Alara Resources Ltd (ASX:AUQ) is now expecting the Washihi JORC resource estimate to increase as a result of the recent infill drilling program at the 70% owned Al Hadeetha copper-gold project in Oman.
Initially, the infill drilling program was directed at increasing confidence around the inferred resource and converting it into the indicated category.
Alara now realises that previously unknown new mineralisation has been intersected outside the existing resource boundary at the Washihi deposit.
The new resource model is expected to be finalised on 18-19 September.
Construction of a 1 million tonnes per annum copper concentrator and other site infrastructure is planned to commence at the project during Q1 2017.
Background
Alara has a portfolio of projects in the Middle East and was focused on an infill drilling program during the June quarter at the 70% owned Al Hadeetha Copper-Gold Projects in Oman.
The company has completed an advanced scoping study on both the Daris and Al Hadeetha Copper-Gold Project in Oman.
Most recently it completed a feasibility study for the Washihi deposit within the Al Hadeetha project.
The company has completed a definitive feasibility study on the Khnaiguiyah Zinc-Copper Project in Saudi Arabia, which is the subject of legal proceedings.
The company is transitioning to establish itself as a base and precious metals mine development and production company.
Al Hadeetha Copper-Gold Project: Washihi
The Washihi JORC Resource estimates have been updated to comply with the 2012 code and are now being revised to incorporate the results of the recent drill program.
The current Washihi resource contains 14.1 million tonnes at 0.80% copper and 0.18 g/t gold.
Washihi’s Indicated Resource can be converted into a Reserve only after a mining licence is issued.
The Washihi mining licence application was first submitted in April 2013 and remains pending.
Project management proposals to bring Washihi into operation are currently being assessed with contract awards expected in the last quarter of the year.
Infill drill program
Alara finalised the infill drill program at the Washihi deposit within the Al Hadeetha copper-gold project in late July, 2016.
During drilling, Alara discovered additional high grade copper and gold mineralisation which sits on top of the existing JORC resource.
Infill drilling at the Washihi Exploration License delivered broad intersections such as: 61 metres at 0.48% copper, 0.18g/t gold; and 88 metres at 0.72% copper.
These were supported by high grade intersections including: 7 metres at 2.93% copper, 2.71g/t gold, 22.37 g/t silver; and 11 metres at 4.69g/t gold, 0.31% copper, 17.85g/t silver.
The reverse circulation drilling covered circa 850 metres
Analysis
An increase to the total JORC resource volume is an unexpected bonus for Alara as they continue to progress the Al Hadeetha project towards construction and operation.
Alara has successfully identified project financing options in excess of the forecast capex required to construct the project.
Financing is subject to the issuance of the mining licence and Alara is not aware of any reason why the licence could not be issued in order to meet first production, scheduled for 2018.
Furthermore, Oman has been taking steps to support the country’s mining industry with the government promoting and prioritising its development.
Mining Development Oman has been capitalised with A$200 million and plans to raise a further A$130 million through IPO on Oman’s stock exchange before the end of the year.
Late last year the Public Authority for Mining in Oman submitted a draft of the new mining law for approval by relevant ministries.
The new law is expected to help attract investment to develop the mining sector into a major contributor to the country’s gross domestic product.
The mining sector is also preparing for an international mining and minerals conference, to be held in Muscat in January.
Shares in Alara are trading up 50% year to date, currently priced at $0.02.
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