| Tue 12 Jun 2012, 8:57 | | VIL - Village Main Reef Limited - Village achieves greater resource |
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VIL
VIL
VIL - Village Main Reef Limited - Village achieves greater resource
confidence in Lesego supported by a robust mining business case
VILLAGE MAIN REEF LIMITED
(Incorporated in the Republic of South Africa)
(formerly known as Village Main Reef Gold Mining Company (1934) Limited)
(Registration number 1934/005703/06)
JSE Share Code: VIL ISIN: ZAE000154761
("Village" or the "company")
VILLAGE ACHIEVES GREATER RESOURCE CONFIDENCE IN LESEGO SUPPORTED BY A ROBUST
MINING BUSINESS CASE
- Completed Pre-feasibility Study revealing a robust mining business
case returning an IRR of 18.7% and an NPV of R6.7bn
- Greater confidence in the ore body after completion of the
drilling programme moving 65% of the ore body into the Measured
and Indicated Categories
- Ore body defined from 300m below surface - previously 700m
- Total resource of 204 Mt at an average grade of 5.95 g/t over a
width of 1.23m after applying 17% for geological losses.
Village is pleased to provide a resource update for the company`s majority
owned Lesego Platinum project ("Lesego") situated near Burgersfort in the
Limpopo Province, which is being developed with funding support from the
Industrial Development Corporation, "IDC", who has a 23% effective stake in
the project.
The updated mineral resource estimation is based on borehole data generated
from a database compiled by the specialist mining consultants, MSA
Geoservices (Pty) Ltd "MAS" of all available data from previous and present
drill campaigns, up to 31 March 2012. The campaign included shallow drilling
results from 300 meters below surface. This latest database includes the
results from 116,590 meters of drilling, of which 13,973 meters was from the
2007/8 drilling and 102,618 meters from the 2011/12 boreholes. In total
1,704 meters of core were assayed for Platinum Group Elements (3PGE+Au) as
well as Nickel "Ni" and Copper "Cu".
The updated resource estimate was prepared by MSA in accordance with the
SAMREC Code and signed off by Competent Person, Venmyn (Pty) Ltd "Venmyn".
MSA has reduced the overall tonnages by applying a 17% geological loss as
recommended by Venmyn as the Competent Person to account for possible losses
due to factors such as faulting, pillar losses and potholing.
The updated resource estimate reports 39.03Moz 3PGE+Au in 204 Mt of ore. The
updated resource width of 1.23m was selected to take account of some of the
known mining parameters thus moving the resource closer to what could be
expected in a reserve statement In addition, the resource contains combined
Ni and Cu of 600,000 tons.
The amended resource estimate has improved the measured and indicated
categories to 65% from the 55% previously reported.
The table below summarises the combined Merensky and UG2 Chromitite Resource
Estimate:
After Geological loss of 17% Combined Merensky and UG2 Chromitite
Resource WIDTH GRADE TONNAGE Moz Cu Ni
(g/t)
Classification (m) 3PGE+Au (Mt) 3PGE+Au tons tons
Measured 1.23 5.61 43.97 7.94
38 235 91 838
Indicated 1.23 6.05 83.65 16.26
71 659 168 353
Inferred 1.22 6.03 76.56 14.83
69 434 160 733
Total Project Mineral 5.95
Resources 204.18 39.03 179 328 420 924
MR Mineral 1.15 5.66 80.47 14.65
Resources 101 277 204 878
UG2 Mineral 1.27 6.13 123.71 24.38
Resources 78 050 216 046
Total Project Mineral 5.95
Resources 204.18 39.03 179 328 420 924
Financial implications
The amended results of the Pre-feasibility Study, which was signed off by
the lead project consultant, demonstrates that the resource can be
economically extracted at 300 kt per month to produce over 500koz of 3PGE +
Au and over 8,000 tons of Ni and Cu annually. This indicates a robust
business case returning an IRR of 18.7% (real) and NPV of R6.7 billion
using a real discount rate of 10% .Long term metal prices of US $2,000 for
Platinum, US$750 for Palladium, US$5,100 for Rhodium and US$ 1, 450 for Gold
have been applied. These metal prices were obtained from a study
commissioned by Stephen Forrest and Associates based in Oxford (UK) dated
May 2012.
Cumulative cash flow evaluations reveal a peak funding requirement of R7.5
billion, with a payback of 5 years after the start of production.
Joint CEO Marius Saaiman commented, "The further work conducted on this ore
body has revealed a robust business case to build a mine. With initial
indications of an IRR of 18.7% and a NPV of R6,7 billion, we believe that
the Lesego project has again revealed itself as a world class ore body.
Given the size and scope of the project, we continue to believe that it
would be optimally suited to be exploited by a bigger company focused on PGM
assets, and as such we continue to engage with potential strategic
partners."
The DFS phase of the fully funded feasibility study has commenced and is
expected to be completed during 2013".
Please refer to www.villagemainreef.co.za to view an updated shareholder
presentation on Lesego.
Contacts:
Village Joint CEO | Marius Saaiman | msaaiman@villagemainreef.co.za | 011
274 4603
Vestor | Media and Investor Relations | Louise Brugman | louise@vestor.co.za
| 083 504 1186
12 June 2012
Sponsor
Java Capital
Date: 12/06/2012 08:57:45 Produced by the JSE SENS Department.
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