15/04/19 NI 43-101 official document
A quick dip into the 191 pages of the NI 43 101 release of Regulus Resources on their AntaKori project located in Peru. It’s a short summary, so I encourage you to dive into the full document yourself. I tried to ‘dumb it down’ although I assume some basic understanding and knowledge of the company and the AntaKori project.
Mineral Resource Estimation
- Mineral Resource Estimation The Mineral Resource block model was constructed over the entire Project area. A parent block size of 10 m x 10 m x 10 m and a sub-cell block
size of 5 m x 5 m x 5 m were chosen.
- The pit shell was determined by
evaluation of an NSR with NSR block cut-off = $10.03/t. The NSR of each block was calculated using the following formula: NSR= 45.07* Cu + 24.10 * Au + 0.30 * Ag.
- Using the current geological model and available drill hole data, it appears that a drill spacing of 110 m is required for Indicated Mineral Resources, and it is reasonable to assume a 200 m drill grid would be sufficient for Inferred Mineral Resources. (Pete: atm REG was drilling 150m spaced holes and their intention is to delineate an inferred resource first. The
approach : Find the boundaries first, then start infill drilling)
- Parameters for the conceptual pit shell assumed the deposit would be developed as a long-life operation consisting of a conventional truck and shovel open pit mine feeding a 60,000 t/d concentrator, producing a copper–gold–silver concentrate containing arsenic on-site for sale to third-party refineries
- Based upon
precedent agreements
- The conceptual constraining pit shell reaches a depth of approximately 600 m at the deepest point. The ratio of waste to
total in-pitresource (Regulus and CMC) at a cut-off of 0.3% CuEq is approximately 0.85. (Pete: That’s a really low waste to ore ratio, meaning a minimum of waste ore needs to be mined to get the juicy stuff out)
- There is significant mineralized material that falls outside of the conceptual pit shell and additional drilling will be required to support the estimation of Mineral Resources from this material. (Pete: This is a clear pointer towards the newly released holes 26 & 30)
- Between 2015 and 2018, Regulus re-logged all of the legacy core rather than rely on legacy logging. (Pete: What you do yourself…you do better)
Pete: 54% of total mineralization is skarn (240ppm As). So more than half the 8Blbs is ‘clean’ ore
Surface Rights
- Most of the surface rights in Sub-Area 1 in the southern part of the AntaKori concessions area are owned by CMC which permitted access for the 2017–2018 drill program as part of the Coimolache Collaboration Agreement.
- Regulus purchased 6 ha of surface rights for two properties in the northern part of the AntaKori Project and is negotiating the purchase of other properties. Additional surface rights need to be obtained to support future mining operations. (Pete: This will be a continuous balanced effort. The way of working for whole of Peru, not company specific)
- The drill program outlined in Section 1.15 is planned to be conducted under a combination of existing CMC–Tantahuatay drill
permits, and a DIA permit submitted to the regulatory authorities by Regulus to allow drilling to extend to the north on both the AntaKori and Colquirrumi concessions.
- A DIA has been submitted to permit planned exploration and drilling programs in the northern part of the AntaKori concessions and in the Colquirrumi concessions. The DIA approval is anticipated by about Q3 2019.
Pete: This is permit highly awaited as it will enable Regulus to chose their preferred drill locations, fewer hurdles mean a quicker news flow and most importantly, a clear chance at testing the main targets
- An Environmental Impact Declaration (DIA, Declaración de Impacto Ambiental) has to be presented for Category 1 exploration activities which have a maximum of 40 drilling platforms or disturbance of surface areas of up to 10 ha. CMC met the requirements to extend the Tantahuatay oxide operation onto Regulus concessions and has initiated this activity with corresponding NSR payments made to Regulus (Pete: in the recent webcast, John mentioned a +- 1mil$ payment by CMC to REG in this regard)
- Regulus has not granted Buenaventura or CMC any first right of refusal over the acquisition of its shares nor over the acquisition of its mining concessions.
Metallurgy
- An average copper recovery of 85% and copper concentrate grade of 28% Cu was selected as the basis of the cut-off assumptions used in Mineral Resource estimation. A recovery of 80% As was assumed to the concentrate. The resulting concentrate product would be arsenic-bearing and contain an average of about 3.5% As. This level of arsenic in a concentrate generally requires marketing through specialist base metal concentrate traders for blending, third-party refineries and/or treatment by secondary downstream processing on-site.
- As exploration continues, there is potential that additional mineralization will be identified in skarns, which based on data available to date, tend to have lower arsenic values. This is supported by early-stage results reported in the Regulus news release of 2 April 2019, in which drill hole AK-18-030, located approximately 500 m to the northwest of any previous drilling reported by Regulus, encountered low-grade skarn and porphyry hosted mineralization with low arsenic contents in the lower portion of the drill hole.
Costs
- The cost for the drill program is estimated at US$10 million, assuming an all-in drilling cost of US$400/m. All-in costs include provisions for items such as direct drilling, assays, core boxes, Corescan™, site preparation and remediation, and labour costs.
- The main objective of metallurgical testing will be to define preliminary flowsheet requirements, recoveries, and costs, as well as likely product characteristics, particularly arsenic content, to support mineralization routing, concentrate strategies and economic analysis. The budget for this program is envisaged at about US$300,000.
Pete: A PEA is scheduled for mid 2020 after an updated Resource Estimate in early 2020
Others
- The 2017–2018 drill program has demonstrated that the copper-gold mineralization is open on the north and northeast sides of the AntaKori concessions and into the Colquirrumi concessions. These areas are coincident with circular highs with low centers on a plot of the total field magnetic intensity (TMI) analytical signal of the vertical integration (ASVI). These magnetic anomalies are interpreted as possibly representing multiple porphyry– skarn centers with magnetic-destructive phyllic alteration of porphyry stocks surrounded by magnetite-bearing skarn, thus demonstrating considerable exploration potential. (Pete: As of today, the main targets at AntaKori haven’t even been drilled. That’s about to change once the permit is in)
