Makala

The Makala exploration project is located approximately 28 kilometres from Kolwezi, proximal to road and rail infrastructure as well as air links, at Kolwezi.

The Makala licence is located in an area that is well-known for copper and cobalt mineralisation, with a number of projects underway in the area. The deposits are situated in the Lufilian Arc belt, which hosts both the Zambian and Katanga copper belts, and is home to some of the world’s richest copper and cobalt deposits.

The area has a history of artisanal mining and some exploration trenches, and pits were made by Gecamines. Exploration by Shalina Resources commenced in June 2006.

Makala is one of Shalina Resources most advanced exploration projects. The company has undertaken extensive in-house drilling on two zones of mineralisation: a large low-copper high-cobalt block of R4 sequence, and a smaller higher-grade block of R2. These two blocks, R2 and R4, lie in very close proximity to each other, approximately 1km apart.

Highlights of the drilling programme:

• Completion of 18-hole regional diamond drilling programme
• 37 hole Reverse Circulation programme completed in Masela region
• Phase 2, resource drilling planned and underway with 9 holes already completed at the R4 block.
• Scoping study in progress for R4 block
• Industry standard data capture techniques and standards being adopted

2009 saw drilling activities continue in various areas of PE 4613. Diamond drilling in the R4 block continued to delineate the extent of mineralization at the western end of the block, and mineralization to date remains open along strike to the west. Regional diamond drilling further explored for mineralization in the flat ground between the R4 block and Masela area, with the last of 18 holes completed in May 2009.

A regional reverse circulation drilling programme was also completed in May at the Masela area; its purpose was to test the potential of the Roan (R4) dolomites.

R4 Block

The R4 orebody is formed from a structurally repeated (thrust fault) R4 horizon, which forms in a dilatant jog in a regional structure (bend promoting dilation and fluid focus). While low-grade, there is potential for it to support a satellite HMS operation:

• Firstly because there is the large tonnage; at 17.2Mt there is significant potential to optimise a smaller high-grade near-surface resource. For example, cobalt grades of 1.1% have been intersected over 25m, which equates to 5.5% coppe;
• Secondly, recovery levels are high; preliminary metallurgical work at Makala indicates that a recovery of 70% is possible.

A second phase of resource drilling was initiated in 2009. This second phase of drilling and associated work is being completed at a much higher standard than the initial phase, with all measures being taken to meet JORC compliance. This includes conducting down hole surveys, using good quality core boxes to preserve sample integrity, and capturing data in modern, industry standard formats. The ongoing training of staff is a major component of successful data capture and has been a priority.

A scoping study was initiated in June 2009, with African Mining Consultants (AMC) being selected to carry out the work. The work will entail a review of the data generated to date and the methods employed to obtain this data. In-house beneficiation studies (from which initial results are encouraging) will also aid the scoping study. A report on the study findings is expected by 2011.

R2 Block

The R2 orebody is a small raft of very high-grade mineralisation. The strike mineralization of the ore body at surface extends for 220m with further continuation of the ore body below surface verified through drilling.  At present, an indicated resource of 852,306t has been established at 2,58% Cu and 0.3% Co and an inferred resource of 359,389t has been established at 3.34% Cu and 0.19% Co.

Trenching was carried over a cumulative distance of 145m.  A 2042.50m drill programme was carried out over 31 boreholes to delineate and define the ore body.

A further 2,700m drill programme is planned to further delineate the resource and increase confidence in the deposit by establishing a measured resource and a reserve statement for Makala.