Resource World Magazine

A P R I L / M A Y 2 0 1 6 www.resourceworld.com 43 a u s t r a l i a n u p d at e G r e g B a r n s heROn ResOuRCes [HER-TSX; HRR- ASX] will be in a position to benefit from an upturn in base metals prices now that its Woodlawn zinc-copper project in New South Wales, Australia is well advanced with a feasibility study almost completed. In a recent presentation, Heron noted that falling warehouse stocks of zinc and a forecast metal deficit of 152kt in 2016 along with mine closures and production cuts augurs well for a stronger long term price. Copper is being driven by similar fac- tors with the International Copper Study Group recently indicating it believes the metal's supply and demand fundamentals for this year and 2017 are about balanced. There has been a 16% hike in the copper price since January. The Woodlawn Project, 250 km south- west of Sydney, was a producing mine from 1978 to 1998. It processed 13.8Mt of 9.1% zinc, 3.6% lead 1.6% copper, 0.5 g/t gold, and 74 g/t silver. Today, the project is split into two; the Woodlawn Underground Project (WUP) and the Woodlawn Tailings Retreatment Project (WRP). The WUP currently has polymetallic indicated resources of 1.6 Mt of 10.7% Zn, 4.0% Pb, 1.5% Cu, 78 g/t Ag, 0.46 g/t Au, plus 3.0 Mt of 8.1% Zn, 1.6% Cu, 3.2% Pb, 70 g/t Ag and 0.88 g/t Au inferred. The WRP has measured and indicated resources of 9.83 Mt of 2.25 Zn, 1.33% Pb, 0.51% Cu, 32 g/t Ag, 0.31 g/t Au, plus 1.11 Mt of 2.30% Zn, 0.47% Cu, 1.22% Pb, 26.9 g/t Ag and 0.25 g/t Au inferred. The Woodlawn Project mining licence has been recently renewed for a further 15 years by the New South Wales state gov- ernment and major project approvals have been allowing for mining at the Woodlawn site until 31 December 2034. The mineral rights and production are 100%-owned by Heron Resources. Surrounding the mine area is a larger exploration licence that includes a former satellite mine that pro- duced historically 0.5Mt of 13% Zn, 2.2% Pb, 1.6% Cu and 33 gt/t Ag. The A $11M Feasibility Study is fully funded and its key components include a completed drilling program, delivering numerous high-grade results. These include 9.1m of 31.6% ZnEq from 370m (18.3% Zn, 2.3% Cu, 4.6% Pb, 1.1g/t Au, 53.7g/t Ag); 4.6m of 47.2% ZnEq from 55m (24.4% Zn, 1.1% Cu, 13.6% Pb, 1.4g/t Au, 241g/t Ag). Resource estimation is well advanced with preliminary block models provided to SRK, an engineering company, for start of mine planning. The study has confirmed the Preliminary Economic Assessment con- centrate recovery and grade assumptions. With the completion of the Feasibility Study, Heron will then move to discussions with potential funding parties and con- struction of its plant. It is expecting first production in early 2018. The process plant will be designed to produce annually 51kt Zn, 10kt Cu and 16kt Pb plus Ag and Au. It will have a 1.5Mtpa throughput capacity. Both the WUP and the WRP have a combined mine life of around 11 years. The company says that the larger Woodlawn area is part of a 'quality massive sulphide district' and believes that there is explora- tion upside. Importantly, given the difficult capi- tal markets Heron Resources has about AUS $23M in cash and listed investments of AUS $3M. The healthy balance sheet will no doubt prove attractive to potential mine development partners. n Heron resources nears feasibility at Woodlawn

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