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KAGARA LIMITED

ASX: KZL

The data on Australian Shares.com is intended as a guide only and is compiled from information in the public domain. Data on this website should not be used to make an investment or trading decision.

Description

Kagara Ltd is an S&P ASX 200 Australian resources group (ASX ticker: KZL) and one of Australia’s lower cost producers of zinc, copper, lead and nickel.

The Company’s base metals operations centre on the Mt Garnet-Chillagoe region of north Queensland, with three underground mines, one open pit mine and three processing facilities and a substantial production profile targeting copper production of 23,000 tonnes in FY2011 and zinc production of 100,000 tonnes in FY2012.

Production is also underway at the Lounge Lizard Nickel Project in Western Australia at a targeted nickel ore production rate of 50,000 tonnes per annum.

In addition, Kagara holds an extensive portfolio of high quality development and exploration assets, including the world-class Admiral Bay zinc-lead-silver-barite deposit in Western Australia, capable of delivering long term growth for the Company’s shareholders well into the future.

Western Australia Operations

• Acquired for A$25 million in 2006 from LionOre Mining International
• Development commenced in January 2010 under agreement with neighbour Western Areas NL, which owns the adjoining Flying Fox Nickel Mine
• Production of 1,700 tonnes of nickel for the 2010/11 financial year
• High-grade resource of 1.15Mt @ 4.6% Ni for 103,300t of contained nickel
• Concentrate sold into Western Areas’ existing nickel off-take agreements with BHP Billiton and Jinchuan Group Ltd
• Potential for significant additional resources to be delineated

Queensland Operations

• Three underground mines, one open pit mine
• Flexible, high-grade production base, with targeted zinc production of 45,000 tonnes and copper production of 23,000 tonnes in the 2010/11 financial year
• Three treatment plants currently in operation, processing ore from multiple production centres
• Long-term off-take agreements in place with Korea Zinc and Transamine Trading S.A
• Newly commenced mining operation at Vomacka deposit to add 20,000t to zinc production in the 2011/12 financial year

Admiral Bay Zinc Project, Western Australia

• Major undeveloped zinc-lead-silver deposit with significant discovery upside
• Discovered in 1981 and explored by CRA Exploration
• Maiden Resource of 72 million tonnes grading 3.1% Zn, 2.9% Pb, 18g/t Ag and 20% Ba
• Pre feasibility study completed in July 2010 with key recommendation that Kagara proceed to a Bankable Feasibility Study (BFS)
• Potential 3-10Mtpa operation producing up to 450,000tpa zinc of concentrates, 350,000tpa of lead concentrates containing 7.5Mozpa silver

Mungana Goldmines, Queensland

• Kagara retains 62.1% stake in ASX-listed Mungana Goldmines (ASX: MUX) following a A$56.5M spin-off in June 2010
• Combined resources of 1.85Moz gold, 180,000t copper and 13Moz silver
• Targeting a defined resource capable of producing greater than 150,000 ounces of gold and 60,000 tonnes of copper concentrate per year
• Outstanding exploration potential within 814km2 tenement portfolio

West 45, Queensland

West 45 currently contains an inferred resource of 532,000 tonnes grading 7.2% zinc, 3.0% lead, 0.5% copper, 48 grams per tonne silver and 0.26 grams per tonne gold. An infill and extension drilling program is currently underway which is expected to significantly increase the contained metal within the resource. The current drilling program is being carried out in preparation for mining of the West 45 ore body and as soon as a reserve is established, detailed mining studies will commence. As the majority of the ore body lies within 200 metres of the surface, both open pit and underground mining options will be considered. It is expected that West 45 ore will then be processed through the Thalanga polymetallic treatment plant in 2012/2013 following the completion of processing Vomacka ore.

King Vol, Queensland

• Reserve of 1.3Mt @ 11.2% Zn & 0.7% Cu
• Additional resource of 2.0Mt @ 14.0% Zn and 0.8% Cu
• Deposit remains open at depth
• Significant addition to resource inventory in the Chillagoe region

Liontown, Queensland

Kagara purchased the Liontown polymetallic deposit from Liontown Resources Ltd for A$4.5 million in December 2009. The project comprises a granted mining lease M/10277 and a surrounding ground package of 51.5km2, and is located only 30 kilometres from Kagara’s Thalanga concentrator, which has recently been upgraded to process polymetallic ore. The Liontown deposit contains 1.85 million tonnes at 7.5% zinc, 2.4% lead, 0.6% copper, 28 grams per tonne silver and 0.55 grams per tonne gold and is located along strike from Kagara’s high-grade Waterloo deposit (476,000 tonnes at 13.5% zinc, 2.5% lead, 2.0% copper, 67 grams per tonne silver and 1.39 grams per tonne gold).

Balcooma, Queensland

Development of the Balcooma underground copper deposit continues with a total of 45,767 tonnes at 3.1% copper ore produced from the project.

Waterloo, Queensland

The Waterloo deposit is located 40km east of Kagara’s Thalanga treatment facility, and has a current Indicated and Inferred Resource of 476,000 tonnes grading 13.5% zinc, 2.4% copper, 1.9% lead, 1.42 grams per tonne gold and 67 grams per tonne silver. Recent drilling at the project, designed to increase the integrity of the resource as part of a program to define a reserve, returned some of the highest grade intersections received from Waterloo to date including 15.35 metres at 20.8% zinc, 4.6% copper, 2.2% lead, 2.3 grams per tonne gold and 117 grams per tonne silver.

Maitland, Queensland

The Maitland copper deposit was acquired in 2008 from Glengarry Resources Ltd, and is located approximately 50 kilometres from Kagara’s Balcooma mining operations. The Project includes an Indicated and Inferred copper-molybdenum resource of 1.49 million tonnes grading 1.5% copper.

Mount Garnet Region Exploration, Queensland

Drilling commenced at Mt Garnet in early November 2010, designed to test the down plunge extension of the Mt Garnet deposit.

Chillagoe Region Exploration, Queensland

Kagara has a pipeline of key exploration targets within the highly-prospective Chillagoe region, with key priorities including:

• Victoria Prospect (current Inferred Resource of 3.44Mt @ 5.1% Zn, 1.0% Cu);
• Montevideo Prospect (current Inferred Resource of 720,000 tonnes @ 7.7% Zn, 0.5% Cu);
• Red Cap Prospect where drilling has intersected 3.2m @ 6.7% Zn, 1.0% Pb and 92m @ 0.7% Zn, 0.8% Pb;
• Nolans Prospect where drilling has intersected 30m @ 1.3% Zn; and
• Belgravia where drilling has intersected 4.0m @ 7.0% Zn, 1.5% Cu and 102g/t Ag.

Thalanga Exploration, Queensland

Kagara has built an impressive landholding within the Thalanga region, with numerous exploration targets in close proximity to the Thalanga treatment facility. Outside of the Vomacka deposit, which is currently in production, the nearby West 45, Orient, Waterloo and Liontown polymetallic deposits are expected to form a key source of future ore feed for the Thalanga treatment facility. These deposits currently contain a combined total of 3.1 million tonnes grading 8.8% zinc, 2.5% lead, 0.9% copper, 40 grams per tonne silver and 0.6 grams per tonne gold, with the Company seeking to increase this resource base over the 2010/11 financial year.

Forrestania Exploration Project

Since first purchasing the Lounge Lizard Project in 2006, Kagara has amassed a large landholding in the Forrestania region of Western Australia, and now controls approximately 300 square kilometres of the Forrestania Greenstone Belt and in excess of 20 strike kilometres of the Western Ultramafic unit which hosts the Lounge Lizard, Flying Fox, New Morning, Beautiful Sunday and Spotted Quoll deposits.

Kagara also controls 30 strike kilometres of the Eastern Ultramafic unit which hosts the Digger Rocks and Cosmic Boy deposits and several nickel sulphide and gold occurrences.

A $5 million diamond drilling program commenced at Forrestania in July 2010. This has been designed to test for repeats of nickel sulphide mineralisation in the Forrestania Greenstone Belt, which is one of the most highly endowed high grade nickel exploration environments in Australia. Priority areas include the immediate strike extension of the Lounge Lizard deposit. Further regional targets include down dip of the Western Area’s Beautiful Sunday deposit (indicated resource of 480,000 tonnes at 1.4% nickel) and down dip of the Boojum, Arrow Head and Willy nickel prospects.

To the end of the September 2010 quarter Kagara had completed 10 drill holes totalling 6,715 metres. Drilling south of Lounge Lizard has limited the immediate along strike potential but the deposit remains open down plunge and cumulate ultramafic rocks have been encountered in a structurally complex area at the south end of the tenement. The prospectivity of the Lounge Lizard tenement along strike is still to be systematically tested. Stratigraphic drilling of the western ultramafic belt is being undertaken on holes centred up to one kilometre apart. This program is designed to test the western belt at approximately 600 metres vertical depth where it is interpreted to pass into Kagara’s ground.

In addition to the drilling, a ground electromagnetic (EM) survey has been conducted over tenements at the Cross Roads prospect where disseminated and stringer nickel sulphides have been intersected by drilling in the past. The results of this survey are being assessed.

Mine For

zinc, copper, lead, nickel, silver, barite

Location of operation(s)

Queensland, Western Australia

Address

2nd Floor , 24 Outram Street
WEST PERTH, WA, AUSTRALIA

Phone

(08) 9481 1211

Email

Website


Last Updated

10/5/2011

 

The data on Australian Shares.com is intended as a guide only and is provided purely as an indication of what information can be found through official announcements. Data on this website should not be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. The publisher (Intaanetto Pty Ltd) will not be held liable for any loss arising from the use of this website.