STONEHENGE METALS MARKET UP
Stonehenge Metals Limited (ASX:SHE) (Stonehenge or the Company) is pleased to provide shareholders the following market update with respect of the Company's activities.
Geology
- Ongoing collation and translation of historical data. The existing data has been verified with new reports and new information has been added to an access database.
- Ventilation of the Chubu Adit has been setup to allow for sampling and mapping. This will add to the understanding of the mineralogy and structural geology of the project. Monitoring of the adit is now in place for the health and safety of workers.
- An in-house workshop was carried out to outline and focus on key projects. Targets and goals were set to move projects forward.
- The collection of 2 bulk samples from the Chubu Adit dump were sent for metallurgical testing in Perth. Both of these samples are to be used for vanadium analysis.
Planned Work
- Historical Collars Some of the drilling sites that were completed in the 1980's have been located. An accurate survey of the collars is planned during the autumn months.
- Data Sharing - Stonehenge has been building relationships with key partners and will be working on data sharing and information agreements.
- Pit Optimisation Stonehenge has commissioned Optiro to undertake a preliminary pit optimisation to help identify key areas for resource upgrade.
- The study will consider mining cost and uranium grade as the main parameters for this optimisation study. Based on the current operating cost study it has been assumed that 2.75Mtpa (million tonnes per annum) of ore is required to be delivered to the mill at an average head grade of 400ppm U3O8 during the initial payback period for an annual production rate of 1,000 tpa U3O8. Multiple scenarios will be run in order to understand the sensitivities on mining operation to achieve an ore throughput of 2.75Mtpa.
Corporate
On 5 May 2011, Stonehenge announced to the ASX that it was in negotiation with a second party in regard to a potential acquisition. The potential acquisition resulted from a proposal to the Stonehenge Board by Tozai Holdings Inc. to acquire up to 51% of their uranium tenements in Korea,most notably Daejon 49.
A terms sheet was agreed upon, subject to the conditions being met in a Letter of Intent (LOI). A due diligence period of three months was granted in order to confirm the conditions outlined in the LOI. One of the key components of the due diligence was the agreed level of conversion from the prior KORES historic estimate of 23Mt of ore within Daejon 49 to a resource reported in accordance with the JORC Code.
Over the period that the terms of the LOI were being finalised, Stonehenge was advised by its independent resource consultant, Optiro, that based on available data supplied by KORES, an Inferred Resource of 17Mt @ 352 ppm U3O8, at a 200 ppm U3O8 cut off, equating to 13.2M lbs U3O8, was calculated. When compared to the KORES resource evaluation of 23Mt @ 380 ppm U3O8 equating to 19.3M lbs U3O8, this resulted in only 68% of the historic estimate being reported in accordance with the JORC Code.
Stonehenge advised Tozai of the Optiro results and, as this fundamentally changed the nature of the implied valuation in the Tozai proposal, Stonehenge formally withdrew from negotiations on 29 September 2011.
The two companies have since agreed to revisit the proposal when certain unspecified economic and business matters are clarified.
For further information refer to the full ASX Announcement released by Stonehenge Metals Limited:HERE