Monty (Montenegro)

Monty PROJECT (100%)
Zinc-Lead-Copper-Silver Deposit in Montenegro

The Monty Project is in the eastern part of Montenegro located near to the town of Mojkovac and approximately 100km from the capital city of Podgorica.  Mojkovac is linked by rail and road between Podgorica and Belgrade, Serbia.

Balamara received a 25 year exploration and mining lease of the Brskovo Lead and Zinc Complex (Monty Project) in 2010 on favorable acquisition terms. Since then Balamara has developed a JORC defined resource at Monty and completed further drilling in 2011 for metallurgical samples.  Currently work is progressing on the feasibility study as the Company is targeting to bring Monty into production in 2013.

Highlights include:

• 9.2 Million Tonnes of Zn-Pb-Cu-Ag Mineralisation;
• Total Acquisition Cost 120,000 Euro;
• Monty Project contains 5 Large Already Defined Deposits;
• Excellent Potential to make New Discoveries;
• Company Tax in Montenegro is set at only 9%; and
• Low sovereign risk.

The acquisition of the Monty Project significantly enhances Balamara’s assets. It offers Balamara immediate potential for commercial exploitation due to its previous mining history and infrastructure already being partially established.

The JORC inferred resource at Monty is as follows:

Balamara will also be continuing to explore at Monty with a further 3,000 meter drilling program being planned for 1H 2012, targeting increased tonnage and grade and also looking to reclassify some inferred tonnes into the indicated category. This drill program will focus on the Zuta Prla and Visnjica deposits rather than Brskovo.

History of Mining

Brskovo was a historical mining centre and is mentioned in history books describing the Balkans in the Late Medieval period. Brskovo on the banks of the Tara was first mentioned in 1253 and was Serbia’s largest silver mine in the second part of the thirteenth century. It was also the location of an important mint. The mines were primarily developed by Saxons who had migrated from Hungary and had the technical knowledge to develop the ore.

Modern exploration began at the Brskovo field in 1950 and continued until the beginning of exploitation at Zuta Prla 1976. Exploitation began at Brskovo in 1978. The Brskovo and Zuta Prla deposits were the only two deposits in the field to have been exploited and open cut mining ceased at Brskovo in 1987 and underground exploitation at Zuta Prla continued until 1991.

At Brskovo itself the highest point is approximately 1170 metres and the ore body was apparently originally covered by scree. The deposit was explored on underground levels 1161, 1145, 1114, 1105, 1078, 1045, 1007 and 940 and exploitation began as an underground operation but after a short time this was replaced by an open pit mining operation which took in the remnants of the previous underground work and also included the old Saxon workings.

Open cut mining continued and was completed at the 1110 level and both ore body no.1 and no.2 remain essentially unexploited below this level (except the relatively small amounts that were taken for evaluation purposes from the lower development levels). From official production figures historical ore production at Brskovo is approximately 909,000 tonnes at an unspecified grade.

The Zuta Prla deposit does not outcrop and from the generalized cross section the surface level above the deposit is at approximately 1175. The top of the ore body is at approximately 1020 and underground exploration and exploitation was conducted on levels 1019, 1007, 998, 987, 977, 961 and 955. It has essentially been mined down to 961 (except for pillars) and development was conducted on 955. According to official production figures approximately 1,942,000 tonnes were mined from 1976-1991.

At Zuta Prla the main transport level for the passage of people, equipment and ore haulage is on level 845 meters and it connects to a similar access drive from Brskovo before leading to the outside as a common access.

Visnjica and Igriste are relatively less explored and have not been exploited. Visnjica has one exploration adit and some surface drilling, while there has only been quite limited surface drilling at Igriste. There was limited information on the exploration undertaken at Razvrsje but there are resource figures given.

About Montenegro

Montenegro is an independent country located in South-eastern Europe and was part of the former Yugoslavia until recently.  It has a coastline on the Adriatic Sea to the south and borders Croatia to the west, Bosnia and Herzegovina to the northwest, Serbia to the northeast, Albania to the southeast.

Its capital and largest city is Podgorica.  It has a population of approximately 700,000 people in an area of 1,381km2. The official language(s) spoken are Serbian, Croatian, Albanian, Bosnian and Montenegrin.

The Brskovo ore field is located a few kilometres from the town of Mojkovac in the municipality of the same name. It has a population of 4,120 (2003 census) and lies approximately 100km from Podgorica.  Mojkovac is linked by rail and road between Podgorica and Belgrade.

Brskovo was a historical mining centre located on the banks of the Tara and the first mention of the name is in 1253. It was Serbia’s largest silver mine in the second part of the thirteenth century and an important centre for minting silver coins.

Current Status

On the 2nd of May 2012, Balamara was pleased to announce the discovery of high-grade silver mineralisation at its Montenegro Base Metals Project (Monty). The results come from two holes drilled at the end of 2011 to provide samples for metallurgical testing. The most significant intersection on the first hole was 5.5m (181.5m to 187m) at 507.7 g/t silver, 4.01% zinc, 2.83% lead and 0.28% copper. The latter also returned 5.5m (146.5m to 152m) at 17.8 g/t silver, 7.18% zinc, 4.71% lead, and 0.08% copper; and 11m (161m to 172m) at 14 g/t silver, 5.13% zinc, 3.44% lead and 0.21 % copper. The first silver assays generated highlight significant potential for silver mineralisation to boost the economics of a mining operation there. The second hole also intersected high grade silver within the zinc, lead and copper, with the most significant intersections being: 8m (147m to 155m) at 129.7 g/t silver, 2.45% zinc, 1.50% lead and 0.29% copper which includes 3m (147m to 150m) at 337 g/t silver, 4.05% zinc, 2.74% lead and 0.61% copper; amd 18.5m (94.5m to 113m) at 14.0 g/t silver, 4.64% zinc, 3.67% lead and 0.29% copper.

Balamara plans to follow up these two holes with additional drilling at Brskovo to test the extent of these high-grade silver intersections. We are targeting production at this project by the end of 2013 and the company is currently working through the feasibility study as a key part of this process. We also believe there is significant potential to further expand this resource and commence a second diamond drilling exploration program there in the March Quarter. This program is focusing on the higher-grade Zuta Prla and Visnjica deposits, located near to the original Brskovo deposit, with the objective of increasing both the overall tonnage and grade of the resource and upgrading part of the existing Inferred Resource to Indicated category.