Intrepid Mines Limited
TSX : IAU
ASX : IAU

Intrepid Mines Limited

October 09, 2012 08:36 ET

Intrepid Mines Limited: Porphyry Resource Model Announcement

Tujuh Bukit, Indonesia

Significant Copper and Gold Upgrade to Tumpangpitu Porphyry Copper-Gold Resource

- New Tumpangpitu porphyry Inferred resource now stands at 1.9 billion tonnes at 0.45% copper and 0.45g/t gold (19 billion pounds of contained copper and 28 million ounces of contained gold at a 0.2% copper cut-off)

- The high grade core of 1.0 billion tonnes at 0.61% copper and 0.61g/t gold (at a 0.4% copper cut-off) is the focus of an on-going scoping study

- The new resource estimate delivers a 9% increase in copper grade (and an increase in contained copper and gold by 34% and 23% respectively) at a 0.4% copper cut-off

BRISBANE, AUSTRALIA--(Marketwire - Oct. 9, 2012) - Intrepid Mines Limited (TSX:IAU)(ASX:IAU) ("the Company") reports that assay results from drilling completed since January 2012 around the known porphyry copper-gold zone at the Tumpangpitu prospect of the Tujuh Bukit Project in Indonesia, have been incorporated to deliver an updated resource.

This latest Inferred Mineral Resource is estimated at 1.9 billion tonnes at 0.45% copper, 0.45 grams per tonne ("g/t") gold and 90 parts per million ("ppm") molybdenum, at a cut-off grade of 0.2% copper. This resource contains 19 billion pounds of copper, 28 million ounces of gold and 380 million pounds of molybdenum. The expanded resource has been estimated by independent consultants H&S Consultants Pty Ltd and is reported in accordance with the JORC Code and Canadian National Instrument 43-101.

This latest resource estimate is from the area shown in Figure 1 and is documented in Table 1 and the associated tonnage-grade curve. Resource blocks in excess of 0.2% copper occur over an area of approximately 1.9 kilometres by 1.3 kilometres and over a vertical extent of 1.2 kilometres, from 300 metres above to 900 metres below sea level.

The entire porphyry resource estimate (porphyry and overprinting high sulphidation mineralisation) is based on 55 drill holes for 54,000 metres, of which 49 holes for 48,000 metres penetrate the porphyry stockwork zone. The latest resource incorporates an additional 13 deep holes from GTD-11-248 onwards, which penetrated to a maximum depth of 1,223 metres.

This drilling focussed on four key targets:

1) infilling areas to convert geological potential to Inferred resource,

2) infilling areas to aid in open cut and/or underground mine designs,

3) definition of the margins of the mineralisation, and

4) drilling around high grade hole GTD-11-248 (689 metres at 1.00% copper and 0.85g/t gold as reported on 27 February 2012).

Table 1 - Summary of Inferred Resource Estimate by Cut-Off Grade

Cut-off Grade Tonnes Grade Contained Metal
(Cu %) (Mt) Cu (%) Au (g/t) Mo (ppm) As (ppm) Cu (Blb) Au (Moz) Mo (Mlb)
0.2 1,900 0.45 0.45 90 250 19 28 400
0.3 1,400 0.53 0.53 110 270 16 24 330
0.4 1,000 0.61 0.61 120 300 13 19 250
0.5 600 0.70 0.70 140 340 9 14 180
0.6 400 0.80 0.79 160 380 7 10 130
0.7 200 0.90 0.88 180 390 5 6 90
0.8 100 1.01 0.98 200 390 3 4 60
Notes: Figures may not sum due to rounding.
Significant figures do not imply an added level of precision.

Significant intercepts in drill holes from this program that have not been previously reported are listed in Appendix 1.

The previously released Mineral Resource Estimate (see Intrepid release dated 7 December 2011) was 1.7 billion tonnes at 0.41% copper, 0.46g/t gold and 100ppm molybdenum at a 0.2% copper cut-off. The subsequent 10% copper grade increase is largely related to a high grade zone in the south-eastern part of the deposit (Figure 2), intersected in holes GTD-11-248 and GTD-12-256 (278 metres at 1.08% copper and 1.24g/t gold) (see Intrepid release dated 16 July 2012).

A detailed interpretation of the mineralisation styles has been undertaken to help control the resource estimation process and to categorize the deposit into four major domains (Figures 3a and 3b and Figures 4a and 4b). The tonnage and contained metal increases are largely due to the additional drilling, whereas the increase in copper grade is due to a combination of the additional drilling, the new domaining strategy and improved geological understanding.

The recent drilling and the domaining of mineralisation have also defined a high grade core of 1.0 billion tonnes at 0.61% copper and 0.61g/t gold, which would likely form the basis of a mining operation. A scoping study is now on-going based on this resource model, the results of which will be reported in early 2013.

This resource estimate does not include the oxide mineralisation (see Intrepid release dated 10 September 2012) of 70 million tonnes at 0.71g/t gold and 27g/t silver Measured and Indicated Resources and an additional 19 million tonnes at 0.75g/t gold and 21g/t silver of Inferred Resources at a 0.3g/t gold cut-off.

While the recent drilling has largely constrained the known mineralisation with the exception of the depth extent, the enhanced geological understanding of the deposit has resulted in the definition of a number of new targets, particularly at the south-east end of the deposit.

Brad Gordon, Intrepid CEO, noted: "The increased Porphyry resource estimate was achieved despite a number of planned holes not proceeding or not being completed, due to the suspension of operations at the direction of the Company's joint venture partner, PT Indo Multi Niaga on 19 July 2012. "The combined values of 0.61%Cu and 0.61g/tAu for the 1 billion tonnes (0.4%Cu cut-off grade) resource places the Tumpangpitu deposit in the top echelon of yet-to-be developed copper-gold porphyry."

As previously reported, the Company does not have direct rights to the Tujuh Bukit Project tenements and the Tujuh Bukit IUPs (the form of mining licence under which activities are conducted) are held by its Indonesian joint venture partner. The Company, through a number of contractual arrangements with PT IMN, has acquired an entitlement to an 80% interest in the Tujuh Bukit Project. Since the Company has no direct interest in the Tujuh Bukit Project as yet, it is reliant on the observance by PT IMN, and its shareholders, of these contractual arrangements, including an agreement to issue to Intrepid or its subsidiaries 80% of the share capital in PT IMN. PT IMN is currently in breach of the agreements in place with the Company and has excluded the Company's personnel from the Tujuh Bukit site and operations and ceased communications with the Company's management. The Company has issued a notice of dispute to IMN and its shareholders in relation to these events.

To view the "Grade Tonnage Curve - Porphyry Model - Cu% cut-off" chart, please visit the following link: http://media3.marketwire.com/docs/iau109chart.pdf.

To view "Figure 1: Drilling locations, resource outlines and cross section locations (Figures 3 and 4)", please visit the following link: http://media3.marketwire.com/docs/iau109fig1.pdf.

To view "Figure 2: Tumpangpitu deposit (looking southeast and up) showing drill holes with down hole copper values (shallow oxide holes excluded) and the porphyry stockwork surface. Note high grade area around GTD-11-248", please visit the following link: http://media3.marketwire.com/docs/iau109fig2.pdf.

To view "Figure 3a: Schematic cross section 10660mN showing geology and selected significant intersections", please visit the following link: http://media3.marketwire.com/docs/iau109fig3a.pdf.

To view "Figure 3b: Schematic cross section 10660mN, mineralised domains, copper intercepts and the relation between porphyry, high sulphidation and oxide mineralisation", please visit the following link: http://media3.marketwire.com/docs/iau109fig3b.pdf.

To view "Figure 4a: Schematic cross section 11220mN showing geology and selected significant intersections", please visit the following link: http://media3.marketwire.com/docs/iau109fig4a.pdf.

To view "Figure 4b: Schematic cross section 11220mN, mineralised domains, copper intercepts and the relation between porphyry, high sulphidation and oxide mineralisation", please visit the following link: http://media3.marketwire.com/docs/iau109fig4b.pdf.

To view the table "Appendix 1: Table of Significant drill results not previously reported", please visit the following link: http://media3.marketwire.com/docs/iau109app1.pdf.

Qualified Person

The Mineral Resource Estimates were prepared by Rob Spiers (MAIG) who is a Director and full time employee of H&S Consultants Pty Ltd. All resource work was reviewed by Dr. Phillip Hellman FAIG, who is a consultant to H&S Consultants Pty Ltd. Both Mr. Spiers and Dr. Hellman have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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" and as Independent Qualified Persons as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. Spiers and Dr. Hellman consent to the inclusion of these estimates in the form and context in which they appear.

The information in this announcement that relates to exploration results is based on information compiled by or under the supervision of Mr. Gary Snow, who is a full-time employee of Intrepid Mines Limited. Mr. Snow has sufficient experience which is 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 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. Snow consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Sample Analysis

Intrepid exercises a strict chain of sample custody in its drilling program at Tujuh Bukit. Joint Venture personnel remove core from the drill rig and deliver it to a project geologist who logs the core and marks the core into two metre sample intervals. Intrepid and Joint Venture personnel supervise the immediate splitting, sawing and bagging of samples, and packaging of groups of samples for dispatch to the laboratory. The remainder of the split core is securely stored on site.

Samples are securely packaged, batched, and then transported under supervision to the Intertek laboratory facility in Jakarta. At the laboratory, the samples are prepared by crushing and pulverizing and a 30 gram charge is assayed for gold by conventional fire assay and/or atomic absorption methods. Multi-element ICP analysis is carried out using a multi-acid digestion process. All samples that contain silver and/or copper, lead, and zinc values that exceed the upper detection limits for ICP are re-analysed by conventional atomic absorption methods to determine the absolute values of these metals.

Nature of data

A total of 125,295 metres in 392 drill holes were available to contribute to the resource estimate and comprise entirely diamond core (DD) drilling. Of these, nominally 55 holes for 53,736 metres are deep holes that contribute significantly to the porphyry and high sulphidation resources. Other holes, drilled generally to test the oxide resources, have contributed to the high sulphidation part of the resource, where they have intersected sulphide mineralisation below the base of oxidation.

Drill holes were almost all sampled in two-metre intervals for PQ, HQ or NQ sized core. For estimation purposes the assay data was composited into two-metre intervals. The block model consists of blocks of 40 metre x 40 metre x 10 metre (XYZ).

Block Classification

Ordinary Kriging was used for the estimation with the search and data acceptance parameters used for the domains being; pass 1 (Measured) a search ellipse of 70 metres x 90 metres x 55 metres using a minimum of 12 and a maximum of 32 two-metre composites and 4 octants; pass 2 (Indicated) with a search ellipse of 140 metres x 180 metres x 110 metres and using a minimum of 12 and a maximum of 32 two-metre composites and 4 octants; and a pass 3 (Inferred) with a search ellipse of 140 metres x 180 metres x 110 metres and using a minimum of 6 and a maximum of 32 two-metre composites and 2 octants. Searches were aligned consistent with the orientations defined during the geometry modelling for each individual mineralised domain.

Forward-looking statements

This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.

Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Forestry Activities

The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The area of the Porphyry copper-gold resource estimate and the oxide resource estimate areas fall within a protected forest area. There is no assurance that the forestry reclassification will take place in this instance, to allow for development of the project.

PT IMN received an extension of the Forestry Exploration Permit I July 2012, which allows for exploration activities within the forestry areas at Tujuh Bukit.

Directors
Colin G. Jackson (Chairman)
Ian McMaster (Deputy Chairman)
Brad A. Gordon (Managing Director)
Laurence W. Curtis (Non-executive Director)
Robert J. McDonald (Non-executive Director)
Alan Roberts (Non-executive Director)
Adrianto Machribie (Non-executive Director)
Nyla Bacon (Company Secretary)
Stock Exchange Listing
ASX and TSX symbol: IAU
Substantial Shareholders
Taurus Funds Management 8.5%
Acorn Capital 8.2%
Van Eck Associates 7.8%
Surya Paloh 5.0%
Issued Capital
553,751,671 shares
9,015,095 unlisted options
6,181,693 unlisted share rights
25,604,016 unlisted restricted performance rights
Shareholder Enquiries
Matters related to shares held,
change of address and tax file
numbers should be directed to:
Computershare Investor Services
GPO Box 2975, Melbourne, Victoria 3001, Australia
Telephone: 1300 850 505
+61 3 9415 4000

Contact Information

  • Inquiries regarding this report and Company business may be
    directed to: Intrepid Mines Limited
    Brad Gordon, Managing Director, Chief Executive Officer
    Brisbane, Australia
    (office) +61 7 3007 8000 or (mobile) +61 400 036 636
    bgordon@intrepidmines.com

    Intrepid Mines Limited
    Greg Taylor
    Investor Relations, Toronto, Canada
    (office) +1 905 337 7673 or (mobile) +1 416 605 5120
    gtaylor@intrepidmines.com
    www.intrepidmines.com