Okrious
KBR (TSX-V)
For release on Tuesday, April 6, 2004.
NEWSLETTER FOR MARCH, 2004
Take-over bid
Although occurring after month-end, the take-over bid announced by the
Puplava Group on April 6 is too important to be omitted from this
newsletter. We are very pleased to have Jim Puplava and his associates as
principal shareholder of the Company. Kimber’s board and management
believe that Mr. Puplava’s objectives for the Company are well-aligned
with the interests of the other shareholders. This is excellent news for
Kimber.
Estimate "J"
We apologise for the delay in publishing Estimate "J", calculations for
which were not finalized until the last day of March. The delay was caused
by our having to decide between alternative ways of treating the north end
of the Carmen structure, whether to estimate on the basis of sections
across the Carmen structure or on sections across the Dome structure.
Estimate "J" did not cover the whole Carmen deposit, but it nevertheless
changed some of our understandings and revealed both positive and negative
features of the deposit. Before discussing these, I describe below the
relationship of the two main structures and then, for those of our readers
who are not familiar with the subject, I take the liberty of explaining
two aspects of resource estimation.
The Carmen deposit
The Carmen deposit is made up of resources in several mineralized
structures. Consider a backwards sloping "T". In plan (bird's eye) view,
the stem of the "T" is the Carmen structure and the top of the "T" is the
Dome. Nearly all of our drilling has been from northeast to southwest
across the Carmen structure. Recently we became aware of the importance of
the Dome structure and the need to test it with a substantial number of
holes drilled in a different direction (perpendicular to the top of the
“T”).
Deposit boundaries
Although some orebodies have easily defined boundaries between ore and
waste (often changes in rock type), others, including the Carmen deposit,
have richer zones outside which the grades diminish with distance. Better
grades are flanked by zones with lesser and lesser grades. The boundaries
of such deposits change with commodity prices and the costs of production.
Strip ratio
A key feature of open pit deposits is the "strip ratio", which defines the
number of tonnes of waste which have to be removed to get at each tonne of
ore. For example, a strip ratio of 4:1 means that four tonnes of waste
must be mined in order to mine one tonne of ore. If one of those tonnes of
waste contains enough metal to pay for itself, the ratio is then
diminished. By including the low grade material the average grade is
lowered but the strip ratio is improved.
One of the features of the latest estimate is that we have included more
of the lowgrade silver zones. In so doing we have lowered the grade and we
anticipate that we will have lowered the strip ratio and added silver
ounces. This net change is positive, especially as most of these zones are
shallow levels.
We have excluded some deep, gold-rich, resources at the north end of the
Carmen which formed part of the Inferred category in the previous
estimate. We had attributed some good intersections to the Carmen
structure, but recent drilling has shown that they do not extend in that
direction. We now believe those intersections are controlled by the
recently-recognised Dome structure. We expect to "recover" some of these
by developing resources on the Dome structure, but this cannot happen
until the structure is better drilled. We have lost some ounces, but there
are two aspects of this change that have to be taken into account. Most of
these resources were in the Inferred or least certain category. Also, they
would not have been mined until the seventh or later years of mine life,
and they would therefore be of less present value than those nearer the
surface.
The third, and possibly the most important, change is the emergence of the
Dome structure as one with potential to add considerably to resources of
the Carmen deposit. Indications of the structure have been followed for
over 550 metres. Of this only 220 metres have been drilled tested but with
only nine holes. Of the nine, seven have yet to be included in any
resource estimate. The potential of the Dome structure to add to the
Carmen deposit is very positive.
In general there are more gold-equivalent ounces in the Measured &
Indicated categories than previously, with silver contributing a greater
proportion. Gold grades are lower mainly because the lowgrade "silver
zones" form a greater proportion of the whole, but also because of some
lower grade holes limiting the influence of some highgrade intersections.
Continuity within the deposit has become well established. The bench plans
reveal a well-defined body of mineralized rock which can be followed from
level to level.
On balance? In the short term, the loss of ounces is unfortunate because
of the market's tendency to "count ounces" (regardless of their resources
category of profitability). But the additional near-surface tonnage, the
lower strip ratio, the greater role of silver, are very encouraging. The
emergence of the Dome fault as a mineralized structure of similar length
to the Carmen and likely to contribute additional resources is especially
promising.
Silver to gold conversion ratio
Kimber will continue to report gold-equivalent grades and gold-equivalent
ounces using conversion factor of 100 as the best representation of
current in-the-ground relative value of gold and silver in the Carmen
deposit, but in most cases, grades and contained ounces will also be
calculated using a factor of 70 to facilitate comparison with other
deposits where the lower ratio is used.
On site progress
With two drills turning, the flow of drill results will increase. The
recently-recognised importance of the Dome structure opens the Carmen
deposit to the east and will require a lot more drilling. This will almost
certainly lead to the planned prefeasibility study being postponed into
2005. Drilling of some of the exploration targets which lie to the west of
the Carmen has been started.
Robert Longe, P.Eng., President
6 April, 2004
FOR FURTHER INFORMATION PLEASE CONTACT:
Paul Frigstad, Investor Relations,
Email pfrigstad@kimberresources.com
or
Robert Longe, President & CEO,
Email: news@kimberresources.com
North America Toll Free: 1-866-824-1100, Tel: (604) 669-2251,
Fax: (604) 669-8577.
Website: kimberresources.com
Statements in this release may be viewed as forward-looking statements.
Such statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. There are no assurances
the Company can fulfil such forward-looking statements and the Company
undertakes no obligation to update such statements. Such forward-looking
statements are only predictions; actual events or results may differ
materially as a result of risks facing the Company, some of which are
beyond the Company’s control.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. |
