Resource Estimate on Mokopane Iron Ore Project

RNS Number : 8050S

Obtala Resources Limited

25 November 2011

 



25 November 2011

Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Resource Estimate on Mokopane Iron Ore Project, South Africa

The Board of Obtala Resources Limited, the natural resources investment and development company is pleased to announce an update on the Mokopane Iron Ore Project, a vanadiferous titanomagnetite (VTM) project in South Africa with the completion of a JORC compliant Competent Persons' Report ("CPR") and Mineral Resource Estimate ("MRE") completed by the MSA Group ("MSA") of Johannesburg, South Africa.

In March 2011, Obtala announced it had entered into a conditional agreement to acquire a 50% interest in the issued share capital of Bushveld Resources Limited ("BRL") through Obtala's 100% owned subsidiary Bendell Enterprises Ltd ("Bendell"). Through this acquisition, Obtala has interests of 32% and 34.25% in the underlying subsidiaries that hold the licences over the Mokopane Iron Ore Project.

Highlights:

·     Mineral resource estimation and CPR completed

·     Confirmation of robust vanadiferous titanomagnetite (or VTM) mineralisation (the P-Q Zone) averaging between 40 and 50 metres in thickness

·     Combined Indicated and Inferred Resources in excess of 600Mt

·     The P-Q Zone is consistently developed along a strike of 4,200m on only the one farm tested to date and is open ended to the north and south with potential extension onto the remaining farms under licence

o  Indicated Mineral Resource for the P-Q Zone, to a vertical depth of 200m using a 35%  Fe₂O₃ cut-off grade:

260.2Mt at 46.3% Fe₂O₃, 11.3% TiO₂ and 0.18% V₂0₅

o  Inferred Mineral Resource for the P-Q Zone, to a vertical depth depth of 400m from surface using a 35%  Fe₂O₃ cut-off grade:

307.2Mt at 45.6% Fe₂O₃, 11.5% TiO₂ and 0.19% V₂0₅

·     Main Magnetite Layer ("MML") mineral resource estimate reported from two of four farms held under licence

o  Inferred Resource for the Main Magnetite Layer, to a vertical depth of 100m using a 40%  Fe₂O₃ cut-off grade:

66.2Mt at 53.1% Fe₂O₃, 9.2% TiO₂ and 1.24% V₂0₅

·     Completed drilling to date, combined with aeromagnetic and geochemistry interpretation suggests a substantial mineral resource with potential for significant extension

Bushveld 2011 Drilling and Exploration Programme

BRL has recently completed a diamond drilling programme with MSA utilising 14 relevant drillholes for a total of 3,140.73m in the database used for the mineral resource estimation exercise.

The key outcomes of the BRL exploration programme carried out in 2011 are:

·     Confirmation of robust Ti-magnetite mineralisation on two of the farms under licence that were tested

·     Potentially significant Ti-magnetite iron ore deposit

·     Two main zones identified - the Main Magnetite Layer ("MML") and the Upper ("PQ") Magnetite Zone consisting of massive and disseminated magnetite with both correlating along strike and showing comparative thicknesses and grades

·     Completed drilling to date, combined with aeromagnetic and geochemistry interpretation have suggested a substantial mineral resource exists

·     Follow-up drilling programme along identified strike planned to confirm extension of mineral resource as part of the next phase of the programme

The Project area is situated within the Northern Lobe of the Bushveld Igneous Complex ("BIC") and covers the top portion of the Main Zone ("MZ") and the entire Upper Zone ("UZ"). The BIC is the world's largest and economically most important layered complex and is known for the remarkable geological and geochemical continuity of the overall magmatic stratigraphy. Individual units and layers can frequently be traced for tens of kilometres along strike.

The project area has not been previously explored for its vanadiferous titano-magnetite (VTM) potential and no historic Mineral Resource Estimates have been carried out on the VTM layers in the area. Exploration undertaken has focussed on the semi-massive to massive Main Magnetite Layer ("MML") which has an average true thickness of about 8.4 m and dips 18° to the west, and the P and Q ("P-Q") Layers within the broader PQ Zone of Ti-magnetite gabbro rocks which contain considerable quantities of medium to coarse grained disseminated titano-magnetite and has a true thickness in the order of 45m.

The P and Q Layers consist of high-grade generally massive, vanadium-bearing titano-magnetite-rich, vanadium-bearing ("VTM") intervals within a zone of magnetite-enriched (10% - >50%) disseminated magnetite gabbro-norite. The PQ Zone is readily correlatable in the boreholes evaluated.

The input database for the mineral resource estimation exercises consists of 3,140.73 m in 14 diamond drillholes. This was composed of 4 drillholes totalling 789.30 m of drilling on the MML  and 10 drillholes totalling 2,351.4 m on the P-Q Zone.

The mineral resource estimation was undertaken using an un-rotated 3-D block model with a parent block size of 100 m (easting or X) x 100 m (northing or Y) x 20 m (for the Z height) with wireframes used to generate the block models. Sub-celling of the parent blocks was subsequently applied along the XY plane in order to achieve optimal block model fitting onto the wireframes and closer fitting for the Z height. Inverse distance weighting, to the power of 2 was used as the preferred interpolation method for the grade estimation for all elements.

The mineral resource classification is based on the dimensions of the search ellipsoid used in the grade interpolation. MSA applied a 300 m square grid to delineate Measured Resources, 600 m for Indicated Resources and 1,200 m for Inferred Resources.

The results are tabled below:

P-Q Zone In-situ Indicated Mineral Resources, <200 m, at 35% Fe₂O₃  cut-off

Cut-Off	Million	SG	Fe	Fe2O3	P2O5	TiO2	V205	SiO2	Al2O3
Fe2O3 (%)	Tonnes		%	%	%	%	%	%	%
35	260.20	3.70	32.4	46.3	0.05	11.3	0.18	24.4	10.2

P-Q Zone In-situ Inferred Mineral Resources, 0m to 400m, at 35% Fe₂O₃  cut-off

Cut-Off	Million	SG	Fe	Fe2O3	P2O5	TiO2	V205	SiO2	Al2O3
Fe2O3 (%)	Tonnes		%	%	%	%	%	%	%
35	307.23	3.75	31.9	45.7	0.05	11.5	0.19	23.4	10.2

MML In-situ Inferred Mineral Resources, <100 m, at various Fe₂O₃  cut-offs

Cut-Off	Million	SG	Fe	Fe2O3	P2O5	TiO2	V205	SiO2	Al2O3
Fe2O3 (%)	Tonnes		%	%	%	%	%	%	%
40	66.21	3.83	37.1	53.1	0.01	9.2	1.24	17.9	11.1
45	66.15	3.83	37.1	53.1	0.01	9.2	1.24	17.9	11.1
50	51.05	3.84	37.9	54.2	0.01	9.4	1.27	17.0	10.9

 Project Work Plan

Over the next 12 months, BRL's work programme will continue to focus on the objective of proving the continuity and grade of mineralization along strike and down dip. Activities include:

·     Acquisition and interpretation of ground geophysics data

·     Geological mapping

·     Diamond Drilling - regular grid based wide spaced diamond drilling programme

·     Initiate pre-feasibility study

·     Mineralogical studies and metallurgical test work and initial processing plant design

·     Bulk sampling programme

·     Preliminary financial evaluation

·     Acquisition of additional projects through in-house target generation

Francesco Scolaro, Chairman of Obtala, commented "I am very pleased with the progress and advances in understanding that has been made on the Mokopane Iron Ore Project. The Mokopane Iron Ore deposit is located in one of the most advanced mining regions in the world with the potential to grow into a world class asset. This initial JORC compliant resource is based principally on only one of the four farms held under licence and suggests great upside potential for the project as a whole. These results highlight what an attractive investment this is, and confirms the quality of the Bushveld management team. I look forward to progressing the project further in the coming months and remain confident of the upside potential of this project for our shareholders."

Obtala Resources Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
Macquarie Capital (Europe) Limited (Nomad and Broker)
Steve Baldwin	[phone]
Nicholas Harland
Threadneedle Communications
Beth Harris Laurence Read	[phone]

In accordance with the AIM Rules, the information in this announcement has been compiled by Richard Viljoen and Morris Viljoen, both qualified geologists with over 50 years' combined experience in the mining industry, and has been reviewed by Simon Rollason, a qualified geologist with over 20 years' experience, and who is the Managing Director of Obtala Resources Limited.

Additional Information

Bushveld Resources Limited is a private Guernsey registered company focused on evaluating and developing iron ore projects in sub Saharan Africa. BRL is the holding company of two subsidiary companies in South Africa which hold 64% and 68.5% interests respectively in two prospecting licences over the Mokopane iron ore project. The remaining 36% and 31.5% is held by Black Empowerment partners in South Africa. The project is located, approximately 60km from Polokwane and is in close proximity to several large scale mining operations and associated mining infrastructure.

 

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