Stonegate Agricom Announces Updated Mineral Resource for Lower Zone at Paris Hills Phosphate Project
TSX: ST and ST.WT
-- 2011 Technical Report will identify Measured and Indicated
Mineral Resource of 19 million tonnes of phosphate
materialization with average grade of 30.6% P2O5in Lower Zone's
horizontal limb based on definition drilling assay results to
date
-- Potential to increase Lower Zone Measured and Indicated Mineral
Resource as a result of planned additional drilling in
horizontal limb areas containing estimated Inferred Mineral
Resource of 12 million tonnes with average grade of 30.0% P2O5
-- 2011 Technical Report will identify Exploration Target in
upright limb with an estimated conceptual tonnage of seven to
10 million tonnes of phosphate mineralization with average
grade of 28.0% to 32.0% P2O5
-- Mineral Resource estimates support Stonegate's pre-feasibility
study objective for the Lower Zone of a direct-ship phosphate
mining operation with a life of at least 15 to 20 years
TORONTO, Oct. 3, 2011 /CNW/ - Stonegate Agricom Ltd. ('Stonegate' or the 'Company')
today announced updated Mineral Resource estimates for the Lower Zone of its Paris Hills Phosphate Project in Idaho. The Mineral Resource estimates will be contained in a National Instrument 43-101 ('NI 43-101') Technical Report (the '2011 Technical Report') being prepared for the Company by Agapito Associates Inc., an independent geological and mining engineering consulting firm based in Grand Junction, Colorado.The 2011 Technical Report (details below) will identify a Measured Resource of 9.2 million tonnes with an average grade of 30.8% P(2)O(5) and an Indicated Resource of 9.9 million tonnes with an average grade of 30.4% P(2)O(5) in the Lower Zone, for a total Measured and Indicated Mineral Resource of 19.0 million tonnes with an average grade of 30.6% P(2)O(5).
The 2011 Technical Report also will identify an additional Inferred Resource of 12.0 million tonnes with an average grade of 30.0% P(2)O(5) in the same zone.
'The 2011 Technical Report is based on assay results from diamond drilling that Stonegate has conducted at the Paris Hills Phosphate Project since September 2010. Combined with the previously reported successful fertilizer tests, it represents a major advancement of our knowledge of the deposit,' said Mark Ashcroft, President and Chief Executive Officer. The fertilizer tests were announced in a news release on August 5, 2011.
'The assay results and fertilizer test have shown that the quality and grade of the Lower Zone in-situ material, without beneficiation or processing, is in-line with higher-quality phosphate rock concentrates traded in the international merchant markets and imported into the United States for the manufacture of end-product fertilizers.
'As a result of this successful development work at Paris Hills, we are closer to our goal of establishing an underground mining operation in the Lower Zone with a life of at least 15 to 20 years producing approximately 1 million tonnes per annum of concentrate-quality phosphate material shipped directly to fertilizer producers (without the need for beneficiation). This could make Paris Hills the first new domestic supplier of merchant grade phosphate rock concentrate in the United States in many years.'
Stonegate expects to publish a pre-feasibility study focusing on a direct-ship operation in the Lower Zone by early 2012. The Company also intends to provide an update of the Mineral Resource in the deposit's Upper Phosphate Zone in 2012 (see below for previously reported Inferred Mineral Resource).
'I am very pleased with the efficiency at which we took this forward, having completed the successful fertilizer tests and producing a new estimate - from the commencement of drilling to a NI 43-101 compliant Mineral Resource estimate in 53 weeks,' Mr. Ashcroft stated.
'The Company intends to continue drilling at the property well into 2012 with the intention of potentially expanding the Measured and Indicated Mineral Resource estimate, and expects to publish mineral resource updates in the future, first in the pre-feasibility study for the project by early 2012 and again in an expected feasibility study later in 2012.
'Stonegate will also drill for the first time in the coming weeks on the small portion of the property where the U.S. Bureau of Land Management ('BLM') owns the mineral rights. The BLM recently granted the Company a two-year exploration license and prospecting permit for this area, which covers approximately 15% of the Paris Hills property. The remaining 85% of the property, for which exploration licenses were granted last year, involve mineral rights owned by the State of Idaho and individuals.'
A map of the drill hole sites and mineralized area at the Paris Hills Phosphate Project is available at: http://files.newswire.ca/923/Paris_Hills.pdf
2011 Technical Report
The 2011 Technical Report is being prepared for Stonegate by Leo Gilbride, P.E., and Vanessa Santos, P.G., of Agapito Associates, Inc. on the Company's Paris Hills Phosphate Project in southeastern Idaho. The 2011 Technical Report will be filed with SEDAR (www.sedar.com) within 45 days of the date of this news release.
The 2011 Technical Report will present a Mineral Resource estimate based on 21 holes cored through the Lower Zone at depths ranging from 59 to 778 metres during the Company's 2010-2011 exploration drilling program. Chemical analyses of phosphate content (weight percent P(2)O(5)) were complete on 0.3-metre-long core samples at two independent, industry recognized analytical laboratories, IAS EnviroChem in Pocatello, Idaho, and Thornton Laboratories, Inc., in Tampa, Florida.
The 2011 Technical Report will identify a Measured Resource of 9.2 million tonnes with an average grade of 30.8% P(2)O(5) and an Indicated Resource of 9.9 million tonnes with an average grade of 30.4% P(2)O(5) in the Lower Zone, as described in Table 1 (below). The 2011 Technical Report will also identify an Inferred Resource of 12.0 million tonnes with an average grade of 30.0% P(2)O(5) in the Lower Zone. The Mineral Resource estimate has an effective date of September 30, 2011.
Reasonable potential for economic extraction is based on an underground room-and-pillar base case mining scenario for market prices of phosphate rock concentrate in excess of US$100 per tonne. The Mineral Resource estimate assumes a minimum Lower Zone composite cut-off grade of 28.0% P(2)O(5) and a minimum bed thickness of 1.5 metres targeting a direct-ship phosphate concentrate in excess of 30.0% P(2)O(5). In 21 core holes, the Lower Zone thickness ranges from 1.5 to 2.8 metres with composite grades ranging from 28.6% to 33.3% P(2)O(5). The Lower Zone averages 1.9 metres thick across the property.
The Mineral Resource estimate is based on a kriged gridded-seam model developed using Carlson Mining 2011 Software™. Mineral Resource classifications are based on the technical methodology of Sedimentary Phosphate Resource Classification System of the U.S. Bureau of Mines and the U.S. Geological Survey (Geological Survey Circular 882, 1982). The Mineral Resource calculations are compliant with Canadian Institute of Mining, Metallurgy and Petroleum ('CIM') Best Practice Guidelines for Industrial Minerals.
Fertilizer tests completed under laboratory conditions on composite drill core samples have demonstrated the ability to manufacture marketable diammonium phosphate (DAP) and monoammonium phosphate (MAP) products from the Lower Zone material without the need for additional processing (beneficiation) if the targeted grade can be achieved during mining.
Table 1. Stonegate Paris Hills Phosphate Mineral ResourceEstimate dated as of
September 30, 2011(7)
Average Resource In-Situ Bulk In-Place
Thickness Area1 Density2 Tonnes P2O5
(m) (sq km) (tonnes/m3) (millions) (wt %)
LOWER PHOSPHATE ZONE3
Measured4 2.0 1.76 2.61 9.2 30.8
Indicated5 1.9 1.96 2.61 9.9 30.4
Total Measured and 2.0 3.72 19.0 30.6
Indicated Mineral
Resources
Inferred6 1.9 2.42 2.61 12.0 30.0
1 Total property area is 8.86 sq km.
2 Average in-situ bulk density derived from 60 laboratory bulk
density tests on representative Lower Zone core.
3 Bed thickness cut-off 1.5 m, Lower Zone composite grade cut-off
28.0% P2O5, excludes out-of-seam dilution.
4Measured Mineral Resource located within a 200-m radius of an
exploration hole.
5 Indicated Mineral Resource located between a 200-m and 400-m
radius of an exploration hole.
6 Inferred Mineral Resource located between a 400-m and 800-m radius
of an exploration hole.
7 Numbers may not add up due to rounding.
The Lower Zone is a folded bedded deposit comprising a gently dipping horizontal limb and a subvertical to overturned upright limb. The Mineral Resource estimate is limited to the horizontal limb where the majority of exploration drilling has been focused and mining appears most favorable. The upright limb is projected to contain substantial mineralization based on limited historical mining and surface trenching. The 2011 Technical Report will identify the upright limb as an exploration target ('Exploration Target'), separate from the Mineral Resources, potentially containing seven to 10 million tonnes of phosphate mineralization with an average grade of 28.0% to 32.0% P(2)O(5).
The Exploration Target is conceptual in nature and there has been insufficient exploration to define it as a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource under NI 43-101. The Exploration Target is not being reported as part of any Mineral Resource or Mineral Reserve.
Daniel Thompson, P.E., Manager, Technical Services of the Company, who is a qualified person as defined under NI 43-101, supervised the exploration program and has reviewed and approved the contents of this news release. Leo Gilbride, P.E., a qualified person who is independent of Stonegate for the purposes of NI 43-101, prepared the Mineral Resource estimate and the information related to it that is contained herein. Leo Gilbride, P.E., and Vanessa Santos, P.G., each of whom is a qualified person as defined under NI 43-101, have reviewed and approved the technical information in this news release.
Previous Resource Estimate
The previous NI 43-101 compliant Technical Report for the Paris Hills Phosphate Project (the 'AMEC Report') was dated February 1, 2010 and was prepared for Stonegate by Edward J.C. Orbock III, MAusIMM, Douglas Reid, P.Eng. and John Rust, MAusIMM, each independent qualified persons under NI 43-101, on behalf of AMEC E&C Services Ltd.
The AMEC Report, based on CIM Standards, estimated an Inferred Mineral Resource for the Paris Hills property of 73.6 million tonnes with an average grade of 23.1% P(2)O(5 )in the Upper Phosphate Zone, and 35.9 million tonnes with an average grade of 24.7% P(2)O(5) in the Lower Phosphate Zone. The cut-off grade was 20% P(2)O(5).
The estimates were based on assay results from six holes drilled in 2008 at the southern end of the property using a reverse circulation ('RC') drilling rig, and on documents describing the results of RC and core drilling and sampling between 1972 and 1976. Drilling was conducted by previous owners of the property. Details are available in the technical report filed at www.sedar.com under the Company's profile.
About Stonegate
Stonegate Agricom, which is actively engaged in acquiring and developing agricultural nutrient projects, is currently focused on the development of two potentially world-class, long-life phosphate deposits, the Paris Hills Phosphate Project located in Idaho and the Mantaro Phosphate Project located in Peru. Stonegate is confident that the two deposits have sufficient size and grade to become strategic, cost-effective sources of phosphate supply for major fertilizer producers. The Company intends to continue definition and exploration drilling to confirm and expand estimates of NI 43-101 compliant Mineral Resources in the deposits and then complete feasibility studies leading to a decision to proceed with extracting and processing the phosphate. More information is available at www.stonegateagricom.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains 'forward-looking statements' and 'forward-looking information' within the meaning of applicable law. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking terminology such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate', 'believes', or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'occur' or 'be achieved'. All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: the general risks associated with the speculative nature of the Company's business, commodity prices, current global financial conditions, uncertainty of additional capital, price volatility, the Mantaro and Paris Hills projects are advanced exploration stage projects, limited operating history, no history of earnings, government regulation in the mining industry, environmental risks and hazards, impending climate change legislation, required approvals and permits, foreign subsidiaries, political and economic risk in Peru, risks relating to the retention of the Mantaro project, risks relating to the retention of the Paris Hills project, expiration of leases and permits for the Paris Hills Project, title to mineral properties, obtaining and converting mineral concessions and surface rights, community relations and project support, water rights, exploration, development and operating risks, uncertainty in the estimation of mineral resources, uncertainty of inferred mineral resources and mineralization, mineral exploration, reliability of historical exploration work, risks associated with having a controlling shareholder, dilution to the common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition, legal proceedings, conflicts of interest and lack of dividends as well as those factors discussed in the section entitled 'Risk Factors' in the Company's most recently filed annual information form available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The forward-looking statements and forward-looking information contained in this press release are included for the purpose of providing investors with information to assist them in understanding the offering as well as the Company's expected financial and operational performance and may not be appropriate for other purposes. Stonegate does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.
SOURCE Stonegate Agricom Ltd
Image with caption: 'Map showing areas of phosphate mineralization at the Paris Hills Phosphate Project in Idaho as reported by Stonegate Agricom Ltd. in a news release issued October 3, 2011 (CNW Group/Stonegate Agricom Ltd)'. Image available at: http://photos.newswire.ca/images/download/20111003_C8861_PHOTO_EN_4109.jpg
Stonegate Agricom Ltd
CONTACT:
Wayne Cheveldayoff Christine Stewart
Vice President, Investor Relations Renmark Financial
Stonegate Agricom Ltd. Communications Inc.
Tel: (416) 864-0303 Tel: (416) 644-2020
wcheveldayoff@stonegateagricom.comcstewart@renmarkfinancial.com