Zamia Metals (ASX: ZGM) has significantly increased the Inferred Resource at the Anthony molybdenum (Mo) deposit in central Queensland.
Hellman & Schofield produced the resource estimate for the Anthony deposit from drill holes announced on 13 December 2010, 2 February 2011 and 21 February 2011.
The sulphide resource increased by 38% to 173 million tonnes at 430 ppm Molybdenum (Mo) for 163 million tonnes of contained Mo. The high grade portion of the deposit increased by 56% to 20 million tonnes at 810 parts per million (ppm) Mo for a contained Mo of 36 million tonnes.
This resource upgrade represents a significant jump in both grade and tonnage at Anthony for Zamia. If near-surface oxide and transition (partly oxidised) material was taken into account in the estimate, the total resource is 233 million tonnes at 420 ppm Mo.
A simple pre-concentration process can upgrade both the lower grade oxide and sulphide resources, which surround the higher grade zones.
With the net effect the grade will increase in the material to be processed in the early years, which would have a significant positive impact on cash flows for the project in early years.
As well the Anthony project is located in an area endowed with excellent infrastructure, there is a sealed road to the site and close proximity to port, near the towns of Clermont, Emerald and Moranbah. There is also grid power nearby and a new water pipeline planned.
Resource estimates are reported only if they occur within a conceptual pit shell. There is potential for additional resources within the pit shell and drilling is continuing to test the extent and depth of the resource.
Based on recent drill holes, the Anthony deposit contains higher grade sulphide and oxide material within larger lower grade zones.
The near surface high grade zones are likely to be the target of early mining to maximise cash flow.
Results from five recent drill holes were not yet included in this new resource estimate. Reverse circulation drilling is planned to complete an approximate 100m x 50m grid to outline the resource to about 250m depth.
Based on the existing resource, it is likely that a high grade feedstock of 24 million tonnes at 1,000 ppm Mo can be produced at Anthony in the early years of operation leading to higher project returns. While a lower grade stockpile can be processed later in the life of project.
Zamia will complete a scoping study for a molybdenum mining and processing operation based on the Anthony resource during the first half of 2011. A Definitive Feasibility Study will be completed in mid-2012.
Construction is aimed for 2013 with production in 2014.
The molybdenum price is currently about $17.50 a pound and some analysts predict prices to rise to $21 by the end of this year and $24 by the fourth quarter of 2011 as global industrial output expands.