ASX: ANX

17 JANUARY 2022

only

UPDATED WHIM CREEK SCOPING STUDY -

EVELYN AND NEW STUDY WORK ADD EXCEPTIONAL VALUE

Anax Metals Limited (ASX: ANX, Anax, or the Company) is pleased to announce a JORC 2012 Mineral

  1. source Estimate for the high-grade Evelyn Deposit (Evelyn) and the results of the updated Scoping useStudy (the Study) for the Whim Creek Project (Project). The Whim Creek Project is 80% owned by Anax with the remaining 20% owned by Develop Global Limited (Develop), formerly Venturex Resources Limited (Venturex). The Scoping Study results are reported on a 100% Project basis pre-tax with all
    c rrency quoted in AUD, unless otherwise specified.

CAUTIONARY STATEMENT

personalThe Scoping Study referred to in this ASX announcement and accompanying Study Report has been undertaken to assess the potential for the development of the Whim Creek Copper-Zinc Project. It is a

preliminary technical and economic study of the potential viability of the Whim Creek Copper-Zinc Project with a nominal margin of error of ±30%. It is based on low level technical and economic assessments that are not sufficient to support the estimation of ore reserves. Further evaluation work and appropriate studies are required before Anax Metals Limited will be able to estimate any ore reserves or to provide any assurance of an economic development case. The Scoping Study is based on the material assumptions outlined below. These include assumptions about the availability of funding. While Anax considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.

To achieve the range of outcomes indicated in the Scoping Study, funding in the order of A$50 to 65 million will likely be required. Anax has signed an agreement with Anglo American Marketing Limited (Anglo), a subsidiary of Anglo American PLC, under which Anglo may provide project funding of up to ForUS$20 million for the development of the Project, investors should note that the funding is contingent n technical due diligence to be carried out by Anglo. Investors are therefore cautioned that there is no certainty that the Anglo funding will become available. In addition, there is no certainty that Anax will be able to raise additional funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Anax's existing shares. It is also possible that Anax could pursue other 'value realisation' strategies such as a sale, partial sale or joint venture of the project. If it does, this could materially reduce Anax's proportionate ownership of

the project.

The directors of the Company consider this to be a fair and balanced summary of the study undertaken. However, given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.

ASX Announcement | ASX Code: ANX | Page 1

JORC 2012 Mineral Resource completed for the high-gradeEvelyn Deposit at the Whim Creek Project (Pilbara, WA)
Evelyn Resource (no cut-off):
550 Kt @ 2.19% Cu, 3.49% Zn, 0.8 g/t Au and 35 g/t AgWhim Creek Project Global Resources now exceeds 10 Million Tonnes Exceptional additional value demonstrated in updated Scoping Study through:
Inclusion of Evelyn Deposit (potential open pit)
Reduction in power cost due to switch from diesel generator to gas-firedpower Incorporating results from bio-leachingtest work
Base case zinc price assumption revised from US$2300/t to US$2750/t The updated Study indicates the concentrator would produce:
39,000 Tonnes Copper; 70,000 Tonnes Zinc; 18,000 Tonnes Lead; 1.8 Moz Silver; 14,300 Oz Gold
Free Cashflow* of $291 Ma (Range: $249Mb and $459Mc)** Pre-productioncapital cost* estimate of $55 million Internal rate of return* of 83%a (Range: 72%b to 129%c) NPV* (6%) of $227Ma (Range: $192Mb to $363Mc)

HIGHLIGHTS

only•

•

•

•

usepersonal•

•

•

•

•

The Company's Managing Director, Geoff Laing, commented: "The Anax team continues to deliver on the Company strategy, to generate leveraged outcomes, on our projects and we are very pleased with the results of this updated study. Near term sustainable production from this valuable copper asset in the Pilbara remains the focus of the Anax team. The Definitive Feasibility Study is in progress and we are excited to be at the forefront of using smart technology to enhance project outcomes and deliver measurable environmental

Forbenefits."

  • Reported on a 100% Project Basis. Anax has an 80% interest in the project and will contribute 80% of costs and receive 80% of financial outcomes
  • Free Cashflow reported after financing and before tax.
  1. Base Case (medium-term) price assumptions: $8,550/t Cu; $2,750/t Zn, $2,100/t Pb, $25/oz Ag, $1,750/oz Au, US$1.00 = AU$0.73 b Long-term price assumptions: $7,700/t Cu; $2,500/t Zn, $2,000/t Pb, $25/oz Ag, $1,750/oz Au, US$1.00 = AU$0.73c
    c Spot price assumptions (12 January 2022): $10,080/t Cu; $3,570/t Zn, $2,345/t Pb, $23.15/oz Ag, $1,825/oz Au, US$1.00 = AU$0.73

ASX Announcement | ASX Code: ANX | Page 2

1. BACKGROUND

onlyIntroduction

The initial Study, released in August 2021,1 investigated mining of defined Mineral Resources at the Mons Cupri, Whim Creek and Salt Creek deposits, located 115km southwest of Port Hedland in the West Pilbara Region of Western Australia and 3 km south of the historic Whim Creek Hotel.

The Company is pleased to announce an updated Study for the Project, which incorporates:

use

  • An increased production target based on a new JORC 2012 Mineral Resource completed for the high-grade Evelyn Deposit, located approximately 25 km south of Whim Creek (Figure 1)
  • A switch to gas-firedpower from diesel generated power, delivering both cost and environmental benefits
  • Results from bacterial sulphide leaching test work
  • Updated base case Zinc Price assumptions

Key considerations and assumptions that underpin the revised Study, together with the results of personalupdated financial modelling are presented in this announcement. Additional information can be

found in the original Study released to the market on 30 August 2021.1 For

Figure 1: Whim Creek Project Location

ASX Announcement | ASX Code: ANX | Page 3

Table 1: Whim Creek Project Global Copper Dominant Mineral Resource

2. GEOLOGY AND RESOURCES

only

JORC 2012 Mineral Resource has been completed for the

high-grade Evelyn deposit by

A

independent resource consultancy, Trepanier Pty Ltd. Further details are provided later in this release. The updated combined global resources for the Whim Creek Project are shown below in Table 1 and Table 2 and now exceed 10 million tonnes.

use

Deposit

Classification

Kt

Cu %

Zn %

Pb %

Ag ppm

Au ppm

Mons Cupri2

Measured

990

1.62

1.42

0.61

38

0.28

(0.40% Cu Cut-off)

Indicated

3,130

0.84

0.47

0.20

16

0.09

Inferred

400

0.60

0.22

0.10

10

0.03

Salt Creek2

Measured

-

-

-

-

-

-

(0.40% Cu Cut-off)

Indicated

850

1.40

1.12

0.24

8

0.11

Inferred

460

1.15

2.41

0.60

27

0.16

personal

Whim Creek3

Measured

-

-

-

-

-

-

(0.40% Cu Cut-off)

Indicated

1,750

1.10

0.63

0.16

6

0.04

TOTAL Cu Resources

Combined

8,790

1.10

0.93

0.25

16

0.14

Inferred

660

0.56

0.17

0.08

2

0.02

Evelyn

Measured

-

-

-

-

-

-

(No Cut-off)

Indicated

440

2.40

3.89

0.30

40

0.95

Inferred

110

1.31

1.80

0.14

15

0.19

COMBINED

Measured

990

1.62

1.42

0.61

38

0.28

Indicated

6,170

1.10

0.85

0.20

14

0.14

Inferred

1,630

0.78

0.93

0.24

12

0.07

Note: Appropriate rounding applied.

Table 2: Whim Creek Project Global Zinc Dominant Mineral Resource (≥ 2.0% Zn; < 0.40% Cu)

Deposit

Classification

Kt

Cu %

Zn %

Pb %

Ag ppm

Au ppm

Mons Cupri2

Measured

70

0.16

4.56

1.79

53

0.23

For

Indicated

340

0.09

3.56

1.01

38

0.07

Inferred

150

0.08

4.84

1.96

27

0.04

Salt Creek2

Measured

-

-

-

-

-

-

Indicated

170

0.18

14.15

4.23

85

0.53

Inferred

380

0.12

8.75

2.57

62

0.25

Whim Creek3

Measured

-

-

-

-

-

-

Indicated

120

0.12

3.22

0.44

12

0.08

Inferred

45

0.13

2.46

0.40

9

0.04

COMBINED

Measured

70

0.16

4.56

1.79

53

0.23

Indicated

630

0.12

6.34

1.77

46

0.19

Inferred

575

0.11

7.22

2.23

48

0.18

TOTAL Zn Resources

Combined

1,275

0.12

6.63

1.98

47

0.19

Note: Appropriate rounding applied.

ASX Announcement | ASX Code: ANX | Page 4

Table 3: Key Cost and Revenue assumptions used in the Evelyn Pit Optimisation

The Mineral Resource estimates for Mons Cupri and Salt Creek were first announced by Venturex2 in

accordance with ASX Listing Rule 5.8 in its announcement of 23 March 2018 and reported by Anax in its

onlytechnical parameters underpinning the Mineral Resource estimate in the previous announcement c ntinue to apply and have not materially changed.

recompliance prospectus released on 18 September 2020.3 The Mineral Resource estimate for Whim

Creek was first reported by Anax in accordance with ASX Listing Rule 5.8 in its announcement of 25 May

2021.4 The Company confirms that it is not aware of any new information or data that materially affects

the information included in the previous announcements and that all material assumptions and

use3. MINING - EVELYN

Anax commissioned Orelogy Consulting Pty Ltd (Orelogy) to complete pit optimisations for Evelyn. Optimisations were previously completed for Mons Cupri, Whim Creek and Salt Creek and results were reported in the initial Scoping Study released in August 2021.1

Pit Optimisations

personalAs part of the initial study, mining costs were developed by Orelogy using first principals for a contract

mining strategy assuming a mining rate of ~9 million tonnes per annum (Mtpa) to feed the crusher at a rate of 800 ktpa. These assumptions were also applied for the Evelyn optimisation.

Limited geotechnical information is available for Evelyn, but indications from previous drilling are that the host rock is competent. A conservative approach was taken, however, and overall slope angles of 27 degrees were assumed for oxide and 39 degrees for fresh rock.

The parameters used in the Evelyn pit optimisation are shown in Table 3 and Table 4.

Parameter

Unit

Value

Copper Price

US$/t

8,550

Zinc Price

US$/t

2,300

For

Lead Price

US$/t

2,100

Ore loss

%

5%

Silver Price

US$/oz

25

Gold Price

US$/oz

1,750

Exchange Rate

USD: AUD

0.73

Dilution

%

5%

Overall Slope Angle (Oxide)

Degrees

27

Overall Slope Angle (Fresh)

Degrees

39

OP Mining Cost (Ave)

$/t

3.48

Crush and Primary Sort

$/t

4.00

Secondary Sort Haul/Crush/Sort/Stack on Heap

$/t

5.00

Concentrator Process Cost

$/t

45.00

ASX Announcement | ASX Code: ANX | Page 5

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Anax Metals Ltd. published this content on 16 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 January 2022 21:34:06 UTC.