Black Mountain Resources -  Technical Update For Namekara Project

Black Mountain Resources - Technical Update For Namekara Project

Black Mountain Resources (ASX: BMZ) has defined an Exploration target of 45-55Mt at 20-27% >180µm and 15-19% >425µm for the Namakera Vermiculite Mine in Uganda. The Exploration Target is based on historical internal studies as well as 7 years of intermittent mining. The newly defined Exploration Target will be included in a Replacement Prospectus as part of the capital raising to complete the transaction.


Black Mountain Resources Limited (ASX:BMZ) (Black Mountain or the Company) is pleased to provide an Exploration Target for the Namekara Vermiculite Mine located in Uganda. This Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource in accordance with the JORC 2012 Code.

BASIS OF THE NAMEKARA EXPLORATION TARGET

The Exploration Target has been prepared by the Company’s technical consultants and is based on data generated from approx. 7 years of intermittent mining and process plant operations and the production of saleable vermiculite flake product at the Namekara Vermiculite Mine site and from historical resource evaluation studies completed between 2008 and 2012. Only one of these resource evaluation studies has been published externally and is in the public domain.

In June 2008, Rio Tinto completed an internal resource estimate in compliance with the JORC 2004 Code. This was based on a 72 vertical hole, 3,490m reverse circulation, drilling program in 2007 and 2008.

On the 23rd July 2009, Gulf Resources Limited (ASX:GLF) (“Gulf”) published an Inferred Resource estimated completed in compliance with the JORC 2004. In the period 2011/12, Gulf completed 56 angled boreholes in a 3,408 metre, diamond core, infill drilling campaign based on recommendations in the SRK Consulting review published by Gulf in July 2009. Following this drilling campaign, Gulf completed a number of internal reviews, none of which were made public.

Further details regarding the basis of the Exploration Target are provided in Table 1 to this announcement

THE NAMEKARA VERMICULITE MINE

The Namekara Vermiculite Mine is located in Eastern Uganda near the towns of Mbale and Tororo, approx. 190 km from the Uganda capital, Kampala and close to the border with Kenya. It is on major central African road and rail networks and is 10 km from a rail spur that connects to the Kenyan port of Mombasa.

Namekara Mining Company Limited (“NMCL”) is the registered holder of Mining License ML 4651, upon which it operates the Namekara Vermiculite Mine.

Vermiculite mineralisation on ML 4651 occurs within an approximately 34m thick sub-horizontal tabular zone and is derived by weathering of phlogopite within coarse-grained to pegmatoidal pyroxenite. The vermiculite mineralisation has been identified to extend from surface to a depth of between 45m to 55m.

Current open pit mining operations are focused on a single deposit approximately 1.0 km2 and to a maximum depth of 35 m, with bench heights of 2.5 m. Vermiculite mineralisation is excavated using conventional earthmoving equipment including excavators, front end loaders, bulldozers and tipper trucks.

Vermiculite ore from the ROM bin is conveyed to a magnetic separator which separates magnetic minerals (predominantly magnetite) from the vermiculite-bearing non magnetics. The magnetite is discarded on a separate waste stockpile.

The non-magnetic, vermiculite-rich ore is then fed into a rotary dryer where the moisture content is lowered from an average +9% to less than 5%, which will allows the material to pass over screens without excessive blinding.

The dried ore then passes through a bank of screens where dust is removed from the stream and is separated into the different vermiculite size fractions as per the table below.

The final vermiculite product is bagged in 1 tonne bulk bags, loaded into containers and transported to Mombasa from where it is shipped to customers in Europe, Australia, Japan and China.

The mine has been operating in its current form since it was refurbished and a new rotary dryer kiln installed in 2012. BMZ plan to refurbish and upgrade the beneficiation plant and purchase a modern replacement mining fleet. An expanded marketing plan is currently underway with a number of trial shipments already made to new customers in Europe and Asia in anticipation of the expanded production capacity.

PROPOSED ACQUISITION OF THE NAMEKARA PROJECT

The Namekara Project is the Company’s key acquisition and was the subject of the Extra Ordinary General Meeting (“EGM”) on the 15 August 2016. At this meeting the shareholders of the Company unanimously approved the acquisition of GLF Holdings Limited, the owner of the Namekara Mine. The explanatory memorandum, which accompanied the EGM, gave a detailed description of the Namekara Project.

The Company lodged a Prospectus to raise funds to complete the Namekara Project on the 2 August 2016 to raise funds to complete the acquisition as indicated in the Notice of Meeting to shareholders. On the11 August 2016, BMZ received an interim stop order relating to the lodgement of the Prospectus. The Company intends to update the prospectus following the publication of the Exploration Target which has been published for Namekara in accordance with the JORC 2012 Code and will issue a replacement prospectus shortly with the aim of completing the GLF Holdings transaction.

PROPOSED ADDITIONAL EXPLORATION WORK

In the coming months, the Company intends to complete further work focused on assay techniques and specific gravity through laboratory test-work and further investigations. The Company may also elect to drill twin holes alongside some of the original Rio Tinto drill holes to further understand the vermiculite flake size and how this relationship can be better understood by the drilling and assay techniques. Flakes size is a key attribute for the Namekara Vermiculite Mine and the marketing of the vermiculite product.

ENDS

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