Metallurgical Test Work Update, Oman Projects

RNS Number : 0349W
Savannah Resources PLC
06 February 2017
 

 

Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

 

6 February 2017

 

Savannah Resources Plc

Metallurgical Test Work Update, Oman Copper Projects

 

Savannah Resources plc (AIM: SAV) ('Savannah' or 'the Company'), announces that it has received the preliminary metallurgical results for the Mahab 4 deposit (Figure 1 - See PDF) in Block 5, Oman, which has a Current Indicated and Inferred JORC Mineral Resource of 1.51Mt at 2.1% copper at Mahab 4.  Savannah is a 65% shareholder in Al Fairuz Mining, the holder of the Block 5 licence.  To view the press release with the illustrative maps and diagrams please use the following link: 

 

http://www.rns-pdf.londonstockexchange.com/rns/0349W_1-2017-2-3.pdf

 

HIGHLIGHTS:

·    Chalcopyrite identified as the sole copper bearing mineral, which is likely to lead to a simple, quick and relatively low cost flotation process to concentrate the copper ('Cu')

·    Test data indicates that any potential development should enjoy favourable processing costs as the resource at Mahab 4 appears to be relatively soft and requires relatively low primary milling power requirements

·    Test work also indicates relatively low equipment liner and grinding media wear due to low abrasion rates

·    Initial rougher flotation test work indicated potential recoveries of around 95% at moderate grind sizes

·    Rougher cleaner flotation at 38microns indicated that a saleable copper concentrate of over 23% can be achieved with recoveries over 90% with additional gold and silver credits

·    There is potential to also produce a zinc product but further work is required to confirm that this is possible without affecting the copper grades and recoveries

·    Additional test work is now underway to refine the process and to try and further improve the recoveries and overall copper concentrate grades

 

Savannah's CEO, David Archer said: "The results from the preliminary metallurgical test work are very encouraging in highlighting the commercial appeal of the Mahab 4 deposit, with work confirming that a saleable copper concentrate can be produced with recoveries exceeding 90%.  We are also encouraged by the potential for both gold and silver credits and the possibility of an additional zinc product.  Importantly, test work points towards Mahab being a soft ore, which should mean that copper produced from Mahab 4 ought to enjoy favourable overall processing costs.  The results from this work points towards a relatively simple float process and a clean and desirable copper concentrate, which is likely to be keenly sought after by off-takers and smelters.  Further test work is continuing and we look forward to updating shareholders on these developments."

 

Figure 1. Project Location Map - See PDF

 

OVERVIEW

 

Perth based consulting group Independent Metallurgical Operations Pty Ltd ('IMO') have been contracted to complete staged Preliminary Feasibility Study test work and flowsheet development for Savannah Resources on the Mahab 4 project. The programme has been broken into two stages:

 

Stage 1 Master Composite Flowsheet Development 

 

Master Composite flowsheet development testing has been sequenced as follows:

•    Master Composite Selection - 125kg of mineralised material was sourced from drill holes 16B5DD010 and 16B5DD017;

•    Composite Characterisation - including assaying, mineralogy and comminution test work (comminution is the reduction of solid materials to minute particles or fragments, by crushing, grinding, cutting, or other processes);

•    Flowsheet Development - staged open circuit flotation flowsheet optimisation testing; and

•    Locked Cycle Testing - closed circuit flowsheet confirmation including recycle streams.

 

Stage 2 Variability Composite Testing

 

Variability Composite testing based on the Stage 1 flowsheet and the scope is sequenced as follows:

•    Variability Composite Selection - comprising the selection of Variability Composites across the resource;

•    Variability Composite Characterisation - including assaying, mineralogy and comminution; and

•    Open Circuit Variability Composite Testing - allowing verification of the performance of the flowsheet developed as part of Stage 1.

 

MAHAB 4 MASTER COMPOSITE - PRELIMINARY RESULTS

 

Mineralogy

Optical mineralogy and point counting was conducted on a representative subsample ground to a P80 size of 300μm; sulphide mineral modal distribution is summarised in Table 1 and as follows:

·    Sulphide mineralisation is predominantly Pyrite and Chalcopyrite; no secondary copper mineralisation was identified; Chalcopyrite was identified as the sole copper bearing mineral;

·    The liberation size of Chalcopyrite was estimated as ~50μm, also indicating a requirement for regrinding of rougher flotation concentrate;

·    Chalcopyrite was identified veining through Pyrite grains of ~ 50μm size; 

·    Sphalerite was identified as minor discrete grains and as composites with Chalcopyrite and Chalcopyrite/Pyrite composites, also indicating a requirement for zinc depression during flotation upgrade targeting a copper concentrate zinc grade below 3%; and

·    The association of Sphalerite indicates potential for separate flotation recovery of zinc.

 

 

Table 1 Mahab 4 Master Composite - Sulphide Mineral Modal Distribution 

Sulphide Mineral Mode

Symbol

Distribution (%)

Pyrite

Py

80.7

Chalcopyrite

Ccp

8.4

Sphalerite

Sp

0.5

Subtotal - Discrete Grains

89.6

Chalcopyrite/Pyrite

Ccp/Py

5.9

Chalcopyrite/Sphalerite

Ccp/Sp

1.2

Chalcopyrite/Pyrite/Sphalerite

Ccp/Py/Sp

0.6

Sphalerite/Pyrite

Sp/Py

0.3

Subtotal Composite Grains

8.1

Chalcopyrite Veins Pyrite

2.3

Total Sulphides

100.0

 

Comminution Test Work

 Sag Mill Comminution ('SMC'), Bond Ball Mill Work and Abrasion Index testing was conducted; results are summarised in Table 2; key comments are provided as follows:

·    SMC data indicates Mahab 4 to be relatively soft as evidenced by a low Drop Weight Index and associated: Crushing (Mic), HPGR (Mih) and Coarse Milling (Mia) index values;

·    Bond Ball Mill Work Index testing based on a closing screen size of 106μm also indicates relatively low milling power draw based on a work index of 11.6kWh/t; while comminution power is expected to increase based on regrinding of flotation rougher concentrate, the below results indicate relatively low primary milling power requirements; and

·    Bond Abrasion Index testing reported an average index of 0.0798; this also indicates relatively low equipment liner and grinding media wear.

Table 2 Mahab 4 Master Composite - Comminution Results Summary 

Drop Weight Index (kWh/m3)

SMC Summary

Bond Summary

Morrell Index (kWh/t)

SMC Indices

Ball Mill Work Index

Abrasion Index

Mic

Mih

Mia

A

b

A*b

Bwi (kWh/t)

Ai

3.23

2.7

5.1

8.1

75.8

1.49

112.9

11.6

0.0798

 

Rougher Flotation Results

Rougher flotation simulates the first flotation stage, which would be conducted in any process plant established to extract the copper; the results for copper are show in Figure 2 (see PDF) and summarised below.

Copper

·    Copper recovery tends to reduce with increasing grind size - the difference is marginal between 38um (96.9% Cu recovery) and 53um (97.2% Cu recovery);

·    In overall terms the Cu grade recovery response and ability to recycle cleaner tailings streams during Rougher Cleaner flotation indicate we could adopt a coarser primary grind (P80) size of 63um, also resulting in reduced overall power consumption.

 

Figure 2 Mahab 4 Master Composite - Rougher Flotation Copper Grade Recovery - See PDF

 

Silver

·    Silver recovery appears to be insensitive to grind size between 38um and 75um with recoveries ranging from 76.7% to 77.7%.

Zinc

·    Zinc recoveries are significant and do not appear to be overly sensitive to grind size below a 106um grind size; and

·    Sphalerite recovery into the rougher concentrate acts to dilute overall copper grade; depression with either ZnSO4 and/or SMBS will assist in increasing copper concentrate grade at high recovery.

 

Batch Rougher Cleaner Flotation Testing

Batch rougher cleaner flotation testing has been conducted leading to recent completion of locked cycle flowsheet testing; key results are presented in Table 3; grade recovery curves are presented for copper in Figure 3 ( See PDF) and zinc in Figure 4 (See PDF) based on a primary grind (P80) size of 63μm and rougher concentrate regrind (P80) sizes of: 38μm, 30μm and 19μm; key comments are offered as follows:

·    Copper recoveries of ~ 90% achieved based on Mahab 4 Master Composite assaying 4.38% Cu;

·    Copper grade improves with reduced rougher concentrate regrind (P80) size from 23.5% Cu at a 38μm grind to 28.4% Cu based on a 19μm regrind;

·    Concentrate Zinc grade tends below a typical 3% smelter penalty limit based on a regrind size between 30μm and 19μm.

 

Table 3 Mahab 4 Master Composite - Rougher Cleaner Flotation Variable Regrind (P80) Size 

 

Test

Regrind P80 Size (μm)

Mass (%)

Cu

Zn

Au

Ag

Grade (%)

Rec (%)

Grade (%)

Rec (%)

Grade (g/t)

Rec (%)

Grade (g/t)

Rec (%)

FT13

38

16.1

23.50

90.2

4.76

48.2

0.439

29.6

38

47.4

FT14

30

14.9

25.74

90.2

3.48

32.4

0.432

27.8

42

44.5

FT15

19

13.8

28.35

89.3

2.28

21.1

0.487

29.4

40

46.1

 

Figure 3 Mahab 4 Master Composite - Copper Grade Recovery; Variable Rougher Regrind Size - See PDF

 

Figure 4 Mahab 4 Master Composite - Zinc Grade Recovery; Variable Rougher Regrind Size - See PDF

 

Competent Person and Regulatory Disclosures

 

The information in this document that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

 

For further information please visit www.savannahresources.com or contact:

 

David Archer

Savannah Resources plc

Tel: +44 20 7117 2489

David Hignell / Gerry Beaney (Nominated Adviser)

Northland Capital Partners Ltd

Tel: +44 20 3861 6625

Jon Belliss / Elliot Hance

(Corporate Broker)

Beaufort Securities Ltd

Tel: +44 20 7382 8300

Charlotte Page /

Lottie Brocklehurst

St Brides Partners Ltd

Tel: +44 20 7236 1177

 

Notes

Savannah Resources Plc (AIM: SAV) is a growth oriented, multi-commodity, mineral development company.

 

Mozambique

Savannah operates the Mutamba heavy mineral sands project in Mozambique in collaboration with Rio Tinto, and can earn a 51% interest in the related Consortium, which has an established initial Indicated and Inferred Mineral Resource Estimate of 3.5 billion tonnes at 3.8% THM over the Jangamo and Dongane deposits.  Under the terms of the Consortium Agreement with Rio Tinto, upon delivery by Savannah of the following Savannah will earn the corresponding interest in the Mutamba Project: scoping study - 20%; pre-feasibility study - 35%; feasibility study - 51%. Additionally, the Consortium Agreement includes an offtake agreement on commercial terms for the sale of 100% of production to Rio Tinto (or an affiliate).

 

Oman

Savannah has interests in two copper blocks in the highly prospective Semail Ophiolite Belt in Oman.  The projects, which have an Indicated and Inferred Mineral Resource of 1.7Mt @ 2.2% copper and high-grade intercepts of up to 56.35m at 6.21% Cu, with gold credits, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper and gold producer in a relatively short time frame. Together with its Omani partners, Savannah aims to outline further mineral resources to provide the critical mass for a central operating plant to develop the deposits and in December 2015 outlined exploration targets of between 10,700,000 and 29,250,000 tonnes grading between 1.4% and 2.4% copper.

 

Finland

Savannah has Reservation Permits over two new lithium projects, Somero and Erajarvi, covering an area of 159km² in Finland.  Savannah holds a 100% interest in these projects through its Finnish subsidiary Finkallio Oy.  Geological mapping has highlighted the presence of seven pegmatites across the licence areas - two on Somero and five on Erajarvi - with key lithium minerals petalite, spodumene and lepidolite all identified in hand specimens. Follow up work to further expand and define the pegmatites in readiness for drilling is being planned for the second quarter of 2017 (after winter).

 

Notes - The information in this document that relates to the resource estimation is based upon information compiled by Mr Colin Rothnie, an independent consultant. Mr Rothnie is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Rothnie consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

 

APPENDIX 1 - Mahab 4 and Maqail South JORC 2012 Table 1

Section 1 Sampling Techniques and Data

Criteria

JORC Code explanation

Commentary

Sampling techniques

·    Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

·    Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

·    Aspects of the determination of mineralisation that are Material to the Public Report.

·    In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30g charge for fire assay'). In other cases, more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

·    All data at the Maqail South and Mahab 4 Prospects has been gathered from diamond core.  HQ and NQ core sizes have been used.  Majority of holes have been angled to optimally intersect lithology structures.

·    Sampling from diamond drilling is by half core sampling of NQ or HQ core

·    Core is geologically logged and samples selected based on geological logging.  Samples are then dispatched to Bureau Veritas in Turkey for analysis using the following process route.

·      Whole sample is dried at 85°C, Crush to 70% -10 mesh (2mm), 100% pulverize to 85%passing -200 mesh (75 μm).

·      Au: 30gr Fire Assay / lead collection fusion / AAS finish / 5ppb - 10ppm

·      Au>10ppm (& Ag if also over-limit): 30gr / fire assay fusion / GRAVIMETRIC finish

·      24 Element (Mo, Cu, Zn, Ag, Ni, Co, Mn, Fe, As, Sr, Cd, Sb, Bi, Ca,P, Cr, Mg, Al, Na K, W, Hg, S) Aqua Regia Digest ICP-OES finish.

 

·    Bulk density determinations are made for all samples that are assayed, using the Archimedes method.  This measurement is completed in Oman by Savannah employees.

Drilling techniques

·    Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

·    Diamond drilling used HQ2 or NQ2 sized equipment.  Diamond core was not orientated.

·    Down hole surveys are completed using a single shot Tropari device at approximately 30-50m intervals down hole.

Drill sample recovery

·    Method of recording and assessing core and chip sample recoveries and results assessed.

·    Measures taken to maximise sample recovery and ensure representative nature of the samples.

·    Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

·    Diamond core recoveries were recorded in the drill logs.  It is unknown if a relationship exists between sample recovery and grade.

·    Areas of poor recoveries were observed in some areas and recorded in the logging.

·    In areas of poor recovery additional drilling muds were applied to improve recovery.

 

Logging

·    Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

·    Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

·    The total length and percentage of the relevant intersections logged.

·    All drill holes were logged for recovery, RQD, geology and structure.

·    Logging of recorded lithology, mineralogy, mineralisation, weathering, colour and other features of the samples. Diamond core was photographed wet.

·    All drill holes were logged in full.

Sub-sampling techniques and sample preparation

·    If core, whether cut or sawn and whether quarter, half or all core taken.

·    If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

·    For all sample types, the nature, quality and appropriateness of the sample preparation technique.

·    Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

·    Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

·    Whether sample sizes are appropriate to the grain size of the material being sampled.

·    HQ and NQ core was cut in half using a core saw. 

·    Certified reference standards, blanks and duplicates are routinely inserted in the sample sequence to assess the quality of sampling and analysis.

·    Sample sizes are considered appropriate for the style of mineralisation expected.

Quality of assay data and laboratory tests

·    The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

·    For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

·    Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

·    The analytical techniques used are appropriate for the elements and mineralization styles being explored for.

·    Savannahs QAQC protocol is to industry standards with standard reference material and blanks submitted at a minimum of 5% frequency rate.

Verification of sampling and assaying

·    The verification of significant intersections by either independent or alternative company personnel.

·    The use of twinned holes.

·    Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

·    Discuss any adjustment to assay data.

·    No independent or alternative verification of the assays has been made

·    No twin holes have been drilled

·    No adjustments have been made to the assay data

Location of data points

·    Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

·    Specification of the grid system used.

·    Quality and adequacy of topographic control.

·    Holes have been located DGPS unit by a licensed surveyor using WGS84 Zone 40N co-ordinates.

·    Holes have been downhole surveyed using a Tropari single shot device

·    Detailed topographic data is available for immediate area surrounding Maqail South and Mahab 4 projects.

·    The quality of the topographic data is excellent with elevations recorded to an accuracy of 0.1m.  

Data spacing and distribution

·    Data spacing for reporting of Exploration Results.

·    Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

·    Whether sample compositing has been applied.

·    Hole spacing is approximately 25m by 25m at Maqail South.

·    Hole spacing at Mahab 4 is approximately at 25m centers or less and have been designed to selectively target the mineralized zone.

·    Data at Maqail South and Mahab 4 is sufficient to establish geological and grade continuity needed for Mineral Resource estimation.  The current drilling is infilling previously reported Mineral Resources.

Orientation of data in relation to geological structure

·    Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

·    If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

·    Majority of drill holes are angled approximately perpendicular to the orientation of the lithological trends.  Some holes have been angled down the dip of the structure to collected material for metallurgical testing.

·    Orientation of the holes does not bias sampling data.

·    Reported intervals are down hole widths and are not necessarily true widths of mineralisation.

Sample security

·    The measures taken to ensure sample security.

·    Chain of custody is managed by Savannah. Samples are stored on site in a locked yard.  Samples are then transported to Turkey by airfreight.  Savannah personnel have no contact with the samples once they have been dispatched.

Audits or reviews

·    The results of any audits or reviews of sampling techniques and data.

·    No audits or reviews of the sampling techniques or data have been completed.

 

 

 

 

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

·    Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

·    The security of the tenure held at the time of reporting along with any known impediments to obtaining a license to operate in the area.

·    The Maqail South and Mahab 4 prospects are located with the exploration permit referred to as Block 5 Savannah has a 65% interest in the Block with the remainder being held by a local JV partner.

·    The tenement is in good standing with no known impediment to renewal.

Exploration done by other parties

·    Acknowledgment and appraisal of exploration by other parties.

·    Previous exploration has been completed at Maqail South and Mahab 4 by Gentor Resources between 2010 - 2012.

Geology

·    Deposit type, geological setting and style of mineralisation.

·    The deposit type being tested is the Cyprus type VMS model.  VMS mineralisation is interpreted to have formed on a mid ocean ridge and then emplaced as an ophiolite on the Arabian Craton.  Several examples of this model exist in the region.

Drill hole Information

·    A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

·    If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

·    The location of the drilling at Mahab 4 and Maqail South are summarised in Table 1 in the body of this release.

·    Previously completed holes by Gentor at Maqail South are not all reported in this release.

·    Not all holes completed in this program by Savannah have been reported in this release.

Data aggregation methods

·    In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

·    Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

·    The assumptions used for any reporting of metal equivalent values should be clearly stated.

·    Significant intersections are based on assays greater than 0.5% Cu and may include up to a maximum of 3.0m of internal dilution, with a minimum composite grade of 0% Cu.  The minimum width for an intersection is 0.2m.

·    Cu grades used for calculating significant intersections are uncut.

·    Minimum and maximum diamond core sample intervals used for intersection calculation are 0.2m and 1.2m respectively subject to location of geological boundaries.

·    No metal equivalents are used in the intersection calculation.

·    Where core loss occurs; the average length weighted grade of the two adjacent samples are attributed to the interval for the purpose of calculating the intersection.  The maximum interval of missing core which can be incorporated with the reported intersection is 1m.

Relationship between mineralisation widths and intercept lengths

·    These relationships are particularly important in the reporting of Exploration Results.

·    If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

·    If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').

·    Exploration results are reported as length weighted averages.

·    No high grade cuts have been applied to the reporting of the exploration results.

·    No metal equivalent values have been used.

·    Down hole intervals have been reported.  True widths are not known.

Diagrams

·    Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

·    Relevant diagrams and maps have been included in the main body of the release.

Balanced reporting

·    Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

·    All results have been reported.

Other substantive exploration data

·    Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

·    The interpretation of the results at Maqail South and Mahab 4 are consistent with the observations and information obtained from historical data collected.

Further work

·    The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

·    Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

·    No further drilling is planned for Mahab 4 or Maqail South.  Recent results will be incorporated into an updated mineral resource estimate.

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

Criteria

JORC Code explanation

Commentary

Database integrity

·    Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

·    Data validation procedures used.

·    Data collected at Mahab 4 and Maqail South is stored in an Microsoft Access database that is maintained by Savannah Resources.  Data is loaded via fixed format templates that are populated by site geologists.

·    Data is validated by visual inspection and data base queries to check integrity of hole depths against spatial information.

Site visits

·    Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

·    If no site visits have been undertaken indicate why this is the case.

·    Numerous site visits have been completed by Mr Dale Ferguson in 2014-2016.  At the visits the geological setting was reviewed with basic mapping completed. 

·    Location of drill collars have been validated by visual inspection and the use of a GPS.

·    Visual inspection and re-logging of core have been completed for the majority of holes.

Geological interpretation

·    Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

·    Nature of the data used and of any assumptions made.

·    The effect, if any, of alternative interpretations on Mineral Resource estimation.

·    The use of geology in guiding and controlling Mineral Resource estimation.

·    The factors affecting continuity both of grade and geology.

·    Good confidence exists for the geological interpretation of deposit.  Detailed logging and mapping has been completed for the area, which supports the interpretation. 

·    The geological model is based on geological logging from diamond core drilling and from surface geological mapping.   The geological model is well established for the formation of VMS mineralisation in the region.

·    Mineralisation occurs on the contact between the Geotimes and Lasail basalts and the position of this contact has been used to guide the location of the mineralisation.

Dimensions

·    The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

·    Mahab 4 is a steeply dipping lens of massive sulphide that is 300m long and 10-30m wide with a dip extent of 100m.  Mineralisation is located from surface to a depth of 200m

·    Maqail South is a shallow dipping lens of massive sulphide that is 100m long and 100m wide and a thickness of 1-20m.  Mineralisation is located 40m below surface to a depth of 80m

Estimation and modelling techniques

·    The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

·    The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

·    The assumptions made regarding recovery of by-products.

·    Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

·    In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

·    Any assumptions behind modelling of selective mining units.

·    Any assumptions about correlation between variables.

·    Description of how the geological interpretation was used to control the resource estimates.

·    Discussion of basis for using or not using grade cutting or capping.

·    The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

·    A resource estimate is not relevant to this announcement

Moisture

·    Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

·    Moisture is not relevant to this announcement

Cut-off parameters

·    The basis of the adopted cut-off grade(s) or quality parameters applied.

·    See details in Section 4

Mining factors or assumptions

·    Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

·    See details in Section 4

Metallurgical factors or assumptions

·    The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

·    See details in Section 4

Environmen-tal factors or assumptions

·    Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

·    See details in Section 4

Bulk density

·    Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

·    The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

·    Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

·    Bulk density has been estimated from density measurements carried out on drill core.

·    The Archimedes Principle has been used to measure the bulk density of material.  All measurements have been taken on fresh competent rock material only

Classification

·    The basis for the classification of the Mineral Resources into varying confidence categories.

·    Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

·    Whether the result appropriately reflects the Competent Person's view of the deposit.

·    Resource Classification is not relevant to this announcement

Audits or reviews

·    The results of any audits or reviews of Mineral Resource estimates.

·    N/A

Discussion of relative accuracy/ confidence

·    Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that 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.

·    These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

·    N/A

 

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 explanation

Commentary

Mineral Resource estimate for conversion to Ore Reserves

·    Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

·    Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

·    A mineral resource estimate is not relevant to this announcement

Site visits

·    Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

·    If no site visits have been undertaken indicate why this is the case.

·    A site visit is not relevant to this announcement

Study status

·    The type and level of study undertaken to enable Mineral Resources to be converted to Ore

·    Reserves.

·    The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

·    The metallurgical testing completed in this announcement is part of an ongoing Pre-Feasibility Study that will be used to support an Ore Reserve estimate at a future date.

Cut-off parameters

·    The basis of the cut-off grade(s) or quality parameters applied.

·    The material selected for testing is considered to represent the typical grade and physical properties of material expected to be mined based on previous scoping studies.

Mining factors or assumptions

·    The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

·    The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

·    The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling.

·    The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).

·    The mining dilution factors used.

·    The mining recovery factors used.

·    Any minimum mining widths used.

·    The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.

·    The infrastructure requirements of the selected mining methods.

·    Mining factors are not relevant to this announcement.

Metallurgical factors or assumptions

·    The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

·    Whether the metallurgical process is well-tested technology or novel in nature.

·    The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.

·    Any assumptions or allowances made for deleterious elements.

·    The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.

·    For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

·    Amenability to metallurgical treatment and upgrade is the focus of a detailed metallurgical testwork program including comminution and flotation flowsheet development testing, which has been applied to representative Master and Variability Composites.  Testing procedures follow standard industry processes and technologies which are used for the recovery of metals in VMS mineralisation.

·    Future comminution circuit design is supported by recognised test methodologies providing test data as criteria for crushing and milling circuit design.

·    Copper grade recovery response has been established based on batch flotation optimisation testing applied across a range of primary and regrind sizes, reagent types, dosages and head sample sources and grades.

·    Amenability to treatment and upgrade has been assessed following batch test optimisation based on locked cycle flotation testing, including recirculation of recycle streams and applied to representative Master and Variability Composites.

·    Metallurgical testwork reporting will include conclusions supported by physical test data and recommendations regarding any remaining testwork to support preparation of engineering design criteria.

·    The amount and distribution of the testing has been selected on the size and characteristics of the geological domains identified in scoping study evaluations.

·    Assessment of the quantities of typical deleterious elements have been made as part of the testing programs.  No elevated levels of deleterious elements have been identified.

Environmen-tal

·    The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

·    Metallurgical evaluation and study includes the performance of separate concentrate and tailings thickening and filtration properties based on representative products derived at locked cycle level.

Infrastructure

·    The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

·    Preliminary studies have been conducted to the existence of appropriate infrastructure required for a process plant development.  Required power, water, labour, transport and suitable land is available in the project area for the likely development.

Costs

·    The derivation of, or assumptions made, regarding projected capital costs in the study.

·    The methodology used to estimate operating costs.

·    Allowances made for the content of deleterious elements.

·    The derivation of assumptions made of metal or commodity price(s), for the principal minerals and co- products.

·    The source of exchange rates used in the study.

·    Derivation of transportation charges.

·    The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.

·    The allowances made for royalties payable, both Government and private.

·    No cost assumptions have been made as part of the metallurgical test program.

Revenue factors

·    The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

·    The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

·    Revenue factors are not relevant to this announcement

Market assessment

·    The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

·    A customer and 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.

·    Preliminary evaluations have been made at a scoping study level to assess the future demand and supply trends for copper concentrate.

·    Preliminarily discussions have been held with potential customers for the sale of copper concentrate. 

Economic

·    The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

·    NPV ranges and sensitivity to variations in the significant assumptions and inputs.

·    Detailed economic analysis is not relevant to this announcement

Social

·    The status of agreements with key stakeholders and matters leading to social licence to operate.

·    Savannah and its joint venture partners are in regular discussions with key stakeholders including government agencies and local communities on the development of this projects.

Other

·    To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

·    Any identified material naturally occurring risks.

·    The status of material legal agreements and marketing arrangements.

·    The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

·    No other matters are relevant to this announcement

Classification

·    The basis for the classification of the Ore Reserves into varying confidence categories.

·    Whether the result appropriately reflects the Competent Person's view of the deposit.

·    The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

·    Ore reserve classification is not relevant to this announcement

Audits or reviews

·    The results of any audits or reviews of Ore Reserve estimates.

·    N/A

Discussion of relative accuracy/ confidence

·    Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, 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.

·    N/A

 

 

 


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