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MATSA RESOURCES LIMITED — Capital/Financing Update 2017
Sep 25, 2017
65296_rns_2017-09-25_3c2882f6-9a3f-4ecb-8af7-0616d9dc7e3f.pdf
Capital/Financing Update
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Matsa Resources Limited
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LIMITED ABN 48 106 732 487
ASX Announcement
26[th] September 2017
Acquisition of Red October Gold Project
Highlights
CORPORATE SUMMARY
Executive Chairman
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Matsa to acquire 100% of the high grade Red October Gold Mine and Project area from Saracen Mineral Holdings Limited. The mine has had historical production of 342,000oz gold at an average of 6.1g/t.
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The acquisition includes:
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64km[2] of granted mining tenements contiguous to Matsa’s Lake Carey project where recent highly anomalous gold targets have been identified
Paul Poli
Director
Frank Sibbel
Director & Company Secretary
Andrew Chapman
Shares on Issue
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Project includes Treasure Island and several other high quality gold targets
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A JORC compliant gold resource of 99,000 ounces which results in an increase in Matsa’s gold resource to 453,000 ounces
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All mining and exploration information relating to the mine
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A modern 68 person camp with full accommodation and administration facilities setup up for the Red October mine
144.7 million
Unlisted Options
16.98 million @ $0.25 - $0.30
Top 20 shareholders
Hold 54.615%
Share Price on 22[nd] September 2017
- All supporting mine infrastructure and haul roads
18.5 cents
- Matsa to immediately assess the potential to recommence mining at Red October and to determine the ability to increase gold resources via further exploration and drilling
Market Capitalisation
$26.77 million
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Significant opportunity for Matsa to achieve reduced operational expenditure and mining efficiencies at its Fortitude trial mine by utilising the Red October camp and facilities
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The acquisition significantly and strategically increases Matsa’s footprint in the Lake Carey area and provides additional production opportunities
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Matsa Resources Limited
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Matsa Resources Limited (“Matsa” or “the Company” ASX: MAT) is pleased to advise that it has entered into an Asset Sale and Purchase Agreement (“ASPA”) with Saracen Mineral Holdings Limited (“Saracen”; ASX: SAR) to acquire the Red October Gold Project from Saracen for a combination of cash and shares to the deemed value of $2 million.
The Red October Gold Project is located immediately adjacent and contiguous with Matsa’s Lake Carey Project, containing the Fortitude mining operation (Figure 1). The project areas covers 64 km[2] and consists of nine MLs, an extensive well maintained underground mine with associated 68 person camp, offices, wet and dry messes, power, mining equipment and a Mineral Resource Estimate of 99,000 oz of gold (refer Table 1). The camp was formerly 128 person camp, and as such remains easily upgradeable to its former capacity.
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Figure 1: Red October Location Map and gold targets
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Strategically, the Red October acquisition is an excellent geographical fit with Matsa’s Lake Carey gold project, which will now give a combined project area totalling 509 sq. km.
Matsa intends to immediately investigate the mining potential of Red October with a view to recommence mining as soon as practicable, as well as drill a number of targets to increase the life of a potential mining operation. Matsa believes the potential to do so is excellent.
Matsa will also immediately utilise the Red October facilities to reduce operational expenses at Fortitude.
Matsa’s Executive Chairman Mr Paul Poli said “The acquisition of Red October represents an outstanding value opportunity for Matsa to increase both its footprint in the high quality Lake Carey project area and expand our production ability beyond the Fortitude trial mine currently in production. In addition, there are a number of exploration targets that we believe will yield strong results in due course.”
Mr Poli added “Not only has Matsa acquired an excellent production opportunity but the use of the Red October camp and facilities will allow us to reduce our operating expenses and be considerably more efficient at the Fortitude gold mine. This is particularly relevant as it may assist the Fortitude gold mine to be expanded beyond the trial stage. Furthermore, the fact that Saracen were keen to acquire a strategic shareholding in Matsa is a vote of confidence in our future plans. An added benefit is the Saracen shareholding provides quality exposure to the astute shareholders of Saracen themselves.”
The consideration for the acquisition of the Red October Gold Project is:
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A deposit of $150,000 in cash at the time of execution of the ASPA (paid);
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At completion Matsa will issue 4,545,000 fully paid ordinary shares to Saracen at a deemed value of $0.22 each
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90 days after completion Matsa will pay Saracen a deferred cash consideration of $850,000; and
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Adoption of all rehabilitation of the existing mine area.
Completion is subject to the following conditions precedent:
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Ministerial consent to the transfer of the Mining Tenements;
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Royalty holder consents; and
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Confirmation from Saracen’s financier that it will remove its security from the Sale Assets.
Should completion not occur due to a breach of the agreement by either party then a break fee of $150,000 will be payable by the party who caused the breach to the other party. Completion of the transaction should occur in late October 2017.
Red October Geological Summary
The Red October mine is a structurally controlled gold deposit located in the Laverton Greenstone Belt (LGB) which hosts >25Moz of gold and includes Sunrise Dam, Granny Smith, Wallaby, Lancefield, Chatterbox and Matsa’s Fortitude Mine (Figure 1).
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Matsa Resources Limited
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Currently in care and maintenance, the Red October mine has produced a total of 1.7Mt at 6.1g/t for 342koz Au. The Open Pit operation contributed 113koz Au at 6.5g/t Au between 1999 and 2002 and the underground operation has produced 1.2Mt at 5.9g/t for 229koz Au to a depth of 550m vertical metres from 2012 to 2017. As at 30 June 2017, the Red October Mineral Resource estimate stands at 99,000 ounces of gold (Table 1).
| Indicated | Indicated | Indicated | Inferred | Inferred | Total | ||||
|---|---|---|---|---|---|---|---|---|---|
| June 30 2017 | tonnes | g/t | Oz Au | tonnes | g/t | Oz Au | tonnes | g/t | Oz Au |
| Red October OP | 251,000 | 17 | 14,000 | 251,000 | 1.7 | 14,000 | |||
| Red October UG | 89,000 | 12.1 | 35,000 | 106,000 | 14.6 | 50,000 | 195,000 | 13.6 | 85,000 |
| Total | 340,000 | 4.5 | 49,000 | 106,000 | 14.7 | 50,000 | 446,000 | 6.9 | 99,000 |
Table 1 : 30 June 2017 Red October Resource Estimate (ref ASX: SAR 02/08/2017)
The Red October deposit lies 1.5km east of a granitic body, beneath the Lake Carey lake system and is hosted by a northeast trending mafic and ultramafic volcanic package that dips steeply to the northwest. The basal rocks consist of pillowed basalt with overlying ultramafic/high MgO basalt flows and a thin graphitic shale at the contact between the two lithologies.
Mineralisation at Red October occurs over 900m along strike and to a depth of at least 700m. Two structurally controlled gold mineralisation styles have been identified at the mine; shear zone mineralisation, and stockwork veining and brecciation style mineralisation.
Shear zone hosted mineralisation is hosted within quartz-carbonate shear veins and wall rock alteration. It is dominant in the top 300m at Red October and comprises the northeast trending Red October Shear Zone (ROSZ), the recently (2016) discovered Lionfish Lodes running sub-parallel to the ROSZ in the hanging wall ultramafics and the north trending Anchor and Smurf type lodes. The intersections of the north trending shear zones with the northeast trending lodes are typified by more intense alteration and high grade gold (Figure 2).
The black shale unit at the contact of basalt and higher MgO units is referred to as the ROSZ. Within the ROSZ, intense biotite alteration is associated with mineralisation while the Anchor and Smurf structures contain a more sericitic alteration. Gold occurs as irregular grains interstitial to quartzcalcite vein infill and in equilibrium with pyrite and arsenopyrite. Hydrothermal alteration associated with the ROSZ and the associated shear veins shows a zonation outward from the ROSZ. Proximal alteration comprises muscovite-calcite-quartz-pyrite and extends up to 1m away from the ROSZ. The proximal alteration passes to a biotite-quartz-chlorite-calcite-pyrite alteration that extends up to 2m beyond the proximal alteration zone. The distal alteration extends up to 30m away from the ROSZ and consists of chlorite-calcite-pyrite. Hydrothermal alteration in all zones consistently overprints the metamorphic mineralogy.
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Figure 2: Long section of Red October looking NNW (mine grid West) showing the main structural elements.
The Anchor shear zones are semi-regularly spaced at 25 to 40 metres apart in the footwall and hanging wall. The intensity of deformation and associated vein abundance/alteration in the Anchor shear zones is variable. The moderately east dipping Smurf shear zones are only developed in the footwall basalt succession and are typically strongly sericite-carbonate-pyrite altered with quartz-carbonate shear veins and medium grade gold mineralisation.
At approximately 300m below surface, ROSZ shear zone mineralisation transitions to a narrow (<2m) zone termed the Marlin lode that comprises stockwork veining and brecciation within the footwall pillow basalts. The preservation of early epidote-quartz-calcite sea-floor alteration of pillow basalts within or adjacent to the Marlin lode is interpreted to have been a fundamental control on the localisation of shearing, tensile failure with veining and brecciation that led to high grade gold mineralisation. The Marlin contains similar gold blowouts associated with the Anchor and Smurf structures as the ROSZ (Figure 3). The breccia has a jigsaw texture with clasts of fragmented wall rock ranging from a few mm to 0.5 m in size. The breccia infill is coarse-grained anhedral quartz with finegrained calcite and interstitial pyrite ± arsenopyrite. The tenor of gold mineralisation within the Marlin decrease below around 600m below surface. Coincident with the reduction in the width of the Marlin and contained gold grades is a moderately south to southeast dipping lamprophyre dyke. It is unclear if there is a genetic link between reduced gold grades and the lamprophyre given the latter post-dates mineralisation.
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Matsa Resources Limited
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Figure 3: Gold from Marlin Lode 1220S stope
Forward Work Strategy
The Red October mine was recently (June 2017) placed in care and maintenance and the mine remains in good, dry condition. A number of areas are available for immediate mining however the business case of exploiting these areas is yet to be determined and a review is underway. Exploration for additional ounces, both within and near the mine as well as over the tenement package is planned in order to increase potential mine life longevity.
The potential for extensions of known lodes and discovery of new lodes is considered excellent as evidenced by the recent discovery of the Lionfish lodes.
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Figure 4: Long Section looking Mine Grid W showing intercepts greater than 15 g/t Au with values greater than an ounce annotated with gold grade (g/t).
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Matsa Resources Limited
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For further information please contact:
Paul Poli Executive Chairman
Phone +61 8 9230 3555 Fax +61 8 9227 0370 Email [email protected] Web www.matsa.com.au
Competent Persons Statement
The information in the report to which this statement is attached that relates to Exploration Results and Mineral Resources related to Gold is based upon information compiled by Mr Daniel Howe, a Competent Person who is a member of the Australian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Daniel Howe is a full-time employee of Saracen Resources. Daniel Howe has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and the activity being undertaken to qualify as a Competent Person as defined in the 2102 Edition of the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Daniel Howe consents to the inclusion in the report of matters based on his information in the form and context in which it appears.
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Appendix 1 - Matsa Resources Limited – Red October Gold Project
For further information provided in this report please refer to the following Saracen ASX announcements noted below (date format = YYYYMMDD):
SAR 20170802 Reserves grow 40% to 2.1Moz SAR 20170718 Quarterly Report June 2017 SAR 20170419 Quarterly Report Mar 2017 SAR 20170124 Quarterly Report Dec 2016 SAR 20161210 Carosue Dam Update SAR 20161207 Exploration update SAR 20161025 Quarterly Report September 2016 SAR 20161025 Annual Report to Shareholders 2016 SAR 20161012 2016 Mineral Resources and Ore Reserves SAR 20160917 Quarterly Report June 2016 SAR 20160917 Exploration Update SAR 20160907 Exploration Update SAR 20160727 Tripling of exploration budget to grow production and life SAR 20160511 Deep South ramp-up underpins Carosue Dam production outlook SAR 20160504 Investor Presentation May 2016 SAR 20160427 Quarterly Report Mar 2016 SAR 20160225 Presentation to RIU Conference SAR 20160129 Quarterly Report Dec 2015 SAR 20151023 Annual Report to Shareholders 2015 SAR 20151021 Quarterly Report September 2015 SAR 20151019 Clarification of Robust five year outlook SAR 20151015 Robust five year outlook SAR 20151015 2015 Mineral Resource and Ore Reserves SAR 20150722 Quarterly Report June 2015 SAR 20150525 Exploration update SAR 20150409 Quarterly Report Mar 2015 SAR 20150310 Red October Exploration Update SAR 20150121 Quarterly Report Dec 2014 SAR 20141126 MD's presentation to AGM 2014 SAR 20141126 Exploration Update SAR 20141023 Annual Report 2014 SAR 20141019 Mineral Resource and Ore Reserves 2014 SAR 20141015 Quarterly Report September 2014 SAR 20141015 Presentation to Macquarie Western Australia Forum SAR 20141009 Mineral Resource and Ore Reserves Explanatory notes 2014 SAR 20140910 Exploration update SAR 20140805 Presentation to Diggers and Dealers SAR 20140723 Quarterly Report June 2014 SAR 20140623 Red October Exploration Update SAR 20140416 Quarterly Report March 2014 SAR 20140128 Quarterly Report December 2013
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SAR 20140116 Exploration Update - Red October and Karari (amended) SAR 20131119 MD's presentation to AGM 2013 SAR 20131017 Annual report to shareholders 2013 SAR 20131014 Quarterly Report September 2013 SAR 20131014 North American Presentation SAR 20131008 Mineral Resources and Ore Reserves 2013 SAR 20130723 Quarterly Report June 2013 SAR 20130417 Quarterly Report March 2013 SAR 20130125 Quarterly Report December 2012 SAR 20121010 Quarterly Report September 2012 SAR 20120926 Mineral Resource and Ore Reserves 2012 SAR 20120731 Quarterly Report June 2012 SAR 20120614 Red October Mine Update SAR 20120427 Quarterly Report March 2012 SAR 20120127 Quarterly Report December 2011 SAR 20111026 Quarterly Report September 2011 SAR 20110906 Mineral Resource and Ore Reserve 2011 SAR 20110728 Quarterly Report June 2011 SAR 20110603 Exploration Update SAR 20110421 Quarterly Report March 2011 SAR 20110127 Quarterly Report December 2011 SAR 20060110 Prospectus
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Appendix 2 - Matsa Resources Limited – Red October Gold Project
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| Sampling | Nature and quality of sampling (eg cut channels, | Sampling activities conducted at Red October by Saracen include reverse circulation (RC), |
| techniques | random chips, or specific specialised industry | surface and underground diamond drilling (DD) and underground face chip sampling. Historic |
| standard measurement tools appropriate to the | sampling methods conducted since 1989 have included aircore (AC), rotary air blast (RAB), RC |
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| minerals under investigation, such as down hole | and surface and underground DD holes |
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| gamma sondes, or handheld XRF instruments, etc). | Sampling for RC, DD and face chip sampling is carried out as specified within Saracen sampling |
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| These examples should not be taken as limiting the | and QAQC procedures as per industry standard. RC chips and NQ diamond core provide high |
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| broad meaning of sampling. | quality representative samples for analysis. RC, RAB, AC and surface DD drilling completed by | |
| Include reference to measures taken to ensure | previous holders is assumed to adhere to industry standard at that time 1989- 2004. |
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| sample representivity and the appropriate |
Saracen sampling activities have been carried out to industry standard. Reverse circulation |
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| calibration of any measurement tools or systems | drilling is used to obtain 1 m samples, diamond core is sampled to geological intervals |
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| used. | (0.2m to 1.2m) and cut into half core and UG faces are chip sampled to geological intervals (0.2 | |
| Aspects of the determination of mineralisation that | to 1m), with all methods producing representative samples weighing less than 3kg. Samples are |
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| are Material to the Public Report. | selected to weigh less than 3 kg to ensure total sample inclusion at the pulverisation stage. | |
| In cases where ‘industry standard’ work has been | Saracen core and chip samples are crushed, dried and pulverised to a nominal 90o/o passing |
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| done this would be relatively simple (eg ‘reverse | 75μm to produce a 40 g sub sample for analysis by FA/AAS. Visible gold is occasionally |
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| circulation drilling was used to obtain 1 m samples | encountered in drillcore and face samples. Historical AC, RAB, RC and diamond sampling is |
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| from which 3 kg was pulverised to produce a 30 g | assumed to have been carried out to industry standard at that time. Analysis methods include |
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| charge for fire assay’). In other cases more | fire assay, aqua regia and unspecified methods. |
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| 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 | Drill type (eg core, reverse circulation, open-hole | The deposit was initially sampled by 495 AC holes, 73 RAB holes, 391 RC holes (assumed |
| techniques | hammer, rotary air blast, auger, Bangka, sonic, etc) | standard 5 %" bit size) and 159 surface diamond NQ and HQ core holes. 5 RC holes were drilled |
| and details (eg core diameter, triple or standard | using a 143mm diameter bit with a face sampling hammer. The rig was equipped with an |
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| tube, depth of diamond tails, face-sampling bit or | external auxiliary/ booster. Saracen has previously completed 6 reverse circulation drill holes, |
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| 9 surface HQand NQdiamond drill holes,839 underground NQdiamond drill holes and sampled |
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| Criteria | JORC Code explanation | Commentary | ||
|---|---|---|---|---|
| other type, whether core is oriented and if so, by | 2931 underground faces. Diamond drill core has been oriented using several different methods |
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| what method, etc). | which include Ezi-Mark, ACT, and more recently Ori-Finder. Some historic surface diamond drill | |||
| core appears to have been oriented byunknown methods. | ||||
| Drill sample | Method of recording and assessing core and | chip | RC chip recoveries are recorded in the database as a percentage based on a visual weight |
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| recovery | sample recoveries and results assessed. | estimate. Underground and surface diamond core recoveries are recorded as percentages | ||
| Measures taken to maximise sample recovery and | calculated from measured core versus drilled metres, and intervals are logged and recorded in |
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| ensure representative nature of the samples. | the database. Diamond core recoveries average >90%. Limited historic surface sampling and | |||
| Whether a relationship exists between sample | surface diamond recoveries have been recorded. |
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| recovery and grade and whether sample bias | may | During RC drilling daily rig inspections are carried out to check splitter condition, general site |
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| have occurred due to preferential loss/gain of | and address general issues. Ground condition concerns led to extensive hole conditioning |
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| fine/coarse material. | meaning contamination was minimised and particular attention was paid to sample recovery. | |||
| Diamond core is reconstructed into continuous runs on an angle iron cradle for orientation | ||||
| marking. Depths are checked against depth given on the core blocks. UG faces are sampled left | ||||
| to right across the face allowing a representative sample to be taken due to the vertical nature | ||||
| of the orebody. Historical AC, RAB, RC and diamond drilling to industry standard at that time. | ||||
| There is no known relationship between sample recovery and grade for RC drilling. Diamond | ||||
| drilling has high recoveries due to the competent nature of the ground meaning loss of material | ||||
| is minimal. Anyhistorical relationshipis not known. | ||||
| Logging | Whether core and chip samples have been | Logging of all RC chips and diamond drill core is carried out. Logging records lithology, |
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| geologically and geotechnically logged to a level of | mineralogy, texture, mineralisation, weathering, alteration and veining. |
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| detail to support appropriate Mineral Resource | Logging is both qualitative and quantitative in nature. Geotechnical and structural logging is |
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| estimation, mining studies and metallurgical | carried out on all diamond core holes to record recovery, RQD, defect number, type, fill |
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| studies. | material, shape and roughness and alpha and beta angles. Core is photographed in both dry and | |||
| Whether logging is qualitative or quantitative in | wet state. All faces are photographed and mapped. Qualitative and quantitative logging of |
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| nature. Core (or costean, channel, |
etc) | historic data varies in its completeness. Some surface diamond drill photography has been |
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| photography. | preserved. | |||
| The total length and percentage of the relevant | All RC and diamond drill holes are logged in full and all faces are mapped. Historical logging is |
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| intersections logged. | approximately95% complete,some AC,RAB and RCpre-collar information is unavailable. | |||
| Sub-sampling | If core, whether cut or sawn and whether quarter, | All diamond core is cut in half on-site using an automatic core saw. Samples are always collected |
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| techniques | half or all core taken. | from the same side. | ||
| and sample | If non-core, whether riffled, tube sampled, rotary | RC drilling has been cone split and was dry sampled. UG faces are chip sampled using a hammer. |
||
| preparation | split, etc and whether sampled wet or dry. | AC, RAB and RC drilling has been sampled using spear, grab, riffle and unknown methods. | ||
| The sample preparation of RC chips, diamond core and UG face chips adhere to industry best | ||||
| practice. It is conducted by a commercial laboratory and involves oven drying, coarse crushing | ||||
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| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| For all sample types, the nature, quality and | then total grinding using an LM5 to a grind size of 90% passing 75 microns. Best practice is |
|
| appropriateness of the sample preparation |
assumed at the time of historic sampling. |
|
| technique. | All subsampling activities are carried out by commercial laboratory and are considered to be | |
| Quality control procedures adopted for all sub- | satisfactory. Sampling by previous holders is assumed to adhere to industry standard at the | |
| sampling stages to maximise representivity of | time. |
|
| samples. | RC field duplicate samples are carried out at a rate of 1:20 and are sampled directly from the | |
| Measures taken to ensure that the sampling is | on-board splitter on the rig. These are submitted for the same assay process as the original |
|
| representative of the in situ material collected, | samples and the laboratory are unaware of such submissions. No duplicates have been taken |
|
| including for instance results for field |
of UG diamond core, face samples are duplicated on ore structures. Sampling by previous |
|
| duplicate/second-half sampling. | holders assumed to be industry standard at the time. | |
| Whether sample sizes are appropriate to the grain | Sample sizes of 3kg are considered to be appropriate given the grain size (90% passing 75 |
|
| size of the material being sampled. | microns)of size of the material of the material sampled. | |
| Quality of | The nature, quality and appropriateness of the | A 40 gram fire assay with MS finish is used to determine the gold concentration for RC chip, UG |
| assay data and | assaying and laboratory procedures used and |
diamond core and face chip samples. This method is considered one of the most suitable for |
| laboratory | whether the technique is considered partial or | determining gold concentrations in rock and is a total digest method. Historic sampling includes |
| tests | total. | fire assay, aqua reqia and unknown methods. |
| For geophysical tools, spectrometers, handheld XRF | No geophysical tools were utilised for reporting gold mineralisation. |
|
| instruments, etc, the parameters used in |
Certified reference material (standards and blanks) with a wide range of values are inserted into |
|
| determining the analysis including instrument | every RC, diamond drill hole (1 in 30) and UG face jobs to assess laboratory accuracy and |
|
| make and model, reading times, calibrations | precision and possible contamination. These are not identifiable to the laboratory. Blanks are |
|
| factors applied and their derivation, etc. | also included at a rate of 1 in 30 for diamond drill core and one per lab dispatch for face samples. | |
| Nature of quality control procedures adopted (eg | Feldspar flush samples are requested after each sample with visible gold, or estimated high |
|
| standards, blanks, duplicates, external laboratory | grade. QAQC data returned are checked against pass/fail limits with the SQL database and are |
|
| checks) and whether acceptable levels of accuracy | passed or failed on import. A report is generated and reviewed by the geologist as necessary |
|
| (ie lack of bias) and precision have been | upon failure to determine further action. QAQC data is reported monthly and demonstrates |
|
| established. | sufficient levels of accuracy and precision. Sample preparation checks for fineness are carried | |
| out to ensure a grind size of 90o/o passing 75 microns. The laboratory performs a number of | ||
| internal processes including standards, blanks, repeats and checks. Industry best practice is | ||
| assumed forprevious holders. HistoricQAQC data is stored in the database but not reviewed. |
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| Criteria JORC Code explanation |
Commentary |
|---|---|
| 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. |
Significant intercepts are verified by the Geology Manager and corporate personnel. No specific twinned holes have been drilled at Red October but underground diamond drilling has confirmed the width and grade of previous exploration drilling. Primary data is collated in a set of excel templates utilising lookup codes. This data is forwarded to the Database Administrator for entry into a secure acQuire database with inbuilt validation functions. Chips from RC drill holes are stored in chip trays for future reference. Remaining half core is stored in core trays and archived on site. Hard copies of face mapping, backs mapping and sampling records are kept on site. Digital scans are also kept on the corporate server. Data from previous owners was taken from a database compilation and was validated as much as practicable before entry into the Saracen acQuire database. No adjustments have been made to assay data. First gold assay is utilised for resource estimation. Re-assays carried out due to failed QAQC will replace original results, though both are stored in the database. |
| 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 drill hole collars are picked up by company surveyors using a Leica TS15i (total station) with an expected accuracy of +/~2mm. Underground faces are located using a Leica D5 disto with an accuracy of+/-1mm from a known survey point. Exploration RC holes have been gyroscopically downhole surveyed by ABIMS where possible once drilling is completed. Surveys are carried out every 30m downhole during RC and diamond drilling using an Eastman single shot camera. Previous holders' survey accuracy and quality is generally unknown. A local grid system (Red October) is used. It is rotated 44.19 degrees east of MGA_GDA94.The two point conversion to MGA_GDA94 zone 51 is: ROEast RONorth RL MGAEast MGANorth RL Point 1 5890.71 10826.86 0 444223.25 6767834.66 0 Point2 3969.83 9946.71 0 442233.31 6768542.17 0 Historic data is converted to Red October local grid on export from the database DGPS survey has been used to establish topographic surface |
| 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 nominal spacing for the reported results are not uniform and therefore a definitive drill spacing will not be quoted. Not all data reported meets the required continuity measures to be considered for inclusion in a resource estimate. Holes reported inside or within 40m of the resource will be incorporated into the resource model, or if sufficient density of data confirms continuity, it will be considered for inclusion in the resource. RC drill holes are sampled to 1 m intervals and underground core and laces are sampled to geological intervals;compositingis not applied until the estimation stage. Some historic RAB |
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| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| and RC sampling was composited into 3-4m samples with areas of interest resampled to 1 m | ||
| intervals. It is unknown at what threshold this occurred. | ||
| Orientation of | Whether the orientation of sampling achieves | RC drilling was carried out at the most appropriate angle possible. The mineralisation is |
| data in | unbiased sampling of possible structures and the | intersected at closely as possible to perpendicular. The steeply dipping nature of the |
| relation to | extent to which this is known, considering the | mineralisation means that most holes pass through mineralisation at lower angles than ideal. |
| geological | deposit type. | Production reconciliation and underground observations indicate that there is limited sampling |
| structure | If the relationship between the drilling orientation | bias. Underground diamond drilling is designed to intersect the orebody in the best possible |
| and the orientation of key mineralised structures is | orientation given the constraints of underground drill locations. UG faces are sampled left to |
|
| considered to have introduced a sampling bias, this | right across the face allowing a representative sample to be taken due to the vertical nature of |
|
| should be assessed and reported if material. | the orebody. | |
| No significant sampling bias has been recognised due to orientation of drilling in regards to | ||
| mineralised structures | ||
| Sample | The measures taken to ensure sample security. | Samples are prepared on site under supervision of Saracen geological staff. Samples are |
| security | selected, bagged into tied numbered calico bags then grouped into larger secured bags and | |
| delivered to the laboratorybySaracenpersonnel. | ||
| Audits or | The results of any audits or reviews of sampling | An internal review of companywide sampling methodologies was conducted to create the |
| reviews | techniques and data. | current sampling and QAQC procedures. No external audits or reviews have been conducted. |
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
| Criteria | JORC Code explanation | Commentary | |
|---|---|---|---|
| Mineral | Type, reference name/number, location and | Red October is wholly located within Mining Lease M39/412. Mining Lease M39/412 is held |
|
| tenement and | ownership including agreements or material issues | 100% by Saracen Gold Mines Ply Ltd a wholly owned subsidiary of Saracen Mineral Holdings |
|
| land tenure | with third parties such as joint ventures, | Limited and is subject to a bank mortgage (499142). Mining Lease M39/412 has a 21 year life |
|
| status | partnerships, overriding royalties, native title | (held until 2019) and is renewable for a further 21 years on a continuing basis. There is one |
|
| interests, historical sites, wilderness or national | Registered Native Title Claim over M39/412 for the Kurrku group (WC10/18), lodged |
||
| park and environmental settings. | December 2010. Mining Lease M39/412 was granted prior to registration of the Claim and is | ||
| The security of the tenure held at the time of | not affected by the Claim. Aboriginal Heritage sites within the tenement (Site Numbers WO |
||
| reporting along with any known impediments to | 2442, 2447, 2448, 2451, 2452 and 2457) are not affected by current mining practices. Third |
||
| obtaining a licence to operate in the area. | party royalties are payable on the tenement. A Royalty is payable under Royalty Deed | ||
| M39/411, 412, 413 based on a percentage of deemed revenue (minus allowable costs) on gold | |||
| produced in excess of 160,000 ounces. A Royaltyispayable based on apercentage ofproceeds | |||
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| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| of sale or percentage of mineral value. All production is subject to a Western Australian state | ||
| government NSR royalty of 2.5%. | ||
| The tenement is ingood standingand the licence to operate alreadyexists | ||
| Exploration | Acknowledgment and appraisal of exploration by | Mount Martin carried out exploration including RAB and RC drilling in 1989. This along with |
| done by other | other parties. | ground magnetics was used to delineate a number of anomalies on islands to the immediate |
| parties | north and south of Red October. Mount Burgess Gold Mining identified a north east trending | |
| magnetic anomaly on Lake Carey between the islands considered analogous to Sunrise Dam | ||
| in 1993. Aircore and RC drilling was carried out to define what would become the Red October | ||
| pit. Sons of Gwalia entered into a joint venture with Mount Burgess, carrying out RC and | ||
| diamond drilling to define a pittable reserve before purchasing Mount Burgess' remaining | ||
| equity. Extension RC and diamond drilling from within and around the pit defined the | ||
| potential underground resource. | ||
| Geology | Deposit type, geological setting and style of | Red October gold mine is situated within an Archaean greenstone belt of the Laverton |
| mineralisation. | Tectonic Zone. The stratigraphic sequence consists of footwall tholeiitic basalts, mineralised | |
| shale (containing ductile textures defined by pyrite mineralisation) and a hanging wall | ||
| dominated by ultramafic flows interbedded with high-Mg basalts. Prenhite- pumpellyite facies | ||
| are evident within both the tholeiitic basalts and komatiite flows. Sulphide mineralisation is | ||
| hypothesised to have been caused from interaction with an auriferous quartz vein, which has | ||
| caused the intense pyrite-defined ductile textures of the shale in the upper levels. The fluid is | ||
| believed to have been sourced from the intruding granitoid to the (grid) south of the deposit. |
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| Criteria | JORC Code explanation | Commentary | ||
|---|---|---|---|---|
| Drill hole | A summary of all information material to the | All material data is periodically released on the ASX:07/12/2016, 07/09/2016, |
27/07/2016, | |
| Information | understanding of the exploration results including | 11/05/2016, 25/05/2015, 0/03/2015,25/05/2015,16/01/2014,14/10/2013, |
23/07/2013, | |
| a tabulation of the following information for all | 17/04/2013, 25/01/2013, 14/06/2012, 27/04/2012, 28/07/2011, 03/06/2011 |
|||
| 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 | In reporting Exploration Results, weighting |
All significant intercepts have been length weighted with a lower cut-off Au grade of 2.5ppm. |
||
| aggregation | averaging techniques, maximum and/or minimum | No high grade cut is applied. |
||
| methods | grade truncations (eg cutting of high grades) and | Intercepts are aggregated with minimum width of 1 m and maximum width of 3m for internal |
||
| cut-off grades are usually Material and should be | dilution. Where stand out higher grade zone exist with in the broader mineralised zone, the |
|||
| stated. | higher grade interval is reported also. | |||
| Where aggregate intercepts incorporate short | No metal equivalents are reported. |
|||
| 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. | ||||
| Relationship | These relationships are particularly important in | The geometry of the mineralisation is highly variable and the complex nature of the ore bodies |
||
| between | the reporting of Exploration Results. | makes the definitive calculation of true thickness difficult. Drilling has been orientated to | ||
| mineralisation | If the geometry of the mineralisation with respect | intersect the various ore bodies at most optimum angle where possible. This has not always |
||
| widths and | to the drill hole angle is known, its nature should be | been achieved. Where holes have drilled parallel to or within a lode, additional holes have |
||
| intercept | reported. | been drilled at a more suitable orientation to account for the poor angle. | ||
| lengths | ||||
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| Criteria | JORC Code explanation | Commentary | |
|---|---|---|---|
| If it is not known and only the down hole lengths | |||
| are reported, there should be a clear statement to | |||
| this effect (e.g. ‘down hole length, true width not | |||
| _known’). _ | |||
| Diagrams | Appropriate maps and sections (with scales) and | Diagrams are referenced in the body of the release |
|
| 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. | |||
| Balanced | Where comprehensive reporting of all Exploration | All results have been reported. |
|
| reporting | 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. | |||
| Other | Other exploration data, if meaningful and material, | Dr John McLellan from GMEX Pty Ltd was contracted to carry out a stress modelling study on |
|
| substantive | should be reported including (but not limited to): | the Red October deposit. A data set of structural observations from core and field mapping |
|
| exploration | geological observations; geophysical survey |
was compiled and used to create a three dimensional mesh of the deposit. A series of regional |
|
| data | results; geochemical survey results; bulk samples – | scale stress fields of varying deformational stages and strengths were applied to the mesh to |
|
| size and method of treatment; metallurgical test | predict the behaviour of the Red October deposit and highlight areas of increased stress and |
||
| results; bulk density, groundwater, geotechnical | strain and thus likely mineralisation. Two targets were drilled in the recent RC campaign with |
||
| and rock characteristics; potential deleterious or | results supporting John's findings. Model Earth Pty was engaged to conduct a structural |
||
| contaminating substances. | review of the Red October camp area in May 2015. Several local and regional scale targets | ||
| were identified for follow-up. | |||
| Further work | The nature and scale of planned further work (eg | Red October is currently under review. |
|
| 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. | |||
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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 | Measures taken to ensure that data has not been | Saracen utilises AcQuire software on an SQL server database to securely store and manage all |
|
| integrity | corrupted by, for example, transcription or keying | drill hole and sample information. Data integrity protocols are built into the system to ensure |
|
| errors, between its initial collection and its use for | data validity and minimise errors are built into the data entry and import processes. |
||
| Mineral Resource estimation purposes. | Data that is captured in the field is entered into Excel templates which are checked on import | ||
| Data validation procedures used. | into the database for errors. Assay jobs are dispatched electronically to the lab to minimise the | ||
| chance of data entry errors. Assay results from the lab are received in CSV format and are | |||
| checked for errors on import into the database. Data is regularly validated using the mining | |||
| software. The data validationprocess is overseen bythe Database Administrator. | |||
| Site visits | Comment on any site visits undertaken by the | The Competent Person regularly visits site (Monthly and more so when the geological work is |
|
| Competent Person and the outcome of those visits. | more complex and demanding) to assess geological competency and ensure integrity across all |
||
| If no site visits have been undertaken indicate why | geological disciplines. |
||
| this is the case. | |||
| Geological | Confidence in (or conversely, the uncertainty of) | The resource categories assigned to the model directly reflect the confidence in the geological |
|
| interpretation | the geological interpretation of the mineral | interpretation that is built using structural, mineral, and alteration geology obtained from UG |
|
| deposit. | mapping, core logging and drill results. Confidence in the interpretation improved with | ||
| Nature of the data used and of any assumptions | increased data density from close-spaced grade control drilling at 20m X 20m and UG drive |
||
| made. | mapping. | ||
| The effect, if any, of alternative interpretations on | The geological interpretation has considered all available geological information from drill core |
||
| Mineral Resource estimation. | and UG mapping. It includes rock types, mineral association as well as alteration and veining | ||
| The use of geology in guiding and controlling | assemblage information altered from all sources to help define the mineralised domains and |
||
| Mineral Resource estimation. | regolith boundaries. | ||
| The factors affecting continuity both of grade and | The geological wireframes defining the mineralised zones are considered to be robust. |
||
| geology. | Alternative interpretations were trialled earlier and had a negative effect on the estimation | ||
| process with zones becoming less robust. | |||
| The wireframed domains are estimated as hard boundaries during the Mineral Resource | |||
| Estimation. They are constructed using all available geological information (as stated above) | |||
| and terminate along known structures. Mineralisation styles, geological homogeneity, and | |||
| grade distributions for each domain (used to highlight any potential for bimodal populations) | |||
| are all assessed to ensure effective estimation of the domains. | |||
| "Grade continuity is affected by both structural and lithological controls. Higher grades | |||
| (nuggetty gold)are associated with vertical N-S striking (mine) quartz breccia structures | |||
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| Criteria | JORC Code explanation | Commentary | |
|---|---|---|---|
| plunging along the northern contacts of NE (mine) dipping fault zones. Where these zones | |||
| interact with the main Shale contact, high grade shoots tend to occur with steep northerly | |||
| plunges internal of the shale contact. Structurally the quartz breccia and shale units are offset | |||
| bythe NE dippingfault zones." | |||
| Dimensions | The extent and variability of the Mineral Resource | Mineralization at Red October occurs over 900m along strike and to a depth of 700m. |
|
| expressed as length (along strike or otherwise), | Mineralization is hosted in vertical quartz breccia zones as well as where they intersect the |
||
| plan width, and depth below surface to the upper | primary host of graphitic black shales sitting on a Mafic/ultramafic contact. Inside the primary |
||
| and lower limits of the Mineral Resource. | ore zone ore is seen as nuggetty visible gold and moving away from these zones mineralization | ||
| is patchy with continuity along strike of between 5-20m and sub mineralization outside zones | |||
| of silica flooding/brecciation. | |||
| Estimation and | The nature and appropriateness of the estimation | The mineralised ore domains were wireframed based on geological homogeneity, grade |
|
| modelling | technique(s) applied and key assumptions, | populations, mineralisation styles and orientation of grade continuity. The domain wireframes | |
| techniques | including treatment of extreme grade values, | were estimated as hard boundaries during the estimation process. RAB, Air-core and grab | |
| domaining, interpolation parameters and | samples were excluded from the estimation process due to the unreliability of results. | ||
| maximum distance of extrapolation from data | Negative gold grades were replaced with a grade of 0.001 g/t and null gold grades were | ||
| points. If a computer assisted estimation method | excluded from the estimation process. Drillhole assays were composited to 1m intervals with a | ||
| was chosen include a description of computer | minimum length of 0.3m that best conformed to the sample length of the majority of the | ||
| software and parameters used. | RC/DD data. High grades within each domain were identified and top cuts were applied where | ||
| The availability of check estimates, previous | necessary. Variograms were produced to determine the directional influence of each sample | ||
| estimates and/or mine production records and | during the estimation process. The Mineral Resource Estimate was interpolated using | ||
| whether the Mineral Resource estimate takes | Ordinary Kriging in Micromine. | ||
| appropriate account of such data. | The Mineral Resource Estimation is checked against the previous block model estimations and | ||
| The assumptions made regarding recovery of by- | reconciled production numbers. | ||
| products. | No assumptions have been made regarding the recovery of by-products for this Mineral | ||
| Estimation of deleterious elements or other non- | Resource Estimation. | ||
| grade variables of economic significance (eg | No estimation of deleterious elements or non-grade variables is required. | ||
| sulphur for acid mine drainage characterisation). | The model has been created using a parent cell size of 2.5m (East- West) x 10m (North-South) | ||
| In the case of block model interpolation, the block | x 10m (vertical). Sub-cells have been used to a resolution of 0.25m x 1 m x 1 m to ensure high |
||
| size in relation to the average sample spacing and | resolution at ore boundaries. The search distances are variable and are adjusted according to |
||
| the search employed. | the directional ranges calculated from the variograms, and the geological understanding of Au | ||
| Any assumptions behind modelling of selective | and geometry continuity for each domain. Search ellipsoids are variable and reflect individual | ||
| mining units. | domain conditions and are extended in later search asses with a decreased number of | ||
| minimum samples where data is sparse. | |||
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| Criteria | JORC Code explanation | Commentary | Commentary | |
|---|---|---|---|---|
| Description of how the geological interpretation | | No assumptions have been made regarding the modelling of selective mining units for this | ||
| was used to control the resource estimates. | Mineral Resource Estimation. | |||
| Discussion of basis for using or not using grade | | No assumptions have been made regarding the correlation between variables for this Mineral | ||
| cutting or capping. | Resource Estimation. | |||
| The process of validation, the checking process | | Mineralised domains were wireframed within the context of the known local and structural | ||
| used, the comparison of model data to drill hole | geology which was supported by the geological mapping UG and the geology logging of | |||
| data, and use of reconciliation data if available. | drillholes. Correlations between rock type, texture, alteration, and gold mineralisation were | |||
| investigated. | ||||
| | Samples with extreme high grades that bias the mean grade and positively skew the grade | |||
| population within each mineralised domains are top cut to reduce the influence high grade | ||||
| outliers. The geostatistical analysis to determine to cuts includes probability plots and the | ||||
| coefficient of variation. | ||||
| | A number of statistical and visual measures are used to validate the accuracy of the | |||
| estimation. The mean grade of the block model is compared to the mean grade of composites | ||||
| by domain. These are then further investigated by appropriate northing, easting and bench | ||||
| intervals in the form of swathe plots. The volume variance between the wireframed domains | ||||
| and block model domains are assessed. Kriging efficiency, and slope results give an indication | ||||
| of the quality of the estimate. A visual inspection of the drill hole assay results are compared | ||||
| to the estimated block model in section. | ||||
| Moisture | Whether the tonnages are estimated on a dry | | Tonnages are estimated on a dry basis. | |
| basis or with natural moisture, and the method of | ||||
| determination of the moisture content. | ||||
| Cut-off | The basis of the adopted cut-off grade(s) or | | A cut-off grade of 2 g/t was chosen after economic considerations for the reporting of the Red | |
| parameters | quality parameters applied. | October Mineral Resource | ||
| Mining factors | Assumptions made regarding possible mining | | No assumptions have been made as to possible mining methods or dilution factors due to the | |
| or assumptions | methods, minimum mining dimensions and | variable nature of the dip and thickness of the ore body. Current mining methods employed at | ||
| internal (or, if applicable, external) mining | Red October utilize both air legging and long hole production rigs and is determined by ore | |||
| dilution. It is always necessary as part of the | body dimensions. Dilution is calculated using a low grade wireframe encompassing the ore | |||
| process of determining reasonable prospects for | domains which typically grades at 0.01 g/t. | |||
| 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 | ||||
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| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| should be reported with an explanation of the | ||
| basis of the mining assumptions made. | ||
| Metallurgical | The basis for assumptions or predictions | Red October has a variable recovery in certain zones dependant on the mineralized host. The |
| factors or | regarding metallurgical amenability. It is always | lowest recoveries are in domain 110, which has a high refractory component with most ore |
| assumptions | necessary as part of the process of determining | locked in arsenopyrite, and in the unbreacciated primary shale unit which has recorded up to |
| reasonable prospects for eventual economic | 2% active carbon causing it to have a preg robbing nature. Both are between 45-65% recovery. | |
| extraction to consider potential metallurgical | The quartz breccia has a high gravity gold component and most mineralization hosted in pyrite | |
| methods, but the assumptions regarding | with recoveries varying between 80-93%. The average recovery applied to Red October and | |
| metallurgical treatment processes and | seen through the mill is 84%. | |
| 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. | ||
| Environmental | Assumptions made regarding possible waste and | Waste rock characterisation has been conducted on the deposit with no environmental issues |
| factors or | process residue disposal options. It is always | identified except dispersive oxidised material and waste dump construction plan in place to |
| assumptions | necessary as part of the process of determining | manage. Tailings from the deposit are stored in an appropriate licensed tailings facility and |
| reasonable prospects for eventual economic | closure plan in place at Carosue Dam. | |
| 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. |
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| Criteria | JORC Code explanation | Commentary | |
|---|---|---|---|
| Bulk density | Whether assumed or determined. If assumed, the | The bulk densities for Red October were determined via testing of representative intervals | |
| basis for the assumptions. If determined, the | from diamond drill holes, regular sampling via grab samples from the pit development. The | ||
| method used, whether wet or dry, the frequency | sample size is generally between 0.5 and 1.5kg and the method of calculation is the water | ||
| of the measurements, the nature, size and | displacement technique. Measurements have been recorded in the acquire database and | ||
| representativeness of the samples. | extraction schemes pair this data with the major lithology code for statistical analysis. | ||
| The bulk density for bulk material must have been | Ore zones predominantly exist in fresh non porous material, so additional measures to reduce |
||
| measured by methods that adequately account | moisture intake during the water displacement method is unnecessary at this stage. Coating | ||
| for void spaces (vugs, porosity, etc), moisture and | more friable oxides and sediments (to reduce moisture loss or moisture gain during the | ||
| differences between rock and alteration zones | process) is considered on a deposit by deposit basis. | ||
| within the deposit. | An average mean of densities collected for each lithological type has been uniformly applied | ||
| Discuss assumptions for bulk density estimates | to the modelled geological units. The oxide and transitional zones have an assumed density | ||
| used in the evaluation process of the different | based on regional work in similar deposits and general goldfields region | ||
| materials. | |||
| Classification | The basis for the classification of the Mineral | Resource classifications were defined by a combination of data; drill hole spacing, estimation | |
| Resources into varying confidence categories. | quality (search pass, Kriging Efficiency and Slope results), geological confidence and Au | ||
| Whether appropriate account has been taken of | continuity of domains. Based on these factors hard boundaries were wireframed for | ||
| all relevant factors (ie relative confidence in | measured, indicated and inferred material. Measured material exhibits high confidence | ||
| tonnage/grade estimations, reliability of input | defined by development drives and closed spaced GC drilling, with estimates in the first search | ||
| data, confidence in continuity of geology and | and Kriging Efficiency and Slope results >80%. Indicated material is defined by close spaced | ||
| metal values, quality, quantity and distribution of | drilling, having good geological continuity along strike and down dip and in such is reflected | ||
| the data). | with good KE and Slope results. Inferred classification is given to the estimate outside the | ||
| Whether the result appropriately reflects the | mineable area with more sparse drill intercepts (>25m X 25m) and having poorer estimation | ||
| Competent Person’s view of the deposit. | quality. | ||
| All relevant factors have been taken into account and are validated through thorough QAQC | |||
| of the drill hole database and geological knowledge and interpretation of the Red October | |||
| deposit. Thorough model validations and reviews ensure the integrity of the final estimation | |||
| and the grade and tonnage numbers. | |||
| The reviewing process allows the Competent Person's to assess and sign off on the model. | |||
| Audits or | The results of any audits or reviews of Mineral | At the completion of resource estimation Saracen Gold Mines undertake an extensive review | |
| reviews | Resource estimates. | of the model that covers model inventory and comparisons to previous models. Geological | |
| interpretation, wireframing, domain selection, statistics by domain, assay evaluation, parent | |||
| cell sizes, data compositing, variography, search strategy, estimation and Kriging | |||
| Neighbourhood Analysis and finally model validation and resource categorisation are all | |||
| discussed and scrutinised bythegeological and mineplanningteams. | |||
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| Criteria | JORC Code explanation | Commentary |
|---|---|---|
| Discussion of | Where appropriate a statement of the relative | The Mineral Resource has been reported in accordance with the guidelines of the 2012 edition |
| relative | accuracy and confidence level in the Mineral | of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore |
| accuracy/ | Resource estimate using an approach or | Reserves. Saracen Gold Mine uses a standard approach to resource estimation and the |
| confidence | procedure deemed appropriate by the Competent | procedure requires the systematic completion of the Saracen Resource Estimation Document |
| Person. For example, the application of statistical | that is thoroughly investigated and assessed in the Model review process, as stated above. | |
| or geostatistical procedures to quantify the | The statement relates to global estimates. | |
| relative accuracy of the resource within stated | Previous Mineral Resource estimates have had on average a positive reconciliation against mill | |
| confidence limits, or, if such an approach is not | figures | |
| 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 | ||
| withproduction data, where available. |
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