Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX:
MND, OTCQB: MNDJF) is pleased to announce updated Mineral Resources
and Reserves numbers estimates for its Costerfield gold-antimony
mine in Australia and its Björkdal gold mine in Sweden as at
December 31, 2019. All dollar amounts in this press release are in
U.S. dollars, unless otherwise noted.
Highlights
Costerfield
- Net of depletion for production in 2019, Proven and Probable
Mineral Reserves for contained gold and antimony increased by 13%
and 3%, respectively;
- Site maintains minimum 3-year mine life for the eighth year in
a row; and
- Majority of Mineral Reserves increase was a result of Resource
conversion drilling and upgrade of the Youle vein.
Björkdal
- Net of depletion for production in 2019, Björkdal underground
Proven and Probable Mineral Reserves for contained gold increased
slightly;
- Site maintains a 10-year mine life; and
- Exploration costs of adding to Mineral Reserves was
approximately $27 per ounce of gold.
Dominic Duffy, President and CEO of Mandalay,
commented, “Mandalay’s Proven and Probable Mineral Reserves as of
December 31, 2019, totaled 816,000 ounces of gold and 17,800 tonnes
of antimony, compared to 824,000 ounces of gold and 17,200 tonnes
of antimony at year-end 2018.”
Mr. Duffy added, “At Costerfield, we were
pleased to increase Mineral Reserves net of depletion for
production in 2019 as contained gold and antimony increased by 13%
and 3%, respectively. By year-end 2019, the site exploration team
had completed 6.8 kilometres of diamond drilling to test the
extensions of the Youle ore body, and 2.8 kilometres of diamond
drill core was drilled from the Costerfield Deeps project. Detailed
grade control drilling as well as face sampling increased the
confidence in grade continuity of the upper section of Youle. This
allowed for the conversion of Inferred Resources into Indicated
Resources, as well as a 16% increase in gold grade for the Measured
and Indicated areas of the Youle deposit.”
Mr. Duffy added, “A small net reduction in
Mineral Reserves from 2019 depletion was experienced at Björkdal,
predominantly from a 35,000 ounces of gold reduction from the open
pit. This can be attributable to a shift in strategy with resources
directed towards infill-drilling of the underground Aurora deposit,
and the pausing of open pit mining during July 2019. Excluding the
open pit reduction, Björkdal increased its underground Reserves by
5,000 ounces of gold net of 2019 depletion. During 2019, the
underground operations completed 5,621 metres of on-vein
development, which was mapped and sampled in accordance with our
grade control protocols. Overall, a total of 26,800 ounces of gold
were added to Reserves at a cost of $0.7 million which equates to
$27 per ounce of gold added.”
Mr. Duffy concluded, “Exploration successes
achieved during 2019 allowed Costerfield to grow its Mineral
Reserves through further Resource conversion at Youle, and for
Björkdal to preserve its 10-year mine life. Over the last two
years, our Mineral Reserves have remained relatively unchanged net
of depletion, but we have grown our Mineral Resources, underpinning
the strength of our core assets. Looking forward to 2020,
Costerfield’s exploration program will continue on the Youle vein,
drilling will commence at the near-mine exploration targets of:
Damper Gully, True Blue, Robinsons and Browns, and the deep hole
program will continue during 2020. Lastly, at Björkdal, its
exploration program will continue with its four priorities: depth
extensions in Aurora; up-dip drilling of Aurora from surface; north
of Aurora zone; and the high-grade skarn deposit.”
Table 1: Mineral Reserves as of December
31, 2019 and 2018
|
2019 |
2018 |
|
Contained Au (koz) |
Contained Ag (koz) |
Contained Sb (kt) |
Contained Au (koz) |
Contained Ag (koz) |
Contained Sb (kt) |
Proven |
37 |
292 |
5.4 |
22 |
292 |
3.1 |
Probable |
779 |
7,511 |
12.4 |
802 |
7,511 |
14.2 |
Proven + Probable |
816 |
7,803 |
17.8 |
824 |
7,803 |
17.2 |
Notes:
- Reserves are contained at Björkdal, Costerfield and Cerro Bayo
properties only.
- See tables 4 and 6 for details of Proven and Probable Reserve
tonnages and grades at each property, including cut-off grades and
Qualified Persons.
- Mineral Reserves have not been estimated for Challacollo.
- Totals may appear different from the sum of their components
due to rounding.
Table 2: Mineral Resources, Inclusive of Mineral
Reserves, as of December 31, 2019 and 2018
|
2019 |
|
Contained Au (koz) |
Contained Ag (koz) |
Contained Sb (kt) |
Contained Cu (klbs) |
Measured |
90 |
421 |
12.7 |
- |
Indicated |
1,465 |
39,871 |
24.0 |
459,000 |
Measured + Indicated |
1,555 |
40,292 |
36.7 |
459,000 |
Inferred |
477 |
10,255 |
9.0 |
13,000 |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
Contained Au (koz) |
Contained Ag (koz) |
Contained Sb (kt) |
Contained Cu (klbs) |
Measured |
70 |
421 |
9.8 |
- |
Indicated |
1,415 |
39,871 |
31.0 |
459,000 |
Measured + Indicated |
1,487 |
40,292 |
40.8 |
459,000 |
Inferred |
457 |
10,255 |
9.5 |
13,000 |
Notes:
- See tables 3 and 5 for details of tonnages and grades at each
property.
- Totals may appear different from the sum of their components
due to rounding.
Details of the Mineral Resources and Reserves
estimates at each property are set out below. Estimates were
prepared or verified by the following independent third parties:
Roscoe Postle Associates Inc. (“RPA”), now part of SLR Consulting
Ltd. (“SLR”), at Björkdal; and SRK Consulting (Australasia) Pty
Ltd. (“SRK”) at Costerfield.
The year-end 2019 estimates of Mineral Resources
and Reserves for the Costerfield and Björkdal will be fully
documented in independent Technical Reports prepared in accordance
with National Instrument 43-101 (“NI 43-101”) to be filed on
www.sedar.com and the Mandalay website www.mandalayresources.com
within 45 days of this press release.
Mineral Resources and Reserves were estimated at
Cerro Bayo by depleting the year-end 2016 estimates (verified by
RPA and press released on February 23, 2017) to account for
production through the operating suspension on June 9, 2017. The
estimate of Mineral Resources at the Challacollo project has not
changed from 2014. For more details, please refer to the technical
reports prepared in accordance with NI 43-101 filed on
www.sedar.com and the Mandalay website
www.mandalayresources.com
Table 3: Mineral Resources at Costerfield, Inclusive of
Mineral Reserves, as of December 31, 2019 and December 1,
2018
|
2019 |
|
Tonnes (kt) |
Au Grade (g/t) |
Sb Grade (%) |
Cont. Au (koz) |
Cont. Sb (kt) |
Measured |
283 |
9.6 |
4.5 |
87 |
12.7 |
Indicated |
830 |
9.6 |
2.9 |
256 |
24.0 |
Measured + Indicated |
1,113 |
9.6 |
3.3 |
344 |
36.7 |
Inferred |
533 |
6.8 |
1.7 |
117 |
9.0 |
|
|
|
|
|
|
|
2018 |
|
Tonnes (kt) |
Au Grade (g/t) |
Sb Grade (%) |
Cont. Au (koz) |
Cont. Sb (kt) |
Measured |
245 |
8.5 |
4.0 |
67 |
9.8 |
Indicated |
1,073 |
8.2 |
2.9 |
283 |
31.0 |
Measured + Indicated |
1,319 |
8.3 |
3.1 |
351 |
40.8 |
Inferred |
497 |
8.0 |
1.9 |
128 |
9.5 |
Notes:
- Mineral Resources estimated as of December 31, 2019, with
depletion through to this date.
- Mineral Resources stated according to CIM guidelines and
include Mineral Reserves.
- Tonnes are rounded to the nearest thousand; contained gold (oz)
rounded to the nearest thousand and contained antimony (t) rounded
to the nearest hundred.
- Totals may appear different from the sum of their components
due to rounding.
- A 3.5 g/t Au Equivalent (AuEq) cut-off grade over a minimum
mining width of 1.2 m is applied where AuEq is calculated at a gold
price of USD1,500/oz, antimony price of USD10,000/t.
- The Au Equivalent value (AuEq) is calculated using the formula:
AuEq = Au g/t + 1.52 * Sb %
- Geological modelling and sample compositing was performed by
Mandalay Resources and Cael Gniel MAIG, full time employee of
Mining Plus. The models were independently verified by Danny
Kentwell FAusIMM, full time employee of SRK Consulting.
- The Mineral Resource estimation was performed by Cael Gniel.
The resource models were verified by Danny Kentwell. Danny Kentwell
is the qualified person under NI 43-101 and is responsible for the
Resource estimate.
Since the last Resources and Reserves was
estimated (December 1, 2018), Mandalay drilled a total of 9.5
kilometres (“km”) of diamond core at a cost of $1.76 million. Of
this, 6.8 km of diamond drill core was dedicated to testing
extension of the Youle ore body, and 2.8 km of diamond drill core
was drilled from the Costerfield Deeps project. In addition, the
Company completed 3,094 metres (“m”) of on-vein development with
mine sampling predominantly on the Brunswick deposit, but also
along the first mined drives of Youle.
Drill core was logged and sampled by Costerfield
geologists, who also performed mine sampling. All samples
were sent to Onsite Laboratories in Bendigo, Victoria, Australia,
for sample preparation and assay. Site geological and metallurgical
personnel have implemented a QA/QC process that includes the
regular submission of standard reference materials, duplicates and
blanks with drill and face samples submitted for assay. Standard
reference materials have been certified by Geostats Pty Ltd.
A two-dimensional modelling method was
undertaken for all models. Core and mine sampling data were entered
into Datamine software and composited to true vein width. Gold
accumulation, antimony accumulation and true vein width were
estimated into a two-dimensional block model for each lode using
ordinary kriging and inverse distance where the density of data was
insufficient for ordinary kriging. Gold and antimony vein grades
were back calculated using estimated accumulated data and true vein
width.
Where vein true widths are less than 1.2 m, vein
grades were diluted to a minimum mining width of 1.2 m using
dilution grades of zero g/t gold and zero percent antimony. Grades
where vein true widths are greater than 1.2 m were not diluted.
Mineral Resources were estimated at a cut-off grade of 3.5 g/t Au
equivalent (“AuEq”) grade (using $1,500/oz Au and $10,000/t Sb),
AuEq is calculated using the formula AuEq= Au + (Sb x 1.52) where
Sb is in % and Au is in grams per tonne based on 1.2 m diluted
grades.
From the Mineral Resources, a mine plan was
designed based only on Measured and Indicated Resource blocks
using, predominantly, the cemented rock fill blast hole stoping
method. A cut-off grade of 4.0 g/t AuEq and minimum stoping width
of 1.5 m were used, with planned and unplanned dilution at zero
grade. AuEq grade (using $1,300/oz Au and $7,000/t Sb), AuEq is
calculated using the formula AuEq= Au + (Sb x 1.28) where Sb is in
% and Au is in grams per tonne.
Financial viability of Proven and Probable Mineral Reserves was
demonstrated at metal prices of $1,300/oz Au and $7,000/t Sb.
Table 4: Mineral Reserves at Costerfield as of December
31, 2019 and December 1, 2018
|
2019 |
|
Tonnes (kt) |
Au Grade (g/t) |
Sb Grade (%) |
Cont. Au (koz) |
Cont. Sb (kt) |
Proven |
114 |
9.5 |
4.8 |
35 |
5.4 |
Probable |
360 |
14.6 |
3.4 |
169 |
12.4 |
Proven + Probable |
474 |
13.4 |
3.8 |
204 |
17.8 |
|
|
|
|
|
|
|
2018 |
|
Tonnes (kt) |
Au Grade (g/t) |
Sb Grade (%) |
Cont. Au (koz) |
Cont. Sb (kt) |
Proven |
76 |
8.4 |
4.0 |
20 |
3.1 |
Probable |
461 |
10.8 |
3.1 |
160 |
14.2 |
Proven + Probable |
537 |
10.4 |
3.2 |
180 |
17.2 |
Notes:
- Mineral Reserve estimated as of December 31, 2019
- Tonnes are rounded to the nearest thousand; contained gold (oz)
rounded to the nearest thousand and contained antimony (t) rounded
to the nearest hundred.
- Totals may appear different from the sum of their components
due to rounding.
- Lodes have been diluted to a minimum mining width of 1.5 m for
stoping and 1.8 m for ore development.
- A 4.0 g/t Au Equivalent (AuEq) cut-off grade is applied.
- Commodity prices applied are; gold price of $1,300/oz, antimony
price of $7,000/t and exchange rate USD:AUD of 0.70.
- AuEq value is calculated using the formula: AuEq = Au g/t +
1.28 * Sb %.
- The Mineral Reserve is a subset, a Measured and Indicated only
Schedule, of a Life of Mine Plan that includes mining of Measured
and Indicated Resources.
- The Mineral Reserve estimate was prepared by Daniel Fitzpatrick
and Dylan Goldhahn, AAusIMM who are full time employees of Mandalay
Resources and was independently verified by Anne-Marie Ebbels,
MAusIMM, CP (Mining) who is a full time employee of SRK Consulting
who is a qualified person under NI 43-101.
The net increase of 24,000 ounces of gold in Proven and Probable
Reserves for 2019 relative to 2018 is the result of a total of
24,000 ounces of gold depleted from the 2018 Reserves, which has
been positively offset by the addition of 48,000 ounces of gold
added by Resource conversion and mining re-evaluation. The
600 tonnes of antimony net increase in Proven and Probable Reserves
is the result of 3,800 tonnes of antimony depleted from the 2018
Reserves, offset by the 4,400 tonnes of antimony added by Resource
conversion and mining re-evaluation.
The majority of the increase (24,000 ounces of gold and 600
tonnes of antimony) is a result of Resource conversion drilling and
upgrade of the Youle deposit.
Table 5: Mineral Resources at Björkdal, Inclusive of
Mineral Reserves, as of December 31, 2019 and 2018
|
2019 |
Category |
Tonnage (kt) |
Au Grade (g/t) |
Contained Au (koz) |
Indicated Resources |
Underground |
9,656 |
2.58 |
799 |
Open Pit |
3,114 |
2.08 |
208 |
Norrberget Open Pit |
144 |
3.29 |
15 |
Stockpile |
2,644 |
0.64 |
54 |
Total Indicated |
15,558 |
2.15 |
1,077 |
|
|
|
|
Inferred Resources |
Underground |
2,143 |
2.36 |
163 |
Open Pit |
3,338 |
1.30 |
139 |
Norrberget Open Pit |
3 |
4.03 |
0.5 |
Stockpile |
- |
- |
- |
Total Inferred |
5,483 |
1.71 |
302 |
|
|
|
|
|
2018 |
Category |
Tonnage (kt) |
Au Grade (g/t) |
Contained Au (koz) |
Indicated Resources |
Underground |
7,416 |
2.98 |
711 |
Open Pit |
2,947 |
2.30 |
218 |
Norrberget Open Pit |
144 |
3.29 |
15 |
Stockpile |
2,700 |
0.64 |
56 |
Total Indicated |
13,207 |
2.36 |
1,000 |
|
Inferred Resources |
Underground |
1,922 |
2.63 |
162 |
Open Pit |
2,516 |
1.32 |
107 |
Norrberget Open Pit |
3 |
4.03 |
1 |
Stockpile |
- |
- |
- |
Total Inferred |
4,441 |
1.89 |
271 |
Notes:
- Björkdal Mineral Resources are estimated using drill hole and
sample data as of September 30, 2019 and depleted for production
through December 31, 2019. Norrberget Mineral Resources are
based on a data crystallization date of October 4, 2017.
- CIM definitions (2014) were followed for Mineral
Resources.
- Mineral Resources are inclusive of Mineral Reserves.
- Mineral Resources are estimated using an average Au price of
$1,500/oz. and an exchange rate of 9.0 SEK/US$.
- Bulk density is 2.74 t/m3 for veins and host rock. Bulk density
is 2.92 t/m3 for skarn ore bodies.
- High gold assays were capped to 30 g/t Au for the open pit
mine.
- High gold assays for the underground mine were capped at 60 g/t
Au for the first search pass and 40 g/t Au for subsequent
passes.
- High gold assays at Norrberget were capped at 24 g/t Au.
- Interpolation was by inverse distance cubed utilizing diamond
drill, reverse circulation and chip channel samples.
- Open pit Mineral Resources are estimated at a cut-off grade of
0.34 g/t Au and constrained by the resource pit design.
- Underground Mineral Resources are estimated at a cut-off grade
of 0.80 g/t Au.
- A nominal two metres minimum mining width was used to interpret
veins using diamond drill, reverse circulation, and underground
chip sampling.
- Reported Mineral Resources are exclusive of previously mined
underground development and stopes.
- Stockpile Mineral Resources are estimated at a cut-off grade of
0.40 g/t Au and are based upon surveyed volumes supplemented by
production data.
- Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
- Numbers may not add due to rounding.
- The Björkdal Mineral Resource estimate was prepared by Reno
Pressacco, P.Geo., Principal Geologist with RPA, who is a Qualified
Person as defined by NI 43-101. The Norrberget Mineral Resource
estimate was prepared by Jack Lunnon, CGeol, Senior Geologist with
RPA, who is a Qualified Person as defined by NI 43-101.
During 2019, Mandalay drilled 8,057 m of diamond
holes at Björkdal for a total expenditure of $0.7 million. In
addition, underground operations completed 5,621 m of on-vein
development, which was mapped and sampled in detail according to
our grade control protocols.
Table 6: Mineral Reserves at Björkdal as
of December 31, 2019 and 2018
|
2019 |
Category |
Tonnage (kt) |
Au Grade (g/t) |
Contained Au (koz) |
Probable |
Underground |
5,410 |
2.10 |
365 |
Open Pit |
2,875 |
1.23 |
114 |
Norrberget Open Pit |
162 |
2.80 |
15 |
Stockpile |
2,644 |
0.64 |
54 |
Total Probable |
11,090 |
1.54 |
548 |
|
|
|
|
|
2018 |
Category |
Tonnage (kt) |
Au Grade (g/t) |
Contained Au (koz) |
Probable |
Underground |
4,754 |
2.36 |
360 |
Open Pit |
3,768 |
1.23 |
149 |
Norrberget Open Pit |
162 |
2.80 |
15 |
Stockpile |
2,700 |
0.64 |
56 |
Total Probable |
11,384 |
1.58 |
580 |
Notes:
- Björkdal Mineral Reserves are estimated using drill hole and
sample data as of September 30, 2019 and depleted for production
through December 31st, 2019. Norrberget Mineral Reserves are based
on a data crystallization date of October 4, 2017.
- CIM definitions (2014) were followed for Mineral Reserves.
- Open Pit Mineral Reserves are based on mine designs carried out
on an updated resource model, applying a block dilution of 100% at
0.0 g/t Au for blocks above 1.0 g/t and 100% at in-situ grade for
blocks between 0.4 g/t and 1.0 g/t. The application of these
block dilution factors is based on historical reconciliation
data. A cut-off grade of 0.4 g/t Au was applied.
- Underground Mineral Reserves are based on mine designs carried
out on an updated resource model. Minimum mining widths of 3.85 m
for stopes (after dilution) and 4.35 m for development (after
dilution) were used. Stope dilution was applied by adding 0.5
m on each side of stopes as well as an additional 10% over break
dilution. An overall dilution factor of 14.5% was added to
development designs. Mining extraction was assessed at 95% for
contained ounces within stopes and 100% for development. A
cut-off grade of 0.92 g/t Au was applied. An incremental cut-off
grade of 0.4 g/t Au was used for development material.
- Stockpile Mineral Reserves are estimated at a cut-off grade of
0.40 g/t Au and are based upon surveyed volumes supplemented by
production data.
- Mineral Reserves are estimated using an average long-term gold
price of $1,300/oz, and an exchange rate of 9.0 SEK/US$.
- Tonnes and contained gold are rounded to the nearest
thousand.
- Totals may appear different from the sum of their components
due to rounding.
- The Björkdal Mineral Reserve estimate was prepared by Derek
Holm, FSAIMM, Senior Mining Engineer with RPA, who is a Qualified
Person as defined by NI 43-101.
The net decrease 32,200 ounces of gold in
Probable Reserves for 2019 relative to 2018 included mining
depletion of 59,000 ounces of gold during 2019. Therefore, a total
of 26,800 ounces of gold were added to reserves for the 2019
exploration spend of $0.7 million reported above. The exploration
cost of adding those Reserves was $27 per ounce of gold.
Qualified Persons:
All Qualified Persons listed below have read and
approved the contents of this news release as it pertains to the
Mineral Resource and Mineral Reserve estimates disclosed in this
news release.
For Costerfield: The Mineral Resource estimate
was carried out under the supervision of Danny Kentwell, FAusIMM,
an employee of SRK Consulting and independent of Mandalay. He is a
Qualified Person for the purpose of National Instrument 43-101. The
Mineral Reserve estimate was carried out under the supervision of
Anne-Marie Ebbels, MAusIMM CP(Mining), an employee of SRK
Consulting and independent of Mandalay. She is a Qualified Person
for the purposes of NI 43-101.
For Björkdal: The Mineral Resource estimate was
carried out under the supervision of Reno Pressacco, P.Geo.,
Principal Geologist and an employee of RPA and independent of
Mandalay. He is a Qualified Person for the purpose of National
Instrument 43-101. The Mineral Reserve estimate was carried out
under the supervision of Derek Holm, FSAIMM, Senior Mining Engineer
and an employee of RPA and independent of Mandalay. He is a
Qualified Person for the purposes of NI 43-101. For Norrberget: The
Mineral Resource Estimate was carried out under the supervision of
Jack Lunnon, CGeol, Senior Geologist and an employee of RPA and
independent of Mandalay. He is a Qualified Person for the purpose
of National Instrument 43-101. The Mineral Reserve estimate was
carried out under the supervision of David Smith, CEng., FIMMM,
Principal Mining Engineer and an employee of RPA and independent of
Mandalay. He is a Qualified Persons for the purposes of NI
43-101.
For Further Information:
Dominic Duffy President and Chief Executive
Officer
Edison Nguyen Manager, Analytics and Investor
Relations
Contact: 647.260.1566
About Mandalay Resources
Corporation:
Mandalay Resources is a Canadian-based natural
resource company with producing assets in Australia and Sweden, and
care and maintenance and development projects in Chile. The Company
is focused on executing a roll-up strategy, creating critical mass
by aggregating advanced or in production gold, copper, silver and
antimony projects in Australia, the Americas and Europe to generate
near-term cash flow and shareholder value.
Forward-Looking Statements:
This news release contains "forward-looking
statements" within the meaning of applicable securities laws.
Readers are cautioned not to place undue reliance on
forward-looking statements. Actual results and developments may
differ materially from those contemplated by these statements
depending on, among other things, changes in commodity prices and
general market and economic conditions. The factors identified
above are not intended to represent a complete list of the factors
that could affect Mandalay. A description of additional risks that
could result in actual results and developments differing from
those contemplated by forward-looking statements in this news
release can be found under the heading “Risk Factors” in Mandalay’s
annual information form dated March 28, 2019, a copy of which is
available under Mandalay’s profile at www.sedar.com. In addition,
there can be no assurance that any inferred resources that are
discovered as a result of +additional drilling will ever be
upgraded to proven or probable reserves. Although Mandalay has
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
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