| Wed 18 Nov 2009, 10:52 | | MTX - Metorex - Ruashi Life of mine plan and Operational update |
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MTX
MEMTX
MTX - Metorex - Ruashi Life of mine plan and Operational update
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
Share code: MTX
ISIN: ZAE000022745
Issuer code: MEMTX
("Metorex")
Ruashi Life of mine plan and Operational update
Metorex, a focussed base metals mining group, listed on the JSE Limited,
wishes to inform shareholders and update the market of Ruashi Mining SPRL`s
performance during October 2009 and on the life of mine plan.
Chief Executive Officer Terence Goodlace said; "The Ruashi mine continues to
improve output and the mine produced 2,512 tons of copper and 274 tons of
cobalt for the month of October 2009 and the plant tonnage throughput is at
90 per cent of capacity. Positive increases in copper and cobalt prices are
driving revenues higher and total costs net of the cobalt credit have reduced
to US$2,800 per ton of copper produced. The Ruashi life of mine plan has
been completed to the required level of technical diligence utilising the new
resource model. We can now move forward and build off the current base
through completing the production ramp up and advancing the infill drilling
required to bring inferred resources into account. The life of mine shows
that the mine can produce an average of 36,000 tons of copper and 4,000 to
5,000 tons of cobalt per annum. It is also pleasing to note that the sale of
our 55% stake in the Vergenoeg flourspar mine for US$60m is on track for
completion during December 2009. "
Table 1 - Salient Production Features at Ruashi
Units June September October
2009 2009 2009
quarter quarter month
Waste Tons 1,369,295 1,690,647 828,688
Mined
Ore Mined Tons 247,344 430,720 169,171
Processed Tons 229,820 303,786 107,247
Processed % Cu 2.69% 2.76% 2.87%
Processed % Co 0.49% 0.57% 0.45%
Copper Tons 5,245 5,690 2,512
Produced
Cobalt Tons 568 666 274
Produced
Mineral Resource Management
The Ruashi geological resource model has been updated based on the 2009
drilling campaign results and in-pit mapping. This has markedly improved the
structural and lithological interpretation of the deposit with the orebody
being further sub-divided into oxide and sulphide zones based on the observed
degree of weathering in the drillholes.
The 2009 geological block model was completed by IGS (Pty) Ltd using the
Surpac geological and mine planning software platform. Grades were
interpolated by ordinary kriging into discrete geological (lithological and
structural) domains with geostatistical estimation parameters matched to each
domain. A hard boundary approach has been applied to oxide and sulphide
zones of the same lithological unit to more accurately reflect the
statistical difference in grades between the weathered and unweathered units.
The 2009 Ruashi orebody model has been classified into SAMREC compliant
resource categories on a subjective basis by the Competent Person, with the
majority of the drillhole data spaced close enough to categorise the resource
as either Indicated or Measured. A high geological confidence exists in the
location and continuity of the Lower Ore Body ("LOB") stratiform units.
These units have been categorized as Measured in the Ruashi 1 and 2 orebodies
where current mining activity has confirmed the continuity and grade of the
units. Further drilling will be required to upgrade these units to Measured
in the Ruashi 3 orebody.
With the exception of the Calcaire a Minerais Noire zone ("CMN"), all other
lithological units have been classified as Indicated. The CMN zone occurs in
the stratigraphic hangingwall of the Upper Orebody ("UOB") and is dominated
by weathered and altered dolomite mineralization. This zone has proved to be
more lenticular in nature with a vertical structural and surface weathering
control. In the opinion of the Competent Person, this zone has a low
geological confidence based on the current drillhole spacing and has
consequently been downgraded to an Inferred category. Additional drilling is
planned in the future to upgrade the CMN zone into the Indicated and Measured
category.
A revised Ruashi LOM reserve pit shell for the 2009 model was completed by
VBKOM Consulting Engineers (Pty) Ltd using the Whittle 4X pit optimization
software. A mining cost of US$4.10 per ton mined (based on the current
waste:ore ratio) and a processing cost of US$72.70 per ton processed has been
used based on F2010 steady state budget prices and the completion of the acid
plant. Reserves as of 30 June 2009 have been stated within an optimal NPV
Whittle pit shell based on a long-term copper and cobalt price of US$5,000
per ton copper and US$15 per pound cobalt respectively. Inferred resources
were not included in the life of mine ("LOM") plan and production schedule
for Ruashi. The detailed life of mine pit design and scheduling has now been
completed using the Mine24D and XPac Scheduler mine planning software.
Two Year Plan
A detailed two year mining schedule has been completed to the end of F2011.
For the eight months remaining in F2010 it is planned to process 904,000 dry
metric tons split 60:40 between open pit feed and feed from stockpile and
tailings sources. This throughput includes taking account of the rainy
season between November and April and the commissioning of the new crusher
circuit and coarse ore stockpile facility as from January 2010. A total of
4.4 million tons of waste will be stripped. Metal production is expected to
be 20,000 tons of copper cathode and 1,756 tons of contained cobalt for the
eight months ending June 2010.
During F2011, 1.35 million tons of ore and 13 million tons waste are
scheduled to be mined. Metal production will rise to an average of 3,000
tons of cathode and 330 tons of contained cobalt per month as the full plant
feed originates from the open pits.
Thereafter the mining profile stabilises at a rate of 1.44 million ore tons
and 9 million tons of waste per annum, with a forecast metal production of
36,000 tons of finished cathode and in excess of 4,500 tons of contained
cobalt per annum. Cobalt production is expected to peak at over 5,200 tons
of contained cobalt in F2013 coinciding with a period of high cobalt grades
from the upper benches of Pit 3.
Waste pre-stripping of Pit 3 is scheduled to commence in March 2010 with the
stripping ratio increasing to a peak of 9.6 tons of waste per 1 ton of ore
mined in F2011. As from F2012 the stripping ratio reduces to an average of
6.25:1. As a result of the increased stripping requirement for Pit 3, mining
costs are expected to increase proportionally.
Total unit costs have now reduced to US$2,800 per ton of copper cathode (net
of cobalt credits), and ongoing plant optimisation at steady state production
is expected to result in a further reduction in costs. Cobalt revenue
achieved for October was 64 per cent of the US$15.88 per pound cobalt price.
In addition cobalt recoveries are expected to improve from current levels as
the benefits of plant enhancements in the cobalt circuit are realised.
Cobalt revenues are also expected to increase as a result of a general
improvement in the cobalt price and the payability increasing to 70 per cent
from November 2009, further reducing the net copper cost.
The current LOM schedule indicates a mine life in excess of 10 years, based
solely on scheduling available current reserves within the practical pit
design. A drilling programme is continuing to provide for enhance geological
confidence and a full grade control programme has now been implemented. This
does not include processing of approximately 0.6 million tons of low grade
tailings, or the conversion of any inferred resources to reserves, or any
other opportunities available to Ruashi. Other processing opportunities that
need to be investigated in the short term are the sulphide mining (open pit
and underground) and processing options through the Phase 1 concentrator.
This plant is currently on care and maintenance, and has an installed ore
processing capacity to treat 480,000 tons per annum.
Ore Reserves as declared as at 30 June 2009
OXIDES Tons (Mt) Cu Grade Copper Co Grade Cobalt
(%) (`000t) (%) (`000t)
CLASSIFICATION F2009 F2008 F2009 F2008 F2009 F2008 F2009 F2008 F2009 F2008
Oxides
Probable 15.1 18.5 3.2 3.7 483 686 0.39 0.36 59 67
Total Oxides 15.1 18.5 3.2 3.7 483 686 0.39 0.36 59 67
Surface
Stockpiles
Probable 0.3 - 2.5 - 7 - - - - -
Total Surface 0.3 - 2.5 - 7 - - - - -
Stockpiles
OXIDE TOTAL 15.4 18.5 3.2 3.7 491 686 0.39 0.36 59 67
Competent persons
The Ruashi geological resource estimation and mine design were completed and
signed off by independent consultants as stated below.
Resource Estimation Reserve Estimation
Independent Mr. S. Savage, PrSciNat, Mr F. van Daalen, PrEng,
Competent BSc(Hons) IGS (Pty) Ltd BSc(Eng) VBKOM Consulting
Persons Engineers (Pty) Ltd
This report has been compiled and checked by Mr.T.P.Williams, PrSciNat (SA
Council of Natural and Scientific Professionals Registration No 400387/04),
Fellow of the Southern African Institute of Mining and Metallurgy, BSc
(Hons). Mr Williams is Group Mineral Resource Manager and is a full-time
employee of the Company. He is a mining geologist with 19 years experience
in exploration, resource development and estimation and mining geology in
gold and base metals through west, central and east Africa. Mr Williams is
based at the Company`s Head Office at 2nd Floor, Cradock Heights, 21 Cradock
Avenue, Rosebank 2146, Johannesburg.
Johannesburg
18 November 2009
For further enquiries please contact:
Metorex CEO, Terence Goodlace Tel: 011 880 3155
CFO, Maritz Smith
College Hill Jacques de Bie/Hayley Crane Tel: 011 447 3030
Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 18/11/2009 10:52:01 Produced by the JSE SENS Department.
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