7 July 2016
This announcement contains inside information
AMUR MINERALS CORPORATION
(AIM: AMC)
June 2016 Drill Update
High Grade Extension - 50 Metres of 0.97% Nickel
Amur Minerals Corporation ("Amur" or the "Company"), a nickel-copper sulphide mineral exploration
and resource development company focused on the far east of Russia, is pleased to announce the June 2016 drill results from its
Maly Kurumkon / Flangovy ("MKF") drill programme at Kun-Manie.
Highlights:
· The early start to the drill season and higher
than anticipated drilling rates have resulted in the completion of 38 holes containing a total of 7,469.2 metres which is nearly
50% of the total planned 15,000 metres for the year. A record number of metres have been drilled since 5 May 2016. This is
more than have ever been completed in a single field season. The greatest previous total was 7,201.9 metres completed in
2012.
· The 2016 programme is divided into three areas
identified as Area A, Area B and Area C. Area A is the first target located at the west end of MKF. The planned
programme for Area A was intended to confirm, upgrade and expand the resource over a 500 metre length of the deposit.
Planned for 3,300 metres of drilling, the programme was significantly upgraded during June in direct response to having
identified new mineralisation to the west of the 500 metre long block which had been interpreted to be barren of mineral.
The target area had been doubled to a length of 1,000 metres.
· Within Area A, drilling of a 2.1 million tonne
high grade (>0.5% nickel) Inferred resource has now been completed to a drill spacing previously used to identify Indicated
resources. The comprehensive high grade drill data set within the Inferred resource area indicates the zone to be 25.2
metres in average thickness, an increase from 15.8 metres used to define the April 2016 resource statement. The average
length weighted grade of the holes within the Inferred resource area has also increased from 0.81% nickel to 0.88% nickel.
Copper content increased from 0.21% to 0.25%. The high grade Inferred resource reported in April 2016 is considered to
understate the mineralised tonnage, grade and metal for this 300 metre wide block.
· Area A mineralisation potential was considered
to be limited to the west of the Inferred resource block where a fault was present and the geological rock type changed from ore
hosting pyroxenites to typically barren metagabbro. Step out holes located across the fault now indicate the metagabbro is
present but not as extensively as previously interpreted and high grade mineralisation is now confirmed to be present by
drilling. The high grade mineralisation is continuous from the Inferred resource block for an additional 400 metres
westward, all of which is new discovery mineral. The total length of MKF has been increased to 2,600 metres.
Additional potential remains further to the west within Area A and the Company will continue to drill further step outs in
increments of 100 metres until the metagabbro is intersected in the drilling.
· The newly discovered high grade mineralisation
in excess of 0.5% nickel averages 21.8 metres per hole containing 0.99% nickel and 0.24% copper. Drilling in the newly
discovered mineralisation is being conducted at a spacing that SRK Consulting (UK) Ltd has used to report Indicated
resources.
· Area A metallurgical holes drilled adjacent to
existing holes have been completed with at least another four holes planned for the new mineral.
· Drilling of DFS metallurgical holes located in
1,200 metre long Area B located to the east of A was initiated in late May and is ongoing.
· Analytical results continue to be generated
onsite using the Company's two Niton XL2 500 X-Ray Fluorescence ("RFA") units, allowing
for rapid turnaround and decision making in the field.
· Alex Stewart Laboratories ("ASL") confirms that
the analytical results from the first batch of 570 samples (May drilling) are in are being prepared for analysis. ASL
results are used to estimate resources. An additional 478 samples (June drilling) have been shipped from our facilities in
Khabarovsk, Russia to ASLS in Moscow.
Based on total metres, the 2016 drill programme of 15,000 metres is nearly 50% complete.
Since inception of drilling in early May, the focus has been on the western limit of MKF identified as Area A. High grade
nickel and copper results have been drilled and exceed expectations. The current Inferred drill resource appears to be
understated with regard to thickness, grade and contained metal. The presently identified Inferred resource could be as
much as 50% thicker (based on a 0.50% cutoff grade ("COG") and with an average grade increase of 10%.
The drill discovery of another 400 metres of high grade nickel and copper mineralisation
immediately to the west of the Inferred resource indicates that the MKF deposit is at least 2,600 metres in length. Very
similar grades and thicknesses to that of the Inferred resource substantiate the potential to add to the reserve inventory.
Given the location of the Area A mineralisation and the logistical support requirements to drill at Kun-Mane, the Company plans
to drill all resources to a classification of Indicated. This precludes having to return to the area for any additional
resource drilling and delineation.
Robin Young, CEO of Amur Minerals, commented:
"Last month we were pleased to report that the acquired 2016 drill results for the western area of
Maly Kurumkon - Flangovy were successfully delineating the limits of the mineralisation and the likely conversion of a two to
three million tonne block of Inferred resource to that of Indicated. We were also able to inform our shareholders that we
had identified the presence of the thick, high grade zone located along the entire length of the deposit. This discovery of
the pipe provides us with the additional potential to increase the tonnage and average grade of ore within this Inferred block
during the next resource update. We were in the final stages of defining the western limit of the mineralisation and
planning to shift our efforts to the collection of the metallurgical sample along the central area of Maly Kurumkon -
Flangovy.
Results from the first drill hole in June immediately modified to our plans. This first hole
intersected the high grade pipe where mineralisation was not anticipated to be present based on surface geological
information. We immediately expanded the step out drill programme and have now extended the pipe a further 400 metre long
along bringing its total length to 2,600 meters. Two of the holes have intersected mineral thicknesses of 50 metres which
contain nickel grades ranging from 0.82% to 0.98%. This new mineralisation should add substantially to the resource
inventory and contribute to the project potential. The rapid adjustment to our programme was possible due to our ability to
generate preliminary analytical results at site.
We look forward to continuing our monthly drill updates as well as providing additional
information related to the Definitive Feasibility Study."
Company
Amur Minerals Corp.
|
Nomad and Broker
S.P. Angel Corporate Finance LLP
|
Public Relations
Yellow Jersey
|
Robin Young CEO
|
Ewan Leggat
Laura Harrison
|
Dominic Barretto
Harriet Jackson
|
+74212755615
|
+44(0)2034700470
|
+44(0)7544275882
|
For additional information, visit the Company's website, www.amurminerals.com.
Please follow the link at the end of this RNS to view figures showing MKF drill hole location
map.
Notes to Editors
The information contained in this announcement has been reviewed and approved by the CEO of Amur,
Mr. Robin Young. Mr. Young is a Geological Engineer (cum laude), a Professional Geologist licensed by the Utah Division of
Occupational and Professional Licensing, and is a Qualified Professional Geologist, as defined by the Toronto and Vancouver Stock
Exchanges. An employee of Amur for 12 years, previously Mr. Young was employed as an exploration and mine geologist, mining
engineer, construction manager of a mine startup as well as independent consultant with Fluor Engineers, Fluor Australia and
Western Services Engineering, Inc. during which time his responsibilities included the independent compilation of resources and
reserves in accordance with JORC standards. In addition, he has been the lead engineer and project manager in the
compilation of numerous studies and projects requiring the compilation of independent Bankable Studies utilised to finance small
to large scale projects worldwide. Mr. Young is responsible for the content of this announcement which includes information
derived by SRK.
For further information, see the Company website at www.amurminerals.com.
The 2016 Drill Programme
Amur's 2016 drill programme is focused on the largest of its five defined deposits at the
Kun-Manie nickel - copper sulphide deposit located in the Russian Far East. The programme is a continuation of seasonally
implemented exploration work programmes initiated since 2004. In 2015, the Company was awarded a 20 year mining licence
(valid through 1 July 2035) and subsequently initiated the compilation of a Definitive Feasibility Study ("DFS"). Whilst
the DFS is under development, the Company continues to conduct exploration and development drilling on the site for the purposes
of resource expansion, reserve definition and additional work to provide metallurgical information for inclusion in the
DFS.
This year's 15,000 metre drill programme is to be completed over three distinct geographical areas
located along the 2,200 metre long Maly Kurumkon - Flangovy ("MKF") deposit. The programme is intended to accomplish the
following;
· Generate a large representative bulk sample for
metallurgical test work to be included in the DFS planned for completion 31 December 2017. The sample will be used for
process flow sheet design, plant design, determine of the composition of the concentrate and to establish the parameters for the
design of a furnace to smelt the concentrate into a saleable Low Grade Matte ("LGM").
· Verify and check drill a limited area of
Indicated resource by completion of holes along two already drilled sections which are Indicated by resource class. This is
to confirm that the increase in drill density does not significantly change the interpretation of the mineral thickness, grade
and dip limits of the ore zone(s).
· Convert drill-identified Inferred resource to
that of Indicated. Indicated resources are suitable for consideration in reserve definition in accordance with December
2012 JORC standards.
· Expand the resource beyond that delineated by
previous drilling and reported as a part of the resource statement in April 2016.
Geographically, the programme covers three areas which require different considerations with
regard to drill objectives and inclusion in the DFS. The areas are identified as A (the westernmost), B (the central) and C
(the easternmost). Using the Company owned drill rigs (LF70 and LF90C), the drill programme is advancing as planned from
west to east. This year's drilling was initiated on 5 May 2016, a full four weeks ahead of the planned startup during the
first week of June 2016.
Selection of MKF for the 2016 Drill Programme
This season's focus remains on the MKF deposit. It is the largest of the five drill
identified deposits with regard to ore tonnage, contained nickel and total length. MKF contains 59% (285,200 tonnes of
nickel) of the global Measured and Indicated resource (484,100 tonnes of nickel) identified at Kun-Manie. Measured and
Indicated resources are the source of reserves. MKF also contains 81,400 tonnes of nickel classified as an Inferred
resource which is located in two distinct pods at the eastern and western limits of the 2.2 kilometre long deposit.
Resource expansion potential is present along strike from the most recent and outermost drill sections which contain substantial
economic intervals of mineralisation. Given the size, grade and potential for resource expansion, this deposit is
considered to represent the primary source of ore production during the early stage of the planned operation. The resource
for MKF follows.
April 2016 Maly Kurumkon / Flangovy JORC Resource
Zero Cutoff Grade (Includes Internal Waste)
Resource
|
Tonnes
|
Ni
|
Ni
|
Cu
|
Cu
|
Pt
|
Pt
|
Pd
|
Pd
|
Category
|
(millions)
|
(%)
|
Tonnes
|
(%)
|
Tonnes
|
g/t
|
Kg
|
g/t
|
Kg
|
Indicated High Grade
|
24.9
|
0.86
|
214,300
|
0.23
|
57,200
|
0.1
|
3,700
|
0.1
|
3,900
|
Indicated Low Grade
|
43.5
|
0.16
|
70,800
|
0.06
|
27,000
|
0.1
|
2,900
|
0.1
|
3,000
|
Total Indicated
|
68.4
|
0.42
|
285,200
|
0.12
|
84,200
|
0.1
|
6,600
|
0.1
|
6,900
|
Inferred High Grade
|
7.1
|
0.76
|
54,400
|
0.20
|
14,100
|
0.1
|
1,000
|
0.1
|
1,000
|
Inferred Low Grade
|
15.0
|
0.18
|
27,000
|
0.08
|
11,500
|
0.1
|
900
|
0.1
|
1,000
|
Total Inferred
|
22.2
|
0.37
|
81,400
|
0.12
|
25,600
|
0.1
|
2,000
|
0.1
|
2,000
|
Total High Grade
|
32.0
|
0.84
|
268,700
|
0.22
|
71,300
|
0.1
|
4,700
|
0.1
|
4,900
|
Total Low Grade
|
58.5
|
0.17
|
97,800
|
0.07
|
38,500
|
0.1
|
3,800
|
0.1
|
4,000
|
Total
|
90.6
|
0.40
|
366,600
|
0.12
|
109,800
|
0.1
|
8,500
|
0.1
|
8,900
|
The Company remains mindful that as the DFS progresses with the focus on MKF, the deposits of
Vodorazdelny ("Vod") and Ikenskoe / Sobolevsky ("Iken") contain substantial amounts of Measured and Indicated resources that will
likely contribute reserves to the DFS production schedule. Presently, inclusion of these reserve sources will be considered
after the reserves are established during the mining evaluation of MKF. The largely Inferred Kubuk resource presents
additional production potential as well as providing highly prospective potential for resource expansion to the east, west and
dip directions. Kubuk requires both infill and step out drilling to establish it limits and to define the potential of the
deposit to contribute to the reserve inventory. The most recent global resource statement (April 2016) for all deposits
within the Company's production licence follows.
Global Total Resource - All Deposits
Zero Cutoff Grade (Includes Internal Waste)
|
Resource
|
Tonnes
|
Ni
|
Ni
|
Cu
|
Cu
|
Pt
|
Pt
|
Pd
|
Pd
|
|
Category
|
(millions)
|
(%)
|
Tonnes
|
(%)
|
Tonnes
|
g/t
|
Kg
|
g/t
|
Kg
|
|
Measured
|
18.3
|
0.51
|
93,300
|
0.14
|
25,600
|
0.19
|
3,400
|
0.20
|
3,700
|
|
Indicated
|
88.7
|
0.44
|
390,900
|
0.12
|
111,100
|
0.11
|
9,600
|
0.11
|
10,200
|
|
Sub-total
|
107.0
|
0.45
|
484,100
|
0.13
|
136,600
|
0.12
|
13,000
|
0.13
|
13,900
|
|
Inferred
|
57.7
|
0.44
|
255,900
|
0.13
|
76,200
|
0.13
|
7,700
|
0.14
|
7,800
|
|
Grand Total
|
164.7
|
0.45
|
740,100
|
0.13
|
212,900
|
0.12
|
20,600
|
0.13
|
21,700
|
|
2016 Drill Schedule and Productivity
The 2016 drill programme covers three geographical areas located along the length of the MKF
deposit. Identified as Areas A (the westernmost), Area B and Area C (the easternmost). Each has unique drill
objectives and requirements. A total of 15,000 metres of drilling are planned for the season. Originally planned to
be drilled over a five month period including June through October, a total drill rate of 3,000 metres per month was used to
develop the programme and attendant schedule. Drilling is being conducted using the Company's existing LF70 and a newly purchased
LF90C Boart Longyear drill rig. The Q1 2016 drill plan by area and drill objective follows.
Drill
Objective
|
Area A
(m)
|
Area B
(m)
|
Area C
(m)
|
TOTAL
(m)
|
Resource Verification
|
800
|
-
|
-
|
800
|
Resource Conversion
|
1,200
|
500
|
4,500
|
6,200
|
Resource Expansion
|
600
|
-
|
2,000
|
2,600
|
Metallurgical Sample
|
700
|
2,500
|
2,200
|
5,400
|
Planned Metres
|
3,300
|
3,000
|
8,700
|
15,000
|
Scheduled Completion
|
1 Jul
|
1 Aug
|
31 Oct
|
|
The 2016 Q1 plan was to complete 3,000 total metres at 1 July 2016. At the end of June 2016,
7,469.2 metres have been completed within 38 holes representing nearly 250% more than scheduled and nearly half that planned for
the entire 2016 season.
The substantially greater productivity is related to drilling having begun four weeks ahead of
schedule and higher drill productivity rates. The average drill rate per day is 140 metres whilst 100 metres was used for
planning purposes. More metres have already been drilled this year than have ever been drilled in a single field season
(2012 - 7,201.9 metres).
Drill production from 5 May through 28 June is summarised below.
Drill
Objective
|
Area A
(m)
|
Area B
(m)
|
Area C
(m)
|
TOTAL
(m)
|
Resource Verification
|
702.5
|
-
|
-
|
702.5
|
Resource Conversion
|
1,916.8
|
660.0
|
-
|
2,576.8
|
Resource Expansion
|
2,694.9
|
-
|
-
|
2,694.9
|
Metallurgical Sample
|
654.0
|
841.0
|
-
|
1,495.0
|
Total Completed
|
5,968.2
|
1,501.0
|
-
|
7,469.2
|
Drilling to date has been focused on the western area of MKF which is identified as Area A.
Results have exceeded expectations and therefore additional drilling beyond that planned has been and will be completed in the
area. The Inferred resource block appears to have been underestimated with regard to both contained ore tonnage and
grade. Infill drilling of the mineralisation indicates it is both thicker and higher in grade (established in May).
The resource expansion effort of the Area A programme has extended the mineralisation up to 400 metres in the westward direction
where resource expansion was thought to be limited. Having planned a single 100 metre expansion step out, the
mineralisation has now been identified to extend and additional 400 metres which has required a substantial increase in the
budgeted drill requirements for Area A.
The Company will continue to drill Area A until the full extent of the mineralisation is
established. The newly discovered mineralisation will be drilled at a spacing that has historically resulted in the
definition of Indicated resources. By implementation of this approach, the Company will no longer need to remobilise to the
area for future drilling. Metallurgical holes are planned within the expanded resource area. With the increase in metres
for Area A, the allocation of the 15,000 metre drill budget to the three geographical areas will be adjusted.
Area A Progress Overview
A total of 3,300 metres of drilling were planned for Area A. The present drill total is
5,968.2 metres with two of four drill objectives fully complete. This is a substantial increase over that planned for Area
A. The primary reason for the increase is related to the success of the step out programme requiring substantially more
drilling than planned. Mineralisation has been identified to extend further to the west with the discovery of resources
where it was previously thought have limited expansion potential.
The original the step out (Resource Expansion) drill component was comprised of three to four
holes totaling approximately 600 metres. These were intended to define the location and orientation of a fault that was
interpreted to potentially limit the mineralisation at the western extent of MKF. At the end of May, reported drill results
from the first two holes indicated that the intersected mineralisation was sub-economic and limited in thickness. The third
hole (completed in early June) intersected 29.1 metres of 0.74% nickel and 0.19% copper indicating the orientation of fault
(based on limited surface information) was significantly different and that potential for resource expansion existed.
Management approved additional step out drill metres to continue drilling along the strike
direction from MKF to identify the extent of the newly discovered mineralisation in the westward direction. Any newly
identified mineralisation was also to be drilled at the spacing SRK has utilised to define Indicated resources. At month
end, a total of 12 holes had been completed and mineralisation had been extended an additional 400 metres in the western
direction (now totaling 2,600 metres). At this report, another 100 metre step out is planned for Area A.
Additional metallurgical holes will be completed within the newly defined resource.
Additional metallurgical drilling may be required if resource expansion continues to be defined.
By implementation of this approach, the area should be sufficiently drilled for the determination
of Indicated resource and subsequent reserve definition thereby precluding the Company from having to return to the area for
further resource drilling in the future.
The LF90C core rig is scheduled to drill the remainder of Area A.
Area B Progress Overview
Area B contains an Indicated resource inventory. The majority of the drilling planned within
this area is for the acquisition of metallurgical sample for use in the DFS. A total of 12 holes (2,500 total metres) are
scheduled for completion. An additional 600 metres is also budgeted to define the dip limits of mineralisation for mine
design purposes. Area B drilling was initiated in late May (ahead of schedule) and is projected to be completed toward the
end of July.
Presently, four of the twelve metallurgical holes have been completed containing a total of 841.0
metres. Drilling of the holes to define the mineralised limits in the dip direction has also been progressed with three
holes containing 660 total drill metres having been completed.
During July, The LF70 will be drilling for the collection of the DFS metallurgical
sample.
Area C Progress Overview
Drilling is scheduled to begin in August. As the Company plans to complete 15,000 metres of
drilling during the 2016 season, this portion of the 2016 drill programme will be revised downward from the budgeted 8,700 metre
total. These metres are now allocated to the definition of Area A. Once Area A is fully drilled, the Area C budget
will be adjusted with priority drill metres allocated to resource conversion of the Inferred resource block and to the collection
of additional metallurgical sample from within the Inferred block. All remaining metres are planned for step out drilling
for resource expansion as the final stage of drilling in Area C and the completion of the 2016 field season.
Area A Detailed Drill Results
The Area A drill plan was designed to test a 500 metre length of the MKF deposit located at the
westernmost limits of existing drill defined mineralisation. There are four drill objectives for Area A which include:
· The drilling of a 100 metre wide area of
Indicated resources located at the eastern limit of Area A to establish that there would be a limited change in the
interpretation of the mineralisation with regard to grade and thickness by the introduction of new holes creating a more densely
drilled pattern. This was successfully completed in May and reported in the 1 June 2016 RNS.
· Infill drill the 300 metre wide Inferred
resource block to a spacing suitable to reassign the mineralisation to that of the Indicated category. Initiated in May,
this resource conversion (upgrade) was completed in June. The drill hole density increase has confirmed the continuity of
the mineralisation and should result in an upgrade of the resource. It is noted that the 2016 drill information indicates
the zone to be substantially thicker and higher in grade than previously estimated and the Company anticipates the newly
estimated resource within this block will also substantially increase during the next resource update.
· A limited step out drill effort was planned 100
metres to the west of the Inferred block and begun by end of May. Based on a change of rock type (which typically is barren
of mineralisation) and an identified fault thought to represent the contact between the barren and mineral host rock types, a
three to four hole programme was designed to define the orientation of a fault interpreted to truncate the mineralisation at the
western end of MKF. In the 1 June 2016 RNS, two holes had been completed and a third was in progress. At that date,
limited mineral had been identified and the mineralisation was sub-economic. The third hole (completed 2 June) intersected
a substantial zone of 29.1 metres averaging 0.74% nickel and 0.19% copper. As a result, the Company immediately expanded
the step out drilling effort in the westward direction. Advancing in 100 metre steps during the month of June, successful
drilling has identified that high grade mineralisation continues for an additional 400 metres to the west.
· As a part of the DFS, drilling for metallurgical
sampling was planned. A total of five holes had been planned along the 500 metre length block that contains the Indicated
and Inferred resource blocks. Drilling of these five originally planned holes is complete. Four additional
metallurgical holes are anticipated and more may be required if step out drilling continues to add to the mineralised strike
length.
Area A planned versus actual drilling distribution is summarised in the following
table.
Drill
|
Area A
|
Area A
|
|
Objective
|
Planned (m)
|
Drilled (m)
|
Status
|
Resource Verification
|
800.0
|
702.5
|
Complete
|
Resource Upgrade
|
1,200.0
|
1,916.8
|
Complete
|
Resource Expansion
|
600.0
|
2,694.9
|
Ongoing
|
Metallurgical Sample
|
700.0
|
654.0
|
Ongoing
|
Metres
|
3,300.0
|
5,968.2
|
|
Comprehensive Drill Summary Report
28 June 2016
Hole
|
Depth
(m)
|
Target
|
Analytical
Results
|
Completion
Month
|
C400
|
47.0
|
Verification
|
RFA
|
May
|
C401
|
301.0
|
Verification
|
RFA
|
May
|
C402
|
61.0
|
Verification
|
RFA
|
May
|
C403
|
207.0
|
Verification
|
RFA
|
May
|
C406
|
86.5
|
Verification
|
RFA
|
May
|
C404
|
138.6
|
Resource Upgrade
|
RFA
|
May
|
C405
|
171.0
|
Resource Upgrade
|
RFA
|
May
|
C407
|
153.2
|
Resource Upgrade
|
RFA
|
May
|
C408
|
193.0
|
Resource Upgrade
|
RFA
|
May
|
C409
|
204.0
|
Resource Upgrade
|
RFA
|
May
|
C415
|
271.0
|
Resource Upgrade
|
RFA
|
June
|
C326
|
82.0
|
Resource Upgrade
|
RFA
|
June
|
C327
|
109.0
|
Resource Upgrade
|
RFA
|
June
|
C410
|
240.0
|
Resource Expansion
|
RFA
|
May
|
C411
|
187.0
|
Resource Expansion
|
RFA
|
May
|
C412
|
256.0
|
Resource Expansion
|
RFA
|
June
|
C413
|
187.0
|
Resource Expansion
|
RFA
|
June
|
C414
|
299.2
|
Resource Expansion
|
RFA
|
June
|
C416
|
264.0
|
Resource Expansion
|
RFA
|
June
|
C417
|
331.0
|
Resource Expansion
|
RFA
|
June
|
C418
|
314.5
|
Resource Expansion
|
RFA
|
June
|
C419
|
213.0
|
Resource Expansion
|
RFA
|
June
|
C420
|
298.2
|
Resource Expansion
|
RFA
|
June
|
C421
|
340.0
|
Resource Expansion
|
RFA
|
June
|
C422
|
360.00
|
Resource Expansion
|
Sample Prep
|
June
|
C105T
|
82.5
|
Metallurgical Sample
|
NA
|
May
|
C149T
|
115.5
|
Metallurgical Sample
|
NA
|
May
|
C404T
|
112.0
|
Metallurgical Sample
|
NA
|
June
|
C407T
|
142.0
|
Metallurgical Sample
|
NA
|
June
|
C409T
|
202.0
|
Metallurgical Sample
|
NA
|
June
|
Total
|
5,968.2
|
|
|
|
NA: Whole core remains intact for Metallurgical Test Work.
Resource Verification
The Company successfully completed the verification drill effort in May and there is no new
information to report. The final results are summarised in the 1 June 2016 RNS.
Resource Conversion - Inferred to Indicated
The Inferred to Indicated resource conversion programme of Area A was completed in June with the
addition of three holes. The objective was to increase the drill density grid allowing for the conversion of Inferred
resource to that of Indicated. A total of eight new holes within the 300 metre long Inferred block brings the final number
of holes completed within the block to twelve (including the four previously completed holes used to define the Inferred
resource).
The 2016 infill drill results have successfully confirmed the continuity of the mineralisation
within the Inferred resource block and the drill density is now equal to that used at MKF by SRK to assign the area to the
Indicated resource category for reserve derivation. Within the 300 metre long block and at a cutoff grade ("COG") of 0.2%
nickel, the Inferred resource contains 3.4 million tonnes of ore with (averaging 14.9 metres thickness) an average projected
resource grade of 0.55% nickel and 0.16% copper. Using a higher COG of 0.5% nickel, the Area A Inferred resource block
contains 2.1 million ore tonnes averaging 0.74% nickel and 0.21% copper with a thickness in the order of 9.6 metres. This
Inferred resource reported as of April 2016 was based on four widely spaced drill holes located at the extreme eastern and
western limits of the 300 metre wide Inferred block. The drill results for the four discovery holes follow:
Area A - Inferred Resource Drill Information
April 2016 SRK Resource
Hole
|
0.2% Cutoff Grade
|
0.5% Cutoff Grade
|
From (m)
|
To (m)
|
Length (m)
|
Ni (%)
|
Cu (%)
|
From (m)
|
To (m)
|
Length (m)
|
Ni (%)
|
Cu (%)
|
Easternmost Drill Section
|
C105
|
26.1
|
57.5
|
31.4
|
0.78
|
0.20
|
26.1
|
56.0
|
29.9
|
0.80
|
0.21
|
|
61.6
|
78.8
|
17.2
|
0.71
|
0.17
|
61.6
|
78.8
|
17.2
|
0.75
|
0.19
|
C103
|
129.6
|
147.5
|
17.9
|
0.52
|
0.12
|
129.9
|
134.5
|
4.6
|
0.91
|
0.20
|
|
|
|
|
|
|
143.6
|
146.0
|
2.4
|
0.95
|
0.19
|
C106
|
174.7
|
186.1
|
11.4
|
0.73
|
0.19
|
174.7
|
179.7
|
5.0
|
0.92
|
0.23
|
|
|
|
|
|
|
182.5
|
186.1
|
3.6
|
0.78
|
0.28
|
Westernmost Drill Section
|
C151
|
124.3
|
137.5
|
13.2
|
0.71
|
0.18
|
125.4
|
136
|
10.6
|
0.83
|
0.19
|
Average Per Hole
|
19.6
|
0.70
|
0.17
|
|
|
15.8
|
0.81
|
0.21
|
During June, an additional three holes (total of eight during 2016) were completed to define the
dip limits of the mineralisation within the 300 metre block. The area is now considered to have been drilled to the extent
that the contained resources are likely considered to of the Indicated resource category. The comprehensive 2016 infill
drill results are presented in the following table.
2016 Infill Drill Results
(Bold and Italics Highlighted Holes Completed in June 2016)
Hole
|
0.2% Cutoff Grade
|
0.5% Cutoff Grade
|
From
(m)
|
To
(m)
|
Length
m)
|
Ni
(%)
|
Cu
(%)
|
From
(m)
|
To
(m)
|
Length
(m)
|
Ni
(%)
|
Cu
(%)
|
C404
|
47.9
|
76.0
|
28.1
|
0.72
|
0.20
|
47.9
|
52.4
|
4.5
|
0.55
|
0.19
|
|
|
|
|
|
|
55.4
|
66.0
|
10.6
|
0.93
|
0.24
|
|
83.5
|
109.0
|
25.5
|
0.78
|
0.20
|
83.5
|
86.0
|
2.5
|
0.69
|
0.22
|
|
|
|
|
|
|
93.5
|
107.5
|
14.0
|
1.02
|
0.21
|
C405
|
131.9
|
136.4
|
4.5
|
0.87
|
0.24
|
131.9
|
136.4
|
4.5
|
0.87
|
0.24
|
|
154.9
|
163.0
|
8.1
|
0.67
|
0.17
|
156.4
|
163.0
|
6.6
|
0.76
|
0.19
|
C407
|
74.9
|
143.3
|
68.4
|
0.93
|
0.26
|
74.9
|
98.2
|
23.3
|
0.94
|
0.25
|
|
|
|
|
|
|
100.8
|
143.3
|
42.5
|
1.01
|
0.29
|
C408
|
155
|
165.5
|
10.5
|
0.79
|
0.25
|
155.0
|
165.5
|
10.5
|
0.79
|
0.25
|
|
174.4
|
183.3
|
8.9
|
0.55
|
0.14
|
177.5
|
183.3
|
5.8
|
0.65
|
0.13
|
C409
|
135.8
|
201.1
|
65.3
|
0.86
|
0.273
|
135.8
|
153.3
|
17.5
|
0.90
|
0.33
|
|
|
|
|
|
|
156.3
|
199.6
|
43.3
|
0.93
|
0.28
|
C415
|
233.7
|
244.1
|
10.4
|
0.60
|
0.15
|
235.1
|
241.1
|
6.0
|
0.81
|
0.18
|
|
250.1
|
259.0
|
8.9
|
0.44
|
0.15
|
253.1
|
256.1
|
3.0
|
0.62
|
0.23
|
C326
|
6.0
|
9.0
|
3.0
|
0.31
|
0.05
|
|
|
|
|
|
|
14.5
|
19.0
|
4.5
|
0.27
|
0.11
|
|
|
|
|
|
|
31.0
|
44.5
|
13.5
|
0.44
|
0.21
|
31.0
|
32.5
|
1.5
|
0.55
|
0.25
|
|
|
|
|
|
|
37.0
|
40.0
|
3.0
|
0.70
|
0.21
|
|
56.6
|
74.1
|
17.5
|
0.78
|
0.19
|
59.5
|
74.1
|
14.6
|
0.88
|
0.20
|
C327
|
94.0
|
98.5
|
4.5
|
0.28
|
0.07
|
|
|
|
|
|
2016 Average / Hole
|
35.2
|
0.77
|
0.22
|
|
|
30.5
|
0.90
|
0.25
|
Prior Average / Hole
|
19.6
|
0.70
|
0.17
|
|
|
15.8
|
0.81
|
0.21
|
Global Average / Hole
|
30.0
|
0.75
|
0.21
|
|
|
25.2
|
0.88
|
0.25
|
The resource conversion drill programme has been highly successful within the 300 metre long
Inferred block of Area A. The following has been noted:
· Continuity of the mineralisation has been
verified and the drill spacing is equivalent to that used by SRK to identify Indicated resources. The next update to the
resource estimate should result in the reclassification of this portion of the Inferred resource upward to Indicated.
· The 2016 drill information significantly varies
from that used to estimate the Inferred resource. The estimate is based on a total of four holes. The global length
weighted thicknesses and grades using 8 additional holes indicate the mineralised zone has greater thicknesses and higher
grades. It is anticipated that a significant increase in the resource tonnage and total contained nickel and copper will be
generated in the resource update for this specific Inferred resource block.
· At a 0.2% COG, the mineralised thickness as
determined by the drill holes has been increased by 10.4 metres (53%) to an average of 30.0 meters with the nickel grade
increasing from 0.70% to 0.75%. Copper has also increased from 0.17% to 0.21%. The current 0.2% COG Inferred resource
is projected to be 3.4 million tonnes with an average projected resource grade of 0.55% nickel and 0.16% copper.
· At the 0.5% COG, the drill hole mineralised
thickness has been increased by 59% (9.4 metres) to an average of 25.2 metres. Concurrently, the average nickel grade has
increased from 0.81% to 0.88%. Copper has been increased from 0.21% to 0.25%. The 0.5% nickel COG indicates the block
contains 2.1 million ore tonnes averaging 0.74% nickel and 0.21% copper with a thickness in the order of 9.6 metres.
· The projected increase in in both thickness and
average grade has a compounding effect when both tonnage and grade are increased. Ultimately, it is anticipated that the
resource update for this Inferred resource area can increase the tonnage by as much as 50 to 60% while simultaneously having
average grade increases approaching 10% for both nickel and copper.
Drilling is now complete for this resource conversion phase of Area A.
Resource Expansion - Mineral Limit Delineation
Resource expansion drill planning was set to complete one step out of 100 metres to the west of
the limits of the block model. This limited plan was based on surface geological observations. A fault had been
identified and the composition of the rock type changed from the host of pyroxenite to a typically unmineralised
metagabbro. Drilling was begun at the end of May with three or four drill holes to confirm the precise location of the
fault and that mineralisation was not present. At month end and as reported in the 1 June 2016 RNS, a total of 548.0 metres
within three holes had been drilled. A fourth hole was also planned. The results from the first two holes indicated
that minor sub-economic mineralisation was present with the third hole being transported to the onsite sample prep facilities for
geological logging and analysis.
Analyses for the third hole (C412), indicated that there was substantial mineralisation present
within the hole. The onsite lab results indicated a mineralised thickness of 29.1 metres containing 0.74%
nickel and 0.19% copper. The fourth hole completed on the section also intersected 18.1 metres of 0.92% nickel and 0.23%
copper.
Management and site staff conferred and step out drilling along strike to the west was immediately
implemented. To be completed in 100 metre step outs, staff was directed to also drill any newly identified mineralisation
on a grid sufficient to allow for its assignment to that of the Indicated resource category.
As of 28 June, a total of 12 step out holes containing a total of 3,289.9 metres spaced along four
100 metre spaced drill sections have been completed. All sections have intersected substantial thicknesses of high grade
mineralisation adding 400 metres to the continuous mineralised strike length at MKF. MKF's total mineralised length now
approaches 2.6 kilometres. Onsite generated analytical results from eleven holes are available with the most recently
completed hole undergoing sample prep for site analysis. Additional holes are planned which will test another 100 metres of
strike length and to also define the dip limits of the mineralisation for newly identified mineralisation. Drill results
for the eleven new resource holes are presented in the following table.
2016 Step Out Drill Results
(Bold and Italics Highlighted Holes Completed in June 2016)
Hole
|
0.2% Cutoff Grade
|
0.5% Cutoff Grade
|
From
(m)
|
To
(m)
|
Length
(m)
|
Ni
(%)
|
Cu
(%)
|
From
(m)
|
To
(m)
|
Length
(m)
|
Ni
(%)
|
Cu
(%)
|
C410
|
227.3
|
230.3
|
3.0
|
0.22
|
0.07
|
|
|
|
|
|
C411
|
181.1
|
187.0
|
5.9
|
0.27
|
0.13
|
|
|
|
|
|
C412
|
211.9
|
241.0
|
29.1
|
0.74
|
0.19
|
211.9
|
224.2
|
12.3
|
1.00
|
0.22
|
|
|
|
|
|
|
233.2
|
239.0
|
5.8
|
0.88
|
0.25
|
C413
|
151.7
|
157.7
|
6.0
|
0.44
|
0.20
|
154.7
|
156.2
|
1.5
|
0.53
|
0.22
|
|
163.7
|
166.7
|
3.0
|
0.33
|
0.14
|
163.7
|
165.2
|
1.5
|
0.51
|
0.23
|
C414
|
236.3
|
251.3
|
15.0
|
0.96
|
0.24
|
236.3
|
251.3
|
15.0
|
0.96
|
0.24
|
|
260.3
|
296.7
|
36.4
|
0.98
|
0.24
|
260.3
|
294.6
|
34.3
|
1.02
|
0.25
|
C416
|
227.2
|
237.5
|
10.3
|
0.75
|
0.23
|
227.2
|
237.5
|
10.3
|
0.75
|
0.23
|
|
244.0
|
252.4
|
8.4
|
0.56
|
0.15
|
245.5
|
247.0
|
1.5
|
0.56
|
0.12
|
|
|
|
|
|
|
248.5
|
252.4
|
3.9
|
0.79
|
0.20
|
C417
|
286.6
|
297.1
|
10.5
|
0.69
|
0.15
|
288.1
|
292.6
|
4.5
|
1.21
|
0.26
|
|
303.1
|
313.6
|
10.5
|
0.32
|
0.14
|
312.1
|
313.6
|
1.5
|
0.62
|
0.18
|
C418
|
274.5
|
292.6
|
18.1
|
0.92
|
0.23
|
274.5
|
290.6
|
16.1
|
0.99
|
0.25
|
C419
|
207.0
|
211.1
|
4.1
|
0.28
|
0.12
|
|
|
|
|
|
C420
|
237.7
|
288.6
|
50.9
|
0.82
|
0.21
|
237.7
|
243.4
|
5.7
|
0.70
|
0.20
|
|
|
|
|
|
|
246.8
|
263.3
|
16.5
|
1.24
|
0.22
|
|
|
|
|
|
|
266.3
|
287.1
|
20.8
|
1.07
|
0.27
|
C421
|
305.1
|
332.6
|
27.5
|
0.91
|
0.24
|
305.1
|
318.6
|
13.5
|
0.97
|
0.27
|
|
|
|
|
|
|
321.6
|
331.1
|
9.5
|
1.15
|
0.28
|
2016 Average / Hole
|
21.7
|
0.77
|
0.21
|
|
|
21.8
|
0.99
|
0.24
|
2016 Average / Interval
|
15.9
|
0.77
|
0.21
|
|
|
10.2
|
0.99
|
0.24
|
The highly successful step out programme should substantially increase the resource of MKF.
Specifically, it has been noted that:
· Mineralisation continues for at least another
400 metres to the west where none was anticipated.
· Mineralisation from within 11 holes averages
21.7 m in thickness per hole and contains 0.77% nickel and 0.21% copper when a 0.2% nickel cutoff grade is applied.
· For high grade intersections (>0.5% nickel),
8 holes have an average thickness per hole of 21.8 metres averaging 0.99% nickel and 0.24% copper.
· Resource estimation in the area should add
substantially to the MKF and global mineral inventory. Drilling is being conducted at a spacing which has previously been
suitable for the definition of Indicated resources.
· The step out drill programme has been
substantially increased from that originally budgeted.
Metallurgical Drill Programme
All five holes originally planned for metallurgical sample collection in Area A have been
completed. The holes (654 total metres) are comprised of a combination of HQ and NQ diameter cores. With the
expansion of the resource in the westward direction, it is intended to add additional metallurgical holes. It is
anticipated than an additional hole will be added for each successful 100 metre step out.
Area B Detailed Drill Results
Drilling of the 1,200 metre long Area B was originally planned to begin in early July 2016.
Drilling was initiated in May due to the drill season commencing a month ahead of schedule. The majority of the planned
drilling (2,500 metres) is to be focused on the acquisition of the bulk metallurgical sample for the DFS. A limited number
of infill holes (totaling approximately 500 metres) are planned also scheduled to define mineralised dip limits where
appropriate. Area B drilling is being conducted using the LF70. It is anticipated the LF90C will be available late in
mid-July and will assist in the completion of the programme in this area. Again drilling will advance from west to
east.
Presently, three of twelve metallurgical holes have been completed (624 metres). Mineral
limit definition has also been completed along three drill sections containing a total of 660 metres.
Area C Detailed Drill Results
Drilling at Area C will begin once the Areas A and B drill efforts have been completed.
Planned to begin in August, infill drilling for conversion of a 400 metre wide block of Inferred resource identified by the 2015
drill programme will be conducted first. Additional metallurgical holes spaced 100 metres along strike will be identified
and drilled based on the infill drill results. Once the 400 metre long Inferred resource has been infill drilled and
metallurgical holes completed, step out holes will be drilled for resource expansion. The total budgeted metres for Area C
will be reduced from the projected 8,700 metres.
Analytical Results - Cautionary Comment
The analytical results presented within this RNS have been internally derived by the Company using
two Niton XL2 500 X-Ray Fluorescence units ("RFA"). Use of these units provides a rapid turnaround
allowing for knowledgeable decisions to be made in the field. Use of these results is not without risk if a unit has not
been rigorously tested and calibrated. It is therefore, necessary to utilise the standards provided with the units, to test
existing samples that have been analysed by external facilities and to use samples from the types of ore that are to be
encountered to calibrate the units. Both units are calibrated at the beginning of the season and are tested daily at the
start and end of each shift to ensure that there is no drift during the course of the shift or damage to the Niton units thereby
introducing erroneous information. The reported RFA results provide reasonable but not definitive results and for this
reason, the Company reports RFA results with this cautionary comment. This rigorous calibration process allows the Company
to report preliminary but reasonable results in advance of obtaining the final externally derived results which require from 6
weeks and to 10 weeks from Alex Stewart Laboratories ("ASL") based in Moscow, Russia.
As noted, the second source of analytical results is produced by Alex Stewart Laboratories ("ASL")
located in Moscow, Russia. This fully independent, licenced and certified laboratory provides the results that are
considered to be the final analytical values used in resource estimation and is of a greater accuracy than that of the RFA
unit.
For information purposes, a comparison of the results generated by the RFA unit with that of ASL
during the 2015 drill programme are summarised in the table below.
Niton (RFA) Versus ASL Analytical Results
Control Analysis
Commodity / COG
|
Metal %
RFA
|
Metal %
ASL
|
Nickel +0.2%
|
0.717
|
0.725
|
Nickel +0.5%
|
0.942
|
0.951
|
Copper +0.1%
|
0.246
|
0.244
|
Copper +0.2%
|
0.312
|
0.310
|
Copper +0.3%
|
0.410
|
0.388
|
Alex Stewart Laboratory Results
The turnaround time from when a mineralised core sample is recovered at the drill rig to obtaining
the final analytical result is dependent upon multiple factors. The Company provides a monthly helicopter flight to the
site to provide fresh food stuffs, undertake staff changes and provide required spares. On the return flight, the sample
pulps are delivered to Khabarovsk staff and then are transshipped by rail to ASL's Moscow, Russia facility. On receipt of
the ASL analytical results, the Company carefully examines the data to ensure that the external results are accurately
reported. This is accomplished analysis of results determined by ASL for Company inserted blind known and blank
samples. If there is any notable difference within the reported results from these hidden samples, the Company will request
a re-assay of the samples. Once samples are verified as representative, these become the master result available for future
use in resource estimation and metallurgical test work. These externally derived results require a minimum of 6 and up to
10 weeks to be obtained from ASL.
In June, a total of 570 samples from the first 16 holes were delivered to ASL for the holes
completed in May. An update from ASL indicates that results from the samples should be available to the Company during
July. Once verified, these results will replace those of the Company derived RFA results. The second set of sample
pulps collected during June (478) have been delivered to Khabarovsk, Russia and shipped to ASL.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) (www.jorc.org)
A 'Mineral Resource' is 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.
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. It is inferred from geological evidence and assumed but not
verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and
reliability.
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. It is based on
exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be assumed.
A 'Measured 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 high level of confidence. It is based on
detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and/or grade
continuity.
An 'Ore Reserve' is the economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate
assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining,
metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the
time of reporting that extraction could reasonably be justified. Ore Reserves are sub-divided in order of increasing confidence
into Probable Ore Reserves and Proved Ore Reserves.
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