Amur Minerals Corporation Operational Blueprint -2-
June 29 2015 - 2:00AM
UK Regulatory
-- Based on the existing resource inventory at Kun-Manie, the
resource is capable of supporting ore production at the nominal
annual throughput of six million tonnes of ore for 15 years. Infill
drilling of Inferred resources is required to confirm this first.
At a later date the Company has the opportunity to add additional
resources by step out drilling into highly prospective ground. Mine
production will be undertaken using both open pit and underground
mining methods. Open pit ores will be derived from four of the five
deposits, whilst underground production will be obtained from areas
lateral two of the pits. Ore will be transported by truck to the
processing plant.
The process plant and tailings impoundment areas have been
relocated to more central locations, allowing for optimised ore
transport from the four sources along the Kurumkon Trend within the
Production Licence. The upsized 6.0 million tonnes of ore per year
plant location also provides storage for the greater volume of
tailings that will be generated.
-- The process plant design has been expanded to handle six
million tonnes of ore per annum (18,000 tonnes per day). Additional
metallurgical test work indicates that metal recoveries will be
improved over previously estimated recoveries, and independent work
has confirmed that a single simple concentrate can be generated by
classic and proven flotation technology. The concentrate is also
suitable for smelting at either a toll smelter or its own captive
smelter.
-- The concentrate will be truck transported to the Baikal Amur
rail line ("BAM") where supplies and fuel will be delivered by rail
for backhaul to the mine.
-- External smelting specialists have examined the proposed
composition of the concentrate to be generated by the processing
plant and determined that it is suitable for smelting on a toll or
owner operated basis. Preliminary capital cost estimates have been
provided and a smelting cost per tonne of concentrate determined. A
trade off study indicates that the greater benefit to the Company
is generated by owning and operating its own smelter rather than
shipping to a toll smelter. The preferred smelter location is
immediately adjacent the BAM rail line where coal and limestone can
be delivered to support smelting of the concentrate. Anticipated
final products are nickel and copper cathodes, cobalt precipitate,
and refined platinum, palladium, gold and silver. Available
capacity at the smelter can be used to smelt concentrates for a fee
on a contract basis should other mining companies in the region
have suitable products that require processing.
PEA Production Basis and Projections
The Blueprint Design originates with the Company's JORC defined
resource compiled by SRK and updated at the end of Q1 2015. The
current resource ranks among the top 20 nickel sulphide projects in
the world, whilst the potential to expand the resource appears
highly prospective. The limits of four of the five drilled deposits
remain unknown as the potential is open in the dip and strike
directions. Kun-Manie is expected to move up the list in the world
ranking of sulphide deposits by simple step out drilling.
Presently, there are 650,000 tonnes of nickel and 178,000 tonnes of
copper delineated by drilling as well as additional by-product
metals including cobalt, platinum, palladium, gold and silver.
Resource Tonnage Ni Ni Cu Cu Pt Pt Pd Pd
Class
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
Mt % t % t g/t kg g/t kg
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
Total Measured 15.7 0.52 81,800 0.13 21,100 0.2 2,900 0.2 3,200
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
Total Indicated 37.8 0.56 210,500 0.15 57,000 0.1 4,560 0.1 5,300
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
Sub-total 53.5 0.55 292,300 0.15 78,100 0.1 7,460 0.2 8,500
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
Total Inferred 67.3 0.53 358,300 0.15 100,300 0.1 9,440 0.1 9,500
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
Grand Total 120.8 0.54 650,600 0.15 178,400 0.1 16,900 0.1 18,000
----------------- -------- ----- -------- ----- -------- ---- ------- ---- -------
With the assistance of Runge, Pincock, Minarco (RPM), pit
optimisation models were compiled for four of the drilled deposits.
Using all resource classes including Inferred, ultimate pit limits
based on Q1 2015 operating costs, metallurgical recoveries and
mining constraints for each deposit were generated. Kun-Manie's
existing resource inventory is sufficient to produce 90 million
tonnes of ore from four open pits over the anticipated 15 year
production life. It was also noted that substantial portions of
these pits required the removal of large amounts of overlying waste
that must be extracted to access the ore. In such cases,
underground mining may provide higher profit per ore tonne than
open pit production. The configuration and orientation of the
mineralised bodies was examined and it was confirmed that an
underground method such as Reverse Room and Pillar could be a
viable alternative. A trade off study was completed confirming an
optimal blend of open pit and underground production provides a
greater operating profit than open pit production alone. The
following table provides a summary reserve potential based on the
conversion of Inferred resource to Indicated resource by infill
drilling.
Production Total Total Total Strip Ni Cu Co Pt Pd
All Resource Tonnes Ore Waste Ratio (%) (%) (%) (g/t) (g/t)
Classes (Mt) (Mt) (Mt)
-------------------- -------- ------ ------- ------- ----- ----- ----- ------- -------
Open Pit /
Underground 90.0 130.5 0.56 0.15 0.01 0.13 0.15
-------------------- -------- ------ ------- ------- ----- ----- ----- ------- -------
Open Pit Component 175.5 45.0 130.5 2.9 0.59 0.15 0.01 0.13 0.16
-------------------- -------- ------ ------- ------- ----- ----- ----- ------- -------
Underground
Component 45.0 0.54 0.15 0.01 0.13 0.14
-------------------- -------- ------ ------- ------- ----- ----- ----- ------- -------
The analysis provided key information for future planning
purposes. Open pit production will be derived from Maly Kurumkon /
Flangovy, Vodorazdelny, Ikenskoe / Sobolevsky and Kubuk.
Underground production will be derived from the deposits at
Flangovy and Kubuk. Infill drilling of the conceptual reserve will
be focused on the underground portion wherein the majority of the
resource is currently classified as Inferred, while the open pit
production areas are generally Measured and Indicated. The future
infill drill programme will be given priority, allowing for the
generation of a full JORC qualified reserve to be utilised in the
assembly of a Definitive Feasibility Study. Step out drilling to
further expand the global resource will begin subsequent to
completion of the infill verification work.
The plant flowsheet consists of a classical flotation plant
suitable for sulphide mineralisation. The design and metallurgical
recovery results have been verified by SGS Minerals located in
Chita, Chichinskaya Oblast of the Russian Federation. The projected
life of mine production through the 6.0 million tonne ore per annum
plant is summarised in the tables below.
Delivered Mine Production Plant Production Smelter Deliverable
Concentrate
----------------------------------- ------------------------------- ---------------------------------
Mill Tonnes
Strip Ratio 2.9 Feed t 90,000,000 Dry Concentrate t 6,300,000
--------------------- ------------ -------------- ----------- ----------------- ----------
Open Pit Recovery Contained
Waste t 130,450,000 of Nickel % 80.4 Moisture % 8.00%
---------------- --- ------------ -------------- ----------- ----------------- ----------
Tonnes
of Recovered Concentrate
Pit Ore t 44,950,000 Ni t 411,556 Wet Tonnes t 6,804,000
---------------- --- ------------ -------------- ----------- ----------------- ----------
Underground Recovery Ni Grade
Ore 45,050,00 of Copper % 90.2 in Concentrate % 6.53%
--------------------- ------------ -------------- ----------- ----------------- ----------
Tonnes
Ni Head of Recovered Cu Grade
Grade % 0.56 Cu t 124,899 in Concentrate % 1.98%
---------------- --- ------------ -------------- ----------- ----------------- ----------
Recovery Co Grade
Ni Delivered t 512,123 of Cobalt % 66.00% in Concentrate % 0.10%
---------------- --- ------------ -------------- ----------- ----------------- ----------
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