Afferro Mining Inc. - Nkout Overall Resource Increased by 41% to 2 Billion Tonnes

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TSX-V: AFF
AIM: AFF

LONDON, UK, Nov. 14, 2011 /CNW/ - Afferro Mining Inc. ("Afferro" or the "Company"), the TSX-V / AIM listed exploration and development company, with iron ore projects in Cameroon and Liberia, is pleased to announce its third NI 43-101 compliant Mineral Resource Estimate ("MRE") of 2011 for the Nkout project in Cameroon.

Highlights:

  • Total Nkout resource increased by 41% to 2.0Bt at 32.2% Fe
  • 70% tonnage increase in high-grade, potential direct shipping ore ("DSO")  to 18.5Mt
  • Corresponding increase in DSO grade from 58.7% Fe total to 60.3% Fe total with an associated drop in SiO2, Al2O3
  • 944Mt of magnetite banded iron formation ("BIF") promoted to Indicated category at Nkout Centre, representing 47% of the MRE
  • MRE now covers an 8.9km section of a 20km-long magnetic anomaly
  • Drilling campaign continues to focus on further definition of high-grade zones and adding additional tonnage at depth

Luis da Silva, Chief Executive of Afferro, commented:

"This is the third resource increase of the year at Nkout, demonstrating the speed of the project development, having commenced drilling just 15 months ago.  It is a substantial increase in both the magnetite BIF and the potential DSO resource with an increase in grade. Together with the infrastructure scoping study, which we expect to release shortly, this goes further to demonstrating the economic viability of the Nkout iron ore project. Our aggressive drilling campaign continues at pace with further metallurgical test work continuing on the DSO, saprolite and BIF."

Mineral Resource Estimate

This Nkout Mineral Resource Estimate, issued by independent engineers SRK Consulting (UK) Ltd ("SRK") has been prepared for the Company and made compliant with Canadian National Instrument 43-101 ("NI 43-101").

The report serves as an independent report prepared by Mr Howard Baker of SRK Consulting (UK) Ltd, a Qualified Person as defined by the Canadian NI 43-101 and the companion policy 43-101CP. The definitions of Measured, Indicated and Inferred Resources, as well as reserves as used by the author, conform to the definitions and guidelines of the CIM (Canadian Institute of Mining, Metallurgy and Petroleum) reporting codes.

SRK have embedded on site an independent and permanent Resource Geologist providing continual assistance in drill planning and ensuring that compliance to all appropriate QAQC procedures is maintained. Continual review and updates to the geological model has allowed targeted drill programmes to be developed with a focus on increasing the reportable Mineral Resources and focussing on the delineation of high grade near surface material.

Table 1: Nkout Mineral Resource Statement

Zone Resource
Category
 Tonnes 
(Mt)
Fe %  SiO2 %   Al2O3 %  P %
110
(oxidized, >55%
Fe) 
Measured - - - - -
Indicated - - - - -
 Meas + Ind  - - - - -
Inferred 18.5   60.30   6.89 3.09   0.117  
120
(oxidized, 50 to
55% Fe) 
Measured - - - - -
Indicated - - - - -
Meas + Ind - - - - -
Inferred 7.9 51.52 15.64 5.14 0.084
130
(oxidized, 30 to
50% Fe)
Measured - - - - -
Indicated - - - - -
Meas + Ind - - - - -
Inferred 216.9 36.09 36.49 6.13 0.064
210
(Magnetite BIF) 
Measured - - - - -
Indicated 944.4 32.73 45.59 2.26 0.047
Meas + Ind 944.4 32.73 45.59 2.26 0.047
Inferred 810.9 29.58 48.65 3.31 0.048
TOTAL Measured - - - - -
Indicated 944.4 32.73 45.59 2.26 0.047
Meas + Ind 944.4 32.73 45.59 2.26 0.047
Inferred 1,054 31.62 45.17 3.90 0.053
TOTAL 1,999 32.15 45.37 3.12 0.050

Notes:
(1) Mineral Resources which are not Mineral Reserves have not demonstrated economic viability
(2) The effective date of the Mineral Resource Statement is 11 November 2011
(3) The Mineral Resource Estimate for the Nkout deposit was constrained within lithological and grade based solids and within a Lerchs-Grossman optimised pit shell defined by the following assumptions; metal price of USD1.40/dmtu; slope angles of 35º and 44º in the oxide and fresh material; a mining recovery of 97.5%; a mining dilution of 2.5%; a base case mining cost of USD1.40/t and an incremental mine operating costs of USD0.05/t/10 m below the 80 m reference RL and USD0.05/t/10 m above the 80 m reference RL; process operating costs of USD2.50/t crushed DSO, USD3.50/t crushed oxide and USD4.50/t crushed BIF ore; DSO processing recovery of 80%; Oxide processing recovery of 65%; BIF processing recovery of 90% and G&A costs of USD 2.31/t crushed ore.

Nkout Centre Resource Potential

The Nkout Centre model is open at depth and SRK recognises that there is potential to increase the Mineral Resource Estimate by targeting material that falls below the optimised pit shell but remains potentially economic. This material, based on a metal price of USD1.40/dmtu is considered by SRK to be potentially economic, should sufficient exploration data be collected that confirms the geometry and continuation of the mineralisation and that enables a classified resource to be estimated. SRK has estimated that an additional 750Mt to 1,500 Mt lies below the optimised pit shell used for constraining the Inferred and Indicated Mineral Resources. The potential quantity of tonnes is conceptual in nature as there has been insufficient exploration or demonstration of economic viability to report these in the Inferred Mineral Resource category at the current time. It is uncertain if further exploration will result in these targets being defined and reported in a future Mineral Resource Estimate. These potential tonnages reflect a range of material within SRK's wireframe solid models outlining the interpreted down dip extent of mineralisation.

Database Validation

The QA/QC program for Company's Nkout project consists of alternating the insertion of a blank, standard and duplicate sample on a regular basis within the sample train. The Company uses standards with varying grades which are also alternated. All samples have been assayed at the accredited OMAC laboratory in Ireland. SRK found that the results of the above described QA/QC program indicate that the Company's Nkout assay databases were appropriate for Mineral Resource Estimation.

Data Verification

Howard Baker as qualified person completed the verification of data on which the Nkout Resource Estimate was based. This verification included an assessment of QA/QC data, sample preparation and assay methodologies, density data, data inputs and survey data used in the estimate. Data was validated by using field checks, statistical methods and evaluating the Company's protocols.

Geological Modelling, Resource Estimation Assumptions, Parameters and Methods

Nkout Centre, Nkout East and Nkout West, being a 8.9 km portion of a larger 20 km strike length magnetic anomaly, forms an east-west trending magnetite Banded Iron Formation ("BIF") with an oxidized cap of dominantly haematite mineralisation. SRK created a geological model based on the lithological logging and magnetic susceptibility data enabling the hanging wall and footwall contacts of the BIF unit to modelled and a three dimensional solid to be created. A statistical review of the validated drill hole data enabled grade based domains to be created within the oxidized cap. Internal metasedimentary waste domains created within the BIF and oxidized cap were based on lithology logging, magnetic susceptibility data and predominantly Al2O3 assay grades.

A 5m composite file was used in a geostatistical study (variography and Quantitative Kriging Neighbourhood Analysis, "QKNA") that enabled Ordinary Kriging ("OK") to be used as the main grade interpolation method. The interpolation used an elliptical search following the predominant dip and dip direction of the geological domains. The results of the variography and the QKNA were utilised to determine the most appropriate search and estimation parameters.

The interpolated block model was validated through visual checks and a comparison of the mean input composite and output model grades. SRK is confident that the interpolated block grades are a reasonable reflection of the available sample data.

About Afferro Mining Inc.

Afferro is an established exploration and development company listed on the TSX-V (AFF) and AIM (AFF). Afferro's portfolio includes the Nkout iron ore project (the "Nkout Project"), and surrounding iron targets in Cameroon and which is subject to a resource expansion drilling programme. Afferro also has a 38.5% interest in the Putu iron ore project in Liberia (the "Putu Project"), which is subject to a resource expansion drilling programme and is moving through pre-feasibility managed by joint venture partner Severstal Resources (the mining division of London and Moscow listed OAO Severstal). In September 2010, the Putu Project was granted a 25 year renewable Mineral Development Agreement by the Government of Liberia.

Qualified Person

Howard Baker has some ten years' experience in the exploration, definition and mining of iron ore Mineral Resources. Howard Baker is a full-time employee of SRK Consulting (UK) Ltd, an independent Consultancy and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Qualified Person in accordance with NI43-101 and a Competent Person as defined in the June 2009 Edition of the AIM Note for Mining and Oil & Gas Companies. Howard Baker consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

The NI 43-101 compliant Technical Report on the Mineral Resource Estimate will be filed on www.sedar.com within 45 days.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

SOURCE Afferro Mining Inc.

For further information:

Afferro Mining Inc.
Luis da Silva / Jeremy Cave
Tel: +44 (0) 20 7257 2930

Evolution Securities Limited
Nominated Adviser: Jeremy Ellis / Neil Elliot
Corporate Broker: Tim Redfern / Jonathan Wynn
Tel: +44 (0) 20 7071 4300

RBC Capital Markets
Joint Broker: Martin Eales / Richard Hughes
Tel: +44 (0) 20 7653 4000

Pelham Bell Pottinger
Nick Lambert / James MacFarlane
Tel: +44 (0) 20 7861 3232

Profil de l'entreprise

Afferro Mining Inc.

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