Element 25 Ltd (ASX:E25, OTCQX:ELMTF) has resource infill drilling underway at the 100%-owned Butcherbird Manganese Project in Western Australia in a bid to extend reserves and the mine life of 7.2 years to around 20 years at an annual rate of 1.1 million tonnes of concentrate production.
This program comprises about 209 percussion drill holes for 6,270 metres targeting infill of the existing Butcherbird inferred resources.
Financing component
The company said increasing the ore reserve was an important component of securing project financing for the Butcherbird Expansion Project at favourable rates with the current reserve constrained by the drill hole spacing in the inferred resource areas.
This work follows a recently completed feasibility study to expand the processing facility at Butcherbird to support annual manganese concentrate production of 1.1 million tonnes.
Element 25 managing director Justin Brown said: “This drilling program will allow the global resource at Butcherbird to be recalculated with a higher degree of certainty.
“This is expected to result in a signification conversion of inferred resources to measured and indicated which will support project financing by increasing the reserve tail beyond that covered by the existing 7.2-year mine life.”
Infill drilling
E25 is seeking to extend the life-of-mine (LOM) plan to ~20 years based on conversion ratios seen at Butcherbird previously.
Butcherbird hosts a global resource of more than 260 million tonnes of manganese ore but the current reserves are limited to areas which have been drilled out to a sufficient density to support measured and indicated classifications required as the basis for a statement of reserves.
Recalculating resource base
On completion of the program, the new drilling combined with historical data will be used to recalculate the resource base to support a recalculation of the proved and probable reserves with the aim of supporting a longer mine life and support project financing activities for the Butcherbird Expansion Project.
The increase in the 'reserve tail' is important for project financing and can open the project up to a wider range of potential financiers in addition to NAIF, who are undertaking due diligence.
This drilling program is expected to take about four weeks. Samples will be submitted for assay and database integration to be followed by a recalculation of resources and reserves.