Resource Estimate on Mokopane Tin Project

RNS Number : 3400K

Obtala Resources Limited

13 July 2011

 



Obtala Resources Limited

("Obtala" or the "Company")

(AIM: OBT)

Resource Estimate on Mokopane Tin Project, South Africa

The Board of Obtala Resources Limited, the natural resources investment and development company is pleased to announce an update of activities on the Mokopane Tin Project in South Africa.

In February 2011 Obtala announced it had entered into a conditional agreement to acquire a 50% interest in the issued share capital of Greenhills Resources Limited ("Greenhills") and a resulting 37% interest in the Mokopane Tin Project, located in the Limpopo Province. The completion of this acquisition is pending some minor legal administration and is expected to complete in Q3 2011. Obtala has provided a non refundable advance of $2 million of the consideration in order to undertake a drilling programme., with a further $2 million to be paid upon completion at which point Obtala will be issued with 50% of the share capital of Greenhills.

Highlights:

·     53 New boreholes drilled to verify previous drilling results

·     Preliminary JORC compliant resource estimate completed on Groenfontein prospect

·     Statistical analysis verifies inclusion of historical drill data

·     Contained tin ("Sn") metal at 0.05% cut-off increases by 335% to 11,262 tonnes from 3,365 tonnes from previous estimates

·     Several intersections of >1% SnO₂

·     A number of high grade pipe structures intersected by new drilling, with grades of up to 17% SnO₂ over 1 m

·     Competent Persons Report (CPR) expected soon

Greenhills has recently completed a diamond drilling programme comprising 53 boreholes and a total of 1720 m, on the Groenfontein prospect, which represents only one of five known prospects, to date, within the Mokopane Tin Project.  The results from 22 holes that were selectively twinned with historical drillholes from previous drilling programmes in the project area, have undergone correlative statistical analysis by IRES, an independent Cape Town based Geological Consultancy engaged by Greenhills for the purpose of undertaking a geostatistical resource estimation of the available data for the Groenfontein prospect.

The result of the comparative statistical analysis indicates that there is no bias observed between the new drill assay results and the historical assays, and allows for the 203 historical drillholes to be incorporated into a single integrated database together with new assay information for the purpose of completing a resource estimation using a three-dimensional block model.

MSA have been instructed to prepare a CPR which will utilise the IRES results and is expected to be ready in the near future.

IRES completed variography, top-cut limits analysis and sample interval compositing to determine interpolation search radii parameters for a block model with block sizes of 10m x 10m x 2m (YXZ). Ordinary kriging was selected as the final method of interpolating tin grades into the model. The resources estimated are classified as measured, indicated and inferred. The criteria utilized were as follows: block grade and tonnages estimated within the first variogram range of the double structure spherical models were classified as being within the Measured category. This principle range of 50m approximately represents two thirds of the total variance. Resources estimated via the second structure of the double spherical model were classified as Indicated whilst resources estimated at about one and half times the longest variogram ranges were classified as Inferred.

The results are tabled below:

                            Resource using a 500ppm (0.05%Sn) cut-off grade

Classification	Tonnes	Sn (%)	Contained Tin (tonnes)
Measured	2,446,000	0.103	2,519
Indicated	6,190,000	0.093	5,757
Measure + Indicated	8,636,000	0.096	8,291
Inferred	3,161,000	0.094	2,971
Combined Total	11,797,000	0.095	11,262

                            Resource using a 1000ppm (0.1%Sn) cut-off grade

Classification	Tonnes	Sn (%)	Contained Tin (tonnes)
Measured	1,566,000	0.122	1,911
Indicated	4,257,000	0.106	4,512
Measure + Indicated	5,823,000	0.110	6,405
Inferred	2,337,000	0.105	2,454
Combined Total	8,160,000	0.109	8,859

These results show a marked increase in overall tonnage and contained metal when compared with the in-house estimation made by Greenhills (as announced on 23 February 2011), using two non-statistical methods for the resource calculation, namely the calculation of block areas derived by plotting grade contours on thickness contours and the calculation of areas based on polygons around each borehole.

                            Historical preliminary (non-statistical) resource using a 500ppm

                            (0.05%Sn) Cut-off grade

Classification	Million Tonnes	Sn (%)	Contained Tin (tonnes)
Inferred	2.65	0.13	3,419

The Groenfontein project continues to be the immediate focus of Greenhill's exploration programme. Recent geological modelling by Greenhills' technical team and drilling has further confirmed the presence of a well defined mineralized zone and the scope for increased resources as additional results are received. Drilling has identified a number of higher grade zones with grades of up 0.99% over 6 m, in addition to pipe structures with tin grades of up to 16.86% tin over 1 m.

Additional drilling is planned to extend the resource by confirming lateral extensions to the orebody. In addition to an outcropping ore body, and thus amenable to low-cost open cast mining, the tin mineralisation at the Mokopane tin project lends itself to relatively simple and inexpensive processing. Locally, South Africa has a long history of tin production and extensive experience and expertise in tin beneficiation.

Project Work Plan

Over the next 12 months, Greenhills' work programme will continue to focus on;

·     Completing a feasibility study on the Groenfontein target, including

-      Resource drilling programme

-      Metallurgy and mineralogical tests, processing plant design

-      Bulk sampling programme

-      Acquiring a mining license,

·     Defining a resource on the Zaaiplaats and Salomon's Tempel targets

·     Geophysics, geochemical sampling and mapping programme on the Appingendam - Groenvley target

·     Geochemical, Geophysical, sampling, mapping and trenching programme on Union Tin Member target

·     Acquisition of additional projects through in-house target generation

·     Trial mining at Groenfontein aimed for 2012

Francesco Scolaro, Chairman of Obtala, commented "I am delighted with the progress that has been made so far on the Mokopane Tin Project and the initial drill results from only one of five prospects highlights what an attractive investment this is. I look forward to progressing the Project further in the coming months and remain confident of the potential for the remaining four prospects that have yet to be drilled."

Obtala Resources Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
ZAI Corporate Finance Ltd	[phone]
Marc Cramsie Sarang Shah
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

Description of the assets

Greenhills is a junior exploration and mining company focused on developing a portfolio of mineable tin resources in Africa. Greenhills' anchor assets, the Mokopane Tin Project, comprise five known prospective targets contained in two new-order prospecting licenses covering a total of approximately 7,500 hectares. The project is located on the northern limb of the Bushveld Complex, 30 km from Mokopane, 60km from Polokwane and approximately 200km north of Johannesburg. The deposit lies less than 15 km from the world's largest opencast platinum mine and associated mining infrastructure.

Geology of the Project Area

The control on tin mineralisation in the project area is related to the presence of the red, volatile‐enriched Bobbejaankop Granite, lying at the top of Bushveld Granite sheet and occurring in two north‐west trending domes. Tin mineralisation is associated with the uppermost part of the Bobbejaankop Granite (Zaaiplaats target) and in the immediately overlying and finer grained Lease Granite (Groenfontein target). Mineralisation occurs both in pipes and as disseminations within sheets and pods in the granites. The best disseminated mineralisation occurs within two pronounced granite domes exposed by erosion in which tin mineralisation has been concentrated. The Main or Zaaiplaats/Groenfontein dome extends over a distance of 9 km along strike, while the less well exposed Appingendam dome extends over a strike distance of 12 km.

Another style of tin mineralisation present in the region is associated with the Union Tin Tuff Member of the Rooiberg Group which hosts a number of old tin mines and workings. This style of mineralisation, although derived from solutions emanating from the Bobbejaankop Granite, has been emplaced into suitable structures in the rocks overlying the granite.

The Groenfontein and Zaaiplaats projects are the most advanced targets, with extensive geochemical surveys conducted on both targets, together with a closely spaced drilling programme on the Groenfontein target undertaken in the 1970's. Selective mining on some high-grade tin pipes was also undertaken, as well as some limited quarrying operations on the disseminated mineralisation.

Glossary

"ppm" - Parts per million

 

END

 

 

DRLUOSORAUABAAR