SXI holds a majority interest (71.25%) in the exploration rights to the ‘Malala Molybdenum Project’ comprising of 5 strategic concession areas (IUP’s under the new Indonesian mining law) in the Toli-Toli Regency on the island of Sulawesi in Indonesia covering a total area of 23,747Ha.
The concessions cover the most prospective sections of a former 3rd Generation Contract of Work (COW) held by Rio Tinto during 1977-1985 and for a period in joint venture with Santos Ltd during 1980-82.
Geology: Molybdenum found in a broad zone near the geological contact between a porphyritic intrusive and sedimentary rock. Recent work has defined a prospective target area over 4km long and up to 300m wide, an increase of 300% compared to previous knowledge (as detailed in market announcement dated [x]). The Molybdenum is found as the mineral Metalsbdenite, mostly on fractures and in veins.
|Camp Facilities: The Project is well resourced with accommodation and messing for up to 100 employees, including internet, power (generator), offices, core handling & storage|
|Primary Target Area: The Company is in the process of verifying an initial Exploration Target at Anomaly B (Inti Cemerlang) of 105- 115Mt @ 660-900ppm Mo based on previous work by Rio Tinto and Santos. Based on the new interpretation, this Exploration Target sits within 800m of the >4km of Target Zone now defined. The upside to this Exploration Target could be very significant.|
Secondary Target Area: Promistis is a new discovery 10kms north-west of Anomaly B, 13 stream sediment samples >10ppm Mo within 3km x 3km area, by comparison Anomaly B was discovered by following up stream sediment sample of 8ppm Mo. Currently the focus of an aggressive exploration campaign.
Several other anomalous stream sediment samples need following up, with enormous regional potential to make further discoveries.
The recognition of the geological contact between the intrusive rocks and the sedimentary rocks has important implications for regional prospecting.
Historic Work: Rio Tinto discovered Anomaly B and undertook detailed exploration in conjunction with Santos, including extensive geochemistry, trenching, drilling (36 holes) and resource/reserve estimations. Several drill holes returned world-calss intersections. This work occurred in the late 1970’s and early 1980’s at a time of very low molybdenum prices. With current levels of demand the economics are now very attractive. VWM undertook limited drilling (2,100m) during 2007/08 but has since undertaken significant geological work including soil sampling, trenching and surveying.
RESULTS & FUTURE EVALUATION
Impressive Historical Drilling Results:
A snapshot of historic drilling;
234m @ 1,680ppm Mo from 45m
245m @ 1,200ppm Mo from 5m
363m @ 600ppm Mo from 0m
87m @ 2,300ppm Mo from 84m
New Geological Model - Significant increase in Target Zone:
A number of geological data sets have now been combined with the results of an IP survey undertaken in March 2010 over Anomaly B, resulting in the definition of a revised geological model. This model highlights the potential for significant upside at Anomaly B, with the Target Zone increased from 800m to over 4km. Two main areas will be the focus of further detailed exploration, including resource definition drilling – the Northern Limb & the Southern Limb.
Aggressive Work Program:
At Anomaly B, planned drilling to begin mid 2010 on the Northern Limb, followed by drill testing of the Southern Limb will seek to upgrade and extend the exploration target of 107Mt of 660-900ppm to a JORC compliant resource.