LionOre extends Waterloo (July 29, 2002)

Drilling by LionOre Mining International (LIM-T) on the Wildara property in Western Australia has extended the strike length of the Waterloo nickel-platinum-group-metals deposit by 250 metres to 750 metres.The latest drilling focused on the southern end of the deposit and is highlighted by:

• Hole 504 – 9 metres (from 209 metres below surface) grading 1.02% nickel and 2.8 metres (from 234.2 m) of 7.67% nickel;
• Hole 506 – 7.2 metres (from 20.3.6 m) running 2.25% nickel; and
• Hole 514 – 9.7 metres (from 263.6 m) of 0.97% nickel; and
• Hole 516 – 15.6 metres (from 286 m) grading 1.8% nickel, including 1.4 metres (from 300.2 m) of 7% nickel.
• Hole 519 – 14 metres (from 212 m) of 1.2% nickel, 4.8 metres (from 241.2 m) grading 6.2% nickel, and 1.1 metres (from 251 m) running 10.7% nickel.

The holes also returned between 0.4 and 1.7 grams combined platinum group metals and generally less than 0.5% copper.

Results are pending for four other holes that cut various widths of disseminated and massive sulphides.

LionOre continues to trace the extensions with holes on 80-metre spacings.

Confirmation drilling further north on the Waterloo deposit, comprising scissor and twin holes, generally returned between 1 and 3% nickel over widths from 1 to 30 metres.

Limited drilling west of the steep parallel fault that truncates the Waterloo deposit has cut favourable host rocks and returned up to 1 metre (from 490 m) of 1.2% nickel. LionOre believes that the area may represent a down-faulted extension of the Waterloo zone. The company plans further downhole electromagnetic (EM) surveying and drilling.

About 300 metres to the south of the most southerly intersection at Waterloo, two holes collared on an EM anomaly (MC9) returned up to 6 metres (from 172 m) averaging 3% nickel and 1.48 metres (from 209.6 m) of 1.12% nickel. Further drilling will aim to better define the new zone of mineralization.

Drilling on several other EM anomalies failed to cut any nickel sulphides. The company plans to test other newly defined anomalies around MC9.

Mineralization at Waterloo is dominated by high-grade matrix to disseminated sulphides, with associated zones of structurally controlled massive sulphides. Disseminated sulphides typically have grades of up to 3% nickel; the matrix sulphides grade between 3% and 9% nickel; and the massive sulphides run between 9% and 15% nickel.

Preliminary metallurgical tests on the three styles of mineralization have indicated recovery rates of 92-98%, with concentrate grades running 9-15% nickel. Massive sulphide samples have yielded recoveries of 97-98% with concentrate grades of 18-21% nickel. Platinum group element recoveries are between 78 and 92%.

LionOre owns 60% of the Wildara project and manages exploration. Australian-listed Dalrymple holds the remaining stake.

Waterloo lies about 6 km from the partners’ developing Thunderbox gold project, which is slated to pour its first dor bar in the fourth quarter. Over a 5-year lifespan, the mine is expected to produce 800,000 oz. at an average cash cost of US$157 per oz.

Reserves are pegged at 10.9 million tonnes averaging 2.43 grams gold per tonne, based on a gold price of US$254 per oz. and a cutoff grade of 0.7 gram per tonne for oxidized material and 1.1 grams for primary material.

Thunderbox too is owned 60% by LionOre and 40% by Dalrymple.