REG - Metals Exploration - Updated Mineral Resource and Ore Reserve Estimate

Metals ExplorationAnnouncement

14/02/2022 07:00

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RNS Number : 5072B  Metals Exploration PLC  14 February 2022

METALS EXPLORATION PLC

 

Updated Mineral Resource and Ore Reserve Estimate

 

Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or the
"Group"), a gold producer in the Philippines, today provides an updated
Mineral Resource Estimate and Ore Reserves Statement at its Runruno gold
project ("Runruno" or the "Project") in the Philippines.

 

Summary of Report

In association with the Company's review of its mining plan for the remaining
life of mine ("LOM"), the Company commissioned Robin Rankin of GeoRes
Consulting to verify the Company's updated JORC compliant Mineral Resource
Estimate (the "MRE") for the Runruno project. The last MRE was independently
compiled in 2011 by Mining Associates.

At present, mining rates estimated in the new MRE indicates a mine life of at
least five years with possible extensions through further drilling.

Orebody domains and wireframes have been updated using information obtained
from 49 new diamond drill holes and the compilation of a new structural
geology model. Using updated univariate statistics and variography, a new
Ordinary Kriged estimate was used to generate a 10 metres x 10 metres x 5
metres Block Model of the Mineral Resource.  Table 1 below shows the
breakdown of the 2021 MRE by resource category.

 

                                Table 1:
Updated 2021 Total Mineral Resource Estimate

 Main Runruno       Ore   Gold        Sulphur
 Resource Category  Mt    g/t   Moz   %     Mt
 Measured           12.1  1.66  0.65  1.48  0.18
 Indicated          9.3   1.44  0.43  1.16  0.11
 Inferred           5.1   1.14  0.19  1.03  0.05
 Total              26.5  1.48  1.27  1.29  0.34

 

The new drilling generally intercepted lower grades on the Western extensions
of the Runruno ore body, which is in line with the actual mining outcomes
experienced.  Shorter ranges were used in the variograms which better reflect
the style of mineralisation.  The block size used in this model was reduced
to 10 metres x 10 metres x 5 metres in order to better define the thinner lode
structures and reduce waste dilution within the model.

Table 2 below compares the 2021 MRE to the previous official MRE release in
2011.

 

 

Table 2 - Comparison of the 2011 and 2021 Mineral Resource Estimates

 

 Main Runruno              Ore   Gold
 Resource Category         Mt    g/t   Moz
 2011 Resource  Measured   11.2  1.88  0.68
                Indicated  7     1.64  0.37
                Inferred   7.5   1.44  0.35
                Total      25.7  1.69  1.39
 2021 Resource  Measured   12.1  1.66  0.65
                Indicated  9.3   1.44  0.43
                Inferred   5.1   1.14  0.19
                Total      26.5  1.48  1.27
 Variance       Measured   8%    -12%  -4%
                Indicated  33%   -12%  16%
                Inferred   -32%  -21%  -46%
                Total      3%    -12%  -9%

 

The new resource model shows an increase in tonnage but at a lower grade.
The net result is an overall increase of 30,000 Measured and Indicated
Resource ounces.

Updated Ore Reserve Estimate

The updated 2021 MRE was used by the Company to re-optimize the open pit and
calculate a new Ore Reserves Estimate for its Runruno project.  This work was
carried out in-house and independently verified by Xenith Consulting,
compilers of the 2020 Ore Reserve estimate.  Set out below are several
matters that should be considered in conjunction with the Updated Ore Reserve
Estimate:

·      Updated structural geology and geotechnical models were used in
the pit optimisation;

·      Pit optimisation was based on an average 80% recovery and
US$1,750/oz gold price;

·      The higher gold price drove a lower economic cut-off grade of
0.53 g/t gold vs 0.56 g/t in 2020;

·      Pit designs were updated based on the optimisation results to
include ramps and other accesses;

·      Both in-pit and ex-pit waste dumps were redesigned and optimised;

·      A new life of mine schedule was developed based on the updated
pit designs;

·      Updated mine economics were based on the Company's internal
budgets and economic models; and

·      A substantial amount of mineral resource remains uneconomic due
to grade, depth and/or terrain restrictions, or a combination of these
factors.

 

The remaining estimated ore Reserves as verified by Xenith Consulting as at
February 2022 are set out in Table 3 below:

Table 3: 2022 Ore Reserve Estimate

 Reserve            Ore   Gold
 Category           Mt    g/t   M Oz
 Proved             -     -     -
 Probable           9.94  1.35  0.43
 Total              9.94  1.35  0.43
 Inferred included in LOM model pit
 Inferred material  0.69  1.11  0.02

 

·      Mining grade dilution reduced to 20% based on model
reconciliations.

·      Unchanged mining recovery of 85% inclusive of a 5% mining loss.

·      Measured and Indicated Resource - converted to 9.94Mt of Probable
Reserve.

·      0.69Mt of Inferred resource represents 6% of the total reserve.

·      LOM pit design remains economic with Inferred material included
at zero grade.

Reconciliation to 2020 Ore Reserve estimate

 

The 2020 Ore Reserves estimate, prepared by Xenith Consulting in April 2020,
is shown in Table 4 below.

 

Table 4: 2020 Ore Reserve Estimate

 Reserve            Ore   Gold
 Category           Mt    g/t   M Oz
 Proved             Nil   nil   nil
 Probable           11.7  1.38  0.50
 Total              11.7  1.38  0.50
 Inferred included in LOM model pit
 Inferred material  2.7   1.21  0.10

 

While overall tonnes of ore have been depleted at a rate consistent with the
available tonnes as estimated in the 2020 Ore Reserve Estimate, the updated
estimated grade is lower reflecting both new drill results and mining history.

 

The Company has an ongoing resource drilling programme that will provide the
basis for the next updated project Ore Reserve Estimate and an exploration
program to develop extensions to the existing pit and available Ore Reserves.

 

 

Darren Bowden, CEO of Metals Exploration commented:

"The results released today demonstrate a life of mine of at least five years
which, given the work that we have carried out and are undertaking we are
confident can be extended.

This report shows we have an excellent project and that we have built a solid
foundation from which to grow."

 

 

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014, which forms part of United Kingdom domestic law by
virtue of the European (Withdrawal) Act 2018. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

-       END    -

 

 

Glossary of Key Terms

 

 Cut-off grade       the lowest grade value that is included in a resource statement
 g/t                 grams per tonne, equivalent to parts per million
 grade               relative quantity or the percentage of ore mineral or metal content in an ore
                     body
 Indicated resource  that part of a Mineral Resource for which tonnage, densities, shape, physical
                     characteristics, grade and mineral content can be estimated with a reasonable
                     level of confidence
 Inferred resource   that part of a Mineral Resource for which tonnage, grade and mineral content
                     can be estimated with a low level of confidence
 JORC                The Australasian Joint Ore Reserves Committee Code for Reporting of
                     Exploration Results, Mineral Resources and Ore Reserves 2012 (the "JORC Code"
                     or "the Code"). The Code sets out minimum standards, recommendations and
                     guidelines for Public Reporting in Australasia of Exploration Results, Mineral
                     Resources and Ore Reserves
 Kriging             A method of interpolation which predicts unknown values from data observed at
                     known locations. It uses the variogram to express spatial variation, and
                     minimises the error of predicted values that are estimated by spatial
                     distribution of the predicted values
 Measured Resource   that part of a Mineral Resource for which tonnage, densities, shape, physical
                     characteristics, grade and mineral content can be estimated with a high level
                     of confidence. It is based on detailed and reliable exploration, sampling and
                     testing information gathered through appropriate techniques from locations
                     such as outcrops, trenches, pits, workings and drill holes.
 Mineral Resource    a concentration or occurrence of material of intrinsic economic interest in or
                     on the Earth's crust in such form, quality and quantity that there are
                     reasonable prospects for eventual economic extraction. The location, quantity,
                     grade, geological characteristics and continuity of a Mineral Resource are
                     known, estimated or interpreted from specific geological evidence and
                     knowledge. Mineral Resources are sub-divided, in order of increasing
                     geological confidence, into Inferred, Indicated and Measured categories
 Mt                  million tonnes
 oz                  troy ounce (= 31.103477 grams)
 Probable Reserve    the economically mineable part of an indicated, and in some circumstances, a
                     Measured Mineral Resource. The confidence in the Modifying Factors applying to
                     a Probable Mineral Reserve is lower than that applying to a Proven Mineral
                     Reserve
 Proven Reserve      is the highest confidence level of the economically mineable part of a
                     Measured Mineral Resource
 Reserve             the economically mineable part of a Measured and/or Indicated Mineral Resource

 

 

 

 

For further information please visit or contact:

 

 Metals Exploration PLC
 Via Tavistock Communications Limited     +44 (0) 207 920 3150
 Nominated & Financial Adviser:           STRAND HANSON LIMITED
 James Spinney, James Dance, Rob Patrick  +44 (0) 207 409 3494
 Financial Adviser & Broker:              HANNAM & PARTNERS
 Matt Hasson, Franck Nganou               +44 (0) 207 907 8500
 Public Relations:                        TAVISTOCK COMMUNICATIONS LIMITED
 Jos Simson, Nick Elwes, Oliver Lamb      +44 (0) 207 920 3150

 

 

Web:                      www.metalsexploration.com
(http://www.metalsexploration.com)

Twitter:                  @MTLexploration
(https://twitter.com/MTLexploration)

LinkedIn:               Metals Exploration
(https://www.linkedin.com/company/metals-exploration-plc)

 

 

Competent Person's Statement

The information contained in this release that relates to the 2021 gold
Mineral Resource Estimate is based on information compiled by Mr Vyron Leal of
Metals Exploration and reviewed by Mr Robin Rankin, who is a Member of The
Australasian Institute of Mining and Metallurgy and the Australian Institute
of Geoscientists.  Mr Rankin is a full-time employee of GeoRes Consulting.
 Mr Rankin has sufficient experience that is relevant to the style of
mineralisation and type of deposit described in the release to qualify as a
Competent Person as defined by the JORC Code, 2012 Edition. Mr Rankin consents
to the inclusion of this information in the form and context in which it
appears in this release.

 

The Ore Reserve Statement was compiled by Paola Tuyor of Metals Exploration
and reviewed and verified by Grant Walker of Xenith Consulting.  Mr Walker is
a Member of The Australasian Institute of Mining and Metallurgy and is a
Competent Person as defined by the JORC Code, 2012 Edition, having five years'
experience that is relevant to the style of mineralisation and type of deposit
described in the Report.

 

Mr Darren Bowden, a director of the Company, a Member of the Australasian
Institute of Mining and Metallurgy and who has been involved in the mining
industry for more than 25 years, has compiled, read and approved the technical
disclosure in this regulatory announcement in accordance with the AIM Rules -
Note for Mining and Oil & Gas Companies.

 

Forward Looking Statements

Certain statements relating to the estimated or expected future production,
operating results, cash flows and costs and financial condition of Metals
Explorations, planned work at the Company's projects and the expected results
of such work contained herein are forward-looking statementswhich are based on
current expectations, estimates and projections about the potential returns of
the Group, industry and markets in which the Group operates in, the Directors'
beliefs and assumptions made by the Directors. Forward-looking statements are
statements that are not historical facts and are generally, but not always,
identified by words such as the following: "expects", "plans", "anticipates",
"forecasts", "believes", "intends", "estimates", "projects", "assumes",
"potential" or variations of such words and similar expressions.
Forward-looking statements also include reference to events or conditions that
will, would, may, could or should occur. Information concerning exploration
results and mineral reserve and resource estimates may also be deemed to be
forward-looking statements, as it constitutes a prediction of what might be
found to be present when and if a project is actually developed.

 

 

 

These statements are not guarantees of future performance or the ability to
identify and consummate investments and involve certain risks, uncertainties
and assumptions that are difficult to predict, qualify or quantify. Among the
factors that could cause actual results or projections to differ materially
include, without limitation: uncertainties related to raising sufficient
financing to fund the planned work in a timely manner and on acceptable terms;
changes in planned work resulting from logistical, technical or other factors;
the possibility that results of work will not fulfil projections/expectations
and realize the perceived potential of the Company's projects; uncertainties
involved in the interpretation of drilling results and other tests and the
estimation of gold reserves and resources; risk of accidents, equipment
breakdowns and labour disputes or other unanticipated difficulties or
interruptions; the possibility of environmental issues at the Company's
projects; the possibility of cost overruns or unanticipated expenses in work
programs; the need to obtain permits and comply with environmental laws and
regulations and other government requirements; fluctuations in the price of
gold and other risks and uncertainties.

 

The Company expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law or the AIM Rules.

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