DMC Mining announces initial JORC resource at Mayoko Thursday , 08 May 2008
• Total Inferred Mineral Resource estimate of 33MT @ 55.5% Fe (50% Fe cut off) at the Mayoko Iron Ore Project
• Geological modelling of the Mayoko Project has outlined an exploration target of 110 - 135Mt of haematite enrichment at 55 - 58% Fe and 750 - 800Mt magnetite at 35 - 45% Fe
• Major drilling programme of 20,000m+ is planned to commence in July 2008
• Scoping Study currently underway by GRD Minproc to access mining parameters is due for completion in May 2008
• With significant infrastructure largely in place, DMC is poised to become a direct shipping ore (DSO) producer within the next few years
• Independent research confirms The Republic of The Congo ("ROC") as one of the lowest risk African countries
SUMMARY
The directors of DMC Mining Limited ("DMC") are pleased to announce details of the initial JORC classified estimate of the Mineral Resource at the Mayoko Iron Ore Project.
The Mayoko Mineral Resource Estimate was carried out by independent mining consultants, Runge Limited (www.runge.com). Runge's "Resource Summary" is attached as Schedule A to this announcement.
A total of 26 historic diamond drill holes formed the basis of the initial resource of 33MT @ 55.5% Fe, 0.1% P, 10.4% SiO2 and 3.8% Al2O5. The cut off grade was 50% Fe. The average depth of the holes was 38m. "This is a significant milestone in the development of the Mayoko Project, and the near surface, low strip ratio deposit lends itself to potentially economic DSO production" Executive Director David Sumich said.
The resource is classified as an Inferred Mineral Resource based on adequate drilling density to support the proposed geological model and define the grade and volume of mineralisation with sufficient confidence. Preliminary economic studies have been carried out by DMC. A scoping study is currently underway by GRD Minproc. This study, together with a comparison of existing iron ore mining operations elsewhere suggest that the project has reasonable prospects for eventual economic extraction.
The project area lies over the Precambrian Congo Craton of West Africa. The area consists of meta-sedimentary rocks that have been metamorphosed up to granulite facies and are around 2,540 million years old. Enrichment of iron occurs within deeply weathered iron-rich metamorphic rocks, that have been termed "Chapeau de Fer" or hats of iron.
The resource envelope is based on vertical holes drilled on a 100m X 200m grid approximately 1.2km X 400m in size. The drilling was completed in 1975 on behalf of the government of Congo. The delineated resource is approximately 3km from the existing rail to Pointe Noire.
The deposit is open at depth and along strike.
Of the 26 holes which comprised the resource estimate, 25 of the drill holes ended in elevated Fe grades and therefore portions of the deposit are considered to be open at depth.
Latest geological modelling of the Mayoko Project has outlined an exploration target of 110Mt - 135Mt haematite enrichment at 55 - 58% and additionally, 750Mt - 800Mt magnetite at 35 - 40%.
The exploration potential is based upon drilling results of 38 diamond holes, magnetic survey of the Mayoko licence (1,000km2) and the structural geology. The exploration target quantity and grade of near surface haematite and underlying magnetite mineralisation is restricted to an area 3.0km X 0.5km south of the resource envelope within the Mount Lekoumou Zone and an area 10.0km X 0.4km North East of the resource envelope within the Mount Mipoundi, A and B zones.
This target is subject to completion of infill drilling with the objective of defining a JORC Code compliant resource and positive results from ongoing beneficiation testwork. At this stage, this remains an exploration target with any potential or assumed ore quantity and grade being conceptual in nature with insufficient results received from exploration completed to date to estimate a Mineral Resource compliant with the JORC Code (2004) guidelines. Furthermore, it is uncertain if exploration will result in the determination of a Mineral Resource.
EXPLORATION PROGRAMME
The exploration programme to define additional DSO tonnages includes the following;
1. Gravity survey. Scheduled to be completed June 2008
2. Pitting and trenching. On selected targets within the exploration zones.
3. Drilling. DMC has commenced discussions with an incountry drilling contractor for 2 dual purpose drilling rigs to start the 20,000m drilling programme by July 2008.
THE REPUBLIC OF THE CONGO
The Republic of The Congo ("ROC") is a stable, single party dominant Republic based in West Africa. It shouldn't be confused with the Democratic Republic of Congo ("DRC")
Points of note in relation to the resources industry of ROC;
• The Mining Code 2005 encompasses all oil and mining operations in ROC
• The Mining Code 2005 is similar to neighbouring countries Gabon and Cameroon.
• Major oil multinationals such as TOTAL & Chevron - Texaco have been operating uninterrupted for ~30 years.
• Significant mining activities currently within ROC include;
䀂＠MAG Industries (TSXV:MAA) (www.magindustries.com) US$723 million potash production near Pointe Noire.
䀂＠Mexivada Mining Corp. (TSXV:MNV) (www.mexivada.com) Gold and diamond exploration within ROC.
Independent, specialist risk consultancy firm Control Risks (www.controlrisks. com) has rated ROC as one of the lowest risk countries in Africa.
SCOPING STUDY
GRD Minproc was engaged by DMC in January 2008 to undertake a scoping study on the Mayoko Iron Ore Project. The study will access production throughputs of up to 11MT p.a and will access key mining parameters, namely, capital expenditure estimates, operational expenditure and a timeline to production.
The final report is expected to be completed in May 2008.
CAPITAL STRUCTURE
The capital structure of DMC (subject to shareholder approval to be sought at General Meeting on May 15th 2008) is as follows;
Ordinary shares 35.6 million
Options (20c) 24.2 million
TOTAL 59.8 million
DMM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
(20min delay)