DNI Announces 2.7 billion short ton inferred resource from cover rocks above the Buckton Zone on its Alberta polymetallic black shale projects
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(DG7 : Frankfurt)
TORONTO, Sept. 12, 2012 /CNW/ - (DNI:TSX-Ven)(DG7:FSE) announces that its NI-43-101 compliant resource study, relating to cover rocks above the Second White Speckled mineralized black shale at its Buckton Zone, has been completed (the "Buckton Labiche Resource Study"). The Study successfully identified a 2.74 billion short ton inferred resource for Mo-Ni-U-V-Zn-Co-Cu-Li-REEs-Th-Sc hosted in the Labiche Formation black shale. This Formation makes up majority of the cover rocks above the Buckton Zone on DNI's Alberta polymetallic black shale projects. Approximately 630 million short tons of the Labiche resource being announced lies directly above the Buckton inferred maiden resource (announced October 24, 2011, and January 16, 2012), and had previously been regarded as overburden cover "waste" material which would have to be removed to access the Buckton Zone.
Recognition of the Labiche inferred resource is a significant new milestone development from the Buckton Zone. It will enable potential inclusion of considerable additional tonnages of mineralization hosted in the underlying Second White Speckled Shale Formation into the Buckton resource, all of which tonnages were previously omitted from resources due to excessive thickness of cover material.
The Buckton Labiche Resource Study was prepared by Apex Geoscience Ltd ("Apex"), Edmonton, under the supervision of Mr.Roy Eccles PGeol, Mr.Michael Dufresne PGeol and Mr.Steven Nicholls MAIG, who are the Qualified Persons in connection with its preparation and are independent of DNI. The Study relies on DNI's 2010-2011 winter drilling over the Buckton Zone, together with historic drilling from the area from which all archived Labiche Formation drill core intercepts were re-sampled and re-analyzed by DNI in preparation for the Resource Study for consistency with DNI's more recent drilling data. All of the foregoing drilling campaigns were implemented by Apex under the supervision of Mr.Dufresne. The Buckton Labiche Resource Study complies with National Instrument 43-101 and CIM resource estimation guidelines.
This press release is a summary of salient conclusions from the Resource Study report which is being filed to SEDAR and will be available shortly. The report, "Technical Report, Inferred Resource Estimate Of The Labiche Formation And Its Potential To Add To The Overall Metal Content Of The Buckton Mineralized Zone, SBH Property, Northeastern Alberta", with effective date of September 11, 2012, will also be available from DNI's website www.dnimetals.com once it is filed.
The Buckton Labiche resource reported by the Buckton Labiche Resource Study is classified as an inferred resource consisting of 2,737,641,000 short tons (2,483,546,000 metric tonnes) of mineralized Labiche Formation black shale, extending over 13.8 square kilometres beneath less than 75m of overburden cover, which is mineralized with recoverable Molybdenum (Mo), Nickel (Ni), Uranium (U), Vanadium (V), Zinc (Zn), Copper (Cu), Cobalt (Co), Lithium (Li), Scandium (Sc), Thorium (Th) and Rare Earth Elements Lanthanum (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd), Samarium (Sm), Europium (Eu), Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Yttrium (Y). The Study estimates that the resource is overlain by 740,898,000 short tons (672,131,000 metric tonnes) of glacial till overburden.
Details of the inferred resource reported by the Buckton Labiche
Resource Study are tabulated below.
|Buckton Labiche Inferred Resource|
|Mineralized Shale (tons)||2,737,641,000|
|Raw Grade (ppm)||3||49||5||448||143||31||13||400|
|Recoverable Grade (ppm)||2||39||4||45||107||20||10||160|
|Metal/Oxide Price* (US$/lb)||21.6||11.1||73||8.1||1.1||3.2||25.3||3|
|Recoverable metal/oxide (kg)||4,014,000||97,673,000||9,655,000||111,312,000||265,984,000||49,751,000||25,232,000||397,618,000|
|Recoverable metal/oxide (lbs)||8,850,870||215,368,965||21,289,275||245,442,960||586,494,720||109,700,955||55,636,560||876,747,690|
|Raw Grade (ppm)||46||82||10||37||7||2||6||1|
|Recoverable Grade (ppm)||7||21||3||13||4||1||4||1|
|Metal/Oxide Prices** US$/kg)||$42.9||$41.3||$81.3||$93.4||$39.3||$1,202.6||$56.0||$1,017.4|
|Recoverable Oxide (kg)||17,141,000||51,056,000||7,311,000||32,516,000||8,984,000||2,023,000||8,657,000||1,341,000|
|Recoverable Oxide (lb)||37,795,905||112,578,480||16,120,755||71,697,780||19,809,720||4,460,715||19,088,685||2,956,905|
|Raw Grade (ppm)||5||1||3||1||3||1||33||24||12|
|Recoverable Grade (ppm)||3||1||2||0.2||1||0.3||18||7||4|
|Metal/Oxide Prices** US$/kg)||$547.6||$275.6||$240.0||$97.0||$76.9||$719.4||$57.4||$3,528.5||$252.0|
|Recoverable Oxide (kg)||7,634,000||1,519,000||3,778,000||570,000||3,479,000||699,000||45,516,000||17,769,000||9,059,000|
|Recoverable Oxide (lb)||16,832,970||3,349,395||8,330,490||1,256,850||7,671,195||1,541,295||100,362,780||39,180,645||19,975,095|
*Metal/Oxide commodity prices are the five year average to Aug/2006 used
to establish bulk recoverable values for cut-off grade thresholding
**Metal/Oxide commodity prices used to establish bulk recoverable values for cut-off grade thresholding tests are the three year trailing average to Nov17/2011 for
La-Ce-Pr-Nd-Sm-Eu-Gd-Tb-Dy and Y, and the one year trailing average to Nov17/2011 for Ho-Er-Yb-Lu and Sc. Tm value from Montviel Core Zone REE resources
study 2011 by SGS Canada Inc. Th value per USGS Mineral Commodity Summaries 2008-2010. Metal prices vary among various commodity information sources and,
in all conflicting instances, the lower pricing was used. The 2011 drilling included an appropriate number of analytical standards, blanks and duplicates, and no
analytical issues were identified. Re-analysis of historic drill core included an appropriate number of analytical standards, blanks and duplicates, and no analytical
issues were identified. ton=short ton; lb=pound; kg=Kilogram; Figures may not add exactly due to rounding.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the mineral resource reported herein will be converted into a mineral reserve. An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The value reported therefore represent preliminary mineral recovery testing results and may not reflect ultimate actual process recoverability, which is subject to ongoing studies.
This Buckton Labiche resource has been classified as an inferred resource according to CIM standards. This classification is based on a number of factors, namely; limited number of drill holes and their wide spacing, good continuity of mineralization and geological control between drill holes and from section to section along approximately six kilometres of strike.
The Buckton Labiche Resource Study concludes that the Buckton Labiche inferred mineral resource is mineralization that is believed to have a reasonable prospect for extraction in the future, especially in conjunction with extraction of the underlying higher grading Second White Speckled Shale Formation. It includes all Labiche underlying uppermost blocks that are beneath less than 75m of overburden/till, and for blocks whose combined metal content meets a lower cut-off of US$7.5 per tonne whose value is represented by the collective value of contained recoverable Mo-Ni-U-V-Zn-Co-Cu-Li-REEs-Th-Sc relying on the trailing one to five year commodity price averages as tabulated above (see table footnotes for details) and relying on the best achieved metals recoveries as reported from the collective of DNI's leaching testwork (see press Sept8/2011 and Dec2/2011).
The Buckton Labiche resource is open to the north, northeast and south, and eastward to the erosional edge of the Birch Mountains over a large area with thin overburden cover where mineralization intermittently outcrops at surface or is intermittently exposed throughout several kilometres of valley walls.
The Buckton Labiche Resource Study relies on an aggregate of eleven vertical core holes distributed over an area of approximately 15.8 square kilometres, and spaced approximately 240m-2500m apart (averaging 1000m). Approximately 85% of the Labiche Formation shale within the foregoing area lies beneath less than 75m of overburden till and meet cut-off threshold criteria for classification as an inferred resource. This Formation also shows good lateral uniformity for many of the contained metals over large distances across the Property. The spacing and number of holes are considered sufficient for the determination of inferred resources, and extrapolation of grades between the drill holes is supported by statistical variography examined during the Study.
The Buckton Labiche resource comprises an approximately 13.8 square kilometer, 13m to 109m thick, near-horizontal tabular zone hosted entirely within the Labiche Formation, bounded by its upper and lower contacts. Ultimate thickness of the Formation over the area drilled is unknown since its upper portions have been eroded away predominantly by glaciation. This Formation is exposed throughout the eastern erosional edge of the Birch Mountains but is overlain westward by glacial till. Given the uniformity of metals grades within this shale, the Labiche resource is laterally delimited based on depth criteria rather than continuity of metallic mineralization which extends well beyond its limits. Presence of Labiche Formation shale beyond the area drilled has been confirmed by oil/gas downhole well logs which report sections of Labiche shale over a large area extending well beyond the current boundaries of the resources.
The Buckton Labiche Resource Study consisted of modeling and tonnage estimation using a 3-dimensional block model based on geostatistical applications using commercial mine planning software MICROMINE. The sample file comprised 854 samples of variable length for all lithologies but, when composited in MICROMINE, yielded a database of 269 sample composites for the Labiche shale which were used for the mineral resource estimation. All drill holes are short vertical holes and, as such, there are no down-hole surveys.
Variography was conducted on the composited drill hole data within the Labiche Shale domain to produce spherical semi variograms. Each metal was modeled individually to determine the continuity and orientation of mineralization. As a result of the wide drill hole spacing a parent model block size of 250mx250mx2m was chosen for the resource estimate. The block model was extended far enough past the mineralized wireframe to encompass the entire mineralized shale domain. The recoverable grades for the metals were translated into a US$ value for each block and sub-block relying on trailing average metal/oxide as noted in footnotes to the above tables, and the collective values aggregated to enable testing against a block value base case cut-off of US$7.5 per tonne being the same cut-off previously utilized for the Buckton maiden and Buckton supplemental REE-Y-Th-Sc resource studies. According to the foregoing method, the Study concluded that the reported resource represents an average value of US$12.2 per short ton (US$13.5 per tonne) representing the aggregate value of recoverable grades for Mo-Ni-U-V-Zn-Co-Cu-Li-REEs-Th (US$35.1 per short ton; US$38.7 per tonne if Scandium is also included). REEs account for approximately two-thirds of the foregoing aggregate values (excluding Sc).
The US$7.5 per tonne cut-off is considered to be a reasonable benchmark which has been utilized by recent mineral resource estimates for open pit mineable poly-metallic black shales in Sweden as the break-even point and lower cut-off. Considering a scenario of possible open pit mining in northeast Alberta along the eastern edge of the Birch Mountains, with potential for a low strip ratio at startup, the likely free-dig nature of the poorly consolidated Shale, the potential for easy access to multiple working faces, the location of the project with respect to access, power and other important infrastructure, a lower cut-off value for the mineral resource estimate of US$7.5 per tonne is considered reasonable by the Study as a base case cut-off threshold which also captures a relatively continuous mineralized zone with favourable bulk mining configuration. Iteration of the Labiche resource model at a higher cut-off of $10 per tonne had no effect on the Labiche resource.
The Buckton Labiche Resource Study notes that although the resource reported represents mineralization which is recoverable by a single bulk leaching method from the Labiche shale, REEs account for approximately two-thirds of the recoverable value reported (excluding Sc). The per ton (or tonne) values reported are, accordingly, subject to uncertainties as to long term REE pricing and viability of demand, the unknown effect of new production on REE markets; and the ultimate cost of separating REEs from pregnant leaching solutions once they have been leached from the shale and their refinement into useable saleable final products.
The Buckton Labiche Resource Study demonstrates that a substantive portion of the cover material above the Buckton maiden resource is not waste and represents mineral value recoverable by the same leaching methods as those required for recovery of metals and REEs from the Buckton maiden resource. Considering that the Buckton maiden resource has been delimited based on thickness of overlying cover rocks rather than continuity of grade, the Study recommends that the Buckton maiden resource study and the Buckton Supplemental REE-Y-Sc-Th resource study be reviewed to determine whether mineralized tonnages previously reported lying under more than 75m of cover rocks, which were previously omitted from classification as resources, might be re-classified and included to expand the Buckton inferred resource given that much of the cover rocks above these tonnages consist of Labiche Formation shale which holds intrinsic recoverable value per the Labiche resource announced herein.
The Buckton Labiche Resource Study concludes that the Labiche inferred resource announced herein has excellent potential for expansion with further drilling, and recommends implementation of additional exploration at the Buckton Zone, and the Property, to include additional leaching testwork and additional drilling to continue expanding and upgrading the Buckton Zone resource hosted within the Labiche as well as the Second White Speckled Shale Formations. Some of this drilling is in progress as is ongoing leaching testwork. The Study reinforces that work on the Buckton Zone advance toward commencing a Preliminary Economic Assessment study (Scoping Study) as planned by DNI, and that DNI give consideration to viewing the Buckton Zone, previously regarded as mineralization confined only to the Second White Speckled Shale Formation, to consist of a Zone of "stacked" polymetallic mineralization consisting of an upper, lower grading, zone hosted in Labiche Formation shale which directly overlies a higher grading zone hosted in the Second White Speckled Shale which has thus far been DNI's primary target.
The Study also recommends that resources identified at the Buckton Zone, hosted in the Labiche as well as the Second White Speckled shale Formations, be revised and updated to incorporate additional results from DNI's 2012 drilling program in progress, and that the cut-off threshold of US$7.5 per tonne utilized in the prior resource studies be revised to US$10 per tonne to incorporate a nominal cost for refining REEs into saleable final products. Prior iteration of the resource model at the higher US$10 per tonne cut-off noted an insignificant change in the resource identified in the Second White Speckled Shale at the Buckton Zone, and no effect on the Labiche resource announced herein.
In a statement Mr.S.Sabag, DNI's president & CEO, commented: "… we are excited by this significant development which substantially represents a tenfold expansion of DNI's mineral resources at the Buckton Zone. We look forward with equal excitement to further expansion of these resources with results from our drilling in progress and to advancing the project to a Preliminary Economic Assessment study as planned".
The Qualified Persons in connection with the preparation of the Buckton Labiche Resource Study are Mr.Roy Eccles PGeol, Mr.Michael Dufresne PGeol and Mr.Steven Nicholls MAIG who are independent of DNI. The Qualified Person in connection with this press release and in respect of the Alberta polymetallic black shale projects is S.F.Sabag PGeo, President and CEO of DNI, who is responsible for verification and quality assurance of the exploration information disclosed in connection with the projects and this release.
Ton=short ton; lb=pound; tonne = metric tonne = 1000kg. The 2011 drilling and re-analysis of historic Labiche drill core intercepts included an appropriate number of analytical standards, blanks and duplicates, and no analytical issues were identified. Metal/Oxide commodity prices used to establish bulk recoverable values for cut-off grade thresholding tests are the three year trailing average to Nov17/2011 for La-Ce-Pr-Nd-Sm-Eu-Gd-Tb-Dy and Y (consolidated from www.metal-pages.com), and the one year trailing average to Nov17/2011 for Ho-Er-Yb-Lu and Sc (consolidated from www.asianmetal.com). Tm value from Montviel Core Zone REE resources study 2011 by SGS Canada Inc. Th value per USGS Mineral Commodity Summaries 2008-2010. Metal prices vary among various commodity information sources and in all conflicting instances the lower pricing was used.
Analyses by Activation Labs, Ancaster, ON; Analytical results from the 2011 drilling were announced on Jul15/2011, along with details of DNI's analytical quality assurance and quality control parameters. Additional REE and Specialty Metals grades were announced on Dec2/2011. Archived drill core from some of the historic drilling was examined, re-sampled and re-analyzed by DNI as part of its verification sampling program in 2008-2009. All samples from 2011 drilling were re-analyzed for REEs in December 2011 by Activation Labs, Ancaster, ON, by Fusion and Trace Element Fusion ICP (Code8). Labiche Formation intercepts from archived historic 1997 drill core were re-sampled and re-analyzed by Activation Labs, Ancaster, ON, by Fusion and Trace Element Fusion ICP (Code8) for consistency with DNI's more recent data.
For detailed information related to the Buckton maiden inferred resource as it relates to base metals, Uranium and Lithium, see the resource study report "Technical Report, Maiden Resource Estimate, Buckton Mineralized Zone, SBH Property, Northeast Alberta", October 18, 2011, effective date September 30, 2011, by APEX Geoscience Ltd. For detailed information related to the Buckton Supplementary REE Inferred Resource relating to REE-Y-Sc-Th see the resource study report "Technical Report, Supplementary REE-Y-Sc-Th, Inferred Resource Estimate To Accompany The Maiden Resource Mo-Ni-U-V-Zn-Cu-Co-Li Estimate, Buckton Mineralized Zone, SBH Property, Northeast Alberta", December 22, 2011, effective date January 18, 2012, by APEX Geoscience Ltd. The foregoing reports are available from www.sedar.com and from DNI's website www.dnimetals.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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