REPORT ON ACTIVITIES FOR THE QUARTER ENDED 30 JUNE 2007

Transcription

1 REPORT ON ACTIVITIES FOR THE QUARTER ENDED 30 JUNE 2007 As we continue to build the Company, the Directors of Tri Origin Minerals Ltd (TRO) are pleased to announce the following achievements during the June quarter of QUARTERLY HIGHLIGHTS Activities for the quarter continued to focus upon the Woodlawn ZincCopper Projects (WZP) comprising the Woodlawn Retreatment Project (WRP) and the Woodlawn Underground Project (WUP). Key achievements include: Advancing the bankable feasibility study (BFS) of the WZP which remains on track for completion during first quarter Ongoing development of the WUP geological rock model. Defining the WUP geotechnical drilling requirements. Reviewing possible WUP mining methods and commencement of stope delineation work. Advancing the WRP and WUP metallurgical optimisation test work. Initiating the requirements for the WZP statutory approval process. The project is classified as a Major Development under the New South Wales state project development guidelines. Completion of an independent estimate of the WRP resources. Undertaking exploration drilling at Woodlawn and Overflow prospects. Initiation of Lewis Ponds field work in preparation for future drilling. Initiating discussions with a number of parties regarding offtake rights for WZP concentrate and the formation of a strategic alliance. The above achievements include activities which were stated as priorities for the period in the March quarterly report to shareholders. Tri Origin Minerals Ltd ACN Level 2, 2 O Connell Street, Sydney. NSW Australia Telephone Facsimile

2 The priorities of the Company for the September quarter are to: Further advance the BFS for the WZP by o Commencing geotechnical drilling for the underground mine, plant site, decline and other areas. o Advancing the mining studies. o Defining the metallurgical flowsheet. o Advancing infrastructure and services studies. Advance the WZP statutory approval process; Complete exploration drilling at the Overflow Prospect; Commence drilling within the Cullarin Joint Venture area; Appoint a concentrate marketing advisory group for the WZP. Have in place a strategic plan for potential business alliances. 2. WOODLAWN DISTRICT The WZP BFS will evaluate the WRP and WUP as two separate ore treatment operations whereby the Company can achieve economies of scale through increased milling rates at the site and have the choice of blending lower grade concentrates from the WRP with higher grade concentrates from the WUP. The BFS remains on target for delivery during the first quarter of Woodlawn Retreatment Project As part of ongoing studies Tri Origin announced an additional JORC compliant Measured, Indicated and Inferred Resource estimate for the Woodlawn Retreatment Project (WRP) West and South tailings dams of: PROJECT LOCATION PLAN 0.54% Cu, 1.30% Pb, 2.26% Zn, 0.29 g/t Au, 28g/t Ag The third dam, the North tailings dam, is yet to be drilled and evaluated. Based upon mine production reconciliations, it is anticipated that tailings of up to 2.5Mt may be defined within this dam. The WRP metallurgy is progressing in line with expectations. A low grade zinc concentrate can be produced, and there is potential to produce a lower grade copper concentrate for possible blending with underground plant concentrate output. 2

3 2.2 Woodlawn Underground Project The WUP comprises 10.1 Mt of high grade Resources and remains Tri Origin s flagship project. During the quarter the development of a geological rock model for detailed mine planning purposes neared completion. The mining work component of the BFS has reached the mining method selection and optimisation stage. This involves (having confirmed a shortlist of practical mining methods), the iterative process of assessing the mining value chain from geology through to the financial key performance indicators. It encompasses trade off studies and assessments of the selected mining method options; cut off grade analyses, production development and production scale. Once these aspects have been iteratively optimised, then the next phase of work will involve the design detail for the preferred selected mining methods (as several may be used) which will lead to the reserve estimation phase. Stope fill strategies are also being evaluated to BFS standard. Given the high grade of the mineralisation and the nature of remnant mining, a key consideration of the mining study is to ensure that ore grades delivered to the mill are maximised through minimal dilution and maximum ore recovery. Following geotechnical logging of selected core from the substantial core database at Woodlawn, further evaluation of the extensive geotechnical database and on the advice of key consultants, drilling from surface is now planned to confirm geotechnical inputs into the mine design and planning process. This approach has been recommended to the Company to achieve the required level of geotechnical definition for the BFS rather than as previously planned accessing the upper part of the underground workings via the current decline. In meeting the independent consultants requirements, drilling is planned to commence in the current quarter and will provide: The prerequisite level of confidence for BFS geotechnical criteria; and Additional core for metallurgical optimisation test work. Metallurgical test work is ongoing with optimisation studies in progress. The focus is on both primary and regrind grind sizes with regard to achieving the optimum recovery of copper and lead to concentrates. Results to date are encouraging. 2.3 Other Activities The Company has also commenced test work on potential zinc and copper metal recovery from concentrates at Woodlawn using the Albion Processing Technology. Initial results are expected this quarter. 3. EXPLORATION The objective of the regional exploration programme is not to incrementally add to existing resources but to test targets that through success will potentially create significant value for the benefit of shareholders. 3.1 Woodlawn Regional 3

4 Tri Origin s first drill programme within the Cullarin Joint Venture prospects located north of Woodlawn will be conducted this quarter. The Company has received assay results for WLT001 which intersected pyrite rich sulphide mineralisation from m (7.8 m down hole thickness), as announced in ASX Release April 16, Mineralisation was of lower tenor than expected. However, the broad zone of anomalous zinc is considered highly encouraging. Details of the drill hole are: Hole No. MGA me MGA mn The mineralisation is associated with zones of polymict breccia containing limestone, pumice, tuff and siltstone fragments associated with siderite and minor barite. The Company believes this intersection represents a new style of mineralisation in the Woodlawn area. It occurs at a stratigraphically lower level as compared to the Woodlawn deposit and exhibits skarn type affinities. This opens up a significant new area of exploration potential. A similar style of mineralisation has been documented at the Collector Skarn deposit located 15km north of WLT Overflow Project (EL 5878) The project is located on the eastern margin of the Cobar Basin approximately 200km west of Dubbo. Tri Origin believes the area is prospective for Cobar styles of mineralisation. In May drilling at Overflow was interrupted due to a lack of water in the area, however, recent rains have now provided the opportunity to continue with the programme. The next hole to be drilled this quarter is a diamond drill hole planned to evaluate mineralisation at depth below the historic Overflow Mine. The hole is to be drilled to a target depth of 430 metres. Five reconnaissance reverse circulation holes were drilled during the quarter. Dip Azimuth (MGA) Depth (m) WLT From to Interval Zn% Fe% Maximum Maximum

5 Hole No. MGA me MGA mn Dip Azimuth (MGA) Depth (m) OFTRC OFTRC OFTRC OFTRC OFTRC Relatively wide zones of anomalous ZnPb and Ag +/ CuAu mineralisation were intersected in all holes. Hole No. From To Interval # Au Ag Cu Pb Zn m m m ppm ppm % % % OFTRC < OFTRC < OFTRC OFTRC incl OFTRC OFTRC * OFTRC incl OFTRC * OFTRC < incl <0.01 < *in mineralisation at end of hole. # true width estimated to be 50% of reported downhole interval Mineralisation was typically associated with the contact zone between tuffaceous rocks and metasediments. Both lithologies exhibited varying degrees of pervasive silicapyrite alteration with local quartz veining. Pyrite content ranges up to approximately 5%. Rare galenachalcopyrite and sphalerite were observed. The results are considered encouraging and indicate the potential for base metal sulphide mineralisation occurring over a wide area, particularly at depth. Cut off grades used to calculate intercepts were 0.1% Zn and/or 0.1% Pb. All assays were of 4m intervals (or part thereof) and were derived from compositing individual 1m samples. Sampling was done utilising the spear method. Analyses were undertaken at a commercial laboratory. Quality control procedures indicate acceptable levels of precision and accuracy for the assay method used. Holes OFTRC002, 003 and 004 failed to achieve desired target depths due to drilling difficulties. 5

6 Downhole EM was conducted on holes OFTRC1, 2 and 4, the results of which indicated no significant offhole conductors. 3.3 Lewis Ponds (EL 5583) Exploration activities continued at Lewis Ponds. Ground checking of approximately 40 selected HoistEM anomalies was completed. Assays have been received for selected field samples from the anomalies. Elevated AgCuPbZn values were returned from eight prospects and several others require additional follow up work. Many of the identified target areas are located at Icely which is 68km SSE of Lewis Ponds and results support previous work in this area. The HoistEM data was also reprocessed using TargetTEM modelling. The results of this work are currently being assessed and additional exploration targets may be identified. A review of downhole EM responses in hole TOS002 drilled at Icely was undertaken. The review highlights a strong conductor off the end of the hole. However, it remains unclear if the conductor is a response to sulphide mineralisation or carbonaceous shales. Tri Origin plan to extend this hole to investigate the anomaly. 4. SAFETY & ENVIRONMENT The Company had no LTI s during the quarter and there are no significant environmental liabilities outstanding. We have also retained the services of a professional Occupational Health & Safety consultant to review and work with us as we develop and implement all our OH & S systems taking us from our current stage of evaluation through to future operations. The Company has no material environmental liabilities. 5. CORPORATE The Company remains focused on continuing to add further value for shareholders by: Advancing the BFS for the Woodlawn ZincCopper Projects; Drilling targets that through exploration success may add considerable value; Evaluating the opportunity to form an appropriate strategic alliance; and As is appropriate and with BFS advances, consider the alternatives to commence front end engineering and design early and hence have the opportunity to compress the development timeframe of the WZP. The aforementioned WRP Resource estimate was in line with the expectations of the Company and brings the total JORC compliant Resource base of Tri Origin to 25 Mt, including the previously announced Woodlawn Underground Project (WUP) Resources of 10.1 Mt and Lewis Ponds Resources of 6.6 Mt. As the Company evaluates the development opportunities associated with these projects, and due to recent work, the Company has adequate mineral resources at its key sites to consider the development of each as a separate project (i.e. not resource constrained). 6

7 TRO had a cash position of $8.4 million at the end of the June quarter. In accordance with the Australian Stock Exchange Limited Listing Rules Appendix 5A, the information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr David Hobby, an employee of the Company, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hobby has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Hobby consents to the inclusion in the report of the matters in the form and context in which they appear based on information derived from his technical work. For further information please contact Bruce Robertson on By order of the Board, Bruce M Robertson Managing Director 7

8 Appendix 5B Mining exploration entity quarterly report Appendix 5B Rule 5.3 Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98. Name of entity Tri Origin Minerals Ltd ABN Quarter ended ( current quarter ) June 2007 Consolidated statement of cash flows Current quarter Year to date (12. months) Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration (680) (268) (1,784) (983) 1.3 Dividends received 1.4 Interest and other items of a similar nature received Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows Cash flows related to investing activities 1.8 Payment for purchases of: 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets (a) prospects (b) equity investments (c) other fixed assets (850) (2,604) 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows (50) (62) 1.13 Total operating and investing cash flows (carried forward) (900) (2,666) (50) (62) + See chapter 19 for defined terms. 1/7/98* Appendix 5B Page 1

9 Appendix 5B Mining exploration entity quarterly report 1.13 Total operating and investing cash flows (brought forward) (900) (2,666) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 9,164 9, Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other Share issue costs (410) (410) Net financing cash flows 8,754 9,443 Net increase (decrease) in cash held 7,854 6, Cash at beginning of quarter/year to date 552 1, Exchange rate adjustments to item Cash at end of quarter 8,406 8,406 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Directors fees & expenses 72,500 Directors superannuation 6,525 Consultants fees paid to related party 7,500 Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest + See chapter 19 for defined terms. Appendix 5B Page 2 1/7/98*

10 Appendix 5B Mining exploration entity quarterly report Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used 3.1 Loan facilities 3.2 Credit standby arrangements Estimated cash outflows for next quarter 4.1 Exploration and evaluation 4, Development Total 4,563 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter Previous quarter 5.1 Cash on hand and at bank Deposits at call 8, Bank overdraft 5.4 Other (provide details) (48) Total: cash at end of quarter (item 1.22) 8, Changes in interests in mining tenements Tenement reference Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased + See chapter 19 for defined terms. 1/7/98* Appendix 5B Page 3

11 Appendix 5B Mining exploration entity quarterly report Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price per security (cents) (see note 3) 7.1 Preference + securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Amount paid up per security (cents) (see note 3) Ordinary securities 96,308,234 96,308, Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks 10,386,224 10,386,224 Various various Convertible debt securities Performance Share 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 2,750, Options Listed Unlisted 1 November: 1 share for 1 option 26 October: 1 share for 1 option 8 June: 1 share for 1 option 9 March: 1 share for 1 option 10 Feburary: 1 share for 1 option 3,000, , ,000 2,000, ,000 Exercise price 20cents 20cents 30cents 25cents 121cents Expiry date 01/11/09 26/10/10 08/06/11 09/03/11 10/02/ Exercised during quarter 7.9 Issued during quarter 7.10 Expired during quarter 7.11 Debentures 7.12 Unsecured notes + See chapter 19 for defined terms. Appendix 5B Page 4 1/7/98*

12 Appendix 5B Mining exploration entity quarterly report Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: Date: 30 July 2007 (Company secretary) Print name: John Falconer Notes 1 The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. + See chapter 19 for defined terms. 1/7/98* Appendix 5B Page 5