A$5 Million Sale of Redmoor Project
ASX Announcement 19 March 2019
HIGHLIGHTS
- NAE executes Sale and Purchase agreement to sell its 50% ownership of the Redmoor Tin/Tungsten Project for approx. A$5 million, subject to meeting any regulatory or shareholder approval requirements (as applicable) and the parties agreeing the final terms of the transaction’s associated documents.
- Consideration of the Redmoor sale is divided into three stages as follows:
- i. Approx. A$2 million in cash on the completion date (Stage 1).
- ii. A$1 million cash payable 180 days after settlement of Stage 1 (Stage 2).
- iii. A royalty stream of 1.5% of Net Smelter Revenue from Redmoor production capped at A$2 million (Stage 3).
- Company to be in a strong financial position upon settlement of the sale and in-conjunction with the recent capital raising of ~$940k. The divestment of this asset will also significantly reduce costs.
New Age Exploration (“NAE” or “the Company”) is pleased to announce that it has entered into arrangements with Strategic Minerals Limited (“SML”) to sell its entire 50% shareholding in Cornwall Resources Limited (“CRL”), the joint venture vehicle developing the Redmoor Tin/Tungsten project in Cornwall (“Redmoor”), to its existing joint venture partner Strategic Minerals plc (“SML”) for a total purchase price of approximately A$5 million (the “Sale”). The Sale is subject to conditions precedent that all necessary regulatory and/or shareholder approval will be obtained (as applicable) and that the parties agree on the terms of the transaction’s associated documents, which include a Royalty Deed and a Mortgage to secure the Stage 2 payment. The Company will now focus on the development of its Lochinvar/Otago projects and continue to pursue other value add opportunities.
Commenting, Joshua Wellisch, Executive Director, New Age Exploration, said:
“The sale of the Redmoor Tin/Tungsten project is an excellent outcome for NAE shareholders as the new board continues execution of its strategic corporate direction. A cash sale of this asset will provide the Company with a strong funding base and will significantly reduce costs. The board believes the transaction was at an opportune time in the development cycle of the project, whereby a substantial value for the asset was realised, while mitigating risk. The sale may be subject to approval by NAE shareholders at a general meeting, we consider this will be forthcoming within six weeks and we look forward to finalising the transaction.”
Shareholders are advised that New Age Exploration's Chairman, Alan Broome, is also the Chairman of SML. After making the Board of NAE aware of the Redmoor opportunity, he excused himself from any further dealings with the Sale and any voting at Board level in both the Company and SML.
Redmoor Resource Update Delivers: Inferred Mineral Resource Tripled and Grade Increased by 17%
ASX Announcement 14 February 2019
New Age Exploration Limited (ASX:NAE) is pleased to announce the results of an updated mineral resource estimate for its Redmoor Tin-Tungsten Project in the UK, undertaken through its 50% owned joint venture vehicle, Cornwall Resources Limited (“CRL”). The updated Mineral Resource Estimate has been completed by external consultants Geologica (UK), following the completion of CRL’s successful 12-hole 2018 diamond drilling program, aimed at expanding the Redmoor resource.
Highlights
- Updated Inferred Mineral Resource of 11.7 Mt @ 0.56% WO3, 0.16% Sn, 0.50 % Cu (1.17% Sn Eq or 0.82% WO3 Eq)3 defined within parallel high-grade zones within the Sheeted Vein System (SVS) using a break even cut-off grade of 0.45% Sn Eq1 .
- This represents a tripling of the contained metal (now 137kt Sn Eq) compared with the previous March 2018 Mineral Resource estimate (45kt Sn Eq).
- The 1.17% Sn Eq updated Inferred Mineral Resource grade, reported at a 0.45% break-even cut-off grade, is 17% higher than the previous March 2018 Mineral Resource estimate (4.5Mt @ 1.0% Sn Eq).
- Included within the Inferred Mineral Resource is 10.2Mt at 1.26% Sn Eq at a 0.65% Sn Eq total cost cut-off grade, reinforcing the potential to economically mine the resource.
- Continuity of the SVS which hosts the high-grade zones now confirmed over a strike length in excess of 1,000 m and for some 650 m down dip. Ore body geometry appears likely to be amenable to underground mining.
- Redmoor now ranks as the 2nd highest grade undeveloped tin or tungsten Mineral Resource in the world on a grade basis.
- On a contained metal basis, the Redmoor Mineral Resource now ranks the (No. 1) largest undeveloped tin or tungsten underground mining project in the world.
- The majority of the Redmoor deposit remains open down-dip and to the west, where an Exploration Target has been defined in addition to the resource.
- Initial metallurgical testwork program underway at Wardell Armstrong International, Cornwall.
- Mining study to commence shortly aimed at identifying optimal project development path.
- CRL’s shareholders will then consider the next steps in the work program aimed at advancing the project towards PFS completion.
NAE Director Joshua Wellisch commented “The updated Redmoor Inferred Mineral Resource further establishes the project as a deposit of global significance. The 1.17% Sn Eq resource grade places the project in an outstanding competitive position relative to other new tin and tungsten projects around the world. The result of the resource update is consistent with the increased grades seen through the 2018 drill program and provides an extremely strong base on which the project will be advanced from this year”.
Click here to view the full announcement
Redmoor 2018 Drilling Concludes with Exceptional Results
ASX Announcement 24 January 2019
The Company is pleased to announce continued exceptional results from the final four holes of the 2018 drilling program at its Redmoor Tin-Tungsten Project, being undertaken through the 50% owned joint venture vehicle Cornwall Resources Limited (“CRL”).
Highlights
- Assay results from the final four holes in the Redmoor 2018 program provide further confidence in continuity and high grade of the high-grade zones within the Sheeted Vein System (SVS), highlights of which are:
- CRD029: 5.80 m @ 0.87% Sn Eq from 478.60 m, including 1.00 m @ 2.82% Sn Eq
- CRD029: 8.25 m @ 0.75% Sn Eq from 498.64 m, including 1.00 m @ 4.27% Sn Eq
- CRD029: 3.86 m @ 3.03% Sn Eq from 538.88 m, including 1.00 m @ 5.60% Sn Eq
- CRD029: 1.00 m @10.34% Sn Eq from 554.74 m
- CRD030: 7.21 m @ 0.77% Sn Eq from 503.80 m, including 1.10 m @2.54% Sn Eq
- CRD031: 2.63 m @ 6.33% Sn Eq from 413.67 m, including 0.88 m @ 10.52% Sn Eq
- CRD031: 1.75m @ 12.45% Sn Eq from 453.85 m
- CRD031: 5.90 m @ 4.93% Sn Eq from 537.95 m, including 1.00 m @ 26.20% Sn Eq
- CRD032: 3.58 m @ 2.63% Sn Eq from 660.33 m
- These results include some of the highest-grade intercepts seen to date at Redmoor, and spectacular intercepts of up to 26.20% Sn Eq comparable with grades recently seen in CRD028 of up to 29.68% Sn Eq.
- Without exception, all 12 of the 2018 drillholes intersected potentially ore-grade mineralisation. This level of success in targeting mineralisation further confirms CRL’s confidence in the geological model and the continuation of mineralisation in high-grade zones within the SVS both at depth and along-strike.
- Weighted average Tin equivalent grade of all significant intercepts of high-grade zones within the SVS for the 2018 program (1.81% Sn Eq) is 81% higher than the current Mineral Resource (1.0% Sn Eq), which does not include these subsequent holes.
- The particularly high tenor of the 2018 results, including the highest-grade intercepts ever drilled at Redmoor, highlights the potential to substantially increase both the Resource tonnage and grade.
- Full 2018 drill program successfully completed on time, under budget, and with no safety or environmental incidents; further demonstrating the CRL team’s ability to deliver high quality cost-effective results.
- Updating of Mineral Resource estimate commenced and results are expected Q1 of 2019.
- CRL received a £138,000 Research and Development refund from HMRC on 3 January 2019.
NAE Director Joshua Wellisch commented: “The results from Redmoor continue to exceed our expectations. Grades of up to 26.2 % Sn Eq are extremely encouraging and provide a strong conclusion to CRL’s already superb 2018 drill program results. These results provide a strong basis for the resource update that is now underway. The Directors would like to thank the CRL team for their outstanding job of delivering the 2018 program, which we expect will set the tone for a year of substantial progress in 2019.”
Click here to view the full announcement
Spectacular Grade Intercepts at Redmoor Tin-Tungsten Project
ASX Announcement 27 November 2018
The Company is pleased to announce continued outstanding results from the 2018 drilling program at its Redmoor Tin-Tungsten Project, being undertaken through its 50% owned joint venture vehicle Cornwall Resources Limited (“CRL”). In addition, these results include exceptional ‘Spectacular’ style assays just received from the lab for the first hole of the Phase 2 program (CRD028).
Highlights
- Outstanding ‘Spectacular’ style intercepts of up to 29.68% and 13.15% tin equivalent for the first hole of the Phase 2 program (CRD028).
- These results are the highest-grade intercepts yet drilled and reinforces the caliber of the drill campaign and the high-grade of the Redmoor project overall.
- Assay results from four further holes in the Redmoor 2018 program provide continued evidence of the highgrade zones within the Sheeted Vein System (SVS), highlights of which are:
- CRD028: 6.56 m@ 3.30% Sn Eq from 459.41 m, including 1.22 m @ 15.55% Sn Eq
- CRD028: 12.01 m @ 1.84% Sn Eq from 493.16 m, including 0.75 m @ 13.15% Sn Eq
- CRD028: 7.99 m @ 3.45% Sn Eq from 543.61 m, including 0.70 m @ 29.68% Sn Eq
- CRD027: 9.10 m @ 1.15% Sn Eq from 442.02 m, including 1.00 m @ 4.17% Sn Eq
- CRD026: 10.31 m @ 1.17% Sn Eq from 518.60 m, including 1.62 m @ 3.25% Sn Eq
- CRD026: 5.00 m @ 2.95% Sn Eq from 537.00 m, including 2.00 m @ 4.75% Sn Eq
- CRD025: 11.00 m @ 1.10% Sn Eq from 277.15 m, including 2.10 m @ 3.00% Sn Eq
- These results provide further confirmation of improving grades at depth at Redmoor.
- The Phase 2 program has progressed rapidly, with four holes now complete (CRD028 to CRD031).
- Additional hole planned – the efficiency of the CRL Team has allowed one supplementary hole (CRD032) to be added to the Phase 2 program, funded from within the current budget. We expect this hole to further boost the potential for resource growth.
- Drilling of the additional hole, CRD032, is expected to complete during December. Following this, and the receipt of assay results, CRL plans to carry out an update to its Inferred mineral resource in Q1 2019.
- Final Results from the Phase 2 drilling are likely to be available in early Q1 2019.
- In preparation for a future Pre-Feasibility Study, and to add to existing testwork data, preliminary ore characterisation metallurgical testwork on samples from Redmoor, has commenced.
Technical Director Neil Hutchison commented: “These results are outstanding and have exceeded expectations, with grades of up to 29.68% Sn Eq, the drilling has been successful in extending and increasing the grades of the known mineralisation beyond the existing resource model. Distribution of the various metals is demonstrating zonation within the structure, which is typical of large mineralised systems supporting the upside potential of the project. The joint venture agreed to incorporate another drill hole into the program which is expected to contribute to the planned resource upgrade as the CRL team have demonstrated success by extending known mineralisation beyond the existing resource model. On receipt of all assay results, expected early in 2019, a resource upgrade will be performed, with the aim of significantly extending the current high-grade resource. As the drilling continues NAE will continue to update the market as assay results are received.”
Click here to view the full announcement
REDMOOR
Location & History
The Redmoor Project is located between the village of Kelly Bray and the small town of Callington in southeast Cornwall, United Kingdom, approximately 25 km by road from the city and port of Plymouth, and 40 km from the recently commissioned Drakelands (Hemerdon) tungsten mine and processing plant. The area has well-established infrastructure and is located in the historically significant Cornish tin – tungsten – copper mining district.
Redmoor Project Location Map
The original Redmoor Mine is one of a group of mines (Redmoor, Holmbush and Kelly Bray) that were opened in the 18th century and continued operating until 1892 when they were forced to close due to low tin prices. Sections of the Redmoor Mine were re-opened between 1907 and 1914 and again in 1934. Historical records show operations at the Redmoor Mine, Kelly Bray Mine, and Wheal Florence Mine. The license area has records of the production of 574 tonnes of tin, 268 tonnes of WO3, 852 tonnes of copper, 153 tonnes of lead and 9,179 ounces of silver.
Ownership
In October 2012, NAE acquired a 100% interest in the Redmoor Tungsten-Tin-Copper project through an exploration license and option agreement with the owner of the mineral rights. These rights cover an area of approximately 23 km2, including the Redmoor Project. The exploration license was granted for an initial period of 15 years with modest annual payments. The license is now held by subsidiary Cornwall Resources Limited (CRL).
CRL has the right to a 25 year mining lease, extendable by a further 25 years, which can be exercised at any time during the term of the exploration license. The mining lease permits commercial extraction of the minerals, subject to obtaining planning and other approvals, and is subject to a 3% net smelter return royalty payable to the mineral right owner once commercial production has commenced. Surface land access for exploration drilling and mining over part of the Redmoor deposit is also included in these agreements.
In 2016, Strategic Minerals plc (SML), an AIM listed company, entered a Joint Venture with NAE. Following investment by SML, which largely funded the 2017 drill program NAE and SML are now equal 50% shareholders of CRL.
Geology
The geology of the Redmoor Project is typical of other established mining areas of Cornwall. Tin, tungsten and sulphide mineralisation is spatially related to granite intrusions, which caused mineralising fluids to be mobilised along fractures and faults in host rocks. Redmoor is located adjacent to the Kit Hill granite intrusion, which is the focus of a number of historic mines, both within and contiguous to the east of the CRL mineral rights.
At Redmoor, tungsten and tin-oxide, and other base metal sulphide mineralisation occurs both in discrete veins or lodes (e.g. Johnson’s Lode, Kelly Bray Lode) and within a zone of numerous closely-spaced sub-parallel narrow mineralised quartz-veins known as the Sheeted Vein System (SVS). The SVS contains High Grade Zones where there is a higher density of mineralised quartz veins. These High Grade Zones within the SVS form the basis of the current, 2018 Redmoor High Grade Inferred Resource.
3D View of the Redmoor Deposit Looking South East
Previous Exploration, Testwork and Studies
South West Minerals Limited (SWM) completed a drilling program at Redmoor between 1980 and 1983 comprising 35 diamond drillholes (totalling 12,146 m) to a maximum depth of 600 m.
The majority of the SWM drillholes were angled holes designed to intersect true thickness of the target lodes. All holes were downhole surveyed. Core was split and assayed for metals including tin, tungsten and copper in mineralised zones.
Two metallurgical testwork programmes were undertaken on composited samples of crushed diamond drill core. The results of this testwork was used by SWM for flowsheet and engineering design of the processing plant. SWM also undertook mine design and feasibility studies aimed at constructing a mine and processing plant at Redmoor.
The work of SWM came to an end in the mid-1980s as a result of the tin price crash resulting from the collapse of the International Tin Council. The resource potential outlined by SWM was left in the ground, offering an opportunity when metal prices recovered.
In 2015 NAE completed a detailed review of SWM’s metallurgical testwork and, through its consultant, Devlure, concluded that the Redmoor ore is coarse grained, is a simple, low-cost ore to process and that overall process recoveries of 68% tin, 72% tungsten, and 35% – 85% copper (depending on flowsheet design) are expected.
2017 Exploration by Cornwall Resources
In 2017 Cornwall Resources Limited (“CRL”) drilled 20 diamond holes for 7,046 m in total. This program was successful in identifying high-grade zones within the SVS which form the basis of the 2018 High Grade Inferred Resource.
CRL 2017 Boreholes, Historic Boreholes and Surface Geology
Community and Environmental Responsibility
Minimising community and environmental impacts is CRL’s first priority in all exploration activities it undertakes on site. There has been positive community engagement throughout the 2017 drilling program with 14 community meetings held to date. No complaints have been received from the local community despite drilling operations being in relatively close proximity to residential and rural properties. CRL has also aimed to maximise local employment and collaboration with local universities.
2018 High Grade Inferred Mineral Resource
In March 2018, SRK UK and CRL defined an updated JORC Inferred Mineral Resource and Exploration Target for the Redmoor Project:
Redmoor 2018 Inferred Mineral Resource Estimate[2]
[2] Equivalent metal calculation notes; Sn(Eq)% = Sn%*1 + WO3%*1.43 + Cu%*0.40. Commodity price assumptions: WO3 US$ 33,000/t, Sn US$ 22,000/t, Cu US$ 7,000/t. Recovery assumptions: total WO3 recovery 72%, total Sn recovery 68% & total Cu recovery 85% and payability assumptions of 81%, 90% and 90% respectively.
2018 High Grade Exploration Target
SRK UK also identified a high-grade exploration target within the SVS of 4-6 Mt with an estimated grade between 0.9% SnEq and 1.3% SnEq.
It should be noted that this exploration target is conceptual in nature, that there has been insufficient exploration to define a mineral resource within this target volume and that it is uncertain if further exploration will result in the determination of a mineral resource.
Cross section showing Inferred Resource (SVS High Grade Zones) & Exploration Target
2018 Studies by Cornwall Resources
A process plant engineering and surface infrastructure study was completed by Fairport Engineering in April 2018. This study included capital and operating cost estimates for the processing plant and mine surface infrastructure.
A consulting metallurgist, experienced in processing Cornish ores, has been retained by CRL to guide future metallurgical testwork.
Consultants Mining One completed a mining study in May 2018, which utilised the 2018 resource to produce a potential scoping-level mine design, life-of-mine schedule and mining capital and operating cost estimates.
An economic assessment of the project based on the 2018 processing, surface infrastructure and mining studies has been carried out by CRL and has shown that the Redmoor project is economically attractive, especially if the size of the resource can be increased.
2018 Drilling Program by Cornwall Resources
CRL will commence a fully funded 2018 Phase 1 drilling program (4,000 m) in June 2018 which will focus on extending the high-grade resource at Redmoor and aim to add a significant portion of the 4-6Mt exploration target to the resource.
The grade of the inferred resource increases with depth; it is hoped that the 2018 drilling program, focused on the Exploration Target which deeper than the existing resource may also increase the overall grade of the resource.
A general permitted development order (GPDO) has been obtained for the drilling programme. Continuing consultation with landowners, local community, local councils and other key stakeholders will form an integral part of the drilling program planning and implementation.
Grade of Inferred Resource Increasing with Depth
Redmoor Benchmarking
The Redmoor High Grade Resource is in the world’s top five highest grade tin-tungsten projects (SnEq Basis) and the top 3 new projects.
The Redmoor Inferred Resource has 45,000 tonnes of contained tin equivalent and the Exploration Target has the potential to increase this to 100,000 tonnes via further drilling planned for 2018. If successful, Redmoor will become a world-class project in terms of contained metal.
Redmoor Benchmarking
LOCHINVAR
Location and History
The Lochinvar Coking Coal Project is located on the Scottish / English border and is the Company’s principal focus. The project comprises two adjacent exploration and conditional underground mining licences known as Lochinvar (67.5 km²), and Lochinvar South (51km²).
Location of the Lochinvar Project
These licenses cover a shallow portion of the Canonbie Coalfield, an undeveloped coking coal resource located adjacent to the West Coast Main Line rail connecting with UK steelmakers, coke makers and export ports.
Historic exploration at Lochinvar was conducted in the 1950’s by the National Coal Board, which sank four boreholes. This work proved the existence of the same sequence of thick coals of the Middle Coal Measures, which had been previously mined at Rowanburn colliery to the east of the licence where operations ceased in 1922.
From 1979 the NCB drilled a further nine boreholes and shot 55 kilometres of seismic line which proved the existence of a large concealed coking coalfield (the Canonbie Coalfield).
NAE drilled an initial four drill holes at Lochinvar in 2013 and a further 6 holes in 2014.
Scoping Study Results
In October 2014, NAE completed the Lochinvar Scoping Study which confirmed the potential for a low cost long life 1.9Mtpa long wall mining project to deliver 1.4Mpta coking coal into UK and European markets. The Scoping Study was updated in March 2017.
The Updated Scoping Study delivered a robust set of economics highlighted by an NPV9% of US$410M with and IRR of 27% and a payback of 4 years.
The project is focused on an underground mine connected by a drift (decline) to the surface where coal will be processed and loaded into rail wagons for direct delivery to either UK steel mills or port facilities in the UK for shipping into Europe. Underground coal will be mined using a 200m wide longwall with development roadways constructed by 3 continuous miner/ bolters.
Lochinvar Schematic Mine and Infrastructure Layout
Based on the production schedule over the life of mine, a total of 47.3 Mt ROM coal will be produced, averaging 1.9 Mtpa ROM coal with a peak production of 3.1 Mtpa ROM coal in year 16. The ROM coal will be processed at a high 71% yield to produce 33.7 Mt of clean coal (saleable product), averaging 1.4 Mtpa clean coal.
Lochinvar Scoping Study Production Schedule
These results demonstrate the potential for Lochinvar to deliver excellent returns on investment with lowest quartile operating costs and a low capital cost structure.
Summary Economic Results – Lochinvar Scoping Study Update (March 2017)
Indicated and Inferred Mineral Resource
A total resource of 111 Mt comprising 49 Mt Indicated Resource and 62 Mt Inferred Resource has been defined for the Nine Foot and Six Foot Seams. The Indicated Resource, Inferred Resource and Exploration Target have been reported in accordance with the JORC Code (2012) and have been independently estimated by Palaris Australia Pty Ltd, an internationally recognised mining consultancy specialising in coal exploration and mining. The resource estimate is based on 9 holes drilled by the National Coal Board (NCB) from 1979 through to 1983 and 10 holes drilled by NAE in 2013 and 2014.
Lochinvar Resource Statement (August 2014)
An additional Exploration Target of 31 – 64Mt has also been identified which includes both the Lochinvar and Lochinvar South Leases.
It should be noted that this exploration target is conceptual in nature, that there has been insufficient exploration to define a mineral resource within this target volume and that it is uncertain if further exploration will result in the determination of a mineral resource.
Geology
Geological data collected from the two phases of NAE drilling and a re-interpretation of the available seismic data has increased the understanding of the Lochinvar structure. Palaris completed a revised structural interpretation in August 2014 which identified an increased density of faulting compared to the previous interpretation. Mine plans in the Scoping Study will be based on this revised structural interpretation.
Lochinvar Structural Interpretation and Nine Foot Seam Depth Contours
This Resource occurs between 200m and 1,000m depth with 95 Mt of the total resource, including 74 Mt from the Nine Foot Seam, being shallower than 800m depth. All of the Indicated Resource is shallower than 800m depth.
Average seam thickness is 2.2m for the Nine Foot Seam and 1.8m for the Six Foot Seam.
Lochinvar Resource – Depth from Surface
Coal Quality
Lochinvar Coal is comparable to highly sought after US High Volatile A Hard Coking Coal (Wood Mackenzie Lochinvar Marketing Study, March 2017).
Wood Mackenzie completed an assessment of the expected Lochinvar coal specification compared with commonly traded industry standard benchmark coking coals as follows:
Lochinvar Coal Quality Summary (Source Wood Mackenzie, 2017)
Lochinvar expected coal quality vs competing benchmark coals:
- Very Low Ash & Phosphorous
- Comparable VM, CSN, CSR (Predicted) & Fixed Carbon
- High Sulphur but within UK / Europe blend limits. Potential to reduce to 1.2% based on coal processing modelling
- Lochinvar Fluidity has wide range in results which were affected by laboratory media
- Lochinvar CSR has been predicted by Pearson Coal Petrography. Bulk samples and CSR tests are planned to determine actual CSR
These results confirm the potential for Lochinvar to produce a low ash high volatile coking coal product at a high yield that will be attractive to the UK and European steel industry.
Market and Infrastructure
Lochinvar is ideally located to become a supplier of low cost, high volatile hard coking coal to the European Steel Industry as a result of:
- 7km to main West Coast Main Line railway which links directly to nearby Steel mills in UK and nearby ports to access European market
- Lower labour rates when compared to Australian mining costs
- Excellent UK fiscal regime with low corporate taxes and royalties
- European Metallurgical Coal imports forecast to grow from around 52Mt (2017) to 61Mt (2035)
- Lochinvar Coal is comparable to US High Volatile A Hard Coking Coal – highly sought after in Europe
- European High Volatile Hard Coking Coal (HV HCC) imports forecast to increase from 10.4Mt (2017) to 15.9Mt (2035)
- Lochinvar 1.4Mtpa annual production represents ~12% of UK/Europe HV HCC coking coal imports in 2021
- Lochinvar coal enjoys a clear distance and freight cost advantage over competing imported coal and the benefit of regular local deliveries reducing customer inventories
Lochinvar Infrastructure and Potential Markets
