Upgraded Resource Estimate
April 28 2008 - 4:16AM
UK Regulatory
RNS Number:2042T
Leyshon Resources Limited
28 April 2008
28 April 2008
Upgraded Resource Estimate
Zheng Guang Gold Zinc Project
Leyshon Resources Limited ("Leyshon") (AIM & ASX: LRL) is pleased to report a
substantially upgraded resource estimate for the Zheng Guang gold zinc project
in Northeast China which allow's the Company to rapidly progress the development
of the project.
Independent resource specialists Hellman and Schofield Pty Ltd (H&S) of
Australia has reported a revised resource estimate incorporating the 43,500
metre 2007 drill programme. Resources were estimated by Multiple Indicator
Kriging including block support correction to give tonnage and grade estimates
at open pit mining selectivity, and are reported below at gold equivalent
cut-off grades.
The March 2007 resource estimate was reported at gold cut-off grades. Taking
into account the different basis of cut-off grades used to report the 2007
estimates, the current estimate at a 0.5 g/t gold equivalent cut-off grade has:
* increased the overall resource by approximately 25% from 24 to 30
million tonnes,
* increased the Measured and Indicated resources by approximately 60% from
10 to 16 million tonnes,
* slightly decreased contained gold by approximately 4% from 1.2 to 1.16
million ounces,
* increased contained silver by approximately 20% from 3.7 to 4.5 million
ounces, and
* increased zinc content by approximately 30% from 94,000 to 120,000
tonnes.
The following table presents the 2008 resource estimates at a range of cut-off
grades. The figures in this table have been rounded and may exhibit rounding
errors. Preliminary studies suggest that a 0.5 g/t gold equivalent is a likely
approximate lower operating cut-off grade.
Zheng Guang April 2008 Resource Estimates
Cut-off Au Equiv. g/t Resource Tonnes Au Zn Ag
Category (Million) (g/t) (%) (g/t)
0.3 Measured 9.25 1.28 0.39 4.84
Indicated 12.2 1.04 0.33 3.96
Measured + Indicated 21.5 1.14 0.36 4.34
Inferred 23 0.7 0.2 3.2
Total 44 0.9 0.3 3.7
0.5 Measured 7.16 1.57 0.47 5.70
Indicated 8.91 1.32 0.41 4.78
Measured + Indicated 16.1 1.43 0.44 5.19
Inferred 14 1.0 0.3 4.2
Total 30 1.2 0.4 4.7
0.7 Measured 5.73 1.86 0.54 6.49
Indicated 6.81 1.59 0.48 5.52
Measured + Indicated 12.5 1.71 0.51 5.96
Inferred 9.7 1.2 0.4 5.1
Total 22 1.5 0.5 5.6
0.9 Measured 4.70 2.15 0.60 7.23
Indicated 5.36 1.87 0.55 6.22
Measured + Indicated 10.1 2.00 0.57 6.69
Inferred 6.9 1.5 0.4 5.9
Total 17 1.8 0.5 6.4
Gold equivalent cut-offs were used to allow the value of zinc and silver to be
taken into account as part of the estimation process. This was based on 1% Zn
and 1g/t Ag being equivalent to 0.67 g/t Au and 0.018g/t Au respectively. These
ratios were calculated at a gold price of $930/oz and metallurgical recovery of
87.3%, and silver price of $US17/oz and metallurgical recovery of 84%, and zinc
price of US$2250/tonne and recovery of 84% with payments at 47.5% of recovered
zinc metal to allow for smelting, refining and transport charges.
A copy of the H&S summary report is appended to this announcement.
The principal objective of the 2007 diamond drilling campaign was to increase
confidence in resource estimates for the Main Mineralised Zone to allow detailed
mine design studies to undertaken before mine development. This was achieved
with estimates for portions of the Main Mineralised Zone upgraded to Measured
and Indicated status.
The 2007 drilling programme also reinforced the project's exploration potential.
Mineralisation in the main zone was traced for an additional 50 metres to the
north and the mineralised trend continues at depth. Encouraging early results
were encountered at Zheng Guang North, South, East and West.
Figure 1 presents an example cross section showing drill hole traces and the
current resource estimates coloured by estimated gold grade. Figure 2 presents
drilling and mineralisation trends relative to a preliminary pit design and
infrastructure layout derived from the 2007 model. (Please refer to company
website www.leyshonresources.com for PDF version of announcement which includes
the Figures referred to).
Following structural interpretation of the core from the 2007 drilling
programme, a new model for the mineralisation has been developed by the
Company's geological consultants. This has highlighted the potential for en
echelon pods of mineralization to occur within dilation zones within a
north-west trending regional shear. The Main Zone at Zheng Guang has been
interpreted as one of these dilation zones.
The 2008 programme is scheduled to commence shortly and will be targeting the
strike extensions to the north and south of the Main Mineralised Zone. The
programme will be testing dilationary targets within the interpreted north-west
trending regional shear zone which hosts the Main Mineralised Zone, Zheng Guang
North and Zheng Guang East.
Full details on this programme as well as details of the regional exploration
programme to be undertaken on the recently acquired 130 km2 exploration licence
areas, will be provided shortly.
The Company is in the final stages of approvals ahead of the commencement of
development in the project in the next few weeks. Full details of the progress
being made will be provided in the Quarterly Report to be released by 30 April.
Managing Director Paul Atherley commented:
"The Company's strategy strategy is to rapidly delineate the Main Ore Zone as a
mineable resource, get into production and use the cashflows to aggressively
explore this highly mineralised and under explored gold and copper belt.
This successful upgrade of the Main Ore Zone to Measured and Indicated status
allows us to progress the development of China's newest and most exciting gold
projects."
For further information contact:
Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +86 137 1800 1914
Mob: +61 417 475 038
Pelham Public Relations
Charles Vivian
Tel:+44 (0)207 743 6672
Mob: +44 (0)7977 297 903
Candice Sgroi
Tel: +44 (0)207 743 6376
Mob: +44 (0)7894 462 114
Seymour Pierce
Jonathan Wright
Tel: +44 (0)207 107 8000
http://www.leyshonresources.com
Background Information
Leyshon is fully engaged in China with its main operating office in Beijing its
Chairman, Managing Director and Chief Operating Officer all based in China. Over
80% of employees are either native Chinese or Mandarin speaking.
The Company is rapidly progressing the Zheng Guang gold zinc project to
production status and is aiming to jointly develop it as the first ever Sino
Foreign owned mine in the mineral rich province of Heilongjiang in 2008.
The project benefits from exceptional infrastructure as it is located within a
well established coal and copper mining community with rail, power, water and
mining contractor services immediately available.
Changchun Design Institute has recently reported that the capital cost estimate
for the 1.5 million tonne per annum combined carbon in leach and flotation
circuit process plant is RMB323 million RMB (US$46 million). Orders have been
placed for two 4.6 metre diameter ball mills at a cost of RMB15.2 million (USD
2.1 million) and a RMB12.1 million (USD 1.7 million) order has also been placed
for the supply of a 700 tonne per hour Nordberg crushing circuit.
Leyshon's partner, the Qiqiha'er Brigade of the Heilongjiang Bureau of Geology
and Mineral Resources, one of the largest organizations of its kind in China, is
providing a range of services to the joint venture from its complement of 4,000
technical staff, drill rigs, laboratory and other technical facilities. This
valuable support is enabling the project to rapidly move ahead on an extremely
cost-effective basis.
COMPETENT PERSONS STATEMENTS
The information in this report that relates mineral resource estimation is based
on work completed by Mr Jonathon Abbott who is a full time employee of Hellman
and Schofield Pty Ltd and a member of the Australasian Institute of Mining and
Metallurgy. Mr Abbott has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves' and as a Qualified Person as defined in the AIM
Rules. Mr Abbott consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
The exploration data on which the Mineral Resource estimate is based has been
compiled by Mr Irvine Hay who is a member of the Australian Institute of Mining
and Metallurgy. Mr Hay is a fulltime employee of CSA Australia Pty Ltd a
consultancy which provides geological services to Leyshon and has sufficient
experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr Hay
consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears.
Comments relating to exploration potential and calculation of metal equivalents
have been compiled by Mr Richard Seville who is a member of the Australian
Institute of Mining and Metallurgy. Mr Seville is a Director of Leyshon
Resources Limited and has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves.' Mr Seville consents to the inclusion in the report
of the matters based on his information in the form and context in which it
appears.
Appendix - Hellman and Schofield Pty Ltd Summary Report
28th April 2008
Notes on April 2008 Zheng Guang Resource Estimate
(to be read in conjunction with Public Release, 28 April 2008:
"Upgraded Resource Estimate Zheng Guang Gold Zinc Project")
Table 1 reports the April 2008 Zheng Guang resource estimate at a range of gold
equivalent cut-off grades. Leyshon has advised that the 0.5 g/t gold equivalent
cut-off is likely for open pit mining. Figures used in the table may exhibit
rounding errors.
Gold equivalent grades were calculated from gold, zinc and silver grades using
the following formula provided by Leyshon Resources Limited (Leyshon) which
incorporates anticipated metallurgical recoveries, and revenues for each
element.
Gold Equivalent = Gold (g/t) + 0.67 x Zinc(%) + 0.0177 x Silver(g/t)
The resource estimates include mineralisation at Zheng Guang, Zheng Guang South
and Zheng Guang North, and extend to a maximum depth of approximately 470 metres
below surface.
Notes:
1. The resource estimates are based on reverse circulation (RC) and
diamond drill data supplied by Leyshon on the 14th of April 2008. Within the
area covered by the current resource estimate, the supplied dataset contains 286
diamond holes and 1,035 RC holes for a total of 84,174 drill metres.
2. The diamond drill holes are mostly restricted to the central portion of
the deposit where they cover the central mineralised zone at various
orientations on 25 metre spaced east-west traverses to generally around 280
metres below surface. The vertical RC drilling covers the central area and
portions of peripheral mineralisation, such as Zheng Guang North on a 10 by 10
metre pattern to an average of 28 metres depth.
3. For all drill phases, only selected portions of drill holes have been
assayed. In the supplied dataset only 49% of diamond drilling and 53% of RC
drilling has been assayed for gold. For early drill phases, not all samples
selected for gold assay were also assayed for zinc and silver.
4. Leyshon classified un-sampled intervals as potentially mineralised, or
barren on the basis of geological logging. Barren intervals were assigned very
low grades (0.004 g/t Au, 0.001 % Zn 0.004 g/t Ag). Potentially mineralised
intervals, which represent 1% of the un-sampled drill hole intervals were
assigned null values, and were not included in estimates.
5. The mineralisation interpretation used to define domains for estimation
comprises the main moderately west dipping mineralised zone incorporating
mineralisation referred to as the Main Zone, Eastern Splay, and Golf Club
(hanging wall) mineralisation; a moderately northwest dipping mineralised zone
at Zheng Guang North, and background generally low grade material.
6. For the previous resource estimate generated in March 2007,
mineralisation was subdivided into completely oxidised and fresh zones. For the
current estimate, the fresh mineralisation was further subdivided into
transitional and un-oxidised material. H&S interpreted surfaces representing the
base of complete oxidation, and base of transitional oxidation from geological
logging using a base of oxidation wireframe supplied by Leyshon in 2007 to help
guide the interpretation.
7. Current estimates use bulk densities of 2.5, 2.8 and 2.9 t/bcm,
respectively, as specified by Leyshon for completely oxidised, transitional and
un-oxidised mineralisation. The previous estimate used densities of 2.51 and
3.17 for oxidised and fresh mineralisation respectively.
8. The currently specified densities for transitional and un-oxidised
material are consistent with a dataset of 2,128 density measurements undertaken
during 2007. The full set of density data shows that measurements available for
the previous model, which suggested a fresh rock density of 3.17 t/bcm, were
from un-representative sulphide-rich mineralisation. This overstated the average
mineralisation density.
9. The 32 density measurements of oxidised material undertaken during 2007
which average 2.77 t/bcm appear anomalously high and poorly representative of
oxidised mineralisation. Leyshon geologists confirm that the density of 2.5 t/
bcm specified for oxide mineralisation, as supported by pre-2007 measurements,
is a more appropriate estimate for this material.
10. Additional measurements are recommended to confirm the density applied to
oxide material which contributes approximately 9% of the estimated resource.
11. Resources were estimated by Multiple Indicator Kriging (MIK) with block
support correction. Recoverable estimates for gold, zinc and silver were
estimated for panel proportions estimated above gold equivalent gold cut off
grades.
12. For Indicator Kriging, indicator average grades were derived from
conditional bin mean grades. For each element, up to seven, and generally one to
three high grade outlier values from each mineralisation/oxidation domain were
cut to the next highest value to reduce the impact of outlier composite grades
on estimated resources.
13. Peripheral mineralisation such as Zheng Guang North, which is currently
tested by only shallow vertical RC holes and a small number of deeper angled
diamond holes, is currently poorly defined. Appropriately oriented infill
drilling would be required to improve the accuracy of estimates for this area.
14. Resource estimates were classified by search criteria and mineralisation
domain. Panels within the main mineralised zone estimated by the first two of
five progressively more relaxed search passes are classified as Measured and
Indicated, respectively. All other panels are classified as Inferred.
15. RC holes were used only for estimation of resources in peripheral areas
without diamond drilling. For the central area of the deposit, where RC data was
excluded from estimates, a comparative independent grade control model was
constructed from the RC data using H&S's MP3(c) grade control software. Table 2
compares the grade control estimates with a MIK model generated at gold cut off
grades using the same estimation parameters as the current gold equivalent
resource estimate. The close agreement between these estimates confirms the
appropriateness of excluding the central RC data from the MIK estimate and
provides a valuable comparative check on the MIK estimate.
Table 1. Zheng Guang April 2008 Resource Estimates
Cut off Au Equiv. Resource Tonnes Au Equiv. (g/t) Au Equiv. Au Zn Ag
g/t Category (Million) (k oz) (g/t) (%) (g/t)
0.3 Measured 9.25 1.63 485 1.28 0.39 4.84
Indicated 12.2 1.33 522 1.04 0.33 3.96
Meas+Ind 21.5 1.46 1,006 1.14 0.36 4.34
Inferred 23 0.9 666 0.7 0.2 3.2
Total 44 1.2 1,672 0.9 0.3 3.7
0.4 Measured 8.09 1.81 471 1.43 0.43 5.28
Indicated 10.3 1.50 497 1.18 0.37 4.38
Meas+Ind 18.4 1.64 968 1.29 0.40 4.78
Inferred 18 1.1 637 0.8 0.3 3.7
Total 36 1.4 1,604 1.0 0.3 4.2
0.5 Measured 7.16 1.99 458 1.57 0.47 5.70
Indicated 8.91 1.67 478 1.32 0.41 4.78
Meas+Ind 16.1 1.81 936 1.43 0.44 5.19
Inferred 14 1.2 540 1.0 0.3 4.2
Total 30 1.5 1,477 1.2 0.4 4.7
0.6 Measured 6.39 2.16 444 1.72 0.50 6.11
Indicated 7.76 1.84 459 1.46 0.44 5.16
Meas+Ind 14.2 1.98 903 1.58 0.47 5.59
Inferred 12 1.4 540 1.1 0.3 4.6
Total 26 1.7 1,443 1.4 0.4 5.1
0.7 Measured 5.73 2.34 431 1.86 0.54 6.49
Indicated 6.81 2.01 440 1.59 0.48 5.52
Meas+Ind 12.5 2.16 871 1.71 0.51 5.96
Inferred 9.7 1.6 499 1.2 0.4 5.1
Total 22 1.9 1,370 1.5 0.5 5.6
0.8 Measured 5.18 2.51 418 2.01 0.57 6.86
Indicated 6.02 2.18 422 1.73 0.51 5.87
Meas+Ind 11.2 2.33 840 1.86 0.54 6.33
Inferred 8.1 1.7 443 1.4 0.4 5.5
Total 19 2.1 1,283 1.7 0.5 6.0
0.9 Measured 4.70 2.68 405 2.15 0.60 7.23
Indicated 5.36 2.34 403 1.87 0.55 6.22
Meas+Ind 10.1 2.5 808 2.00 0.57 6.69
Inferred 6.9 1.9 421 1.5 0.4 5.9
Total 17 2.3 1,230 1.8 0.5 6.4
1.0 Measured 4.28 2.85 392 2.29 0.63 7.58
Indicated 4.79 2.51 387 2.01 0.58 6.54
Meas+Ind 9.1 2.67 779 2.14 0.60 7.03
Inferred 5.9 2.0 379 1.6 0.5 6.2
Total 15 2.4 1,158 1.9 0.6 6.7
Table 2. Model comparison within volume covered by grade control model
Cut off MIK Grade control model Difference
Au g/t
Tonnes Au g/t Au oz Tonnes Au g/t Au oz Tonnes Au g/t Au oz
0.5 752,000 1.16 28,046 743,000 1.16 27,710 -1% 0% -1%
1.0 335,000 1.71 18,418 337,000 1.71 18,528 1% 0% 1%
1.5 160,000 2.24 11,523 152,000 2.30 11,240 -5% 3% -2%
The information in this report that relates to mineral resource estimation is
based on work completed by Mr Jonathon Abbott who is a full time employee of
Hellman and Schofield Pty Ltd and a Member of the Australian Institute of Mining
and Metallurgy. Mr Abbott has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in
the 2004 edition of the "Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves".
This information is provided by RNS
The company news service from the London Stock Exchange
END
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