DNI METALS INC. TORONTO, Oct. 24, 2011 /CNW/ - DNI Metals Inc. is
pleased to announce the initial mineral resource from the Buckton
Mineralized Zone, on its Alberta polymetallic black shale Property,
Athabasca region, northeast Alberta. This Zone, with an inferred
resource of 250,092,000 short tons which is being announced, is one
of six mineralized systems, or zones, identified on the 2,720
square kilometer Property, and it is the most advanced with
sufficient drilling to enable estimation of mineral resources over
a portion of it. As outlined in the technical report for the
Property dated Oct28/2008 (announced Nov10/2008, revised in press
release of Jul15/2011), the Buckton Mineralized Zone is a
conceptual target for further exploration based on surface sampling
and historic widely spaced drilling. This Zone is projected to
extend over 26 square kilometers and is open in three directions.
Sufficient drilling was completed over a portion of this Zone by
DNI to classify a portion of it to an inferred resource relating to
base metals, Uranium and Lithium. The Buckton resource study (the
"Study") was prepared by Apex Geoscience Ltd ("Apex"), Edmonton,
under the supervision of Mr.Michael Dufresne PGeol, who is the
Qualified Person in connection with its preparation and is
independent of DNI. The Study relies on drilling completed during
the past winter by DNI over the Zone, together with historic
drilling from the area, all of which drilling campaigns were
implemented by Apex under the supervision of Mr.Dufresne. DNI
completed verification sampling and analysis of archived core from
some of the historic drilling in 2008 and 2009. The Study complies
with National Instrument 43-101 and CIM resource estimation
guidelines. This press release is a summary of salient conclusions
of the Buckton resource study report which is being filed to SEDAR
concurrently with this announcement. The report will also be
available from DNI's website www.dnimetals.com once it is filed.
The Buckton inferred mineral resource reported by the Study is
classified as an inferred resource consisting of 250,092,000 short
tons (226,880,000 metric tonnes) of mineralized Second White
Speckled black Shale, 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) and
lithium (Li). The inferred resource includes 124,031,000 short tons
which are under less than 50m of overburden cover and 19,847,000
short tons which are under less than 25m of overburden cover.
Silver and gold were assessed but omitted from the resources, as
were also rare earth elements and specialty metals except Li. An
estimate of specialty metals and rare earth elements contained
within the Buckton resource will be announced in an addendum to the
Study. Details of the Buckton inferred resource reported by the
Study are tabulated below.
_____________________________________________________________________________________________________
|Buckton | | |Inferred | | |Resource | 250,092,000 | |Mineralized|
| |Shale | | |(tons) | |
|___________|_________________________________________________________________________________________|
| | MoO3 | Ni | U3O8 | V2O5 | Zn | Cu | Co | Li2CO3 |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|Raw Grade | 115 | 148 | 37 | 1288 | 302 | 76 | 23 | 302 | |(ppm) |
| | | | | | | |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|Recovery % | 50% | 90% | 90% | 40% | 90% | 60% | 90% | 50% |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|Recoverable| 57 | 133 | 33 | 515 | 272 | 46 | 21 | 151 | |Grade
(ppm)| | | | | | | | |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|Recoverable| 0.115 | 0.266 | 0.066 | 1.030 | 0.544 | 0.091 | 0.042
| 0.302 | |Grade | | | | | | | | | |(lbs/ton) | | | | | | | | |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|Metal/Oxide| 21.6 | 11.1 | 73 | 8.1 | 1.1 | 3.2 | 25.3 | 3 |
|Price* | | | | | | | | | |(US$/lb) | | | | | | | | |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|Recoverable|28,656,000|66,454,000|16,513,000|257,604,000|136,065,000|22,832,000|10,412,000|75,507,000|
|metal/oxide| | | | | | | | | |(lbs) | | | | | | | | |
|___________|__________|__________|__________|___________|___________|__________|__________|__________|
|*Metal/Oxide commodity prices are the five year average to
Aug/2006 used to establish bulk | |recoverable values for cut-off
grade thresholding tests. | |ton(s)=short ton(s); lb(s)=pound(s);
The 2011 drilling included an appropriate number of analytical |
|standards, blanks and duplicates, and no analytical issues were
identified. Numbers may not add 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. This is
the first mineral resource estimate for the Buckton Mineralized
Zone and it 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
6 km of strike. The Study concludes that the Buckton inferred
mineral resource is mineralization that is believed to have a
reasonable prospect for extraction in the future. It represents
material which is at a depth of less than 75m from surface, at a
US$7.5 per tonne lower cut-off, whose value is represented by the
collective value of contained recoverable Mo-Ni-U-V-Zn-Co-Cu-Li,
relying on the average 5 year metal prices to Aug/2006 and relying
on the best achieved metals recoveries as reported from the
collective of DNI's leaching testwork (see also press September 8,
2011). Testing and iteration of the Buckton resource model at a
higher cut-off of US$10 per tonne reported a similar tonnage as the
US$7.5 per tonne cut-off base case scenario save for approximately
100,000 tonnes which did not meet threshold criteria. The Buckton
resource is open to the north and northeast, and for approximately
300m 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 Study relies on
an aggregate of eleven vertical core holes distributed over an area
of approximately 5.7 square kilometres, and spaced
approximately 240m-2400m apart (averaging 1000m). Notwithstanding
systematic vertical grade variations or zonation within the Second
White Speckled Shale Formation, bulk averaged grades across the
Formation show good uniformity over large distances across the
Property. Considering this uniformity, 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
Study estimates that the resources reported are overlain by
762,678,000 short tons (691,890,000 metric tonnes) of overburden
cover material consisting of LaBiche Formation shales and overlying
till. The foregoing overburden material is barren of base metals
and uranium, and is, accordingly, considered to be "waste" by the
Study for the purposes of estimating the base metals and uranium
resources being reported. The overburden material does, however,
contain Li and rare earth elements which have not yet been fully
evaluated even though, based on partial analytical data, their
grades are comparable to grades from the Buckton Mineralized Zone
(see press September 8, 2011). All samples from all available drill
core are being re-analyzed for the complete suite of rare earth
elements and will be announced when completed. DNI has not yet
completed the necessary leaching testwork to determine recovery of
specialty metals and rare earth elements from the overburden
material. The Buckton inferred resource comprises an approximately
5.7 square kilometer, 13m to 23m thick, near-horizontal tabular
zone hosted entirely within the Second White Speckled Shale
Formation, bounded by its upper and lower contacts. This Formation
is exposed throughout the erosional edge of the Birch Mountains but
is overlain westward by progressively thicker sequences of other
shales and till. Given the uniformity of metals grades within the
Shale, the resource is laterally delimited based on depth criteria
rather than continuity of metallic mineralization which extends
well beyond its limits. Presence of the Speckled Shale for at least
6km to its north and south, and beyond, has been confirmed by
oil/gas downhole well logs in the area which report sections of
this Shale over a large area extending well beyond the current
boundaries of the resources. The Buckton mineral 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 872
samples of variable length for all lithologies but, when composited
in MICROMINE, yielded a database of 197 sample composites for the
Second White Speckled 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 Second White Specks
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 200mx200mx2m was chosen for the resource
estimate, with sub-blocking down to 20mx20mx1m. 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 the five year average metal/oxide
price to Aug/2006, and the collective values aggregated to enable
testing against a block value base case cut-off of US$7.5 per
tonne. According to the foregoing method, the Study concluded that
the reported resource represents an average value of US$21.5 per
short ton (US$23.7 per tonne) representing the aggregate value of
recoverable grades for the eight metals reported in the resource.
This 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. Testing and iteration of the Buckton
resource model at a higher cut-off of US$10 per tonne reported a
similar tonnage as the US$7.5 per tonne cut-off base case scenario
save for approximately 100,000 tonnes which did not meet threshold
criteria. The US$10 per tonne cut-off is considered to be a
reasonable benchmark which has been utilized by recent mineral
resource estimates as the break-even point and lower cut-off for
open pit mining of a poly-metallic black shale and its processing
by bioheapleaching in Finland. Considering a scenario of possible
open pit mining in northeast Alberta along the eastern edge of the
Birch Mountains, with potential for a low strip ratio at startup,
the likely free-dig nature of the poorly consolidated Speckled
Shale, the potential for easy access to multiple working faces, the
location of the project with respect to access, power and other
important infrastructure, a lower cut-off value for the mineral
resource estimate of US$S7.5 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. In addition to testing the Buckton resource model at
different value based cut-offs, the resource model also iterated
various scenarios to estimate tonnages constrained by different
overburden thicknesses at a US$7.5 per tonne cut-off, including
tonnages which are less than 100m-125m of the surface. The Study
concluded that mineralized tonnages ranging 401,703,000-551,130,000
short tons can be blocked, with similar grades as the Buckton
inferred resource being reported, which are under less than
100m-125m of the surface, which are overlain by
1,410,086,000-2,299,891,000 short tons of overburden. The foregoing
tonnages are not resources and cannot currently be classified as
resources since it is unclear, in the absence of a rigorous
economic assessment, whether they have a reasonable prospect for
extraction in the future given the large tonnages of overburden
cover rocks overlying them. Intentions are to evaluate significance
of the foregoing tonnages in the context of a Preliminary Economic
Assessment Study (Scoping Study) in 2012 and until such time they
are considered to be mineralized material which is a target for
further work whose ultimate quantity and grade are conceptual in
nature as there has been insufficient exploration to define a
mineral resource and it is uncertain whether further exploration
will result in discovery of a mineral resource. The Study makes
recommendations to implement certain additional mineralogical and
leaching work, in addition to a 5,000m diamond drilling program
intended to expand the Buckton inferred resource northward and
eastward, and to upgrade a portion of it into an Indicated or
higher resource classification. This drilling also includes initial
holes to test the Buckton South Zone located approximately nine
kilometres to the south of the Buckton inferred resources, and
which may represent its southerly extension or an entirely separate
similar Zone which has not yet been drilled (cored) by DNI,
although 12m-23m thick intercepts of the Speckled Shale Formation
are reported in downhole logs from approximately twenty historic
oil/gas wells throughout a 100-150 square kilometre area.
Permitting for the foregoing drilling is in progress. In a
statement Mr.S.Sabag, DNI's president & CEO, commented: "… this
is the first resource study from the Buckton Mineralized Zone, or
from any of the other Zones at the Property for that matter. It
represents a significant milestone in development of the Property.
While DNI is excited about continuing work to further expand and
upgrade the reported resource through additional drilling, we are
especially keen to evaluate the potential of specialty metals and
rare earth elements contained in the Buckton resource and Zone and
in the overlying overburden cover material thus far
considered to be waste rocks". The Qualified Person in connection
with the preparation of the Buckton resource study is Mr.Michael
Dufresne PGeol who is 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(s)=short ton(s);
lb(s)=pound(s); tonne = metric tonne = 1000kg. The 2011 drilling
included an appropriate number of analytical standards, blanks and
duplicates, and no analytical issues were identified. Metal/Oxide
commodity prices are the five year average to Aug/2006 used to
establish bulk recoverable values for cut-off grade thresholding
tests. Analyses by Activation Labs, Ancaster, ON; Analytical
results from the 2011 drilling were announced on July 15, 2011,
along with details of DNI's analytical quality assurance and
quality control parameters. 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. For
additional detailed information 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. The report will
shortly be 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. DNI - TSX Venture DG7 -
Frankfurt Issued: 60,100,284 We seek Safe Harbour. This
announcement includes forward looking statements. While these
statements represent DNI's best current judgment, they are subject
to risks and uncertainties that could cause actual results to vary,
including risk factors listed in DNI's Annual Information Form and
its MDS&A's, all of which are available from SEDAR and on its
website. DNI Metals Inc. CONTACT: DNI Metals Inc. - Shahe Sabag,
President & CEO or Denis Clement,Chairman - 416-595-1195email
ir@dnimetals.com. Also visit www.dnimetals.com
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