Black Angel exploration programme to
start in June
20/04/2006
Press Release
Angus & Ross PLC (AGU)
is pleased to announce
the exploration programme for its Black Angel
zinc/lead property in West
Greenland.
The three-month programme will include:
- 6,000-7,000m of diamond drilling in 7 target
areas;
- Reinterpretation and computer modelling of old
data;
- Geological mapping of areas uncovered by melting
of ice and snow;
- Airborne geophysical survey;
- Environmental Baseline
Studies.
The main objective of this season's exploration is to find additional
zinc/lead
resources and to increase the already known reserves and resources
located
mainly in the old mine.
The project currently has proven and probable
reserves
of 2.2m tonnes of high grade ore (9.7%Zn, 3% Pb).
A pre-feasibility study
completed by Wardell Armstrong International in January 2006, based
on prices
of $1,950/t for zinc and $1,100/t for lead concluded that there is
a strong
economic case to proceed with the project. Current zinc prices are
$3,182/t and
lead prices are $1,149/t (see
effect on NPVs in Notes below).
The Company has finalised contracts with two drilling companies:
Oy Kati AB
from Finland and Greenland Drilling A/S (a subsidiary
of Swedish
TGB). Both
companies are experienced arctic drillers with many years of specialisation
in
extreme conditions. The programme will utilise two drill rigs: Atlas
Copco
Diamec 262 and Onram-300 which between
them are expected to drill up to 60
diamond holes totalling 6000-7000m. Drilling is
expected to be performed around
the clock taking advantage of the 24-hour daylight at this latitude.
An agreement has also been reached between the Company and Air
Greenland A/S
for the exclusive use of a Bell-212 helicopter,
which will be stationed at the
drill site for the drilling season facilitating the efficient movement
of both
equipment and people.
The total field team will number around 20 people with two senior
geologists
running the programme. The Exploration Manager Frank
van der Stijl is a former
Chief Geologist of the Black Angel mine and has over 20 years of
experience in
Greenland. Guy Della Valle has a PhD in geology
and has also worked for Black
Angel in the past. The programme will be coordinated by mining consultants
Wardell Armstrong International (WAI).
The field team will be based on the 'Arctic
Pioneer', a converted
factory ship,
which will be moored in the fjord next to the drilling area. The
ship will also
be used for transportation of rigs and supplies and will have broadband
internet connectivity enabling timely exchange of data between the
site and
UK-based geologists from WAI.
Environmental Baseline Studies (part of the Environmental Impact
Assessment
work) will be conducted by the Department of
Arctic Environment of
the National
Environmental Research Institute in Roskilde, Denmark, by
the scientists who
have been monitoring the site since the 1980s.
A helicopter-based airborne geophysical survey of the most prospective
areas is
also planned. 300 line km at 100m spacing is to be flown with the
objective of
identifying further drilling targets.
The programme will start at the beginning of June and will last until
September.
Robin Andrews, Chairman of Angus & Ross, said:
'Angus & Ross is becoming a focussed
Greenland zinc and lead mining company and
we are pleased that the planning stages of our drilling programme
for the Black
Angel programme are nearly complete. Last year's reconnaissance
has shown many
new prospective areas uncovered by the retreating ice and snow
fields,
including a massive ore outcrop grading 30% Zn and 20% Pb. We have
a high
degree of confidence that this year's programme will find additional
ore. With
zinc prices nearly 60% higher than in January, when WAI pre-feasibility
study
was completed, the economic case for reopening the mine is even
more
compelling.'
(The programme is run by Black Angel Mining
Ltd, a wholly owned subsidiary
of
Angus & Ross plc headed by CEO Andrew Zemek.)
- Ends -
Notes to Editors
Angus & Ross PLC
Angus & Ross PLC, holds the beneficial title to two exploration
licence areas
covering the Black Angel mine and surrounding area in West Greenland
near
Maarmorilik.
The Black Angel Project consists of:
- The Black Angel zinc/lead
mine
- 187 sq km of surrounding exploration area
A pre-feasibility study
completed by Wardell Armstrong International in January
2006 and based on prices of $1,950/t for zinc and $1,100/t for
lead concluded
that there is a strong economic case to proceed with the project:
- Base case (1.7 million tonnes proven reserves only):
NPV
$52m (@10%) IRR 35% on $38m capital expenditure requirement;
- Improved
case (if 1.3 million tonnes additional reserves are found):
NPV
$189m (@10%) IRR 56% on $46m capital expenditure requirement.
At current zinc price of $3,182/t the
NPV for the base case is $109m (55% IRR) and for the improved case
$336m (109% IRR). With 123.22m shares in issue
this equates to respectively 51p/share NPV and 156p/share
NPV.
Black Angel Mine (
Brief History):
- Deposit discovered in the 1930s;
- Major exploration in the
1960s by Cominco
- Mine opened in 1973 and closed in 1990
- 12m tonnes of high
grade ore has been produced and some 3m tonnes left behind;
- Licence
acquired by Angus & Ross PLC in 2003 and extended in 2005.
Angus & Ross
plc
Robin Andrews (Chairman) +44-1751 430 988
Andrew Zemek
(COO of Angus & Ross, CEO of Black Angel Mining) +44-7850-755 450
Financial
Dynamics,
Billy Clegg, Edward Westropp, +44-20
7831 3113
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