Anglo American Takes 12% Stake in Australian Explorer

Engineering and Mining Journal, Oct 2008

Anglo American is investing $8.08 million to acquire a 12% interest in Magma Metals, an exploration company headquartered in West Perth, Western Australia. Magma Metals has advanced nickel-copper-platinum-palladium projects in the East Yilgarn and East Kimberley regions of Western Australia and the Thunder Bay region of Ontario, Canada.

Magma is using the Anglo funds primarily to complete a 24,000-m diamond drilling program at its Thunder Bay North project, located 50 km north-northeast of Thunder Bay, and to finance follow-up drilling programs and geophysical surveys designed to establish the scale and scope of the project. The companies will establish an advisory technical committee to guide on-going exploration and potential future development of the project.

On August 29, 2009, Magma reported that it had completed 7,390 m of drilling on the Current Lake intrusive complex at Thunder Bay North. Excellent drill intercepts have been achieved, and data from this program and previous drilling programs will form the basis for initial resource estimates scheduled for completion during the first quarter of 2009. Drill results have included an intersection of 61.7 m grading 5.61 g/mt combined platinum and palladium, 0.66% copper, and 0.38% nickel, starting at a depth of 29.3 m, and including 35.5 m grading 8.83 g/mt combined platinum and palladium, 1.04% copper and 0.57% nickel.

Strong sulphide zones have been intersected in several drill-holes in both the northern part of Current Lake and the eastern part of the Beaver Lake area, 2.5 km along strike to the southeast. A barge drill is operating in the northern part of Current Lake, completing systematic 50-m-spaced traverses across the intrusive complex, with holes generally spaced 20 m apart on each traverse. A land drill in the eastern part of the Beaver Lake area is drilling holes approximately 50 m apart on 100-m-spaced traverses to allow mapping of the extent of the mineralized zones. Once the zones have been defined, the drill-spacing will be closed to 50 m x 50 m to provide sufficient information for resource estimation. (www.magmametals.com.au)

Exploration News Briefs

Rio Tinto has signed two exploration joint-venture agreements with Codelco's 100%-owned subsidiary, CCM Los Andes, in Chile. The agreements follow an initial exploration joint venture agreement signed by Rio Tinto and Codelco in January 2008. The new properties to be explored are the Esteli and Paloma prospects in northern Chile. The Esteli property adjoins the Exploradora property, which is the subject of the January 2008 agreement, while the Paloma property is located near the Spence and El Tesoro copper mines. An exploration drilling program is currently underway at Exploradora and will be followed by drilling at Paloma this year.

Rio Tinto has the option to earn a 55% interest in each prospect through stand alone exploration investments of $20 million. The agreements include provisions to increase Rio Tinto's ownership to 60%. (www.riotinto.com)

Agnico-Eagle continues to expand the resource inventory at its Kittilä mine development project in northern Finland. In a resource update issued September 4, 2008, the company reported that drilling at depth has increased inferred resources at the project by 1 million oz of gold to 2.2 million oz in 15.7 million mt grading 4.34 g/mt. The mineral inventory at Kittilä also includes 3 million oz of gold in 18 million mt of probable reserves grading 5.1 g/mt and 500,000 oz of gold in 5.4 million mt of indicated resources grading 3 g/mt.

The new inferrred resources at Kittilä are based on confirmation of the extension of the main Suuri deposit to 1,100 m below surface (approximately 300 m below the current reserves and resources). Six diamond drills, including an underground drill, are now operating on the property covered by the Kittilä mining lease. Two drills are working on the deep-resource expansion program, and four, including the underground drill, are focused on conversion of resources to reserves.

As a result of the rapid growth of resources and reserves at Kittilä, AgnicoEagle has initiated a scoping study to examine the economics of increasing the project's currently planned 3,000-mt/d production rate. The study is scheduled for completion during the first quarter of 2009. (www.agnico-eagle.com)

Kagara Ltd. has reported an initial JORC-compliant inferred resource at its Admiral Bay zinc-lead-silver-barium deposit in the Kimberley region of Western Australia sufficient to generate talk of the deposit's potential to produce 300,000 mt/y of zinc, 250,000 mt/y of lead, and 4.5 million oz/y of silver. Metallurgical test work is continuing on the recoverability of barite to a saleable product, and the company anticipates that some proportion of the 2 million mt of barite processed annually will be recovered.

The inferred resource at Admiral Bay currently stands at 97 million mt, grading 2.4% zinc (2.3 million mt of zinc), 2.9% lead (2.8 million mt of lead), 16 g/mt silver (48 million oz of silver), and 16% barium at a nominal 2% zinc equivalent cut-off. The resource estimation has been restricted to a 2.1-km section of an 18-km strike length of known mineralization. The resource occurs at depths of 1,200 m to 1,350 m below sea level and remains open to the east and west along strike.