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Following discussions with the ASX, the Directors of Zenith Minerals Limited advised that certain statements made in the ASX Release dated 10 May 2011 ("Positive Scoping Study Results for Mount Alexander Magnetite Iron Project") require qualification or clarification.
The independent Scoping Study on development options for the Mount Alexander magnetite project used as its basis an "assumed inventory" of 560 million tonnes of ore with a head grade of 30.9% iron (giving a proposed 20 year mine life for the purpose of the study). The term "assumed inventory" is not a defined term for the purposes of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). The Company did not intend to imply that the term “assumed inventory” is such a defined term nor that a JORC Code compliant Resource or Reserve of this size had been determined as at the time of the 10 May 2011 Release. The Company has reported an initial JORC Inferred Resource of 392 million tonnes grading 29.5% iron for the Mount Alexander project. The Company has previously given guidance on its views of the ultimate size of the Mount Alexander project with the release to ASX of an Exploration Target of 600 million to 1.2 billion tonnes grading 25 to 35% iron on 11 March 2010. The Exploration Target estimate is based on detailed mapping, surface sampling and drilling of the deposit, which outcrops strongly as a prominent range. The current JORC Inferred Resource occupies only around 40% of the Exploration Target volume. The "assumed inventory" of 560 million tonnes used in the Scoping Study is less than the lower limit of the Company's stated Exploration Target range, and was selected in order for the study assumptions to be set conservatively, however the financial modelling completed by ProMet Engineers in the Scoping Study was based in part on sections of the deposit that are yet to be included in a JORC Resource. As the Company has not presently defined a JORC compliant Ore Reserve or Mineral Resource of sufficient size to substantiate the mine life used as the basis for the Scoping Study's financial models, there remains insufficient certainty as to whether economically mineable mineralisation exists to permit reliable estimates of future production. As a result, comments made in the 10 May 2011 Release concerning mine life and production rates should not be used as a basis for investment decisions, nor should investment decisions be made based on the net present value, an the internal rate of return which were referred to in the 10 May 2011 Release. More information, click here. |
