Mineral Resource Estimate

RNS Number : 9961B

Regency Mines PLC

25 April 2012

 

REGENCY MINES PLC

Maiden JORC Compliant Mineral Resource Estimate for the Mambare Nickel Laterite Project

25 April 2012

Regency Mines plc ("Regency"), the mining exploration and mineral investment company with interests in nickel and other minerals in Western Australia, Queensland, Papua New Guinea and Pakistan announces the maiden JORC compliant Mineral Resource Estimate ("MRE") for the Mambare Nickel Laterite Project in Papua New Guinea.

The combined Indicated and Inferred JORC compliant Resource is:

95.1 million tonnes grading 0.96% nickel and 0.08% cobalt

912,595 tonnes of contained nickel

at a 0.60% nickel cut-off grade

The resource estimate was independently calculated by CSA Global (Perth, Australia) ("CSA") based on the results of the 2011 exploration campaign and only those holes from the 2008 exploration campaign located within the 2011 drilling area, comprising 3790.40 metres from 162 drill holes and 5 test pits.

A detailed breakdown of the resource is provided below, with the South representing the slopes of the Plateau and the North representing the Plateau;

Area	Lith Type	Class	Cut off Ni%	Vol '000m3	Tonnes '000 t	Ni%	Fe%	Co%	MgO%	SiO2%
South	Limonite	Indicated	0.6	1,618	1,699	1.00	40.93	0.11	4.05	15.84
		Inferred	0.6	36,958	38,805	0.89	39.77	0.11	4.87	16.84
		Total	0.6	38,575	40,504	0.90	39.82	0.11	4.84	16.80
	Saprolite	Indicated	0.6	1,648	1,928	1.05	13.75	0.04	23.12	44.84
		Inferred	0.6	22,565	26,401	1.02	14.29	0.04	22.43	42.82
		Total	0.6	24,213	28,330	1.03	14.25	0.04	22.48	42.96
	Total	Indicated	0.6	3,266	3,627	1.02	26.48	0.07	14.19	31.26
		Inferred	0.6	59,523	65,207	0.95	29.45	0.08	11.98	27.36
		Total	0.6	62,789	68,834	0.95	29.30	0.08	12.10	27.57
North	Limonite	Indicated	0.6	0	0	0.00	0.00	0.00	0.00	0.00
		Inferred	0.6	17,647	18,530	0.89	43.48	0.11	2.94	12.71
		Total	0.6	17,647	18,530	0.89	43.48	0.11	2.94	12.71
	Saprolite	Indicated	0.6	0	0	0.00	0.00	0.00	0.00	0.00
		Inferred	0.6	6,580	7,699	1.20	14.35	0.05	24.16	40.31
		Total	0.6	6,580	7,699	1.20	14.35	0.05	24.16	40.31
	Total	Indicated	0.6	0	0	0.00	0.00	0.00	0.00	0.00
		Inferred	0.6	24,227	26,228	0.99	34.93	0.10	9.17	20.81
		Total	0.6	24,227	26,228	0.99	34.93	0.10	9.17	20.81
Total		Indicated	0.6	3,266	3,627	1.02	26.48	0.07	14.19	31.26
		Inferred	0.6	83,750	91,435	0.96	31.02	0.08	11.18	25.48
		Total	0.6	87,016	95,062	0.96	30.85	0.08	11.29	25.70

All tonnes in this announcement are dry metric tonnes.

Exploration at the Mambare Nickel Laterite Project is being undertaken by Oro Nickel Ltd, a 50:50 Joint Venture of Regency Mines plc and Direct Nickel Pty Ltd. All values are reported on a total (100%) rather than attributable basis.

The MRE was calculated across a combined area of 9 square kilometres, with only 2 square kilometres in the primary target, the 80sq km plateau. The remainder of the resource is on the southern slopes below the plateau.

Details of the estimation methods, constraints and assumptions, and quality assurance and quality control (QA/QC) for this MRE are provided in the attached Executive Summary produced by CSA.

http://www.rns-pdf.londonstockexchange.com/rns/9961B_-2012-4-24.pdf 

The Executive Summary has been provided by CSA to Oro Nickel Ltd, pending the delivery of the full JORC report which will contain full supporting documentation normally accompanying such a report.

Mambare Project Manager, Ian Warden, commented:

"This has the potential to be one of the world's largest single nickel laterite deposits.

"This resource estimate of 95 million tonnes is three times the size of our initial target for this campaign.

"We found better thicknesses and grades than we anticipated, having penetrated the full profile including both limonite and saprolite horizons. Within the total JORC compliant resource there appear to be significant tonnages of higher-grade material, which bodes well for future project economics.

"We have drill tested less than 3% of the plateau surface, with mineralization open across the plateau to the north and west of the current drilling. This indicates the very significant potential upside of this project.

"These results reinforce our belief that the combined potential of the Mambare Nickel Laterite Project and the revolutionary Direct Nickel Process for extracting nickel from laterites will allow us to create a truly outstanding project."

The results detailed above are based primarily on the data from the 2011 drill programme as well as selected 2008 holes located in the vicinity of the 2011 operations.  An expanded MRE incorporating all the results from the 2008 exploration campaign and Ground Penetrating Radar Surveys as well as the results released here, will be released in the coming weeks in the form of a second report with a further increase in tonnage expected.

Following the delivery of the MRE at Mambare, attention will now be given to future resource definition work, metallurgical testing, and scoping studies.

The Mineral Resource estimate was completed by Rory Devlin under the direction of Dmitry Pertel and Mick Elias. Rory Devlin, Dmitry Pertel and Mick Elias are employees of CSA Global.  Mick Elias , FAusIMM is a Competent Person as defined by the Australasian Code for the Reporting of Exploration Results, Mineral Resources or Ore Reserves (JORC Code 2004 Edition), and as a Qualified Person within the meaning of AIM's Note for Mining and Oil & Gas Companies of June 2009.  Mr. Elias has reviewed the information contained in this announcement and consents to the inclusion of such information in the form and context in which it appears.

For further information contact:

Andrew Bell	0207 402 4580 or 07766 474849	Regency Mines plc	Chairman
Sandra Spencer	0207 402 4580 or 07757 660 798	Regency Mines plc	Public and Investor Relations
Phillip Davies/David Porter	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

Updates on the Company's activities are regularly posted on its website, www.regency-mines.com.

Background on the Mambare Nickel Laterite Project

The Mambare project consists of a portfolio of two exploration licences with an aggregate area of over 459 km2, including 255 km2 of granted tenure. The licence areas are situated on the Mambare Plateau, located in the Oro Province of Papua New Guinea.

The Mambare Plateau is situated north and east of the Mambare River and on the south-western boundary of the Ajule-Kajale Range. The Kokoda district is situated to the south of the project area. Recent exploration activity has been undertaken from an exploration camp situated about 8 km north of Kokoda on the southern slopes of the plateau and north of the village of Botue.  Access to the project area is via sealed and gravel road from the provincial capital Popondetta to Kokoda. Sealed road also connects Popondetta to the commercial port of Oro Bay.

The Mambare joint venture has also secured two exploration licences covering 1473 km2 in the Mount Lamington and Hydrographers Range volcanic areas, and 191 km2 in the Mt Trafalgar volcanic area.   These Exploration Licences have been granted to explore the region for geothermal heat, which could provide cheap, renewable energy for process heat and electrical energy for use in any future mine and DNi Process plant. Exploration will also assess the potential of any other minerals discovered within the application area.

Technical Glossary

Co	Chemical symbol for Cobalt
Cut-Off Grade	The estimated lowest grade of ore to be considered and included in the potentially economic part of the deposit
Fe	Chemical symbol for Iron
Grade	Quantity of metal for unit weight of host rock
Ground Penetrating Radar	Is a geophysical method that uses radar pulses to image the subsurface. This non-destructive method uses electromagnetic radiation in the microwave band (UHF/VHF frequencies) of the radio spectrum, and detects the reflected signals from subsurface structures. GPR can be used in a variety of media, including rock, soil, ice, fresh water, pavements and structures. It can detect objects, changes in material, and voids and cracks.
Indicated Mineral Resource	Defined in the JORC Code as "An 'Indicated Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence." For the purposes of the CSA resource estimate, Indicated Resources are defined by 100 x 100m drill hole spacings or smaller.
Inferred Mineral Resource	Defined in the JORC Code as "An 'Inferred Mineral Resource' is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence." For the purposes of the CSA resource estimate, Inferred Resources are defined by drill spacings of greater than 100 x 100m, with drill spacings generally being on 200 x 200m and 200 x 400m spacings.
JORC	The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code' or 'the Code') sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves
Laterite	A strongly leached, iron and aluminium rich rock, formed at the surface by weathering in tropical conditions
Limonite	An amorphous, hydrated iron oxide, dark brown to black, occurs in earthy masses of various forms.
MgO	Chemical symbol for Magnesium Oxide
Mineral Resource	A concentration or occurrence of material of economic interest in or on the Earth's crust in such a form, quality, and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, estimated from specific geological knowledge, or interpreted from a well constrained and portrayed geological model
Mineralization	Accumulations of economic or related minerals
Mt	Millions of dry metric tonnes
Ni	Chemical symbol for Nickel
Saprolite	A soft, earthy, red or brown, clay-rich and totally decomposed rock, formed in place by chemical weathering of igneous or metamorphic rocks, particularly in humid climates.  Structures that were in the unweathered rock are preserved in saprolite.
SiO2	Chemical symbol for Silicon Dioxide

http://www.rns-pdf.londonstockexchange.com/rns/9961B_1-2012-4-24.pdf 

 

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