Pretty long post but there is a bit to cover.....We were flooded...

Pretty long post but there is a bit to cover.....

We were flooded with information on Bogdan a while back, so I thought a summary might be of interest. I have pulled info from the Fox-Davies (FD) report and also added some stuff that I have spoken to the Company about directly. I hope it is of interest.

KGHM state that next door to Bogdan, Polymetallic ore is extracted at their Lubin mine. Polymetallic can be defined as “a substance composed of a combination of different metals”. The KGHMs Lubin mine has copper, silver, nickel, cobalt and molybdenum. That’s where the copper + credits come in. Yes there is copper, but there’s also potentially a lot of other stuff of significant value as well.

It appears that the Kupferschiefer formation is indeed present on our tenement, and is most probably under a great deal of the tenement. Hole 1 hit it, it looks like Hole 2 hit it, and now also Hole 3. This is very good news because the whole point of purchasing the tenement was with the hope that that Kupferschiefer formation (and the Polymetallic ore) extended into our land. The first drilling campaign is intended purely to determine whether the formation extended into our tenement. We firstly need to determine the presence of the Kupferschiefer formation in a broad sense, then test its boundaries and hone in on the higher grade areas.

The minerals in the formation vary in type, depth and thickness the further away from the feeder fault that one goes. Closer to the fault the mineralisation is shallower and thinner with copper/precious metals zones more predominant. As one moves away from the fault, lead/silver/zinc zones become more prevalent. FD suggests that there can also be a significant variation in the thickness and grade of the mineralisation over say a <20 m horizontal spacing. So really, one needs a lot of holes (many more than 4) to get a good idea of exactly what we have.

This type of mineralised formation is typically only relatively thin compared to the usual plunging type of formation that some may be used to thinking about. The Kupferschiefer formation according to FD is usually between 1m and 12m thick, with average copper grades of less than 2% and silver grades averaging 50g/t. Balamara has commented that KGHM’s copper equivalent grade over all mines is between approx. 1.7%-3.5%. Our first hole produced a copper equivalent grade of 1.25% over 2m and 1.9% over 1m. Balamara and the analysts (Fat Prophets and Fox-Davies) are happy with this as a first result. KGHM successfully mines the 1-5m ore body that exists in their part of the Kupferschiefer formation up to 1,200m deep. The key thing to note with this sort of ore body is that it is very flat and reasonably consistent and that all adds up to a comparatively easy formation to mine. Because of this flat, consistent distribution of ore, there is every possibility that our resource may cover a ”huge” part of our 42 sq km tenement. We just need to keep drilling!

This sort of resource can deliver huge tonnage, and be converted to a JORC resource relatively quickly.

Conversion Factor
Management enthusiastically described the conversion factor for the Kupferschiefer formation from resource to reserve as “phenomenal” at approx. 90% in KGHM’s case. Again, if we have the same sort of formation, we are targeting much the same conversion factor. This means that a lot of the JORC resource can ultimately become a mineable reserve.

Infrastructure
KGHM’s infrastructure (from concentrator through to smelters) and spare capacity sitting next door ultimately means a relatively cheap start up cost once a JORC resource and reserve is in place as we’ll be able to use their facilities to toll treat or sell them ore at the mine gate.

JORC
We are planning on delineating a JORC resource in the next 6-9 months.

The Fox-Davies report provides a good summary of the Company, Bogdan included.

http://www.uploadlibrary.com/foxdavies/Balamara_InitiationReport_150612.pdf