Total estimated REE mineral resources and detailed REO grades in the Inferred category for the Greater Bull Hill area deposits plus Whitetail Ridge are given in Table 5. REE resources in the Inferred category for all mineralization types increased to 42.3 million tons grading 2.59% REO in 2013 from 34.6 million tons at 2.83% REO in 2012. Total Inferred Oxide resources (Ox+OxCa) increased from 25.7 million tons grading 2.86% REO in 2012 to 31.4 million tons at 2.68% REO in 2013.
Geology and Mineralization
The Bull Hill area deposits contain the bulk of the current resources. They comprise steeply-dipping FMR (FeOx-MnOx-REE)-carbonatite dike swarms with dominant northwesterly and subordinate northerly trends mainly intersecting the Bull Hill diatreme breccia. Carbonatite dikes at depth are interpreted to transition toward the surface into either oxide-carbonate bodies or FMR bodies, which range in size from sub-millimeter veinlets to large dikes more than 100 feet (30 m) in width.
The Whitetail Ridge deposit is more enriched in HREEs and is distinguished by a zone of FMR dikes and stockwork that invade the Whitetail Ridge diatreme breccia and adjacent trachyte/phonolite intrusive rocks. Expansion of the Indicated REE resource at Whitetail Ridge is a key objective of the Company's planned 2013 drilling program.
The major dike sets in all of the resource areas are accompanied by peripheral zones of lower-grade stockwork REE mineralization. The term "stockwork" refers to a rock cut by a network of small veins or dikes that contain the mineralization. REE grades in the stockwork zones range between about 0.5% and 2.5% REO. The Company is continuing its investigation of low-cost physical processing methods to upgrade the contained REE mineralization in the stockwork for eventual inclusion with the resources.
Cutoff Grade & Metallurgy
The resource size is sensitive to an assumed cut-off grade, which is sensitive to metallurgical operating costs. See Table 3 for cut-off grade sensitivities. The Company will conduct pilot scale metallurgical testing on more than 21 tons (19.1 tonnes) of mineralized material in 2013 in conjunction with its planned Feasibility Study (FS). Metallurgy of the FMR oxide zone is well established and was reported previously. Metallurgical testing of the oxide-carbonate zone resource is in progress. Bench-scale optimization and variability testing is ongoing for both mineralization types.
Mineral Resources are not Reserves
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for minability, selectivity, mining loss, and dilution. These mineral resource estimates are in the measured, indicated, and inferred mineral resource categories. Inferred mineral resources are normally considered too speculative geologically for the application of economic considerations that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to M&I mineral resource categories through further drilling or into mineral reserves once economic considerations are applied.
The Company announced positive economic results from its Pre-Feasibility Study (PFS) on 1 March 2012, and in a revised news release on 12 April 2012. The PFS established a Proven plus Probable mineral reserve for the Bull Hill deposit that contains 7.9 million tons (7.2M metric tonnes) at a grade of 3.12% REO and at a cutoff grade of 1.1% REO.
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