REG - Xtract Resources plc - Bushranger second stage pre-concentration study

Xtract ResourcesAnnouncement

18/06/2024 07:00

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RNS Number : 7787S  Xtract Resources plc  18 June 2024

18 June 2024

Xtract Resources Plc

("Xtract" or the "Company")

Second Stage Pre-Concentration study for the Bushranger Copper-Gold Project

The Board of Xtract Resources Plc ("Xtract" or the "Company") is pleased to
announce the results of a second stage review of pre-concentration options for
the Bushranger project in the Lachlan fold NSW, Australia prepared for the
Company by Altrius Consulting Pty ("Altrius").

 

Highlights

·    The Altrius review concluded that while the Racecourse mineralisation
is not considered amenable to upgrade by Tomra ore sorting, other methods of
ore sorting/pre-concentration may be more suitable and the Bushranger
flowsheet may benefit from alternative pre-concentration technologies. To this
end Altrius has recommended further test work on Pre-Screening, Gravity
Separation and Coarse Particle Floatation.

·    Accordingly, test work is now being undertaken by ALS in Perth on
Pre-Screening and Dense Media Separation (two separate tests).

·    In addition, the Company has commissioned NovaCell Coarse Particle
Floatation test work, and this work is progressing favourably.

·    As previously reported, the Bushranger Racecourse project has the
potential to be economically mined at rates of 20Mtpa or greater at USD10,000
per tonne copper price or above. The objective of the current work is to
re-assess the breakeven copper price for the Project.

The Company will provide an update on the initial results which are expected
before the end of the third quarter of this year.

Colin Bird Executive Chairman said:

"The forecast shortage of copper together with increasing demand has finally
convinced the industry, that new copper resources have to be found on an
urgent basis.  The Bushranger project, whilst marginal at previous prices,
becomes as previously reported NPV positive at USD10,000 per tonne copper.
The project has the benefit of a high-grade component, which can be optimised
and integrated into future mining plans.

Whilst the area that has been studied contains a previously reported resources
of some 1.1 million tonnes of contained copper, the project is geologically
open in most directions notwithstanding the relatively unexplored Ascot
section.

It is our intention, if the current tests results are positive, to rework our
financial and technical plans to re-assess the break-even copper price for the
project.  We will keep the market appraised of progress as the information is
received and integrated into our base model."

Background

The Board believes that the forecast copper supply shortage will bring into
production a next stage generation of porphyries, which in recent years may
have been considered technically or financially marginal.

Bushranger fits into this new next generation category and the Board have
committed expenditure to carry out more detailed pre-concentration work to
follow the initial assessment leading to the financial study reported in
November 2023 (see RNS dated 6 November 2023).

 

Ore Pre-Concentration Test Work Programme on Mineralisation from the
Racecourse Mineral Resource

Previously published preliminary studies conducted by Optimal Mining on the
Bushranger Gold-Copper Project ("Optimal Studies"), completed in 2022 and
2023, concluded that a minimum mining rate of 20 Mtpa, and copper price more
than US$10,000/tonne, are required to generate a positive Net Present Value
("NPV") from the project (see RNS dated 7 March 2023). Project economics
measured as NPV, can potentially be improved by means of ore pre-concentration
which is aimed at:

·    Increasing feed grade (%Cu/t) to processing plant which in turn will
lead to;

 

·    Reduction in tonnes processed for the same final product volumes and
thus lower unit production costs.

 

Altrius was commissioned by Xtract to undertake a review of the metallurgical
and pre-concentration test work previously completed (see RNS dated 20 July
2023) and conduct a desk top assessment of the available pre-concentration
technologies. The outcomes of the assessment of the historical Optimal Studies
test work included:

 

·    Copper occurring as chalcopyrite is finely disseminated and is
associated with pyrite and pyrrhotite, both of which are considered easily
floatable mineral types.

 

·    Sighter rougher flotation test work yielded very good Cu recoveries
between 92% and 96% into a concentrate containing between 5% and 6% Cu with
the rougher concentrates containing negligible penalty elements.

 

·    Cleaner flotation test work (excluding regrinding) achieved Cu
concentrate grades between 12% and 27%, with Cu recovery of between 81% and
92%.  Gold recovery to concentrate ranged from 35% to 55% with an
accompanying gold grade of 0.30 g/t to 5.4 g/t.

 

·    Re-grinding of the copper-gold concentrate to 15µm improved cleaner
concentrate grade to between 19% and 27% Cu, at a final copper recovery of
between 78% and 89%.

 

The Optimal Studies indicated that the Racecourse deposit's copper-gold
mineralisation is amenable to conventional flotation processes.
Pre-concentration technologies may in turn significantly benefit processing of
the Racecourse copper-gold mineralisation, with a subsequent potential
improvement to the overall project NPV.

The most prominent pre-concentration processes currently used throughout the
mining industry on different ore types are:

-      Blasting (or selective mining)

-      Screening

-      Ore sorting (bulk or particle based)

-      Gravity separation

-      Magnetic separation

-      Flotation.

The selection of the best pre-concentration option depends on the ore
characteristics and economics. Altrius concluded, based on their assessment,
that the pre-concentration techniques potentially most suitable for processing
the fine grained copper-gold mineralisation of the Racecourse deposit were, in
order of preference:

·    Pre-Screening of run-of-mine ore after blasting and primary crushing,
which have shown at some operations to concentrate between 60% and 80% of the
target mineralisation into less than 40% to 60% of the feed mass.

 

·    Gravity Separation via Dense Media Separation ("DMS"), a commonly
used and well understood technology. Typically, a DMS circuit would be
expected to achieve a mass rejection of approximately 70% with a corresponding
valuable mineral recovery of >95%.

 

·    Coarse Particle Flotation ("CPF") which consists of the recovery of
partially liberated valuable mineral particles following coarse primary
grinding. The concept is to reject a portion of barren material at a coarse
size, rather than having to grind the entire feed resulting in reduced
comminution (milling) costs. CPF has been shown to recover between 92% and 98%
of the mineralisation into 6% of the mass for deposits similar to the
Racecourse deposit.

 

In order to evaluate the amenability of the deposit to pre-concentration
techniques metallurgical test samples from drill holes BRDD21-036 (168m @
0.14% Cu & 0.06g/t Au), BRDD22-053 (320m @ 0.11% Cu & 0.06g/t Au) and
BRDD21-022 (144m @ 0.25% Cu & 0.02g/t Au) have been dispatched to selected
laboratories.

 

Pre-Screening, Gravity Separation and Coarse Particle Flotation test work has
commenced at the individual laboratories and results are expected to be
available in 2-3 months.

 

Further information

 

Further information is available from the Company's website which details the
Company's project portfolio as well as a copy of this
announcement: www.xtractresources.com (http://www.xtractresources.com)

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law pursuant to the Market
Abuse (Amendment) (EU Exit) regulations (SI 2019/310). The person who arranged
for the release of this announcement on behalf of the Company was Colin Bird,
Executive Chairman and Director.

 

 

Enquiries:

 Xtract Resources Plc                               Colin Bird,          +44 (0)20 3416 6471

                                                    Executive Chairman   www.xtractresources.com (http://www.xtractresources.com)

 Beaumont Cornish Limited                           Roland Cornish       +44 (0)207628 3369

 Nominated Adviser and Joint Broker                 Michael Cornish      www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk)

                                                    Felicity Geidt

 Novum Securities Limited                           Jon Belliss          +44 (0)207 399 9427

 Joint Broker                                       Colin Rowbury        www.novumsecurities.com

 

 

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

 

Qualified Person

Information in this announcement relating to the exploration works has been
reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to Xtract. Mr Slowey
is a graduate geologist with more than 40 years' relevant experience in
mineral exploration and mining, a founder member of the Institute of
Geologists of Ireland and is a Qualified Person under the AIM rules. Mr
Slowey has reviewed and approved the geological content of this announcement.

Qualified Person

In accordance with AIM Note for Mining and Oil & Gas Companies, June 2009
("Guidance Note"), Colin Bird, CC.ENG, FIMMM, South African and UK Certified
Mine Manager and Director of Xtract Resources plc, with more than 40 years'
experience mainly in hard rock mining, is the qualified person as defined in
the Guidance Note of the London Stock Exchange, who has reviewed the technical
information contained in this press release.

Mineral Reserves and Resources

The Company estimates and discloses mineral reserves and resources using the
definitions adopted by JORC.  Further details are available at
www.jorc.org.  See the "Glossary of Geological and Mining Terms" for complete
definitions of mineral reserves and mineral resources.

About Mineral Resources

Mineral resources are not mineral reserves and do not have demonstrated
economic viability but do have reasonable prospect for economic extraction.
They fall into three categories: measured, indicated, and inferred. The
reported mineral resources are stated inclusive of mineral reserves.
Measured and indicated mineral resources are sufficiently well-defined to
allow geological and grade continuity to be reasonably assumed and permit the
application of technical and economic parameters in assessing the economic
viability of the mineral resource. Inferred mineral resources are estimated on
limited information not sufficient to verify geological and grade continuity
or to allow technical and economic parameters to be applied.  Inferred
mineral resources are too speculative geologically to have economic
considerations applied to them. There is no certainty that mineral resources
of any category will be upgraded to mineral reserves.

Important Information about Mineral Reserve and Resource Estimates

Whilst the Company takes all reasonable care in the preparation and
verification of the mineral reserve and resource figures. the figures are
estimates based in part on forward-looking information. Estimates are based on
management's knowledge, mining experience, analysis of drilling results, the
quality of available data and management's best judgment. They are, however,
imprecise by nature, may change over time, and include many variables and
assumptions including geological interpretation, commodity prices and currency
exchange rates, recovery rates, and operating and capital costs. There is no
assurance that the indicated levels of metal will be produced, and the Company
may have to re-estimate the mineral reserves based on actual production
experience. Changes in the metal price, production costs or recovery rates
could make it unprofitable to operate or develop a particular deposit for a
period of time.

TECHNICAL GLOSSARY

The following is a summary of technical terms:

 

 "Ag"                          Silver
 "Au"                          Gold
 "chalcopyrite"                A copper-iron sulphide mineral, CuFeS(2), often found in copper ores
 "Cu"                          Copper
 "CuEq"                        Copper equivalent grade, calculated using assumed metal prices for copper,
                               gold and other metals

 "Indicated Mineral Resource"  That part of a Mineral Resource for which quantity, grade (or quality),
                               densities, shape and physical characteristics are estimated with sufficient
                               confidence to allow the application of Modifying Factors in sufficient detail
                               to support mine planning and evaluation of the economic viability of the
                               deposit. Geological evidence is derived from adequately detailed and reliable
                               exploration, sampling and testing gathered through appropriate techniques from
                               locations such as outcrops, trenches, pits, workings and drill holes, and is
                               sufficient to assume geological and grade (or quality) continuity between
                               points of observation where data and samples are gathered. (JORC 2012)

 "Inferred Mineral Resource"   That part of a Mineral Resource for which quantity and grade (or quality) are
                               estimated on the basis of limited geological evidence and sampling. Geological
                               evidence is sufficient to imply but not verify geological and grade (or
                               quality) continuity. It is based on exploration, sampling and testing
                               information gathered through appropriate techniques from locations such as
                               outcrops, trenches, pits, workings and drill holes. (JORC 2012)

 "mineralisation"              Process of formation and concentration of elements and their chemical
                               compounds within a mass or body of rock
 "Mtpa"                        Million tonnes per annum
 "porphyry"                    A deposit of disseminated copper minerals in or around a large body of
                               intrusive rock

 "pyrite"                      Iron sulphide mineral, FeS2
 "pyrrhotite"                  An iron sulphide mineral, Fe1-XS, often magnetic

ENDS

 

 

 

 

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