Name and Location
Namib lead/zinc/silver mine project, Namibia.

Client
North River Resources (NRR).

Project Description
Namib was operated as the Deblin mine between 1968 and 1991. It was abandoned by its owners in 1992 and remained idle until its acquisition by Kalahari Minerals in 2007. In 2009 NRR acquired the project and began an investigation into its reopening.

The definitive feasibility study (DFS) has confirmed that the Namib project is technically low risk and economically robust.

The project has a maiden mineral ore reserve of 585 000 t at 6.2% zinc, 2.9% lead and 46 parts per million silver.

Total mineral resources are estimated at 1.25-million tonnes at 2.5% lead, 6.5% zinc and 43.7 g/t silver, equivalent to a 3.5-year mine life.

According to the DFS, the project will have a yearly throughput of 250 000 t at an average grade of 9% lead and zinc, producing 19 100 t of metal in concentrate. Silver by-product output is estimated at 280 000 oz/y.

The process route is based on simple bulk crushing and milling followed by lead then zinc flotation.

The project has an initial mine life of 3.5 years and resources of 1.25-million tonnes, equivalent to a five-year life-of-mine (LoM). The resource expansion programme is continuing and it is expected that the mine life will grow further over the coming year.

Net Present Value/Internal Rate of Return
According to the cash-flow models produced in the DFS – one based only on the initial reserve, the other considering all resources as an LoM plan – the project has a net present value, at an 8% discounted resource value, of $50.26-million, and a reserve value of $31.17-million. The project has an estimated internal rate of return of 65% (resource value) and 45% (reserve value).

Payback based on the resource value is estimated at 12 months, while payback on the reserve value is estimated at 15 months.

Value
The total life-of-mine capital cost of the project is estimated at $27.78-million and the reserve total estimated at $27.8-million.

Duration
The project will take 13 months to bring the mine into production.

Latest Developments
NRR will, as part of a two-stage fundraising programme, raise $4-million to progress its flagship lead/zinc Namib project to a construction decision.

The funding will be undertaken through an initial placing of $1.2-million of unsecured 10% convertible loan notes, followed by a $2.8-million placing and open offer of new ordinary shares to new and certain existing shareholders in September.

NRR’s biggest investor and private equity fund, Greenstone Resources, will conditionally subscribe or underwrite the full $4-million, providing the first $1.2-million immediately after NRR’s general meeting.

The fundraising will enable NRR to continue to work towards delivering an economically and operationally robust project ahead of construction.

The first phase will result in the initial front-end engineering and design, early development of the Namib project North decline, sourcing of plant and equipment, starting an ongoing underground development programme required to establish access for the next phase of resource expansion drilling, and recruitment of technical and operational staff.

“While the licence application process has prompted some slippage in the development schedule, we are confident that this will soon be forthcoming.

“As demonstrated by Greenstone's ongoing support for the Namib project, we are not alone in this belief and I am hopeful that our shareholders share this confidence in what is a standout brownfield asset located in a highly attractive mining environment,” NRR CEO James Beams has said.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
NRR, tel +264 64 461701, fax +264 61 300209 or email reception@northriverresources.com.