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Mineral Deposits Limited

October 30, 2008

Mineral Deposits Limited (TSX: MDM)(ASX: MDL) –

HIGHLIGHTS

– Sabodala Gold Project Resources Increased to 3.51 Million Ounces

— Major resource upgrade at the Sabodala Gold Project to 3.51 million ounces, up 28% on the previous announcement in 2007.

— Step-out drilling since 1 September 2007 has extended the Sabodala deposit in all directions and at depth.

— Infill drilling targeted near surface in-pit zones to increase drill confidence from Indicated and Inferred to Measured and Indicated in areas to be mined in 2008 and 2009.

– Sabodala Gold Mine Construction Phase Now 87% Complete

— Construction of the Sabodala mine and processing plant is now 87% complete.

— Project start-up remains on schedule for first gold pour in late December 2008.

— Approximately 168,000 ounces of gold is expected to be produced in calendar 2009.

— The power station and processing plant works are well advanced.

— Phase 1 open pit development, ROM pad construction and stockpiling of ore works are progressing well.

– Regional Gold Exploration

— New joint venture signed with AXMIN Inc, a Canadian exploration company, covering three exploration permits within 30 kilometres of the Sabodala gold plant.

— Encouraging results received from Bransan and Dembala Berola projects.

– Corporate

— First drawdown under the Project Finance Facility of US$70 million provided by Macquarie Bank Limited. MDL anticipates that this facility will a cover all expenditure to first gold production.

— Red Back Mining Inc. acquired approximately 62 million shares (12.8%) of MDL’s issued capital.

 SABODALA GOLD PROJECT 90% through operating company Sabodala Gold Operations SA  10% Government of the Republic of Senegal 

Background

The Sabodala Gold Project is located in Senegal, some 650 kilometres east of the capital Dakar within the Birimian belt and about 90 kilometres from major gold discoveries in Mali. The Sabodala and Niakafiri deposits lie within a 20.3 square kilometre mining concession. During the quarter, a new global gold resource of 3.51 million ounces was announced. Pit design optimisation work is in progress and a new mineable ore reserve statement (October 2007 mineable gold reserve is 1.406 million ounces) is scheduled to be completed by December this year, and expected to extend the project’s mine life.

New Sabodala Resource Estimate

On 15 September 2008, the company announced an updated gold mineral resource estimate at Sabodala of 3.51 million ounces. The new resource is up 28% on the previous global resource announcement in October 2007. A new mineable reserve estimate is in progress and is expected to be released later in the December 2008 quarter. The breakdown of the resources is summarised below:

 ----------------------------------------------------------------------- ---- Deposit                           Sabodala               Niakafiri                                       0.65g/t cut-off         0.5g/t cut-off       --------------------------------------------------------------------------- Resource Categories    Tonnes    Grade   Ounces   Tonnes    Grade   Ounces                            (M)    (g/t)   ('000)      (M)    (g/t)   ('000) --------------------------------------------------------------------------- Measured                 27.4     1.92    1,687      0.3     1.77       15 --------------------------------------------------------------------------- Indicated                14.7     1.71      807      7.9     1.33      340 --------------------------------------------------------------------------- Measured + Indicated     42.1     1.84    2,494      8.2     1.34      355 --------------------------------------------------------------------------- Inferred                 10.6     1.38      469      6.2     0.97      192 --------------------------------------------------------------------------- Total                    52.7     1.75    2,963     14.4     1.18      547 --------------------------------------------------------------------------- 

The new diluted resource for Sabodala of 2,963,000 ounces at a 0.65g/t gold cut-off, together with Niakafiri resources of 547,000 ounces, extends the Sabodala Gold Project above 3.5 million ounces. The upgraded resources are viewed as an extension of the mineralisation at the Sabodala and Niakafiri deposits. Of the total gold resources:

– the current Measured and Indicated (diluted) resource for the Sabodala deposit comprises an estimated 42.1 million tonnes at an average grade of 1.84g/t gold containing 2.5 million ounces and compares with the previous estimate in October 2007 of 28.3 million tonnes grading 2.22g/t gold containing 2.0 million ounces;

– Inferred resources for the Sabodala deposit now stand at 10.6 million tonnes at an average grade of 1.38g/t gold containing 469,000 ounces compared to the 182,000 Inferred ounces reported in 2007; and

– the Measured and Indicated Niakafiri diluted resource still stands at 8.2 million tonnes at an average grade of 1.34g/t containing 355,000 ounces above a cut-off grade of 0.50g/t. An Inferred resource of 6.2 million tonnes at an average grade of 0.97g/t contains 192,000 ounces.

The updated Mineral Resource for the Sabodala Mining Concession was recently audited by independent consultants Geosystems International in the USA. The resource grade model was completed in-house using procedures developed together with Geosystems International. The geological block model was interpreted by MDL’s geologists on-site.

Step-out drilling since 1 September 2007 has extended the deposit to the east and west along the Main Flat to the south into Sutuba, to the north along the Main Flat and Northwest Shear intersection and to depth along the Steep Fg related zone. Infill drilling targeted near surface in-pit zones to increase drill confidence from Indicated and Inferred to Measured and Indicated in areas to be mined in 2008 and 2009 (Attachments 1 and 2).

The current mineable ore reserve estimate is based on MDL drill holes and assay data available at 1 September 2008. The drill database for the new resource estimate includes a total of 1,276 drill holes for 134,069 metres representing 126,642 assays.

The resource estimate obtained for the Sabodala gold deposit is based on a combination of Ordinary Kriging (OK) and Multiple Indicator Kriging (MIK) for a total of nine different zones within the Main Sabodala Zone. Grade estimation was constrained using zone envelopes, which were validated using visual and statistical analyses and comparisons. Full details of these are contained in MDL’s 15 September 2008 release.

The latest grade estimates as presented in Attachment 3 have been classified as a combination of Measured, Indicated and Inferred Mineral Resources in accordance with CIM Definitions (2005) resource reporting classification guidelines and reconciled to the JORC Code (2004).

The Niakafiri deposit remains open at depth and, to the west, a new deposit (Niakafiri West) is in the planning stages for a third round of drilling. Shear related mineralisation has been traced for over a kilometre and widths up to 60 metres identified by RC and diamond drilling. True widths are yet to be determined.

Mine Development Progress

Project construction works are now 87% complete at the end of October, with most of the major capital equipment installed or on site (Attachment 4). The processing plant, power station and open pit development works are well advanced. The bulk of the work remaining for completion is the installation of various heavy engineering items, piping and electrics.

This period has been a productive one with the following notable achievements:

Sabodala Open Pit/ROM Pad

Sabodala mine open pit excavation works continued during the quarter. The primary goals of this stage of mining are to complete construction of the ROM pad and to mine 500,000 tonnes of ore prior to mill commissioning. Both of these goals are on track for completion ahead of schedule (Attachment 5).

Process Plant

The construction of the processing plant is well advanced, with critical path areas such as grinding mill installation and pipe rack structural steel deliveries attaining good levels of progress (Attachment 6).

Power Station

The bulk of the civil works at the 30 megawatt power station have been completed and it is on track for load testing in October 2008.

Water

Total water levels in the storage dams on site are at 3.1 million cubic metres as at mid October, as the wet season draws to a close. The company has received approval to lay a water pipeline of more than 40 kilometres to the Faleme River to ensure that ample process water is available for the project into the future.

Mine Site Accommodation Village

At present, total site occupancy is at about 900 people as the construction phase of the Sabodala gold mine and processing operations is nearing completion.

Sabodala Drilling Update

During the period, RC and diamond drilling programmes continued in the environs of the Sabodala gold project at Sabodala and Niakafiri West. Significant intercepts received during the quarter are summarised in Attachment 7.

Niakafiri West

Diamond drilling completed at Niakafiri West aimed to define the mineralisation style and structure continuity along strike and its depth extent. Assays from these holes are pending.

Sabodala

RC infill drilling was completed on the southern end pit limit where mineralisation remains open at relatively shallow depths. This has confirmed the existence of the Main Flat Zone as identified from previous drilling. Assays are pending.

REGIONAL EXPLORATION

In addition to its granted Sabodala mining concession, MDL, through its 100% subsidiary Sabodala Mining Company SARL (“SMC”), has five joint ventures covering an area of approximately 1,770 square kilometres. These comprise the company’s regional gold exploration programme. Massakounda, Dembala Berola and Makana are the subject of 80% joint ventures and, at Bransan; SMC holds a 70% interest. Under a new joint venture with AXMIN Inc. (AXMIN), SMC may earn up to an 80% interest in AXMIN’s three gold exploration permits. The company now has a significant land holding in this area with all projects located within 10-40 kilometres of the Sabodala mine lease (Attachment 8).

AXMIN Joint Venture

In early October, SMC signed a joint venture agreement with AXMIN covering three exploration permits located in the Birimian belt of Eastern Senegal – Sabodala NW, Heremakono and Sonkounkou – for a total of 821 square kilometres. These cover a large part of the prospective Mako Volcanic Belt. The broad terms of the agreement include:

– SMC is required to spend a total of US$2.5 million over three years to earn a 51% interest in each permit, with a minimum expenditure of US$0.5 million in year one, US$0.8 million in year two and US$1.2 million in year three. There is a minimum commitment of $0.8 million to be spent on the three properties under the agreement.

– If AXMIN elects not to contribute following the initial three year period, then SMC may earn an 80% interest in each permit by expenditure of an additional $3.5 million in the following three years.

– At that stage, AXMIN may elect to participate or transfer its residual interest to SMC in return for a 1.5% royalty.

Preliminary evaluation has identified over 12 prospects for follow-up. Drilling is proposed for a priority area located just 25 kilometres from Sabodala, where previous drilling had intersected short intervals of high grade gold mineralisation in a set of quartz lodes (best intersection is 10.6g/t gold over 1.9 metres).

Bransan Project

During the quarter, diamond drilling commenced to test part of the fold hinge zone on the Diadiako prospect. Significant gold mineralisation intersections were encountered in two of eight widely spaced holes. The intersections include:

– BSDD007: Interval of 14 metres @ 0.78g/t gold from 80 metres; and

– BSDD008: Interval of 7.6 metres @ 2.24g/t gold from 193 metres, located within a broader mineralised zone from 189 metres, which averages 1.43 g/t gold over 13 metres.

Follow-up drilling is planned for this prospect which is located some 12 kilometres from Sabodala.

Dembala Berola Project

Interpretation of the gold results received to date from the regional soil sampling has highlighted several areas of significant elevated gold values. Encouraging structural and lithological associations have been noted in many of these locations which have been broadly grouped into six areas for follow-up mapping and rock chip sampling.

At Berola Hill, some 15 kilometres west from Goundamekho, geophysical and remote sensing interpretation identified a large and high tenor gold anomaly where subsequent soil sampling confirmed anomalous gold values over an area of 600 metres by 2,000 metres. Values inside the greater than 50ppb gold outline average 124ppb gold with a maximum of 656ppb gold.

Encouraging results were received from the trench sampling programme completed last quarter.

 ----------------------------------------------------------------------- - Prospect                 Trench No.    From       To  Interval     Gold                                          (m)      (m)       (m)    (g/t) ------------------------------------------------------------------------ Goundamekho North           GTR013        3       14        11     0.21 ------------------------------------------------------------------------                                          16       32        16     1.37 ------------------------------------------------------------------------                             GTR016       14       22         8     0.53 ------------------------------------------------------------------------                             GTR019       31       52        21      2.7 ------------------------------------------------------------------------                               inc.                           1     52.5 ------------------------------------------------------------------------ Sadiola Hill                GTR017       17       28        11      0.7 ------------------------------------------------------------------------                                          38       57        19      0.7 ------------------------------------------------------------------------                                          73       80         7     2.75 ------------------------------------------------------------------------                             GTR018       16       46        30     0.32 ------------------------------------------------------------------------ 

Visible gold was also reported in two other trenches at the Goundamekho North prospect. RAB drilling has now commenced in the Goundamekho area, testing a number of structural targets, artisanal workings, historic anomalies and possible covered extensions of the Sadiola Hill and Goundamekho North prospects.

Massakounda Project

Geochemical sampling on a 400 metre by 100 metre grid is nearing completion at Massakounda. Preliminary results have been received and data compilation is in progress. The presence of lateritic caps, which may alter the surface geochemical signatures, was noted and RAB testing is warranted.

Makana Project

A diamond drilling programme commenced with one drill hole completed at the Majiva prospect, at the eastern side of the exploration permit. This intersected over 80 metres of sericite-silica +/- albite alteration in the interpreted southern extension of the Niakafiri Shear Zone. Assays are pending.

Additional targets have been interpreted from aeromagnetic analysis further to the west where the Sabodala structure lies beneath laterite cover. RAB and RC drilling is planned.

 GRANDE COTE MINERAL SANDS PROJECT 90% through operating company Grande Cote Operations SA 10% Government of the Republic of Senegal 

Background

The Grande Cote Mineral Sands Project, covering a strike length of more than 50 kilometres of continuous mineralisation, is located some 100 kilometres north of the capital city Dakar, which has an excellent deep water port. Final approvals were received for this project in November 2007, whereby the company was awarded a 25 year Mining Concession and a 15 year tax exoneration, amongst other incentives under the executed Mining Convention and Supplementary Deed.

Mine Planning

Work continued during the quarter on the detailed computer modelling and optimisation process to finalise the detailed mine plan. This task is expected to be completed later this year.

Ilmenite Project

Plans to rework the development plan and feasibility study to incorporate ilmenite are in progress.

Hydrological Testwork

Deep hydrological drilling continued throughout the quarter to evaluate make-up water supplies for management of the dredge pond levels. The target is within the Maestritchien sandstones, located some 460 metres below surface.

CORPORATE

Drawdown of Project Finance Facility and Gold Hedging Programme

On 20 August 2008, MDL announced the first drawdown under the US$70 million Project Finance Facility provided by Macquarie Bank Limited (MBL). A condition precedent of the Project Finance Facility was the establishment by the borrower, Sabodala Gold Operations SA, of a gold hedging programme and this programme has been completed.

In total, 460,000 ounces of gold has been committed for delivery between February 2009 and February 2014 at a delivery price of US$861.35 per ounce. In addition, 227,000 ounces of put options have been purchased with exercise dates over the same five year period at a strike price of US$861.35 per ounce.

Revolving Working Capital Facility

On 1 July 2008, the company issued 5,000,000 unlisted options to each of RMB Australia Holdings Limited (RMB) and MBL under the terms of the Option Deed following the final drawdown of monies under the Working Capital line on 10 June 2008. Should the Revolving Working Capital Facility remain drawn post 31 December 2008, then the company is required to issue up to 9,000,000 additional options equally between RMB and MBL.

Private Placement of Ordinary Shares Approved

On 6 August 2008, the company announced that shareholders had approved the issue of 63 million ordinary shares at $0.77 to institutional clients of GMP Securities Europe LLP and Euroz Securities Limited of Australia under a private placement. The amount raised was A$48.51 million (before costs).

Red Back Mining Inc. Investment in MDL

On 25 September 2008, MDL announced that it had received notification from Red Back Mining Inc. of Vancouver, Canada that it had acquired approximately 62 million shares (12.8%) of MDL’s issued capital.

Cash and Debt Position

At the end of the quarter, cash at bank was A$11.7million. The company also drew down US$40 million of the US$70 million Project Finance Facility provided by MBL.

The information in this report that relates to Exploration Results is based on information compiled by MDL’s Mining Operations Manager, Bruce Van Brunt MSc Mining Engineering, who is a member of The Australasian Institute of Mining and Metallurgy and is also a registered professional geologist in the State of Washington, USA. Mr Van Brunt has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken. He is qualified 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 defined in NI43-101. Mr Van Brunt has consented to the inclusion of this information in the form and context in which it appears in this report.

To view Attachment 1, please visit the following link: http://media3.marketwire.com/docs/MDM%20A1.pdf

To view Attachment 2, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A2.pdf

To view Attachment 3, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A3.pdf

To view Attachment 4, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A4.pdf

To view Attachment 5, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A5.pdf

To view Attachment 6, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A6.pdf

To view Attachment 7, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A7.pdf

To view Attachment 8, please visit the following link:

http://media3.marketwire.com/docs/MDM%20A8.pdf

ABN 19 064 377 420

 Contacts: Mineral Deposits Limited Jeff Williams (03) 9909 7633 Email: jeff.williams@mineraldeposits.com.au Website: www.mineraldeposits.com.au

SOURCE: Mineral Deposits Limited




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