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AVIRA RESOURCES LTD — Interim / Quarterly Report 2013
Jul 25, 2013
64473_rns_2013-07-25_373a64b2-6fc9-4350-92ab-cf842e24c46f.pdf
Interim / Quarterly Report
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Quarterly Report
Quarter to 30 June 2013 ASX Code: MGS
Registry: Computershare Issued Shares: 288,157,040
Tin Price: US$19.365/t Gold Price: US$1,336/oz
Highlights
Solid start to 2013 Summer Hills Drilling Campaign
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Commenced three-phase drilling program at flagship Mt Garnet Tin Project with stage 2 plant upgrade to 250,000tpa capacity to commence upon reaching sufficient resource base
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Phase one diamond drilling consistent with new geological model
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Summer Hills drill targets located in close proximity to Mt Veteran Tin Processing Plant and can provide near-term cash flow generation
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Solid results from Phase One drilling program include 3.8m @ 0.4% (DDHDAL104) between 17 and 21m, including 1m @ 0.72% , 5m @ 0.43% (DDHDAL108) between 33 and 38m, including 1m @ 1.0% ; 1m @ 0.7% (DDHDAL110) between 49 and 50m, 1m @ 1.0% (DDHDAL110) between 53 and 54m
MGT
Resources Limited 2.05/68 York Street Sydney NSW 2000 Australia
- Phase Two drilling already completed and results are pending
Strong financial position
- $6 million financing facility secured to progress Tin Project
T: 61 2 9262 1122 F: 61 2 9299 5175 www.mgt.net.au [email protected]
- Cash in bank as at 30 June 2013 $1.1 million
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1. MT GARNET TIN PROJECT, QUEENSLAND (MGT 86.48%)
Includes: Summer Hills ML20547; Mt Veteran Mill ML4349; Heads or Tails ML20655; Nymbool EPM16948
1.1 Mt Garnet Tin Project Exploration
Three Phase Drilling Program Commenced
A Three Phase drilling program is underway at Summer Hills ML20547. The program is designed to further define an easily mineable resource close to the Mt Veteran Mill in order to provide near term cash flow.
Phases One and Two have been completed and Phase Three is due to commence shortly. Analytical results have been received from Phase One, while Phase Two results are expected by the end of August.
Phase 1 – Diamond Program results confirm geological model at Summer Hills
Five diamond holes were drilled in Phase One – four at Dalcouth and one diamond tail at Extended for a total of 230 metres. The results support MGT’s geological model at the Summer Hills Mining Lease.
Consistent with previous programs at Summer Hills, diamond drilling was shallow (approximately 50 metres vertical depth) and did not attempt to test the mineralisation at depth.
Encouraging tin intersections including:
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! 3.8m @ 0.4% (DDHDAL104) between 17 and 21m, including 1m @ 0.72%
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! 5m @ 0.43% (DDHDAL108) between 33 and 38m, including 1m @ 1.0%
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! 1m @ 0.7% (DDHDAL110) between 49 and 50m
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! 1m @ 1.0% (DDHDAL110) between 53 and 54m
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! 2.8m @ 0.32% (X23 tail) between 59.2 and 62m, including 1m @ 0.4%. This extends the mineralised zone at the bottom of the original hole to 5m @ 1.0% between 57 and 62m.
An extensive brecciated zone was identified in all four Dalcouth holes which correlates generally with the mineralised zone. The rhyolite porphyry dyke was also intersected.
Dalcouth 500 metres from the plant
The Dalcouth prospect is approximately 500 metres from the plant. The resource known to shallow depths (down to approximately 50 metres), the host rock is easy to drill and it has favourable metallurgical characteristics. MGT plans to prove up sufficient tonnages at Dalcouth to provide near term cash flow generation through processing at the Mt Veteran plant.
The diamond drill holes were drilled through the centre of the main Dalcouth mineralised zone to improve MGT’s understanding of lithology, structure and mineralisation. The holes were also essential for providing geotechnical information. A diamond tail (30m) was also drilled at the end of percussion hole X23 at Extended, to close off the mineralised zone at the bottom of that hole.
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Brecciated Zone at Dalcouth and porphyry dyke intersections
The diamond holes at Dalcouth intersected a wide brecciated zone, which appears to be associated with the rhyolitic porphyry dyke and is roughly correlatable with the higher grade mineralised zone present in the central part of the deposit. The plotted mineralised zones appear to be locally offset which may have taken place along one of the faults that have been mapped at surface. Further structural interpretation is necessary to determine if this is the case.
Diamond Tail at Extended
A diamond tail was drilled from RC hole X23 which ended in mineralisation. Samples from the bottom 3m of the RC hole averaged 1.68% Sn. The diamond tail showed that this mineralised zone extended for a few more metres, bringing the overall intersection to 5m @ 1.0% between 57 and 62m. A mineralised vein was intersected at 87.4m with that metre returning 0.27% Sn. Results from the tail at Extended suggest that the mineralised zone may be narrow but high grade with significant mineralisation also carried in veins through the system.
1.2 Operations – mining and processing
Planned processing of tailings from the Heads or Tails mining lease 20655 has been delayed by extra environmental approval requirements. The company is working diligently with the Department of Environment and Heritage Protection so that processing can commence as soon as possible.
1.3 Next steps
Phase Two & Three Summer Hills Drilling Program
Phase Two of the program was recently completed with assay results pending. This phase was a reverse circulation (RC) program. MGT geologists were able to use initial petrographic studies on the core from the Phase One diamond holes to help plan Phase Two. Planning of Phase Three (follow-up RC holes) will be completed when the assay results from Phase Two are returned, allowing the new information to optimise targeting of follow-up holes.
2. MGT CORPORATE
2.1 $6 million raised in Convertible Notes
On 9 July 2013 MGT agreed to binding terms with two separate parties for the provision of A$6 million in convertible note facilities (together ‘Convertible Notes’ or ‘Notes’).
SUMMARY OF THE TERMS
Subscribers Marvel Network Limited for $3,000,000 & Cloud Adventurer Limited for $3,000,000 Conversion Convertible at $0.11 per share Coupon 8% paid semi-annually in arrears Security Unsecured Maturity 3 years from date of issue Redemption If not previously converted or redeemed, the Notes will be redeemed at the Maturity Date provided the price of MGT shares on the maturity date is $0.11 or less
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CONDITIONS PRECEDENT
The Convertible Notes are subject to MGT shareholder approval. ASX Listing Rule 7.1 limits the number of equity securities (including convertible securities) that a company can issue within any 12 month period to 15% of the company’s existing issued capital without shareholder approval.
An extraordinary general meeting of shareholders (EGM) will be held on 13 August 2013 where shareholder approval for the Notes will be sought. If Shareholders vote to approve the Convertible Notes then the issue of Shares on conversion of the Notes will be excluded from the calculation of the 15% limit under ASX Listing Rule 7.1.
2.2 Options Expired
On 29 June 2013 11,400,000 unlisted options expired.
2.3 Cash
Cash at hand as at 30 June 2013 was $1.1 million
2.4 Tin Market Summary
Along with other commodity prices, there has been softness in the tin price thanks to an uncertain macroeconomic environment in the June quarter. This has kept tin prices fairly stable at around US$19,000 - $20,000 per tonne.[1]
ENDS
For more information:
Investor and media enquiries:
Alexander Moody
Company Secretary
T: +61 2 9262 1122 [email protected]
ABOUT MGT RESOURCES
MGT is an Australian mining and exploration company listed on the Australian Securities Exchange (ASX:MGS) focused on tin mining at the Mt Garnet Tin Project in far North Queensland, and on exploration on its Pyramid Gold Project near Charters Towers, Queensland.
The Mt Garnet Tin Project is located in the historic Herberton Tin Fields, 3 hours west of Cairns in Queensland. Dams, roads, power, water and stage 1 plant upgrade to 70,000 input tonnes per annum is now complete.
1 CRU International Ltd, ‘CRU Monitor: Tin’ June 2013
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ABOUT THE MT GARNET TIN PROJECT
MGT’s flagship Mt Garnet Tin Project is 3 hours’ drive south west of Cairns in far North Queensland.
MGT’s primary mining lease Summer Hills ML20547 (Summer Hills ML) was granted in late January 2013. The Summer Hills ML, the main tenement on MGT's flagship Mt Garnet Tin Project, is 1,170 Ha in area, making it one of the largest mining leases in the region. The mining lease was granted for a period of 21 years.
ML Contains Mill And Mining And Exploration Targets
Within the Summer Hills ML sits the Mt Veteran Tin Processing Plant on its own ML4349, along with a number of tin mining and exploration targets, including the Dalcouth and Extended prospects.
Dalcouth is MGT’s first open pit mining target. Recent petrographic reports confirmed the presence of rhyolite porphyry dykes throughout the ML, and present within the Dalcouth resource.
Grades of up to 15.75% tin have been intersected at Extended. For investors unfamiliar with tin, 1% tin is approximately equivalent in value terms to 4.5 grams per tonne of gold, or 3% copper.
Competent Persons statement
Information in this report related to exploration results or mineral resources are based on information compiled by MGT technical staff and checked by Max Rangott of Rangott Mineral Exploration Pty Ltd, who is a member of both the AIG and the AusIMM. Mr Rangott 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 2004 Edition of the ‘ Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’. Mr Rangott consents to the inclusion in the report of the statements based on the information in the form and context in which it appears.
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Appendix 5B
Mining exploration entity quarterly report
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