REG - Kavango Resources - Zim: Maiden 5,860/oz Indicated Gold Resource
06/03/2024 07:00
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RNS Number : 7828F Kavango Resources PLC 06 March 2024
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
(https://polaris.brighterir.com/public/kavango_resources_plc/news/rns/story/x5zmj9x)
).
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
(https://polaris.brighterir.com/public/kavango_resources_plc/news/rns/story/x5zmj9x)
).
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/m(3) 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 Measured - - - -
East & West
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 · Samples were extracted as auger samples at 1.5 m intervals at an
specific specialised industry standard measurement tools appropriate to the average mass of 1.51 kg.
minerals under investigation, such as down hole gamma sondes, or handheld XRF
instruments, etc). These examples should not be taken as limiting the broad · These were placed in plastic bags, ticketed, and sealed.
meaning of sampling.
· Samples were split using a riffle splitter. A duplicate, standard
· Include reference to measures taken to ensure sample representivity (CRM) and blank were inserted every 20th sample. Samples were re-ticketed to
and the appropriate calibration of any measurement tools or systems used. ensure numerical continuity and were batched in coated clean poly-weave sacks.
· 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.
Drilling techniques · Drill type (eg core, reverse circulation, open-hole hammer, rotary · Each hole was drilled using an engine-driven hydraulic auger with a
air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or 50 mm rotating spiral enclosed within a core barrel.
standard tube, depth of diamond tails, face-sampling bit or other type,
whether core is oriented and if so, by what method, etc). · 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 · All samples were weighed.
results assessed.
· No relationship was noted between sample size and grade.
· Measures taken to maximise sample recovery and ensure representative
nature of the samples. · Some holes stopped short of final depth due to hitting concrete
infrastructure. This may result in under-reporting of grade as deeper
· Whether a relationship exists between sample recovery and grade and (potentially enriched) portions could sometimes not be sampled.
whether sample bias may have occurred due to preferential loss/gain of
fine/coarse material. · 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 · Logging was limited to colour and textural descriptions given the
geotechnically logged to a level of detail to support appropriate Mineral nature of the tailings. This is considered sufficient for the style of
Resource estimation, mining studies and metallurgical studies. deposit.
· Whether logging is qualitative or quantitative in nature. Core (or · All intervals were logged, using the same sample intervals as the
costean, channel, etc) photography. assay samples.
· The total length and percentage of the relevant intersections logged.
Sub-sampling techniques and sample preparation · If core, whether cut or sawn and whether quarter, half or all core · Samples were split using an appropriately sized riffle splitter,
taken. aiming at a >500g sample weight for analysis.
· If non-core, whether riffled, tube sampled, rotary split, etc and · The riffle splitter was cleaned with compressed air between samples.
whether sampled wet or dry.
· The 500g sample size is considered representative for the particle
· For all sample types, the nature, quality and appropriateness of the size.
sample preparation technique.
· A duplicate, standard (CRM) and blank were inserted every 20th
· Quality control procedures adopted for all sub-sampling stages to sample.
maximise representivity of samples.
· Field duplicates were derived from the primary sample using the
· Measures taken to ensure that the sampling is representative of the balance of the sample.
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.
Quality of assay data and laboratory tests · The nature, quality and appropriateness of the assaying and · A company audit was made of the assay laboratory before it was
laboratory procedures used and whether the technique is considered partial or engaged.
total.
· The bottle roll technique uses a cyanide leach and is a partial
· For geophysical tools, spectrometers, handheld XRF instruments, etc, analysis method.
the parameters used in determining the analysis including instrument make and
model, reading times, calibrations factors applied and their derivation, etc. · 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
· Nature of quality control procedures adopted (eg standards, blanks, this work was however to estimate leachable rather than total gold, and for
duplicates, external laboratory checks) and whether acceptable levels of which bottle roll is considered most appropriate.
accuracy (ie lack of bias) and precision have been established.
· 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 · The Company's internal CP reviewed sampling and visited site to
or alternative company personnel. confirm that protocols had been followed.
· The use of twinned holes. · No twinned holes were used.
· Documentation of primary data, data entry procedures, data · Logged data was securely recorded and backed up.
verification, data storage (physical and electronic) protocols.
· Assay data was received as assay certificates and cross checked
· Discuss any adjustment to assay data. against sample submission data to ensure a correct match.
Location of data points · Accuracy and quality of surveys used to locate drill holes (collar · All holes were set out by a professional survey company using
and down-hole surveys), trenches, mine workings and other locations used in Differential GPS.
Mineral Resource estimation.
· Map datum is standard for the region of UTM35S Arc 1950.
· Specification of the grid system used.
· Location of actual holes was observed to vary by up to 40cm from laid
· Quality and adequacy of topographic control. 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. · The auger drill sites were designed according to a grid with 20 m
line spacing and 20 m sample spacing.
· Whether the data spacing and distribution is sufficient to establish
the degree of geological and grade continuity appropriate for the Mineral · This is considered appropriate for the Mineral Resource and Ore
Resource and Ore Reserve estimation procedure(s) and classifications applied. Reserve estimation procedure and classifications.
· Whether sample compositing has been applied. · Compositing was not required.
Orientation of data in relation to geological structure · Whether the orientation of sampling achieves unbiased sampling of · The greatest variation is likely to be vertically, through
possible structures and the extent to which this is known, considering the stratification as feed material sources varied over time.
deposit type.
· The vertical orientation of the holes allows for close to 90°
· If the relationship between the drilling orientation and the intersection angle with the stratification within the dumps
orientation of key mineralised structures is considered to have introduced a
sampling bias, this should be assessed and reported if material. · 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 · The mineral Claims are held by a third party with whom Kavango holds
agreements or material issues with third parties such as joint ventures, a valid Option agreement Call Option Agreement dated 23 June 2023.
partnerships, overriding royalties, native title interests, historical sites,
wilderness or national park and environmental settings. · 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
· The security of the tenure held at the time of reporting along with has exclusive access to the Claims.
any known impediments to obtaining a licence to operate in the area.
· 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 · These data are provided as an appendix in the Mineral Resource Report
exploration results including a tabulation of the following information for to the Company.
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.
Data aggregation methods · In reporting Exploration Results, weighting averaging techniques, · No weighted averages have been used.
maximum and/or minimum grade truncations (eg cutting of high grades) and
cut-off grades are usually Material and should be stated. · No higher cut has been used, as not considered appropriate.
· Where aggregate intercepts incorporate short lengths of high grade · Samples are generally of a consistent length.
results and longer lengths of low grade results, the procedure used for such
aggregation should be stated and some typical examples of such aggregations · Only gold values are included.
should be shown in detail.
· The assumptions used for any reporting of metal equivalent values
should be clearly stated.
Relationship between mineralisation widths and intercept lengths · These relationships are particularly important in the reporting of · The auger holes are considered perpendicular to stratification from
Exploration Results. when tailings were laid down.
· If the geometry of the mineralisation with respect to the drill hole · Down hole lengths will therefore approximate to true widths.
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').
Diagrams · Appropriate maps and sections (with scales) and tabulations of · These are contained in separate resource report.
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.
Balanced reporting · Where comprehensive reporting of all Exploration Results is not · All grades and widths have been reported.
practicable, representative reporting of both low and high grades and/or
widths should be practiced to avoid misleading reporting of Exploration
Results.
Other substantive exploration data · Other exploration data, if meaningful and material, should be · Density data was collected from 6 points across the tailings using a
reported including (but not limited to): geological observations; geophysical volumetric metal box to obtain a measure of in-situ density. The weight of
survey results; geochemical survey results; bulk samples - size and method of this was then divided by the volume to provide the density.
treatment; metallurgical test results; bulk density, groundwater, geotechnical
and rock characteristics; potential deleterious or contaminating substances. · 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 · There may be scope to extend the resource at depth.
extensions or depth extensions or large-scale step-out drilling).
· Additional nearby dumps may become available in the future.
· Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling areas,
provided this information is not commercially sensitive.
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 · Data is stored in a Dropbox archive, which only two people have write
example, transcription or keying errors, between its initial collection and access to.
its use for Mineral Resource estimation purposes.
· All data have been run through Micromine and Surpac's validation
· Data validation procedures used. 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 · Due to the project location and straightforward nature of the
outcome of those visits. tailings deposit the Resource Consultant did not visit. The Company's internal
CP did however visit and has validated the hole locations and sampling
· If no site visits have been undertaken indicate why this is the case. protocols as well as visiting the analytical laboratory.
Geological interpretation · Confidence in (or conversely, the uncertainty of ) the geological · The mineralized domains which constitute the deposit consist of
interpretation of the mineral deposit. horizontally layered tailings deposit material deposited in 2 adjacent
facilities which form above ground level elevated "dumps" and are free
· Nature of the data used and of any assumptions made. draining.
· The effect, if any, of alternative interpretations on Mineral · Data used for the resource estimation consisted of auger drill data
Resource estimation. assay results as well as logging data describing colour and grain size.
· The use of geology in guiding and controlling Mineral Resource · The correlation between grade with colour and grain size is low and
estimation. it was not considered appropriate to try and sub-divide the dumps into
separate domains based on either colour or grain size.
· The factors affecting continuity both of grade and geology.
· 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 · The Mineral Resource domains consist of 2 adjacent historical
length (along strike or otherwise), plan width, and depth below surface to the tailings dumps. The east dump contains the bulk of the Mineral Resource and
upper and lower limits of the Mineral Resource. 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 · Estimation consisted of exploratory data analysis (EDA) of the auger
and key assumptions, including treatment of extreme grade values, domaining, sample data separately for the two domains (East and West). Following data
interpolation parameters and maximum distance of extrapolation from data validation the sample assay data was selected as the interpolation variable.
points. If a computer assisted estimation method was chosen include a The reason for this was that the sample length of 1.5m is the most common
description of computer software and parameters used. sample length and very few samples fell below this interval. Correlation
cross plots of sample length against gold grade showed no material bias
· The availability of check estimates, previous estimates and/or mine between length and grade and it was decided that the sample length is an
production records and whether the Mineral Resource estimate takes appropriate effective composite for use in the grade estimate.
account of such data.
· The grade histogram exhibits the classic high grade tail seen in most
· The assumptions made regarding recovery of by-products. 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
· Estimation of deleterious elements or other non-grade variables of was considered that there was no requirement for high grade cutting given the
economic significance (eg sulphur for acid mine drainage characterisation). 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
· In the case of block model interpolation, the block size in relation throughout the deposit.
to the average sample spacing and the search employed.
· Estimation and EDA were conducted using the Isatis Neo(®)
· Any assumptions behind modelling of selective mining units. software. Semi-variogram analysis was conducted on the raw data composites
and the resulting experimental variograms were modelled with ranges of 52m and
· Any assumptions about correlation between variables. 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
· Description of how the geological interpretation was used to control of Regression (KsoR) results.
the resource estimates.
· Search parameters closely followed the geostatistical ranges and are
· Discussion of basis for using or not using grade cutting or capping. summarized below:
· The process of validation, the checking process used, the comparison · Ellipsoid parameters:
of model data to drill hole data, and use of reconciliation data if available.
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 · Densities have been measured using in-situ tailings densities,
moisture, and the method of determination of the moisture content. 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 · No cut-off has been applied. The majority of material contains some
applied. 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 · It is assumed that small mobile plant will be used.
dimensions and internal (or, if applicable, external) mining dilution. It is
always necessary as part of the process of determining reasonable prospects · As selective mining will not be used no mining losses or dilution are
for eventual economic extraction to consider potential mining methods, but the anticipated.
assumptions made regarding mining methods and parameters when estimating
Mineral Resources may not always be rigorous. Where this is the case, this · The material is considered to be "free dig" throughout the full depth
should be reported with an explanation of the basis of the mining assumptions extent of the dumps and the gold grade is relatively consistent throughout the
made. domains modelled
· The format of the dumps makes such mining straightforward.
Metallurgical factors or assumptions · The basis for assumptions or predictions regarding metallurgical · The bottle roll data may provide a reasonable proxy for recoverable
amenability. It is always necessary as part of the process of determining gold using a cyanide leach.
reasonable prospects for eventual economic extraction to consider potential
metallurgical methods, but the assumptions regarding metallurgical treatment · Adjacent properties are processing tailings and generating
processes and parameters made when reporting Mineral Resources may not always significant revenue. This appears to demonstrate the viability of a future
be rigorous. Where this is the case, this should be reported with an operation.
explanation of the basis of the metallurgical assumptions made.
· 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 · The project is in a brownfield area of tailings. With careful
disposal options. It is always necessary as part of the process of determining planning it is expected that given there will be minimal change in volume of
reasonable prospects for eventual economic extraction to consider the the material, that it can be redeposited in its source area.
potential environmental impacts of the mining and processing operation. While
at this stage the determination of potential environmental impacts, · Consideration will be given as to whether the material can be
particularly for a greenfields project, may not always be well advanced, the improved in terms of chemical and physical stability, and whether for example
status of early consideration of these potential environmental impacts should revegetation can be facilitated.
be reported. Where these aspects have not been considered this should be
reported with an explanation of the environmental assumptions made.
Bulk density · Whether assumed or determined. If assumed, the basis for the · Density data was collected from 6 locations across the tailings on
assumptions. If determined, the method used, whether wet or dry, the frequency the upper, sides and base of the dumps using a volumetric metal box to obtain
of the measurements, the nature, size and representativeness of the samples. a measure of in-situ density. The weight of this was then divided by the
volume to provide the density.
· The bulk density for bulk material must have been measured by methods
that adequately account for void spaces (vugs, porosity, etc), moisture and · There is distinct variation in the results obtained from the
differences between rock and alteration zones within the deposit. 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
· Discuss assumptions for bulk density estimates used in the evaluation material is prone to solifluction and wind action. The final density
process of the different materials. estimate used was a global figure of 1.76t/m(3) 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 · The majority of the defined Mineral Resource (96%) is considered by
varying confidence categories. the competent person to be in the Indicated category. A portion of the
deposit was initially considered suitable for classification as Measured.
· Whether appropriate account has been taken of all relevant factors However it was decided that the lack of appropriate density data coverage
(ie relative confidence in tonnage/grade estimations, reliability of input would preclude the classification any part of the Mineral Resource as Measured
data, confidence in continuity of geology and metal values, quality, quantity at this stage. Notwithstanding, upon receipt of appropriate density sample
and distribution of the data). results the consultant considers a material portion of the deposit could be
re-classified in the highest Mineral Resource category.
· Whether the result appropriately reflects the Competent Person's view
of the deposit. · 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 · Classification was based on a combination of visual and statistical
level in the Mineral Resource estimate using an approach or procedure deemed parameters along with the results of the kriging quality parameters,
appropriate by the Competent Person. For example, the application of principally the slope of regression (KSoR). The relatively close spaced
statistical or geostatistical procedures to quantify the relative accuracy of drilling and the defined block size lend a high degree of confidence to the
the resource within stated confidence limits, or, if such an approach is not final estimates based on the quality of the semi-variogram results.
deemed appropriate, a qualitative discussion of the factors that could affect
the relative accuracy and confidence of the estimate. · No production data is available as of the effective date of this
report and therefore a reconciliation is not possible between the block model
· The statement should specify whether it relates to global or local and actual production information.
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.
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