Luiri Gold Limited
TSX VENTURE : LGL

Luiri Gold Limited

October 15, 2007 08:39 ET

Luiri Gold in Discussions With JV Partner on the Nambala Iron Project

The company has received a report from RSG Global with the results of an independent project review of the Nambala Iron deposit and based on the recommendations are in discussions with a potential Joint Venture partner to commence the first phase of exploration.

TORONTO, CANADA--(Marketwire - Oct. 15, 2007) - Luiri Gold Limited (TSX VENTURE:LGL) has received a report on an independent project review of the Nambala iron deposit on the Luiri Hill license about 120km west of Lusaka in Zambia prepared by RSG Global Consulting Pty Ltd (now Coffey Mining). The scope of the review, which did include a site visit by a RSG Global geologist, was to assess the current information available on the deposit, and to check the economic viability of mining an iron deposit at the Luiri Hill project in Zambia, a landlocked country.

The report states that while there was limited technical information, assuming a saleable product can be produced, there is potential to establish an economically viable operation. The preliminary modeling by RSG Global estimated that there is the potential to obtain a mineralized iron tonnage of between 100 million to 300 million tonnes. Due to the uncertainty on the extent of the mineralization and the potential elevated levels of silica and phosphorus, RSG Global recommends that an initial drilling programme be undertaken in order to obtain a better understanding of the mineralization. Note that the potential quantity and grade is conceptual in nature, and there is insufficient exploration to define a mineral resource and therefore it is uncertain if further exploration will result in the target being delineated as a mineral resource.

While the core strategy of Luiri Gold is focused on gold and copper-gold exploration in Africa, the company will look to further enhance their shareholder value by advancing the iron project through a Joint Venture. In this manner, they will maintain their current funds for the gold strategy, while advancing the exploration at the Nambala Iron Deposit through the Joint Venture. The company is currently in negotiations with a potential Joint Venture partner.

Nambala Iron Deposit

In the west of the Luiri Hills project, is reportedly one of the largest iron deposits in Zambia, the Nambala deposit. The deposit is situated approximately 25km to the southeast of Mumbwa, a regional centre, and access to the project area is gained by travelling west via the sealed M9 road from Lusaka for approximately 120km, and then south for 10km along an all weather gravel road (the project is also less than 20km from the Luiri Hill regional exploration office). The M9 road has recently been upgraded, reducing travelling time from Lusaka to the area to less than two hours. The area is also about 120km to the nearest rail link.

The main Nambala occurrence is found within a well defined ferruginous facies of rocks that extends for about 80km. The occurrence generally has a prominent topography in mostly flat terrain. The best examples Nambala Ridge, Utinthi and Sonkwe form a prominent range within the Luiri Hills license. The Sonkwe Peak is a conical hill rising 240m above the southern plain, and marking the southern termination of the range. The northern edge is defined by the Nambala Ridge where the elevation rises to 270m at Nambala Peak. The Nambala Ridge is composed of hard, resistant massive hematite with coarser hematite rich breccia and shale inter layers cradled between under and overlying shale and sandstone sequences and to date has been the main focus of exploration.

The most comprehensive work to date was carried out by ZIMCO Limited, a Zambian company in the early 1980's at Nambala Ridge. This project included the drilling of five diamond core drill holes totalling 943m in a selected area, surface sampling on a 100 x 50m grid totalling 1,300 samples, geological and structural mapping, a number of pits and trenches, a mineralogical and petrographic study, and a "resource" estimate. Assays included Fe, P, S, Al2O3, SiO2 and Ti.

This was the main analytical information available to RSG Global. Using this information, RSG Global undertook preliminary modelling work which showed that there is the potential to obtain an iron mineralized tonnage of 8 million tonnes per 400m strike length or 20 million tonnes per kilometre of strike at a 60% Fe cutoff and 21 million tonnes per 400m strike length or 52 million tonnes per kilometre of strike at a 55% Fe cutoff. Based on an overall strike length of 6km, this could equate to a potential total project tonnage of between 100 million and 300 million tonnes.

Note: The potential quantity and grade is conceptual in nature, and there is insufficient exploration to define a mineral resource and therefore it is uncertain if further exploration will result in the target being delineated as a mineral resource.

However, while they were unable to estimate the deleterious elements, they noted concern for the SiO2 and P values. In the "massive ore" type, 5 of the 16 samples assayed less than 7% SiO2, 7 between 12% and 19% SiO2, and 4 between 20% and 32% SiO2, while the average P value is highly skewed due to the presence of one assay of 4.36%. However, 5 out of the 16 samples had values greater than 0.1% P. Alumina and sulphur values appear to be favourable.

RSG Global also investigated the economic viability of an iron mining operation in the region and found that assuming that a saleable product could be produced by the project then, based on the costs estimates in their database, and an average iron ore price of US$75c/dmtu, there is the potential to establish an economically viable operation.

RSG Global recommended that given the uncertainties, particularly with regards to the extent of the iron ore mineralization, as well as, the grade of Fe and particularly SiO2 and P, a phased approach to an exploration programme is considered prudent.

A limited RC / Diamond Tail drilling campaign should be carried out to determine:

- The true levels of SiO2 and P at Nambala Hill and whether the mineralization continues at depth (two inclined holes).

- The potential mineralization and levels of deleterious material along strike of the Nambala ridge also (six inclined holes, 500m apart along strike).

- Assuming the results are positive, an additional eight inclined holes to be drilled into the other associated hills.

Qualified Person

The Luiri Gold exploration programmes and resource calculations are carried out under the supervision of Mr. Michael Sperinck, MAusMIM. Mr. Sperinck is a qualified person, as defined by National Instrument 43-101, with more than 25 years of experience in the mining industry.

About Luiri Gold

Luiri Gold is a gold focused African resource company with a strategy of creating shareholder value through expanding into a geographically diversified gold resource company with assets potentially ranging from producing mines and near term production to exploration properties in Africa. Luiri Gold's wholly-owned Zambian subsidiary, Luiri Gold Mines Limited, holds mineral tenements within southern-central Zambia covering approximately 2,400km2 of highly prospective exploration ground focused on the historic Dunrobin and Matala gold mines. The Luiri Hill Project is situated approximately 120km west-northwest of the Zambian capital of Lusaka in Zambia's Central Province. Access to the Project area is by a newly-upgraded paved road from Lusaka.

Luiri Gold's mineral tenements, including the Nambala deposit, are the subject matter of a Technical Report dated February 6, 2006 prepared pursuant to National Instrument 43-101 by Snowden Mining Industry Consultants Pty. Ltd. and entitled "Independent Technical Report on the Mineral Assets of Luiri Gold Mines Ltd.", available for review under the Company's profile at www.sedar.com.

ON BEHALF OF THE BOARD OF DIRECTORS OF LUIRI GOLD LIMITED

Michael Sperinck, President and CEO

Ted Grobicki, Chairman

This press release contains forward-looking information which involves risks and uncertainties. Forward looking information represents management's current views and these may change significantly as new information comes to hand.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Luiri Gold Limited
    Michael Sperinck
    President
    +61-401-694-322
    Website: www.luirigold.com