Guadalupito Iron and Heavy Mineral Sands Project (100%) – Iron / Gold / Heavy Minerals
Location
The Guadalupito Project is located on the northern coast of Peru. The company has a total concession area of 17,500ha, which cover a 45km long mineralised shoreline that extends up to 4km inland.
The Project is located 25km north of Chimbote, where there is a major port and one of the largest steel smelters in Peru.
Resources and Reserves
In December 2011, LRS released an initial inferred JORC Resource Estimate based on the results from an initial 682ha are of the 17,500ha concession. The results are tabled below. Heavy mineral assemblage includes iron minerals –magnetite, goethite and hematite; and ferro-titanium minerals – Ilmenite, Zircon, Andalusite, Titanite (Sphene) and Garnet sands.
| Classification | Split | Domain | Tonnes | HM | HM in sand | Sand | Oversize | Fines |
| Mt | % | % | % | % | % | |||
| Inferred | Above water table | Gravel Unit | 23.2 | 8.7 | 17.9 | 47.5 | 49.9 | 2.6 |
| Sand Unit | 14.9 | 9.2 | 11.2 | 88.2 | 9.2 | 2.5 | ||
| sub-total | 38.1 | 8.9 | 15.3 | 63.5 | 34 | 2.6 | ||
| Below water table | Gravel Unit | 5.6 | 4.9 | 12.7 | 35.2 | 61.6 | 3.2 | |
| Sand Unit | 75.1 | 4.1 | 4.8 | 88.1 | 4.9 | 6.9 | ||
| sub-total | 80.7 | 4.1 | 5.3 | 84.4 | 8.9 | 6.7 | ||
| Grand total | 118.8 | 5.7 | 8.5 | 77.7 | 16.9 | 5.4 |
Table 1: Latin’s Initial Inferred Mineral Resource Estimate at Guadalupito – December 2011
On 7 August the company announced a 160% increase to the Inferred Resource Estimate
|
Inferred Recource Block |
Split | Tonnes Mt | HM in situ % |
HM in Sand %
|
Sand % | Oversize % | Fines % |
| Heldmaier | 42.6 | 7.4 | 15.2 | 61.3 | 37.3 | 1.7 | |
| Tres Chosas | Above Water Table | 41.5 | 8.7 | 11.9 | 78.5 | 19.8 | 1.7 |
| Total | 84.1 | 8 | 13.6 | 69.8 | 28.7 | 1.7 | |
| Heldmaier | 93 | 4.6 | 6.4 | 82.7 | 11.2 | 6.2 | |
| Tres Chosas | Below Water Table | 215.4 | 3 | 3.4 | 88.8 | 4.9 | 6.4 |
| Total | 308.4 | 3.5 | 4.3 | 87 | 6.8 | 6.3 | |
| Heldmaier | 135.6 | 5.5 | 9.2 | 76 | 19.4 | 4.8 | |
| Tres Chosas | Total Inferred Resources | 256.9 | 3.9 | 4.7 | 87.1 | 7.3 | 5.6 |
| Grand Total | 392.5 | 4.5 | 6.3 | 83.3 | 11.5 | 5.3 |
Table 2: Total JORC Inferred Resource Estimate at Guadalupito as at 7/08/2012
The updated results were derived from an area of 1,920ha out of the total concession are of 17,500ha. Given the results reflect -11% of the total concession area these results are positive for the mineral prospects for the rest of the project area.
Scoping Study Executive Summary
Guadalupito Iron Mineral Sands Project Scoping Study Report Section 1 - Executive Summary
Exploration & Sampling
In May 2011, LRS announced a conceptual exploration target of 2B tonnes of mineralised sediment. This target was based on an estimated 6,000ha of prospective sediments at a depth of 20m. LRS identified traces of Magnetite, Andalusite, Gold, Monazite, Zircon, Ilmenite and Wolframine. The Proof of Concept report completed by Snowden’s suggests that this target is achievable, with an exploration target of 1.1B-4B tonnes (see Scoping Study Section below)
LRS has completed 2,895 exploration samples collected from 1m deep pits. The results confirm elevated heavy mineral contents in the pits sampled. Samples of 1m pits were taken along 28km of the 45km long strike and inland up to 4km. Average heavy mineral content of 8.9% was identified at a cut-of grade of 1% and an average gold content of 0.32g/t.
The company has identified the area immediately south along the strike from the Inferred Resource estimate as an area of significance, with heavy mineral content and significant gold content in the Undersize (-52 µ) fraction present in samples along 8km of strike with an average width of 1.5km. Drilling has advanced in this area to test the depth extent of the mineralisation.
Figure 2: Guadalupito Project Concessions
On the 26 July 2012. LRS announced the discovery of a new heavy mineral deposit at Los Conchales, 3km north-east of the existing Inferred Resource (see map below).
11 holes were drilled on three sections, 1.6km apart up to depths of 48m. The results have resulted in a conceptual exploration target of 690Mt at 6.8% heavy mineral in the Los Conchales area. This is in addition to the 393Mt Inferred Resource estimate already determined. Identified minerals included Magnetite, Andalusite, Ilmenite, Zircon, Rutile and Monazite.
Figure 3: Mapped Data – Tres Chosas and Heldmaier Resource Areas and the Los Conchales Target Area
Scoping Study
A Scoping study has commenced and is expected to be completed in August 2012. The Scoping study will include the Proof of Concept study undertaken by Snowden. The Proof of Concept study undertook an initial analysis using results from the exploration target to determine whether the Project was economically viable.
The Proof of Concept study was based on a conceptual model with an exploration target of 1.1B to 4.4B tonnes across two conformable sediment units of weighted average 8.8% heavy mineral and 4.2% heavy mineral, based on a depth of 13.3m.
The Proof of Concept study concluded that if the exploration target was proven up as JORC compliant resources, it could potentially be extracted economically at low cost using proven mineral methods. Confirmation of an economically viable Project is dependent on further exploration and feasibility studies.
The Scoping study will determine a cash flow model whereby magnetite, andalusite and gold are produced. The mining operation will be expanded within 5 years to a 50Mtpa operation.
The Scoping study will determine the most suitable mining method and therefore provide an indication on operating costs. The study will also look at the off-take options including delivering magnetite to the Chimbote smelter and export to Asia.
Based on an annual tonnage of 35Mtpa and an average heavy mineral content of 4.4%-8.8%, the company would be expecting to produce between 1.5Mtpa and 3.1Mtpa of heavy minerals.