Mr. Michael Williams reports
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
Vendetta Mining Corp. has provided 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 six to eight weeks.
Highlights include:
Significant increase in the indicated mineral resource from 2.2 million tonnes to 5.8 million tonnes. See "Comparison of the 2017 and 2018 mineral resource estimates" table;Maiden mineral resource for the underground Bridge zone: indicated 560,000 tonnes at 9.5 per cent lead, 2.5 per cent zinc, 15 grams per tonne silver and inferred 309,000 t at 8.7 per cent Pb, 2.5 per cent Zn and 14 g/t Ag. See "Underground mineral resource summary by material type and zones" table.Open-pit constrained indicated mineral resource of 5.1 million tonnes at 6.2 per cent Pb, 2.6 per cent Zn, 15 g/t Ag and inferred mineral resource of 4.4 million tonnes at 5.1 per cent Pb, 2.2 per cent Zn and 14 g/t Ag. See "Open-pit constrained mineral resource summary by material type and zones" table.Increasing overall grade as the mineral resource moves from inferred to indicated. Zinc grade increasing at depth. See "Comparison of the 2017 and 2018 mineral resource estimates" table.
The updated mineral resource estimate was performed by AMC Mining Consultants (Canada) Ltd. 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 the "July, 2018, mineral resource estimate" table.
JULY, 2018, MINERAL RESOURCE ESTIMATE (see notes for details) Classification Material type TonnesPbZnAg(kt) (%) (%) (g/t)IndicatedTransition 1,111 4.9 2.3 8 Sulphide 4,647 6.9 2.612 Total5,758 6.5 2.611Inferred Transition 1,829 5.2 2.0 7 Sulphide 6,447 5.1 3.1 9 Total8,277 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 per cent Pb plus Zn and that applied to the underground is 5 per cent Pb plus Zn.(3) Based on the following metal prices: 95 U.S. centsper pound for Pb, $1.05 (U.S.)/lb for Zn and $16.50 (U.S.)/ounce for silver.(4) Exchange rate of 75 U.S. cents:$1 (Australian).(5) Metallurgical recoveries vary by zone and material type as follows: Lead to lead concentrate: from 80.6 per cent to 91.3 per cent for transition and 88.0 per cent to 92.7 per cent for sulphide.Zinc to zinc concentrate: from 19.3 per cent to 75.2 per cent for transition and 61.8 per cent to 78.5 per cent for sulphide.(6) Using drilling results up to April 15, 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 chief executive officer 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 per cent 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."
UNDERGROUND MINERAL RESOURCE SUMMARY BY MATERIAL TYPE AND ZONES(see notes for the "July, 2018, mineral resource estimate" table) Tonnes PbZnAgZoneClassificationMaterial type (kt)(%) (%) (g/t)Zone 3 Indicated Sulphide235.0 2.011Inferred7506.2 2.312Zone 4 Indicated Sulphide505.5 3.4 8Inferred4684.4 3.5 8Zone 5 Indicated Sulphide105.9 3.5 9Inferred2,3534.5 4.1 6Bridge zoneIndicated Sulphide 5609.5 2.515Inferred3098.7 2.514Total undergroundIndicated Sulphide 6449.0 2.614Inferred3,8805.1 3.6 4
OPEN-PIT CONSTRAINED MINERAL RESOURCE SUMMARY BY MATERIAL TYPE AND ZONES(see notes for the "July, 2018, mineral resource estimate" table)ZoneClassificationMaterial typeTonnes Pb Zn Ag(kt)(%) (%) (g/t)BHZIndicated Transition724.22.27 Sulphide 2864.73.09 Subtotal 3574.62.98Inferred Transition 53.92.06 Sulphide 1256.33.1 11 Subtotal 1316.23.1 11Zone 1 Indicated Transition 3425.92.7 10 Sulphide 1,4666.42.4 12 Subtotal 1,8086.32.5 11Inferred Transition 9695.01.98 Sulphide 1,1614.71.8 10 Subtotal 2,1314.81.89Zone 2 Indicated Transition 6894.52.27 Sulphide 1,8196.92.7 12 Subtotal 2,5086.32.6 10Inferred Transition 5566.12.15 Sulphide 3305.32.39 Subtotal 8875.82.26Zone 3 Indicated Transition 83.91.78 Sulphide 4336.52.6 11 Subtotal 4416.42.6 11Inferred Transition 2984.22.47 Sulphide 9505.22.89 Subtotal 1,2484.92.78Total open pit Indicated Transition 1,1114.92.38 Sulphide 4,0036.52.6 11Total 5,1146.22.6 11Inferred Transition 1,8295.22.07 Sulphide 2,5675.02.3 10Total 4,3965.12.28
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)IndicatedTransition 685 5.2 2.591,111 4.9 2.3 8 Sulphide 1,560 5.7 2.7 114,647 6.9 2.612Total 2,245 5.6 2.6 105,758 6.5 2.611Inferred Transition 1,035 5.3 2.681,829 5.2 2.0 7Sulphide8,612 4.9 2.986,447 5.1 3.1 9Total 9,647 5.0 2.988,277 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 per cent Pb plus Zn 3-D wireframe envelope positioned within a geological 3-D envelope constructed using both geology and background grades, nominally 0.2 per cent Pb plus Zn. A 3-D model of the crosscutting postmineral amphibolite dike 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, PGeo, D. Nussipakynova, PGeo, M. Angus, MAIG, P. Lebleu, PEng, of AMC, and A. Riles, MAIG, of Riles Integrated Resource Management Pty. Ltd., and has an effective date of July 31, 2018, incorporating drill results to April 15, 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 per cent Pb plus Zn for transition material is 3.22 to 3.60 t/cubic metres. The range for sulphide is between 3.91 and 4.08 t/cubic metres. At greater than 5 per cent Pb plus Zn for the Bridge zone the average bulk density is 4.19 t/cubic metres.
Financial considerations used in determining cut-offs:
Commodity price assumptions: lead 95 U.S. cents/lb, zinc $1.05 (U.S.)/lb and silver $16.50 (U.S.)/oz;Australian dollar to U.S. dollar exchange rate of 0.75;Concentrate transport costs of $37 (Australian)/t lead concentrates and $49 (Australian)/t zinc concentrates;Lead concentrate terms: treatment and refining charges of $170 (U.S.)/t, payables of 95 per cent lead, 50 per cent zinc, 95 per cent silver, with minimum deductibles of 3 per cent lead and 50 g/t silver, and a $1.25 (U.S.)/oz silver refining charge;Zinc concentrate terms: treatment and refining charges of $180 (U.S.)/t, payables of 50 per cent lead, 85 per cent zinc and 70 per cent silver, with minimum deductibles of 8 per cent zinc and 93 g/t silver, and a $1.25 (U.S.)/oz silver refining charge.Queensland government net smelter return royalties of 4.28 per cent on lead and 2.92 per cent on zinc, and a vendor net smelter return royalty of 1.5 per cent 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 optimization 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 $32.42 (Australian)/t determined using the parameters defined above and the following assumptions:
Fifty-five-degree 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, 2018.BHZ transition metallurgical recoveries and concentrate grades (open cycle) are as per Vendetta news release dated March 6, 2017.An 8-per-cent discount rate is applied.Open-pit mining costs of $3.50 (Australian)/t ore and $2.50 (Australian)/t waste, $1 (Australian)/t ore ROM (run of mine) rehandle, $4.50 (U.S.)/t ore mine supervision and technical services, $2 (Australian)/t ore surface general and administrative overheads and processing costs of $23.92 (Australian)/t ore.
Within the open-pit shell the mineral resource is stated at a 3 per cent lead plus zinc cut-off, based on a comprehensive cut-off approach, approximately equal to the $32.42 (Australian)/t NSR cut-off used to generate the pit shells.
Oxide lead-zinc mineralization is not included in the current mineral resource as with the sequential flotation processing flow sheet envisaged it is considered that there is no effective method for mineral processing of oxide mineralization and hence no economic basis for its inclusion.
Additional notes on underground mineral resource
Mineral resources outside of the open-pit shell are considered to be potentially minable using underground mining methods. Underground mineral resources have been defined using a 5-per-cent lead plus zinc cut-off based on a cut-off calculation determined from the parameters defined above and the following assumptions:
Zone 3 and Bridge zone metallurgical recoveries and concentrate grades (locked cycle) are as per Vendetta news release dated March 5, 2018.Zone 5 metallurgical recoveries and concentrate grades (open cycle) are as per Vendetta news release dated March 6, 2017.Underground mining costs of $45 (Australian)/t ore and general and administrative expenses of $5 (Australian)/t ore and processing costs of $23.92 (Australian)/t ore.
2018 resource development drilling update
Logging and sampling of the first phase of the 2018 drilling program have been completed, interpretation and assay results are pending. The recent program has further tested a new high-grade structure in zone 3 that was identified at the close of the 2017 program. This new discovery was not included in this mineral resource estimate, nor will it be included in the PEA.
A metallurgical drilling program was also conducted in one of the pits contemplated to be mined first, although the results of this test work will not be available for the PEA they are an important part of further derisking the project for the next phase of study work.
About Pegmont
Pegmont is a stratiform, Broken Hill-type deposit that outcrops with an overall shallow dip to the southeast and is hosted in a magnetite-rich banded iron formation within high-grade metamorphic rocks. The project consists of three granted mining leases and one exploration permit that cover an area of approximately 8,290 hectares.
Pegmont is situated in the Mount Isa -- McArthur mineral province, which hosts one of the world's richest endowments of lead-zinc-silver mineralization, including several world-class lead-zinc-silver mines.
Pegmont is located 25 kilometres west of South 32's Cannington silver-lead-zinc operation, one of the world's largest producers of lead and silver, and 28 km north of Chinova Resources' Osborne copper-gold operations. Pegmont is proximal to existing infrastructure including public roads, mine haul roads, rail and a natural gas pipe line for power generation.
About Vendetta Mining Corp.
Vendetta Mining is a Canadian junior exploration company focused on advanced stage exploration and development at the Pegmont lead-zinc project in Australia. Vendetta has an option to acquire a 100-per-cent interest by completing certain work requirements and making option and advance royalty payments.
Qualified person
Peter Voulgaris, MAIG, MAusIMM, a director of Vendetta, is a non-independent qualified person as defined by National Instrument 43-101. Mr. Voulgaris has reviewed the technical content of this press release, and consents to the information provided in the form and context in which it appears.
John Morton Shannon, PGeo, principal geologist at AMC Mining Consultants (Canada) Ltd., is an independent qualified person, as defined in NI 43-101. Mr. Shannon has reviewed the technical content relating to the mineral resource disclosure of this press release, and consents to the information provided in the form and context in which it appears.
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