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  • Vital Metals' Tungsten Resource Upgrade Propels Watershed DFS Towards End Of Year Finish  0 comments
    Aug 1, 2012 8:11 PM

    Vital Metals (ASX: VML) is on track to achieve end of year completion of the Definitive Feasibility Study for its Watershed Tungsten Project in Queensland with an upgrade of the JORC Resource.

    Measured, Indicated and Inferred Resources for Watershed now total 20.6 million tonnes at 0.25% for 50,700 tonnes WO3, using a 0.10% cut-off.

    Using a lower cut-off of 0.05%, the broader Measured, Indicated and Inferred Resources increase to 49.2 million tonnes at 0.14% for 70,400 tonnes WO3.

    Importantly, the model has been reviewed and accepted by joint venture partner Japan Oil, Gas and Metals National Corporation (JOGMEC), which is working to earn a 30% stake in the Watershed Project.

    The significance of this is that any finance from Japan requires JOGMEC technical signoff and this has been achieved.

    JOGMEC has a mandate to secure supplies of ores and metals for Japanese companies, which is the reason for its involvement in the Watershed Project.

    The company provides updates to interest parties in Japan and has organised for Vital to meet with Japanese companies in Australia to discuss the progress of the project.

    Vital is targeting construction at Watershed in 2013 and production by 2014, meaning the project is well placed to take advantage of rising tungsten prices, with the price of the commodity rising more than 30% in 2011.

    An increase in Chinese demand, which will exceed its domestic supply, is set to propel tungsten prices even higher.

    Anticipated milestones

    Metallurgical test work is progressing towards completion by the end of the September quarter 2012.

    The Project Environmental Management Plan has also been submitted to the Department of Environment and Heritage Protection and is undergoing assessment.

    Project permitting, which is running in parallel with the DFS, is likely to be finalised in 2013.

    Watershed snapshot

    The Watershed deposit is part of a large structural system that is largely unexplored. Vital's exploration package now covers 600 square kilometres.

    The project comprises walk up exploration prospects at the Watershed South, Desailly and Desailly North.

    Exploration upside exists with the mineralisation open at depth and along strike. Mineralisation has been shown to increase with depth, evidenced by one hole which intersected 20 metres at 1.27% WO3 from 302 metres.

    Importantly the geological model suggests potential for mineralisation to have significant grade and thickness at depth, which bodes well for a potential underground operation in the future.

    Earlier this year, Vital identified the potential to expand the Watershed Project after a regional assessment of historical exploration data turned up a potential satellite deposit.

    The primary target is the Desailly tungsten prospect, 5 kilometres south of Watershed, where drilling in the 1980s intersected tungsten mineralisation in multiple veins, with potential for between 2 and 3 million tonnes of mineralisation.

    Drilling at Desailly returned a peak assay of 2 metres at 0.55% tungsten from 37 metres depth.

    Burkina Faso gold

    Meanwhile, over in Burkina Faso Vital has identified four new gold prospects from geochemical soil sampling.

    A program of trench sampling at Boungou South on the Zeko tenement has returned some good widths of gold mineralisation with a best result of 12 metres at 2.2 grams per tonne (g/t) gold.

    Substantial progress has also been made in permitting with the submission of the Environmental Management Plan to the Department of Heritage and Planning and with Vital's metallurgical test work program which is on track for completion in the September quarter.

    Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.

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