Mineral Resources 2017-12-11T20:55:16+00:00

Mineral Resources

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Mineral Resources
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Download our NI 43-101 Mineral Resource Estimate

Table 1. Mineral Resource Summary for all Zones at Pegmont

Classification Material type Tonnes (kt) Pb % Zn % Ag g/t
Open Pit Constrained Zones 1, 2, 3 and BHZ (see notes on Open Pit Mineral Resource for details)
Indicated Transition 685 5.2 2.5 9
Sulphide 1,379 5.7 2.7 11
Total 2,064 5.5 2.6 10
Inferred Transition 1,035 5.3 2.6 8
Sulphide 5,276 5.5 2.4 9
Total 6,311 5.4 2.4 9
Underground – Zone 4 and 5 (see notes on Underground Mineral Resource for details)
Indicated Sulphide 181 5.7 2.6 8
Inferred Sulphide* 3,336 4.1 3.8 6
Total (Open Pit Constrained and Underground)
Indicated Transition 685 5.2 2.5 9
Sulphide 1,560 5.7 2.7 10
Total 2,245 5.6 2.6 10
Inferred Transition 1,035 5.3 2.6 8
Sulphide 8,612 4.9 2.9 8
Total 9,647 5.0 2.9 8

* includes Zone 5 Inferred 2.8Mt @ 4.1% Pb, 3.9% Zn and 6 g/t Ag

The updated 2017 Mineral Resource estimate was performed by AMC Mining Consultants (Canada) Limited in their Vancouver office. The estimate includes the addition of more than 12,700 m of resource development drilling conducted between 2014 and 2016 by Vendetta, a comprehensive re-interpretation of the geology and the results of the recent metallurgical test work.

The Pegmont Mineral Resource is now reported using open pit optimization to define the boundary between open pit and underground potential mining areas. The results can now be used to systematically refine the resource development drilling at Pegmont.

Highlights Include:

  • Total Inferred Mineral Resources of 9.6 million tonnes at 5.0% Pb, 2.9% Zn.
  • Total Indicated Mineral Resources of 2.2 million tonnes at 5.6% Pb, 2.6% Zn.
  • Open pit constrained Inferred Mineral Resource of 6.3 million tonnes at 5.4% Pb, 2.4% Zn and Indicated Mineral Resource of 2.1 million tonnes at 5.5% Pb, 2.6% Zn.
  • Maiden underground Inferred Mineral Resource for Zone 5 of 2.8 million tonnes at 4.1% Pb 3.9% Zn.

The Mineral Resource for the open pit constrained and underground portions and the combined global Mineral Resource is provided in Table 1.

Technical Report  

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, and A Riles MAIG, all of AMC Consultants, and has an effective date of 22 June 2017.

The completed Technical Report in standard form prescribed by Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects will be published on Vendetta’s web site and SEDAR www.sedar.com within 45 days of the release of the new Mineral Resource. The Mineral Resource was classified into Indicated or Inferred categories in accordance with the CIM Definition Standards on Mineral Resources and Reserves (CIM Definition Standards) adopted by CIM Council on May 10, 2014.

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.

  • Using drilling results to 8th May 2017, including 12,491 m in 60 new holes.
  • Specific Gravity is applied based on oxidation state and zone to capture variation in mineralogy between the zones. Transitions specific gravity varied between 3.32 and 3.90 and sulphide specific gravity varied between 3.86 and 4.08.
  • Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves.
  • Mineral Resource tonnage have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
  • Commodity price assumptions: Lead US$0.90/lb, Zinc US$0.95/lb and Silver US$15/oz.
  • Australian Dollar (AU$) to USA Dollar (US$) exchange rate of 0.73.
  • Concentrate transport costs of AU$32/t Lead concentrates and AU$60/t Zinc concentrates.
  • Lead concentrate terms: treatment and refining charges of US$120/t, payables of 95% Lead, 50% Zinc, 95% Silver, with deductables of 3% Lead, and 50g/t Silver and a $1/oz Silver refining charge.
  • Zinc concentrate terms: treatment and refining charges of US$140/t, payables of 50% Lead, 85% Zinc and 70% Silver, with deductables of 8% Zinc, and 93g/t Silver and a $1/oz Silver refining charge.
  • Queensland Government net smelter return royalties of 4.1% on Lead and 2.7% on Zinc and a vendor net smelter return royalty of 1.5%.

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

Notes on Open Pit Constrained Mineral Resource

With the increased understanding of the potential development strategies, for the first time an open pit constrained Mineral Resource estimate for Pegmont is provided.

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 resource was based on a net smelter return (NSR) cut-off of AU$33.50/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.
  • Metallurgical Recoveries and concentrate grades as per the BHZ metallurgy test work, see Vendetta News Release NR#1 March 6th, 2017.
  • A 5% discount rate is applied.
  • Open pit mining costs of AU$3.50/ore and AU$2.50/waste, $1/t ore ROM rehandle, $4.50/t ore surface general and administrative overheads and processing costs of $25/t ore.

Within the shell the Mineral Resource is stated at a 3% lead + zinc cut off, based on a comprehensive cut off approach, approximately equal to the AU$33.50/t NSR cut off used to generate the pit shells.

Oxide lead-zinc mineralisation 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 mineralisation and hence no economic basis for its inclusion.

Notes on Underground Mineral Resource

Mineral Resources outside of the open pit shell are considered to be potentially minable using underground mining methods. Underground resources have been defined using a 5% lead + zinc cut-off based on a comprehensive breakeven cut-off calculation determined from the parameters defined above and the following assumptions:

  • Metallurgical Recoveries and concentrate grades as per the Zone 5 metallurgy test work, see Vendetta News Release NR#1 March 6th, 2017.
  • Underground mining costs of AU$45.00/t ore and G&A of AU$5.00/t ore and processing costs of AU$25/t ore.

Comparison with 2014 Mineral Resource

A large proportion of the 2017 Mineral Resource is now constrained by an open pit optimised shell determined at a different cut-off compared to that used in the February 2014 Mineral Resource. Table 2 is provided for comparative purposes to show the net effect of the changes that have occurred due to drilling and the new geology interpretation. The table shows the 2017 open pit constrained block model tonnes and grade at the same cut offs as applied in 2014: 3% lead + zinc for oxide and transition and 5% for sulphide.

Table 2. Comparison of the 2014 Mineral Resources and 2017 Block Model at the Cut-offs applied in 2014.

Classification Material Type 2014 2017*
Tonnes (kt) Pb (%) Zn (%) Ag (g/t) Tonnes (kt) Pb (%) Zn (%) Ag (g/t)
Indicated Oxide 512 4.56 1.58 6.37
Transition 797 4.50 2.17 6.88 548 5.4 2.6 9
Sulphide 757 6.66 2.69 11.87 1,093 6.5 2.7 11
TOTAL 2,066 5.31 2.21 8.6 1,641 6.2 2.7 11
Inferred Oxide 614 5.76 1.23 5.18
Transition 1,066 5.01 2.23 6.77 1,029 5.2 2.5 7
Sulphide 4,417 6.51 2.80 10.58 7,793 5.2 3.1 8
TOTAL 6,097 6.17 2.54 9.35 8,823 5.2 3.0 8

* The 2017 block models reported at 3% Pb+Zn transition and 5% Pb+Zn sulphide.

Resource Development Drilling Update

The objective of the 2017 program is four fold:

  1. To further delineate high grade open pit material, as there remains data gaps within the limits of the 2017 Zone 1 -3 pit optimization;
  2. To further expand the underground potential of Zone 5, the high grade zinc area;
  3. Test conceptual and advanced exploration targets for lead-zinc mineralisation; and
  4. Test the new copper-gold target, by follow up drilling of the recently identified EM conductor.

The updated Mineral Resource estimate will be used to focus the 2017 drilling program currently ongoing.

To date 21 holes, for a total of 3,995 m has been completed predominately in Zones 2 and 3, of these 15 holes have been logged and 11 have been sampled and shipped to analysis, results are expected within two weeks.

Qualified Person

Peter Voulgaris, MAusIMM, MAIG, a Director of Vendetta, is a non-independent Qualified Person as defined by NI 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 P.Geo., Principal Geologist at AMC Mining Consultants (Canada) Limited, 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.