TIDMMNC
RNS Number : 5605X
Metminco Limited
27 November 2017
AIM ANNOUNCEMENT 27 November 2017
Maiden Ore Reserve for Miraflores - Update
Metminco Limited (ASX: MNC, AIM: MNC) ("Metminco" or the
"Company") is pleased to announce a maiden NI 43-101 and JORC
2012-compliant Ore Reserve for its 100%-owned Miraflores Gold
Project in Colombia. This announcement replaces that made on 18
October 2017. The Company notes that the total contained tonnes,
grade and metal content remain unchanged from the announcement of
18 October 2017, however the previously advised "Planned dilution"
has been incorporated into the Proved and Probable categories of
the Ore Reserve estimate as required by the JORC Code (2012).
The Ore Reserve has been estimated using a gold price assumption
of US$1,200/oz and a cut-off grade of 1.53g/t Au. It is contained
entirely within the Miraflores Deposit constrained Mineral Resource
Estimate and is based entirely on the Measured and Indicated
Resources.
The estimate represents a conversion rate of approximately 50%
of Measured and Indicated Resources and has been based on
information derived from the Miraflores Feasibility Study (FS)
released on October 18(th) , 2017 with a further update on October
30, 2017.
Miraflores Mineral Reserve Estimate as at October 2017 (100%
basis)
Reserve Classification Tonnes Gold Silver Contained Metal Contained Metal
(Mt) (g/t) (g/t) (Koz Au) (Koz Ag)
------------------------ ------- ------- ------- ---------------- ----------------
Proved 1.70 2.75 2.20 150 120
------------------------ ------- ------- ------- ---------------- ----------------
Probable 2.62 3.64 3.13 307 264
------------------------ ------- ------- ------- ---------------- ----------------
Total 4.32 3.29 2.77 457 385
------------------------ ------- ------- ------- ---------------- ----------------
Rounding-off of numbers may result in minor computational
errors, which are not deemed to be significant. Source: Ausenco,
2017
The Company's Ore Reserve estimate for the Miraflores Gold
Project has been independently reviewed and signed off by Mr Boris
Caro who is a Member of the Australasian Institute of Mining and
Metallurgy and a Registered Member of the Chilean Mining
Commission. Mr Caro is an independent consultant contracted by
Ausenco to review and sign off the Ore Reserve estimate.
The information communicated in this announcement includes
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014.
Mr William Howe, Managing Director, said: "The release of the
maiden Ore Reserve for the Miraflores Gold Project marks a
significant step towards our goal of near-term production in South
America and the culmination of many months of dedicated work by our
team. It also cements our confidence in the projects location on
the prolific Western Cordillera Andean Cauca trend."
William Howe
Managing Director
Miraflores Gold Project
Mineral Resources
The Miraflores Measured and Indicated Mineral Resources are
reported at a gold cut-off grade (CoG) of 1.20 g/t Au. The
resources are based on 25,884m of drilling in 73 diamond drill
holes and 236m of underground channel samples. This includes 3,624m
in 10 holes carried out by AngloGold Ashanti and B2Gold in
2006-2007.
Miraflores is a gold-silver rich, magmatic-hydrothermal breccia
pipe, located within a fertile hypabyssal porphyry cluster, whose
genesis is intimately related to the evolution and cooling of
magmatic and hydrothermal fluids emanating from the porphyry
cluster's parent magma chamber.
At the porphyry-district scale certain geological, mineralogical
and geochemical features are characteristic of peripheral breccias
in the porphyry environment: the presence of altered and
mineralised porphyry stocks in relative proximity to the breccia
system.
Miraflores is located within 2 km of intense porphyry-style
mineralisation, and at the property scale it cuts porphyry
dykes.
Mineralisation at Miraflores is contained within the Miraflores
magmatic-hydrothermal breccia body and in the basalts close to the
contact. The prospect is well known for free native gold and silver
occurring in vugs and cavities in the carbonate and quartz cement
of the breccia. Drilling has shown that gold mineralisation occurs
in all types of breccias in the cement and matrix.
Statistical and visual checks were performed by Metal Mining
Consultants of the estimated block model to ensure there were no
discrepancies in the grade estimation routines and to ensure the
geometry of mineralisation meets the configuration that the
geologists expected for estimated mineralisation. The Mineral
Resources are reported inclusive of the Ore Reserves.
Measured Mineral Resources; 2.96Mt @ 2.98g/t Au and 2.48g/t
Ag
Indicated Mineral Resources; 6.31Mt @ 2.74g/t Au and 2.90g/t
Ag
Measured and Indicated Mineral Resources; 9.27Mt @ 2.82g/t Au
and 2.77g/t Ag
Inferred Mineral Resources; 0.49Mt @ 2.36g/t Au and 3.64g/t
Ag
Competent Persons
Mineral Resources
The information provided in this ASX Release as it relates to
Exploration Results and Mineral Resources of the Miraflores Gold
Project is based on information compiled by Scott Wilson, President
of Metal Mining Consultants Inc. in Colorado, USA. Mr Wilson, a
Competent Person for JORC (2012 Edition) compliant statements,
reviewed the technical information presented in this document. Mr
Wilson has sufficient experience that is relevant to the style of
mineralisation and type of mineral deposit under consideration, and
to the activity which was undertaken, to make the statements found
in this report in the form and context in which they appear. Mr
Wilson has consented to be named in this announcement and inclusion
of information attributed to him in the form and context in which
it appears herein.
The full details of Mineral Resources are contained in ASX
announcement of 14 March 2017 "MIRAFLORES MINE DEVELOPMENT UPDATED
JORC 2012 MINERAL RESOURCE STATEMENT".
Ore Reserves
The Company's Ore Reserve estimates for the Miraflores Gold
Project have been independently reviewed and signed off by Mr Boris
Caro who is a Member of the Australasian Institute of Mining and
Metallurgy and a Registered Member of the Chilean Mining
Commission. Mr Caro is an independent consultant contracted by
Ausenco to review and sign off the Ore Reserve estimate. Mr Caro
has a broad international experience leading mining projects in
several countries and he was a Qualified Person of Fortuna Silver
Mines in 2014 and 2015. Mr Caro has over five years' experience
relevant to the style of mineralisation and type of mineral deposit
under consideration, and to the activity which was undertaken, to
make the statements found in this report in the form and context in
which they appear. Mr Caro visited the site in August 2017 for 3
days as part of the study team to review all aspects of the study
including an investigation of the mine, plant and site layouts. Mr
Caro has consented to be named in this announcement and inclusion
of information attributed to him in the form and context in which
it appears herein.
Type of Study Completed
A feasibility study has been completed for the Miraflores
Project. Metminco engaged GR Engineering Services to complete the
processing, infrastructure and feasibility study management aspects
of the feasibility study. Ausenco Chile were engaged to complete
all aspects of the mine design, mine scheduling, geotechnical
analysis and ventilation system design to support the mine design,
including capital and operating costs for the mine. Surface
geotechnical design for the plant, infrastructure and tailings
facility was undertaken by Dynami Geo Consulting (a Medellin based
consulting company) and Grana y Montero Engineering, a Lima, Peru
based engineering and contracting group assisted in the design of
the Tailings Storage Facility. This study provided sufficient
technical and economic support to back up the Ore Reserve
estimate.
Further analysis and test work is recommended for the stope
filling sequence and stability analysis prior to any decision to
commence with the project construction.
Cut-off grade determination
An underground CoG of 1.53 g/t for gold was applied to
underground diluted resources constrained by the final underground
design. This grade delineated the Ore Reserve estimate. The CoG was
utilised for the stope optimisation and the mining schedule.
-- Reserves are based on a gold price of US$1,200/oz;
-- Reserves are defined within an underground mine plan
generated from diluted Measured and Indicated Mineral
Resources;
-- An underground CoG of 1.53 g/t Au was applied to underground
resources constrained by a final underground design;
-- Underground reserves assume a total dilution of 31%;
-- In-situ Au ounces disregard metallurgical recovery of 92%;
-- 28% of the mined out stopes and drifts will use backfill
including waste and filtered tailings material. Backfilling
operations will commence in the 2nd year of operation;
-- Detailed ventilation designs were applied; and
-- Reserves are based on topography received from Metminco on January 26, 2017.
Ore Reserve Estimation Factors
For stope optimisation, Stope Optimizer from Vulcan(TM) mine
planning software was used. A post analysis of the optimisation
confirms that for a life of mine of around 10 years, ore to plant
of 1,300 tpd producing 4,000 oz Au per month. The stopes were
requested to achieve a minimum average grade of 1.75 g/t-Au in the
optimisation algorithm.
The mining method selected for the Miraflores deposit is the
retreat longhole open stope method with partial backfill. The
decision of which stopes require to be backfilled was made taking
into consideration the geotechnical analysis and the mining
sequence.
Only the underground resources contained within the mining
stopes or underground development drives were included in the Ore
Reserve estimate.
Underground reserves assume a total dilution of 31%.
Ore loss has been accounted for by removing areas that will not
be mined as they are either too remote from other potential ore to
pay for additional development, or the potential value has been
diluted to a point where the material is eliminated from
consideration. No other ore loss has been considered.
Mine development and stope production were scheduled using
Vulcan Gantt Scheduler(TM). The scheduler package developed the
schedule following a logic sequence of development drives with a
maximum monthly rate of 270m per horizontal development drill
jumbo.
Ramps; 4.5 x 4.5 metres
Drifts and cross-cuts; 4 x 4 metres
Stoping minimum width; 2.5 metres
Stoping average width; 7 metres
Production will start in year 1, focusing on high-grade areas
and the early level development from the secondary ramps. The
production will ramp up relatively quickly, allowing the processing
of 1,300 tonnes per day during the first year of the mine
schedule.
The mine operating and capital cost estimate was also
constructed using first principles and an Excel(TM) cost model.
The geotechnical study included the data collection through
drilling and mapping, rock mass classification, structural
analysis, stability analysis and ground support
recommendations.
The mine operation includes in-fill drilling activities for
stope delineation and ore control purposes.
The dilution material will contain a small amount of Inferred
Mineral Resources,(1) However, this material contributes less than
3% of the total material included in the mine plan. The mining
method does not allow to avoid the extraction of dilution material
mainly due to poor selectivity within the stope boundaries or
mining development drifts and cross-cuts. There is a low level of
geological confidence associated with inferred mineral resources
and there is no certainty that further exploration work will result
in the determination of indicated mineral resources or that the
production target itself will be realised.
The mining production schedule developed by Ausenco requires
approximately 20% of the process tailings and all waste material
mined for stope backfill purposes. Further backfill material (up to
50% of the total tailings), will be placed underground for cost and
environmental benefit. Conceptually, Ausenco considers this
strategy as adequate to improve either the stability of the stopes
and for reducing the size of the tailing storage facility. However,
it will be necessary to revisit the mining production schedule to
achieve the proposed stope backfill targets prior to mining
commencing.
(1) Cautionary Statement:
There is a low level of geological confidence associated with
Inferred Mineral Resources and there is no certainty that further
exploration work will results in the determination of indicated
mineral resources or the production target itself will be realised.
The dilution material is considered as non-economical material,
however, the mining method selected by Miraflores Feasibility Study
does not allow to avoid the blend between the ore reserve and the
dilution material.
Metallurgical Factors
The feasibility study metallurgical testwork program was
conducted by Inspectorate Exploration and Mining Services of
Vancouver, Canada, and ALS Laboratories and was designed to
evaluate a process flowsheet that included:
-- Three-stage crushing;
-- Grinding;
-- Gravity concentration of the coarse gold;
-- Gold flotation of the gravity tailing;
-- Cyanide leaching of the gold flotation concentrate;
-- Cyanide detoxification of the cyanidation residue; and
-- Tailing thickening and filtration.
This flow sheet as tested has resulted in a gold recovery of 92%
and silver recovery of 60% being utilised in the process plant
design.
The process facility is designed to treat 474,500 tonnes of ore
per annum (1,300 tonnes per day). The wet plant is scheduled to
operate seven days per week at a nominal treatment rate of 59 dry
t/h.
Environmental Studies
Baseline environmental studies were initiated by the previous
owner in order to advance the development and preparation of an
Environmental Impact Assessment (EIA) study needed for regulatory
permitting in Colombia. Given the current revision to the mine
plan, some additional studies may be required for the areas to
which the mine facilities have been relocated. This will be
determined once the final mine plan is developed and the
aforementioned gap analysis has been completed but some of this
information has already been gathered to date.
As of July 2017, Baseline Study and Environmental Impact
Assessment programs have recommenced. The bulk of the Baseline
activities previously completed will be used as background
information, however, local regulations requires all environmental
and social baseline data to be no older than 12 months since its
collection, thus new monitoring programs are underway starting Q3
of 2017.
The monitoring and environmental inventories consist of:
-- Fauna and flora characterisation;
-- Underground and surface water characterisation;
-- Noise, vibration and air pollution; and
-- Potential contaminants from extracted minerals and stored tailings.
This data along with the mineralogical, geological, social and
economic aspects of the new project will be used to complete the
Environmental Impact Assessment, as per the Terms of Reference
received by Miraflores from the local environmental agency
Corporacion Autonoma Del Risaralda (CARDER) in July 2017.
The Environmental Management Plan will be drafted once the
environmental impacts are completed and finalised in late 2017.
Acid rock drainage characterisation data obtained to date
includes ABA, multi-element analyses, and mineralogical analyses.
Column testing was conducted for waste rock and low-grade stockpile
materials. Geochemical evaluation of flotation tailings and cyanide
leach tailings was also conducted. Preliminary results indicate
that the flotation tailings and the majority of waste rock are
non-PAG (non-potentially acid generating); whereas the low-grade
stockpiles and cyanide leach tailings are PAG (potentially acid
generating). Potential for metal leaching is indicated in the
static test data, but further evaluation is in progress to acquire
kinetic data for use in geochemical modelling.
The current mine plan does not include low grade stockpiling on
surface. The cyanide leach tailings will be placed underground as
part of the mine backfilling requirements.
The current environmental strategy includes the use of a large
fraction of the expected tailings flow as underground backfill
material. The remaining filtered tailings will be sent to the
tailings management facility where they will be spread and
mechanically compacted to achieve an unsaturated, dense and stable
tailings deposit. No pond or water impoundment will exist so there
is no potential for infiltration to native soils from the tailings
materials.
Miraflores has received a mine development permit from the
CARDER for the development of 2,000m of underground exploration
development which includes 2 permanent waste dumps and water
discharge licence (Resolution 1505 of 7 September 2017).
Infrastructure
The area is well serviced with respect to roads. The site is
located approximately 7km from the Panamerican highway that runs
along the Cauca River. The road connecting the Panamerican Highway
with the town of Quinchia passes within a few kilometres of the
site and is currently being upgraded with 4 of the 7km of road now
newly sealed and with the remaining portion of the road expected to
be completed prior to construction commencing. From the newly
sealed road access to the site is via an unsealed road which will
require upgrading to allow access for large bulk loads. The
feasibility capital estimate allows for the upgrade to this access
road, the mine haul roads and other proposed internal roads for the
operation.
Sufficient labour is readily available throughout the region but
specifically in Quinchia and in communities immediately surrounding
the site. Professional and experience labour will be sourced from
both within and outside of Colombia. The town of Quinchia and
surrounding towns have an adequate supply of suitable accommodation
for any labour brought into the area. It is Miraflores's intention
to employ labour locally and where labour is brought into the area
from outside, the Company will require that labour to relocate to
Quinchia.
Power Supply to the site will be via a new overhead power line
from Quinchia. The incoming supply voltage will be 33 kV, with
step-down transformers to the site distribution voltage of 13.8 kV.
A medium voltage distribution board installed at the incoming HV
switchyard will distribute power to the outgoing feeders. The new
power line will be approximately 8km in length and will be a
dedicated line.
Water supply needs for the Project (processing plant and camp)
have been assessed and the water balance summary has been carried
out. The processing plant will require a total of 500 m3/day of
water to operate.
The accommodation camp will require 30 m3/day of freshwater
which will be trucked to site from the local community water
supply. The surplus water from mine dewatering operations will be
used for construction works, dust suppression and drilling and/or
will be sent to the water treatment plant.
Capital and Operating Costs
The capital and operating cost estimates produced for the
establishment of the mine is considered to be an AACE class 3
estimate with a level of accuracy within -10% and +15%. Costs are
presented in United States dollars (US$) and are based on prices in
effect during the second quarter of 2017; no escalation factors
have been applied.
The exchange rate applied for the operating and capital cost
estimates are:
-- US$1.00 = A$0.80 (Australian Dollar);
-- US$1.00 = EUR0.86 (Euro); and
-- US$1.00 = 3,000 COP (Colombian Pesos).
The FS delivered a total estimated Initial Capital cost of
bringing the project into production of US$71.8 million excluding
all contingency. This cost is based upon an EPCM approach whereby
Miraflores assumes general risk. Contingencies of US$6.2 million
was estimated for the project development. Contingencies have been
estimated at 7.67% of initial capital.
Sustaining capital requirements associated with the mine and
owner cost of US$18.5 million were included into the financial
model.
The Operating cost was based on a high productivity operation,
this will demand a high efficient environment for productivity and
cost controls. No contingency was embedded into the operating
cost.
The FS delivered the following results for the operating
costs:
-- Mining cost of US$27.94 /processed t;
-- Processing cost of 20.54/processed t;
-- Tailing cost of US$0.62 /processed t; and
-- G&A cost of US$4.36 / processed t.
The total site operating cost is US$53.46 /processed t.
Government Royalty of US$52.18 / payable ounce.
Refining charges, transport and insurance of US$4.50 / payable
ounce.
Total Cash Costs of US$599 / payable ounce.
The operating cost estimate did not include Corporate overheads
and exploration activities.
Revenue Factors
The revenue estimate was conducted as per industry standards
taking into consideration the annual metal production, commercial
terms and predicted metal prices.
The revenue estimate utilised the following assumptions:
-- A gold and silver prices of US$1,300/oz and US$18 /oz
respectively (Within the range of industry expectations and Broker
and Bank predictions. The gold price used is close to the moving 5
year average gold price);
-- The average processed head grade of 3.29 g/t and 2.56 g/t for
gold and silver respectively (from the mine and processing
schedules);
-- Metallurgical recoveries of 92 % and 60 % for gold and silver
production respectively (determined from metallurgical
testwork);
-- Metal payability factors of 96.6 % and 99.0 % for gold and
silver respectively (from historical figures and discussions with
refiners);
-- Refinery and transport and insurance charges of US$4.50/
payable ounce (based on previous study estimates); and
-- Royalty of 4 % of the net smelter return (based on the
Miraflores licence and Existing Aporte contract expiry (2019) prior
to commencement of production in late 2019 when the licence will
revert to the normal system of concession contracts which are
subject to a 4% royalty only).
Economic Analysis
Metminco developed a comprehensive financial model for the
economic evaluation of the Miraflores Gold Project. The financial
model incorporates the modifying factors delivered by the FS.
The key assumptions utilised in the financial model are listed
as follows:
-- Gold and silver prices of US$1,300 /oz and US$18 /oz respectively;
-- Net smelter return as per the Revenue estimate;
-- Operating and capital costs as per industry standards;
-- Working capital and inventory management as per industry standards;
-- Debt and financing activities are excluded from the net present cost estimate;
-- All cash flows were treated in real terms, therefore, no
inflation or escalation factors were applied;
-- Discount Rate of 8%;
-- Site operating cost of US$ 53,46 /processed t; and
-- Income tax of 33%.
The FS delivered a Net Present Value of US$72.3 million after
tax and an Internal Rate of Return of 25%.
Social Licence
According to the social base line information for the project
carried out in 2013, there were 289 families in the direct
influence area, with a total population of 1,152 inhabitants. The
village that has the largest number of inhabitants was Miraflores
with 410 inhabitants.
Community base line studies, social impact assessments and
community development plans will be complete by the end of
2017.
The Company has an existing agreement with the artisanal miners
at Miraflores that will provide education, training and jobs for
some of the certified miners while others will receive compensation
when the project enters construction and artisanal mining
ceases.
The Company maintains excellent relations with the local
community, municipality and government agencies.
Project Risks and Operating Licences
The main risks for the development of the Miraflores Gold
Project identified by the FS are described as follows:
-- Social disruptions or community unacceptance of the project;
-- Gold price;
-- Increase of the predicted capital or operating cost;
-- Not achieving the target production because of mining or
processing issues. E.g. reduced ore grade, not achieving the design
processing throughput or gold recovery, etc.
-- Existing Miraflores licence contract is not renewed or the
licence does not revert to the normal system of concession
contracts which are subject to a 4% royalty only);
-- Geotechnical instability; and
-- Unpredicted water levels in the underground mine.
Other than the Aporte contract for the Miraflores licence no
other material agreement is in effect at this time.
The Miraflores Project Environmental Impact Assessment Study
(2013) did not previously have an official Terms of Reference
(ToR), instead, the baseline data collection and impact assessment
development was progressed under a generic ToR for open pit mining.
This generic ToR was issued by National Authority of Environmental
Licenses (ANLA) in 2012. In July 2016, a new ToR was issued by
ANLA. The Project submitted a request to CARDER for an official ToR
for the new underground Project concept. The new ToR was obtained
in August 2017 and is being used as the basis for the ongoing
environmental and social work.
The Environmental Impact Assessment Study is expected to be
submitted in Q1 of 2018.
Plan de Trabajos y Obras or (PTO); The PTO licence is issued by
the Ministry Of Mines and Energy and must comply with the Terms of
Reference set out by the ministry for non seabed minerals and
materials.
All projects must obtain an EIA and PTO prior to commencing
development of the project. Approvals are expected to take between
4 and 6 months from submission depending on the requirement to
provide further data requested by the authorities.
Ore Reserve Estimate
The Ore Reserve estimate of the Miraflores Project is reported
as at the effective day of 18 October, 2017.
The Ore Reserve estimate is inclusive of Mineral Resources.
The reference point of the Ore Reserve is the run of mine stock
pile area where the material will be fed into the process
plant.
The Reserve Estimate is supported by the FS complying with the
JORC Code standards.
The Ore Reserve estimate provided appropriately reflects the
Competent Person's view of the opportunity for Metminco to develop
the Miraflores Gold Project based on the modifying factors derived
from the FS work and the updated Mineral Resource model.
The key modifying factors of the Ore Reserve estimate are
described as follows:
-- Reserves are based on a gold price of US$1,200/oz and silver price of US$18/oz;
-- An underground CoG of 1.53 g/t-Au was applied to underground
resources constrained by a final underground design;
-- Reserves are defined within an underground mine plan
generated from diluted Mineral Resources;
-- Underground reserves assume a total dilution of 31%;
-- Mining and processing production schedules were developed for
assessing the technical viability of the project;
-- Revenue estimates were developed as per industry standards;
-- Operating and capital cost estimates were executed as per industry standards; and
-- The construction and production schedules formed the basis
for a financial model delivering a positive outcome for the
economic evaluation.
Proved: 1.70Mt @ 2.75g/t Au and 2.20g/t Ag
Probable: 2.62Mt @ 3.64g/t Au and 3.13g/t Ag
Proved and Probable: 4.32Mt @ 3.29g/t Au and 2.77g/t Ag
Statement of Accuracy
The Competent Person has recommended that further work be
conducted prior to commencement of construction of the Miraflores
Project on the following topics:
-- Geotechnical stability analysis for the underground mine,
especially in the areas containing non-backfilled stopes;
-- Stope Backfilling sequence;
-- Develop a detailed mining construction schedule;
-- Understand the predicted underground water levels; and
-- Update the environmental and social costs as per the granted permit -still to be granted.
This further work may result in some changes to the modifying
factors representing a high risk for the achievement of the
technical and economic outcome of the Miraflores Gold Project
delivered by the FS.
GLOSSARY OF TECHNICAL TERMS
"basalt" A dark-coloured, fine-grained extrusive igneous rock
composed of plagioclase feldspar, pyroxene, and magnetite,
with or without olivine and not more than 53 per cent.
SiO2.
------------------- ----------------------------------------------------------------
"breccia" Breccia is a rock classification, comprises millimetre
to metre-scale rock fragments cemented together in a
matrix, there are many sub-classifications of breccias.
------------------- ----------------------------------------------------------------
"cut-off" the grade threshold above which a mineral material is
considered potentially economic
------------------- ----------------------------------------------------------------
"concentrate" Metal ore once it has been through milling and concentration
so that it is ready for chemical processing or smelting.
------------------- ----------------------------------------------------------------
"grade" The proportion of a mineral within a rock or other material.
For gold mineralisation this is usually reported as
grams of gold per tonne of rock (g/t).
------------------- ----------------------------------------------------------------
"g/t" grams per tonne; equivalent to parts per million ('ppm').
------------------- ----------------------------------------------------------------
"hypabyssal" intermediate in texture between coarse-grained intrusive
rocks and fine-grained extrusive rocks.
------------------- ----------------------------------------------------------------
"Indicated An "Indicated Mineral Resource" is that part of a Mineral
Resource" Resource for which quantity, grade or quality, densities,
shape and physical characteristics, can be estimated
with a level of confidence sufficient to allow the appropriate
application of technical and economic parameters, to
support mine planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed
and reliable exploration and testing information gathered
through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that
are spaced closely enough for geological and grade continuity
to be reasonably assumed.
------------------- ----------------------------------------------------------------
"Inferred An "Inferred Mineral Resource" is that part of a Mineral
Resource" Resource for which quantity and grade or quality can
be estimated on the basis of geological evidence and
limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based
on limited information and sampling gathered through
appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes.
------------------- ----------------------------------------------------------------
"JORC Code" The Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (2012 edition), published
by The Joint Ore Reserves Committee of the Australasian
Institute of Mining and Metallurgy, Australian Institute
of Geoscientists and Minerals Council of Australia ("JORC").
------------------- ----------------------------------------------------------------
"Measured A "Measured Mineral Resource" is that part of a Mineral
Resource" Resource for which quantity, grade or quality, densities,
shape, and physical characteristics are so well established
that they can be estimated with confidence sufficient
to allow the appropriate application of technical and
economic parameters, to support production planning
and evaluation of the economic viability of the deposit.
The estimate is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely
enough to confirm both geological and grade continuity.
------------------- ----------------------------------------------------------------
"Mineral Reserve" That part of a Mineral Resource that has been demonstrated
to be economically extractable.
------------------- ----------------------------------------------------------------
"Mineral Resource" A "Mineral Resource" is a concentration or occurrence
of diamonds, natural solid inorganic material, or natural
solid fossilized organic material including base and
precious metals, coal, and industrial minerals in or
on the Earth's crust in such form and quantity and of
such a grade or quality that it has reasonable prospects
for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge.
------------------- ----------------------------------------------------------------
"Mineralisation" The process by which minerals are introduced into a
rock. More generally, a term applied to accumulations
of economic or related minerals in quantities ranging
from weakly anomalous to economically recoverable.
------------------- ----------------------------------------------------------------
"open pit A method of extracting minerals from the earth by excavating
mining" downwards from the surface such that the ore is extracted
in the open air (as opposed to underground mining).
------------------- ----------------------------------------------------------------
"porphyry" A medium to coarse-grained intrusive, felsic, igneous
rock which is conspicuously porphyritic, containing
more than 25 per cent phenocrysts by volume. The phenocryst
mineral is usually alkali feldspar.
------------------- ----------------------------------------------------------------
"Probable according to the JORC Code, the economically mineable
Reserve" part of a Measured and/or Indicated Mineral Resource.
It is inclusive of diluting materials and allows for
losses that may occur when the material is mined. Appropriate
assessments, which may include feasibility studies,
have been carried out, including consideration of, and
modification by, realistically assumed mining, metallurgical,
economic, marketing, legal, environmental, social and
government factors. These assessments demonstrate at
the time of reporting that extraction is reasonably
justified.
------------------- ----------------------------------------------------------------
"Proved Reserve" according to the JORC Code, the economically mineable
part of a Measured Mineral Resource. It is estimated
with a high level of confidence. It is inclusive of
diluting materials and allows for losses that may occur
when the material is mined Appropriate assessments,
which may include feasibility studies, have been carried
out, including consideration of, and modification by,
realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and government
factors. These assessments demonstrate at the time of
extraction is reasonably justified.
------------------- ----------------------------------------------------------------
"underground extraction of minerals from the Earth's crust using
mining" a system of
underground mine workings.
------------------- ----------------------------------------------------------------
"vugs" a cavity in rock, lined with mineral crystals.
------------------- ----------------------------------------------------------------
Abbreviations
-------------------------------------------------------------------------------------
Association for the Advancement of Cost Engineering
AACE International
------------------- ----------------------------------------------------------------
ABA Acid Base Accounting
------------------- ----------------------------------------------------------------
Ag Silver
------------------- ----------------------------------------------------------------
Au Gold
------------------- ----------------------------------------------------------------
Cu Copper
------------------- ----------------------------------------------------------------
CoG Cut off Grade
------------------- ----------------------------------------------------------------
h hour(s)
------------------- ----------------------------------------------------------------
km Kilometres
------------------- ----------------------------------------------------------------
l Litres
------------------- ----------------------------------------------------------------
M million(s)
------------------- ----------------------------------------------------------------
Mt/a Million tonnes per annum
------------------- ----------------------------------------------------------------
m Metres
------------------- ----------------------------------------------------------------
t Tonnes
------------------- ----------------------------------------------------------------
t/a tonnes per annum
------------------- ----------------------------------------------------------------
t/d or tpd tonnes per day
------------------- ----------------------------------------------------------------
t/h tonnes per hour
------------------- ----------------------------------------------------------------
For further information,
please contact:
METMINCO LIMITED
Brian Jones Office: +61 (0) 2 9460 1856
NOMINATED ADVISOR AND BROKER
RFC Ambrian
Australia
Will Souter / Alena Broesder Office: +61 (0) 2 9250 0000
United Kingdom
Charlie Cryer Office: +44 (0) 20 3440 6800
JOINT BROKER
SP Angel Corporate Finance
LLP (UK)
Ewan Leggat Office: +44 (0) 20 3470 0470
PUBLIC RELATIONS
Camarco
United Kingdom
Gordon Poole / Nick Hennis Office: + 44 (0) 20 3757 4997
Media + Capital Partners
Australia
Luke Forrestal Office: +61 (0) 411 479 144
Forward Looking Statement
All statements other than statements of historical fact included
in this announcement including, without limitation, statements
regarding future plans and objectives of Metminco are
forward-looking statements. When used in this announcement,
forward-looking statements can be identified by words such as
"anticipate", "believe", "could", "estimate", "expect", "future",
"intend", "may", "opportunity", "plan", "potential", "project",
"seek", "will" and other similar words that involve risks and
uncertainties.
These statements are based on an assessment of present economic
and operating conditions, and on a number of assumptions regarding
future events and actions that, as at the date of this
announcement, are expected to take place. Such forward-looking
statements are not guarantees of future performance and involve
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are beyond the control of the
Company, its directors and management of Metminco that could cause
Metminco's actual results to differ materially from the results
expressed or anticipated in these statements.
The Company cannot and does not give any assurance that the
results, performance or achievements expressed or implied by the
forward-looking statements contained in this announcement will
actually occur and investors are cautioned not to place undue
reliance on these forward-looking statements. Metminco does not
undertake to update or revise forward-looking statements, or to
publish prospective financial information in the future, regardless
of whether new information, future events or any other factors
affect the information contained in this announcement, except where
required by applicable law and stock exchange listing
Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2
and 3, also apply to this section.)
Criteria JORC Code Commentary Responsible
Explanation to Complete
and/or
Review
the
Comments
-------------------- ------------------- ------------------------------------------------------------------ ------------
Mineral Resource Description of Miraflores is a gold-silver rich, Metminco
estimate review the Mineral magmatic-hydrothermal breccia
for conversion Resource pipe, located within a fertile
to Ore Reserves estimate used as hypabyssal porphyry cluster,
a basis for the whose genesis is intimately related
conversion to an to the evolution and cooling
Ore of magmatic and hydrothermal
Reserve. fluids emanating from the porphyry
cluster's parent magma chamber.
Clear statement At the porphyry-district scale
as to whether the certain geological, mineralogical
Mineral Resources and geochemical features are
are reported characteristic of peripheral
additional breccias in the porphyry environment:
to, or inclusive the presence of altered and mineralised
of, the Ore porphyry stocks in relative proximity
Reserves. to the breccia system.
Miraflores is located within
2 km of intense porphyry-style
mineralisation, and at the property
scale it cuts porphyry dykes.
Alteration is dominated by lower
temperature phyllic, argillic
and propylitic varieties, forming
peripheral to or above the higher
temperature potassic core zones
associated with the porphyries
themselves. Alteration at Miraflores
is strongly propylitic.
The increased values of base
and trace metals (Zn, Pb, Sb,
As) as seen at Miraflores occur
peripheral to the core porphyry
zones containing Au, Cu and Mo.
The Miraflores occurrence conforms
to that of a magmatic-hydrothermal
breccia. It is the only type
of potentially economic precious
metal mineralisation presently
known to be contained within
the Miraflores property. The
above outlined features support
its genesis in direct relation
to the emplacement and cooling
of mineralised hypabyssal Au-Cu-rich
porphyry bodies in the Quinchía
district. It is important to
note that no significant porphyry-style
mineralisation or hypabyssal
porphyry bodies have been detected
within the Miraflores property.
Sillitoe (2006) notes that the
prevalence of epidote and carbonate
in the Miraflores breccia is
uncommon for magmatic-hydrothermal
breccias. He interprets their
abundance, along with the lack
of alteration in the basalt clasts,
as an indication of the buffering
effect exerted by the abundant
calcium rich basalt clasts upon
the hydrothermal solutions circulating
throughout the breccia. In the
case of the white breccia, the
polymictic breccia was moved,
broken and invaded by the quartz-calcite
infill, which in the porphyry
veinlet classifications belong
to the 'E' stage (Tobey, 2012).
Younger sub-vertical mineralised
faults (veins) SSE - NNW and
SE - NW, dipping from 75deg to
90deg that cross cut the breccia,
represent a late event that are
characterised by a high content
of sulfides (chalcopyrite, pyrite,
galena and sphalerite), and high
gold grades. These structures
could have acted as the feeders
of the mineralisation to the
breccia where the pre-existing
porosity and permeability have
played an important role in the
mineralization control.
At 200 to 300 m depth, high gold
grade mineralisation in the cement
and matrix of the breccia is
found, possibly associated with
a boiling zone. This is an irregular
zone of 60 m width.
Mineralisation at Miraflores
is contained within the Miraflores
magmatic-hydrothermal breccia
body and in the basalts close
to the contact. At surface, the
breccia is exposed on a 30deg
slope, which has been worked
by informal miners using artisanal
methods in small excavations
and irregular tunnels.
The prospect is well known for
free native gold and silver occurring
in vugs and cavities in the carbonate
and quartz cement of the breccia.
Drilling has shown that gold
mineralisation occurs in all
types of breccias in the cement
and matrix.
At least two mineralising events
before formation of the epithermal
breccia have been observed in
the fragments of the breccia.
Locally, basalt clasts with veinlets
of 'B' style (comb quartz without
alteration halo) cut by pyrite-epidote
cracks are evidence of a possible
porphyry style mineralisation
preceding the breccia formation.
In the case of the white breccia,
the polymictic breccia was moved,
broken and invaded by the quartz-calcite
infill, which in the porphyry
veinlet classifications belong
to the 'E' stage (Tobey, 2012).
In the White Breccias sulfide
minerals occur throughout the
quartz and calcite stages, and
are often concentrated on epidote
at the start of the quartz phase,
and are also commonly euhedral
in quartz vugs. The sulfides
are euhedral and coarse grained
(2 to 4 mm). The percentage of
sulfides is low. The sulphides
seen are pyrite, chalcopyrite,
molybdenite, galena and sphalerite
(honey-colored,
Zn- rich). Rare visible gold
can occur in vugs.
Low grade gold mineralisation
is found in a halo around the
breccia pipe in the basalts,
and is characterised by quartz-calcite
veinlets with low content of
sulfides (pyrite, galena, sphalerite)
controlled by the density of
fracturing created by the formation
of the breccia.
The mineralisation in breccias
and in the basalt is characterised
by low contents of chalcopyrite,
sphalerite and galena, occurring
as fine grains (<100 um).
The younger sub-vertical veins
SSE - NNW and NW - SE, dipping
from 75deg to 90deg that cross
cut the breccia, are characterised
by argillized material that contain
important quantities of sulfides
pyrite, chalcopyrite, sphalerite
and galena. Some visible gold
has been observed. The sulfides
are present as coarse particles
ranging from 100 to 200 um and
greater than 200 um. The persistence
of the SSE- NNW structures is
important and is clearly recognised
in the exploitation workings
of the AMM where high gold grade
mineralisation can be followed
by more than 150 m in horizontal
and more than 80 m in vertical,
with almost no displacement of
the structures. Crossing of structures
(veins) are forming high gold
grade shoots of variable dimensions
that can be observed in the AMM
workings.
The Mineral Resource estimate
for the Miraflores deposit reported
on 14 March 2017 was used as
the basis for the conversion
to an Ore Reserve.
The Mineral Resource model was
delivered to Ausenco through
a data file The resource model
for Miraflores was constructed
with Vulcan software using a
block model. All of the required
information about the deposit
is stored in each individual
block. This includes estimated
characteristics of gold and silver
and statistical characteristics
such as number of samples used
in an estimate, distances to
the nearest sample, number of
drill holes used, etc., are stored
in each individual block. Geologic
triangulations were also used
to identify the rock type of
each block, and these structures
also controlled the sub-blocking
in Vulcan along their boundaries.
Geologic codes stored in the
block model were also used to
assign the density within specific
geologic boundaries.
Final geologic codes were applied
to the block model using indicator
kriging. Indicator kriging provides
a very good check against the
implicit models derived with
Leapfrog. This methodology estimates
the probability that any block
is a certain rock type based
on the geologic information identified
in drill hole logging. The volumes
derived from the indicator kriging
were nearly identical to the
volumes identified with Leapfrog.
So in keeping with generally
accepted practices rock units
were applied using indicator
kriging.
Blocks identified as breccia,
basalt and saprolite were estimated
only using samples also identified
as the same. Samples within the
modelled veins were not used
to estimate grade within the
breccia, basalt or saprolite.
Samples within the veins were
limited to the vein the samples
correlated with and only used
to estimate grades within that
specific vein. Samples within
the breccia, basalt and saprolite
but outside the veins were not
used to estimate grade within
the veins. For example: only
samples flagged in vein 800 were
used to estimate blocks within
vein 800 and only samples flagged
as breccia were used to estimate
blocks within the breccia boundary.
Inverse distanced cubed grade
estimation methodology was used
to estimate gold and silver grades
for Miraflores. For the breccia,
basalt and saprolite variography
was done to determined proper
search ellipsoid orientation
and search distances.
The Miraflores Measured and Indicated
Mineral Resources are reported
at a gold cut-off grade of 1.20
g/t Au. The resources are based
on 25,884mof drilling in 73 diamond
drill holes and 236m of underground
channel samples. This includes
3,624m in 10 holes carried out
by AngloGold Ashanti and B2Gold
in 2006-2007.
Statistical and visual checks
were performed by Metal Mining
Consultants of the estimated
block model to ensure there were
no discrepancies in the grade
estimation routines and to ensure
the geometry of mineralisation
meets the configuration that
the geologists expected for estimated
mineralisation.
Measured Mineral Resources; 2.96Mt
@ 2.98g/t Au and 2.48g/t Ag
Indicated Mineral Resources;
6.31Mt @ 2.74g/t Au and 2.90g/t
Ag
Measured and Indicated Mineral
Resources; 9.27Mt @ 2.82g/t Au
and 2.77g/t Ag
Inferred Mineral Resources; 0.49Mt
@ 2.36g/t Au and 3.64g/t Ag
The Mineral Resources are reported
inclusive of the Ore Reserves.
Artisanal miners have caused
ore depletion within the Miraflores
Project mining footprint. The
Mineral Resource Estimate used
as the base for the Ore Reserve
estimate incorporates this ore
depletion. The Ore Reserve estimate
has relied on the accuracy of
the Mineral Resource Estimate.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Site visits Comment on any Mr Boris Caro visited the site CPs
site visits in August 2017 for 3 days as
undertaken part of the study team to review
by the Competent all aspects of the study including
Person and the an investigation of the mine,
outcome of those plant and site layouts.
visits.
The site visit involved field
If no site visits work on the project footprint
have been area including an inspection
undertaken of the underground tunnels and
indicate why this artisanal miners workings.
is the case.
Consultants involved in the mining
study, metallurgical testwork,
geotechnical and geological mapping,
infrastructure study, social
and environmental studies all
visited the site during this
time.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Study status The type and level A feasibility study has been Metminco
of study completed for the Miraflores
undertaken Project. Metminco engaged GE
to enable Mineral Engineering Services to complete
Resources to be the processing, infrastructure
converted to Ore and feasibility study management
Reserves. aspects of the feasibility study.
Ausenco Chile were engaged to
The Code requires complete all aspects of the mine
that a study to design, mine scheduling, geotechnical
at least analysis and ventilation system
Pre-Feasibility design to support the mine design,
Study level has including capital and operating
been undertaken costs for the mine. Surface geotechnical
to convert Mineral design for the plant, infrastructure
Resources to Ore and tailings facility was undertaken
Reserves. Such by Dynami Geo Consulting (a Medellin
studies will have based consulting company) and
been carried out Grana y Montero Engineering,
and a Lima, Peru based engineering
will have and contracting group assisted
determined in the design of the Tailings
a mine plan that Storage Facility. This study
is technically provided sufficient technical
achievable and and economic support to back
economically up the Ore Reserve estimate.
viable,
and that material Further analysis and test work
Modifying Factors is recommended for the stope
have been filling sequence and stability
considered. analysis prior to any decision
to commence with the project
construction.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Cut-off parameters The basis of the An underground cut-off grade AUSENCO
cut-off grade(s) (CoG) of 1.53 g/t for gold was
or quality applied to underground diluted
parameters resources constrained by the
applied. final underground design. This
grade delineated the Ore Reserve
estimate.
-- Reserves are based on a gold price of US$1,200/oz;
-- Reserves are defined within an underground mine plan
generated from diluted Measured and Indicated Mineral
Resources;
-- An underground CoG of 1.53 g/t Au was applied to
underground resources constrained by a final
underground design;
-- Underground reserves assume 20% planned and 11%
unplanned dilution;
-- In-situ Au ounces disregard metallurgical recovery of
92%;
-- 28% of the mined out stopes and drifts will use
backfill including waste and filtered tailings
material. Backfilling operations will commence in the
2nd year of operation;
-- Detailed ventilation designs were applied; and
-- Reserves are based on topography received from
Metminco on January 26, 2017.
The cut-off grade was utilised
for the stope optimisation and
the mining schedule.
There are approximately 7,000
ounces of gold contained in material
with a gold grade between 0.60
and 1.53 g/t. This material is
not part of the Ore Reserve but
it may deliver a positive economic
value, therefore, it will be
kept in a stock pile for potential
feed to the processing plant.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Mining factor The method and For stope optimisation, Stope AUSENCO
or assumptions assumptions used Optimizer from Vulcan(TM) mine
as planning software was used. A
reported in the post analysis of the optimisation
Pre-Feasibility confirms that for a life of mine
or Feasibility of around 10 years, ore to plant
Study to convert of 1,300 tpd producing 4,000
the Mineral oz Au per month. The stopes were
Resource requested to achieve a minimum
to an Ore Reserve average grade of 1.75 g/t Au
(i.e. either by in the optimisation algorithm.
application of
appropriate The mining method selected for
factors the Miraflores deposit is the
by optimisation retreat longhole open stope method
or by preliminary with partial backfill. The decision
or detailed of which stopes require to be
design). backfilled was made taking into
consideration the geotechnical
The choice, nature analysis and the mining sequence.
and
appropriateness The quantity and shape of the
of the selected stopes were optimised with the
mining method(s) Vulcan(TM) software. This process
and other mining defined the total amount of Mineral
parameters Resources above the cut-off grade.
including Subsequently, a manual check
associated design to eliminate the stopes isolated
issues such as or difficult to mine reduced
pre-strip, access, the material selected for the
etc. Ore Reserve estimate. For example,
the stopes located between surface
The assumptions and a vertical distance of 80m
made regarding were eliminated from the Ore
geotechnical Reserve estimate due to geotechnical
parameters stability considerations.
(e.g. pit slopes,
stope sizes, The Mineral Resource Model used
etc.), was developed by Metal Mining
grade control and Consultants of Denver, USA who
pre-production provided the block model to Ausenco.
drilling.
Only the underground resources
The major contained within the mining stopes
assumptions or underground development drives
made and Mineral were included in the Ore Reserve
Resource model estimate.
used for pit and
stope optimisation Underground reserves assume total
(if appropriate). dilution of 31%.
The mining Ore loss has been accounted for
dilution by removing areas that will not
factors used. be mined as they are either too
remote from other potential ore
The mining to pay for additional development,
recovery or the potential value has been
factors used. diluted to a point where the
material is eliminated from consideration.
Any minimum mining No other ore loss has been considered.
widths used.
The mine layout was developed
The manner in to obtain quick access to several
which Inferred mining areas by utilising three
Mineral Resources mine access portals. The ventilation
are utilised in circuit was designed to use the
mining studies mine portals, ramps and three
and the 3.1m diameter raise bored shafts
sensitivity for air intake and one large
of the outcome extraction raise (5m x 5m) was
to their designed to extract the contaminated
inclusion. air.
The stope design included an
assessment of the crown pillar,
sill pillars, dip pillars and
rib pillars. The mine development
design includes the main ramp
and secondary ramps, drifts,
cross cuts, passing bays, muck
loading bays, refugee stations,
dewatering bays, electrical substation
bays and ventilation drifts.
Details of the dimensions for
the stope and mine development
designs are listed below and
described in the Miraflores Feasibility
Study Report.
Mine development and stope production
were scheduled using Vulcan Gantt
Scheduler(TM). The scheduler
package developed the schedule
following a logic sequence of
development drives with a maximum
monthly rate of 270m per horizontal
development drill jumbo.
Ramps; 4.5 x 4.5 metres
Drifts and cross-cuts; 4 x 4
metres
Stoping minimum width; 2.5 metres
Stoping average width; 7 metres
Production will start in year
1, focusing on high-grade areas
and the early level development
from the secondary ramps. The
production will ramp up relatively
quickly, allowing the processing
of 1,300 tonnes per day during
the first year of the mine schedule.
The mine development and production
schedule included an estimate
of the mine mobile equipment
and workforce required to achieve
the production targets. Ausenco
created an Excel(TM) model for
this purpose taking into consideration
productivity and maintenance
factors.
The mine operating and capital
cost estimate was also constructed
using first principles and an
Excel(TM) cost model.
The geotechnical study included
the data collection through drilling
and mapping, rock mass classification,
structural analysis, stability
analysis and ground support recommendations.
An extensive section describing
further details for these topics
are detailed in of the Miraflores
Feasibility Study Report.
The mine operation includes in-fill
drilling activities for stope
delineation and ore control purposes.
The dilution material will contain
a small amount of Inferred Mineral
Resources(1) , However, this
material contributes less than
3% of the total material included
in the mine plan. The mining
method does not allow to avoid
the extraction of this material
mainly due to the poor selectivity
within the stope boundaries or
mining development drifts and
cross-cuts.
The mining production schedule
developed by Ausenco requires
approximately 20% of the process
tailings and all waste material
mined for stope backfill purposes.
Further backfill material (up
to 50% of the total tailings),
will be placed underground for
cost and environmental benefit.
Conceptually, Ausenco considers
this strategy as adequate to
improve either the stability
of the stopes and for reducing
the size of the tailing storage
facility. However, it will be
necessary to revisit the mining
production schedule to achieve
the proposed stope backfill targets
prior to mining commencing.
(1) Cautionary Statement
There is a low level of geological
confidence associated with inferred
mineral resources and there is
no certainty that further exploration
work will results in the determination
of indicated mineral resources
or the production target itself
will be realised. The dilution
material is considered as non-economical
material, however, the mining
method selected by Miraflores
Feasibility Study does not allow
to avoid the blend between the
ore reserve and the dilution
material.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Metallurgical The metallurgical The Feasibility Study metallurgical GRES
factors or process proposed testwork program was conducted
assumptions and the by Inspectorate Exploration and
appropriateness Mining Services (Inspectorate)
of that process of Vancouver, Canada, and ALS
to the style of Laboratories (ALS) and was designed
mineralisation. to evaluate a process flowsheet
that included:
Whether the -- Three-stage crushing;
metallurgical
process is -- Ball mill grinding;
well-tested
technology or -- Gravity concentration of the coarse gold;
novel
in nature. -- Gold flotation of the gravity tailing;
The nature, amount -- Cyanide leaching of the gold flotation concentrate;
and
representativeness -- Cyanide detoxification of the cyanidation residue;
of metallurgical and
test work
undertaken, -- Tailing thickening and filtration.
the nature of the
metallurgical
domaining
applied and the This flow sheet as tested has
corresponding resulted in a gold recovery of
metallurgical 92% and silver recovery of 60%
recovery factors being utilised in the process
applied. plant design.
Any assumptions Three testwork programs using
or allowances made Miraflores diamond drill core
for deleterious have been completed by Miraflores,
elements. all using the services of Inspectorate
Exploration and Mining Services
The existence of (Inspectorate) based in Vancouver,
any bulk sample Canada. Similar results have
or pilot scale been achieved in all three programs.
test work and the
degree to which The metallurgical process is
such well tested and is utilised in
samples are the extraction of gold in many
considered parts of the world and is well
representative proven for this type of mineralisation.
of the orebody No part of the process design
as a whole. is novel in nature. The metallurgical
testwork has successfully demonstrated
For minerals that that recovery of gold at Miraflores
are defined by by gravity and flotation concentrating
a specification, is very effective with demonstrated
has the ore recoveries for gold of 92%.
reserve
estimation been Although small amounts of base
based on the metals are evident, testwork
appropriate has indicated that these are
mineralogy to meet not concentrated to deliterous
the levels in the concentrate and
specifications? have no effect in gold recovery
at Miraflores.
Historical mining and processing
by previous owners Asociación
de Mineros de Miraflores (AMM)
demonstrated the effectiveness
of processing ore from the Miraflores
breccia. Stoping over a vertical
distance of 80m and strike of
200m demonstrated grade continuity
and extraction of gold using
cyanide processes.
The mineralogy of the orebody
at Miraflores is best presented
by the investigation of three
panned concentrates from Knelson
concentrate test work that determined
that the primary gold-bearing
mineral present is native gold
with only minor amounts present
as electrum. Minor amounts of
Au/Ag telluride minerals were
also observed being primarily
composed of petzite, having a
higher gold content, and subordinate
amounts of hessite and stuetzite.
These tellurides are often closely
association with native gold,
but not exclusively. Native gold
was mainly liberated with finer
grains attached or included in
sulphide minerals, which include
pyrite, sphalerite and galena
in minor amounts. Mineralogical
work has shown that greater than
97% of gold at Miraflores occurs
as free gold with the rest made
up mostly of electrum. This fact
supports the testwork which has
demonstrated that gravity gold
recovery using Knelson concentrators
achieves high gold recoveries
into a gravity concentrate. (>60%).
At the completion of the feasibility
study the only testwork remaining
to be completed was filtration
testwork on the flotation tailings
and concentrate leach residue
both of which are currently in
progress.
The process facility is designed
to treat 474,500 tonnes of ore
per annum (1,300 tonnes per day).
The wet plant is scheduled to
operate seven days per week at
a nominal treatment rate of 59
dry t/h.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Environmental The status of Baseline environmental studies DYNAMI
studies were initiated by the previous
of potential owner in order to advance the
environmental development and preparation of
impacts of the an Environmental Impact Assessment
mining and study needed for regulatory permitting
processing in Colombia. Given the current
operation. Details revision to the mine plan, some
of waste rock additional studies may be required
characterisation for the areas to which the mine
and the facilities have been relocated.
consideration This will be determined once
of potential the final mine plan is developed
sites, and the aforementioned gap analysis
status of design has been completed but some of
options considered this information has already
and, where been gathered to date.
applicable,
the status of As of July 2017, Baseline Study
approvals and Environmental Impact Assessment
for process programs have recommenced. The
residue bulk of the Baseline activities
storage and waste previously completed will be
dumps should be used as background information,
reported. however, local regulations requires
all environmental and social
baseline data to be no older
than 12 months since its collection,
thus new monitoring programs
are underway starting Q3 of 2017.
The monitoring and environmental
inventories consist of:
-- Fauna and flora characterisation;
-- Underground and surface water characterisation;
-- Noise, vibration and air pollution; and
-- Potential contaminants from extracted minerals and
stored tailings.
This data along with the mineralogical,
geological, social and economic
aspects of the new project will
be used to complete the Environmental
Impact Assessment, as per the
Terms of Reference received by
Miraflores from the local environmental
agency Corporacion Autonoma Del
Risaralda (CARDER) in July 2017.
The Environmental Management
Plan (EMP) will be drafted once
the environmental impacts are
completed and finalised in late
2017.
Acid rock drainage characterisation
data obtained to date includes
ABA, multi-element analyses,
and mineralogical analyses. Column
testing was conducted for waste
rock and low-grade stockpile
materials. Geochemical evaluation
of flotation tailings and cyanide
leach tailings was also conducted.
Preliminary results indicate
that the flotation tailings and
the majority of waste rock are
non-PAG (non-potentially acid
generating); whereas the low-grade
stockpiles and cyanide leach
tailings are PAG (potentially
acid generating). Potential for
metal leaching is indicated in
the static test data, but further
evaluation is in progress to
acquire kinetic data for use
in geochemical modelling.
The current mine plan does not
include low grade stockpiling
on surface. The cyanide leach
tailings will be placed underground
as part of the mine backfilling
requirements.
The current environmental strategy
includes the use of a large fraction
of the expected tailings flow
as underground backfill material.
The remaining filtered tailings
will be sent to the tailings
management facility where they
will be spread and mechanically
compacted to achieve an unsaturated,
dense and stable tailings deposit.
No pond or water impoundment
will exist so there is no potential
for infiltration to native soils
from the tailings materials.
Laboratory testing completed
by ACZ Laboratories in 2012 resulted
in Acid Generation Potentials
between 0 and 34 and Acid Neutralization
Potential between 9 and 140.
The potentially acid generating
samples were identified as low
grade ore and cyanide leach tailings.
Sulphur contents range from 0
to 1.4%. Paste pH ranges from
7.7 to 9.4 with an average of
8.6. It is Miraflores' intention
to place the cyanide leach tailings
underground. Any low grade material
mined will either be placed back
underground or be processed depending
on the grade of the material
The proposed filtered stacked
tailings storage facility will
be permitted as part of the EIA
application. Any waste dumps
permitted in the EIA will be
temporary dumps as the plan is
to use all of the waste mined
for planned backfilling operations
in the mine.
Miraflores has received a mine
development permit from the CARDER
for the development of 2,000m
of underground exploration development
which includes 2 permanent waste
dumps and water discharge licence
(Resolution 1505 of 7 September
2017).
-------------------- ------------------- ------------------------------------------------------------------ ------------
Infrastructure The existence of The Project is a greenfield site, DYNAMI
appropriate the facilities that will be required
infrastructure: to be installed on site include: GRES
availability of * Construction accommodation facilities;
land for plant
development,
power, * Kitchen and messing facilities;
water,
transportation
(particularly for * Main office;
bulk commodities),
labour,
accommodation; * First aid and ambulance post;
or the ease with
which the
infrastructure * Fuel Handling Facilities;
can be provided,
or accessed.
* Mine change house;
* Power supply (overhead power line);
* Stores and workshops; and
Sewage treatment facilities.
* Access roads linking the tailing dam and construction
camp with the process plant;
* Mining haul roads;
* Mining and maintenance workshops;
* Warehouse and store;
* Administration buildings;
* Laboratory;
* Reagents storage building;
* Communications upgrade;
* Security facilities;
* Sewage and water treatment facilities;
* Emergency response facilities including firefighting
building and equipment; and
* Dedicated overhead power line.
A new overhead power line will
be constructed for the process
plant, mine, water supply, tailings
area, administration and infrastructure.
Power requirements will be as
follows:
* Process plant 4 x 2,250 kVA;
* Mining 1 x 2,000 kVA;
* Accommodation 1 x 300 kVA;
* Tailings Area 1 x 50 kVA; and
* Water Supply 1 x 50 kVA.
Each area will have a dedicated
transformer and power supply
motor control centre.
Power Supply to the site will
be via a new overhead power line
from Quinchia. The incoming supply
voltage will be 33 kV, with step-down
transformers to the site distribution
voltage of 13.8 kV. A medium
voltage distribution board installed
at the incoming HV switchyard
will distribute power to the
outgoing feeders. The new power
line will be approximately 8km
in length and will be a dedicated
line.
Water supply needs for the Project
(processing plant and camp) have
been assessed and the water balance
summary has been carried out.
The processing plant will require
a total of 500 m3/day of water
to operate.
The accommodation camp will require
30 m3/day of freshwater which
will be trucked to site from
the local community water supply.
The surplus water from mine dewatering
operations will be used for construction
works, dust suppression and drilling
and/or will be sent to the water
treatment plant.
Miraflores have purchased 28
ha of land and intend to purchase
a further 100ha as part of the
development plan. Suitable sites
for mine portals, haul roads,
processing facilities and infrastructure
to support those operations has
been identified, geotechnical
assessments of the ground conditions
made and facility layouts completed
as part of the feasibility study.
The area is well serviced with
respect to roads. The site is
located approximately 7km from
the Panamerican highway that
runs along the Cauca River. The
road connecting the Panamerican
Highway with the town of Quinchia
passes within a few kilometres
of the site and is currently
being upgraded with 4 of the
7km of road now newly sealed
and with the remaining portion
of the road expected to be completed
prior to construction commencing.
From the newly sealed road access
to the site is via an unsealed
road which will require upgrading
to allow access for large bulk
loads. The feasibility capital
estimate allows for the upgrade
to this access road, the mine
haul roads and other proposed
internal roads for the operation.
Sufficient labour is readily
available throughout the region
but specifically in Quinchia
and in communities immediately
surrounding the site. Professional
and experience labour will be
sourced from both within and
outside of Colombia. The town
of Quinchia and surrounding towns
have an adequate supply of suitable
accommodation for any labour
brought into the area. It is
Miraflores's intention to employ
labour locally and where labour
is brought into the area from
outside, the Company will require
that labour to relocate to Quinchia.
Dynami Geo Consulting have completed
preliminary basic engineering
on the tailings storage facility
(TSF). The dry stack tailings
storage facility will receive
filtered tailings for spreading
and compaction. The final TSF
configuration allows for 50%
of final tailings to be used
as backfill in the underground
mine which includes 100% of the
concentrate leach residue tailings.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Cost The derivation Capital and operating cost estimates AUSENCO
of, or assumptions have been developed for a mining
made, regarding operation treating 466,628 tonnes
projected capital per annum of gold and silver
costs in the bearing ore and includes:
study. * An underground operating mine; and GRES
The methodology DYNAMI
used to estimate * A gold / silver processing plant recovering these
operating costs. metals, utilising a flow sheet comprising crushing,
grinding, gravity separation, conventional flotation,
Allowances made cyanide leach circuit for the concentrates,
for the content concentrate leach residue washing with Merrill Crowe
of deleterious for recovery of the precious metals, concentrate
elements. leach tailings detoxification and filtration for mine
back fill, flotation tailings filtration for mine
The source of backfill and dry stack tailings storage and support
exchange infrastructure and utilities.
rates used in the
study.
Derivation of The capital and operating cost
transportation estimates produced for the establishment
charges. of the mine is considered to
be an AACE class 3 estimate with
The basis for a level of accuracy within -10%
forecasting and +15%. Costs are presented
or source of in United States dollars (US$)
treatment and are based on prices in effect
and refining during the second quarter of
charges, 2017; no escalation factors have
penalties for been applied.
failure
to meet The exchange rate applied for
specification, the operating and capital cost
etc. estimates are:
-- US$1.00 = A$0.80 (Australian Dollar);
The allowances
made for royalties -- US$1.00 = EUR0.85 (Euro); and
payable, both
Government -- US$1.00 = 3,000 COP (Colombian Pesos).
and private
Transportation charges were derived
from an international freight
forwarder allocating individual
equipment and fabricated transport
charges included overseas freight
to port of Buenaventura where
applicable and in country freight
from port/ fabrication shop to
site.
Refining charges; from discussions
with potential refiners and from
previous studies by SRK;
Gold Payability - 99.6%
Silver Payability - 99.0%
Refining, transport and Insurance
costs - US$4.50/ payable ounce.
Miraflores will determine quality
prior to completing an offtake
agreement. No deleterious elements
are expected based on the metallurgical
testwork completed.
The feasibility study delivered
a total estimated Initial Capital
cost of bringing the project
into production of US$71.8 million
excluding all contingency. This
cost is based upon an EPCM approach
whereby Miraflores assumes general
risk. Contingencies of US$6.2
million was estimated for the
project development. Contingencies
have been estimated at 7.67%
of initial capital.
Sustaining capital requirements
associated with the mine and
owner cost of US$18.5 million
were included into the financial
model.
The Operating cost was based
on a high productivity operation,
this will demand a high efficient
environment for productivity
and cost controls. No contingency
was embedded into the operating
cost.
During the first year of operation,
allowances for the employment
of experienced ex-patriate personnel
were incorporated but it is expected
that this personnel will be replaced
progressively by local workforce.
The main consumables and labour
wages were benchmarked against
other similar operations.
The feasibility study delivered
the following results for the
operating costs:
* Mining cost of US$27.94 /processed t;
* Processing cost of 20.54/processed t;
* Tailing cost of US$0.62 /processed t; and
* G&A cost of US$4.36 / processed t.
The total site operating cost
is US$53.46 /processed t.
Government Royalty of US$52.18
/ payable ounce and
Refining charges, transport and
insurance of US$4.50 / payable
ounce.
Total Cash Costs of US$599 /
payable ounce.
The operating cost estimate did
not include Corporate overheads
and exploration activities.
The Miraflores Feasibility Study
assumed that the salvage value
of the remaining assets at the
end of the operating mine life
will off-set the closure and
remediation cost.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Revenue factors The derivation The revenue estimate was conducted Metminco
of, or assumptions as per industry standards taking
made regarding into consideration the annual
revenue factors metal production, commercial
including head terms and predicted metal prices.
grade,
metal or commodity The revenue estimate utilised
price(s) exchange the following assumptions:
rates, -- A gold and silver prices of US$1,300/oz and US$18 /oz
transportation respectively (Within the range of industry
and treatment expectations and Broker and Bank predictions. The
charges, gold price used is close to the moving 5 year average
penalties, gold price);
net smelter
returns, -- The average processed head grade of 3.29 g/t and 2.56
etc. g/t for gold and silver respectively (from the mine
and processing schedules);
The derivation
of assumptions -- Metallurgical recoveries of 92 % and 60 % for gold
made of metal or and silver production respectively (determined from
commodity metallurgical testwork);
price(s),
for the principal -- Metal payability factors of 96.6 % and 99.0 % for
metals, minerals gold and silver respectively (from historical figures
and co-products. and discussions with refiners);
-- Refinery and transport and insurance charges of
US$4.50/ payable ounce (based on previous study
estimates); and
-- Royalty of 4 % of the net smelter return (based on
the Miraflores licence and Existing Aporte contract
expiry (2019) prior to commencement of production in
late 2019 when the licence will revert to the normal
system of concession contracts which are subject to a
4% royalty only).
-------------------- ------------------- ------------------------------------------------------------------ ------------
Market assessment The demand, supply Metminco has been actively monitoring Metminco
and stock the market trends for the gold
situation industry. Modifying factors such
for the particular as gold price, payable metal
commodity, factors, and transport and refining
consumption costs are within the ranges predicted
trends by the industry analysts.
and factors likely
to affect supply Gold and silver are readily traded
and demand into around the world. These markets
the future. are considered mature and with
reputable smelters and refiners
A customer and located throughout the world.
competitor
analysis
along with the
identification
of likely market
windows
for the product.
Price and volume
forecasts and the
basis for these
forecasts.
For industrial
minerals the
customer
specification,
testing and
acceptance
requirements prior
to a supply
contract.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Economic The inputs to the Metminco developed a comprehensive Metminco
economic analysis financial model for the economic
to produce the evaluation of the Miraflores
net present value Gold Project. The financial model
(NPV) in the incorporates the modifying factors
study, delivered by the Miraflores Feasibility
the source and Study.
confidence of
these The key assumptions utilised
economic inputs in the financial model are listed
including as follows:
estimated -- Gold and silver prices of US$1,300 /oz and US$18 /oz
in ation, discount respectively;
rate, etc.
NPV ranges and -- Net smelter return as per the Revenue estimate;
sensitivity to
variations in the -- Operating and capital costs as per industry
significant standards;
assumptions
and inputs. -- Working capital and inventory management as per
industry standards;
-- Debt and financing activities are excluded from the
net present cost estimate;
-- All cash flows were treated in real terms, therefore,
no inflation or escalation factors were applied;
-- Discount Rate of 8%;
-- Site operating cost of US$ 53.46 /processed t; and
-- Income tax of 33%.
The Miraflores Feasibility Study
delivered a Net Present Value
of US$72.3 million after tax
and an Internal Rate of Return
of 25%.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Social The status of The Miraflores Gold Project is PORTEX
agreements located in the municipality of
with key Quinchía. The municipality
stakeholders obtained its name from the fortresses
and matters in Guadua that were called "Quinchos".
leading In 1966, Quinchía became
to social licence part of the Risaralda Department.
to operate.
The basic economy of the region
can be divided in two activities:
agricultural and mining activities.
Quinchía is characterised
by being a municipality with
an agricultural vocation, with
small land divisions and with
mining potential. However, there
is a lack of attention to land
uses and environmental regulations
within the agricultural sector.
For the primary information,
the results of the surveys undertaken
in 2013 were used. This information
will be updated when the new
social baseline study is completed
at the end of 2017. For the study
undertaken in 2013, the direct
influence area of the project
included the villages of Miraflores,
Guerrero, Aguas Claras, Veracruz,
Agua Salada, La Esmeralda and
Los Medios.
According to the social base
line information for the project
carried out in 2013, there were
289 families in the direct influence
area, with a total population
of 1,152 inhabitants. The village
that has the largest number of
inhabitants was Miraflores with
410 inhabitants.
Community base line studies,
social impact assessments and
community development plans will
be complete by the end of 2017.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Other To the extent The main risks for the development Metminco
relevant, of the Miraflores Gold Project
the impact of the identified by the feasibility CPs
following on the study are described as follows:
project and/or -- Social disruptions or community unacceptance of the
on the estimation project;
and classification
of the Ore -- Gold price;
Reserves:
-- Increase of the predicted capital or operating cost;
Any identified
material naturally -- Not achieving the target production because of mining
occurring risks. or processing issues. E.g. reduced ore grade, not
achieving the design processing throughput or gold
The status of recovery, etc;
material
legal agreements -- Existing Miraflores licence contract is not renewed
and marketing or the licence does not revert to the normal system
arrangements. of concession contracts which are subject to a 4%
royalty only);
The status of
governmental -- Geotechnical instability; and
agreements and
approvals critical -- Unpredicted water levels in the underground mine.
to the viability
of the project,
such as mineral
tenement status, Other than the Aporte contract
and government for the Miraflores licence no
and statutory other material agreement is in
approvals. effect at this time.
There must be
reasonable The Miraflores Project Environmental
grounds to expect Impact Assessment Study (2013)
that all necessary did not previously have an official
Government Terms of Reference (ToR), instead,
approvals the baseline data collection
will be received and impact assessment development
within the was progressed under a generic
timeframes ToR for open pit mining. This
anticipated in generic ToR was issued by National
the Authority of Environmental Licenses
Pre-Feasibility (ANLA) in 2012. In July 2016,
or Feasibility a new ToR was issued by ANLA.
study. Highlight The Project submitted a request
and discuss the to CARDER for an official ToR
materiality of for the new underground Project
any unresolved concept. The new ToR was obtained
matter that is in August 2017 and is being used
dependent on a as the basis for the ongoing
third party on environmental and social work.
which extraction
of the reserve The Environmental Impact Assessment
is contingent. Study is expected to be submitted
in Q1 of 2018.
Plan de Trabajos y Obras or (PTO);
The PTO licence is issued by
the Ministry Of Mines and Energy
and must comply with the Terms
of Reference set out by the ministry
for non-seabed minerals and materials.
All projects must obtain an EIA
and PTO prior to commencing development
of the project. Approvals are
expected to take between 4 and
6 months from submission depending
on the requirement to provide
further data requested by the
authorities.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Classification The basis for the The Measured and Indicated Mineral AUSENCO
classification Resources were classified as
of the Ore Proved and Probable Ore Reserves
Reserves respectively.
into varying
confidence The Ore Reserve estimate of the
categories. Miraflores Project is reported
as at the effective day of 18
Whether the result October 2017.
appropriately re
ects the Competent The Ore Reserves estimate is
Person's view of inclusive of Mineral
the deposit. Resources.
The proportion The reference point of the Ore
of Probable Ore Reserve is the run of mine (ROM)
Reserves that have stock pile area where the material
been derived from will be fed into the process
Measured Mineral plant.
Resources (if
any). The reserve estimate is supported
by the Miraflores Feasibility
Study complying with the JORC
Code standards.
The Ore Reserve estimate provided
appropriately reflects the Competent
Person's view of the opportunity
for Metminco to develop the Miraflores
Gold Project based on the modifying
factors derived from the Feasibility
Study work and the updated Mineral
Resource model.
The key modifying factors of
the Ore Reserve estimate are
described as follows:
-- Reserves are based on a gold price of US$1,200/oz and
silver price of US$18/oz;
-- An underground cut-off grade (CoG) of 1.53 g/t-Au was
applied to underground resources constrained by a
final underground design;
-- Reserves are defined within an underground mine plan
generated from diluted Mineral Resources;
-- Underground reserves assume total dilution of 31%;
-- Mining and processing production schedules were
developed for assessing the technical viability of
the project;
-- Revenue estimates were developed as per industry
standards;
-- Operating and capital cost estimates were executed as
per industry standards; and
-- The construction and production schedules formed the
basis for a financial model delivering a positive
outcome for the economic evaluation.
As can be appreciated from the
information in Table 1, the Ore
Reserve gold cut-off grade utilised
a gold price, site operating
costs and gold recovery values
which have small differences
from the figures used in the
financial model. This is due
to the Ore Reserve cut-off grade
being estimated for the stope
optimisation analysis prior to
development of the financial
model, being the first activity
executed during the Miraflores
Feasibility Study. The cut-off
grade delineated the material
to be included in the Ore Reserve
estimate but subsequent activities
such as the metallurgical test
work, mine and processing production
schedule and operating cost estimate
provided the final values for
the modifying factors which have
been included into the financial
model. The Competent Person assessed
these small discrepancies and
concluded that no material impact
on the final technical and economic
outcome of the Miraflores Feasibility
Study is evident.
Ore Reserves
Proved: 1.70Mt @ 2.75g/t Au and
2.20g/t Ag
Probable: 2.62Mt @ 3.64g/t Au
and 3.13g/t Ag
Proved and Probable: 4.32Mt @
3.29g/t Au and 2.77g/t Ag
-------------------- ------------------- ------------------------------------------------------------------ ------------
Audit or reviews The results of No formal audits have been conducted Metminco
any audits or on the Mineral Reserve estimate
reviews
of Ore Reserve
estimates.
-------------------- ------------------- ------------------------------------------------------------------ ------------
Discussions Where appropriate The Competent Person has recommended Metminco
of relative a statement of that further work be conducted
accuracy/confidence the relative prior to commencement of construction CPs
accuracy of the Miraflores Project on
and confidence the following topics:
level in the Ore -- Geotechnical stability analysis for the underground
Reserve estimate mine, especially in the areas containing
using an approach non-backfilled stopes;
or procedure
deemed -- Stope Backfilling sequence;
appropriate by
the Competent -- Develop a detailed mining construction schedule;
Person.
For example, the -- Understand the predicted underground water levels;
application of and
statistical or
geostatistical -- Update the environmental and social costs as per the
procedures to granted permit - still to be granted.
quantify
the relative
accuracy
of the reserve This further work may result
within stated in some changes to the modifying
confidence factors representing a high risk
limits, or, if for the achievement of the technical
such an approach and economic outcome of the Miraflores
is not deemed Gold Project delivered by the
appropriate, feasibility study.
a qualitative
discussion
of the factors
which could affect
the relative
accuracy
and confidence
of the estimate.
The statement
should specify
whether it relates
to global or local
estimates, and,
if local, state
the relevant
tonnages,
which should be
relevant to
technical
and economic
evaluation.
Documentation
should
include
assumptions
made and the
procedures
used.
Accuracy and
confidence
discussions should
extend to specific
discussions of
any applied
Modifying Factors
that may have a
material impact
on Ore Reserve
viability, or for
which
there are
remaining
areas of
uncertainty
at the current
study stage.
It is recognised
that this may not
be possible or
appropriate in
all circumstances.
These
statements of
relative accuracy
and confidence
of the estimate
should be compared
with production
data, where
available.
-------------------- ------------------- ------------------------------------------------------------------ ------------
This information is provided by RNS
The company news service from the London Stock Exchange
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