Calgary-based Naneco Minerals (NNE-A) has retained the consulting group of Watts Griffis & McOuat to prepare a prefeasibility study on the Jiawula polymetallic deposit in the Inner Mongolia region of China.
The consulting group is charged with confirming the information provided in a feasibility study by a Chinese research institute.
The Shenyang Non-ferrous Metallurgical Design and Research Institute determined Jiawula contains a geological reserve of 7.34 million tonnes grading 124 grams silver per tonne, 5.2% zinc, 3.3% lead and 0.38% copper.
The minable reserve was pegged at 5.17 million tonnes grading 141 grams silver, 5.7% zinc, 3.9% lead and 0.46% copper.
The calculation was based on 93,000 metres of drilling by the Chinese on two veins. None of the core was saved from this vertical drilling.
The Shenyang study also determined that, with an investment of US$24 million, the company could construct a mine to process 800 tonnes per day.
The operation would employ shrinkage and long-hole stoping methods. Ore would be hoisted to the surface and sent through a 3-stage crushing system.
A flotation mill would produce three concentrates for sale within China.
Overall metal recoveries would be 81% for silver, 87% for zinc, 93% for lead and 48% for copper.
Jiawula also has exploration potential; there are more than 40 known veins exposed at surface. The company believes potential tonnage to be up to 20 million tonnes.
The Shenyang study also paved the way for Naneco’s foreign investment approval from the Chinese government. Naneco expects to begin drilling angled diamond drill holes at Jiawula as soon as possible. “We’ve mobilized a rig and could be drilling by the first of May,” says President Archie Nesbitt.
The company plans to drill between 5,000 and 15,000 metres to confirm the mineralization on the main vein and to assess its potential below 300 metres. Naneco will also check the mineral content between the veins, as well as assay for gold, neither of which were ever performed by the Chinese, Nesbitt says.
If Jiawula goes to production, the company will receive 75% of the revenue until payback of its costs, and 70% thereafter. The remaining stake is held by Hulunbeir, a local mining league.
The Jiawula property covers 25 sq. km, plus an area of interest encompassing 700 sq. km.
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