TSX: ST and ST.WT
TORONTO, Aug. 15, 2012 /CNW/ - Stonegate Agricom Ltd. ("Company") (TSX: ST) today announced significant positive revisions in updated Mineral Resource estimates for the Lower Phosphate Zone ("Lower Zone") and new Mineral Resource estimates for the Upper Phosphate Zone ("Upper Zone") of its Paris Hills Phosphate Project in Idaho, U.S.A. All Mineral Resource estimates were completed by Agapito Associates Inc. of Grand Junction, Colorado.
Highlights of New Mineral Resource Estimates:
Overview
"The publication of these Mineral Resource estimates marks Stonegate's achievement of another important milestone in the development of our high-grade phosphate deposit in Idaho," said Mark Ashcroft, President and Chief Executive Officer.
"We had conducted definition drilling at Paris Hills for almost two years in order to determine Mineral Resources and that work has been completed. The Company will focus in the months ahead on completing a bankable Feasibility Study for the Lower Zone by the end of 2012 and on environmental permitting activities for a planned underground mine.
"We expect the reported increase in Measured and Indicated Resource estimates will generate an upward revision in Lower Zone Mineral Reserve estimates and estimated mine life when the mine plan is updated for the Feasibility Study," Mr. Ashcroft stated.
"While Stonegate is not intending to pursue more resource-oriented drilling in the near term, the Paris Hills deposit has an unexplored upturned limb and the horizontal limb remains open to the north, leaving open the possibility for the Company to engage in future additional exploration drilling and thereby potentially adding to the known mineralized phosphate deposit."
"The results of the March 26, 2012 Pre-Feasibility Study demonstrated that a Lower Zone underground phosphate mine at Paris Hills would have competitive operating costs and would be well-positioned as a supplier of phosphate rock to North American fertilizer producers and/or via U.S. West Coast ports to Asian fertilizer producers," Mr. Ashcroft added.
"The Lower Zone's high grade is an important advantage for the project because the mined material can be shipped directly without incurring the capital or operating costs associated with a processing (beneficiation) plant, which is typically required at other phosphate mines."
The Paris Hills Pre-Feasibility Study and the upcoming Feasibility Study have been limited in scope to the horizontal limb of the Lower Zone and therefore these studies do not address the mine potential of the horizontal limb of the Upper Zone or the upturned limb.
Lower Phosphate Zone Mineral Resources
The revised Mineral Resource estimate for the Lower Zone is based on chemical analyses of core samples from 39 exploration holes drilled by the Company from September 2010 to July 2012 in the horizontal limb of the property.
Drill holes show that the Lower Zone thickness ranges from 0.8 to 2.9 metres with composite grades ranging from 24.5% to 34.2% P2O5. The Lower Zone typically ranges between 1.6 and 2.0 metres thick in the area of interest for mining, and averages 1.7 metres thick across the entire property.
The Lower Zone Measured and Indicated Mineral Resource expanded by 7.5 million tonnes, or 33.6%, compared to the previous March 26, 2012 estimate due to the addition of assay data from six new exploration holes. Inferred Mineral Resources are 4.6 million tonnes, down from 8.1 million tonnes, as a result of a combination of additional drilling and upgrading of the previously reported Inferred Mineral Resources to the Measured and Indicated Mineral Resource categories.
The grade and quality of the Lower Zone Mineral Resources are sufficient to support a direct-ship mining operation. Laboratory testing of core samples from the Lower Zone demonstrated that merchant grade phosphoric acid and granular fertilizers - diammonium phosphate (DAP) and monoammonium phosphate (MAP) - could be produced from the Lower Zone material without beneficiation.
The following table summarizes the Lower Zone Mineral Resource estimates.
| Mineral Resource of the Lower Phosphate Zone - Horizontal Limb28 (effective August 15, 2012) | ||||||||||||||||||||||||||||
| P2O5 | Fe2O3 | Al2O3 | MgO | CaO | CaO/P2O54 | |||||||||||||||||||||||
| In-Place Tonnes1,2 |
Average Thickness |
Grade | Grade | Grade | Grade | MER3 | Grade | Ratio | ||||||||||||||||||||
| (millions) | (metres) | (wt %) | (wt %) | (wt %) | (wt %) | (wt %) | ||||||||||||||||||||||
| Measured5 | 15.4 | 1.8 | 30.4 | 0.50 | 0.93 | 0.37 | 0.059 | 45.9 | 1.52 | |||||||||||||||||||
| Indicated6 | 14.4 | 1.7 | 29.8 | 0.49 | 0.82 | 0.49 | 0.061 | 46.0 | 1.56 | |||||||||||||||||||
| Total M&I | 29.8 | 1.7 | 30.1 | 0.50 | 0.88 | 0.43 | 0.060 | 45.9 | 1.54 | |||||||||||||||||||
| Inferred7 | 4.6 | 1.6 | 29.9 | 0.48 | 0.80 | 0.56 | 0.062 | 45.8 | 1.55 | |||||||||||||||||||
| 1 Average in-situ bulk dry density of 2.6 t/m3. | ||||||||||||||||||||||||||||
| 2 Zone thickness cut-off 0.5 m, composite grade cut-off 24.0% P2O5, excludes out-of-seam dilution. | ||||||||||||||||||||||||||||
| 3 Minor Element Ratio, MER = (Fe2O3 + Al2O3 + MgO)/P2O5, <0.10 desirable for phosphate rock. | ||||||||||||||||||||||||||||
| 4 CaO to P2O5 ratio; <1.60 desirable for phosphate rock. | ||||||||||||||||||||||||||||
| 5 Measured Mineral Resource located within a 200-m radius of an exploration hole. | ||||||||||||||||||||||||||||
| 6 Indicated Mineral Resource located between a 200-m and 400-m radius of an exploration hole. | ||||||||||||||||||||||||||||
| 7 Inferred Mineral Resource located between a 400-m and 800-m radius of an exploration hole. | ||||||||||||||||||||||||||||
| 8 Mineral Resources include Mineral Reserves. | ||||||||||||||||||||||||||||
A map of the drill hole sites included in the revised Lower Zone Mineral Resource estimates, along with the August 15, 2012 Mineral Resource Classification Areas, is available at: http://files.newswire.ca/923/StonegateLowrPhosZone.pdf
Upper Phosphate Zone Mineral Resources
The Mineral Resource estimate for the Upper Zone is based on chemical analyses on core samples from 29 of the exploration holes drilled in the horizontal limb of the property. The Upper Zone thickness ranges from 2.6 to 5.7 metres with composite grades ranging from 20.2% to 31.4% P2O5.
The grade and quality of the Upper Zone Mineral Resources are not sufficient, on average, to support the possibility for mining a direct-ship product and some processing (beneficiation) will be required to produce a marketable phosphate rock concentrate. Laboratory testing of core samples from the Upper Zone demonstrated that beneficiation (involving grinding and flotation) could produce a marketable phosphate rock concentrate with a grade of at least 30% P2O5 and an acceptable (low) CaO/P2O5 ratio and MER and that it would be suitable for producing phosphoric acid and downstream phosphate products.
The following table summarizes the Upper Zone Mineral Resource estimates.
| Mineral Resource of the Upper Phosphate Zone - Horizontal Limb2 (effective August 15, 2012) | ||||
| P2O5 | ||||
| In-Place Tonnes1,2 |
Average Thickness |
Grade | ||
| (millions) | (metres) | (wt %) | ||
| Measured3 | 28.4 | 3.8 | 22.8 | |
| Indicated4 | 31.8 | 3.7 | 22.6 | |
| Total M&I | 60.3 | 3.7 | 22.7 | |
| Inferred5 | 9.4 | 3.5 | 22.6 | |
| 1 Average in-situ bulk dry density of 2.6 t/m3. | ||||
| 2 Zone thickness cut-off 1.5 m, composite grade cut-off 20.0% P2O5, excludes out-of-seam dilution | ||||
| 3 Measured Mineral Resource located within a 200-m radius of an exploration hole. | ||||
| 4 Indicated Mineral Resource located between a 200-m and 400-m radius of an exploration hole. | ||||
| 5 Inferred Mineral Resource located between a 400-m and 800-m radius of an exploration hole. | ||||
A map of the drill hole sites used for the Upper Zone Mineral Resource estimates, along with the August 15, 2012 Mineral Resource Classification Areas, is available at: http://files.newswire.ca/923/StonegateUpprPhosZone.pdf
Phosphate Exploration Targets
In addition to the Mineral Resource estimates above for the horizontal limb of the Paris Hills property, there is potentially additional in-place mineralized phosphate tonnage in the upturned limb of the property as follows: 7 to 10 million tonnes grading 28% to 32% P2O5 in the Lower Zone upturned limb (previously reported); and 14 to 20 million tonnes grading 21% to 25% P2O5 in the Upper Zone upturned limb (previously included in a combined estimate for the horizontal and upturned limbs).
At present, insufficient exploration information is available to support the estimation of an NI 43-101 Mineral Resource in the upturned limb, although it is expected to contain significant mineralization. Historical trenching along outcrop and historical test mining confirm the persistence of mineralization in the upturned limb; however, no exploration drill holes penetrate the upturned limb and no information is available at depth. As a result, all estimates for the upturned limb are classified as Exploration Targets until further drilling is completed.
The Exploration Targets, as stated, are conceptual in nature and there has been insufficient exploration to define them as Mineral Resources, and it is uncertain if further exploration will result in the determination of a Mineral Resource under NI 43-101. The Exploration Targets are not being reported as part of any Mineral Resource or Mineral Reserve.
Previously Reported Lower Phosphate Zone Mineral Reserves
The Pre-Feasibility Study announced on March 26, 2012 provided for the first time a Mineral Reserve estimate for the Lower Zone horizontal limb. This previously reported estimate was based on fewer drill holes than now available and will be revised when the results of the Feasibility Study are published. Only Measured and Indicated Mineral Resource estimates (not Inferred Mineral Resource estimates) are eligible for calculation of Mineral Reserve estimates. The following table summarizes the previously reported results.
| Mineral Reserve of the Lower Phosphate Zone (effective date March 26, 2012) | ||||||||||||||||||||||||||||
| P2O5 | Fe2O3 | Al2O3 | MgO | CaO | CaO/P2O5 | |||||||||||||||||||||||
| Tonnes †, ‡ | Thickness | Grade | Grade | Grade | Grade | MER | Grade | Ratio | ||||||||||||||||||||
| (metres) | (wt %) | (wt %) | (wt %) | (wt %) | (wt %) | |||||||||||||||||||||||
| Proven | 5,167,101 | 1.8 | 30.0 | 0.56 | 1.07 | 0.44 | 0.069 | 45.22 | 1.51 | |||||||||||||||||||
| Probable | 4,848,361 | 1.7 | 28.8 | 0.54 | 0.93 | 0.58 | 0.071 | 44.95 | 1.56 | |||||||||||||||||||
| Reserves | 10,015,462 | 1.8 | 29.4 | 0.55 | 1.00 | 0.50 | 0.070 | 45.09 | 1.53 | |||||||||||||||||||
| † Average in-situ bulk dry density of 2.6 t/m3. | ||||||||||||||||||||||||||||
| ‡ Minimum mining height of 1.5 m + 0.15 m dilution. | ||||||||||||||||||||||||||||
Previously Reported Lower Phosphate Zone Pre-Feasibility Study Results
The Company on March 26, 2012 announced the results of a positive Pre-Feasibility Study for the development of an underground mine in the Lower Zone of the Paris Hills Project. This mine will produce a direct-ship phosphate rock concentrate with an average grade of 29.4% P2O5 and that meets or exceeds typical industry standards. The estimates are subject to revision when the Feasibility Study is completed. The Pre-Feasibility Study was compiled by Agapito Associates Inc. of Grand Junction, Colorado. The study's estimates include (all amounts are estimates and in U.S. dollars):
Report Filing
The Mineral Resource revisions and new estimates are contained in a new NI 43-101 Technical Report, which will be filed on SEDAR at www.sedar.com and posted on the Stonegate website at www.stonegateagricom.com within 45 days.
The significant changes will be incorporated in the Mineral Resource related sections of the new Technical Report. All other sections in this new report will be substantially the same as published in the March 26, 2012 Technical Report, entitled "NI 43-101 Technical Report Paris Hills Phosphate Project Bloomington, Idaho". Future changes to the mine plan and Mineral Reserves estimates for the Lower Zone, as well as other new information, will be published subsequent to the completion of the bankable Feasibility Study. This study is expected by the end of 2012.
The Mineral Resource calculations are calculated using Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Best Practice Guidelines for Industrial Minerals.
Additional technical information on the Paris Hills Phosphate Project is also available in the Company's annual information form dated March 29, 2012.
Qualified Persons
The Pre-Feasibility Study (including Mineral Resource and Reserves estimates) announced on March 26, 2012 and the subsequent August 15, 2012 changes to Mineral Resource estimates were compiled by Agapito Associates Inc. of Grand Junction, Colorado supervised by Leo J. Gilbride, P.E., Vanessa Santos, P.G., and Gary L. Skaggs, P.E., P.Eng., each of whom are independent qualified persons under the standards set forth by National Instrument 43-101 and have reviewed and approved the contents of this news release.
The contents of this news release have been reviewed and approved by Daniel Thompson, P.E., Manager, Technical Services, Paris Hills Agricom Inc., who is a qualified person as defined in National Instrument 43-101.
About Stonegate Agricom
Stonegate Agricom, which is actively engaged in acquiring and developing agricultural nutrient projects, is currently focused on the development of two potentially world-class, long-life phosphate deposits, the Paris Hills Phosphate Project located in Idaho and the Mantaro Phosphate Project located in Peru. The Company is confident that the two deposits have sufficient size and grade to become strategic, cost-effective sources of phosphate supply for major fertilizer producers. More information is available at www.stonegateagricom.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable law, which include statements herein relating to the potential to increase mineral resource and mineral reserve estimates. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: risks relating to assumptions used in preparation of the Pre-Feasibility Study on the Lower Phosphate Zone of the Paris Hills Phosphate Project including government regulation, phosphate prices, labour costs and capital costs, and project risks including project location, permitting requirements, project delays, ground control and dilution and water management; the general risks associated with the speculative nature of the Company's business, commodity prices, current global financial conditions, uncertainty of additional capital, price volatility, the Paris Hills Phosphate Project being an advanced exploration stage project, limited operating history, no history of earnings, government regulation in the mining industry, environmental risks and hazards, impending climate change legislation, required approvals and permits, foreign subsidiaries, risks relating to the retention of the Paris Hills project, expiration of leases and permits for the Paris Hills Project, title to mineral properties, obtaining and converting mineral concessions and surface rights, community relations and project support, water rights, exploration, development and operating risks, uncertainty in the estimation of mineral reserves and resources, uncertainty of inferred mineral resources, mineral exploration, reliability of historical exploration work, absence of public trading market, risks associated with having a controlling shareholder, arbitrary offering price, dilution to the common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition, legal proceedings, conflicts of interest and lack of dividends as well as those factors discussed in the section entitled "Risk Factors" in the Company's most recently filed annual information form available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The forward-looking statements and forward-looking information contained in this press release are included for the purpose of providing investors with information to assist them in understanding the Company's expected financial and operational performance and may not be appropriate for other purposes. Stonegate does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.
Cautionary Note to United States Investors Concerning Estimates of Mineral Resources
This news release uses the terms "Measured Mineral Resources", "Indicated Mineral Resources" and "Inferred Mineral Resources". United States investors are advised that while such terms are recognized and required by Canadian regulations to be disclosed, the United States Securities and Exchange Commission generally does not permit disclosure of mineral resources of any kind in documents filed with the United States Securities and Exchange Commission. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured Mineral Resources or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
PDF available at: http://stream1.newswire.ca/media/2012/08/15/20120815_C7223_DOC_EN_16880.pdf
PDF available at: http://stream1.newswire.ca/media/2012/08/15/20120815_C7223_DOC_EN_16881.pdf
SOURCE: Stonegate Agricom Ltd
Wayne Cheveldayoff
Vice President, Investor Relations
Stonegate Agricom Ltd.
Tel: 416-479-4359
[email protected]
Christine Stewart
Renmark Financial Communications Inc.
Tel: 416-644-2020
[email protected]
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