Stonewall Advances Theta Hill DG4 Evaluation
ASX Announcement 23 April 2018
HIGHLIGHTS
- Theta Hill continues to develop open cut potential with RC drilling and trenching results on the adjacent DG4 section yielding positive results including:
- Trench C, 122m @ 1.3g/t Au on Bevett’s mineralisation, including 2m @ 14.8 g/t Au and 2m @ 11.2 g/t Au (lateral sampling)
- RC Drilling (RCBH DG4LT8) 4m @ 4.3 g/t on Bevett’s mineralisation, including 1m @ 12.4 g/t Au (vertical sampling)
- RC Drilling (RCBH DG4B6) 1m @ 5.6 g/t on Beta mineralisation.
- A second diamond rig is on site to assist in the completion of the Theta Hill drilling and drilling of the nearby DG4 target area, to meet schedules on planned resource/reserve definition
- An RC rig is being brought back to site to complete infill drilling on the DG4 area of Theta Hill
Stonewall Resources Limited (ASX: SWJ and SWJO) (“Company”) wishes to update shareholders as to progress with the exploration program at Theta Hill, which has been ongoing since late 2017.
Trenching at the adjacent DG4 target has yielded positive grades from the Bevett’s seam exposed at surface. This DG4 area is part of the Project Bentley Theta Hill project and is only 700 metres from the fully permitted TGME CIL process plant ‐see Figure 1 below. A RC drilling rig is also being mobilised for the first week of May to advance the evaluation of the depth extent of Bevett’s that has been exposed by 5 trenches, as well as to undertake infill drilling at the DG4 and the underlying Lower Theta and Beta Reef targets. The target gold zone at the DG4 area has a low strip‐ratio, and represents the first possible mill‐feed target ahead of pre‐stripping activities being considered at Theta Hill (subject to definition of reserves in accordance with JORC 2012).
A second diamond drill rig is on site to assist with Theta North drilling program where after it will be relocated to the DG4 area to advance the resource drilling for this area. Diamond drilling meterage rates have been below expectations to date with slow progress due to the highly fractured and variable ground conditions including voids in the dolomite and broken ground. The second diamond rig will improve on the daily drill meters achieved in order to meet the schedule for completing the program.
Planning is underway to commence drilling at Vaalhoek during Q2 2018, where a maiden JORC (2012) inferred resource of 617Kt @ 16.88 g/t Au (for 335koz) (Annexure 2) was announced to the ASX on 24 March, 2018. In addition, Stonewall is reviewing the Columbia Hill area and continues to define new targets for planned drilling, with the objective of defining additional open cut reserves for inclusion in the planned commencement of open‐cut mining in 2019.
TGME EXPLORATION, RIETFONTEIN AND PROJECTS UPDATE
Stonewall Resources Limited (ASX: SWJ, ASX: SWJO) (“The Company”) is pleased to provide an exploration update to the market regarding ongoing work at the TGME project in South Africa.
In Summary:
Diamond drilling at Theta Hill open cut project is expected to be completed in late April 2018, with a second diamond rig expected to arrive on site in early April 2018.
The annual JORC Resource review and update of the Company’s resources being undertaken by independent geologists Minxcon is proceeding well and is expected to be completed by late April 2018.
Pre‐feasibility study (“PFS”) activities continue at Rietfontein to include extending access now to the mine Level 4 Adit for sampling and bulk metallurgical samples.
Onsite legal and environmental planning work has been ongoing for the last 18 months, as part of converting the remaining Prospecting Rights (PR) to Mining Rights (MR). All of our core projects such as the Project Bentley open cut areas at Theta Hill and Columbia Hill and the Rietfontein and Beta underground projects are already covered by Mining Rights except for Vaalhoek which is covered under this PR to MR conversion process. The Vaalhoek PR to MR conversion process is proceeding well.
Site engineering visits to the Company’s TGME CIL plant have been completed by various South African engineering contractors to review and recommend a plant refurbishment program and cost.
As part of getting ready for planned near‐term mine development, all Environmental Compliance requirements are being regularly monitored and maintained up to date.
The Company is also continuing to engage with the local communities and BEE partners on potential recommencement of operations.
MD Rob Thomson commented, “We have been increasing the level of activities at the TGME project in recent months, with an acceleration of mine planning work ahead of our aim to declare maiden open‐cut reserves in 2018. With all mine approvals expected to be granted, and detailed costs estimates prepared, we are removing impediments to a quick resumption of gold production for the group. In addition, work on gaining underground access to Rietfontein for the purposes of resource/reserve drilling and metallurgical sampling is also continuing. This is an exciting time for shareholders of SWJ as we get closer to production, with the high level of activity and news flow expected to continue in 2018”.
INDEPENDENT INVESTMENT RESEARCH REPORT RELEASED
ASX Announcement 19 March 2018
NEAR DEVELOPMENT, FULLY PERMITTED LOW COST GOLD
Recent work, including drilling, by Stonewall Resources Limited (“Stonewall” or “the Company”) at the 4.15Moz , high grade TGME Gold Project (“TGME” or “the Project”) located over the historic Sabie-Pilgrims Rest Goldfield in South Africa has highlighted the open cut potential of the field. This is supported by the recently completed initial high grade open-cut resources at the Vaalhoek prospect and the results of drilling and cyanide bottle roll metallurgical test work at Theta Hill and Vaalhoek - the metallurgical work has returned recoveries of ~90 % to 95% for potentially open pittable oxide mineralisation.
This follows on from a robust Scoping Study for underground operations on the historically mined Rietfontein and Beta deposits, which are now the subject of an ongoing Pre-feasibility Study (“PFS”) - the brownfields project includes a fully permitted processing plant and thus by virtue of the existing facilities and permits in place, any restart of the expected low operating cost operations can be executed within a short time frame and at a low up-front capital cost.
The open cut potential has come about from an ongoing data review and compilation over its 620km2 holdings (the first ever such review done over the entire field), which covers at least 43 historical mines which have produced over 7Moz of gold since 1873. This review, “Project Bentley” has thus far identified the potential open cut opportunities with a midpoint Exploration Target of 1.15Moz of gold - ongoing work is continuing to identify additional high quality targets and is highlighting what we view is the multi-million ounce potential of TGME, reinforced by our site visits over the past twelve months.
KEY POINTS
Advanced project: TGME is an advanced, largely permitted brownfields project with the potential for a rapid restart of operations.
Short term open cut possibilities: The recent drilling and metallurgical test work has confirmed the high grade open cut potential at both Vaalhoek and Theta Hill, with the possibility for a quick start up, low capex operation with only relatively minor refurbishment work required to bring the plant back into operation.
Robust underground operations: The recently Scoping Study at Rietfontein and Beta, based on a 9 year, ~90,000ozpa underground operation returned a pre-tax NPV10 of US$166 million, with an IRR of 61% for a maximum capital exposure of US$29 million; in addition to these forecast robust returns, expected operating costs are expected to be a very low US$495/ounce, with an AISC of US$624/ounce.
High grades with significant resource upside: The current global resources of 28.2Mt @ 4.34g/t are relatively high grade when compared to peers; these include a diluted production inventory of 3.3Mt @ 7.7g/t for the planned Rietfontein and Beta underground operations as modelled in the recent Scoping Study and potential open cut resources of 0.62Mt @ 16.9g/t Au for Vaalhoek; in addition all current resources are open with significant upside potential both from the existing resources and targets identified from Project Bentley.
Infrastructure rich: TGME is well served by infrastructure, including power, water, roads and a readily available skilled workforce; in addition site infrastructure includes a fully permitted CIL processing plant that will only require modest capital to refurbish and upgrade, and a permitted tailings dam.
Long mining history: South Africa is a country with a long history of mining, and is currently or has been a major global producer of a number of resources, including gold, PGEs, diamonds, iron ore and coal; as such it has in place highly skilled and capable labour and services.
Political Changes: The recent resignation of Jacob Zuma and appointment of Cyril Ramaphosa as President of South Africa have been viewed very positively, and provide optimism for positive changes in the country and mining industry; this has been supported by the appointment of Gwede Mantashe as Mines Minister.
Positive outlook for gold: Our view is that the gold price will remain at around current levels or higher for the foreseeable future.
Strong management and technical team: The Company has management and technical personnel with extensive experience in the junior resources sector, and a proven history of successfully taking projects through to operations; in addition directors have direct and indirect holdings in ~21% of the Company, thus aligning their interests with those of other shareholders.
Active Exploration Programmes: Current and planned activities should lead to positive news flow over coming months.
Valuation: We have an indicative valuation range of A$0.018 to A$0.058/share, with a preferred midpoint value of A$0.038/share.
DIAMOND DRILLING COMMENCED AT THETA HILL
ASX Announcement 14 March 2018
HIGHLIGHTS
- Drilling contractor OMT Exploration Drilling has commenced Diamond drilling at Theta Hill, with both Diamond and RC drilling currently underway ahead of maiden open‐cut resource calculations.
- Diamond tails to be completed on 20‐25 holes, with additional diamond holes planned.
- Completion expected by April 2018, with assays from late March. Maiden open‐cut resource at Theta Hill due by May 2018.
Stonewall Resources Limited (ASX: SWJ, SWJO) (“Company”) is pleased to announce that the diamond drill rig has commenced drilling at Theta Hill this week, with the RC rig continuing to test targets at Theta Hill as part of planning for potential open‐cut resource calculations and feasibility work in 2018.
Last week the Company announced a maiden open cut resource at Vaalhoek of 0.62Mt @ 16.9g/t Au for 335koz (88% Inferred*). Theta Hill is the current focus for establishing a second JORC open‐cut resource as part of Project Bentley, and ultimately declaring maiden open‐cut reserves.
New Open‐Cut discovery at Vaalhoek Mine with maiden 17g/t
StonewallResources Limited (ASX: SWJ, “The Company”) is pleased to announce a third open‐cut discovery at Vaalhoek with maiden high grade open‐cut resource. This is our third open‐cut target after Theta Hill and Columbia Hill. This maidenresource forms part of the successful ProjectBentley to identify potential high grade open‐cut opportunities with near term production potential.
This resource upgrade is part of an overall annual JORC review of all project areas and completion of this work is anticipated by the end of April 2018.
SUMMARY
- Third open‐cut discovery at Vaalhoek with near term production potential
- Maiden Vaalhoek open‐cut resource of 0.62Mt @ 16.9 g/t Au for 335Koz (82% Inferred, 18% Indicated)
- 215% increase in Vaalhoek resource to 791Koz Au (3.3Mt @ 7.46 g/t Au), 89% Inferred, 11% Indicated, including a revised underground resource
- Re‐modelling with additional information (historical reef sampling, maps and boreholes) has enabled a resource upgrade ahead of planned drilling
- Two reefs, Vaalhoek Reef and Thelma Leaders Reef (11‐15m below Vaalhoek reef) modelled with preliminary metallurgical testwork showing 92% recovery from face sampling
Stonewall MD Rob Thomson commented:
“The investment by Stonewall into a complete re‐assessment of the geological potential of the tenement area with a recent focus on open‐cut targets, continues to uncover excellent opportunities. This maiden high‐grade open‐cut resource demonstrates the potential for multiple open cut mines in the area. With an additional open cut resource expected within the coming weeks from the Theta Hill drilling currently underway, the company is starting to build towards multiple high grade, low capital intensity open‐cut deposits and we plan to be in a position to begin plant refurbishment and submit mine plans in 2018. We expect further positive news flow, including further increases to our resource base and the development ofreserves to underpinre‐development of the TGME project. These plans are complementary to our ongoing plans to re‐open the Rietfontein Mine”.
Ongoingwork as part of ProjectBentley has delivereda maiden open cut resourceat the historical Vaalhoek mine to the north of the existingCIL plant. Plannedwork will examinethe project from an open‐cut perspectiveand the intentionis to presentpreliminary mine schedulingand scoping study work.Stonewall is encouragedby the work to date and intendsto drill at Vaalhoek at the earliest opportunity.
In addition, there is strong exploration potential along strike of the identified gold reef and both infill drilling and exploration drilling is planned in the future.
The images below show the location of Vaalhoek relative to the TGME plant, the terrain of the area and the potential open cut oppportunities on the resource.
Figure 1) Regional aerial photo showing location of Vaalhoek Project (Source: Minxcon)
Figure 2) Photo of Vaalhoek Project, showing terrain of area
Figure 3) Vaalhoek Project, showing potential open cut areas (Source: Minxcon)
Experienced team, strong in‐country presence
Stonewall has a development team in place that will take the company to production
Robert Thomson (Australia)
Managing Director Stonewall Resources, MD Stonewall Mining and Director of TGME and Sabie BEE compliant companies
35+ years Mining Engineer & Director. Development/Operations as CEO/Exec Director/Project Manager in 8 gold and base metal projects progressed through exploration, BFS , approvals, financing, construction and delivery to operations. Commenced career in underground gold mining in Southern Africa. Successful Project Director/GM – Chatree and Sepon Stage 1, 125,000+ ozpa goldmines.
George Jenkins (South Africa)
Chief Executive Officer and Director Stonewall Mining, and Director of TGME and Sabie (BEE compliant) companies
26 Years Mining Industry Experience. 22 Years Extraction Metallurgist. 19 Years in various hands‐on management and executive roles in South Africa and Australia.
Chin Haw Lim (Australia)
Chief Financial Officer
Chartered Accountant with many years mining industry experience. Has worked in various ASX‐listed companies as CFO/Financial Controller and Company Secretary in areas of financing, development and operation.
Johan Fourie (South Africa)
Environmental & Strategic Planning Stonewall Mining
40 years of mining industry experience. Has managed the successful completion of approvals for the Stonewall redevelopment plans.
Hanlie Grobler (South Africa)
Finance & Administration Stonewall Mining
30 years Financial Management experience including 7 years as CFO and Financial Director of Multi National as well as 7 years mining.
Elane Botha (South Africa)
Legal, Environmental Compliance Stonewall Mining
Qualifications in Law and Environmental Management, over 14 years experience and joined SWJ in 2013 and works with Johan on permitting.
Consultants (South Africa)
Minxcon, Bara, Adrian Singh & Robbie Murray
Group Resource Geologists, Group Mining Engineers, Group Metallurgical Consultants respectively
