Feb 8 2011
African Aura Mining Inc., the TSX-V (AUR) and AIM (AAAM) listed exploration and development company has announced an updated independent National Instrument 43-101 compliant Mineral Resource Estimate at its 38.5% owned Putu iron ore project in Liberia.
- Inferred resource increased to 2.4 billion tonnes of iron mineralisation at 34% Fe
- Test work on magnetite BIF indicates a high grade concentrate can be produced
- Potential for direct shipping ore exists to generate near term cash flow
- Aggressive drilling campaign underway and expected to total >60,000m
- Potential for a further 1 to 2.5Bt below current modelled optimised pit shell
Luis da Silva, Chief Executive of African Aura, commented:
"The more than doubling of the resource at the Putu iron ore project in Liberia to 2.4Bt is further excellent news for African Aura's shareholders. The headline objective of African Aura and our joint venture partner Severstal Resources was a 2Bt tonne resource and I am very pleased that this has rapidly been achieved. We expect to upgrade this resource to the indicated category during 2011. The JV partners are mindful of the importance of moving the project forward as efficiently as possible, for the benefit of the local communities and all other stakeholders, and I look forward to providing updates on progress in due course.
This news also comes on top of our announcement last week of a maiden 1Bt resource at our 100% owned Nkout iron ore project in Cameroon. African Aura's attributable iron ore inventory has increased fivefold in short order, from 0.38Bt at 34% Fe in 2010 to the current 1.96Bt at 34% Fe (equivalent to 666Mt of contained iron) and with the potential for significant further growth from here. The rationale for the proposed split of the Company into separately listed iron ore and gold companies, with shareholders in African Aura receiving one share in each company for each share they hold in African Aura, is a means to allow the market to better measure and reflect the intrinsic value of our assets which is becoming increasingly apparent."
Mineral Resource Estimate
This Putu Mineral Resource estimate, issued by independent engineers SRK Consulting (UK) Ltd ("SRK") has been prepared for the Company and made compliant with Canadian National Instrument 43-101 (NI43-101).
The report serves as an independent report prepared by a Qualified Person as defined by the Canadian National Instrument 43-101 and the companion policy 43-101CP. The definitions of Measured, Indicated and Inferred Resources, as well as reserves as used by the author, conform to the definitions and guidelines of the CIM (Canadian Institute of Mining, Metallurgy and Petroleum) reporting codes.
In total, SRK has estimated an Inferred Mineral Resource for the Putu Project of 2.37 billion tonnes ("Bt") grading 34.1% Fe, 43.8% SiO2, 1.49% Al2O3 and 0.07% P. Of this, 185 million tonnes ("Mt") grading 37.8% Fe lies within surface oxidized zone, 2.17 Bt grading 33.7% Fe lies within the fresh magnetite itabirite zone, and 17 Mt grading 48.25% Fe lies within the fresh haematite itabirite zone.
Putu Resource Potential
The Putu model is open at depth and SRK recognises that there is potential to increase the Mineral Resource Statement by targeting material that falls below the optimised pit shell but remains potentially economic. This material, based on a metal price of USD1.40/dmtu is considered by SRK to be potentially economic, should sufficient exploration data be collected that confirms the geometry and continuation of the mineralisation and that enables a classified resource to be estimated.
SRK has identified that an additional 1 to 2.5 Bt lies below the optimised pit shell used for constraining the Inferred Mineral Resources. The potential quantity of tonnes is conceptual in nature as there has been insufficient exploration or demonstration of economic viability to report these in the Inferred Mineral Resource category at the current time. It is uncertain if further exploration will result in these targets being defined and reported in a future Mineral Resource Estimate. These potential tonnages reflect a range of material within SRK's wireframe solid models outlining the interpreted down dip extent of mineralisation.
Database Validation
The QA/QC program for Company's Putu project consists of alternating the insertion of a blank and duplicate sample on a regular basis within the sample train. All samples have been assayed at the accredited SGS Johannesburg laboratory in South Africa. SRK found that the results of the above described QA/QC program indicate that the Company's Putu assay databases were appropriate for Mineral Resource Estimation, however, these databases need to be improved in order to upgrade the Inferred Mineral Resources to Indicated Mineral Resources.
Data Verification
Howard Baker as qualified person completed the verification of data on which the Putu Resource Estimate was based. This verification included an assessment of QA/QC data, sample preparation and assay methodologies, density data, data inputs and survey data used in the estimate. Data was validated by using field checks, statistical methods and evaluating the Company's protocols.
Geological Modelling, Resource Estimation Assumptions, Parameters and Methods
Putu can be divided into two main areas, Montroh and Jideh. The former is east-west trending, and the latter is northnortheast-southsouthwest trending. Both areas are compromised of magnetite Banded Iron Formation ("BIF") with oxidized caps of dominantly haematite mineralisation. SRK created a geological model based on the lithological logging and magnetic susceptibility data enabling two separate antiform structures, one at Jideh and one at Montroh, comprising BIF material to be modelled and a three dimensional solid to be created. A statistical review of the validated drill hole data enabled a domain to be created within the oxidized cap. Internal metasedimentary waste domains created within the BIF and oxidized cap were based on lithology logging, magnetic susceptibility data, Fe and Al2O3 assay grades.
A 5 m composite file was used in a geostatistical study (variography and Quantitative Kriging Neighbourhood Analysis, "QKNA") that enabled Ordinary Kriging ("OK") to be used as the main grade interpolation method. The interpolation used an elliptical search following the predominant dip and dip direction of the geological domains. The results of the variography and the QKNA were utilised to determine the most appropriate search and estimation parameters.
The interpolated block model was validated through visual checks and a comparison of the mean input composite and output model grades. SRK is confident that the interpolated block grades are a reasonable reflection of the available sample data.
Putu Metallurgical Test Work
As previously announced, metallurgical test work was conducted on five samples from each of the main mineralisation units - magnetite itabirite, epidote-chlorite magnetite itabirite, haematite itabirite, transitional magnetite itabirite, and weathered (predominantly haematite) itabirite. The test work was undertaken by Amdel Mineral Laboratories in Australia.
The test work results indicate that the unweathered magnetite itabirite should be amenable to conventional magnetite processing, that is, using several stages of Wet Low Intensity Magnetic Separation.
Given the high (60%) recovery achieved for the transitional itabirite sample in the Davis Tube tests, despite the low magnetite content of this material according to the Satmagan measurement, this material may be amenable to the same flow sheet as the unweathered magnetite itabirite, albeit with a lower recovery. The suitability of this material to such a flow sheet may also depend on the relative proportions of this material to unweathered magnetite itabirite in the resource.
For the weathered itabirite and haematite itabirite samples, a process route possibly consisting of a combination of gravity separation, magnetic separation and flotation is indicated. In all cases, further test work is required in order to firm up potential process flow sheets and optimise the conditions under which to achieve a combination of acceptable product quality and recovery.
Putu Mineral Resource Classification
The Putu project has been classified as containing Inferred Mineral Resources in the unweathered itabirite and oxidised domains. This is mostly due to the current lack of assay data and the requirement for more robust QAQC results. Inferred Mineral Resources have been extrapolated no more than 200 m down dip of the deepest drill hole intersection. It is the opinion of SRK that the down dip extension of Inferred Mineral Resources is justified in areas of unsupported blocks due to the known down-dip extensions observed in the geological logging and the quality of the estimate in adjacent blocks.
Putu Iron Ore Project
The Putu iron ore project is a 13km long iron rich ridge, located only 130km inland from the deepwater shoreline of eastern Liberia. In February 2011 the Company announced an Independent Mineral Resource of 2.4 billion tonnes of iron mineralisation at 34% total iron (Fe). The best drill results to date are 73m @ 60.4% Fe in hole PDD011 (predominantly oxide) and 366m @ 41.5% Fe in hole PDD052 (predominantly magnetite itabirite, with some haematite itabirite).The project is being advanced in joint venture with Severstal who are earning a 61.5% interest in the project as it moves towards completion of a Pre-Feasibility Study. A Mineral Development Agreement detailing the fiscal and legal terms for the development and mining of the Putu iron ore deposit was granted and ratified by the Government of Liberia on 9th September 2010.