REG - Berkeley Energia - DFS confirms Salamanca as a low cost producer <Origin Href="QuoteRef">BKY.AX</Origin> - Part 5
14/07/2016 07:51
- Part 5: For the preceding part double click ID:nRSN1376Ed
The Zona 7 uranium mineralisation covers an area of approximately 3.0km by 0.4km and generally occurs within 100m of surface.
Estimation and modelling techniques The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used. A mineralised envelope at Zona 7 is created encompassing all zones of significant mineralisation. A number of different domains have been interpreted.Geostatistical
variogram modelling was used to determine appropriate parameters for estimation of uranium grade using Ordinary Kriging (OK) (for all Domains) followed by the application
of Uniform Conditioning (UC) and Local Uniform Conditioning (LUC) using Isatis Software, in order to simulate the grade tonnage distribution based on a Selective Mining
Unit (SMU) of 5m x 5m x 6m for Domain 6 only.Surpac software was used for mineralisation volume interpretation. Surpac and Isatis software were used for uranium grade
estimation.Three sources of drillhole uranium grade data was used:· Chemical U3O8 (ppm): 76%· Down hole radiometric equivalent eU3O8 (ppm): 17%· Background
based on XRF and radiometric results (10 ppm U3O8): 7%The drill hole spacing for Domain 6 is nominally 35m by 35m inside the two first year open pit production, 50m by 50
spacing in the remaining Domain 6 area and 100m by 100m spacing in the remaining smaller domains. Some of the historical JEN DD was drilled at a spacing of 35m by
35m.Five mineralisation domains were identified (2, 3, 4, 5 and 6). 1m samples were used to estimate grade into 25m by 25m by 6m parent blocks using OK. Domain 6 was
estimated into 5m by 5m by 6m blocks using LUC.Note that the Berkeley 2015 drilling infilled domain 6 only. So no changes have been made to the MRE previously reported in
April 2014 for domains 2, 3 and 4, and domain 5 reported in October 2015.In order to reduce local bias due to extreme high grades, top cuts were applied per domains: ·
2: 1,800ppm U3O8· 3: none· 4: 2,200ppm U3O8· 5: 1,300ppm U3O8· 6: 6,000ppm U3O8 Appropriate search volumes, minimum and maximum sample numbers and
top cutting strategy were used, based on the results of Kriging Neighbourhood Analysis. The variogram nugget % and maximum ranges in the order of major, semi-major and
minor per domain in meters are presented below: · 2: 30% / 30 / 60 / 120· 3: 30% / 40 / 80 / 160· 4: 30% / 40 / 80 / 160· 5: 21% / 40 / 88 / 161·
6: 21% / 40 / 88 / 161 In-situ dry bulk densities were assigned based on zones of weathering intensity and used to estimate tonnage.
The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data. The current resource estimate was compared with the previous resource estimate (October 2015) which was based on earlier drill campaigns (historical, 2007, 2008, 2013 and
2014) and to a polygonal estimation. Both of which support the current results.No mining production has taken place at Zona 7.
The assumptions made regarding recovery of by-products. The resource model only estimates uranium.
Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation). At this stage, there are no deleterious elements or other non-grade variables identified as being of economic significance at Zona7.
In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed. The uranium grade is estimated into the 25m (X) by 25m (Y) by 6m (Z) blocks using OK. This compares to the average drill spacing of 35-50m in X and Y. UC and LUC were
used to estimate the expected grade tonnage distribution for the chosen SMU of 5m x 5m x 6m in Domain 6 which contains >88% of the resource, and contains the material
classified as Measured and Indicated, and is targeted for mining in the early years of production. This SMU size was chosen to match the feasibility study open cut mining
methodology. OK was used to estimate grade in the remaining smaller domains which account for <12% of the MRE and which have wider spaced drill data classified as
Inferred material.
Any assumptions behind modelling of selective mining units. SMU dimensions have been chosen based on results of the current open pit feasibility study with load and haul being conducted with 125 tonne backhoe excavators and 100
tonne dump trucks.
Any assumptions about correlation between variables. Uranium is the only economic metal estimated in the current resource model.
Description of how the geological interpretation was used to control the resource estimates. Geological interpretation controlled the volume of the resource estimate by restricting the interpretation of the mineralisation volume and associated samples to material
with continuity above a 100 ppm U3O8 grade.The domains are based on geology, structure and uranium grade with defined zones of mineralisation that show continuity along
and across strike.A further division of the model into completely weathered, partially weathered and fresh rock is applied by triangulated surfaces interpreted from the
logging of the drill samples. This division is only applied for density and reporting purposes.
Discussion of basis for using or not using grade cutting or capping. Uranium grade distribution exhibits a strong positive skewness, so a top cut was applied to reduce local bias by extreme grades outliers around the 97.5 population
percentile. The domains were assessed independently and a top cut grade was determined for each domain.
The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available. Validation of the MRE included visual inspection of the grade distribution compared to the drill data, comparison of block model statistics to the sample statistics and
generation of swath plots. These confirmed that the MRE appropriately represents the grade and tonnage distribution of the uranium mineralisation at the confidence levels
reported.
Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content. The resource tonnage is reported on a dry bulk density basis. In-situ dry bulk density measurements were completed on dry DD core and using a solid pycnometer method for
RC samples. Sample grades are reported using dry weight. No moisture content of DD core has been determined.
Cut-off parameters The basis of the adopted cut-off grade(s) or quality parameters applied. The MRE has been reported using a 200ppm U3O8 cut-off grade. Recent feasibility studies on adjacent properties have demonstrated that a 100ppm U3O8 cut-off is economic.
Based on the current uranium market, reporting of the MRE at a 200 ppm cut-off grade is both justifiable and consistent with previous published MRE's for this style of
mineralisation.
Mining factors or assumptions Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made. The DFS demonstrated that the Zona 7 resource can potentially be extracted using open pit mining methods, with the recovery of uranium through the application of acid
heap leach methods.Indicative parameters used for pit optimisation purposes in recent DFS are:Uranium selling price: US$50 to US$65/lb U3O8, Total Mining Cost: US$4.0/lb
U3O8Mining recovery: 95%Mining dilution: 5%Plant Process Cost: US$9.0/lb U3O8Recovery U3O8: 85%Royalties: 1.2%Selling costs: 1.5%
Metallurgical factors or assumptions The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made. Metallurgical testwork on representative samples across a range of ore types has been undertaken for Zona 7. The results of this testwork showed the mineralisation to be
amenable to convention acid heap leach, with uranium recoveries in the order of 85% with a low acid consumption of 12-18 kg/t.
Environmental factors or assumptions Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made. It is planned that all spent heap leach (ripios) material will be returned to the open pit which will be lined so as to encapsulate the ripios. Any Naturally Occurring
Radioactive Material (NORM) or Acid Rock Drainage (ARD) waste will also be stored within the lined pit.An Environmental Scoping Study will serve to define the scope and
content of the Environmental and Social Impact Assessment.
Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples. Bulk density values were derived from 800 solid-fluid pycnometer measurements. These values have been validated with DD core bulk density results obtained using the water
immersion method. The in-situ dry bulk density values are: Completely weathered: 2.28 g/cm3Partially weathered: 2.40 g/cm3Fresh rock: 2.64 g/cm3The bulk density values
have been updated from those previously used in the October 2015 MRE based on a 50% increase in bulk density data. The values shown above have been used to estimate
tonnages for the updated domain 6. Bulk density values used for domains 2, 3 and 4 are unchanged from those used in the April 2014 MRE, those used for domain 5 are from
October 2015.
The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit. Fresh and slightly weathered rock is competent enough to ensure the method used takes into account any rock porosity. A factor derived from comparison with DD core was
used to adjust the weathered material.
Discuss assumptions for bulk density estimates used in the evaluation process of the different materials. The density measurements have been classified by weathering intensity, defined by the geological logging. Three dominant zones have been identified, namely: completely
weathered; partially weathered; and fresh rock. The average of the density data from each zone was applied in the resource model.
Classification The basis for the classification of the Mineral Resources into varying confidence categories. The reported MRE has been classified as Measured, Indicated and Inferred after consideration of the following:· Adequate geological evidence and drill hole sampling
is available to assume geological and grade continuity.· Adequate in-situ dry bulk density data is available to estimate appropriate tonnage factors.· Adequate
mining, metallurgy and processing knowledge to imply potential prospect for eventual economic extraction.
Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data). The reported MRE has been classified with consideration of the quality and reliability of the raw data, the confidence of the geological interpretation, the number,
spacing and orientations of intercepts through the mineralised zones and knowledge of grade continuity gained from observations and geostatistical analysis.
Whether the result appropriately reflects the Competent Person's view of the deposit. The reported MRE and its classification are consistent with the Competent Person (CP) view of the deposit. The CP was responsible for determining the resource
classification.
Audits or reviews The results of any audits or reviews of Mineral Resource estimates. Berkeley has undertaken a review of the previous MRE and concluded that the estimate was developed using industry standard methods and that the estimate was considered to
reflect the understanding of the geology and grade continuity.Malcolm Titley (CP, Geology Consultant, Maja Mining Limited) reviewed the reported MRE and concluded that
the estimate appropriately represents the grade and tonnage distribution of uranium mineralisation at confidence levels commensurate with the Indicated resource
classification.
Discussion of relative accuracy/
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