RNS Number : 4630F
Vatukoula Gold Mines PLC
13 January 2010
13 January 2010 AIM: VGM
Vatukoula Gold Mines plc
("Vatukoula" or "the Company")
Updated Mineral Reserve and Mineral Resource Estimate
Vatukoula Gold Mines (AIM: VGM) the Fijian gold producer is pleased to announce a summary of the results of an independent assessment of the Company's Mineral Reserves and Mineral Resources as at 31 August 2009. This assessment was carried out by AMC Consultants Pty Ltd ("AMC") and represents the first Mineral Reserve and Mineral Resource estimation carried out by the Company since re-admission in March 2008. These estimates confirm the world class size and scale of the ore deposit at the Vatukoula Gold Mine in Fiji.
Mineral Reserve and Mineral Resource Highlights Include;
-
A combined Proven and Probable Mineral Reserve estimate of 1.9 million tonnes of ore grading 10.9 grams of gold per tonne for contained gold of 0.68 million ounces. This is based on a gold price of US$750 per ounce and projected operating costs of US$107
(F$203) per tonne of ore.
-
A sensitivity that showed potential to increase the Mineral Reserve by approximately 20% if the assumed gold price is increased to US$1,050 per ounce, while other parameters remain constant.
- An underground combined Measured and Indicated Mineral Resource of 8.3 million tonnes grading 10.5 g/t for contained gold of 2.8 million ounces.
- An Inferred Mineral Resource of 4.7 million tonnes grading 8.6 g/t for contained gold of 1.3 million ounces.
The methodology employed for this present evaluation, and the classification of Mineral Reserves and Mineral Resources is compliant with Canadian National Instrument 43-101 and in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves.
The Mineral Reserve and Mineral Resource estimates do not include any of the oxide material that is currently being evaluated for mining and processing.
In this estimate of the Mineral Resources the Company and AMC employed a methodology which is regarded as more conservative but more appropriate for this type of deposit.The methodology is thought to produce a model and Mineral Resource that more accurately reflects the grades obtained from the orebodies. As a result of the change in methodology there was a reduction of the Mineral Resource of approximately 0.73 million ounces compared with the last estimate undertaken in 2008.
The Mineral Reserve has been calculated by AMC using a gold price of US$750 per ounce and assuming a cost of operations at Vatukoula of US$ 107 per tonne of ore (F$ 203/t). We believe that the cost per tonne will be further reduced once we have achieved our targeted production levels. The reported Mineral Reserves provide a mine life of approximately seven years at our planned production rates.
David Paxton, CEO of Vatukoula Gold Mines commented - "We are pleased to release our updated Mineral Reserve and Mineral Resource figures. AMC has undertaken a complete review of the mining operations and a detailed review of the Mineral Reserve and Mineral Resource estimates. As a result of using a more conservative methodology, the Mineral Resources are lower than those published in our 2008 admission document. Nonetheless this updated estimate continues to demonstrate that VGM has a world class gold deposit in terms of size, scale and potential."
Qualified Person Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School. Kiran is the Finance Director of VGM.
Please click on the link at the end of this announcement for the full text of the AMC Summary Report which is also available on the Company's website www.vatukoula.com.
Enquiries:
Vatukoula Gold Mines plc
David Paxton + 44 20 7016 7861
Kiran Morzaria
W.H. Ireland Limited
David Porter + 44 20 7220 1666
James Joyce
Arbuthnot Securities Limited
John Prior +44 20 7012 2000
Edward Burbidge
Bishopsgate Communications
Michael Kinirons +44 20 7562 3350
Notes to Editors
The Company acquired the Vatukoula Gold Mine in April 2008 and has since then re-established gold mining operations. The mine has operated for over 75 years and over that time has produced approximately 6.9 million ounces of gold. Current planning is to restore mine operations to a rate of 100,000 ounces per year. The mine has a combined Proven and Probable Mineral Reserve of 680,000 ounces gold, a combined Measured and Indicated Mineral Resource of 3.0 million ounces gold, and an Inferred Mineral Resource of 1.3 million ounces gold. The Mineral Reserve provides for a mine life at the current rate of production of approximately 7 years. The Company has no forward gold sales and has no bank debt.
Glossary
Mineral Resource: is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for 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 has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.
Inferred Mineral Resource: is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Indicated Mineral Resource: is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Measured Mineral Resource: is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate 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 that are spaced closely enough to confirm both geological and grade continuity.
Mineral Reserve: is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined. Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.
Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant equivalent facility. The term ‘Mineral Reserve’ need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.
Probable Mineral Reserve: is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.
Qualified Person means an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and the technical report; and is a member or licensee in good standing of a professional association.
Canadian National Instrument 43-101: is a national instrument for the standards of disclosure for mineral projects. The
Instrument is a codified set of rules and guidelines for reporting and displaying information
related to mineral properties owned by, or explored by, companies which report these results
on stock exchanges
CIM Definition Standards: establish definitions and guidelines for the reporting of exploration information, Mineral
resources and Mineral reserves in Canada. The Mineral Resource and Mineral Reserve definitions were incorporated, by reference, in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).
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