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Coventry Reports Encouraging Interim Results from Ongoing Metallurgical Testwork Program from Caribou Dome Copper Project

Coventry Resources Inc. is pleased to advise it has received the first interim results from an ongoing metallurgical testwork program being undertaken on samples from the high-grade Caribou Dome Copper Deposit in Alaska, USA.

In late 2015 approximately 70kg of representative drill core, comprising quarter core recovered during the Company's 2015 drilling program at the Project, were submitted to an independent metallurgical laboratory Arnofio Flotation Services for flotation testwork. Approximately 50kg of the sample material was from Lenses 4, 5 and 6; with the other 20kg from the Lense 7/8 area.

The first phase of metallurgical testwork has to date focused on conventional flotation of copper sulphides from only the Lense 4, 5 and 6 area. This sample averaged 5.03% copper.

Rougher recoveries of >85% copper into rougher flotation concentrates have been achieved. This exceeds recoveries achieved in the most recent historical testwork (2009).

Equally significant, cleaner concentrates grading as high as 24.5% copper have also been produced, which provides further confidence in the potential to produce a saleable copper concentrate using conventional flotation methods.

Although testwork parameters are yet to be optimised, these interim results are considered very encouraging and provide further confidence that a conventional flotation processing plant may provide a viable low-CAPEX pathway for the development of the Caribou Dome Project.

FURTHER METALLURGICAL TESTWORK

Having assessed the results of the testwork to date, consultant metallurgists have identified numerous conditions whereby higher copper recoveries might be achievable whilst maintaining a high copper concentrate grade.

Accordingly a second phase of testwork on samples from the Lense 4, 5 and 6 area has commenced (approximately 10kg of sample from this area remains, unused, to date). Results from this work are expected in late April.

On completion of this work, optimal parameters for initial metallurgical testwork on the samples from the Lense 7/8 area will be defined and utilised to assess whether the metallurgical properties of mineralisation in that area are similar to those in the Lense 4, 5 and 6 area.

ONGOING MINING STUDIES

Only 12,662 metres of drilling have been completed at the Caribou Dome Project to date. Significant thicknesses of shallow, high-grade mineralisation have been intersected along the entire initial 700m-long corridor drilled to date, with results including:

  • 51.1m* at 5.3% Cu from 4.4m
  • 18.1m at 9.3% Cu from 22.7m
  • 14.1m at 9.9% Cu from 134.6m
  • 18.4m at 6.3% Cu from 31.4m
  • 15.4m at 7.0% Cu (U/G drill hole)
  • 10.4m at 7.9% Cu from 14.0m
  • 12.8m at 5.8% Cu (U/G drill hole)
  • 13.0m at 4.9% Cu (U/G drill hole)
  • 10.1m at 7.1% Cu from 39.0m
  • 9.1m at 7.0% Cu from 28.7m
  • 10.2m at 6.2% Cu from 46.6m
  • 12.2m at 5.0% Cu from 27.1m

* True width estimated to be approximately 25m

Mineralisation remains open in all directions, hence it is highly likely additional mineralisation will be discovered with further exploration. Notwithstanding this, the Company has recently been undertaking preliminary mining studies to help target and optimise further exploration and resource expansion drilling at the Project.

The preliminary mining studies referred to in this report are based on high-level technical and economic assessments and are as yet insufficient to support Ore Reserves or to provide assurance of an economic development at this stage, or to provide certainty that the conclusions of the preliminary mining studies will be realised.

Preliminary Open Pit Mining Studies

The geological model for the mineralisation has recently been refined. This confirms there is considerable:

  1. shallow;
  2. high-grade; and
  3. thick mineralisation at the Project. An independent mining engineer was subsequently engaged to undertake initial open pit mining studies.

This work has confirmed that it should be possible to initially recover a considerable amount of mineralisation by way of open pit mining. This offers a low-capital-cost start-up development opportunity. Furthermore the thick and high-grade nature of the shallow mineralisation should have a positive impact on initial operating costs in the event the Company undertakes open pit mining operations at the Project.

Initial open pit modelling indicates two separate pits may be optimal, one to recover the shallow mineralisation in the Lense 2, 4, 5 and 6 area and the other to recover the shallow mineralisation in the Lense 7/8 area (see Figures 1 and 2). This appears to be primarily because there is very little drilling between these two areas. Indeed, delineation of additional shallow mineralisation between these two areas should have a positive effect on open pit mining costs. Further exploration in this immediate corridor is therefore a priority.

The open pit designed to potentially recover mineralisation from the Lense 7/8 area is also constrained by the lack of drilling to the north east (see Figure 1). Significantly, multiple geophysical (IP and mise-a-la-masse) and geochemical targets are evident in this immediate vicinity. These too are high-priority targets for further exploration

Preliminary Underground Mining Studies

Following completion of the first phase of open pit mining studies, an underground mining engineer was recently engaged to commence assessing potential recovery of deeper mineralisation. This work is progressing well, and has already highlighted multiple areas where further extensional drilling may delineate significant additional mineralisation.

Evaluation of Possible Capital Costs

While the Company is very confident further exploration will lead to the discovery of additional mineralisation at the Project, the Company has, as a base-case, been contemplating initial development of a reasonably small mining/conventional flotation processing operation to produce a typical copper concentrate.

In order to benchmark potential capital costs for development of such an operation, the Company has reviewed recent cost estimates for development of other operations. In particular it has assessed cost estimates for the potential development of (i) IDM Mining Inc's Red Mountain Gold Project in British Columbia, Canada, (ii) Avanco Resources Limited's Antas North Copper Project in Brazil, and (iii) Doray Minerals Limited's Deflector Copper-Gold Project in Western Australia. Development cost estimates for these projects ranged from US$55million to US$70million. Development of similar-sized operations at the Caribou Dome Project could potentially cost similar amounts.

Given the potential to initially develop a low-CAPEX, high-grade open pit mining operation at the Project before transitioning to underground mining, it is anticipated that there is scope to rapidly pay back any capital development costs.

Further exploration success would likely justify reoptimisation of the scale of development of a mining operation at the Project (and hence the capital development costs). Furthermore there are nuances in developing all mining projects and possible capital costs will have to be considerably refined further as Coventry advances the development of the Caribou Dome Project.

Source: http://www.coventryres.com/

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