CHINA PIT SCOPING STUDY FINALISED – FIRST MINE IN THE BAWDWIN RE-DEVELOPMENT PROJECT
- Scoping Study for the first open pit at Bawdwin has been completed, targeting the Indicated Mineral Resources of the China lode
- The China Pit is a 13 year ‘starter pit’ for the Bawdwin Project that funds life-of-mine infrastructure while consuming only 26% of the current Indicated and Inferred Mineral Resources
- Pits on the Shan and Meingtha lodes, and an underground mine targeting the Shan, Meingtha and China lodes, are anticipated to follow the China Pit but have not been considered in the Scoping Study
- The Scoping Study indicates the potential to develop a low cost open pit mining operation in an accelerated time frame, with rapid payback of the life-of-mine infrastructure for future openpit and underground mining operations
Study Parameters – Cautionary Statements
The Scoping Study referred to in this announcement has been undertaken to determine the potential viability of an open-pit mine with a conventional milling and flotation circuit to produce multiple metal concentrates.
The operating parameters and economic estimates detailed in the Scoping Study are representative of a 100% interest in the Bawdwin Project. Myanmar Metals Limited (“MYL” or “the Company”) has a 51% participating interest in the Bawdwin Project, held through a contractual joint venture (“Bawdwin JV”).
The Scoping Study is a preliminary technical and economic study based on low level technical and economic assessments (+/- 35% accuracy) that are not sufficient to support the estimation of Ore Reserves. Further evaluation work and appropriate studies are required before MYL will be able to estimate any Ore Reserves or provide any assurance of an economic development.
The JORC-compliant Mineral Resource estimate announced on 2 July 2018 forms the basis for the Scoping Study that is the subject of this announcement. Over the life of the China Pit considered in the Scoping Study, 88% of the processed Mineral Resource originates from Indicated Mineral Resources and 12% from Inferred Mineral Resources; 99.5% of the processed Mineral Resource during the payback period would be from Indicated Mineral Resources. Over the first 5 years of the mine life, 91% of the processed Mineral Resource would be from Indicated Mineral Resources. The viability of the development scenario envisaged in the Scoping Study therefore does not depend on Inferred Mineral Resources.
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised.
This Scoping Study is based on the material assumptions outlined elsewhere in this announcement (in particular, pages 23 to 26). These include assumptions about the availability of funding. While MYL considers that all the material assumptions are based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by this study will be achieved.
To achieve the range of outcomes indicated, additional funding in the order of US$200 million will likely be required. Investors should note that there is no certainty that MYL and its partners will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of MYL’s existing shares. It is also possible that MYL could pursue other ‘value realisation’ strategies such as a sale or partial sale of its interest in the Project. If it does, this could materially reduce MYL’s proportionate interest in the Project.
This announcement contains forward-looking statements. MYL has concluded it has a reasonable basis for providing these forward-looking statements and believes it has reasonable basis to expect it will be able to fund development of the project. However, a number of factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of this study.
SYSTEMATIC EXPLORATION PROGRAM TO DEFINE BAWDWIN UPSIDE
- Exploration program in progress to define the upside to the Bawdwin deposit and establish the future production pipeline.
- Soil sampling program commenced – collection of approximately 1300 samples.
- Gradient Array IP Survey on 100m spaced lines in progress. ▪ Alteration mapping in progress.
Myanmar Metals Limited (“MYL” or “the Company”) is pleased to report that the Bawdwin Joint Venture (JV) is progressing the first comprehensive site wide exploration program ever conducted on the Bawdwin Concession.
The Bawdwin deposit remains open at depth and along strike. It is one of the few hydrothermal massive sulphide style deposits globally which has not been explored using modern technologies.
The 2018 exploration program can be characterised as a reconnaissance program, designed to discover extensions of the known Bawdwin lodes along strike and test the potential elsewhere within the licence area. The program will also serve an important secondary purpose of identifying areas where mine infrastructure can be built.
The exploration program encompasses electrical geophysics, soil sampling, magnetics, geological, structural and alteration mapping. These surveys have been chosen because of their proven success in identifying exploration targets on similar style deposits globally. Information gained in the current geometallurgical study will also contribute to understanding the alteration signature of the mineralisation and aid its recognition in new areas.
The new surveys will fill the gap in knowledge between isolated historic drill holes drilled in the 1960’s to 1980’s, where difficult drilling conditions and poorly maintained equipment resulted in very poor sample recoveries, old Chinese and European workings and the modern drilling and technical studies completed by the JV. This will allow the definition of new robust drill targets. Drilling of the best exploration targets is planned for later this year.
The known China, Shan and Meingtha Lodes extend for a strike distance of almost 2km. Mineralisation, not included in any resource category but defined either in historic adits and underground workings, or from isolated old drill holes, extends a further 500m north (Chin copper mineralisation) and a further 1km to the south (historic Chinese adits), for a known mineralised strike length of 3km (Figure 2). Beyond this, the host mineralising structures are interpreted to extend to the current licence boundaries for a distance of 8km. The potential for parallel mineralised structures will also be tested. In this program a 4km by 2.5km area will be covered by the IP and soil sampling.
As announced on March 1 2018, independent consultant Valentis Services, delivered an exploration report which identified: at least 30 known gossan outcrops which have similarities to the original gossans above the known lodes at Bawdwin, over 30 known shallow historical mine adits situated outside of the known mine environs with several containing substantial base metal sulphide intersections, several areas of base metals mineralisation outcropping on the concession outside of the known lodes and base metal intersections in the small number of historical regional drill holes which were never followed up.
As an example, in 1959, Adit 4520S was driven horizontally into the western face of Mt Teddy in ER Valley to test a localised soil anomaly (Figure 2). The adit is over 300m long with several cross cuts. Sampling by the Myanmar Burma Company at the time returned the following assay values1 :
- 6.4% Pb over 115 ft (35m) in the main drive
- 8.9% Pb over 75 ft (23m) in ND2292E drive
- 6.4% over 62 ft (19m) in EX4652S crosscut.
These samples are supported by anomalous intersections in some isolated drill holes as well as in historic Chinese underground workings 700m further to the southeast.
To test this significant potential, an exploration program, comprising the following elements has been devised:
PROJECT DIRECTOR APPOINTED FOR BAWDWIN
Myanmar Metals Limited (“MYL” or “the Company”) is pleased to announce that it has appointed Mr Rob Cicchini as Project Director to lead the Bawdwin project through the study, permitting and construction stages.
Mr Cicchini is a Civil Engineer with more than 27 years’ experience in the resource sector including 3 years in the construction and maintenance industry and 24 years in engineering consultancy, where he directly managed numerous major mining projects in Australia and overseas jurisdictions.
During a lengthy career with the Lycopodium group of companies, he held various senior project management and development roles including project development and feasibility studies for major resource projects in Australia and Africa, including the Bouly, Ity, Ahafo, Golden Pride, Geita, Obotan and Buzwagi Projects in Africa and St Ives, Golden Grove, Cloud Break, Wallaby, Mount Keith, Pasmico (Broken Hill) Sand fill and Marandoo projects in Australia.
Robert served as Managing Director of Lycopodium Infrastructure for a 4 year period and was the chairman of the Lycopodium Infrastructure board. His project development experience ranges from conceptual studies right through to project implementation, commissioning and handover in numerous countries and metals, including base and precious metals.
John Lamb, Executive Chairman and CEO, stated:
“This world-class project deserves an A-grade development team, and an Agrade team requires an A-grade leader. Rob’s project delivery experience, leadership skills and ability to engage with people on all levels make him an asset to Myanmar Metals and to the Bawdwin Joint Venture.”
Mr Cicchini will work between Perth where the company is assembling a study team of consultants and in-house professionals and Myanmar where the Bawdwin Joint Venture is establishing offices and local staff in Yangon as well as a substantial team already conducting work on site at Bawdwin.
He will be responsible for taking the project through to completion of construction, and handover to the Operations team in 2021.
About Myanmar Metals Limited
The Bawdwin project forms the means by which MYL intends to become a leading regional base metals producer. MYL is well positioned to realise this goal, enabled by: the Tier 1 Bawdwin project resources, world class exploration potential, a strategically advantageous project location, a management team with experience and depth, highly capable local partners and a strong balance sheet with supportive institutional shareholders.
The Bawdwin Concession is held under a Production Sharing Agreement between Win Myint Mo Industries Co. Ltd. (WMM) and Mining Enterprise No. 1, a Myanmar Government business entity within the Ministry of Natural Resources and Environmental Conservation. It contains a global Tier 1 polymetallic deposit with a JORC compliant Indicated and Inferred Mineral Resource of 82.0 Mt at 4.8% Pb, 119g/t Ag, 2.4% Zn and 0.2% Cu, (0.5% Pb cut-off above 750m RL, 2% Pb below 750m RL) including an Indicated Mineral Resource of 24.8 Mt at 5.1% Pb, 134g/t Ag, 2.8% Zn and 0.2% Cu (0.5% Pb cut-off above 750m RL, 2% Pb below 750m RL) (refer to ASX announcement dated 2 July 2018). The Company confirms that it is not aware of any new information or data that materially affects the information included in the market announcement dated 2 July 2018 and, in the case of estimates of mineral resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.
Myanmar Metals Limited (ASX: MYL) holds a majority 51% participating interest in the Bawdwin Project in joint venture with its project partners, WMM and EAP.
ACCELERATED BAWDWIN MINE RE-DEVELOPMENT PROGRAM
- Clear project milestones defined in accelerated Bawdwin mine redevelopment.
- 15,000 metre drilling program starts today.
- The Company’s largest drilling program to date is designed to target the Shan and Meingtha lodes, which will seek to upgrade the classification of a significant proportion of existing project resources, grow project resources overall and target areas prospective for copper-cobalt-nickel mineralisation.
- Pre-feasibility studies are underway with key contractors appointed for the delivery of engineering, mining, environmental and social studies.
- Exploration program will begin to define the upside to the Bawdwin deposit and establish the future production pipeline.
Myanmar Metals Limited (“MYL” or “the Company”) and its partners, Win Myint Mo Industries Co., Ltd (WMM) and EAP Global Mining Company Limited (EAP), have formed the Bawdwin Joint Venture (Bawdwin JV). MYL is pleased to report that the Bawdwin JV is now progressing an accelerated path to re-develop the world-class Bawdwin polymetallic mine with a number of clear project milestones defined. Through the Bawdwin JV, MYL holds a majority 51% participating interest in Bawdwin alongside its partners, who each hold a 24.5% interest.
Accelerated project re-development program underway
An accelerated re-development of Bawdwin is directed towards achievement of a number of value accretive operational milestones in the next 12 months. These milestones are outlined in more detail in the sections to follow and summarised in Table 1. Activities and technical studies presently being undertaken will contribute to the completion of a Pre-Feasibility Study (PFS) in early 2019. This is a key milestone for the Company as it is designed to lead to the declaration of a maiden Bawdwin project mineral reserve, updated project resource estimates and importantly, clearly demonstrate the attractive project economics which underpin this world class project.
The PFS will in turn feed into a Feasibility Study (FS) which is planned for completion in late 2019. Further resource drilling and an exploration program will be also be undertaken in 2019, following on from the 2018 programs. On completion of the FS, the Bawdwin JV will apply for development and investment approvals from Myanmar's Ministry of Natural Resources and Environmental Conservation (MONREC) and the Myanmar Investment Commission (MIC) with a view to construction commencing in 2020 and commissioning and first ore processed by late 2021.