Legend International Announces 60 Year Mine Life from Its Maiden Mineral Reserve Estimate for the Paradise South Phosphate Deposit
Legend International Holdings, Inc (OTCBB: LGDI) (Legend) is
pleased to announce its maiden mineral reserve estimate for its 100%
owned Paradise South phosphate project. For this initial mineral reserve
estimate, Legend aimed to define reserves for a minimum 30 year mine
life to support the base case scenario of producing 600,000 tonnes per
year of Diammonium Phosphate (DAP) and Monoammonium Phosphate (MAP) high
analysis phosphate fertilizers, for 30 years as covered by Legend's
feasibility study (see press release dated July 24 2010 on the company
website www.lgdi.net).
The resulting mineral reserve estimate is well above expectations with
the following highlights:
- Proven and probable reserves of phosphate rock that will support
59.8 years of operation for the 600,000 tonnes DAP and MAP per annum
production scenario or 29.9 years at a doubled rate of production.
- 'As-mined' proven and probable ore reserves of phosphorite
of 196.1 million tonnes at 14.6% P2O5. - Proven and probable mineral reserves of recoverable,
commercially useable and internationally marketable phosphate rock
concentrate of 55.5 million tonnes at 33% P2O5
(72 BPL). - Reserves based on a DAP price of US$445 per tonne FOB Tampa with
DAP prices currently over US$610 per tonne.
For the full report with maps and tables included please see the
detailed technical report available on Legend's website www.lgdi.net
Following Nomura's appointment as Legend's financial advisor (see press
release dated December 2, 2010) keen interest has been received by
international industry corporations for potential strategic transactions
involving development and financing of the phosphate assets. A number of
parties are conducting due diligence on the phosphate assets and the
company is continuing discussions with these parties.
The reserve area targeted by recent drilling within the Paradise South
Mining Lease Application (MLA90197) equates to only approximately 70% of
the area that contains historically defined mineralised material within
this lease and only approximately 50% of the area that contains
historically defined mineralised material within Legend's exploration
licence EPM16942. The current reserve estimates correlate well to
historical (1970's) estimates. This supports potential further increases
in reserve tonnage upon successful future drilling results within areas
that have not recently been tested with modern drilling techniques but
have reported phosphate intersections in historical drilling information.
Paradise South is one of seven phosphate rock deposits controlled by
Legend and is the first to have a current mineral reserve estimate
reported. All seven deposits however have historically reported
mineralised material of significant tonnage.
Reserves
The reserve estimate is presented below in Table 1 as both 'as-mined'
ore reserves of phosphorite which will provide feed for the
beneficiation plant to be located at Paradise South, and the recoverable
commercially useable or marketable phosphate rock concentrate or
'product' mineral reserves achievable from the ore reserves. The ore
reserves and mineral reserves cannot be aggregated as the mineral
reserves represent the recoverable product derived from the ore reserves
after beneficiation of the phosphorite. Reserve classifications are as
defined in the U.S Securities and Exchange Commission's Industry Guide
No. 7.
The 'as-mined' proven ore reserves of the Paradise
South phosphorite deposit are currently estimated at 98.0 million tonnes
of phosphorite at 15.3% P2O5. The Paradise South
phosphorite deposit contains additional probable ore reserves
estimated at 98.1 million tonnes of phosphorite at 13.9% P2O5.
The total proven and probable ore reserves are estimated at 196.1
million tonnes of phosphorite at 14.6% P2O5. These
reserves are based on a block model, typical of industry standards,
developed from 180 drill holes using reverse circulation drilling
technology and 32 cored diamond drill holes.
The recoverable, proven mineral reserves of the Paradise South
phosphorite deposit are currently estimated at 28.9 million tonnes of
phosphate rock concentrate at 33.1% P2O5 (72.4
BPL). The Paradise South phosphorite deposit contains additional
probable mineral reserves estimated at 26.6 million tonnes of phosphate
rock concentrates at 32.9% P2O5 (71.8 BPL). The
total proven and probable mineral reserves are estimated at 55.5 million
tonnes of phosphate rock concentrates at 33.0% P2O5 (72.1
BPL). These reserves are based on a block model, typical of industry
standards, developed from 180 drill holes using reverse circulation
drilling technology, 32 cored diamond drill holes and a beneficiation
process developed specifically for Legend's phosphorite ore types.
The projects base case scenario of producing 600,000 tonnes per year of
DAP/MAP fertilizers requires approximately 0.93 million tonnes per annum
of phosphate rock concentrate at 33% P2O5 to feed
Legend's proposed Mt Isa Fertilizer Complex. The above proven and
probable phosphate rock concentrate reserves of 55.5 million tonnes
therefore provide a total project life estimated at 59.8 years. This
mine life calculation is based on recovering 93% of the P2O5
from the rock concentrate during the acidulation process and 95%
of the P2O5 during the DAP/MAP granulation
process. It is also based on producing MAP and DAP at a 2:1 ratio which
have total P2O5 contents of 52% and 46%
respectively. A doubled production scenario would provide an estimated
total project mine life of 29.9 years.
Proven reserves are based on an area of influence for each drill hole
not to exceed 20 acres (8 hectares). Probable reserves are based on an
area of influence for each drill hole not to exceed 40 acres (16
hectares).
It is reasonable to expect that additional fill-in drilling to reduce
the drill hole area of influence will result in the reclassification of
probable reserves into the proven category. Legend may endeavour to
expand the Paradise South proven and probable reserves in future
drilling seasons.
| ||||||||||||||||||||||||||
(1) (2)ORE RESERVES - 'As-Mined' | ||||||||||||||||||||||||||
Tonnes | %P2O5 | Average BPL | %Fe2O3 | %Al2O3 | %MgO | %CaO | ||||||||||||||||||||
| Proven | 98.0 | 15.3 | 33.4 | 6.5 | 2.6 | 0.4 | 21.3 | |||||||||||||||||||
| Probable | 98.1 | 13.9 | 30.4 | 6.1 | 2.4 | 0.4 | 19.3 | |||||||||||||||||||
| Total | 196.1 | 14.6 | 31.9 | 6.3 | 2.5 | 0.4 | 20.3 | |||||||||||||||||||
Acres | Hectares | (3)Overburden | (3)Ore | (3)Interburden | ||||||||||||||||||||||
Proven | 1,277 | 517 | 10.1 | 10.5 | 2.3 | |||||||||||||||||||||
Probable | 1,315 | 532 | 13.4 | 10.2 | 3.2 | |||||||||||||||||||||
Total | 2,592 | 1,049 | 11.8 | 10.4 | 2.8 | |||||||||||||||||||||
| ||||||||||||||||||||||||||
| (4) (2)MINERAL RESERVES - Recoverable Phosphate Rock Concentrate (Post Processing) | ||||||||||||||||||||||||||
Tonnes | %P2O5 | Average BPL | %Fe2O3 | %Al2O3 | %MgO | %CaO | ||||||||||||||||||||
| Proven | 28.9 | 33.1 | 72.4 | (5)3.0 | 0.8 | 0.2 | 47.0 | |||||||||||||||||||
| Probable | 26.6 | 32.9 | 71.9 | (5)2.9 | 0.8 | 0.2 | 46.6 | |||||||||||||||||||
| Total | 55.5 | 33.0 | 72.1 | (5)2.9 | 0.8 | 0.2 | 46.8 | |||||||||||||||||||
(1) | Ore reserves are defined here as the phosphorite ore material for the beneficiation plant. It is 'as-mined' material and is before screening and processing in the proposed flotation beneficiation plant to be located at Paradise South. All ore reserves are in areas that are fully accessible for mining; free of surface or subsurface encumbrance, legal setbacks, environmental reserves and other legal restrictions that preclude permittable access for mining; believed by us to be permittable within a reasonable timeframe; and meet specified minimum physical, economic and chemical criteria related to current mining and production practices of the industry. | |||
(2) | Proven and Probable Reserves have been estimated by Henry J. Lamb (a member of the American Institute of Professional Geologists and Licensed Professional Geologist Registered in the states of Florida and North Carolina), who has more than 30 years experience in the exploration, development, valuation and operation of phosphorite deposits throughout the world including the United States, Peru, Egypt, Iraq, Uganda, Australia, Jordan, and Kazakhstan. Mr. Lamb is an independent consultant contracted to Legend. During this project, Mr. Lamb had opportunities to observe portions of the drilling and sampling activity, reviewed analytical and metallurgical laboratory procedures, reviewed the geologic database, converted the phosphorite ore information to phosphate rock concentrate (product); reviewed the operating cost model, and independently estimated the proven and probable reserves based on phosphate industry accepted procedures and standards. In preparing this proven and probable phosphate rock concentrate reserve estimate, Mr. Lamb relied upon his independent examination of geologic, metallurgical, and cost estimate data provided by Legend. Throughout the exploration and development program, Mr. Lamb has been an independent Technical Advisor to the Legend staff and project management regarding the exploration and development of the Paradise South Phosphorite Deposit. | |||
(3) | Overburden, ore and interburden are reported here as average thicknesses in vertical metres. | |||
(4) | Mineral reserves are defined here as the recoverable rock concentrate post screening and processing of the ore through the proposed flotation beneficiation plant to be located at Paradise South. This material is therefore a subset of the ore reserves and cannot be summed with the ore reserves. These reserves are in areas that are fully accessible for mining; free of surface or subsurface encumbrance, legal setbacks, environmental reserves and other legal restrictions that preclude permittable access for mining; believed by us to be permittable within a reasonable timeframe; and meet specified minimum physical, economic and chemical criteria related to current mining and production practices of the industry. | |||
(5) | Please see comments in the detailed technical report in the section on Metallurgy titled 'Investigative studies on the Fe2O3 content' which details test work that shows less than 50% of the iron contained in the rock concentrate leaches into the phosphoric acid due to the iron species being less amenable to acidulation than other known iron species. |
Project Expansion Study
An expanded study has also been underway to examine the feasibility of
doubling production to produce 1.2 million tonnes of DAP/MAP and 30,000
tonnes of AlF3 per year. Indications are positive
in that the project economics improve with increased scale and that the
proposed scale is technically and economically feasible. The above
reported reserve estimates also warrant an expanded production scenario
with no further drilling required. Completion and reporting of results
of this study are now estimated to occur before the end of this current
quarter (Q1 2011).
Forward-Looking Statements
Forward-looking statements in this press release are made pursuant to
the 'safe harbour' provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking
statements involve risks and uncertainties including, without
limitation, the risks of exploration and development stage projects,
risks associated with environmental and other regulatory matters, mining
risks and competition and the volatility of mineral prices. Actual
results and timetables could vary significantly. Additional information
about these and other factors that could affect the Company's business
is set forth in the Company's fiscal 2009 Annual Report on Form 10-K and
other filings with the Securities and Exchange Commission.
Legend International Holdings, Inc.
Mr. Joseph Gutnick, +011
613 8532 2866
Chief Executive Officer
Fax: +011 613 8532 2805
josephg@axisc.com.au
or
Legend
International Holdings, Inc.
General Manager Business
New
York Office, 212-223-0018
Fax: 212-223-1169
legendinfo@axisc.com.au