25 May 2012 AMENDED PERKOA JOINT VENTURE PROJECT MINERAL RESOURCE UPGRADE Please find attached an amended version of the Perkoa Joint Venture Project Mineral Resource Upgrade announcement released yesterday. The third paragraph on page 5 has been amended to now read: Negotiation of the detailed Project financing arrangements for the incremental capital necessary to fund the expansion case has been concluded in anticipation of a final investment decision by Blackthorn Resources. The financing arrangements are substantially in line with the provisions of the term sheet agreed with Glencore in mid- 2011 and are to be incorporated in amended provisions of the Senior Facility Agreement. Additional consequential amendments are also being drafted to other Perkoa JV Transaction Documents to reflect the agreed Project finance terms for the expansion proposal. Should you require further information please contact: Scott Lowe Managing Director Ph: + 61 2 9357 9000 Blackthorn Resources Limited ABN 63 009 193 980 Level 5, Suite 502, 80 William Street, Sydney NSW 2011, Australia t +61 2 9357 9000 f +61 2 9332 1336 www.blackthornresources.com.au
25 May 2012 PERKOA JOINT VENTURE PROJECT MINERAL RESOURCE UPGRADE KEY POINTS Perkoa JV Project Mineral Resource increased to 12.17 Mt @ 10.3% Zn and 53.9 g/t Ag, an 80% increase over the 2005 Mineral Resource which contained 6.72 Mt @ 16.4% Zn and 35.4 g/t Ag. Measured and Indicated Mineral Resources increased to 7.15 Mt @ 11.0% Zn and 53.8 g/t Ag. The Perkoa Deposit (total Mineral Resource) now contains: o 1.246 Mt of zinc metal; o 655.5 tonnes (23 Moz) of silver; o 19,600 tonnes lead; compared to 2005 Mineral Resource of: o 1.102Mt of zinc metal o 238 tonnes (8.4 Moz) silver; and o zero lead. Commissioning of generators commencing in next 2 weeks, with Dry commissioning of the process plant expected to commence in latter stage of Q3 CY2012. Blackthorn Resources Limited ABN 63 009 193 980 Level 5, Suite 502, 80 William Street, Sydney NSW 2011, Australia t +61 2 9357 9000 f +61 2 9332 1336 www.blackthornresources.com.au
Blackthorn Resources Limited (ASX: BTR, Blackthorn Resources or the Company ) is pleased to report the following updated Mineral Resources estimate at the Perkoa JV Project. The estimate has been completed by independent consultants, SRK Consulting (Australasia) Pty Ltd, in accordance with the principles of the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The Perkoa Mineral Resources are: Measured Mineral Resource Indicated Mineral Resource Inferred Mineral Resource TOTAL MINERAL RESOURCES 1.49 Mt @ 13.1% Zn and 38.4 g/t Ag 5.66 Mt @ 10.5% Zn and 57.9 g/t Ag 5.01 Mt @ 9.1% Zn and 54.1 g/t Ag 12.17 Mt @ 10.3% Zn and 53.9 g/t Ag (All Mineral Resources are reported above a cut-off grade of US$80 per tonne.) 2005 Mineral Resources 2012 Mineral Resources Proportional Change from 2005 Mineral Resources (%) Mt Zn % Ag Pb % Mt Zn % Ag Pb % Mt Zn % Ag g/t g/t g/t Measured 0.43 17.2 41.4 1.49 13.1 38.4 0.09 347% 24% 7% Indicated 6.29 16.3 35.0 5.66 10.5 57.9 0.18 10% 36% 65% Measured + Indicated 6.72 16.4 35.4 7.15 11.0 53.8 0.16 6% 33% 52% Inferred 5.01 9.1 54.1 0.17 5Mt TOTAL 6.72 16.4 35.4 12.17 10.3 53.9 0.16 80% 37% 52% The changes to the Mineral Resources estimate are due to: the inclusion of additional samples from extensional and infill drilling; re-modelling to create silver and lead domains that lie outside the zinc domain (Figure 1); and applying a cut-off value (US$80/t) rather than a cut-off grade (5% Zn) to ensure that the area of silver and lead that are independent of the zinc are assessed. This equates to a zinc equivalent cut-off of approximately 4.5% assuming the following parameters in Table 1. 2
Table 1 - Cut-off Value Parameters Metal values: Zn - US$2300/t Pb - US$2200/t Ag - US$29/oz Recovery: Zn 90% in Zn conc Pb 70% in Pb conc Ag 70% in Pb conc Payable: Zn 85% Pb 95% Ag 95% in Pb conc (80/0.90/0.85/2300=0.045) About the Perkoa JV Project The Perkoa Project is a joint venture with Glencore International (50.1%), Blackthorn Resources (39.9%) and the Burkina Faso Government (10% free carried) which is currently developing the first large-scale underground base metals mine in Burkina Faso. The Project is located 120km west from the country s capital Ouagadougou within the north-easterly trending Proterozoic, Boromo Greenstone Belt. The ore body at Perkoa is a volcanogenic massive sulphide (VMS) style deposit that is host to zinc (Zn), silver (Ag) and lead (Pb) mineralisation contained in an overturned sequence of steeply dipping, meta-volcanic and meta-sedimentary rock units which have been intruded by various ages of granitoids. In September 2011 Glencore provided Blackthorn Resources with an investment proposal to enhance the business case for the Perkoa Project in Burkina Faso. The investment proposal stemmed from investigations conducted by Glencore to upgrade the existing mineral resource through the evaluation of additional data obtained from a 2011 drilling program. This recent drilling is illustrated in Figure 1 together with the historical drilling. The investment proposal provided by Glencore included: Modifying the process plant configuration to include separate Ag/Pb concentrate and Zn concentrate product streams Increased plant throughput capacity to 1Mtpa ROM at peak production Open-cut mining to supplement the underground mine. The financial model supporting the investment case included tonnage and grade estimates based on both historical data and assays received to date from the 14 holes drilled to explore for along-strike extension of mineralisation in the proposed open-cut area. The model will now be updated with the new Mineral Resources estimate numbers along with other assumptions used. 3
Figure 1: Perkoa block model coloured by metal and drilling coloured by date drilled. Recent extensional drilling in red. Blackthorn Resources expects to receive the updated financial model from Glencore in the near future along with other outstanding information to support the investment case. The outstanding information includes final results from the metallurgical test work to confirm the metallurgical properties of the samples including concentrate recoveries and mineralogical properties for silver and lead. Following receipt of all outstanding information the Board of Blackthorn Resources will be in a position to make a final decision about participation in the enhanced business case. Project Update Work on site is progressing well and includes work necessary for the expansion case to proceed. Construction of surface infrastructure including camp, offices, workshops, laboratory, change rooms and amenities has now been completed. Construction activities associated with the processing plant (including the lead/silver circuit) are also progressing to schedule and currently on target to commence commissioning in Q3 CY2012. 4
Underground development is continuing to progress well since the arrival of mechanised drilling Jumbos, with mining taking place in the decline as well as from production drives which have now accessed the zinc ore body. Pre-strip mining over the proposed open-cut site is also well advanced and it is anticipated that mining of the oxidised ore will commence within the next month. The ore from both the open pit and the underground development will be stockpiled on the surface once mined, ready for wet-commissioning of the plant. Commissioning of power generators is expected to commence in next 2 weeks, with dry-commissioning of the process plant now expected in latter part of Q3 CY2012. First concentrates will be produced as a part of wetcommissioning later in H2 CY2012. This slight delay has been caused by delays in inbound logistics and late delivery of steelwork to the project. Negotiation of the detailed Project financing arrangements for the incremental capital necessary to fund the expansion case has been concluded in anticipation of a final investment decision by Blackthorn Resources. The financing arrangements are substantially in line with the provisions of the term sheet agreed with Glencore in mid- 2011 and are to be incorporated in amended provisions of the Senior Facility Agreement. Additional consequential amendments are also being drafted to other Perkoa JV Transaction Documents to reflect the agreed Project finance terms for the expansion proposal. Managing Director, Mr Scott Lowe said: Blackthorn Resources is very pleased to have received the updated Mineral Resources estimate for the Perkoa JV Project and we now look forward to receiving the updated financial model supporting the Enhanced Business Case proposal. The Mineral Resources upgrade and proposed expansion represents a potential major development in Perkoa s history and a final decision to proceed would represent increased value for shareholders. The Company is eager to receive the remaining information from Glencore as soon as possible to confirm the business case. The Company notes the slight delay in dry-commissioning schedule. However, we are confident Glencore is working to complete the construction phase as quickly as possible. 5
ATTRIBUTION The information in this report that relates to the Mineral Resources estimate for the Perkoa JV Project is based on information compiled by Mr Danny Kentwell, who is a Fellow of The Australasian Institute of Mining and Metallurgy (FAusIMM). Mr Kentwell has 23 years experience in resource evaluation, mine planning and operations and is employed full-time by SRK Consulting Australasia Pty Ltd. Mr Kentwell has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Kentwell has consented to the inclusion in the report of the matters pertaining to the Perkoa Mineral Resource estimate based on his information in the form and context in which it appears. Should you require further information please contact: Scott Lowe Managing Director Ph: + 61 2 9357 9000 Ends 6