REG - Xtract Resources plc - Racecourse Prospect Updated Mineral Resource

Xtract ResourcesAnnouncement

23/11/2022 07:00

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RNS Number : 2677H  Xtract Resources plc  23 November 2022

 

For immediate release

23 November 2022

 

Xtract Resources Plc

("Xtract" or the "Company")

Racecourse Prospect Updated Mineral Resource Estimate

 

The Board of Xtract Resources Plc ("Xtract" or the "Company") is pleased to
announce an updated Mineral Resource Estimate for the Racecourse Prospect, on
the Bushranger Copper-Gold Project in central New South Wales, Australia.
Utilising all the data from the recently completed Phase 2 diamond drilling
programme, independent consultants, Measured Group Pty Limited ("Measured
Group"), have prepared an updated Mineral Resource Estimate for the Racecourse
deposit.

 

Highlights

 

·    Following the completion of a substantial drilling programme by
Xtract, independent consultants, Measured Group, updated the historic Inferred
Mineral Resource Estimate for the Racecourse Prospect, which is now reported
as 512Mt @ 0.22% CuEq*, at a cut-off of 0.1% CuEq, containing 1.1Mt of copper
equivalent metal and classified as Indicated and Inferred in accordance with
JORC (2012)

·    The Racecourse Mineral Resource contains 50Mt @ 0.25% CuEq which has
been classified as Indicated in accordance with JORC (2012)

·    A higher-grade core of the Racecourse mineralisation extends from
near surface to relatively shallow depths and contains 191Mt @ 0.33% CuEq,
reported at a cut-off of 0.2% CuEq

·    The majority of the updated 512Mt Racecourse Mineral Resource is
expected to occur within depths amenable to open pit mining methods, given an
open pit mining study completed by independent consultants Optimal Mining in
July 2021 concluded that the Racecourse copper-gold mineralisation could
potentially be economically extracted via open pit mining to a depth of 600m
(see RNS dated 26 July 2021)

·    The Measured Group report also concluded that, as the mineralisation
increases in grade and width down plunge, the area north and down plunge of
the currently defined mineralisation is a clear exploration target and
represents an opportunity to significantly increase tonnage

·    Xtract is now proceeding with defining a maiden Mineral Resource
Estimate for the Ascot Prospect, located to the south of the Racecourse
prospect, which is expected to add to the overall mineral inventory on the
Bushranger Project

·    Following completion of the Ascot Prospect Mineral Resource, the open
pit mining study for the Bushranger Project will be updated to determine the
economics of a 25Mtpa open pit mining operation, utilising the Mineral
Resources at both the Racecourse and Ascot prospects

 

*CuEq % = (Cu%) + (Au g/t * 0.6577) + (Ag g/t * 0.008769)

Cu Price = US$8800/t, Au Price = US$1800/Oz, Ag Price = US$24/Oz

 

Colin Bird, Executive Chairman said: "With over a million tonnes of contained
copper equivalent metal, the Racecourse Mineral Resource represents a
substantial undeveloped copper-gold porphyry deposit within the Lachlan Fold
Belt in central New South Wales and on a grade basis is equivalent to Alkane's
recently announced Boda Mineral Resource. A positive for Racecourse is that
the highest-grade part of the deposit extends from the surface to relatively
shallow depth. Also, we know from the open pit study completed in July 2021,
that open pit mining could potentially be profitably undertaken to a depth of
600m. If an updated open pit mining study indicates similar depths are
mineable, this means that the majority of the updated Racecourse Mineral
Resource could potentially be mined and we can maximise the early cash flows
by mining the higher grade 191Mt core to the deposit at rates up to 25Mpta.
Now that the updated Racecourse Mineral Resource estimate has been completed,
we are working on the maiden Mineral Resource for the Ascot Prospect, which we
expect will significantly increase the overall mineral inventory on the
Bushranger Project. Once, the maiden Mineral Resource has been defined for
Ascot, we will update the open pit mining study, which will detail the
economics of a 25Mtpa mining operation, based upon extracting both the
Racecourse and Ascot Mineral Resources. We expect that the open pit mining
study will be completed early in 2023."

 

Racecourse Prospect Updated Mineral Resource Outline

 

http://www.rns-pdf.londonstockexchange.com/rns/2677H_1-2022-11-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2677H_1-2022-11-22.pdf)

 

Representative Geological Cross Section Through the Racecourse Prospect (No.
1)

 

http://www.rns-pdf.londonstockexchange.com/rns/2677H_2-2022-11-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2677H_2-2022-11-22.pdf)

 

Representative Geological Cross Section Through the Racecourse Prospect (No.
2)

 

http://www.rns-pdf.londonstockexchange.com/rns/2677H_3-2022-11-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2677H_3-2022-11-22.pdf)

 

Representative Geological Long Section Through the Racecourse Prospect

 

http://www.rns-pdf.londonstockexchange.com/rns/2677H_4-2022-11-22.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2677H_4-2022-11-22.pdf)

 

Racecourse Prospect Updated Mineral Resource Estimate

From July 2021 until July 2022, Xtract completed a Phase 2 diamond drilling
programme at the Racecourse and Ascot prospects on the Bushranger Project in
central New South Wales, Australia. A total of 49 drill holes were completed
for 32,695m of drilling. The objectives of the Phase 2 diamond drilling
programme were as follows:

 

1.    Extend to the northwest and southeast of the 2018 initial Racecourse
Inferred Mineral Resource of 71Mt @ 0.44% Cu and 0.064g/t Au, at a 0.3% Cu
cut-off (see RNS dated 27 October 2020)

2.    Test a series of IP resistivity anomalies to determine if the
resistivity anomalies relate to areas of increased intensity of copper
mineralisation at the top of the Racecourse porphyry intrusion

3.    Test the continuity of copper mineralisation on the eastern side of
the Central Porphyry Intrusion at the Racecourse prospect

4.    Determine the extent and grade of the newly discovered copper
mineralisation at the Ascot Prospect

 

Following the completion of the Phase 2 drilling programme on the Bushranger
Project, a new 3-dimensional geological model was defined for the Racecourse
Prospect.  Geochemical assay data from the historical drilling, Phase 1 and
Phase 2 Xtract drilling programmes, along with the new Racecourse Prospect
geological model, were used to prepare an updated Mineral Resource estimate
for the Racecourse Prospect.

 

The updated Mineral Resource estimate, which has been prepared at different
cut-off grades by independent consultants, Measured Group, based in Brisbane,
Australia, is set out in Tables 1 and 2 below and is prepared in accordance
with JORC (2012) and in compliance with Appendix 3 of the AIM Note for Mining
and Oil & Gas Companies - June 2009.

 

Measured Group have reported a Mineral Resource estimate of 512Mt @ 0.22%
CuEq, reported at a cut-off of 0.1% CuEq and classified as Indicated and
Inferred in accordance with JORC (2012). Within the overall Racecourse Mineral
Resource, 50Mt @ 0.25% CuEq has been classified as Indicated and 462Mt @ 0.21%
CuEq is classified as Inferred in accordance with JORC (2012).

 

Table 1 - Racecourse Prospect Mineral Resource Estimate

 

                                     Average Values                        Contained Metal
 Resource Classification  Mass (kt)  Cu (%)  Au (g/t)  Ag (g/t)  CuEq (%)  Cu (tonnes)  Au (t.oz)  Ag (t.oz)   CuEq (tonnes)
 Indicated                50,150     0.22    0.04      0.87      0.25      108,700      59,600     1,397,500   124,500
 Inferred                 461,950    0.17    0.05      0.71      0.21      797,300      757,200    10,566,500  980,100
 Total                    512,100    0.18    0.05      0.73      0.22      906,000      816,800    11,964,000  1,104,600

 

Notes:

1.     Xtract owns 100 per cent. of ProspectOre Ltd, the operator of the
Bushranger Project and gross and net attributable resources are therefore the
same.

2.     Mineral Resources are reported in accordance with JORC guidelines.
Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability.

3.     All figures are rounded to reflect appropriate levels of
confidence.

4.     Apparent differences in totals may occur due to rounding.

5.     A cut-off grade of 0.1% CuEq has been used applying a copper price
of US$8,800/t, a gold price of US$1,800/Oz and a silver price of US$24/Oz

6.     The Mineral Resource estimate is based on information reviewed by
Measured Group, with an effective date of 31 October 2022.

7.     CuEq Formula : CuEq % = (Cu%) + (Au g/t * 0.6577) + (Ag g/t *
0.008769)

 

 

Table 2 - Racecourse Grade vs Tonnage estimates using CuEq cut-offs

 CuEq**        Cu (%)  Au (g/t)  Ag (g/t)  CuEq** (%)  Tonnage  CuEq

 Cut Off (%)                                           (Kt)     (Contained Tonnes)
 0.00          0.16    0.05      0.66      0.20        592,300  1,164,921
 0.05          0.16    0.05      0.66      0.20        582,910  1,161,456
 0.10          0.18    0.05      0.72      0.22        512,091  1,104,631
 0.15          0.21    0.06      0.89      0.26        335,837  881,798
 0.20          0.27    0.08      1.15      0.33        191,010  632,217
 0.25          0.31    0.09      1.34      0.38        143,735  508,475

 

Notes:

1.     Xtract owns 100 per cent. of ProspectOre Ltd, the operator of the
Bushranger Project and gross and net attributable resources are therefore the
same.

2.     Mineral Resources are reported in accordance with JORC guidelines.
Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability.

3.     The Mineral Resource estimate is based on information reviewed by
Measured Group, with an effective date of 31 October 2022.

4.     CuEq Formula: CuEq % = (Cu%) + (Au g/t * 0.6577) + (Ag g/t *
0.008769)

 

 

A higher-grade core of the Racecourse mineralisation extends from surface to
relatively shallow depth and contains 191Mt @ 0.33% CuEq, reported at a
cut-off of 0.2% CuEq, which is equivalent to the cut-off used by Alkane
Resources Limited for the maiden Mineral Resource for the Boda Prospect. This
shallow higher-grade section of the Racecourse prospect is expected to
positively impact the economics of an open pit mining operation, by allowing
cash flows to be maximised in the first 8 years of a mining operation,
assuming a mining rate of circa 25Mtpa. The majority of the updated 512Mt
Racecourse Mineral Resource is expected to occur within depths amenable to
open pit mining methods, given that an open pit mining study completed by
independent consultants, Optimal Mining, in July 2021, concluded that the
Racecourse copper-gold mineralisation could potentially be economically
extracted via open pit mining to a depth of 600m (see RNS dated 26 July 2021).

 

The updated Racecourse Indicated and Inferred Mineral Resource compares to the
previous April 2018 Inferred Mineral Resource of 71Mt @ 0.44% Cu and 0.064g/t
Au at a cut-off grade of 0.3% Cu, which was based on a much smaller set of
drill intercepts. The updated Mineral Resource uses a cut-off grade of 0.1%
Cu, based on analysis of the Grade vs Tonnage curve, higher prevailing
commodity prices, a large moderate grade deposit envelope based on the
additional drilling by Xtract and the 2021 Optimal Mining report which
suggested that mining to 0.15% Cu cut-off could produce a positive economic
return - this report was prepared before the new drill data was available.

 

 

Next Steps

Xtract is currently completing a geological model for the Ascot Prospect,
located approximately 1.5km south of the Racecourse Prospect. Upon completion
of the Ascot Prospect geological model, the Company will engage Measured Group
to complete a Mineral Resource estimate for the copper-gold mineralisation at
Ascot. This will be the first Mineral Resource defined for the Ascot Prospect,
following the new discovery in December 2021 (see RNS dated 9 December 2021).
The Company anticipates that the Ascot Mineral Resource estimate will be
completed before the end of 2022.

 

In July 2021, Xtract contracted Optimal Mining to complete an open pit mining
study which examined the economics of mining the Racecourse Mineral Resource
based on the historic April 2018 Inferred Mineral Resource and the deposit
outline as it was defined in July 2021 (see RNS dated 26 July 2021). Once the
Ascot Prospect Mineral Resource Estimate has been defined, Xtract will again
contract Optimal Mining and Measured Group to update the open pit mining study
based upon the newly updated Racecourse Mineral Resource and to also utilise
the maiden Mineral Resource for the Ascot Prospect. This open pit mining study
will examine the economics of a 25Mtpa open pit mining operation. Xtract
estimates that the update to the open pit mining study will be completed early
in 2023.

 

Further information is available from the Company's website which details the
company's project portfolio as well as a copy of this
announcement: www.xtractresources.com

 

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 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").

 

The person who arranged for the release of this announcement on behalf of the
Company was Colin Bird, Executive Chairman and Director.

 

Enquiries:

 

 Xtract Resources Plc                               Colin Bird,          +44 (0)20 3416 6471

                                                    Executive Chairman   www.xtractresources.com (http://www.xtractresources.com)

 Beaumont Cornish Limited                           Roland Cornish       +44 (0)207628 3369

 Nominated Adviser and Joint Broker                 Michael Cornish      www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk)

                                                    Felicity Geidt

 Novum Securities Limited                           Jon Belliss          +44 (0)207 399 9427

 Joint Broker                                       Colin Rowbury        www.novumsecurities.com

 

 

Updated Mineral Resource Estimate - Qualified Person

The information in this announcement that relates to the updated mineral
resource estimate has been prepared by Mr Christopher Grove of Measured Group
and who has acted as the Qualified Person. Mr Christopher Grove, who has
reviewed and confirmed the statements related to the mineral resource estimate
set out herein, is a Competent Person as defined by the JORC Code 2012
Edition, having at least five years of experience that is relevant to the
style of mineralisation and type of deposit described in the mineral resources
report, and to the activity for which he accepts responsibility. Mr
Christopher Grove is a Member of The Australasian Institute of Mining and
Metallurgy (AusIMM) and a full-time employee of Measured Group and has more
than 25 years of experience in the estimation of mineral resources both in
Australia and overseas. This expertise has been acquired principally through
exploration and evaluation assignments at operating mines and exploration
areas.

 

Mr Christopher Grove has reviewed the information in this announcement that
relates to the mineral resource estimate and has confirmed that the
information so presented in this announcement is balanced and complete and not
inconsistent with Measured Group's audit and review of the mineral resource
estimate.

 

Qualified Person

Information in this announcement relating to the exploration works has been
reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to Xtract. Mr Slowey
is a graduate geologist with more than 40 years' relevant experience in
mineral exploration and mining, a founder member of the Institute of
Geologists of Ireland and is a Qualified Person under the AIM rules. Mr
Slowey has reviewed and approved the geological content of this announcement.

 

Qualified Person

In accordance with AIM Note for Mining and Oil & Gas Companies, June 2009
("Guidance Note"), Colin Bird, CC.ENG, FIMMM, South African and UK Certified
Mine Manager and Director of Xtract Resources plc, with more than 40 years'
experience mainly in hard rock mining, is the qualified person as defined in
the Guidance Note of the London Stock Exchange, who has reviewed the technical
information contained in this press release.

 

Mineral Reserves and Resources

The Company estimates and discloses mineral reserves and resources using the
definitions adopted by JORC.  Further details are available at
www.jorc.org.  See the "Glossary of Geological and Mining Terms" for complete
definitions of mineral reserves and mineral resources.

About Mineral Resources

Mineral resources are not mineral reserves and do not have demonstrated
economic viability but do have reasonable prospect for economic extraction.
They fall into three categories: measured, indicated, and inferred. The
reported mineral resources are stated inclusive of mineral reserves.
Measured and indicated mineral resources are sufficiently well-defined to
allow geological and grade continuity to be reasonably assumed and permit the
application of technical and economic parameters in assessing the economic
viability of the mineral resource. Inferred mineral resources are estimated on
limited information not sufficient to verify geological and grade continuity
or to allow technical and economic parameters to be applied.  Inferred
mineral resources are too speculative geologically to have economic
considerations applied to them. There is no certainty that mineral resources
of any category will be upgraded to mineral reserves.

Important Information about Mineral Reserve and Resource Estimates

Whilst the Company takes all reasonable care in the preparation and
verification of the mineral reserve and resource figures. the figures are
estimates based in part on forward-looking information. Estimates are based on
management's knowledge, mining experience, analysis of drilling results, the
quality of available data and management's best judgment. They are, however,
imprecise by nature, may change over time, and include many variables and
assumptions including geological interpretation, commodity prices and currency
exchange rates, recovery rates, and operating and capital costs. There is no
assurance that the indicated levels of metal will be produced, and the Company
may have to re-estimate the mineral reserves based on actual production
experience. Changes in the metal price, production costs or recovery rates
could make it unprofitable to operate or develop a particular deposit for a
period of time.

Forward Looking Statements

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''will'' or the negative of
those, variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on historical
facts but rather on the Directors' current expectations and assumptions
regarding the Company's future growth, results of operations, performance,
future capital and other expenditures (including the amount, nature and
sources of funding thereof), competitive advantages, business prospects and
opportunities. Such forward looking statements reflect the Directors' current
beliefs and assumptions and are based on information currently available to
the Directors. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements
including risks associated with vulnerability to general economic and business
conditions, competition, environmental and other regulatory changes, actions
by governmental authorities, the availability of capital markets, reliance on
key personnel, uninsured and underinsured losses and other factors, many of
which are beyond the control of the Company. Although any forward-looking
statements contained in this announcement are based upon what the Directors
believe to be reasonable assumptions, the Company cannot assure investors that
actual results will be consistent with such forward looking statements.

 

TECHNICAL GLOSSARY

The following is a summary of technical terms:

 

 "Ag"                          Silver
 "Au"                          Gold
 "Cu"                          Copper
 "CuEq"                        Copper equivalent grade, calculated using assumed metal prices for copper,
                               gold and other metals

 "Induced Polarisation (IP)"   A method of ground geophysical surveying which employs the passing of an
                               electrical current into the ground to test for indications of conductive
                               metallic sulphides

 "Indicated Mineral Resource"  That part of a Mineral Resource for which quantity, grade (or quality),
                               densities, shape and physical characteristics are estimated with sufficient
                               confidence to allow the application of Modifying Factors in sufficient detail
                               to support mine planning and evaluation of the economic viability of the
                               deposit. Geological evidence is derived from adequately detailed and reliable
                               exploration, sampling and testing gathered through appropriate techniques from
                               locations such as outcrops, trenches, pits, workings and drill holes, and is
                               sufficient to assume geological and grade (or quality) continuity between
                               points of observation where data and samples are gathered. (JORC 2012)

 "Inferred Mineral Resource"   That part of a Mineral Resource for which quantity and grade (or quality) are
                               estimated on the basis of limited geological evidence and sampling. Geological
                               evidence is sufficient to imply but not verify geological and grade (or
                               quality) continuity. It is based on exploration, sampling and testing
                               information gathered through appropriate techniques from locations such as
                               outcrops, trenches, pits, workings and drill holes. (JORC 2012)

 "mineralisation"              process of formation and concentration of elements and their chemical
                               compounds within a mass or body of rock
 "porphyry"                    a deposit of disseminated copper minerals in or around a large body of
                               intrusive rock

 "Mtpa"                        Million tonnes per annum

ENDS

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