Bom Futuro Tailings Maiden Resource Delivers Positive Preliminary Economic Assessment
Bom Futuro Tailings Maiden Resource Delivers Positive Preliminary Economic
Assessment
LONDON, Dec. 7, 2017 /CNW/ - Meridian Mining SE (TSX V: MNO) ("Meridian" or the "Company")
today released findings of its maiden Resource and Preliminary economic assessment for the Bom
Futuro tailings project, in the state of Rondônia, in NW Brazil.
PROJECT BACKGROUND
The Bom Futuro tin mine has produced 195,000 tonnes of tin over a thirty-year history of continuous
operation since its discovery in 1987. Meridian entered a joint venture with the project owners -
Coopersanta - in late 2016 1. The initial priority has been to evaluate opportunities to recover tin from the
several million cubic meters of tailings which have accumulated around the Bom Futuro Hill. The
appreciation of the tin price in recent years has created a more favourable climate for assessing
retreatment scenarios. The Company engaged independ ent specialists H&S Consultants ("H&SC"; world
experts servicing the global mining industry for 30 years) to undertake a resource estimation following a
site visit completed in September 2017. The drilling and interpretation has now enabled a maiden
resource estimate and a positive preliminary econom ic assessment.
HIGHLIGHTS
• Bom Futuro drilling program defines significant ma iden resource inventory:
• Indicated Resources: 3.3Mt @ 626ppm tin ("Sn") for 2,076 tonnes ("t") of Sn.
• Inferred Resources: 57.9Mt @ 526 ppm Sn for 30,447 t of Sn
• Several metallurgical testwork studies were conduc ted:
• Preliminary testwork was conducted at São Paulo Un iversity laboratories, SGS-Geosol and
INBRAS (equipment supplier).
• Further testwork was conducted at Met-Solve Canada and Mineral Technologies Australia.
• A process flowsheet combining gravitic and magneti c separation methodologies was designed
to achieve a 60% Sn concentrate, with 60% metallurgical recovery.
• An engineering study was completed for the PEA pre paration, which indicates:
• Plant feed rate of 3.8Mt per year for production o f 31,925 t of concentrate over a mine life of 16
years.
• Capex of US$28.3m, including US$3m in contingencie s.
• After-tax NPV of $50.2m at 10% discount rate, IRR of 39.8% (Sn metal price at US$20,500 per
tonne).
• Targets for further resource additions exist with extensional and infill drilling of the tailings basins,
and exploration of the newly allocated palaeochanne l sequence.
• The Company will file a technical report in connec tion with the mineral resource estimate and the
PEA within 45 days in accordance with National Instrument 43-101.
___________________________________
1 Details of the agreement are summarised in the Company's announcements of Dec. 19, 2016; March
16, 2017.
"The results of our resource studies and economic evaluation of the Bom Futuro tailings support the
potential of this project to deliver a long-life operation," said Anthony Julien, President and CEO of
Meridian. "Further opportunities exist at Bom Futuro to enhance the value of the project with explorat ion
programs on the newly allocated areas, including extensions to the paleochannel systems which have
contributed significantly to past production. As work on the tailings consolidates, we will be able to focus
attention more on targeting extensions to the Bom Futuro corridor in the broader exploration area. Our
programs will be paused over the wet season as we plan for the next phase of evaluation. These results
exceeded our expectations and encourage us to advan ce our activities with Coopersanta".
MERIDIAN TAILINGS RESOURCE EVALUATION PROGRAM
Meridian has been allocated tailings basins under a mining services agreement with our joint venture
partners Coopersanta, covering an area of 1,261 ha (Fig 1). The resource study incorporates the results
of 252 percussion holes completed for 2,854.3m and 437 auger holes completed for 1504.1m.
The resource estimates for the Bom Futuro tin tailings project were prepared by Simon Tear, a qualified
independent geologist of H&S Consultants Pty Ltd. Estimation utilized a mixture of Ordinary Kriging
("OK") and Inverse Distance Squared ("ID 2") grade interpolation methods. Grade top-cuts were applied of
1,500ppm Sn in the Jacaré Leste area and of 1,700pp m Sn in the NE tailings group (EBESA, Gilberto,
Mutum, Carlinhos). Models incorporated 854 density data measured on site. Grade interpolation was
made using a series of expanding search passes (ref er to notes). Ordinary Kriging techniques were used
for resource estimates at Jacaré Leste, Santa Cruz, Jacaré Inferior (JI), and the NE tailings group. T he
ID 2 technique was used at Santa Cruz Central, LC75 and LC80, based on the spacing and amount of the
available drilling data. A summary of the resource estimates for tailings at the Bom Futuro Tin Projec t is
summarized in Table 1, quoted at a 200ppm cut-off g rade.
Table 1: Bom Futuro Tailings Mineral Resource Estim ates by Area.
Category Area Mtonnes Tin
ppm
Tin
Tonnes
Density
t/m3
Indicated NE Area 1.9 523 967 1.68
St Cruz Cent 0.3 796 217 1.71
St Cruz LC75 0.5 873 436 1.66
St Cruz LC80 0.6 712 456 1.61
Indicated Total 3.3 629 2,076 1.67
Inferred Jacaré Leste 20.3 584 11,863 1.63
NE Area 23.9 509 12,173 1.55
St Cruz - JI 8.8 349 3,071 1.5
St Cruz Cent 0.7 767 539 1.7
St Cruz LC75 0.4 800 309 1.61
St Cruz LC80 3.8 694 2,654 1.61
Inferred Total 57.9 526 30,447 1.57
Top-cut values are used for the resource.
EXPLORATION TARGET
The tailings have been deposited on an incised topographic surface. Drilling has been conducted
nominally on a 100 x 100m grid for auger drilling and a 200 x 200m grid for percussion drilling. The
deeper areas of the tailings pile have not always been intersected in this drill pattern. They will require
further targeted drilling to fully quantify the amount of tin present. Some portions of some tailings basins
have also been inaccessible due to surface water. W here sufficient data has not available to meet
Inferred Resource classification criteria, the available drilling information and relief models have been
used to support the nomination of an "Exploration T arget". Table 2 details a summary of the Exploration
Potential for the Bom Futuro Tin Project, suggesting the possibility of an additional 20 to 30Mt of tailings
at a grade of 400 to 450ppm Sn, requiring drill confirmation. The potential quantity and grade is
conceptual in nature and there has been insufficient exploration to yet define a Mineral Resource for this
material. It is uncertain if further exploration will result in the determination of a Mineral Resource.
A significant portion of the Exploration Target tonnage is located in the large Mutum and Jacaré Infer ior
basins which contain palaeovalley rejects. Tailings from primary bedrock ore sources such as Jacaré
Leste are anticipated to have higher grades. A program of infill drilling targeting unclassified areas
commenced prior to the wet season closure. The Comp any is also evaluating barge-based drilling
platforms that may allow access to areas with surface water for future resource definition.
Table 2: Bom Futuro Exploration Targets Tonnage and Grade Ranges by Area
Area Tonnage Range Tin Grade Range
Jacaré Leste 3 to 4Mt 580 to 660ppm
NE Area 11 to 17Mt 400 to 450ppm
St Cruz - JI 5.5 to 7.5Mt 340 to 420ppm
St Cruz Central 0.2 to 0.3Mt 650 to 750ppm
St Cruz LC80 0.1 to 0.2Mt 750 to 850ppm
Total 20 to 30Mt 400 to 500ppm
Exploration targets are in addition to the resource estimate; there is no overlap.
Metallurgical Testwork
Preliminary testwork was conducted in São Paulo Uni versity, SGS-Geosol and INBRAS (equipment
supplier) Laboratories based in Brazil. These test works were designed for a first evaluation of the
suitability of the resources to gravitic processes such as spirals and centrifugal concentrators, shak ing
tables and magnetic separation.
For further studies, samples from the main areas were collected, and 9 tons of material were sent to
SGS-Geosol facilities in Brazil, where a grain size distribution study of the ROM was carried out with wet
sieving.
The coarse material (over 1mm) was preconcentrated through jig separation and then grinded to below
1mm. Combined below 1mm samples were prepared and s ent to Mineral Technologies laboratory in
Australia and Met-Solve laboratory in Canada, according to the proportion observed at the size
distribution analysis. Further gravitic and magnetic separation test works were conducted in both
laboratories.
A process flowsheet was designed based on the test results, with the following stages:
• Separation of the coarse material with further jig ging and grinding of the concentrate to below 1mm;
• Gravitic separation using spiral concentration in rougher and cleaner stages;
• Grinding of the tailings to below 0.1mm and separa tion using centrifugal concentrators;
• Low and high intensity separation of the combined concentrates;
• Final upgrade of the material at shaking tables an d air separation.
Mineral Reserves
At this stage of the project no mineral reserves were estimated.
Engineering Study
With the testwork results, Kuttner do Brasil Ltda, an EPC company was contracted to develop process
and plant basic engineering with necessary equipment for this plant, including CAPEX and OPEX
estimates to enable a return on investment calculat ion.
The mine operation was designed for basic excavation and truck hauling for the initial 3 years, and an
investment in a dredging system planned for the third year, to resume operation in year 4. A preliminary
study for the tailings management was conducted and identified areas for the tailings disposal. Initia lly
one specific area identified requires no capital to be allocated. Additional sustaining capital was
considered for tailings area preparation.
The plant was designed for 3.8 million tonnes per year feed rate, estimating a production averaging 2, 000
tonnes of 60% Sn concentrate per year. A basic mine schedule was prepared, with production varying
according to the feed grade at the plant throughout the mine life.
A CAPEX of US$28.3 million was estimated, including:
• Plant equipment and structures
• Services (Engineering, Construction)
• Environmental Studies & Compensation
• Contingencies
- US$13.0m
- US$11.3m
- US$1.0m
- US$3.0m
Other estimates and assumptions for the economic evaluation are as follows:
• Tin prices assumed as US$20,500 per t (in line with the last 12 months average);
• Operating costs of US$ 7.7m (based on the engineering study);
• US inflation of 2% (estimated CPI) for prices and costs;
• Production of a 60% Sn concentrate, with 60% metallurgical recovery at the plant
The main indicators achieved are as follows:
• After-ta x NPV of US$50.2m at 10% discount rate
• After-tax NPV multiple of 1.8 to CAPEX
• After-tax IRR of 39.8%
• Payback in 2.3 years
The PEA is preliminary in nature and includes Inferred Mineral Resources which are considered too
speculative geologically to have the economic considerations applied to them that would enable them to
be categorized as Mineral Reserves. Therefore, there is no certainty that the PEA will be realized.
FORWARD PROGRAM
The Mineral Resource and Exploration Target tables do not yet include estimates for material in the
recently allocated Carlinhos South and Grota Rica tailings basins, or along the southern palaeovalley
trend (Figure 1). Drilling has commenced in these areas with some results received from ALS
Laboratories following the mid-November cut-off dat e for the resource database. Future work will be
targeted at testing the resource potential of these areas, and extending drill coverage in the existing
basins to upgrade the resource classification.
The Carlinhos South tailings cover an area of 13 hectares to the south of the Bom Futuro Hill. Results
reported to date show a grade range consistent with rejects from primary ore sources at Bom Futuro:
• BFPC_0222: 7m@724ppm Sn
• BFPC_0224: 14m@1001ppm Sn
• BFPC_0232: 20m@422ppm Sn
• BFPC_0234: 15m@436ppm Sn
• BFPC_0228: 11.7m@693ppm Sn
• BFPC_0230: 14m@821ppm Sn
• BFPC_0236: 22m@682ppm Sn
The Grota Rica tailings cover an area of 100 hectares to the north of the Bom Futuro Hill. A channel
sampling and drilling program also commenced over this broad area. Nine holes have been drilled with a
tailings depth range of 3 to 16.5m. Results are pending.
A priority target for ongoing exploration at Bom Futuro is the recently allocated southern palaeochannel
trend. Mining of the Bom Futuro palaeochannels comm enced in 1991, with activity peaking on the
southern channel system from 2006 to 2012. The exte nsions of the southern channel system have never
been drilled and provide a broad exploration footprint. The unconsolidated palaeochannel material is
considered to offer synergies with tailings retreatment scenarios under evaluation. Scout drilling confirms
the sedimentary package persists at least 100m beyond the mining front, with assays pending (Figure 2).
A dedicated drill campaign is required to test both this area and the regional palaeochannel targets
defined in the broader licence area.
On behalf of the Board of Directors of
Meridian Mining SE
"Anthony Julien"
Anthony Julien
President, CEO and Director
QUALIFIED PERSON
The technical information about the Company's exploration activities has been has been prepared under
the supervision of and verified by Dr Adrian McArthur (B.Sc. Hons, PhD. FAusIMM), the Chief Geologist
of Meridian Mining, who is a "Qualified Person" within the meaning of National Instrument 43-101.
The Resources Estimates and Exploration Targets hav e been provided by Mr Simon Tear of H&S
Consulting Pty Ltd BSc Hons (Mining Geology), P.Geo (Institute Of Geologists of Ireland 17), EurGeol
(26) who is an independent "Qualified Person" within the meaning of National Instrument 43-101. Mr
Simon Tear reviewed and approved their inclusion in the contents of this release.
All the other sections of the Preliminary Economic Assessment report have been prepared under the
supervision of Dr Homero Delboni Jr (B.E., M.Eng.Sc., PhD, MAusIMM Chartered Professional - CP
Metallurgy), who is an independent "Qualified Person" within the meaning of National Instrument 43-101 .
Dr Homero Delboni Jr reviewed and approved their inclusion in the contents of this release.
ABOUT MERIDIAN
Meridian Mining SE is focused on the acquisition, exploration, development and mining activities in Brazil.
The Company is currently focused on exploring and d eveloping the Espigão manganese project, the Bom
Futuro tin JV area, and adjacent areas in the state of Rondônia. The Company employs a two-pronged
strategy with the objective of growing pilot production while advancing a parallel multi-commodity reg ional
exploration program. Meridian is currently producing high grade manganese at its project located at
Espigão do Oeste.
Further information can be found at http://www.meridianmining.co
FORWARD-LOOKING STATEMENTS
Some statements in this news release contain forward-looking information or forward-looking statements
for the purposes of applicable securities laws. These statements include, among others, statements with
respect to the Company's plans for exploration and development of its properties and potential
mineralization. These statements address future events and conditions and, as such, involve known and
unknown risks, uncertainties and other factors, which may cause the actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed
or implied by the statements. Such risk factors inc lude, among others, failure to obtain regulatory
approvals, failure to complete anticipated transactions, the timing and success of future exploration and
development activities, exploration and development risks, title matters, inability to obtain any required
third party consents, operating hazards, metal prices, political and economic factors, competitive factors,
general economic conditions, relationships with strategic partners, governmental regulation and
supervision, seasonality, technological change, industry practices and one-time events. In making the
forward-looking statements, the Company has applied several material assumptions including, but not
limited to, the assumptions that: (1) the proposed exploration and development of mineral projects wil l
proceed as planned; (2) market fundamentals will result in sustained metals and minerals prices and (3)
any additional financing needed will be available on reasonable terms. The Company expressly disclaims
any intention or obligation to update or revise any forward-looking statements whether as a result of new
information, future events or otherwise except as otherwise required by applicable securities legislat ion.
The Company cautions that it has not completed any feasibility studies on any of its mineral properties,
and no mineral reserve estimate has been established. In particular, because the Company's production
decision relating to BMC's manganese project is not based upon a feasibility study of mineral reserves ,
the economic and technical viability of the Espigão manganese project has not been established.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Arrangement and has
neither approved nor disapproved the contents of this news release. Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
NOTES
Meridian ratified a joint venture agreement with Coopersanta in March following a three-month due
diligence period. The Company is evaluating tailings reprocessing scenarios in allocated areas, and is
exploring for primary / palaeochannel targets in a 2,000 ha "Central Area", and a 18,000 ha "Unexplored
Area". Details of the agreement are summarized in m arket releases of December 19, 2016, March 16,
2017, and October 23, 2017.
The drilling campaign commenced in Q1 2017 with a m echanical auger drilling program. The subsequent
percussion drilling program has been conducted with self-managed Sondeq SS5 and Bucyrus Erie 20w
hammer percussion rigs. The auger program was conducted nominally on a 100 x 100m grid and the
percussion drilling on a 200 x 200m grid, with some variation to account for site access and local infill.
Drill holes are surveyed by a Trimble R3 differential GPS.
Samples are collected in 1m intervals, weighed, dried, composited to 3m intervals and divided by riffle
splitter to produce a 5kg sample. Samples are pulverized at the Company's sample preparation facilities
in Espigão do Oeste, with one pulp sent for provisional analysis by pressed powder XRF at the
Coopersanta laboratory at Bom Futuro using a Rigaku X-ray spectrometry (XRF). Final assays are
determined through ALS Global (results have been reported through both Lima, Peru and Vancouver,
Canada). A variety of analytical methods have been utilised, with the default method being tin analysi s via
lithium borate fusion and ICP-MS (1-10000 ppm detec tion range; 82% of the database). Checks have
been conducted by lithium metaborate - lithium tetraborate flux with XRF Finish, including checks on
higher grade samples of >1000ppm via method code XR F-15b (5% of the database). At the
commencement of the program, technique ME-XRF10 was utilized (detection range of 0.01 – 60% Sn;
13% of the database). Quality control protocols include submission of certified reference materials and
field duplicates, and twin drill holes with a selection of percussion-percussion and percussion-auger pairs.
Tin grades quoted and illustrated in this report are those reported by the ALS Global.
For resource estimation, grade interpolation consists of one search strategy with three search passes
increasing in search radii and decreasing in data requirements. Block size is 50m by 50m by 3m and
discretization of the blocks is based on 6 x 6 x 2 points (east, north and vertical respectively). A s earch of
up to 250m radius has been used to support inferred resource classification. Broader searches of 400 –
500m have been used to support statements of tonnage range and grade range for the nominated
Exploration Targets. A supporting NI 43-101 Technical Report will be posted on SEDAR at
www.sedar.com no later than 45 days after the date of this release.
SOURCE Meridian Mining S.E.
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For further information: please contact: Jonathan Richards, T: +1 (604) 802-4447, E:
CO: Meridian Mining S.E.
CNW 07:00e 07-DEC-17