Nickel Joint Venture Update

RNS Number : 6672A

URU Metals Limited

03 April 2012

 

3 April 2012

URU METALS LIMITED

("URU Metals" or "URU" or "the Company")

South African Nickel Joint Venture Update

 Ongoing drilling continues to confirm large disseminated nickel resources at Burgersfort and Zebediela nickel projects, South Africa

Highlights

·    Additional drilling results from both the Burgersfort and Zebediela nickel projects confirm large open pit disseminated sulphide nickel resources. The first phase of drilling has now been completed on both projects.

·    URU Metals has satisfied the terms of the Joint Venture Agreement and has fully vested its interest in both projects.

·    The South African Nickel Joint Venture ("Joint Venture") has engaged MSA Group to complete a Preliminary Economic Assessment ("PEA") on the Zebediela Nickel Project. 

·    Appointment of Mike Houston as CEO of the Joint Venture.

Commenting on the nickel joint venture update, Paul Loudon, Non-Executive Chairman of URU Metals, said: "The results continue to be extremely pleasing and indicate that both Burgersfort and Zebediela host large open pit disseminated sulphide nickel resources. Furthermore, the economic potential of one of these projects, Zebediela, will be indicated with the completion of a PEA.  I am particularly pleased to announce that Mr. Mike Houston, a highly experienced mine builder has joined the team.  Mike will lead the feasibility assessments and development of the projects on behalf of the Joint Venture. "

Background

URU Metals, the exploration and development company with uranium interests in Niger and South America, and nickel interests in southern Africa, announces additional diamond drilling results on two of its nickel projects which confirm the presence of large open pittable disseminated nickel sulphide resources. 

The first drilling campaign has been completed and test work on bulk samples is in progress to design comminution and metallurgical flow sheets to optimise metallurgical recoveries on the projects.  Further to the completion of the drilling campaign, URU has satisfied its obligations under the Joint Venture Agreement and has now fully vested a 50% interest in the South African Nickel Joint Venture.

Subject to the Joint Venture seeking to continue the development of the Zebediela Nickel Project, Umnex Mineral Holdings (Pty) Ltd. ("Umnex"), the vendor of the Zebediela Nickel Project, (see announcement dated 6 April 2011) will receive a direct interest in the Joint Venture from both Southern African Nickel and URU, in equal proportions following which the effective interest of each party in the Joint Venture will be: URU Metals 45 per cent., South African Nickel 40 per cent. and Umnex 15 per cent.

Details of drilling programme

The initial Burgersfort and Zebediela drilling programs were designed to establish the potential for large tonnage near-surface disseminated sulphide nickel mineralisation. The latest diamond drilling results are set out below.

Burgersfort Nickel Project

The Burgersfort Nickel Project is located close to the town of Burgersfort in the Limpopo Province of South Africa where nickel sulphide mineralisation in the extensive Aapiesdoorndraai peridotite sill is being evaluated.  Drilling of 12 vertical holes in a 2,500m by 1,500m target area in the north portion of the sill has been completed where the focus was to delineate a large, near surface disseminated nickel sulphide resource. Results of the boreholes are shown in Table 1 below.

Table 1- Significant Assay Results of vertical Diamond Drilling at Burgersfort Nickel Project

Borehole ID	From (metres)	To (metres)	Interval (metres)	% total Ni*	Remarks
AP05	38	253.61	215.61	0.24
Including	38	61	23	0.29	Oblique dyke 54.41m to 107.4m
Including	107.4	253	145.6	0.30
AP08	20	229.67	209.67	0.25
Including	38	164	126	0.33
AP09	42.55	169	126.45	0.22
Including	93	155	62	0.27
AP10	62.15	86	23.85	0.24
Including	66	78	12	0.26
AP11	69	204.39	135.39	0.26
Including	69	174	105	0.27
AP12	36	125.44	89.44	0.27
Including	36	102	66	0.28
AP13	33.62	148.7	115.08	0.19
Including	97	127	30	0.24
AP14	81.12	328.8	247.68	0.28
Including	85	265	180	0.29
AP15	10	115.64	105.64	0.22
Including	58.36	99	40.64	0.28
AP19	55.2	183.7	128.5	0.25
Including	55.2	99.17	43.97	0.27
AP21	41	273.8	232.8	0.33
Including	41	246	205	0.34
AP22	38	346	308	0.32
Including	38	327	289	0.33

*Ni grades shown as determined by multi-acid digest with ICP finish

Metallurgical test work has commenced on bulk samples made from Burgersfort drill core.  Subject to satisfactory progress of the metallurgical test work and the completion of a review of all QAQC results it is intended that a NI 43-101 compliant resource will be completed during Q2 2012.

Zebediela Nickel Project

The Zebediela Nickel Project is located in the Limpopo Province of South Africa close to the platinum mining town of Mokopane. A large peridotite body with known disseminated nickel sulphide mineralisation is being evaluated with the target of proving the existence of a large (potentially in excess of 1 billion tonnes) near-surface disseminated nickel sulphide resource.  The diamond drilling program has now been completed and a detailed metallurgical test program is in progress to determine an optimal process to produce a nickel sulphide concentrate of acceptable grade and quality.  Positive results have triggered the commencement of a NI 43-101 compliant resource and a Preliminary Economic Assessment (PEA) on the project which should be completed during Q2 2012.

The current drilling programme has confirmed that the body is continuous in a north-west, south-east direction for more than 3,000 metres with an average surface width of more than 1,000 metres.  Drilling and assay results to date have shown only minor variation in both host rock hartzburgite composition and nickel grades throughout the body.   Significant intercepts of the sixteen boreholes from which assay results have been received, together with the results of two historical holes are shown in Table 2 below.

Table 2 - Significant Nickel Intercepts of inclined Diamond Drilling at Zebediela Nickel Project

Borehole ID	From (metres)	To (metres)	Interval (metres)	% total Ni*	Remarks
U01 (historical)	101	622	521	0.26	Stopped in NE footwall
Including	536	631	95	0.30
U02 (historical)	60	222	162	0.27	Stopped in NE footwall
Including	116	211	95	0.33
Z01	35	96	61	0.26	Stopped in NE footwall
Including	59.54	96	36.46	0.26
Z02	51.7	238.53	186.83	0.22	Stopped in NE footwall
Including	174	228	54	0.25
Z03	59.34	312.37	253.03	0.23	Stopped in NE footwall
Including	83	178	95	0.28
Z04	47	364	317	0.25	Stopped in mineralized hartzburgite
Including	203	314	111	0.28
Z05	44.82	368	323.18	0.26	Stopped in NE footwall
Including	59	167	108	0.28
Z06	57.65	345.1	287.45	0.24	Stopped in mineralized hartzburgite
Including	93.08	201	107.92	0.27
Z07	51.17	446.25	395.1	0.24	Stopped in NE footwall
Including	76	200	124	0.29
Z08	60.94	381	320.06	0.26	Stopped in NE footwall
Including	230	345	115	0.27
Z09	58	329.35	271.35	0.22	Stopped in NE footwall
Including	58	158	100	0.26
Z10	50.8	202.80	152.00	0.21	Stopped in NE footwall
Including	71	159	88	0.22
Including	137	159	22	0.26
Z11	35.1	183.2	148.1	0.19	Stopped in NE footwall
Including	119	141	22	0.25
Z12	59	338.4	279.4	0.28	Stopped in  mineralized hartzburgite
Including	132	335	203	0.31
Z13	72.6	342.65	270.05	0.25	Stopped in  mineralized hartzburgite
Including	225	342.65	117.65	0.30
Z14	46	321.7	275.7	0.20	Stopped in  mineralized hartzburgite
Including	160.85	321.7	160.85	0.22
Z15	38.03	217	178.97	0.25	Stopped in mineralized hartzburgite
Including	153.54	215	61.46	0.35
Z16	34	316.4	282.4	0.17	Failed to reach SW hanging wall target

*Ni grades shown as determined by multi-acid digest with ICP finish.

Boreholes Z01, Z03, Z04, Z06, Z12, Z13 and Z14 are heel-toe boreholes along the same section drilled to evaluate the full width of the peridotite body with borehole Z01 drilled close to the bottom contact and the other holes drilled to intersect peridotite stratigraphically deeper into the body. Boreholes Z05, Z07 to Z011, Z15 and Z16 are placed to define, together with historical holes U1 and U2, the strike extent of the body.

Increased spending commitment by the Joint Venture partners

As a consequence of the drilling programme and progress made in metallurgical testing phases, the Joint Venture partners have committed a further US$685,000 (approximately ZAR 5 million) in order to complete a Preliminary Economic Assessment study on the Zebediela Nickel Project and to continue with metallurgical testing of the Burgersfort Nickel Project mineralization.

Details of the Preliminary Economic Assessment Study ("PEA")

Significant progress has been made in proving-up the selective recovery of disseminated nickel and magnetite from the Zebediela ore body using conventional technologies.  The MSA Group has been commissioned to conduct a PEA, which is currently underway and is based on work performed by the following experts:

·     TWP Engineering, responsible for the comminution circuit design;

·     Bateman Engineering N.V., responsible for the concentrator design;

·     Mintek SA, responsible for the comminution test work;

·     SGS South Africa Pty Ltd., responsible for mineralogy work and magnetite recovery test work;

·     Maelgwyn Mineral Services Africa Pty Limited, responsible for nickel flotation test work;

·     Professional Cost Consultants Pty Ltd., responsible for the process facility costing;

·     The MSA Group, responsible for the NI  43-101 compliant mineral resource statement and accompanying NI 43-101 technical report, mine plan, mine and infrastructure costing, environmental studies, financial model and collation of the overall PEA report

It is anticipated that the PEA study will be completed during Q2 2012.  

Appointment of Joint Venture CEO

The Nickel Joint Venture is pleased to announce the appointment, with effect from 2 April 2012, of Mr Mike Houston M.Sc. as the CEO of the Nickel Joint Venture who will be based at the URU Metals offices in Sandton, South Africa.  As announced by the Company in October 2010, the intention remains that URU Metals and South African Nickel plan to convert the Joint Venture and its associated nickel projects into a separate listed entity.  Mike will lead the listing of the Joint Venture and will manage the future development of the Joint Venture nickel projects through to the completion of a Definitive Feasibility Study.

Mike was previously non-executive chairman and remains a non-executive director of ZimPlats Holdings Limited. He is a founding director of Erin Mineral Resources (Pty) Ltd, an Australian exploration company with gold interests in West Africa and was an executive director of Anglo American Zimbabwe with responsibility for their mining assets. In his various roles at Zimbabwe Platinum Holdings Limited, Mike was involved in the development of a fully integrated major platinum producer from an initial opencast brown mining operation.  Mike is also a director TSX-V-listed Hana Mining Limited.                                                                                                                                                                         

For further information:

URU Metals Limited

Roger Lemaitre, Chief Executive Officer

Tel: [phone]

Fairfax I.S. PLC (Nominated Adviser and Joint Broker)

Ewan Leggat/Laura Littley

Tel: [phone]

Daniel Stewart & Company (Joint Broker)

Tel: [phone]

Brand: Mining IR

Andre Morral / Dr Iestyn Adams

Tel: [phone]

Forward-Looking Statements:

This press release contains statements that are 'forward-looking'. Generally, the words 'expect,' 'intend,' 'estimate,' 'will' and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Company's business or proposed business, which are not historical facts, are 'forward looking' statements that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

These forward-looking statements speak only as of the date they are made.

The technical information contained in this announcement has been reviewed and approved by Dr Brendan Clarke Pr.Sci.Nat., Geology Operation Manager at The MSA Group.  He is a member of the Geological Society of South Africa and a Professional Natural Scientist (Pr. Sci. Nat) registered with the South African Council for Natural Scientific Professions.  Dr Clarke has sufficient experience relevant to the style of mineralisation under consideration to qualify as a Qualified Person (QP) and is a consultant to URU Metals with no interest in the Company.  Dr Clarke has consented to the inclusion in this announcement of his name in the form and context in which it appears and verifies that exploration data is acquired by URU Metals using best practice quality assurance and quality control protocols.

GLOSSARY

Disseminated

A verb meaning spread or disperse (something, esp. information) widely, or spread throughout an organ or the body. 

Harzburgite

The ultramafic igneous rock, hartzburgite, is a variety of peridotite consisting mostly of the two minerals, olivine and low-calcium  pyroxene.

JORC

The JORC Code, Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves, was established as a joint initiative of The AusIMM, the Minerals Council of Australia and the Australian Institute of Geoscientists through the Joint Ore Reserves Committee

Nickel or Ni

Nickel belongs to the transition group of metals, is hard and ductile and a silvery-white metal with a slight golden tinge that takes a high polish.

Peridotite

A peridotite is a dense, coarse-grained igneous rock, consisting mostly of the minerals olivine and pyroxene. Peridotite is ultramafic, as the rock contains less than 45% silica. It is high in magnesium, reflecting the high proportions of magnesium-rich olivine, with appreciable iron

Preliminary Economic Assessment

A comprehensive study of a deposit in which all geological, engineering, operating, economic and other relevant factors are considered in sufficient detail for it to reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production. and is the equivalent to a JORC scoping study but allows inferences and costings to be drawn on the back of inferred resources.

 

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