AI assistant
STREAMPLAY STUDIO LIMITED Interim / Quarterly Report 2007
65841_rns_2007-07-19_849f4426-7d00-4a79-ac43-4cfca7f36505.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
FOURTH QUARTER ACTIVITIES REPORT
Period: April - June 2007 Release date: 20 July 2007
HIGHLIGHTS
ABU DABBAB TANTALUM-TIN PROJECT
- ♦ Updated Feasibility Study
- ♦ Tantalum resource up-grade drilling
- ♦ Additional Tantalum exploration targets
- ♦ Appointment of Egyptian Directors for JVC Tantalum Egypt JSC
WADI ALLAQI EXPLORATION - GOLD
- ♦ Signing of additional drilling contract
- ♦ Resource follow-up drilling
- ♦ Significant regolith & rock-chip results
- ♦ Topographic surveys completed at Seiga and Shashoba to facilitate gold resource upgrade
- WADI ALLAQI EXPLORATION COPPER-NICKEL
- ♦ Commencement of TEM survey at Abu Swayel copper-nickel prospect
- ♦ Drilling programme to test near surface mineralisation
- SUCCESSFUL LONDON CAPITAL RAISING
- APPOINTMENT OF UK-BASED DIRECTOR
ABU DABBAB
Feasibility Study Up-date
During the quarter Gippsland took delivery of the updated feasibility study for the 40 million tonne Abu Dabbab tantalum-tin project located in Egypt. The updated study has estimated a total cost of US$108 million inclusive of capital costs (2Mtpa processing plant, mining fleet, haul roads, power plant, and general infrastructure) and financing costs during the construction period. The comparative estimated cost as at November 2005 was US$90 million. The Directors believe that this increase is well below the general industry increases for capital items experienced during the period.
The Company has been able to minimise the increase in Capex and Opex through the optimisation the Abu Dabbab processing route as a result of discussions with the Company's off-take customer. The Company is presently in negotiation with its tantalum off-take customer to adjust tantalum contractual arrangements to take into account the revised capital and operating costs.
Discussions are been held with a range of German financiers to secure the necessary debt and equity funding for the project.
Tantalum Reserve Up-grade Drilling
Work commenced on a programme of RC and diamond drilling to upgrade a significant proportion of the inferred resources to the indicated resource category. The drilling will include ten holes totalling 2,350m collared from four locations. Site investigations and geological mapping have identified the four locations which will require a small amount of site preparation by bulldozer. The drilling programme has been designed to upgrade existing inferred resources to the indicated category, allowing for an additional 5.4Mt to be converted to reserve status. Given that the distribution of the mineralisation is reasonably homogenous and that the inferred resources were included in the pit design study, it is anticipated that the Abu Dabbab reserves will increase from 14.6Mt to in excess of 20Mt which will provide project financiers with increased confidence in the project.
Additional Tantalum Exploration Targets
As a result of recent Abu Dabbab document discovery the Company has learnt that extensive geological, geochemical and geophysical exploration by Egyptian and Soviet teams during the early 1970s resulted in the identification of four targets that were considered to be prospective for tantalum and tin mineralisation. Drilling was proposed but was never completed. All four of the targets are located within the Company's existing Abu Dabbab mining licence area.
The Company will undertake a small drilling programme to test these targets however in view of the project's likely 20-year plus mine life this work will be undertaken following commencement of routine production at Abu Dabbab.
Appointment of Tantalum Egypt JSC Directors
On 10 April 2007, His Excellency Eng Sameh Fahmy, The Minister of the Egyptian Ministry of Petroleum and Mineral Resources nominated two Egyptian Directors to the board of Tantalum Egypt JSC, the Egyptian registered joint venture company which owns Mining Licences for the 40Mt Abu Dabbab and the nearby 98Mt Nuweibi tantalum deposits.
The gentlemen concerned, Mr Fekry Mohamed Youssef and Mr Hammed Abu Al Fotooh, are highly respected and experienced professionals having both been closely involved in the development of the Egyptian petroleum and mining sectors, particularly with respect to attracting foreign investment to Egypt. Gippsland is represented on the four member Tantalum Egypt board by Dr JM Chisholm and Mr RJ Telford (Executive Chairman).
WADI ALLAQI
Contract for Second Multi-purpose Drill Rig Executed
During July 2007, the Company executed a contract with a major African drilling company which will supply a heavy duty track-mounted RC drilling rig having the capacity to drill to depths in excess of 200m. This additional rig has a nominal penetration rate of 200m per shift, twice the rate of the multi-purpose rig presently being employed by the Company in Wadi Allaqi. It is therefore anticipated that Wadi Allaqi exploration programme will benefit from an overall three-fold drilling rate increase.
RC Drilling
During the quarter a total of 57 RC holes totalling 1,682m were completed at four prospects.
| Prospect | No. of holes | Total metres |
|---|---|---|
| Garayat & regional | 15 | 29 |
| Haimur | 10 | 468 |
| Seiga | 31 | 1,104 |
| Shashoba | 1 | 81 |
| Totals | 57 | 1,682 |
During May and June the failure of a drill rig air compressor restricted drilling operations for several weeks. The compressor is presently being repaired and is due back on site at Wadi Allaqi by 23 July 2007.
Drill access and site preparation continued during the quarter on the Seiga and Shashoba prospects to allow for the drill testing of rock chip anomalies identified during the March quarter. A bulldozer is presently on site preparing drill pads for the expanded drilling programme.
Seiga - Gold
The majority of the work was at the Seiga prospect where programmes of RC drilling, regolith sampling and rock-chip sampling were completed although the failure of the compressor severely constrained the planned drilling programme with only a few holes being completed. The holes that were completed returned most encouraging results
Resource Drilling
A programme of drilling to increase the resource at Seiga by deeper drilling and testing the along strike extensions commenced during the quarter. The shorter holes were drilled using RC with the deeper holes pre-collared by RC drilling with diamond tails to be completed during the next quarter.
Two holes were completed as part of the resource infill drilling. They are located to the north of the defined resource zone at 50530N. Hole CRC135 intersected 44m at 1.25g/t Au from 40m including 4m at 7.67g/t Au, and 4m at 1.52g/t Au from 116m to the end of the hole. The intersections in hole CRC135 are of particular interest as the current drilling programme is specifically designed to delineated mineralisation both at depth and down plunge to the north. Hole CRC134 was drilled to test the eastern margin of a rock chip anomaly and the results indicate that the mineralised zone is at least 60m wide.
The diamond drilling of the deeper parts of the resource is due to commence during late July 2007.
Rock-chip Sampling Anomalies
The previous programme of continuous rock-chip sampling along 21 profiles was very successful in highlighting the known zones of mineralisation as well as identifying a number of new zones. Two additional lines of rock chip sampling (CP22 & 23) were completed to give complete cover for the Seiga ridge area.
The results are consistent with those obtained on either side to the north and south and include 25m at 0.14g/t Au in profile CP22 between 80 to 105m and 15m at 0.53g/t Au in profile CP23 between 95 to 110m.
The RC drilling to test the anomalies commenced during the quarter but was delayed by the compressor downtime and delays in site preparation as most of the targets are in areas of steep ridges. The programme comprises seventeen RC holes totalling 840m to test the rock-chip geochemical anomalies. To date only eleven holes have been completed.
The results of the RC holes drilled to test the rock-chip anomalies attest to the effectiveness of the sampling method. Quite subtle surface anomalies have yielded significant results in the drilling. Hole CRC133 drilled to test the eastern end of a rock-chip anomaly of 15m at 0.33g/t Au intersected 59m at 0.72g/t Au from 1m depth including 19m at 1.17g/t Au. This has increased the width of the mineralised zone at 49800N as intersected by RC drilling to at least 60m.
A line of holes drilled to the east of the ancient pit where access was available along a small wadi intersected modest gold values below some very subtle but continuous rock-chip profile anomalies. The intersections included 2m at 0.47g/t in CRC125, 4m at 0.42g/t from 16m and 2m at 0.54g/t from 28m in CRC126 and 4m at 0.36g/t in CRC131.
The presence of mineralisation below the low order rock-chip profile anomalies are very encouraging as the highest order anomalies located in the south have yet to be drilled.
Regional Reconnaissance Drilling
A series of RC drill profiles was completed to locate and test the Seiga shear beneath the wadi sands to the south of the main workings. The shear is clearly identified in existing holes by gold values of greater than 0.1g/t. The drill profile at northing 2493450N identified a zone approximately 65m wide of >0.1g/t Au and the profile 225m to the south at 249350N recorded a zone approximately 50m wide. Drilling during the quarter included three profiles which extended the length of the mineralised shear a further 500m beyond the previous drilling. One of the profiles (CRC104 to 107) was drilled between two existing lines from which the best intersection was 6m at 0.33g/t Au in hole CRC104 from 2m.
The other two profiles were drilled in the southern part of the prospect to further extend the known position of the shear a further 500m to the south.
The profile of holes (CRC108 to 113) intersected a best value of 2m at 0.36g/t Au from 2m in CRC109. Anomalous gold values greater than 0.1g/t associated with shearing were intersected in the adjacent holes CRC108 and 110. The most southerly profile extended a previous profile to the west and three holes (CRC116, 117 & 118) recorded gold values greater than 0.1g/t.
It is likely that the shear extends further to the south and geological mapping will be required to locate the shear more accurately prior to drilling any further profiles.
Regolith Sampling
Programmes of regolith sampling were completed at Seiga and Shashoba. Two areas of 20m x 20m infill sampling were completed to more clearly define the three anomalies (A, B & C) picked up by the more broadly spaced 100m x 20m samples. The more detailed sampling clearly identified the B anomaly as a coherent anomaly of greater than 0.5g/t Au that is still open to the southeast and will be drill tested.
At Shashoba sampling was completed over two areas of interest on a 100m x 40m grid. In the northeast area, two anomalous zones were delineated with four samples containing greater than 1g/t Au with a maximum value of 5.91g/t Au. The more easterly of the zones spans four lines giving it a length of at least 400m.
Topographic Surveys
A topographic survey to 1m vertical accuracy was completed during the quarter at the Seiga prospect to accurately locate all of the drill collars, ancient workings and topography in preparation for upgrading the currently defined Seiga resource to a higher resource category once the current drilling programme has been completed. A similar topographic survey was completed at the Shashoba prospect.
Haimur - Gold
Ten holes were completed at the Haimur prospect following up previous drilling results and geochemical anomalies. Hole HRC55 intersected a broad zone of low grade mineralisation averaging 0.53g/t Au over 56m from the surface.
Abu Swayel – Copper – Nickel
Gridding and geological investigations were completed at the Abu Swayel prospect in preparation for the Transient Electromagnetic Survey (TEM) survey to be completed during July. The TEM survey is designed to identify extensions to the known mineralisation identified by diamond drilling in the 1960s when a diamond drilling program of ten holes tested the down-dip continuity of the mineralisation over a strike length of 200m. Of the 1,205m of drilling completed, only 21 samples ranging from 1-2m in length were assayed.
Three of the holes (DH01, DH02 & DH14) returned significant Cu and Ni values.
| Location | From (m) | To (m) | Interval (m) | Cu (%) | Ni (%) | |
|---|---|---|---|---|---|---|
| DH01 | 21.00 | 23.60 | 2.6 | 1.16 | 0.24 | |
| DH02 | 25.70 | 29.95 | 4.25 | 1.58 | 0.23 | |
| DH14 | 48.55 | 49.85 | 1.30 | 2.23 | 0.20 | |
| Shaft | 30.00 | 40.00 | 10.00 | 1.87 | 1.53 | |
| Cross-cut | 7.50 | 15.50 | 8.00 | 4.11 | 1.77 |
Abu Swayel - Cu & Ni intersections for holes DH01, 02 & 14
In the early part of the 1900s the Nile Valley Company Limited sank a shallow shaft with a crosscut at the 22m level to test the vertical continuity of the mineralisation. This shaft was deepened to 69m in the 1960s by the West German company Demag AG. Sampling of the cross-cut in the 1960s gave an average 4.11% Cu, 1.77% Ni, 17.81% Fe and 9.94% S over 8m.
Following the interpretation of the TEM survey results a programme of RC drilling will be undertaken to test the anomalies. Four holes will also be drilled though the mineralised zone identified by the 1960s drilling in order to confirm the results of the previous drilling and to provide information as to the distribution of the Cu & Ni values as the earlier drilling results were reported only for the entire intersections.
CAPITAL RAISING - LONDON
On 26 April 2007 the Company announced the placement of 26,666,666 fully paid ordinary shares to UK institutional investors at a price of 4.5 pence (approximately 10.82 Australian cents) per share raising the sum of UK£1,200,000 (approximately A$2.89 million) before costs. The placing was undertaken by UK broker HB-Corporate.
The funds raised under this placing are being employed to accelerate exploration in Wadi Allaqi where several highly prospective gold, copper and nickel targets are being evaluated.
In addition to on-going working capital, the funds raised are also be used for the expansion of Gippsland's management team in Australian and Egypt as the Abu Dabbab project advances towards being a world scale tantalum producer.
APPOINTMENT OF LONDON-BASED DIRECTOR
During May 2007 the Company announced the appointment of Mr Jon Starink to the Company's Board of Directors.
Mr Starink's qualifications include Bachelor of Science with First Class Honours (University of Sydney), a Bachelor of Chemical Engineering with First Class Honours (University of Sydney) and a Master of Applied Science (University of Sydney).
His academic achievements include; Union Carbide Prize in Inorganic Chemistry, Western Mining Prize in Chemical Engineering and Beckman Coulter Postgraduate Prize for Best Overall Performance in Molecular Biotechnology. He held the position of Deputy Head Department of Chemical Engineering at Curtin University of Technology during 1984-85 & 1987.
Based in London, Jon Starink is a Chartered Professional Engineer, a Chartered Scientist and a Chartered Industrial Chemist, a Fellow of the Institution of Engineers Australia, a Fellow of the Australasian Institute of Mining and Metallurgy, a Fellow of the Institution of Chemical Engineers, a Member of The Metallurgical Society and a Member of the Royal Australian Chemical Institute.
His corporate experience encompasses, inter alia, board level corporate governance; executive corporate management and administration; corporate finance & strategic business development; technical and financial project audit & evaluation; introductions to capital markets and investment risk management.
He has 30 years experience in the mining industry in the role of both executive and non-executive director. His extensive practical and operational experience includes engineering design and project management; mining exploration management; science and engineering research & development and process innovation & development.
Of particular relevance, for ten years he served in senior technical and engineering roles with the Sons of Gwalia Ltd Greenbushes tantalum-tin project where he was directly responsible for process development, project design and construction management for the tin smelter and tantalum extraction projects.
RJ (Jack) Telford Executive Chairman
For further information please contact:
Jack Telford Gippsland Limited www.gippslandltd.com Tel: +61 (0)8 9340 6000 [email protected]
Laurence Read / Ed Portman Conduit PR Tel: +44 (0)20 7429 6605 / 6607 [email protected] [email protected]
Les Polden / Luke Cairns Hoodless Brennan Plc Tel: +44 (0)20 7538 1166 [email protected] [email protected]
Fiona Owen Grant Thornton Corporate Finance Tel: +44 (0)20 7383 5100 [email protected]
Note:
The information in this document that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr John Chisholm who is a Fellow of the Australasian Institute of Mining and Metallurgy. Dr Chisholm, an Executive Director and a full-time employee of Gippsland Limited, has sufficient experience which is relevant to the style of mineralisation and type of deposits 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, Mineral Resources and Ore Reserves". Dr John Chisholm consents to the inclusion in this document the matters based on his information in the form and context in which it appears.