6 March 2024
Kavango Resources
("Kavango" or "the
Company")
Zim: Maiden 5,860/oz Indicated Gold
JORC Resource
Kavango Resources plc (LSE:KAV), the Southern
Africa focussed metals explorer, is pleased to announce that it has
received a maiden Resource Estimate (the "Resource Estimate") for
the largest tailings dump at the Nara Gold Project ("Nara") in
Zimbabwe.
The Resource Estimate highlights the potential
for the tailings dump to provide Kavango with a significant
near-term source of gold production and early, non-dilutive free
cash flow.
HIGHLIGHTS
- The Resource Estimate
concludes that the two Nara tailings dumps tested together
contain:
- An Indicated Mineral
Resource of 293,000 tonnes ("t") at an average of 0.62 grams per
tonne ("g/t") gold, for a total of 5,860 ounces gold
contained.
- An inferred resource
of 11,900t at 0.66g/t gold, for a total of 253 ounces gold
contained.
- Some 96% of the
Mineral Resource has been categorised as Indicated thus placing it
into a relatively high resource category for the early stage of the
project, demonstrating confidence in the continuity of the
material.
- Future extraction
costs will be operational, with no mining required.
- The Mineral Resource
Estimate also identified upside potential at the tailings dump,
highlighting the opportunity to increase tonnage at as-yet-untested
depths.
- Kavango
is now assessing options to commercialise the gold in the Nara
tailings dump.
- The
Company plans to use free cash flow generated by any tailings
production to advance its wider exploration activities targeting
large-scale, bulk-mineable metal deposit discoveries in
Zimbabwe.
Kavango currently has an exclusive 2-year
option to buy Nara (announced
>>> 26 June 2023).
Ben Turney,
Chief Executive of Kavango Resources, commented:
"This Maiden
Resource Estimate for gold for the Nara tailings dumps is the first
Mineral Resource Estimate Kavango has delivered.
It's a
milestone moment for our company and reflects the speed at which we
are growing in Zimbabwe.
Given that
this is a tailings dump, all material has already been mined and
there are no further mining costs. The Resource Estimate and high
resource category achieved underline the commercial potential at
Nara.
While our
primary objective is to discover larger-scale, bulk minable gold
deposits, the 6,000 ounces of gold in the main tailings dump
present an early opportunity for commercialising this
project.
The free cash
flow we could generate from processing the gold in the Nara
tailings can help fund both our development of this project and our
wider exploration across Zimbabwe's highly prospective,
under-explored greenstone belts.
We will now
commence metallurgical test work to optimise plant design to enable
future gold production."
Background
Kavango signed an exclusive two-year option to
acquire the Nara Gold Project in June 2023
(announced
>>> 26 June 2023).
Nara covers four historic mines with total
recorded production of more than 90,000oz in the first half of the
20th Century. These mines also produced credits of tungsten and
silver. There is a 30-year plus history of small-scale mining &
custom milling on the property.
No drilling or modern exploration has been
carried out to assess the >4km of strike potential at Nara,
meaning that longer term there is significant potential for Kavango
to explore for hard-rock resources, and for which it is ultimately
targeting >1 million oz. gold potential.
Near-term cash flow potential also exists at
Nara within the project's historical tailings dumps. These are the
focus of the current resource estimate.
In Q4 2023, Kavango engaged a contractor to
carry out auger sampling on two of the tailings dumps at Nara. Each
hole was drilled using an engine-driven hydraulic auger with a 50
millimetre ("mm") rotating spiral enclosed within a core barrel.
Samples were extracted at 1.5 meter ("m") intervals at an average
mass of 1.51 kilograms ("kg"), placed in plastic bags, ticketed,
and sealed.
Analysis of these samples was subsequently
carried out by a laboratory in Zimbabwe. The samples were
pulverised, split, weighed into 500 gram ("g") aliquots and bottle
rolled for 24 hours in 0.2 % CN at a pH of 10.5 to 11. The
solutions were analysed for gold via atomic adsorption spectrometry
(AAS).
Of the samples, 10% were selected for fire
assay. This was utilised to provide an indication of 'recovered'
grade of gold in the bottle roll versus total gold
content.
Resource estimation was carried out in February
2024 by Dr John Arthur, a UK based independent resource consultant.
Mineral Resource classification categories and subsequent
reporting are summarised in the following table. The Mineral
Resource Statement presented has been classified in accordance with
the requirements of the 2012 edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC 2012 Edition). The Competent Person who assumes
responsibility for reporting of the Mineral Resource is Dr John
Arthur who is a Competent Person as defined by the JORC Code 2012
Edition, having more than 5 years experience that is relevant to
the style of mineralisation and type of deposit described herein,
and to the activity for which he accepts responsibility. The
effective date of the Mineral Resource statement is 5 March
2024.
Updated surface topography and original basal
topography along with surveyed drill collars were used to model the
volumetric domains for the larger East and smaller West
dumps. Auger drilling results were validated and composited
prior to Exploratory data analysis (EDA) which established the
nature of the variography and indicated anisotropic ranges of
between 40-60m for the gold grade distribution within the
individual dump domains. Analysis was carried out separately
for the two dumps. Following validation of the variography
and appropriate kriging neighbourhood analysis (KNA) a parent block
model using 10x10x4m blocks was established which, given the drill
spacing of 20x20m and 1.5m sample interval (on average) was
considered appropriate and was confirmed by the KNA analysis.
The parent model was subsequently sub-blocked to allow a better fit
to the domain boundaries and Ordinary kriging was carried out on
gold grade values within the parent blocks. Density data is
limited and a value of 1.76t/m3 was applied globally
based on the results obtained from 6 sites across the dumps and the
average expected value of sand material benchmarked from various
sources.
The classification of the majority of the
material into the Indicated category is considered to be
conservative and is primarily due to the lack of detailed density
information. Dr Arthur considers that a significant tonnage
of material could be subsequently upgraded to the Measured Mineral
Resource category given a relatively small amount of work to
establish detailed density analysis across the two
dumps.
Mineral
Resource Statement
Table
1. Nara Tailings Mineral Resource
statement, effective date 5 March 2024
Domain
|
Category
|
Tonnes (Kt)
|
SG
|
Au (g/t)
|
Au (oz)
|
NARA
East
& West
|
Measured
|
-
|
-
|
-
|
-
|
Indicated
|
292.94
|
1.76
|
0.62
|
5860
|
Meas +
Ind
|
292.94
|
1.76
|
0.62
|
5860
|
Inferred
|
11.9
|
1.76
|
0.66
|
253
|
NOTES:
1. Mineral Resources
estimated using 0.0 (zero)Au.g/t cut-off grade and presented on a
100% (of bottle roll value)-basis
2. Mineral Resources
include mineralisation which may subsequently be evaluated and
classified as Ore Reserves following appropriate technical and
economic study.
3. The estimate of Mineral
Resources may be materially affected by environmental, permitting,
legal, marketing, or other relevant issues. Notwithstanding, it is
considered that the reported Mineral Resources show reasonable
prospects for eventual economic extraction.
4. The quantity and grade
of reported Inferred resources in this estimation are uncertain in
nature and there has been insufficient exploration to define these
Inferred Resources as an Indicated or Measured Mineral Resource. It
is uncertain if further exploration will result in upgrading them
to an Indicated or Measured Mineral Resource
category.
5. Contained metal and
tonnes figures in totals may differ due to
rounding.
Next
Steps
Kavango intends to carry out metallurgical test
work to assess further the potential recovery of gold, reagent
consumption, and operating parameters for a possible future
facility to process Nara's gold tailings.
Kavango will also carry out additional density
measurements, which the consultant recommends may allow for a
portion of the resource to be upgraded to a Measured Mineral
Resource category.
The Company will follow this up with a study
aimed at commercialising Nara's gold tailings opportunity to
achieve early cashflow.
Kavango intends to investigate potential upside
in the Mineral Resource Estimate identified by Dr. Arthur's
work.
Multiple holes stopped short due to
intersecting items such as past concrete infrastructure, meaning
there is potential for the tonnage to increase.
Likewise, some grade enrichment with depth was
also seen in multiple holes, potentially as a result of gravity
concentration. Given that not all holes reached target depth this
may offer additional contained gold beyond the original target
depths scoped out for the auger drilling.
The Nara
Option
Under the terms of the Option, Kavango has full
access to Nara to conduct field due diligence.
To exercise the Option, Kavango
would pay the current claims holder (the
"Vendor") US$4million cash (the "Acquisition
Price").
Kavango has agreed to pay an option
fee to the Vendor of up to US$220,000 over the 2-year
option period, split into 4 individual payments
of US$55,000 each payable at the start of each half year
of the option period (the "Option Payments").
In the event Kavango exercises the
Option, any Option Payments paid to the Vendor will be deducted
from the Acquisition Price.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS
PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT)
(EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS
DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
Further information in respect of the Company
and its business interests is provided on the Company's website at
www.kavangoresources.com and on Twitter at #KAV.
For further information please
contact:
Kavango Resources
plc
Ben Turney
+46 7697 406 06
First Equity (Broker)
+44 207 374 2212
Jason
Robertson
Kavango Competent Person Statement
The technical information contained in this
announcement pertaining to the Nara Tailings Resource Estimate has
been read and approved by Dr John Arthur. Dr Arthur is
Chartered Geologist (FGS) with some 28 years' experience in the
minerals industry. He has a PhD from Cardiff university. Dr
Arthur has sufficient experience that is relevant to the
exploration programmes and geology of the main styles of
mineralisation and deposit types under consideration to act as a
Qualified Person as defined in the 2012 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'.
APPENDIX
1
JORC Code, 2012
Edition - Table 1 NARA TAILINGS effective date 5 March
2024
Section 1 Sampling
Techniques and Data
(Criteria in this
section apply to all succeeding sections.)
Criteria
|
JORC Code
explanation
|
Commentary
|
Sampling
techniques
|
·
Nature and quality of sampling
(eg cut channels, random chips, or specific specialised industry
standard measurement tools appropriate to the minerals under
investigation, such as down hole gamma sondes, or handheld XRF
instruments, etc). These examples should not be taken as limiting
the broad meaning of sampling.
·
Include reference to measures
taken to ensure sample representivity and the appropriate
calibration of any measurement tools or systems used.
·
Aspects of the determination of
mineralisation that are Material to the Public Report.
·
In cases where 'industry
standard' work has been done this would be relatively simple (eg
'reverse circulation drilling was used to obtain 1 m samples from
which 3 kg was pulverised to produce a 30 g charge for fire
assay'). In other cases more explanation may be required, such as
where there is coarse gold that has inherent sampling problems.
Unusual commodities or mineralisation types (eg submarine nodules)
may warrant disclosure of detailed information.
|
· Samples
were extracted as auger samples at 1.5 m intervals at an average
mass of 1.51 kg.
· These
were placed in plastic bags, ticketed, and sealed.
· Samples
were split using a riffle splitter. A duplicate, standard (CRM) and
blank were inserted every 20th sample. Samples were re-ticketed to
ensure numerical continuity and were batched in coated clean
poly-weave sacks.
|
Drilling
techniques
|
·
Drill type (eg core, reverse
circulation, open-hole hammer, rotary air blast, auger, Bangka,
sonic, etc) and details (eg core diameter, triple or standard tube,
depth of diamond tails, face-sampling bit or other type, whether
core is oriented and if so, by what method, etc).
|
· Each hole
was drilled using an engine-driven hydraulic auger with a 50 mm
rotating spiral enclosed within a core barrel.
· Samples
were extracted as auger samples at 1.5 m intervals.
|
Drill
sample recovery
|
·
Method of recording and assessing
core and chip sample recoveries and results assessed.
·
Measures taken to maximise sample
recovery and ensure representative nature of the
samples.
·
Whether a relationship exists
between sample recovery and grade and whether sample bias may have
occurred due to preferential loss/gain of fine/coarse
material.
|
· All
samples were weighed.
· No
relationship was noted between sample size and grade.
· Some
holes stopped short of final depth due to hitting concrete
infrastructure. This may result in under-reporting of grade as
deeper (potentially enriched) portions could sometimes not be
sampled.
· Drilling
was carried out "dry" and recovery is therefore high with no
perceptible preferential loss of either fine or coarse
material.
|
Logging
|
·
Whether core and chip samples
have been geologically and geotechnically logged to a level of
detail to support appropriate Mineral Resource estimation, mining
studies and metallurgical studies.
·
Whether logging is qualitative or
quantitative in nature. Core (or costean, channel, etc)
photography.
·
The total length and percentage
of the relevant intersections logged.
|
· Logging
was limited to colour and textural descriptions given the nature of
the tailings. This is considered sufficient for the style of
deposit.
· All
intervals were logged, using the same sample intervals as the assay
samples.
|
Sub-sampling techniques and sample
preparation
|
·
If core, whether cut or sawn and
whether quarter, half or all core taken.
·
If non-core, whether riffled,
tube sampled, rotary split, etc and whether sampled wet or
dry.
·
For all sample types, the nature,
quality and appropriateness of the sample preparation
technique.
·
Quality control procedures
adopted for all sub-sampling stages to maximise representivity of
samples.
·
Measures taken to ensure that the
sampling is representative of the in situ material collected,
including for instance results for field duplicate/second-half
sampling.
·
Whether sample sizes are
appropriate to the grain size of the material being
sampled.
|
· Samples
were split using an appropriately sized riffle splitter, aiming at
a >500g sample weight for analysis.
· The
riffle splitter was cleaned with compressed air between
samples.
· The 500g
sample size is considered representative for the particle size.
· A
duplicate, standard (CRM) and blank were inserted every 20th
sample.
· Field
duplicates were derived from the primary sample using the balance
of the sample.
|
Quality of
assay data and laboratory tests
|
·
The nature, quality and
appropriateness of the assaying and laboratory procedures used and
whether the technique is considered partial or total.
·
For geophysical tools,
spectrometers, handheld XRF instruments, etc, the parameters used
in determining the analysis including instrument make and model,
reading times, calibrations factors applied and their derivation,
etc.
·
Nature of quality control
procedures adopted (eg standards, blanks, duplicates, external
laboratory checks) and whether acceptable levels of accuracy (ie
lack of bias) and precision have been established.
|
· A company
audit was made of the assay laboratory before it was engaged.
· The
bottle roll technique uses a cyanide leach and is a partial
analysis method.
· 10% of
samples were analysed by Fire Assay as a further check. This in all
but one sample reported a higher grade (as was expected). The
target of this work was however to estimate leachable rather than
total gold, and for which bottle roll is considered most
appropriate.
· Round
robin and accreditation results for the laboratory were reviewed
and considered acceptable.
· The
company's QAQC samples, including standards, are considered to
confirm acceptable bias and precision, with no contamination issues
identified.
|
Verification of sampling and
assaying
|
·
The verification of significant
intersections by either independent or alternative company
personnel.
·
The use of twinned
holes.
·
Documentation of primary data,
data entry procedures, data verification, data storage (physical
and electronic) protocols.
·
Discuss any adjustment to assay
data.
|
· The
Company's internal CP reviewed sampling and visited site to confirm
that protocols had been followed.
· No
twinned holes were used.
· Logged
data was securely recorded and backed up.
· Assay
data was received as assay certificates and cross checked against
sample submission data to ensure a correct match.
|
Location
of data points
|
·
Accuracy and quality of surveys
used to locate drill holes (collar and down-hole surveys),
trenches, mine workings and other locations used in Mineral
Resource estimation.
·
Specification of the grid system
used.
·
Quality and adequacy of
topographic control.
|
· All holes
were set out by a professional survey company using Differential
GPS.
· Map datum
is standard for the region of UTM35S Arc 1950.
· Location
of actual holes was observed to vary by up to 40cm from laid out
position. Overall accuracy therefore is to be considered as +-40cm
in X and Y, and approximately +-10cm in Z axis.
|
Data
spacing and distribution
|
·
Data spacing for reporting of
Exploration Results.
·
Whether the data spacing and
distribution is sufficient to establish the degree of geological
and grade continuity appropriate for the Mineral Resource and Ore
Reserve estimation procedure(s) and classifications
applied.
·
Whether sample compositing has
been applied.
|
· The auger
drill sites were designed according to a grid with 20 m line
spacing and 20 m sample spacing.
· This is
considered appropriate for the Mineral Resource and Ore Reserve
estimation procedure and classifications.
·
Compositing was not required.
|
Orientation of data in relation to geological
structure
|
·
Whether the orientation of
sampling achieves unbiased sampling of possible structures and the
extent to which this is known, considering the deposit
type.
·
If the relationship between the
drilling orientation and the orientation of key mineralised
structures is considered to have introduced a sampling bias, this
should be assessed and reported if material.
|
· The
greatest variation is likely to be vertically, through
stratification as feed material sources varied over time.
· The
vertical orientation of the holes allows for close to 90°
intersection angle with the stratification within the dumps
· The
relatively short sample length (1.5m) allows for relatively
accurate definition of variation in source feed, colour, grain
size.
· No bias
is considered to have resulted.
|
Sample
security
|
·
The measures taken to ensure
sample security.
|
· Samples
were stored in a locked company compound at site and in a locked
container in Bulawayo. They were shipped onwards to the analytical
facility by a reliable courier.
|
Audits or
reviews
|
·
The results of any audits or
reviews of sampling techniques and data.
|
· The auger
sampling process was recorded on video and is considered acceptable
by both the internal and external CP.
· Riffle
splitting of sub-samples was reviewed by the Company's internal CP
and is considered acceptable.
· The
Resource Consultant reviewed all data, and spot checked 10% of
values versus logs.
|
Section 2 Reporting
of Exploration Results
(Criteria listed in
the preceding section also apply to this section.)
Criteria
|
JORC Code
explanation
|
Commentary
|
Mineral
tenement and land tenure status
|
·
Type, reference name/number,
location and ownership including agreements or material issues with
third parties such as joint ventures, partnerships, overriding
royalties, native title interests, historical sites, wilderness or
national park and environmental settings.
·
The security of the tenure held
at the time of reporting along with any known impediments to
obtaining a licence to operate in the area.
|
· The
mineral Claims are held by a third party with whom Kavango holds a
valid Option agreement Call Option Agreement dated 23 June
2023.
· The 45
Claims under the agreement cover 415 hectares, and the Call Option
Agreement is valid for two years to 23 June 2025, during which
Kavango has exclusive access to the Claims.
· Under the
Call Option Agreement Kavango will need to pay the licence holder a
fee before expiry, following which Kavango will own 100%.
· There is
established mining activity in the area. An environmental permit is
held by the Claims holder.
|
Exploration done by other parties
|
·
Acknowledgment and appraisal of
exploration by other parties.
|
· The Nara
project covers four historic mines with total recorded production
of more than 90,000oz in the first half of the 20th Century. These
mines also produced credits of tungsten and silver. There is a
30-year plus history of small-scale mining & custom milling on
the property.
· No
drilling or modern exploration has been carried out to assess the
property.
|
Geology
|
·
Deposit type, geological setting
and style of mineralisation.
|
· The
resource is a tailings deposit.The Nara prospect is located within
the Filabusi Greenstone Belt, sitting astride the Redwing Shear
Zone, which hosts gold mineralisation. Seven formations have been
identified at Filabusi and these are grouped into Lower and Upper
greenstones of the Bulawayan Group as in the adjoining Mberengwa
belt. There is apparent unconformity between the Lower and Upper
greenstones.
·
Historical reports and longitudinal sections show mining of at
least two parallel orebodies and a third oblique splay. The
southern or footwall reef consists of massive boudinage quartz
veins, and the northern hangingwall reef consists of quartz
stringers, both hosted within mafic schist. Both types of reefs are
set in highly sheared and laminated chlorite- and carbonated
biotite-feldspar-schists, with the proportion of biotite increasing
towards the quartz. There is congruence between one of the reefs
and the splay, with the first type truncating the second along
strike east of the old main shaft.
· The area
around the Nara project contains 139 historic gold mines with a
combined production of greater than 1.7Moz gold. These mines have
been predominantly narrow, high-grade oxide production.
· There are
currently no active large mines. The area is instead serviced by
stamp mills, receiving ore from tribute miners.
|
Drill hole
Information
|
·
A summary of all information
material to the understanding of the exploration results including
a tabulation of the following information for all Material drill
holes:
o easting and northing of the drill hole
collar
o elevation or RL (Reduced Level - elevation
above sea level in metres) of the drill hole collar
o dip and azimuth of the hole
o down hole length and interception
depth
o hole length.
·
If the exclusion of this
information is justified on the basis that the information is not
Material and this exclusion does not detract from the understanding
of the report, the Competent Person should clearly explain why this
is the case.
|
· These
data are provided as an appendix in the Mineral Resource Report to
the Company.
|
Data
aggregation methods
|
·
In reporting Exploration Results,
weighting averaging techniques, maximum and/or minimum grade
truncations (eg cutting of high grades) and cut-off grades are
usually Material and should be stated.
·
Where aggregate intercepts
incorporate short lengths of high grade results and longer lengths
of low grade results, the procedure used for such aggregation
should be stated and some typical examples of such aggregations
should be shown in detail.
·
The assumptions used for any
reporting of metal equivalent values should be clearly
stated.
|
· No
weighted averages have been used.
· No higher
cut has been used, as not considered appropriate.
· Samples
are generally of a consistent length.
· Only gold
values are included.
|
Relationship between mineralisation widths and
intercept lengths
|
·
These relationships are
particularly important in the reporting of Exploration
Results.
·
If the geometry of the
mineralisation with respect to the drill hole angle is known, its
nature should be reported.
·
If it is not known and only the
down hole lengths are reported, there should be a clear statement
to this effect (eg 'down hole length, true width not
known').
|
· The auger
holes are considered perpendicular to stratification from when
tailings were laid down.
· Down hole
lengths will therefore approximate to true widths.
|
Diagrams
|
·
Appropriate maps and sections
(with scales) and tabulations of intercepts should be included for
any significant discovery being reported These should include, but
not be limited to a plan view of drill hole collar locations and
appropriate sectional views.
|
· These are
contained in separate resource report.
|
Balanced
reporting
|
·
Where comprehensive reporting of
all Exploration Results is not practicable, representative
reporting of both low and high grades and/or widths should be
practiced to avoid misleading reporting of Exploration
Results.
|
· All
grades and widths have been reported.
|
Other
substantive exploration data
|
·
Other exploration data, if
meaningful and material, should be reported including (but not
limited to): geological observations; geophysical survey results;
geochemical survey results; bulk samples - size and method of
treatment; metallurgical test results; bulk density, groundwater,
geotechnical and rock characteristics; potential deleterious or
contaminating substances.
|
· Density
data was collected from 6 points across the tailings using a
volumetric metal box to obtain a measure of in-situ density. The
weight of this was then divided by the volume to provide the
density.
· No
metallurgical work has yet been carried out, however the bottle
roll testwork provides a strong indication of the leachability of
the tailings.
· No
deleterious materials were observed in the dumps or
samples.
|
Further
work
|
·
The nature and scale of planned
further work (eg tests for lateral extensions or depth extensions
or large-scale step-out drilling).
·
Diagrams clearly highlighting the
areas of possible extensions, including the main geological
interpretations and future drilling areas, provided this
information is not commercially sensitive.
|
· There may
be scope to extend the resource at depth.
·
Additional nearby dumps may become available in the future.
|
Section 3 Estimation
and Reporting of Mineral Resources
(Criteria listed in
section 1, and where relevant in section 2, also apply to this
section.)
Criteria
|
JORC Code
explanation
|
Commentary
|
Database
integrity
|
·
Measures taken to ensure that
data has not been corrupted by, for example, transcription or
keying errors, between its initial collection and its use for
Mineral Resource estimation purposes.
·
Data validation procedures
used.
|
· Data is
stored in a Dropbox archive, which only two people have write
access to.
· All data
have been run through Micromine and Surpac's validation tool, and
any anomalies investigated and corrected.
· A manual
check of 10% of all data was carried out by the Resource
Consultant.
|
Site
visits
|
·
Comment on any site visits
undertaken by the Competent Person and the outcome of those
visits.
·
If no site visits have been
undertaken indicate why this is the case.
|
· Due to
the project location and straightforward nature of the tailings
deposit the Resource Consultant did not visit. The Company's
internal CP did however visit and has validated the hole locations
and sampling protocols as well as visiting the analytical
laboratory.
|
Geological
interpretation
|
·
Confidence in (or conversely, the
uncertainty of ) the geological interpretation of the mineral
deposit.
·
Nature of the data used and of
any assumptions made.
·
The effect, if any, of
alternative interpretations on Mineral Resource
estimation.
·
The use of geology in guiding and
controlling Mineral Resource estimation.
·
The factors affecting continuity
both of grade and geology.
|
· The
mineralized domains which constitute the deposit consist of
horizontally layered tailings deposit material deposited in 2
adjacent facilities which form above ground level elevated "dumps"
and are free draining.
· Data used
for the resource estimation consisted of auger drill data assay
results as well as logging data describing colour and grain
size.
· The
correlation between grade with colour and grain size is low and it
was not considered appropriate to try and sub-divide the dumps into
separate domains based on either colour or grain size.
·
Continuity of grade appears high, likely due to the relatively
uniform nature of the source material. Variations within the
deposits for colour and grain size do not materially impact the
variability of grade.
|
Dimensions
|
·
The extent and variability of the
Mineral Resource expressed as length (along strike or otherwise),
plan width, and depth below surface to the upper and lower limits
of the Mineral Resource.
|
· The
Mineral Resource domains consist of 2 adjacent historical tailings
dumps. The east dump contains the bulk of the Mineral
Resource and is roughly circular in plan view with dimensions of
approximately 220x220m and a height of between 10-12m. The
west dump dimensions are approximately 145m x 130m and a height of
only 4m
|
Estimation
and modelling techniques
|
·
The nature and appropriateness of
the estimation technique(s) applied and key assumptions, including
treatment of extreme grade values, domaining, interpolation
parameters and maximum distance of extrapolation from data points.
If a computer assisted estimation method was chosen include a
description of computer software and parameters used.
·
The availability of check
estimates, previous estimates and/or mine production records and
whether the Mineral Resource estimate takes appropriate account of
such data.
·
The assumptions made regarding
recovery of by-products.
·
Estimation of deleterious
elements or other non-grade variables of economic significance (eg
sulphur for acid mine drainage characterisation).
·
In the case of block model
interpolation, the block size in relation to the average sample
spacing and the search employed.
·
Any assumptions behind modelling
of selective mining units.
·
Any assumptions about correlation
between variables.
·
Description of how the geological
interpretation was used to control the resource
estimates.
·
Discussion of basis for using or
not using grade cutting or capping.
·
The process of validation, the
checking process used, the comparison of model data to drill hole
data, and use of reconciliation data if available.
|
·
Estimation consisted of exploratory data analysis (EDA) of the
auger sample data separately for the two domains (East and
West). Following data validation the sample assay data was
selected as the interpolation variable. The reason for this
was that the sample length of 1.5m is the most common sample length
and very few samples fell below this interval. Correlation
cross plots of sample length against gold grade showed no material
bias between length and grade and it was decided that the sample
length is an effective composite for use in the grade estimate.
· The grade
histogram exhibits the classic high grade tail seen in most gold
deposits, however, given the nature of the tailings product the
high grades are relatively well controlled with the highest grade
only 2.5g/t. It was considered that there was no requirement
for high grade cutting given the smoothing process inherent in the
kriging algorithm and the fact that the high grades tend to occur
in discrete groupings rather than a random scattering throughout
the deposit.
·
Estimation and EDA were conducted using the Isatis
Neo® software. Semi-variogram analysis was
conducted on the raw data composites and the resulting experimental
variograms were modelled with ranges of 52m and 37m in the east and
north directions respectively and a relatively low nugget variance
leading to a high estimated kriging efficiency and high Kriging
Slope of Regression (KsoR) results.
· Search
parameters closely followed the geostatistical ranges and are
summarized below:
· Ellipsoid
parameters:
o Ellipsoid
rotation Dip = 0°
Dip Azimuth = N90° Pitch = 90°
o Ellipsoid size
(radius) 50 m,35 m,4 m
o Use anisotropic
distances
Yes
o Number of angular sectors
4
o Maximum number per
sector 20
o Split ellipsoid
vertically
No
o Minimum number of
samples
4
· Parent
block size was set at 10x10x4m (XYZ) and sub blocking was performed
in order to better fit the resulting reporting to the modelled
domain boundaries. The sub-blocks were defined at
2.5x2.5x0.5m. hole spacing is 20x20m with an average sample
length of 1.4m thus the block size is considered appropriate to
locate sufficient samples within a block to provide a reliable
estimate of grade.
· Grade
interpolation was performed into the parent blocks and all
sub-blocks retained the grade of their parent block for reporting
purposes
·
Validation was carried out using visual examination of hole and
block sections along with swath plots for the two domains
independently. The following plot shows the superimposed
histograms for the East domain samples (red) and kriged blocks
(blue) highlighting the smoothing caused by the kriging
algorithm.
· There are
no previous estimates.
· No
by-product production is assumed.
· No
deleterious elements have been identified, however future
metallurgical work should include this.
|
Moisture
|
·
Whether the tonnages are
estimated on a dry basis or with natural moisture, and the method
of determination of the moisture content.
|
· Densities
have been measured using in-situ tailings densities, moisture has
not been calculated but is considered typical for this largely hot
and dry area.
|
Cut-off
parameters
|
·
The basis of the adopted cut-off
grade(s) or quality parameters applied.
|
· No
cut-off has been applied. The majority of material contains some
grade, and owing to the nature of the deposit style, all material
will be required to be mined and processed.
|
Mining
factors or assumptions
|
·
Assumptions made regarding
possible mining methods, minimum mining dimensions and internal
(or, if applicable, external) mining dilution. It is always
necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider potential
mining methods, but the assumptions made regarding mining methods
and parameters when estimating Mineral Resources may not always be
rigorous. Where this is the case, this should be reported with an
explanation of the basis of the mining assumptions made.
|
· It is
assumed that small mobile plant will be used.
· As
selective mining will not be used no mining losses or dilution are
anticipated.
· The
material is considered to be "free dig" throughout the full depth
extent of the dumps and the gold grade is relatively consistent
throughout the domains modelled
· The
format of the dumps makes such mining straightforward.
|
Metallurgical factors or
assumptions
|
·
The basis for assumptions or
predictions regarding metallurgical amenability. It is always
necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider potential
metallurgical methods, but the assumptions regarding metallurgical
treatment processes and parameters made when reporting Mineral
Resources may not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis of the
metallurgical assumptions made.
|
· The
bottle roll data may provide a reasonable proxy for recoverable
gold using a cyanide leach.
· Adjacent
properties are processing tailings and generating significant
revenue. This appears to demonstrate the viability of a future
operation.
·
Metallurgical testwork will follow as a next step to verify
recoveries, residence times, and estimate reagent consumptions.
|
Environmen-tal factors or
assumptions
|
·
Assumptions made regarding
possible waste and process residue disposal options. It is always
necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider the
potential environmental impacts of the mining and processing
operation. While at this stage the determination of potential
environmental impacts, particularly for a greenfields project, may
not always be well advanced, the status of early consideration of
these potential environmental impacts should be reported. Where
these aspects have not been considered this should be reported with
an explanation of the environmental assumptions made.
|
· The
project is in a brownfield area of tailings. With careful planning
it is expected that given there will be minimal change in volume of
the material, that it can be redeposited in its source area.
·
Consideration will be given as to whether the material can be
improved in terms of chemical and physical stability, and whether
for example revegetation can be facilitated.
|
Bulk
density
|
·
Whether assumed or determined. If
assumed, the basis for the assumptions. If determined, the method
used, whether wet or dry, the frequency of the measurements, the
nature, size and representativeness of the samples.
·
The bulk density for bulk
material must have been measured by methods that adequately account
for void spaces (vugs, porosity, etc), moisture and differences
between rock and alteration zones within the deposit.
·
Discuss assumptions for bulk
density estimates used in the evaluation process of the different
materials.
|
· Density
data was collected from 6 locations across the tailings on the
upper, sides and base of the dumps using a volumetric metal box to
obtain a measure of in-situ density. The weight of this was then
divided by the volume to provide the density.
· There is
distinct variation in the results obtained from the different areas
of the dumps with the highest density in the upper surface
(possibly due to compaction by machinery) and the lowest at the
base where the material is prone to solifluction and wind
action. The final density estimate used was a global figure
of 1.76t/m3 based on benchmarking of sand material
density from a number of sources in the engineering literature and
from experience of similar styles of deposition.
· The
determination of reliable and accurate density is recommended for
the project going forward.
· The data
are considered representative for what is a relatively homogenous
tailings deposit.
|
Classification
|
·
The basis for the classification
of the Mineral Resources into varying confidence
categories.
·
Whether appropriate account has
been taken of all relevant factors (ie relative confidence in
tonnage/grade estimations, reliability of input data, confidence in
continuity of geology and metal values, quality, quantity and
distribution of the data).
·
Whether the result appropriately
reflects the Competent Person's view of the deposit.
|
· The
majority of the defined Mineral Resource (96%) is considered by the
competent person to be in the Indicated category. A portion
of the deposit was initially considered suitable for classification
as Measured. However it was decided that the lack of
appropriate density data coverage would preclude the classification
any part of the Mineral Resource as Measured at this stage.
Notwithstanding, upon receipt of appropriate density sample results
the consultant considers a material portion of the deposit could be
re-classified in the highest Mineral Resource category.
· The
resulting Mineral Resource statement appropriately and accurately
reflects the Competent Persons view of the grade values and
distribution within the defined domains.
|
Audits or
reviews
|
·
The results of any audits or
reviews of Mineral Resource estimates.
|
· No third
party review has yet been carried out.
|
Discussion
of relative accuracy/ confidence
|
·
Where appropriate a statement of
the relative accuracy and confidence level in the Mineral Resource
estimate using an approach or procedure deemed appropriate by the
Competent Person. For example, the application of statistical or
geostatistical procedures to quantify the relative accuracy of the
resource within stated confidence limits, or, if such an approach
is not deemed appropriate, a qualitative discussion of the factors
that could affect the relative accuracy and confidence of the
estimate.
·
The statement should specify
whether it relates to global or local estimates, and, if local,
state the relevant tonnages, which should be relevant to technical
and economic evaluation. Documentation should include assumptions
made and the procedures used.
·
These statements of relative
accuracy and confidence of the estimate should be compared with
production data, where available.
|
·
Classification was based on a combination of visual and statistical
parameters along with the results of the kriging quality
parameters, principally the slope of regression (KSoR). The
relatively close spaced drilling and the defined block size lend a
high degree of confidence to the final estimates based on the
quality of the semi-variogram results.
· No
production data is available as of the effective date of this
report and therefore a reconciliation is not possible between the
block model and actual production information.
|