Zanaga Project Mineral Resource Update

RNS Number : 8411Q

Zanaga Iron Ore Company Ltd

25 October 2011

 



26 October 2011

ZANAGA IRON ORE COMPANY LIMITED

("ZIOC" or the "Company")

Zanaga Project Mineral Resource Update

Zanaga Iron Ore Company Limited (AIM:ZIOC) is pleased to announce the following Mineral Resource update relating to the expansion and improvement in resource classification on the Zanaga Iron Ore Project (the "Zanaga Project") in the Republic of Congo (Congo Brazzaville). The updated resource estimate was prepared by independent consultants SRK Consulting (UK) Ltd ("SRK") and reflects additional drill-hole and assay data obtained since the preparation of the last estimate reported on 5 April 2011.

Highlights

·      Iron ore mineral resource expands to 4.3 billion tonnes at an average grade of 33.0% Fe from 4.0 billion tonnes at an average grade of 33.9% Fe, reported in accordance with the JORC Code

·      Improvement in resource classification: Ratio of Measured, Indicated and Inferred Resources has improved to 3%:59%:38% respectively, representing a significant change from the previous estimate announced on 5 April 2011 of 0%:43%:57%

·      Total of 126,984 metres drilling included in updated JORC statement

·      Mineral Resources derived from only 25km of the 47km orebody trend

Clifford Elphick, Non-Executive Chairman of ZIOC, commented:

"I am pleased to announce an improvement in the JORC compliant Mineral Resource classification as well as an expansion in Mineral Resource inventory at the Zanaga Iron Ore Project. A significant drilling programme has been conducted on the Zanaga Project and today's results provide further confidence in the large scale orebody."

Zanaga Iron Ore Project Mineral Resource Grows to 4.3 billion tonnes at 33.0% Fe

Mineral Resource Statement

Classification	Tonnes (Mt)	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)	Mn (%)	LOI (%)
Measured	149	38.7	39.1	2.4	0.047	0.093	1.2
Indicated	2,540	34.1	43.6	2.8	0.050	0.112	1.0
Inferred	1,650	31	46	4	0.05	0.12	2
Total	4,339	33.0	44.3	3.3	0.049	0.114	1.3

Reported at a 0% Fe cut-off grade within an optimised Whittle shell representing a metal price of 130 USc/dmtu.

The Mineral Resource statement set out above is reported in accordance with the terms and definitions included in the Australasian Joint Ore Reserves Committee (JORC) Code (2004) as at September 2011. As at this date, the total Mineral Resources reported at a 0%Fe COG constrained within an optimised Life of Mine (LOM) pit shell, amounts to 4.34 Bt grading 33.0% Fe, 0.049% P, 44.3% SiO2, 3.3% Al2O3, 0.114% Mn, and 1.3% LOI. The shell was determined by SRK using operating costs derived from the Pre-Feasibility Study work streams and a selling price of 130 USc/dmtu based on the SRK 3^rd Quarter 2011 consensus market forecast for Brazilian fines without adjustment.  The table above presents the Measured Mineral Resource, Indicated Mineral Resource, the Inferred Mineral Resource and the total Measured plus Indicated plus Inferred Mineral Resource based on drilling to 26 August 2011 and as estimated by SRK in September 2011. The Competent Person, Dr John Arthur of SRK, has given his permission for the publication of this information in the form and context within which it appears.

Drilling programme summary

The updated JORC Mineral Resource is estimated on drilling completed on the Zanaga Project up until 26 August 2011 and includes an additional 59,618 metres (88% increase) & 951 holes (45% increase) to drilling carried out for the previous resource statement announced on 5 April 2011. In addition, a total of 43,373 XRF analyses and 37,617 Niton analyses were used to model the mineral resource, more than twice the amount used in the previous mineral resource statement. Please see the table below for an update on drilling completed.

Drilling completed	Metres
at 30 Jun 2010 (IPO JORC resource)	42,706
30 Jun 2010 - 24 Nov 2010 (previous JORC resource, announced 5 Apr 2011)	24,660
24 Nov 2010 - 26 Aug 2011 (new JORC resource, announced 26 Oct 2011)	59,618
Total to date	126,984

Geological Summary

The north-south oriented greenstone belt which hosts the Zanaga deposit has been defined by an airborne geophysical survey over 47 km in length, and is typically between 0.5 and 3.0 km in width.

The iron bearing lithologies within the Zanaga deposit are itabirites/BIF, interbedded with basic lavas. Typically, the itabirites consist of layers of iron-rich and quartz rich meta-sediments which alternate on a millimetre to centimetre scale and which have been crosscut by late intrusions and dolerite dykes.

The weathered itabirite units which overlie un-weathered ore are typical of iron ore deposits and characterised by an enrichment in iron due to a mass reduction and associated leaching of the silicate layers.

For further information please contact:

Zanaga UK Services Limited                                                                              

Corporate Development and                                                                                                                  Andrew Trahar
Investor Relations Manager                                                                                                            [phone]

Liberum Capital Limited

Nominated Adviser, Financial                                                                          Chris Bowman, Christopher Britton
Adviser and Joint Corporate Broker                                                                                  and Christopher Kololian

                                                                                                                                                               [phone]

Citigroup Global Markets Limited

Joint Corporate Broker                                                                                                                                   Alex Carter

                                                                                                                                                               [phone]

Pelham Bell Pottinger

Financial PR                                                                                                                                       James MacFarlane
                                                                                                                                                          and Philippe Polman

                                                                                                                                                               [phone]

About us:

Zanaga Iron Ore Company Limited (AIM:ZIOC) is a BVI registered Company and the owner of 50% less one share interest in the Zanaga Iron Ore Project based in the Republic of Congo (Congo Brazzaville) through its joint venture partnership with Xstrata. The Zanaga Iron Ore Project is focused on the management, development and construction of a world-class iron ore mine and related, processing, rail and port infrastructure

Important Notice

The Competent Person who has reviewed the Mineral Resources as reported by the Company is Dr John Arthur (CEng MIMMM, CGeol FGS), who is an employee of SRK Consulting (UK) Ltd.  Dr Arthur is a Member of the Geological Society of London (CGeol) and of the Institute of Materials, Minerals and Mining (CEng) and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves"(JORC Code 2004 Edition) and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects'.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's and its subsidiaries' results of operations, financial position, liquidity, prospects, growth, strategies and expectations.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Company and its subsidiaries operate, may differ materially from those described in, or suggested by, the forward-looking statements contained in this Announcement. In addition, even if the development of the markets and the industry in which the Company and its subsidiaries operate are consistent with the forward-looking statements contained in this announcement, those developments may not be indicative of developments in subsequent periods. A number of factors could cause developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation or government, changes in its business strategy, political and economic uncertainty and other factors.

Any forward-looking statements in this announcement reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's and its subsidiaries' operations and growth strategy. Subject to the requirements of the AIM Rules for Companies or applicable law, the Company undertakes no obligation publicly to release the result of any revisions of any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement.

Glossary

AL2O3	Alumina (Aluminium Oxide)
BIF	Banded Iron Formation is the fresh, hard, un-oxidised, banded, magnetite itabirite and consists of magnetite, silica and occasional amphibolite, at Zanaga the BIF has a total iron grade range of 10%Fe to 47%Fe averaging 30%Fe.
Concentrate	the clean product recovered through the beneficiation processes
Fe	Iron
Feasibility Study ("FS")	a technical and economic study which demonstrates the technical and economic viability of a mining project to within a range of accuracy of 15% and to an appropriate degree of detail such that a decision for proceeding to the project development stage may be made without substantive revision to either scope or scale
Itabirite	metamorphosed banded iron formation
JORC Code	the 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia
LOI	Loss on ignition
Magnetite	a magnetic greyish black iron mineral (Fe2O4)
Mineral Resource	a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction.  The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.  Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories
Mn	Manganese
P	Phosphorus
Pre-Feasibility Study ("PFS")	a technical and economic study which demonstrates the technical and economic viability of a mining project to within a range of accuracy of 25% and to an appropriate degree of detail such that a decision for proceeding to the project development stage may be made without substantive revision to either scope or scale
SiO2	Silica

 

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