Black Canyon Limited has upgraded the JORC classification of its KR2 manganese deposit to 90% Indicated, enhancing resource confidence and supporting improved mine planning for its Balfour Manganese Field project.
- KR2 Mineral Resource Estimate upgraded to 90% Indicated classification
- Combined KR1 and KR2 deposits total 104 million tonnes at 10.3% manganese
- Upgrade supports enhanced mine scheduling and feasibility studies
- 2024 Scoping Study projects strong financial returns with low CAPEX
- Ongoing exploration at Wandanya high-grade manganese and iron discovery
Resource Upgrade Strengthens Project Outlook
Australian manganese explorer Black Canyon Limited has announced a significant upgrade to the JORC Mineral Resource Estimate (MRE) classification for its KR2 deposit within the Balfour Manganese Field (BMF) in Western Australia. Approximately 90% of the KR2 resource has been reclassified from Inferred to Indicated, reflecting increased geological confidence following an extensive infill reverse circulation (RC) drilling program completed in 2024.
This upgrade is a crucial milestone for Black Canyon, as it bolsters the reliability of the resource base underpinning the combined KR1 and KR2 deposits. Together, these deposits now total 104 million tonnes at an average grade of 10.3% manganese, containing an estimated 10.7 million tonnes of manganese metal. The KR2 deposit alone accounts for 25 million tonnes at 11.5% manganese, with 23 million tonnes classified as Indicated.
Implications for Mine Planning and Economics
Managing Director Brendan Cummins highlighted that the upgraded classification enables a re-optimisation of the mining schedule from the 2024 Scoping Study. Previously, higher-grade KR2 material classified as Inferred was scheduled beyond the first five years of production. With the reclassification, this material can be brought forward, potentially improving early cash flows and overall project financial metrics.
The 2024 Scoping Study already indicated robust economics for the KR1/KR2 project, with a pre-tax net present value (NPV) of A$340 million at an 8% discount rate and an internal rate of return (IRR) of 70%. The project envisages a 16-year mine life, producing an average of 3 million tonnes per annum, with a low capital expenditure of A$84 million and a payback period under two years.
Geological and Metallurgical Context
The KR2 deposit is hosted in manganese-enriched shales of the Proterozoic Balfour Formation, characterized by continuous mineralization with a shallow dip to the west. The deposit remains open along strike and at depth, offering exploration upside. The infill drilling, conducted on a 100m by 100m grid, confirmed geological and grade continuity, justifying the Indicated classification.
Metallurgical testwork on the adjacent KR1 deposit has demonstrated promising beneficiation results, upgrading manganese grades from 25% in situ to over 36% in concentrate, with leaching tests yielding 97% manganese recovery suitable for battery-grade manganese sulphate production. Black Canyon plans diamond drilling to obtain metallurgical samples for further processing studies.
Broader Exploration and Market Position
Beyond KR1 and KR2, Black Canyon continues to advance exploration at its Wandanya project, which hosts a high-grade manganese and iron discovery with significant scale potential. The company’s consolidated landholding in the Balfour Manganese Field and Oakover Basin totals approximately 2,000 square kilometers, positioning it as a notable player in the manganese sector.
Manganese remains a critical mineral for steel alloy production and lithium-ion battery cathodes, underpinning strong long-term demand fundamentals. Black Canyon’s resource upgrades and ongoing exploration efforts enhance its prospects to supply this essential commodity.
Bottom Line?
With the KR2 upgrade now in place, Black Canyon is poised to refine its development plans, potentially accelerating production and strengthening its position in the manganese market.
Questions in the middle?
- How will the upgraded KR2 resource classification impact the timing and scale of project financing?
- What are the next steps for metallurgical testwork and feasibility studies to confirm processing pathways?
- How might ongoing exploration at Wandanya influence Black Canyon’s overall resource portfolio and valuation?