DEVELOP GLOBAL LIMITED — Interim / Quarterly Report 2016

Jan 31, 2016

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ASX Announcement
ASX Code: VXR
Released: 29 January 2016
For further details
John Nitschke
Managing Director
T: +61 8 6389 7400
Board
Tony Kiernan
Chairman
John Nitschke
Managing Director
Anthony Reilly
Non-Executive Director
Darren Stralow
Non-Executive Director
Trevor Hart
Company Secretary
Contact Details
Registered Office
Level 2
91 Havelock Street
West Perth WA 6005
T: +61 8 6389 7400
F: +61 8 9463 7836
admin@venturexresources.com
www.venturexresources.com
ABN: 28 122 180 205
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QUARTERLY ACTIVITIES REPORT FOR PERIOD ENDED 31 DECEMBER 2015

Successful quarter for Venturex with re-optimisation of Panorama Cu-Zn Project, identification of new exploration opportunities at Sulphur Springs and Whim Creek, and strongly supported capital raising

Highlights

- Pilbara Copper Zinc Projects

• Outstanding Results from Optimisation Study on Panorama Copper-Zinc Project, with key outcomes including:

• 28% reduction in pre-production capital cost to $202M

• Mine life increased to 11 years

• Payback of 2.1 years from production start

• Forecast copper production of 12,500tpa and increased zinc production of 32,200tpa

• Life-of-mine C1 cash costs to A$0.84/lb of payable copper after by-product credits[*]

• Pre-tax NPV8% of A$307M[*]

• Sulphur Springs exploration potential highlighted following successful review

• Production of copper cathode continues from Whim Creek

Corporate

• Experienced mining executive John Nitschke appointed as Managing Director

• Independent Investment Report identifies significant upside in value

• Successful Entitlement Issue completed with 86% participation level, raising $0.991 million

OVERVIEW

Venturex Resources Limited (ASX: VXR) is pleased to report on an active and successful December Quarter which saw the adoption of a reinvigorated approach to unlocking the value of the Company’s extensive portfolio of zinccopper assets in the Pilbara region of WA.

OPTIMISATION STUDY – PANORAMA COPPER ZINC PROJECT

The Optimisation Study on the Pilbara Copper-Zinc Project , located 162km south of Port Hedland in Western Australia, was released in November ( see ASX Announcement – 4 November 2015 ).

• The LOM schedule used in the study was derived from a mining inventory of which 67% is Indicated Resources and 33% are Inferred Resources, the LOM inventory does not constitute an Ore Reserve. There is a low level of geological confidence associated with inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Resources or that the production target will be realised

The Optimisation Study delivered a number of significantly enhanced outcomes providing a strong foundation for Venturex to advance the Project towards financing and development.

These include a 28% reduction in the estimated pre-production capital cost to A$202 million (from $279 million previously), a 30% increase in the mine life to 11 years, and a 46% reduction in forecast life-of-mine C1 cash operating costs to A$0.84/lb[] after by-product credits. This underpins robust financial outcomes including forecast life-of-mine net cash-flow of A$568 million and a substantial increase in pre-tax NPV 8% to A$307 million[] .

The Optimisation Study identified the opportunity to utilise an open pit mining operation to extract the top portion of the Sulphur Springs deposit before moving to underground mining. This has resulted in a significant reduction in the estimated capital costs of the underground mine and deferred these costs until Year 4 of the Project. Open pit mining is cheaper than underground mining and significantly reduces the technical and start-up risks associated with the Project.

The improved recovery of the Resource via the initial open pit mining operation – together with the inclusion of the Kangaroo Caves deposit in the mining inventory – has delivered an increase in both mine life and zinc metal production. As a result, the Project now offers significant exposure to the strong long-term market outlook for zinc.

Ore will be processed through a 1Mtpa conventional processing plant located adjacent to the Sulphur Springs deposit to produce both copper and zinc concentrates. Concentrates will then be trucked to Port Hedland and shipped to International customers.

A preliminary assessment of the permitting requirements for the revised Project has identified that the existing environmental permit for the Project will need to be amended. Consultation has commenced with the regulators to determine the permitting process that will apply.

EXPLORATION

With the viability of the Pilbara Copper-Zinc Project now confirmed, the Company has continued to assess the significant exploration potential of its extensive land-holding in the Pilbara region – where it controls most of the horizons with the potential for VMS deposits, including the Whim Creek basin and the Panorama trend.

Panorama Project

Sulphur Springs Deposit

A “back-to-basics” review of the Sulphur Springs VMS deposit identified strong potential to extend the known mineralisation both at depth and along strike. This review highlighted that down-hole EM (DHTEM) surveys were carried out on only a small number of the holes drilled into the deposit by previous owners because the low-powered systems available at the time were not considered effective.

Re-processing of the limited historical DHTEM data that is available using the latest EM modelling and visualisation techniques identified that there is one previously unidentified DHTEM plate located within the host horizon east of hole SSD 044A. Follow-up drilling of this plate was recommended. The long section below ( Figure 1 ) shows the location of the drill holes surveyed and this conductor plate.

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Figure 1 – Sulphur Springs Long Section Showing EM Plates

Inspection of the core from selected drill holes and petro-physical test work carried out as part of the geological review has confirmed that there is no graphite in these shale horizons previously assumed to be conductive, and that there is a reasonable resistivity contrast associated with the massive sulphide mineralisation.

As a consequence, DHTEM anomalies that have previously been dismissed as graphitic shales require further assessment as there is a possibility that these may in fact be a vector to mineralisation not previously recognised.

The Sulphur Springs orebody is a typical Volcanogenic Massive Sulphide (VMS) deposit. These deposits typically occur in clusters and at multiple levels within the rock sequence of the basin in which they form. The Company’s focus for future exploration will be to apply modern geophysical techniques combined with the developing geological model for the Sulphur Springs deposit to discover additional mineralisation adjacent to the deposit. In the first instance, the Company will assess the potential to re-enter historical holes and carry out DHTEM surveys.

Kangaroo Caves

No work was completed on Kangaroo Caves during the December 2015 Quarter.

Whim Creek Project

Subsequent to Quarter-end, Venturex completed an extensive review and compilation of the historical exploration and geophysical data sets for the Whim Creek Copper-Zinc Project , located 130km from Port Hedland in WA.

A “back-to-basics” review of this dataset along similar lines to that undertaken at the Sulphur Springs deposit is expected to generate a significant pipeline of fresh exploration targets and opportunities for the Company.

The recently completed work has highlighted the significant untapped exploration potential at the Whim Creek Project, which includes the Mons Cupri, Whim Creek, Evelyn and Salt Creek copper-zinclead and precious metal deposits together with 18,500 hectares of tenements covering the Whim Creek, Salt Creek and Liberty Volcanogenic Massive Sulphide (VMS) basins.

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This work is ongoing, preliminary results of the review were released in January 2016 ( see ASX announcment - 20 January 2016 ). Further results will be released as the work proceeds.

Liberty-Indee Joint Venture (70%)

No fieldwork has been carried out during the December 2015 Quarter.

PRODUCTION

Blackrock Metals Pty Ltd

Blackrock Metals Pty Ltd (“Blackrock”) has access rights to the existing Whim Creek oxide copper processing site to refurbish an existing five tonne per day SX-EW treatment facility and re-process the existing heap leach pads to recover copper metal. In return, Blackrock is required to pay Venturex a fee based on the calculation of a 15% Net Profit Interest (“NPI”).

During the December 2015 Quarter, Blackrock produced approximately 251 tonnes of Copper Cathode. The NPI payable is currently being calculated and is due and payable by the end of January 2016.

	31 Mar	30 June	30 Sept	31 Dec	31 Mar	30 June	30 Sept	31 Dec 2015 Qtr
	2014 Qtr	2014 Qtr	2014 Qtr	2014 Qtr	2015 Qtr	2015 Qtr	2015 Qtr
Tonnes produced	80	80	140	370	170	395	342	251
NPI $	-	-	-	$47k	-	$263k	$210k	TBC

Table 1 – Copper Cathode Production and NPI

CORPORATE

The Annual General Meeting was held on the 27 November 2015. All resolutions were passed on a show of hands at the meeting.

Board Update

Experienced Australian mining executive Mr John Nitschke has been appointed full-time Managing Director, effective from 1 December 2015.

Independent Investment Research

During the quarter, a research report has been produced by Independent Investment Research (“IIR”), titled “Asset Rich Copper Zinc Project Developer”. The full report can be located on the Company’s web page www.venturexresources.com

Securities Information

As at 31 December 2015, the issued capital of the Company is 1,746,194,595 ordinary fully paid shares and 19,366,197 unlisted Performance Rights.

Financial Information

A Rights Issue was successfully completed during the Quarter, raising a total of $0.991M with an 86% take up of shares offered by existing shareholders. The Company’s net cash and receivables position as at 31 December 2015 was $0.9 million and it has no debt.

The Pro -forma Appendix 5B – Statement of Consolidated Cash Flows is provided in a separate report.

John Nitschke Managing Director

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John Nitschke / Trevor Hart – Venturex Resources Limited on Ph: +61 (08) 6389 7400 or via Email: admin@venturexresources.com

For further information, please contact:

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Media:

Nicholas Read – Read Corporate on Ph: (08) 9388 1474 or via Email: info@readcorporate.com.au

About Venturex Resources Limited

Venturex Resources Limited (ASX: VXR) is an exploration and development company with a significant portfolio of VMS projects in the Western Pilbara. Venturex owns or controls significant resources of copper, zinc, lead, silver and gold at Sulphur Springs, Kangaroo Caves, Whim Creek, Mons Cupri, Salt Creek and Liberty‐ Indee. The Company is committed to a strategy of exploring for and developing VMS projects in the Western Pilbara through a proposed centralised processing hub at Sulphur Springs.

Competency Statements

The information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled or reviewed by Mr James Guy who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Guy is a consulting geologist engaged by Venturex Resources Limited and has sufficient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaking to qualify as Competent Persons as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Guy consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. The information in this report that relates to Ore Reserves are detailed in the ASX Announcement dated 4 November 2015.

INTERESTS IN MINING TENEMENTS

AREA OF INTEREST	TENEMENTS	GROUP ENTITY’S INTEREST	ACQUIRED DURING QUARTER	DISPOSED DURING QUARTER
WESTERN AUSTRALIA
Liberty-Indee Project	E47/1209	70%(90% on decision to mine)
	E47/1796	70%(90% on decision to mine)
	M47/1455	70%(90% on decision to mine)
Whim Creek Project	E47/976	100%
	M47/236	100%
	M47/237	100%
	M47/238	100%
	M47/443	100%
	L47/36	100%
Salt Creek Project	M47/323	100%
	M47/324	100%
Sulphur Springs Project	E45/4447	100%
	M45/494	100%
	M45/587	100%(Kangaroo Caves)
	M45/653	100%
	M45/1001	100%
	L45/166	100%
	L45/170	100%
	L45/173	100%
	L45/179	100%
	L45/188	100%
	L45/189	100%
	L45/287	100%
Panorama Project	P45/2609	100%
	P45/2610	100%
	P45/2611	100%
	P45/2612	100%
	P45/2613	100%
	P45/2614	100%
	P45/2616	100%
	P45/2910	100%
	P45/2911	100%
	ML45/1253	100%	Application
	ML45/1254	100%	Application

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