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February 17, 2016

Bisha Mining Continues to Deliver Resource Growth from 2015 Drilling

Bisha Mining Share Company (“BMSC” or the “Company”) is pleased to announce the updated mineral resource estimate effective December 31, 2015, for both the Bisha and Harena deposits.  These updated resources form the first part of the annual year end mineral reserve and mineral resource statement for 2015.  The updated mineral reserve estimate, currently in-progress, will be released in the coming weeks.

Highlights

  • Increased Bisha district inferred resources which now contain 426 million pounds copper, 1.16 billion pounds zinc, 531 thousand ounces gold, and 18 million ounces silver
  • Increased Bisha district measured and indicated resources which now contain 959 million pounds copper, 3.56 billion pounds zinc, 840 thousand ounces gold, and 46 million ounces silver
  • 15% increase to Harena primary indicated resources, now 3.7 million tonnes at 0.86% Cu, 3.1% Zn, 0.6 g/t Au and 27 g/t Ag
  • 69% increase to Harena primary inferred resources, now 10.9 million tonnes at 1.45% Cu, 4.0% Zn, 1.0g/t Au and 41 g/t Ag
  • Bisha and Harena remain open at depth with further drilling ongoing in 2016
  • Positive Bisha and Harena underground scoping study, more investment warranted

 

Cliff Davis, BMSC Chairman, commented, “Our drilling at Harena continues to produce significant increases in the total resource available for the Bisha operation.  We anticipate that further drilling will continue to grow the deposit at depth.  Our exploration drilling was also successful in discovering new massive sulphide mineralization at Asheli, highlighting the prospectivity of the Bisha District to host additional resources.”  Mr. Davis went on to say, “The underground scoping study demonstrated the potential to extend Bisha Main life by transitioning to underground mining in the future and the potential to provide additional feed to the Bisha mill from a Harena underground mine. In 2016, we will further assess these opportunities through additional investment.”

Resource growth due to 20,308 metres of new drilling at Harena was the most pronounced development. The new drilling also led to an improved understanding of the geology and mineral zonation used in the resource estimation process.  Indicated resources at Harena grew by 480,000 tonnes or 15% from the previous year adding 12 million pounds of copper, 20 thousand ounces of gold and 560 thousand ounces of silver, offset by zinc indicated resources decreasing slightly by 10 million pounds.  Of most significance, the inferred resources at Harena increased by 4.5 million tonnes or 69% from the year earlier for an additional 186 million pounds of copper, 423 million pounds of zinc, 230 thousand ounces of gold and 6.47 million ounces of silver.  In-situ metal grade estimates in the inferred resource category also improved as contained copper grew by 115%, zinc by 80%, gold by 177% and silver by 82%. Tables 1.1 to 1.5 contain the complete mineral resource estimates for each deposit.

At Bisha, a relatively modest 2,819 metres of drilling was completed in 2015. Despite the lower commodity prices used in 2015 as compared with 2014 for mineral resource calculations, the measured and indicated resource at Bisha remained essentially unchanged from the year previous while the inferred resource decreased slightly by 0.3 million tonnes.  Year on year, the Bisha measured and indicated resources of contained zinc, gold and silver increased by 5%, 11% and 11%, respectively, helping to offset the 25% reduction in copper driven mainly by mine depletion of the supergene zone.

Life of Mine Optimization

In Q2 2015, BMSC commissioned SRK Consulting (Canada) Inc. to prepare an internal conceptual study (internal scoping study) of the potential for underground mining at Bisha and Harena as well as to conduct a life-of-mine optimization study considering all Bisha regional resources.  As this optimisation study used inferred mineral resources, no mineral reserves have been estimated.

Bisha Underground

The scoping study indicated that underground mining at Bisha is highly plausible and that some of the material currently in the open pit mine plan may be more economic if extracted by underground bulk mining methods as compared with high strip ratio open pit cutbacks.  An exploration drive would be required to further assess this opportunity with increased drilling to upgrade mineral resource classifications and further investigate geotechnical, hydrology and metallurgical rock characteristics.  A decision to drive an exploration ramp most likely in H2 2017 will be made following further exploration drilling and metallurgical and geotechnical test work which will be conducted from within the Bisha pit during 2016.

The scoping study also confirms the correct decision last year to halt the cutback (Phase 9) of waste stripping for the Bisha open pit.  If further work at Bisha main pit demonstrates that the upside potential is limited under the current economic and technical assumptions, waste stripping could be restarted with minimal disruption to the existing mine plan provided this happens over the next one to two years.

Harena Underground

For Harena, the underground mining scoping study used an interim mineral resource calculated mid-2015 which has since been superseded by the current larger resource in Table 1.3.  The study showed a potentially mineable deposit with marginal economics that was sensitive to metal prices and metallurgical recoveries.  Therefore, additional metallurgical drilling at Harena is planned during 2016 before making a decision to invest in an exploration decline which would be required to take the deposit through feasibility.  An updated scoping study including this work is expected in early 2017.

The current economics for Hambok and Northwest were less encouraging during the scoping study assessment.  Accordingly, in the current metal price environment no further investment is planned for Hambok or Northwest.

Qualified Person Statement

All mineral resource estimates in this report have been prepared by the Qualified Persons described below in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum's Classification System (CIM Definition Standards for Mineral Resources and Mineral Reserves 2010).

The information in this press release that relates to mineral resources was prepared by Phil Jankowski, a Qualified Person as defined by NI 43-101.  Mr. Jankowski has reviewed and approved the technical contents of this press release for his relevant sections.

 

A Quality Assurance/Quality Control programme was part of the sampling programme for the Bisha work. Certified reference material (standards), duplicates and blank samples are systematically inserted into the flow of drill samples and results analysed on a batch by batch basis. This programme includes a chain of custody whereby diamond drill core samples are initially crushed and subsampled at the Bisha Mine sample preparation facility and pulverised and analysed by Genalysis in Perth, Australia. Multi-element analysis is completed using ICP-AES methods; gold is analysed by fire assay with AAS finish. Reverse circulation drill samples are processed at the Bisha Mine on-site laboratory, which is a member of the SGS group. Multi-element analysis is completed using ICP-OES methods with gold also analysed by fire assay.

Forward Looking Statements:  The above contains forward-looking statements regarding increases in estimated grade and mineral resources and reserves, future production profiles, and the effect of future production profiles on future cash flows and net present value. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimated,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or be achieved. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors.  The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no obligation to update such forward-looking statements in the future.

Bisha Mining Share Company

“Cliff T. Davis”

Cliff T. Davis

Chairman

 

Mineral Resources

The below reported Mineral Resources for Bisha and Harena are inclusive of Mineral Reserves which will be reported later in our Annual Information Form.

Table 1.1 Mineral Resource Estimate (Combined Bisha, Harena, Northwest and Hambok)

Phil Jankowski, MAusIMM (CP), (BMSC), Effective Date: December 31, 2015

Measured

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

0.0

0

Supergene Phase

550

2.42

0.6

13

30,000

10

230

Primary Phase

1,150

2.79

3.55

0.8

48

71,000

90,000

30

1,770

Total Measured

1,700

101,000

90,000

40

2,000

Indicated

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

300

13.6

427

130

4,120

Supergene Phase

1,490

1.56

0.4

12

51,150

20

580

Primary Phase

36,540

1.00

4.31

0.6

33

806,390

3,471,490

650

39,300

Total Indicated

38,330

857,540

3,471,490

800

44,000

Measured and Indicated

Contained Metal

 

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

300

13.6

427

130

4,120

Supergene Phase

2,040

1.80

0.5

12

81,150

 

30

810

Primary Phase

37,690

1.06

4.29

0.6

34

877,390

3,561,490

680

41,070

Total Meas & Ind

40,030

958,540

3,561,490

840

46,000

Inferred

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

1,060

3.6

35

121

1,180

Supergene Phase

1,400

1.23

0.2

4

38,000

10

190

Primary Phase

12,572

1.40

4.18

1.0

42

388,430

1,158,410

400

16,860

Total Inferred

15,032

426,430

1,158,410

531

18,230

 

Table 1.2 Bisha Mineral Resource Estimate

Phil Jankowski, MAusIMM (CP), (BMSC), Effective Date: December 31, 2015

Measured

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

Supergene Phase

550

2.42

0.6

13

30,000

10

230

Primary Phase

1,150

2.79

3.55

0.8

48

71,000

90,000

30

1,770

Total Measured

1,700

101,000

90,000

40

2,000

Indicated

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

300

13.6

427

130

4,120

Supergene Phase

470

1.76

0.6

17

18,000

10

250

Primary Phase

23,430

0.98

5.56

0.7

43

506,000

2,872,000

520

32,730

Total Indicated

24,200

525,000

2,872,000

660

37,110

Measured and Indicated

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

300

13.6

427

130

4,120

Supergene Phase

1,030

2.11

0.6

15

48,000

20

490

Primary Phase

24,590

1.07

5.47

0.7

44

577,000

2,962,000

550

34,500

Total Meas & Ind

25,920

625,000

2,962,000

700

39,110

Inferred

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

400

4.3

60

60

780

Supergene Phase

1,300

1.28

0.1

3

36,000

0

120

Primary Phase

1,600

1.09

5.94

0.7

50

38,000

204,000

40

2,520

Total Inferred

3,200

74,000

204,000

100

3,420

Table 1.3 Harena Mineral Resource Estimate

Phil Jankowski, MAusIMM (CP), (BMSC), Effective Date: December 31, 2015

Indicated

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

Primary Phase

3,720

0.86

3.14

0.6

27

70,000

258,000

70

3,260

Total Indicated

3,720

70,000

258,000

70

3,260

Inferred

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

130

2.0

21

10

90

Primary Phase

10,870

1.45

3.97

1.0

41

348,000

952,000

350

14,280

Total Inferred

11,000

348,000

952,000

360

14,360

Table 1.4 Northwest Mineral Resource Estimate

Phil Jankowski, MAusIMM (CP), (BMSC), Effective Date: December 31, 2014 (not updated as no change to drill information)

Indicated

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

Supergene Phase

1,020

1.47

0.2

10

33,150

10

330

Primary Phase

2,530

1.04

1.08

0.3

13

58,020

60,250

20

1,050

Total Indicated

3,550

91,170

60,250

30

1,380

Inferred

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

500

3.7

18

50

300

Supergene Phase

100

0.8

3.7

19

2,000

10

70

Primary Phase

100

0.9

0.9

2.9

15

2,400

2,400

10

60

Total Inferred

700

4,400

2,400

70

430

Table 1.5 Hambok Mineral Resource Estimate

Phil Jankowski, MAusIMM (CP), (BMSC), Effective Date: December 31, 2014 (not updated as no change to drill information)

Indicated

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

Primary Phase

6,860

1.14

1.86

0.2

10

172,370

281,240

40

2,260

Total Indicated

6,860

172,370

281,240

40

2,260

Inferred

Contained Metal

Tonnes

Copper

Zinc

Gold

Silver

Cu

Zn

Au

Ag

Zone

('000s)

%

%

g/t

g/t

('000 lbs)

('000 lbs)

('000 Oz)

('000 Oz)

Oxide Phase

20

1.5

17

1

10

Primary Phase

2

0.9

0.2

0.2

8

30

10

0

0

Total Indicated

22

30

10

1

10

Bisha and Harena notes to be read in conjunction with the Resource tables above:

(1) Mineral Resources are defined within an optimal Lerchs-Grossman (LG) pit shell, generated using metal prices for copper, zinc, gold and silver of $3.15/lb, $1.10/lb, $1,265/oz and $21/oz respectively using blocks of all Resource categories. The mining cost and total ore based cost (process, G&A and stockpile rehandle) applied was approximately 10% below the long term view on costs with appropriate ore haulage costs for each satellite deposit. Overall pit slopes varied from 31 deg to 44 deg for Bisha and 29 deg to 44 deg for Harena NSR cut-off ($US/t) used were:

a. Bisha: $37.50 for Oxide Phase; $37.00 for Supergene and $38.50 for Primary Phase.

b. Harena: $40.00 for Oxide Phase and $41.00 for Primary Phase.

(2) Net Smelter Return values were calculated for each block using all resource categories, metal prices, recoveries, appropriate smelter terms and downstream costs. Metallurgical recoveries, supported by metallurgical test work, were applied as follows:

a. Bisha oxide zone: recoveries of 88% and 22% were applied for gold and silver respectively.

b. Harena oxide zone: a recovery of 75% and 22% were applied for gold and silver respectively.

c. Bisha Supergene zone; recoveries of 83.3%, 55.5% and 70% were applied for copper, gold and silver respectively.

d. Bisha Primary zone; recoveries to copper concentrate of 85%, 36% and 29% were applied for copper, gold and silver respectively. Recovery to zinc concentrate of 83.5% was applied for zinc.

e. Harena primary zone; recoveries to copper concentrate of 85%, 36% and 29% were applied for copper, gold and silver respectively. A zinc recovery to zinc concentrate of 72% was applied.

(3) Mineral Resources are reported within the pit shell generated using the specified commodity prices, using NSR block grade cut-off derived as above. Tonnage is rounded to the nearest 10,000 tonnes and grades are rounded to two decimal places for copper and zinc, one decimal place for gold and zero decimal places for silver. Tonnages and grades for the Inferred category are further rounded reflecting the uncertainty that attaches to this category. Contained metal for copper and zinc are rounded to the nearest million pounds for Bisha and Harena.

(4) Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content.

(5) Tonnage and grade measurements are in metrics units. Contained gold and silver ounces are reported as troy ounces, contained copper and zinc pounds as imperial pounds.

(6) Stockpile tonnages are included in the total given in the tables for Bisha and Harena, with their resource category generally reflecting the underlying resource category from which they were derived.

(7) Both the Bisha and Harena Primary Inferred Resources includes an Underground Resource. These were derived by defining a shape around contiguous blocks outside the optimized resource pit shell, where an overall NSR of $100 was achieved. The value of NSR $100 represents the processing cost plus approximately $60/t mining cost.

(8) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Hambok and Northwest notes to be read in conjunction with the Resource tables above:

(1) No change has occurred to Hambok and Northwest since 2014 which used metal prices for copper, zinc, gold and silver of $3.35/lb, $1.05/lb, $1,350/oz and $23/oz, respectively. Mineral Resources are defined within an optimal Lerchs-Grossman (LG) Pit Shell. The mining cost and total ore based cost (process, G&A and stockpile rehandle) applied was approximately 10% below the long term view on costs with appropriate ore haulage costs for each satellite deposit. Overall pit slopes varied from 39 to 45 for Northwest and 40 overall for Hambok (preliminary assessment). NSR cut-off ($US/t) used were:

a. Northwest: $40.70 for Oxide Phase, $39.70 for Supergene and Primary Phase.

b. Hambok: $44.45 for Oxide Phase and $43.45 for Primary Phase.

(2) Net Smelter Return values were calculated for each block using all resource categories, metal prices, recoveries, appropriate smelter terms and downstream costs. Metallurgical recoveries, supported by metallurgical test work, were applied as follows:

a. Northwest oxide zone; recoveries of 88% and 22% were applied to gold and silver respectively.

b. Northwest Supergene zone; recoveries of 87%, 46% and 50% were applied for copper, gold and silver respectively. Zinc has not been assigned a recovery as the values are isolated on the fringes of the deposit.

c. Northwest Primary zone; recoveries to copper concentrate of 87%, 36% and 29% were applied for copper, gold and silver respectively. Recoveries to zinc concentrate of 81%, 36% and 29% were applied for zinc, gold and silver respectively.

d. Hambok oxide zone; recoveries of 88% and 22% were applied to gold and silver respectively.

e. Hambok; recoveries to copper concentrate of 88%, 87%, 36% and 29% were applied for copper, zinc, gold and silver respectively. Preliminary metallurgical characterization studies, but not full testing, have been completed for Hambok.

(3) Mineral Resources are reported within the pit shell generated using the specified commodity prices, using NSR block grade cut-off derived as above. Tonnage is rounded to the nearest 10,000 tonnes and grades are rounded to two decimal places for copper and zinc, one decimal place for gold and zero decimal places for silver. Tonnages and grades for the Inferred category are further rounded reflecting the uncertainty that attaches to this category. Contained metal for copper and zinc are rounded to the nearest million pounds for Bisha and Harena.

(4) Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content.

(5) Tonnage and grade measurements are in metrics units. Contained gold and silver ounces are reported as troy ounces, contained copper and zinc pounds as imperial pounds.