I am just trying to figure out how much the upgrade could be here.
---from the exploration update---
King Vol probable Ore Reserve will host a significant tonnage of very high-grade zinc mineralisation. This is a very positive development as the presence of this very high-grade mineralisation is likely to enhance the economics of a future mine development at King Vol.
The published probable Ore Reserve for King Vol stands at 1.3 million tonnes at 11.2% zinc and 0.8% copper. This was calculated in 2007 at a 4% zinc cut-off grade.
The drill-out of King Vol Deeps, to upgrade the current Inferred Resource of 1.9 million tonnes at 14% zinc and 0.8% copper to Indicated status is budgeted for Q4FY12.
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Now, if I read that right, does it mean that what will be upgraded is this inferred 1.9 mill @ 14.1 grade zinc to reserve status and in addition to what was published in 2007 1.3mt @ 11.2%?
In the 5 year strategic plan, they state a current resource of 3.3mt @ 4.5-5.5 grade zinc.
Given that reserves are the economically mineable part of a measured or indicated resource, I'm guessing that we could see an upgrade of probable reserves by about half or 1Mt @ an approx 12.6% grading.
That equates to about 120,000t of pure zinc *1848 (@84c) = or 220 mill to the reserve base but could be as much as 490 mill.
So with King and the two Red Cape lodes we could see upgrade estimates in the order of 500-750 mill between now and the end of December but I'm guessing these are conservative with a final resource upgrade to be completed at the end of January.
I really need to invest in a friendship with a geologist.
KZL Price at posting:
28.5¢ Sentiment: Buy Disclosure: Held
