March 2011: Quarterly Activities Report

Transcription

1 AXIOM MINING LIMITED ARBN Level 11 1 Chifley Square Sydney NSW 2000 Australia 29 April 2011 ASX / Media release T F Axiom Mining Limited (ASX Code: AVQ) March 2011: Quarterly Activities Report Solomon Islands Prospecting licence issued Two tenements issued Exploration to begin in May Corporate $4m capital raising completed Appointment of new CFO Vietnam Exploration and mining licences over Sepon region Au projects due in May Joint Stock Company licence granted Path to Vietnamese IPO Drilling to begin this quarter Queensland Exploration program planned to advance prospects Review of Queensland assets after exploration program this year Scoping study on Mountain Maid gold project delayed due to flooding

2 Solomon Islands On 15 April 2011 Axiom KB Limited (Axiom KB), a Solomon Islands company owned 80% by Axiom Mining Limited ( Axiom or the Company ) was granted a Prospecting Licence over the Kolosori land on Isabel Island. A Letter of Intent covering the San Jorge deposit was also issued to Axiom KB and surface access agreements covering this land are currently being obtained from the customary landowners. Axiom KB Limited Axiom has had a relationship with the customary landowners of the Isabel nickel and cobalt deposits since After its new Board and management team were appointed in 2010, the Company re-established these relationships particularly with the Kolosori and Bungusule Trustees. This relationship was further strengthened in December 2010 with the incorporation, in the Solomon Islands, of Axiom KB Limited (Axiom KB) with Axiom owning 80% and the Kolosori and Bungusule Landowner Trustee groups jointly owning 20%. The Solomon Islands Foreign Investment Board has granted approval to this registration and ownership. Axiom KB has five directors, with one each from the two landowner groups and three from Axiom that include its Chairman and Chief Executive Officer. It is Axiom KB that has been granted the Prospecting Licence (PL) over the Kolosori land and holds the Letter of Intent (LOI) over the Bungusule land. Axiom Mining Limited will fund all exploration and mine development expenditure for the project. This will be provided as an advance against future revenues earned.

3 Choiseul SANTA ISABEL ISLAND Vella Lavella Island Kolombangara New Georgia Islands Santa Isabel Isabel Nickel Deposits New Georgia San Jorge Island KOLOSORI Solomon Islands Ruaniu Lungga Honiara Nguvia Malaita San Cristobal Granted Tenement Perpetual Estate Title 50 Year Land Lease Surface Access Agreement Signed Prospecting Licence (PL-74/11) Nickel - Cobalt Deposit SAN JORGE ISLAND DEEP WATER CHANNEL BUNGUSULE Granted Tenement Customary Land Letter of Intent for 12 Months Nickel - Cobalt Deposit LATERITE NI CO DEPOSITS SANTA ISABEL and SAN JORGE ISLANDS SOLOMON ISLANDS Kilometres

4 Significant Dates 15 February - Kolosori Trustees granted Perpetual Estate Title over their land as well as the land being registered with the Registry of Titles. 22 February - Axiom KB secures exclusive 50 year leasehold over Kolosori Land. The lease was registered with the Registry of Titles and stamped on 23 rd February. 12 April Letter of Intent (LOI) granted to Axiom KB by the Ministry of Mines, Energy and Rural Electrification. The LOI gives Axiom KB two tenements and provides for up to 12 months to obtain Surface Access Agreements (SAA) with the land owners. 14 April Kolosori tenements SAA signed and lodged. 15 April Prospecting Licence (PL) issued to Axiom KB over the Kolosori tenement. 27 April - Axiom KB formally triggers intention to commence prospecting under the terms of the PL. Director of Mines of the Ministry of Mines, Energy & Rural Electrification approves and validates the formal intention to begin activities under the terms of the licence. 29 April - Kolosori and Bungusule Trustees including their Axiom KB director representatives met with the newly appointed Minister of Mines, Energy and Rural Electrification. The Minister confirmed that the PL issued to Axiom KB is valid and they should proceed to prospecting under the terms of the licence. Timeline of Events Actual Forecast Letter of Intent Surface Access Agreement Prospecting Licence Exploration Activities Mining Licence First Commercial Shipment of Ore Now May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Kolosori Bungusule

5 Work Program Exploration teams assembled and being deployed to Isabel now including the environmental and community team. Primary focus is to verify previous work and data produced by some of the world s largest mining companies as well as drill testing the saprolitic zone which has never been fully defined. Aim is to bring this into production via a dig and deliver operation as soon as practicable with an application for a Mining Licence anticipated to be submitted this year. Axiom KB will soon announce senior appointments to its executive team to ensure efficient and effective development of the deposit. Frequently Asked Questions about the Isabel Nickel-Cobalt Deposit in the Solomon Islands Q. Can a Prospecting Licence be granted over Bungusule land since it is classified as customary land? A. Yes. Bungusule land is customary land i.e. not yet proceeded through land acquisition process to be registered and recognised as a Perpetual Estate. This does not stop the process of securing a Surface Access Agreement or the granting of a Prospecting Licence. The Mines and Mineral Act of the Solomon Islands is structured to accommodate customary land. In fact all other mining and prospecting operations including Allied Gold s Gold Ridge are on customary land. Q. When will the Surface Access Agreement be completed for the Bungusule land? A. Bungusule is commencing the Surface Access Agreement signing process now. It could take weeks to months. Axiom KB will take enough time as necessary to ensure the true landowners are represented in the SAA. Axiom is confident of a successful outcome. Q. Are the two tenements contingent on each other being granted a licence to develop the site? A. No, they are separate tenements. Axiom KB will be beginning activities next week on Kolosori land whether or not Bungusule land has a Prospecting Licence issued over it. Q. What are main terms of the Prospecting Licence? A. The licence exclusively gives Axiom KB three (3) years to carry out all forms of prospecting (exploration) with the ability to renew twice for 2 year periods. During this time if a commercial discovery is made Axiom KB can apply for a Mining Licence.

6 Q. What other mining companies are operational in the Solomon Islands? A. Allied Gold, Newmont, Pacific Porphyry, Sumitomo as well as some smaller operators. Q. Can you please explain the significance of the Saprolite zone on the Isabel Deposit? A. Tropical or wet nickel-cobalt laterite deposits are composed of two layers; an upper Limonite and lower Saprolite zone. The full thickness of the two zones can be as much as 25m. At Isabel, historical reports indicate that equipment size limitations restricted sampling of the laterite profile to approximately 6m, therefore the deeper parts of the Saprolite zone were not fully sampled. This is significant for both the size of the deposit as well as the nickel content, as higher concentrations of nickel often occur in the lower sections of the Saprolite zone. Corporate On 27 April the Company announced that it had secured $4 million from investors via an unsecured, interest free, Convertible Note Facility ( Facility ) convertible at $0.15 per share. The Facility which includes a $1 million investment from Axiom s CEO, gives the Company the ability to draw down funds when required to commence Isabel exploration operations in the Solomon Islands and other working capital requirements. The Facility also provides the Company more flexibility to finalise negotiations on a larger more structured financing package to ensure that the Isabel Project is fully funded. On 3 March the Company announced the appointment of Mr Mike Wells as Chief Financial Officer. Mr Wells brings a wealth of experience in both mining and international finance to the role and is ideally suited to lead the expansion of the Company. This appointment is seen as the first in a major executive recruitment plan. Vietnam Joint Stock Company (JSC) Licence On 15 March Axiom announced the formation of Axiom Vietnam JSC following the issue of a JSC licence in Vietnam. This JSC status enables Axiom to begin the process of listing its Vietnamese interests on one of two Vietnamese stock exchanges and raise capital to fund its operations in Vietnam. Axiom Vietnam JSC is a subsidiary of Axiom that will be used to hold all of its Vietnamese mineral interests. The four gold projects Axiom is pursuing in Vietnam will be transferred from other Axiom subsidiaries to be held in Axiom Vietnam JSC.

7 Quang Tri gold project The Mineral Exploration Licence application has undergone final assessment by the Ministry of Natural Resources and Environment in Hanoi. Written notification of the last step in the licensing process was received and minor technical issues have been addressed by Axiom s Vietnamese consultants. The next step in the approval process is an Assessment Meeting at which a confirmation of licence issue is made. This meeting is expected to be held in early May with the Mineral Exploration Licence to follow within days of the meeting. Quang Binh gold project The project has received the written support of the Provincial Government following meetings held in March. Documentation required for the grant of a licence permitting field work in preparation for a Mining Licence application will be submitted for approval to the Government in Hanoi in early May. Axiom and the Vietnamese Government consider these two projects located adjacent to the highly prospective Sepon region as significant. In preparation for the commencement of field work, senior appointments have been made further strengthening the team in Hanoi. In addition, a new office has been opened to accommodate the expansion and these upcoming programs. Funding for this work is planned to be sourced locally, in Vietnam.

8 Queensland Exploration programs on several of Axiom s projects are scheduled for the 2011 field season. The objectives of the programs are as follows: 1) Drill to expand the higher grade gold mineralisation related to a feldspar porphyry intrusive at Mountain Maid and increase the JORC resource in both grade and tonnage. 2) Deliver initial Inferred resource estimates on two prospects, namely the OK Mines copper-zinc deposit and the Cardross Mining Lease copper-silver-gold deposit by systematic drilling. 3) Identify a high grade target at the Porphyry prospect. 4) Identify a copper bearing porphyry intrusive reported in historical drilling at the Split Rock porphyry copper prospect and determine if the porphyry also contains gold and silver. The field programs will commence as soon as access is possible following a heavy wet season, which has lasted through a large part of the month of April this year. Mountain Maid Scoping Study A scoping study was commissioned after a JORC report was produced. The Scoping Study is examining the potential for a low cost heap leach operation. Leach tests are still in examination and due to the heavy flooding in the area the scoping study is not yet complete. Review of Queensland tenement portfolio Axiom has a large tenement portfolio with some genuine potential for commercial gold and copper deposits and has received numerous expressions of interest. After this current planned exploration and drill program Axiom will review the best ways to maximise the value of these assets.

9 Burke Deve lopment H ig hway OK Mines Cu, Zn [ QUEENSLAND Project Area Cairns! Townsville!! Brisbane Porphyry Au, Ag Cardross Cu, Au, Ag [ [ King Vol Ag, Zn, Cu, Pb Red Dome/Mungana Au, Ag, Cu, Pb, Zn [ [ [ [ [ Mountain Maid Au! CHILLAGOE Axiom EPM Split Rock Cu RegionalGeology Cover rocks Silurian-Devonian sediments including the Chillagoe formation Carboniferous - Permian volcanics and granites Proterozoic Dargalong metamorphics, Nundah granodiorite

10 ENDS For further information contact: Ryan Mount Jack McCarthy Chief Executive Officer Chief Geologist Axiom Mining Limited Axiom Mining Limited P: P: E: E: About Axiom Mining Limited Axiom Mining Limited is an advanced mineral exploration company with 100% owned highly prospective gold, silver and copper tenements in Chillagoe, North Queensland, Australia and gold and silver projects in Vietnam as well as an interest in the world class Isabel Island nickel deposit in the Solomon Islands. The company is listed in the ASX and operates in Australia, Solomon Islands and Vietnam. For more information on Axiom Mining and details of our Australian, Solomon Islands and Vietnamese projects please refer to the company website at: Competent Persons Statement Geological information presented in this announcement is based on exploration results compiled by Mr John McCarthy. Mr McCarthy is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the styles of mineralisation and types of deposits under consideration and to the activity, which he is undertaking to qualify as Competent Person in accordance with Clause 8 of the JORC Code. Mr McCarthy is a full-time employee of the Company and consents to inclusion in this report of the matters based on their information in the form and context in which it appears. Statements in this document that are forward-looking and involve numerous risks and uncertainties that could cause actual results to differ materially from expected results are based on the Company s current beliefs and assumptions regarding a large number of factors affecting its business. There can be no assurance that (i) the Company has correctly measured or identified all of the factors affecting its business or there extent or likely impact, (ii) the publicly available information with respect to these factors on which the Company s analysis is based is complete or accurate, (iii) the Company s analysis is correct; or (iv) the Company s strategy, which is based in part on this analysis, will be successful. Disclaimer Statements in this document that are forward-looking and involve numerous risks and uncertainties that could cause actual results to differ materially from expected results are based on the Company s current beliefs and assumptions regarding a large number of factors affecting its business. There can be no assurance that (i) the Company has correctly measured or identified all of the factors affecting its business or there extent or likely impact, (ii) the publicly available information with respect to these factors on which the Company s analysis is based is complete or accurate, (iii) the Company s analysis is correct; or (iv) the Company s strategy, which is based in part on this analysis, will be successful.