Resource World Magazine

AUST R ALIAN UPD ATE June. With that in hand we will proceed to get the land use permit in place that allows for the physical work on the ground to get started. We think this permit should be in place by the fall sometime." TriAusMin confirms Woodlawn underground potential by Greg Barns FEASIBILITY STUDY HIGHLIGHTS • The discounted cash flow analysis yields a 22.5% internal rate of return (IRR) on a pre-tax basis and a 19.6% IRR on an after-tax basis, assuming 100% equity financing. The Project's net present value (NPV) at a 10% discount rate is $1.351 billion(1) pre-tax and $900 million after-tax. (CIM definitions were followed for Mineral Reserves.) • Total Project construction capital costs are $1.575 billion, which is inclusive of a 13% contingency and $122 million in sustaining capital. Operating costs average $264.5 million per year. • Revenues average $645.8 million per year - $456.5 million from separated rare earth oxides (REO) and $189.3 million from the sale of an enriched zirconium concentrate (EZC). • Revenues from HREE are in excess of 50% of total project revenue. (Based on Mineral Resources in News Release dated November 26, 2012.) • Sales of the five critical REO (neodymium, europium, terbium, dysprosium and yttrium) account for over 82% of the separated REO revenues. Avalon also has the Separation Rapids Project in the Kenora Mining Division, Ontario, which hosts a giant deposit of the rare lithium mineral petalite. Bubar said they have recently, "dusted off the files and retrieved some more sample material out from the site last winter." He said, "We've had some new interest from the glass industry in the petalite product." Avalon also has two tin projects in Eastern Canada. Bubar said of the Nova Scotia tin project, "We are trying to work through some issues around the environmental liability from historic tin mining operations in the late 80s to get full access to look at doing a feasibility study to redevelop the site. There is a significant tin resource that was left in the ground. We have to do a little bit of work on it to bring it up to NI 43-101 standards before we can talk about it and we are planning to do that work this year. Tin is a pretty interesting commodity right now. There is more demand now than there was a few years ago from the electronics industry and there are relatively few supply sources." n 38 www.resourceworld.com During the 1980s and 1990s the Woodlawn base metals project in southern New South Wales, Australia, was a handy asset, producing 13.8 million tonnes grading 9.1% zinc, 1.6% copper, 3.6% lead, 74 g/t silver and 0.5 g/t gold.  TriAusMin Limited [TOR-TSX, ASX] is hoping to replicate that success with a tailings treatment operation and an underground mine. Located in the historically rich Lachlan Fold Belt of New South Wales, the Woodlawn Project has significant potential. The company's major priority, until recently, has been the Woodlawn tailings retreatment project. The Woodlawn tailings project has proven and probable reserves of 11.2 Mt at 2.2% zinc; 1.3% lead; 0.5% copper; 31 g/t silver; and 0.3 g/t gold. According to a business case developed last year, TriAusMine expects production to be at a rate of 4,300 tonnes/day.  Mine life is scheduled at 7.5 years and annual production is forecast at 7 M lbs Cu, 12M lbs Pb, 49 M lbs Zn, 470,000 oz Ag, and 1,800 oz Au. Operating costs are A$26/tonne of processed ore. The project will require A$92.8 million in development capital with a payback period of 3.8 years. However, in an interview in April with the Resources Rising website, Tri-AusMin CEO Wayne Taylor said the tailings project might have to play second fiddle to the underground project given the current market environment. "We could bring the tailings re-treatment project into production within 18 months, which would deliver cash flow quite quickly. But in a tough environment for financing mining project development, we're finding that prospective investors definitely seem to prefer the underground project, because of the higher grades," Taylor said. He noted that the tailings grades are "missing a bit of that excitement." The Woodlawn underground project is a high-grade ore body. It has JORCcompliant measured and indicated resources of 8.6 Mt at 10.3% Zn, 4.0% Pb, 1.8% Cu, 84 g/t Ag, and 0.5 g/t Au.  Inferred resources are 1.5 Mt at 9.6% Zn, 4.1% Pb, 1.7% Cu, 87 g/t of Ag, and 0.6 g/t of Au. Recent underground drilling results are confirming the potential of the underground project. On May 10, the company announced that drilling "delivered strong intercepts of 32 metres at 1.8% copper, 1.2% lead, 4.6% zinc, 22 g/t silver and 0.6 g/t gold from 377 metres. This intersection included 9 metres at higher grades. Importantly, the 2013 underground drilling program also confirmed the continuity of the high-grade I & D lenses, intersected in the 2012 drill program," the company said. For Taylor, these results mean that the Woodlawn underground mine will be a near term producer. "The discovery of this new high-grade sulphide lens confirms the potential for material additions to the existing 8.6 million tonne indicated and 1.5 million tonne inferred resource base at Woodlawn in an area immediately adjacent to the existing underground mine workings. This, together with the establishment of continuity of the I and D lenses adjacent to the existing mine workings, is expected to lead to the reopening of the Woodlawn Mine and for TriAusMin to establish itself as a profitable producing mining company in the near term," Taylor said. n JULY 2013

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