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Herald Resources Limited www.herald.net.au

Herald is an emerging lead/zinc producer. Herald’s primary focus is currently on the high-grade Dairi zinc/lead project in North Sumatra. The Dairi deposit is located within the Generation VII Dairi Contract of Works (CoW), 120km south southwest of the provincial capital Medan and 3km south of village of Sopokomil.

PT Dairi Prima Mineral is the current owner of Dairi CoW which is a joint venture between Herald 80% (via on offshore subsidiary Gain and Win) and PT Aneka Tambang (Persero) of Indonesia 20%. The CoW is a highly regarded title under which most of the mines operate in Indonesia. As the name suggests the CoW is a legally enforceable contract between the mining company and Republic of Indonesia, and set out in detail the mining company’s rights and obligations including income tax (30%) and royalties (1 – 2%).

The deposit was discovered in the late 1990’s following identification of massive sulphide outcrop in the late 1997. To date, a number of deposits have been discovered and have reported resources. The most advanced of these deposits is the Anjing Hitam deposit. The project area is accessed by a bitumen road from Medan to the town of Sidikalang, and by a lower grade provincial road to the village of Sopokomil the remaining 3km access to the base camp is by foot path. The estimated annual rain fall is 3,500 to 4,000 mm.

The Dairi project feasibility study has been completed and construction is expected to commence following forestry approval. Production is expected to commence two years from start of construction.

At full production the project is expected to produce 175kt of Zinc and 60kt of lead. The initial seven years of production is from Anjing Hitam deposit and is expected to be followed by other deposits in the area. There are numerous base metal occurrences in the Dairi district, especially north of the Sopokomil Dome, and there is good potential for additional discoveries. Currently the geological work is concentrating to get an improved understanding of regional and district-scale geology.

The orebody is accessed by a main decline (6m high X 5.5m wide) at 1:7 gradients. The total decline length is 2.24 km. Two additional declines for ventilation and past plant are included in the design. Combinations of open stoping and cut & fill methods are used in ore extraction process. Capital provisions are included for underground ventilation, ground water control and electrical requirements. It is estimated that it would take 9 months to reach the orebody and the steady state production of 85ktper month would be achieved in 25 month from the from start of project. All the decline development and ore mining will be by an experienced contact mining company. Total diluted ore to be mined is 6.6 mt @ 14.6% Zn, 8.8% Pb, 11 g/t Ag. The proposed mining method enables to extract 84% of the resource leaving 1.6 mt. If the geotechnical condition is better than expected then significant proportion of the remaining ore would be extracted.
Metallurgical test work carried out has been successful in demonstrating satisfactory level of metal recoveries; Zn 85% into a 55% concentrate and for Pb 75% into 64% concentrate. Minor amount of silver reports to both concentrate.

It is worth noting that the Zinc concentrate will have less than 6% Iron. The Dairi concentrate can be classified as medium “coarseness” which is in great demand by smelters in the region who are using “finer” concentrate produced by other mines. This will be a major advantage in marketing this product. Sample of concentrate has been sent a number of smelters for testing and feedback is positive.

The process flow sheet involves – single stage jaw crusher, primary grind to p80=40 micron with SAG/Ball mill combination, flotation and re-grind circuits to produce zinc and lead concentrate. The concentrate is dewatered and loaded on to purpose built sealed containers before being transported 220km to a purpose built port on the northern coast of Sumatra. The concentrator after ramping up will operate at 1.0 mtpa for four years and at 75% - 80% capacity in the later 3.5 years, partly as a function of past fill availability and ore extraction rate.

It is intended that the mine stopes and development drives would be filled with cemented past thickened tailing from the past plant. Only 25% of the total process tailings would go to the surface tailings dam which would be constructed to specification to permanently hold the tailings material and rehabilitated to permit agricultural activity.
 
© 2017 PT. Bumi Resources Tbk.