The update reflects additional drill-hole and assay data completed since the preparation of the last Mineral Resource Estimate reported on the 19th May 2009. The update now incorporates a Mineral Resource Estimate for the Kasafoni deposit, and updated Mineral Resource Estimates for the Numbara, Simbili and Marampon deposits.
Metallurgical testwork performed by independent consultants AMMTEC Ltd ("AMMTEC") is also reported, confirming the amenability of Tonkolili magnetite iron ore to the production of high grade iron ore concentrates using established metallurgical processes.¬†
MAGNETITE IRON ORE MINERAL RESOURCE
African Minerals has completed over 110,000m of diamond drilling across Numbara, Simbili, Marampon, and the newly reported Kasafoni deposit, which is located along strike to the north of Numbara.¬† A total of 90,893 diamond drill metres were utilised by SRK in preparing the updated Mineral Resource Estimate, and excluded geotechnical and metallurgical drill holes which were reserved for use in these respective technical disciplines.
The updated Mineral Resource Estimate is 10.5 billion tonnes at an average in situ grade of 29.0% iron. This exceeds the Companyís target mineral resource of 10 billion tonnes for the current phase of resource development. Included within the 10.5 billion tonnes are 9.7 billion tonnes at an average grade of 30.1% iron in situ.
This Mineral Resource Estimate is reported over a strike length of 20km, and includes holes completed up to 26th January 2010. Drilling has continued with up to four core rigs to test high grade BIF targets in the Kasafoni West area. The Company expects to update the Mineral Resource Estimate upon completion of this work in the near future.
MAGNETITE IRON ORE METALLURGY
Detailed metallurgical test work has been completed by AMMTEC on 20 tonnes of Tonkolili magnetite iron ore to identify an optimal mineral processing circuit to produce a high quality magnetite concentrates for sale. This work featured several tonnage scale pilot plant runs that have been used to define process design criteria for the Definitive Feasibility Study ("DFS"). Metallurgical test work also included ore characterisation by the CSIRO Iron Ore Group, and additional laboratory and industrial testwork by AMMTEC.
The process design criteria for the DFS comprise a conventional metallurgical circuit using the proven technologies of Low Intensity Magnetic Separation ("LIMS") and flotation. Pilot plant runs on composites of the main magnetite Banded Iron Formation ("BIF") zones provided these design criteria for processing Tonkolili magnetite ores yielding very high grade concentrates.¬†
Staged crushing and grinding for the reported concentrates progressively removes tailings at the coarsest possible particle size, which minimizes energy consumption, with more than 45% of the feed is removed at coarser size fractions, leaving less than 55% of the feed sample for final grinding.
This testwork yields excellent results that have exceeded the Companyís predictions of iron grade, mass recovery and impurities removal, and provides a robust basis for the progression of the DFS which is now underway.
CHINA RAILWAY MATERIALS COMMERCIAL CORPORATION ("CRM")
Negotiations with CRM in respect of the planned investment by CRM in the Company announced on the 6th January 2010 are progressing well. In 2009 CRM was ranked 57th among the top 500 State Owned Enterprises in China. Subject to the finalisation of terms, in March 2010 African Minerals expects to execute definitive agreements for long term iron ore off-take by CRM, the investment by CRM and the procurement of equipment and services relating to the Project.
£80M CASH PLACING
On the 11th February 2010 the Company announced completion of the £80m cash placing (the "Placing") with institutional investors. The proceeds of the Placing are to be used to commence construction of key infrastructure for Phase 1 of the Project, the production of up to 8 million tonnes per annum of hematite iron ore.
HEMATITE IRON ORE PRODUCTION
The Company is targeting delivery of commercial production of hematite iron ore in Q1 2011 and work is progressing well on defining a hematite resource with SRK. AML is therefore focusing its management and technical resources on that early target. The AML management team, with its proven track record of delivering such projects within tight time frames, is confident of its ability to deliver on this goal. As a consequence, AMLís board has elected to push back delivery of the DFS for the magnetite Project, being prepared by Worley Parsons, to Q2 2010, allowing the Company to focus all its resources on delivery of the Phase 1 hematite project.
All assay, geological, metallurgical and Mineral Resource Estimate work referred to in this announcement was undertaken and/or verified by independent experts.¬†
Commenting on the Mineral Resource Estimate and Project Update, Alan Watling, Chief Executive Officer of AML said:
"I am delighted with our progress at Tonkolili. We have doubled the size of the resource having completed what we believe to be the largest exploration programme in Africa during 2008 and 2009, Tonkolili is now firmly in place as the largest reported JORC compliant magnetite iron ore mineral resource in the world.
Furthermore, independent industrial pilot metallurgical testwork demonstrates that a premium quality product can be produced with very high grades and low levels of impurities.
The combination of the size and quality of iron ore concentrate produced at pilot plant scale, together with close proximity to railway and port infrastructure over which the Company has a 99 year lease, certainly provides the platform for a stand-out project.
I am confident that the Companyís experienced management team will deliver on the targets we are setting ourselves. Coupled with the market forecast of significant increases in iron ore prices in the next two years, we are in a very strong position to realise the full potential of the Project and to compete alongside leading iron ore producers in supplying international steel markets."