| Fri 19 Dec 2008, 16:30 | | LAF - Lonrho Plc - Lonrho Mining Limited quarterly report for period ended 30 |
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LAF
LOLAF
LAF - Lonrho Plc - Lonrho Mining Limited quarterly report for period ended 30
November 2008
Lonrho Plc
(Formerly Lonrho Africa Plc)
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho" or "the Company")
LONRHO MINING LIMITED (ASX: LOM) QUARTERLY REPORT FOR PERIOD ENDED 30 NOVEMBER
2008
Lonrho (AIM: LONR), the conglomerate with a structured portfolio of African
investments, is pleased to note the following announcement to the Australian
Securities Exchange this morning by Lonrho Mining Ltd (formerly known as Nare
Diamonds), which is owned 24.16% by Lonrho:
HIGHLIGHTS
LULO PROJECT, ANGOLA
- The first kimberlite pipe (K72) was identified within the Lulo Concession.
- Six priority aeromagnetic anomalies were inspected and sampled. Heavy mineral
micro-probe analyses results are expected in January 2009.
- The L6 target on the west bank of the Cacuilo River was visited. Field
evidence suggests this location may represent a buried kimberlite pipe.
OPERATIONS
LULO DIAMOND CONCESSION - ANGOLA
Kimberlite Exploration
The 1,000 km2 aeromagnetic survey flown in January 2008, revealed a cluster of
some 200 magnetic anomalies suggestive of kimberlite pipe intrusives. This
interpretation was supported by the presence of historically reported kimberlite
pipes within the aeromagnetic target area. The view that diamond rich kimberlite
pipes are located within this province is reinforced by the extensive illicit
diamond digger (garimpeiro) activity within the Cacuilo River catchment area,
which hosts the aeromagnetic anomaly cluster as well as the reported kimberlite
pipes.
The aim is to fast track the discovery of any diamond bearing kimberlites. The
largest pipe within a kimberlite province is invariably also the most
diamondiferous member. Based on that empirical fact, it was decided to inspect
the apparent largest eight accessible targets based on both aeromagnetic
modelling and aerial-photo interpretation. The targets are listed in Table 1.
TABLE 1 - KIMBERLITE TARGET ANOMALIES
Anomaly No. Basis for selection
K6 aeromagnetic anomaly only
K14 aeromagnetic anomaly/digger activity
K29 aeromagnetic anomaly/photo feature/hill
K30 as above - adjoining targets/1 source?
K50 aeromagnetic anomaly only
K71 aeromagnetic/photo anomaly
K72 aeromagnetic/photo anomaly
K212 aeromagnetic anomaly only
L6 historical kimberlite/digger activity
The field inspection included the surface soil sampling of the selected targets
as well as the mapping of any rock outcrops. Targets K212 and the twin targets
K29 and K30 were not sampled as the former is a large swamp adjacent to the
Cacuilo River and access to the latter was restricted.
On the other six sites, a single -2mm screened sample was collected at the point
modelled as the centre of the aeromagnetic anomaly. This material was then
concentrated using a gold pan. The concentrates were dried and delivered to the
MSA Group laboratories in Johannesburg, South Africa. The final micro-probed
mineral results are expected towards the end of January 2009.
K72 represents a hill with outcrops of lateritised breccia and a heavy
concentrate of ilmenites which have now been positively identified by MSA as
being picro-ilmenites typical of Group 1 kimberlites.
K71 is located about 1.5 km due west of K72. It lies beneath a large grassed
area (visible on aerial-photo images) on the summit of a hill. No lateritised
outcrops were seen.
L6 is located on the west bank of the Cacuilo River where a historical map has
indicated a kimberlite pipe location. Due to security consideration relating to
the garimpeiros active there in January 2008, this section was not flown by the
low level (25 metres) helicopter borne aeromagnetic survey. However, an area of
about 15 hectares has been extensively mined to the water table by the
garimpeiros to an average estimated depth of 10 metres. The rim of this
disturbed area has a very high concentration of ilmenites. The material
excavated consists of white sand, gravels and yellow clay, suggestive of the
surface in-filled overburden of a buried pipe. A drilling programme is planned
here during the dry season 2009.
K14. This magnetic anomaly is located within a swampy area within the Cacuilo
River floodplain. Abandoned garimpeiro diggings are present on the edge of the
swamp.
L6. This magnetic anomaly shows no obvious topographic features.
K50. This is the largest of the aeromagnetic anomalies. It lies on an interfluve
area with no obvious topographic features.
K212. This magnetic anomaly lies beneath a swampy area within the floodplain of
the Cacuilo River. The presence of garimpeiros prevented access onto this site.
K29 and K30 are two magnetic anomalies within 400m of each other and may
represent feeders of one pipe. Access was not possible due to the rugged terrain
and prevailing weather conditions.
Alluvial Exploration
The exploration of the west bank Cacuilo River terrace gravels will commence
early in the dry season as access into these wet areas present difficulties
during the current wet season. A 4 km river frontage has been selected for the
first phase of exploration. Access tracks along the bank of the river will be
constructed along which control points can be established for the surveyed base
lines cut at right angles to the river. These parallel base lines will be spaced
at 500 metre intervals along which exploration pits at 100 metre intervals will
be sited. This will allow for accurate sub-surface geological mapping on which
the bulk sampling and trial mining programmes will be based.
The planning for the rotary pan construction and transportation to site is well
advanced. This diamond recovery plant is scheduled to commence operations within
the second quarter of 2009.
Most of the garimpeiros have departed following an Angolan army operation in
August 2008. However, it was obvious from this recent visit that many diggers
have drifted back into the Cacuilo River valley. This issue is being addressed
with Endiama, the Angolan government diamond mining department. The current camp
is located some 5 km from the river.
A contingent of 21 Manbodji security guards armed with AK47 rifles were
despatched to the Lulo Concession in September 2008 and are now deployed in a
defensive role to protect the exploration activities.
SCHMIDTSDRIFT - SOUTH AFRICA
Production and Sales for the Quarter
Production for the quarter was 910 carats from 219,088 ROM tonnes at an average
grade of 0.42 carats per hundred tonnes. The production included 15 stones in
excess of 5 carats in size. This included 5 stones between 10 and 30 carats in
size.
During the quarter, 720 carats were sold at an average price of US$472 for a
total of US$340,003. A total of 694 carats were sold to Representation
Investments (Pty) Ltd (previously Unitrade 1266 CC) for US$330,467 and 26 carats
were sold to the State Diamond Trader for US$9,536.
Sale of the Schmidtsdrift operation
In August 2008, the Company entered into an option agreement to sell the
Schmidtsdrift operation to New African Mining AG (NAM).
Under the Option Agreement, NAM paid a non-refundable option fee of US$500,000
for an exclusive option to conclude an agreement for the sale of the Company`s
interests in the Schmidtsdrift operation.
On 6 October 2008 the Company signed formal agreements (the agreement) for the
sale of the Schmidtsdrift operation. In terms of the agreement, NAM was to
acquire all the Schmidtsdrift assets from Lonrho. This included all plant and
equipment on the Schmidtsdrift site, the prospecting right for the Schmidtsdrift
property, all rehabilitation deposits for the Schmidtsdrift property and the 80%
shareholding in Schmidtsdrift Mining Enterprises (Pty) Ltd (collectively
hereafter referred to as the Schmidtsdrift asset).
The total purchase consideration for the Schmidtsdrift asset was US$11.8 million
payable in cash. In addition, NAM was to assume rehabilitation liabilities of
US$1.4 million.
On 31 October 2008 NAM paid the required US$500,000 into trust with their
lawyers in terms of the agreement. The US$500,000 was to be released to the
Company on the Effective Date - refer to the Company`s 31 August 2008 half year
report.
On 14 November 2008 the South African Competition Commission granted the
unconditional approval for the sale of the Schmidtsdrift asset. The Effective
Date of the Sale, in terms of the agreement, is the date of approval by the
Competition Commission, namely 14 November 2008.
NAM has instructed their lawyers not to release the US$500,000 held in trust and
has failed to make any further payments in terms of the agreement. The Company
has served NAM with notice to remedy their breaches and the agreement will now
be cancelled. The South African companies are likely to be placed into
liquidation and this process has commenced.
KAMFERSDAM - SOUTH AFRICA
In November 2007, the Company agreed to sell certain tailings dumps near
Kimberley in South Africa and its Kamfersdam new order prospecting rights to
Meepo Investment Consortium (Pty) Ltd for A$3.7 million (see announcements dated
15 and 28 November 2007). De Beers has approved the sale of the tailings dumps
which was a condition of the transaction. Completion of the sale of the new
order prospecting rights will also now occur subject to receiving final approval
of that transaction from the Department of Minerals and Energy.
No exploration costs have been incurred by the Company on this asset during the
quarter.
GROEN RIVIER - SOUTH AFRICA
The Groen River prospect is an exploration alluvial diamond prospect located in
Namaqualand adjacent to an exploration programme conducted by Firestone Diamonds
and De Beers.
No exploration costs have been incurred by the Company on this asset during the
quarter.
KLIPSPRINGER JOINT VENTURE - SOUTH AFRICA
Background
The Company owns a 20 percent interest in the Mwana Africa Plc (Mwana) operated
Klipspringer mine.
During 2007 a trial mining and bulk sampling exercise was undertaken by Mwana to
try a new mining method and test market conditions. The mining method was
changed to a more conventional underhand stoping method as opposed to the long
hole open stoping method used in the initial mine design. The mine was re-
engineered with the new mining method resulting in reduced tonnage along with a
significant reduction in manpower and costs but designed to operate in a strong
Rand environment. The trial mining programme was operated successfully and in
December 2007 a decision was made by Mwana to commence commercial production.
Production and Sales for the Quarter
Production for the quarter was 7,579 carats from 15,487 ROM tonnes at an average
grade of 48.94 carats per hundred tonnes.
During the quarter, 8,681 carats were sold at an average price of US$97 per
carat raising a total of US$838,257.
The mine currently employs 210 people including contractors. This is under
review given the current market conditions.
No costs were incurred by the Company during the quarter.
MILES KENNEDY
DIRECTOR
19 December 2008
Competent Persons Disclosure
The information in this report that relates to Exploration Results, Mineral
Resources or Ore Reserves has been prepared by Consulting Geologist Manfred Marx
and Consulting Consulting Geophysicist, E.O. Kostlin (in relation to Angola) and
Gerhard du Plessis (in relation to South Africa). Mr Marx and Mr Kostlin are
consultants to the Company and have sufficient experience with the relevant
style of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to be qualified as a Competent Person as
defined in the 2004 Edition of the `Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves`. Dr du Plessis is a full time
employee of the Company and has sufficient experience with the relevant style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking to be qualified as a Competent Person as defined in the 2004
Edition of the `Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves`. Each of Mr Marx, Mr Kostlin and Dr du Plessis
consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears.
LONRHO ENQUIRIES
Lonrho Plc +44 (0)20 7016 5105
David Lenigas, Executive Chairman +44 (0)7881 825 378
Geoffrey White, Chief Executive Officer +44 (0)7717 307 308
Emma de Borchgrave, Executive Director +44 (0)7867 785 177
Pelham PR
Charles Vivian +44 (0) 20 7743 6672
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7743 6375
+44 (0) 7841 672831
Collins Stewart Europe : NOMAD to Lonrho
Hugh Field +44 (0) 20 7523 8350
About LONRHO:
Lonrho Plc is an expanding conglomerate that is rapidly growing a successful
business throughout Africa. The Company`s shares are traded on the London AIM
stock exchange (LONR). Lonrho is strategically focused on the development of
business opportunities in infrastructure, transportation, support services,
hotels and natural resources. The Company has over 19,000 shareholders and
substantial institutional backing to support its mandate to build a profitable
business that plays a fundamental role in the development of the African
economy.
Since 2006, the Company has invested in or acquired control of:
Hotel Cardoso - www.hotelcardoso.co.mz (retained)
Lonrho Mining - www.lonrhomining.com
Luba Freeport - www.lubafreeport.com
Fly540 - www.fly540.com
Swissta Holdings - www.swissta.com
SA Independent Liner Services - www.saliners.com
Bytes and Pieces www.bytespieces.com
Kwikbuild - www.e-kwikbuild.co.za
LonZim - www.lonzim.co.uk
19 December 2008
South African Sponsor
Java Capital (Proprietary) Limited
Date: 19/12/2008 16:30:20 Produced by the JSE SENS Department.
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