Bluejay Mining plc / EPIC: JAY / Market: AIM / Sector: Mining

29 May 2019

Bluejay Mining plc ('Bluejay' or the 'Company')

Onshore & Maiden Offshore Resource Update at Dundas Ilmenite Project

Bluejay Mining plc, an AIM and FSE listed company with projects in Greenland and Finland, is pleased to announce a significant resource increase, which includes a maiden Exploration Target for the offshore region within its licence area at Dundas Ilmenite Project ('Dundas' or the 'Project'). 

Highlights:

·    Total Mineral Resource increased by 15% to 117Mt at 6.1% ilmenite in-situ at a 0% cut-off grade, reported in accordance with the JORC Code (2012), following drilling at onshore Iterlak East and Iterlak West

·    Maiden offshore Exploration Target, reported in accordance with the JORC Code (2012), highlights the significant expansion potential from the offshore deposit at Dundas

The 2018 onshore drill results recorded at Dundas' Iterlak East and Iterlak West project areas have resulted in an updated Mineral Resource of 117Mt containing 6.1% ilmenite in situ (the 'Resource').  This estimate has been derived and reported by SRK Exploration Services Ltd ('SRK').  The Resource, reported at a 0% cut-off grade and in accordance with the JORC Code (2012), has been delivered from sampling of consistent and homogenous material with high-grade and high-quality ilmenite from the onshore raised beaches at the Iterlak East and West deposits.  This updated Mineral Resource estimate replaces the Mineral Resource announced in the RNS dated 17 December 2018 and positively enhances the Project economics.

RSC Global Pty Ltd ('RSC') has determined a maiden offshore Exploration Target of between 300Mt and 530Mt of ilmenite at an average expected grade range of 0.4 - 4.8% ilmenite in-situ.  This has been evaluated through a work programme involving marine seismic, bathymetry, as well as active and drowned beach sampling.  This target has been presented as an Exploration Target in accordance with the JORC Code (2012), and the Competent Person takes responsibility for the form and the context in which the Exploration Target appears in this report.  The potential quantity and grade of the Exploration Target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource, therefore it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Bluejay CEO Roderick McIllree said: "The resource base at Dundas has always been significant, and this latest increase of 15% in indicated onshore resources to both the east and west of the Iterlak delta resource demonstrates that there is still a lot yet to be realised. The Company intends to continue with additional resource progression over the next 12 to 24 months.  The total tonnage has risen to a total of 117Mt at 6.1% ilmenite on the raised beaches of Dundas, enhancing both the economic potential of the Project and the potential life of mine.

"Significant upside is also represented by the publication of the maiden offshore Exploration Target prepared by RSC. In conjunction with this, today's announced onshore resource upgrade represents another meaningful step forward in both the financial and commercial evaluation of the Project with the successful identification of additional saleable material at Dundas.

"Importantly, we anticipate that the inherent advantages of the homogenous and consistent material, high-grade Indicated Resource, and the coarse-grained and chemical nature of our ilmenite will enhance Project economics over the long term.  Coupled with the fact that this material is now recognised by industry players as being suitable for sulphate pigment, sulphate slag and chloride slag production, the Company is in an extremely favourable position moving forward.

"More generally, we continue to make good progress with the permitting process and the publication of an optimised pre-feasibility study ('PFS').  We expect to be able to update shareholders on both aspects shortly.  Moreover, the team has been working hard with our consulting partners Wood plc, IHC Robbins, Royal IHC and study managers Quedtech ltd, Keypointe ltd and SRK, in order to continue developing our mine and operational plan.

"Bluejay has been working closely with world-leading dredging company Royal IHC to produce a dredging study at Dundas' offshore ilmenite deposit.  Early indications thus far support a conceptual low-cost operation. Furthermore, environmental baseline studies for the marine deposit have been ongoing and will continue in 2019.  These studies will provide a very strong base for assessing the environmental impact of an offshore mining operation.

"Upon the announcement of these 2018 onshore exploration results at Dundas and the upgraded onshore Mineral Resource, we are able to shift our land-based exploration activities to some of our other projects in Greenland, whilst we continue driving the permitting process and offshore exploration at Dundas.  The offshore Exploration Target provides upside for the current development of the onshore-focused mining and processing scenario which, following the intended upgrading of the Exploration Target to Mineral Resource, will be assessed in the PFS for Dundas.  These are exciting times and the Company looks forward to updating shareholders regarding all other activities in due course."

Further Information

To view this announcement with illustrative images, please use the following link:  

http://www.rns-pdf.londonstockexchange.com/rns/3898A_1-2019-5-28.pdf

New Onshore Resource

SRK has produced an updated Mineral Resource Estimate for the Moriusaq onshore raised beach mineral sands deposit that forms part of Bluejay's Exploration Licence in northwest Greenland (licence number: 2015/08) based on all valid data available as at 8 May 2019.  The estimate has been derived using a combination of auger and sonic drilling data, pit and trench work, as well as bulk samples to assess the effect of sonic drilling on the integrity of the ore material.  This information was then interpolated into a series of 3D geological models created by SRK.

Figure 1 below shows the model produced for Iterlak East and Table 1 presents the updated Mineral Resource.  SRK considers that all the delineated mineralisation has reasonable prospects for eventual economic extraction and the Mineral Resource Statement has therefore been reported at a 0% cut-off grade using the terminology and guidelines set out in the JORC 2012 Code.

Figure 1: TiO2 grades (block model) developed by SRK Exploration Service along the 5 km long onshore raised beached at Iterlak East

Table 1: Updated onshore Mineral Resources (classified according to JORC 2012) for the Dundas Ilmenite Project

1.     The effective date of the Mineral Resource is 8^th May 2019;

2.     The numbers are presented at a 0.0% in-situ TiO₂ cut-off grade reflecting the fact that the mining scenario ultimately adopted by the Company may or may involve selective mining;

3.     "THM" and "HM" mean Total Heavy Minerals and Heavy Minerals respectively;

4.     HM have been separated from a -2 mm +63 µm size fraction using heavy liquid separation at a density of 2.95 g/cm³;

5.     Mineralogical assessments indicate that ilmenite is the only mineral of value in the assemblage.  The remainder of the heavy mineral suite is dominated by pyroxene and amphibole;

6.     % TiO₂ in-situ assumes that all recoverable TiO₂ is in the HM component of the -2 mm +63 µm size fraction;

7.     % Ilmenite In-situ assumes that all TiO₂ is within ilmenite and that the ilmenite contains 47.65% TiO₂, based on historical exploration data.

The main difference between the Mineral Resource reported above and the Mineral Resource reported in December 2018 is that it now incorporates updated estimates for Iterlak East and Iterlak West.  These updated estimates have been produced by SRK following receipt and analysis of exploration data collected during the 2018 field season, which has also enabled SRK to upgrade the Mineral Resource to the Indicated category.  SRK remains of the opinion that it is likely that the raised beaches hosting the updated Mineral Resource extend further along the shoreline within Bluejay's licence area.  This opinion is based on the fact that the licence area includes a 30km length of raised beaches and deltas and that Bluejay has demonstrated mineralisation in several places in addition to the area covered by the updated Mineral Resource presented.

The updated Mineral Resource for Iterlak East and West will now be included in Dundas' ongoing pre-feasibility studies as part of a future onshore mining schedule.  The drillable raised beach licence area remains open to the east for a further 10km, demonstrating potential further expansion and material upside for Dundas.

Dundas 2018 Offshore Exploration Target

In support of the Project's potential offshore development, the Mineral License and Safety Authority ('MLSA') within the Government of Greenland has awarded Bluejay the first Marine Exploration Licence in Greenland.  Alongside the Company's onshore exploration programme which has been ongoing over the past four years at Dundas, Bluejay has worked to evaluate the potential of the offshore deposit via a marine seismic, bathymetry, as well as active and drowned beach sampling.  RSC has determined an Exploration Target of 300 - 530 Mt at an average expected grade range of 0.4 - 4.8% ilmenite in-situ (Table 2).  This target has been presented as an Exploration Target in accordance with the JORC Code (2012), and the Competent Person takes responsibility for the form and the context in which the Exploration Target appears in this Report.  The potential quantity and grade of the Exploration Target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Table 2: Offshore Maiden Exploration Target tonnage and grade ranges.

Geology & Mineralisation

The Deposit occurs offshore of the Thule Black Sand Province, which extends from Kap Edvard Holm in the south to Kap Alexander in the north and consists of extensive plains, tiered beaches and delta terraces.  The mineral deposition model of the offshore Deposit is based on the general formation characteristics of Heavy Mineral Sand ('HMS') deposits and a sequence of relative sea level changes.

The geophysical surveys have shown that a considerable volume of unconsolidated sediment is present immediately offshore from Dundas.  The dominant factor controlling the sedimentary processes that govern the deposition of these sediments has been relative sea level change.  The three units identified within the offshore sedimentary package have been interpreted to be highstand systems tract ('HST'), lowstand systems tract ('LST') and transgressive systems tract ('TST') units.  Only the HST unit is interpreted to occur in the onshore environment and this unit hosts the current onshore ilmenite resource. The HST unit has become exposed following a recent drop in relative sea level.

The offshore sediments are derived from the erosion of crystalline Archean and Proterozoic rocks that are exposed along the coast.  These crystalline rocks have been intruded by the high-Ti Steensby Sill Complex (up to 6% Ti in whole-rock analysis) and form the main source for the ilmenite in the HMS.  Erosion and fluvioglacial transportation allowed for a constant influx of ilmenite during the formation of the HST, LST and TST units.

Figure 2: Systems tracts and principal geological model for the offshore component of the Dundas Ilmenite Project

Vibrocore - Earlier Offshore Exploration

During 2015 and 2016, the Geological Survey of Denmark and Greenland (GEUS) carried out Van Veen and vibrocore sampling and completed geophysical surveys on behalf of Bluejay.  Assay results are only available for some of the 2016 vibrocore samples (Appendix 1).  A total of 237 vibrocore samples were collected and 126 analyses completed.  The range of titanium dioxide (TiO₂) was 0.02 - 5.79%, with an average of 0.52% TiO₂.  The maximum depth of the vibrocore holes is 1.9m and an average depth 0.7m, meaning that the Deposit has not been tested to its full depth.  More details regarding the 2016 vibrocore sampling programme can be found in Appendix 2.

GEUS carried out seismic surveys in 2015 and 2016.  The surveys showed areas with soft sediment potential, generated a soft-sediment thickness map (LST+TST only), and interpreted seismic profiles.

Figure 3: Thematic map of the assayed vibrocore samples (WGS 84 UTM Zone 19N)

Data Quality

RSC reviewed the available geological, geophysical and sampling data and found the data sets to be incomplete.  Only about 50% of the vibrocores collected in 2016 could be located by GEUS at its storage facility in Copenhagen.  The remainder is unaccounted for and has not been assayed as a result.  Assessment of the geophysical data revealed that the seismic data set is incomplete and that the seismic profiles and their interpretation are not always clear.  In general, below average sample and data processes appear to have affected most components of the 2015 and 2016 exploration programmes.  Issues with the data were taken into account by the Competent Person in assessing the exploration potential of the Deposit.

Exploration Target - Offshore Dundas Ilmenite Project

RSC assessed the exploration potential of the Deposit based on existing sampling and geophysical data and in conjunction with the geological model.  The sample coverage is limited by the large proportion of missing samples, sampling undertaken has not tested the full thickness of the Deposit, and no samples have been collected within the offshore LST and HST units.  Since no quality control data is available, the quality of the existing vibrocore samples cannot be assessed.  Additionally, the quality of the geophysical work means that the interpretations should be used with caution.

RSC used the vibrocore samples to estimate an approximate grade range for the TST unit.  The 126 vibrocore samples were composited into 107 1m composite samples.  The elevations of all single-point composite samples were set to the same elevation (zero RL) in preparation for estimation in 2D.  The composite sample grades ranged from 0.02 to 5.79% TiO₂ and had a mean of 0.52% TiO₂.  No grade capping was applied in the grade interpolation process.

No domaining was used in the TST estimation.  Variograms of the composited samples showed good continuity in the NW-SE (300^o) direction, suggesting reasonable continuity up to 4km.  This orientation matches the trend of the coastline.  The data also showed a low nugget of 5%.  RSC approximated the range of the grade of the TST unit by means of ordinary kriging.  The grade was estimated into a 200 x 200m block model, with a single block height of 1m (Figure ).

The grade of the LST and HST units, for which no exploration grade data were available, have been assigned a grade of 2.9% TiO₂ based on the average grade resulting from the onshore resource estimation.  The offshore estimation is based on the geological model and the interpretation of the geophysics which indicates the occurrence of the LST and HST units in the offshore environments.  RSC considers the grade assumption for the offshore component of the LST and HST reasonable.  This is because the onshore resource grade was estimated with due care and diligence at appropriate confidence categories, and the geological controls on mineralisation are unlikely to differ materially towards the offshore part of the Deposit.  It is therefore fit for the purpose of determining the exploration potential of the offshore component.

Offshore tonnage estimates were derived from the digital LST+TST thickness contour map that is part of the 2015 GEUS survey.  The thickness contours were converted into an LST+TST thickness and attributed into a 200 x 200m parent block model.  In order to estimate the tonnage of the TST, LST and HST units, the interpreted seismic profiles in the 2015 GEUS report were used to establish the cross-section ratios of the TST, LST and HST units.  The ratios were used to estimate the volume of the TST, LST and HST units.  These volumes were then converted into dry tonnes using an overall density of 2.1 t/m³, which is the density determined in the onshore resource estimate.

In the Competent Person's opinion, the parameters used in the process of determining the range of tonnage and grades for the Deposit are fit for the purpose of defining an Exploration Target in accordance with the JORC Code (2012).

The total exploration potential of the offshore component of the Dundas Ilmenite Project is in the order of 300 - 530Mt at an average expected grade range of 0.2 - 2.3% TiO₂ (Table 3).  This target has been presented as an Exploration Target in accordance with the JORC Code (2012), and the Competent Person takes responsibility for the form and the context in which the Exploration Target appears in this report.  The potential quantity and grade of the Exploration Target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Figure 4: Plan view of the block model of the TST and LST units

Table 3: Offshore Maiden Exploration Target tonnage and grade ranges

Further Offshore Exploration

A staged approach is planned to test the validity of the exploration target, starting with a review of the existing seismic data in 2019.  The review will help better define the sediment units, total thicknesses and can possibly be used to select the areas that are best suited for follow-up magnetic and high-resolution sub-bottom profiling surveys.  This work is planned to be undertaken during 2020.  These surveys will further refine the sedimentary units, internal structures and HMS rich zones.  The high-resolution geophysical data collected can be used to define drill targets, which can be tested in the summer of 2021.

Competent Person's Statement

The information in this press release that relates to onshore Mineral Resources is based on information compiled under the direction of Dr. Mike Armitage C Geol., C Eng., who is a Fellow of the Geological Society and a Member of the Institute of Materials, Minerals and Mining both of which are Recognised Overseas Professional Organisations (ROPOs) included in a list promulgated by JORC from time to time.  Dr. Armitage is a full-time employee of SRK Consulting (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC Code) and for the purposes of the AIM Rules.  Dr. Armitage has reviewed this press release and consents to the inclusion in the press release of the matters based on his information in the form and context in which this appears.

The information in this announcement that relates to the Exploration Target for the offshore component of the Dundas Ilmenite Project is based on information compiled by Mr. René Sterk, a Competent Person who is a Chartered Professional and a Fellow with the AusIMM, as well as a Member and Registered Professional Geologist with the AIG.  Mr. Sterk is employed by RSC Global Pty Ltd. He has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.  Mr. Sterk consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.  

**ENDS**

For further information please visit http://www.titanium.gl or contact:

Additional Information

Appendix 1- Vibrocore drill hole information (offshore)

The TiO₂ and HM% in situ for vibrocore holes that are deeper than 1m and have two samples analysed has been averaged.  The weighted average column indicates which holes have an average grade.  The weighted average was calculated as follows: ((length sample 1 * grade sample 1) + (length sample 2 * grade sample 2)) / (length sample 1 + length sample 2).

Appendix 2 - Sampling Techniques and Data (offshore)

Sampling techniques and data; Table 2 and Table 3, section; 'Dundas 2018 Offshore Exploration Target' and section; 'Exploration Target - Offshore Dundas Ilmenite Project':

Reporting of Exploration Results (offshore); Table 2 and Table 3, section; 'Dundas 2018 Offshore Exploration Target' and section; 'Exploration Target - Offshore Dundas Ilmenite Project':