REG - Bluejay Mining PLC - Dundas Ilmenite Resource Update

Bluejay MiningAnnouncement

16/04/2024 07:00

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RNS Number : 6930K  Bluejay Mining PLC  16 April 2024

 

16 April 2024

Bluejay Mining plc / Ticker: JAY / Market: AIM / Sector: Mining

Dundas Ilmenite Resource Update

 

Bluejay Mining plc ('Bluejay' or the 'Company'), the AIM, FSE listed and
Pink-Market traded exploration and development company with projects in
Greenland and Finland, is pleased to provide an update on the Company's 100%
owned Dundas Ilmenite Project ('Dundas' or the 'Project') located in
North-West Greenland.

Following an in depth assessment of deficiencies in the 2022 work programs at
Dundas, alongside consultations with various independent consultants, the
Company has determined that there is sufficient evidence to warrant the
reinstatement of the 2019 Mineral Resource Estimate (MRE) at the Dundas
Ilmenite Project. After joining the Company in late December 2023, significant
concerns were raised by the new management team regarding the accuracy and
representativeness of the 2023 MRE. This decision to reinstate the 2019 MRE
reflects the Company's well-informed position that the downgrade in the 2023
MRE was the result of multiple factors, including the use of unsuitable
drilling methods, and questionable decision-making.

Bluejay reaffirms its commitment to transparency and integrity with its
shareholders and will continue to prioritize clear communication,
accountability and ethical conduct. The Company is also considering its legal
options concerning individuals involved in the 2023 resource estimation
process, including former members of management.

Background:

JORC resource historic milestones:

 Campaign  Drilling Method            Sampled Meters & No. of Holes      Results Available & Months Delay      Programme Result
 2019 MRE Work Programs
 2016      Shallow Auger              182 m                              April 2017                            23.6Mt

(8 months)
8.8% Ilmenite in-situ
                                      190 holes
 2017      Sonic & Shallow Auger      678 m                              April 2018                            96.0Mt

(8 months)
6.9% Ilmenite in-situ
                                      261 holes
 2018      Sonic                      643 m                              May 2019                              117 Mt

(9 months)
6.1% ilmenite in-situ
                                      201 holes
 2023 MRE Work Programs
 2022      Geoprobe                   395 m                              September 2023                        *29.7Mt

(13 months)
4.2% Ilmenite in-situ
                                      153 holes

*Downgrade from 59.3Mt at 6.8% ilmenite in-situ within Moriusaq West

Key Concerns and Observations of the 2022 Work Streams

·        Choice of Drill Rig: In 2022, a Geoprobe rig, which deploys a
combination of direct push, diamond drilling, and other methods was selected
by the Company's prior management as an alternative method of drilling to the
sonic rig:

o  Diamond drilling is rarely, if ever, deployed during exploration of
mineral sand deposits.

o  At Dundas, a sonic drill was successfully used on prior campaigns to
collect high-quality core samples from the subsurface.

o  Sonic drilling is an industry standard for achieving representative
samples in unconsolidated sediment.

·        Variability in Sample Types: The utilization of multiple
drilling approaches (direct push, diamond, auger, etc) led to inconsistencies
in sample types, recovery rates, and comparability of results.

·        Challenges with Diamond Drilling: Diamond drilling with water
lubrication in hard ground conditions resulted in poor core recovery and
material washing, particularly affecting particle size distribution (PSD), and
recovery of sand.

·        Short Drill Runs: Short drill runs yielded a significant
number of very short samples, highlighting drilling difficulties alongside
repeated hole withdrawals and abandonments.

·        Geoprobe Limitations: Geoprobe struggled to penetrate
ice-bound sediment, leading to misinterpretation of basement refusal as
bedrock, negatively impacting both grade and tonnage estimates.

·        Exclusion of Fluvial Zones: Fluvial zones were omitted from
resource estimation without sufficient justification, potentially overlooking
significant resource areas.

·        Rejection of Pre-2022 Exploration Data: During the Mineral
Resource Estimate (MRE) process in May 2023, all exploration data predating
2022 was dismissed without a valid rationale.

·        Neglect of Oversight: The 2022 Qualified Person refrained
from visiting site and failed to engage with pre-2022 consultants to rectify
disparities in grade and tonnage estimates.

 

Eric Sondergaard, Managing Director, commented: "The resource downgrade of the
Dundas Ilmenite Project on September 21, 2023, came as a shock to all
shareholders, including myself. The release lacked critical and necessary
disclosures, compelling the new board to initiate an internal review. This
unpaid work was undertaken by independent, globally recognised resource and
feasibility experts, and raised serious concerns regarding the execution of
the 2022 drilling campaign, decision making processes, and resultant resource
amendments. The assertions made by former management that 1.5 months of
inefficient and ineffective exploration in 2022 is more representative than
the cumulative three-year work stream preceding it is fraught with problems.
As such the Company is reviewing suitable courses of action to retrieve the
effectively wasted shareholder capital from those responsible.

On a brighter note, we are very pleased that consensus exists to re-instate
the 2019 Mineral Resource Estimate. The Company is taking steps to finalize
this process, which has begun with a low-cost review of limited sample
material available from the 2022 campaign. As Dundas is fully permitted, with
a valid mining license, we will continue to review critical aspects of the
project, as well as potential value adding acquisitions within the country."

 

Qualified Person

The scientific and technical disclosure included in this announcement has been
reviewed and approved by Roderick McIllree, a director of Bluejay Mining plc,
who is also a Fellow of the Australasian Institute of Mining and Metallurgy
(FAusIMM). Mr. McIllree has sufficient experience, relevant to the styles of
mineralisation and type of deposits under consideration and to the activity
that he is undertaking, to qualify as a Qualified Person ('QP') as defined by
the AIM rules, and for the purposes of The Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves. Mr. McIllree has
reviewed this press release and consents to the inclusion in the press release
of the matters based on his information in the form and context in which this
appears.

Market Abuse Regulation (MAR) Disclosure

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 ('MAR') which has been incorporated into UK law by the
European Union (Withdrawal) Act 2018.

For further information please visit http://www.bluejaymining.com
(http://www.bluejaymining.com)  or contact:

 Eric Sondergaard                        Bluejay Mining plc               enquiry@bluejaymining.com
 Ewan Leggat / Adam Cowl                 SP Angel Corporate Finance LLP   +44 (0) 20 3470 0470

(Nominated Adviser and Broker)
 Tim Blythe / Megan Ray / Said Izagaren  BlytheRay                        +44 (0) 20 7138 3205

(Media Contact)

 

2022 MRE Drilling Campaign at Dundas, from 2022 Internal Post-Season Debrief

Bluejay Mining conducted a drill programme at its Dundas Ilmenite project in
2022, intending to operate on a 7-day per week and 24hr basis with one day
shift and one night shift. The planned programme aimed to drill a total of
1323 meters. Due to slow progress, drilling issues, broken equipment, the
programme reverted to a single dayshift for the remaining 50% of the
programme. The actual programme recovered 395m of sampled material. In a
highly irregular course of events, multiple drilling methods were used or
attempted including Hollow Stem Auger, Direct Push, Diamond Coring, Split
Spoon, Continuous Sampling, HWT, Downhole Hammering, and ODEX Hammering. The
primary drilling methods were Hollow Stem Auger, Diamond Coring and Direct
Push, within the same borehole.

A detailed internal presentation documenting the issues mentioned was
distributed to a board member in September 2022. This presentation was never
distributed to the broader Board of Directors.

 

Hollow Stem Auger

A hollow stem auger is a drilling tool used in geotechnical and environmental
drilling. It consists of a hollow steel tube with a cutting bit on the end.
The larger footprint of the augers can disturb the surrounding environment,
leading to complications such as flowing sands, sand lock (the entrapment of
sand in the auger), and ice rinds (frozen layers) in ice-bound sediment.
Hollow stem auger drilling requires specialized equipment with specific torque
and weight requirements. If the equipment lacks sufficient power or stability,
it cannot effectively penetrate tough formations.

Figure 1: New auger bit (left), used auger bit (centre), damaged auger flyte
(right)

In rocky or ice conditions, augers may struggle to retrieve intact samples due
to the resistance of the material. This can compromise the representativeness
of the samples collected and affect subsequent analyses. In the 2022
programme, the hollow stem auger was often used as "casing", to drill and
recover the first meter.

Direct Push

Direct push sampling method is a technique used to collect soil directly from
the subsurface. Unlike traditional drilling methods that involve rotary
drilling or augering, direct push does not involve the removal of soil or rock
during drilling. Instead, specialized tools are pushed into the ground to
collect samples. During the 2022 field programme, borehole stability was a
continual problem, particularly in unstable formations, where the boreholes
could collapse or freeze around the sampling tool, significantly affecting
sample quality and integrity. Additionally, the method's shallow depth
penetration restricted its exploration potential, especially in areas
requiring deeper sampling. Concerns about sample integrity arose due to the
method's inability to remove soil or rock during drilling, potentially
distorting collected samples. First meter recovery averaged only 83% during
the 2022 drilling programme, which is typically the highest-grade portion of
the orebody.

Figure 2: Damaged direct push bit (left), sand liquefaction and escape (right)

Diamond Coring

Diamond coring is a drilling technique that uses a diamond-tipped bit to
extract cylindrical samples of consolidated rock from the subsurface, with
significant amounts of water being used to cool the bit.

Figure 3: Diamond coring samples showing preferential washing of sand, reduced
sample quality.

The use of water during diamond coring, intended to aid in lubrication and
debris removal, had adverse impacts on the representativeness of the collected
samples, particularly in sand-rich intervals. This resulted in two obvious
issues: the reduction of sand core (sample) diameter due to prolonged drilling
time with water, and the outright washing away of sand, leaving behind only
coarser-grained material, especially at the beginning of drilling runs.
Additionally, the observed ejection of particles smaller than 5 mm coming out
of the hole, along with water returns, has major implications on the particle
size distribution of retrieved samples.

 

An analysis of rejected sand, often present in significant quantities, was
found to carry significant grade. Furthermore, the combined use of diamond
coring and the hollow stem auger was often reported to have liquified the
ground contributing to an increase in the diameter of the borehole, further
complicating sampling operations. Collectively, these factors highlight the
obvious lack of suitability of the equipment selected to undertake the 2022
drilling campaign. It is not obvious in any capacity why these samples were
regarded as being representative of the subsurface, and the Dundas orebody.

Figure 4: Sand reject material being ejected from hole (left),
collected/sampled sand reject material (right)

 

Table 1: Example comparing Geoprobe drillhole analytical results to reject
sand collected from the same drilling location

 

 

About Bluejay Mining plc

Bluejay is listed on the London AIM market and Frankfurt Stock Exchange and
its shares also trade on the Pink Market in the US. With multiple projects in
Greenland and Finland, Bluejay offers both portfolio and commodity
diversification focused on base and precious metals in Tier 1 jurisdictions.

Bluejay, through its wholly owned subsidiary Disko Exploration Ltd., has
signed a definitive Joint Venture Agreement with KoBold Metals to guide
exploration for new deposits rich in the critical materials required for the
green energy transition and electric vehicles (the Disko-Nuussuaq
nickel-copper-cobalt-PGE Project). This project is Bluejay's primary focus.

Bluejay's most advanced project is the Dundas Ilmenite Project in Greenland,
which is fully permitted and being developed towards production in the near
term, with preparatory activities scheduled to commence in 2022. Dundas has a
Mineral Resource reported in accordance with the JORC Code of 117Mt at 6.1%
ilmenite and a maiden offshore Exploration Target of between 300Mt and 530Mt
of ilmenite at an average expected grade range of 0.4 - 4.8% ilmenite in-situ.
The Company has agreed a Master Distribution Agreement with a major Asian
conglomerate for up-to 340ktpa of its anticipated 440ktpa annual output. The
Company has signed on a major European bank to head the financing syndicate
for Dundas. The Company's strategy is focused on securing financing ahead of
commencing commercial production at Dundas in order to create a company
capable of self-funding exploration on its current and future projects.

Disko Exploration Ltd holds two additional projects in Greenland - the 692 sq
km Kangerluarsuk zinc-lead- silver project, where historical work has
recovered grades of up to 45.4% zinc, 9.3% lead and 596 g/t silver; and the
920 sq km Thunderstone project which has the potential to host large-scale
base metal and gold deposits. Bluejay also owns 100% of the fully permitted
Dundas Ilmenite Project under its subsidiary Dundas Titanium A/S in northwest
Greenland.

In Finland, Bluejay currently holds three large scale multi-metal projects
through its wholly owned subsidiary FinnAust Mining Finland Oy. The Company
has identified multiple drill ready targets at the Enonkoski
nickel-copper-cobalt project in East Finland. Bluejay's Hammaslahti
copper-zinc-gold-silver project hosts high-grade VMS mineralisation and
extensions of historical ore lodes have been proven. The drill ready Outokumpu
copper-nickel-cobalt-zinc-gold-silver project is located in a prolific
geological belt that hosts several high-grade former mines. In August 2023,
Bluejay successfully divested its Black Schist Projects in Finland to Metals
One plc in a transaction worth £4.125 million (Bluejay currently owns c. 29%
of the issued ordinary share capital of AIM listed Metals One plc).

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