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  • Vital Metals Maintains Momentum At Watershed  0 comments
    Jan 30, 2013 8:56 PM

    Vital Metals (ASX: VML) is advancing towards the completion of a Definitive Feasibility Study at its Watershed Tungsten Project in Queensland, where it has the backing of Japan Oil, Gas and Metals National Corporation (JOGMEC).

    The DFS is slated for completion in the March quarter of 2013, with Vital's end goal being production by 2014. Vital Metalshad a cash balance of $2.4 million as at 31 December 2012.

    The Indigenous Land Use Agreement which provides for the development of the Watershed mine was registered with the National Native Title Tribunal in December, marking another project milestone.

    Environmental approvals outstanding, all of the major requirements needed for approval of the mining leases are now in place.

    Farm-in partner Japan Oil, Gas and Metals National Corporation (JOGMEC) continued to contribute to the cost of the DFS study during the quarter.

    JOGMEC has now remitted $4.41 million, including an $800,000 payment, in total to Vital for costs incurred for the Watershed DFS since committing to the farm-in in August 2011.

    DFS progress

    Work completed during the December quarter included metallurgical, plant design (engineering), environmental permitting and approvals.

    Guangzhou Research Institute of Non-ferrous Metals has finalised variability test work on the Whole of Ore samples which has confirmed the stability of the process.

    The Whole of Ore process achieved consistent mass and metal stability in producing a scheelite concentrate of 65.5% WO3 for a recovery of 84%.

    As Vital is using an X-Ray ore sorter on the processing front end, which effectively halves the amount of ore which needs grinding by rejecting un-mineralised rocks, the net recovery of scheelite is expected to be around 78%.

    Guangzhou has started work on the optimisation of the dosage of flotation reagents to find the balance between scheelite recovery and minimisation of operating costs of the Whole of Ore process.

    Vital Metals has also retained Guangzhou to undertake a flotation program on the gravity spiral tails, which is scheduled for completion in the March quarter 2013.

    Once this is completed, a full analysis of the costs and benefits of the respective processes will be assessed and a process will be nominated.

    Work on completing the Environmental Management Plan progressed during the December quarter with the final remaining item being the management of waste from the mining and processing operations.

    Vital Metals, in consultation with the Department of Environment and Heritage Protection, has agreed to remove the tailings dam from the project and will instead be producing a "dry process residue" which will be dumped within the waste dump.

    Watershed exploration

    Exploration mapping undertaken during the December quarter has returned high grade tungsten rock chip samples from the Mt Elephant and Henry Hill prospects.

    The Mt Elephant tungsten prospect is located on the south western side of Mt Elephant.

    Samples of three veins with visible scheelite mineralisation were taken and sent for multi-element analyses to ALS in Townsville.

    In two of the three rock chip samples, WO3 concentration exceeded 3.78% with the highest rock chip sample reporting 4.14% WO3.

    Further detailed mapping will be undertaken to identify the source for the anomalies on the northern and southern side of Mt Elephant.

    The Henry Hill prospect is situated directly next to a well maintained gravel road parallel to McLeod River which is about 10 kilometres north of the Mulligan Highway.

    Two rock chip samples were taken from the main trench at Henry Hill and sent to ALS in Townsville for multi-element analyses. The rock chip samples reported 1.19% WO3 and 0.05% WO3.

    The geochemical sampling program at Henry Hill identified a strong but localised anomaly along the strike of the main trench vein, with the anomalous zone along the soil sampling having a width of around 400 metres.

    Burkina Faso gold

    Drilling is currently underway at the Doulnia Gold Project in Burkina Faso with initial results expected to be available by March.

    The program is targeting shallow high grade gold mineralisation with the aim of extending the limits of known gold mineralisation on the Doulnia tenement.

    The drilling on the Kollo Shear zone will test the undrilled area between Kollo South and Central and will also test the limits of mineralisation at Kollo Central.

    Previous drilling at Kollo Central intersected significant gold mineralisation such as 5 metres at 60.36 grams per tonne (g/t) gold from 75 metres, including a bonanza hit of 2 metres at 128.5g/t gold from 76 metres.

    Sixteen reverse circulation holes for 1,850 metres, including up to three diamond tails, are planned to test the limits of known gold mineralisation.

    Average hole depths for the program are between 100 and 120 metres.

    Meanwhile, column leach test work conducted on reverse circulation chips reported that gold mineralisation at Kollo is free and amenable to leaching, within 30 days more than 90% of the gold was extracted into the solution.

    Analysis

    Vital and its investors will soon have a clear indication of the value of the Watershed Project, which ranks in the top 10 unexploited tungsten deposits worldwide outside of China, through the delivery of the DFS.

    The DFS is slated for completion in the March quarter of 2013, with Vital's end goal being production by 2014.

    Interest in Watershed is high, with five Japanese companies having already declared their interest in the project as potential partners and offtake buyers.

    Proactive Investors considers Vital to be undervalued based on the potential price driving announcements to be released in 2013.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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