Mount Burgess’ Nxuu Deposit Progress & Pipeline; Botswana Govt Eases COVID-19 Restrictions

Summary

• Mount Burgess continues to focus on maximising beneficiation within Botswana via its PL 43/2016; remains on track to develop the completely oxidised Nxuu deposit.
• While Botswana is renowned for one of the most profitable vanadium mines globally, MTB continues to seek vanadium credits to unlock the potential of its Kihabe – Nxuu Project.
• COVID-19 restrictions are gradually lifting in the region, paving a path for proposed project plans to proceed further.

To maximise beneficiation within Botswana, Mount Burgess Mining NL (ASX:MTB) is currently developing the Kihabe and Nxuu Project in Western Ngamiland. MTB’s prior accomplishments include the discovery of three kimberlites in Namibia and Red October Gold Deposit in Western Australia.

In November 2018, Minister Eric Molale renewed title over the original licence area of MTB’s Kihabe – Nxuu Project (PL 43/2016) for a further two years to 31 December 2020, with a right to renew beyond two years to 31 December 2022. This allows for potential further discoveries of minerals like Germanium and Vanadium Pentoxide which could exist outside the known Zinc, Lead and Silver mineralised domains.

Kihabe and Nxuu Deposits

To date, the Company has been successful in developing resources in both the Kihabe and Nxuu Deposits. MTB’s initial premise on the acquisition of Kihabe Project in 2003 was that both deposits were Zn/Pb deposits and holes drilled in the earlier drilling campaigns were not always assayed for Vanadium/Vanadium Pentoxide (V/V₂O₅) and/or Germanium (Ge).

However, MTB plans to develop the Nxuu Deposit first, as it considers it to be a potentially shallow, low-risk and low-cost operation.

COVID-19 Update

On 2 April 2020, State of Public Emergency was declared in Botswana with lockdown and extreme social distancing in place, owing to COVID-19.

However, with recently lifted lockdown restrictions in the region, people can now attend work under certain conditions. Crossing regional borders within Botswana still necessitate access permit which can be applied via locally registered service providers in the exploration industry. Once granted, staff can cross regional borders to get to the project site.

Company Propositions with Restrictions Gradually Lifting

MTB intimated that it plans to drill proposed vertical drill holes which will be assayed for Zn/Pb/Ag/Ge/V, subject to funding and lifting of lockdown restrictions to enable access to the site. Once the drilling/assaying is complete, it will be in a position to quote an Indicated/Measured resource compliant with the 2012 JORC Code.

The Company will also progress other test work which was delayed due to the pandemic restrictions- Bulk Sensor Sorter X ray and Bulk Vertical milling test work.

Initial Bulk Sensor Sorter X ray test work has already demonstrated that upon crushing, 45% of entire crushed product over 4mm was rejected as insignificantly mineralised/ barren. Moreover, 55% of crushed feed over 4mm need then be subject to milling and downstream treatment costs. The Bulk Sensor Sorter X ray test work has been planned to confirm these encouraging results, to be conducted by STEINERT.

On the other side, as Nxuu is completely oxidised and soft, EDS South Africa, which proposes that their Vertical milling process will work effectively on the deposit, is due to conduct a Bulk Vertical milling test work that requires as little as 25% of the power to operate conventional Ball/SAG/ROD mills.

Besides this, samples comprising Ge have been sent to the University of Naples for test work to determine the host mineral of Ge. If this is depicted as recoverable, a further credit for the Project will be achieved as Ge is currently trading at US $1,890/kg. Proceeds are expected once lockdown restrictions imposed by the Italian Government ease and the University reopens.

Nxuu Deposit Developments: Vanadium, Zinc & Silver Grade Details

A basin-shaped deposit, Nxuu is totally oxidised. Total 24 holes have been drilled at Nxuu to date, with 40m average depth to the end of mineralisation. While, ~58% of every hole contains recoverable mineralisation. For the remaining 42%, 17% consists of Kalahari sand cover while merely 25% is left as insignificantly mineralised quartz wacke.

MTB will be better positioned to determine depths to barren dolostone basement for the proposed drill holes, based on drilling results to date. It should be noted that overall estimated average depth of 58 proposed vertical drill holes for entire Nxuu is ~ 45m.

On the Vanadium front, MTB’s previous test work outline that-

• V/ V₂O₅ in Nxuu is hosted in the oxide vanadate DESCLOIZITE, where V₂O₅ is 1.785 times the volume of V.
• V₂O₅ can be extracted through the simple process of flotation using a hydroxamate for recovery, representing a significant credit for the Project. It can also be sold as a marketable product.
• V₂O₅ mineralisation at Nxuu extends beyond the zones of Zn/Pb/Ag mineralisation, increasing the overall mineralised domains within the mineralised quartz wacke.
• Based on metallurgical test work recovery results affirmed by ALS Laboratories, MTB has discounted the V₂O₅ grades to 80% to show the RECOVERABLE grades.

Moving onto Zinc and Silver-

The Zinc Equivalent Grade for Nxuu includes grades of Zinc, Lead and Silver. After calculating the grades (avg of 5 trading days LME closing prices for Zinc and Lead and 5 trading days of the US closing prices for Silver, from 22 to 26 January 2018), Zinc and Lead grade values were discounted to 93% to reflect the RECOVERABLE value, as per AMMTEC’s metallurgical test work. Silver grade values were discounted to 70% to reflect the RECOVERABLE value of Silver as achieved in similar deposits.

Combined total discounted US$ value of each assay including any or all of Zinc, Lead and Silver was divided by the discounted calculated Zinc price of US $32.21 per 1% to arrive at the RECOVERABLE Zinc Equivalent Grade. Resulting grades of over 1% Zinc Equivalent grade were applied in establishing widths of mineralised intersections reported to ASX.

MTB notified that to assess current zinc equivalent grades, the current Zn/Pb/Ag prices as on 2 June 2020 have been compared to January 2018 prices (to reflect any impact on the January 2018 Zn equivalent grades currently applied), depicted below-

(Source: MTB’s Report)

MTB last traded at $ 0.003 on 5 June 2020. The stock has delivered a YTD return of 50%.

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