This provides the Company with a platform for the start of a Scoping Study in the current September quarter.
The initial Indicated and Inferred JORC Resource came in 36% higher at 6.79 million tonnes at 0.31% tungsten trioxide, 22.8 grams per tonne (g/t) silver and 0.17% copper, using a 0.2% tungsten trioxide cut-off.
Importantly, 90% sits in the higher confidence Indicated category.
This maiden Resource well and truly exceeds the original exploration target for Desert Scheelite of 4 to 5 million tonnes at 0.3 to 0.33% tungsten trioxide.
Demonstrating a potentially major bulk tonnage target, the Desert Scheelite Resource falls within a broader Indicated and Inferred Resource, using a lower cut-off of 0.1% tungsten trioxide, sits at 12.99 million tonnes at 0.23% tungsten trioxide, 17.2g/t silver and 0.12% copper.
Around 84% of this Resource is in the Indicated category.
Anthony Baillieu, chairman, commented on the milestone: “The Board is extremely pleased with the results of the maiden JORC resource estimate for the Desert Scheelite Deposit which has exceeded expectations. This is a significant milestone for the Project and confirms the Company’s belief in the substantial potential of Pilot Mountain.
“The company will now push forward with the next steps in advancing the project including metallurgical test work and Scoping Studies and looks forward to reporting results to shareholders in the fourth quarter 2012.”
Updated exploration target
As a result of the strong results, Black Fire has updated the exploration target across the three primary deposits to 10.8 to 12.5 million tonnes at 0.32 to 0.35% tungsten trioxide.
This includes 3 to 4 million tonnes at 0.36 to 0.41% tungsten trioxide at the Garnet and Gunmetal Deposits.
Strong extensional potential
The potential for extension to mineralisation at Desert Scheelite is substantial, with the deposit remaining open in all directions.
The most easterly drill hole of the recent diamond drilling program returning an exceptional intersection of 13.9 metres at 0.89% tungsten trioxide, 1.75% copper and 31g/t silver.
The broader potential within the Pilot Mountain Tungsten Project is also high, with 11 other prospects still to be assessed.
While tungsten is the primary commodity focus for Pilot Mountain, copper and silver mineralisation as well as lesser zinc and lead mineralisation has been identified by drilling.
Within the 0.2% tungsten trioxide cut-off resource estimation more than 4.9 million ounces of silver and 25 million pounds of copper mineralisation has been defined.
The potential economic significance of these metals will be investigated as part of the metallurgical review, however Union Carbide’s 1981 Feasibility Study did envisage separate recovery of these metals.
Black Fire has begun a metallurgical review of historic Feasibility Study data, generated by Union Carbide, as well as new test work to investigate modern processing and blending alternatives, targeting an increase in historical recoveries above the reported 76 to 86%.
Black Fire Minerals’ entry into the tungsten market is well timed with growing demand and tightening supply pushing prices higher with the metal now classified as a critical raw material by the European Commission.
The price of tungsten has risen about 700% since 2002, and demand continues to grow.
Demand is being driven largely by China, which holds about 60% of global reserves and provides about 85% of the world’s tungsten supplies and is the metal’s largest consumer. China’s increasing demand for the metal has led to a reduction in exports, leaving other producers struggling to meet demand.
Black Fire has a market cap. of just A$11 million and, with cash in the bank of $2.8 million at the end of the March 2012 quarter, an enterprise value of around $8.2 million, given the value accreting from the Pilot Mountain Project, Longonjo Rare Earth Project, Kangeshi Copper-Silver Project and Mystique Gold Project.
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