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HOMEX - Brisbane
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Mehdiabad Zinc Project - Iran
Union Capital Limited advises that mining consultants Bateman
Engineering Pty Ltd (Bateman) have completed a preliminary open cut
mine design of the Mehdiabad Zinc Project in Iran, based on a
geological model constructed on Surpac software by Union's
geologists. The model relies on 23,555 metres of past diamond core
drilling, which is currently being updated by Union's geologists to
include other geological information such as assays from sampling of
old tunnels not previously digitised. The aim of the preliminary mine
design was principally to select drill sites for conversion of the
current resources to mineable reserves.
Bateman feel that based on existing information, an open cut mine
appears feasible. Specialist mineralogical examination of 40 samples
of the existing core indicates that most of the ore will be amenable
to flotation.
Bateman have calculated the NPV of the project to be A$770 million
(over US$500 million). Because the deposit is still at the
"Resources" level of confidence, and further drilling is needed to
upgrade the deposit to "Mineable Reserve", Bateman have placed a
confidence level on the above estimate of (+ 30% to 40%).
Under the "Basic Joint Venture Agreement" signed in November by
Union, the Company is currently spending US$5 million to earn a 25%
interest in the project.
The current resources are (at a 4% cutoff):
At a 4.0% Zn Cutoff:
Indicated Resource:
108.5 million tonnes at 7.0% Zn, 2.3% Pb and 58 g/t Ag
Inferred Resource:
97.0 million tonnes at 8.6% Zn, 1.7% Pb and 29 g/t Ag
Total Discounted Resource:
205.5 million tonnes at 7.7% Zn, 2.0% Pb and 44 g/t Ag
These estimates are discounted from the total resource by the
application of a minimum mining thickness of three metres, a minimum
separable waste thickness of three metres and allowance for internal
waste dilution. Intervals containing internal waste have only been
included if they exceed the relevant Zn cut-off. A 10% discount has
been applied to compensate for the presence of cavities and voids,
the presence of which has been indicated by the drilling. The
inferred resource has been conservatively determined from
extrapolations below existing drill holes and expected extensions to
the ore body.
At the first Mehdiabad Project Management Committee Meeting held
recently in Tehran, Union was appointed the "Project Managers". This
will allow the mine and process plant to be developed using "world's
best practice" open cut mining and zinc ore processing technology and
with international management.
The Company is currently finalising its application to the Department
of Economics & Finance in Iran for Government guaranteed protection
of its investment. Union's Iranian lawyers feel that after this
approval is obtained, (with the subsequent sign off by the Cabinet of
the Iranian Parliament), then Union's Security of Title will be best
obtainable under Iranian Law. Union is of the view that the Security
of Title that ultimately will be given, has an excellent chance of
being acceptable to the foreign lending and investment institutions,
some of whom have recently set up offices in Tehran, as the climate
for foreign investment improves.
Union is currently organising a US$2.8 million (Union's share US$1.4
million) diamond core drilling program to commence as soon as the
Department of Economics & Finance guarantee of Union's investment is
granted. Union is unsure how long the approval will take, with
estimates ranging from 1 to 6 months being made by its Iranian
associates. However, the application is supported by the Ministry of
Mines & Metals and this will greatly "speed up" the process. The
Company's policy is to be in a position to commence drilling as soon
as the above approval is obtained.
R B Murdoch
MANAGING DIRECTOR
-------------------------
Mehdiabad Zinc Project - Iran
Union Capital Limited advises that mining consultants Bateman
Engineering Pty Ltd (Bateman) have completed a preliminary open cut
mine design of the Mehdiabad Zinc Project in Iran, based on a
geological model constructed on Surpac software by Union's
geologists. The model relies on 23,555 metres of past diamond core
drilling, which is currently being updated by Union's geologists to
include other geological information such as assays from sampling of
old tunnels not previously digitised. The aim of the preliminary mine
design was principally to select drill sites for conversion of the
current resources to mineable reserves.
Bateman feel that based on existing information, an open cut mine
appears feasible. Specialist mineralogical examination of 40 samples
of the existing core indicates that most of the ore will be amenable
to flotation.
Bateman have calculated the NPV of the project to be A$770 million
(over US$500 million). Because the deposit is still at the
"Resources" level of confidence, and further drilling is needed to
upgrade the deposit to "Mineable Reserve", Bateman have placed a
confidence level on the above estimate of (+ 30% to 40%).
Under the "Basic Joint Venture Agreement" signed in November by
Union, the Company is currently spending US$5 million to earn a 25%
interest in the project.
The current resources are (at a 4% cutoff):
At a 4.0% Zn Cutoff:
Indicated Resource:
108.5 million tonnes at 7.0% Zn, 2.3% Pb and 58 g/t Ag
Inferred Resource:
97.0 million tonnes at 8.6% Zn, 1.7% Pb and 29 g/t Ag
Total Discounted Resource:
205.5 million tonnes at 7.7% Zn, 2.0% Pb and 44 g/t Ag
These estimates are discounted from the total resource by the
application of a minimum mining thickness of three metres, a minimum
separable waste thickness of three metres and allowance for internal
waste dilution. Intervals containing internal waste have only been
included if they exceed the relevant Zn cut-off. A 10% discount has
been applied to compensate for the presence of cavities and voids,
the presence of which has been indicated by the drilling. The
inferred resource has been conservatively determined from
extrapolations below existing drill holes and expected extensions to
the ore body.
At the first Mehdiabad Project Management Committee Meeting held
recently in Tehran, Union was appointed the "Project Managers". This
will allow the mine and process plant to be developed using "world's
best practice" open cut mining and zinc ore processing technology and
with international management.
The Company is currently finalising its application to the Department
of Economics & Finance in Iran for Government guaranteed protection
of its investment. Union's Iranian lawyers feel that after this
approval is obtained, (with the subsequent sign off by the Cabinet of
the Iranian Parliament), then Union's Security of Title will be best
obtainable under Iranian Law. Union is of the view that the Security
of Title that ultimately will be given, has an excellent chance of
being acceptable to the foreign lending and investment institutions,
some of whom have recently set up offices in Tehran, as the climate
for foreign investment improves.
Union is currently organising a US$2.8 million (Union's share US$1.4
million) diamond core drilling program to commence as soon as the
Department of Economics & Finance guarantee of Union's investment is
granted. Union is unsure how long the approval will take, with
estimates ranging from 1 to 6 months being made by its Iranian
associates. However, the application is supported by the Ministry of
Mines & Metals and this will greatly "speed up" the process. The
Company's policy is to be in a position to commence drilling as soon
as the above approval is obtained.
R B Murdoch
MANAGING DIRECTOR
