Bass Metals Ltd.: HELLYER PROJECT - MINE LIFE INCREASE

ID: 1020203
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Bass Metals Ltd.: HELLYER PROJECT - MINE LIFE INCREASE

Highlights

•34% increase to Fossey Ore Reserve to 1.1 million tonnes
•New 3 to 5 million tonne resource target at Hellyer

Australian base and precious metals miner, Bass Metals Ltd (ASX:BSM) (“Bass” or ”the Company”) is pleased to report further positive developments on increased mine life at its Hellyer Mine project (HMP) through an increase to the Fossey Ore Reserve and identification of a major resource target immediately beneath the current Hellyer Mine workings.

1. Fossey Ore Reserve

The Ore Reserve tonnage at Fossey has been increased by 34% to 1.1 million tonnes from 0.82 million tonnes as summarised in Table 1 below. The increased tonnage comprises lower grade disseminated mineralisation adjacent to the high-grade massive sulphide mineralisation that comprised the previous Fossey Ore Reserve.


Table 1: Fossey Ore Reserve Update

http://www.irw-press.com/dokumente/BSM_Tables_191110.pdf

This additional ore can be accessed utilising mine development currently being installed in accordance with the original mine plan and has been assessed on an incremental cost basis. The increased ore tonnage can therefore be extracted with minimal additional work with plenty of capacity in the Hellyer Mill to process it. This initial Ore Reserve upgrade increases metal production and reduces average mining and milling unit costs. Further Ore Reserve increases at Fossey are possible based on the current resources defined there.

2. Hellyer Stockwork Resource Target

A resource target of between 3 to 5 million tonnes has been identified immediately beneath the existing Hellyer mine workings as several drill intersections have indicated the potential for high grade copper stockwork mineralisation and lower grade lead-zinc (+- copper) stockwork mineralisation as presented in Figure 1 and Table 2.



Copper Stockwork Zone

High-grade copper intersections below the central and southern feeders at Hellyer including 4.0 metres at 12.9 % copper and 70 g/t silver (HL 029) highlight the potential for a zone with dimensions of 200 metres along strike by 5 metres wide by 200 metres down dip. This zone has a resource potential of approximately 0.25 to 0.75 million tonnes at 2 to 3 % copper.

Lead-Zinc (Copper) Stockwork Zone

Wide moderate grade lead-zinc (+- copper) drill intersections highlight the potential for a large zone of base and precious metal stockwork mineralisation, including:

•44.7 metres at 1.7 % copper, 6 % lead, 3.3 % zinc, 113 g/t silver and 0.9 g/t gold (HL237);
•40.3 metres at 1.9 % lead, 3.3 % zinc and 25 g/t silver (HL334); and,
•27.2 metres at 2.1 % lead, 3.3 % zinc and 6 g/t silver (HL018).

The drill intercepts, discussed above are relatively close to the Hellyer massive sulphide mineralisation. Drill hole (HL 840) intersected 24.9 metres at 3.1 % zinc, 0.7 % lead and 8 g/t silver approximately 400 metres below the Hellyer orebody, highlighting the potential with depth.

Based on the available drill data, Bass estimates that potential exists for a zone of this style of mineralisation with dimensions of 200 metres along strike by 20 metres wide and 400 metres down dip. The resource potential is 3 to 5 million tonnes at approximately 4 to 6 % lead and zinc, with copper, silver and gold credits.

Exploration and Development Potential

Bass considers that successful delineation of a major resource comprising stockwork mineralisation in the footwall of the Hellyer zone could add significantly to the HMP mine life. This stockwork zone has not previously been specifically tested as it was considered the grades were too low and the intercepts quoted are largely “tails” of historic diamond drill holes testing the Hellyer massive sulphide zone.

Bass Metal’s enthusiasm to pursue this opportunity is based on its understanding that:

•historical metallurgical testwork gave very positive recovery results due the coarse grained nature of the base-metal sulphides in the stockwork veins;
•higher current metal prices than between 1987 and 2000, when Hellyer was operational; and,
•possible utilisation of a heavy media separation plant to segregate heavy base metal sulphide vein material from “less dense” gangue silicate minerals.

Drill testing of these zones from surface is challenging because of the existing mine development, however the Company is assessing means to do this to scope out the resource potential further. Ultimately, the HMP mine plan envisages driving north from the Fossey underground mine into the Hellyer workings to access the current Hellyer Resource. This will provide a further opportunity for a detailed delineation drill programme of this zone.

3. Comment

Mr. Rosenstreich, Managing Director of Bass Metals welcomed the developments and the potential to significantly increase value for Bass shareholders.

“Having secured a large scale processing facility for a cash outlay of just $4 million, our aim is to increase the utilisation of the refurbished mill and extract value for investors by increasing the production profile and mine life,” Mr Rosenstreich said.

“This report clearly indicates progress in this regard with a significant but technically straightforward increase in the Company’s Ore Reserve at Fossey and the identification of a realistic major resource increase within close proximity to existing mine infrastructure. And it is important to note this does not include the promising Fossey East discovery which we are currently drilling”.

“These advances are hopefully part of an ongoing process of successfully adding to our resources and reserves that will underpin a long production future at Hellyer,” he added.

Contact:

Mike Rosenstreich
Managing Director – Bass Metals Ltd
Tel: (+61-8) 6315 1300

Media:

David Brook
Professional Public Relations
Mob: (+61) (0) 415 096 804

About Bass Metals Ltd (ASX: BSM)

Bass Metals Ltd is a growth focussed and profitable Australian base and precious metal producer with a portfolio of high quality zinc, lead, copper and gold assets in the rich Mount Read Volcanic mineral belt in northwest Tasmania.

Listing in 2005, Bass delivered its maiden profit in 2008 from its profitable base metals production hub at Que River in Tasmania, which has generated $25 million in cash flow over the last two years.

The Company’s larger transformational Hellyer Mine Project is on track to commence production toward the end of 2010. With an initial through-put rate of 400,000 tonnes per annum (tpa), the 1.5 million tpa capacity Hellyer Mill will produce 53,000 tpa of zinc concentrate, 27,000 tpa of lead concentrates and 4,500 tpa of copper—silver-gold concentrates.

The Company also has an active and successful exploration programme and is currently following up on recent discoveries at Switchback and Fossey East which are high-grade and located in close proximity to existing mine and milling infrastructure.

Bass has an experienced Board and operating team who have a strong track record of delivering profitable production underpinned by exploration success and are highly motivated to improve on that record.



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Bass Metals Ltd
16 Thelma Street
West Perth WA 6005

Mike Rosenstreich,
Managing Director
Tel.: +61 8 9322 8044
Fax: +61 8 9481 2846
E-Mail: admin(at)bassmetals.com.au



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Date: 11/22/2010 - 02:46
Language: English
News-ID 1020203
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