ASX Announcement
12 May 2008
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web:
www.westernmetals.com.au
ASX: WMT/WMTO
Parys Mountain Historic Mineral Resources
and Summary Geological Information
Following approval by the ASX, Western Metals is pleased to provide a summary of the historical
mineral resources of the Parys Mountain Cu-Pb-Zn project in North Wales which is currently
under option to purchase by Western Metals.
The total historic indicated and inferred un-depleted resource on the project is;
7.76 million tonnes at 2.0% copper, 2.4% lead, 4.9% zinc, 39 g/t silver and 0.33 g/t gold.
Details relating to this historic resource are in section 2 “Parys Mountain Historic Resource
Estimates” of this document.
There has been no historic mining in the resource areas beyond establishment of a 300 metre
shaft and approximately 800 metres of lateral underground development established as an
underground exploration drilling platform and for the purposes of collecting a bulk sample.
As previously announced, the transaction is subject to a 120 day due diligence which commenced
on April 8th 2008. On successful completion Western Metals will sign a formal sale agreement and
pay Anglesey Mining AUD$7.6m in a combination of cash and shares. On the completion of a
successful bankable feasibility study or 3 years whichever is earliest, Western Metals will make a
final payment of AUD$21.5m in a combination of cash and shares. The total purchase price is
AUD $29 million.
The Project has had significant modern exploration, definition and infrastructure established. The
key aspects of this work include:
Activity Amount
Surface Drilling 60,400 metres
Underground Drilling 10,800 metres
4.5 Metre Diameter Shaft Sunk (Morris Shaft) 300 metres
Underground Exploration Development 900 metres
Pilot Processing Plant 800 tonnes
The Project has current planning approvals for a 1,000 tonnes per day operation, and
enjoys strong community and government support.
For further information contact:
George Bauk Paul Downie
Managing Director Porter Novelli (Perth)
Western Metals Limited (08) 9386 1233
(08) 6380 3600 0414 947 129
2
1. Parys Mountain Geology Overview and Historic Resources.
Anglesey lies within the Caledonian Orogenic Belt which extends northeast into Scotland and
southwest through Southern Ireland. Related formations are also found in the mining camps of
Newfoundland and New Brunswick, Canada. In the area of Parys Mountain, the principal formations
comprise Ordovician and Silurian volcanic and sedimentary rocks resting on older metamorphic
rocks.
1 km
Morris
Shaft
Parys Mountain
Historic Open Pits
Diagram 1: Parys Mountain Regional Geology
The structure in which the Parys Mountain ore is contained is interpreted to be an overturned,
northeast/southwest trending syncline.
The mineralisation is mainly of volcanic origin and occurs at or above the contact between the
sedimentary and volcanic rocks.
The known sulphide deposits occur as massive sulphides concentrations or as semi-massive and
vein sulphide deposits hosted in quartz rich rocks. The deposits contain varying proportions of zinc,
lead and copper sulphides as sphalerite, galena, chalcopyrite with associated silver and gold.
Diagram 2 is a composite cross section of the deposit that shows the relative locations of the sulphide
bodies in relation to the general geology.
3
Diagram 2: Parys Mountain Composite Geology Cross Section
Massive Sulphide Zones
The massive sulphides zones identified to date are known as the Engine, Central and Garth Daniel
zones. These zones are located on or proximal to the contact between the southern shales and
overlying rhyolite sequences.
The sulphide contains variable amounts of copper, lead, zinc, silver and gold ranging up to 4% Cu,
25% Zn, 10% Pb, 600 g/t Ag and 5 g/t Au in the most massive sulphides. Mineralised true widths
range from narrow stringers to 20 metres.
The dominant sulphide minerals present are chalcopyrite (Cu), galena (Pb) and sphalerite (Zn). The
silver and gold are found associated with the sulphides.
There has been no historic mining of the massive sulphide zones beyond limited level development
completed as an underground exploration drilling platform in 1990 on the Engine Zone and White
Rock Zone. A portion of the mineralisation produced from the development was used in pilot plant
processing trials conducted in 1990.
The Engine Zone (EZ) located close to the Morris Shaft is a 60 to 160 metre wide zone that can be
traced from near surface, over 600 metres down dip in a north-easterly direction. The zone has been
4
investigated by surface and underground exploration drilling and underground exploration
development. The EZ has been the subject of historical resource estimation, laboratory and pilot plant
scale metallurgical testing and conceptual mine design.
The historic resource estimate for the Engine Zone is:
Table 1: Engine Zone Historic Resource
Refer to notes regarding historic resource estimates in section 2. “Parys Mountain Historic Resource Estimates”
of this document
Applying forward pricing estimates and metallurgical test work recoveries to the historic resource
figures derives a copper equivalent grade of 5.1% Cu per tonne or a zinc equivalent of 16.5% Zn
per tonne for the historic Engine Zone resource. Notes on the calculation of these equivalent grades
are shown in Appendix 1 of this document
The Central Zone is a sparsely drilled area to the east of the Engine Zone. The zones are separated
by a barren contact zone thought to represent the centre of volcanic activity. Historic drilling has
identified sulphides in the area.
The Garth Daniel Zone is also sparsely drilled and may represent the fault displaced down plunge
extension of the Engine Zone. Limited drilling has produced high grade results. Significant
intersections at a greater than 3% combined metal grade in this area are:
Table 2: Significant Intersections Garth Daniel Zone
Hole ID
From
(m)
To
(m)
Interval
(m) Cu% Pb% Zn%
Ag
(g/t)
Au
(g/t)
H30 569 573.9 4.9 1.32 1.53 3.92 8 not assayed
AMC15 562.7 565.2 2.5 6.34 11.94 22.26 887 0.46
AMC16 529 529.35 0.35 2.19 4.18 7.81 20 0.08
AMC17 496.6 502.1 5.5 3.73 6.06 12.51 78 0.37
Notes on Table 2: All drilling diamond core HQ or NQ size. Samples collected by core cutting half core. AMC
hole samples have been analysed by ICP at Omac laboratories Ireland. All intersection lengths are estimated to
be true width of mineralisation based on local geological observation.
The distribution of massive sulphide deposits is shown in Diagram 3.
Category Tonnes (millions) Cu% Pb% Zn% Ag (g/t) Au (g/t)
Indicated 1.41 1.99 3.42 6.65 99 0.79
Inferred 2.8 3.2 1.9 4.5 22 0.1
Total 4.21 2.8 2.4 5.2 48 0.3
5
Historic
Indicated
Resource
1.41 Mt
1.99% Cu
3.42% Pb
6.65% Zn
99 g/t Ag
0.79 g/t Au
ENGINE ZONE
GARTH DANIEL
ZONE
CENTRAL ZONE
Historic Indicated Resource
Historic Inferred Resource
Sulphide Zones
A 3 Drill Intercept Point
After: Ore Systems Consulting
AMC 15
2.5 metres
6.34% Cu
11.94% Pb
22.26% Zn
887 g/t Ag
0.46 g/t Au
AMC 17
5.5 metres
3.73% Cu
6.06% Pb
12.51% Zn
78 g/t Ag
0.37 g/t Au
Diagram 3: Plan Projection Contact Massive Sulphide Horizon
Semi-Massive, Disseminated and Stringer Sulphide Zones
The Parys mountain deposit contains significant discrete zones of semi-massive, disseminated and
stringer sulphide bodies bearing variable quantities of base and precious metals.
These are known as the White Rock, Carreg-y-Dol and Northern Copper Zones. These zones are all
located in the Northern Shales and Northern Rhyolites. Diagram 2 shows the general location of
these zones in relation to the general deposit geology.
The Carreg-y-Dol is a 5 metre to 15 metre wide zone of massive quartz rich rocks containing
chalcopyrite-pyrite rich veins and metre scale pods of semi-massive sulphides. The shallower
portions of this zone were mined in the historic underground workings. A historic inferred resource
was estimated in 1990.
Table 3: Carreg-y-Dol Historic Resource Estimate
Refer to notes regarding historic resource estimates in section 2. “Parys Mountain Historic Resource Estimates”
of this document
The White Rock Zone is a complex zone of silicified shale, quartz and silicified rhyolite presenting as
a plunging shoot up to 50 metres thick that has been traced from surface outcrop over 600 vertical
Category Tonnes (millions) Cu% Pb% Zn% Ag (g/t) Au (g/t)
Inferred 1.4 2.1 2.6 4.8 12 0.2
6
metres. Sulphides within the zone are disseminated to semi-massive with locally pods of massive
sulphide. The mineralisation is dominated by zinc and lead with minor copper compared to the other
zones at Parys Mountain.
The White Rock has been the subject of historic resource estimates with the latest completed in 2007
Table 4: White Rock Historic Resource Estimate
Refer to notes regarding historic resource estimates in section 2. “Parys Mountain Historic Resource Estimates”
of this document
The Northern Copper Zone was the subject of extensive drilling in the 1960’s and 1970’s. The vein
style mineralisation is primarily composed of quartz-chalcopyrite-pyrite. The veining has been
identified over estimated true widths ranging from 5 metres to over 140 metres at grades ranging from
0.4% to 1.2% copper along a strike length of 800 metres.
References available in the public domain that can provide more detailed information on the Parys
Mountain deposits are:
Tyler P.A., 2003, The Parys Mountain volcanogenic sulphide deposit, North Wales: a new
interpretation, in Europe’s Major Base Metals Deposits, Irish Association of Economic Geology
journal
Barrett T.J.,MacLean W.H., Tennant S.C., Volcanic Sequence and Alteration at the Parys
Mountain Volcanic – Hosted Massive Sulfide Deposit, Wales, United Kingdom: Applications of
Immobile Element Lithochemistry, Economic Geology Vol 96, 2001, pp. 1279 - 1305
Category Tonnes (millions) Cu% Pb% Zn% Ag (g/t) Au (g/t)
Indicated 1.75 0.36 2.22 4.27 39 0.43
Inferred 0.4 0.3 1.6 3.5 45 0.4
Total 2.15 0.35 2.10 4.13 40 0.42
7
2. Parys Mountain Historic Resource Estimates
The Parys Mountain Project contains mineral resources estimated over the past 20 years.
The deposit contains several bodies which have been estimated at different times in the past and are
therefore treated separately for reporting purposes. Table 6 shows the last update of historic
resources.
Table 5 Parys Mountain Resources – Most Recent Estimates
Note: Inferred resources have been rounded to maximum of one decimal place to reflect estimation level.
Differences in totals relate to rounding.
1990 Resource Estimate
Resource estimates for all known zones of Parys Mountain were completed in 1990 by the Robertson
Group plc of the UK and are considered historic.
Table 6: 1990 Historic Resource Estimates
Category Zone Mt Cu% Pb% Zn% Ag
(g/t)
Au
(g/t)
White Rock 0.84 0.49 3.44 6.84 42 0.45
Indicated Engine Zone 1.41 1.99 3.42 6.65 99 0.79
Total 2.25 1.43 3.43 6.72 78 0.66
Engine Zone 2.83 3.20 1.92 4.54 22 0.12
Inferred Carreg-y-Dol 1.37 2.07 2.64 4.79 12 0.17
Total 4.20 2.83 2.2 4.6 19 0.1
1990
Resource Total 6.45 2.34 2.60 5.35 39 0.32
The following points are made regarding these historic resources
1. The 1990 estimates are considered to be historic and not estimated under JORC (2004)
guidelines. Western Metals intends to undertake a resource definition program to ultimately reestimate
the resource in accordance with JORC (2004) guidelines but is unable at this time to
speculate on the outcome of that program.
2. The historical resources were estimated 1990 in the United Kingdom by Robertson Group plc a
UK consulting firm and reported to Anglesey Mining in “Report No. 4400, AN INDEPENDENT
White Rock resources – 2007
Category Zone Mt Cu% Pb% Zn% Ag (g/t) Au (g/t)
Indicated White Rock 1.75 0.36 2.22 4.27 39 0.43
Inferred White Rock 0.4 0.3 1.6 3.5 45 0.4
Total White Rock 2.15 0.35 2.10 4.13 40 0.42
Other resources – 1990
Category Zone Mt Cu% Pb% Zn% Ag g/t Au g/t
Indicated Engine 1.41 1.99 3.42 6.65 99 0.79
Total 1.41 1.99 3.42 6.65 99 0.79
Engine 2.8 3.2 1.9 4.5 22 0.1
Inferred Carreg-y-Dol 1.4 2.1 2.6 4.8 12 0.2
Total 4.2 2.8 2.2 4.6 19 0.1
Total Other
Resources 5.61 2.6 2.5 5.1 39 0.30
All Total 7.76 2.0 2.4 4.9 39 0.33
8
REVIEW OF THE GEOLOGICAL RESERVES AT PARYS MOUNTAIN, ANGLESEY , WALES by J.
EMBERTON, AND M.D. STUART – OCTOBER 1990 (Robertson Group plc)”
3. The historical estimate was based on over 60,000 metres of drilling, underground development
and bulk sampling through a pilot test plant. These results were developed by a reputable
company utilizing the techniques of the day. They are highly relevant in the decision to buy the
project and in planning the future programs and direction of the Project.
4. The resource data collection and estimation has been conducted in a systematic manner
appropriate for the level of confidence applied to its reporting.
• The historical resource has been estimated entirely from surface and underground
diamond drilling.
• Sampling has been via cut half or quarter core with sampling intervals based on
geological controls. Much of the drill core used in the resource estimation remains on
site.
• Geological logging has been conducted on all drill holes with many petrographic samples
also evaluated to assist geological assessment. Core recovery is generally >90% and
has been logged on the majority of drillholes.
• Collar and down hole survey of drilling and topographic survey of surface have used
recognised methods.
• Bulk density has been initially determined experimentally from a set of samples and then
calculated mathematically using combined grade regression. Later checks have been
made using further core samples and validated the original relationship.
• Geological interpretation has used the well documented knowledge of the deposit. Some
re-logging of historic holes was completed by Robertson Group to ensure consistency of
geological interpretation.
• Estimation has been conducted on a sectional basis using cross and long sections to
define the mineralisation boundary at a ₤10 Net Smelter Return (NSR) value. The NSR is
used as the deposit is polymetallic and cut-offs must relate to the presence of economic
concentrations relative to all minerals not specific minerals. Resources have then only
been reported above a ₤20 cut-off internal to the mineralized boundary. Grades have
been estimated from drill intersection averages in each block.
• Classification has been derived from drill data density and geological continuity.
• Checks have been conducted against drilling related estimates and underground
exposure of a limited portion of the resource. In general the drilling correlates with the
location of the mineralization and the various grades of mineralization. Some variation on
local scale was shown in average grades. Underground exposure shown greater
localized fault dislocation than anticipated suggesting a requirement for tighter drilling
requirements for final detailed stope design.
5. The estimate is material as it represents 70% of the known resources and therefore reflects the
consideration paid for the project and the extent of the planned evaluation programmes.
The company will immediately following formal purchase embark on a AUD$12m - $15m
feasibility study including approximately 25,000m drilling and resource definition program aimed
at bankable status in 2 years.
The company has $27m in cash reserves to fund the program through to BFS.
9
The company has the financial and staffing resources internally to manage the project.
Prioritisation of funding to the most advanced projects may logically lead to divestment of assets
that fall below our investment horizon.
6. The classification definitions were originally based on AUSIMM Bulletin 1981 proposed
classification system which was then revised in 1989. These also closely follow those
recommended by the Committee of the Society of Economic geologists 1956.
The original classification has then been adjusted to reflect JORC terminology at a later date. The
classification was originally as Probable A Geological Reserves (less than 50 metre drill spacing),
Probable B Geological Reserves (50 to 75 metre drill spacing) and Possible Geological Reserves
(greater than 75 metre drill spacing and broad geological knowledge). Probable A and B
Geological Reserve have been renamed as Indicated Resource and Possible Geological
Resource renamed Inferred Resource by Anglesey Mining to be consistent with JORC
terminology.
7. The White Rock Zone is a discrete body of zinc, lead, silver and gold that commences from
surface and has been identified over a 600 metre plunge extent.
Resource estimation on the White Rock was last updated in 2007 following a surface drilling
program. The resource estimate was completed by Micon International Ltd UK. This was reported
by Anglesey Mining as a JORC resource in February 2007
Western Metals is treating this resource estimate as historic and intends to conduct a reestimation
as part of its work programme. It is uncertain whether or not following evaluation
and/or further exploration the resource or reserve will ever be able to be reported in accordance
with the JORC Code by Western Metals.
There have been no further resource estimates completed on the Engine or Carreg-y-Dol Zones.
8. Subject to successful due diligence and purchase Western Metals plans a full feasibility study on
the project with a view to achieving a bankable outcome and developing the mine to full
production capability. In order to achieve this Western Metals will conduct a resource definition
and re-estimation program aimed at bringing the historical resources to JORC compliant status.
9. The Australian Stock Exchange (ASX) has granted a waiver from listing rule 5.6 to allow Western
Metals to report the historic estimates.
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled and/or assessed by Mr. Geoff Chapman who is a Member of The Australasian Institute of
Mining and Metallurgy. Mr. Chapman is employed by Western Metals Ltd. Mr. Chapman has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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 Resources and Ore Reserves’. Mr. Chapman consents to the inclusion in
the report of the matters based on his assessment of the available information in the form and context in which it
appears.
10
Appendix 1 Notes on Equivalent Metal Calculations
Copper and Zinc Equivalent calculations derived from:
1. Copper Equivalent % = Copper % + (Lead %* USD Lead per tonne * Lead Recovery % + Zinc% *
USD Zinc per tonne * Zinc Recovery % + Silver grams per tonne/31.10 * USD Silver per ounce *
Silver Recovery %+ Gold grams per tonne/31.10 * USD gold ounce per tonne * Gold Recovery
%)/USD Copper per tonne
2. Zinc Equivalent % = Zinc% + (Lead %* USD Lead per tonne * Lead Recovery % + Copper% * USD
Copper per tonne * Copper Recovery % + Silver grams per tonne/31.10 * USD Silver per ounce *
Silver Recovery % + Gold grams per tonne/31.10 * USD gold ounce per tonne* Gold Recovery
%)/USD Zinc per tonne
3. Commodity Prices applied to Equivalent calculations:
Commodity USD Source
Copper (USD per lb) $ 3.52 LME 27 month forwards
Zinc (USD per lb) $ 1.08 LME 27 month forwards
Lead (USD per lb) $ 1.32 LME 15 month forwards
Silver (USD per oz) $ 15 Kitco
Gold (USD per oz) $ 800 Kitco
4. Historic resource estimate values used.
5. Recovery values derived from 2007 metallurgical test work conducted on Parys Mountain
mineralisation by Wardell Armstrong International Limited are total recovery to concentrate for each
metal:
Copper Recovery % 92%
Zinc Recovery % 93%
Lead Recovery % 74%
Silver Recovery % 88%
Gold Recovery% 85%
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web:
www.westernmetals.com.au
ASX: WMT/WMTO
BACKGROUND TO WESTERN METALS
An emerging resource company developing a portfolio of world class Uranium and Base
Metals Projects. The company has immediate plans, and the capability, to underpin value
and accelerate growth through acquisition and exploration success.
COMPANY PROJECTS
URANIUM
An agreement with Uranium Resources plc including the Mtonya Project in Tanzania
wherein Western Metals has a 40% interest with the ability to earn 60% by spending up to
$4m. Western Metals also has a 42.5% interest in an additional 10,413 km2 of tenements in
Tanzania bringing the license area to 13,851 km2 with a further 211 km2 under a 45% joint
venture.
A uranium Project joint venture with Lynx1 LLC from the United States. The JV holds
exploration and mining rights over prospective lands in Colorado and is currently
undertaking exploration activities. Western Metals currently holds a 68% interest, with an
ability to earn up to 85% by spending up to US$1.6 million.
BASE METALS
An option to acquire 100% of the advanced Parys Mountain copper-zinc Project on the
island of Anglesey in North Wales from Anglesey Mining plc (LSE:AYM), a UK based mining
company listed on the London Stock Exchange (http://www.angleseymining.co.uk ). The
total consideration for the project is AUD$29m including a 120 day due diligence. On signing
the formal sale agreement, Western Metals will commence a full feasibility study estimated
for completion in 2 years at a cost of $12 - $15m.
An agreement with BHP Billiton to explore for base metals in the West Georgetown region of
northern Queensland. The agreement provides for Western Metals to achieve 100%
ownership at the completion of an airborne geophysical survey whilst our partner has a claw
back provision (on EL14722 only).
An option to purchase 100% interest in the Snowbird Nickel Project in the Northwest
Territories of Canada by paying a non-refundable US$250,000 cash payment following a
due diligence period, drilling one exploration drill hole, and paying a further US$1,250,000
cash payment in 2009. A major mining house retains a 60% back-in right.
WMT has purchased a 100% interest in all exploration data relating to the Mid-Continent
Nickel Project in Minnesota including all regional geophysical data, drill hole and analytical
data owned by BHP Billiton by payment of US$300,000.
A joint venture in Peru with a private Peruvian entity, to target a large tonnage Cu-Mo-Au
porphyry deposit similar to other giant deposits in the region. Western Metals can own 100%
through payments of US$2.5 million over a four year period.
WMT
western metals limited
