Bauxite Resources Limited (ASX:BAU) Quarterly Activities Report And Update On Yankuang Group Joint Venture
Perth, May 3, 2010 AEST (ABN Newswire) - During the March quarter the Bauxite Resources Limited (
ASX:BAU) (PINK:BXRDF) exploration program continued with 2107 vacuum holes, for 8,589 metres were drilled in the North Darling Range Project area including Bindoon, New Norcia and Toodyay region; and in the South Darling Range Project area around the Brunswick Junction region.
Drilling in the Northern region has defined grades sufficient for Direct Shipping Ore (DSO), subject to obtaining regulatory approval. In all three project areas (North, East, South) the focus is on bringing tenements to grant and negotiating land access agreements. Reconnaissance mapping visits has allowed pre-preparation of Programs of Work (POW) for submission to Department of Minerals and Petroleum (DMP) once Tenement grant and Access Agreements occur.
Additional Exploration Licences Obtained for the Quarter
BRL submitted an additional 21 Exploration Licence (EL) applications during this quarter. This brings the total number of EL applications to 117 of which five are granted to end of March 2010. The total area covered by tenements, granted and applications is approximately 25,000km2; 108 tenements are located in the North, South and East Darling Range project areas, seven tenements in the Kimberley project area and two tenement applications in the new Northern Territory project area.
Five of these licences have been granted in the North Darling Range Project area with a further two close to grant; while in the South two EL are close to grant.
Target Generation
BRL is focusing exploration to meet its objectives of defining sufficient bauxite mineralisation to develop sustainable long-term DSO operations within the Darling Range. BRL continues with its planned systematic drilling program of targets, the majority of which are relatively close to existing infrastructure, including rail lines and ports.
The priority targets for exploration are those areas with historical data and non-drilled areas considered prospective (based on several overlapping defining parameters) by the BRL geological team on both Crown and freehold land.
Furthermore, an exploration program in the Southern Darling Range is targeting sufficient bauxite mineralisation to support the undertaking of a Bankable Feasibility Study (BFS) for a Refinery. Exploration will focus on a combination of Crown Land and freehold farmland close to existing infrastructure and services.
Exploration Program
Exploration work for the March 2010 Quarter consisted of target generation, surface mapping, drilling and securing land access agreements.
Mapping Work Completed this Quarter
BRL's on-going mapping programme continued during the March quarter mapping over the East and South Darling Range projects was completed. This mapping and rockchip sampling confirmed the presence of extensive laterite plateaux indicating potential for these tenements to host significant bauxite mineralisation.
Exploration Program scheduled for June 2010 Quarter
Work planned for the June quarter will focus on resource definition drilling of a number of targets in the North Bindoon New Norcia, Victoria Plains, Moora and Toodyay regions through the North Darling Range project; and Manjimup, Yornup, Dinninup regions for the South Darling Range project. The exploration program will consist of the following:
- Continued reconnaissance mapping, sampling and target generation of the Darling Range project.
- Resource definition drilling of high-grade targets in the North Bindoon region, New Norcia, Victoria Plains and Toodyay regions with the objective of defining sufficient bauxite mineralisation to support a DSO mining operations for 10 years.
- Scout and resource definition drilling of high-grade targets in the Bunbury hinterland region.
- Resource modeling of high-grade bauxite mineralisation previously defined by drilling in the North Bindoon Region.
NORTH DARLING RANGE PROJECT
A total of 1,773 holes for 7,359 metres were drilled during the March Quarter in the North Bindoon, Moora, New Norcia and Toodyay regions. BRL also continued land access negotia-tion for properties in the Victoria Plains and Northam Shires for drilling during the March and June quarters.
Drilling concentrated on the definition of bauxite mineralisation associated with the proposed pits at the North Bindoon Operation and identification of new zone of mineralisation associated with targets in the North Bindoon and Toodyay regions.
Further drilling is planned to focus on other areas identified by historical CSR/Pacminex drilling data that contains potentially economic bauxite mineralisation serviced by existing infrastructure.
North Bindoon
During the March Quarter, the exploration team completed wide spaced and resource definition drilling on the Hares Hill prospect and targets on adjacent properties.
Access has been negotiated for a number of key properties in this region and first-pass drilling of these targets is currently underway. BRL is reviewing other high-grade targets in the area and securing land access agreements, principally with farmers over grazing areas.
SOUTH DARLING RANGE PROJECT
Several land access agreements signed and drilling of 334 holes for 1,230 metres was undertaken in the Brunswick Junction area during the quarter. This has shown significant refinery grade bauxite and potential for DSO bauxite from the southern region.
Reconnaissance of areas of imminent tenement grant has occurred with prospective areas and tar-get properties identified for Land Access Agree-ments. Drilling of these targets will commence in the June quarter.
OPERATIONS FOR THE QUARTER
Trial Shipment Operations
Operations at BRL's trial shipment site in North Bindoon continued during the first quarter of 2010, extracting and delivering the third and final shipment of DSO High Grade Bauxite to Kwinana Bulk Terminal (KBT). The ore was delivered to KBT primarily by rail, with approximately 7200 tonnes transported via road.
Third Shipment
The Third shipment of 41,500 tonnes was loaded onto the Pacific Embolden which departed from Kwinana on 5th February at 10.15 am.
Future Operations
Looking to the future, BRL purchased an 870 Hitachi excavator and three 40t off-road dump trucks, and a mainly refurbished crusher. Major equipment delivered during the period included, a WA 500 front end loader and D10T dozer.
Grade Control
The control and reconciliation of ore prior to delivery at the rail or port stockpile has provided some challenges but all grades are within contract specifications. Results for the second and third shipments were within contract specification.
Rehabilitation
The trial mining area was reshaped using the overburden extracted from the pit footprint and topsoil replaced, a water truck was utilised for approx three weeks to stabilise the topsoil in the warmer times. Re-seeding as per the land access agreement will commence after season opening rains.
LAND ACCESS
BRL will only access private farmland with the express permission of the landowner.
During the quarter an additional two land access staff have been recruited. Land access activities have extended in the Northern Regional Shires including Toodyay, Victoria Plains, Moora and more recently Williams, Boyup Brook and Northam.
To date BRL has agreements covering 106 properties.
DOWNSTREAM PROCESSING BANKABLE FEASIBILITY STUDY (BFS)
Technical Integration Approach
Essentially, the BFS for downstream processing aims to evaluate a number of processes that the metallurgical testwork has determined as technically viable. On the basis of testwork completed to date it is proposed that the studies be undertaken as two phases:
Phase 1: Calcined Bauxite
Phase 2: High Purity Alumina Refinery
A technical visit by BRL's Ben Ziegelaar and Geoff Beros and two consultants was undertaken in March.
Various options as well as modern Bayer approaches were studied and will be further reported after aspects of intellectual property are investigated.
Feasibility Delivery
Current metallurgical studies will form the basis of the future engineering design. A fit for purpose "project development framework" (PDF) has been formulated and will be adopted as studies progress.
TECHNICAL REPORT FOR BAUXITE MARKETING
Beneficiation testing
Beneficiation is a treatment that may be applied to the bauxite ore to improve its refining properties prior to export.
Jigging has been demonstrated to be suitable for beneficiation of BRL's southern tenement ores. This operation can be used to remove the very low density, high silica fraction as well as an iron rich, high density, low available alumina fraction.
Geoff Beros, General Manager Processing, and Ben Ziegelaar, Manager R & D Technical Marketing, visited All-Mineral in Duisberg Germany, held discussions with technical personnel and visited a Rhine river stone jigging beneficiation operation.
All-Mineral personnel are confident that tests using the All-Jig rig at Nagrom laboratories in Perth accurately reflect what can be obtained in practice.
Analytical
The analytical laboratory at Nagrom is now operating with two fully functioning state of the art XRF machines, fusion equipment and auto-mated Loss on Ignition measurement. A Fourier Transform Infrared spectrometer is in the process of calibration. Bomb Digest and a laser particle sizer will be added to this in May giving BRL excellent low cost laboratory facilities.
ENVIRONMENT APPROVALS
BRL had applied for approval for a six-month, commercial scale test for mining and direct shipping of bauxite from a farm near Bindoon. The proposal was for a six month, 1.2 million tonne, low impact mining proposal from 20 hectare of parkland cleared farmland within BRL's two and a half million hectare of tenements in the Darling Range.
The method or level of assessment now chosen for approvals processes by EPA, the environmental regulator, is slower than the methods anticipated by BRL in the context of its planned operation, or in comparison to other similar but larger operations for extracting gravel.
The level of assessment chosen has no bearing on the ultimate likelihood of receiving approvals for mining, but it does affect timing.
In view of the EPA determination BRL has appealed the determination and is seeking a faster process. In parallel with the existing application for approvals for the six-month project, BRL will continue to seek general approvals for mining and transport across its tenements on Darling Range farmland.
Open Dialogue with EPA for general across-the-board approval
BRL continues its efforts with the EPA and government departments to commence an across-the-board process for assessment and general approval of bauxite extraction and transport from private property within BRL tenements. BRL proposes that this approach in parallel with specific assessments such as the specific six-month proposal should satisfy procedural and public requirements without unreasonable time constraints on development.
COMMUNITY & PUBLIC AFFAIRS
Bauxite Resources has recently appointed Chantelle O'Sullivan to the role of Public Affairs Manager. Helen Trlin has been appointed to work fulltime with Chantelle in community affairs.
On the 11 February 2010 a formal 'Conversations with the Community' was held in Bindoon with 170 attendees. Presentations and forum covered community questions, trial shipments and future plans. Topics raised by the community covered potential benefits to the community, approval processes, truck movements, noise and dust, water usage, land access and land values, discussions for community and open communication.
A Community Consultation Strategy is being reviewed part of which is the formation of the Bauxite Resources Community Consultative Committee (BRBC3). This committee will:
- Recognise the importance of community engagement in addressing potential issues or areas of interest relating to mining operations in the local community;
- Assist BRL to disseminate information relating to both current and planned mining operations, and the deliberations and proceedings from the meetings, to the wider community;
- Provide a forum for constructive and transparent discussions between BRL, appointed community representatives and other stakeholders.
In conjunction with the formation of the Community Consultative Committee there has been two community bus trips to view the trial mine site and the rail siding and a further bus trip by government officers to the trial mine site.
EXECUTIVE STAFF - QUARTERLY UPDATE
During the quarter, BRL engaged the following senior personnel during the quarter:
Geoff Beros joined the Company as the General Manager Processing. Geoff has over 25 years experience in the Mining industry and has held a number of senior positions in technical marketing, process engineering, feasibility study management, processing operations and research and development consulting. Geoff is high regarded in the industry and his experience will assist BRL with the proposed development and management of the bauxite refining and smelting operations.
Ben Ziegelaar (Jnr) joined BRL as Principal Engineer working with Geoff Beros on the Bankable Feasibility Study. Ben spent 15 years working with Alcoa as a Senior Electrical Engineer where he was responsible for electrical engineering and control systems for the Huntly and Willowdale mine sites.
Ben has extensive experience managing project feasibility studies and due diligence reports for existing electrical infrastructure and new projects.
Chantelle O'Sullivan joined the Company as Manager Public Affairs. Chantelle has spent the past three years as Communications Manager for the City of Cockburn where she was responsible for strategy development for the City and Public Relations issue management. Chantelle also has extensive experience in Marketing roles with Edith Cowan University, St John of God Health Care and St Hilda's Girls School.
These new senior management bring a wealth of knowledge from their various backgrounds to the BRL Management team which will assist with the Company's future growth and development.
CORPORATE SUMMARY
Yankuang Share Placement
During the quarter the company signed a Heads of Agreement with Yankuang Group Corporation Ltd for 50/50 joint venture for the development of an alumina refinery in the south west of Western Australia. Part of the Heads of Agreement was the placement of 19.7 million shares at 50 cents each. The placement was completed on 25 January 2010.
Market Capitalisation
There are approximately 234 million shares on issue and as at 31 March 2010 the share price at the end of the quarter was 80 cents. At this price the company has a market capitalisation of around A$187 million.
Cash Reserves and Expenditure
Cash reserves at 31 March 2010 were A$61 million and the company also had A$10 million in property plant and equipment as it geared up for the commencement of mining operations. The company is still considering the various rail and port options available for its planned direct shipping ore operations but has not yet committed to significant capital expenditure on any option at this stage. The company has preserved significant cash reserves to allow for expenditure on Bankable Feasibility Studies on the planned alumina refinery and also for CAPEX on port and rail and trucking options to achieve long term sustainable operating cost savings.
Board of Directors Appointment
Mr Yan Jitai a senior executive of Yankuang Group Corporation Ltd was appointed a non-executive director during the quarter further strengthening the BRL board. The board now comprises a non executive Chairman, the Managing Director and six non executive directors.
Office Relocation
At the end of March the office moved to new premises at The Garden Office Park complex in Osborne Park. The head office has now doubled in floor space and has provision for the expected arrival of the joint venture partners Yankuang Group Corporation Ltd.
For the complete Bauxite Resources Quarterly Activities Report for the period ending 31 March 2010, please click the following link:
http://www.abnnewswire.net/media/en/docs/62755-ASX-BAU-489842.pdf
About Bauxite Resources Limited
Bauxite Resources (ASX:BAU) (OTCMKTS:BXRDF) was established with a substantial tenement holding in Western Australia to develop new bauxite supply for the global alumina/aluminium industry. The Company listed on the Australian Securities Exchange (ASX) in October 2007.
The Darling Range in the south-west of Western Australia (WA) is the world's largest bauxite mining and alumina refining region producing around 20% of the world's alumina. This area has mined bauxite and refined alumina since the 1960s. These industries are leaders in sustainable resource development and represent the fifth largest sector of WA's resource industry.
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