ASX / MEDIA RELEASE 21 December 2020 MT ALEXANDER NICKEL-COPPER SULPHIDE PROJECT – EXPLORATION AND DEVELOPMENT UPDATE DRILLING OF NEW ELECTROMAGNETIC (EM) CONDUCTORS: • Diamond drilling of strong EM conductors identified from recent downhole EM (DHEM) surveys in MAD185, MAD192 and MAD193 is scheduled to begin within weeks • Multiple new EM conductors will be tested with the highest priority targets being: the two conductors identified from the DHEM survey in MAD192 that are modelled with conductivity of 55,550 Siemens and 26,000 Siemens, respectively the two conductors identified from the DHEM survey in MAD185 that are modelled with conductivity of 33,100 Siemens and 14,225 Siemens, respectively • These conductors have an electrical signature consistent with massive sulphides and are ideally situated within the large mafic-ultramafic unit that is known to host massive nickelcopper sulphides in other parts of the Mt Alexander Project RESOURCE DEFINITION DRILLING TO COMMENCE AT INVESTIGATORS AND CATHEDRALS: • Reverse circulation (RC) drilling to support a resource estimate of the shallow high-grade mineralisation at both the Investigators and Cathedrals Prospects is scheduled to begin in February 2021 • Drilling at Investigators will include the drilling of a large number of untested EM conductors that represent outstanding targets for locating more massive nickel-copper sulphides • More than 10,000m of RC drilling is planned in this resource drill programme POSITIVE RESULTS FROM INTERIM METALLURGICAL TEST WORK FOR STRICKLANDS: • High metallurgical recoveries achieved in test work completed in Canada on nickel-copper sulphides from the Stricklands Prospect • Test work shows the oxide and fresh composite is amenable to the production of separate nickel and copper concentrates from conventional flotation circuits • Further metallurgical test work planned to better optimise the potential mining and processing of ore from Stricklands • Scoping study for the Stricklands starter mine proposal awaiting final metallurgical test work for completion ASX / MEDIA RELEASE 2 Growth-focused Western Australian nickel company St George Mining Limited (ASX: SGQ) (“St George” or “the Company”) is pleased to provide an update on exploration and development activities at its flagship Mt Alexander Project, located in the north-eastern Goldfields. DRILLING OF NEW EM CONDUCTORS: DHEM surveys in drill holes MAD185, MAD192 and MAD193 have identified a total of 11 off-hole EM anomalies for follow-up testing. A diamond drill rig is scheduled to arrive at site in late January 2021 to commence drilling of these exciting targets. Each of MAD185, MAD192 and MAD193 intersected disseminated nickel-copper sulphides on the basal contact of the same mafic-ultramafic intrusive unit, a positive indication for the potential presence of massive nickel-copper sulphides along strike from these holes. The first two targets to be drilled in 2021 will be the strongest of the off-hole conductors identified from the DHEM survey in each of MAD192 and MAD185. These two conductors, modelled with very high conductivity of 55,550 Siemens (MAD192) and 33,100 Siemens (MAD185) respectively, are outstanding targets for the discovery of new massive nickel-copper sulphide mineralisation. The conductors are located down-dip from the two drill holes and known massive sulphides, which is a favourable location for potential larger accumulations of mineralisation at depth. For further details of the new EM conductors, see our ASX Release dated 3 December 2020 ‘Multiple New EM Conductors at Mt Alexander’. Figure 1 – planned drilling and target areas with the new EM conductors (overlying MMR imagery). ASX / MEDIA RELEASE 3 RESOURCE DEFINITION DRILLING AT INVESTIGATORS AND CATHEDRALS: An RC resource definition drilling programme has been designed for the Investigators and Cathedrals Prospects. An RC rig is expected to arrive at site in mid-February 2021 to commence the drill-out with more than 10,000m of drilling planned. At Investigators, drilling will include the testing of at least 20 EM conductors (and potentially more) which have been largely identified from DHEM surveys completed in drill holes at Investigators. These conductors are located between or closely along strike from known nickel-copper sulphides intersected in previous drilling and are interpreted to indicate continuity of the known massive and semi-massive sulphides. The large number of conductors suggests that a significant volume of nickel-copper sulphide mineralisation is likely to be identified by the drilling of the conductors. The proposal for a starter mine operation at Mt Alexander envisages that mining will potentially commence at the Stricklands Prospect to be followed by mining at Investigators and Cathedrals. Each of these areas hosts high-grade nickel-copper-cobalt-PGE mineralisation that commences 30m from surface. In 2020, resource definition drilling was completed at Stricklands to delineate a resource estimate for the shallow high-grade mineralisation discovered there. The drill-out focused only on the shallow mineralisation, between 30m to 100m below surface, and did not include a drill-out of deeper extensions – consistent with the concept of a starter mine that can be executed quickly and for a very low capital cost. The resource estimate for Stricklands will be finalised once the metallurgical test work for Stricklands is completed. This will allow an accurate estimate of the amount of mineralisation that can be classified as economic ore and enable completion of pit optimisation work. Figure 2 – planned drilling and target areas along the Cathedrals Belt (overlying magnetic imagery RTP 1VD). ASX / MEDIA RELEASE 4 POSITIVE RESULTS FROM INTERIM METALLURGICAL TEST WORK FOR STRICKLANDS: XPS (Expert Process Solutions), based in Sudbury in Canada, has been mandated to complete detailed test work on the metallurgical performance of the Stricklands mineralisation and to develop a flowsheet for the potential mining and processing of the Stricklands ore. Multiple metals – nickel, copper, cobalt and PGEs – are comprised in the ore, requiring a very comprehensive range of test work to best optimise the value that can be attained from the processing. Interim results from the test work are very positive and indicate: • The combined oxide and fresh composite is amenable to the production of separate nickel and copper concentrates from conventional flotation circuits • Overall copper recoveries of 91% to 93% • Overall nickel recoveries of 73% to 84% • Talc up to 1% to 1.5%, which can be suppressed in the flotation process The concept for mining at Stricklands envisages an open pit. Material that would be mined in this scenario includes partly oxidised mineralisation (both disseminated and massive) at the top of the deposit followed by fresh sulphide mineralisation (both disseminated and massive) below. This material would represent the Life of Mine (LOM) ore feed. A master composite sample for metallurgical testing was prepared incorporating all mineralisation types. Test work results have shown that recoveries from the oxidised disseminated mineralisation are poor and therefore this small volume of material is unlikely to be classified as ore. In light of this result, and despite the low overall volume of expected oxidised disseminated mineralisation – approximately 5% of the overall volume, the master composite sample does not now reflect the true LOM ore. A new master composite sample needs to be prepared for completion of final test work that will represent the actual LOM feed and allow for a robust and reliable flowsheet to be developed. Some additional metallurgical drill holes will be completed in early 2021 to provide further samples to be shipped to XPS. Scoping study: The scoping study for the Stricklands starter mine is progressing well despite a number of delays caused by COVID-19 restrictions in Western Australia and in Canada. The impact included limitations on completing work and have prevented us meeting the initial target of delivering the scoping study in Q4 2020. Environmental studies have been completed. Final metallurgical test work, and subsequently the resource estimate, are required to complete the scoping study. This information is critical to the mine design and development, the mining production schedules and the completion of financial modelling. Although this delay is disappointing, it may provide an opportunity to more quickly incorporate the Investigators and Cathedrals deposits into the scoping study and to thereby increase the potential scale and value of the proposed mining operation. John Prineas, St George Mining’s Executive Chairman, said: “2020 has been a difficult and odd year. Some businesses have been devastated by COVID-19 while others have flourished. Everyone has been required to make adjustments in order to survive in the new world environment. ASX / MEDIA RELEASE 5 “At St George, we have carefully managed our operations in compliance with COVID-19 regulationsto protect the health and safety of our team and service providers. “Notwithstanding the significant challenges faced by everyone, we have managed to achieve many important milestones in 2020. “We commenced our deeper drill programme in June this year and completed multiple deep holes – the deepest to 850m. We confirmed the presence of fertile intrusive rocks at depth, giving confidence that the extensive shallow high-grade mineralisation already discovered could also occur at depth. “We were further rewarded when downhole EM surveys in several deep holes lit up very powerful EM conductors. We have secured a diamond rig for January and look forward to starting 2021 with a new massive sulphide discovery. “We believe our high-grade nickel-copper sulphides are amongst the best mineralisation discovered in Western Australia with a combination of high-grades of nickel, copper, cobalt and platinum group metals that is unmatched by other discoveries. “Thorough metallurgical test work is required to develop a flowsheet that can maximise the value of all these metals in a potential mining and processing operation. Positive test work results have been delivered by work in Perth and Canada. The test work will be finalised next year, allowing for completion of a scoping study for a starter mine at Mt Alexander. “The next year promises to be another exciting one as we continue to unlock the full value of our large, highgrade mineral system. On behalf of the Board of Directors, we thank our shareholders for their support in 2020 and look forward to sharing more success with you in 2021.” About the Mt Alexander Project: The Mt Alexander Project is located 120km south-southwest of the Agnew-Wiluna Belt, which hosts numerous world-class nickel deposits. The Project comprises six granted exploration licences – E29/638, E29/548, E29/962, E29/954, E29/972 and E29/1041. The Cathedrals, Stricklands, Investigators and Radar nickel-copper-cobalt-PGE discoveries are located on E29/638, which is held in joint venture by St George Mining Limited (75%) and Western Areas Limited (25%). St George is the Manager of the Project, with Western Areas retaining a 25% non-contributing interest in the Project (in regard to E29/638 only) until there is a decision to mine. Authorised for release by the Board of St George Mining Limited. For further information, please contact: John Prineas Executive Chairman St George Mining Limited +61 411 421 253 [email protected] Peter Klinger Media and Investor Relations Cannings Purple +61 411 251 540 pklinger@canningspurple
SGQ Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
