Elemental Minerals review of operations for the quarter ended 30 June 2012

PERTH, Australia, July 31, 2012 /CNW/ - Elemental Minerals Ltd. (ASX, TSX: ELM) ("Elemental" or "the Company") is pleased to provide the following quarterly update for activities at its Sintoukola Potash Project located in the Republic of Congo ("ROC").

ACTIVITIES

• 8 resource boreholes (for 2,734 metres) were drilled during the quarter as part of the Phase 2B drill programme.
• 3 hydro-geological boreholes were completed to provide data for the pre-feasibility study ("PFS").
• 359 drill core samples were prepared and sent to Genalysis in Perth for chemical analysis.
• Continued progress with engineering studies on the process plant, infrastructure and mine design.
• Continued with environmental and social baseline assessments.
• Initiated the development of memorandums of understanding with various regulatory parties to secure gas and power.
• Launched land acquisition process.

Phase 2 Exploration Programme

The Company continued with the pre-feasibility phase of its definitive feasibility study ("FS") for the Sintoukola Potash Project this quarter. The Phase 2B drilling was completed with eight resource boreholes drilled for 2,734.20 metres (see Table 1).

Resource boreholes with assays reported during the quarter are listed in Table 1. Some of the boreholes also served to provide geotechnical samples and data for the FS.  An additional three boreholes (762.75 metres) were drilled for hydro-geological purposes to provide data for the Company's PFS. Hydro-geological test work was completed at two well-sites with positive results at both sites, confirming the very low permeability of the intermixed anhydrite sequence and halite layer above the sylvinite ore.

On 8 May the Company announced an updated Mineral Resource estimate. The Kola deposit currently contains 959 Mt Measured and Indicated Mineral Resources with an average grade of 15.11% K₂O (23.93% KCl), and 513 Mt Inferred Mineral Resources with an average grade of 15.33% K₂O (24.27% KCl), at a 10.0% K₂O cut-off grade. The sylvinite portion of the deposit contains 413 Mt Measured and Indicated Mineral Resources with an average grade of 20.39% K₂O (32.39% KCl), and 261 Mt Inferred Mineral Resources grading 19.16% K₂O (30.33% KCl), at a 10.0% K₂O cut-off grade.

Sampling and Analyses

During the quarter 359 drill core samples were prepared and sent to Genalysis in Perth for chemical analysis. Samples (PQ core diameter sizes) are split in half by a diamond saw cutting machine at the project site. The half split samples, each weighing about three to seven kilograms, are collected at an average interval of 0.3 to 1.0 metre. The samples were processed and analysed by Genalysis, Perth, Australia. Sample preparation and analysis is done by Genalysis. Potassium, Sodium, Calcium, Magnesium, Chlorine, and Sulphur were analysed by ICP-ES. Routine international-standard QA/QC procedures were used by Genalysis. One of the six elements analysed are reported here: potassium (K) and its molecular equivalent of Potassium oxide (K₂O, by multiplication with a factor of 1.204). The detection limit for K is 0.001%.

Table 1. Summary information for resource drill holes completed during the quarter.

Borehole	East-WGS84 (m)	North-WGS84 (m)	RL (m)	Depth (m)	Azimuth	Dip	Assays
EK_38	793905.57	9547076.10	17.211	335.30	0	-90	Reported
EK_39	801914.25	9544206.86	42.456	350.35	0	-90	Pending
EK_40	799497.66	9541413.90	44.690	343.25	0	-90	Pending
EK_41	803046.56	9540983.55	11.404	329.40	0	-90	Pending
EK_42	794865.16	9545182.98	34.891	353.40	0	-90	Pending
EK_43	793004.43	9545808.29	20.108	360.95	0	-90	Pending
EK_44	792925.71	9547953.53	20.355	317.25	0	-90	Pending
EK_45	791897.51	9546839.83	25.719	344.35	0	-90	Pending

Table 2. Resource drill hole intersections reported during the reporting period.

Hole	Zone	From (m)	To (m)	True Width (m)	% K2O	% KCl
EK_32	Footwall Seam	289.87	294.52	4.65	18.01	28.53
EK_33	Hanging Wall Seam	213.81	216.45	2.24	33.06	52.36
EK_33	Upper Seam	272.06	275.88	3.82	22.51	35.64
EK_33	Lower Seam	278.91	284.55	5.64	10.89	17.25
EK_35	Footwall Seam	264.03	269.30	5.27	17.85	28.27
EK_36	Upper Seam	281.10	285.75	4.65	19.16	30.35
EK_36	Lower Seam	288.94	293.30	4.36	14.41	17.35
EK_38	Hanging Wall Seam	209.60	212.06	2.46	30.58	48.43
EK_38	Upper Seam	265.80	268.79	2.99	22.72	35.98
EK_38	Lower Seam	272.97	273.20	7.53	12.75	20.19

Note: EK_34 was abandoned due to technical reasons above the target depth. EK_37 was a shallow borehole drilled for geotechnical purposes only.

Pre-Feasibility Study

The study team consisting of Elemental staff, SRK Consulting, AMEC Americas, EGIS International and CSA Global have advanced the PFS, and have achieved good progress in the following areas.

Geotechnical study: Geotechnical testing and analyses has been completed and design inputs for mine design have been issued. Planning of the FS work programme, including requirements for the detailed shaft design was completed. Geotechnical testing was initiated on the Hanging Wall Sylvinite Seam (HWSS), (Footwall Sylvinite Seam (FWSS) and Lower Seam Sylvinite (LSS) zone.

Hydrogeological study: Five day pump tests and short term air-lift tests were completed at well site A and well site B. The tests provided data allowing for several conclusions to be made, including the following:

• A transmissive overburden groundwater system exists above the proposed mine.
• The anhydrite sequence is 6.8 metres thick at Site A and 14.2 metres thick at Site B and at both locations appears to be impermeable. During pre-mining conditions the anhydrite sequence is a hydraulic barrier between the overburden groundwater system and the halite at the top of the main body of the evaporite sequence.
• The halite below anhydrite sequence appears to be impermeable. Results of testing conducted in the anhydrite sequence that included the top one metre of the halite indicate no permeability.
• The underground mine should be designed utilizing extraction ratios that do not result in any disturbances to the anhydrite sequence and upper halite that would cause an increase in their permeability and vertical groundwater movement toward the mining workings.
• Site-specific hydrogeological data needs to be collected for assessment of mine shaft sinking. SRK recommends that a series of holes need to be drilled and additional hydrogeological testing and groundwater sampling be conducted at the potential mine shaft location.

Planning of the FS work programme, including requirements for the detailed shaft design was completed.

Mining: Mine planning continued based on the updated Mineral Resource estimate issued during the quarter. An initial assessment of the shaft location, equipment selection and panel design was completed and preliminary production schedules were issued. The Company appointed Allan Auld Engineering (AAE) to investigate alternative shaft sinking techniques in parallel to the PFS study, which could improve the implementation schedule and capital requirements. The AAE work will be reviewed by SRK and may be incorporated into the PFS. Work continued on ventilation design, mine services and mining cost estimates, as well as updating the mine schedule to account for 2mtpa muriate of potash ("MoP") production.

Processing: AMEC Americas completed the PFS scope of work and issued the draft PFS report for review. A decision to target both the Upper Seam and Lower Seam in the mine design reduced the expected run-of-mine ("ROM") grade to 19.8% K₂O. The modified grade estimate required that the mass balance be revised to maintain 2mtpa MoP production. This work is underway. Process flow diagrams, report and costing will also be updated for the PFS study. The first phase of metallurgical test works on the FWSS, LSS and HWSS, which was completed at Saskatchewan Research Council in Canada, will be incorporated into the FS.

Residue storage facility ("RSF"): SRK (Perth) completed the PFS report on the RSF and issued it for review. Changes to the design due to the revised mass balance are currently being incorporated into the PFS report. A ROM storage facility was included in the design to accommodate ore produced in the ramp-up phase while the process plant is under construction. This will aid in fast-tracking the mine development and processing ramp up period.

Infrastructure: EGIS International completed the PFS report on infrastructure and issued it for review. Changes to power and water supply as well as ROM ore transport (due to the revised mass balance) are currently being incorporated into the PFS report. Planning of the FS surface geotechnical campaign was completed and is scheduled for implementation during the dry season (August to October).

Environmental and Social Impact Assessment: Work commenced on the preliminary impact assessments and continued on the baseline assessment. Planning of the dry season baseline assessment was completed. The final field work campaign will begin in July 2012.

Project Management: In preparation for the PFS, a draft economic model has been completed.  This will be revised as the individual engineering studies provide updated costing to support the 2mtpa MoP production rate in the PFS.

Planning of the FS study phase was started during the quarter, and is currently being refined.

Meetings were held with various regulatory bodies in the ROC, including Ministry of Hydrocarbons, Ministry of Energy and Water, Centrale Electrique du Congo S.A., SNE and ENI. The Company is currently pursuing Memorandums of Understanding with these various entities to secure power and gas to serve the project requirements.

A land commission was established in cooperation with the Ministry of Land to start the process of land acquisition.

This quarter marks the conclusion of the Company's capital intensive Phase 2B drill programme as well as much of the detailed engineering work required for the completion of the PFS. The Company is now in the process of consolidating this data and aims to present the PFS as a CIM 43-101 technical report in September. During the coming quarter Elemental Minerals will focus its activities on the completion of the environmental and surface geotechnical fieldwork programmes required for delivery of the FS and preparation for the Mining Licence application.

About Elemental Minerals

Elemental Minerals Limited is an advanced mining exploration and development company that aims to grow shareholder value through its 93%-owned Sintoukola Potash Project on the Republic of Congo coastline.  Elemental Minerals is dual listed on the Australian Stock Exchange and the Toronto Stock Exchange under the symbol ELM. For more information, visit www.elementalminerals.com

Mineral Resource Summary - Kola Deposit of Sintoukola Project¹

• The Sintoukola Project's Kola deposit currently contains 959 Mt Measured and Indicated Mineral Resources with an average grade of 15.11% K₂O (23.93% KCl), and 513 Mt Inferred Mineral Resources with an average grade of 15.33% K₂O (24.27% KCl), at a 10.0% K₂O cut-off grade.
• Within such Mineral Resources, the sylvinite portion of the deposit contains 413 Mt Measured and Indicated Mineral Resources with an average grade of 20.39% K₂O (32.39% KCl), and 261 Mt Inferred Mineral Resources grading 19.16% K₂O (30.33% KCl), at a 10.0% K₂O cut-off grade.
• These resources are mostly within two seams, the Upper Seam and the Lower Seam, which are separated by a barren halite layer averaging three metres in thickness. The depth to the top of the Upper Seam is within 250 to 320 metres from surface. A small portion of the Inferred Resource is contained within the Footwall Seam which occurs approximately 45 metres below the level of the Lower Seam in certain areas of the deposit. The deposit is contained within 80 km² of the current 1,436 km² license area.
• Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 Edition (The JORC Code), which is consistent with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards 2005 and hence complies with NI 43-101.

Competent Person / Qualified Person Statement:

Information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by Dr. Simon Dorling and Mr. Jeff Elliott, of CSA Global Pty Ltd, the Company's geological consultants. Dr. Dorling and Mr. Elliott are members of the Australian Institute of Geoscientists (MAIG) and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Dr. Dorling and Mr. Elliott are also Qualified Persons for the purposes of Canadian National Instrument 43-101 and they consent to the inclusion in this report of the Information, in the form and context in which it appears.

Further information respecting Elemental's Sintoukola Project is contained in a technical report entitled ''NI 43-101 Technical Report, Sintoukola Potash Project, Republic of Congo'' prepared by Messrs. Simon Dorling, Jeff Elliott, and Andrew Scogings of CSA Global Pty Ltd. for the Company dated June 21, 2012 with an effective date of June 21, 2012 (the "Technical Report").  The Technical Report can be accessed on the Company's profile on SEDAR.

Forward-Looking Statements

This news release contains statements that are "forward-looking". Generally, the words "expect," "potential", "intend," "estimate," "will" and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, to differ materially from those expressed or implied in any of our forward-looking statements, which are not guarantees of future performance. Statements in this news release regarding the Company's business or proposed business, which are not historical facts, are "forward looking" statements that involve risks and uncertainties, such as resource estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.

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¹ For a full description of the resource refer to the NI 43-101 Technical Report, dated 21 June 2012 available on SEDAR, www.sedar.com

 

Image with caption: "Figure 1: Location of Sintoukola Potash Project (CNW Group/Elemental Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20120731_C3818_PHOTO_EN_16537.jpg

Image with caption: "Figure 2: Kola Phase 2 drill hole plan showing progress to 30 June 2012. (CNW Group/Elemental Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20120731_C3818_PHOTO_EN_16538.jpg

SOURCE: Elemental Minerals Limited

Iain Macpherson
Chief Executive Officer
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John Sanders
Executive Director
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Ilja Graulich
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