MALACHITE RESOURCES NL
Drilling At Conrad Project Triples Contained Silver Resource
MAR - Resource Upgrade - Dr Garry Lowder, Chairman and MD
Tue, 12 Aug 2008 10:15AM
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Dr Garry Lowder
Tue, 12 Aug 2008
10:15AM Australia/NSW
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MALACHITE RESOURCES NL (MAR)
ASX code: MAR
Website: http://www.malachite.com.au/
Industry: Materials
Principal Activities:
Mineral explorer focussed on intrusive-related mineral deposits in eastern Australia, with emphasis on gold, silver and associated metals.
Address:
799 Pacific Highway, Keycorp Tower B, Suite 1502
Chatswood
NSW
Phone: (02) 9411 6033
Fax: (02) 9411 6066
Executives & Directors
Mr Andrew J Cooke , Company Secretary
Mr Peter Hopkins , Assist.Co. Secretary
Dr Garry G Lowder , Chairman, Managing Director
Mr Russell Meares , Executive Director
Mr Warren J Staude , Non Exec. Director
Mr Denis O'Neill , Non Exec. Director
Mr Roy M Randall , Non Exec. Director
Mr Peter Hopkins (Assist.Co. Secretary) , Company Secretary
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Announcements from the preceding six months are shown below.
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MALACHITE RESOURCES NL (MAR) Events
Australia/NSW
MALACHITE RESOURCES NL (MAR)
| Directors Options to be Amended | Fri, 28 Nov 2008 |
| Appendix 3B - Director and Mt Lidster Options | Thu, 27 Nov 2008 |
| Change of Director`s Interest Notice - Dr. Garry Lowder | Wed, 26 Nov 2008 |
| Change of Director`s Interest Notice - Denis ONeill | Wed, 26 Nov 2008 |
| Change of Director`s Interest Notice - Roy Randall | Wed, 26 Nov 2008 |
| Change of Director`s Interest Notice - Russell Meares | Wed, 26 Nov 2008 |
| Change of Director`s Interest Notice - Warren Staude | Wed, 26 Nov 2008 |
| Chairman`s Address to Shareholders | Tue, 25 Nov 2008 |
| Results of Meeting | Tue, 25 Nov 2008 |
| Annual General Meeting Presentation | Tue, 25 Nov 2008 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
INTERVIEW WITH GARRY LOWDER, CHAIRMAN AND MANAGING DIRECTOR OF MALACHITE RESOURCES NL (MAR)
“Drilling At Conrad Project Triples Contained Silver Resource”
http://www.brr.com.au/event/49339
TUESDAY, AUGUST 12, 2008, 10:15 AM.
BRR Good morning and welcome to Boardroom Radio. Today, we are speaking with Mr. Garry Lowder, Managing Director and Chairman of Malachite
10 Resources. Thanks for joining us today, Garry.
MAR Good morning.
BRR Garry, we have seen your announcement today that you have announced a significant upgrade in the silver resource at your Conrad Project. Can you
15 enlarge on that statement for our listeners?
MAR Certainly, happy to. Earlier this week we announced a new resource estimate which contains just over three times as much silver as our initial estimate made last year. Even so, what we did announce this week is still very much an interim figure because it is based only on drilling completed up until the
20 end of June, given that there is a lag between completion of drilling and getting the assay results. We are still drilling at Conrad and we continue to intersect nice-looking mineralisation, so there will be a further significant upgrade to this resource later on in the year. So up to June, we have delineated a resource that contains 8.8 million ounces of silver or about
25 double that on a silver equivalent basis. I might explain that when we use the term silver equivalent, we are essentially equating the value of the associated base metals as though it were silver, but in doing that, we use an equation which makes assumptions about recoveries and payable metals, smelter returns, that sort of thing. We have adopted recently conservative figures for
30 all of those at this early stage, so we think our silver equivalent figure is really quite conservative. Even so, we are looking at something in the order of 18 million ounces silver equivalent, so that is a pretty solid and valuable resource. The key thing is that we have had to make these assumptions because we just do not have a lot of information about metallurgical
35 recoveries as yet, and until we do that, we just have to make the assumptions. We have not yet put into the equation at all the indium content at Conrad which we expect to be a significant credit down the track.
Now, the key driver for getting the interim resource statement out to the
40 market this week was the impending deadline for the exercise of our outstanding options. We have about 40 million 20-cent listed options that are in the market and we wanted to make sure that our option holders had as much information as we can give them about the progress at Conrad before they have to decide really whether to exercise their options. So that was the
45 key reason to get this resource out just now.
When you look at the Conrad mineralisation, the Conrad ore, it is important really to understand that most of the metal at Conrad is packed into narrow lodes that are generally less than a metre wide. Because of that, there are several ways that the resource can be modelled. You can do it on the basis of a minimum mining width or on a grade cut-off basis or in some combination of these. What we have done initially is to estimate the global resource at Conrad by assuming a minimum mining width of 1.5 metres, and this shows
5 that we have plenty of tonnes to work with, but of course, on a global basis, it is relatively low grade. So the next step was to have a look at the impact on the tonnes and grades by applying a combination of 1.5-metre mining width and a cut-off grade of 300 grams per tonne silver equivalent. Now, we can only do this for part of the deposit at present as we just do not have results in
10 a number of key areas. Elsewhere, our drilling density, the spacing between the holes, is yet just not sufficient to allow us to work the data to that sort of level. Even so, we are encouraged to see some discrete areas of high grade emerging from the data we do have.
15 The thing we have not done as yet, and which we will do later in the year, is estimate resources based purely on various cut-off grades and develop what is called a grade-tonnage curve which shows the variation and the inter-relation between the two. To do this effectively, we really need to wait until more of the current infill drilling has been completed. So towards the end of
20 this year, we will have that information and we will be able to look realistically at the economics of mining this deposit. At this stage, our thinking is that if we can define as little as 1 million tonnes of ore grading, around 15 to 20 ounces per tonne of silver equivalent, then we will be in the economic ballpark. I think this week's resource statement shows that we are well on the way to
25 achieving that target.
BRR Garry, what does this upgrade mean for Malachite and whereto from here for Conrad?
MAR Eddie, we believe that Conrad is a company maker for Malachite and this
30 resource upgrade has given us a lot of encouragement that this truly will be the case. The resource we have defined is still very much open, along strike and at depth, so it looks like we will have plenty of tonnes in resource from which to select that smaller amount of high grade ore to be our initial mining reserve. Because Conrad is truly a polymetallic resource with as many as six
35 payable metals, we really need to get a good handle on the metallurgy. It will be a key factor in the development. So far, we have completed several tests, but they are all done on a single sample of the King Conrad lode, which is important, but King Conrad is not a major part of the resource. So going forward, we would like to accelerate our studies based on drill core samples
40 of the Conrad lode just to see how variable the metallurgical behaviour in the ore really is. We do know, for a example, that some of the recent holes into the Conrad load at the south-eastern end of the system have turned up some silver-copper-tin rich mineralisation of good grade. Now, this material is quite different from the ore at the north-western end, which seems to be more of a
45 silver-lead-zinc rich type. Interestingly, though, indium is well developed in those types. So more metallurgy is a high priority.
At the same time, since the economics of Conrad should be driven more by grade than by tonnes, we need to drill out in some detail several of these high grade shoots that we have so far hit in just one or two holes. There is little doubt that most of the metal value in the Conrad ore will be concentrated into shoots and these might be quite a small proportion of the total lode system. An interesting sidelight in that regard is that last month I was in the United
5 States, where I visited the famous Comstock Lode in Virginia City in Nevada. Comstock produced 193 million ounces of silver and 8 million ounces of gold, so it was quite an ore deposit, but what impressed me particularly about the Comstock was that most of that production came from this great ore body which is about 3 kilometres long, by the way. Most of that production came
10 from quite small shoots, which if you put them all together make up perhaps 25% of the total lode volume. I am sure we will see something the same at Conrad.
BRR Garry, just lastly, what else is in the pipeline at Malachite?
15 MAR Well, we are pushing on with the evaluation of our Elsmore Tin Project, and specifically, the Karaula palaeo-alluvial prospect. In fact, we are starting some air core drilling there this week to get a better handle on grade variations with depth in the deposit. We are especially interested in the bedrock interface because that is where the best grades should be found and that is certainly
20 what the old-timers seem to have gone after wherever they could.
Looking externally, I guess the radical change in the capital markets that we have seen this year makes a potential cash flow opportunity like Elsmore doubly important to Malachite. We are placing a high priority on utilising some
25 of our cash resources, hopefully including some new capital from the exercise of our options to start up some sort of cash generating activity at Elsmore if it can be done. We think there is a good chance of making 5 or 6 million a year in cash flow from our small alluvial mining operation at the Karaula deposit and the indications are that this could be done for a very modest capital
30 investment. In fact, the nature of the deposit lends itself to starting with a trial mining exercise and then simply scaling up once the economics have been proven.
Looking regionally, we now have a large prospective land holding in the
35 Inverell area, so until Conrad comes on-stream, paying our way in the world by tin mining in this district is high on the agenda. We will be looking hard both at Elsmore and our new Delungra tenement to the west of Inverell. We know there are quite a few tin occurrences at Delungra, but there has been little or no modern exploration before us so we will have to see what turns up
40 as we start kicking rocks on the ground.
BRR Garry, thank you very much for your time today and we look forward to speaking to you soon.
MAR It is a pleasure.
45
BRR That was Garry Lowder, Managing Director and Chairman of Malachite Resources. If you have any questions about this broadcast or any other broadcast, please feel free to contact us on brr@brr.com.au. I am Eddie (Inaudible) (00:10:03) and thank you for listening to Boardroom Radio.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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