Heron Resources Limited (ASX:HRR TSX:HER, “Heron” or the
“Company”) is pleased to provide the following update on the
Company’s Woodlawn Zinc-Copper Project in New South Wales,
Australia. Since the first ground was broken at the Woodlawn
Project on 29 August 2017, site activities have ramped-up
considerably, progressing on track and within budget.
- Site activities at Woodlawn continue to ramp-up with
development on track and on budget
- Earthworks: With 40 items of mobile plant in operation Ertech
will deliver critical path working areas ahead of schedule
- EPC: Sedgman (a member of the CIMIC Group) ramps-up
design, awards procurement packages and tenders critical path
concrete, steel and plate work packages – set for award in
December
- Recruitment of key operational personnel continues
- Advanced tendering of multiple operational contracts, including
the underground mining contract
- Extensions to the project’s life-of-mine continues to be
pursued through both in-mine and regional prospects
- Zinc market continues to tighten with LME stocks falling to
nine year lows. A further significant supply deficit has been
forecast for 2018
Commenting on the progress, Heron’s Managing
Director, Mr Wayne Taylor said:
“Development activity at Woodlawn continues to
march ahead with a 40-strong fleet of equipment progressing
critical path earthworks ahead of schedule while our EPC
contractor, Sedgman, advances detailed plant design work and
procurement. The strong progress means the project remains on track
to first production in late 2018 / early 2019 and meet highly
favourable zinc market conditions, characterised by a heavily
constrained physical market and strong demand outlook. In parallel
with the site construction activities, the Company has been busy
drilling a number of in-mine and regional prospects which have the
potential to extend the project’s life and create additional value
for Heron shareholders.”
Earthworks
The earthmoving contractor, Ertech, continues to
make good progress with 40 items of mobile plant deployed across
various site work areas (figure 1). Seasonal inclement weather has
resulted in some lost days, however, Ertech has rescheduled
activities and rosters to accommodate for this. The focus has been
on the completion of the process plant pad area (figure 2) in
preparation for the commencement of concrete works which are
scheduled to start in February 2018. This represents the current
project critical path activity with an expected completion date,
subject to weather impacts, of early January providing a schedule
float of four weeks.
Other current work areas include:
- Site access road – The Collector Road turnout has received a
final bitumen coating and is now complete.
- Site drainage works – In maintaining the sites zero discharge
requirement, significant work has been completed on the various
drainage channels and work has largely finished on the event
control dam located near the site access road, being the lowest
point of the construction site.
- Haul road between the ROM pad and box cut – Widening and
levelling is well advanced.
- Box cut excavation – Rock stockpiled during former operations
has been removed from the box-cut footprint with drainage works
being the next step prior to commencing the excavation below the
natural surface level.
- TSF4 – Top soil removal is well underway with dam wall
construction due to start soon.
Figure 1: Woodlawn site earthworks looking north from ROM pad.
http://www.heronresources.com/tsximages/20171213/171213_fig1.jpg
Figure 2: Process plant pad filling and
compaction.
http://www.heronresources.com/tsximages/20171213/171213_fig2.jpg
Figure 3: Hauling pad fill in the foreground.
Scraper top soil stripping of TSF4 in the background.
http://www.heronresources.com/tsximages/20171213/171213_fig3.jpg
Figure 4: One of two on-site crushers producing
final pavement material.
http://www.heronresources.com/tsximages/20171213/171213_fig4.jpg
Engineering Procurement &
Construction
Sedgman continues to advance the EPC contract
within the delivery timeline with the critical path remaining
unchanged since last month. The schedule was modified in October
with the removal of the IsaMill from the critical path due to a
revised early delivery. Sedgman has progressively increased
drafting resources to assist with the detailed design work to allow
for tendering of work packages. Progress against the overall
project ‘S’ curve is reported as being on schedule to the end of
November.
The current focus of activities is around key
design works, finalising China steel fabrication and tendering for
site concrete works.
November saw a number of contracts awarded
covering the paste plant, bins and tanks, overhead crane, HV
switchgear, valves, administration building and change rooms. The
concrete package was issued for tender with award expected in
December. Also for award in December will be the plant structural
steel and plate work which should result in fabrication commencing
no later than early in the New Year.
Figure 5: Process plant detailed schematic
looking southwest.
http://www.heronresources.com/tsximages/20171213/171213_fig5.jpg
Figure 6: Woodlawn’s IsaMill M10000 shell –
original critical path item that is ahead of the forecast
fabrication schedule.
http://www.heronresources.com/tsximages/20171213/171213_fig6.jpg
Production Readiness and Life of Mine
Growth
Recruitment – The next phase of recruitment is
underway for key site personnel including Mining Superintendent,
Geology Superintendent, Processing Superintendent, Maintenance
Superintendent and Site Services Manager. The Company continues to
receive strong interest in employment opportunities at
Woodlawn.
Operational Contracts – The underground mining,
water treatment, tailings mining and port services contracts are
all currently in late stage tendering. Concentrate transport and
power supply contracts are currently pre-tender with settlement
expected in 2018.
Mine Inventory Expansion – The final mine design
and planning schedule is being completed on the G2 resource to
accommodate the new close-to-surface mineralisation. The next phase
of work is currently under design with a focus on upper D Lens and
the new Lisa Lens. These lenses are the next to be accessed by mine
development beyond the defined reserves. Following this will be I
and D Lenses along strike and at depth and then the B Lens northern
extension.
Woodlawn Regional Exploration – Active programs
have progressed both advanced and early stage prospects all with
the potential to becoming satellite production sources for
Woodlawn:
- Peelwood – The pegging of the John Fardy and Peelwood projects
has provided immediate advanced stage deposits with previously
reported JORC (2004) Mineral Resources. Data from Balamara, the
previous tenement holder, continues to be reviewed and the next
steps in the assessment of these projects are being
formulated.
- Currawang – Following completion of the 5 hole drilling program
a downhole EM survey was undertaken. A significant off-hole
conductor has been modelled to the south of the old mine, however
further survey work is recommended to enable better definition
prior to any further drill planning.
- Kangiara – A RAB drilling program has commenced over the Crosby
prospect to follow-up the 42m @ 0.20 g/t Au and 0.26% Cu from 4m to
end of hole (CRRB027).
Zinc Market Outlook
The supply and demand fundamentals of zinc
remain extremely strong. The combined LME and Shanghai stocks are
down 55% year-to-date and currently sit at 8.31 days of consumption
(10 days or less is the level at which the market is considered to
be in a significant shortage). LME stocks have dropped below 200kt
for the first time in nine years. The current stock levels,
combined with the forecasted demand significantly exceeding supply
again in 2018, presents a very tight market to further support
strong zinc prices. This provides an excellent commodity backdrop
to be entering the market with Woodlawn’s first base metal
concentrates expected to be delivered in the first quarter of
2019.
Figure 7: Zinc price and stocks 2013 to
2017(source – LME, RBA, SHFE, Terra Studio).
http://www.heronresources.com/tsximages/20171213/171213_fig7.jpg
Corporate
Heron Board – Late in November Heron appointed
Dr Ian Pattison to the Board as a Non-executive Director. Dr
Pattison is a well-respected metallurgist with previous experience
at Woodlawn along with a number of other base metal operations.
This experience includes the recent commissioning of the Rasp
concentrator at Broken Hill. Dr Pattison adds further technical
depth to the Board and will provide valuable insight as Woodlawn
progresses through its commissioning phase.
About Heron Resources
Limited:
Heron’s primary focus is the development of its
100% owned, high grade Woodlawn Zinc-Copper Project located 250km
southwest of Sydney, New South Wales, Australia. In addition,
the Company holds a significant high quality, gold and base metal
tenement holding regional to the Woodlawn Project.
1 Scotia Daily Mining Scope. Edition 1953. 11 December 2017
For further information, please visit www.heronresources.com.au or contact:
Australia:
Mr Wayne Taylor
Managing Director and Chief Executive Officer
Tel: +61 2 9119 8111 or +61 8 6500 9200
Email: heron@heronresources.com.au
Canada:
Tel: +1 647-862-1157 (Toronto)