Nama Cobalt Property

Nama Group of Licences - Zambia

Caledonia Nama Limited, a wholly owned subsidiary of Caledonia, holds four contiguous Large Scale Mining Licences, which cover an area of 806 square kilometres on the northern extension of the Zambian Copperbelt and host open-pittable near-surface low grade cobalt /copper mineralization.

This area lies immediately north-west of the operating Konkola Copper mine and adjoins the extensive holdings of what was formerly Teal Mining and Exploration Limited (now a joint venture between African Rainbow Minerals and Vale).

Work Completed:

The 2001/2002 soil sampling program carried out jointly by Caledonia and BHP Billiton was completed over the majority of the original licence areas. This program identified a number of high priority anomalous targets within the required geological setting. These targets have been followed up in the search for copper/cobalt oxide and sulphide bodies. The top priority targets established by follow up drilling in 1996/7 were determined to be anomalies A, C, and D

In the second quarter of 2004, a mini bulk sample of 30 tonnes was excavated at Nama A (Discovery) site and underwent successful screening tests and heavy media/gravity separation tests in South Africa. Following encouraging results, further one-tonne samples were sent for additional test work to fine tune the extraction process for the cobalt oxide.

During 2006 metallurgical test work has provided a proposed metallurgical flow-sheet. Two further bulk samples were taken from Anomaly A to enhance and refine the metallurgical processes and cost parameters for producing a marketable and economically viable cobalt product.

Also in 2006/2007 a Technical Report, compliant with NI 43-101 was prepared for Anomaly A at Nama by Mr. David Grant, C.Geol., FGS, Pr.Sci.Nat., an independent consultant who is the "Independent Qualified Person" for Nama’s resources as required by National Instrument 43-101 of the Canadian Securities Administrators.

In his report Mr. Grant estimates the Indicated Resources at Anomaly A as 43,656,000 tonnes grading 0.055% Co, 0.099% Cu and 0.011%Ni. In a subsequent Technical Report published in May 2007 Mr. Grant estimated an Indicated Resource of 78,218,000 tonnes grading 0.043% Co, 0.012% Cu and 0.019% Ni in the Anomaly C area.

Thus the combined Indicated Resource for Anomalies A and C is estimated as 121,874,000 tonnes with a weighted average grade of 0.047% Co and 0.043% Cu. The NI 43-101 Technical Report detailing this full resource has been filed on SEDAR and is available in the Technical Report section of this website.

Exploration work and metallurgical testing conducted in 2008 focused on anomaly D where the cobalt is contained in iron-rich ores (magnetite and haematite). Metallurgical test work suggested that it is not possible to extract cobalt from such ores by a hydrometallurgical process to produce high value, low volume cobalt hydroxide.