1. Art and Diseño

Quarterly Report
For the three months ending December 2014
Vital Metals Limited
For personal use only
ASX Code: VML
ACN: 112 032 596
64 Churchill Avenue,
Subiaco, WA 6008
Tel: +61 8 9388 7742
Fax: +61 8 9388 0804
VITAL SHAREHOLDERS GET ON BOARD TO
SUPPORT WATERSHED TUNGSTEN PROJECT
AS IT CLOSES IN ON DEVELOPMENT
Highlights:

$1M raised to progress the Watershed Tungsten Project
following a strong response from shareholders to the
Company’s Share Purchase Plan.

Project financials significantly enhanced as a result of the
depreciation in the Australian Dollar and lower input costs.

Slaty Range Prospect identified as a substantial tungsten (W)
and tin (Sn) anomaly following a review of historical stream
sediment geochemical data on 100%-owned EPM25102.
Email:[email protected]
www.vitalmetals.com.au
Capital Structure
304 million shares
80 million unlisted options
Board & Management
David Macoboy
Chairman
Mark Strizek
CEO and Managing Director
Peter Cordin
Non-Executive Director
Andrew Simpson
Non-Executive Director
Ian Hobson
Company Secretary
For further information:
Investors:
Mark Strizek
Managing Director
Vital Metals
(08) 9388 7742
Vital maintained significant momentum during the December
Quarter in advancing its flagship 70%-owned Watershed Tungsten
Project in North Queensland towards financing and development
with key highlights including completion of a strongly supported
Share Purchase Plan (SPP) which raised $1 million.
Vital’s Managing Director, Mr Mark Strizek, said that he was pleased
to see the strong level of shareholder support and backing for
Vital’s strategy given the challenging circumstances for equity
markets.
“I was very pleased that most of the SPP funds came from our
shareholders and I appreciate their support during what is a pivotal
time for our company, with Watershed on the cusp of being
developed into a mine,” he said.
“During the December Quarter, our joint venture partners JOGMEC
moved into high gear on their transfer process whereby they are
looking transfer their 30% interest to a Japanese company that
would be a long-term off-take, financing and development partner.
Media:
Nicholas Read
Read Corporate
(08) 9388 1474
“As I said in December, we are also seeing a favourable resetting in
the Australian mining industry and also in the Australian dollar. This
is going to make Watershed even more competitive. The bottom
line is that with the dollar falls and Australian mining costs
declining, the project delivers increasing returns.
“Watershed is well placed to take advantage of this, being
development-ready with all environmental approvals and mining
licences in place. We are ready to go.”
-1-
Watershed Tungsten Project – Queensland (Vital 70%)
For personal use only
The DFS shows that the Watershed Tungsten Project is a premier, long-life asset. The key
conclusions of the DFS, are that a 2.5Mtpa project has the ability to produce high quality
tungsten concentrate over a 10-year mine life at competitive mine operating costs.
During the December Quarter, Vital undertook a review of the cost inputs used in the DFS.
Changes to the exchange rate and diesel costs, along with increased labour availability, have
largely moved outside of the range considered for the DFS.
Vendors were approached for the review and in most cases provided updates to previous
estimates. In the case of diesel - which is a significant component of the mining cost - the
quoted price is at a significant discount to the pricing assumed for the DFS.
The combined effect of changes to exchange rate and operating cost base has made
Watershed an even more compelling proposition. The Project is therefore well placed for
immediate development and the DFS has shown that it will generate very attractive returns
for its shareholders and Joint Venture partners alike.
Project returns1 for a range of prices and an exchange rate of US$0.80 and a 100% equity case
are shown in Table 1 below. The combination of a lower exchange rate and lower operating
costs mean that the project will now generate similar returns at a price of US$375/mtu APT
compared to the previously reported case2, which used a price of US$450/mtu and an
exchange rate of US$0.90. Life-of-mine cash costs are extremely competitive at US$156/mtu.
Table 1: Project Returns 100% Equity Case.
Project Returns
Updated Case
Updated Case
Updated Case
Updated Case
Updated Case
APT
US$325/mtu
APT
US$350/mtu
APT
US$375/mtu
APT
US$400/mtu
APT
US$450/mtu
FX US$0.80
FX US$0.80
FX US$0.80
FX US$0.80
FX US$0.80
Pre
Tax
Post
Tax
Pre
Tax
Post
Tax
Pre
Tax
Post
Tax
Pre
Tax
Post
Tax
Pre
Tax
Post
Tax
NPV @ 8%
$63M
$31M
$111M
$65M
$160M
$100M
$207M
$132M
$300M
$200M
IRR
16.0%
12.3%
21.5%
16.6%
26.8%
20.6%
31.7%
24.5%
40.8%
31.6%
Payback Years
Free Cashflow
4.8
$184M
Cash Costs US$/ mtu
156
Total Costs US$/ mtu
212
$130M
3.4
$259M
2.8
$182M
$335M
$235M
2.5
$410M
$288M
2.1
$561M
$394M
Vital will continue to review the DFS, seeking opportunities to further improve the financial
metrics where possible. The Company believes that there are good opportunities to reduce
some of the capital expenditure given the opportunity presented by new equipment that was
landed and not purchased, as well as second-hand equipment. For example, there are
excellent opportunities for deep discounts with offers for mining camps and mobile
equipment currently being received.
1
2
ASX Announcement 22 January 2015
ASX Announcement 17 September 2014
2
Exploration - Australia
For personal use only
Our exploration team was on the ground at Slaty Range during the December Quarter and
was able to confirm the geology and extent of the previously identified tungsten anomaly.
First-pass 500mN by 200mE soil geochemical sampling and mapping was completed over the
Slaty Range anomaly during November.
The anomaly was previously identified from stream sediment sampling completed by BHP in
1981. From this data, a 7km long zone of elevated tungsten and tin values was identified with
peak values of 132ppm W and 3,910ppm Sn.
Mapping of the area by Vital’s geologists has confirmed the geology of the anomaly with the
area dominated by arenites and the S-type Northedge granite (Figure 4). Mafic volcanics,
zones of manganese veining and an increased quantity of pegmatite veining were observed in
the east of the anomaly. In one location coarse grained cassiterite grains of up to 10mm were
observed within pegmatite and an associated hydrothermal quartz vein hosted by hornfelsed
arenites.
A total of 123 samples were collected during sampling, completing the southern section of
Phase 1 sampling. A review of the analytical results of the soil sampling program shows that
15 samples exceed the 30ppm W limit and 12 exceeding 50ppm with a highest value of
240ppm received (Figure 5).
For tin, 26 samples exceeded the 30ppm lower cut-off and 13 exceeded 50ppm with a
maximum value of 100ppm received (Figure 6). Tungsten is anomalous in the Slaty Range with
the majority of values >50ppm W located within the Northedge Granite. It may be observed
that tin is spatially correlated with the occurrence of granite and arsenic is anomalous in the
region (Figure 7).
Sampling in the north of the anomaly will continue after the wet season with 52 samples
remaining. The streams draining the north of the granite have returned the highest tin values
(6270ppm), demonstrating considerable potential for a hard rock tin deposit in this area.
Follow-up exploration activities over the Slaty Range prospect are being planned in
preparation for the 2015 field season, which will commence after the wet season.
3
Tungsten Market
For personal use only
Tungsten prices remain positive (see following chart). Lower demand being experienced
currently is largely driven by a seasonal cycle and it is expected that prices will start to pick up
following end of the holiday season.
The APT price averaged around US$360/mtu in 2014 and most market forecasters expect it to
head above US$350/mtu in the second half of the year with higher prices expected in 2016.
The fall of the Australian Dollar against the US Dollar means that Australian prices are
relatively buoyant.
Figure 1: APT price
The low oil price should help boost global economic growth and tungsten demand relates
closely to GDP growth. On the supply side, there is very little new production coming through
(only Hemerdon towards the end of the year). The Chinese Government remains keen to
control domestic output which suggests that production from China is unlikely to grow in
2015.
4
Doulnia Gold Project – Burkina Faso
For personal use only
During the December Quarter notification was received from the Ministère des Mines et de
l'Energie that the Doulnia and Zeko permits are to be renewed for an additional term. In
addition the Arête for the Kampala permit has been received.
The recent leadership change in Burkina Faso appears to have been accepted as a step in the
right direction by the people. The situation in Ouagadougou is stable and business is
operating as normal. The change to the leadership of in the Ministère des Mines et de
l'Energie appears to have sped up the processing of exploration permit applications which are
now being processed in months rather than years.
Corporate
Vital had a cash balance of $0.87 million as at 31 December 2014. The Company successfully
completed a Share Purchase Plan (SPP) for $1 million that was underwritten Patersons
Securities Limited during the December Quarter.
Looking ahead, Vital believes that the combined effect of changes to exchange rate and
operating cost base will make the Watershed Tungsten Project an even more compelling
development proposition.
The Watershed Tungsten Project is well placed for immediate development and the DFS has
shown that it will generate very attractive returns for its shareholders and Joint Venture
partners alike.
For further details, refer to the Company’s website, www.vitalmetals.com.au:
Contact:
Mark Strizek
Managing Director
Vital Metals Ltd
Phone: +61 8 9388 7742
Email: [email protected]
Media Inquiries:
Nicholas Read
Read Corporate
Telephone: +61-8 9388 1474
Email: [email protected]
5
Competent Person’s Statement
For personal use only
The information that refers to Mineral Resources in this announcement was prepared and first disclosed under the JORC Code
2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially
changed since last reported.
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is
based on information compiled by Mr Mark Strizek, a Competent Person who is a Member or The Australasian Institute of
Mining and Metallurgy. Mr Strizek is a full time employee of the Company. Mr Strizek has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify
as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Strizek consents to the inclusion in the announcement of the matters based on his
information in the form and context in which it appears.
The information in this report that relates to Mineral Resources for the Watershed Deposit is based on information evaluated
by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”. Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to
the inclusion of the estimates in the report of the Mineral Resource in the form and context in which they appear.
This Ore Reserves statement has been compiled in accordance with the guidelines defined in the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code – 2012 Edition). The Ore Reserves have
been compiled by Mr Steve Craig of Orelogy Group Pty Ltd, who is a Fellow of Australasian Institute of Mining and Metallurgy.
Mr Craig has had sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit
under consideration to qualify as Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of
Mineral Resources and Ore Reserves”. Mr Craig consents to the inclusion in the announcement of the matters based on his
information in the form and context in which it appears.
Forward looking statements
Certain written statements contained or incorporated by reference in this report, including information as to the future
financial or operating performance of the Company and its projects, constitute forward-looking statements. All statements,
other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”,
“contemplate”, “target”, “plan”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions
identify forward-looking statements.
Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect
of tungsten, gold or other metal production and prices, operating costs and results, capital expenditures, mineral reserves and
mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a
number of estimates and assumptions related to future business, economic, market, political, social and other conditions that,
while considered reasonable by the Company, are inherently subject to significant uncertainties and contingencies. Many
known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or
results reflected in such forward-looking statements. Such factors include, but are not limited to: competition; mineral prices;
ability to meet additional funding requirements; exploration, development and operating risks; uninsurable risks;
uncertainties inherent in ore reserve and resource estimates; dependence on third party smelting facilities; factors associated
with foreign operations and related regulatory risks; environmental regulation and liability; currency risks; effects of inflation
on results of operations; factors relating to title to properties; native title and aboriginal heritage issues; dependence on key
personnel; and share price volatility and also include unanticipated and unusual events, many of which are beyond the
Company's ability to control or predict.
For further information, please see the Company's most recent annual financial statement, a copy of which can be obtained
from the Company on request or at the Company's website: www.vitalmetals.com.au. The Company disclaims any intent or
obligation to update any forward-looking statements, whether as a result of new information, future events or results or
otherwise. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements.
Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, not to
put undue reliance on such statements.
6
For personal use only
Cautionary Statement
The Definitive Feasibility Study (DFS) referred to in this report is based on a Proved and Probable Ore Reserve derived from a
Measured and Indicated Mineral Resource, plus a small proportion of mining inventory, which comprises material that is
currently classified as Inferred Mineral Resource. There is a low level of geological confidence associated with Inferred
Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral
Resources or that the production target itself will be realised. The Company advises that the Proved and Probable Ore Reserve
provides 93% of the total tonnage and 93% of the total WO3 metal underpinning the forecast production target and financial
projections, and that the additional life of mine plan material comprises less than 7% of the total tonnage and WO3 metal.
Furthermore, in the first five years of production, 95% of the material planned to be processed is based on Proved and
Probable Ore Reserves. As such, the dependence of the outcomes of the DFS and the guidance provided in this announcement
on the lower confidence Inferred Mineral Resource material contained in the life of mine plan is minimal. The Company has
concluded that it has a reasonable basis for providing the forward looking statements included in this report.
7
ABOUT VITAL METALS
Vital Metals Limited (ASX: VML) is an explorer and developer , focused on progressing two highly
prospective mineral Projects: the advanced Watershed Tungsten Project in far north Queensland,
Australia and the Doulnia Gold Project in southern Burkina Faso, West Africa.
For personal use only
Watershed Tungsten Project – Queensland
The Watershed scheelite (calcium tungstate) Project, in far north Queensland, 150 kilometres northwest of Cairns, is the Company’s flagship venture. Vital entered into a formal Earn-In Agreement with
JOGMEC (Japan Oil, Gas and Metals National Corporation) where JOGMEC has earnt 30% of the
Project for $5.4M (valuing the Project at the time of the farm-in at $18M). The funds have been used
to complete the Definitive Feasibility Study (DFS).
Doulnia Gold Project – Burkina Faso
The Doulnia Gold Project (100% Vital) is located in southern Burkina Faso. The Project is made up of
three contiguous permits; the Doulnia, Kampala and Zeko exploration permits. The Project is located
in highly prospective Birimian Greenstone terrain with over 400 sq. km of contiguous tenements lying
on the trend of the Markoye Fault Corridor and the Bole shear zone and hosting the Kollo Gold Project
and Boungou South Gold Prospect.
About JOGMEC
Japan Oil, Gas and Metals National Corporation (JOGMEC) were established in 2004. JOGMEC is
Government owned and integrates the functions of the former Japan National Oil Corporation, which
was in charge of securing a stable supply of oil and natural gas and the former Metal Mining Agency of
Japan, which was in charge of ensuring a stable supply of nonferrous metal and mineral resources and
implementing mine pollution control measures. It has an annual budget of around 1,600 billion yen
($18B) and provides financial assistance, technology development and technical support to Japanese
companies and their foreign subsidiaries.
Figure 2: Vital Metals Project Locations
8
For personal use only
Figure 3: Vital Metals North Queensland Permits
9
For personal use only
Watershed Mineral Resources
Tonnage Mt
WO3%
Measured
9.5
0.16
Indicated
28.4
0.14
Sub Total: Measured and Indicated
37.8
0.15
Inferred
11.5
0.15
Total: Measured, Indicated and Inferred
49.3
0.14
Table 2: Watershed Mineral Resources
Watershed Ore Reserves
3
Tonnage Mt
WO3%
Proved
6.4
0.16
Probable
15
0.14
Total: Proved and Probable
21.3
Table 3: Watershed Ore Reserves
0.15
4
Name
Tenement
Elements of
Interest
Tonnage Range
(kt)
Grade Range
Watershed Deeps
ML20536
W
10,500 – 14,000
0.14 - 0.25%
Watershed South
MDL127
W
830 - 1,000
0.06 - 0.15%
Desailly North
MDL127
W
830 - 1,000
0.06 - 0.15%
Desailly
MDL127
W
1,150 – 1,500
0.06 - 0.15%
Mt Elephant
EPM 14735
W, Sn
1,000 - 3,000
0.06 - 0.15%
Slaty Range
EPM 25102
W, Sn
35,000 – 60,000
0.10-0.18%
W
49,000 – 80,000
0.10-0.19%
Exploration Potential exclusive
of current Mineral Resource
Table 4: Watershed Tungsten Project Exploration Targets
3
Watershed Mineral Resources first reported in ASX release 30 July 2012.
Watershed Ore Reserves first reported in ASX release 17 September 2014.
Watershed Mineral Resources are inclusive of Ore Reserves.
Watershed Mineral Resources and Ore Reserves reported at a cut-off grade of 0.05% WO3.
5
Exploration Targets reported 25 November 2013, AGM Presentation.
Please refer to Competent Persons statement accompanying this release.
4
10
Comments
These Exploration
Targets are
conceptual in
nature, and there
has been
insufficient
exploration to
define a Mineral
Resource. It is
uncertain if further
exploration will
result in the
estimation of a
Mineral Resource.
5
For personal use only
Doulnia
Percentage held / earning at
beginning of Quarter
100%
Percentage held / earning
at end of Quarter
100%
Kampala
100%
100%
Burkina Faso
Zeko
100%
100%
Watershed
EPM 25102
100%
100%
Watershed
MDL127
70%
70%
Watershed
EPM 18171
70%
70%
Watershed
EPM 14735
70%
70%
Watershed
EPM 15544
70%
70%
Watershed
EPM 15064
70%
70%
Watershed
EPM 19089
70%
70%
Watershed
EPM 25139
70%
70%
Watershed
ML 20535
70%
70%
Watershed
ML 20536
70%
70%
Watershed
ML 20537
70%
70%
Watershed
ML 20538
70%
70%
Watershed
ML 20566
70%
70%
Watershed
ML 20567
70%
70%
Watershed
ML 20576
Location
Tenement
Burkina Faso
Burkina Faso
70%
70%
Table 5: Interests in Mining Tenements.
11
ILUA
Environmental Approval
For personal use only
Mining Lease
Strategic Partner
Mineral Resource
Mineral Reserves
Definitive Feasibility Study
JV Partner
Exploration Pipeline
Agreement with the Western Yalanji people for development of the
open pit operation secured and registered with the National Native
Title Tribunal.
Open pit operation permitted by the Department of Environment and
Heritage Protection on 3rd September 2013.
Seven Mining Leases for a total of 1,904 hectares were granted on the
1st December 2013 for a period of 20 years by the Department of
Natural Resources and Mines.
Listed global mineral processing and infrastructure solution provider
Sedgman Limited acquired a strategic interest in Vital Metals on 1st July
2014.
Measured, Indicated and Inferred Mineral Resources.
At a cut-off grade of 0.05% WO3 the Watershed deposit contains
Mineral Resources of 49.32Mt at 0.14% WO3 for 70,400 tonnes of
WO3.6
Proved and Probable Ore Reserve derived from Measured and
Indicated Mineral Resources. Total in-ground ore inventory within final
design pits is 21.3 Mt at an average WO3 grade of 0.15% using a cut-off
grade of 0.05% WO3 and is inclusive of a 95% mining recovery.7
DFS considered 10-year open pit operation processing 2.5Mtpa with
only ~40% of resources extracted. Significant near-mine exploration
potential.8
JOGMEC expected to transfer their 30% interest in the Watershed
Project to a Japanese company (with interests in the tungsten
industry). This company will have responsibility for arranging its share
of project finance in addition to its off-take interest.
World-class pipeline of tungsten exploration prospects to drive
growth.9
Table 6: Milestones towards Development.
6
Mineral Resources initially reported ASX release 30 June 2012. Mineral Resources classified using JORC 2004 guidelines.
Watershed Ore Reserves first reported in ASX release 17 September 2014. Mineral Reserves classified using JORC 2012 guidelines.
8
Key finding Watershed DFS first reported in ASX release 17 September 2014.
9
Exploration Targets reported in ASX release 13 October 2014.
7
12
For personal use only
Figure 4: Slaty Range completed sampling locations with logged lithology.
13
For personal use only
Figure 5: Slaty Range soil sampling results for tungsten.
14
For personal use only
Figure 6: Slaty Range soil sample results for tin.
15
For personal use only
Figure 7: Slaty Range soil sampling results for arsenic.
16
JORC Code, 2012 Edition – Table 1 – Slaty Range geochemical soil sampling
Geochemical soil sampling was completed over the Slaty Range Prospect.
Section 1: Sampling Techniques and Data
For personal use only
Criteria
Sampling
Technique
JORC Code
Explanation
Nature and quality of sampling (eg cut
channels, random chips, or specific
specialised industry standard measurement
tools appropriate to the minerals under
investigation, such as downhole gamma
sondes, or handheld XRF instruments, etc.).
These examples should not be taken as
limiting the
broad meaning of sampling
Include reference to measures taken to
ensure sample representivity and the
appropriate calibration of any
measurement tools or systems used.
Aspects of the determination of
mineralisation that are Material to the
Public Report.
Commentary
Geochemical soil sampling was completed by Vital Metals’
geologists.
Samples were obtained from the lower B-horizon using picks and
sieved to -40 mesh (-0.389mm) in the field to achieve a 100g sub
sample before being submitted to the laboratory.
Multi-element analysis was completed for 33 elements using ALS
method ME-ICP61. The elements of primary interest are W, Sn, Cu
and As.
The geochemical sampling methods utilised are consistent with
the practices at Watershed.
In cases where ‘industry standard’ work has
been done this would be relatively simple
(eg ‘reverse circulation drilling was used to
obtain 1 m samples from which 3 kg was
pulverised to produce a
30 g charge for fire assay’). In other cases
more explanation may be required, such as
where there is coarse gold that has
inherent sampling problems. Unusual
commodities or mineralisation types (eg
submarine nodules) may warrant disclosure
of detailed information.
Drilling
Drill type (eg core, reverse circulation,
open- hole hammer, rotary air blast, auger,
Bangka, sonic, etc.) and details (eg core
diameter, triple or standard tube, depth of
diamond tails, face- sampling bit or other
type, whether core is oriented and if so, by
what method, etc.).
Drill Sample
Recovery
Method of recording and assessing core
and chip sample recoveries and results
assessed.
Measures taken to maximise sample
recovery and ensure representative
nature of the samples.
Whether a relationship exists between
sample recovery and grade and whether
sample bias may have
occurred due to preferential loss/gain of
fine/coarse material.
Logging
Whether core and chip samples have
been geologically and geotechnical
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
Whether logging is qualitative or
quantitative in nature. Core (or
costean/Trench, channel, etc.)
photography.
The total length and percentage of the
relevant intersections logged.
No new drilling being reported.
No new drilling being reported
No new drilling being reported
17
For personal use only
Sub-Sampling
Technique and
Sample
Preparation
If core, whether cut or sawn and whether
quarter, half or all core taken. If non-core,
whether riffled, tube sampled, rotary
split, etc. and whether sampled wet or
dry.
For all sample types, the nature, quality
and appropriateness of the sample
preparation technique.
Quality control procedures adopted for all
sub-sampling stages to maximise
representivity of samples.
Measures taken to ensure that the
sampling is representative of the in situ
material collected, including for
instance results for field duplicate/
second-half sampling. Whether sample
sizes are appropriate to the grain size of
the material being sampled.
Samples are firstly dried, a prepared sample (0.25 g) is then
digested with perchloric, nitric, hydrofluoric and hydrochloric
acids. The residue is topped up with dilute hydrochloric acid and
the resulting solution is analysed by inductively coupled plasmaatomic emission spectrometry. Results are corrected for spectral
interelement interferences.
Assays which exceed equipment maximum tolerances are analysed
by additional methods.
The sample preparation technique is in accordance with current
standard industry practices.
The sample size is more than sufficient considering the targeted
grainsize.
Multielement standards were submitted with the samples at a rate
of 1 in 30.
Quality of
Assay Data and
Laboratory Tests
The nature, quality and appropriateness
of the assaying and laboratory
procedures used and whether the
technique is considered partial or total.
For geophysical tools, spectrometers,
handheld XRF instruments, etc., the
parameters used in determining the
analysis including instrument make and
model, reading times, calibrations factors
applied and their derivation, etc.
Nature of quality control procedures
adopted (eg standards, blanks, duplicates,
external laboratory checks) and whether
acceptable levels of accuracy (ie lack of
bias) and precision have been established.
Verification of
Sampling and
Assaying
The verification of significant
intersections by either independent or
alternative company personnel.
The use of twinned holes The verification
of significant intersections by either
independent or alternative company
personnel. Discuss any adjustment to
assay data
Location of
Data points
Accuracy and quality of surveys used to
locate drill holes (collar and down- hole
surveys), trenches, mine workings
and other locations used in Mineral
Resource estimation.
Specification of the grid system used
Quality and adequacy of topographic
control
Data Spacing
and
Distribution
Data spacing for reporting of
Exploration Results
Whether the data spacing and distribution
is sufficient to establish the degree of
geological and grade continuity
appropriate for the Mineral Resource and
Ore Reserve estimation procedure(s) and
classifications applied.
Whether sample compositing has been
applied
Analysis for all elements including tungsten, tin, copper and
arsenic was completed by Mass Spectrometry following four acid
digestion method.
The sample preparation techniques used are in accordance with
current practices. All techniques are assumed to be total for the
element of interest.
The analytical techniques are appropriate for the elements of
interest.
Quality control procedures adopted by the laboratory include
internal standards and duplicates. Acceptable levels of accuracy
have been established.
No independent verification has been completed to date.
Geochemical soil sample locations have been captured with
Garmin handheld GPS. Accuracy is stated to be <12m in easting
and northing.
Samples taken on a grid of 200mE by 500mN however there is
some variation where the terrain was difficult.
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Orientation of
Data in Relation
to Geological
Structure
Whether the orientation of sampling
achieves unbiased sampling of possible
structures and the extent to which this
is known, considering the deposit type.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered to
have introduced a sampling bias, this
should be assessed and reported if
material.
Sample
Security
The measures taken to ensure sample
security
Audits or reviews
The results of any audits or reviews of
sampling techniques and data
The Slaty Range anomaly is orientated NNW, as identified in
historical stream sediment sampling completed by BHP.
Major structures in the region strike to the NNW and NE.
Ticket books and labels were used to ensure the sample id’s were
not compromised.
No external reviews or audits have been completed to date.
Section 2 Reporting of Exploration Results
Criteria
Mineral
Tenement and
Land Tenure
Status
Exploration
Done by Other
Parties
JORC Code
Explanation
Type, reference name/number, location
and ownership including agreements or
material issues with third parties such as
joint ventures, partnerships, overriding
royalties, native title
interests, historical sites, wilderness or
national park and environmental settings.
The security of the tenure held at the time
of reporting along with any known
impediments to obtaining a licence to
operate in the area.
Acknowledgment and appraisal of
exploration by other parties.
Commentary
The EPM25102 was granted by the Mines Minister of
Queensland on November 22 2013 for 5 years. The EPM is held
by North Queensland Tungsten Pty Ltd a wholly owned
subsidiary of Vital Metals Ltd, this MDL is not subject to any JV
agreements.
Previous exploration by other parties is detailed in historical
annual reports submitted to the Department of Mines. The
previous holders of the area who completed the greatest
amount of work was Broken Hill Proprietary and CRA
Exploration.
The standard of work completed by the companies appears to be
of a high standard. Preliminary exploration techniques and
quality control practices reported appear to be in line with
industry best practice procedures and practices.
Geology
Drill Hole
Information
Deposit type, geological setting and
style of mineralisation.
A summary of all information material to
the understanding of the exploration results
including a tabulation of the following
information for all Material drill holes:
•
easting and northing of the drill
hole collar
•
elevation or RL (Reduced Level –
elevation above sea level in metres)
of the drill hole collar
•
dip and azimuth of the hole
•
down hole length and interception
depth
•
hole length
•
If the exclusion of this information is
justified on the basis that the
information is not Material and
this exclusion does not detract from
the understanding of the report, the
Competent Person should clearly
explain why this is the case.
Mapping by BHP geologists reported casitterite within
pegmatites and dykes in addition to alluvial tin.
No new drill holes being reported.
Tungsten in soil assays are typically considered anomalous when
greater than 20ppm.
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Data
Aggregation
Methods
In reporting Exploration Results, weighting
averaging techniques, maximum and/or
minimum grade truncations (eg cutting of
high grades) and cut-off grades are usually
Material and should be stated.
Where aggregate intercepts incorporate
short lengths of high grade results and
longer lengths of low grade results, the
procedure used for such aggregation should
be stated and some typical examples of
such aggregations should
be shown in detail.
The assumptions used for any reporting of
metal equivalent values should be clearly
stated.
Relationship
Between
Mineralisation
Widths and
Intercept
Lengths
These relationships are particularly
important in the reporting of Exploration
Results If the geometry of the
mineralisation with respect to the drill hole
angle is known, its nature should be
reported. If it is not known and only the
down hole lengths are reported, there
should be a clear statement to this effect
(eg ‘down hole length, true width not
known’).
No new drill holes being reported, orientation of mineralisation
is currently unknown.
Appropriate maps and sections (with
scales) and tabulations of intercepts
should be included for any significant
discovery being reported These should
include, but not be limited to a plan view
of drill hole collar locations and
appropriate sectional views.
Where comprehensive reporting of all
Exploration Results is not practicable,
representative reporting of both low and
high grades and/or widths should be
practiced to avoid misleading reporting of
Exploration Results.
Other exploration data, if meaningful and
material, should be reported including (but
not limited to): geological observations;
geophysical survey results; geochemical
survey results; bulk samples – size and
method of treatment; metallurgical test
results; bulk density, groundwater,
geotechnical and rock characteristics;
potential deleterious or contaminating
substances.
The appropriate location plans have been included in the text of
this document.
The nature and scale of planned further
work (eg tests for lateral extensions or large
scale step out drilling.
Further exploration work is planned this will include follow up
sampling and mapping. Once the results of this work have been
received Vital will be able to better identify the extents of
mineralisation and prepare for drilling.
Diagrams
Balanced
Reporting
Other
Substantive
Exploration
Data
Further Work
Diagrams clearly highlighting the areas
of possible extensions, including the
main geological interpretations and
future drilling areas, provided this
information is not commercially
sensitive.
No data aggregation completed.
Reporting is on geochemical soil samples and as such may be
biased to some extent. Additional sampling and drilling is
required on the prospect.
Geophysical exploration is limited to magnetic surveys; this
technique is not applicable to the mineralisation styles being
explored for.
Tin mineralisation is observed to be as coarse cassiterite within
pegmatites. Manganese mineralisation has been observed as
veins within siliceous sediments. No other mineralisation has
been observed to date.
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