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copper gold base metals saudi arabia aquisition

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    Level 15, 115 Pitt St, Sydney, NSW 2000
    All Mail to: GPO Box 4492, Sydney, NSW 2001
    Tel: +61 2 9223 3171 Fax: +61 2 9221 3018
    Email: [email protected]
    ADV secures exposure to a portfolio of outstanding Copper, Gold, and Base Metal Projects
    ADV Group (ADV) is pleased to announce, that in accordance with its previously announced strategy of assessing and reviewing opportunities for growth, it is conducting due diligence on, and has the option to secure rights to, an exciting portfolio of Copper, Gold and other Base and precious metal projects on the Arabian Shield in Saudi Arabia. The projects are owned by Vertex Group (Middle East) WLL (“Vertex”), a company incorporated in Bahrain, which holds a 70% interest in a Saudi Arabian operating subsidiary Bariq Mining Ltd (“Bariq”).
    The key projects include:
    Jabal Sayid
    The Jabal Sayid project is a potentially world class copper deposit (Bariq earn in to 50%) where previous work, predominantly in the 1970’s and 1980’s, focused on a high grade underground development scenario. Work undertaken included approximately 50,000 metres of drilling, 5.5km of surface trenching, and 3.9km of underground development. Tonnage and grade estimates were made using geostatistical modelling techniques based on the drilling and underground work by the BRGM for the Saudi Arabian Government but are not in compliance with the current JORC Code and cannot be stated. Estimates were made using a 1.5% Cu cut-off grade for a pre-feasibility study on a 1 M tpa underground mine scenario undertaken in 1985 (when the copper price was US$0.85 lb compared to the current price in excess of US$3.40 lb). A subsequent scoping study in the 1990’s indicated that the likely exploration target at Jabal Sayid is a 100-150Mt open cut orebody at 1-1.5% Cu with significant Au, Ag and Zn credits that could potentially be mined by open cut.
    A 5,000 metre drilling program as part of due diligence and pre-feasibility studies has been commenced, with first results anticipated shortly. It is planned that JORC compliant resource estimates will be prepared as part of this work.
    Jabal Shayban
    The Jabal Shayban gold/copper project (Bariq 100%) is located on the Shayban Mineral belt, the south-eastern extension of the Mahd Adh Dhahab/Jabal Sayid mineral belt. Some 70 drill holes have been completed with results including 47m at 10.1 g/t Au and 6.2 g/t Ag and 21m at 7.2 g/t Au and 85.8 g/t Ag. The following JORC compliant resource (253,000 oz Au Equiv.) was reported by the previous operator in 1999. This resource is open in all directions and previous drilling has tested only 500 metres of a 3km strike extent of ancient copper workings. Vertex’s current drilling program aims to double this resource.
    Oxide Zone
    Sulphide Zone
    g/t Au
    g/t Ag
    % Cu
    g/t Au
    g/t Ag
    % Cu
    Combined total oxide + sulphide
    Jabal Baydan
    The Jabal Baydan zinc/gold project (Bariq 100%) is located 10km from Jabal Shayban where 24 drill holes have been completed with results including 32m at 2.1 g/t Au, 64.5 g/t Ag, 1.9% Zn, 0.9% Cu, 19.7m at 4.0 g/t Au, 80 g/t Ag, 6.5% Zn, 0.6% Cu and 29m at 5.4 g/t Au, 12.5 g/t Ag, 1.4% Zn, 0.5% Cu. The Jabal Baydan gossan, which covers some 1250m metres, is the most prominent gossan on a lightly explored line of gossans which covers several kilometres of strike. An exploration target size for the mineralisation of 0.5-0.7 Mt at 15-18% Zn (100,000 t Zn) and 1-3 g/t Au (~40,000 oz Au) was estimated by a previous operator.
    In the information provided above, concerning the Jabal Sayid and the Jabal Baydan projects, any statement or mineralisation target referring to potential quantity or grade is conceptual in nature as there has been insufficient exploration to define a Mineral Resource (as that term is defined in the JORC Code) and it is uncertain if further exploration will result in the determination of a Mineral Resource (as defined in the JORC Code).
    The Lahuf gold project (Bariq 100%) is located 6km from Mahd Adh Dhahab gold mine, a World-class epithermal gold project where historically more than 6 M oz of gold production has taken place. Lahuf has the following JORC compliant resource (135,000 oz Au) in shallow, mainly oxide breccia veins reported by the previous operator in 1999. This resource has potential at depth and in parallel vein zones. The geologically similar Mahd Adh Dhahab operation is currently mining underground at 300m depth.
    Weighted Average Grade
    Contained gold (ounces)
    g/t Au
    The Bari (Bariq 100%) project which consists of lightly explored ancient gold workings covering a strike extent of some 1.4 km . Previous drill results included 39m at 7.32 g/t Au, 12.86 g/t Ag and 1.2% Zn and 84m at 6.75 g/t Au and 5.1 g/t Ag.
    The Muraijib-Bil’iwy (Bariq 100%) project where limited (3) trenching has been conducted on a major alteration system which cover areas varying from 150 m2 to 1,000 m2 intersected 32m at 1.75 g/t Au and 12m at 1.8 g/t Au.
    Wadi Kamal
    The Wadi Kamal (Bariq 100%) project is a virtually unexplored layered ultramafic complex where the only recorded drill hole intersected 17m 0.53% Ni and 0.23% Cu with PGE’s up to 1.2 g/t. Two areas of gossan around drill hole KMS1 analysed 0.2 and 8.06 ppm total PGE and 0.02 and 6.2 g/t Au.
    In describing the transaction Mr Fletcher Quinn, Chairman of ADV, said
    “this is a world class opportunity for ADV which could not be ignored. Vertex has a number of projects which are all potential company makers and with drilling underway at Jabal Sayid this strategic investment is timely.
    This initial drilling program will evaluate the distribution of ore grade material around the existing underground mineralisation, which was defined using a 1.5% Cu cut off; likely gold, silver and zinc credits which have not been evaluated; and the relatively unexplored 100-150 metre oxide/supergene zone between the extensive surface gossans and the known sulphide mineralisation.
    We believe that Jabal Sayid has the potential to quickly emerge as a large scale open cut orebody.”
    ADV anticipates releasing further details on the initial exploration program including the drilling program at Jabal Sayid shortly. ADV is also compiling the extensive historical data and will release additional information on each project as it is reviewed.
    The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Ralph Stagg, who is a Member of the Institution of Materials, Mining and Metallurgy, a Chartered Engineer and a Fellow of the Australasian Institute of Mining and Metallurgy, a Chartered Professional, and is the technical director of Bariq Mining. Ralph has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Ralph consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
    Project Location
    1. Madh Adh Dhahab
    • Jabal Sayid – Cu, (+ Au, Ag, Zn)
    • Lahuf – Au
    • Bari – Au
    • Jabal Ramram - Au
    2. Wadi Shugea
    • Jabal Shayban – Au (+ Ag, Cu)
    • Jabal Baydan – Zn (+ Au)
    3. Yanbu
    • Wadi Kamal –Ni, PGE (+ Au)
    • Murayjib-Bil’iwy – Au
    4. Idhkiri South
    • Jabal Al Qunnawat – Au
    • Jabal Idhkiri West – Au
    ADV has agreed to provide an A$1.5 million loan to Vertex which will be used to assist in the funding of an exploration program on the Bariq tenements. This program has already commenced and will include 10,000m of drilling, re-assaying of existing core, and detailed geophysical surveys over Jabal Sayid and Shayban.
    ADV may, at its option, convert the loan into a 25% interest in Vertex. If the loan is not converted it will be repayable by Vertex on or before June 30 2007. In return for providing the loan funds to Vertex ADV has also been granted the first, and last, right of refusal to engage in negotiations to acquire a greater interest in Vertex. The parties have agreed to a period of exclusive dealing up until 30 March 2007.
    Any decision that ADV’s may make to convert its loan into an equity interest in Vertex, or to proceed with negotiations to acquire an increased interest in Vertex will be made after an assessment of the results of the drilling programme currently being undertaking and other technical an legal due diligence that ADV may require. ADV has appointed the international minerals industry consultancy firm Behre Dolbear to undertake an initial independent technical assessment of the Vertex projects to assist with due diligence.
    ADV anticipates that a decision to convert the loan into equity in Vertex is likely to amount to a “change of activities” as defined under Chapter 11 of the ASX Listing Rules. Accordingly ADV would seek the approval of the shareholders to any such transaction at a specially convened General Meeting at which full details of the transaction and the Company’s future plans would be made available to shareholders. Also in accordance with the provisions of the listing rules, a Prospectus would be issued and provided to shareholders.
    If ADV where to proceed in this manner a possible timetable for these steps would be a follows:
    • Advance of funds, undertaking of drilling programme, and assessment of results and due diligence enquiries:
    o 3 to 5 months time
    • Detailed Announcement to shareholders of intention to change activities and details of the proposed transaction
    • Provision of meeting materials to shareholders for a general meeting to consider the transactions
    o 3 weeks thereafter
    • General meeting
    o 4 weeks thereafter
    • Shareholder approval and suspension in trading of the ADV shares pending compliance with chapters 1 and 2 of the ASX listing rules
    o Immediately upon obtaining shareholder approvals to the transactions
    • Issue of prospectus with full details of the Company going forward and for the purposes of raising fresh capital if required
    o 2 weeks thereafter
    • Re-quotation of the Company’s securities to trading on the ASX
    o 2 to 4 weeks thereafter
    If ADV decides not to proceed and requests the repayment of its loan it will continue to focus on its existing medical centre and also assess further investment opportunities as they arise. If shareholder approval were to be obtained ADV would review its ongoing operation and involvement in the existing Medical Business.
    Ralph Stagg – Technical Director of Vertex, Ralph is a geologist and has over 30 years experience in all facets of gold and base metal exploration and development including extensive experience planning and running exploration programmes. Ralph has extensive experience in Australasia, Africa, and the Middle East.
    Ines Scotland – A founding Director of Vertex, Ines has fifteen years experience in the mining industry the majority of which was working for Rio Tinto. Ines has worked in professional positions in Australia, Papua New Guinea, USA and the Middle East and is currently located in Saudi Arabia with Vertex. Ines has extensive experience in large scale Gold and Copper companies and managing operations in diverse cultures.
    Brett Butlin - Exploration Manager, has 12 years experience as an Exploration Geologist working most recently at Jabiru Metals as a Senior Exploration Geologist at Teutonic Bore in Western Australia. Prior to joining Jabiru Brett worked for Barrick Gold and a number of other Australian based exploration and mining companies.
    Saudi Arabia has a land mass of 1.96 million square kilometres, or about one quarter of Australia’s, and a population of 26.4 million. The biggest cities are the inland capital of Riyadh, with 4.7 million people and the Red Sea port city of Jeddah, the main commercial centre with 3.4 million people. Saudi Arabia was admitted into the WTO on November 11 2005 and has one of the 25 largest economies in the world, with a per capita GDP of US$13,000 compared to US$30,000 for Australia.
    “Saudi Arabia and its economy are vastly more dynamic than is generally known or appreciated.”
    His Excellency Ali bin Ibrahim Al-Naimi, Minister for Petroleum and Mineral Resources, 29 November 2004.
    A key driver to Saudi’s new mineral industry is the need to create new jobs for a youthful Saudi population, with 56 per cent of the population aged 20 or younger. A new Mining Investment Code was ratified by Royal Decree of 4 October 2004, becoming effective from 18 January 2005, with the key objectives including:
    • increasing the relative importance of mining in the national economy
    • attracting investment into the mining sector
    • streamlining procedures for mining projects
    • creation of job opportunities for Saudi nationals, and
    • transfer of mining technology to the Kingdom of Saudi Arabia.
    The new Saudi Mining Investment Code offers an attractive base for mineral exploration and mine development. Saudi offers:
    • Certainty of tenure from exploration through to exploitation
    • 20% corporate tax with NO mineral royalties
    • all commodities open to all parties including 100% foreign owned companies
    • no limit on repatriation of profits
    While petroleum production in Saudi Arabia is well known, with Saudi accounting for 25% or the world’s petroleum reserves, little attention has been focussed on the countries mineral resources. Gold mining in Saudi Arabia dates back 5,000 years, with the search for gold resulting in the discovery of hundreds of occurrences. Notable epochs of gold mining include early periods at about 3,000 BC and 1000 BC, the early Islamic period between 750 and 1258 AD, and a modern period since 1936.
    In recent years, the Saudi mining industry has been dominated by a vigorous industrial minerals and 5
    construction materials sector, with major production of limestone, clay and gypsum for cement manufacture and other building materials, including salt, ceramics, feldspar and kaolin. Many cement producers are listed on the local stock exchange, with strong profits recorded for 2004, between SR89 and SR156 per tonne of cement production, or equivalent to an average profit of US$30 per tonne of cement production.
    In 1997 the Saudi Arabian Government established a state owned joint stock company to serve as a catalyst for private sector investment in the mining sector. Ma’aden owns and operates four gold mines, one of which is an underground operation, currently producing 240,000 oz of gold, 500,000 oz of silver, 1,000 tonnes of copper; and 2,000 tonnes of zinc per annum. It is bringing another two into production. Ma’aden is also developing large scale phosphate, bauxite and magnesium projects.
    For further information please contact:
    Fletcher Quinn (Director) or Kris Knauer (Director)
    (07) 3303 0625 (02) 9375 0108
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