Block 4 and 5 Copper Projects, Oman
Savannah has rights to two blocks covering 1,004km² in the copper-rich, Semail Ophiolite Belt in the Sultanate of Oman, a region proven to host clusters of moderate to high-grade copper deposits with gold credits and metallurgically simple ores. The two blocks are located approximately 180km northwest of Muscat, the capital city of Oman, and within close proximity to the export Port of Sohar. The Company’s strategy is centred on building a copper and gold resource inventory to support high margin, low cost operations and establish Savannah as a commercial producer, with initial production targeted for late 2017.
Mineral Resource and Exploration Target
The Ophiolite belt is characterised by medium to high grade copper deposits with gold credits and metallurgically simple ores that have been shown to be amenable to profitable, open-cut development, to produce high quality copper concentrates for local or overseas smelters. Despite the region's rich history of copper production there has however been limited modern exploration in Oman. The Company and its Omani partners aim to capitalise on this by applying rigorous, modern exploration techniques such as Versatile Time Domain Electromagnetic Surveying (‘VTEM’). Importantly, all new discoveries in Oman over the past 10 years have largely come out of the application of VTEM.
Block 5 has a current Indicated and Inferred Mineral Resource of 1.7Mt at 2.2% copper ('Cu'), including a high-grade zone of 0.5Mt at 4.5% Cu, which was defined at the Mahab 4 target. This resource has been delineated at the Mahab 4 (1.51Mt at a grade of 2.1% copper for 31,500t of contained copper) and Maqail South (0.16Mt at a grade of 3.8% copper) deposits. Significant potential has been identified to increase the current resource potential, with the deposits remaining open along strike. Mining licences were applied for in September 2016 for open-cut development at the Maqail South deposit and for an underground development at the Mahab 4 deposit.
At Block 4, the Company has defined multiple prospective targets for development. This includes four targets (Aarja, Zuha, Lasail and Bayda) which host old copper mines that collectively produced over 190,000t copper and boast existing mine infrastructure to support rapid development and exploitation, and two targets with additional gold upside potential (Salahi 1 and Gaddamah). A number of exploration programmes have been conducted across these targets, with results returned including;
Aarja – drill results: 9m at 4.86% copper, 1.54% zinc, 1.3g/t gold and 37.3g/t silver, including 6m at 7.01% copper, 2.20% zinc, 1.9g/t gold and 53.8g/t silver from 103m, from the Dog’s Bone area
Bayda - 33.4m at 0.69% copper and 0.1g/t gold in 16B4DD003 from 87m including 4m at 1.56% copper and 5.1m at 1.22% copper
Based on the results received to-date (both from work undertaken by Savannah and from historical data) and other exploration factors, a series of internally generated Exploration Targets have been calculated for each of Savannah's high priority areas, namely the Mahab 4 and Maqail South deposits in Block 5 and the Aarja and Bayda and Lasail deposits in Block 4. This has led to the projection of an Exploration Target between 10,700,000t and 29,250,000t grading at between 1.4%/t and 2.4%/t copper with additional gold credits.*
*It is important to note that the potential quantity and grade of the Exploration Target is conceptual in nature, there has been in sufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Savannah is focussed on building a copper and gold resource inventory to support high margin, low cost operations, with initial production targeted for late 2017. To this end, Savannah has initiated a fast paced exploration programme focused on advancing the identified high priority target areas in Block 4 and 5 and increasing the current mineral resource of 1.7Mt at 2.2% copper. To support near term development objectives, Savannah continues to assess a number of potential production routes relating to the establishment of a central processing facility in Oman. Leveraging shared infrastructure with other local operators will help minimise capital expenditure and maximise operating margins. Mining licence applications for open-cut development at the Maqail South deposit and for underground development at the Mahab 4 deposit were applied for in September 2016 and advanced discussions with Government ministries have also commenced. Technical feedback is being sought from eight Government departments in order to finalise financial evaluations of the mine developments.