Search Minerals Phase III Drilling Increases Foxtrot REE Project Resource Estimate by 55% of Similar Grade

VANCOUVER, Nov. 1, 2012 /PRNewswire/ - Search Minerals Inc. ("Search" or the "Company") (TSXV: SMY) and its wholly-owned subsidiary, Alterra Resources Inc., are pleased to announce that Roscoe Postle Associates (RPA) have prepaed an updated mineral resource estimates for the Foxtrot Project in the Port Hope Simpson Rare Earth Element (REE) District in southeastern Labrador.

HIGHLIGHTS

  • A 270% increase in Indicated Resources, largely from extending the initial resource to depth.

  • 9,229,000 tonnes of Indicated Mineral Resources with a grade of 0.17% heavy rare earth elements (HREE+Y), equivalent to 0.21% heavy rare earth oxides (HREO+Y), and

    • 0.88% total rare earth elements (TREE+Y), equivalent to 1.07% heavy rare earth oxides (HREO+Y), including 189 ppm dysprosium (218 ppm Dy2O3) and 1,442 ppm neodymium  (1,687 Nd2O3).

  • 5,165,000 tonnes of Inferred Mineral Resources with a grade of 0.16% HREE+Y (0.20% HREO+Y) and 0.77% TREE+Y (0.93% TREO+Y), including 176 ppm Dy (202 ppm Dy2O3) and 1,233 ppm Nd (1,442 Nd2O3).

  • A continuous band of higher-grade mineralization, amenable to lower tonnage underground mining, containing a majority of the resources.

  • A broader zone with larger tonnages of mineralization slightly lower in grade, and amenable to open pit mining.

  • The deposit remains open at depth along more than 500m of strike length.

Jim Clucas, President and CEO of Search Minerals, stated "The latest RPA resource estimate reflects the results from all three successful drill programs at Foxtrot.  The significant increase in both size and quality of the resource gives us the flexibility to consider different production scenarios including a starter pit and a smaller high grade underground mine.  This case should result in significantly reduced capital costs and a faster payback as well as reducing the environmental footprint."

MINERAL RESOURCE ESTIMATES

The resource estimate was carried out by Roscoe Postle Associates Inc. (RPA), and is an update on the initial resource estimate, dated Sep. 30, 2011. Table 1 provides a summary of the mineral resource inventory from the block model, using a reporting cutoff of 130 ppm Dy (150 ppm Dy2O3), the heavy rare earth element with the greatest in situ value at Foxtrot. This summary also reports the grade of neodymium, the light rare earth with the greatest in situ value.

The focus of exploration has been a steeply dipping tabular zone that has a true width of 60m to 100m. This zone consists of inter-layered bands of mafic and felsic volcanics, with the felsic bands hosting the economic mineralization. Mineral Resources are limited to the portions of the zone logged as felsic.  Drilling to date has established strong REE mineralization over a near-surface strike length of more than 2,000 meters, and identified a Central Area with high economic potential, to a depth of 450m. Horizontal extensions of the Central Area, primarily to the west, are generally thinner; the HREE grades are similar to those in the Central Area, and the LREE grades are generally lower. All of the Indicated resources lie in the well-drilled heart of the Central Area; Inferred resources lie at depth in the Central Area, and in the eastern and western extensions.

Table 1. Estimated open pit mineral resources for the Foxtrot Project, at a Dy cutoff
  of 130 ppm (equivalent to a Dy2O3 cutoff of 150 ppm), as of September 30th, 2012.

Classification Zone Tonnage
(in tonnes)
Dy
(in ppm)
Nd
(in ppm)
Y
(in ppm)
HREE+Y
(in %)
TREE+Y
(in %)
Indicated Central 9,229,000 189 1,442 1,040 0.17 0.88
Indicated Extensions -- -- -- -- -- --
INDICATED TOTAL 9,229,000 189 1,442 1,040 0.17 0.88
               
Inferred Central 3,291,000 178 1,339 982 0.16 0.83
Inferred Extensions 1,874,000 171 1,046 960 0.16 0.67
INFERRED TOTAL 5,165,000 176 1,233 974 0.16 0.77
               
               
Classification Zone Tonnage
(in tonnes)
Dy2O3
(in ppm)
Nd2O3
(in ppm)
Y2O3
(in ppm)
HREO+Y
(in %)
TREO+Y
(in %)
Indicated Central 9,229,000 218 1,687 1,345 0.21 1.07
Indicated Extensions -- -- -- -- -- --
INDICATED TOTAL 9,229,000 217 1,687 1,320 0.21 1.06
               
Inferred Central 3,291,000 205 1,567 1,247 0.20 1.00
Inferred Extensions 1,874,000 197 1,224 1,219 0.19 0.81
INFERRED TOTAL 5,165,000 202 1,442 1,237 0.20 0.93
  1. The elements that contribute to the HREE+Y total, and whose oxides contribute to the HREO+Y total, are: Y, Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb and Lu.
  2. Numbers are rounded to reflect the precision of the estimated tonnages and grades.
  3. Estimated mineral resources are not mineral reserves and do not have demonstrated economic viability.
  4. An average dry bulk density of 2.71 tonnes per cubic meter (t/m3) was used for felsic rocks and 2.88 t/m3 for mafic rocks.
  5. Grades were interpolated using ordinary kriging.
  6. Resources have been classified using the Definition Standards of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM); details of the classification procedures are provided in the text below.
  7. The decision to base the reporting cutoff on dysprosium is based on its current and recent market value and on its grade, the combination of which makes it the project's predominant heavy rare earth element in terms of in situ value. It is possible that, in the future, the project's reporting cutoff will incorporate other rare earth elements.
  8. There are no known legal, political, environmental, or other risks that could materially affect the potential development of the mineral resources.

A complete tabulation of the grades of the entire suite of elements, and their oxides, are given at the end of this news release in Table 3.

ADDITIONAL RESOURCE POTENTIAL

On every section through the Central Area, the deepest holes show strong mineralization, including the section on which a hole reached mineralization at a vertical depth of about 450m. This indicates potential for a significant increase in resources at depth in the Central Area, where the deposit remains open at depth along the entire 500m.

The eastern and western extensions have been tested to a depth of only 50-100m, and their down-dip extensions remain targets for future drilling. In the west, where several sections show a consistent band of high-grade mineralization that remains open at depth, future drilling may add to the current resources.

HIGH-GRADE CENTRAL BAND

RPA carried out a Preliminary Economic Assessment (PEA) on a bulk open pit mining scenario (results were disclosed in a press release dated May 1, 2012).  The PEA indicated that material at 130 ppm Dy has a net smelter return (NSR) well above the marginal cost of mining and processing. Since the project's economic viability will depend on the details of metal prices, metallurgical recovery factors, and costs, the project's mineral resources may, in future, be reported at lower or higher cutoffs. Table 2 shows the sensitivity of tonnage and grade to the reporting cutoff, using a range of Dy cutoffs.

Table 2 shows that there is a sizeable resource at higher cutoff grades, with 80% of the Indicated tonnage and 70% of the Inferred tonnage being above a 150 ppm Dy cutoff (173 ppm Dy2O3). The vast majority of these high-grade resources lie along three continuous bands of felsic material that lie close to the footwall of the broader felsic zone. With widths of 5-20m, and with near-vertical dips, these bands are amenable to small-scale underground mining.

Table 2. Sensitivity of the project's total open pit mineral
resources to changes in the Dy cutoff grade.

Classification Dy
Cutoff
Grade
(in ppm)
Tonnage
(in tonnes)
Dy
(in ppm)
Nd
(in ppm)
Y
(in ppm)
HREE+Y
(in %)
TREE+Y
(in %)
Indicated 130 9,229,000 189 1,442 1,040 0.17 0.88
  150 7,653,000 199 1,515 1,094 0.18 0.93
  170 6,056,000 210 1,594 1,149 0.19 0.97
  190 4,605,000 219 1,660 1,198 0.20 1.01
               
Inferred 130 5,165,000 176 1,233 974 0.16 0.77
  150 3,661,000 191 1,371 1,058 0.18 0.86
  170 2,537,000 204 1,523 1,137 0.19 0.95
  190 1,654,000 218 1,673 1,217 0.20 1.04
               
Classification Dy2O3
Cutoff
Grade
(in ppm)
Tonnage
(in tonnes)
Dy2O3
(in ppm)
Nd2O3
(in ppm)
Y2O3
(in ppm)
HREO+Y
(in %)
TREO+Y
(in %)
Indicated 150 9,229,000 217 1,687 1,320 0.21 1.06
  173 7,653,000 229 1,772 1,389 0.22 1.11
  196 6,056,000 241 1,865 1,459 0.24 1.17
  219 4,605,000 252 1,943 1,521 0.25 1.22
               
Inferred 150 5,165,000 202 1,442 1,237 0.20 0.93
  173 3,661,000 219 1,604 1,343 0.22 1.03
  196 2,537,000 235 1,782 1,444 0.23 1.14
  219 1,654,000 251 1,957 1,545 0.25 1.25

MINERAL RESOURCE ESTIMATION AND CLASSIFICATION PROCEDURES

The mineral resource estimates are based on assay results obtained from channel samples and from three drilling campaigns. The Phase I drilling campaign was completed in 2010/2011 and consisted of 23 diamond drill holes totaling 3,955m. The Phase II drilling program was completed in the summer of 2011 and consisted of 20 diamond drill holes totaling 4,083m. The Phase III drilling campaign was completed in spring 2012 and consisted of 29 diamond drill holes totaling  10,836m. The channel sampling program was completed in 2011 and consisted of 269m of samples taken from ten channel cuts across the full width of the mineralized zone exposed at surface.

Mineral resources were estimated by ordinary kriging, a geostatistical estimation method that uses information on the spatial continuity of grades. A search ellipse with a radius of 140m (along strike) by 70m (down dip) by 5m (across the mineralized zone) was used. The search ellipse was sub-divided into octants (eight sectors) and within each octant the assay data from a maximum of three sample intervals were used for grade estimation. The variogram model used for ordinary kriging had ranges of correlation equal to the radiuses of the search ellipse and its orientation was aligned with the search ellipse. With the rare earth elements all being strongly correlated with each other, the same variogram model was used for the estimation of all rare earth grades.

Within 10x5x10m blocks, the tonnage of felsic material was estimated using the nearby samples, and the grades of the complete rare earth element suite were estimated using the assays from the nearby felsic samples.

Mineral resources were classified as Indicated if the block estimate was based on samples in all eight octants, which restricts the Indicated resources to the well-drilled heart of the felsic zone. Blocks were classified as Inferred if their estimate was based on assays from at least two different drill holes within the range of correlation as defined by the variogram. In the down-dip direction, Inferred resources were required to be within 50m of the base of current drilling.

Two ISO-certified commercial laboratories have been used for the assays used in these resource estimates. The primary lab is the Activation Laboratories Ltd. (ActLabs) facility in Ancaster, Ontario; the secondary lab, used for check purposes, is the SGS facility in Toronto, Ontario. The reliability of the assay information was established through two quality assurance and quality control (QA/QC) programs, one conducted and monitored by Search Minerals and its consultants and the other conducted and monitored internally by ActLabs. Both QA/QC programs use certified reference materials and blanks to check the accuracy and precision of the assay information provided by the laboratory; the internal program of ActLabs also uses pulp duplicates to monitor the reliability of the data.

QUALIFIED PERSON

Mohan Srivastava (P.Geo), an independent consultant, is the Qualified Person (QP) responsible for the calculation and classification of the mineral resource estimate; Mr. Srivastava has also reviewed and approved the technical disclosure in this news release. A National Instrument 43-101 Technical Report will be filed by Search Minerals on SEDAR within 45 days of the date of this news release.

Table 3. Element and oxide grades for open pit mineral resources, at a Dy cutoff grade
of 130 ppm (equivalent to a Dy2O3 cutoff of 150 ppm), as of September 30th, 2012.

      INDICATED   INFERRED
      Central Extensions TOTAL   Central Extensions TOTAL
Tonnage (t)   9,229,000 -- 9,229,00   3,291,000 1,874,000 5,165,000
Element Units                
Y Ppm   1,040 -- 1,040   982 960 974
La Ppm   1,646 -- 1,646   1,564 1,183 1,426
Ce Ppm   3,337 -- 3,337   3,139 2,429 2,881
Pr Ppm   384 -- 384   359 280 330
Nd Ppm   1,442 -- 1,442   1,339 1,046 1,233
Sm Ppm   262 -- 262   245 197 228
Eu Ppm   13 -- 13   12 9 11
Gd Ppm   205 -- 205   193 165 183
Tb Ppm   33 -- 33   30 28 30
Dy Ppm   189 -- 189   178 171 176
Ho Ppm   37 -- 37   35 34 34
Er Ppm   103 -- 103   98 98 98
Tm Ppm   15 -- 15   14 15 14
Yb Ppm   92 -- 92   88 95 91
Lu Ppm   14 -- 14   13 15 14
Zr Ppm   9,619 -- 9,619   9,538 10,987 10,064
Nb Ppm   626 -- 626   585 455 538
LREE %   0.71 -- 0.71   0.66 0.51 0.61
HREE %   0.17 -- 0.17   0.16 0.16 0.16
TREE %   0.88 -- 0.88   0.83 0.67 0.77
Oxide Units                
Y2O3 Ppm   1,320 -- 1,320   1,247 1,219 1,237
La2O3 Ppm   1,926 -- 1,926   1,830 1,385 1,669
CeO2 Ppm   4,105 -- 4,105   3,861 2,988 3,544
Pr6O11 Ppm   465 -- 465   434 339 400
Nd2O3 Ppm   1,687 -- 1,687   1,567 1,224 1,442
Sm2O3 Ppm   303 -- 303   285 228 264
Eu2O3 Ppm   15 -- 15   14 10 13
Gd2O3 Ppm   236 -- 236   222 190 210
Tb4O7 Ppm   38 -- 38   36 33 35
Dy2O3 Ppm   217 -- 217   205 197 202
Ho2O3 Ppm   42 -- 42   40 39 39
Er2O3 Ppm   118 -- 118   112 112 112
Tm2O3 Ppm   17 -- 17   16 17 16
Yb2O3 Ppm   105 -- 105   100 109 103
Lu2O3 Ppm   16 -- 16   15 17 16
ZrO2 Ppm   12,985 -- 12,985   12,877 14,832 13,586
Nb2O5 Ppm   789 -- 789   737 573 677
LREO %   0.85 -- 0.85   0.8 0.62 0.73
HREO %   0.21 -- 0.21   0.2 0.19 0.2
TREO %   1.06 -- 1.07   1.05 0.81 0.93

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility of the adequacy or accuracy of this release

About Search:

Search Minerals Inc. (TSXV:SMY) is a TSX Venture Exchange listed company, headquartered in Vancouver, B.C. Search is the discoverer of the Port Hope Simpson REE District, a highly prospective light and heavy REE belt located in southeast Labrador. The company controls a dominant land position in a belt 135km long and up to 12km wide.  In addition, Search has a number of other mineral prospects in its portfolio located in Newfoundland and Labrador, including a number of claims in the Strange Lake Complex, where Quest Rare Minerals has an earn-in agreement with the Company; and at the Red Wine Complex, where Great Western Minerals Group has a Joint Venture with the Company.

Furthermore, Search Minerals is the owner of the Starved Acid Leaching Technology (patents pending) ("SALT"), a process with the potential to economically recover nickel and cobalt from known deposits currently considered sub economic.

Search Minerals is led by a management team and Board of Directors with a proven track record in the mining industry. The Company has experienced geological and metallurgical teams led by Dr. Randy Miller and Dr. David Dreisinger respectively.

All material information on the Company may be found on its website at www.searchminerals.ca and on SEDAR at www.sedar.com.

Cautionary Statement:

This news release contains forward-looking statements that are not historical facts. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward- looking statements. Factors that could cause actual results to differ materially from these forward- looking statements include those risks set out in Search's public documents filed on SEDAR at www.sedar.com.  Although Search believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, Search disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Search Minerals Inc.



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