH Modelling shows the Zone B zinc lodes extending to the north of the existing resource. Limited drilling in this target area has delineated near surface mineralisation that requires extensional drilling, both along strike and at depth. Exploration drilling includes: MNRC 009 3m @ 1.45% Zinc from 6 metres MNRC 010 3m @ 1.71% Zinc from 3 metres Mulgara North will be further tested as a part of ongoing exploration. • MULGARA ‘DEEPS’ A number of the deeper drill holes within the resource have intersected highgrade mineralisation, which is interpreted to be a repetition of the near surface lode. This deeper mineralisation remains open along strike and at depth. The deeper extensions of Mulgara will be tested by EM and drilling as a part of ongoing exploration. 2.3 ZONE D NORTH - KULTARR Zone D North is the largest of the resource areas at Manindi. Drilling shows that the resource has a high-grade core surrounded by peripheral low grade ore. The Kultarr JORC resource, at a 1% Zinc cut-off grade, is as follows: The Metals drilling has resulted in much of the resource at Kultarr being upgraded to ‘Measured & Indicated’. ZONE B Measured Indicated Inferred Dilution Total Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade 2008 JORC 111,176 6.84 52,620 6.50 15,917 4.24 10,109 0.68 189,822 6.20 ZONE D Measured Indicated Inferred Dilution Total NORTH Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade 2008 JORC 265,881 7.22 266,993 6.30 199,338 5.46 34,355 0.71 766,567 6.15 OPEN AT DEPTH OPEN DOWN PLUNGE INTERNAL FAULT ZONE D NORTH OPEN DOWN PLUNGE ZONE D SOUTH 2000 JORC RESOURCE OUTLINE 2000 JORC RESOURCE OUTLINE KULTARR 'DEEPS' ZONE D 'BRIDGE' KULTARR 'NEAR SURFACE' 11200 mE 400 mN 500 mN 600 mN 11200 mE 100 mN 200 mN 300 mN 10900 mE 11000 mE 11100 mE 10900 mE 11000 mE 11100 mE 10700 mE 10800 mE 10700 mE 10800 mE 400 mN 10500 mE 10600 mE 500 mN 600 mN 10500 mE 10600 mE 100 mN 200 mN 300 mN FRC001 75FWD034 FRC006 FRC048 MND026 FRC050 FWD014 MND027 FRC005 FRC060 FRC004 75FWD033 FRC020 MND028 MND030 MND029 FRC003 MND031 75FWD032 FWD028 FWD016 MND035 FWD054 FWD021 MND034 MND001 FWD015 FWD029 MND032 MND033 FWD027 MND036 MND038 FWD020 FWD017 FWD030 MND037 MND040 MND039 MND005 FWD022 FWD052 MND041 MND042 FWD023 FWD050 75FWD035 MND043 FWD018 FWD019 FWD053 FWD039 FWD037 FWD036 Date:20/3/2008 Scale: 1:1000 Projection: Non-Earth (meters) Drawing: TSP Author: TSP Office: Perth metres 50 MANINDI ZINC PROJECT ZONE D NORTH & SOUTH CONTOURED LONG SECTION (ZINC% METRES) FIGURE 3. METALS AUSTRALIIA LTD 0 25 Manindi LS (Zn%m) 100 to 1,000 (10) 50 to 100 (6) 25 to 50 (2) 10 to 25 (6) 5 to 10 (5) 2.5 to 5 (11) 0 to 2.5 (18) -999 to 0 (5) LEGEND TARGET AREAS FROM RESOURCE MODELLING 5 The resource modelling of Zone D North has highlighted a number of target areas at Kultarr (see Figure 3.): • ZONE D ‘BRIDGE’ Modelling shows that Zone D North and South are part of a larger ore system. The area between the two existing resources remains largely unexplored and requires further exploration. This target is further discussed as part of the Zone D South resource. • KULTARR ‘NEAR SURFACE’ The surface geochemistry indicates that the mineralisation may extend to surface at Kultarr. The drilling to date only tests the mineralised lodes below 40 metres depth. The near surface environment and up dip extensions to the mineralisation remain untested by drilling. • KULTARR ‘DEEPS’ Modelling of the mineralisation at Kultarr indicates that the ore body has a northerly plunge component. The down plunge extensions of the ore system remain untested by drilling. The targets at Zone D North will be further explored as a part of the ongoing exploration programme at Manindi. 2.4 ZONE D SOUTH - KOWARI The Zone D South resource was the smallest of the resource areas, and was the subject of limited drilling. Drilling undertaken by Metals on this resource has greatly expanded its size and shows that it is part of a larger system. The Kowari JORC resource at a 1% Zinc cut-off grade is as follows: The recent drilling indicates that the Kowari resource most likely represents the periphery of the Zone D ore system. The resource has substantially increased in tonnage but decreased in grade, reflecting the position of the ore zone in relation to the core of the ore body at Zone D North. The resource modelling, coupled with recent drilling and EM, indicates that Zones D North and South are part of a larger mineralised system that requires further testing as a part of the active exploration programme. 3. ONGOING WORK PROGRAMME The ongoing work programme at Manindi is now divided into two streams, a development study and regional exploration: ZONE D Measured Indicated Inferred Dilution Total SOUTH Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade Tonnes Grade 2008 JORC 22,206 4.47 40,969 3.84 106,385 3.72 77,592 0.48 247,152 2.79 6 3.1 DEVELOPMENT STUDY A development study is now in progress to determine the viability of mining the Manindi ore bodies. This study includes: • MINING STUDY Initial mining studies have previously indicated that Zones A & B are amenable to open pit mining operations, while the Zone D ore bodies are more likely to be mined by a combination of both open pit and underground methods. Pit and mine design will commence in the near future with a view to establishing the economic parameters of the ore system. • METALLURGICAL TEST WORK Metallurgical testing of the Manindi ores has identified bacterial leaching as an effective process for ore treatment. Preliminary testing shows excellent recoveries. Samples of the ore have now been submitted for conventional float testing. All test work to date has been extremely positive for this phase of metallurgical work. Final results will be reported as they are received. • PLANT DESIGN & COSTINGS Processing circuits, plant requirements and costings are now being determined for various options including bacterial leaching and concentrate production. This work is largely dependent upon the results of the current metallurgical testing programme. 3.2 REGIONAL EXPLORATION A detailed geological study of the regional potential of the project has recently been completed, demonstrating that only a fraction of the prospective stratigraphy has been explored. The results of this study are currently being analysed and combined with other geophysical and geological data to assist in the generation of targets for drilling. The regional exploration programme will be designed to explore for repetitions of the existing resources to add to the mine inventory. The results of this study will be discussed in future announcements. Yours faithfully, Norman Grafton Company Secretary Metals Australia Ltd Competent Person Declaration The information in this report that relates to Mineral Resources or Ore Reserves is based on information compiled by Phil Jones, who is a member of The Australasian Institute of Geoscientists and the Australian Institute of Mining and Metallurgy. Mr. Jones has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that 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 Resource and Ore Reserves”. Mr Jones has utilised information provided by Metals Australia in making his assessment of the resources but is not responsible for the generation of that data, which includes bulk densities and QA/QC information. Mr Jones consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 7 The information in this report that relates to Exploration Results and Exploration Potential is based on information compiled by Tim Putt of Exploration and Mining Information Systems, who is a member of The Australasian Institute of Geoscientists. Mr. Putt has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that 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 Resource and Ore Reserves”. Mr Putt consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. For further information please contact: Tim Putt, Exploration Manager Phone (08) 9481 7833 Or consult our website: www.metalsaustralia.com.au
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