16 december 2014 sula iron & gold plc (sula or the … · 16 december 2014 sula iron & gold...
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16 December 2014
Sula Iron & Gold plc ("Sula" or the "Company")
MAIDEN MINERAL RESOURCE ESTIMATE DECLARED AT FERENSOLA
Total oxide resource of 55.5Mt @45.39% Fe represents easily accessible mineralisation with a total resource of 514.5Mt @ 31.8% Fe
Deep exploration target outlined by SRK suggests further resource base
Sula Iron & Gold plc, the exploration and development company focused on iron ore, gold and coltan in Sierra Leone, is pleased to announce a Maiden JORC Compliant Mineral Resource Estimate at its 100% owned Ferensola iron ore project in Sierra Leone ("Ferensola"). Highlights:
• Five distinct iron mineralised units, consisting of unique material zones based upon characteristics and iron grades, have been identified at Ferensola. Total JORC compliant Mineral Resources for each of the given separate zones are:
o Oxidised, laterite Cap : 8.3Mt @ 42.95% Fe;
o Oxidised, high grade: 7.4Mt @ 56.71% Fe;
o Oxidised, Saprolite: 8.1Mt @ 39.01% Fe;
o Oxidised, Upper Saprolite: 31.7Mt @ 45.02% Fe; and
o Fresh Magnetite ore: 459Mt @ 30.2% Fe.
• Total oxidised resource of 55.5Mt @ 45.39% Fe over the full 2.8km strike of BIF1;
• Total Indicated mineral resource of 17.6Mt @ 45.6% Fe;
• Total Inferred mineral resource of 496.9Mt @ 31.3% Fe; and
• Mineral Resource Estimate prepared by SRK who have in addition identified an exploration target comprising an additional 100Mt to 250Mt, with a grade range of between 20% Fe and 35% Fe that lies below the optimised pit shell.
NB. The Mineral Resource quoted above occurs entirely within the license boundary and within an optimised pit shell though the pit shell itself was not constrained by license boundary limitations. Commenting on today’s landmark news, Nick Warrell CEO of Sula, said: “We are very pleased to update our shareholders and the market with our Mineral Resource Statement. Back in 2013 we set ourselves the target of identifying a 500Mt iron ore resource and today’s results reflect the past two year work programme. The total oxidised resource of 55.5Mt @45.39% Fe represents easily accessible mineralisation at surface. This, coupled with exceeding the SRK ES Exploration Target of 500Mt, is pleasing. “Furthermore, the deep exploration target of 100-250Mt at BIF1 outlined by SRK suggests that we can add further to the resource base.”
Sula Iron & Gold plc Nick Warrell / Matt Wood
+44 (0) 20 7583 8304
Cairn Financial Advisers LLP (Nominated Adviser) James Caithie / Avi Robinson
+44 (0) 20 7148 7900
VSA Capital Limited (Broker) Bhavesh Patel / Richard Buckle
+44 (0) 20 3617 5177
Strand Hanson (Financial Adviser) Simon Raggett / James Harris
+44 (0) 20 7409 3494
Yellow Jersey PR (Financial PR) Dominic Barretto / Kelsey Traynor
+44 (0) 7768 537 739
Project Background
The Ferensola License area lies largely within the rugged greenstone belt of the southern Sula
Mountain Range, approximately 20 km northeast of the town of Bumbuna. Ferensola is an
exploration project comprising a BIF with a supergene-enriched oxide cap. Ferensola is thought to be a northerly extension of the Kasafoni deposit, which is part of the Tonkolili Iron Ore Project, owned by African Minerals Ltd, which lies directly to the south and adjacent to the Ferensola licence.
Mineral Resource Estimation
This Mineral Resource Estimate (“MRE”) has been prepared by SRK Consulting (UK) Ltd (“SRK”) following the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves 2012 Edition (“the JORC Code”).
The definitions of Measured, Indicated and Inferred Mineral Resources as used in the report, are as defined in the JORC code prepared by the Joint Ore Reserves Committee of the Australasian Institute
of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (“
JORC”).
SRK has conducted a site visit to the Ferensola Project during the course of the drilling campaigns undertaken by Sula. The site visit was undertaken by Mr Colin Rawbone, Senior Geologist with SRK, who is a Competent Person and Chartered Professional Member of the AusIMM (Membership ID:313771). During the site visit, Mr Rawbone undertook an associated review of all on site procedures and protocols.
The Mineral Resource Statement (“MRS”) generated by SRK has been restricted to all classified material falling within the license area and within an optimised pit shell representing a metal price of USD150c/dmtu for magnetite and sinter fines concentrate (The metal price selected is based upon SRK’s internal consensus market forecast data). The different ore-types have been reported based on various material specific marginal cut-off grades which have been derived by SRK as a result of metallurgical test work undertaken. This represents the material which SRK considers has reasonable prospect for eventual economic extraction based on the above pit optimisation and processing recovery analysis. The MRS for Ferensola is shown in Table 1.
The pit outline used to report the final MRS has not been restricted to the license boundary i.e. the projected pit edge extends into the adjacent license and mining would need to occur in this in order to exploit the Mineral Resource reported. For clarity therefore, SRK has also derived a pit outline that occurs entirely within the Ferensola license and does not encroach onto the adjacent license. If the company is only able to mine material falling within this pit then this would exclude 72.3 Mt of the reported Mineral Resource, of which 71.7 Mt% (99%) is from the magnetite BIF, 0.5 Mt is from
domain 100 and 0.1 Mt is from domain 130 even though this does occur within the license boundary.
Table 1: Mineral Resource Statement for Ferensola
Domain CoG Resource Category Tonnes
(Mt) Fe % SiO2 % Al2O3 % P %
Oxidised, Laterite Cap 17%
Measured
Indicated 1.8 39.9 3.89 22.59 0.07
Meas. + Ind. 1.8 39.9 3.89 22.59 0.07
Inferred 6.5 43.8 2.62 20.00 0.07
Oxidised High Grade 5%
Measured
Indicated 3.3 56.6 5.77 5.66 0.07
Meas. + Ind. 3.3 56.6 5.77 5.66 0.07
Inferred 4.1 56.8 5.30 5.17 0.07
Oxidised Saprolite 17%
Measured
Indicated 4.9 38.3 35.19 3.75 0.05
Meas. + Ind. 4.9 38.3 35.19 3.75 0.05
Inferred 3.2 40.1 33.44 3.21 0.06
Oxidised Upper Saprolite 13%
Measured
Indicated 7.6 47.0 9.86 12.34 0.08
Meas. + Ind. 7.6 47.0 9.86 12.34 0.08
Inferred 24.1 44.4 13.74 12.39 0.08
Fresh Magnetite BIF 7%
Measured
Indicated
Meas. + Ind.
Inferred 459.0 30.2 44.29 4.71 0.04
TOTAL
Measured
Indicated 17.6 45.6 15.60 9.72 0.07
Meas. + Ind. 17.6 45.6 15.60 9.72 0.07
Inferred 496.9 31.3 41.88 5.27 0.05
Notes:
(1) Mineral Resources which are not Mineral Reserves have no demonstrated economic viability
(2) The effective date of the Mineral Resource is 12 December 2014
(3) The Mineral Resource Estimate for Ferensola was constrained within lithological and grade based solids and
within a Lerchs-Grossman optimised pit shell defined by the following assumptions; metal price of US150c/dmtu
based on SRK’s internal consensus market forecast data; slope angles of 43º in the oxide zones and 50º in the
fresh material, depending on respective location; a mining recovery of 97.0%; a mining dilution of 3.0%; a base
case mining cost of USD1.50/t and an incremental mine operating costs of USD0.03/t/12 m below the 670 m
reference RL and USD0.03/t/12 m above the 670 m reference RL; process operating costs of USD2.50/t crushed
DSO and high grade saprolite, all other saprolite crushed USD4.00/t and USD5.50/t crushed BIF; Fe recovery of
30% for the Laterite cap, 100% for the High Grade oxide, 30% for Saprolite, 40% for the upper saprolite and 80%
for the fresh Magnetite BIF.
(4) Mineral Resources at Ferensola have been classified according to the JORC code by Howard Baker
(FAusIMM(CP)), an independent Competent Person as recognised by JORC.
The Competent Person responsible for this Mineral Resource Statement is Mr Howard Baker (FAusIMM(CP)). Mr Baker is a CP as defined by the JORC Code and a Principal Resource Geologist with SRK who is a Chartered Professional Fellow of the AusIMM (Membership ID: 224239). Sula and SRK are not aware of any additional factors (environmental, legal, title, taxation, socio-economic, marketing, political, or other relevant factors) that could have material impacts on the Mineral Resource Estimate. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to further define these as Indicated or Measured Mineral Resource respectively; and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category. Ferensola Exploration Target SRK recognises that there is potential to increase the Mineral Resource at Ferensola through deep drilling that targets material that falls beneath the base of the optimised pit shell where the deposit remains open at depth. This material may be considered by SRK to be potentially economic, should sufficient exploration data be collected that confirms the geometry and continuation of the mineralisation. SRK has identified an Exploration Target comprising an additional 100 to 250 Mt, with a grade range of 29 and 35% Fe that lies below the optimised pit shell used for constraining the Mineral Resource reported above. SRK notes that the Exploration Target is conceptual in nature, that there has been insufficient exploration to estimate a Mineral Resource in this area and that it is uncertain if further exploration will result in the estimation of a Mineral Resource in this area. In addition, SRK recognises the potential for further conversion from the Inferred category to the Indicated and or Measured categories following further exploration. Database Validation The QA/QC programme for Ferensola consists of alternating the insertion of a blank, standard and duplicate sample on a regular basis within the sample sequence. The Company uses standards with varying grades representative of the deposit which are also alternated. All samples have been prepared at the ALS laboratory in Monrovia, Liberia and assayed at the accredited analytical facility in County Galway, Ireland. SRK found that the results of the above described QA/QC programme indicate that Ferensola’s assay databases were appropriate for mineral resource estimation. Data Verification Mr Colin Rawbone and Mr Howard Baker as the Competent Person’s completed the verification of data on which the MRE is 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. MRE Drilling A 3D geological model based on a total of 85 diamond drill holes for 8,873 m has been used to develop the model used in the MRE. This includes 3,863 raw Fe assays from project inception up to the cut-off date of September 2014.
Ferensola Deposit Characteristics Ferensola covers a 2.8 km portion of a larger 20 km strike length magnetic anomaly extending SW from the license area. The target forms a BIF with an oxidised cap of dominantly haematite / magnetite mineralisation. Capped by a ~10 m thick laterite, the oxide mineralisation consists of friable to weakly indurated haematite rich saprolite which has been subdivided into multiple unique domains based principally on the relationships between Fe, Al2O3 and SiO2. The oxide material has been subjected to supergene enrichment resulting in the progressive dissolution of SiO2 that increases with depth. As such, the general observed trend shows an increase in Fe grade moving up the sequence away from the base of oxidation which is accompanied by a decrease in the SiO2 content within the oxide material. In addition to this sequence two units of elevated/enriched material, characterised by low Al2O3 have been interpreted and are considered a reflection of a fluctuating water table. The spatial relationships are reflected in Figure 1.
Figure 1: Ferensola deposit oxide domains
Fresh BIF mineralisation is modelled into five independent strike continuous packages separated by intercalated metasediments. The BIF units are comprised of laminated to bedded magnetite rich BIF horizons and, weakly foliated aggregates of magnetite. Basement footwall mineralisation consists of coarse grained mica bearing gneiss. The hanging wall is comprised of biotite and sericite rich intercalated meta-sediment.
Figure 2: Strike continuous BIF packages modelled at Ferensola
Geological Modelling, Resource Estimation Assumptions, Parameters and Methods SRK created a geological model based on the lithological logging, assay and magnetic susceptibility data, enabling the hanging wall and footwall contacts of the BIF unit to be modelled and a three dimensional solid model to be created. The oxide cap was modelled using statistical grade
boundaries, the magnetic susceptibility data and Loss on Ignition values to determine the base of oxidation. A 2 m 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 based on the presence of primary fabric of the fresh to semi fresh units and following the predominant dip and dip direction and topographic parallel elliptical searches in the highly weathered oxide units. SRK also utilised Datamine’s dynamic anisotropy function to honour slight changes in the overall dip and dip direction of the data. 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. Competent Persons The information in this press release that relates to the current drilling programme is based on information compiled by Mr Colin Rawbone, who is a Chartered Professional Member of the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr Rawbone is a full time employee of SRK and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Colin Rawbone has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears. In addition to the above, this press release has been compiled under the direction of Mr Howard Baker, who is a Chartered Professional Fellow of the Australasian Institute of Mining and Metallurgy ("AusIMM"). Mr Baker is a full time employee of SRK Consulting (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Baker has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears. Forward-looking Statements This announcement includes certain forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various known and unknown risks and uncertainties as well as other factors. Such forward looking statements are subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including delays in obtaining or failure to obtain required regulatory approvals. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Notes: Sula Iron & Gold plc is a multi-commodity exploration company focused on West Africa. The Company's main objective is to explore and advance its Ferensola project in Northern Sierra Leone, which is highly prospective for iron and gold. The 153 sq. km license area is contiguous to African Minerals’ Tonkolili Iron Mine, which has a JORC resource of 12.8 billion tonnes iron mineralisation. Significant Greenstone Belt-style gold mineralisation has also been identified at various prospects within the license area. Five target areas for hard rock gold mineralisation have been identified
based on the location of historic drill intercepts, the source areas for alluvial gold deposits, and the position of major structures as defined by airborne magnetic data and drainage orientation. The information in this release that relates to Exploration Results has been reviewed by Mr Andrew Dacey, Non-Executive Technical Director of Sula Iron & Gold plc. Mr Dacey is a Fellow of the Institute of Materials Minerals and Mining, a Registered Professional Geologist with the Australian Institute of Geoscientists and a Competent Person as defined in the Australasian Code for Reporting of exploration results and Mineral Resources and Ore Reserves.
APPENDIX A. JORC CODE, 2012 Edition, Table 1 (Section 1 and 2)
Section 1 Sampling Techniques and Data
Criteria JORC Code explanation Commentary
Sampling
techniques • Nature and quality of
sampling (eg cut channels,
random chips, or specific
specialised industry standard
measurement tools
appropriate to the minerals
under investigation, such as
down hole gamma sondes, or
handheld XRF instruments,
etc). These examples should
not be taken as limiting the
broad meaning of sampling.
Diamond core samples collected by Sula staff were of half HQ
or NQ core, with the sample cut so as to equally divide
structures. Sample lengths ranged from 0.5 m to 2 m. Sample
intervals were not matched to geological boundaries.
• Include reference to
measures taken to ensure
sample representivity and the
appropriate calibration of any
measurement tools or
systems used.
Sula used a minimum sample size of 0.25 kg per core sample
dispatched. They routinely submitted blanks, duplicate and
certified reference material.
• Aspects of the determination
of mineralisation that are
Material to the Public Report.
Diamond core samples were HQ diameter, and were cut in half
using a core saw, dividing geological structures equally where
possible. Some samples demonstrated a significant variance
when compared to duplicate samples, but this affect was
observed to be minor, with most samples showing good
repeatability.
Sample preparation techniques were deemed to be of
international best practice.
Criteria JORC Code explanation Commentary
• In cases where ‘industry
standard’ work has been
done this would be relatively
simple (eg ‘reverse
circulation drilling was used
to obtain 1 m samples from
which 3 kg was pulverised to
produce a 30 g charge for fire
assay’). In other cases more
explanation may be required,
such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or
mineralisation types (eg
submarine nodules) may
warrant disclosure of detailed
information.
All sampling preparation has been undertaken by an accredited
laboratory; preparation of samples has been undertaken
through ALS Monrovia and XRF analysis has been undertaken
by ALS based in Ireland.
Drilling
techniques • Drill type (eg core, reverse
circulation, open-hole
hammer, rotary air blast,
auger, Bangka, sonic, etc)
and details (eg core
diameter, triple or standard
tube, depth of diamond tails,
face-sampling bit or other
type, whether core is oriented
and if so, by what method,
etc).
Drill methods were diamond drilling of dominantly HQ core
using standard tubes for the drill programmes undertaken. A
CS1000 man portable drill rig operated by a reputable company
acting under industry best practices.
Core on vertical holes targeting oxide material has not been
orientated.
Drill sample
recovery • Method of recording and
assessing core and chip
sample recoveries and
results assessed.
Drill core recovery was recorded for every hole through routine
monitoring of drill rod depth and recovered core. Recoveries
for each hole were graphically plotted and show total recovery
better than 85%. Where recovery has been recorded these
intervals are identified and flagged for re-drilling as required.
• Measures taken to maximise
sample recovery and ensure
representative nature of the
samples.
Supervision of the diamond drilling by Sula geologists ensured
sample recovery was good, and that samples were
representative without contamination issues. Where poor
recovery has been encountered contractual agreements with
the drill company incur penalties and re-drill policies.
Criteria JORC Code explanation Commentary
• Whether a relationship exists
between sample recovery
and grade and whether
sample bias may have
occurred due to preferential
loss/gain of fine/coarse
material.
No studies are known to have been completed on sample bias.
Logging • Whether core and chip
samples have been
geologically and
geotechnically logged to a
level of detail to support
appropriate Mineral Resource
estimation, mining studies
and metallurgical studies.
Geological logging for diamond core includes a descriptive log
with some quantitative logging of mineralogy and alteration, in
addition to plotting of assays and the geology as a graphic log.
No geotechnical logging has been undertaken on oxide material
due to core fragmentation and lack of orientation.
• Whether logging is qualitative
or quantitative in nature. Core
(or costean, channel, etc)
photography.
Logging is qualitative, with the exception of some quantitative
logging of mineralogical and alteration content.
Core photography is undertaken for both half and whole core
on a box by box basis.
• The total length and
percentage of the relevant
intersections logged.
100% of diamond core samples can be correlated to graphic
logs of the diamond drill hole.
Sub-sampling
techniques and
sample
preparation
• If core, whether cut or sawn
and whether quarter, half or
all core taken.
Drill core samples were half HQ core, where the core was cut to
equally divide significant structures in the rock. Half core is
dispatched for analytical process’s
• If non-core, whether riffled,
tube sampled, rotary split, etc
and whether sampled wet or
dry.
All sampling relates to drill core
• For all sample types, the
nature, quality and
appropriateness of the
sample preparation
technique.
Diamond core samples have been analysed by XRF for a full
suite of analytes including but not limited to Fe_%, Al2O3_%,
SiO2_% and P_%. In addition to this analysis the LOI was also
recorded.
• Quality control procedures
adopted for all sub-sampling
stages to maximise
representivity of samples.
For diamond drill core sampling, standards, duplicates and
blanks were interleaved randomly with the routine samples,
every 20th sample; targeting a frequency of 5%
Criteria JORC Code explanation Commentary
• Measures taken to ensure
that the sampling is
representative of the in situ
material collected, including
for instance results for field
duplicate/second-half
sampling.
Field duplicates are submitted as 1 in 20 insertion rate, where
duplicates are selected the remaining half core is split to
produce a field based quarter core sample for comparative
studies.
• Whether sample sizes are
appropriate to the grain size
of the material being
sampled.
Diamond core samples were half HQ core, which is a large
diameter core for exploration drilling.
Quality of assay
data and
laboratory tests
• The nature, quality and
appropriateness of the
assaying and laboratory
procedures used and
whether the technique is
considered partial or total.
SRK deem the accredited laboratory and the requested analysis
to be suitable and sufficient for this type and style of
mineralisation deposit
• For geophysical tools,
spectrometers, handheld
XRF instruments, etc, the
parameters used in
determining the analysis
including instrument make
and model, reading times,
calibrations factors applied
and their derivation, etc.
No geophysical tools were employed, Magnetic susceptibility
has been measured when drilling below the oxide cap t0o aid
on site identification of the target material.
• Nature of quality control
procedures adopted (eg
standards, blanks, duplicates,
external laboratory checks)
and whether acceptable
levels of accuracy (ie lack of
bias) and precision have
been established.
For diamond drill core sampling, standards, duplicates and
blanks were interleaved randomly with the routine samples,
every 20th sample; targeting a frequency of 5%.
Samples are reviewed on a batch by batch basis to identify any
bias with in the analytical process.
Verification of
sampling and
assaying
• The verification of significant
intersections by either
independent or alternative
company personnel.
Mr Colin Rawbone of SRK has independently verified the
intersections derived from lithological and grade logging.
• The use of twinned holes. No twinned holes have been used to verify sampling and
assaying.
Criteria JORC Code explanation Commentary
• Documentation of primary
data, data entry procedures,
data verification, data storage
(physical and electronic)
protocols.
Data has been compiled from good quality paper plans and
digitally compiled at a later date.
The data has been assimilated into the Company’s Microsoft
Excel database, after compilation and validation in Mapinfo
Software.
• Discuss any adjustment to
assay data.
No adjustment to assay data has been undertaken
Location of data
points • Accuracy and quality of
surveys used to locate drill
holes (collar and down-hole
surveys), trenches, mine
workings and other locations
used in Mineral Resource
estimation.
All drill collars are positioned with handheld GPS to an accuracy
of within 5m.
Down hole surveys are not utilised on shallow vertical drill
holes but where required on inclined holes have been
undertaken using REFLEX tools
• Specification of the grid
system used.
WGS 84 UTM Zone 29 North
• Quality and adequacy of
topographic control.
An aerial survey to 0.5 meter scale accuracy has been
undertaken
Data spacing
and distribution • Data spacing for reporting of
Exploration Results.
Diamond drill core samples are collected over contiguous
intervals of alteration as per logging. There are lengths of
diamond core not sampled. Some sampled intervals were re‐
sampled as composites, or as single duplicate samples.
Drilling has taken place on 400m spaced drill fences at 50m
intervals
• Whether the data spacing
and distribution is sufficient to
establish the degree of
geological and grade
continuity appropriate for the
Mineral Resource and Ore
Reserve estimation
procedure(s) and
classifications applied.
No Mineral Resource or Ore Reserve calculations have been
reported on the deposit at this stage.
• Whether sample compositing
has been applied.
Sample compositing was performed for reporting of diamond
drill core results, based on a weighted average as a function of
sample length versus grade.
Criteria JORC Code explanation Commentary
Orientation of
data in relation
to geological
structure
• Whether the orientation of
sampling achieves unbiased
sampling of possible
structures and the extent to
which this is known,
considering the deposit type.
Drilling has been best orientated to allow a perpendicular
intercept of the surface oxide zone to be achieved.
• If the relationship between
the drilling orientation and the
orientation of key mineralised
structures is considered to
have introduced a sampling
bias, this should be assessed
and reported if material.
Based on current information no bias has been introduced
based on the orientation of drilling and relationship with key
structures.
Sample security • The measures taken to
ensure sample security.
Sula geologists maintain a full chain of custody of samples as
they leave site and are transported to the process laboratory.
Upon sample return sufficient checks and balances are
undertaken to ensure samples have not been tampered with.
Audits or
reviews • The results of any audits or
reviews of sampling
techniques and data.
All logging and sampling techniques have been audited during
an independent site visit undertaken by Mr Colin Rawbone of
SRK
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
JORC Code explanation Commentary
Mineral tenement
and land tenure
status
• Type, reference
name/number, location
and ownership including
agreements or material
issues with third parties
such as joint ventures,
partnerships, overriding
royalties, native title
interests, historical sites,
wilderness or national
park and environmental
settings.
EL54/2011 issued by the Government of Sierra Leone 23rd August 2011 to Blue Horizon (SL Ltd). Blue Horizon (SL Ltd) is a 100% owned subsidiary of Sula Iron & Gold Plc. Full due diligence on the license was carried out by Sula’s SL lawyers and UK lawyers prior to IPO in October 2012. There are no joint ventures in place save an MOU with the Town Chief and his Elders of Dalakuru Town regarding the buildings in Dalakuru base camp. There are no historical sites, wilderness or national park and environmental settings within our demarcated license area.
JORC Code explanation Commentary
• The security of the tenure
held at the time of
reporting along with any
known impediments to
obtaining a license to
operate in the area.
As above
Exploration done
by other parties • Acknowledgment and
appraisal of exploration by
other parties.
Exploration carried out by Mano River during the 1990s. Almost impossible to appraise the exploration as little or no records of the exploration were submitted to the Ministry of Mineral Resources.
Geology • Deposit type, geological
setting and style of
mineralisation.
The Ferensola project appears to be a typical weathered BIF
with an underlying fresh magnetite BIF.
Drill hole
Information • A summary of all
information material to the
understanding of the
exploration results
including a tabulation of
the following information
for all Material drill holes:
o easting and northing of
the drill hole collar
o elevation or RL
(Reduced Level –
elevation above sea
level in metres) of the
drill hole collar
o dip and azimuth of the
hole
o down hole length and
interception depth
o hole length.
All tabulated exploration collars are included in the release in
appendix B.
Table depicts all intercepts where drill holes have intercepted
mineralisation. Intercept lengths from diamond drilling are
presented as down hole lengths, not true lengths, and this is
stated in the release.
JORC Code explanation Commentary
• If the exclusion of this
information is justified on
the basis that the
information is not Material
and this exclusion does
not detract from the
understanding of the
report, the Competent
Person should clearly
explain why this is the
case.
Intercepts have been omitted from this report where drill holes
have not intercepted the interpreted mineralisation. Drill
collars for each of these holes however have been recorded in
Appendix B
Data aggregation
methods • In reporting Exploration
Results, weighting
averaging techniques,
maximum and/or
minimum grade
truncations (eg cutting of
high grades) and cut-off
grades are usually
Material and should be
stated.
Weighting is calculated as a function of each sample length
multiplied by each grade, with the summed product divided by
the total sample length, to present composited intervals. A high
grade portion of these intercepts has been highlighted using a
55% Fe Cut-off grade where intervals were greater than 5m.
• Where aggregate
intercepts incorporate
short lengths of high
grade results and longer
lengths of low grade
results, the procedure
used for such aggregation
should be stated and
some typical examples of
such aggregations should
be shown in detail.
Where intercepts are reported as longer lengths of lower
grade, it is clearly stated that the higher incepts within are part
of the lower grade intercept, not in addition to the low grade
intercept.
• The assumptions used for
any reporting of metal
equivalent values should
be clearly stated.
No metal equivalents are used for the exploration results at
Ferensola Prospect.
Relationship
between
mineralisation
widths and
• These relationships are
particularly important in
the reporting of
Exploration Results.
Diamond drill sample intercepts are reported as down hole
widths.
JORC Code explanation Commentary
intercept lengths • If the geometry of the
mineralisation with
respect to the drill hole
angle is known, its nature
should be reported.
Mineralisation is considered to be steeply dipping (approx. 70°
NW) with a dominant strike NE-SW. However oxidation of this
material is deemed to have affected a horizon of material
concordant with topography. Therefore the vertical holes
currently drilled in targeting this material are deemed suitable
to intercept the primary target as close to 90° as possible.
• If it is not known and only
the down hole lengths are
reported, there should be
a clear statement to this
effect (eg ‘down hole
length, true width not
known’).
This is clearly stated in the release.
Diagrams • Appropriate maps and
sections (with scales) and
tabulations of intercepts
should be included for any
significant discovery being
reported These should
include, but not be limited
to a plan view of drill hole
collar locations and
appropriate sectional
views.
Diagrams are provided that show all surface samples and the
diamond drill hole traces in plan view, plus a cross section is
provided with the intercept locations and known geology.
Balanced reporting • Where comprehensive
reporting of all Exploration
Results is not practicable,
representative reporting of
both low and high grades
and/or widths should be
practiced to avoid
misleading reporting of
Exploration Results.
Exploration results are presented in the Table 1, regardless of
grade where mineralised material has been intercepted. Grade
has been split by lithology based on logging undertaken by the
Sula geologists.
JORC Code explanation Commentary
Other substantive
exploration data • Other exploration data, if
meaningful and material,
should be reported
including (but not limited
to): geological
observations; geophysical
survey results;
geochemical survey
results; bulk samples –
size and method of
treatment; metallurgical
test results; bulk density,
groundwater, geotechnical
and rock characteristics;
potential deleterious or
contaminating
substances.
Discussion of the Ferensola Prospect geology is included in the
release.
In situ density measurements are carried out using
Archimedean principles for consolidated fresh core and are
undertaken on a lithological basis.
To date no economic or extractive measures such as bulk
samples, metallurgical testing, bulk density, groundwater,
geotechnical or rock samples have been undertaken.
Further work • The nature and scale of
planned further work (eg
tests for lateral extensions
or depth extensions or
large-scale step-out
drilling).
Drill testing is identified as future planned work. At present the
infill drilling to a 200m x 50m spacing has been commenced to
increase confidence in the initial interpretations of geometry
and grade distribution. In addition 1,500m of deep drilling has
been planned to develop the fresh magnetite BIF interpreted
below the primary oxide material.
• Diagrams clearly
highlighting the areas of
possible extensions,
including the main
geological interpretations
and future drilling areas,
provided this information
is not commercially
sensitive.
Possible extensions are indicated on the plan and cross section
provided in the release.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
Criteria JORC Code explanation Commentary
Database integrity • Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.
• Data validation procedures used.
• Data provided by field geologists is verified and checked prior to insertion into the company database using a series of excel cross check and visual validation by the senior geologist on site.
• In addition SRK have undertaken a review of the drill holes at the core shed to check the quality of the logging, along with cross-checking assay certificates against the database. Further statistical validation of the presented database was undertaken upon final receipt using Datamine Studio 3 and
Leapfrog software.
Site visits • Comment on any site visits undertaken by the Competent Person and the outcome of those visits.
• If no site visits have been undertaken indicate why this is the case.
• A site visit to the property and inspection of the sample preparation facilities has been undertaken by Colin Rawbone, a Senior Geologist with SRK; Mr Rawbone is a Qualified Person and Chartered Professional Member of the AusIMM (313771). Mr Rawbone undertook a site visit in May 2013 during the most recent drilling campaign and has since provided technical advice with respect to the then on going drill programmes.
Geological interpretation
• Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit.
• Nature of the data used and of any assumptions made.
• The effect, if any, of alternative interpretations on Mineral Resource estimation.
• The use of geology in guiding and controlling Mineral Resource estimation.
• The factors affecting continuity both of grade and geology.
• SRK considers the geological interpretation of the deposit to be robust and in keeping with projects throughout West and Central Africa.
• SRK created a geological model based on the lithological logging, assay and magnetic susceptibility data, enabling the hanging wall and footwall contacts of the BIF unit to be modelled and a three dimensional solid model to be created. The oxide cap was modelled using statistical grade boundaries and the magnetic susceptibility data to determine the base of oxidation.
• The geological zones created are primarily based on the Fe distribution and its relationship with SiO2 and Al2O3 identified through statistical analysis and are characteristic of the Project.
• The Mineral Resource Estimation has been constrained to geological units where such units are supported by associated magnetic susceptibility and grade data provided.
• Geological and grade continuity has been supported by geo-statistical analysis (variography). Limiting factors relating to grade continuity are resultant of the spatial relationship available derived from drill spacing.
Dimensions • The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.
• The Mineral Resource Estimate is based on a 3 km portion of a larger northeast-southwest regional trending magnetite BIF. SRK has created a geological model constrained by the license holdings of the company and based on the lithological logging, assay data and magnetic susceptibility readings for the project. Deep drilling has proved the continuation of magnetite mineralisation to a depth of approximately 300 m below surface. SRK have extended this mineralisation to 500 m down dip through the modelling process (RL: 200 m).
Criteria JORC Code explanation Commentary
Estimation and modelling techniques
• The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.
• The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.
• The assumptions made regarding recovery of by-products.
• Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).
• In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.
• Any assumptions behind modelling of selective mining units.
• Any assumptions about correlation between variables.
• Description of how the geological interpretation was used to control the resource estimates.
• Discussion of basis for using or not using grade cutting or capping.
• The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.
• A 2 m 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 final search ellipse dimensions and sample numbers used for the first pass interpolation were selected based on the QKNA studies. Strike and dip directions of the ellipse are based upon the geological interpretation (strike -45°, dip 110°) and the presence of primary fabrics based on the weathering intensity. Dynamic anisotropy was used in the interpolation to honor slight changes in the deposit orientations.
• Grades of Fe, LOI, Al2O3, SiO2, P, Mn, CaO, TiO2, K2O, S, and MgO were interpolated into the model.
• No grade cutting or capping was applied during this estimate.
• A single block model was created using block sizes of 25 mY by 100 mX by 10 mZ.
• 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.
• No check estimates, historical estimates or production records are available and therefore are not accounted for in the this MRE
Criteria JORC Code explanation Commentary
Moisture • Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.
Cut-off parameters • The basis of the adopted cut-off grade(s) or quality parameters applied.
• Cut off parameters have been applied to each unique material type (domain) identified. This has been derived from domain specific metallurgical test work undertaken in SGS Cornwall and verified by an accredited SRK processing engineer.
Mining factors or assumptions
• Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.
• The Mineral Resource Estimate for Ferensola was constrained within lithological and grade based solids and within a Lerchs-Grossman optimised pit shell defined by the following assumptions; metal price of US150c/dmtu; slope angles of 43º in the oxide zones and 50º in the fresh material, depending on respective location; a mining recovery of 97.0%; a mining dilution of 3.0%; a base case mining cost of USD1.50/t and an incremental mine operating costs of USD0.03/t/12 m below the 670 m reference RL and USD0.03/t/12 m above the 670 m reference RL; process operating costs of USD2.50/t crushed DSO and high grade saprolite, all other saprolite crushed USD4.00/t and USD5.50/t crushed BIF; Fe recovery of 30% for zone 100 (Laterite), 100% for zone 110 (High Grade), 30% for zone 120 (Saprolite), 40% for zone 130 (upper saprolite) and 80% for zone 210 (Magnetite BIF).
Criteria JORC Code explanation Commentary
Metallurgical factors or assumptions
• The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.
Environmen-tal factors or assumptions
• Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.
• Sula and SRK are not aware of any additional factors (environmental, legal, title, taxation, socio-economic, marketing, political, or other relevant factors) that have materially affected the Mineral Resource Estimate. The Ferensola deposit is a greenfield site and therefore is not affected by any mining, metallurgical or infrastructure factors.
Criteria JORC Code explanation Commentary
Bulk density • Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.
• The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.
• Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.
• Bulk density readings are taken based on lithological intervals thus targeting representative samples being collected. Measurements are carried out on whole core (typically 10-15 cm pieces) using a balance with top and modified under-slung measuring capabilities with a detection limit of ±1 gm. The balance is regularly checked and re-calibrated using certified weights.
• Density measurements are carried out using Archimedean principles for consolidated fresh core. The methodology involves drying the samples using a standard oven over a predefined period of time (approximately 4hours) to generate a dry sample and weighing samples in air and water using the balance. Wrapping the porous samples in plastic wrap and/or coating in wax prior to immersion prevents the sample becoming saturated.
• Samples maintain a positive correlation with respect to Fe grade with a positive relationship between Fe grade and density for samples within the oxide and fresh BIF domains. A trend line therefore can be fitted to the data distribution and a regression formula derived to calculate bulk density in the geological model.
• SRK acknowledges that the limited data available in the oxidised domains renders the process slightly less efficient in determining accurate regression based curves for the density application. SRK does not believe this discrepancy to be material and consider this method of density determination more robust than applying average densities to the oxidised domains in the block model. It is recommended that additional density data is collated for these material types.
Classification • The basis for the classification of the Mineral Resources into varying confidence categories.
• Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).
• Whether the result appropriately reflects the
Competent Person’s view
• To classify the deposits at Ferensola, the following key indicators were used, geological complexity, quality of the data used in the estimation, assay data, density data, QA/QC results, results of the geostatistical analysis and quality of the estimated block model.
• Mineral Resources at Ferensola have been classified according to the JORC code by Howard Baker (FAusIMM(CP)), an independent Competent Person as recognized by the JORC code.
Criteria JORC Code explanation Commentary
of the deposit.
Audits or reviews • The results of any audits or reviews of Mineral Resource estimates.
• This Mineral Resource Estimate has been subjected to an internal review process by SRK employees.
Criteria JORC Code explanation Commentary
Discussion of relative accuracy/ confidence
• Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.
• The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.
• These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.
• It is the opinion of SRK that the quantity and quality of available data is sufficient to generate Indicated and Inferred Mineral Resources and that the Mineral Resource Statement has been classified in accordance with the JORC 2012 reporting code definition standards. It has an effective date of 12 December 2014.
• The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to further define these Inferred and Indicated Mineral Resources as Indicated or Measured Mineral Resource respectively; and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
• The pit optimisation undertaken to report the final MRS has not been restricted to the license boundary with the resource pit crest being extrapolated into the adjacent license. Mineralisation however has been modelled to the license boundary only. SRK also ran a second optimisation that restricted the resource pit crest to the Ferensola license so as not to encroach on the adjacent license. As a comparison, SRK has also reported the grade and tonnage of the restricted optimization.
• The restricted optimisation, using a license constraint results in a reduction of 72.26Mt of material of which 71.66Mt% (99%) is from the magnetite BIF, 0.49Mt is from domain 100 and 0.11Mt is from domain130.