PERILYA LIMITED - ASX: PEM

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Description

Perilya Limited is an Australian base metals mining and exploration company operating the iconic Zinc, Lead and Silver mine in Broken Hill, New South Wales. Perilya's operations also include the Flinders Project in South Australia and the Mount Oxide Project in Queensland.

Broken Hill Operations

In 2010 Perilya achieved a significant milestone - its first eight years of successful operation of its Broken Hill Mine. The company has brought a new lease of life to the historic Broken Hill mine since acquiring it in June 2002, increasing production and extending its life to more than six years based on existing reserves. During these eight years, Perilya Broken Hill mined approximately 15 million tonnes of ore and shipped over 800,000 tonnes of zinc metal and 450,000 tonnes of lead. Further increasing ore reserves and extending the mine life at Broken Hill to beyond 10 years are important cornerstones in the company’s strategy for sustainable growth.

Cerro De Maimon Operations

Cerro de Maimón, is an operating copper/gold mine in the Dominican Republic. Cerro de Maimón hosts approximately 6 million tonnes of open-pit copper/gold reserves, as reported in a National Instrument 43-101 compliant technical report dated August 2007 by independent consultants. The Cerro de Maimón property, and surrounding 3,391 hectare exploitation concession, was acquired from Falconbridge Dominicana (Falcondo) in April 2002. Falcondo retained a 2% NSR of which Perilya purchased 50% in 2008. The company owns 100% of the deposit, subject to the remaining 1% NSR retained by Falcondo. The Dominican Secretary of State of Environment and Natural Resources granted the Environmental License to Perilya to mine the Cerro de Maimón mineral deposit in 2004. There is potential for expanding the reserve base of the operation from satellite deposits in Perilya's 100% owned Maimón Concession surrounding the Cerro de Maimón deposit. The Maimón Concession covers approximately 85% of the Maimón massive sulphide belt.

Broken Hill North Mine Deeps - Development

The Broken Hill North Mine Deeps project has known mineralogy, an existing local mining workforce that can be expanded to accommodate the project and is in close proximity to Perilya’s existing infrastructure. The previously mined North Mine has known high grade mineralisation with potential for a significant ongoing mining operation at Broken Hill. The North Mine Deeps resource contains 3.7 million tonnes at 11.3 per cent zinc, 13.5 per cent lead and 219 g/t silver making it one of the highest grade deposits in the world. The Broken Hill North Mine Deeps project has known mineralogy, an existing local mining workforce that can be expanded to accommodate the project and is in close proximity to Perilya’s existing infrastructure. The North Mine and North Mine Deeps developments were placed on care and maintenance in September 2008.

Broken Hill Potosi - Development

The Potosi project, located approximately two kilometres north of the existing North Mine at Broken Hill, currently contains a mineral resource of 1.6 million tonnes at 13.0 per cent zinc, 3.1 per cent lead and 43.1 g/t silver. The mineral resource includes two mining zones – Potosi North and Potosi Extended, and these represent approximately 50 per cent of the targeted mineralised zones along strike.

Flinders - Development

Perilya has 100 per cent ownership of the Beltana high grade zinc oxide mine, as part of the Flinders Project, near Leigh Creek in South Australia. The Flinders project is robust for a wide range of zinc prices due to the direct shipping of ore to smelters. This is made possible by high grade deposits comparing favourably with the concentrate grade from other operations, hence obviating the need for concentrating the ore. Total mineral resources, in all categories, in the project area currently stand at 972,000 tonnes at 29.8 per cent zinc metal, containing almost 300,000 tonnes zinc metal.

Development of the Beltana zinc mine at Flinders comprised a 12 month open mining and on-site crushing program. Mining operations commenced in March 2007, ahead of schedule and under budget, and concluded in February 2008. The project was internally funded. The Beltana mine is the first phase of the Flinders Project, located 520 kilometres north of Adelaide in the Flinders Ranges, and involves direct shipment of high grade zinc oxide ore through Port Pirie to smelters in Asia. A total of 316.400 tonnes of zinc silicate ore was mined and stockpiled at an approximate average grade of 32 per cent zinc, for a total of 101,385 tonnes of contained zinc. Shipments of Beltana blended intermediate grade ore have been sold to China and on 24 January 2008, Perilya signed a two year agreement with Padaeng Industry Public Co. Ltd for the sale of approximately 60,000 tonnes of high grade ore and 50,000 tonnes (subject to further testing) of low grade ore from Beltana. This has established a solid marketing platform for intermediate grade ore. Sales of the stockpiled ore have now been completed. A current exploration program is activley being pursued.

Mount Oxide - Development

An 80% increase (announced on 28 February 2008) in the Mount Oxide mineral resource estimate to 203,000 tonnes of contained copper, together with the majority Indicated status of the resource, strengthens the project’s potential for development in the current strong copper market. Mount Oxide has considerable potential as a low cost near term development project. Mount Oxide is located in a proven mineralised system in the highly prospective Mount Isa region and is part of Perilya’s 720 square kilometre tenement holding in this area. It is close to existing infrastructure. Within the project area, Mount Oxide mine produced 51,000 tonnes of secondary copper ore at a grade of 21 per cent copper from an underground mining operation to a depth of 90 metres below surface, prior to 1958. Between 1968 and 1971, an unknown quantity of ore was also extracted from an open pit at the mine. The potential of the deposit was proven by previous shallow open cut mining and the resource is open at depth. Mount Oxide is located 25 kilometres from an under-utilised processing facility and close to a major mining service town. A feasibility study on the development of Mount Oxide is currently underway.

Moblan - Development

GlobeStar's Moblan project covers a group of pegmatite sills and dykes in Archean-age greenstone north of Chibougamau, Quebec, Canada that are characterized by high lithium (Li) values in the mineral, spodumene, a lithium aluminum silicate. The project is divided into two areas, West and East. The Moblan West property hosts the Main Sill pegmatite body. The Moblan West property comprises 14 contiguous staked claims covering 235 hectares in which GlobeStar earned an interest of 60% from SOQUEM in November 2008, having exceeding the required initial earn-in of US$150,000. A Technical Report prepared for GlobeStar on the Moblan West property was completed in December 2008. It provided Indicated mineral resources for the Main Sill in the Moblan West property of 5.34 million tonnes at an average grade of 1.51% Li2O and a cut-off grade of 0.43% Li2O.. In the higher grade eastern half of the Moblan West property, Indicated mineral resources were estimated at 2.09 million tonnes at an average grade of 1.85% Li2O, and at the same cut-off grade. The Moblan East property is less advanced than Moblan West and is made up of 11 contiguous staked claims covering 163 hectares owned 100% by GlobeStar.

broken Hill Extended Exploration

Perilya manages 1,042 square kilometres of prospective terrain around Broken Hill, which includes exploration licences over the historic Little Broken Hill and Pinnacles area, and mine leases incorporating the Southern Operations, North Mine and Potosi line. Exploration activities continue at Little Broken Hill, the Pinnacles and Stirling Vale where significant high-grade intercepts identified indicate that these assets could play a key role in the future of the Broken Hill operations. The Broken Hill ore body is the largest base metal ore body in the world, however controls on mineralization are poorly understood, despite decades of research.

Mount Oxide Exploration

An 80% increase (announced on 28 February 2008) in the Mount Oxide mineral resource estimate to 203,000 tonnes of contained copper, together with the majority Indicated status of the resource, strengthens the project’s potential for development in the current strong copper market. Mount Oxide has considerable potential as a low cost near term development project. Mount Oxide is located in a proven mineralised system in the highly prospective Mount Isa region and is part of Perilya’s 720 square kilometre tenement holding in this area. It is close to existing infrastructure. Within the project area, Mount Oxide mine produced 51,000 tonnes of secondary copper ore at a grade of 21 per cent copper from an underground mining operation to a depth of 90 metres below surface, prior to 1958. Between 1968 and 1971, an unknown quantity of ore was also extracted from an open pit at the mine. The potential of the deposit was proven by previous shallow open cut mining and the resource is open at depth. Mount Oxide is located 25 kilometres from an under-utilised processing facility and close to a major mining service town.

Rockhampton Exploration

Increased demand for resources has led to a recognition by downstream industry participants (smelters, metal traders) of the potential value in many of our near development/advanced exploration projects; such as Rockhampton Copper-Zinc. The Rockhampton project is 10 kilometres south-east of the old Mount Morgan mine in southeast Queensland. Mt Morgan produced 8 million ounces of gold and 350,000 tonnes of copper from 50 million tonnes of ore between 1882 and its closure in 1989. The project covers a 40 kilometre strike length of a sequence of altered and mineralised volcanics equated with the hosts sequence of Mount Morgan. Potential for discovering mineralisation similar to the Mount Morgan deposits is considered high.

Tampaing Exploration

The Tampang project is a joint venture, (the Ranau Joint Venture) with Malaysian partners Mega First Sdn Bhd, which covers a region of porphyry copper gold mineralisation in Sabah, Malaysia on the island of Borneo, 65 kilometres east of the state capital of Kota Kinabalu. The exploration project comprises two Prospecting Licences covering 327 square kilometres. Exploration commenced in 1996 under the 50:50 joint venture. Perilya is the exploration project manager.

Maimon Concession Exploration

Perilya's Maimón Concession covers approximately 80% of the Maimón massive sulphide belt surrounding GlobeStar's Cerro de Maimón copper/gold operation in the central Dominican Republic. The Maimón Concession extends for over 105 square kilometers of highly prospective exploration ground and has excellent potential to host massive sulphide mineralisation suitable for treatment at the Cerro de Maimón operation. The most advanced exploration project is Loma Pesada. Perilya's systematic approach to exploring the Maimón Concession has progressed from identification of regional geophysical and/or stream sediment anomalies to establishing exploration grids over targets confirmed by prospecting and mapping. Soil and rock sampling programs are carried out on promising targets and ground geophysics is employed to identify mineralization at depth. In 2007, GlobeStar commissioned Fugro Airborne Surveys to conduct a 68 square kilometer electromagnetic/magnetic HeliGEOTEM® airborne survey that covered most of the Maimón Formation. Subsequent data interpretation has identified over 40 electromagnetic anomalies of which at least 10 had not been identified previously. Perilya has completed ground reconnaissance on the new anomalies and two scout drilling programs were undertaken in 2008. The highest density of electromagnetic anomalies within the Maimón Formation is located in the vicinity of the Cerro de Maimón deposit. The area is defined by a 5 kilometer radius around the mine. Perilya's priority exploration programs for volcanogenic massive sulphide on the Maimón Concession are within this area. It includes the Loma Barbuito prospect and is being mapped at a scale of 1:10.000. The mapping program is focused on hydrothermal alteration and the identification of hydrothermal vectors towards mineralisation.

Bayaguana Concessions - Exploration

Perilya has 100% interests in the Managuá, Rincón Abajo and Trinidad Concessions and the Company's exploration program covers approximately 7,200 hectares of the Los Ranchos Formation. Perilya's concessions in the Bayaguana district cover a large area of intense alteration in the Los Ranchos Formation surrounding the Managuá volcanic centre and which is recognized as the largest hydrothermal alteration complex in the Dominican Republic outside the Pueblo Viejo system which lies 70 kilometers to the northwest. The Los Ranchos Formation hosts Barrick Gold/Goldcorp's operation at Pueblo Viejo where construction started in 2008. During 2008, Perilya reinterpreted the geology of the eastern segment of the Bayaguana district, particularly the Guaimarote basin on the Trinidad Concession, and considers that the geological setting is very similar to that of the Pueblo Viejo system. This interpretation has been confirmed by geologists at the Pueblo Viejo operation. Perilya believes that a large portion of the Bayaguana district has had little exploration for gold. Copper and silver are also associated with mineralisation in the Los Ranchos Formation.

Nickel Laterite Exploration

Perilya controls 60 square kilometers of nickel laterite concessions in the Dominican Republic. Two of Perilya's 100%-held concessions, C1 and Corozal, are located immediately adjacent to the Falcondo mining and smelting complex which has a nameplate capacity of approximately 28,000 tonnes of nickel in ferronickel annually. Perilya's strategy for its nickel laterite concessions is to maximize value to the Company by identifying mineralized material that may be processed economically through existing nickel facilities, or by other processing alternatives, including development of a stand-alone operation. The potential to utilize existing smelting infrastructure may provide Perilya with an advantage compared with similar greenfield, stand-alone nickel laterite projects.

Cuance-Los Hojanchos Joint Venture

Perilya is actively exploring the Cuance and Los Hojanchos Concessions for copper/gold massive sulphide and epithermal deposits within the Los Ranchos and Maimón Formations, with the goal of providing additional ore for the nearby Cerro de Maimón operation. Exploration is funded by Perilya's joint venture partner, Everton Resources Inc., which will earn an interest of 50% on expenditure of $1.17 million by July 31 2009. Everton may earn an additional 20% by funding a feasibility study to bring the project into production. Perilya is the operator of the Cuance-Los Hojanchos joint venture.

Mine For

lead, zinc, silver, iron ore, gold, copper, cobalt

Location of operation(s)

Queensland, South Australia, Malaysia

Address

Level 1, Building E, 661 Newcastle St
LEEDERVILLE, WA, AUSTRALIA

Phone

(61 8) 6330 1000

Email

Website

http://www.perilya.com.au/

Last Updated

21/02/2010