quarterly report

ASX / Quarterly Report
31 July 2008
JUNE 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.
Highlights and activities during the quarter included:
Tanzania Uranium
o
Recommencement of drilling at its uranium projects in Southern Tanzania
o
Earns 60% interest in JV with Uranium Resources plc
o
Drilling continues to intersect exciting uranium mineralisation
12 metres at 676 ppm U3O8 from 22 metres
3 metres at 690 ppm U3O8 from 12 metres
2 metres at 1,525 ppm U3O8 from 11 metres
7 metres at 263 ppm U3O8 from 44 metres
5 metres at 222 ppm U3O8 from 18 metres
3 metres at 250 ppm U3O8 from 4 metres
West Georgetown Base Metals
o
Commencement of drilling of gravity/magnetic targets at Fog Creek (EPM14724)
o
Norman River tenement (EPM14722) granted
Snowbird Nickel, Base Metals and Gold
o
Due diligence completed resulting in the decision to proceed with the project
o
Rock chip sampling returns highly encouraging results including:
KB-1 Magmatic Copper-Nickel Target
-
2.57% Cu, 0.12% Ni
-
1.88% Cu, 0.12% Ni
KB-2 Gold-Silver / Base Metals Target
-
31.2 g/t Au, 806 g/t Ag, 3.16% Cu, 10.55% Zn
-
25.4 g/t Au, 769 g/t Ag, 2.23% Cu, 7.44% Zn, 4.22% Pb
o
Field work results in five additional claims staked and held 100% by Western Metals. Results from this area include:
- 273 g/t (9.6 oz/t) Au, 28.5 g/t Ag
- 9.97 g/t Au
Parys Mountain Base Metals
o
Due diligence on Parys Mountain Project continues
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 JUNE QUARTER 2008
Western Metals is pleased to provide an update on activities undertaken during the June 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.
TANZANIA
SW TANZANIA: URANIUM
WESTERN METALS EARNS 60% INTEREST IN JOINT VENTURE WITH URANIUM RESOURCES PLC IN TANZANIAN URANIUM PROJECTS
Effective 30th June 2008 Western Metals has earned 60% interest in its Tanzanian joint venture with Uranium Resources plc by completing A$4 million expenditure since May 2006.
WESTERN METALS CONTINUES TO DRILL HIGH GRADE URANIUM MINERALISATION IN TANZANIA
RC drilling recommenced in Southern Tanzania on schedule on the 22nd May 2008. The current RC drilling programme has been designed to continue to evaluate the Mtonya Corridor and then to move onto to evaluation of the regional prospects in the Ruhuhu and Ruvuma Project areas. Western Metals tenure and major prospects are shown below with simplified Karoo geology in Figure 1.
Figure 1: Western Metals tenure in SW Tanzania showing location of major prospects.
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
Mtonya Project Area
The focus of the current phase of exploration during 2008 has and will continue to be RC drilling evaluation of prospects along the Mtonya Corridor and in particular the Grandfather, Rufus, Henri, Para Extended and Mad Fish prospects.
RC drilling has initially been aimed at evaluating the Grandfather prospect where previous trenching 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 (Figure 2) with:
T25 giving a peak interval of 1.2 metres at 7,723ppm U3O8, incl. 0.4 metres at 2.13% U3O8;
T27 giving a peak interval of 1.2 metres 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.
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
Figure 2: Secondary Uranium Mineralisation
As of 14th July a total of 74 RC holes for 4,516 metres had been completed during the 2008 drilling program into numerous prospects along the Mtonya Corridor. Infill and extension drilling at known prospects such as Moysten and Henri have confirmed tenor and extended mineralisation. Assay results of the first batch of samples from drilling completed at the Grandfather Prospect, located some 5 kilometres northeast of the Henri prospect, returned a number of significant intersections.
Significant intercepts from results received to date from 2008 RC drilling include:
•
MRC143 - 12 metres at 676 ppm U3O8 from 22 metres
•
MRC143 – 3 metres at 690 ppm U3O8 from 12 metres
•
MRC139 - 2 metres at 1,525 ppm U3O8 from 11 metres
•
MRC116 - 7 metres at 263 ppm U3O8 from 44 metres
•
MRC136 - 5 metres at 222 ppm U3O8 from 18 metres
•
MRC127 - 3 metres at 250 ppm U3O8 from 4 metres
•
MRC138 - 2 metres at 300 ppm U3O8 from 22 metres
Only a small number of assay results from drilling carried out to date have been received. Drill status as of 14th July is shown in Figure 4 where holes have been thematically mapped on maximum downhole U3O8 and presented on a uranium channel radiometric image. White points represent drilled holes for which assays are pending.
Figure 4: Mtonya Corridor drilling status map as at 14th July 2008.
PROPOSED SEPTEMBER QUARTER WORK PROGRAMME
RC drilling will continue to test the Moysten, Para, Rufus, Grandfather and Mad Fish prospects as well as evaluating strike continuity to the south west of Para and testing a number of conceptual targets. The drilling programme will also include a number of holes designed to provide stratigraphic information and further explore the concept of blind uranium mineralisation at depth in the Mtonya corridor.
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
Evaluation of properties and prosects outside the Mtonya Corridor with be accelerated and RC drilling will follow ground based geological mapping, ground geophysical and geochemical surveys at the Pedro and Eland prospects.
Regional reconnaissance exploration of the Mtonya, Ruhuhu and Ruvuma project areas will continue. Work has involved a high resolution airborne radiometric survey and will include, helicopter and ground supported mapping, trenching, geochemical and geophysical surveys. It is expected that regional work will deliver new targets for drill testing in 2009. The budget for the second half of 2008 is in the order of A$2 million.
AUSTRALIA
WEST GEORGETOWN: SILVER-ZINC-LEAD-URANIUM-COPPER-GOLD
WESTERN METALS COMPLETES PHASE 1 DRILLING CAMPAIGN AT WEST GEORGETOWN PROJECT IN QUEENSLAND, AUSTRALIA
Western Metals commenced RC / diamond drilling at its West Georgetown Project in North Queensland on 10 June 2008. Two of the FalconTM gravity-magnetic, two of the structural-magnetic and one historical target were followed up during this drilling campaign. All targets to be drill tested are located within the Fog Creek tenement (EPM 14724). A combined total of 1,469m has been drilled to date, comprising of 655m of RC and 814m of diamond drilling. Results are currently being interpreted. Assay results are pending.
Figure 5. Diamond drilling Glenora Station WGN_F003 June 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
NORMAN RIVER TENEMENT (EPM14722) GRANTED BY QUEENSLAND DEPARTMENT OF MINERALS AND ENERGY
Western Metals has been advised that the Norman River Tenement (EPM14722) of the West Georgetown Project was granted to BHP Billiton on the 22nd July 2008. The documentation to assign the tenement to Western Metals is currently being prepared by BHP Billiton.
In line with the 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 Falcon Gravity slice image (Figure 6).
Table 1. Priority Targets Norman River Tenement EPM14722
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,
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
.
Figure 6. Priority targets on a FalconTM gravity depth slice image
PROPOSED SEPTEMBER QUARTER WORK PROGRAMME
Collate compile and interpret results of Phase 1 drilling at Fog Creek. Commence permitting and heritage clearances of western most sites on the Norman River Tenement. Evaluation of selected targets scheduled to commence October 2008.
CANADA
SNOWBIRD PROJECT: NICKEL-BASE METALS-GOLD
POSITIVE DUE DILIGENCE RESULTS IN DECISION TO PROCEED WITH SNOWBIRD INCLUDING NEW LEASES STAKED (ASX ANNOUNCEMENT 29 JULY 2008)
Western Metals is pleased to announce it has progressed its Option to purchase 100% of the Snowbird polymetallic project in Canada from BHP Billiton. The decision follows a due diligence field investigation completed on the highly prospective region in the Northwest Territories. Additional work on the Wendy prospect adjacent to the Snowbird project identified it as prospective for high grade gold mineralisation. This led to the staking of the five additional Wendy claims now held 100% by Western Metals.
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
Rock chip sampling conducted during the field investigation confirmed tenor of mineralisation and delivered highly encouraging results including:
•
KB-1 Magmatic Copper-Nickel Target
-
2.57% Cu, 0.12% Ni
-
1.88% Cu, 0.12% Ni
•
KB-2 Gold-Silver / Base Metals Target
-
31.2 g/t Au, 806 g/t Ag, 3.16% Cu, 10.55% Zn
-
25.4 g/t Au, 769 g/t Ag, 2.23% Cu, 7.44% Zn, 4.22% Pb
•
Wendy Gold Target
-
273 g/t (9.6 oz/t) Au, 28.5 g/t Ag
-
9.97 g/t Au
The new Snowbird project area now consists of 21 claims (Figure 7) within the Snowbird Tectonic Zone, located 625 km NW of the city of Thompson. The Snowbird Tectonic Zone is on the margin of an ancient continent that hosts the Thompson, Raglan and Voisey’s Bay nickel deposits as well as various gold and base metals mines. Several EM bedrock anomalies and the presence of elevated Cu, Ni, Ag, Zn and Au in exposed sulphide mineralisation have resulted in the definition of a number of drill-ready targets.
Figure 7. Geology of the Snowbird region area showing the claim block and targets for follow-up
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
PROPOSED WORK PROGRAMME
Surface mapping and geophysical surveys will be completed on the Wendy claims prior to drilling. The KB-1 and KB-2 targets on BHP Billiton option tenements are considered drill ready based on existing BHP Billiton detailed geophysics and Western Metals field validation. Field work is scheduled for this calendar year, followed by diamond drilling to commence in early 2009, with all results expected to be received and interpreted by July 2009.
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 purchase is subject to the satisfactory completion of a 120 day due diligence which progressed during the quarter.
UNITED STATES OF AMERICA
GLADE PROJECT: URANIUM
WESTERN METALS INCREASES EQUITY TO 72%
Western Metals has increased its equity in the Glade project to 72% based on its Project spend during the six months to 30 June 2008.
UNITED STATES OF AMERICA
MID CONTINENT: NICKEL
WESTERN METALS CONTINUES TO CONSOLIDATE LAND POSITION AT MID CONTINENT MINNESOTA, USA
As announced in the March Quarterly, 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. During the quarter Western Metals continued to build and secure its land position in the area.
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 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
Permitting
Drilling
CANADA
Snowbird & Wendy
Permitting
Ground Geophysics
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 72% 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 subject to a 120 day due diligence.
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 drilling one exploration drill hole, and paying US$1,250,000 by 31 December 2009. BHP Billiton 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