REG - Ferro-Alloy Rsrcs - Full Updated Ore-Body 1 Mineral Resource Estimate

Ferro-Alloy ResourcesAnnouncement

02/05/2023 14:30

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RNS Number : 1516Y  Ferro-Alloy Resources Limited  02 May 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 (INCLUDING AS IT FORMS PART OF THE LAWS OF
ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018
("MAR").

 

 

 

2 May 2023

Ferro-Alloy Resources Limited

("Ferro-Alloy" or the "Group" or the "Company")

 

Full Updated Ore-Body 1 Mineral Resource Estimate

 

Ferro-Alloy Resources Limited (LSE:FAR), the vanadium producer and developer
of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, is
pleased to announce the full results of the updated mineral resource estimate
("MRE") from SRK Consulting Ltd ("SRK") prepared in accordance with the terms
and guidelines of the Australian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves ("JORC" or the "JORC Code") for
Ore-Body 1 ("OB1") at the Balasausqandiq deposit.

MRE Highlights Include:

·    An Indicated Mineral Resource of 32.9 million tonnes for OB1, at a
mean grade of 0.62% V(2)O(5,) reported at a marginal cut-off grade of 0.4%
V(2)O(5) - equating to 203,364 contained tonnes of vanadium pentoxide
("V(2)O(5)")

·    An increase of 8.6 million tonnes (35.4%) of mineral resource and an
increase of 38,058 tonnes (23%) of contained V(2)O(5) by comparison with the
estimate contained in the Company's 2018 Competent Persons Report

·    The results of the previously reported infill drilling and trenching
programmes completed during 2021/22 have been successful in converting 100% of
the Resources to Indicated for the OB1 deposit. No Measured or Inferred
Resource are stated

·    A total of 75 diamond core holes and 88 trenches were used to define
the Resource (a reduction of drill section spacing to 250 metres from the
original 500 metres increased confidence)

·    Confirmation that there are reasonable prospects for eventual
economic extraction by constraining the Mineral Resources to an optimised open
pit shell (50 degree slopes and a revenue factor of 1) using a selling price
for 98% V(2)O(5) flake of USD9.82 /lb

 

Commenting on the MRE, Nick Bridgen, CEO of Ferro-Alloy Resources said:

"We are delighted with the results of this MRE for OB1 which has not only
upgraded the classification of all the resources to the Indicated category,
but increased the contained V(2)O(5) at OB1 by 23%.   Exploration of OB2, 3
and 4 has been completed and the mineral resource estimate for those
ore-bodies is expected later this year.

We look forward to publishing the results of the feasibility study for Stage 1
of the Balasausqandiq project, expected to be completed in the final quarter
of 2023, with the feasibility study for Stage 2 to follow in 2024."

 

Overview of the April 2023 Mineral Resource Estimate for Balasausqandiq OB1
Deposit

The MRE for the Balasausqandiq OB1 vanadium deposit was based on the historic
and latest infill trench and diamond drill programme completed in 2021-2022.
The Resource has been estimated from 35 new drillholes and 29 new trenches and
was aimed to verify historic diamond drilling and trenching. A total of 75
diamond core holes and 88 trenches have now been used to define the Resource.

The current estimate is based on diamond core and trench profiles sections at
a 250 m spacing along the strike of the OB1 deposit. A pit optimization study
has also been conducted to assess the reasonable prospects for eventual
economic extraction. The latest TetraTech testwork shows high recoveries in
the order of 85 to 95% V(2)O(5) across all grade ranges. The pit optimisation
used an overall slope angle of 50 degrees, a processing recovery of 85% and a
revenue factor of 1.0 for a selling price of USD9.82 /lb to give a
conservative evaluation and achieve the head grade for which the 85%
processing recovery was applicable at the marginal cut-off grade.

Results of the updated MRE are an Indicated Mineral Resource of 32.9 million
tonnes (Mt) at a mean grade of 0.62% V(2)O(5) reported at a marginal cut-off
grade of 0.4% V(2)O(5).

No Measured or Inferred Resources are reported. Table 1 below presents a
summary of the OB1 MRE broken down by metal and Resource Classification.

Table 1. Summary Report for April 2023 MRE OB 1 Resource

 Classification  Zone               Tonnage (Mt)  % V(2)O(5)  % Mo    % U     % C
 Indicated       Oxide              1.57          0.67        0.014   0.0047  7.16

                 Transitional

                 Fresh (Sulphide)
                 1.25                             0.66        0.014   0.0045  7.17
                 30.08                            0.61        0.015   0.0052  8.83
 Total                              32.90         0.62        0.015   0.0051  8.69

Notes for Mineral Resource Estimate:

·      Mineral Resources have an effective date of 1st April 2023

·      Reported Mineral Resources are those remaining below the depleted
current historic pits and topographic surface as of 1st April 2023

·      All Resources are reported above a cut-off grade of 0.4% V(2)O(5)
 

·      The MRE established that there are reasonable prospects for
eventual economic extraction by constraining the Mineral Resources to an
optimised open pit shell (50 degree slopes and a revenue factor of 1) using a
selling price for 98% V(2)O(5)  flake of USD9.82 /lb

·      Tonnages are reported in metric units, grades in percent (%).
All contained metal is reported in tonnes.  Tonnages, grades, and contained
metal totals are rounded appropriately.  Rounding as required by reporting
guidelines may result in apparent summation differences in Table 1

 

 

Table 2. Comparison of 2018 and 2023 MRE Estimates

 Estimate                                 Tonnage (Mt)  % V(2)O(5)  Contained V(2)O(5) (t)
  2018 MRE COG 0.0% (Ind + Inf)           24.3          0.68        165,306
 2023 MRE Indicated COG 0.4% (Indicated)  32.9          0.62        203,364

 

 

The Competent Person for the declaration of Mineral Resources is Mr Peter
Gleeson (CEng, MIMMM, AIGS), an employee of SRK.  The Mineral Resource
estimate was prepared by a team of consultants from SRK.

 

For further information, visit www.ferro-alloy.com or contact:

 

 Ferro-Alloy Resources Limited     Nick Bridgen (CEO) / William Callewaert (CFO)  info@ferro-alloy.com

 Shore Capital                     Toby Gibbs/John More                           +44 207 408 4090

 (Joint Corporate Broker)

 Liberum Capital Limited           Scott Mathieson/William King                   +44 20 3100 2000

 (Joint Corporate Broker)
 St Brides Partners Limited        Catherine Leftley/Ana Ribeiro                  +44 207 236 1177

 (Financial PR & IR Adviser)

 

About Ferro Alloy Resources Limited:

The Company's operations are all located at the Balasausqandiq deposit in
Kyzylordinskoye Oblast in the South of Kazakhstan. Currently the Company has
two main business activities:

a) the high grade Balasausqandiq vanadium project (the "Project"); and

b) an existing vanadium concentrate processing operation (the "Existing
Operation")

Balasausqandiq is a very large deposit, with vanadium as the principal product
together with several by-products. Owing to the nature of the ore, the capital
and operating costs of development are very much lower than for other vanadium
projects.

The most recent mineral resource estimate for ore-body one (of five) provided
an Indicated Mineral Resource of 32.9 million tonnes at a mean grade of 0.62%
V(2)O(5) equating to 203,364 contained tonnes of V(2)O(5). In the system of
reserve estimation used in Kazakhstan the reserves are estimated to be over
70m tonnes in ore-bodies 1 to 5 but this does not include the full depth of
ore-bodies 2 to 5.

The Project will be developed in two phases, Phase 1 and Phase 2, treating 1m
tonnes per year and an additional 3m tonnes per year. Production will be some
5,600 tonnes of V(2)O(5) from Phase 1, rising to 22,400 tonnes V(2)O(5) after
Phase 2 is commissioned.

There is an existing concentrate processing operation at the site of the
Balasausqandiq deposit. The production facilities were originally created from
a 15,000 tonnes per year pilot plant which was then expanded and adapted to
recover vanadium, molybdenum and nickel from purchased concentrates.

The existing operation is located on the same site and uses some of the same
infrastructure as the Project, but is a separate operation which will continue
in parallel with the development and operation of the Project.

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