Shaw River Manganese (ASX: SRR) continues to move forward the Otjo Project in Namibia at speed, with the latest positive a resource upgrade.
The resource at Otjo has jumped 60% to 10.7 million tonnes at 22.2% manganese, which importantly includes the higher confidence maiden Indicated Resources of 3.8 million tonnes.
Vincent Algar, managing director, said that the resource increase and upgrade gives the company huge confidence in proceeding with its plans to develop a new manganese mine at Otjo.
A Feasibility Study is continuing and targeting production of up to 500ktpa of final product. The study is forecast to be delivered to the market in the September quarter of 2012, with the deadline extended due to evaluating the potential of a larger operation.
Otjo currently has an exploration target of 35 to 50 million tonnes at 23% to 27% manganese.
Production at Otjo historically has already demonstrated that grades of 36% to 42% manganese can be produced with low contaminants.
Shaw River holds a 75.5% stake in the project
Exploration targets resource growth
There is the potential for another resource upgrade in the short term, with a new 11,000 metre reverse circulation drilling program to commence at Otjo in April - which has an aim of increasing the resource to the milestone 20 million tonnes by September 2012.
Algar added, “What is even more exciting is the fact that there is outstanding potential to further grow resources, and to do so rapidly by targeting immediate extensions to the existing deposits.
“Further resource drilling will commence in April this year. This drilling will be designed to boost resources in the short term to around 20 million tonnes and, in the longer term, to convert the exploration target of 30 to 50 million tonnes.
“The achievement of this target would further validate the world-class potential of the Otjo Project.”
Feasibility Studies point to lower mining costs
Algar said that the company's Feasibility Studies which are ongoing and are being extended to the third quarter of calendar 2012 to investigate a larger operation, and suggest that Otjo has the potential to enjoy lower mining costs, as most the deposits outcrop and the open pits will be relatively shallow.
"Additional drilling will further expand the project resource inventory, while also improving our understanding its potential economics, whilst focusing on near-surface opportunities within 50 metres of the surface.”
Originally published at: http://www.proactiveinvestors.com.au/companies/news/25552/shaw-river-manganese-gains-confidence-to-develop-new-manganese-mine-at-otjo-in-namibia-25552.html