The mining geotechnical report was completed indicating strong wall rock competency characteristics

Transcription

1 Regulatory Story Company TIDM Headline Released Number Galileo Resources PLC GLR Glenover Rare Earth Project - PEA Update 07:00 10-Dec T07 RNS Number : 0869T Galileo Resources PLC 10 December December 2012 Galileo Resources Plc ("Galileo" or the "Company") Glenover Rare Earth Project - Preliminary Economic Assessment Update The Board of Galileo Resources Plc (AIM: GLR), the emerging African Rare Earth exploration and development company, reports positive and significant progress on the Preliminary Economic Assessment (PEA) of its Glenover Rare Earth Project in South Africa, a joint venture with Glenover Phosphate (Pty) Ltd ("Glenover"). As part of the PEA, Galileo through Glenover, and lead contactor GBM Minerals Engineering Consultants Limited ("GBM"), commissioned independent and recognised resource industry consultants to undertake a review of Glenover's resource estimate (announced 17 April 2012), to generate PEA confidence level mine design including pit optimization and financial modelling, as well as an environmental study; the initial results of these reports are now available. PEA Progress - Significant Highlights: The Glenover Resource Statement (announced April 2012) has been independently reviewed ('the Review") including data on the Rare Earth Oxide (REO) distribution applicable to the Resource Estimate (see Rare Earth Oxide Ratios table herein)* The relative density (RD) of surface stockpiles and their volumes were retested and redefined respectively, the net effect of which increased by 8 the reported Inferred stockpile resource to a gross amount of million tonnes from million tonnes reported in the Glenover Carbonatite Geological and Resource Report - August 2012 The mining geotechnical report was completed indicating strong wall rock competency characteristics The open pit planning determined a low stripping ratio of 1.5 to 1 (tonnes to tonnes) An enviromental study was completed which showed no fatal flaws in this area Extensive metallurgical testwork is being carried out and the results to date suggest that a high grade marketable REO product can be produced Engineering, costing and marketing studies are progressing to schedule Completion of the PEA is anticipated in early Q * The Resource was compiled by GeoConsult International and the Competent Person is Mr Pete Siegfried with professional registration with MAusIMM. The total tonnage for the in-situ material is Mt (Indicated & Inferred). Colin Bird, Executive Chairman of Galileo Resources, said: "We are particularly pleased with the potential increase in tonnage of the stockpiles and that the open pit design is not adversely affected by potential poor rock stability. So far, all of the fundamentals that 'make or break' the outcome of this important PEA are particularly positive and we look forward to the completion of the PEA in the New Year."

2 Mineral Resource Review The resource covers in-situ material comprising apatite breccia, carbonatite and pyroxenite as well as the stockpiles related to the historical mining activities by Gold Fields SA between 1963 and The Review redefined the volume of each stockpile using wire frames compiled from topographic data provided by Glenover. The recalculated volume of Mm 3 is 5 lower than the previous estimate of Mm 3. A reassessment of the relative density (RD) of the stockpiles was carried out using the nuclear Troxler method. An average RD of 2.30 t/m 3 was determined which is 14 higher than the value of 2.02 t/m 3 used in the original resource estimate. This higher RD value is consistent with historical reported values and consequently was deemed the most appropriate value for the Review. The net effect of the re-assessed volume and RD values is an 8 increase in the stockpile tonnage to 2.94 million tonnes from million tonnes. The Review confirmed The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves ("the SAMREC Code") classification of the resource in the stockpiles to be of Inferred category for reasons that included: moderate confidence in the volumes of each stockpile; moderate confidence in the RD values for each stockpile; the origin of the material is inferred from geological evidence and sampling, but not verified geologically or through analysis of grade continuity; and the limitations in scope and reliability of the assay data for the stockpiles. Preliminary mining studies have indicated that within the current economic environment, the stockpiles will be processed. A zero cut-off was used for the stockpiles based on the fact that all the material contained within the stockpiles is likely to be processed. Based on this modelling the Inferred Mineral Resource of the total eight stockpiles following the Review is as follows: Inferred Mineral Resource - Stockpiles August 2012 Stockpiles RD TonnesNet TREOP 2 O 5 TREO Net TREO P 2 O 5 Net P (t/m 3 )(Mt) Tonnes () () Content Content Content Content (Mt) (Mt) (Mt) (Mt) (Mt) Total Note: Net means attributable amounts based on Galileo's option to acquire up to in the Glenover Joint Venture project by proving funding of up to $7million.

3 Distribution of Rare Earth Oxides In the Review, geostatistical assessments were made for eight of the more significant REO (La, Ce, Pr, Nd, Eu, Dy, Tb, Y) to assess whether average distributions for these key elements can be applied to estimated TREO grades to provide the distribution of individual REOs in the estimated grades for each rock type. The analysis showed strongly normal and narrow distributions for the REOs and very similar REO distributions for each rock type domain, implying a constant geochemical signature and that the distribution in the main is not affected by the REO grade. The relative contribution of all 15 REOs was calculated for each of the rock types contributing to the resource estimate and are summarised in the table below. Rare Earth Oxide Apatite Breccia Carbonatite Pyroxenite Stockpiles La 2 O CeO Pr 6 O Nd 2 O Sm 2 O Eu 2 O Gd 2 O Tb 4 O Dy 2 O Ho 2 O Er 2 O Tm 2 O Yb 2 O Lu 2 O Y 2 O Source: Glenover Carbonatite Geological and Resource Report - August 2012 The Company intends to undertake more detailed analysis as part of a pre-feasibility study and to test these values through a full geostatistical analysis of the individual elements. Further drilling to add more definition to the ore body as well as drilling of the stockpiles will occur. Based on the reviews undertaken on the Glenover Mineral Resources for the in-situ (hard rock) mineralization dated 17 April 2012, the Review concluded inter alia that: the quoted resource figures of tonnage and grade are valid and representative of the data from which they derived; the criteria used for the resource estimate in the determination of the confidence levels of Indicated and Inferred insitu Mineral Resources has taken into account the confidence in tonnage/grade computations, density, quality, value and distribution of primary data and information and the geological and mineralization models; and the work undertaken and the modelling suggest that the geological, sample, survey and density data for the project used by Glenover is reliable for use in resource estimation work and that no significant bias in this data exists that materially affects the quality of the resource estimates that rely on these data.

4 Geotechnical and Mine Design The aim of the geotechnical and mine design was to assess the current Glenover open cast pit potential based on previous geotechnical design criteria/parameters and to re-evaluate design criteria / parameters to a potential mining depth of ±155 metres (m). The basic mining rock types that comprise the ore body are described in the table below. Basic Mining Rock Types Rock Type Description Soil / Calcrete Weathered residual reddish soil (thickness < 3m). Saprolite Saprolite at various levels of weathering (thickness < 5m). Hard Rock Biotite - pyroxenite / carbonatite / apatite - haematite - breccia (thickness +120m). For the soft / saprolite rocks and soils, the investigation determined stable bench angles of 65 using the Hoek and Bray design charts. Stable bench stack heights of 60 m and bench stack angle of 62 for the hard rock were determined using Haines and Terbrugge charts. The use of slide modeling determined a Factor of Safety of +2 and a Probability of Failure of 0 for deep seated failures (based on the mechanical properties of the rock), which implies that the likelihood of a large rock mass failure (slope collapse) in the high walls of the open cast pit is very low. A geotechnical programme has been recommended in order to design the Glenover open pit according to international geotechnical design criteria for pre-feasibility and feasibility study standards. A first-pass design for the open pit mine was completed as part of the pit optimization using a stripping ratio of 1.5 to 1.0. Environmental The main aims of the preliminary assessment of environmental matters for the Project were to identify any possible fatal flaws and to develop terms of reference (ToR) for a pre-feasibility study and a full feasibility study including an Environmental Impact Assessment (EIA), required to obtain the relevant environmental authorisations. The environmental assessment scope of work included, inter alia, assessment of the general environmental conditions of the project area, existing environmental and mining authorisations associated with the existing license area and fatal flaw analysis including an Environmental Legal Due Diligence. In terms of environmental and social information available, the environmental report did not indentify any fatal flaws that would prevent the project to proceed into a feasibility phase. The risks identified in the Report can be mitigated during the feasibility phase, should the project proceed. Metallurgical Testwork and Process The Company, through Fer-Min-Ore, its JV partner in Glenover, commissioned Maelgwyn Minerals in South Africa to undertake initial metallurgical test work on stockpile samples with the objectives being to recover the REEs and the phosphate (apatite) to a saleable product. A grade of >30 P 2 O 5 and <2 Fe (iron) - the general iron specification for marketing phosphates- was to be achieved, primarily by direct flotation. This test work was completed and a report issued in October The test work achieved phosphate flotation concentrates assaying up to 33.0 P 2 O 5 with 3.8 Fe at P 2 O 5 recovery of 56 by rougher flotation at elevated temperature (60 o C) and alkaline ph with depressant reagents followed by five stages of cleaner flotation. After four stages of cleaning the flotation concentrate assayed 31.6, still greater than the targeted 30 P 2 O 5, at a P 2 O 5 recovery of 67. However, the Fe content of this fourth cleaner concentrate increased to 4.6 Fe. Magnetic separation and multi gravity separation on this concentrate to remove iron was not able to reduce the total iron assay to <2 Fe. A nitric acid leach of the concentrates solubilized 70 of the P 2 O 5 and approximately 50 of the Fe, a result that indicated the phosphate concentrate could meet the iron specification since the soluble Fe in the product, which is the critical criterion, would be around 2.

5 Following a review of this initial test work, Glenover commissioned two laboratories, Anzaplan Dorfner in Germany and GRINM in China, to undertake comprehensive metallurgical test work comprising further beneficiation, hydrometallurgy on the beneficiation products and hydrometallurgy on run-of mine (ROM) material to produce high grade marketable REE product or products. Both laboratories have rare earth beneficiation expertise, while the Chinese laboratory also has considerable expertise in processing rare earth concentrate to marketable products. Preliminary results from Anzaplan, testing a physical processing option - comminution and magnetic separation followed by flotation of the phosphate from the non magnetic product - achieved a potentially saleable apatite concentrate of >30 P 2 O 5 with modest P2O5 recovery and some 11 of the rare earth elements (REEs) reporting to the P 2 O 5 concentrate. Beneficiation tests on the iron-rich magnetics and phosphate flotation tailings to recover the balance of the REEs showed modest separation of REEs from Fe minerals even at relatively fine regrinding. Alternative hydrometallurgical processing options are being tested including acid or caustic cracking (leaching) on the aforementioned magnetics and tailings, as well as on ROM material. Results are highly encouraging, sulphuric acid cracking producing high recovery of the REEs into solution, from which an REE product assaying 43 REE was effectively precipitated, free of significant Ca, Fe, Mg or Na contamination. These tests are on going. For further information, please contact: Colin Bird, Chairman & CEO Tel +44 (0) Andrew Sarosi, Executive Director Tel +44 (0) Beaumont Cornish Limited Nominated Advisor and Broker Roland Cornish/James Biddle Shore Capital Stockbrokers Limited Joint Broker Jerry Keen/Toby Gibbs Gable Communications Justine James Tel +44 (0) Tel +44 (0) Tel +44 (0) M +44 (0) A copy of the announcement is available on the Company's website Technical Sign-Off Andrew Sarosi, Technical Director of Galileo, who holds a B.Sc. Metallurgy and M.Sc. Engineering, University of Witwatersrand and is a member of The Institute of Materials, Minerals and Mining, is a 'qualified person' as defined under the AIM Rules for Companies and a competent person under the reporting standards. The technical parts of this announcement have been prepared under Andrew Sarosi's supervision and he has approved the release of this announcement. Notes Galileo Resources Plc is a natural resource exploration company. The Company has an experienced management team with proven technical and commercial background. The flagship property is the Glenover Phosphate concession, which produced phosphate for many years. Phosphate however, is now subordinated to Rare Earth Elements ("REEs"). The project area is known to contain REEs and that the grades, if of sufficient size and continuity may well lead to a mediumsized operation for the production of REOs. Galileo Resources currently has a interest in the Glenover Project and has the option, via additional stage payments as set out in the Company's Admission Document, to earn up to a maximum interest of One of the key benefits of the project for a medium-sized operation is that, if REEs, which have been shown to be present in the stockpiles from the previous phosphate operations, can be proven to compliant resource category, the cost of mining it and the associated risks should substantially be reduced. The concession is of considerable size and hosts mineralisation types suitable for potential REE presence. The aim is to investigate the mineralisation types for REE presence and content with the view to proving up a mineable resource of REOs. Technical Glossary

6 Phosphate (P 2 O 5 ): An oxide of phosphorus REE (rare earths element): A set of fifteen chemical elements in the periodic table specifically the lanthanides (plus yttrium ad hoc and scandium) and by convention categorised as light REE (the first seven elements plus yttrium) and heavy REE (the other eight lanthanides) REO (rare earth oxide): The oxide form of the rare earth elements TREO: Total rare earth oxides The rare earth elements in the Glenover deposit: Ce: Cerium Uses include cathode ray tube glass to prevent age discoloration, in auto catalytic converters, rich red colour pigments, low energy light bulbs, film studio carbon-arc lighting and minor use in self cleaning ovens Dy: Dysprosium Uses include halide discharge lamps for intense light, permanent magnets and in nuclear industry as cermet (composite of ceramic and sintered material) Eu: Europium Uses include bright red coloration in television tubes; industrial street lighting to give a more natural light, thin film superconductor alloys and in lasers Gd: Gadolinium Uses include neutron capture capability and in compounds as a contrasting agent in radiography and magnetic resonance imaging in medical diagnostics La: Lanthanum Uses include carbon-arc lighting, additive to glass for lenses and new treatment for bone disease (osteodysrophy). Potential use for hydrogen (H) storage for H-fuelled vehicles: being able to absorb hydrogen as much as 400 times its volume Lu: Lutetium Uses mainly for research and in tiny amounts in magnetic bubble memory devices Nd: Neodymium Uses include alloyed with iron and boron to make one the most powerul permanent magnets known (see also Samarium below) and found in modern vehicles using motorised devices; in welders protective glasses and power lasers Pr: Praseodymium yellows for glazes Uses include as an additive to give glass a pure yellow colour and brilliant pastel greens and Sm: Samarium Uses include alloyed with cobalt to produce permanent magnets ten thousand times more powerful than iron and has the highest resistance to demagnetization; in masers (microwave lasers) capable of cutting steel and bouncing off the surface of the moon Tb: Terbium diagnosis Uses include lasers, low energy light bulbs and mercury lamps and improving safety in x-ray Y: Yttrium Uses include lasers, as host for europium in TV red phosphor, alloyed with boron and cobalt high temperature superconductors and microwave filters This information is provided by RNS The company news service from the London Stock Exchange