Mt Kare Project
Gold/Silver Resource - Papua New Guinea
Papua New Guinea (PNG), has the world's greatest concentration of world-class gold and copper deposits. In Indochine's 100% owned Mt Kare project the gold resource, has had prior expenditure of approximately A$60 million, including 365 drill holes. This led to an initial JORC-compliant Mineral Resource Statement for the Mt Kare Gold Project, released in December 2011, with 2.1 million ounces gold equivalent or 1.8 million ounces gold. The deposit lies 15 kilometres southwest of Barrick's 28 million ounce Porgera gold mine, which produces over 500,000 ounces of gold per year.
A major increase in the quality of the resource was recently announced with two substantial high grade zones averaging 5 - 20 g/t gold, with intersections over 100 g/t gold. The current focus is to extend these high grade zones as they allow for a rapid, low cost underground mining option at significantly reduced capital costs than announced in the company's 2012 Pre-Feasibility Study.
Geologically the Mt Kare deposit shares many similarities with the nearby Porgera gold mine, with the same host rocks, similar geological structures, mineralisation types and the same age of mineralisation. This indicates the large potential for growth in the current Mt Kare resource. Porgera is one of the world's top 10 gold mines, with over 500,000 oz/yr production for over two decades, and has developed significant infrastructure, including roads and power lines, nearby to Mt Kare. Porgera started as a high grade underground mine and later developed a major open cut operation, now more than 500 metres deep.
Mt Kare Fly Through
The Mt Kare projects' total Mineral Resource is 43 Mt at 1.5 g/t Au for 2.1 Moz Au, 18 Moz Ag or a 2.5 million ounce gold equivalent, with nearly 75% in the higher confidence Measured and Indicated category, based on 454 diamond drill holes (73,639 m), as at July, 2013.
The company's 2012 Pre-Feasibility Study set out options for development, which will be optimised for underground mining of the high grade zones utilising the recently updated resource model and new integrated geological model.
The company's experienced team comprises mainly local PNG geologists, headed by George Niumataiwalu, an experienced mining engineer. George has a proven record of successful project development in PNG, having taken the Hidden Valley gold/silver deposit from the resource stage through development, permitting and a landowner agreement in 2 years. George is assisted by PNG veteran geologist Tony Burgess, whose experience includes 11 years at Porgera.
A completed Landowner Investigation Study has been a key focus for the company to formally identify local landowners. Ground identification of claims were conducted in the first has of 2013, leading to a completed Landowner Investigation Report under the auspices of the Land Act. This report allows for full discussions to occur with landowners and the government on future benefits sharing when the project becomes a mining operation. Local communities and the government regulators have been overwhelmingly supportive of this process and it is being considered as a future guideline for unlocking the country's mineral wealth.
The total JORC-compliant Indicated and Inferred Mineral Resources as at December 2011 are estimated as 28.3 million tonnes at 1.9 grams per tonne of gold (g/t Au) and 22.5 g/t silver (Ag) containing 1.76 million ounces of goldand 20.40 million ounces of silver (using a 0.5 g/t gold cut-off grade). The Resource estimate has 2.13 million ounces of gold equivalentat a grade of 2.3 g/t gold equivalent (AuEq) ( see Table below and the ASX release dated 19 December 2011 ). The Mt Kare JORC Resource Statement has confirmed the previously estimated size and tenor of gold/silver mineralisation at Mt Kare, contained in Snowden’s 2007 Canadian NI 43-101 resource estimate, produced under the previous owners ( see 2011 Annual Report ). Inclusion of Indochine's PFS drilling will result in an upgrade of material from inferred to higher confidence. Indicated and measured categories recent drilling on bonanza targets has intersected 21 m at 33.8 g/t Aug, within 49m at 22.3 g/t in 1835013.
Table: Mineral Resource Statement, Mt Kare Gold/Silver Project, 2013
- Gold equivalent grades (AuEq) are calculated based on a gold price of US$1200/0Z and a silver price of US$22/oz, or 54.55 silver ounces per 1 gold ounce; this does not consider metallurgy recovery factors.
- Cut-off grades and capping: A lower cut-off of 0.5 g/t Au was used based on the data distribution. Capping strategy utilised: in low grade domains, analyses capped at 30 g/t Au, 250 g/t Ag; Upper Zone and high grade domains of 50 g/t Au, 500 g/t Ag.Material classified as Measured and Indicated Resources and wire framed gold mineralisation based on the 2013 block model considering an average distance between drill of 25 m and 50 m among other criteria. It is considered that this category material has a high probability of being economically extracted, including comparisons with a previously modelled PFS open pit shell based on various assumptions including the prior 2011 resource. Mineralisation beyond an average distance between drilling of 80 m was not included with the lowest category of inferred Resource.
- Rounded estimates are used, which may cause apparent discrepancies in totals. Significant figures do not imply precision.
- The resources have been reported in compliance with the JORC (2004) code.
Anthony Gates, a Non- Executive Director of Indochine Mining Limited, is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken, being reported herein as Mineral Resources and Exploration Results, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves (The JORC Code, 2004 Edition). Anthony Gates has consented to the public reporting of these statements and results and the form and context in which they appear.