Dec 21 2010
Hana Mining Ltd., (TSX VENTURE:HMG)(FRANKFURT:4LH) has announced that it has received an updated 43-101 compliant, independent resource estimate that has significantly increased the size of the Banana Zone and the adjacent Chalcocite Zone, located within the Ghanzi Copper-Silver project in northwestern Botswana, Africa.
At a 0.75% copper cut-off, the estimated mineral resources at the Ghanzi Project are:
- Indicated Mineral Resources: 19.7 million tonnes grading 1.35% copper and 19.7 g/t silver, containing 585 million pounds of copper and 12.5 million ounces of silver.
- Inferred Mineral Resources: 91.2 million tonnes grading 1.20% copper and 13.83 g/t silver, containing 2.4 billion pounds of copper and 40.6 million ounces of silver.
At a 0.30% copper cut-off, the estimated mineral resources at the Ghanzi Project are:
- Indicated Mineral Resources: 37.4 million tonnes grading 0.93% copper and 13.4 g/t silver, containing 762 million pounds of copper and 16.1 million ounces of silver.
- Inferred Mineral Resources: 423.9 million tonnes grading 0.60% copper and 6.3 g/t silver, containing 5.6 billion pounds of copper and 85.4 million ounces of silver.
Discussion of Results:
The most recent resource estimate was prepared by Sphynx Consulting CC of Noordbrug, South Africa. This estimate updates the previous resource estimate (Hana news release April 21, 2010) by GeoLogix Mineral Resource Consultants (Pty) Ltd. of Potchefstroom, South Africa, reflecting six months of drilling exclusively in the Banana and Chalcocite Zones. The last resource estimate was completed and filed on SEDAR in May 2010. Resource drilling was not carried out at Zones 5 and 6 and therefore the resource estimates for these two zones remain unchanged.
The company has focused on expanding and upgrading the resources at the Banana and Chalcocite Zones since the last resource estimate was completed and filed on SEDAR in May 2010. The goal of the drilling program was to delineate the entire Banana and Chalcocite Zones and convert the Inferred mineral resources at portions of the New Discovery, Northeast Fold and South Limb areas to the Indicated category and aid in the preliminary pit design within these areas, which will be incorporated into the upcoming Preliminary Economic Assessment. Based on our internal modeling, a cut-off grade of 0.3% copper was found to be a more appropriate when stating the mineral resources at the Ghanzi Project.
Since the initial resource estimate, which was released in June 2009, the amount of contained copper at the Ghanzi Project has increased by 115% and the contained silver by 97%.
Additional infill drilling will be carried out in 2011 to convert mineralized material to the Indicated category and support a bankable feasibility study. The new resource estimate is based on drilling (both reverse circulation and diamond drilling) the entire 64 kilometre strike length of the Banana and Chalcocite Zones. While the entire strike length has been confirmed to host copper-silver resources, mineralization is still open at depth (see press release dated December 6, 2010). Approximately two-thirds of the drilling has been reverse circulation with the remainder being diamond drilling.
The new resource estimate will be used as the basis for the ongoing Preliminary Economic Assessment which is expected to be made public in early 2011.
Portions of resources at the Banana Zone have been classified in the Indicated category totaling 762 million pounds of copper and 16 million ounces of silver based on the Zone based on a copper cut-off grade of 0.30%.
Also, the updated National Instrument 43-101 compliant Inferred Resource estimate now totals 5.6 billion pounds of copper and 85 million ounces of silver based on the additional mineralized material from the Banana Zone, Chalcocite Zone, Zone 5 and Zone 6 at a copper cut-off grade of 0.30%.
Total contained copper within the Banana and Chalcocite Zones has increased by approximately 43% and contained silver by 48% since the previous Inferred Resource estimate which was released in April 2010.
Preparation of the Updated Mineral Resource Estimate:
This updated Ghanzi Project resource estimate is based on a total of 767 drill holes (96,930.7 metres), drilled on 50-200 metres spacing between holes. Out of the 96,931 metres drilled, 78,109 metres was resource development drilling and 18,822 metres was infill drilling.
Resource modeling was carried out using a three-dimensional solid geological model for each copper/silver bearing prospect, and grade estimation for blocks within a prospect using assay sample composites within the same prospect. Geological solids were created by wireframe models delineating the various lithological and grade contacts of each prospect in the drillholes. The Kalahari sand has been wireframed as a discrete layer. The model did not go below the 800 m elevation, maximizing depth below surface to 200-225 m. All geological modeling work was done by Sphynx Consulting with Datamine software.
Based on the geological confidence, the integrity of the data, the spatial continuity of the mineralization as demonstrated by the variography, and the quality of the estimation, the mineral resources have been classified as Indicated and Inferred.
Development Update:
The following engineering and consultation activities are ongoing to fulfill the goal of completion of a PEA in Q1 2011:
- Preliminary mine open pit modeling has been carried out using the December 2010 resource as a basis to define the parameters to be used. A revised model will be completed after the 2010 drilling has been incorporated;
- Metallurgical (column leaching) work, which is being carried out by Metcon Research in Tucson, Arizona, on the Chalcocite Zone is ongoing. Results are expected to be available by the end of the year;
- Field work for water exploration is ongoing;
- Stefanutti Stocks Mining Services of Johannesburg South Africa have been engaged by Hana to provide the preliminary tailing impoundment designs for the project;
Qualified Person and Quality Assurance/Quality Control
Ms. Vivian Park, P.Geo., Senior Geologist/Database Manager for Hana, is the qualified person as defined in NI 43-101 and has reviewed the technical information in this press release.
The Ghanzi Project is located in the center of the Kalahari Copper Belt in northwestern Botswana. The Ghanzi property covers 2,169 square kilometres, and contains sediment-hosted copper-silver deposits with a demonstrated cumulative tested strike length of 70 kilometres. This favorable geology extends over an estimated strike length of 600 kilometres. Hana Mining released results of its most recent NI 43-101 compliant resource estimate for the Ghanzi Project on December 20, 2010, announcing an Indicated mineral resource of 762 million pounds of copper and 16 million ounces of silver from 37.4 million tonnes at a grade of 0.93% copper and 13.4 g/t silver. All of the Indicated resources are from the Banana Zone. The resource estimate also includes 5.6 billion pounds of copper and 85.4 million ounces of silver from 423.9 tonnes. This Inferred mineral resource estimate consists of 225.4 million tonnes grading 0.64% Cu and 8.1 g/t Ag in the Banana Zone, 20.7 million tonnes grading 1.23% Cu and 8.7 g/t Ag in Zone 5, 16.7 million tonnes grading 0.86% Cu and 4.0 g/t Ag in Zone 6, and 161.1 million tonnes grading 0.45% Cu and 3.6 g/t Ag in the Chalcocite Zone; all at a cut-off grade of 0.30% Cu.
The Banana Zone exhibits certain areas of higher grade Cu and Ag mineralization, particularly between sections 49700 to 52000 on the North limb and sections 63000 to 71000 on both the North and South limb, which represent an opportunity to locate starter pits and mine initial tonnages at higher than average grades. These higher grade pockets tend to be well within open pit depth parameters and represent opportunities to improve early cash flow and overall returns in development.
The project will benefit from proposed rail and power infrastructure expansions, along with proximity to local population centers and workforce. A feasibility study is currently underway (funded by the World Bank and the governments of Botswana and Namibia) to support completion of a rail line link that would connect Botswana with the Namibian port of Walvis Bay, on the Atlantic coast. The closest existing railhead to port is at Gobabis, in Namibia, approximately 550 km from our property. Construction has begun on the 600MW expansion of the government-owned Moropule Power Plant, having secured US$825 million project funding in May 2010. The Ghanzi Copper-Silver Project is currently accessed by the paved Trans-Kalahari highway, which passes within 15 km of the property.