Sirius Minerals PLC: Maiden Ore Reserve
September 18, 2013 (Source: Sirius Minerals) — Highlights:
- York Potash Project Ore Reserve of 250 million tonnes with an average grade of 87.8% polyhalite from just 1% of the Project Area.
- Thickest and highest grade polyhalite Ore Reserve in the world defined from world’s largest and highest grade polyhalite resource.
- Ore Reserve provides for a Phase 1 mine life in excess of 50 years.
- Potential for mine life to double following underground exploration of the Inferred Mineral Resource.
The Directors of Sirius Minerals Plc (AIM: SXX, OTCQX: SRUXY) (“Sirius” or the “Company”) are pleased to announce a maiden Ore Reserve for the York Potash Project (the “Project”) comprising a Probable Ore Reserve of 250 million tonnes of polyhalite with a mean grade of 87.8% polyhalite. This has been derived from, and is a sub set of, the Indicated Mineral Resource reported for the Project on 7 May 2013 of 820 million tonnes at an average grade of 87.3%. The Indicated Resource is derived from just 1% of the Project Area of Interest (“AOI”).
The Ore Reserve has been prepared by independent consultants SRK Consulting (UK) Ltd (“SRK”) and reflects the results of the Pre-Feasibility Study (“PFS”) prepared by the by the Company and its consultants which were released in December 2012, the Mineral Resource completed by SRK in May 2013, and ongoing technical work being undertaken as part of the Definitive Feasibility Study (“DFS”) scheduled for completion, subject to funding, in 2014. This combined work has now advanced the Project to the point where SRK considers an Ore Reserve estimate can be reported.
Chris Fraser, Managing Director and CEO of Sirius said:
“The scale and quality of the York Potash polyhalite deposit has now been confirmed as truly exceptional. Our exploration programme has delivered a number of world firsts – the world’s largest and highest grade polyhalite resource, and now the world`s thickest and highest grade polyhalite Ore Reserve.”
“The York Potash Project will deliver significant value to our shareholders and can make an exceptional contribution to the UK and local economies. Defining such a significant high quality Ore Reserve is a vitally important step in the financing and development of the project.”
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“While the additional time required for the approvals process is frustrating for our many supporters, a potential mine life of over 100 years hopefully puts that into some perspective.”
The Ore Reserve is summarised in the table below and has been reported using the guidelines and definitions set out in the 2004 edition of the JORC Code. The Mineral Resource previously reported is also provided as reference.
In preparing its statement, SRK has drawn upon work it undertook in preparing the Mineral Resource and also ongoing work undertaken by SRK as part of the DFS where it has to date been responsible for mining aspects. In addition SRK has reviewed all other technical aspects of the Project so as to enable it to take responsibility for the statement as a whole.
The mining schedule upon which the Ore Reserve is based assumes a mining rate of 5Mtpa (“Phase 1”). While ongoing studies as part of the DFS are focussed on increasing this to 12mtpa, the PFS was based on this Phase 1 level and so SRK has retained this scenario, which is the most engineered, for the purpose of this statement.
The statement takes into account all losses and dilution associated with mining and represents the material that will be extracted from the mine.
SRK’s Ore Reserve also assumes that:
1. The mining method will be room and pillar using a combination of drill and blast and continuous miners;
2. Access to the mine will be by vertical shaft the most up to date design and cost estimate for which remains that presented in the PFS; and
3. The proposed process route will comprise milling at the mine site followed by slurry pipeline transportation to Teesside for drying and granulation.
|Reserve Statement September 2013|
|Seam||Reserve Category||Mean Thickness (m)||Tonnage
|Mean Polyhalite Grade (%)||Polyhalite Content (Mt)|
|Resource Statement May 2013|
|Seam||Resource Category||Mean Thickness (m)||Tonnage
|Mean Polyhalite Grade (%)||Polyhalite Content (Mt)|
Notably, the Ore Reserve is backed up by a ‘Life of Mine plan’ (“LoM”) which extends for some 50 years at a mining rate of 5Mtpa. This LoM is based solely on the mining of the Ore Reserve detailed in this announcement. While it cannot be guaranteed, further exploration from underground, undertaken as part of normal mining operations, should enable additional Mineral Resource to be upgraded to the Measured and Indicated Categories. SRK believes that this has potential to double the mine life reported here from just an additional 4% of the AOI.
Environmental and Social Management
The Company has evaluated the environmental and social impacts of the mine by means of an Environmental Impact Assessment (“EIA”), as required by the planning application process. Baseline studies required for the pipeline EIA have been completed and an updated Environmental Statement is under preparation. A significant amount of stakeholder engagement activities are ongoing for the mine and pipeline, with efforts demonstrated to exceed statutory requirements.
Mineral Rights in the United Kingdom generally belong to either the present freehold surface owner or a previous owner who may have reserved them. In order to extract the minerals, permission is required from the mineral owner usually under the terms of a lease. Sirius is in the process of entering into agreements with respective landowners and has already reached agreement on about 90% of the Mineral Resource outlined above and has no reason to expect that this process will not result in all the required agreements being made in due course.
Planning applications need to be submitted for the mine, pipeline, materials handling plant and port. The mine application is underway, the pipeline is in progress and a clear submission timetable has been outlined for the materials handling facility and port.
The application for the mine was submitted in January 2013 but is now in the process of revision following receipt of comments on this. Notably, York Potash has obtained a planning opinion on the case and has requested additional time from the North York Moors National Park Authority to enable it to appropriately respond to outstanding issues.
About Sirius Minerals Plc
Sirius Minerals is a globally diversified potash development company. Its primary focus is to bring on stream major potash mining facilities through the acquisition and development of projects overlying recognised potash deposits. Today it holds properties in the United Kingdom (North Yorkshire) and the United States (North Dakota). Incorporated in 2003, Sirius Minerals’ shares are traded on the London Stock Exchange’s AIM market. Its shares are also traded in the United States on the OTCQX through a sponsored ADR facility. Further information on the Company can be found at www.siriusminerals.com.
The information in this press release that relates to Ore Reserves and Mineral Resources is based on information compiled under the direction of Dr Mike Armitage C Eng, who is a Member of the Institute of Materials, Minerals and Mining which is a ‘Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by ASX from time to time.
Dr Armitage is a full time employee of SRK and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code) and for the purposes of the AIM Rules. Dr Armitage has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears.
Graham Clarke, Operations Director for Sirius Minerals Plc, who has reviewed this Stock Exchange Announcement, has over 26 years’ experience in the potash mining industry. He has a Degree in Mining Engineering from the University of Nottingham, is a Fellow of the Institute of Materials, Minerals and Mining (IMMM) and extensive operational experience gained at Cleveland Potash Limited in the mining of the Boulby Potash seam and the exploration and development of the upper Fordon Polyhalite seam.
Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>