• Mulga Rock Project now at 90.1Mlbs U3O8 being 71.2Mt at 570ppm U3O8
• High-grade at Mulga Rock East comprises 25Mlbs at 1,500ppm U3O8
• A 30% increase in Mulga Rock East resource since November 2016
• 50% of the global Mineral Resource is in Measured and Indicated status
Vimy Resources Limited (“Vimy” ASX: VMY) is pleased to announce the results from a Mineral Resource update at its Mulga Rock Project (MRP). This update relates to the entire Mulga Rock Project as a result of recent infill drilling completed in 4Q 2016.
The new global Mineral Resource has increased by 17% to 71.2Mt at 570ppm U3O8 for 90.1Mlbs U3O8 compared to the November 2016 estimate of 76.8Mlb U3O8. Significantly, the new resource includes 45.4Mlbs U3O8 of Measured and Indicated material and it is expected that most of this material will be converted to Proven and Probable Reserves at the completion of the Definitive Feasibility Study (DFS).
The Mulga Rock East mining centre, comprising the Princess and Ambassador deposits, will feed the process plant for the first 13 years of production. The Mineral Resource at Mulga Rock East has increased by 30% for a total of 56.4Mlb U3O8 at 670ppm U3O8 compared to the November 2016 estimate.
Upgrades expected to significantly improve project economics
Higher grade zones within Ambassador comprise 25Mlb at 0.15% (1,500ppm) U3O8. In mining studies currently underway, it is evident that early mining of much of this high-grade zone will provide significantly improved economics, compared to the PFS, released 16 November 2015, and underpin the initial project payback period.
Managing Director, Mike Young said, “This resource upgrade highlights the world class scale and economic development potential of the Mulga Rock Project.
“A 30% increase in uranium metal, and definition of the higher grade zone is a great result by the Vimy team, and will lead to a significant improvement in our operating costs in the Definitive Feasibility Study currently underway.
“Vimy is a compelling investment case in any uranium market, and therefore provides maximum leverage to uranium price.”
On the back of these excellent results, the Company expects to complete the following work over the next two
• Assess high-grade mining scenarios and staged capital implementation plans
• Complete an updated Ore Reserve using the new resource models
• Run financials for the DFS with new metal throughputs, and
• Submit remaining secondary permits to ensure the project is construction ready by mid-2018
These activities feed into the final DFS to be completed in the September 2017 quarter and published
Mulga Rock Project
The Mulga Rock Project is 100% owned and operated by Vimy Resources and lies approximately 240km eastnortheast of Kalgoorlie, situated on two granted Mining Leases (ML39/1104 and ML39/1105). Vimy holds title to approximately 750 square kilometres of exploration ground across the Mulga Rock Project (Figure 1).
As announced on 26 April and 25 May 2017, the Company identified several areas where the understanding of uranium mineralisation has improved through recent infill drilling and an independent review of the resource model. This new information has led to a material increase in the uranium metal through the following factors:
• Drill hole density: Increased drilling density, irrespective of drilling method, increases contained meta (common in supergene deposits)
• Diamond drilling: Diamond core shows a slightly thinner ore horizon at much higher uranium grade for similar contained metal when compared to aircore holes
• In-situ ore bulk densities: Additional diamond core data has demonstrated an increase in ore densities
• Twin hole drilling: Additional twin hole data sets have improved the understanding of disequilibrium factors and allow application by geological domain rather than globally; this has also resulted in an overall increase in the upper cut-off grades applied prior to estimation
The July 2017 Mulga Rock Project Mineral Resource is reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, (JORC Code 2012) and validated by AMC Consultants Pty Ltd.
Figure 1: Location of Mulga Rock Uranium Deposits
The July 2017 Mulga Rock Project Uranium Mineral Resource is 71.2Mt at 570ppm U3O8 for 90.1Mlbs U3O8 (see Table 1). This represents an increase of 17% in contained U3O8 metal for the global resource compared to the November 2016 estimate, comprising an increase in tonnage of 5% and an increase in grade of 11%.
Table 1: Mulga Rock Project Mineral Resource, July 2017 1, 2
There is 45.4Mlbs U3O8 in Measured and Indicated status representing 50% of the total global resource (Figure 2). It is expected that most of the Measured and Indicated material will convert to Proven and Probable Reserves as a result of the ongoing DFS.
The Mulga Rock East mining centre containing the Princess and Ambassador resources represents 63% of the global resource and will be the focus of initial mine development.
Figure 2: 2017 Mulga Rock Project Mineral Resource
Resource Estimates at Mulga Rock East
The Mulga Rock East mining centre comprises the Ambassador and Princess resources and will form the first stage of the mine development for the Mulga Rock Project (Figure 1). The Ambassador resource is a large, flat-lying deposit that is approximately 9 kilometres in length and 1 kilometre wide. It has been extensively drilled with 1,606 aircore and reverse circulation (AC and RC) holes completed for a combined total depth of 101,174 metres, and 366 diamond drill holes (DDH) for 20,065 metres (see Figure 3).
Figure 3: Ambassador and Princess deposits collar location map
The Princess resource is a more compact deposit approximately 2km long and 0.5km wide. It has been drilled with 204 aircore and reverse circulation (AC and RC) holes completed for a combined total depth of 11,605 metres, and 21 diamond drill holes (DDH) for 1,108 metres.
The Mulga Rock East mining centre will feed the process plant for approximately the first 13 years of production. The Mineral Resource at Mulga Rock East has increased by 30% for a total of 56.4Mlbs U3O8 at 680ppm U3O8 when compared to the last global resource update in November 2016.
There is a high-grade component within the Ambassador deposit containing 25Mlb at an average uranium grade of 0.15% U3O8, with 91% in Measured and Indicated status. As part of ongoing DFS work, Vimy has identified four major high-grade pit shells that will be the focus of initial mining activities during the project payback period.
Figure 4 shows a uranium grade ‘heat map’ for the Mulga Rock East area.
Resource Estimates at Mulga Rock West
Mulga Rock West mining centre comprises the Shogun and Emperor resources. An update to the Shogun exploration database and correction factors applied to historical radiometric drilling data was completed.
The Shogun Resource Estimate (Table 1) is 3.1Mt at 620ppm U3O8 for 3.8Mlbs U3O8, with 85% of the Mineral Resource now classified as Indicated. The Shogun Mineral Resource update shows a 3% increase in tonnage and 1% increase in contained uranium metal compared to the November 2016 estimate.
The overall Mineral Resource for Mulga Rock West now contains 33.8Mt at 450ppm U3O8 for 33.6Mlbs U3O8
using a 150ppm U3O8 cut-off. Figure 5 provides a drill collar map for the Mulga Rock West area.
Figure 5: Emperor and Shogun deposits collar location map
Managing Director and CEO
Dated: 12 July 2017
The information in this announcement that relates to the Exploration Results for the Mulga Rock Resource Estimate (U3O8), are based on information compiled by Xavier Moreau, who is a Member of the Australian Institute of Geoscientists. Mr Moreau is a full-time employee of Vimy Resources. Mr Moreau has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as Competent Persons as defined in the 2012 Edition of the JORC ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Moreau consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. The information in this announcement that relates to the Mulga Rock Mineral Resource estimates (U3O8) is based on information compiled under the supervision of AMC Consultants as consultants to the Company and reviewed by Ingvar Kirchner an employee of AMC Consultants. Mr Kirchner consents to the inclusion, form and context of the relevant information herein as derived from the original resource reports. Mr Kirchner has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.