Andromeda Metals Ltd.: Barns Metallurgy Results Deliver 97% Plus Gold Recovery

Adelaide, Australia - Andromeda Metals Ltd. (ASX:ADN) is pleased to announce Barns metallurgy results deliver 97% plus gold recovery.

Summary

- 97% gold recoveries achieved on three separate composited samples from the Barns deposit.

- The composites comprise one supergene and two primary zone samples. Total gold recovery results were consistent across the three ore types using a conventional gravity and cyanide leach flowsheet.

- Bureau Veritas Minerals Pty Ltd, an independent organisation, also conducted bottle roll (heap leach simulation) and flotation tests at their laboratory in Perth, Western Australia.

- These initial metallurgical results add further confidence to the potential economic value of the Barns deposit.

- The previously released Mineral Resource estimate for the Barns deposit is 2.11 million tonnes at 1.6g/t gold for 107,000 ounces of gold using a cut-off grade of 0.5g/t gold.

- In addition, exploration drilling was recently completed at nearby Baggy Green with results pointing to a potential increase in the local resource base.

- An independent Mineral Resource estimation for Baggy Green, and a rapidly emerging Wudinna Gold Camp, has commenced.

Background

Andromeda Metals' Eyre Peninsula gold project comprises eight tenements securing an area of 2,807 km2 in the Gawler Craton.

The Company priority on Eyre Peninsula is directed toward advancing the wholly owned Wudinna Gold Camp, a cluster of gold prospects including Barns, White Tank and Baggy Green, into production.

The Company has previously released a Mineral Resource estimate for the Barns deposit of 2.11 million tonnes at 1.6g/t gold for 107,000 ounces using a 0.5g/t gold cutoff grade.

An assessment of the Barns deposit by independent mining consultants in 2016 found the robustness of the project would be improved by completing metallurgical testwork to determine gold recoveries, and by increasing the resource base in the Wudinna Gold Camp by adding further shallow resources.

Metallurgical testing of Barns samples is now complete and reported herein. Progress towards increasing the Wudinna Gold Camp resource base has also been made with a recent 23 hole drilling programme completed at the Baggy Green prospect.

As one of the goals of the Baggy Green programme was the definition of shallow ounces, drilling targeted mineralisation commencing within 100 metres of the surface. Additionally, hole spacings were designed to be close enough for use in mineral resource estimation.

Results from the programme included the two best intersections recorded to date from Baggy Green with adjacent 50 metre spaced holes recording 16 metres at 5.72g/t gold and 11 metres at 9.32g/t gold respectively.

The drilling confirms the presence of a gently dipping, coherent zone of gold mineralisation which persists for 500 metres along strike, and remains open to the north, south, and at depth.

A Mineral Resource estimate for Baggy Green is underway with results anticipated to be announced in January 2017.

Barns metallurgical test work

Composite samples

Three composite samples were assembled from diamond core drilled at Barns. The representative samples included:

- supergene mineralisation,

- hangingwall (upper primary lodes) material, and

- footwall (basal primary lode) material.

The samples were shipped to Bureau Veritas Minerals Pty Ltd metallurgical laboratories in Perth, Western Australia.

Representative sub-samples were submitted for gold, silver, copper and sulphur analysis in particular - see Table 1 (in the link below).

Gold head grade reconciliation was noted to show a variation implying the presence of free gold, later borne out by gravity test work.

Gravity and cyanide leach

2kg of each composite was ground in a stainless steel rod mill to a p80 nominally minus 75 microns.

The ground material was passed through a Knelson Concentrator to produce a gravity concentrate and gravity tailings.

The gravity concentrate was then passed over a Mozely Table to reduce the mass to approx. 0.25% of the initial feed.

The Mozely Table concentrate was then subjected to 24 hours of intense cyanidation at 10% pulp density with a solution of 2.5% sodium cyanide. The pregnant solution was analysed for gold, silver and copper.

The leach residue was combined with both the Knelson Concentrator and Mozely Table tailings and subjected to 48 hours leaching at 45% pulp density with initial and minimum sodium cyanide solution strength of 500 and 300 mg/L respectively. Oxygen was sparged and lime was added to maintain a pH of 10 during the test.

The pulp was filtered and the liquid and solids submitted for gold, silver, and copper analysis to determine gold recoveries.

Gravity plus leach gold recoveries ranged from 96.9% to 98.8% - see Table 2 (in the link below).

Bottle roll cyanide leach tests

Samples of each composite were reduced to crush sizes of minus 12.5mm, 6.5mm and 3.35mm to investigate (simulate) heap leach flowsheet options.

Each sample was bottle rolled for 96 hours at 45% pulp density with initial and minimum sodium cyanide solution strength of 500 and 300 mg/L respectively. Lime was added to maintain a pH of 10.0 to 10.5.

A sub-sample of leached pulp was extracted from the bottle and analysed for gold and cyanide at 4, 8, 24, 48 and 72 hours.

The tests were terminated at 96 hours and the pulp was filtered and the liquid and solids submitted for gold, silver, and copper analysis to determine gold recoveries.

Gold recoveries were determined for each composite at three crush sizes - Table 3 (in the link below).

Flotation

The two primary lode composites were ground to minus 75 microns and conditioned with 100g/t copper sulphate activator, 100g/t potassium amyl xanthate collector and 10g/t of MX Gold 900 collector.

Gold recoveries approaching 90% were achieved in approx. 6% of the feed mass from rougher flotation only and represent an approx. concentration ratio of 17.

The supergene composite was not tested as the sulphur level was considered too low.

The results are noted - see Table 4 (in the link below).

Analysis of results
The gravity and cyanide leach results, achieved with low lime addition (0.2kg/t) and modest cyanide additions (approx. 1 kg/t) for the orebody tonnage dominant primary material, presents a viable conventional flowsheet option to treat all ore types identified at Barns.

Future test work would target coarsening the grind size to establish the optimum economic grind-recovery combination.

The bottle roll cyanide leach tests results achieved are a pointer as to whether a low capital cost heap leach circuit is potentially viable. Gold recoveries generally improved with the finer crush size and reached acceptable levels at 60% plus, again with low lime and modest cyanide consumption rates for the dominant primary ore type.

Future test work would require larger samples to be tested in columns over periods to 90 days.

The flotation results, producing concentrates assaying over one ounce per tonne are excellent in the context where cyanide cannot be used.

However, the gravity and cyanide leach results are superior to the flotation results and given the simpler flowsheet, no further flotation test work would be envisaged at this point.

Next steps

The next logical metallurgical test work to be conducted would duplicate the above preliminary investigations on Baggy Green material, should the Mineral Resource estimate, currently being completed, indicate a meaningful addition to the gold inventory at the Wudinna Gold Camp.

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About Andromeda Metals Ltd:

Andromeda Metals Ltd. (ASX:ADN) is an Australian Securities Exchange listed company focusing on mineral exploration for gold, copper and lithium deposits. The company has built a highly prospective exploration portfolio of projects covering 7,969 sq kms within 21 exploration licences located in South Australia, Queensland, Western Australia and the Northern Territory. Andromeda Metals was incorporated on 23 December 1993 and subsequently listed on the ASX on 11 September 1996. The company's head office is in Adelaide, South Australia.

Andromeda Metals' vision is to be a sustainable minerals exploration company providing shareholders with risk managed discovery, development and mining opportunities.



Contact:

Andromeda Metals Ltd.
Chris Drown Managing Director
Nick Harding Executive Director, Company Secretary
Tel: +61-8-8271-0600
Email: admin@andromet.com.au
www.andromet.com.au