Vendetta Increases Pegmont Lead-Zinc Mineral Resource to 5.8 Million Tonnes Indicated and 8.3 Million Tonnes of Inferred. Open Pit Constrained Mineral Resource now at 54% Indicated

 

Vancouver, British Columbia--(Newsfile Corp. - August 9, 2018) - Vendetta Mining Corp. (TSXV: VTT) ("Vendetta" or the "Company") is pleased to provide the results of the updated Mineral Resource estimate for the Pegmont Lead-Zinc sulphide project in Queensland, Australia. This Mineral Resource will form the basis of the Pegmont Preliminary Economic Assessment (PEA), with a planned completion in the next 6 to 8 weeks.

Highlights Include:

• Significant increase in the Indicated Mineral Resource from 2.2 Mt to 5.8 Mt. See Table 4.

• Maiden Mineral Resource for the underground Bridge Zone: Indicated 560 Kt at 9.5% Pb, 2.5% Zn, 15 g/t Ag and Inferred 309 Kt at 8.7% Pb 2.5% Zn, 14 g/t Ag. See Table 2.

• Open pit constrained Indicated Mineral Resource of 5.1 million tonnes at 6.2% Pb, 2.6% Zn, 15 g/t Ag and Inferred Mineral Resource of 4.4 million tonnes at 5.1% Pb, 2.2% Zn, 14 g/t Ag. See Table 3.

• Increasing overall grade as the Mineral Resource moves from Inferred to Indicated. Zinc grade increasing at depth. See Table 4.

The updated Mineral Resource estimate was performed by AMC Mining Consultants (Canada) Limited (AMC). The estimate includes the addition of more than 22,400 m of resource development drilling conducted during 2017 by Vendetta and the results of the recent Locked Cycle metallurgical test work. The combined Mineral Resource for the open pit constrained and underground portions of the project are provided in Table 1.

Table 1: July 2018 Mineral Resource Estimate (see notes for details)

Classification	Material type	Tonnes	Pb	Zn	Ag
		(kt)	(%)	(%)	(g/t)
Indicated	Transition	1,111	4.9	2.3	8
	Sulphide	4,647	6.9	2.6	12
	Total	5,758	6.5	2.6	11
Inferred	Transition	1,829	5.2	2.0	7
	Sulphide	6,447	5.1	3.1	9
	Total	8,277	5.1	2.8	8

1. CIM Definition Standards (2014) were used to report the Mineral Resources.
2. Cut-off grade applied to the open pit Mineral Resources is 3% Pb+Zn and that applied to the underground is 5% Pb+Zn.
3. Based on the following metal prices: US$0.95/lb for Pb, US$1.05/lb for Zn, and US$16.5/oz for silver.
4. Exchange rate of US$0.75 : A$1.0
5. Metallurgical recoveries vary by zone and material type as follows: 
   • Lead to lead concentrate: from 80.6% to 91.3% for transition and 88.0% to 92.7% for sulphide.
   • Zinc to zinc concentrate: from 19.3% to 75.2% for transition and 61.8% to 78.5% for sulphide.
6. Using drilling results up to 15 April 2018.
7. Mineral Resource tonnages have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

Vendetta's CEO and President Michael Williams, stated: "This Mineral Resource Update achieved the goals we set at the start of the 2017 drilling program. We are excited to deliver on four fronts; an overall increase in the Mineral Resource at a higher grade, a maiden resource on the 2017 high grade underground Bridge Zone discovery and a significant increase in confidence of the open pit constrained Mineral Resource, which is now at 54% Indicated. These significant advances place us on a solid foundation for the PEA.

With the discovery of another high grade fold in Zone 3 and with the higher grade zinc Zone 5 still open for expansion, we expect that the Pegmont Deposit will continue to deliver significant results beyond this Mineral Resource estimate."

Table 2. Underground Mineral Resource Summary by Material Type and Zones (see notes for Table 1)

Zone	Classification	Material type	Tonnes	Pb	Zn	Ag
			(kt)	(%)	(%)	(g/t)
Zone 3	Indicated	Sulphide	23	5.0	2.0	11
	Inferred		750	6.2	2.3	12
Zone 4	Indicated	Sulphide	50	5.5	3.4	8
	Inferred		468	4.4	3.5	8
Zone 5	Indicated	Sulphide	10	5.9	3.5	9
	Inferred		2,353	4.5	4.1	6
Bridge zone	Indicated	Sulphide	560	9.5	2.5	15
	Inferred		309	8.7	2.5	14
Total Underground	Indicated	Sulphide	644	9.0	2.6	14
	Inferred		3,880	5.1	3.6	4

 

Table 3. Open Pit Constrained Mineral Resource Summary by Material Type and Zones (see notes for Table 1)

Zone	Classification	Material type	Tonnes	Pb	Zn	Ag
			(kt)	(%)	(%)	(g/t)
BHZ	Indicated	Transition	72	4.2	2.2	7
		Sulphide	286	4.7	3.0	9
		Sub-total	357	4.6	2.9	8
	Inferred	Transition	5	3.9	2.0	6
		Sulphide	125	6.3	3.1	11
		Sub-total	131	6.2	3.1	11
Zone 1	Indicated	Transition	342	5.9	2.7	10
		Sulphide	1,466	6.4	2.4	12
		Sub-total	1,808	6.3	2.5	11
	Inferred	Transition	969	5.0	1.9	8
		Sulphide	1,161	4.7	1.8	10
		Sub-total	2,131	4.8	1.8	9
Zone 2	Indicated	Transition	689	4.5	2.2	7
		Sulphide	1,819	6.9	2.7	12
		Sub-total	2,508	6.3	2.6	10
	Inferred	Transition	556	6.1	2.1	5
		Sulphide	330	5.3	2.3	9
		Sub-total	887	5.8	2.2	6
Zone 3	Indicated	Transition	8	3.9	1.7	8
		Sulphide	433	6.5	2.6	11
		Sub-total	441	6.4	2.6	11
	Inferred	Transition	298	4.2	2.4	7
		Sulphide	950	5.2	2.8	9
		Sub-total	1,248	4.9	2.7	8
Total Open pit	Indicated	Transition	1,111	4.9	2.3	8
		Sulphide	4,003	6.5	2.6	11
		TOTAL	5,114	6.2	2.6	11
	Inferred	Transition	1,829	5.2	2.0	7
		Sulphide	2,567	5.0	2.3	10
		TOTAL	4,396	5.1	2.2	8

 

Table 4. Comparison of the 2017 and 2018 Mineral Resource Estimates

Classification	Material Type	2017					2018
		Tonnes (kt)	Pb (%)	Zn  (%)	Ag (g/t)	Tonnes (kt)		Pb (%)	Zn  (%)	Ag  (g/t)
Indicated	Transition	685	5.2	2.5	9	1,111		4.9	2.3	8
	Sulphide	1,560	5.7	2.7	11	4,647		6.9	2.6	12
	TOTAL	2,245	5.6	2.6	10	5,758		6.5	2.6	11
Inferred	Transition	1,035	5.3	2.6	8	1,829		5.2	2.0	7
	Sulphide	8,612	4.9	2.9	8	6,447		5.1	3.1	9
	TOTAL	9,647	5.0	2.9	8	8,277		5.1	2.8	8

 

Details of the Mineral Resource Estimate

An inverse distance estimate was run using Datamine's dynamic anisotropy search to estimate lead, zinc and silver into the block model. The new block model is built using 1% Pb+Zn 3D wireframe envelope positioned within a geological 3D envelope constructed using both geology and background grades, nominally 0.2% Pb+Zn. A 3D model of the cross cutting post mineral amphibolite dyke is superimposed on the model at zero grade. The zones are broadly based on their geometry, and are for reporting purposes only.

• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of mineral resources will be converted to mineral reserves. Quantity and grades are estimates and are rounded to reflect the fact that the resource estimate is an approximation.

• The Mineral Resource update has been prepared by independent qualified persons ("QPs") J.M. Shannon P.Geo, D Nussipakynova P.Geo, M. Angus MAIG, P. Lebleu P.Eng, of AMC and A Riles MAIG, of Riles Integrated Resource Management Pty Ltd., and has an effective date of 31 July 2018, incorporating drill results to 15 April 2018, including 22,163 m in 107 new holes drilled in 2017 and early 2018.

• Quality Assurance/Quality Control ("QA/QC") protocols were carried out during Vendetta's 2014, 2016 and 2017 drill programs to assess the quality of the drilling assay results and the confidence that can be placed in the assay data. The QA/QC data available demonstrate the analytical data are of sufficient quality to be used in estimating Mineral Resources.

• Bulk density is applied based on oxidation state and zone to capture variation in mineralogy between the zones. These are individually calculated on grade for each zone and the range at greater than 3% Pb+Zn for transition material is 3.22 to 3.60 t/m³. The range for sulphide is between 3.91 and 4.08 t/m³. At greater than 5% Pb+Zn for the Bridge Zone the average bulk density is 4.19 t/m³

Financial considerations used in determining cut off's:

• Commodity price assumptions: Lead US$0.95/lb, Zinc US$1.05/lb and Silver US$16.50/oz.

• Australian Dollar (A$) to USA Dollar (US$) exchange rate of 0.75.

• Concentrate transport costs of A$37/t Lead concentrates and AU$49/t Zinc concentrates.

• Lead concentrate terms: treatment and refining charges of US$170/t, payables of 95% Lead, 50% Zinc, 95% Silver, with minimum deductibles of 3% Lead, and 50g/t Silver and a US$1.25/oz Silver refining charge.

• Zinc concentrate terms: treatment and refining charges of US$180/t, payables of 50% Lead, 85% Zinc and 70% Silver, with minimum deductibles of 8% Zinc, and 93g/t Silver and a US$1.25/oz Silver refining charge.

• Queensland Government net smelter return royalties of 4.28% on Lead and 2.92% on Zinc and a vendor net smelter return royalty of 1.5% on all minerals.

Specific details relating to the open pit constrained and underground Mineral Resources are found below.

Additional Notes on Open Pit Constrained Mineral Resource

AMC Consultants performed the open pit optimisation using the Lerch-Grossman algorithm coded into the Whittle software. The open pit shell used to constrain the Mineral Resource was based on a net smelter return (NSR) cut-off of A$32.42/t determined using the parameters defined above and the following assumptions:

• 55° pit slopes were used, based on experience with similar rocks and conditions within the region.

• Zones 1, 2, 3 and BHZ sulphide and Zone 1 transition metallurgical recoveries and concentrate grades (locked cycle) are as per Vendetta News Release dated March 5^th, 2018.

• BHZ transition metallurgical recoveries and concentrate grades (open cycle) are as per Vendetta News Release dated March 6^th, 2017.

• An 8% discount rate is applied.

• Open pit mining costs of A$3.50/t ore and A$2.50/t waste, A$1/t ore ROM rehandle, A$4.50/t ore mine supervision and technical services, AU$2/t ore surface general and administrative overheads and processing costs of A$23.92/t ore.

Within the open pit shell the Mineral Resource is stated at a 3% lead + zinc cut off, based on a comprehensive cut off approach, approximately equal to the A$32.42/t NSR cut off used to generate the pit shells.