Quarterly Activities Report
July 20 2007 - 3:01AM
UK Regulatory
RNS Number:5694A
Gippsland Limited
20 July 2007
Gippsland Limited ("Gippsland") ASX & LSE ticker "GIP"
QUARTERLY ACTIVITIES REPORT
Period: April - June 2007
Release date: 20 July 2007
To view detailed geological graphics associated with this report, please refer
to Quarterly Reports situated under Investor Relations on the Gippsland website
www.gippslandltd.com
HIGHLIGHTS
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
ABU DABBAB TANTALUM-TIN PROJECT
* Updated Feasibility Study
* Tantalum resource up-grade drilling
* Additional Tantalum exploration targets
* Appointment of Egyptian Directors for JVC Tantalum Egypt JSC
WADI ALLAQI EXPLORATION - GOLD
* Signing of additional drilling contract
* Resource follow-up drilling
* Significant regolith & rock-chip results
* Topographic surveys completed at Seiga & Shashoba to facilitate gold resource
upgrade
WADI ALLAQI EXPLORATION - COPPER-NICKEL
* Commencement of TEM survey at Abu Swayel copper-nickel prospect
* Drilling programme to test near surface mineralisation
SUCCESSFUL LONDON CAPITAL RAISING
APPOINTMENT OF UK-BASED DIRECTOR
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
ABU DABBAB
FEASIBILITY STUDY UPDATE
During the quarter Gippsland took delivery of the updated feasibility study for
the 40 million tonne Abu Dabbab tantalum-tin project located in Egypt. The
updated study has estimated a total cost of US$108 million inclusive of capital
costs (2Mtpa processing plant, mining fleet, haul roads, power plant, and
general infrastructure) and financing costs during the construction period. The
comparative estimated cost as at November 2005 was US$90 million. The Directors
believe that this increase is well below the general industry increases for
capital items experienced during the period.
The Company has been able to minimise the increase in Capex and Opex through the
optimisation the Abu Dabbab processing route as a result of discussions with the
Company's off-take customer. The Company is presently in negotiation with its
tantalum off-take customer to adjust tantalum contractual arrangements to take
into account the revised capital and operating costs.
Discussions are been held with a range of German financiers to secure the
necessary debt and equity funding for the project.
TANTALUM RESERVE UP-GRADE DRILLING
Work commenced on a programme of RC and diamond drilling to upgrade a
significant proportion of the inferred resources to the indicated resource
category. The drilling will include ten holes totalling 2,350m collared from
four locations. Site investigations and geological mapping have identified the
four locations which will require a small amount of site preparation by
bulldozer. The drilling programme has been designed to upgrade existing inferred
resources to the indicated category, allowing for an additional 5.4Mt to be
converted to reserve status. Given that the distribution of the mineralisation
is reasonably homogenous and that the inferred resources were included in the
pit design study, it is anticipated that the Abu Dabbab reserves will increase
from 14.6Mt to in excess of 20Mt which will provide project financiers with
increased confidence in the project.
ADDITIONAL TANTALUM EXPLORATION TARGETS
As a result of recent Abu Dabbab document discovery the Company has learnt that
extensive geological, geochemical and geophysical exploration by Egyptian and
Soviet teams during the early 1970s resulted in the identification of four
targets that were considered to be prospective for tantalum and tin
mineralisation. Drilling was proposed but was never completed. All four of the
targets are located within the Company's existing Abu Dabbab mining licence
area.
The Company will undertake a small drilling programme to test these targets
however in view of the project's likely 20-year plus mine life this work will be
undertaken following commencement of routine production at Abu Dabbab.
APPOINTMENT OF TANTALUM EGYPT JSC DIRECTORS
On 10 April 2007, His Excellency Eng Sameh Fahmy, The Minister of the Egyptian
Ministry of Petroleum and Mineral Resources nominated two Egyptian Directors to
the board of Tantalum Egypt JSC, the Egyptian registered joint venture company
which owns Mining Licences for the 40Mt Abu Dabbab and the nearby 98Mt Nuweibi
tantalum deposits.
The gentlemen concerned, Mr Fekry Mohamed Youssef and Mr Hammed Abu Al Fotooh,
are highly respected and experienced professionals having both been closely
involved in the development of the Egyptian petroleum and mining sectors,
particularly with respect to attracting foreign investment to Egypt. Gippsland
is represented on the four member Tantalum Egypt board by Dr JM Chisholm and Mr
RJ Telford (Executive Chairman).
WADI ALLAQI
CONTRACT FOR SECOND MULTIPURPOSE DRILL RIG EXECUTED
During July 2007, the Company executed a contract with a major African drilling
company which will supply a heavy duty track-mounted RC drilling rig having the
capacity to drill to depths in excess of 200m. This additional rig has a nominal
penetration rate of 200m per shift, twice the rate of the multi-purpose rig
presently being employed by the Company in Wadi Allaqi. It is therefore
anticipated that Wadi Allaqi exploration programme will benefit from an overall
three-fold drilling rate increase.
RC DRILLING
During the quarter a total of 57 RC holes totalling 1,682m were completed at
four prospects.
Prospect No. of holes Total metres
------------------ ------------------ ------------------
Garayat & regional 15 29
Haimur 10 468
Seiga 31 1,104
Shashoba 1 81
------------------ ------------------ ------------------
Totals 57 1,682
------------------ ------------------ ------------------
During May and June the failure of a drill rig air compressor restricted
drilling operations for several weeks. The compressor is presently being
repaired and is due back on site at Wadi Allaqi by 23 July 2007.
Drill access and site preparation continued during the quarter on the Seiga and
Shashoba prospects to allow for the drill testing of rock chip anomalies
identified during the March quarter. A bulldozer is presently on site preparing
drill pads for the expanded drilling programme.
SEIGA - GOLD
The majority of the work was at the Seiga prospect where programmes of RC
drilling, regolith sampling and rock-chip sampling were completed although the
failure of the compressor severely constrained the planned drilling programme
with only a few holes being completed. The holes that were completed returned
most encouraging results
RESOURCE DRILLING
A programme of drilling to increase the resource at Seiga by deeper drilling and
testing the along strike extensions commenced during the quarter. The shorter
holes were drilled using RC with the deeper holes pre-collared by RC drilling
with diamond tails to be completed during the next quarter.
Two holes were completed as part of the resource infill drilling. They are
located to the north of the defined resource zone at 50530N. Hole CRC135
intersected 44m at 1.25g/t Au from 40m including 4m at 7.67g/t Au, and 4m at
1.52g/t Au from 116m to the end of the hole. The intersections in hole CRC135
are of particular interest as the current drilling programme is specifically
designed to delineated mineralisation both at depth and down plunge to the
north. Hole CRC134 was drilled to test the eastern margin of a rock chip anomaly
and the results indicate that the mineralised zone is at least 60m wide.
The diamond drilling of the deeper parts of the resource is due to commence
during late July 2007.
ROCK-CHIP SAMPLING ANOMALIES
The previous programme of continuous rock-chip sampling along 21 profiles was
very successful in highlighting the known zones of mineralisation as well as
identifying a number of new zones. Two additional lines of rock chip sampling
(CP22 & 23) were completed to give complete cover for the Seiga ridge area.
The results are consistent with those obtained on either side to the north and
south and include 25m at 0.14g/t Au in profile CP22 between 80 to 105m and 15m
at 0.53g/t Au in profile CP23 between 95 to 110m.
The RC drilling to test the anomalies commenced during the quarter but was
delayed by the compressor downtime and delays in site preparation as most of the
targets are in areas of steep ridges. The programme comprises seventeen RC holes
totalling 840m to test the rock-chip geochemical anomalies. To date only eleven
holes have been completed.
The results of the RC holes drilled to test the rock-chip anomalies attest to
the effectiveness of the sampling method. Quite subtle surface anomalies have
yielded significant results in the drilling. Hole CRC133 drilled to test the
eastern end of a rock-chip anomaly of 15m at 0.33g/t Au intersected 59m at 0.72g
/t Au from 1m depth including 19m at 1.17g/t Au. This has increased the width of
the mineralised zone at 49800N as intersected by RC drilling to at least 60m.
A line of holes drilled to the east of the ancient pit where access was
available along a small wadi intersected modest gold values below some very
subtle but continuous rock-chip profile anomalies. The intersections included 2m
at 0.47g/t in CRC125, 4m at 0.42g/t from 16m and 2m at 0.54g/t from 28m in
CRC126 and 4m at 0.36g/t in CRC131.
The presence of mineralisation below the low order rock-chip profile anomalies
are very encouraging as the highest order anomalies located in the south have
yet to be drilled.
REGIONAL RECONNAISSANCE DRILLING
A series of RC drill profiles was completed to locate and test the Seiga shear
beneath the wadi sands to the south of the main workings. The shear is clearly
identified in existing holes by gold values of greater than 0.1g/t. The drill
profile at northing 2493450N identified a zone approximately 65m wide of
> 0.1g/t Au and the profile 225m to the south at 249350N recorded a zone
approximately 50m wide. Drilling during the quarter included three profiles
which extended the length of the mineralised shear a further 500m beyond the
previous drilling. One of the profiles (CRC104 to 107) was drilled between two
existing lines from which the best intersection was 6m at 0.33g/t Au in hole
CRC104 from 2m.
The other two profiles were drilled in the southern part of the prospect to
further extend the known position of the shear a further 500m to the south.
The profile of holes (CRC108 to 113) intersected a best value of 2m at 0.36g/t
Au from 2m in CRC109. Anomalous gold values greater than 0.1g/t associated with
shearing were intersected in the adjacent holes CRC108 and 110. The most
southerly profile extended a previous profile to the west and three holes
(CRC116, 117 & 118) recorded gold values greater than 0.1g/t.
It is likely that the shear extends further to the south and geological mapping
will be required to locate the shear more accurately prior to drilling any
further profiles.
REGOLITH SAMPLING
Programmes of regolith sampling were completed at Seiga and Shashoba. Two areas
of 20m x 20m infill sampling were completed to more clearly define the three
anomalies (A, B & C) picked up by the more broadly spaced 100m x 20m samples.
The more detailed sampling clearly identified the B anomaly as a coherent
anomaly of greater than 0.5g/t Au that is still open to the southeast and will
be drill tested.
At Shashoba sampling was completed over two areas of interest on a 100m x 40m
grid. In the northeast area, two anomalous zones were delineated with four
samples containing greater than 1g/t Au with a maximum value of 5.91g/t Au. The
more easterly of the zones spans four lines giving it a length of at least 400m.
TOPOGRAPHIC SURVEYS
A topographic survey to 1m vertical accuracy was completed during the quarter at
the Seiga prospect to accurately locate all of the drill collars, ancient
workings and topography in preparation for upgrading the currently defined Seiga
resource to a higher resource category once the current drilling programme has
been completed. A similar topographic survey was completed at the Shashoba
prospect.
HAIMUR - GOLD
Ten holes were completed at the Haimur prospect following up previous drilling
results and geochemical anomalies. Hole HRC55 intersected a broad zone of low
grade mineralisation averaging 0.53g/t Au over 56m from the surface.
ABU SWAYEL - COPPER NICKEL
Gridding and geological investigations were completed at the Abu Swayel prospect
in preparation for the Transient Electromagnetic Survey (TEM) survey to be
completed during July. The TEM survey is designed to identify extensions to the
known mineralisation identified by diamond drilling in the 1960s when a diamond
drilling program of ten holes tested the down-dip continuity of the
mineralisation over a strike length of 200m. Of the 1,205m of drilling
completed, only 21 samples ranging from 1-2m in length were assayed.
Three of the holes (DH01, DH02 & DH14) returned significant Cu and Ni values.
Abu Swayel - Cu & Ni intersections for holes DH01, 02 & 14
Location From (m) To (m) Interval (m) Cu (%) Ni (%)
--------- ---------- ----------- ----------- ---------- ---------
DH01 21.00 23.60 2.6 1.16 0.24
DH02 25.70 29.95 4.25 1.58 0.23
DH14 48.55 49.85 1.30 2.23 0.20
Shaft 30.00 40.00 10.00 1.87 1.53
Cross-cut 7.50 15.50 8.00 4.11 1.77
In the early part of the 1900s the Nile Valley Company Limited sank a shallow
shaft with a cross-cut at the 22m level to test the vertical continuity of the
mineralisation. This shaft was deepened to 69m in the 1960s by the West German
company Demag AG. Sampling of the cross-cut in the 1960s gave an average 4.11%
Cu, 1.77% Ni, 17.81% Fe and 9.94% S over 8m.
Following the interpretation of the TEM survey results a programme of RC
drilling will be undertaken to test the anomalies. Four holes will also be
drilled though the mineralised zone identified by the 1960s drilling in order to
confirm the results of the previous drilling and to provide information as to
the distribution of the Cu & Ni values as the earlier drilling results were
reported only for the entire intersections.
CAPITAL RAISING - LONDON
On 26 April 2007 the Company announced the placement of 26,666,666 fully paid
ordinary shares to UK institutional investors at a price of 4.5 pence
(approximately 10.82 Australian cents) per share raising the sum of UK#1,200,000
(approximately A$2.89 million) before costs. The placing was undertaken by UK
broker HB-Corporate.
The funds raised under this placing are being employed to accelerate exploration
in Wadi Allaqi where several highly prospective gold, copper and nickel targets
are being evaluated.
In addition to on-going working capital, the funds raised are also be used for
the expansion of Gippsland's management team in Australian and Egypt as the Abu
Dabbab project advances towards being a world scale tantalum producer.
APPOINTMENT OF LONDON-BASED DIRECTOR
During May 2007 the Company announced the appointment of Mr Jon Starink to the
Company's Board of Directors.
Mr Starink's qualifications include Bachelor of Science with First Class Honours
(University of Sydney), a Bachelor of Chemical Engineering with First Class
Honours (University of Sydney) and a Master of Applied Science (University of
Sydney).
His academic achievements include; Union Carbide Prize in Inorganic Chemistry,
Western Mining Prize in Chemical Engineering and Beckman Coulter Postgraduate
Prize for Best Overall Performance in Molecular Biotechnology. He held the
position of Deputy Head Department of Chemical Engineering at Curtin University
of Technology during 1984-85 & 1987.
Based in London, Jon Starink is a Chartered Professional Engineer, a Chartered
Scientist and a Chartered Industrial Chemist, a Fellow of the Institution of
Engineers Australia, a Fellow of the Australasian Institute of Mining and
Metallurgy, a Fellow of the Institution of Chemical Engineers, a Member of The
Metallurgical Society and a Member of the Royal Australian Chemical Institute.
His corporate experience encompasses, inter alia, board level corporate
governance; executive corporate management and administration; corporate finance
& strategic business development; technical and financial project audit &
evaluation; introductions to capital markets and investment risk management.
He has 30 years experience in the mining industry in the role of both executive
and non-executive director. His extensive practical and operational experience
includes engineering design and project management; mining exploration
management; science and engineering research & development and process
innovation & development.
Of particular relevance, for ten years he served in senior technical and
engineering roles with the Sons of Gwalia Ltd Greenbushes tantalum-tin project
where he was directly responsible for process development, project design and
construction management for the tin smelter and tantalum extraction projects.
RJ (Jack) Telford
Executive Chairman
For further information please contact:
Jack Telford Les Polden / Luke Cairns
Gippsland Limited Hoodless Brennan Plc
www.gippslandltd.com Tel: +44 (0)20 7538 1166
Tel: +61 (0)8 9340 6000 L.Polden@HBcorporate.com
jtelford@gippslandltd.com L.Cairns@HBcorporate.com
Laurence Read / Ed Portman Fiona Owen
Conduit PR Grant Thornton Corporate Finance
Tel: +44 (0)20 7429 6605 / 6607 Tel: +44 (0)20 7383 5100
Laurence@conduitpr.com Fiona.Owen@gtuk.com
Ed@conduitpr.com
Note:
The information in this document that relates to Exploration Results, Mineral
Resources or Ore Reserves is based on information compiled by Dr John Chisholm
who is a Fellow of the Australasian Institute of Mining and Metallurgy. Dr
Chisholm, an Executive Director and a full-time employee of Gippsland Limited,
has sufficient experience which is relevant to the style of mineralisation and
type of deposits under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves". Dr John Chisholm consents to the inclusion in this document the
matters based on his information in the form and context in which it appears.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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