Sampling advances of underground tin mineralised stockpiles in main Siglo XX tin mine adit

Transcription

1 ASX Announcement 29 January 2015 Sampling advances of underground tin mineralised stockpiles in main Siglo XX tin mine adit Victory s subsidiary, SAT, has commenced mapping, sampling and assessing the amount of low grade tin mineralisation stockpiled underground in Siglo XX tin mine s main adit Much of the 700 kilometres of adits which make up the mine s historical workings contain low-grade stockpiled ore These stockpiles would be potential feed for SAT s planned toll treatment plants An extensive mapping programme is underway to confirm the existence of the main tin veins mined down to Siglo XX tin mine s main extraction level the 650 Level aided by recent maps secured by SAT s partners, the local mining Cooperatives Significant tin-bearing veins are known to exist below the 650 Level - the major San Jose Vein was intersected by a diamond drillhole (DDH811) at approximately the 800 Level where 0.20 metre at 20.2% Sn is reported in recently documents given to SAT by one of its Cooperative partners This intersection demonstrates that very high historic grades previously encountered above the 650 Level can be replicated below this level 1,500 metre drilling programme is planned following completion of the mapping programme and assessment of ore stockpiles Victory is negotiating with a number of parties regarding project development and trading opportunities Victory Mines Limited s (ASX: VIC) ( Victory or the Company ) wholly owned South American Tin Limited (SAT) has advanced sampling of tin mineralised stockpiles and mapping of high grade tin veins underground at the Siglo XX tin mine. These underground stockpiles would be further potential ore feed for SAT s planned toll treatment plants. The Siglo XX Mine is one of the world s largest historic hard rock tin mines. Estimates of production of fine tin and tin remaining in existing tailings equate to approximately 950,000 tonnes of tin. The Mine is known to have 47 main veins and approximately 1,500 minor veins and to have approximately 700 kilometres of underground adits, drives and cross-cuts. In its earliest days head grades from the Mine were 12-15% Sn. Siglo XX has been mined since the 1890 s and it currently being mined by a series of four Mining Cooperatives using artisanal mining and treatment methods. P a g e 1

2 The Mine is contractually owned by four Mining Cooperatives, Dolores, Juan del Valle, Siglo XX, and XX de Octubre under a lease from Bolivia s state-owned mining company, COMIBOL. SAT has signed Preliminary Contracts with each of these Cooperatives that gives SAT exclusive access to the Mine. SAT is seeking to redevelop the historic mine in partnership with the four Cooperatives as a modern underground mine targeting high grade Sn veins, toll treating in planned new processing plants. Future expansions may include a large open pit as one potential development path in conjunction with a large tailings toll treatment project. 650 Level Mapping Programme As reported to shareholders on 21 January, SAT is now in possession of a large amount of very valuable historical data and maps of the Siglo XX Mine. These are being used as the basis for a mapping programme on the 650 Level of the Siglo XX Mine. The most important map is of the 650 Level, the lowest of the main levels in the Mine and the main extraction level (Annexure A Figure 1). From the mid-1940 s approximately 5,000 tonnes per day of ore were hauled out of this level. This map shows all the main veins that were mined down to the 650 Level and include the Blanca, Carnavalito, Demasios, Forastera, Inca, San Fermin, San Jose and San Pedro Veins, and branches of some of these veins. The San Fermin and San Jose Veins are key targets for the mapping programme. The combined strike length of these two veins is approximately 650 metres and as such it presents a major exploration target. On average these two Veins are approximately 1- metre wide but widths of up to 5 metres have been recorded. Members of the Siglo XX Cooperative are currently mining these two veins on the 685 Level in a relatively small area. Figure 2 (Annexure A) is a plan showing the main veins in the Mine on the 411 Level. This figure is taken from Los Yacimentios Minerales y de Hidrocarburos de Bolivia by Dr. Fererico Ahlfeld and Dr. Alejandro Schneider-Scherbina, 1964, considered the bible of Bolivian geology. In the late-1970 s COMIBOL was investigating the same concept of projecting a number of the main veins below the 650 Level as drilling targets. See Annexure A - Figures 3 and 4. The Forastera, San Fermin and San Jose Veins are known to exist on the very small 720 Level, 70 metres below the 650 Level. The San Fermin and San Jose Veins are also known to exist on the even smaller 770 Level, 120 metres below the 650 Level (see Annexure A - Figures 3 and 4). The mapping programme will probably be extended to the 720 Level. This level is currently being worked by members of the Siglo XX Cooperative. P a g e 2

3 Anecdotal evidence from the Past President of the Siglo XX Cooperative suggests that members are mining grades of 3-5% Sn below the 650 Level. This Past-President himself mines below the 650 Level. The 770 Level is being used as the sump for the Mine s main pumping system, so it is currently flooded, as is the level below that see Figure 5 (Annexure A). Underground stockpiled material An equally important aim of the 650 Level mapping programme is to estimate the quantity and grade of the lower grade tin mineralised material stockpiled on the 650 Level. This material is too low in grade to be profitable for the Cooperative miners who only extract and treat the highest grade material through artisanal means, but the ore is likely to be of sufficient grade for treatment by SAT s proposed small-scale toll treatment plants. Figure 6 (Annexure A) shows an example of the stockpiled material underground. This stockpiled material often nearly fills the old drives and cross-cuts. Drives that were once 4 x 4 metres in cross-section have been reduced to widths of just 1 metre. The majority of the Mine workings, some 700 kilometres, are similarly filled with low-grade stockpile ore which is an important source of future feed for SAT s planned small-scale mines. SAT plans to assay this material. Planned drilling programme Following completion of the 650 Level mapping programme and sampling of the stockpiled ore, SAT intends to undertake a 1,500 metre diamond drilling program to better define the mineralisation of some of the Main Veins extending below the 650 Level. SAT will be targeting the extensions of the Main Veins that are present up to 200 metres below the 650 Level. Two cross-cuts on the 650 Level would make ideal drilling platforms as they are in good condition. The San Fermin-San Jose Veins and the Demasios and Forastera Veins will be a major target of the planned drilling programme. The San Jose Vein is known to have been intersected by DDH811 at approximately the 800 Level (150 metres below the 650 Level). The intersection in DDH811 is reported to have been 0.20 metres at 20.19% Sn. Figure 7 (Annexure A) shows the long section through the Siglo XX Mine and the important aspects about the planned drilling programme, including the approximate position of the DDH811 intersection at the 800 Level. Victory looks forward to updating shareholders on the results of the mapping programme and the sampling of stockpiled ore and determining a date for the proposed drilling programme. P a g e 3

4 Corporate update Victory is pleased to report that it is currently engaged with a number of mining companies, end-users and trading houses regarding the future funding of the SAT projects in Bolivia. Interested parties from Japan, the United States, Europe, Australia and South America have all conducted site visits to assess SAT s small-scale toll-treatment strategy and assessing ore trading opportunities. Victory looks forward to updating shareholders once negotiations have reached a point where they can be disclosed to shareholders. SAT s Managing Director John Kelly commented: Following the public announcement of SAT s transaction with Victory Mines, we have fielded multiple inquiries from a number of well qualified parties interested in either project development and/or tin trading opportunities. The level of inquiry and the quality of the parties have been particularly encouraging as it indicates that SAT s Bolivian projects clearly have significant appeal due to their scale, and importantly, the ability to potentially generate early cash flow from both mining and trading without the need for years of expensive exploration spend. The fact that SAT has an in-country presence, a well qualified and experienced local team, and strong political and social connections is also of appeal. We look forward to progressing these discussions now that the transaction with Victory has been completed and the company s ownership structure is well defined. - ENDS - Competent Persons Statement The information herein that relates to Exploration Results is based on information compiled by Mr John Kelly BE(Min), who is a Fellow of The Australian Institute of Mining and Metallurgy. Mr Kelly takes responsibility for the form and context of the Exploration Target reported. Mr Kelly is a fulltime employee, director and shareholder of South American Tin Limited. Mr Kelly has 32 years experience in mining and exploration activities. Mr Kelly has more than five years' experience which is relevant to the style of mineralisation and type of deposit being reported and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves (the JORC Code). Mr Kelly takes responsibility for the Exploration Target in this report. This public report is issued with the prior written consent of the Competent Person as to the form and context in which it appears. JORC Code Table 1 Checklist of Assessment and Reporting Criteria No changes are necessary to the JORC Table 1 over what was reported on 12 th May P a g e 4

5 Enquiries Elizabeth Hunt Company Secretary John Kelly Managing Director or Media Enquiries Sam Burns Six Degrees Investor Relations About Siglo XX: The Siglo XX Mine is one of the world s largest historic hard rock tin mines. Estimates of production of fine tin and tin remaining in existing tailings equate to approximately 950,000 tonnes of tin. The Mine is known to have 47 main veins and approximately 1,500 minor veins and to have approximately 700 kilometres of underground adits, drives and cross-cuts. In its earliest days, head grades from the Mine were 12-15% Sn. Siglo XX has been mined since the 1890 s and it currently being mined by a series of four Mining Cooperatives using artisanal mining and treatment methods. The Mine is contractually owned by the four Mining Cooperatives Dolores, Juan del Valle, Siglo XX and XX de Octubre under lease from COMIBOL, the Bolivian state-owned mining company. In turn SAT has signed Preliminary Contracts with each of these four Mining Cooperatives that gives SAT exclusive access to the Mine to provide feed for proposed processing plants. About Victory: Victory Mines (ASX:VIC) acquired unlisted South American Tin (SAT) in December 2014 with the aim of generating near-term cashflow from toll treating and sales of high grade tin. SAT holds key preliminary contracts with four local mining cooperatives for exclusive access over historically the world s largest tin mine in the North of Potosi, Bolivia. Victory, in partnership with the Cooperatives, is targeting high grade tin veins to be delivered to a modern processing plant for toll treating and sales by Victory. P a g e 5

6 Appendix A Figures Figure Level Survey Map Figure 2 The Main Veins in the Siglo XX Mine at the 411 Level P a g e 6

7 Figure 3 Projections of the Forastera, San Fermin and San Jose Veins at the 720 Level Figure 4 Projections of the San Fermin and San Jose Veins at the 770 Level P a g e 7

8 Figure 5 The Main Mine Dewatering Pump on the 770 Level Figure 6 Stockpiled Low Grade Mineralisation on the 650 Level P a g e 8

9 Current Cooperative Workings DDH811 Intersection Flooded Largely Untouched Potential Figure 7 Important Aspects of SAT s Planned Drilling Programme P a g e 9