Kun-Manie TEO Progress Report

RNS Number : 5216G

Amur Minerals Corporation

25 November 2020

 

25 November 2020

AMUR MINERALS CORPORATION

(AIM: AMC)

November 2020 Kun-Manie TEO Progress Report

Amur Minerals Corporation ("Amur" or the "Company") is pleased to provide an update on the progress of the compilation of its TEO for its far east Russian Kun-Manie nickel copper sulphide project.  A TEO is a mandatory Russian feasibility study addressing the physical and operating project considerations paving the way for registration of the project's mineral reserve by the State Committee on Reserves ("GKZ").  Reserve registration is a necessary milestone for a company to undertake detailed engineering, procurement and construction ("EPC") designs suited for compilation of a Bankable Feasibility Study ("BFS"), also referred to as a Definitive Feasibility Study ("DFS").

Per the terms and conditions of the mining licence, the TEO is due for submission to Russian authorities on 1 December 2020. Since March 30, the numerous companies involved in compilation of the TEO have been working remotely from their offices due to the COVID 19 pandemic.  In addition, the recent surge in infections throughout Russia has impacted our schedule.  On a precautionary basis and in October the Company applied for an extension of the delivery with Amurnedra who delivered the necessary documentation to Rosnedra in Moscow.

Currently, work continues to advance the final sections of the report, being the completion of the economic and financial valuation.  This includes finalisation of the capital and operating expenditures related to the project and development of a cash flow model with estimated revenues, capital and operating expenditures, taxes, depreciation and sustaining capital expenditures. Some work remains on the environmental response action plan.

Once complete, the final draft of the report will be submitted to the Company for review and finalisation.  However, due to remote nature of the compilation of this report, the extensive amount of required hard copy documentation is progressing, though not as rapid as originally scheduled and is now expected to be completed in Q1 21 .

Robin Young, CEO of Amur Minerals Corporation, commented :

"Completion of the Russian required TEO is a major milestone for any company.  This foundation document defines the criteria from which reserves are defined and then registered.  This registration process establishes procedural pathways going forward and what specific tasks are necessary to derive detailed engineering works for the comprehensive mine site and support facilities ultimately leading to a Bankable Feasibility Study.

"Completion of the final sections consisting of the financial analysis of the project and operational plan is anticipated to be Q1 2021 as the generation of the voluminous hard copy documentation is a time intensive task requiring substantial office commitments."

Given the delay, Amur takes this opportunity to provide a significant review of the progress to date.  The Company recommends the following text be read in conjunction with the graphic materials provided in the link at the end of this document.

TEO Highlights:

· Oreall, the certified and lead company responsible for compilation of the TEO has compiled an estimate of the tonnage and contained metals using all drill data and the regulatory requirements based on the Russian estimation requirement.  Grade estimates for nickel, copper, cobalt, platinum, palladium, gold and silver have been generated.  This is the first time gold and silver have been estimated.

· Russian estimation is more conservative than those defined using JORC standards.  Estimates of mineralisation are more highly constrained and seldom is mineralisation projected beyond a drill hole, hence Inferred resources are rarely estimated.  To be estimated, it should be mineable with a minimum of mineralisation falling external the mine plans.  The Russian reserve estimate is roughly correlative to Measured and Indicated JORC resources.

· The Kun-Manie Measured and Indicated JORC resource has been increased from 118.2 million combined tonnes at 0.73% nickel and 0.20% copper to the newly defined Russian total of 150.6 million tonnes at 0.81% nickel (1,215,081 t) and 0.22% copper (328,529 t).  This comparison using a nickel cutoff grade of 0.4% confirms the presence of a significant increase in the mineralisation drilled on a maximum spacing of approximately 100 meters.  It is noted that the above information excludes all mining considerations.  (Pages 2 and 3 of the Summary Pack provide detailed results depicting the location of the orebodies and the inventory.)

· RPM Global is presently compiling an updated JORC estimate for Kun-Manie.

· Russian generated estimates of the mineralisation have been calculated at nickel only cutoff grades of 0.1%, 0.2%, 0.3%, 0.4%, 0.6% and 0.8% (Page 4).

Cutoff Grade Ni%	Total Reserve Balance, t	Content, %				Content, g/t				Reserves, t				Reserves, kg
		Ni	Cu	Co	S	Au	Ag	Pt	Pd	Ni	Cu	Co	S	Au	Ag	Pt	Pd
0.1	323,106,429	0.50	0.15	0.011	1.13	0.05	0.76	0.12	0.13	1,614,441	476,217	35,862	3,654,728	14,756	244,815	38,566	41,880
0.2	215,726,620	0.67	0.19	0.014	1.47	0.05	0.95	0.15	0.15	1,445,430	405,707	30,068	3,177,608	11,303	205,076	31,287	32,483
0.3	176,311,355	0.75	0.21	0.015	1.63	0.06	1.01	0.15	0.16	1,324,006	365,029	26,721	2,872,912	10,036	178,695	26,629	28,577
0.4	150,635,712	0.81	0.22	0.016	1.73	0.06	1.07	0.18	0.19	1,215,081	328,529	24,431	2,609,801	9,559	161,413	26,372	28,646
0.6	104,375,020	0.93	0.24	0.018	1.98	0.06	1.23	0.16	0.18	970,760	249,273	19,274	2,063,726	6,146	128,340	17,003	18,230
0.8	60,052,663	1.05	0.26	0.02	2.22	0.06	1.30	0.16	0.18	629,243	155,020	12,121	1,336,080	3,641	77,360	10,020	11,007

· Gipronickel has completed extensive metallurgical test work on a 10 tonne bulk sample.  A plant flow sheet (Page 5) enabling the recovery of two concentrates has been identified.  Two saleable products can be generated and include a nickel concentrate and a separate copper concentrate.

· An equipment list of the key components has been identified based on various and multiple metallurgical tests. (Page 6)

· Using the 10 tonne bulk sample containing 0.81% nickel (2019 PFS projected mining grade of 0.73%) and 0.21% copper (2019 PFS mining grade of 0.19%), various processing approaches were examined to optimise the recovery of nickel and copper into each of the individual concentrate streams.  Firstly, a sulphide concentrate is generated capturing as much of the sulphide mineralisation as possible.  About 8.8% of the mill feed reports to the intermediate concentrate.  The average nickel content is 7.28% with copper being 2.02%. (Page 7)

· A series of test runs on the intermediate sulphide concentrate successfully established the composition of the two concentrates.  This included detailed analyses identifying the economic minerals (revenue source) and deleterious components (penalty fess). (Page 7)

· Non-binding offtake terms and conditions provided by a confidential metal's trader confirmed payable levels of metal in the nickel concentrate consisted of nickel and minor amounts of platinum and palladium.  Penalty fees are related to the MgO content totaling $37.50 per concentrate tonne.  This is $12.10 per concentrate tonne less than utilised in the 2019 PFS.  It is also noted specific reagents have improved the nickel grade within the concentrate from the PFS level of 9.7% nickel to that of 10.37%.  Also, the annual tonnes of nickel concentrate have increased to 27,124 tonnes from the PFS 24,306 tonnes per annum.  More tonnes of nickel concentrate at a high contained nickel grade should positively impact future financial projections. (Page 8)

· The non-binding terms as related to the copper concentrate indicate copper to be the primary source of revenue with minor amounts of palladium and gold contributing limited revenue.  Deleterious components include payments for the limited nickel ($7.00 per tonne of concentrate), Al₂O₃ at $2.00 per tonne of concentrate, MgO at $4.00 per tonne of concentrate, and silica at $4.05 per tonne of concentrate.  The penalty fees attributable to the copper concentrate therefore total $17.05 per tonne.  (Page 8)

· The ability to generate a copper concentrate creates a substantial and new source of revenue.  The PFS assumed no recovered copper based on the then non-binding offtake terms available.  Using the Gipronickel flowsheet and metallurgical test work results, it is projected that annually about 6,704 tonnes of payable copper would be recovered from 30,000 tonnes of concentrate. (Page 8)

· Only open pit mine production has been considered (compared to the PFS which considered an open pit and underground mining scenario).  Using geotechnical and hydrological studies and average overall pit slope angles of approximately 45 degrees (earlier steeper slopes of 55 degrees had been defined by SRK), three significant open pit locations have been identified to be present within the mining licence boundary limits.  These include the pits of Maly Kurumkon and Vodorazdelny previously identified in the 2019 PFS.  The new larger open pit includes the former pits of Ikenskoe / Sobolevsky and Kubuk as well as the previously unmineralised area between the formerly identified pits.  (Page 9)

· Ultimate pit designs at four cutoff grades have been generated for each of the three pits.  Waste and ore volumes are estimated for each and include the estimation of nickel, copper, cobalt, platinum, palladium, gold and silver.  Reserve tonnages indicate a potential mine life ranging from a minimum of 24 years to a maximum of 41 years based on 6.0 mtpa nominal capacity. (Pages 10 through 12)

· Using the 0.4% nickel cutoff grade, a total of 120.3 million of the 150.6 million total mineralised tonnes falls with the pit shell considerations.  This compares to approximately 90 million ore tonnes mined in the PFS.  The total waste that needs to be mined to recover the 120.3 million ore tonnes is approximately 750.9 million cubic meters.  As nickel and copper are the only two significant sources of revenues, the total tonnages of nickel and copper to be delivered to the mill for treatment are 1.12 million nickel tonnes and 307.5 thousand tonnes of copper.  As the PGM and precious metals provide limited revenue based on the current non-binding offtake terms, these are presently excluded.

· The mine site layout is similar to that of the PFS site layout with the addition of mine waste dumps also being identified in the drawing.  Note, the mining licence delineates the specific area from within which ore and waste can be extracted.  All other mining activities can be located external the boundary.  (Page 13)

· The TEO is the independently compiled source document from which presents the series of analyses.  The document is reviewed by industry experts ultimately leading to the selection of a cutoff grade and the registration of the reserve inventory by GKZ.  This foundation document sets specific criteria upon which the project is designed and the allocation of resources by the Russian Federation for support of infrastructure development.

A document outlining updates on the TEO can be accessed here: https://amurminerals.com/content/wp-content/uploads/20201125-TEO-Update.pdf  

Qualified Persons

The information contained in this announcement has been reviewed and approved by the CEO of Amur, Mr. Robin Young.  Mr. Young is a Geological Engineer (cum laude), a Professional Geologist licensed by the Utah Division of Occupational and Professional Licensing, and is a Qualified Professional Geologist, as defined by the Toronto and Vancouver Stock Exchanges and a qualified person as defined by the AIM Rules for Companies.  An employee of Amur for 15 years, previously Mr. Young was employed as an independent consultant with Fluor Engineers, Fluor Australia and Western Services Engineering, Inc. during which time his responsibilities included the independent compilation of resources and reserves in accordance with JORC standards.  In addition, he was the lead engineer and participant of numerous studies and projects requiring the compilation of independent Bankable Studies utilised to finance small to large scale projects located worldwide.  Mr. Young is responsible for the content of this announcement.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Enquiries:

Company Amur Minerals Corp.	Nomad and Broker S.P. Angel Corporate Finance LLP	Public Relations Blytheweigh
Robin Young CEO	Richard Morrison Adam Cowl	Megan Ray Tim Blythe
[phone]	[phone]	[phone]

 

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