21 July 2005Company Announcements OfficeAustralian Stock...

21 July 2005
Company Announcements Office
Australian Stock Exchange Limited
Level 4, 20 Bridge Street
SYDNEY NSW 2000
Via ASX Online
Dear Sir/Madam
Strategic Joint Venture with Murrin Murrin Joint Venture
Please see attached announcement and associated media release in relation to the above.
Yours faithfully
DAVID BURT
Managing Director
ASX CODE YML 21 JULY 2005
JOINT VENTURE WITH MURRIN MURRIN JOINT VENTURE
Yilgarn Mining Limited ("Yilgarn") announces that the Company has entered into a joint
venture with the Murrin Murrin Joint Venture participants (being Murrin Murrin Holdings
Pty Ltd, a wholly owned subsidiary of Minara Resources Limited, 60%; and Glenmurrin
Pty Ltd, 40%) with the objective of developing nickel-cobalt resources and exploring for
nickel-copper sulphide mineralisation within a jointly held tenement group covering a
substantial portion of the Merolia Greenstone Belt, south east of Laverton, Western
Australia.
The "Irwin Hills-Coglia Joint Venture" comprises the Coglia Well tenements held by the
Murrin Murrin Joint Venture (MMJV) and the Irwin Hills and Stella Range tenements, held
by Yilgarn Mining Limited (through its wholly owned subsidiary, Yilgarn Mining (WA) Pty.
Ltd.). The tenements cover a strike length of approximately 60 km and an area of 320
km2 within the Merolia Greenstone Belt.
Ownership of the Joint Venture will be:
Murrin Murrin Joint Venture - 60%
Yilgarn Mining (WA) Pty Ltd - 40%
The Coglia tenements were recently acquired by the Murrin Murrin Joint Venture from the
Sons of Gwalia Ltd ("SGW") Administrators. SOG had delineated an inferred high grade
nickel-cobalt laterite resource in 2004 and reported to the ASX:
2 Mt grading 1.52% Ni and 0.26% Co
Under the Joint Venture, Yilgarn acquires an immediate 40% interest in this resource.
The co-venturers consider that there is scope to significantly expand the Ni-Co laterite
resources at Coglia.
The Irwin Hills tenements also contain significant Ni-Co laterite intersections as previously
reported by Yilgarn. However, the density of drilling is relatively sparse compared to the
tested resource area at Coglia and the co-venturers plan an early drilling programme to
prove up high grade Ni-Co resources at Irwin Hills.
The co-venturers point to the relatively high cobalt values on the Coglia-Irwin Hills
tenements - a factor which may be very significant for the potential early development of
the resources. Preliminary metallurgical testwork on drill samples from Irwin Hills has
indicated that the high grade cobalt mineralisation is amenable to beneficiation, to
produce a high value concentrate (see Attachment). The mineralogy and geochemistry of
the Coglia Well resource mineralisation is similar to the Irwin Hills mineralisation and the
co-venturers are confident that similar beneficiation may be achievable at Coglia Well.
__________________________________
The co-venturers also plan to test the potential of the Project tenements for nickel-copper
sulphides. There are extensive zones of geochemically anomalous copper and PGE
elements on the Irwin Hills and Coglia tenements. In addition, recent mineralogical
studies have identified the presence of disseminated nickel-copper sulphides (now
present as oxide pseudomorphs) in drill chips from two recent air core holes on the Irwin
Hills tenements.
__________________________________
Under the Joint Venture arrangement, Minara (on behalf of the MMJV) will manage all
aspects of development programmes (including the pre-feasibility studies for the
established Coglia Ni-Co resource). Yilgarn will manage all exploration, including the
further delineation of Ni-Co laterite resources and the Ni-Cu sulphide exploration
programme. The exploration budget for the first year of the Joint Venture will be a
minimum of $1 million (Yilgarn’s share $400,000).
__________________________________
Commenting on the formation of the Joint Venture, Mr. David Burt, Managing Director of
Yilgarn, said “The formation of the Joint Venture represents an important milestone for
Yilgarn in its objective to become a nickel producer. MMJV is the only major Ni-Co
producer in the immediate region and their acquisition of the Coglia tenements underpins
their belief in the potential of the Irwin Hills and Coglia tenements to continue to yield
significant Ni-Co laterite resources (with short term production potential) and Ni-Cu
sulphide resources. MMJV obviously has considerable expertise in the processing of
nickel – cobalt laterite ores and has indicated that there is additional cobalt production
capacity at the Murrin Murrin plant. MMJV has also indicated that they will be assessing
the potential of the Irwin – Coglia tenements to provide upgraded Ni – Co feedstock to
utilise this capacity. Therefore, Yilgarn could be in a position to benefit from the early
development of small high-grade laterite resources (including the existing Coglia
resource) with relatively low capital expenditure requirements.”
For further information please contact:
DAVID BURT
Managing Director
Yilgarn Mining Limited
Telephone: (08) 9474 3911
Fax: (08) 9474 2933
email: [email protected]
IRWIN HILLS – COGLIA JOINT VENTURE TENEMENTS
ATTACHMENT
METALLURGICAL TESTWORK DEMONSTRATES SIGNIFICANT COBALT UPGRADE
The Company reported the results of a 24 hole air-core drill programme on the Irwin Hills
tenements in its March Quarterly Report. The objective of that programme was to further
test the potential for relatively small zones of high grade Ni-Co laterite mineralisation
which could be exploited by shallow open pits producing ore for sale or joint venture with
an existing treatment plant. The more significant results of that programme are repeated
here.
IRWIN HILLS NI-CO LATERITE PROJECT
Summary of significant Ni-Co intersections
RESULTS OF AIRCORE PROGRAM, MARCH 2005
Hole ID From To Width Ni % Co %
IHAC0001 23 31 8 1.42 0.29
IHAC0009 15 18 3 1.14 0.14
IHAC0010 37 50 13 1.06 0.18
IHAC0011 23 39 16 1.33 0.30
IHAC0012 22 25 3 1.23 0.13
IHAC0013 20 31 11 1.28 0.20
IHAC0014 30 33 3 1.15 0.12
IHAC0015 49 52 3 1.35 0.11
IHAC0015 55 60 5 1.41 0.08
IHAC0018 17 32 15 1.19 0.29
IHAC0023 31 48 17 1.13 0.33
IHAC0024 13 20 7 0.81 0.55
________________________________________
Following an assessment of all drill assay data and ahead of initiation of a more
substantial drilling programme, the Company commissioned a preliminary metallurgical
programme with the objective of testing the potential to upgrade cobalt and nickel values,
particularly the possibility of producing a cobalt-rich concentrate to take advantage of the
very high cobalt grades in the mineralisation.
The testwork comprised simple wet screening of "as drilled" composite drill samples
representing high Fe - low Si (the dominant mineralisation type encountered in the drilling)
and low Fe - medium Si mineralisation types. These initial samples (MPH 1 and 2) were
biased towards higher grade mineralisation as the objective was to produce a very high
grade, high value concentrate. Results showed that significant upgrading of the cobalt
(over 3 times) could be achieved and so a larger composite sample of high Fe - low Si
mineralisation (Comp 2) was prepared from 55 separate drill intervals from 8 holes, which
was more representative of average targeted "ore-grade" mineralisation. Results from
this sample confirmed the earlier results, producing an even higher cobalt upgrade of
almost 4 times with over 80% cobalt recovery. Nickel is distributed evenly throughout the
size fractions and the nickel grade of the concentrate will be similar to the head grade (i.e.
there is no appreciable upgrading of nickel).
A summary of the testwork results from the Irwin Hills drill samples is presented below:
Ore Type Sample
No
% Co
Head Grade
% Co
Concentrate
% Ni
Head Grade
% Ni
Concentrate
Co
Upgrade
Co Metal
Recovery
Low Fe - med Si MPH 1 0.7 1.03 1.41 1.41 1.3 times 77%
High Fe - low Si MPH 2 0.42 1.30 1.29 1.45 3.1 times 72%
High Fe - low Si Comp 2 0.27 1.06 1.32 1.38 3.9 times 81%
Most Irwin Hills drill samples contain high chloride levels which have been demonstrated
from the testwork to be due to saline groundwater. High chloride levels can be a serious
problem for some HPAL (High Pressure Acid Leach) plants. In that regard, production of
a high grade cobalt concentrate has the added benefit that the concentrate is far more
conducive to washing to remove chlorides. Acceptable chloride levels would be expected
following washing of the concentrate with very low chloride content water.
The results are considered to be very encouraging and justify a substantial new drilling
programme at Irwin Hills to follow up existing high grade drill holes with the objective of
proving up new resources. The new Joint Venture plans to commence this drilling
programme within the next quarter. The Joint Venture regards the potential metallurgical
break-through as encouraging in that it offers the opportunity to simultaneously upgrade
resource material and significantly reduce the chloride problem at Irwin Hills / Coglia Well.
MEDIA RELEASE THURSDAY, 21 JULY 2005
YILGARN FORGES STRATEGIC JV WITH MURRIN MURRIN
ON LAVERTON NICKEL-COBALT TENEMENTS
FURTHER GROWTH STEP IN YILGARN’S EASTERN GOLDFIELDS NICKEL STRATEGY
Yilgarn Mining Limited (ASX Code: YML) has taken a further significant step in its nickel growth
strategy in the Eastern Goldfields region of Western Australia, today announcing a joint venture with
nickel producer Murrin Murrin to develop nickel-cobalt resources within a consolidated tenement group
that brings together strategically located nickel-cobalt interests held by the two companies in the
Laverton area. Murrin Murrin is a Joint Venture (the MMJV) between Murrin Murrin Holdings Pty Ltd,
a wholly owned subsidiary of Minara Resources Limited (ASX: MRE), 60%; and Glenmurrin Pty Ltd,
40%.
The new joint venture – which will also explore for nickel-copper sulphide mineralisation within the
tenement area – will cover a substantial portion of the Merolia Greenstone Belt, south east of Laverton,
and includes a high-grade nickel-cobalt laterite resource within the Coglia Well tenements (recently
acquired by MMJV) as well as significant nickel-cobalt laterite mineralisation identified at Yilgarn’s
Irwin Hills Project.
The agreement with MMJV adds further weight to Yilgarn’s nickel portfolio. The Perth-based Company
announced a joint venture with Titan Resources Ltd in April this year on the historic Carr Boyd Rocks
nickel project near Kalgoorlie, where it plans to target potential Voisey’s Bay style nickel-copper
sulphide mineralisation.
The ownership of the new joint venture will be MMJV (60%) and Yilgarn Mining (WA) Pty Ltd (40%),
a wholly-owned subsidiary of Yilgarn. The Joint Venture will include tenements covering a strike length
of almost 60km and an area of 320km2 within the Merolia Greenstone Belt.
Under the Joint Venture, Yilgarn will acquire an immediate 40% interest in the Coglia Well tenements
(acquired last week by the Murrin Murrin Joint Venture from the administrators of Sons of Gwalia Ltd),
including an inferred high-grade nickel-cobalt laterite resource reported to the ASX in 2004 of 2 million
tonnes grading 1.52% nickel and 0.26% cobalt.
Also included are the Irwin Hills tenements, where Yilgarn earlier this year reported significant drilling
results which confirmed the potential for zones of high-grade nickel-cobalt laterite mineralization.
However, the density of drilling is relatively sparse compared to the tested resource area at Coglia, and
the co-venturers intend to conduct an early drilling program to prove up a high-grade resource.
Yilgarn’s Managing Director, Mr David Burt, said the relatively high cobalt values within the Coglia-
Irwin Hills tenements could be a very significant factor in the early development of the resources, with
preliminary metallurgical testwork on drill samples from Irwin Hills also announced today indicating
that the high-grade cobalt mineralisation is amenable to beneficiation.
“The mineralisation and geochemistry of the Coglia Well resource is similar to Irwin Hills, and both
parties are confident that similar beneficiation could be achieved,” he added. “The results of preliminary
testwork on composite drill samples from Irwin Hills demonstrate that significant upgrading of the
cobalt (over three times) can be achieved to produce a very high-grade, high-value concentrate.”
Mr Burt continued: “The formation of this Joint Venture with MMJV represents an important milestone
for Yilgarn in its objective to become a nickel producer in the Eastern Goldfields region. MMJV is the
only major nickel-cobalt producer in the immediate region, and its acquisition of the Coglia Well
tenements highlights its belief in the potential of the Irwin Hills and Coglia Well tenements to continue
to yield significant nickel-cobalt laterite resources with short-term production potential as well as nickelcopper
sulphide resources.”
“MMJV has considerable expertise in the processing of nickel-cobalt laterite ores and has indicated that
there is additional cobalt production capacity at the Murrin Murrin plant,” he added.
“MMJV has also indicated that it will be assessing the potential of the Irwin-Coglia tenements to provide
upgraded nickel-cobalt feedstock to utilize this capacity,” Mr Burt continued. “Therefore, Yilgarn could
be in a position to benefit from the early development of small, high-grade laterite resources within the
Joint Venture ground (including the existing Coglia resource), with relatively low capital expenditure
requirements,” Mr Burt added.
Under the Joint Venture, MMJV will manage all aspects of development programs (including the prefeasibility
studies for the Coglia resource), while Yilgarn will manage all exploration including the
further delineation of nickel-cobalt resources and the nickel-copper sulphide exploration program. The
exploration budget for the first year of the joint venture will be a minimum of $1 million (Yilgarn’s
share $400,000).
In addition to its recently announced Carr Boyd Joint Venture and other nickel exploration activities,
Yilgarn launched its first mining venture earlier this year with the commencement of mining operations
at its Rose Dam gold deposit by Paddington Gold Pty Limited (a wholly-owned subsidiary of Placer
Dome Asia Pacific Limited), where ore mined will be treated as part of Paddington Gold’s Kalgoorlie
operations.
The Rose Dam project is forecast to generate a significant cash flow late in 2005, enabling Yilgarn to
accelerate its other exploration and project development activities, including its unfolding nickel growth
strategy in the Eastern Goldfields.
- ENDS -
Released by: On behalf of:
Jan Hope / Nicholas Read Mr David Burt
Jan Hope & Partners Managing Director
Telephone: (+61-8) 9388 1474 Yilgarn Mining Limited
Telephone: (08) 9474 3911
Email: [email protected]