Mineral Deposits Limited

Mineral Deposits Limited

September 14, 2008 20:54 ET

Mineral Deposits Limited: Sabodala Gold Project

- Global gold resource estimate up 28% to 3.51 million ounces - Mining and mill construction on track for late 2008 gold pour

MELBOURNE, AUSTRALIA--(Marketwire - Sept. 14, 2008) - Mineral Deposits Limited (TSX:MDM)(ASX:MDL) - The total Sabodala project gold resource is now 3.51 million ounces. The new resource is up 28% on the previous global resource announcement in October 2007. Pit design optimisation work is in progress and a new ore reserve statement is expected in the December 2008 quarter.

The Managing Director, Mr Jeff Williams, commented that "MDL has demonstrated ongoing success through continued exploration. As significant, other notable gold discoveries within 25 kilometres of the Sabodala project demonstrate that the Senegal Birimian Belt is developing into a new gold region."

Updated Sabodala and Niakafiri Resources

Sabodala Niakafiri
Deposit 0.65g/t cut-off 0.5g/t cut-off
Resource Tonnes Grade Ounces Tonnes Grade Ounces
Categories (M) (g/t) ('000) (M) (g/t) ('000)
Measured 27.4 1.92 1,687 0.3 1.77 15
Indicated 14.7 1.71 807 7.9 1.33 340
Measured +
Indicated 42.1 1.84 2,494 8.2 1.34 355
Inferred 10.6 1.38 469 6.2 0.97 192
Total 52.7 1.75 2,963 14.4 1.18 547

The new diluted resource for Sabodala of 2,963,000 ounces at a 0.65g/t gold cut-off, together with Niakafiri resources of 547,000 ounces, extends the Sabodala Gold Project above 3.5 million ounces. The upgraded resources are viewed as an extension of the mineralisation at the Sabodala and Niakafiri deposits. A new mineable reserve estimate is in progress and will be released later in the December 2008 quarter. Of the total gold resources:

- the current Measured and Indicated (diluted) resource for the Sabodala deposit comprises an estimated 42.1 million tonnes at an average grade of 1.84g/t gold containing 2.5 million ounces and compares with the previous estimate in October 2007 of 28.3 million tonnes grading 2.22g/t gold containing 2.0 million ounces;

- inferred resources for the Sabodala deposit now stand at 10.6 million tonnes at an average grade of 1.38g/t gold containing 469,000 ounces compared to the 182,000 Inferred ounces reported in 2007; and

- the Measured and Indicated Niakafiri diluted resource still stands at 8.2 million tonnes at an average grade of 1.34g/t containing 355,000 ounces above a cut-off grade of 0.50g/t. An Inferred resource of 6.2 million tonnes at an average grade of 0.97g/t contains 192,000 ounces.

The updated Mineral Resource for the Sabodala Mining Concession in Senegal, west Africa was recently audited by independent consultants Geosystems International in the USA. The resource grade model was completed in-house using procedures developed together with Geosystems International. The geological block model was interpreted by MDL's geologists on-site.

Step-out drilling since 1 September 2007 has extended the deposit to the east and west along the Main Flat, to the south into Sutuba, to the north along the Main Flat and Northwest Shear intersection and to depth along the Steep Fg related zone (Attachment 1).

In-fill drilling targeted near surface in-pit zones to increase drill confidence from Indicated and Inferred to Measured and Indicated in areas to be mined in 2008 and 2009.

The current mineable ore reserve estimate is based on MDL drill holes and assay data available at 1 September 2008. Historic drill holes are excluded where quality control and quality assurance information is lacking. The drill database for the new resource estimate includes a total of 1,276 drill holes for 134,069 metres representing 126,642 assays.

The resource estimate obtained for the Sabodala gold deposit is based on a combination of Ordinary Kriging (OK) and Multiple Indicator Kriging (MIK) for a total of nine different zones within the Main Sabodala Zone. Grade estimation was constrained using zone envelopes, which were validated using visual and statistical analyses and comparisons.

There is a wide envelope that is in essence the definition of the mineralised Main Sabodala deposit (called the EDA Zone), used to constrain and avoid the extrapolation of gold grade in areas with little or no mineralisation. There are also eight smaller, higher grade mineralised ore zones within the deposit that exhibit different mineralisation controls and thus distinct spatial distribution of gold grades. These include the NW Structure (NWS Zone), striking about N30W, three mostly flat or sub-horizontal lying zones (Upper, Main, and Lower Flat Zones) and three steep structural/shear zones/contact which are striking about N30E (West Thrust, East Thrust and Steep Fg Related Zones). These additional envelopes avoid the over-extension of higher grade values into medium or lower grade areas and allow a better estimation of the central, higher-grade core of the deposit (Attachments 2 and 3).

The latest grade estimates as presented in Attachment 4 have been classified as a combination of Measured, Indicated and Inferred Mineral Resources in accordance with CIM Definitions (2005) resource reporting classification guidelines and reconciled to the JORC Code (2004).

The Niakafiri deposit remains open at depth and, to the west, a new deposit (Niakafiri West) is in the planning stages for a third round of drilling. Shear related mineralisation has been traced for over a kilometre and widths up to 60 metres identified by RC and DDH drilling. True widths are yet to be determined.

Mining and Mill Construction

MDL initiated mining with the new Komatsu mining fleet in June 2008. Through August, a total of 1,029,544 tonnes representing 98% of the budgeted tonnes for the period have been mined at 96% percent of the budgeted cost. Production will increase as the wet season concludes and two-shift, around-the-clock mining is implemented. The primary goals of this stage of mining are to complete construction of the ROM pad and to mine 500,000 tonnes of ore prior to mill commissioning. Both of these goals are on track for completion ahead of schedule (Attachments 5, 6, 7).

The construction of the processing plant is progressing well, with critical path areas such as grinding mill installation and pipe rack structural steel deliveries experiencing good levels of progress in recent weeks. All equipment critical to the start-up of the plant is either on-site or in port (Attachments 8 and 9).

It is anticipated that total plant Practical Completion status will be achieved in late November / early December 2008. However, because of the staged nature of the completion and handover, some of the plant will be able to commence commissioning activities prior to this date. The commissioning schedule is on track for the first gold production pour at the end of December.

The information in this report that relates to Exploration Results is based on information compiled by MDL's Mining Operations Manager, Bruce Van Brunt MSc Mining Engineering, who is a member of The Australasian Institute of Mining and Metallurgy and is also a registered professional geologist in the State of Washington, USA. Mr Van Brunt has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken. He is qualified 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 as defined in NI 43-101. Mr Van Brunt has consented to the inclusion of this information in the form and context in which it appears in this report.

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To view Attachment 9 please visit the link below:


ABN 19 064 377 420

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