Marengo Mining Limited
TSX : MRN
ASX : MGO
POMSoX : MGO

Marengo Mining Limited

May 30, 2012 07:30 ET

Marengo Mining Limited: Yandera Resource Update

Substantial Increase In Measured Resource & Grade

Metallurgical Testwork Results Improve

Land-Based Tailings Option Selected

TORONTO, ONTARIO--(Marketwire - May 30, 2012) - Marengo Mining Limited (TSX:MRN)(ASX:MGO)(POMSoX:MGO) ("Marengo" or "the Company") -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Marengo Mining is pleased to provide the following resource update for the Yandera Copper-Molybdenum-Gold Project, PNG:

At a 0.25% Copper cut-off Grade: Contained Copper
(M lbs)
Measured & Indicated 362Mt 0.43% Cu 3,422
Inferred 218Mt 0.37% Cu 1,778
At a 0.20% Copper cut-off Grade: Contained Copper
(M lbs)
Measured & Indicated 486Mt 0.37% Cu 3,964
Inferred 347Mt 0.31% Cu 2,371
  • Significant conversion of tonnes to the Measured category, increasing confidence in the possible minimum 20 year mine life plan

  • Identified higher grade zones near surface (grading +0.5% Cu) for initial potential years of production

  • Confirmed large areas of elevated gold and molybdenum grades

At a 0.10 g/t Gold cut-off: (M Troy Oz)
Measured & Indicated 199Mt 0.17 g/t 1.1
At a 40 ppm Molybdenum cut-off: (M lb)
Measured & Indicated 532Mt 0.01% 140
  • Improved recoveries for Cu, Au and Mo. High grade concentrate from the recent metallurgical testwork programme

  • Encouraging results from first hole of the Dirigi exploration programme

International copper development company Marengo Mining Limited has taken a further key step towards its objective of developing a, long-life mining operation at the 100%-owned Yandera Copper-Molybdenum-Gold Project in Papua New Guinea, after today announcing an update to its mineral resource position.

The updated resource estimate was prepared in accordance with the JORC Code by minerals industry consultancy group, Ravensgate. The updated resource estimate corresponds with Canadian Institute of Mining, Metallurgy and Petroleum classifications. A full copy of Ravensgate's current resource statement is attached to this release.

Of particular note is the substantial conversion of copper resources to the Measured category with improved grade and the conversion of additional Indicated resources from the Inferred category.

To view "Figure 1: Yandera Resource Block Model", please visit the following link: http://media3.marketwire.com/docs/yandera_resource.jpg

Marengo's Managing Director & CEO, Mr. Les Emery, said "The resource update supports the previously stated goal of achieving a minimum operating life of at least twenty years. The measured resource category has increased by over 100% and substantial additional resources have been upgraded from the inferred to indicated category".

"Drilling activity continues at Yandera, both on further in-fill tasks within the Yandera Central deposit and on nearby exploration targets", he added.

"Furthermore, areas of higher grade (+0.5% Cu) have been identified that, with the advantage of topography, can potentially be targeted for the initial years of possible production."

The resource estimate incorporates assay results from 465 diamond drill holes totalling 145,335 metres, which were drilled up until the end of 2011.

The Yandera Copper-Molybdenum-Gold Project reviewed as a part of this 2012 updated resource modeling study has so far demonstrated and confirmed that this area contains significant amounts of copper mineralisation. The tonnages reported, for example above a nominal 0.25% Cu lower cut-off, and the coincident contained metal tonnages are significant.

The following table shows the comparison between the current resource estimate and the previous estimate (April 2011);

Table 1: Yandera - Comparison to previous Resource Estimate
Total Measured & Indicated Cut-off Mt Cu (%)
April 2012 Model 0.25% Cu1 361 0.43
April 2011 Model 0.30% CuEq2 359 0.36
Inferred
April 2012 Model 0.25% Cu1 218 0.37
April 2011 Model 0.30% CuEq2 417 0.38
1) Ravensgate does not use copper equivalent grade for reporting
2) The copper equivalent calculation used by Golder Associates in April 2011 was CuEq = (Cu% + (Mo% x 10))

In addition, an extensive section of the Yandera deposit shows zones of higher grade gold and molybdenum (refer tables below), which may make a positive potential contribution to the overall project. Additional metal inventories for by-product silver and rhenium have not been calculated at this time.

Table 2: Yandera April 2012 Resource - Copper
Cut-off (Cu %) Resource Category Mt Cu (%)
0.20 Measured 314 0.38
0.25 Measured 248 0.43
0.30 Measured 192 0.48
0.20 Indicated 172 0.35
0.25 Indicated 114 0.42
0.30 Indicated 81 0.48
Cu % Weighted average
0.20 Measured & Indicated 486 0.37
0.25 Measured & Indicated 362 0.43
0.30 Measured & Indicated 273 0.48
Cu (%)
0.20 Inferred 347 0.31
0.25 Inferred 218 0.37
0.30 Inferred 144 0.42
Table 3: Yandera April 2012 Resource - Molybdenum
Cut-off (Mo ppm) Resource Category Mt Mo (ppm)
40 Measured 354 129
60 Measured 279 150
40 Indicated 178 100
60 Indicated 120 125
Mo weighted average
(ppm)
40 Measured & Indicated 532 119
60 Measured & Indicated 399 142
Table 4: Yandera April 2012 Resource - Gold
Cut-off (Au g/t) Resource Category Mt Au (g/t)
0.10 Measured 155 0.17
0.10 Indicated 44 0.18
0.10 Measured & Indicated 199 0.17

To view "Figure 2: Yandera Central Porphyry", please visit the following link: http://media3.marketwire.com/docs/yandera_porphyry%20.jpg

METALLURGY

Recent metallurgical testwork on mineralised drill core samples from the Yandera deposit has recently been undertaken as follows:

NFC/Nerrin Comprehensive mineralogical assessment, flotation and magnetic separation testwork undertaken at the Beijing General Research Institute of Metallurgy and Mining (BGRIMM) laboratory under the direction of China Nonferrous Metal Industry's Foreign Engineering and Construction Co. Ltd. (NFC) and others.
AMS/Marengo Parallel testing with the NFC program undertaken at ALS-Ammtec in Perth, WA and supervised by Arccon Mining Services (AMS) and Marengo. This program is continuing.

The NFC/Nerrin and AMS/Marengo programs were undertaken on samples of drill core specially produced for metallurgical characterisation. Approximately 22 tonnes of full core, representing a variety of feed types, was obtained.

About 80% of the core was sent to Beijing for testing under the guidance of NFC, whereas the balance of the core was delivered to the ALS-Ammtec laboratories in Perth for predominantly parallel testing under the direction of AMS (Perth branch is individually certified to standards within International Organization for Standardization ISO 9001:2000).

Relative insensitivity to grind size and an optimum P80 grind size of 150 micrometres was selected on the basis of the recovery values and assessment of operating costs associated with comminution.

Copper recoveries of over 91% and preliminary Mo recoveries around 80% were achieved.

Concentrate copper concentrate grades of greater than 30% Cu, plus gold and silver, and preliminary molybdenum concentrate grades of 50% were obtained. The concentrate samples have shown no level of deleterious elements that would cause smelter penalties.

To view the Photo of metallurgical testwork conducted by Ammtec, Perth, please visit the following link: http://media3.marketwire.com/docs/marengo_testwork.jpg

To view "Figure 3: Aerial view of Yandera and Dirigi", please visit the following link: http://media3.marketwire.com/docs/yandera_central.jpg

Exploration

Results have been received for the first hole of the 15 hole exploration program over the Dirigi prospect. In YD475, mineralisation was encountered near surface as detailed below, and is associated with a zone of tectonic brecciation and quartz veining. Averages are presented in the table below:

YD475 (Collar 294311E 9362358N Azimuth (AMG) 215@ -60; E.O.H 401.5 m)
From (m) To (m) Width (m) Cu % Mo ppm Au g/t Ag g/t
3 57 54 0.23 211 0.12 12.76

Work has been completed on the airborne geophysical survey covering the areas of ELs1633 and 1670 which have become the recent focus of Marengo's greenfields exploration interests.

The data generated from this detailed airborne survey, which includes magnetics and radiometrics, will be used in conjunction with fieldwork either already carried out or for the future for target generation. Interpretation is scheduled to commence in the next month following delivery of the finalised dataset.

With improvement in the weather, regional work has commenced with the first of a number of planned sorties for mapping and sampling. This initial fieldwork has embarked on preliminary investigations in the Queen Bee area approximately 15 km NW of Yandera. Historical work reports skarnoid mineralisation around Queen Bee and the team are expected to make progress in identifying and delineating any mineralised bodies. In addition, planning has commenced for a ridge and spur soil sampling program over certain prospective parts of EL1633 (Yomi) identified in the 2011 stream sediment and mapping work.

To view a photo of Helicopter with stinger attached for radiometric survey, please visit the following link: http://media3.marketwire.com/docs/yandera_chopper.jpg

TAILINGS STORAGE NEAR PROJECT

Following a review of the tailings options for the completion of the Feasibility Study, and discussions with various stakeholders, it has been decided to go forward on the basis of a combined rock waste dump and tailings storage facility. The facility will be located in close proximity to the Yandera project and processing areas, with the copper concentrate being transferred to a coastal shipping facility by a small diameter pipeline, which will where possible, follow existing infrastructure corridors to a coastal loading facility.

A National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant technical report in connection with the updated resource filed concurrently on SEDAR (www.sedar.com) or attached to this release.

Les Emery, Managing Director / CEO

30 May 2012

www.marengomining.com

This news release does not constitute an offer to sell or the solicitation of an offer to buy any ordinary shares within the United States. The ordinary shares have not been offered and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the ordinary shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws or an exemption from such registration are granted.

NOTES

Certain statements in this report are forward-looking. These statements address possible future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the results of future exploration, risks inherent in resource estimates, increases in various capital costs, availability of financing and the acquisition of additional licences, permits and surface rights. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward looking statements in light of the risks set forth in the company's continuous disclosure filings as found at the (Canadian) SEDAR website.

"JORC Code" refers to the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition).

The section of this report relating to the Yandera Mineral Resource Estimate was prepared from information by Mr Stephen Hyland of Ravensgate Minerals Industry Consultants and Mr Karl Smith of Karl Smith Mine and Geology Consulting. Mr Hyland And Mr Smith are Fellows of the Australasian Institute of Mining and Metallurgy and both have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken 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 (The JORC Code, 2004 Edition). Mr Hyland and Mr Smith consent to the inclusion in this announcement of the matters based on this information, in the form and context it appears.

The updated mineral resource estimate and the resource estimate for the by-product metals and all other scientific and technical information contained in this news release (including Appendix B) were prepared by or under the supervision of Mr Stephen Hyland, Principal Consultant Geologist, Ravensgate Minerals Industry Consultants and Mr Karl Smith of Karl Smith Mine and Geology Consulting. Mr Hyland and Mr Smith are "Qualified Persons" as defined by National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101"). Mr Hyland and Mr Smith are independent of Marengo Mining Limited (Marengo), as such terms are defined in NI 43-101. Mr. Hyland and Mr Smith have read and approved the contents of this news release (including the Appendices hereto). Mr Hyland and Mr Smith verified the data disclosed and the underlying information contained in this news release. The effective date of the updated mineral resource estimate and the resource estimate for the by-product metals is April 12, 2012. The method used to verify the data was similar to that described in Marengo's technical report filed on SEDAR and dated November 9, 2007. The key assumptions, parameters and methods used to estimate the mineral resources are as set out in Appendix A hereto. The estimate of mineral resources are not materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.

The contents of this release have been approved by Mr. Paul J Kreppold, BEng(Hons) MEngst LLB FIE(Aust) CPEng, a "Qualified Person" as set out in National Instrument 43-101 (NI43-101) by reason of education, affiliation with a professional association (as defined in NI43-101) and past relevant work experience. For further information on Mr. Kreppold please refer to the National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant technical report, SECTION 29. CERTIFICATES OF QUALIFIED PERSONS, in connection with the updated resource filed concurrently on SEDAR (www.sedar.com) or attached to this release.

For further information on the Yandera Project, including a description of Marengo's standard data verification processes, quality assurance and quality control measures, and details of the key assumptions, parameters and methods used to estimate the mineral resources set out in this report and the extent to which the estimate of previously declared mineral resources set out herein may be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or relevant issues, readers are directed to the technical report entitled "Technical Report on the Yandera Copper-Molybdenum-Gold Project Madang Province, Papua New Guinea", dated May 14, 2012, lodged concurrently on SEDAR ( www.sedar.com) or attached to this release.

The resources disclosed herein are preliminary in nature and include inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them to be categorized as mineral reserves. There is no certainty that the mineral resources disclosed herein will be realized or converted to mineral reserves. Mineral Resources which are not mineral reserves do not have demonstrated economic viability.

ABN: 57 099 496 474

YANDERA MINING COMPANY LIMITED (COMPANY NO. 1-53202)

MARENGO MINING (PNG) LIMITED (COMPANY NO. 1-76844)

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