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ASX / Quarterly Report
30 April 2008
WESTERN METALS DELIVERS ON ITS GROWTH STRATEGY
MARCH 2008 QUARTERLY ACTIVITIES REPORT
Western Metals (ASX:WMT) is a diversified uranium and base metals resource company with a portfolio of potential world-class projects.
Activities during the quarter included:
•
Acquisition of an Option over Parys Mountain Cu-Zn Project (www.angleseymining.co.uk)
•
Finalisation and commencement of the 2008 Exploration Programme
o
Increased In-country team in Tanzania to 10
o
Signed drilling contracts in relation to Tanzania and West Georgetown
o
Finalised community programme in Tanzania for 2008
•
Enhancement of Americas portfolio through the acquisition of the US Mid Continent Ni Project from BHP Billiton
•
Renegotiation of the MOA in relation to the West Georgetown Ag-Pb-Zn Project with BHP Billiton
•
Sale of Zeehan Tin Project JV interest to Stellar Resources for $1.2 million
Planned activities for the June Quarter:
•
Commence 2008 drilling in Tanzania
o
Initial focus on Grandfather prospect (best surface trench interval 1.2m @ 7,233ppm U3O8)
•
Commence drilling at West Georgetown
•
Continue Due Diligence on the Parys Mountain Project
•
Continue Due Diligence on Snowbird Ni Project
Western Metals growth strategy is to develop a resource company with a balanced portfolio of exploration and advanced projects in the uranium and base metals sectors.
Activities during the quarter underpinned the commitment to this strategy through the identification of the Parys Mountain Project in Wales and the finalisation of the 2008 exploration programme with drilling to commence in May in both Tanzania and West Georgetown following completion of the wet seasons.
Western Metals Managing Director George Bauk said: “Parys Mountain offers an outstanding opportunity for Western Metals to achieve its aim of becoming a significant metals producer.”
With a highly experienced management team and cash reserves of more than $27 million, Western Metals has the resources to maintain both an aggressive exploration strategy and identify the value associated with the recent acquisitions.
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
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
UPDATE ON ACTIVITIES MARCH QUARTER 2008
Western Metals is please to provide an update on activities undertaken during the March quarter 2008. Excellent progress has been made on all projects with details on each project found on the WMT website (www.westernmetals.com.au) and in relevant announcements made to the Australian Securities Exchange.
WALES
PARYS MOUNTAIN: COPPER - ZINC
WESTERN METALS TO ACQUIRE ADVANCED COPPER ZINC DEVELOPMENT OPPORTUNITY
Western Metals has signed a Term Sheet 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 transaction is subject to a 120 day due diligence and 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 consideration for the acquisition of 100% of the Parys Mountain Project is AUD$29.1m.
The proposed Parys Mountain acquisition reflects the Company’s stated objective of securing an advanced exploration and development opportunity with early cash flow potential.
The Project has had significant modern exploration, definition and infrastructure established. The key aspects of this work include: surface drilling 60,400 metres, underground drilling 10,800 metres, shaft sunk 300 metres, underground development 1,000 metres and pilot processing plant treatment of 2,000 tonnes. The Project has current planning approvals for a 1,000 tonnes per day operation and enjoys strong community and government support.
Western Metals intends to fast-track work programmes including drilling to establish JORC compliant resources and concurrently proceed with a formal feasibility study. Current project schedules estimate completion within approximately 2 years at a cost of AUD$12 - $15m.
Mr Bauk said that Western Metals’ management team possessed the extensive project development and operating expertise needed to quickly and successfully advance the Parys Mountain Project whilst also maintaining an aggressive exploration strategy in the company’s other projects in Tanzania, Queensland and the Americas.
PARYS MOUNTAIN PROJECT OVERVIEW
The Parys Mountain base metal deposit is located on the island of Anglesey in northwest Wales 3 kilometres south of the town of Amlwch. The Project is located approximately 18 kilometres from the port of Holyhead. Anglesey is accessed and traversed by sealed roads and is serviced by rail. The major cities of Liverpool and Manchester are approximately 2.5 hours drive to the east. The Wylfa nuclear power station at Cemaes Bay is 10 kilometres to the northwest of the Project.
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
Exploration recommenced on the deposit in the 1950’s with about 26,000 metres of drilling testing areas below and along strike of the 19th century workings up to 1978. In the late 1970’s a series of widely scattered polymetallic zinc, lead, copper, silver and gold sulphide intersections within shales at the base of the volcanics at the Engine Zone horizon were recognised as indicative of a volcanogenic system (VMS). Drilling was focussed on the Engine Zone area during the early and mid 1980’s in an area approximately 1km west of the historic workings.
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
Between 1988 and 1990 Anglesey Mining sank the Morris Shaft to a depth of 300 metres at the western end of Parys Mountain and completed 1,000 metres of level development as an underground drilling platform for further exploring and defining the Engine Zone sulphide (Cu/Pb/Zn/Ag/Au) and White Rock sulphide (Zn/Pb/Ag/Au) mineralised zones. Approximately 10,000 metres of drilling was completed and a 2,000 tonne trial parcel mined and treated at an on site pilot treatment plant.
In 1990/92 detailed mine and plant designs were completed as part of a development study and planning approvals were granted. These approvals were renewed in 2006. Low commodity prices and the market downturn in 1991/92 resulted in the Project development being suspended.
PARYS MOUNTAIN DUE DILIGENCE
WMT has negotiated to conduct a 120 due diligence on the Parys Mountain Project prior to finalising a formal Sale Agreement and making the initial payment. This due diligence has commenced and is on track to be completed within the 120 day period. The key areas of focus for the due diligence include:
•
Assessment of the Environmental and Community position;
•
Geological validation including resource modelling, core re-assay and database validation;
•
Existing infrastructure assessment; and
•
Commercial, legal and tax reviews.
TANZANIA
SW TANZANIA: URANIUM
STRENGTHENING OF TANZANIAN TEAM
The Tanzanian team has been strengthened and will expand to a total of 10 permanent employees in preparation for the 2008 work programme. The all Tanzanian National team now includes 6 geoscientists, 2 field support technicians, a logistics officer and an accountant. Corporate and technical support will continue to be offered from the Perth based group of experienced specialists.
FIELD WORK AND PREPARATION FOR 2008 PROGRAMME
Planning and preparations for the 2008 exploration programme has progressed well, with all major contractors and consultants signed up. Drilling is expected to commence mid-May and a high-resolution airborne radiometric survey is scheduled to start in late May.
Field work continued during the March quarter with field trips in February, March and April. Work focused on re-establishing access into the Mtonya Corridor prospects after the monsoonal rains and also on establishing access to the Grandfather, Foxy, Eland, Ngaka, Pedro and Mad Fish Prospects. Work completed during the quarter included trenching and sampling at prospects within the Mtonya Corridor, ground scintillometers surveys at Eland, rock chip sampling and mapping at Eland, geophysical re-logging of holes previously drilled into the Mtonya Corridor prospects, hydro-geochemical base line and orientation studies in the Mtonya Corridor area and DGPS surveys at various prospects. Results of geochemical sampling will be available during the June quarter.
Collation and interpretation of geophysical, geological and geochemical data continues and significant progress has been made with respect to correlations between holes and sections and to the possible geometry and controls on mineralisation. The diagram below shows Western Metals’ tenure over interpreted Karoo age rocks in Southern Tanzania, the location of major prospects are also shown.
COMMUNITY RELATIONS
Western Metals continues to engage all stake holders and is continuing to form and foster relationships with the local communities, non-government and government organisations.
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
Negotiations with Hunting Licence owners have been successful and work programmes for 2008 have been endorsed.
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
fice building.
Mr George Bauk, Mr Moshin Adballah of Game Frontiers Ltd, local and neighbouring village residents, village leaders, district and regional government officials and representatives of the Mbarang’andu wildlife community met in Mchomoro in Southern Tanzania in January. The visit was a huge success and the community expressed support for Western Metals’ activities in the area. Western Metals (on behalf of its joint venture with Uranium Resources plc) and Game Frontiers committed significant financial support to the community specifically to – support 250 orphans with schooling for one year, provide 4 high school scholarships to private schools and assistance to complete the district of
EXPLORATION PROGRAMME FOR 2008
An aggressive regional and prospect specific exploration effort consisting of airborne and ground geophysics, geological mapping, geochemical sampling, costeaning and RC drilling is planned for 2008. A dualistic approach to exploration will be adopted. The 2008 programme will continue to build on the successes of the 2007 exploration effort, focusing on evaluation of existing targets and will also aim to generate new targets that will feed the project “pipeline” and will deliver drill targets for 2009.
Mtonya Project Area - The focus of exploration during 2008 will be RC evaluation of prospects along the Mtonya corridor and in particular the Grandfather, Rufus, Para extension and Mad Fish. This includes 8,500m of RC drilling. Work will include geological mapping, costeaning, ground geochemical and geophysical surveys, RC drilling and rehabilitation. The discovery of the Eland anomaly/prospect in “basement” is considered to upgrade the prospectivity of both the Likuyu and Main blocks. Further work will be done to evaluate “basement areas” for similar styles of mineralisation.
RC drilling will initially be aimed at evaluating the Grandfather prospect where previous trenching (reported 22 January 2008) of airborne ground radiometric surveys and surface grab sampling (4.64% U3O8, 0.02% U3O8) returned significant results from a series of 5 trenches excavated over a strike of 1.4 kilometres. Visual uranium mineralisation was identified in several trenches with:
•
T25 giving a peak interval of 1.2 metres at 7,723ppm U3O8, including 0.4 metres at 2.13% U3O8;
•
T27 giving a peak interval of 4,773 ppm U3O8 and 1.2 metres at 2,393ppm U3O8; and
•
T28 giving a peak interval of 1.2 metres at 746ppm U3O8.
Ruhuhu Project Area - The focus of exploration during 2008 will be RC evaluation of regional potential and existing prospects in particular the Pedro anomaly and other airborne radiometric anomalies not yet assessed. This includes 1,000m of RC drilling to drill test the Pedro anomalies and environs. Work will include helicopter supported reconnaissance, geological mapping, costeaning, ground geochemical, geophysical surveys, RC drilling and rehabilitation.
Ruvumu Project Area - The focus of exploration during 2008 will be regional reconnaissance with a view to defining targets for follow-up in 2009 as well as a ground geophysical work, sampling and RC drilling campaigns to evaluate the recently defined Foxy and Eland prospects.
This includes 3,000 m of drilling. Work will include a helicopter supported reconnaissance, an airborne radiometric survey, geological mapping, costeaning, ground geochemical, geophysical surveys, RC drilling and rehabilitation.
UNITED STATES OF AMERICA
MID CONTINENT: NICKEL
WESTERN METALS ACQUIRES DATA, LEASES AND SECURES LAND POSITION IN AREA CONSIDERED PROSPECTIVE FOR BASE METALS IN MINNESOTA, USA
Western Metals has acquired from WMC Exploration Inc (a 100% subsidiary of BHP Billiton) an extensive geophysical database in the state of Minnesota, USA and also acquired two “Exploration Agreement and Option to Lease” rights within the area of interest. In addition to these assets purchased from BHP Billiton, Western Metals has secured tenure over almost the whole of the Cottonwood Intrusion. This 4,500 km2 area of interest is in a geological belt considered highly prospective for nickel sulphide mineralisation.
MID-CONTINENT NICKEL PROJECT OVERVIEW
The Mid-Continent project area in south-west Minnesota was conceptually targeted for nickel sulphide deposits by WMC Resources in 2004, which flew an airborne geophysical survey (GEOTEM electromagnetics and aeromagnetics) over an extensive area of Minnesota (4,500 km2).
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
environment of Minnesota.
Eight high priority anomalies were delineated, two of which were followed up by ground geophysics and diamond drill testing. While not locating any nickel sulphide mineralisation, one of the holes drilled into the Renville East EM target did intersect massive sulphides and thereby confirmed the efficacy of the electromagnetic technique in the covered
In 2007, Western Metals identified BHP Billiton’s Mid-Continent Project area as a compelling greenfields exploration opportunity. An agreement has been signed between Western Metals and BHP Billiton whereby WMT will be assigned BHP Billiton’s “Exploration Agreement and Option to Lease” rights over the Renville West GEOTEM anomaly as well as the entire GEOTEM EM and magnetic dataset.
This large, poorly explored and highly prospective corridor represents a rare example of a prime greenfield opportunity under thin cover amenable to modern geophysical exploration technology. Analogous terranes include the nearby Ni sulphide mineralised Tamarack Intrusion in central Minnesota and the Yellowdog Peridotite which hosts Kennecott’s Eagle Ni-Cu sulphide deposit in Michigan. Minnesota has excellent infrastructure, friendly mineral legislation, and a geological survey with high quality databases and personnel.
WMT has purchased a 100% interest in all exploration data relating to the Mid-Continent Project including all regional geophysical data, drill hole and analytical data owned by BHP Billiton for a payment of US$300,000. If WMT retains an interest in any mineral lease within the area of interest after a period of four years from the effective date, it will be obliged to make a further payment of US$250,000 to BHP Billiton. BHP Billiton will retain a 2% Net Smelter Royalty and a right of first refusal relating to marketing or off-take for any metallic mineral production from mineral leases within the area of interest.
AUSTRALIA
WEST GEORGETOWN: SILVER-ZINC-LEAD-URANIUM-COPPER-GOLD
WESTERN METALS RENEGOTIATES BHP BILLITON AGREEMENT ON WEST GEORGETOWN
Western Metals and BHP Billiton have renegotiated the terms of the “Memorandum of Agreement” dated 23rd February 2007. Under the renegotiated agreement the parties have agreed that:
•
the farm-in option will only apply to EL14722 (when granted) and will not apply to EL14724;
•
the net smelter return will remain at a rate of 3% over both tenements;
•
BHP Billiton has been granted an exclusive and irrevocable option to be appointed as marketing agent in respect of all Minerals produced from the tenements; and
•
WML will test a total of 7 targets on EL14722 within 3 years of its grant.
Western Metals is pleased with the agreement as it considers EL14724 to be prospective for a number of styles of mineralisation and commodities in addition to BHP Billiton’s principle focus of BHT Type Ag-Pb-Zn mineralisation.
TARGET IDENTIFICATION AND PRIORITISATION
EL14724 – Fog Creek Tenement - Western Metals has in conjunction with BHP Billiton identified a number of targets from the magnetic and FalconTM gravity data. A total of 4 targets were selected with variable characteristics. WGN_F001 has a clear association with a major NNE structure and sits within the most prospective unit (Daniel Creek Formation). WGN_F002 is a discrete, isolated feature towards the deeper part of the basin in the Lane Creek formation.
WGN_F003 and WGN_F004 both have interesting and supporting radiometric anomalies and remanent magnetic signatures associated with them. Whilst these two could be considered potential IOCG targets, they also have the potential for Broken Hill type systems. WGN_F003 also has an isolated magnetic high sitting on its eastern edge.
The Company has selected an initial 4 of these high priority geophysical targets for drill testing and an additional target has been selected on the basis of results from historical drilling. A hole drilled in the 80’s intersected what was logged as native copper and but was never assayed for copper. We consider this target type and these results significant and warranting followup. Targets 1-4 are shown on a FalconTM gravity depth slice in the diagram below and details are given in the table below.
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
Name
Easting
Northing
Dimensions
Depth Slice
Signature
Description
WGN_F001
732614
7906076
3000x1500m
500 & 1000m
GDD high (deep)
On NNE structure. Clear BHT target in Daniel Creek Fm (most prospective)
WGN_F002
735990
7888211
1600x900m
500m
GDD high, mod amplitude & depth.
Clear BHT target in Lane Creek Fm.
WGN_F003
710352
7900974
2100x1600m
500 & 1000m
GDD high (deep), small associated magnetic high & U anomaly
Close to basin margin. In Lane Creek Fm. In close proximity to granite contact & remnantly magnetized seds. U & mag signatures suggest possibility could be characterized as an IOCG target.
WGN_F004
709303
7897404
1300x1000m
1000m
GDD high (deep), associated U anomaly
Close to basin margin. In Lane Creek Fm in close proximity to granite contact and remnantly magnetized seds (mineralised?). Otherwise, U signature suggests possibility this could be characterized as an IOCG target.
EP14722 Norman River Tenement - In line with the restructured agreement, BHP Billiton and WMT have reinterpreted and reprioritised targets with a view to defining the 7 top targets for drill testing during 2008. Details and locations of the top 7 targets are included in the table below and on a 1VD RTP magnetic and Falcon Gravity slice image.
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
Target ID
Priority
East
AGD66
Zone 54
North
AGD66
Zone 54
Target Type
Comments
A
2
746508
7848970
BHt
Good structural position in Dead Horse Metabasalt/Corbett Fm, good gravity offset from magnetics
C
2
730300
7838579
BHt
On Lane Ck Formation/Corbett Fm contact mod gravity/weak magnetics
D
1
735478
7848745
BHt
Discrete gravity high offset from magnetic high associated with Dan Ck/Corbett Fm contact
E
1
702720
7850302
BHt
Complex magnetic/gravity anomaly in a regiona fold nose at Dan Ck contact
F
1
715454
7850420
BHt
Offset gravity anomaly from moderate magnetics on Dan Ck/Dead Horse contact
H
3
736569
7843014
BHt
Moderate gravity anomaly on major regional structure in Lane Ck Formation
I
4
708162
7852275
BHt
coincident gravity/magnetics at Dan Ck/Corbett Fm contact-likely amphibolite sill
L
3
755886
7837689
BHt
gravity anomaly at Lane Ck contact, good structure,
During the quarter progress was made in negotiations with Traditional Owners with respect to moving the southern tenement towards grant.
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
EXPLORATION PROGRAMME FOR 2008
An aggressive work program will be undertaken at West Georgetown in Australia during 2008. Native title clearance, access and site preparation will be undertaken to prepare the ground for ground geophysical surveys of the 4 high priority gravity/magnetic targets on the Northern block (Fog Creek). These targets will then be evaluated by RC/Diamond drilling. Access and site preparation is scheduled to commence late-April, ground gravity in early-May and RC/diamond drilling is scheduled to commence late May.
A similar campaign of native title clearance, access and site preparation, ground geophysical surveys of the 7 highest priority targets on the Southern Block (Norman River) will be carried out once licences have been granted and title transferred. The 7 priority targets will then be evaluated by RC/DDH drilling as soon as possible after the tenement is granted.
CANADA
SNOWBIRD PROJECT: NICKEL
DUE DILIGENCE ON TRACK
In December Western Metals announced that it had entered into an agreement with BHP Billiton to have the right to purchase 100% interest in the Snowbird tenements by paying a non-refundable US$250,000 cash payment following a due diligence period (DD to end in June 2008), drilling one hole to test anomaly KB-1, and paying a further cash payment of US$1,250,000 by 31 July 2009. The project consists of claims comprising 261.3 km2 within the Snowbird Tectonic Zone, located 625 km NW of the city of Thompson. The Snowbird Tectonic
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
Zone is on the margin of an ancient continent that hosts the Thompson, Raglan and Voisey’s Bay nickel deposits.
Excellent progress has being made with respect to the due diligence process. Collection, collation and interpretation of historical data has been completed and airborne geophysical data has been re-interpreted by independent experts, Condor Consulting Inc. A segment of the VTEM survey showing lines conductors, targets and some of the more salient features are shown in the figure below.
The due diligence field work has been scheduled for early June – this is the earliest we can access the site and be sure that the snow and ice would have melted and the geology will be exposed.
UNITED STATES OF AMERICA
GLADE PROJECT: URANIUM
REVERSE CIRCULATION DRILLING
As reported previously, drilling commenced at the Glade Uranium Project on Friday 16th November but was unfortunately suspended on Friday 7th of December due to unseasonably wet conditions which compromised safety and productivity of the drilling operations. A total of 3 holes were drilled during this time. Details of hole locations and significant assay results are shown in tables below. Hole GRC002 and GCR003 did not return any significant assay results.
The 3 holes were completed using RC drilling methods for a total of 2,870 feet (875 metres). Geological logging shows each of the holes has intersected a thick sequence (120 to 150m) of Salt Wash beneath some 120 meters of cover. Geological logging identified three well defined rims of thick sandstone, separated by floodplain silts and mudstones, within the Salt Wash. Each hole has a well defined lower and middle rim, while GRC001 also has a thick upper rim of some 40m. These sandstone rims could be considered as favourable lithologies for uranium mineralisation due to their thickness and reduced state in some locations.
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
Drill hole collar locations and details:
Hole Id
East
North
RL (m)
Azi
Dip
Depth
GRC001
696772
4201012
2041
0
-90
970
GRC002
696655
4200879
2077
0
-90
925
GRC003
696437
4200710
2104
0
-90
975
Significant assay results - drill hole GRG003:
Hole Id
From (ft)
To
(ft)
U
ppm
Cu
ppm
Mo
ppm
Se
ppm
V
ppm
Se:Mo
GRC003
625
630
12.9
22.2
0.45
2
40
4.4
GRC003
630
635
11
10.8
0.43
3
27
7.0
GRC003
635
640
31.1
4.9
3.51
4
59
1.1
GRC003
640
645
45.6
2.9
6.12
5
101
0.8
GRC003
645
650
8.4
1.9
0.79
3
43
3.8
GRC003
790
795
2
22.9
0.63
3
31
4.8
GRC003
715
720
2.5
15.4
0.55
1
29
15.4
GRC003
720
725
17.2
7.2
0.78
2
49
7.2
GRC003
725
730
63.7
4.9
6.97
2
121
4.9
GRC003
730
735
12.3
1,6
1.93
2
67
1.6
GRC003
735
740
19.3
11.2
0.52
2
46
11.2
GRC003
740
745
14.9
21.2
1.54
2
46
21.2
GRC003
795
800
57.4
1820
0.42
38
586
90.5
GRC003
800
805
47.4
1150
1.3
15
392
11.5
GRC003
805
810
8.3
166.5
0.4
4
118
10.0
GRC003
810
815
23.3
146.5
0.39
4
128
10.3
Note: Representative samples were collected on 5ft (approx 1.5m) intervals for analysis. Samples were taken either by “spearing” or through a Gilson Splitter located beneath the cyclone. Sample preparation was carried by ALS Chemex Reno Nevada and analysed by ALS Chemex Vancouver Canada. Analytical method used was ME-MS61u using a four acid digest with ICP9 MS (mass spectrometry) finish.
GRC003 returned the only anomalous values for uranium mineralisation, as determined by both gamma logging and geochemical analysis. Three anomalies of sub economic grade have been identified within the middle and lower sandstone rims, each which is between 1 and 2 meters thick. The upper-most anomaly is located within the middle of a thick sequence (>40m) of the middle rim. The sandstone is generally medium grained and reduced. The second anomaly is at the base of the middle rim where it is in contact with underlying silts and mudstones, and the lower-most anomaly is within a 20m sandstone sequence of the lower rim. Geochemical data for U in addition to Cu, Mo, Se and V for each of these anomalies indicate that GRC003 may be located in close proximity to ore rolls. A cross section through the RC holes drilled during November – December 2007 is shown below, U3O8ppm values are shown on the left of the trace and gamma logs on the right.
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
PERU
LUKKACHA: COPPER - GOLD
DETAILED GEOLOGICAL MAPPING AND LITHOGEOCHEMICAL SAMPLING PROGRAMME
A detailed mapping program and litho-geochemical sampling programmes of the northern and southern alteration/geochemical anomalies was carried out in November 2007. During November GeoAndina collected a total of 390 rock chip samples on a pre-determined 200m x 200m grid over the southern and northern alteration / geochemical anomalies.
Composite rock chip samples maximum assay results:
Element
Units
Ag
ppm
As
ppm
Au
ppm
Cu
ppm
Pb
ppm
Zn
ppm
Ba
ppm
Mo
ppm
Maximum
2.3
4510
0.073
2060
844
1135
1700
86
Detection Limit
0.2
2
0.005
1
2
2
10
1
Notes: composite rock chip samples submitted to ALS Chemex Peru, South America. Au determined by ALS method Au-AA23 a 30g Fire Assay with AA finish, other elements determined by ALS method ME-ICP41 a Aqua Regia digest with ICP-AES finish.
In the north part of the mapped area, andesite porphyry dikes and at least one rhyolite dike were emplaced into regional felsic/andesite volcanic rock, followed shortly by emplacement of tourmaline breccias and associated alteration. In the south part of the mapped area, a high-sulfidation hydrothermal system developed within flow-banded rhyolite and underlying andesite tuff and breccia. The continuity of alteration between the north and south areas and the gradual change from relatively deep sericite to shallow quartz-alunite alteration suggests that alteration in the two areas is related to the same hydrothermal system.
The high-sulfidation alteration documented on the northeast flank of Carane Senal Mountain provides some encouragement regarding the potential for gold mineralization at Lukkacha. The
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
current rock chip geochemical survey should have been sufficient to test for this possibility, however, results of this survey did not indicate the presence of a significant exposed gold resource.
A blanket-like silica cap suggests that this part of the hydrothermal system formed close to the surface and that its morphology was influenced by the local water table. Most porphyry systems are thought to form at 2 to 4 km depth. The difference in elevation between the high-sulfidation alteration zone in the south and the tourmaline breccia body in the north is 1.2 km. If a porphyry system is present on the Lukkacha property it is probably beneath the north part of the property and is at least another kilometre beneath the present surface. However, the lack of any significant base metal mineralization in the Lukkacha area indicates a low potential to host a porphyry copper deposit in the near surface environment.
CORPORATE
DIVESTMENT OF INTEREST IN ZEEHAN TIN DEPOSIT
On 17 March Western Metal’s announced the divestment of its 60% interest in the Zeehan Tin JV to Stellar Resources Ltd (ASX: SRZ). Consideration received was $1.178 million made up of $300,000 in cash and $878,000 in Stellar shares. Western Metals lodged a Substantial Shareholder notice with Stellar and the ASX on 24 April.
HUMAN RESOURCES
During the quarter Western Metals further enhanced its resources to manage its growing portfolio. This included the appointment of:
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Mr Kurt Warburton as Project Geologist; and
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Mr David Brinsden as Senior Logistics Co-ordinator.
OTHER
During the quarter, the company lodged its Half Yearly Report for the period ended 31 December 2007.
The company undertook a number of investor roadshows including:
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South Africa (Booth at Indaba Mining Conference);
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Canada (Booth at PDAC Mining Conference);
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Hong Kong; and
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Europe.
The company confirms that no directors or executives have any margin lending arrangements in place.
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
2008 WORK PROGRAMME – KEY ACTIVITIES
2008
Activity
QUARTER 2
QUARTER 3
QUARTER 4
TANZANIA
Mtonya
Geology / Mapping
Geochemistry
Ground Geophysics
Drilling
Ruvumu
Geology / Mapping
Geochemistry
Airborne Geophysics
Ground Geophysics
Drilling
Ruhuhu
Geology / Mapping
Geochemistry
Ground Geophysics
Drilling
AUSTRALIA
West Georgetown
Ground Geophysics
Drilling
UNITED KINGDOM
Parys Mountain
Due Diligence
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.
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled and/or assessed by Glen Edwards who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Edwards is employed by Western Metals Ltd. Mr. Edwards 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. Edwards 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. 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