Contained Metal Equivalents Signal Boost to Economic Potential

Significant Kempfield Resource Update
Significant Kempfield Resource Update
Sydney, May 30, 2018 AEST (ABN Newswire) - Argent Minerals Limited (ASX:ARD) (Argent, or the Company) is pleased to report an updated mineral resource statement for the Kempfield project, which we believe significantly advances the progress of the project.


- Major progress at the Kempfield project with new metallurgical details.

- Kempfield mineral resource statement updated to incorporate the results of metallurgical breakthroughs announced 12 April 2018 and market pricing of zinc, silver, lead and gold.

- Silver equivalent contained metal estimate now 100 million ounces Ag Eq at 120 g/t Ag Eq - approximately double the previous estimate, and significantly higher Ag Eq grade.

- Zinc equivalent contained metal estimate: 520,000 tonnes Zn Eq at 2.0% Zn Eq - newly reported for the Kempfield project as a result of the substantially increased zinc contribution to potential revenues.

- The updated resource estimate statement does not include additional resource potential identified in the Exploration Target announced 8 November 2017.

- The revised silver and new zinc contained metal equivalents signal a significant advance towards potential economic viability as Argent readies further drilling.

- Drilling to proceed as the top priority.

The resource statement has been updated to incorporate the milestone metallurgical results reported on 12 April 2018 - creating a positive new positive development scenario for Kempfield.

The new scenario has been created by the successful separation of the primary feed material into a potentially marketable commercial grade zinc and lead concentrates, which also contain silver and gold.

The contained metal equivalence formula has been substantially revised to reflect the significant impact of the metallurgical recoveries announced on 12 April 2018 for the primary material, as well as updated market pricing for zinc, silver, lead and gold. Whilst the underlying mineral resource estimation methodology and individual metal grade estimates remain unchanged, the cut-off grade for reporting of the primary material resource, which is based on the contained metal equivalence formula, has been increased to 80 g/t Ag Eq (from 50 g/t Ag Eq previously).

The cut-off grade for the oxide/transitional material, which does not depend on the equivalence formula, remains unchanged at 25 g/t Ag.

The application of the updated cut-off grades and the contained metal equivalence formula to the existing underlying resource estimate has resulted in the following contained metal equivalents for the total mineral resource estimate:

100 million ounces silver equivalent contained metal: 26 Mt @ 120 g/t Ag Eq - almost double the ounces and at a significantly higher grade than the previous estimate of 52 million ounces Ag Eq at 74 g/t Ag Eq; OR/

520,000 tonnes zinc equivalent contained metal: 26 Mt @ 2.0% Zn Eq - reported for the first time for the empfield project as required by the JORC 2012 code due to the substantially increased contribution of zinc (approximately 45%) to potential revenues.

Detailed breakdowns are provided by the following updated Kempfield Mineral Resource Statement, which is in turn followed by the Relevant Information Summary, and further details on the boost to the project's economic potential.


Table 1 (see link below) is a summary of the updated Kempfield mineral resource as at 30 May 2018 and Table 2 (see link below) provides details of metal zonation. Table 3 (see link below) shows the Resource tonnes and grades by Measured, Indicated and Inferred categories, whilst Table 4 (see link below) provides details of tonnes and contained metal in the Measured and Indicated categories as at 30 May 2018.

At cut-off grades 25 g/t Ag for Oxide/Transitional and for 80 g/t Ag equivalent(see Note 1 below) for Primary:

Note 1 - 80 g/t Silver Equivalent Cut-off Grade for Primary

This Resource is only reported in Resource tonnes and contained metal (ounces of silver and gold, and tonnes for lead and zinc). The Resource estimation for the Primary material is based on a silver equivalent (Ag Eq) cut-off grade of 80 g/t.

A silver equivalent was not employed for the oxide/transitional material estimation and is based on a 25 g/t silver only cut-off grade.

The contained metal equivalence formula is based on the following assumptions:

Silver price: $US 16.77/oz

Gold price: $US 1,295/oz

Zinc price: $US 3,129/tonne

Lead price: $US 2,402/tonne

Silver recoverable: 86% of head grade

Gold recoverable: 90% of head grade

Zinc recoverable: 92% of head grade

Lead recoverable: 53% of head grade

The metals pricing is based on the one year historical average daily market close as at 25 May 2018.

The metallurgical recovery assumptions are based on metallurgical testing to date, including the results announced on 12 April 2018. It is the Company's opinion that all the elements in the metals equivalents calculation have a reasonable potential to be recovered and sold.

Note 2 - In-situ contained metal equivalent ('Zn Eq' and 'Ag Eq') calculation details

(i) The zinc equivalent (Zn Eq) is reported for the time for the Kempfield deposit on the basis that zinc is estimated to be the greatest contributor to potential revenues (45% - a).

(ii) The formula for calculating the zinc equivalent grade (% Zn Eq) is:

% Zn Eq = % Zn + % Pb x 0.4422 + g/t Ag x 0.0161 + g/t Au x 1.3017

(iii) The silver equivalent (Ag Eq) is also reported on the basis that a) whilst under current market conditions the estimated silver contribution to potential revenues follows zinc closely (36%a), the order of metal contributions is highly sensitive to volatile market prices, which could reverse the order for silver to become the greatest contributor followed by zinc; and b) since the Company has historically published a silver equivalent, the Company's opinion is that continuing to do so is in the interest of transparency for investors.

(iv) The formula for calculating the silver equivalent grade (g/t Ag Eq) is:

g/t Eq Ag = g/t Ag + g/t Au x 80.81 + % Pb x 27.46 + % Zn x 62.08

(v) The above Ag Eq and Zn Eq formulae apply to both the Oxide/Transitional and Primary. For Oxide/Transitional the grade value for Pb and Zn is entered into each formula as zero.

Note 3 - Rounding and Significant Figures

Figures in the tables (see link below) in this report may not sum precisely due to rounding, and any increased number of significant figures, does not imply an added level of precision.

a: Refer to 12 April 2018 announcement (p. 2)


Resource estimation methodology and underlying data

There has been no material change to the underlying individual grades estimates in the Kempfield resource model for the mineral resource estimate as initially reported on 26 April 2012, as subsequently updated to JORC 2012 reporting standard on 6 May 2014, and further updated on 16 October 2014 with the addition of the metal zonation detail in Table 2 (see link below) of the Mineral Resource statement ('Previous Reports').

Investors should refer to the Previous Reports.

The reporting of the underlying Mineral Resource estimate has been updated in this announcement to incorporate:

- Contained metals pricing assumptions updated for the contained metal equivalence formula;

- Metallurgical recovery assumptions updated to incorporate the most recent results into the contained metals equivalence formula;

- Silver equivalent cut-off grade updated for the reporting of the primary material;

- Zinc contained metal equivalent (added); and

- Silver contained metal equivalent - update.

Contained metals pricing assumptions

The underlying market pricing assumptions for the contained metals in the resource have been updated to the values stated in Note 1 of the Mineral Resource Statement (page 4 of this announcement) (see link below).

The metals pricing is based on the one year average of the daily market closes for each of the metals, utilising LBMA for Ag, LME London Fix for Au, and LME Cash Settlement for Zn and Pb, and calculated as at market close on 25 May 2018.

Metallurgical recovery assumptions

The metallurgical recovery assumptions have been updated to the values stated in Note 1 of the Mineral Resource Statement (page 4 of this announcement) (see link below).

The recovery assumptions for the primary material are as reported for the first cleaner stage of both the lead and zinc concentrates in the 12 April 2018 announcement.

The same silver and gold recovery assumptions have been adopted for the Oxide/Transitional material on the basis that they are approximately identical to historical metallurgical results for that material.

The metallurgical recovery assumptions are subject to any changes that may result from future metallurgical testing including variability testing across the various mineralogical domains across the Kempfield deposit.

Silver equivalent cut-off grade

The silver equivalent cut-off grade has been increased to 80 g/t Ag Eq from 50 g/t Ag Eq previously for the primary material.

The cut-off grade provides a numerical filter to determine which resource blocks of the unchanged mineral resource estimate are reported.

Applying the contained metal equivalence formula resulting from the updated pricing and metal recovery assumptions, the 80 g/t Ag Eq primary cut-off was determined on the basis of a comparable estimated net recovered value to that of the 50 g/t Ag Eq cut-off employed in the original April 2012 mineral resource estimate.

A silver equivalent was not employed for the oxide/transitional material, the reporting of which remains based on the original 25 g/t silver only cut-off grade.


This mineral resource update does not include additional mineral resource potential associated with:

- Exploration results of drilling performed subsequent to the original April 2012 mineral resource estimate (which in the Company's opinion is unlikely to be material at this point); and

- the Exploration Target announced 8 November 2017.

The Company intends to perform a mineral resource re-estimate at the point where the Company considers the additional drilling data at the time to be likely to make a material difference.

The Company is currently preparing the next drilling programme.


Commercial grade concentrates

The contained metals reported in this announcement signal a significant advance toward economic viability of the Kempfield project.

This advance is a direct result of the metallurgical work performed over a period of approximately one year to achieve the breakthroughs reported on 12 April 2018. The extraction of metals from Kempfield primary material into separate marketable grade lead and zinc concentrates marks an important milestone for the project - allowing commercial potential smelter revenues to be included in the Company's cash flow modelling at current metals pricing.

Zinc contribution rises to prominence

The reporting of a zinc equivalent for the first time for Kempfield, as required by the JORC Code 2012 when the contribution of a metal to potential revenues rises to prominence, also marks a de-risking of the project. With potentially positive cash flows at recent metals pricing for zinc, silver, lead and gold, the project no longer depends on an escalation in the silver price.

Yet in addition to potentially taking advantage of favourable market conditions for zinc producers, the project retains significant upside leverage to any future silver price escalation that may occur.

Next steps

The Company continues to focus on upscaling the identified potentially cash flow positive scenario toward the goal of economic viability.

Aided by the new 3D Kempfield geological model and the updated resource and related cash flow modelling, the Company is planning drilling the parts of the deposit that are the most likely to result in increased potential cash flows.

The key goal is to achieve a sufficiently positive net present value of potential cash flows to take the project to the next level of feasibility work, and ultimately, production.

This announcement must be read in conjunction with Appendix A - JORC 2012 Table 1 (see link below).

To view tables, please visit:

About Argent Minerals Limited

Argent Minerals Limited (ASX:ARD)Argent Minerals Limited (ASX:ARD) is an Australian publicly listed company with a 100% interest in a silver/gold project at Kempfield NSW. Work is underway on the preparation of an EIS and a feasibility study for the first stage of the project which will involve heap leaching some 8.8 million tonnes of mainly oxide and transitional material to produce over 9.5 million ounces of silver and 15,000 ounces of gold over a 5 year mine life. Argent is also earning up to a 70% interest in two other NSW projects - gold at West Wyalong and base metals at Sunny Corner.



David Busch
Chief Executive Officer
Argent Minerals Limited
M: +61-415-613-800

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