Mining

Yubdo Platinum and Gold Development PLC (51% Minerva Resources) highlights

• Ongoing platinum production on proven deposit
• Pilot plant commissioning to test viability of increased production rates
• Open-pittable, extensive saprolite material

Overview

Minerva Resources, through its subsidiary Golden Prospect Mining Company, owns 51% of the Yubdo Gold and Platinum Mining Company (Yubdo Mining), Ethiopia. Yubdo Mining is the sole platinum producing company in Ethiopia. It is a small scale operation, currently producing approximately 100 ounces of platinum a year. Minerva Resources is investigating the viability of increased mechanisation and expansion of the current mining operations.

Background

In 2001 Minerva Resources, through its subsidiary GPMC, entered into a joint venture with a local entrepreneur, Mr Benti Tassisse (47%), to mine the Yubdo platinum deposit. In May 2005 the Mining Licence was transferred to Yubdo Mining, with obligations to investigate modern mining methods and the process flowsheet, as well as completing an enrionmental review, resource definition and carrying out further metallurgical testwork The mining licences cover 27.26 km2, within the Yubdo Exploration Licence, 100% held by Minerva Resources. The remaining 2% of YPDG is held by Dr Kebede Belete.

Minerva Resources has managed the project since July 2005 and produced 150 ounces (77 ounces attributable) for the eighteen months to the end of 2006 through test production. The Company is currently commissioning a Pilot Gravity treatment plant to improve gravity recoveries from the ore. The Pilot Gravity plant is expected increase recoveries from 5% to 13% and allow throughput to double. Annual production should therefore increase to a rate of over 500 ounces per annum.

Location

The Yubdo Mine is 520km almost due west from Addis Ababa. The road is tarred to Gimbi (460km from Addis) and the remainder of the road is gravel. Yubdo village and the mine site have recently been connected to the grid and an digital telephone centre is under construction in the village.

Mining and Processing

Historically, approximately 2,700 kilograms of platinum have been produced at Yubdo by hydraulic mining, mostly during the period 1926-1941 but with small-scale production continuing to the present day. The mining took place in two principal pits, the Main Pit and the Deressa Pit, totalling about 3.3 square kilometres in area. The average thickness of laterite mined was reported as 10m equating to a total volume of 30 million cubic metres at a recovered grade of 0.090 grams per cubic metre.

The present operation, exploiting resources on the western margins of the Main Pit, is based on two 2.5m benches cut into laterite ore which is mined by hydraulic excavator and transported to the adjacent washing plant by dump truck. The Pilot Gravity treatment plant currently being commissioned will consist of a high intensity washing unit, and a multi-stage trommel that serves to disaggregate clay-rich particles. Undersize is directed through a Knelson concentrator and then onto a Gemini table. The concentrate is a saleable platinum concentrate.

Metallurgical Testwork

In addition to the Pilot Gravity treatment plant, further metallurgical is being undertaken on the platinum ores. Historic metallurgical test work suggests that the platinum is extremely ferrous, fine grained and associated with clays within the saprolite, although there was little control on where the sample locations. The occurrence of dominant fine grained platinum is supported by the poor recoveries (13%) achieved by gravity processing.

Recent work by Minerva Resource geologists has led to a re-interpretation of the mineralising geology at Yubdo and current metallurgical test work is being carried out on clearly defined ore zones. A 100kg sample has been sent to SGS Mineral Services, Cornwall for process testwork. Three smaller samples are being sent to Dr Louis Cabri, CNT Mineral Consulting, Canada for detailed mineralogical evaluation.

Concentrate and Sales

Minerva Resources exports platinum concentrates quarterly. The concentrates are couriered to London for refining at Engelhard refineries. The concentrate grades 55-73% platinum and 2-5% gold, with no other significant other payable metal.

Resources

In 2006 Minerva Resources carried out a programme of pitting over the ridge above and to the southwest of the present small-scale mining operation southeast of Yubdo village, in order to estimate the resource in this small area. Thirty pits were completed on a 60m x 60m square grid covering an area of 420m x 240m. Each pit was hand dug at a nominal 75cm diameter down to decomposed bedrock encountered at an average depth of about 10m. Channel sampling at one metre intervals down the side of the pits returned platinum values ranging up to 1.8 g/t Pt, with acceptable repeatability of duplicate samples suggesting that conventional sampling and assay procedures are effective for establishing the total platinum resource.

Based on the results of the pitting GPMC has used a polygonal method to estimate a resource of 23,760 ounces (793kg) of platinum in 1,470,000 tonnes of laterite material with an average grade of 0.54g/t platinum within the limited area covered by the pitting programme. Importantly, the average grade of the laterite below a barren 1.5m soil layer was 0.82g/t platinum. The pitting programme also indicated that both laterite thickness and platinum grades are lower over the ridge area than on its flanks. Geological mapping shows that potentially mineralised laterite extends along strike for several kilometres on the Yubdo ultramafic intrusion.

Mapping of bedrock exposed in the pitting and in outcrop shows fractures containing quartz-carbonate with pyrite in the form of boxworks and planar fracture fillings occurring in zones trending east of north with generally steep westward dips, cutting the serpentinised dunites and pyroxenites of the Yubdo Ultramafic Complex. Pit sampling shows PGM values in this material relative to fresh rock which support the contention that PGMs are concentrated by hydrothermal action associated with zones of fracturing.