Heron’s Woodlawn Project – New Mineral Resource on Shallow G2 Lens and Total Underground Resource Upgrade

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Sydney, Australia, Nov. 13, 2017 — Heron Resources Limited (ASX:HRR TSX:HER, “Heron” or the “Company”) is pleased to report an upgrade to the Mineral Resource estimate for the shallow G2 Lens and a revision of the total underground Mineral Resources at its wholly-owned Woodlawn Zinc-Copper Project, located 250km south-west of Sydney, New South Wales, Australia.  The resource upgrade follows on from the recently completed drilling program that focused on expanding the shallow G2 position, in areas close to the proposed box-cut and decline.   New Mineral Resource estimate provided for the first mineralisation (G2 Lens) to be accessed in the Woodlawn underground mine – expected to have a positive impact on early cash flowG2 Mineral Resource now has three defined domains: G2 Main (G2), G2 Hanging Wall (GH) and G2 Copper Zone (GC)Combined Mineral Resource  for G2 now estimated at:139kt @ 10.1% ZnEq1(4.5% Zn, 0.8% Cu, 2.3% Pb, 0.4g/t Au, 33g/t Ag)  – Indicated Category58kt @ 13.3% ZnEq (4.0% Zn, 1.0% Cu, 2.2% Pb, 1.2g/t Au, 117 g/t Ag) –  Inferred CategoryTotal underground Mineral Resources for Woodlawn were recalculated as part of this update with separate cut-off grades used for polymetallic and copper domains resulting in a 9.1% increase in total tonnes and a slight lowering of the copper grades within the copper domainsImportantly the total Measured and Indicated Mineral Resource for the underground has increased by 0.5Mt or 12% which has the potential to add to the total reserve baseG2 Ore Reserve estimation, selected metallurgical testing and updating of early mine schedule is underway
1 ZnEq % used in this release refers to the calculated Zn equivalent grade based on the Zn, Cu, Pb, Au and Ag grades, the formula for which is provided at the end of this report.Commenting on the results, Heron Resources Managing Director and CEO, Mr Wayne Taylor, said:”This significant upgrade to the G2 Lens and total underground Mineral Resources is an encouraging development for the early stages of the mine development and we are looking forward to incorporating this material into the mine plan.  It is expected to have a positive impact on the early cash flows of the project as the G2 area did not contribute to the feasibility study projections and will be the first source of underground production.  These results along with the remaining extensional positions continue to demonstrate the discovery potential and economic upside at Woodlawn.”G2 LensThe G2 Lens is located to the south of the Kate Lens, and is adjacent to the planned route of the decline, 100-200m below the surface (see Figures 1-4).  Recent drilling has targeted this area for its ability to add to the early mine inventory.  A program of 22 diamond core holes for a total of 4,246m was recently completed to further define the resource.  Three key mineralised horizons have been identified, namely G2 Main (G2), G2 Hanging-wall (GH) and the newly defined G2 Copper zone (GC).The G2 Main was the primary target of the recent drilling campaign and consists of a zone of 5-10cm zinc sulphide-rich stringers crosscutting beds of coarse-grained volcanic breccia. The GH zone was discovered during the follow-up program and comprises very high-grade massive and stringer polymetallic sulphides occurring approximately 30 to 40m stratigraphically above the G2 Main zone hosted in mudstone.  The GC zone is typical Woodlawn copper sulphide mineralisation consisting of both sulphide stringer and some massive sulphide (pyrite/chalcopyrite) in a chlorite alteration zone.   Full assay results from the recent drilling program are provided in Heron’s ASX release dated 19 September 2017.G2 Lens Mineral Resource EstimateThe G2 Lens Mineral Resource estimate was undertaken by Heron and verified by SRK Consulting. It has been estimated in accordance with the JORC Code (2012) and the NI 43-101 guidelines.  Two distinct types of mineralisation have been modelled: 1) Polymetallic mineralisation and 2) Copper dominated mineralisation. Details of the estimation methodology used is provided below and within the JORC (2012) Table 1 at the end of this report.G2 Mineral Resource Estimate 2017
(Cut-off grades are 7% ZnEq for polymetallic, and 1% Cu for copper mineralization)
Indicated Mineral ResourcesInferred Mineral ResourcesNotes: 1) Please refer to the end of this release for Qualified Persons statements; 2) ZnEq refers to a calculated Zn equivalent grade the formula for which is stated at the end of this report;  3) Polymetallic Type refers to polymetallic massive sulphide mineralisation with high-grade Zn and Pb; Copper Type refers to Cu dominated massive and stringer sulphide mineralisation; 4) Some rounding related discrepancies may occur in the totals; 5) the Mineral Resource  is reported in accordance with the the JORC Code (2012) and NI 43-101 43-101 guidelines; 6) further details of the Mineral Resources estimation are provided in the JORC Code (2012) Table 1 at the end of this report.Total Woodlawn Underground Mineral Resource 2017The total Woodlawn underground Mineral Resource was recalculated as part of the update process, now using a cut-off grade for the copper domain mineralisation of 1% Cu, which has led to a 9.1% increase in the total tonnes of the Mineral Resource with a slight reduction in the copper grades within the copper domains.  The use of a separate and tailored cut-off grade for the copper mineralisation was deemed to be more reflective of the physical and commercial performance of this potential production source.A review of the Ore Reserves and potential total mining inventory has commenced and is to be released in the coming weeks.Woodlawn Total Underground Mineral Resource 2017
(7% ZnEq cog for Polymetallic and 1% Cu cog for Copper)
Indicated + Measured Mineral ResourceInferred Mineral ResourceNotes: 1) Please refer to the end of this release for Qualified Persons statements; 2) ZnEq refers to a calculated Zn equivalent grade the formula for which is stated at the end of this report;  3) Polymetallic Type refers to polymetallic massive sulphide mineralisation with high-grade Zn and Pb; Copper Type refers to Cu dominated massive and stringer sulphide mineralisation; 4) Some rounding related discrepancies may occur in the totals; 5) the Mineral Resource  is reported in accordance with the the JORC Code (2012) and NI 43-101 43-101 guidelines; 6) further details of the Mineral Resources estimation are provided in the JORC Code (2012) Table 1 at the end of this report.Mineral Resource Description and MethodologyThe Woodlawn Volcanogenic Massive Sulphide (VMS) mineralisation is hosted in Late Silurian deep water marine mudstones and volcaniclastic debris flows associated with a rhyolitic volcanic centre within the Goulburn Basin. The Woodlawn deposit comprises of 12 known sulphide lenses which form three mineralised horizons locally disrupted by faulting. The Zn, Cu and Pb mineralisation occurs as massive and stringer sulphide lenses, interpreted to have formed both on the sea floor and as replacement mineralisation in coeval mudstones and volcanic breccia flows. The mineralisation is derived from hydrothermal fluids which emanated from the adjacent volcanic centre and is associated with an aerially extensive, zoned alteration envelope.The G2 lens mineralisation is part of the broader G Lens complex, located at the southern end of the uppermost mineralised horizon. Mineralisation is hosted in both mudstones, and volcanic derived breccia flows. The G Lens was previously mined from the G1 and G2 Lenses, and the new mineralisation identified by Heron is a combination of extensions to the previously mined lenses and newly identified mineralisation positioned to the south of and below the known lenses.The Mineral Resource at Woodlawn is defined by both historic and recent Heron diamond drilling, as well as underground mapping in previously mined areas.  Drill intercept spacing varies from 15×15 m to 20×30 m across the modelled lens area.The G2 Lens Mineral Resources were estimated using block models constrained within wire-framed domains defined mainly by interpreted geologic and structural contacts, using lower cut off grades based on population breaks of 4.0% Zn in polymetallic domains, and 1% Cu in copper domains.  Where appropriate, some material of lower grade was included with the mineralised domains for purposes of continuity.  Estimations were carried out using ordinary kriging for Zn, Cu, Pb, Fe, Ag and Au.  Specific gravity (density) determinations collected from samples of drill cores were applied to blocks using grade-based regression equations.Tonnages and grades were reported above 7.0% ZnEq for the polymetallic mineralisation as in keeping with previous Mineral Resource statements, and at a 1% Cu cut-off grade for the copper mineralisation. The Mineral Resource estimate has been separately classified for each individual lens based on both geological interpretation confidence and geostatistical variance of assay composites between drill holes into the following categories:  Measured (15x15m spaced drilling with geological backs mapping); Indicated (up to 20x30m spaced drilling); and Inferred (greater than 20x30m  spaced drilling).   Mineral Resource estimation was undertaken for the entire G Lens complex, however, there were no material changes to the G1 and G3 domains and they are therefore, not separately reported here.G2 Lens Mineral Resources are expected to be mined using underground mechanised underhand long-hole stoping with paste backfill. Extraction of separate Zn, Cu and Pb concentrates for sale is planned utilising a new processing facility which is currently under construction at the site.Ore Reserve estimation, selected metallurgical testing and the updating of the early mine schedule has commenced on the new G2 resource and will be reported on separately.Figure 1:  Woodlawn G2 Lens (G2 & GC) long-section showing interpreted lens shape, piercements of recent drilling and the position of proposed decline. http://www.heronresources.com/tsximages/20171113/131117_fig1.jpg Figure 2:  Woodlawn G2 Hanging Wall Lens (GH) long-section showing interpreted lens shape, piercements from recent drilling and the location of the proposed decline. http://www.heronresources.com/tsximages/20171113/131117_fig2.jpg Figure 3:  Woodlawn G Lens complex long-section looking east showing key lens components in relation to the proposed box cut and decline.  Kate lens shown for reference.http://www.heronresources.com/tsximages/20171113/131117_fig3.jpg Figure 4:  G2 Lens representative cross-section at approximately mine grid 19180 North. 
http://www.heronresources.com/tsximages/20171113/131117_fig4.jpg About Heron Resources Limited:Heron’s primary focus is the development of its 100% owned, high grade Woodlawn Zinc-Copper Project located 250km southwest of Sydney, New South Wales, Australia.  In addition, the Company holds a significant high quality, gold and base metal tenement holding regional to the Woodlawn Project.Compliance Statement (JORC 2012)The technical information in this report relating to the Mineral Resource is based on information compiled by Mr. Steven Jones, who is a Member of the Australian Institute of Mining and Metallurgy (Chartered Professional – Geology). Mr. Jones is a full time employee of Heron Resources Limited and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results.  Mr. Jones has approved the scientific and technical disclosure in the news release.Compliance Statement (NI43 101)The technical information in this report relating to the Mineral Resource is based on information compiled by Mr. Rodney Brown who is a Member of the Australian Institute of Mining and Metallurgy (Chartered Professional – Geology). Mr. Brown is a full time employee of SRK Consulting and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an independent “qualified person” as this term is defined in Canadian National Instrument 43-101 (“NI 43-101”). Mr. Brown has approved the scientific and technical disclosure in the news release.CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATIONThis report contains forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws, which are based on expectations, estimates and projections as of the date of this report. This forward-looking information includes, or may be based upon, without limitation, estimates, forecasts and statements as to management’s expectations with respect to, among other things, the timing and amount of funding required to execute the Company’s exploration, development and business plans, capital and exploration expenditures, the effect on the Company of any changes to existing legislation or policy, government regulation of mining operations, the length of time required to obtain permits, certifications and approvals, the success of exploration, development and mining activities, the geology of the Company’s properties, environmental risks, the availability of labour, the focus of the Company in the future, demand and market outlook for precious metals and the prices thereof, progress in development of mineral properties, the Company’s ability to raise funding privately or on a public market in the future, the Company’s future growth, results of operations, performance, and business prospects and opportunities. Wherever possible, words such as “anticipate”, “believe”, “expect”, “intend”, “may” and similar expressions have been used to identify such forward-looking information. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and on information available to management at such time. Forward-looking information involves significant risks, uncertainties, assumptions and other factors that could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. These factors, including, but not limited to, fluctuations in currency markets, fluctuations in commodity prices, the ability of the Company to access sufficient capital on favourable terms or at all, changes in national and local government legislation, taxation, controls, regulations, political or economic developments in Canada, Australia or other countries in which the Company does business or may carry on business in the future, operational or technical difficulties in connection with exploration or development activities, employee relations, the speculative nature of mineral exploration and development, obtaining necessary licenses and permits, diminishing quantities and grades of mineral reserves, contests over title to properties, especially title to undeveloped properties, the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other geological data, environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding, limitations of insurance coverage and the possibility of project cost overruns or unanticipated costs and expenses, and should be considered carefully. Many of these uncertainties and contingencies can affect the Company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Prospective investors should not place undue reliance on any forward-looking information. Although the forward-looking information contained in this report is based upon what management believes, or believed at the time, to be reasonable assumptions, the Company cannot assure prospective purchasers that actual results will be consistent with such forward-looking information, as there may be other factors that cause results not to be as anticipated, estimated or intended, and neither the Company nor any other person assumes responsibility for the accuracy and completeness of any such forward-looking information. The Company does not undertake, and assumes no obligation, to update or revise any such forward-looking statements or forward-looking information contained herein to reflect new events or circumstances, except as may be required by law.  No stock exchange, regulation services provider, securities commission or other regulatory authority has approved or disapproved the information contained in this report.
Zinc equivalent calculation
The zinc equivalent ZnEq calculation takes into account, mining costs, milling costs, recoveries, payability (including transport and refining charges) and metal prices in generating a Zinc equivalent value for Au, Ag, Cu, Pb and Zn.  ZnEq = Zn%+Cu%*3.12 +Pb%*0.81+*Au g/t*0.86+Ag g/t*0.03.  Metal prices used in the calculation are Zn US$2,300/t, Pb US$ 2,050/t, Cu US$6,600/t, Au US$1,250/oz and Ag US$18/oz. These metal prices are based on Heron’s long-term view on average metal prices.  It is Heron’s view that all the metals within this formula are expected to be recovered and sold.  Metallurgical metal recoveries used for the formula are 88% Zn, 70% Pb, 70% Cu, 33% Au and 82% Ag; these are based on historical recoveries at Woodlawn and supported by metallurgical test work undertaken during the 2015-16 feasibility study.  Commodity prices and metallurgical recoveries are factored into the zinc equivalent calculation using a standard metal equivalent formula. 
JORC Code (2012) – Table 1Woodlawn Underground Mineral Resource Estimate (October 2017)Section 1                             Sampling Techniques and Data(Criteria in this section applies to all succeeding sections)Section 2                             Reporting of Exploration Results(Criteria listed in the preceding section also apply to this section.)Section 3                             Estimation and Reporting of Mineral Resources(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)For further information, please visit www.heronresources.com.au or contact:
Australia:
Mr Wayne Taylor
Managing Director and Chief Executive Officer
Tel: +61 2 9119 8111 or +61 8 6500 9200
Email: [email protected]

Canada:
Tel: +1 647-862-1157 (Toronto)

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Sarah Thompson

Sarah Thompson

Sarah is a financial reporter, focusing on technology, national security, and policing. Before joining Daily Telescope she worked as a staff writer at Fast Company and spent two years as a foreign correspondent in Turkey. Her work has been published in Al Jazeera America, The Nation, Vice News, Motherboard, and many other outlets.
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