Herald updates Indonesian activities
Tuesday, July 31 2007 - 06:26 AM WIB
The following is an edited excerpt from ASX-listed mining firm Herald Resources Limited on Indonesian projects, taken from quarterly report published Tuesday.
Dairi zinc/lead project
DEVELOPMENT ACTIVITIES
EPCM Works/Capital Costs
The Project is progressing under the negotiated terms of the EPCM engineering contract with Ausenco Ltd. Formal signing of the contract will occur subject to Forestry permit approval which directly affects milestone completion dates to be written into the contract.
Engineering Design Engineering and design of the process plant and infrastructure is well progressed. The delay to access into the forest area has provided time to further rationalize earthworks design at the plant site.
There has been a reduction in process plant earthworks construction volumes and the thickening and filtration areas of the plant have been relocated to a lower elevation in the valley. The decision has been made to relocate the tailings facility, which will enable a significant increase in the storage volume. The facility has been redesigned to suit the revised location and application for approval is underway.
The port facility designs are progressing with the design and construct contractor. Container offloading and concentrate dumping equipment design and construct pricing is currently being sought.
Procurement and Contracts
Tendering, adjudication and award has occurred on most major capital items.
Most major equipment is now becoming available ex works and arrangements are underway to import the equipment and transport it to a consolidation area that has been secured at the port of Belawan in Northern Sumatra.
Construction works on the accommodation camp will commence shortly. Clearing and Contractor site establishment are underway at Kuala Tanjung port facility.
Plant Construction Schedule & Capital Cost
The date for commissioning of the process plant is dependent upon the granting of forestry approval to access the plant site area, and acquisition of the remaining land along the access corridor.
Following the design changes referred to above and other matters, project times and cost schedules are currently being re-estimated by the project engineers Ausenco. Subject to the above review, the Company estimates total capital costs coming in at US$192M. This compares with the previous estimate made in November 2006 of US$182M i.e. a 5% increase in US$ terms since that time, however with the increase in the exchange rate over that period, the AU$ equivalent cost has actually decreased.
EXPLORATION
Lae Jehe
The Lae Jehe prospect is located about 1.5km north of the main Anjing Hitam orebody and 800m north of the planned concentrator site. Lae Jehe is the most advanced target to provide future mill feed following the initial 7 year mine life at Anjing Hitam. The combined indicated and inferred resource at Lae Jehe stands at 6.5 Mt at 11.3% Zn, 6.1% Pb.
Drilling continued through the quarter with two drill rigs in operation. Two deep holes and three shallow holes were completed.
Pre-Feasibility Study
Work on the schematic mining plan is due to commence in the current quarter. The present aim is to complete the PFS by the March quarter next year.
Half drill core from SOP256D has been despatched from site for further metallurgical testwork which will take place over the next six months.
Lae Puncu
The major deposits identified at the Dairi Project to date (Anjing Hitam, Lae Jehe etc) lie on the eastern side of the large structure known as the Sopokomil Dome. Semi-detailed exploration recommenced at Lae Puncu, on the western side of the Sopokomil Dome, where preliminary exploration in 1999-2003 identified anomalous base metal values in stream sediments and a Helicopter Electromagnetic conductive anomaly, which coincide with Julu carbonaceous shale.
Assay results from rock chip sampling during the qaurter at Lae Puncu returned values up to 10.4% Zn, 5.13% Pb and 15ppm Ag in the one sample. The highest lead assay was 7.56% Pb and the highest silver assay was 50ppm Ag in separate samples. Further work is planned including follow up of these high grade samples.
Sinar Pagi
Drilling continued throughout the quarter with holes SPA11D, SPA12D and SPA13D being completed on section 20,100E. These holes tested the strike extent of the galena (lead) mineralisation intersected by drill hole SPA09D, which was drilled on section 20,000E in the previous quarter. SPA09D intersected a 28.6m of 5% Pb, 78 g/t Ag partly oxidised galena lode with upper and lower zones which are less oxidised and more galena rich.
Drill hole SPA11D was abandoned at 142.4m due to technical problems.
Drill hole SPA12D tested the mineralised horizon some 200 meters down-dip from the target zone of drill hole SPA11D. It intersected a 6.8m quartz vein from 444.0m with up to 20% pyrite and unidentified black sulphides and traces of chalcopyrite and galena. The quartzsulphide vein is hosted by altered and crackle-brecciated dolostone, and probably represents the target mineralised horizon.
Drill hole SPA13D (essentially a redrill of the lode position near the SPA11D target) intersected a 4.7m mineralised zone from 234.4 - 239.1m, consisting of 3% galena, pyrite, quartz and carbonate veining in dolostone.
SARKEA BASE METALS PROJECT (Herald 100%)
This area is centred about 10km south of the Dairi Project’s Anjing Hitam deposit. It is held under a SIPP prospecting permit covering 9,606ha.
The assay results at Bukit Enggang, which were not available for the previous quarterly report, were generally disappointing apart from drill hole SKA11D which intersected 6.0m of 1.65% Zn from 5.05m downhole, which overlies a 10.05m zone assaying 0.3% Zn, 23.4 % Fe and 0.05% Sn from 13.05m downhole, and drill hole SKA14D which intersected an 11.85m zone assaying 0.4% Zn, 39.1% Fe and 0.10% Sn from 3.0m downhole.
No further work is planned for the time being.
MELUAK GOLD PROJECT (Herald 26% via Corona Gold Ltd)
Aceh Province
Meluak is contained within a 2,760ha SIPP prospecting permit issued by the Gayo Lues
Regency. Discussions are continuing with the Regency authorities and the Mines Dept about converting the SIPP to a Contract of Work, which is deemed desirable prior to resuming drilling. Previous security concerns are no longer an issue.
The original drill program intersected 72m @ 0.54 g/t Au from 7m, including 8m @ 1.95 g/t Au. (end of edited excerpt)