6.Salt River Resources Ltd (“SRR”) www.srr.co.za

6.1. Mineral rights
SRR was successful in being granted the conversion from an Old Order Prospecting Right to a New Order Prospecting Right over the Remainder of the farm Adjoining Geelvloer No 197 in the Northern Cape Province and New Order Prospecting Right over the farm Graafwater No 198 by the DME. The company was also successful in being granted a New Order Prospecting Right for various base and precious metals over the farms Lovedale No 201, Quagga-Maag No 200 and Hartebeest-Vlei No 199, as well as portions of the farms Gannapoort No 202 and Vaal-Kop No 225 in the Northern Cape Province. The execution and registration of this prospecting right is expected to be completed in the very near future. fold, which plunges in an easterly direction. This style of mineralisation (stratabound, replacive) is considered to be very similar to that of Black Mountain Mine’s Gamsberg orebody, which is currently under an advanced stage of exploration.

6.2. Geologic modeling
As part of an ongoing, modern detailed geologic re-
assessment of the Salt River deposit, company geologists discovered that the Salt River deposit and associated prospects appear to have been deposited in a series of structural controlled, east-northeast trending half-grabens.  Likewise, company geologists have also found that the Salt River deposit occurs along the eastern limb of a previously unidentified, regional-scale, northeast-trending and plunging fold.  Within the immediate vicinity of the deposit, the host rocks strike in an east-northeast direction while dipping roughly 25º to the northeast.  Within the deposits, the sulphide body trends in a north-northeast direction and plunges at roughly 12º.

Re-logging, geologic analysis and new geologic modelling of the deposit have not only revealed an asymmetrical grade distribution and shape to the deposit, but enabled company geologists to define a high-grade zone along the eastern margin of the deposit. The high-grade zone dips at approximately 25º in a north-east direction with a plunge of 22º in a north-northeast direction. This high-grade zone roughly measures 300m in width, averages 5m true thickness and more than 6600m in length down dip, with the deepest mineralised intercept encountered at 1300m below surface.  However, it should be noted that the high-grade zone of the deposit remains open at depth.

As part of a Masters of Science (M.Sc.) project through the University of Johannesburg (“UJ”), the student has simplified and correlated the immediate host rock sequence throughout the Salt River deposit, which will assist in future mine planning, exploration and development of the property.  Based on the value added to the project by Keith Osburn, a second UJ M.Sc. project was approved.  This second study will focus on the textural, mineralogical and geochemical attributes of the sulphide horizons in an attempt to better define and characterize the different types of ore, as well as their mode of formation. This study will add further value to the project through an improved understanding of the sulphide horizons and the beneficiation processes necessary for recovery.

6.3. Prospects and other mineralized occurrences
Of the five prospects in the vicinity of the Salt River deposit, the Graafwater East, Central, and West prospects display numerous characteristics in common with the Salt River deposit and other volcanogenic massive sulfide (VMS) deposits.  By comparison, the Soutputs Noord prospect exhibits features common to mafic magmatic Cu-Ni deposit.  The Salt River-type prospects are characterised by one or more tabular, stratabound to stratiform horizons of semi-massive to massive poylmetallic sulfide mineralisation. In spite of this, as illustrated in Table 6.2, drilling by previous exploration companies indicate that Graafwater East and West prospects are the most prospective.

Although underexplored, elevated concentrations of Cu have been identified in a massive siliceous magnetite, chlorite ± hornblende rock of Portion 8 of the farm Adjoining Geelvloer No. 197.  These siliceous magnetite-chlorite rocks are highly variable in thickness, 1.4 to 25.7 m thick, and hosted by interbedded biotite-rich gneisses and amphibolites with granodioritic/dioritic sills displaying a close spatial association.  Shallow diamond drilling has revealed that the mineralisation comprises stringers of pyrite-chalcopyrite or magnetite, pyrite-pyrrhotite-(pentlandite)-rich chert and massive magnetite or pyrrhotite-(pentlandite).  The elevated Cu content, in conjunction with the close spatial association with granodioritic/dioritic sills, presence of pyrrhotite-rich sulfides and numerous macroscopic similarities with other mafic magmatic Cu-Ni deposits indicate the potential for Cu, Mo, Ni, Co and PGM mineralisation.

6.4. Mineral Resource
As announced in the Competent Persons Report (“CPR”), prepared by CSA Consulting International Ltd and released on 23 August 2007, a 1% Zn cut-off yields a Measured and Indicated Mineral Resource of 24,1 Mt (Table 6.1).  At the same Zn cut-off, company geologists have calculated an Inferred Mineral Resource of 1,91 Mt (Table 6.1).  These values were updated by SRR and announced on 21 May 2008, when the company had increased its total Mineral Resource by about 20 million tonnes in the Inferred category (Table 6.2).  These figures include the resource figures for the high-grade zone, which was announced on 26 June 2008 (Table 6.3).

As announced on 29 May 2008, the total Mineral Resource for the Salt River Project is around 44 million tonnes.  A 1% Zn cut-off yields a Measured and Indicated Mineral Resource of 24,1 Mt with an Inferred Mineral Resource of 20,1 Mt (Table 6.4). 
All Mineral Resource figures have been reported in accordance to the SAMREC Code.

Using the average metal prices for 2004 to 2006 (copper US$5 358/t; lead US$1 049/t; zinc US$1 898/t; gold US$544/oz and silver US$8.51/oz), which are sufficiently robust enough to reflect the annual and cycle variance in pricing for the various metals to be recovered, indicates that the Total Mineral Resource (i.e. 26Mt) for the Salt River deposit are equivalent to a Cu equivalent grade of 1,74% at an insitu value of US$91.55/t or US$2 381 million (R17 675 million at R7,42/US$).

Alternatively, at current metal prices (05 August 2008; copper US$7 809,50/t; lead US$2 016/t; zinc US$1 750/t; gold US$880,40/oz and silver US$16,52/oz), the Total Mineral Resource (i.e. 26Mt) for the Salt River deposit are equivalent to a Cu equivalent grade of 1,61% at an insitu value of US$122,68/t or US$3 191 million (R23 685 million at R7.42/US$).

Following the same methodology (NPV of the estimated future cash flow at 15% discount rate) used in an evaluation published earlier this year at the JSE for a similar base metal resource in South Africa the total value attributed to the Salt River project in US$365 million (R2 641 million at R7.24/US$). Back to Top