Maiden Mineral Resource Estimate Declared at Fe...
16 December 2014
Sula Iron & Gold plc
("Sula" or the "Company")
MAIDEN MINERAL RESOURCE ESTIMATE DECLARED AT FERENSOLA
Total oxide resource of 55.5Mt @45.39% Fe represents easily accessible
mineralisation with a total resource of 514.5Mt @ 31.8% Fe
Deep exploration target outlined by SRK suggests further resource base
Sula Iron & Gold plc, the exploration and development company focused on iron
ore, gold and coltan in Sierra Leone, is pleased to announce a Maiden JORC
Compliant Mineral Resource Estimate at its 100% owned Ferensola iron ore
project in Sierra Leone ("Ferensola").
Highlights:
* Five distinct iron mineralised units, consisting of unique material zones
based upon characteristics and iron grades, have been identified at
Ferensola. Total JORC compliant Mineral Resources for each of the given
separate zones are:
+ Oxidised, laterite Cap : 8.3Mt @ 42.95% Fe;
+ Oxidised, high grade: 7.4Mt @ 56.71% Fe;
+ Oxidised, Saprolite: 8.1Mt @ 39.01% Fe;
+ Oxidised, Upper Saprolite: 31.7Mt @ 45.02% Fe; and
+ Fresh Magnetite ore: 459Mt @ 30.2% Fe.
* Total oxidised resource of 55.5Mt @ 45.39% Fe over the full 2.8km strike of
BIF1;
* Total Indicated mineral resource of 17.6Mt @ 45.6% Fe.
* Total Inferred mineral resource of 496.9Mt @ 31.3% Fe.
* Mineral Resource Estimate prepared by SRK who have in addition identified
an exploration target comprising an additional 100Mt to 250Mt, with a grade
range of between 20% Fe and 35% Fe that lies below the optimised pit shell.
NB. The Mineral Resource quoted above occurs entirely within the
licenseboundary and within an optimised pit shell though the pit shell itself
was not constrained by licenseboundary limitations.
Commenting on today's landmark news, Nick Warrell CEO of Sula, said:
"We are very pleased to update our shareholders and the market with our Mineral
Resource Statement.Back in 2013 we set ourselves the target of identifying a
500Mt iron ore resource and today'sresults reflectthe past two yearwork
programme. The total oxidised resource of 55.5Mt @45.39% Fe represents easily
accessible mineralisation at surface. This, coupled with exceeding the SRK ES
Exploration Target of 500Mt, is pleasing.
"Furthermore, the deep exploration target of 100-250Mt at BIF1 outlined by SRK
suggests that we can add further to the resource base."
To view a full version of the announcement, including figures and maps, please
visit the Company's website at: www.sulaironandgold.com.
Sula Iron & Gold plc +44 (0) 20 7583 8304
Nick Warrell / Matt Wood
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0) 20 7148 7900
James Caithie / Avi Robinson
VSA Capital Limited (Broker) +44 (0) 20 3617 5177
Bhavesh Patel / Richard Buckle
Strand Hanson (Financial Adviser) +44 (0) 20 7409 3494
Simon Raggett / James Harris
Yellow Jersey PR (Financial PR) +44 (0) 7768 537 739
Dominic Barretto / Kelsey Traynor
Project Background
The Ferensola License area lies largely within the rugged greenstone belt of
the southern Sula Mountain Range, approximately 20 km northeast of the town of
Bumbuna. Ferensola is an exploration project comprising a BIF with a
supergene-enriched oxide cap. Ferensola is thought to be a northerly extension
of the Kasafoni deposit, which is part of the Tonkolili Iron Ore Project, owned
by African Minerals Ltd, which lies directly to the south and adjacent to the
Ferensola licence.
Mineral Resource Estimation
This Mineral Resource Estimate ("MRE") has been prepared by SRK Consulting (UK)
Ltd ("SRK") following the guidelines of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves 2012 Edition ("the JORC
Code").
The definitions of Measured, Indicated and Inferred Mineral Resources as used
in the report, are as defined in the JORC code prepared by the Joint Ore
Reserves Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia
("JORC").
SRK has conducted a site visit to the Ferensola Project during the course of
the drilling campaigns undertaken by Sula. The site visit was undertaken by Mr
Colin Rawbone, Senior Geologist with SRK, who is a Competent Person and
Chartered Professional Member of the AusIMM (Membership ID:313771). During the
site visit, Mr Rawbone undertook an associated review of all on site procedures
and protocols.
The Mineral Resource Statement ("MRS") generated by SRK has been restricted to
all classified material falling within the license area and within an optimised
pit shell representing a metal price of USD150c/dmtu for magnetite and sinter
fines concentrate (The metal price selected is based upon SRK's internal
consensus market forecast data). The different ore-types have been reported
based on various material specific marginal cut-off grades which have been
derived by SRK as a result of metallurgical test work undertaken. This
represents the material which SRK considers has reasonable prospect for
eventual economic extraction based on the above pit optimisation and processing
recovery analysis. The MRS for Ferensola is shown in Table 1.
The pit outline used to report the final MRS has not been restricted to the
license boundary i.e. the projected pit edge extends into the adjacent license
and mining would need to occur in this in order to exploit the Mineral Resource
reported. For clarity therefore, SRK has also derived a pit outline that occurs
entirely within the Ferensola license and does not encroach onto the adjacent
license. If the company is only able to mine material falling within this pit
then this would exclude 72.3 Mt of the reported Mineral Resource, of which
71.7 Mt% (99%) is from the magnetite BIF, 0.5 Mt is from domain 100 and 0.1 Mt
is from domain 130 even though this does occur within the license boundary.
Table 1: Mineral Resource Statementfor Ferensola
Domain CoG Resource Tonnes Fe % SiO2 Al2O3 P %
Category (Mt) % %
Oxidised, Laterite 17% Measured
Cap
Indicated 1.8 39.9 3.89 22.59 0.07
Meas. + Ind. 1.8 39.9 3.89 22.59 0.07
Inferred 6.5 43.8 2.62 20.00 0.07
Oxidised High Grade 5% Measured
Indicated 3.3 56.6 5.77 5.66 0.07
Meas. + Ind. 3.3 56.6 5.77 5.66 0.07
Inferred 4.1 56.8 5.30 5.17 0.07
Oxidised Saprolite 17% Measured
Indicated 4.9 38.3 35.19 3.75 0.05
Meas. + Ind. 4.9 38.3 35.19 3.75 0.05
Inferred 3.2 40.1 33.44 3.21 0.06
Oxidised Upper 13% Measured
Saprolite
Indicated 7.6 47.0 9.86 12.34 0.08
Meas. + Ind. 7.6 47.0 9.86 12.34 0.08
Inferred 24.1 44.4 13.74 12.39 0.08
Fresh Magnetite BIF 7% Measured
Indicated
Meas. + Ind.
Inferred 459.0 30.2 44.29 4.71 0.04
TOTAL Measured
Indicated 17.6 45.6 15.60 9.72 0.07
Meas. + 17.6 45.6 15.60 9.72 0.07
Ind.
Inferred 496.9 31.3 41.88 5.27 0.05
Notes:
(1) Mineral Resources which are not Mineral Reserves have no demonstrated
economic viability
(2) The effective date of the Mineral Resource is 12December 2014
(3) The Mineral Resource Estimate for Ferensola was constrained within
lithological and grade based solids and within a Lerchs-Grossman optimised pit
shell defined by the following assumptions; metal price of US150c/dmtubased on
SRK's internal consensus market forecast data; slope angles of 43º in the oxide
zones and 50º in the fresh material, depending on respective location; a mining
recovery of 97.0%; a mining dilution of 3.0%; a base case mining cost of
USD1.50/t and an incremental mine operating costs of USD0.03/t/12 m below the
670 m reference RL and USD0.03/t/12 m above the 670 m reference RL; process
operating costs of USD2.50/t crushed DSO and high grade saprolite, all other
saprolite crushed USD4.00/t and USD5.50/t crushed BIF; Fe recovery of 30% for
the Laterite cap, 100% for the High Grade oxide, 30% for Saprolite, 40% for the
upper saprolite and 80% for the fresh MagnetiteBIF.
(4) Mineral Resources at Ferensola have been classified according to the JORC
code by Howard Baker (FAusIMM(CP)), an independent Competent Person as
recognised by JORC.
The Competent Person responsible for this Mineral Resource Statement is Mr
Howard Baker (FAusIMM(CP)). Mr Baker is a CP as defined by the JORC Code and a
Principal Resource Geologist with SRK who is a Chartered Professional Fellow of
the AusIMM (Membership ID: 224239).
Sula and SRK are not aware of any additional factors (environmental, legal,
title, taxation, socio-economic, marketing, political, or other relevant
factors) that could have material impacts on the Mineral Resource Estimate.
The quantity and grade of reported Inferred Mineral Resources in this
estimation are uncertain in nature and there has been insufficient exploration
to further define these as Indicated or Measured Mineral Resource respectively;
and it is uncertain if further exploration will result in upgrading them to an
Indicated or Measured Mineral Resource category.
Ferensola Exploration Target
SRK recognises that there is potential to increase the Mineral Resource at
Ferensola through deep drilling that targets material that falls beneath the
base of the optimised pit shell where the deposit remains open at depth. This
material may be considered by SRK to be potentially economic, should sufficient
exploration data be collected that confirms the geometry and continuation of
the mineralisation. SRK has identified an Exploration Target comprising an
additional 100 to 250 Mt, with a grade range of 29 and 35% Fe that lies below
the optimised pit shell used for constraining the Mineral Resource reported
above. SRK notes that the Exploration Target is conceptual in nature, that
there has been insufficient exploration to estimate a Mineral Resource in this
area and that it is uncertain if further exploration will result in the
estimation of a Mineral Resource in this area.
In addition, SRK recognises the potential for further conversion from the
Inferred category to the Indicated and or Measured categories following further
exploration.
Database Validation
The QA/QC programme for Ferensola consists of alternating the insertion of a
blank, standard and duplicate sample on a regular basis within the sample
sequence. The Company uses standards with varying grades representative of the
deposit which are also alternated. All samples have been prepared at the ALS
laboratory in Monrovia, Liberia and assayed at the accredited analytical
facility in County Galway, Ireland. SRK found that the results of the above
described QA/QC programme indicate that Ferensola's assay databases were
appropriate for mineral resource estimation.
Data Verification
Mr Colin Rawbone and Mr Howard Baker as the Competent Person's completed the
verification of data on which the MRE is 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.
MRE Drilling
A 3D geological model based on a total of 85 diamond drill holes for 8,873 m
has been used to develop the model used in the MRE. This includes 3,863 raw Fe
assays from project inception up to the cut-off date of September 2014.
Ferensola Deposit Characteristics
Ferensola covers a 2.8 km portion of a larger 20 km strike length magnetic
anomaly extending SW from the license area. The target forms a BIF with an
oxidised cap of dominantly haematite / magnetite mineralisation.
Capped by a ~10 m thick laterite, the oxide mineralisation consists of friable
to weakly indurated haematite rich saprolite which has been subdivided into
multiple unique domains based principally on the relationships between Fe,
Al2O3 and SiO2. The oxide material has been subjected to supergene enrichment
resulting in the progressive dissolution of SiO2 that increases with depth. As
such, the general observed trend shows an increase in Fe grade moving up the
sequence away from the base of oxidation which is accompanied by a decrease in
the SiO2 content within the oxide material. In addition to this sequence two
units of elevated/enriched material, characterised by low Al2O3 have been
interpreted and are considered a reflection of a fluctuating water table.
Fresh BIF mineralisation is modelled into five independent strike continuous
packages separated by intercalated metasediments. The BIF units are comprised
of laminated to bedded magnetite rich BIF horizons and, weakly foliated
aggregates of magnetite. Basement footwall mineralisation consists of coarse
grained mica bearing gneiss. The hanging wall is comprised of biotite and
sericite rich intercalated meta-sediment.
Geological Modelling, Resource Estimation Assumptions, Parameters and Methods
SRK created a geological model based on the lithological logging, assay and
magnetic susceptibility data, enabling the hanging wall and footwall contacts
of the BIF unit to be modelled and a three dimensional solid model to be
created. The oxide cap was modelled using statistical grade boundaries, the
magnetic susceptibility data and Loss on Ignition values to determine the base
of oxidation.
A 2 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 based on the presence of primary fabric
of the fresh to semi fresh units and following the predominant dip and dip
direction and topographic parallel elliptical searches in the highly weathered
oxide units. SRK also utilised Datamine's dynamic anisotropy function to honour
slight changes in the overall dip and dip direction of the data. 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.
Competent Persons
The information in this press release that relates to the current drilling
programme is based on information compiled by Mr Colin Rawbone, who is a
Chartered Professional Member of the Australasian Institute of Mining and
Metallurgy ("AusIMM"). Mr Rawbone is a full time employee of SRK and 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 in the 2012 Edition of
the 'Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves'. Mr Colin Rawbone has reviewed this press release and
consents to the inclusion in the press release of the matters based on his
information in the form and context in which this appears.
In addition to the above, this press release has been compiled under
the direction of Mr Howard Baker, who is a Chartered Professional Fellow of
the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr Baker is a
full time employee of SRK Consulting (UK) Ltd and 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 in the 2012 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Baker
has reviewed this press release and consents to the inclusion in the press
release of the matters based on his information in the form and context in
which this appears.
Forward-looking Statements
This announcement includes certain forward-looking statements. All statements,
other than statements of historical fact, included herein are forward-looking
statements that involve various known and unknown risks and uncertainties as
well as other factors. Such forward looking statements are subject to a number
of risks and uncertainties that may cause actual results or events to differ
materially from current expectations, including delays in obtaining or failure
to obtain required regulatory approvals. There can be no assurance that such
statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Notes:
Sula Iron & Gold plc is a multi-commodity exploration company focused on West
Africa. The Company's main objective is to explore and advance its Ferensola
project in Northern Sierra Leone, which is highly prospective for iron and
gold. The 153 sq. km license area is contiguous to African Minerals' Tonkolili
Iron Mine, which has a JORC resource of 12.8 billion tonnes iron
mineralisation.
Significant Greenstone Belt-style gold mineralisation has also been identified
at various prospects within the license area. Five target areas for hard rock
gold mineralisation have been identified based on the location of historic
drill intercepts, the source areas for alluvial gold deposits, and the position
of major structures as defined by airborne magnetic data and drainage
orientation.
The information in this release that relates to Exploration Results has been
reviewed by Mr Andrew Dacey, Non-Executive Technical Director of Sula Iron &
Gold plc. Mr Dacey is a Fellow of the Institute of Materials Minerals and
Mining, a Registered Professional Geologist with the Australian Institute of
Geoscientists and a Competent Person as defined in the Australasian Code for
Reporting of exploration results and Mineral Resources and Ore Reserves.
APPENDIX A. JORC CODE, 2012 Edition, Table 1 (Section 1 and 2)
Section 1 Sampling Techniques and Data
Logging
Criteria JORC Code explanation Commentary
Sampling * Nature and quality of Diamond core samples collected by Sula
techniques sampling (eg cut staff were of half HQ or NQ core, with
channels, random the sample cut so as to equally divide
chips, or specific structures. Sample lengths ranged from
specialised industry 0.5 m to 2 m. Sample intervals were not
standard measurement matched to geological boundaries.
tools appropriate to
the minerals under
investigation, such
as down hole gamma
sondes, or handheld
XRF instruments,
etc). These examples
should not be taken
as limiting the broad
meaning of sampling.
* Include reference to Sula used a minimum sample size of 0.25
measures taken to kg per core sample dispatched. They
ensure sample routinely submitted blanks, duplicate
representivity and and certified reference material.
the appropriate
calibration of any
measurement tools or
systems used.
* Aspects of the Diamond core samples were HQ diameter,
determination of and were cut in half using a core saw,
mineralisation that dividing geological structures equally
are Material to the where possible. Some samples
Public Report. demonstrated a significant variance
when compared to duplicate samples, but
this affect was observed to be minor,
with most samples showing good
repeatability.
Sample preparation techniques were
deemed to be of international best
practice.
* In cases where All sampling preparation has been
`industry standard' undertaken by an accredited laboratory;
work has been done preparation of samples has been
this would be undertaken through ALS Monrovia and XRF
relatively simple (eg analysis has been undertaken by ALS
`reverse circulation based in Ireland.
drilling was used to
obtain 1 m samples
from which 3 kg was
pulverised to produce
a 30 g charge for
fire assay'). In
other cases more
explanation may be
required, such as
where there is coarse
gold that has
inherent sampling
problems. Unusual
commodities or
mineralisation types
(eg submarine
nodules) may warrant
disclosure of
detailed information.
Drilling * Drill type (eg core, Drill methods were diamond drilling of
techniques reverse circulation, dominantly HQ core using standard tubes
open-hole hammer, for the drill programmes undertaken. A
rotary air blast, CS1000 man portable drill rig operated
auger, Bangka, sonic, by a reputable company acting under
etc) and details (eg industry best practices.
core diameter, triple
or standard tube, Core on vertical holes targeting oxide
depth of diamond material has not been orientated.
tails, face-sampling
bit or other type,
whether core is
oriented and if so,
by what method, etc).
Drill sample * Method of recording Drill core recovery was recorded for
recovery and assessing core every hole through routine monitoring
and chip sample of drill rod depth and recovered core.
recoveries and Recoveries for each hole were
results assessed. graphically plotted and show total
recovery better than 85%. Where
recovery has been recorded these
intervals are identified and flagged
for re-drilling as required.
* Measures taken to Supervision of the diamond drilling by
maximise sample Sula geologists ensured sample recovery
recovery and ensure was good, and that samples were
representative nature representative without contamination
of the samples. issues. Where poor recovery has been
encountered contractual agreements with
the drill company incur penalties and
re-drill policies.
* Whether a No studies are known to have been
relationship exists completed on sample bias.
between sample
recovery and grade
and whether sample
bias may have
occurred due to
preferential loss/
gain of fine/coarse
material.
Sub-sampling techniques and sample preparation
* Whether core Geological logging for
and chip diamond core includes a
samples have descriptive log with
been some quantitative
geologically logging of mineralogy
and and alteration, in
geotechnically addition to plotting of
logged to a assays and the geology
level of as a graphic log.
detail to
support No geotechnical logging
appropriate has been undertaken on
Mineral oxide material due to
Resource core fragmentation and
estimation, lack of orientation.
mining studies
and
metallurgical
studies.
* Whether Logging is qualitative,
logging is with the exception of
qualitative or some quantitative
quantitative logging of mineralogical
in nature. and alteration content.
Core (or
costean, Core photography is
channel, etc) undertaken for both half
photography. and whole core on a box
by box basis.
* The total 100% of diamond core
length and samples can be
percentage of correlated to graphic
the relevant logs of the diamond
intersections drill hole.
logged.
Quality of assay data and laboratory tests
* If core, Drill core samples were
whether cut or half HQ core, where the
sawn and core was cut to equally
whether divide significant
quarter, half structures in the rock.
or all core Half core is dispatched
taken. for analytical
process's
* If non-core, All sampling relates to
whether drill core
riffled, tube
sampled, rotary
split, etc and
whether sampled
wet or dry.
* For all sample Diamond core samples
types, the have been analysed by
nature, quality XRF for a full suite of
and analytes including but
appropriateness not limited to Fe_%,
of the sample Al2O3_%, SiO2_% and
preparation P_%. In addition to
technique. this analysis the LOI
was also recorded.
* Quality control For diamond drill core
procedures sampling, standards,
adopted for all duplicates and blanks
sub-sampling were interleaved
stages to randomly with the
maximise routine samples, every
representivity 20th sample; targeting
of samples. a frequency of 5%
* Measures taken Field duplicates are
to ensure that submitted as 1 in 20
the sampling is insertion rate, where
representative duplicates are selected
of the in situ the remaining half core
material is split to produce a
collected, field based quarter
including for core sample for
instance comparative studies.
results for
field duplicate
/second-half
sampling.
* Whether sample Diamond core samples
sizes are were half HQ core,
appropriate to which is a large
the grain size diameter core for
of the material exploration drilling.
being sampled.
Verification of sampling and assaying
* The nature, SRK deem the accredited
quality and laboratory and the
appropriateness requested analysis to
of the assaying be suitable and
and laboratory sufficient for this
procedures used type and style of
and whether the mineralisation deposit
technique is
considered
partial or
total.
* For geophysical No geophysical tools
tools, were employed, Magnetic
spectrometers, susceptibility has been
handheld XRF measured when drilling
instruments, below the oxide cap t0o
etc, the aid on site
parameters used identification of the
in determining target material.
the analysis
including
instrument make
and model,
reading times,
calibrations
factors applied
and their
derivation,
etc.
* Nature of For diamond drill core
quality control sampling, standards,
procedures duplicates and blanks
adopted (eg were interleaved
standards, randomly with the
blanks, routine samples, every
duplicates, 20th sample; targeting
external a frequency of 5%.
laboratory
checks) and Samples are reviewed on
whether a batch by batch basis
acceptable to identify any bias
levels of with in the analytical
accuracy (ie process.
lack of bias)
and precision
have been
established.
Location of data points
* The Mr Colin Rawbone of SRK
verification has independently
of verified the
significant intersections derived
intersections from lithological and
by either grade logging.
independent
or
alternative
company
personnel.
* The use of No twinned holes have
twinned been used to verify
holes. sampling and assaying.
* Documentation Data has been compiled
of primary from good quality paper
data, data plans and digitally
entry compiled at a later
procedures, date.
data
verification, The data has been
data storage assimilated into the
(physical and Company's Microsoft
electronic) Excel database, after
protocols. compilation and
validation in Mapinfo
Software.
* Discuss any No adjustment to assay
adjustment to data has been undertaken
assay data.
Data spacing and distribution
* Accuracy and All drill collars are
quality of positioned with handheld
surveys used GPS to an accuracy of
to locate within 5m.
drill holes
(collar and Down hole surveys are
down-hole not utilised on shallow
surveys), vertical drill holes but
trenches, where required on
mine workings inclined holes have been
and other undertaken using REFLEX
locations tools
used in
Mineral
Resource
estimation.
* Specification WGS 84 UTM Zone 29 North
of the grid
system used.
* Quality and An aerial survey to 0.5
adequacy of meter scale accuracy has
topographic been undertaken
control.
Orientation of data in relation to geological structure
* Data spacing Diamond drill core
for reporting samples are collected
of Exploration over contiguous
Results. intervals of alteration
as per logging. There
are lengths of diamond
core not sampled. Some
sampled intervals were
re–sampled as
composites, or as
single duplicate
samples.
Drilling has taken
place on 400m spaced
drill fences at 50m
intervals
* Whether the No Mineral Resource or
data spacing Ore Reserve
and calculations have been
distribution is reported on the deposit
sufficient to at this stage.
establish the
degree of
geological and
grade
continuity
appropriate for
the Mineral
Resource and
Ore Reserve
estimation
procedure(s)
and
classifications
applied.
* Whether sample Sample compositing was
compositing has performed for reporting
been applied. of diamond drill core
results, based on a
weighted average as a
function of sample
length versus grade.
* Whether the Drilling has
orientation been best
of sampling orientated to
achieves allow a
unbiased perpendicular
sampling of intercept of
possible the surface
structures oxide zone to
and the be achieved.
extent to
which this
is known,
considering
the deposit
type.
* If the Based on
relationship current
between the information no
drilling bias has been
orientation introduced
and the based on the
orientation orientation of
of key drilling and
mineralised relationship
structures with key
is structures.
considered
to have
introduced a
sampling
bias, this
should be
assessed and
reported if
material.
Sample security * The Sula
measures geologists
taken to maintain a
ensure full chain
sample of custody
security. of samples
as they
leave site
and are
transported
to the
process
laboratory.
Upon sample
return
sufficient
checks and
balances
are
undertaken
to ensure
samples
have not
been
tampered
with.
Audits or * The All logging
reviews results of and
any audits sampling
or reviews techniques
of have been
sampling audited
techniques during an
and data. independent
site visit
undertaken
by Mr Colin
Rawbone of
SRK
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Data aggregation methods
JORC Code explanation Commentary
Mineral * Type, reference EL54/2011 issued by the Government of
tenement and name/number, Sierra Leone 23rd August 2011 to Blue
land tenure location and Horizon (SL Ltd). Blue Horizon (SL Ltd)
status ownership including is a 100% owned subsidiary of Sula Iron
agreements or & Gold Plc. Full due diligence on the
material issues license was carried out by Sula's SL
with third parties lawyers and UK lawyers prior to IPO in
such as joint October 2012. There are no joint
ventures, ventures in place save an MOU with the
partnerships, Town Chief and his Elders of Dalakuru
overriding Town regarding the buildings in
royalties, native Dalakuru base camp. There are no
title interests, historical sites, wilderness or
historical sites, national park and environmental
wilderness or settings within our demarcated license
national park and area.
environmental
settings.
* The security of the As above
tenure held at the
time of reporting
along with any
known impediments
to obtaining a
licenseto operate
in the area.
Exploration * Acknowledgment and Exploration carried out by Mano River
done by other appraisal of during the 1990s. Almost impossible to
parties exploration by appraise the exploration as little or
other parties. no records of the exploration were
submitted to the Ministry of Mineral
Resources.
Geology * Deposit type, The Ferensola project appears to be a
geological setting typical weathered BIF with an
and style of underlying fresh magnetite BIF.
mineralisation.
Drill hole * A summary of all All tabulated exploration collars are
Information information included in the release in appendix B.
material to the
understanding of Table depicts all intercepts where
the exploration drill holes have intercepted
results including a mineralisation. Intercept lengths from
tabulation of the diamond drilling are presented as down
following hole lengths, not true lengths, and
information for all this is stated in the release.
Material drill
holes:
* easting and
northing of the
drill hole collar
* elevation or RL
(Reduced Level -
elevation above sea
level in metres) of
the drill hole
collar
* dip and azimuth of
the hole
* down hole length
and interception
depth
* hole length.
* If the exclusion of Intercepts have been omitted from this
this information is report where drill holes have not
justified on the intercepted the interpreted
basis that the mineralisation. Drill collars for each
information is not of these holes however have been
Material and this recorded in Appendix B
exclusion does not
detract from the
understanding of
the report, the
Competent Person
should clearly
explain why this is
the case.
Relationship between mineralisation widths and intercept lengths
* In reporting Weighting is
Exploration calculated as a
Results, function of each
weighting sample length
averaging multiplied by each
techniques, grade, with the
maximum and/ summed product
or minimum divided by the total
grade sample length, to
truncations present composited
(eg cutting intervals. A high
of high grade portion of
grades) and these intercepts has
cut-off been highlighted
grades are using a 55% Fe
usually Cut-off grade where
Material and intervals were
should be greater than 5m.
stated.
* Where Where intercepts are
aggregate reported as longer
intercepts lengths of lower
incorporate grade, it is clearly
short stated that the
lengths of higher incepts
high grade within are part of
results and the lower grade
longer intercept, not in
lengths of addition to the low
low grade grade intercept.
results, the
procedure
used for
such
aggregation
should be
stated and
some typical
examples of
such
aggregations
should be
shown in
detail.
* The No metal equivalents
assumptions are used for the
used for any exploration results
reporting of at Ferensola
metal Prospect.
equivalent
values
should be
clearly
stated.
* These Diamond drill sample
relationships intercepts are
are reported as down
particularly hole widths.
important in
the reporting
of Exploration
Results.
* If the Mineralisation is
geometry of considered to be
the steeply dipping
mineralisation (approx. 70° NW)
with respect with a dominant
to the drill strike NE-SW.
hole angle is However oxidation of
known, its this material is
nature should deemed to have
be reported. affected a horizon
of material
concordant with
topography.
Therefore the
vertical holes
currently drilled in
targeting this
material are deemed
suitable to
intercept the
primary target as
close to 90° as
possible.
* If it is not This is clearly
known and only stated in the
the down hole release.
lengths are
reported,
there should
be a clear
statement to
this effect
(eg `down hole
length, true
width not
known').
Diagrams * Appropriate maps Diagrams are
and sections provided that
(with scales) show all
and tabulations surface samples
of intercepts and the diamond
should be drill hole
included for any traces in plan
significant view, plus a
discovery being cross section
reported These is provided
should include, with the
but not be intercept
limited to a locations and
plan view of known geology.
drill hole
collar locations
and appropriate
sectional views.
Balanced reporting * Where Exploration
comprehensive results are
reporting of all presented in
Exploration the Table 1,
Results is not regardless of
practicable, grade where
representative mineralised
reporting of material has
both low and been
high grades and/ intercepted.
or widths should Grade has been
be practiced to split by
avoid misleading lithology based
reporting of on logging
Exploration undertaken by
Results. the Sula
geologists.
Other substantive * Other Discussion of
exploration data exploration the Ferensola
data, if Prospect
meaningful and geology is
material, should included in the
be reported release.
including (but
not limited to): In situ density
geological measurements
observations; are carried out
geophysical using
survey results; Archimedean
geochemical principles for
survey results; consolidated
bulk samples - fresh core and
size and method are undertaken
of treatment; on a
metallurgical lithological
test results; basis.
bulk density,
groundwater, To date no
geotechnical and economic or
rock extractive
characteristics; measures such
potential as bulk
deleterious or samples,
contaminating metallurgical
substances. testing, bulk
density,
groundwater,
geotechnical or
rock samples
have been
undertaken.
Further work * The nature and Drill testing
scale of planned is identified
further work (eg as future
tests for planned work.
lateral At present the
extensions or infill drilling
depth extensions to a 200m x 50m
or large-scale spacing has
step-out been commenced
drilling). to increase
confidence in
the initial
interpretations
of geometry and
grade
distribution.
In addition
1,500m of deep
drilling has
been planned to
develop the
fresh magnetite
BIF interpreted
below the
primary oxide
material.
* Diagrams clearly Possible
highlighting the extensions are
areas of indicated on
possible the plan and
extensions, cross section
including the provided in the
main geological release.
interpretations
and future
drilling areas,
provided this
information is
not commercially
sensitive.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to
this section.)
Criteria JORC Code explanation Commentary
Database * Measures taken to * Data provided by field geologists
integrity ensure that data is verified and checked prior to
has not been insertion into the company database
corrupted by, for using a series of excel cross check
example, and visual validation by the senior
transcription or geologist on site.
keying errors,
between its initial * In addition SRK have undertaken a
collection and its review of the drill holes at the
use for Mineral core shed to check the quality of
Resource estimation the logging, along with
purposes. cross-checking assay certificates
against the database. Further
* Data validation statistical validation of the
procedures used. presented database was undertaken
upon final receipt using Datamine
Studio 3 and Leapfrog software.
Site visits * Comment on any site * A site visit to the property and
visits undertaken inspection of the sample
by the Competent preparation facilities has been
Person and the undertaken by Colin Rawbone, a
outcome of those Senior Geologist with SRK; Mr
visits. Rawbone is a Qualified Person and
Chartered Professional Member of
* If no site visits the AusIMM (313771). Mr Rawbone
have been undertook a site visit in May 2013
undertaken indicate during the most recent drilling
why this is the campaign and has since provided
case. technical advice with respect to
the then on going drill programmes.
Geological * Confidence in (or * SRK considers the geological
interpretation conversely, the interpretation of the deposit to be
uncertainty of ) robust and in keeping with projects
the geological throughout West and Central Africa.
interpretation of
the mineral * SRK created a geological model
deposit. based on the lithological logging,
assay and magnetic susceptibility
* Nature of the data data, enabling the hanging wall and
used and of any footwall contacts of the BIF unit
assumptions made. to be modelled and a three
dimensional solid model to be
* The effect, if any, created. The oxide cap was modelled
of alternative using statistical grade boundaries
interpretations on and the magnetic susceptibility
Mineral Resource data to determine the base of
estimation. oxidation.
* The use of geology * The geological zones created are
in guiding and primarily based on the Fe
controlling Mineral distribution and its relationship
Resource with SiO2 and Al2O3 identified
estimation. through statistical analysis and
are characteristic of the Project.
* The factors
affecting * The Mineral Resource Estimation has
continuity both of been constrained to geological
grade and geology. units where such units are
supported by associated magnetic
susceptibility and grade data
provided.
* Geological and grade continuity has
been supported by geo-statistical
analysis (variography). Limiting
factors relating to grade
continuity are resultant of the
spatial relationship available
derived from drill spacing.
Dimensions * The extent and * The Mineral Resource Estimate is
variability of the based on a 3 km portion of a larger
Mineral Resource northeast-southwest regional
expressed as length trending magnetite BIF. SRK has
(along strike or created a geological model
otherwise), plan constrained by the license holdings
width, and depth of the company and based on the
below surface to lithological logging, assay data
the upper and lower and magnetic susceptibility
limits of the readings for the project. Deep
Mineral Resource. drilling has proved the
continuation of magnetite
mineralisation to a depth of
approximately 300 m below surface.
SRK have extended this
mineralisation to 500 m down dip
through the modelling process (RL:
200 m).
Estimation and * The nature and * A 2 m composite file was used in a
modelling appropriateness of geostatistical study (variography
techniques the estimation and Quantitative Kriging
technique(s) Neighbourhood Analysis, "QKNA")
applied and key that enabled Ordinary Kriging
assumptions, ("OK") to be used as the main grade
including treatment interpolation method. The
of extreme grade interpolation used an elliptical
values, domaining, search following the predominant
interpolation dip and dip direction of the
parameters and geological domains. The results of
maximum distance of the variography and the QKNA were
extrapolation from utilised to determine the most
data points. If a appropriate search and estimation
computer assisted parameters.
estimation method
was chosen include * The final search ellipse dimensions
a description of and sample numbers used for the
computer software first pass interpolation were
and parameters selected based on the QKNA studies.
used. Strike and dip directions of the
ellipse are based upon the
* The availability of geological interpretation (strike
check estimates, -45°, dip 110°) and the presence of
previous estimates primary fabrics based on the
and/or mine weathering intensity. Dynamic
production records anisotropy was used in the
and whether the interpolation to honor slight
Mineral Resource changes in the deposit
estimate takes orientations.
appropriate account
of such data. * Grades of Fe, LOI, Al2O3, SiO2, P,
Mn, CaO, TiO2, K2O, S, and MgO were
* The assumptions interpolated into the model.
made regarding
recovery of * No grade cutting or capping was
by-products. applied during this estimate.
* Estimation of * A single block model was created
deleterious using block sizes of 25 mY by
elements or other 100 mX by 10 mZ.
non-grade variables
of economic * The interpolated block model was
significance (eg validated through visual checks and
sulphur for acid a comparison of the mean input
mine drainage composite and output model grades.
characterisation). SRK is confident that the
interpolated block grades are a
* In the case of reasonable reflection of the
block model available sample data.
interpolation, the
block size in * No check estimates, historical
relation to the estimates or production records are
average sample available and therefore are not
spacing and the accounted for in the this MRE
search employed.
* Any assumptions
behind modelling of
selective mining
units.
* Any assumptions
about correlation
between variables.
* Description of how
the geological
interpretation was
used to control the
resource estimates.
* Discussion of basis
for using or not
using grade cutting
or capping.
* The process of
validation, the
checking process
used, the
comparison of model
data to drill hole
data, and use of
reconciliation data
if available.
Moisture * Whether the
tonnages are
estimated on a dry
basis or with
natural moisture,
and the method of
determination of
the moisture
content.
Cut-off * The basis of the * Cut off parameters have been
parameters adopted cut-off applied to each unique material
grade(s) or quality type (domain) identified. This has
parameters applied. been derived from domain specific
metallurgical test work undertaken
in SGS Cornwall and verified by an
accredited SRK processing engineer.
Mining factors * Assumptions made * The Mineral Resource Estimate for
or assumptions regarding possible Ferensola was constrained within
mining methods, lithological and grade based solids
minimum mining and within a Lerchs-Grossman
dimensions and optimised pit shell defined by the
internal (or, if following assumptions; metal price
applicable, of US150c/dmtu; slope angles of 43º
external) mining in the oxide zones and 50º in the
dilution. It is fresh material, depending on
always necessary as respective location; a mining
part of the process recovery of 97.0%; a mining
of determining dilution of 3.0%; a base case
reasonable mining cost of USD1.50/t and an
prospects for incremental mine operating costs of
eventual economic USD0.03/t/12 m below the 670 m
extraction to reference RL and USD0.03/t/12 m
consider potential above the 670 m reference RL;
mining methods, but process operating costs of USD2.50/
the assumptions t crushed DSO and high grade
made regarding saprolite, all other saprolite
mining methods and crushed USD4.00/t and USD5.50/t
parameters when crushed BIF; Fe recovery of 30% for
estimating Mineral zone 100 (Laterite), 100% for zone
Resources may not 110 (High Grade), 30% for zone 120
always be rigorous. (Saprolite), 40% for zone 130
Where this is the (upper saprolite) and 80% for zone
case, this should 210 (Magnetite BIF).
be reported with an
explanation of the
basis of the mining
assumptions made.
Metallurgical * The basis for
factors or assumptions or
assumptions predictions
regarding
metallurgical
amenability. It is
always necessary as
part of the process
of determining
reasonable
prospects for
eventual economic
extraction to
consider potential
metallurgical
methods, but the
assumptions
regarding
metallurgical
treatment processes
and parameters made
when reporting
Mineral Resources
may not always be
rigorous. Where
this is the case,
this should be
reported with an
explanation of the
basis of the
metallurgical
assumptions made.
Environmen-tal * Assumptions made * Sula and SRK are not aware of any
factors or regarding possible additional factors (environmental,
assumptions waste and process legal, title, taxation,
residue disposal socio-economic, marketing,
options. It is political, or other relevant
always necessary as factors) that have materially
part of the process affected the Mineral Resource
of determining Estimate. The Ferensola deposit is
reasonable a greenfield site and therefore is
prospects for not affected by any mining,
eventual economic metallurgical or infrastructure
extraction to factors.
consider the
potential
environmental
impacts of the
mining and
processing
operation. While at
this stage the
determination of
potential
environmental
impacts,
particularly for a
greenfields
project, may not
always be well
advanced, the
status of early
consideration of
these potential
environmental
impacts should be
reported. Where
these aspects have
not been considered
this should be
reported with an
explanation of the
environmental
assumptions made.
Bulk density * Whether assumed or * Bulk density readings are taken
determined. If based on lithological intervals
assumed, the basis thus targeting representative
for the samples being collected.
assumptions. If Measurements are carried out on
determined, the whole core (typically 10-15 cm
method used, pieces) using a balance with top
whether wet or dry, and modified under-slung measuring
the frequency of capabilities with a detection limit
the measurements, of ±1 gm. The balance is regularly
the nature, size checked and re-calibrated using
and certified weights.
representativeness
of the samples. * Density measurements are carried
out using Archimedean principles
* The bulk density for consolidated fresh core. The
for bulk material methodology involves drying the
must have been samples using a standard oven over
measured by methods a predefined period of time
that adequately (approximately 4hours) to generate
account for void a dry sample and weighing samples
spaces (vugs, in air and water using the balance.
porosity, etc), Wrapping the porous samples in
moisture and plastic wrap and/or coating in wax
differences between prior to immersion prevents the
rock and alteration sample becoming saturated.
zones within the
deposit. * Samples maintain a positive
correlation with respect to Fe
* Discuss assumptions grade with a positive relationship
for bulk density between Fe grade and density for
estimates used in samples within the oxide and fresh
the evaluation BIF domains. A trend line therefore
process of the can be fitted to the data
different distribution and a regression
materials. formula derived to calculate bulk
density in the geological model.
* SRK acknowledges that the limited
data available in the oxidised
domains renders the process
slightly less efficient in
determining accurate regression
based curves for the density
application. SRK does not believe
this discrepancy to be material and
consider this method of density
determination more robust than
applying average densities to the
oxidised domains in the block
model. It is recommended that
additional density data is collated
for these material types.
Classification * The basis for the * To classify the deposits at
classification of Ferensola, the following key
the Mineral indicators were used, geological
Resources into complexity, quality of the data
varying confidence used in the estimation, assay data,
categories. density data, QA/QC results,
results of the geostatistical
* Whether appropriate analysis and quality of the
account has been estimated block model.
taken of all
relevant factors * Mineral Resources at Ferensola have
(ie relative been classified according to the
confidence in JORC code by Howard Baker (FAusIMM
tonnage/grade (CP)), an independent Competent
estimations, Person as recognized by the JORC
reliability of code.
input data,
confidence in
continuity of
geology and metal
values, quality,
quantity and
distribution of the
data).
* Whether the result
appropriately
reflects the
Competent Person's
view of the
deposit.
Audits or * The results of any * This Mineral Resource Estimate has
reviews audits or reviews been subjected to an internal
of Mineral Resource review process by SRK employees.
estimates.
Discussion of * Where appropriate a * It is the opinion of SRK that the
relative statement of the quantity and quality of available
accuracy/ relative accuracy data is sufficient to generate
confidence and confidence Indicated and Inferred Mineral
level in the Resources and that the Mineral
Mineral Resource Resource Statement has been
estimate using an classified in accordance with the
approach or JORC 2012 reporting code definition
procedure deemed standards. It has an effective date
appropriate by the of 12 December 2014.
Competent Person.
For example, the * The quantity and grade of reported
application of Inferred Mineral Resources in this
statistical or estimation are uncertain in nature
geostatistical and there has been insufficient
procedures to exploration to further define these
quantify the Inferred and Indicated Mineral
relative accuracy Resources as Indicated or Measured
of the resource Mineral Resource respectively; and
within stated it is uncertain if further
confidence limits, exploration will result in
or, if such an upgrading them to an Indicated or
approach is not Measured Mineral Resource category.
deemed appropriate,
a qualitative * The pit optimisation undertaken to
discussion of the report the final MRS has not been
factors that could restricted to the license boundary
affect the relative with the resource pit crest being
accuracy and extrapolated into the adjacent
confidence of the license. Mineralisation however has
estimate. been modelled to the license
boundary only. SRK also ran a
* The statement second optimisation that restricted
should specify the resource pit crest to the
whether it relates Ferensola license so as not to
to global or local encroach on the adjacent license.
estimates, and, if As a comparison, SRK has also
local, state the reported the grade and tonnage of
relevant tonnages, the restricted optimization.
which should be
relevant to * The restricted optimisation, using
technical and a license constraint results in a
economic reduction of 72.26Mt of material of
evaluation. which 71.66Mt% (99%) is from the
Documentation magnetite BIF, 0.49Mt is from
should include domain 100 and 0.11Mt is from
assumptions made domain130.
and the procedures
used.
* These statements of
relative accuracy
and confidence of
the estimate should
be compared with
production data,
where available.
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