Sydney, Jan 24, 2008 AEST (ABN Newswire) - Tamaya Resources Limited (ASX: TMR)(the "Group") is pleased to advise that a metallurgical test work program at the Lichkvaz project (86.21% TMR) in Armenia supports the development of a polymetallic project (refer Appendix 1 below).
Tamaya acquired a major holding (86.21%) in Iberian Resources Limited ("Iberian") in 2007 and has since commissioned the examination of the project's potential as a copper and zinc resource in addition to the previously known gold potential of the existing project.
Tamaya Chairman Mr Hugh Callaghan said that "the confirmation of a significant base metals content emphasises the low cost nature of the project, with studies pointing to a total operating cash cost after by-products and royalties, of approximately US$295/oz. Using current metals prices, this would attribute a net present value to the project of around US$200 million."
The initial mine scoping model for Lichkvaz was based on the metallurgical test work completed by AMMTEC Laboratories, Perth. The metallurgical samples used for this test work were representative samples taken from the various ore stockpiles and dumps on the existing Lichkvaz mine site as well as fresh ore from the developing Terterasar mine section.
Soon after Tamaya acquired a majority holding in Iberian and access to the Lichkvaz Gold Project, ore samples were taken of the freshly exposed Lichkvaz ore. The results of the current metallurgical test work program based on these samples have shown that Lichkvaz is a polymetallic project.
Mr Hugh Callaghan said that the importance of this metallurgical discovery for Tamaya should not be underestimated.
"Lichkvaz, as a predominantly copper-gold project coming into construction and development, sits neatly in Tamaya's copper portfolio. The project's forecast cashflow from March 2009 will augment our existing revenues from Punitaqui in Chile. We then expect the cashflow from our two operating mines to allow a minimally dilutive financing of Filipina Grande in Chile which is set to be developed as Tamaya's third copper-gold and iron ore project."
The Lichkvaz Polymetallic-Gold Mine project will produce gold and silver in a copper concentrate, a zinc concentrate, and a gold-rich pyrite/arsenopyrite concentrate which will be processed on site by cyanidation through the CIP plant, being relocated from Australia, to produce a gold-silver doré.
The metallurgical test work completed to-date on the fresh Lichkvaz ore samples has shown that the production of two saleable metal concentrates of copper and zinc is possible as well as the production of a third gold-silver rich pyrite/arsenopyrite concentrate that can be processed on site to produce a cyanide soluble feed for normal cyanidation.
The results of the current metallurgical test work program are considered to be of such a standard as to be used to finalise the process route for treatment of the Lichkvaz ores as well as provide the definitive route map for the initial life of mine plan enabling the development of the life-of-mine project plan.
Based on the metallurgical test results, the Lichkvaz Polymetallic-Gold Mine project development will now be split into three phases. These phases will ultimately see initial production increased to the targeted throughput rate of up to 1.2 million tonnes per annum by the addition of a large primary ball mill, or equivalent SAG mill at the front end of the milling circuit. The smaller Rishton secondary mill will then be used as the concentrate re-grind mill, and the Rishton primary mill as the secondary ball mill in the new milling configuration. (The Rishton mill is currently being shipped to site).
Mr Callaghan said that, as well as further metallurgical testing, additional drilling is underway at Lichkvaz for resource extension, and early assay results were highly encouraging.
"We expect that several holes will be drilled and assayed in time for the results to be disclosed to the market during this quarter."
LICHKVAZ PROJECT UPDATE, ARMENIA (APPENDIX 1)
Tamaya Resources Limited is completing a detailed metallurgical testwork programme at its 86.21% owned Lichkvaz project in Armenia, and reports on results to date. The results have shown that Lichkvaz should be reclassified as a polymetallic project, which will produce gold and silver in a copper concentrate, a zinc concentrate, and a gold-rich pyrite/arsenopyrite concentrate that is amenable to cyanide leaching. Indeed, the latter will be processed on site through the plant by cyanidation, to produce a gold-silver doré.
The importance of this discovery for Tamaya cannot be underestimated. Lichkvaz, as a mainly copper-gold project going into construction and development, sits neatly in Tamaya's copper portfolio. And, its positive cashflow from March 2009 will augment that of Punitaqui, as the Group emerges as a mid-tier copper company. The cashflow from two operating mines is expected to allow a minimally dilutive financing of Filipina Grande in Chile, which will emerge as Tamaya's third, and potentially large, copper-gold and iron ore project.
Perhaps most importantly, the confirmation of significant base metals content emphasises the low cost nature of the project, with studies pointing to a total cost after by products and royalties, of US$295/oz. Using current prices as at Friday 18th January 2008, the project has an NPV10 of US$200m
Drilling is underway at Lichkvaz for resource extension and in-fill; and, early assay results are highly encouraging. It is expected that during this quarter, the results of some of the holes drilled and assayed will be disclosed to the market.
Metallurgical Testwork
The initial mine scoping model for the development of the Lichkvaz Gold Mine was developed on the basis of the metallurgical test work completed by AMMTEC Laboratories, Perth in 2006.
The metallurgical samples used for that test work series were representative samples taken from the various ore stockpiles and dumps on the existing Lichkvaz mine site as well as fresh ore from the developing Terterasar mine section. The Lichkvaz samples were from ore mined during the period when the Soviet Geological Expedition developed the deposit by underground exploration, with the Terterasar samples being fresh ore being mined currently by IBR.
Soon after Tamaya Resources Limited merged with Iberian Resources Limited and gained control of the Lichkvaz Gold Project, ore samples were taken of the freshly exposed Lichkvaz ore at the open pit box cut, the underground stoping section on 16-Level, and the 24-Level stoping section.
The initial results of the metallurgical testing of the fresh ore samples showed the following:
- Gold recovery under normal cyanidation conditions were 45-65% for fresh Lichkvaz material, which is significantly lower than expected from previous tests on older Soviet era dump and tailings material at 90%
- The Work index (WI) was lower than expected (17 - 19) compared to 23 - 25.
- The average grade of all the samples was extremely high (60 - 70 g/t gold) compared to the expected grade of 4.0 - 6.5 g/t gold.
- Cyanide leach kinetics was an order of magnitude faster than expected (12 - 15 hours) compared with 24 - 36 hours.
Stage 2 of the metallurgical program involved testing the response of the Lichkvaz ore samples to flotation and investigate the potential to produce saleable base metal concentrates as well as a high-grade gold concentrate that could be treated separately and then processed through the normal cyanidation route. The overall objective of the Stage 2 program was to develop a beneficiation route that would maximise overall gold recovery as well as recovery of additional base metals from the Lichkvaz ore samples. The results of Stage 2 of the test program indicated the following:
- Recoveries of between 94 - 96 per cent for Au, Ag, Cu, Zn, As, Fe, and Sulphur, with Pb recovery of 79 per cent into a sulphide bulk concentrate.
- Recovery into the bulk sulphide concentrate was achieved at coarse grind sizes up to a P80 of 150μ with no major reduction in metal recovery up to the 150μ grind size.
- The bulk concentrate was then subjected to differential flotation with zinc, pyrite and arsenopyrite first being suppressed, with the result being the production of a copper concentrate. The tail of the process was then subjected to re-activation of the zinc minerals with CuSO4 to produce a zinc concentrate, with the final tailings stream then going on to produce a gold-rich pyrite / arsenopyrite concentrate.
- The differential flotation concentrates of copper and zinc were then subjected to final cleaning to produce concentrates of saleable quality with copper concentrate head grades of 20% Cu, and zinc concentrate head grades of 45% Zn.
- The flotation results also showed that both gold and silver were distributed through the flotation products in varying percentages, but more importantly recovery was maintained across all of the flotation products for both Au and Ag.
- In addition to the flotation tests, the 16-Level whole ore composite sample that gave poor recovery from the routine cyanidation test, was treated with a high concentration of Caustic Soda (alkalisation) and then subjected to cyanidation. This process was pioneered by AMMTEC for AngloGold Ashanti's Sunrise Dam project in Western Australia. The results confirmed for this particular sample that gold recovery through this process was possible with recovery of 91.5%.
Whilst the TMR metallurgical test work is on-going the program completed to-date on five composite fresh ore samples has indicated across all of the samples, repeatability and consistency in response to flotation.
The remaining issues to be answered are the following:
- Arsenic is present in the form of arsenopyrite in all the flotation concentrates. With cleaning of both the copper and zinc concentrates, the arsenic levels drop to approximately 0.5%, which is within the envelope for marketable concentrates. Further work is planned to be done using flotation collectors that are copper- and zinc-specific, and repel arsenopyrite and by so doing ensure that in the flotation process, bubble entrainment and arsenopyrite carry-over is reduced. In addition, specific arsenopyrite suppressants are being trialled to create optimal conditions for maximum suppression. In the mean time it is planned to start discussions with known smelters in Europe and Japan that handle base metal and precious metal concentrates of this type and enter into (if need be) life of mine off-take agreements for both copper and zinc concentrates.
- The differential flotation process produces a gold-rich pyrite/arsenopyrite concentrate that potentially can be treated on site. The exact beneficiation route has yet to be decided but the initial results of alkalisation indicate that the gold is not refractory but rather surrounded by the pyrite and arsenopyrite, which when oxidised, liberate the entrapped gold to leaching. This is an explanation why the weathered dump material gives such good gold recovery under normal cyanidation conditions. As well as alkalisation, TMR will also investigate the use of Biological Oxidation (Biox), Pressure Oxidation (POX), the Albion Process, arsenic-specific biological leaching for all concentrates, or the use of an intense leach reactor (ILR). Final selection of the process route will be decided on completion of metallurgical optimisation studies which are now in progress.
- The flotation results all indicate sustainable metal recovery into a bulk concentrate at a P80 of 150μm. In addition, recovery is enhanced by additional grinding of the rougher tail prior to cleaning of the initial differential float product which in this particular case is the copper concentrate. This implies that the final configuration of the process plant for the life-of-mine is gong to include a sulphide flotation circuit with a re-grind mill, potentially of similar size to the current Rishton Plant secondary mill. Rather than installing a specific re-grind mill, the potential exists to use the current Rishton secondary mill as the re-grind mill, and install a large ball mill or a medium sized SAG mill as the new primary mill with the existing primary mill becoming the new secondary mill. This configuration will give the Lichkvaz operation the ability, if justified, to increase mill throughput up to 1.2 million tonnes per annum at the coarser grind of 150μm, with the higher mill output capable of being handled by the newly installed 1.2 Mtpa CIP circuit and the new sulphide flotation circuit.
The metallurgical test work completed to-date on the fresh Lichkvaz ore samples has shown that the production of two saleable precious metal concentrates of copper and zinc is possible as well as the production of a third gold-silver rich pyrite/arsenopyrite concentrate that can be processed on site to produce a cyanide soluble feed for normal cyanidation. Specific details of this will become clearer as the metallurgical test work is completed. The results of the current metallurgical test work program is considered to be of such a standard that the results can be used to finalise the process route for treatment of the Lichkvaz ores as well as provide the definitive route map for the initial life of mine plan enabling the development of the life-of-mine project plan.
Implications for Project Development
Based on the metallurgical test results as at the end of December 2007 which includes the current work under the control of TMR as well as the historical work completed on site, the Lichkvaz Polymetallic-Gold Mine project development will be split into three phases:
Phase 1
Initial production will be based on the existing gravity circuit operating at the Lichkvaz mine site with operation until the Lichkvaz CIP gold recovery plant is commissioned. Once commissioned, the Lichkvaz CIP will treat the existing dump and tailings material that is currently available on site, as well as production from the Terterasar underground mine section.
During phase 1 the current metallurgical test work program will be completed on both current samples as well as fresh ore samples from the currently commissioned RC exploration program, drilling the open pit ore resource. In addition stripping of 22 level Lichkvaz will be completed and diamond drilling of the lower parts of the Lichkvaz ore body started, which will also give additional information on the ore at depth.
During phase 1 a new open pit haul road will be developed from the existing Lichkvaz plant site to the open pit position. As well as enabling the movement of ore, men, and material to and from the open pit, the haul road will also give access to the old adits which are currently inaccessible. On completion of the haul road it is planned to start the open pit waste pre strip in preparation for ore mining from the open pit in phase 2.
Phase 2
Phase 2 involves the treatment of fresh Lichkvaz ore by the addition of a separate flotation and concentrates filtering section to the Lichkvaz CIP circuit. On commissioning of the sulphide flotation circuit, the existing phase 1 milling section will be able to mill the open pit ore as production ramps up from the open pit, and then commissioning of the underground mine section will enable mill throughput to be maintained with ore from both the open pit and the Lichkvaz underground mechanised section. The final configuration of the flotation circuit will be dependent on the completion of the current metallurgical test work, which will occur during the period of relocation of the Phase 1 plant from Australia.
Phase 3
Phase 3 is the potential expansion of the Stage 2 plant configuration from an annualised mill throughput rate of 750,000 tonnes to 1.2 million tonnes per annum. At this early stage of conceptualisation, the targetted throughput is planned to be achieved with the upper throughput limit being the nameplate capacity of the CIP section of the new Lichkvaz plant being relocated from Australia. The new flotation section will also be sized to ensure the additional planned sulphide throughput can be handled through the sulphide flotation circuit. The targeted throughput rate will be achieved by the addition of a large primary ball mill, or equivalent SAG mill at the front end of the milling circuit to enable mill throughput of 1.2 million tonnes per annum at a P80 of 150μ. The smaller Rishton secondary mill will then be used as the concentrate re-grind mill, and the Rishton primary mill as the secondary ball mill in the new milling configuration.
At the end of phase 1, the RC drilling program of the proposed Lichkvaz open pit will be nearing completion as the Lichkvaz CIP plant is commissioned, and similarly the underground diamond drilling of the lower Lichkvaz ore body from the 22 level will have begun. Based on the drilling results the decision to progress with the phase 3 mill expansion will be made, with an increase in the ore resource being a pre-requisite for a decision to proceed with phase 3.
The current life of mine resource as defined by TMR has been used as the basis for the life of mine model with any further expansion dependent on the growth of the current resource by the two drilling programmes that are currently being executed.
For project modelling purposes the metal recovery and head grades used in the Life of Mine plan and indicative Project NPV have been based on the current metallurgical test work commissioned by TMR, as well as the test work historically completed by IBR.
With respect to planned mill throughput the current Rishton mill circuit throughput with the primary and secondary ball mills in series has been used as the base model for the revised Lichkvaz life of mine plan at a P80 of 150μm, which gives an annualised throughput rate of 754,000 tonnes. The leverage for potential expansion to 1-2Mtpa throughput is considerable.
Drilling Underway
The RC drilling programme is underway, and initial assay results from the first hole are highly encouraging. The market will be updated with details of the drilling and assaying to date during this quarter.
Contact
Hugh Callaghan
Executive Chairman
Tamaya Resources Limited
Media: Fortbridge: +612 8399 0089
Bill Kemmery: +61400 122 449
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