- 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 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)
- CIM Definition Standards (2014) were used to report the Mineral Resources.
- Cut-off grade applied to the open pit Mineral Resources is 3% Pb+Zn and that applied to the underground is 5% Pb+Zn.
- 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.
- Exchange rate of US$0.75 : A$1.0
- 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.
- Using drilling results up to 15 April 2018.
- Mineral Resource tonnages have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
Table 2. Underground Mineral Resource Summary by Material Type and Zones (see notes for Table 1)
Table 3. Open Pit Constrained Mineral Resource Summary by Material Type and Zones (see notes for Table 1)
Table 4. Comparison of the 2017 and 2018 Mineral Resource Estimates
|Tonnes (kt)||Pb (%)||Zn (%)||Ag (g/t)||Tonnes (kt)||Pb (%)||Zn (%)||Ag (g/t)|
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 5th, 2018.
- BHZ transition metallurgical recoveries and concentrate grades (open cycle) are as per Vendetta News Release dated March 6th, 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.
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.
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% lead + 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 5th, 2018
- Zone 5 metallurgical recoveries and concentrate grades (open cycle) are as per Vendetta News Release dated March 6th, 2017.
- Underground mining costs of A$45.00/t ore and G&A of A$5.00/t ore and processing costs of A$23.92/t ore.