The Indian Springs property is located in the northeastern corner of Nevada, approximately 25 miles north of Montello. The new resource estimate (performed by SRK Consulting (US) Inc.) was arrived at using 62,000 feet of drill data (299 holes) including and 2,500 trench samples. It included 8,218 feet (24 holes) from Galway's recent drilling program. The highlights of the resource estimate include:
-
The deposit contains 37 million pounds of tungsten (WO3) in the Indicated Category, and 25 million pounds of tungsten (WO3) in the Inferred Category.
-
Approximately 60% of the stated resources fall in the Indicated category, with the balance in the Inferred category. A 7,000 foot core drilling program is slated to begin in June 2007, whose focus will be to continue to upgrade and expand the resources and collect material for metallurgical testing.
-
The open-pittable deposit has exploration potential as the deposit remains open along strike to the northeast and southwest.
-
The current price for tungsten (WO3) is US$13.00 per pound.
Table 1: Indian Springs NI 43-101 Resource Estimate*
| Category |
Tons
(Millions) |
WO3 (%) Grade |
Pounds of Tungsten |
| Indicated |
10.8 |
0.171 |
37,000,000 |
| Inferred |
8.2 |
0.167 |
25,000,000 |
* A cut-off grade of 0.10% WO3 was used for this resource estimate.
SRK completed an independent resource estimation according to CIM resource categories in compliance with NI 43-101 guidelines, and is currently completing an NI 43-101 Technical Report for the Indian Springs project. This report will detail all data verification and the procedures followed in arriving at their resource estimate. Bart Stryhas and Allan Moran of SRK Consulting, are "Qualified Persons" as defined by NI 43-101, and are the Qualified Persons responsible for the resource estimations contained in this news release.
SRK's resource estimation was generated using an inverse distance weighting to the 2nd power estimation technique. The model required a minimum of 3 and maximum of 8 composites to assign grade to each 15-foot cube. The WO3 estimates were limited by a hard boundary grade shell defined by a 0.07 % WO3 cutoff. The indicated resource category required that the block was estimated by at least two drill holes with the closest composite being within 50 feet. The inferred resource category required a minimum of one drill hole with the closest composite greater than 50 feet away but less than 150 feet. Data used in the resource calculation included 11,046 drill samples plus 2,499 trench samples.
The project represents an opportunity for Galway Resources to bring a historical advanced exploration property to current and compliant resource definition and scoping level study (preliminary assessment) in a 12 to 15 month time frame with expected expenditures projected to be around US$1 million. The project had undergone extensive exploration drilling and metallurgical testing during the period of 1968 through 1986, including the activities of three major mining companies; Placer Amex, Union Carbide, and Utah International; for a total estimated historical expenditure (in 1970 dollars) of around $5.0 million.
Infrastructure & Access
The project has very favorable infrastructure advantages including but not limited to road access and nearby rail lines. From Montello, access is north by graded county gravel roads and a two-track dirt road that are relatively flat. Access is available year round to the two track road junction 6.0 miles east of the property, and access to the property during winter months is dependent upon total snow accumulations; but year round access is not foreseen as a problem.
Exploration Potential
A significant amount of drilling and trenching in the late 1960's to early 1980's defined an area of tungsten mineralization on surface and at shallow depths, with a surface area of approximately 3000 feet in northeast orientation, by 2000 feet across, and to drill depths of 100 to over 500 feet (average 300 foot depth) (Himes and Hahn, 1982). Tungsten grade in trenches and drill holes range from 0.05 to over 1.0% WO3, with the majority of values in the 0.08 to 0.40% range. Over 300 drill holes have defined the Indian Springs tungsten deposit, yet there is exploration potential to extend the deposit along strike, and there are conceptual exploration targets both on the property and regionally in the area that were not explored by the previous company activities.
Geology Description
The geology at Indian Spring is comprised of an easterly dipping sequence of Permain age clastic and carbonate sedimentary rocks that have been intruded by a late Cretaceous to Tertiary age two-mica quartz monzonite intrusive. The Indian Springs tungsten deposit includes tungsten-bearing (scheelite) contact tactite mineral assemblages in addition to tungsten bearing "greisen" zones adjacent to late-stage dikes. Un-mineralized Permian age carbonate sedimentary rocks and thin alluvial and volcanic cover conceals part of the deposit and its extensions. Early stage garnet-diopside-epidote (tactite) mineral assemblages replaced calcareous sandstone units of the Permian age Lower Pequop Formation on the east flank of the Indian Springs stock. Minor tungsten mineralization was associated with the contact metasomatic tactite formation. Later intrusive dikes of granitic composition and associated quartz-topaz-muscovite (greisen) alteration and associated quartz-sulfide veining were superimposed on the tactite. The bulk of the tungsten mineralization is associated with the later stage dikes, alteration, and quartz veins and veinlets (stockworks).
Metallurgical Recovery
The property underwent metallurgical testing that identified both high recovery tungsten mineralization (scheelite) at 70% to 90% estimated process recovery, and low-recovery non-scheelite iron-oxide bearing tungsten mineralization (iron-tungstate) at less than 60% process recovery; much historical attention having been paid to the metallurgically challenging mineralization. Autoclaving (elevated temperature and pressure leaching) was tested, and provided the best alternative for high recoveries of mixed mineralization, but at the time (early 1980's) was considered cost prohibitive.
In the last 20 years there have been significant advances in mineral processing technologies, which can be applied to the Indian Springs Property. Improvements in solvent extraction and pressure-leach hydrometallurgy since the mid 1980's have seen both technological and economic improvements. Analytical and process control capabilities have also improved substantially to allow for automated control in mineral processing. Also, with the recent application of automated mineralogical analyzers like the Mineral Liberation Analyzer (MLA), the development and optimization of process flows in metallurgical operations has greatly been enhanced. These advances and others offer Galway Resources the opportunity to re-examine the metallurgical issues at Indian Springs with a real goal of improved recoveries (C. Anderson, pers. comm. 2006).
Indian Springs Deal Terms
Galway Resources can secure an undivided 100% interest in the Indian Springs Tungsten Property by paying to the aggregate sum of $300,000 and by issuing 2,000,000 common shares over a five-year period. The first year cash payment of $12,500 and the issuance of 400,000 shares have already been completed. The terms also include a 2.0% Net Smelter Royalty (NSR) on future production from Indian Springs. The company has the option to buy 1.0% of the NSR for $1,000,000 and has the right of first offer to purchase the remaining 1.0% NSR. Galway also has the right to pay $150,000 before the start of commercial production to establish a price floor for all royalties, such that no royalties will be paid in the event that the tungsten prices trades below $100 per MTU (metric ton unit) for 30 consecutive days.
|
New
NI 43-101 Technical Report
June 2007
|
