Mineral Resources & Ore Reserves

Mineral Resources & Ore Reserves

In 2012 H&S Consultants Pty Ltd (H&SC) completed an update of the mineral resource estimate for the Watershed deposit.  This update used the Multiple Indicator Kriging (MIK) modelling method.

The exploration database on which the mineral resource estimates are based contains over 326 holes and 15 costeans for a total of 54,024 metres of which 47,983 metres are diamond core.  The entire diamond core library, including the first discovery hole is available on site for inspection.

All drill cores and chips have been sampled and assayed under a quality control process encompassing umpire assaying, reference standards, primary crush duplicates and pulp duplicates. Independent review has found a high level of precision.

Scheelite mineralisation intersected by exploration drilling can be of relatively high grade.  Within the resource database, over 300 composite intervals exceed 5m length and have an average grade of 0.5% WO3.  There are also 160 composites with a length exceeding 5m having an average grade of 1.0% WO3.

In 2007 Vital conducted an RC drilling program over three areas to test the short range continuity of the mineralisation.  This drilling was set out on a 10m by 10m “grade control” pattern and demonstrated a favourable comparison with the exploration drilling.

The resource estimates were generated from 26,226 2m composites in six geologically defined domains with two sub-domains for partially weathered material and fresh rock. Grade modelling used MIK with a maximum search distance of 26m by 52.5m by 52.5m and a minimum number of data points of 8 to generate grades for a 10mE by 25mN by 5mRL panel size with an SMU of 2.5m by 5m by 2.5m.  Classification of the resources was based in part on the assumption that Vital plans to selectively mine the deposit via an open pit method.

The current Mineral Resource estimate for the Watershed deposit consists of Measured, Indicated and Inferred Mineral Resources (Table 3). The resource data was prepared in accordance with the JORC Code 2004 guidelines for Mineral Resource reporting.

Mineral Resource estimate for the Watershed deposit
(JORC 2004 guidelines)
MeasuredIndicatedInferredCombined
WO3% Cut-offMtWO3%MtWO3%MtWO3%MtWO3%WO3 Tonnes
0.059.470.1628.360.1411.490.1549.320.1470,400
0.14.420.2511.510.244.730.2620.660.2550,700
0.152.690.346.660.322.830.3512.180.3340,400
0.21.930.414.560.392.050.418.530.434,100
0.31.090.532.40.521.170.544.660.5324,600

Ore Reserves

The maiden Ore Reserve for the Watershed Project, calculated for the proposed open pit mine as part of the DFS completed in 2014,  is based on Measured and Indicated Resources. This reserve comprises 21.3Mt of ore grading 0.15% WO3, for 31,400 tonnes of contained WO3. The related strip ratio is 3:1 (waste to ore).

Ore Reserve statement for the Watershed deposit
(JORC 2012 guidelines)
Ore Reserve CategoryQuantity
(Mt)
WO3 Content
(tonnes)
Grade
(WO3)
Proven6.410,4650.16%
Probable15.020,9490.14%
Total Ore Reseve21.331,4130.15%

Exploration Potential

The Watershed ore body is open to depth and there is significant potential to add additional resources to the deposit by further drilling. Past drilling has proven high grade mineralisation below the current pit design (e.g. MWD119) and the current geological model for Watershed, which is based on similar tungsten deposits world wide, supports continued mineralisation to the presumed granite contact and like to the presence of mineralisation within the granite.

Tungsten deposits are usually related to a granitic pluton, which itself can be mineralised in its roof section (e.g. greisen-style deposits). Drilling at Watershed has not intersected such a pluton yet, but the presence of granitic dykes, contact-metamorphic rocks in drill core and outcrops and geophysical modelling support the presence of such a pluton at limited depth.

Long Section of Watershed Mineral Resource

Besides the resource potential at depth, there is also significant potential along strike. Within a distance of 2 to 5km from Watershed, Utah discovered 3 prospects in 1982, which can are along-strike extensions of Watershed. Those prospects, Watershed South, Desailly North and Desailly, are very similar to Watershed with scheelite mineralisation being hosted by calc-silicate altered arenites.  Utah carried out limited drilling on these prospect in 1983 and 1984 before exploration at Watershed ceased.  Vital has recently continued exploration on these prospects, believing they hold the potential  to extend the life of the Watershed processing plant.

The Watershed resource and nearby prospects.
Scheelite mineralised samples from the Desailly prospect.

Competent Person's Statement

The information that refers to Mineral Resources was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since last reported.

The information that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Mark Strizek, a Competent Person who is a Member or The Australasian Institute of Mining and Metallurgy. Mr Strizek is a full time employee of the Company. Mr Strizek has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Strizek consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

The information that relates to Mineral Resources for the Watershed Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience 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, Mineral Resources and Ore Reserves”. Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion of the estimates in the report of the Mineral Resource in the form and context in which they appear.

This Ore Reserves statement has been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code – 2012 Edition). The Ore Reserves have been compiled by Mr Steve Craig of Orelogy Group Pty Ltd, who is a Fellow of Australasian Institute of Mining and Metallurgy. Mr Craig has had sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Craig consents to the inclusion of the matters based on his information in the form and context in which it appears.