| Wed 8 Mar 2006, 10:54 | | Miranda - Announcement of resource estimate for Ro |
|
MMH
MMH
Miranda - Announcement of resource estimate for Rozynenbosch
Miranda Mineral Holdings Limited
(previously Proper Group Limited)
(Incorporated in the Republic of South Africa)
(Registration Number: 1998/001940/06)
Share code: MMH & ISIN: ZAE000074019
("Miranda" or "the company" or "the group")
Resource estimate of the Rozynenbosch base metal and silver project
1. Summary
The board of Miranda is pleased to announce the findings of a SAMREC-compliant
resource estimate report on the Rozynenbosch deposit, as compiled and signed off
by a competent person, namely that:
* an estimated, in situ gross project value of R3.64 billion has been placed on
the deposit; and
* an Indicated Mineral Resource of 14 million tonnes has been identified.
2. Resource estimate
The company has completed an audited and SAMREC-compliant mineral resource
estimate of the Lead-Silver-Zinc-Copper deposit located on the farm Rozynenbosch
104 (3,978 hectares) in the Kenhardt District of the Northern Cape Province
("the Rozynenbosch deposit"). The company, through a wholly-owned subsidiary,
holds the title deeds to the mineral rights to the farm and its application for
a "new order" prospecting permit has been accepted by the Department of Minerals
and Energy ("DME"). The board currently awaits the granting of the prospecting
permit by the DME.
The competent person, whose qualifications and details are given in paragraph 5,
has identified a SAMREC-compliant Indicated Mineral Resource of 14 million
tonnes ("t") grading at 1.72% Lead ("Pb"), 0.46% Zinc ("Zn"), 0.03% (estimated)
Copper ("Cu") and 34.1 grams per tonne ("g/t") Silver ("Ag").
The resource estimate report has not been reviewed by the JSE Limited.
3. Resource in situ value
The competent person estimated an in situ value for the Rozynenbosch deposit of
R3.64 billion. The in situ value was calculated using London Metal Exchange
commodity prices and exchange rates as at 22 February 2006 (Pb: $1,230/t; Zn:
$2,148/t; Cu: $4,892/t; Ag: $9.56 per ounce ("oz"); R6.05).
4. Conclusion
Consistent with Miranda"s business model outlined previously, the company will
follow an approach of outsourcing all mining risk associated with the project
and will seek to secure a share of the project"s future revenue stream.
Management will therefore next engage in finding suitable strategic exploration
and/or mining partners, in order to further develop this exploration project
once the prospecting permit has been granted.
5. EXTRACT OF RESOURCE ESTIMATE REPORT BY A COMPETENT PERSON
Merlin Resources* was contracted by Miranda to carry out an independent audit
and compile a SAMREC-compliant report on a Pb-Zn-Cu-Ag deposit on the
Rozynenbosch deposit ("the resource estimate report"). The following sections
have been taken from the resource estimate report, which is available in its
entirety from the company"s offices and on its website
(www.mirandaminerals.com).
* a geological consultancy with Roger John Mossum, B.Sc. (Geology), registered
as Pr. Sci. Nat. category Geological Scientist (400058/91), member of the
Geological Society of South Africa, as principal and managing member - he has
the relevant knowledge and experience to compile the report and was previously
involved in applicable projects such as the evaluation of a nickel deposit and
the exploration for a barite / base metal sulphide hosted gold deposit in the
Limpopo mobile belt.
5.1 Executive summary
After the discovery of the Copperton deposit by Anglo Vaal during the late1960s,
the north-western Cape Province (now Northern Cape Province) became a target
area, particularly for base metal mineralisation, which resulted in the
development of mines such as Black Mountain, producing Pb-Cu-Zn.
An aerial reconnaissance survey conducted by Phelps Dodge Africa ("Phelps")
identified a structural feature on the farm Rozynenbosch 104, bisected by the
road between Kenhardt and Kakamas, some 40 kilometres ("km") south of the Orange
River. Ground-based follow-up work identified the potential for base metal
mineralisation, which resulted in an intensive prospecting programme being
initiated using geophysics, soil and whole rock geochemistry, very detailed
mapping and the drilling of 68 diamond drill boreholes.
The Rozynenbosch central deposit is located in the Rozynenbosch formation of the
Vyfbeker Metamorphic Suite of the Hartbees River fragment, forming part of the
Namaqua Metamorphic Complex. The area was subjected to transpressional
convergence between the stable Namaqua and Kaapvaal cratons which produced the
Namaqua Mobile belt and as such has been subjected to polyphase deformation.
All of the rocks in the area, with the exception of the Karoo age sediments and
intrusives, have undergone varying degrees of regional metamorphism, varying
from greenschist to granulite facies. The sulphide mineralisation appears to be
of synsedimentary-volcanogenic origin hosted in a metamorphosed arkosic zone
forming an isoclinal fold with a thickness varying from 8 metres ("m") to 132m,
with an apparent increase in sulphide content at the point of axial thickening.
5.2 Objective and scope of work
The objective of the resource estimate report was to:
* reduce a voluminous amount of data to a manageable document;
* verify and confirm the resource estimates compiled by Phelps and Gold Fields
of South Africa ("GFSA");
* make recommendations on additional work, investigations and the digitising of
data that could probably be undertaken to enhance the value of the geological
and the potential mining-geological database; and
* act as an independent valuator.
The scope of work entailed the following, namely to:
* describe the location and geology of the deposit;
* compile a summary of the Phelps and GFSA information;
* evaluate the deposit to arrive at a Resource Category in compliance with the
SAMREC code;
* arrive at an in situ value for the four commodities based on the latest
available market prices; and
* make recommendations.
The following aspects were considered to be out of scope:
* geological assessment of mine planning and scheduling;
* mineral products after beneficiation;
* financial analysis and cost of mining; and
* metal price forecasting.
5.3 Sources of information
The information was derived from detailed exploration carried out by Phelps from
1972 to 1983 and then by a joint venture agreement with GFSA until 1987. After
the unbundling of GFSA in 1998 and the withdrawal of Phelps in 2000, Miranda
became the sole owner of all information generated by Phelps. The joint venture
information was donated by GFSA to the open file system maintained by the
Council for Geoscience ("CfG") and as such is freely available.
A vast amount of very detailed information was acquired from Phelps comprising
21 files, borehole information, geophysical reports, lead isotope analysis and a
large number of very detailed plans and sections. In addition, some 200 pages
of relevant information were sourced by Miranda from the CfG. The resource
estimate was compiled from the archived Phelps and GFSA exploration results.
Due to the complex nature of the geology, it became apparent that a number of
interpretation differences existed both within Phelps and between Phelps and
GFSA. However, these differences related more to genesis and mode of occurrence
(and as such may be regarded as academic), and did not detract from the fact
that a sizable base metal and silver resource had been delineated.
Being the most concise and up to date source, a great deal of reliance was
placed on the CfG information, particularly in relation to the Metallogeny of
the Upington-Kenhardt area. A large number of Geological Society of South
Africa publications and other texts were also perused (all of which have been
acknowledged and referenced in the resource estimate report).
5.4 Geography
The Rozynenbosch central Pb-Zn-Cu-Ag deposit is located on the farm Rozynenbosch
104 at 2900 04" south latitude and 2000 47" east longitude at an altitude of
750m a.m.s.l., in the Gordonia district of the Northern Cape Province. The farm
is situated some 35km south of the town of Kakamas, bisected by the main
Kakamas/Kenhardt road and east of the seasonal Hartbees River, which constitutes
the main drainage channel of the area.
The area is generally flat-lying with remnant low hills and local small
undulations. The climate is arid to semi-arid with hot summers and cool winters
with an average rainfall of 15-20cm. Rainfall occurs largely in summer as a
result of cumulo-nimbus precipitation with the occasional winter cold-front
generated, nimbo-stratus precipitation.
The communication network consists of reasonably well maintained tar and gravel
roads, a main line railway connection at Upington with a branch line extension
to Kakamas. The Sishen-Saldanna iron ore railway line passes through Kenhardt,
but as this is essentially a private line, although operated by Spoornet, common
user status is not guaranteed. The closest Eskom electricity grid and permanent
water supply from the Orange River will be at Kakamas. Upington, being the
nearest main centre, is served by a scheduled air service.
5.5 Geology and metallogeny
The Namaqua Metamorphic Complex resulted from tectonics which included cratonic
movements which generated three tectonic subdivisions, namely an eastern Kheis
sub-province, a central Gordonia sub-province in which the proterozoic
Rozynenbosch deposit is located, close to the major thrust zone forming the
western boundary and a western Bushmanland sub-province. Two distinctly
recognisable units are evident, the basement or floor rocks and the supra-
crustal cover rocks.
The Rozynenbosch Pb-Zn-Cu-Ag deposit forms part of the Rozynenbosch Formation
which forms part of the Vyfbeker Metamorphic Suite of the Hartbees River
Fragment. The Formation comprises two main rock types, namely a felspathic
(arkosic) unit consisting of quartz/feldspar/biotite gneiss and a calc-silicate
unit comprising amphibole, meta-dolomite, marble and calc-silicate rocks with
minor granitic gneiss and biotite gneiss. All of the rocks in the Rozynenbosch
area have under gone regional metamorphism with the exception of the Karoo age
sediments and intrusive rocks. The grade of the regional metamorphism varies
from greenschist to granulite facies. On Rozynenbosch, the metamorphic grade
increases from amphibolite facies on the western side of the farm to granulite
facies on the eastern side with the mineralised zone falling into the former.
The overiding geological structure has resulted from extensive trans-positional
(lateral) movement along NW - SE trending zones, initiated early in the
deformational history and similarly continued by the later stages of
deformation. The trans-positional movement caused the tight isoclinal folding
with the Rozynenbosch central ore body concentrated between two fold closures.
Two later, less intense episodes resulted in interference folding down the 300
plunge of the ore body.
The stratigraphic column has been derived from drilling results and is reflected
as follows, from the bottom upwards:
* Basement: Pink/grey coloured coarse grained porphyroblastic "augen" gneiss;
* Well laminated grey/white biotite magnetite gneiss;
* Well laminated dark grey/green amphibolite;
* White mottled grey to grey green medium to coarse grained dolomitic limestone;
* Calcareous, garnetiferous, epidote rich calc-silicate;
* Garnet rich, epidotised, meta-arkosic garnet gneiss, well mineralised and
closely associated with the ore zone;
* Arkose derived grey to grey/pink gneiss - this is the main ore-carrying zone,
identified by numerous light pink garnets and feldspar porphyroblasts,
containing galena, sphalerite, chalcopyrite and pyrite as interstitial grains
and crystals, fracture fillings and inclusions with the silver as discrete
particles, attached to or enclosed by base metal sulphides; and
* Pink magnetite gneiss.
Exploration carried out on Rozynenbosch 104, has defined a lenticular shaped
strata bound ore body on what is termed Rozynenbosch central between the
Kakamas/ Kenhardt road and the Hartbees River, containing both massive and
disseminated base metal sulphides and silver. The stratigraphic width of the
ore zone varies from 8m to 132m, with the wider intersections resulting from
axial thickening of the isoclinal folds.
A metallogenic province is defined as "an area characterised by an assemblage of
mineral deposits, or by one or more characteristic types of mineralisation
generated during one or more episodes of mineralisation" or "regarded as areas
of three dimensional crust in which, during some portion of geological time, the
conditions were favourable for the concentration of mineral deposits of a
particular commodity(ies)".
The ore zone host rocks appear to represent meta-sedimentary zones within acid
to intermediate meta-volcanic rock units which implies that the base metal
sulphide bodies and associated silver mineralisation are synsedimentary-
volcanogenic in origin. The suggested mechanism of origin is the production of
sub-marine exhalative sulphide deposits, becoming sediment hosted by
precipitation caused by a change in fluid regimes, solubilities and basin de-
watering. The differential mobility of minerals by contemporaneous or later
metamorphism would modify distribution, as pyrrhotite, sphalerite, chalcopyrite
and galena are considered to be "mobile" minerals.
5.6 Previous exploration
After the discovery and exploitation of the Copperton deposit in the late 1960s,
the north-western Cape Province elicited a great deal of exploration interest in
the search for other mineral deposits in this very geologically complex area.
In 1972, during an aerial reconnaissance survey conducted by Phelps Dodge Africa
in the Kenhardt district, a prominent fold structure was noted close to the
western boundary of Rozynenbosch 104. On a follow-up ground based examination,
a number of old prospecting trenches containing galena were discovered as well
as a significant gossan containing significant lead and silver values.
A total of 11,812 ha of ground in and around Rozynenbosch 104 was acquired for
prospecting purposes. The Rozynenbosch project consisted of geophysics, grid
surveying, detailed geological mapping, geochemical chip sampling and diamond
core drilling, logging sampling, assaying and the compilation of results. A
programme of 68 boreholes totalling some 15,000m of diamond drilling was
completed, from which the geological sections and grade profiles were compiled.
5.7 Resource estimation
In spite of the time that has lapsed since completion of the project, a large
amount of high quality exploration information has been archived and is
available in the form of mapping, geophysics, diamond drill logging and assay
results, the interpretation and presentation of which is sufficient to allocate
the Indicated Mineral Resource category to the Rozynenbosch central ore body.
An "Indicated Mineral Resource" is that part of a resource for which tonnage,
densities, shape, physical characteristics, grade and mineral content can be
estimated with a reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings, and drill-holes. The
locations are too widely or inappropriately spaced to confirm geological and/or
grade continuity but are spaced closely enough for continuity to be assumed.
1) A total of 14.00 million tons of ore was identified by the GFSA/Phelps joint
venture grading at:
Pb: 1.72%, Zn: 0.46%, Cu: 0.03% (estimated), Ag 34.1 g/ton
2) A valuation exercise was carried out by Phelps using a combined Pb and Zn
cut-off grade of 1% over a width of 5m. The result was 6.99 million tons of ore
grading at:
Pb: 2.56%, Zn: 0.54%, (Pb & Zn): 3.09%, Cu: 0.04%, Ag: 43.09 g/ton.
The following commodity prices were sourced from the London Metal Exchange on 22
February 2006:
Pb $1,230/ton, Zn $2,148/ton, Cu $4,892/ton, Ag $9.56/oz.
By applying a Rand/US Dollar exchange rate of R6.05/$, the following in situ
values were derived:
1) Per the GFSA / Phelps JV results, an ore body of 14 million tons will
produce:
Pb: 240,800 @ $1,230/t = $296,184,000 or R1,791,913,200
tons
Zn: 64,400 @ $2,148/t = $138,331,200 or R836,903,760
tons
Cu: 4,200 tons @ $4,892/t = $20,546,400 or R124,305,720
Ag: 15,350,482 @ $9.56/oz = $146,750,611 or R887,841,196
oz
Total estimated in situ = $601,812,211 or R3,640,963.876
value
(2) Per the Phelps results (1% combined Pb/Zn cut-off), 6.99 million tons will
produce:
Pb: 178,944 @ $1,230/t = $220,101,120 or R1,331,611,776
tons
Zn: 37,746 @ $2,148/t = $91,269,828 or R552,182,459
tons
Cu: 2,796 @ $4,892/t = $13,678,032 or R82,752,093
tons
Ag: 9,684,858 @ $9.56/oz = $92,587,247 or R560,152,844
oz
Total estimated in situ = $417,636,227 or R2,526,699,172
value
5.8 Recommendations
* Digitise all of the available information pertaining to the ore resource and
model the deposit using a package such as DATAMINE. This will enable a number
of options to be produced to arrive at an optimum tonnage/grade model, produce
revised plans, sections and production scheduling.
* Determine the oxidation level below surface of the base metal sulphides as
oxides and sulphides require different metallurgical recovery methods. This
does not appear to have been recorded.
* Expand the existing exploration base on the remaining portion, north and south
project areas on Rozynenbosch 104 and include the adjacent farms of Koegab 59
and Witvlei 103.
* Consider employing newer technology geophysics such as seismics (Vibroseis)
and the newer electro-magnetic methods.
* A number of other mineral occurrences in the general area, particularly in the
Bushmanland sub-province to which the Rozynenbosch deposit has an affinity, have
reported concentrations of Barite (BaSO4) in rocks closely associated with the
base metal sulphide deposits. It is suggested that in any future work this
commodity should be targeted as well as the selling price is some R420-00 / ton.
Due to the high SG (4.2) it would be easily recoverable by gravity
concentration, even from adjacent overburden.
5.9 DME and environmental management
Respectively, in terms of reference number NCS 30/5/1/3/2/1 (533) PR and
reference number NCS 30/5/1/3/2/1 (533) EM.
Centurion
8 March 2006
Sponsor:
Sasfin Capital
(A division of Sasfin Bank Limited)
Corporate Advisor:
Radagast Capital (Pty) Ltd
Date: 08/03/2006 10:54:09 AM Produced by the JSE SENS Department
