Herald Resources: Q2 N. Sumatra Zinc/Lead project up date

Australian listed mining company Herald Resources said Monday that despite uncertainty in Indonesian political condition Herald group has encountered little difficulty to date in conducting its operations in Indonesia.

In particular, said the company, the North Sumatra region where its Zinc/Lead project is located was ethnically stable, and very good working relationships have been established with the regional authorities and the local workforce.

Work during the second quarter primarily consisted of diamond drilling at the Sopokomil Prospect, initially at the south end of the Anjing Hitam resource sector, and midway in the quarter switching to the Lae Jehe and Bongkaras sectors.

In Anjing Hitam area, Herald reported indicated resources of 7.5 million tons with 16.7 percent Zn, 10.3 percent Pb and silver of 14 gr per ton, while indicated resources at Anjing Hitam stood at 2.5 million tons with 11.3 percent of Zn, 6.8 percent of Pb and silver of 13 gram per ton.

The company said three holes were completed during the quarter at the south-eastern extremity, where the rising topography necessitates deeper drilling and directional control of the holes becomes more challenging without the aid of specialised equipment.

While thicknesses are waning at the SE end, grades are still high - generally more than 20 percent Zn equivalent and it is intended to resume drilling following a Down-hole Electromagnetic survey (DHEM) in August. This will hopefully help trace the edges and continuity of the zone with savings in drilling costs.

Meanwhile, the company said drilling in Lae Jehe which is approximately 1.5 kms from Anjing Hitam was supported by strong geochemistry, geophysics and two successful previous holes with multiple intercepts including 6m at 8.7 percent Zn, 4.9 percent Pb in SOP13D and 9m at 6.1 percent Zn, 4.4 percent Pb in SOP17D

According to the company, three deeper holes were completed by mid-July and a degree of structural complexity has been indicated with an effective steepening of dip.

While not comparable with Anjing Hitam in terms of grade, Lae Jehe is perceived to have potential to provide significant incremental resources when more closely drilled out. In the meantime, the completed holes will be DHEM surveyed also. Surface EM in this area indicates that the mineralisation is more extensive along strike and downdip.

The Bongkaras sector is about 1.25kms NW of Lae Jehe sector and is also marked by geochemical and geophysical anomalies and with two outcrops of shale hosted sulphide in creeks. The drilling of 2 holes, 400m apart, in 2000 resulted in intercepts of 8.1m at 6.0 percent Zn, 2.9 percent Pb and 5.5m at 14.6 percent Zn, 8.5 percent Pb in holes SOP44D and 45D respectively.

A program of 5 holes was completed by mid July to broadly test a panel of 800m strike.

The company said a metallurgical testwork program was completed during the quarter at the Burnie, Tasmania, facility of Western Metals Ltd. Their experience with the Hellyer Mine mineralisation, which has similar proportions of sphalerite and pyrite and at similar grain size, prompted the commissioning of this work, for which co-operation Herald is most appreciative.

Satisfactory liberation was obtained at 80percent passing 35 micron grind and initial flotation results of 87percent Zn recovery, reporting to a 58.5 percent Zn concentrate and 74 percent Pb recovery reporting to a 54.5 percent Pb concentrate are very encouraging and further work to refine the process is proposed later in the year.

Herald Resources through its 72 percent subsidiary International Annax Ventures owns 80 percent stake at the North Sumatra Zinc/Lead project, while state miner PT Aneka Tambang Tbk. holds the remaining 20 percent. (*)