Mineral Commodities Ltd
ABN 39 008 478 653
40 Murray Road North
Welshpool WA 6106, Australia
PO Box 235, Welshpool DC WA 6986, Australia
Telephone: 61 8 6253 1100
Facsimile: 61 8 9258 3601
Email: [email protected]
Web: www.mncom.com.au
12 March 2014
CLARIFICATION ON PRESENTATION LODGED ON 5 FEBRUARY 2014
Further to the presentation released on 5th February, 2014, Mineral Commodities Limited (ASX: MRC) would like to further clarify the following aspects of the presentation in accordance with ASX Listing Rule 5.16 and the JORC Code 2012:
1. Page 2 of the release includes a bullet point stating that the Company has a target resource of 5 million tonnes grading 41.5% heavy minerals (HM) containing 3.4% zircon,
0.7% Rutile, 13.6% Ilmenite and 8.3% garnet. Prior to the Company's acquisition of the Tormin project, TransHex Group (THG) mined the beach for diamonds. THG completed several phases of drilling and bulk sampling between 1989 and 1991.THG provided
copies of the reports, drilling and bulk sampling to MRC. In addition to the THG work, Richard's Bay Minerals (RBM) conducted separate work and assessment on the Tormin project. The RBM report, which has been made available to MRC, also referred to previous test work from as early as 1957. Accordingly, the THG work, RBM work, and
earlier studies in the area combined with MRC's own sampling of the southern beaches between 2002 and 2011 enabled the Company to establish a JORC Code (2004) compliant resource statement of 2.7Mt grading 49.4% HM as reported and disclosed in the presentation of 5th February, 2012.
The use of the words "targeted resource" is not permissible under the JORC Code 2012. Therefore the Company advises that the difference between the existing JORC Code compliant resource as disclosed in the presentation and the "targeted resource" stated is in fact an exploration target. Whilst test work since 1957 (pre-JORC Code) has substantially confirmed the work completed by THG, additional work by the Company since 2002 has refined and improved upon the expected mineral assemblage. Further test work is expected to provide greater certainty on the historic studies in order to upgrade the resource to JORC Code guidelines.
The Company arrived at the exploration target based on the level of work completed by RBM, and THG in their initial exploration efforts and assessment and as reviewed by the Company. The Exploration Target is now 1.7 to 2.3 million tonnes at 33-41% HM 11-
14% ilmenite 2.7-3.4% zircon 0.5-0.7% rutile 14-18% garnet. The Exploration target is estimated by extrapolating the resources beyond the resource blocks along the beach sands within the Company's tenement and the grade estimates are based on historic drilling within the Target area. Because of the age of the historic drilling the reliability
of drilling results reported by the previous owners cannot be verified as reliable. Although a significant amount of work had been undertaken by THG and others and reviewed by the Company, the potential quantity and grade is conceptual in nature, there has been
insufficient exploration to estimate a mineral resource in accordance with the JORC Code
2012 in excess of that disclosed, and it is uncertain if further exploration will result in the estimation of a mineral resource in excess of that disclosed.
The Company has commenced mining operations at Tormin and actual production results coupled with the test work being undertaken on a daily basis by the Company's geological team will provide greater detail and certainty on the validity of the exploration target over the next 12 months. Initial results are disclosed on page 9 or the presentation.
The Company plans to undertake aeromagnetic surveys over the area, to re-survey the existing beach profile, to re-sample the entire beach Resource area, undertake a redrilling of the existing Northern and Southern resource using Sonic Drilling techniques and to conduct resource survey and grade reconciliation and sample grading on a daily basis as part of the mining operation to correlate between stated resource and actual resource in terms of quantity, grade and replenishment.
2. The presentation released on 5th February also included a production target of 48kt per annum of non-magnetic concentrate over the life of mine and > 100kt per annum of each of ilmenite and garnet. The estimated mineral resources underpinning the production target have been prepared by a Competent Person in accordance with the requirements of the JORC Code 2012. The production target is based on the production rates shown on page 5 of the presentation which the Company considers to be typical for this type of project taking the operating and capital costs indicated to the market into account. Page 11 of the presentation outlines the economic consequences for the Tormin Project based on these assumptions.
The production target is made of 54% JORC Code compliant Indicated resources and the balance made up of the exploration target as noted above.
The Company has a reasonable basis to include the exploration target in its production target given the level of work completed by RBM, and THG in their initial resource definition and as reviewed by the Company. As stated though, the potential quantity and grade of an exploration target is conceptual in nature and there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr Andrew Lashbrooke
CEO Mineral Commodities Limited [email protected]
+27 21 4171700
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