The imformation below is all about RUM which was released today, its a wealth of imformation which could directly relate to NUP considering we are sharing the common boundary thats been drilled on both sides. Interesting read.
Managing Director, Mr David Muller, will present a project update following the close of the meeting. I will focus on some key issues:
The last 12 months has witnessed a rapid expansion in Rum Jungle’s prospects. This time last year we had just a few drill holes in a phosphate discovery at Barrow Creek 1 within our Ammaroo Phosphate Project. Within 6 months we had established a rock phosphate resource of 88 million tonnes. In the next six months we drilled an area approximately three times the size of the original resource, for which preliminary results have been released this week, pointing to another upgrade of resources before the end of the calendar year. In addition a Mine Management Plan has been lodged with the Northern Territory Mines Department to allow sufficient drilling to extend and infill the Ammaroo Phosphate Deposit and to allow a resource calculation to be established for that Date Printed: 14 November 2011 Page 2 of 5 deposit, located 80km east of Barrow Creek 1.
We believe there is tonnage potential for a world-class resource in this project. Our increase in lease holdings continues as we search closer to the Darwin-Adelaide rail corridor for additional deposits. Our knowledge of the formation and distribution of the phosphate increases every day. These events have paralleled the meteoric rise in fertilizer prices over the last few years in a world that has recognized that supplies of fossil energy, water, phosphate and food are insufficient to meet the anticipated exponential growth in economic output, population increase and worldwide standards of living, particularly in our part of the world. China, with its huge demand for raw materials and particularly fertilizer, to feed its huge population, and the world’s largest rock phosphate producer is now imposing an export tariff regime for phosphate to ensure its own adequate supplies.
The rest of Asia and India rely largely on rock phosphate shipped from North Africa. Putting these figures into perspective, production of 30% P205 beneficiated grade rock phosphate, on an annual basis using Quarter 1, year 2011 figures would be as follows: first China with 56M tonnes, second Africa 26M tonnes (mostly exported) and third the USA 28M tonnes (all consumed domestically). It is important to keep these numbers in mind when the company is modelling a 2M tonne per annum operation designed to penetrate markets with our geographic neighbours.
The logistics of our deposits being both shallow and close to rail transport through to the Port of Darwin underlines an exciting future for the company. This is also recognized by international fertilizer traders and producers who have been holding talks with the Company. Next Monday, for example, six delegates in the fertilizer business, from one of our major Asian trading partners will be visiting the Company in Darwin and will proceed to a two day project visit to the Ammaroo deposits before flying directly home. I believe that the unique thing about this Company is that it has not only punched its way into the big league.
1 It is the western-most deposit yet discovered in the giant Georgina Basin which itself extends from the Central Australian Railway (“C.A.R.”) in the west to the Mt Isa region in the east. The Barrow Creek 1 deposit is located about 80kms east of the C.A.R. The C.A.R. connects to Adelaide to the south and the Port of Darwin to the north.
2 It is the shallowest deposit of such size yet discovered in the Georgina basin.
3 The phosphate beds are soft and easily mined without appearing to require drilling and blasting. Bulk samples collected so far have all been free-digging.
4 Low waste stripping ratios will prevail in the start-up years ranging from 2:1 to 3:1 waste to ore.
5 Abundant mineralisation at grades of +30% P205 occur near surface and could provide ‘Direct Shipping Ore” (“DSO”). An estimate of the amount and grade of this higher grade mineralisation will be undertaken when in-fill drilling is complete.
6 Preliminary beneficiation tests on a 2 tonne bulk sample have indicated that ‘as mined’ mineralisation can be upgraded by simple screening with the coarse factor grading about 28% P205.
7 The Port of Darwin offers a significant freight advantage for delivery to Asian consumers compared with product shipped from the Mediterranean area.
8 The phosphate has low levels of deleterious elements.
9 Much potential remains in the Ammaroo Project.
10 Over the last 2 years the price of rock phosphate (32% P205) has risen strongly from $120 to $200 per tonne. In the same period Diammonium Date Printed: 14 November 2011 Page 5 of 5 Phosphate (“DAP”) fertilizer has risen from about $300 per tonne to over $700 per tonne. Recovering global demand for fertilizer is expected to push the price of rock phosphate higher in the future. Market growth rates indicate the need for over 5 million tonnes per annum of new rock phosphate supply each year.
11 Preliminary economic analyses of the deposit indicate that it is potentially a very robust project. We are working hard on assessing the various models for developing Barrow Creek 1. Drilling to expand the resource and evaluation of a possible off-take partner to fund the project are continuing.
NUP Price at posting:
4.0¢ Sentiment: LT Buy Disclosure: Held
