GMJ129-October-December

October – December 2017 VOLUME 1. ISSUE 129
$11.95

Registered by Australia Post PP 643938/00057

Sink or swim:

Silver Lake’s fight to survive

ISSN 1324-4396 EXPLORATION NEWGENGOLD
04 INNOVATION PREVIEW

9 771324 439005



GOLD MINING JOURNAL (ISSN 1324-4396) COVER 18
Published by Paydirt Media Pty Ltd.
A.C.N. 063 985 133 After surviving a near-death experience, Silver Lake Resources Ltd is
on the road to recovery. Though not out of troubled waters just yet, Silver
EDITORIAL Lake managing director Luke Tonkin has cash at his disposal to grow the
Editor: company quickly during high times for the Australian gold sector. Michael
Washbourne accompanied Tonkin to site in the Eastern Goldfields to get a
Dominic Piper gauge on how far the Silver Lake revival has progressed

Deputy editor: EXPLORATION & INNOVATION 24
Mark Andrews
Fresh gold discoveries are getting harder for companies to nail in Austral-
Journalists: ia, meaning there is more of an emphasis on innovative methods to assist
Michael Washbourne, in their exploration endeavours. In this edition, we take a look at some of
the ways companies are embracing innovation in the sector and their suc-
Jonathon Daly cesses to date

Art director: NEWGENGOLD 32
Marian Noonan
For 20 years, NewGenGold has presented gold exploration geologists
Contributors: with the stories of inspiration and perspiration which go into making major
Keith Goode, greenfields gold discoveries. The 2017 edition will be held at the Pan
Brendan Ryan (Johannesburg) Pacific Hotel in Perth on November 14-15, with case histories of 16 world-
class gold deposits to be showcased. GMJ provides a preview to this
ADVERTISING year’s NewGenGold 2017
Advertising manager:
Cover image:
Richa Fuller Silver Lake managing director Luke Tonkin on site at Mount Monger in

Subscriptions: WA’s Eastern Goldfields
Mitchelle Matambo
CONTACT US
PAYDIRT MEDIA
Executive chairman: Suite 9, 1297 Hay St, West Perth, P: (+61 8) 9321 0355
Bill Repard Western Australia 6005 F: (+61 8) 9321 0426
E: [email protected]
Finance manager: P.O. Box 1589, West Perth, W: www.paydirt.com.au
Giovanny Jefferson Western Australia 6872

Accounts/administration:
Heather Melling

CONFERENCES
Melita Fogarty

Namukale Nakazwe-Msiska
Christine Oelschlaeger

PRE-PRESS AND PRINTING:
Vanguard Press

26 John St, Northbridge WA 6003

Member of:

Registered by Australia Post PP 643938/0071.
No pages or articles in this publication may be
reproduced in any form without the consent of the
publisher. This includes photographs either taken by
Paydirt Media staff or provided by other parties

EDITOR’S LETTER

Oh good, another
royalty fight

There was a sense of “here we go again” in September when the mining
industry (at least the gold part of it) launched a campaign against a Labor
Government revenue grab.

The debate has not yet reached the fever pitch the RSPT/MRRT debate did
in 2010 but after a 2,000-strong demonstration in Kalgoorlie, the subject is
generating plenty of headlines and receiving a good amount of airtime.

The hard-line position taken by industry is that the royalty increase will result in
the closure of some West Australian gold mines while the WA Government, led
in this instance by Treasurer Ben Wyatt, is adamant a 2.5% royalty on gold is
far too generous. As is always the case with such debates, neither side is revealing the whole truth although
it appears the State Government’s numbers may be further out than those the industry is working with.

If industry estimates are to be believed, it is likely to deliver less than $25 million to the State Budget in the
six months to June 30, 2018, when the GST returns are taken into account. That is a drop in the ocean
compared to the $28 billion of revenue the State will raise over a financial year. The question must be why is
the Government so prepared to have such a high-profile battle in public over a minor revenue-raising idea?

The same could be said for some of the miners. The royalty increase equates to around 2% of operating
costs. If there are gold mines in WA operating on 2% margins, it may be for the better if they are closed or
put on care-and-maintenance.

Analysts from Patersons Securities and Fat Prophets have already suggested the impact on current
operations will be negligible but what it does for future investment remains difficult to gauge.

The Association of Mining & Exploration Companies (AMEC) argues it will cut future investment and it may
be right but there has been little evidence so far. There certainly hasn’t been the same impact on share
prices of Australian gold miners to that on Acacia Mining plc following the Tanzanian Government’s recent
mining policy decisions.

And, there seemed little sign of the royalty increase slowing down Novo Resources Inc and those riding its
coattails on the Pilbara conglomerates discovery.

There are convenient and inconvenient truths on both sides of the debate at the moment.

One thing I am certain is that the proposed budget measure has somehow managed to once again surprise
us with the unmatched levels of expediency being displayed by our politicians.

Labor, let us remember, came out in opposition to the gold royalty proposal when it was first mooted by
the then-Liberal State Government in 2015. The WA Nationals are opposing the new proposal despite
taking a policy of ripping up state agreements with iron ore miners to this year’s election and the Liberals
themselves have been obfuscating their position, perhaps until they can find one.

Perhaps the most surprising aspect is that the State Government has taken the decision to tackle the gold
miners at all. Remember, this is a party whose Federal counterpart lost two Prime Ministers and an election
landslide off the back of previous attempts for a revenue stream that appears set to deliver so little gain.

It is a brave decision to go down that path again.

[email protected] @DominicPiper /dominicpiper /PaydirtMediaAustralia

Page 4

NEWS

Kin in line at Leonora

by Mark Andrews

Adecision on financing the Leonora Kin has scheduled production to start at the Leonora gold project in
gold project is imminent for Kin the second half of 2018. Processing will be done via the Lawlers mill
Mining NL.
approach and we are very pleased with the outcome,”
The company released a DFS on Sproule said.
Leonora in October which outlined
a seven-year project producing at “We intend to continue with our aggressive exploration
a peak of 65,000 ozpa gold from programme, particularly with the near-mine targets that
reserves of 373,000oz @ 1.5 g/t. have been identified through that drilling programme. With
a bit of luck and if nature is kind to us, we should extend
Life-of-mine revenue of $596.1 million that mine life significantly. As we progress with the testing of
and operating cash flows of $167.9 the deeper higher grade targets, we may see an increase in
million at AISC of $1,038/oz were grade presented to the mill which should increase our output
estimated in the DFS, along with pay with no further capital input or expenditure.”
back of $35.4 million in pre-production
capital within 11 months. All DFS Kin was recognised as the Best Emerging Company at
numbers factored in the proposed Diggers & Dealers this year, with managing director Don
increase to the West Australian gold Harper saying he expected to grow the Leonora project into
royalty rate. something much bigger than initial designs.

Maiden production is scheduled for “We may be starting at 50,000 ozpa gold production, but with
the second half of 2018, with near- the high-grade discovery pointed out, we lift the head grade
surface oxide and traditional ores from from 1.5 g/t to 2.5 g/t without spending any more capital. We
three open-pit production centres are heading to be a 75-100,000 ozpa producer. We have the
initially targeted to feed Kin’s wholly owned 1.5 mtpa plant. ground, we have the opportunities and we are starting to drill
[again] in September,” Harper said.
In a counter-cyclical play, Kin acquired Leonora for $2.7
million in 2014 and has defined a 1 moz resource at the Mertondale, Cardinia and Raeside are the opportunities at
project thus far. hand, however, there is growing potential along the Bruno-
Lewis and Helens-Rangoon trends, which are both 3km-long
Historical production from the project was 2mt @ 4.9 g/t gold trends each hosting primary high-grade gold discoveries.
for 316,117oz, with Kin non-executive director David Sproule
telling GMJ the company was confident of unearthing
many more ounces in a region hosting multiple plus-2 moz
deposits.

“Dacian [Gold Ltd] is a good example at the old [3.3 moz]
Mt Morgans mine. The Leonora gold project is centred over
the Mertondale shear area which produced a lot of gold over
the years. With modern day exploration techniques and the
rate at which we can do it, we are certainly turning up more
ounces,” Sproule said.

“The geological team has generated a much better
understanding of the geology since the last round of drilling,
so we are putting that into good use in planning out our
future drilling programmes.”

Since Kin acquired the project it has also purchased Gold
Fields Ltd’s Lawlers mill, which will be shifted to the Leonora
gold production centre, allowing the company to keep costs
modest.

“It has been a long time coming and it took a lot of work, with
43,000m of drilling completed. There has been a lot of work
gone into the project, but we have taken a very conservative

Page 5

NEWS

Policy winners and losers

by Dominic Piper

The Association of Mining & Exploration Companies “We believe there will be a better uptake, particularly as the
(AMEC) has hailed the Federal Government’s new junior new scheme will aid companies’ ability to go out and raise
exploration tax credit scheme as a potentially massive boost new capital; that is the whole intent of the system,” Short
to gold exploration. said.

The new scheme – announced by Prime Minister Malcolm On announcing the new policy, Turnbull said it would
Turnbull during a visit to Western Australia in early September encourage more greenfields exploration.
– will replace the Exploration Development Incentive (EDI)
scheme which has run for the last three years. It will allow “These tax incentives will encourage junior explorers to
exploration companies to renounce and pass 30% of future take risks and to have a go at discovering the next large-
tax deductions related to exploration onto their shareholders. scale mineral deposit,” he said. “We want to turn around
The scheme is capped at $100 million over four years. the greenfields minerals exploration expenditure which has
declined by almost 70% over the past five years.”
AMEC has long-championed an exploration tax credit
scheme in the mould of Canada’s flow-through share scheme Short said among the new aspects was a focus on new
but the EDI, introduced in 2013, failed to generate much capital raisings, an acceleration of the time between incurring
support among juniors and ended up undersubscribed. the costs and passing on the tax credit and an end to the pro
rata distribution of the credits.
AMEC’s acting chief executive Graham Short told GMJ the
Federal Government’s latest proposal addressed some of “The Federal Government’s review of the EDI did show
the aspects previously neglected in the EDI which would the take-up in the first two years was lower than expected.
improve the overall impact of the scheme. We met with [then-Minister of Resources] Matt Canavan to
express what we thought were shortcomings of the EDI and
developed proposals for a new model.”

Short said the quicker turnaround between the incurring of
costs and the issuing of the credit, and the focus on capital
raisings, would see greater take-up for the new scheme.

“There was a lot of uncertainty about the EDI but taking away
these two major shortcomings will encourage new capital
raisings and ensure there is more interest,” he said.

The launch of the scheme comes at a time when the
exploration sector is beginning to emerge from a long winter.

“Hopefully, the greenshoots we are seeing in exploration
continue with some assistance from the scheme,” Short said.

However, Short was quick to point out another government
policy decision had already cast a cloud over those
greenshoots, particularly in the gold sector.

The West Australian Government’s decision to increase gold
royalties from 2.75% to 3.5% has been met with a robust
backlash from the sector which is arguing the move will see
several WA gold mines close. Short believes the royalty hike
will effect on gold exploration almost as much as existing
operations.

“There is no doubt the enthusiasm for exploration will be
dampened by the WA Government’s decision on royalties,”
Short said. “It will have an impact on gold exploration without
any question; that is the feedback we are getting directly
from our members.

“When companies have been forced to cut to the bone, the
only place they have left to cut is discretionary spending and
that means first greenfields exploration and then brownfields.”

Page 6



NEWS

Draig breathes fire
into Bellevue

by Mark Andrews

Given interest is heightening in Western “The deeper targeting of the Bellevue
Australia’s gold sector, Draig Resources extension will happen from November
Ltd’s maiden drilling programme at the onwards. There will be results from drilling
historic Bellevue project is timely. now through to Christmas and on the
back of that a resource in the New Year,”
At the time of print, Draig had rigs on site Parsons said.
focusing on shallow near-surface gold
mineralisation and the viability of residual Situated on the Wiluna-Norseman belt –
gold in the tailings storage facility. which also hosts some of WA’s finest nickel
mines in Mt Keith, Cosmos, Honeymoon
Sampling from the waste dump returned Well and Leinster – infrastructure,
significant mineralisation of 76.31 g/t gold, including processing facilities, is not a
25.8 g/t and 20.26 g/t, highlighting the concern for Draig.
potential for cash flow from processing or
selling remnant material, if proven to be “It costs a lot of money to build a mine, so
economic. Steve Parsons in a way we do have a fallback position

“There is a truck load of exploration happening on the ground in that there are several processing plants
at the moment,” Draig executive director Steve Parsons told nearby that need ore and are within trucking distance of us,”
GMJ. Parsons said.

“We have gone back to first principles and back to the basics At its peak, Bellevue was one of Australia’s highest grade
because no one has looked at it for 20 years and no one gold mines and when compared with the depths of high-
has done any exploration for 20 years. It has been a matter grade underground mines Paulsens (2,000m down plunge),
of going back to geophysics, mapping the ground again, Jundee (800m), Darlot (850m), Kanowna Belle and Agnew
relooking at the geology with a fresh set of eyes and then (1,300m), Bellevue presents Draig with other options to fill a
obviously getting out there and drilling.” standalone mill, including the continuation of mineralisation
and even discovery of a replica orebody.
Draig’s efforts have identified new and historical targets
to drill, with results from the tailings, waste dump and “That is one option [toll treating], however, I am not going to
stockpiled material expected first, while resource definition say that is the route we do want to go down,” he said.
drilling across the Bellevue mine area will follow.
“We want to see what the resource is going to come out with
The real hidden treasure for Draig is finding a Bellevue and whether it is going to be a standalone operation and I
replica at depth. hope we see the repeat of Bellevue at depth and another
1 moz @ 15 g/t gold directly below those historical mines.”
Mining activities at Bellevue stopped after some 800,000oz
@ 15 g/t gold was produced down to about 430m below Reinforcement of the company’s belief in the greater potential
surface. The project was then largely forgotten about until at Bellevue has come in two forms; a heavily oversubscribed
Draig’s intervention. placement of $3.3 million to new and existing sophisticated
investors in August and WA Government support through
Despite heat returning to WA’s gold sector and the likes of its co-funded drilling grant. Draig was a recipient in the
Darlot, Agnew, Lawlers, Jundee, Matilda and Thunderbox Round 15 co-funded drilling exploration incentive scheme
being within 100km, Bellevue has escaped attention and (EIS) grant handed out by the WA Department of Mines in
has not been subject to any systematic exploration in recent September.
times.
The $200,000 EIS grant will be used to test the depth
It is the lack of effort and attention in the past 20 years, which potential of the Bellevue lode below the historical base of
Draig sees as the opportunity at Bellevue. the underground mine. Parsons said the EIS-supported
hole, whereby Draig also pours in $200,000, was likely to be
While several open pits have the potential to provide Draig drilled in Q4.
with shallow, high-grade resources, Parsons is excited by
the depth potential at Bellevue.

Page 8



NEWS

Sumatra gets Indo backing

by Mark Andrews

Backed by an Indonesian gold heavyweight,
ASX-listed Sumatra Copper & Gold plc now
has the financial clout to deliver on discovery
potential as well as production targets at
Tembang, southern Sumatra.

The company has entered a strategic alliance
at Tembang with Merdeka Copper Gold Tbk,
which operates the Tujuh Bukit mine in East
Java, boasts a market cap of almost $1 billion
and is on track to produce at a rate of 100,000
ozpa gold and 300,000 ozpa silver this year.

Merdeka – led by former Newcrest Mining
Ltd director of exploration in Indonesia Colin
Moorhead – will invest $US1.5 million in
Tembang over the next six months in return
for CDI’s, while two major shareholders of the
company have offered cornerstone support of
$US2 million as part of a $US7.5 million equity
raise planned for November.

Sumatra managing director David Fowler said

the influence of Merdeka’s technical team Underground exploration drilling at Belinau will start in the December quarter

would be as beneficial as the immediate cash

injection. greenfields opportunities to contemplate, and while some

“Colin previously did a JV with Sumatra when he was at areas beyond a 3-4km radius of the mine can be hard
Newcrest. Colin is familiar with the asset and some of the to access, Fowler said having the mine and supporting
guys who worked with him at Newcrest are also part of infrastructure as a base was handy to leverage from.

Merdeka at the moment and they are going to come and Nevertheless, Fowler said, there was enough information

participate in that exploration process,” Fowler told GMJ. available to follow-up on across its package.

“For us, it is good to have that expertise and funding and it “There has been a lot of reasonable stream sediment
comes at a crucial point as we start to get some traction on sampling done and we are now going back out and trying to
the production side. The next challenge is to extend the mine identify the source of the anomalies,” he said.
life and get production up and having this funding available
really brings the last important piece together.” “There has been some geophysics done, but I wouldn’t say
it is of great quality and it is a bit old. There are a lot of good
The company expects to produce at the lower end of guidance indications of potential and they just now need to be worked
of 30,000-40,000oz for calendar year 2017, however, Fowler through systematically, targets identified and drilled over the
is confident of upping the ante in 2018. next 6-12 months.”

“I think we are finding the point where we are starting stoping Two exploration drill drives at the Belinau underground have
underground, so we expect production to increase. We have been established and will be the base from which Sumatra
done a lot of waste stripping out of the pit, but that should drills for depth extensions starting in the December quarter,
also see a production increase and we are targeting 40,000- while in-mine or near-mine targets will be prioritised for
50,000oz gold next year,” he said. resource growth and mine life extension.

“I think once we achieve that level, the business is self- The discovery process will be expedited by Merdeka’s
sustaining and through investing in exploration we really expertise and subject to exploration success and board
want to see that mine life extend and hopefully we will then approvals, the Jakarta-listed company intends to invest up
be able to get production up and make the project [Tembang] to $US10 million under similar terms to the initial alliance.
go a lot better.”

Sumatra has a combination of near-mine, brownfields and

Page 10



NEWS

Conglomerate finds thrust
Pilbara into gold heaven

by Dominic Piper

The spate of conglomerate- The burst of interest sparked
hosted gold discoveries understandable cynicism,

in the Pilbara have sent the given that even Novo is

share prices of the respective yet to drill a hole, however,

companies into orbit in recent prospectors and geologists

weeks, but any hint of a genuinely with intimate knowledge of

new gold discovery usually fires the district have told GMJ

up the sceptics as quick as it such scepticism may be

does the believers. However, De Grey Mining joined Novo Resources in the hunt for overplayed.
this latest Australian gold rush conglomerate-hosted gold orebodies in September after
has seen even the most ardent recovering 91 nuggets on its Loudens Patch prospect “I think people are quite
geological cynics begin to waiver. right to be sceptical
about a discovery like

Starting with TSXV-listed Novo Resources Inc in January, this but you can overdo the scepticism and I believe that,

the Pilbara has delivered three gold discoveries that not only is this real, it is actually even more significant than

experienced explorers and prospectors are hailing as the people think,” Talga Resources Ltd managing director Mark

potential unearthing of a goldfield to rival South Africa’s Thompson told GMJ.

previously unparalleled Witwatersrand Basin. As well as being a mining executive, Thompson is an avid

Novo has been scratching around its Beatons Creek project prospector – the interview was conducted over the phone

in the Pilbara for several years, identifying gold mineralisation from Coober Pedy where he was taking his family on an

in the conglomerates. However, when rumours of prospectors opal hunting holiday – and has spent many years scratching

making considerable gold finds surfaced in Karratha before around the Pilbara. Indeed, Talga listed on gold assets in the

Christmas, the Canadian junior began pegging and farming region which are now in the Novo portfolio.

into down-dip extensions of the conglomerate horizons. He said the West Pilbara was well-known for its gold nuggets.
One of the farm-in agreements was with ASX-listed
Artemis Resources Ltd which had announced coarse gold “I’ve been following that conglomerate story for years as all
mineralisation in the conglomerates on its Purdy’s Reward prospectors have. In fact, Mark Creasy has been around
project south of Karratha. there since the 70s,” he said. “I’ve seen gold come from
those rocks over widths and strikes much greater than
In early July, Novo’s first bulk sample trench at Purdy’s Reward people know of.”
uncovered gold nuggets in the exposed conglomerate.
Duplicate bulk samples collected from the trench reported De Grey operations manager Andy Beckwith agrees.
grades of 87.76 g/t and 46.14 g/t with a significant fine gold
component also recognised. “The conglomerate model for the Pilbara has been around
for years,” he told GMJ. “In fact, we found one quote from 100
The announcement generated immediate comparisons with years ago referring to similarities to the Wits Basin.”
the Witwatersrand Basin but while Novo’s market cap took
off to almost $C1 billion, Artemis’ flattened after an initial Like most geologists, Thompson is happy to play the cynic
spike as scepticism in the local market took hold. when it comes to new gold discoveries but on this occasion
he is struggling to come up with a counter to Novo, Artemis
Market interest was piqued again in September when De and De Grey’s claims.
Grey Mining Ltd announced it had detected 91 gold nuggets
downslope from a shallow dipping to flat-lying conglomerate “The problem with this one is you can’t quite explain it but
at the base of the Mt Roe Basalt on its Loudens Patch you can’t quite kill it like you can so many others,” he said.
prospect. De Grey’s share price soared 150% on release “I have great respect for the people working on it and I think
they are doing things the right way.”

of the find and other juniors also received share price Talga had farmed-out its own Pilbara gold ground into Novo

improvements simply by announcing they were targeting for scrip and has since divested more than 50% of its holding,

conglomerates on their ground. making a tidy profit.

Page 12

The comparisons to the Witwatersrand for and have already identified some

Basin are obvious but as one well- other targets,” Beckwith said.

known, veteran prospector pointed out Novo is one step further and has
to GMJ, there was no direct clone. spent the last six weeks carefully

“The rocks are the same age but as planning its exploration strategy. The

for the actual gold, there is not an coarse nature of the gold means

example in the Wits; there is no direct traditional RC drilling programmes

correlation,” the prospector said. would likely prove ineffective in giving

Thompson believes the discoveries a true indication of grade. Instead,

made by Novo, Artemis and De the company has started preliminary

Grey may be the forerunners to the Mark Thompson with a specimen trenching work and will take a two-
identification of a completely new style from the then-Talga owned Pilbara staged approach to drilling. Scout
of mineralisation. He pointed to the tenements Novo is now working diamond drill holes will allow for
scepticism around the discoveries of the original initial assessment of the depth and

Witwatersrand Basin, Carlin, Voiseys Bay and thickness of targeted gold-bearing

Olympic Dam as examples of how new styles are often conglomerates. Once target depth and thickness has been

initially dismissed. determined, Novo will deploy a large diameter RC rig (17.5”

“But, sometimes in history you are around when someone diameter holes) to collect bulk samples.

finds one of these deposits and they become models in “The more nuggety the gold, the larger the sample you

themselves,” he said. need which is why Novo is using the large diameter holes,”

So, why has it taken so long to identify the gold-bearing Beckwith said. “Building a resource will be all about the
conglomerates in an area which has been extensively number of samples, the spacing and the volume of material.
mapped by the WA Mines Department? The technical challenge won’t be drilling it but defining it. It is
hard but all very achievable.”
“On the whole they haven’t been looked at very hard
because the rocks just don’t look very good,” the veteran De Grey plans to follow a similar path and given the company
prospector said. “The conglomerates are actually very hard also updated the global resource on its wider Pilbara gold
to identify because the sandstone and the basalts have shed project in September, any find in the conglomerates would
everything on top of the conglomerates and it is difficult to likely prove economically beneficial to its development plans.

identify the conglomerates.” “The target is 1,500m by 400m and if it is 5m thick and runs

Thompson believes it may be a matter of experience. at 5 g/t – remember Novo’s grade is more than 60 g/t – that
is 1 moz,” Beckwith said. “We already have more than 1.2
“There are very few geologists around who have worked on
moz, which we think is good alone but if the conglomerate
an alluvial system, they are all orogenic-focused.”
story proves to be real it will blow everything out of the water.”

Even now that De Grey understands what it is looking for, There is still some way to go and Thompson said drilling
Beckwith thinks it will still be hard to define targets. would give the clearest indication yet as to the strength of

“The problem is you have this flat basalt with the the discovery.

conglomerates sitting at the bottom but the contact is “We already know it has been found in three locations 100km
covered up. So, you are looking for little windows where we apart [Beatons Creek, Purdy’s Reward and Loudens Patch]
can sample it.” so if the holes and trenches find mineralisation going a few

That opportunity sparked a new wave of tenement hundred metres behind it you can’t explain why it wouldn’t

applications in September and junior explorers such as go for 100km.”

Southern Hemisphere Mining Ltd, Venturex Resources If drilling by Novo and De Grey produces the results they
Ltd, Impact Minerals Ltd, Kairos Minerals Ltd and Calidus are hoping for, the veteran prospector believes the sky is
Resources Ltd enjoyed strong price gains simply by the limit.
announcing their intentions to hunt for the conglomerates
either on existing ground or newly pegged land. “It is not proven as we speak but if they do get decent grade
down-dip then it could prove to be the biggest gold strike in
“It can be disguised so you could have remnants of the Australia’s history,” he said.
conglomerate unmapped anywhere; that’s what most groups
will be looking for,” Beckwith said. Thompson agrees.

De Grey is in the box seat behind Novo thanks to the nugget- “It is tough to believe and people are saying it could be the
laden sampling campaign. Its next milestone will be the next Witwatersrand but we actually don’t need to know right
return of rock chip assays in late October. now, we can work all that out later. The nice thing about this
project is if it goes large it could be larger than anything
“That will give us a good idea of what we do and don’t have Australia has seen before; these rocks have the capability
but we have got our eye in; we know what we are looking of doing that.”

Page 13

NEWS

Calidus crafts Pilbara story

by Mark Andrews

The technical side of the Warrawoona gold project in The resource at Warrawoona is currently 5.6mt @ 2.08 g/t gold for
Western Australia’s Pilbara has stacked up as expected 374,000oz within 2km of the 7.5km strike of the Klondyke shear
for ASX newcomer Calidus Resources Ltd.
recent lithium boom and he is happy that Calidus is ahead of
However, the market attention being received by the an emerging pack of hopefuls in the region.
company was unforseen, managing director Dave Reeves
told GMJ. Calidus will solidify its status as one of the “first movers”
in the Pilbara gold sector when it completes a $10 million
Drilling on the Gap zone at the Klondyke deposit is the placement to accelerate exploration and drilling at
reason for the interest in Calidus. The drilling at Klondyke Warrawoona in the coming months.
has extended mineralisation to over 2.6km of continuous
strike at Warrawoona, with best hits of 6m @ 63.31 g/t gold The placement was three times oversubscribed, with
and 27m @ 5.85 g/t. cornerstone participation from Novo to the tune of $1.5
million.
In addition to delivering with the drill bit, Calidus has moved
quickly to consolidate its position in the East Pilbara by Calidus will drill hard with the money and plans to push the
entering a binding term sheet agreement with Canadians button on a PFS sometime next year.
Novo Resources Corp over ground surrounding Warrawoona.
“We will be extending the current Klondyke resource east
Calidus has the right to acquire a 70% interest in a group and west and with the addition of the Novo ground we have
of exploration and prospecting licences surrounding that easterly portion now as well,” Reeves said.
Warrawoona, including direct extensions to the Klondyke
shear. “Between them we have probably got about 10km of known
mineralised shear with historical workings that we are yet
Calidus now controls a large portion of a greenstone belt, to drill out. We will also be looking a bit further down-dip to
which has been previously under fragmented ownership, prove these things are not restricted near surface and that
while it is also receiving plaudits for entering a JV with Novo. they do have a lot of depth potential.

Novo has set the Pilbara alight this year by pulling gold “Thirdly, the region hasn’t been scratched, the vast majority
nuggets from its Karratha project, which has started hasn’t even had a soil sampling programme or mapping over
something of a gold boom in the famed iron ore region. it, so we have got an absolute plethora of regional targets
that we need to prioritise and go see them and make sure
Reeves likened the interest in Pilbara’s gold potential to the there is not a big gold treasure chest sitting out there that no
one has ever looked at.”

Page 14

Should Calidus find the bounty it is after extracting gold “Although it took a while for us to get going, I think it is fair
should not be difficult. to say we have produced excellent results and probably
surpassed our expectations from a level of interest side of
Processing should also be straightforward with recoveries things,” Reeves said.
from met test work completed on free milling Klondyke ore
to a vertical depth of 150m reporting in the range of 93-96% “That [Warrawoona] greenstone belt has been known for
gold. a long time, but only little portions have been looked at
because it has been so fragmented. Certainly it has been
Infrastructure established from the iron ore riches is in place, front and centre of our strategy that we wanted to tie up as
including bitumen airstrips and roads at nearby Marble Bar. much of the ground as we could before there was too much
interest in the region.
In conjunction with continued met test work, environmental,
water and geotechnical studies will start next year and once “That was all a lot easier to do before the C word –
Reeves is confident the geological prospectivity of the region conglomerates – came along in the Pilbara, so we managed
is well understood, a PFS will be triggered. to tie up everything we wanted to tie up, so we are very
happy with how that has worked.
“My background is all about feasibility and development, that
is what excited me about this project, so we are pushing “I have spent quite a bit of time in London and elsewhere
hard on that. The caveat is that we don’t want to go too early, and the Pilbara is synonymous with iron ore and I think in
we want to do the region justice,” Reeves said. Australia there has always been a bit of scepticism around
Pilbara gold. We’ve always had the easy pickings around
“We don’t want to go with a smaller starter operation if there Kalgoorlie but those areas have been depleted and now
are bigger things to be done. Once we can right-size the people are heading out to Tropicana, Gruyere – these are
operation, that is when we will push the button on a PFS, but all undercover, remote and difficult areas to explore – and
we are doing all the work for the inputs for that PFS so it is I think what you are seeing now is people are realising that
really just the engineering and size of the plant that we need there is a lot of gold up in the Pilbara and it has never had
to push the button on.” the attention it deserves.”

Reeves expects interest in in the region to build, as investors
worldwide come to grips with the Pilbara being more than
just an iron ore story.

Page 15

NEWS

Capricorn sees gold ahead

by Mark Andrews

As companies start to take respective positions in the Capricorn was expected to release a BFS from Bibra, within
Pilbara conglomerate scene, Capricorn Metals Ltd the Karlawinda project, at the time of print
remains an interested onlooker.
“I think our timing is really good and there are not really too
The company is forging ahead at the Karlawinda project, many others that are in the same position we are. There is
65km south-east of Newman, where a BFS was expected to a group building up behind us, hopefully they will be able to
be released at the time of print, meaning feasibility work has piggyback off our project. We are pretty comfortable with our
been the focus for Capricorn rather than investigating the timing.”
Witswaterand potential touted in the Pilbara.
Hellewell is also comfortable with the fact Capricorn is
“You always keep an eye on the neighbours and what they present in a new area; a reasonably new greenstone belt
are up to and see what knowledge and ideas you can glean akin to Gold Road’s situation at Yamarna.
from the work they are doing. We are following that story
with a lot of interest,” Capricorn executive chairman Heath “It is a greenstone belt which has really had only one or two
Hellewell told GMJ. phases of work. This was a new discovery in 2005 when
WMC was drilling for nickel and they found a bit of gold,”
“We do have the old Archaean rocks, so potentially the whole Hellewell said.
Archaean basement coming up through the younger rocks
potentially in that lower Fortescue Group of rocks within “We have one on our system at Bibra that we are building
the project area. It is something that we haven’t looked at our project on and we also have indications of another gold
because we are focused on our feasibility study, but we are mineralising system of similar scale at Francopan and K3.
watching with interest.” That is a little bit deeper, but it does appear to come to surface
at K3 so we are looking forward to going out and exploring it.
An explorer of some note – Hellewell was jointly awarded All of our focus has been on Bibra, all of the previous focus
the prestigious Prospector of the Year gong in 2014 by the by the previous owners was at Bibra, so really we are the
Association of Mining and Exploration Companies for his first group to get a chance to dedicate some serious time
feats with Doray Minerals Ltd – the experienced geologist and effort to the greater project area.”
would relish the chance to sink his boots into more exploration
when the time comes. A former Independence Group NL project, Karlawinda has
been subject to about 132,000m of RC and diamond drilling
For the time being, producing a “standard West Australian in the past 12 months, with Capricorn investing some $15
gold project” at Karlawinda from the 21mt @ 1.06 g/t gold for million to date.
716,000oz Bibra project is on the horizon.
Hellewell said a key to exploration in the area had been
Hellewell said a 3 mpta CIP operation producing 100,000 the use of seismic geophysics – traditionally applied in the
ozpa gold over an initial seven years would be a simple open oil and gas sector – to understand the key structures and
pit scenario, with potential to start production in 2019. controlling systems.

“Cash flow dynamics of the project are very attractive and “Our orebody is quite flat-dipping, we think that you can apply
that, with a low strip ratio [4.7:1], with its location close to seismic quite well because it will give you a good seismic
Newman and all the benefits that brings means that our reflection with a flat dip. We are doing some test work on that
costs will be very competitive. On that basis, we expect this at the moment to see if we can use that as a new technique,”
will be attractive in terms of the debt financiers, in particular he said.
the traditional Australian and European [banks] that finance
these types of projects,” Hellewell said.

In a research note by Hartleys last month, project financing
and permitting was tipped to be completed by Q3 2018 and
development to follow thereafter.

Dacian Gold Ltd, Gold Road Resources Ltd and Gascoyne
Resources Ltd are a step ahead on the development curve
and Hellewell said Capricorn would slot in well behind them
as the leader of the next wave of WA gold producers.

“As they are finishing construction and going into production,
we will be heading into the construction phase,” he said.

Page 16

Making Calypso king

by Jon Daly

With veteran gold finder Matthew Sullivan
at the helm, Torian Resources Ltd is
carrying out an RC drilling programme on its
Malcolm gold project.

Torian managing director Sullivan said he
believed the project shared a similar geology
with the plus-15 moz Sunrise Dam gold deposit,
55km south of Laverton and 100% owned by
AngloGold Ashanti Ltd.

“[Malcolm] is a massive target. It is about maybe
500m long by 200m wide and very similar in
geology to Sunrise Dam,” he said.

“[Like Sunrise Dam], it is in one of those banded

iron formations and it hasn’t been drilled at

all since 1995-96. It has been held by private

prospectors for all these years.” Poor sample selection has hindered exploration efforts at Calypso in the past

Sullivan told GMJ that while drilling went down

300m, subsequent sampling was questionable. deposit for Delta Gold. Later developed into a mine with a

“The work done in the past was a bit odd because the production of 5.3 moz between 1994 and 2015, Kanowna
previous owners determined that only certain rocks were Belle was acquired by Northern Star Resources Limited in
mineralised, so they only sampled those rocks,” he said. 2014.

“I learnt years and years ago to sample everything. You are In 1995, Sullivan discovered the East Kundana gold deposit,
arrogant if you think you know right at the beginning what is 25km north-west of Kalgoorlie, a deposit which has since
good and bad. You have got to let the sample results speak been developed into a 7 moz gold resource and is operated
for themselves.” by a JV of Northern Star and Rand Mining Ltd.

The drill programme will focus entirely on the 100%-owned Torian also owns the Zuleika gold project, north of East
Calypso prospect, which Torian acquired in 2015. Kundana.

“We have been very keen on this part of the world for a long When asked what it takes to make a major gold find, Sullivan
time,” Sullivan said. said fortune and approach both had their roles.

Past exploration at Calypso, 25km south-east of Leonora, “Luck plays a big part in it. But it also comes down to doing the
has been hampered by poor sample selection of diamond right things and being systematic about how you approach
drill holes, despite gold grades above 1g/t of gold being things,” he said.

found in a variety of rocks. While fortune can’t be manufactured, Sullivan is confident

Previous drilling was also broadly spaced, with holes as far Torian has the approach needed to be successful.

apart as 150m. “We’re a very old fashioned explorer. We just drill lots of

Historical drill results included, 5.32m @ 4.78g/t gold from holes. We start by coming up with a reasonably detailed
10.98m, 5.00m @ 4.56g/t from 102m, 8.00m @ 1.55g/t from interpretation of what we think the geology is likely to be,
36m, 7.35m @ 1.66g/t from 29.65m, and 6.40, @ 2.06g/t then we go in and do relatively cheap drilling to determine if
from 13m. our interpretation is right,” he said.

“Some of the structures associated with the Calypso “We’ve drilled 65-70,000m in the last two years. We have
mineralisation are poorly tested and have remained so since been busy. We are very lucky that we have two drilling
the initial discovery in the early 1980s. Further exploration contractors – one based in Kalgoorlie and one in Perth –
will be required over coming months to better understand that are genuine partners in our business. They take some
this system,” Sullivan said. shares as part of their invoicing. They are really keen on
helping us keep busy and the harder you work the luckier
Sullivan is no stranger to big gold finds. In 1989, he was one you seem to get.”
of two geologists who discovered the Kanowna Belle gold

Page 17

COVER

Silver lining to a
brush with death

by Michael Washbourne
Silver Lake Resources Ltd is well down the road to recovery following its
near-death experience, but managing director Luke Tonkin is not ready to

declare the company out of troubled waters.

Page 18

Luke Tonkin

“We’ve still got a long way to go to

win back the hearts and minds of the
investment community.

Before Northern Star Resources Ltd and Evolution Mining
Ltd became leaders of the Australian gold sector, Silver
Lake was the hottest ticket in town. And with cash to splash,
the two-time winner of GMJ’s Miner of the Year award was
looking to grow. And grow fast.

A $426 million takeover of Integra Mining in 2012 was
universally praised at the time, with many believing the deal
marked the company’s official arrival as a genuine mid-tier
producer.

However, things began to unravel for Silver Lake soon
after as the debt burden from the Integra deal and the
underperformance of its newly started Murchison operations
sent the company into a downward spiral.

Silver Lake was perilously close to flat-lining as investors
began shunning the former market darling, with its stock
plummeting from a post-Integra takeover high of $3.90/
share to below 20c/share in November 2014 when Tonkin
was parachuted in to resuscitate the business.

Fast-forward three years and Silver Lake has returned
to profit, albeit a small one, on the back of a promising
production outlook for its Mount Monger operations in the
Eastern Goldfields.

“We’ve still got a long way to go to win back the hearts and
minds of the investment community,” Tonkin says.

“We’ve run our difficult assets well, but we’re not getting
ahead of ourselves. This is a business that requires
significant discipline because we’re small and things can
change very rapidly.

“And the market dynamics change quite quickly too,
particularly in a market where there are threats every day to
the growth of our business.”

Page 19

COVER

Development
of the Maxwells

underground
continues to

advance

Page 20

Silver Lake posted revenue of $227.5 million
for FY2017, up from $209.5 million in FY2016,
although net profit was down from $4.4 million
to $2 million following gold sales of 137,000oz
at an average price of $1,654/oz.

EBITDA was up 23% to $56.7 million – the
fourth straight year of EBITDA margin growth
– while cash flow from operations also lifted
16% to $64 million.

Disposal of non-core assets, including the
mothballed Murchison operations, during the
past 15 months has also helped boost the
company’s cash and bullion to $69.1 million,
and no debt.

Tonkin says the company’s FY2017 results Silver Lake boasts one of the largest Kalgoorlie-based workforces
were a reflection of a “three-year slog” to turn
around the business.

“Three years ago we were in desperate financial trouble and “If you go back to Daisy’s early days, when it was above
if you look at our cash balance five years ago versus what it 500m, it used to eke out a pretty good margin, but Daisy is
was at the end of the last financial year, we’d actually gone now quite deep and accordingly the cost profiles go up.
backwards $7 million,” he says.
“The orebodies in the Mount Belches area we’re mining now
“But, year-on-year in the last three years, we’ve turned the are a lower tenor and the mining techniques and methods
ship around. We’re still high cost, no doubt about that, but the we use there are not too dissimilar to those that we use at
important thing is that we’ve reinvested back in the ground Daisy; long hole, narrow vein, open stoping. So, by definition
we believe will give us the best return for our dollar. their margins comparatively are a little better than Daisy’s
because they’re a little bit shallower and that’s really where
“We’ve divested what we considered to be non-core assets we see those differences.”
and we’ve paired back our tenement area quite extensively.
More importantly, what you’ve seen over that three years is Tonkin tells GMJ it took only “half a day” of his initial visit
an increase in our exploration spend and an increase in our to Murchison to realise the operation had no future inside
in-mine and ex-mine development.” Silver Lake. A similar decision on the Great Southern project
followed.
Silver Lake’s sole operating focus is now the Mount Monger
gold camp, about 50km east of Kalgoorlie, cornerstoned Murchison was sold to Metals X Ltd spin-off Westgold
by the Daisy Complex which was the centrepiece of the Resources Ltd for $10 million earlier this year, with junior
company’s initial rise to prominence. explorer Musgrave Minerals Ltd – of which Silver Lake is a
major shareholder – exercising a pre-emptive right to acquire
Three mining centres – Daisy, the Mount Belches the company’s stake in the Cue JV.
underground and Imperial Majestic open pits – currently
feed the centrally located Randalls mill, with Aldiss set to Great Southern was snapped up by privately owned ACH
join the mix within the next 12 months. Minerals Pty Ltd for $5 million in July 2016.

Production of 135,000-145,000oz has been guided for “All you could see from the Murchison and from the Great

FY2018, with an expected higher contribution from the Southern was cash being consumed, not generated,” Tonkin

Maxwells and Cock-eyed Bob underground mines within the says. “In turn, Mount Monger had the best tenor, it had

Mount Belches complex. underexplored ground and it lacked investment. So it was a

Group AISC for FY2018 is expected “When you’re a high-cost pretty easy decision for the board in
to be similar to the $1,359/oz the end to stop the haemorrhage.”
achieved in the last financial year. producer and you don’t put
Silver Lake remains a high-cost On top of ongoing cost reductions
producer in comparison to many at its main operations, Silver Lake
of its peers but Tonkin is unfazed, has downsized considerably at the
although he acknowledged the corporate level, with the company’s
head office in South Perth now just
in place some risk-mitigator
company was on a “relentless with respect to revenue, then 20% of the size it once was.
drive” to reduce costs and increase you’ve got serious concerns.
productivity. Tonkin, an experienced mining
executive who previously headed
“The deeper you get, the more Mount Gibson Iron Ltd and Reed

expensive it gets,” Tonkin says. Resources, was also successful

Page 21

COVER

Free-dig ore was a luxury for Silver Lake at the Imperial deposit

in convincing both the company’s board and major point in time you need to start growing your business and our
shareholders that hedging is an absolute must for a high- exploration is a key part of that,” Tonkin says.
cost gold producer. Silver Lake’s hedge book at the end of
FY2017 totalled 142,000oz at an average forward price of “If you’re not exploring, you’re not finding, you’re not
$1,700/oz. developing and you don’t survive. We just need to stick to our
knitting and make sure when we can, we continue to invest
“The major shareholders didn’t like the idea of the company in exploration. If exploration comes under threat, the whole
hedging, which is OK if you’re a low-cost producer because business comes under threat.
you can take that margin no matter what, but when you’re
a high-cost producer and you don’t put in place some risk- “Our key mantra, certainly for the last few years, has simply
mitigator with respect to revenue, then you’ve got serious been about discovering higher margin ounces. To a certain
concerns,” Tonkin says. extent we’ve been reasonably successful at that. We’ve
brought on new mines, but relatively we still haven’t found
“Our hedge position has helped us and that’s been through that Daisy Milano repeat yet and so our exploration is really
disciplined policy, and within that policy we use certain targeting that type of success.”
mechanisms and tactics to ensure that we can keep our
head above water. Adding another 80,000-100,000oz to the company’s annual
production profile within the next two years is one of Tonkin’s
“We always wanted to get approximately three times working top priorities, either through organic growth or M&A.
capital in cash into the balance sheet because as a one-
site operation it gives you a little bit of flexibility so that if With its balance sheet now much cleaner, Silver Lake has
something goes wrong, you can survive.” been presented with a handful of acquisition opportunities,
but no one asset has “tickled our fancy” to date, according
Despite being an operations specialist – and one who is very to Tonkin.
highly regarded by his peers in the industry – Tonkin knows
that successful exploration is the best and only option to “If you’re not exploring, you’re not
grow the company as it stands.
finding, you’re not developing and
Silver Lake has set aside $11.8 million for exploration you don’t survive.
activities around the Mount Monger camp, including near-
term resource definition and project development work at the
Daisy, Maxwells and Cock-eyed Bob underground mines, as
well as a series of regional exploration targets.

“We’ve moved on assets which are non-core, but at some

Page 22

Although Australia is Silver Lake’s base, Tonkin Silver Lake hosted a small group of analysts on site during
says the company is open to running an this year’s Diggers & Dealers conference
operation abroad.
operating entity, you’re large enough to sustain any shocks
“I’d like to see us diversify geographically and and there’s no ego about doing a transaction with an asset
I’d like to see us still in the same sort of asset class.
class, so gold or copper, but relatively small “If you’re a $200 million company like we are now, you’ve
because I’d don’t think there’s any silver bullets got to incrementally grow your business. You can try the big
out there,” Tonkin says. bang effect, but experience tells me it can have very serious
repercussions.”
“Would we go to Africa? No. Would we go to
Canada? Definitely, yes we would. Would we go
to the US? Only certain states. Would we go
into Europe? In certain areas we would.”

Tonkin acknowledges he is coming towards the
end of an impressive career which has also
included senior roles with WMC Resources
and Sons of Gwalia, but the “proud Kalgoorlie
boy” is still very much invested in helping Silver
Lake win back the support of the investment
community.

“I do look a long way ahead, even though I am getting old,
and I do look at what happens after that 80,000-100,000oz,”
he says. “Then you’re in that $400-500 million class and
you can use your balance sheet and your strength to vend
into, merge or acquire assets that make a real difference to
your business. You become attractive because you’ve got an

Royalty hike a tax on jobs: Tonkin

The WA State Government failed to “do its homework” on to look out the window to see that. People have gone far
the potential ramifications of a 50% gold royalty hike, and wide to turn the ground and to return a dividend via
according to Silver Lake Resources Ltd’s Luke Tonkin. employment and investment in the State.

The usually reserved Tonkin has been a vocal critic of “Now, the State has a significant financial issue to address,
the Mark McGowan-led Labor Government’s decision to but it’s not about panic. It should be about clearly incentivising
increase royalties for WA-based gold producers from 2.5% the growth of the State and understanding how you do
to 3.75%. that. So, to go off and say you’re going to introduce a 50%
increase in a tax, without actually doing any analysis of the
Tonkin said the revenue grab had the potential to undo three impact that will have on the State, to me that is fool-hardly.
years of financial repair to Silver Lake’s balance sheet and And to do it after you’ve announced it just reeks of no logic
put multiple jobs at risk, contradicting Labor’s pre-election at all.”
promise.
Tonkin also accused the Government of only looking at
“If a government, be it Liberal or Labor, either State or the AISC reported by the top gold companies and not the
Federal, is thinking about introducing something, then do detailed financial metrics in making its decision.
your homework and consult with the industry because not all
gold mines are the same,” he says. “AISC is based on running your current business at your
current mines; it does not include the new mines that you
“Bulks, bases and precious metals are completely different develop nor the growth exploration,” he says.
businesses – and I know because I’ve run them all – so to use
the same metrics to assess a gold business is fundamentally “That number for Silver Lake the last three years is about
flawed. $30 million per annum, so there’s $30 million of expenditure
going into exploration and new mines that is just not taken
“I don’t think tax in any way shape or form is a smart way of into account in that AISC. It’s included in the total cost,
incentivising a business to create jobs. It’s completely the but that’s not the number that I think the Government is
opposite. I’m disappointed because it really is just a tax on looking at. They’re just looking at the highlight numbers that
jobs. companies put out every quarter.”

“This State is built on the resources sector. You only have

Page 23

EXPLORATION INNOVATION

Dacian dives straight in

by Michael Washbourne

Dacian Gold Ltd is only two quarters away from being recognised as a
producer, but exploration will always remain core to the company’s strategy.

First gold from Mt Morgans is set to be poured at the another goldfield in Australia like it.
end of March, continuing a remarkable story for one of
the last new resources floats of 2012 and GMJ’s reigning “There are very few places in the world where you can find this
Explorer of the Year. level of endowment in the one area. Certainly in and around
where we are there are six 2 moz-plus orebodies within a
At the time of print, construction of the 2.5 mtpa CIL process 25km radius of our tenement holding. I don’t know another
plant and development of the Westralia underground part of Australia and indeed any other prolific goldfield in
complex were both tracking slightly ahead of schedule, giving Canada or the US like what we have in the Laverton district.
both Dacian shareholders and the broader gold industry in
Australia plenty to smile about. “It’s very rare to find this level of endowment and what excites
us is that we have our foot on a great part of the Laverton
However, it is the exploration potential of the Laverton gold district and we’ve quickly proven it’s highly endowed.
gold district which has Dacian executive chairman Rohan We have strong expectations and firm views that there is
Williams and his team most excited. more gold to be found on top of what we’ve already found, so
we’re working quite hard to make that into reality.”
“We’re in elephant country,” Williams said. “I don’t know

Page 24

Dacian set aside $15 million for exploration activities this Morgans and, then, we hope to find the source to the near-
year despite full knowledge most of its focus and cash burn surface gold. Hopefully there is a big mine there somewhere
would be directed towards bringing Mt Morgans to life. that will become an underground mine.”

That decision was justified in late July when the company hit As Dacian races towards first production at Mt Morgans,
2.3m @ 311.3 g/t gold from 140m at Cameron Well, having the company is already looking to return cash flow from the
previously defined a 6sq km gold-in-regolith anomaly from burgeoning operation back into the ground via “aggressive”
855 RAB and aircore drilling. exploration.

Only six diamond holes and 18 RC holes have been punched With two – potentially three if Cameron Well stacks up –
into Cameron Well, with Dacian’s exploration team salivating major discoveries inside the company’s first five years of
at the chance to add crucial oxide ounces to the Mt Morgans public life, Dacian will splash the cash required to grow Mt
inventory. Morgans beyond its initial 200,000 ozpa target.

“It’s a tremendous accumulation of near-surface gold and Williams said it was likely his company would spend around
we’re hoping we can find an oxide mine and an underground
mine under it,” Williams said. “We’re in elephant country. I don’t know
another goldfield in Australia like it.
“I’ve not seen this level of mineralisation and anomalism over
that extent ever before and I’ve been fortunate enough to
work at St Ives and a few other places in Western Australia.”

“We have two aims; one is we want to find oxide material
for supplementary feed in the early production stages of Mt

Page 25

EXPLORATION INNOVATION

Exploration continues to form a key pillar of Dacian’s strategy Raising $20 million just months before the April 2013 gold
price crash proved critical to the company’s chances of
$15 million annually on exploration for at least the next three unearthing the Westralia and Jupiter discoveries over the
years. next two years.
“We have a view that we need a good three years of very
aggressive exploration to get a pretty good handle on what “Had we raised $5 million for the IPO and gone back to the
may be the overall endowment of Mt Morgans,” he said. market to try and raise more money, we simply wouldn’t have
“If you go back to when we started this company, we explored been able to and we wouldn’t have made the discoveries we
quickly and found two discoveries and then within two years have to date,” Williams said.
we were doing the feasibility and raising money and now
we’re into construction. “When we put out the prospectus, based on our level of
“I think we need three years of aggressive exploration to understanding around Mt Morgans at the time, we had a
fully account for how much gold there is to be found at Mt three-year exploration plan and said if we’re lucky, it will be
Morgans. Obviously if we can identify the near-surface gold good but if we’re not, well at least we had a crack.
position then we’ll be able to follow it to depth and hopefully
define something much larger.” “The market dictates your ability to explore so we’re delighted
Dacian might have just scraped in for the IPO Class of we had the ability to explore because we were lucky enough
2012 from a timing point of view, but it was ultimately the to IPO in a good market in late 2012 before the gold price
second largest float of that year and undoubtedly the most dropped 30%.”
successful to date.
Having already gathered widespread acclaim from his
Rohan Williams proactive stint at the helm of Avoca Resources and its
subsequent $US2 billion merger with Anatolia Minerals,
Williams could not have envisaged the success Dacian
would have when he initially conceived the company.

Upon listing, Mt Morgans hosted a resource of 842,000oz
@ 3.1 g/t gold. Today that resource stands at more than 3.3
moz with reserves declared for Westralia (3.3mt @ 4.6 g/t
gold for 492,000oz at a forecast AISC of $US626/oz) and
Jupiter (14.8mt @ 1.4 g/t gold for 643,000oz at a forecast
AISC of $US875/oz).

““It was a $20 million IPO that we felt might have some
We have a view that we need a
good three years of very aggressive
exploration to get a pretty good
handle on what may be the overall
endowment of Mt Morgans.

Page 26

Development
of the

Beresford
underground

mine is
tracking on
schedule

Dacian exploration dug up over the next eight years.
manager Dan Baldwin
“Everything is happening so fast and people are really
opportunity for exploration so we gave it a shot,” Williams enjoying the tangible change that we’re seeing,” Williams told
said. GMJ in late September.

“If you’d said to me we’d make two 1 moz discoveries, “I’m not surprised [by the rapid progress]. You always want
we’d be building a 2.5 mtpa treatment plant and producing that to be the case and you work hard to make that happen.
200,000 ozpa, I would have said that’s a very bullish call, but What we really want is for all this to be on time and on budget
that’s where we’re at. and we’re tracking towards that, which is pleasing.”

“You never know how these things will pan out. You take a Dacian is set to be the first of three WA gold start-ups to
view that this looks like it could be something good, so you come online over the next 12-18 months, alongside Gruyere
raise some money and you say ‘let’s try and exploit it and (Gold Road Resources Ltd/Gold Fields Ltd) and Dalgaranga
whatever happens, happens’.” (Gascoyne Resources Ltd), leading Williams to suggest the
local sector has never been in a healthier position.
According to last year’s DFS, Mt Morgans will have an
initial eight-year mine life and an AISC of $1,039/oz. The “I can see 600,000 ozpa of new gold production coming on
total capital cost is $197 million, including $149 million on and I don’t recall that ever happening in my 30 years in WA
infrastructure. gold,” he said.

Development of the Beresford underground mine is well “You overlay that on top of the higher profile, mid-tier and
advanced, with first ore set to be processed in November. larger gold companies still making significant cash margins
Development of the neighbouring Allanson orebody is and we’re in a spectacular spot.”
scheduled for the following month.

Mining of the Jupiter open pit will also begin before the end
of the 2017, with three sub pits extending over 1.8km to be

GR Engineering Services is overseeing construction of the 2.5 mtpa CIL processing plant
Page 27

EXPLORATION INNOVATION

CSIRO tech benefits
early explorers

by Jon Daly

Australian explorers spend almost $600 million each year The HyLogger
on drilling in search of the next big find and until now the was used in the
early assessment of mineralised systems has been left to early stages of
the eye of experienced exploration geologists. development at
Northern Star’s
However, researchers at CSIRO have been working on a Kanowna Belle
number of innovations to aid explorers in identifying mineral
systems within drill samples and to speed up the analysis gold mine
process. Among the most exciting developments are
the HyLogger, a technology that scans drill core, and the “One of the major parts of how they determine the geology
TESCAN integrated mineral analyser (TIMA), which analyses and the opportunity and whether they are in the type of
rock chip samples to help identify potential mineralisation. environment suitable to host a grade that is mineable, is
going to come from a geologist in the early stages,” Goodey
For the past 15 years, CSIRO has been developing the said.
HyLogger, a technology aiming to provide near-real-time
insights on orebodies and mineralogy of drill cores. “The ability to identify what you are looking at is built
on experience, subjectivity and you cannot see a lot of
The HyLogger scans the surface of a drill core sample and the minerals that are present. Geological mapping is a
uses the spectra of reflected light to interpret its mineralogy, fundamentally difficult stage of the exploration process.
a method otherwise known as hyperspectral analysis.
“Some of the changes in mineralogy … are often very subtle
When a drill core sample passes beneath the HyLogger, and aren’t observable by the human eye. They can be the
each mineral registers differently on the infrared spectrum, important ones that point you towards the mineralisation.
providing a lot more certainty in the interpretation of Slight changes in the composition of certain minerals will tell
mineralogy. you whether you are stepping closer to a mineralised zone
or stepping away from it.”
Corescan Ltd managing director Neil Goodey told GMJ
the technology provided a “robust and repeatable” way of Another benefit is the HyLogger’s near-real time analysis
mapping minerals. can greatly reduce the costs and delays associated with
laboratory analysis.
CSIRO and Corescan have partnered to commercialise the
technology. “[Traditionally, geologists] would make an assessment of
what samples or sample increments were to be sent away
Corescan already operates a network of hyperspectral for assay. Often because of the difficulties in identifying the
mineralogy labs across Australia, South East Asia, Canada, mineralogy that is present, it becomes a necessity to sample
US and South America. at a set interval, just in case you miss what is there,” Goodey
said.
Goodey said the technology removed the subjectivity
associated with traditional logging methods. “By being able to know what minerals are present in each
section of core, you are then able to make a more quantified
“Traditionally logging of core is done by a geologist. The judgement as to whether that sample should be assayed.
geologist’s training and expertise is used to identify the Assays have a high cost and also a long turnaround time.
minerals that are present in the rock,” he said. This is a way of ensuring what is sent to assay is necessary
and that the intervals you are sampling are relevant.”
“It shifts the industry from an experience-driven, manual
process that is very much influenced by the experience,
training and prior knowledge of a geologist, to one which
uses a semi-quantified, automated method of identifying
minerals.”

The assessment of drill core is the biggest expense for
companies assessing the potential of a project, according
to Goodey.

Page 28

CSIRO research director Dr Rob Hough of new drill core from Antakori throughout
said commercialising the technology with this year.
Corescan would allow the industry to take
full advantage of hyperspectral analysis of Northern Star Resources Ltd exploration
drill materials. manager Jamie Rogers told GMJ the
company had trialled the HyLogger in its
Hough said the development would reinforce early stages of development at the Kanowna
Australia’s place as a global leader in Belle gold mine near Kalgoorlie.
mineral exploration and mining technology.
“One of the main mineral phases it was
“Through our partnership with the
Australian state geological surveys, the successful in mapping at Kanowna Belle
National Virtual Core Library and AuScope,
hyperspectral data is now routinely acquired at government Jamie Rogers was the changes in the chemistry of the
core repositories and is generating new knowledge on white mica and that is something you cannot
mineral systems,” he said.
see, so you cannot log it. It really picked up those changes,”
While Corescan has been offering hyperspectral services for
the last 10 years, Goodey said it had taken a few years for he said.
the technology to gain traction within the industry.
However, Rogers believes the more burgeoning technology
“We do a lot of work in North and South America and it is the TIMA, which provides a whole mineral mapping
has been a five-year process of educating the industry on system, could have even greater application.
what the implications are of this type of mapping. There
is a process you go through with all new technology, then “It gives you the whole mineral species, whereas
you go through a number of years of validation and then the HyLogger will give you micas and oxides mainly.
demonstration that it actually does what it is supposed to Hyperspectral technology is mainly for looking for porphyry
do,” he said. coppers, epithermal deposits and clay mineralogy, but the
TIMA gives you every mineral that is present,” Rogers said.
“In the last few years we have seen a shift from assessing
whether the technology is real or not to actually going into an TIMA uses rock chip analysis to help identify potential
implementation stage. A number of the large global miners mineralised systems.
have now stated publically that this is one of the biggest
influences [in the last few decades] on how they are going to The information extracted from minerals in the chip samples
explore and understand their orebodies.” can help expand the footprint of a potential system.

An initial teething period of education, coupled with a global It also reveals the timing of a geological event, which can be
downturn in mining exploration, has been the main obstacle integrated with geochemical and geophysical data to build
for Corescan and the new technology, according to Goodey. an understanding of geological structures.

“With budgets starting to open up, [we are seeing the] “We are involved in a number of projects with the CSIRO and
willingness to look at new technologies that will have an we are using that to map alteration patterns. The CSIRO has
impact on how companies explore. This is where HyLogger spent many years building a library of data that allows them
gets its chance to have an impact on the next commodity to know what the different mineral species are. That is the
cycle,” Goodey said. future,” Rogers said.

In 2015 Corescan put its hyperspectral technology to work Northern Star’s most recent use of the TIMA system was
on Barrick Gold Corp’s Alturas gold project in El Indio, Chile. at the East Kundana gold mine near Kalgoorlie, which was
“very successful” in mapping zonation patterns, according
The company provided an onsite laboratory at Barrick’s to Rogers.
remote exploration camp in the Andes.
CSIRO group leader in mineral system science John Miller
Kevin Creel, Barrick’s senior director for exploration, said said the TIMA helped answer basic questions about the type
Corescan’s onsite service delivered high-quality alteration of mineralised system being explored – an early but important
mineralogy “resulting in more emphasis on interpretation”. question to determine the best exploration techniques.

“Not only have Corescan’s results accelerated understanding “By analysing the chips, you can tell what type of system
of mineralisation controls, positively impacting our you’re in,” Miller said.
exploration program, it also captures robust data for future
use by metallurgists, engineers, and other experts,” he said. “That’s huge for a mineral explorer, because it answers a
question of whether it’s something that’s worth pursuing. It
In March, the company was commissioned to work on TSX- means an early decision in the exploration process because
listed Regulus Resources Ltd’s Antakori gold project in Peru. it can be tuned to different deposit types.”

Under the scope of the contract, Corescan will scan and Miller said a lot of analysis had been conducted on drill core,
process about 15,000m of historical drill core and 15,000m but the ability to analyse chip samples enabled engagement
during the early stages of drilling, such as air core or RC
drilling programmes.

“It’s those chips which give an explorer a good look at what
is underneath surface cover,” Miller said.

Page 29

EXPLORATION INNOVATION

Spike in seismic success

by Michael Washbourne

Success stories told by Australia’s which are turning out to be
leading mid-tier producers have mineralised with gold.”

prompted a spike in seismic exploration Dwyer said the use of seismic as
in the gold industry. an exploration tool for the gold

Leading seismic services company industry was being driven by

HiSeis enjoyed its best year in FY2017 exploration and geology managers

in terms of the number of projects as well as senior executives looking

surveyed since the Perth-based for new ideas and innovations.

business was incorporated in 2009. HiSeis has deployed seismic

Prolific producers Northern Star surveys over more than 50

Resources Ltd and Evolution Mining Ltd Seismic has emerged as a key projects around the world since its

have been vocal supporters of seismic exploration tool for the gold industry inception, with more than half of

technology, deploying it successfully to those being prospective for gold.

better define and interpret the geological features of their Dwyer said seismic data provided users with more than just
respective operations. the potential to discover a major orebody.

“Both of those companies in particular were willing to try “Success also comes from increasing the drilling success
seismic as an innovative exploration technology for their rate in hitting features that may be mineralised,” he said.
particular geological problems, being deep deposits or
undercover orebodies, where seismic is ideally suited,” “We’ve been quoted figures by the miners that their drilling
HiSeis chief executive Joe Dwyer told GMJ. success rates are up around the 80-90% mark now and
they’re hitting several of the features that they’ve wanted to
“We’ve done multiple projects for companies like that and target. Seismic is really making their value for money case
they’ve had considerable success with using seismic. Now for drilling programmes even better.”
they’ve grown into billion dollar-plus mining companies
and along the way they talk about some of the successful HiSeis has also deployed seismic surveys over a number
technologies they’ve adopted and others will hear about that, of projects hosted on the Iberian pyrite belt running through
see the success they’re achieving and essentially become Portugal and Spain and has recently begun some early
fast followers.” stage work on the Central African copper belt.

Other prominent gold miners to have run seismic surveys Being the commercial arm for Curtin University’s Department
over their projects include AngloGold Ashanti Ltd, Newcrest of Exploration Geophysics, HiSeis is also looking to
Mining Ltd, Gold Fields Ltd, Kirkland Lake Gold Ltd and St incubate a range of emerging seismic-related technologies
Barbara Ltd, as well as juniors Emmerson Resources Ltd which some mining companies have expressed interest in
and Doray Minerals Ltd. deploying on their projects.

Seismic technology has been extensively used by the “We’re now thinking about that next stage and taking that cube
petroleum industry over a number of years, but remains of geology and turning it into a block model of parameters
a relatively new exploration tool for the gold sector in that can be used by, not just the geology manager or the
comparison. exploration manager, but the mine manager to plan their
mine design,” Dwyer said.
Unlike VMS-hosted deposits, gold is typically not immediately
detected by a seismic survey, however, astute geologists “It can also be used through the plant by the metallurgy
have been able to interpret the high-resolution 3D “cube” manager and the process manager, because once you
it produces and then use that information to accurately have a block model of your geology, with engineering
pinpoint follow-up drill targets. properties, you can predict how that block will break within
the comminution circuit or how it will perform during the
“Some of the shortcomings attributed to seismic in the flotation circuit.
minerals industry is that it can’t image steep structures,
or mineral terrains are seen as too complex for seismic to “We’re in for a really exciting period in terms of being able
image accurately,” Dwyer said. to use seismic upfront in a project, whether it’s a mine or a
project, to better understand the geology, which will better
“Interesting enough, we’ve been able to develop processes improve decisions right through the whole design and
that are imaging steeply dipping, sub-vertical structures operating phase of the mine.”

Page 30

Programme Tuesday 17 October 2017

07.45 Arrival tea, coffee and registration

Session One

08:25 Welcome: Bill Repard, Executive Chairman, Australia’s Paydirt (5)

08:30 Opening Address: Hon Bill Johnston MLA, Minister for Mines and Petroleum,
Government of Western Australia (20)

08:50 Jim Lennon, Consultant, Macquarie Group Ltd (20)

09:10 Eduard Haegel, Asset President, BHP Nickel West (20)

09:30 Dan Lougher, Managing Director & CEO, Western Areas (20)

09:50 Peter Bradford, Managing Director & CEO, Independence Group NL (20)
10:10 Questions (10)

10:20 Morning Tea sponsored by St George Mining Ltd (30)

Session Two

10:50 John Prineas, Executive Chairman, St George Mining Ltd (20)

11:10 Warren Hallam, Managing Director, Metals X Ltd (20)

11:30 Mark Wilson, Managing Director, Legend Mining Ltd (20)

11:50 Ian Mulholland, Managing Director, Rox Resources Ltd (20)

12:10 Questions (10)

12:20 Lunch (60)

Session Three

13:20 Peter Muccilli, Managing Director, Mincor Resources NL (20)

13:40 Peter Harold, Managing Director, Panoramic Resources Ltd (20)

14:00 Jamie Sullivan, Managing Director, GME Resources Ltd (20)

14:20 Richard Bevan, Managing Director, Cassini Resources Ltd (20)

14:40 Matthew Painter, Managing Director, Ardea Resources Ltd (20)

15:00 Questions (10)

15:10 Afternoon Tea sponsored by PCF Capital Group (20)

Session Four

15:30 Speaker TBC (20)

15:50 Steve Barnes, Science Leader, CSIRO Mineral Resources (15)
16:05 Carey Smith, Senior Analyst, Alto Capital (20)
16:25 Brighton Gwavava, Managing Director, Suntech Geometallurgical Laboratories (15)
16:40 Questions (5)

16:45 Closing Panel Discussion (Convened by Dominic Piper, Australia’s Paydirt) (45)
17:30 Closing Drinks sponsored by GR Engineering Services

* This programme is subject to change without prior notice

Conference Sponsors:

australiannickelconference.com

NEWGENGOLD PREVIEW

Deeper thinking
needed for
gold’s future

by Dominic Piper

Gold exploration conference NewGenGold returns to the Pan Pacific Hotel Perth
on November 14-15 with another round of case histories from some of the
world’s largest recent gold discoveries.

Hope Bay
(Canada)

Öksüt Gross
(Turkey) (Russia)

Moose River Sanbrado Hot Maden
(Canada) (Burkina Faso) (Turkey)
Cascabel
(Ecuador) Yaramoko Namdini
(Burkina Faso) (Ghana)
Tulu Kapi
Houndé (Ethiopia)
(Burkina Faso)

Yaouré Nyanzaga Dead Bullock
(Côte d’Ivoire) (Tanzania) (Australia)

Alturas Mount Morgans
(Chile) (Australia)

Page 32

For 20 years, NewGenGold has presented gold exploration The necessity for a new business model becomes more
geologists with the stories of inspiration and perspiration acute as exploration heads deeper, as Wood believes is
which go into making major greenfield gold discoveries. inevitable.

The 2017 edition will showcase discovery case histories “Deeper is the new greenfield territory and exploring deeper

from 16 gold deposits. As has been the trend in recent years, than 300m is the only certain way, in my opinion, to transform

West Africa is well represented with seven papers from the the business of gold exploration. And, it is essential that gold

region to be presented. Australia, oft-lamented for its poor explorers develop and implement a new deeper-discovery

discovery rates, can boast two papers – Dead Bullock’s Soak exploration approach and business model. The alternative

and Mt Morgans – the same number as Canada and Turkey. to conducting exploration as a business is gambling that a

This year’s keynote opening address “The obvious solution is discovery will eventually come,
will be delivered by Dan Wood former if one gets lucky. This is not a
exploration manager of Australian to demonstrate that gold saleable approach to investors.”
gold giant Newcrest Mining Ltd. discovery is a business, where
Ahead of the conference, GMJ Developing an appropriate
spoke to Wood about the future of business model is one challenge
the gold mining industry and the role but it must be married to an ability
exploration will play in it. to understand what makes an
economic orebody.

A consistent theme through recent the wealth created by finding Wood argues the growth in the
forums has been the alarming fall new orebodies far exceeds use of computers and “big data”
in the rate of discovery, particularly and the rapid corporatisation

since the last exploration boom of that outlaid by their discovery. of exploration has come at the
2005-2012. expense of creative thinking, a

MinEx Consulting’s Richard Schodde trend which hampered discovery
estimates that less than 50% of total exploration expenditure rates in the post-2005 period.

was recovered in the value of reported discoveries during “At a time when this and lateral thinking were crucially

the period; the industry is not delivering investors bang for important to discovery, explorers were deprived of the time to

the buck. think because of corporate demands that ultimately destroy

Wood believes the post-2005 period will be remembered wealth. Important thinking was not done when it was most
as one of economically unacceptable outcomes for the needed, post-2005, and the outcome of this was predictable.”

gold industry and argues the only way to reverse the loss He also rails at any suggestion big data will prove a panacea

of investor confidence is to transform the business of gold to gold’s discovery rate problems.

exploration. “The solution rests with better exploration thinking, using the

“The rewards didn’t justify the unprecedented levels of relevant data, not using all the data available. A computer is

expenditure,” Wood says. “The obvious solution is to not the answer to discovering ore.”

demonstrate that gold discovery is a business, where the He also warns explorers that clearly understanding the
wealth created by finding new orebodies far exceeds that economics of discoveries will be crucial as exploration heads
outlaid by their discovery.” deeper. Wood believes only explorers who demonstrate

According to Wood, the only way to achieve this is by a greater appreciation of mining methods will ultimately

redesigning the gold exploration business model. achieve the goal of orebody discovery.

“The oil and gas industry long ago recognised the crucial “Deposits which are discovered deeper than 300m below
importance of exploration and discovery to the industry’s surface will almost certainly have to be mined by an
performance but the metals mining industry is yet to underground method so it is essential the exploration
acknowledge it. In metals mining, there is a general absence business model is built around a solid understanding of
of geologists in very senior positions in larger mining the constraints applying to underground mining. It will
companies and on their boards. It is only in the junior sector require a much more sophisticated understanding of mining
that geologists have some control, but those companies lack constraints and successful explorers will be those who
funding which limits their ability to chase large deposits. understand the different methods of underground mining,
particularly caving.”
“The heavy reliance on junior exploration companies
presents an issue in transforming the business of gold
exploration, unless there is a greater pooling of financial
resources. In effect, junior gold explorers will need to find
a way of replicating the oil and gas industry’s approach to
funding exploration, where several companies share the
risk.”

Page 33

CASE HISTORIES OF DISCOVERY

The world’s pre-eminent gold exploration event

RENGOISWTER

Pan Pacific Perth 7
November 14-15

Pan Pacific Perth 7
November 14-15

Jointly organised by:

Keith Yates & Associates Pty Ltd

Proceedings Sponsor: Dinner Sponsor: Closing Drinks Sponsor: Lanyard Sponsor: Wine Sponsor: Gold Nugget Sponsor:

Presenter Gifts Sponsor: Café Sponsor: Lunch Sponsor: Morning Tea Sponsor Destination Sponsors:

Exhibitors:

www.newgengold.com

Limited last minute sponsorship opportunities are still available.
Contact Mel Fogarty on (+61) 8 9321 0355 or [email protected] to take advantage!

Conference programme

Monday 13th November Wednesday 15th November

5.00pm Welcome reception 8:30am Registration
Exhibition Area, Pan Pacific, Perth
Session Five
Tuesday 14th November 8.30am Canada Putting the hope back into Hope Bay
9.15am Canada Terry MacGibbon*
7.45am Registration TMAC Resources Inc.
8.30am 10.00am
Welcome and opening Moose River: Applying a different approach
Keith Yates and Bill Repard to revitalise a stale goldfield in Atlantic
Canada
Session One Keynote Address: Transforming the business Wally Bucknell*, John Utely
8.45am of gold exploration Atlantic Gold Corporation
Dan Wood AO, former Executive General Manager
Exploration, Newcrest Mining Limited Morning Tea

9.30am Ethiopia The Tulu Kapi Gold Deposit: A story of Session Six
repeated discovery over the last 90 years
Jeff, Rayner*, Fabio Granitzio and Tadesse Worku 10.30am Australia Mt Morgans: Bringing Dacian Gold’s
Kefi Minerals plc two plus-1 million ounce discoveries into
production with five years of an IPO
10.15am Russia Gross gold deposit: A giant in Siberia Dan Baldwin*, Christopher Oorschot,
Howard Golden* Anna Probst and Rohan Williams
Nord Gold SE Dacian Gold Limited

11.00am Morning Tea 11.15am Australia The Dead Bullock Soak gold deposits –
Multiple new discoveries supporting
Session Two transformational growth in a mature
mining camp
11.30am Burkina Houndé gold discovery: One mine and a long Shaun Schmeider*, Stuart Perazzo and Chris Robinson
Faso story for exploration Newmont Australia
Gérard de Hert* and Paul-Claude Delisle
Endeavour Mining Corporation 12.00pm Lunch

12.15pm Burkina The Yaramoko mine: Timing of mineralisation Session Seven
Faso and regional implication for the Houndé belt
Yan Bourassa*, Razack Ouedraogo, 1.00pm Chile Alturas: A greenfield discovery resetting
Théodore Kabore and Adrian Woolford exploration maturity in El Indio Belt
Roxgold Inc. Raul Guerra*
Barrick Gold Limited

1:00pm Lunch 1.45pm Ecuador Alpala: The discovery and geology of a
world-class porphyry copper-gold deposit
Session Three in the Cascabel project of northern Ecuador
Benn Whistler*, Steve Garwin, Jason Ward,
2.00pm Burkina Sanbrado: Continuing discovery success Nick Mather, Bruce Rohrlach, Santiago Vaca,
Faso along the Markoye Fault José Silva, Bayardo Rosero, Alfredo Cruz, Carlos
Diaz, Alex Chafla, Santiago Mantilla, Leonardo
Richard Hyde and Vincent Morel* Aguilar and Alvaro Guachamin
West African Resources Limited SolGold Plc

2.45pm Ghana Namdini: A major discovery in a new Ghanaian
gold district
Paul Abbott, Kevin Tomlinson*, Julian Barnes, 2.30pm Afternoon Tea
Richard Bray, Malik Easah and Archie Koimtsidis Session Eight
Cardinal Resources Limited 3.00pm Turkey High grade gold-copper mineralisation at the
Hot Maden project, north-east Turkey
3.30pm Afternoon Tea Eric Roth*, Sandstorm Gold Ltd. (formerly Mariana
Resources Ltd.); Firuz Alizade, Polimetal Madencilik
Session Four

4.00pm Côte 85 Years of exploration and mining in the 3.45pm Turkey Öksüt gold deposit: Discovery, history and
d’Ivoire Yaouré gold district geology
Cissé Amadou*, Chris Picken, and Jean-Alexandre Cayn Bahri Yıldız*, Richard Sillitoe, Bob Foster and David
Perseus Mining Limited Hall, Stratex Madencilik (Subsidiary of Stratex
International Plc.); Malcom Stallman, Centerra
4.45pm Tanzania Nyanzaga: Small company approach, big Gold Inc.
company view
Jim Brigden* and Matthew Yates, OreCorp Limited; 4.30pm Forum
Malcom Titley, CSA Global Pty Ltd; Peter Spora,
Acacia Mining plc

7.00pm Dinner 5.30pm Closure followed by farewell drinks

* Presenter

This programme is subject to change without prior notice

NEWGENGOLD PREVIEW

NAME: CASCABEL Tandayama targets are characterised mostly by kaolinite-
illite-smectite (argillic) alteration that overprints small zones
Location: 100km north of Quito, Ecuador of biotite (potassic) alteration that are surrounded by epidote-
propylitic alteration. The sphalerite- and chalcopyrite-bearing
Current owner: SolGold plc (85%), Cornerstone Capital epithermal quartz veins hosted by phyllic and propylitic
Resources (15%) altered volcanic rocks in the Parambas, Carmen and
Cachaco areas are inferred to be the distal expression of a
Discovery date: September 2013 porphyry centre.

Geology: The Alpala porphyry deposit lies in a zone of Resources: N/A
overlap between the Eocene and Miocene Andean porphyry
belts that extend from Colombia through Ecuador and Peru Reserves: N/A
into Chile and Argentina. The Chimbo-Toachi fault zone
(CTFZ) is a major north-northeast trending structure that Economic studies: N/A
separates Eocene magmatism to the west from Miocene
magmatism to the east. The major rock types of the Development status: Resource definition
Cascabel tenement consist of Cretaceous siltstones and
minor sandstones, which are locally calcareous, that are Comment: Potentially the first of a new era of discoveries in
unconformably overlain by a Tertiary sequence of andesitic the country, Cascabel has shot Ecuador up the exploration
volcaniclastic rocks, lavas and volcano-sedimentary rocks. hotspot charts. Since Brisbane-based, AIM-listed SolGold
A series of hornblende-bearing diorites, quartz diorites announced the discovery hole in September 2013, the
and tonalities intrude the volcano-sedimentary sequence world’s majors, mid-tiers and juniors have flocked to
and form plutons, stocks and dykes. Chlorite and epidote- the South American country looking for opportunity. In
bearing propylitic assemblages occurs proximal to distal to September, SolGold had five man-portable rigs on the
the major porphyry centres of the Alpala cluster, Aguinaga project and 34 drill holes had been completed for a total of
and Tandayama-America. The Alpala porphyry cluster around 44,000m. The size of the Alpala deposit continues to
targets, Trivinio and Carmen, are associated with quartz- expand with the completion of nearly every drill hole. The 0.7
sericite/paragonite-plus-illite (phyllic) zones. Dickite- and % copper equivalent anomaly exceeds 1,000m north-west
pyrophyllite-bearing clay (advanced argillic) alteration occurs by 400m north-east and 900m in vertical extent. SolGold
over the southernmost part of Alpala Central, Hematite Hill plans to release a maiden copper-gold resource in late 2017
and Alpala East, South and SE targets. The Aguinaga and or early 2018.

NAME: ÖKSÜT Reserves: 26.1mt @ 1.4 g/t for 1.2 moz gold

Location: 295km south-east of Ankara, Turkey Economic studies: Feasibility study (2015)

Current owner: Centerra Gold Inc Throughput: 3.2 mtpa

Discovery date: 2007 Production: 110,000 ozpa

Geology: The discovery of Öksüt came as a result of a Capex: $US221 million
regional exploraiton campaign inspired by the Incline high-
sulphidation discovery in central Turkey. Satellite image NPV: $US242 million
interpretation recognised Öksüt as a prominent gold-
bearing, advanced argillic lithocap within a partially eroded IRR: 42.5%
stratovolcano. Extended mapping and further chip sampling
of the lithocap identified multiple zones of silicic and quartz- AISC: $US490/oz
alunite alteration, the most important being a silicic breccia.
The host rock to the gold mineralisation is a breccia-filled Development status: First gold pour anticipated in late
vent, probably a diatreme, with horizontal dimensions of 2018
more than 500m by 500m and a minimum vertical extent
of 450m, within which the gold mineralisation is hosted by Comment: Öksüt is set to enter production next year after
a plus-300m by 150m body composed of silicic breccia, a decade in exploration and development. The paper’s
including vuggy residual quartz, and an up to 50m-wide halo authors say no major strategic metallogenic initiative was
of quartz-alunite alteration. The gold mineralisation is deeply involved in the Öksüt greenfield discoveries, rather it was
oxidised to 400m, although only relatively low grades were about “simply boots on the ground”. The exploration efforts
encountered below 200m. were led by Bahri Yildiz and the exploration team at AIM-
listed junior explorer Stratex and the authors put the success
Resources: 6.79mt @ 0.7 g/t for 157,000oz (measured- down to repeated mapping and remapping (plus logging and
indicated) and 2.38mt @ 0.8 g/t for 64,000oz (inferred) relogging of core) and an emphasis on 3D conceptualisation:
“Ultimately, geological mapping and drilling were the most
effective tools”.

Page 36

NAME: SANBRADO

Location: 100km east-southeast of Ouagadougou, Reserves: 16.8mt @ 1.7 g/t for 894,000oz
Burkina Faso
Economic studies: (Feasibility study) Throughput: 2 mtpa
Current owner: West African Resources Ltd
Production: 93,000 ozpa over nine-year mine life
Discovery date: 2010
Capex: $US131 million
Geology: The lithologic sequence of the Sanbrado area
is characterised by metabasalts, metasedimentary and NPV: $US143 million
volcanosedimentary rocks of the Birimian System, intruded
by Eburnean granodiorites, as well as granitic, dioritic and IRR: 27%
mafic intrusions. The metasedimentary package has been
deformed and variably metamorphosed under greenschist AISC: $US708/oz
and amphibolite facies conditions, resulting in schists,
psammites and pelites and is largely constrained by the felsic Development status: Updated feasibility study, including
intrusives. Alteration assemblages observed at Sanbrado underground mining, to be released in the first half of
are typical of greenschist facies domains and dominated by calendar year 2018
chlorite, biotite, epidote, silica, sericite, calcite, albite, pyrite
and tourmaline. Sanbrado displays a strong east-northeast Comment: After acquiring the project as part of its takeover
structural trend, governed by the regional tectonic strain in of Channel Resources in 2014, West African Resources
east Burkina Faso. A number of interpreted shear zones and (WAF) focused on building a small high-margin heap leach
faults occur within the project area and the fault network operation based on the M5 deposit at Sanbrado (then known
can be subdivided both in terms of age and fault order. The as Tanlouka). The fall in the gold price in late 2015 frustrated
Markoye Fault is interpreted to be the main conduit for the those plans and after scraping together $2 million in a
gold mineralisation found at Sanbrado, accommodating capital raising in December 2015, WAF turned its attention
large-scale fluid migration. High-grade mineralisation occurs to the M1 and M3 areas. Initial results were inconsistent
along the fold hinges and is marked by an intense silica- but in February 2016 a hole at M1 returned 12m @ 53.11
albite alteration assemblage. Gold is free and is mainly g/t, including 1m @ 534.45 g/t. Within 12 months, WAF
associated with minor pyrite and pyrrhotite disseminations had completed two resource updates and an open pit CIL
and stringers that are foliation controlled. The mineralised feasibility study. The high-grade hits have continued since
structures occasionally display syn- to post-mineralisation the latest study was released in the March 2017 quarter with
displacement due to plunging fold noses and minor late recent hits of 21m @ 53.13 g/t, including 0.5m @ 1,613.41
faulting. g/t , and 14.5m @ 38.27 g/t from depth at the M1 deposit.
The company expects to complete an updated feasibility
Resources: 29.57mt @ 1.4 g/t for 1.33 moz gold (indicated) study incorporating both open-pit and underground mining
and 18.55mt @ 1.4 g/t for 839,000oz (inferred) scenarios by mid-2018.

Page 37

NEWGENGOLD PREVIEW

NAME: HOUNDÉ

Location: 250km south-west of Ouagadougou, Economic studies: BFS (2015) Throughput: 3 mtpa
Burkina Faso
Production: 235,000 ozpa
Current owner: Endeavour Mining Inc (90%),
Government of Burkina Faso (10%) Capex: $US328 million

Discovery date: 2010 NPV: $US342 million

Geology: The Vindaloo deposit system involves a series IRR: 34.7%
of NNE-trending and steeply-dipping to sub-vertical
mineralised zones hosted by an assemblage composed of AISC: $US717/oz
intermediate volcanic rocks and sedimentary rocks that are
intruded by concordant (sill-like) bodies of monzodiorite. Development status: Construction started in April 2016
Ductile shearing took place in volcanic and sedimentary with first gold anticipated to be poured before the end of 2017
packages whereas monzodiorites were subject to brittle
deformation that led to the formation of stockwork of weakly Comment: Having passed through the hands of half a dozen
to moderately quartz veinlets. Gold mineralisation primarily explorers between 1998 and 2010, Houndé eventually
occurs in the competent monzodiorite, sometimes across the reached resource estimate stage thanks to Avion Gold in
whole intrusion. Minerals (iron carbonate, epidote, sericite late 2010. Avion completed a PEA before being acquired
and silica) add up to the alteration assemblage as the gold by Endeavour in October 2012. Endeavour undertook the
zone is getting near. Gold is related to pyritic quartz veining. first technical 43-101 report proving the robustness of the
High-grade gold occurs in narrow silica bands. These bands project and after a new phase of exploration on the main
were the focus of quartz veining and disseminated pyrite. Vindaloo deposit as well as two satellite deposits, Bouéré
The Vindaloo deposit system comprises a group of closely- and Dohoun, the company updated its feasibility studies to
spaced and sub-parallel mineralised zones that extends over the current levels. Houndé is now set to pour first gold before
a strike length of 7km. the end of the calendar year. Its plus-2 g/t grades and low
AISC numbers make it one of the most robust development
Resources: 37.92mt @ 2.09 g/t for 2.55 moz projects in West Africa. It will be Endeavour’s sixth gold mine
in the region and will become the flagship operation in the
Reserves: 30.6mt @ 2.11 g/t for 2.07 moz company’s 800,000 ozpa portfolio.

Page 38



NEWGENGOLD PREVIEW

NAME: MT MORGANS the Yilgarn Craton. Specifically, the mineralisation at Jupiter
is associated with gently-dipping, gold-bearing structures
Location: Laverton, Western Australia and veins located within near-vertical oriented syenite
intrusive pipe-like stocks. The mineralisation is associated
Current owner: Dacian Gold Ltd with shallow east-dipping lodes intersecting the syenite
and basalt. Gold mineralisation in basalt and syenite is
Discovery date: 1896 characterised by albite, sericite and pyrite alteration and
associated quartz-carbonate veining.
Geology: The Westralia and Jupiter deposits are Archaean
orogenic lode gold systems, located in the Laverton Domain Resources: 8.6mt @ 5.8 g/t for 1.6 moz (Westralia) and
of the Kurnalpi Terrane, Eastern Goldfields province, Yilgarn 33.7mt @ 1.3 g/t gold for 1.4 moz (Jupiter)
Craton. Structural architecture at Westralia is complex, with
a set of steeply east dipping D3a shear zones intersecting Reserves: 3.3mt @ 4.6 g/t for 492,000oz (Westralia) and
the BIF to develop steep south-plunging high-grade shoots. 14.8mt @ 1.4 g/t for 643,000oz (Jupiter)
This group of mineralised structures are common and
host smaller deposits including the Ramornie, Sarah and Economic studies: DFS (November 2016)
Transvaal within basalt; all located north-east of Westralia.
The most identifiable and consistent surface across the Throughput: 2.5 mtpa
Westralia project is the steeply east-dipping hanging wall
contact between the basalt and BIF that marks the start Production: 200,000 ozpa
of the Westralia mine sequence. A number of trends have
been identified; the most striking trends were seen in the Capex: $197 million
hanging wall mineralised domain of the Beresford deposit
and the footwall domain of the Allanson deposit. A distinctive Payback: 21 months
correlatable stratigraphic sequence is present at Beresford;
internal variability is present, however repeatability of ASIC: $US779/oz
features is far more common; the BIF has identifiable
macro-scale characteristics that can be grouped into Development status: First gold scheduled for March 2018
definable packages; and the characteristics of the non-
BIF stratigraphy between BIF units are consistent between Comment: Mt Morgans has been the sole focus for Dacian
holes and should provide key marker horizons to mine-scale since its IPO and subsequent listing on the ASX in November
geological assessment and understanding within the mine. 2012. Led by much of the team behind the exploration
The geology of the Jupiter gold deposit is unusual when success at the Higginsville mine, Dacian is attempting to
compared to the predominant styles of gold mineralisation in repeat Avoca Resources’ achievement of bringing a fresh
approach to a mature field.The project is now in construction,
Dacian having raised funding at the end of 2016.

NAME: TULU KAPI

Location: 360km west of Addis Ababa, Ethiopia Reserves: 15.4mt @ 2.12 g/t for 1.05 moz

Current owner: Kefi Minerals plc Economic studies: DFS (May 2017)

Discovery date: N/A Throughput: 1.5-1.7 mtpa

Geology: The Tulu Kapi region has typical greenstone- Production: 115,000 ozpa
type geology which is characterised by prominent hills
of intrusive rocks and deeply incised valleys containing Capex: $US145 million
metasediments and metavolcanic rocks. Gold at the Tulu
Kapi deposit is hosted in quartz-albite alteration zones as AISC: $US800/oz
stacked sub-horizontal lenses in a syenite pluton into which
a swarm of dolerite dykes and sills have been intruded. Development status: In construction; first gold pour set for
Gold mineralisation extends over a 1,500m by 400m zone December 2019
and is open at depth (plus-400m). The mineralisation is
characterised by a simple mineralogy comprising gold, Comment: Gold was first discovered in the area by Italian
silver, pyrite and minor sphalerite and galena. Metallurgical prospectors in the 1930s. Australian junior Nyota Minerals
recoveries of gold average more than 93% for oxide and took the project from exploration to a DFS over a three-
sulphide ore in the planned open pit. year period but ran aground due to financing challenges in
2012. Kefi took on the project in December 2013 and has
Resources: 18.8mt @ 2.67 g/t for 1.62 moz (indicated) and reinvigorated development, redrawing the DFS and reaching
1.4mt @ 2.4 g/t for 100,000 (inferred) agreement with the Ethiopian Government over a mining
licence which includes a 5% free-carried interest for the
State. Kefi is now planning for first gold before the end of
2019.

Page 40

NAME: YAOURE

Location: 50km north-west of Yamoussoukro, Cote d’Ivoire Economic studies: PFS (November 2014)

Current owner: Perseus Mining Ltd Throughput: 4.5 mtpa

Discovery date: 2005 Capex: $US334 million

Geology: The Yaouré project area lies on the south-eastern NPV: $US55 million
edge of a 100km-long Birimian greenstone belt comprising
a NNE-trending assemblage of paleo-Proterozoic volcanic, IRR: 38%
sedimentary and intrusive rocks. The Yaouré deposit is
located along and immediately south of a major break in Development status: DFS due before the end of calendar
the structural-stratigraphic architecture of the Birimian host year 2017
rocks. South of the break, variably altered basaltic rocks,
porphyry intrusions, and a granodiorite plug host the Yaouré Comment: The Yaouré area has been variously explored
deposit. North of the break lies a distinctly different volcano- since 1983 with two phases of mining focused on oxide
sedimentary sequence that is not currently known to be mineralisation in the periods 1999-2002 and 2008-2011.
mineralised. The gold mineralisation at Yaouré is hosted by Amara Mining picked up the ground from Cluff Gold in
weakly deformed greenschist facies mafic volcanic rocks 2011 and switched focus to the sulphide zone beneath the
and by late tectonic granodiorite intrusives that are cut by two mined oxide zones. Acquired by the company in April
a system of brittle-ductile shears and faults containing a 2016 following its merger with Amara, Yaouré is now being
weakly deformed vein system. The model type/class of ore touted as a company-making project, managing director
deposit is currently being assessed as part of a PhD study, Jeff Quartermaine recently saying “it will be the cornerstone
but has previously been classed as an epithermal gold, for us for years to come”. Amara had struggled to get the
copper and molybdenum porphyry system. economics to make sense but following a 72,000m drilling
programme (completed in July 2017), the company is
Resources: 105mt @ 1.54 g/t for 5.2 moz (indicated) and confident its impending DFS, due before the end of the
47.7mt @ 1.41 g/t for 2.16 moz (inferred) year, will result in a much improved and refined geological
model. Mine construction is expected to start in late 2017
Reserves: 3.2 moz with mining planned to begin in 2018.

Page 41

NEWGENGOLD PREVIEW

NAME: HOT MADEN and 7,000t copper (inferred); Southern deposit:
1.35mt @ 7.2 g/t gold and 0.7% copper for
Location: 130km north-east of 313,000oz gold and 10,000t copper
Erzurum, northern Turkey
Reserves: N/A
Current owner: Lidya Madencilik
(70%), Sandstorm Gold Ltd Economic studies: PEA (January 2017)
(30%)
Throughput: 1 mtpa
Discovery date: February 2015
Production: 290,000 ozpa
Geology: The project lies within
the Eastern Pontides (Tethyan) Capex: $US169 million
metallogenic belt of north-east
Turkey and along an interpreted NPV: $US1.37 billion
north-east trending suture zone
within a Late Cretaceous age, IRR: 153%
island arc volcano-sedimentary
sequence. This suture zone Development status: PFS expected in the 2018 March
separates a terrain of dominantly quarter
VMS-type deposits to the west
(such as Çayeli, Murgul, and Comment: Progress at Hot Maden has been quick since its
Cerattepe) from porphyry/ initial discovery in February 2015 with exploration and mine
intrusion-related and epithermal development activities now being undertaken in parallel.
systems (Berta, Tac-Çorak, Exploration drilling continues along the 5km-long Hot Maden
Ardala-Salinbas) within, and Fault Zone with a view to adding new mineral resources
to the east of, the suture. and extending the life of any future mining operations at Hot
Small-scale mining of narrow, Maden. On the development side, a PEA was completed
high-grade polymetallic veins was also undertaken in the in January 2017, demonstrating robust economics for a
southern portion of the Hot Maden property by Russian potential mining operation at Hot Maden. A PFS is currently
mining interests prior to 1923. Ancient slags have also been in progress and is expected to be completed in Q1 2018.
intersected in alluvial material overlying the Main Zone. At In July, Sandstorm Gold paid $US175 million in cash and
least two styles of high-grade gold-copper mineralisation are shares for Mariana Resources Inc and its 30% interest in
evident at Hot Maden: the predominant multiphase quartz- Hot Maden.
sulphide (pyrite-chalcopyrite) plus-minus hematite/jasperoid
breccia bodies and; semi-massive to massive sulphides
(pyrite-chalcopyrite). Recent drilling suggests that the two
mineralisation styles relate to different mineralising events.
Overall, the highest grade gold mineralisation (typically
more than 15 g/t but locally more than 100 g/t gold) at Hot
Maden lies along the eastern margin of the Main Zone.
Drilling is ongoing but the current dimensions of the Main
Zone are a strike extent of 350m from north to south, a true
width of between 50m and 70m, and a vertical extension
from near surface to more than 300m depth. Stratabound
and disseminated (sphalerite-galena) mineralisation also
flanks the gold-copper mineralisation to the east and
locally to the west. Hydrothermal alteration assemblages
associated with gold-copper mineralisation include chlorite
(andesitic host) and sericite (dacitic host), with argillic and
phyllic assemblages dominantly on the flanks to the gold-
copper mineralisation concentrations of both silver and the
deleterious elements are low.

Resources: Main Zone: 7.13mt @ 12.2 g/t gold and 2.3%
copper for 2.7 moz gold and 166,000t copper (indicated)
and 720,000t @ 2.27 g/t gold and 0.9% copper for 62,000oz

Page 42



NEWGENGOLD PREVIEW

NAME: GROSS Capex: $US250 million

Location: Sakha (Yakutia), Eastern Siberia IRR: 40% (at a gold price of $US1,250/oz)

Current owner: Nordgold SE Development status: Under construction (full-scale
production from 2018)
Discovery date: 2004-05
Comment: Adjacent to the well-established Tabornoe open
Geology: The Gross deposit is situated in the south-west pit heap leach operation, Gross was first defined by Nordgold
corner of the Uguyskiy Graben which has been infilled with in 2004-05 but the target had originally been identified by
Lower Proterozoic sedimentary strata that discordantly overlie geochemical and radiometric anomalies in the mid-1960s.
early Archean gneisses and crystalline schists, intruded by After the initial discovery of low-grade mineralisation in 2004-
later Archean granites and later cretaceous gabbro and 05, more detailed drilling took place from 2008, highlighting
syenite. Like its nearby neighbour Tabornoe, Gross is hosted shallow dipping zone of mineralisation along a strike of 640m
by early Proterozoic sandstones of the Olonnokonskiy and down to a depth of 440m.
Formation. The sandstones are fine-to-medium-grained,
and of quartz-feldspar and feldspar-quartz composition. Construction of the mine began in June 2016 after two years
Three main lithologies have been identified at the deposit: of trial mining and processing which delivered recoveries of
sandstones, syenite porphyry dykes and metasomatites. more than 80%. Gross is Nordgold’s third greenfields project
Four stages of alteration have been identified in the open pit, developed from exploration to production and follows the
ranging from fresh sandstone to limonite-quartz-potassium successful launch of the Bissa mine in January 2013 and
feldspar metasomatites in which the original structure cannot the Bouly mine in September 2016, both in Burkina Faso.
be distinguished. Altered sandstones and metasomatites
contain mono or polymineralic veinlets of quartz, potassium,
feldspar and clinozoisite, containing very finely disseminated
molybdenite, oxidised pyrite crystals, possibly other sulphide
minerals, dendritic pyrolusite and rarely free gold.

Resources: 395mt @ 0.67g/t for 8.48 moz (measured-
indicated-inferred)

Reserves: 4.37 moz

Economic studies: (BFS) Throughput: 12 mtpa

Production: 230,000 ozpa

Page 44

NAME: NAMDINI

Location: 50km south-east of the regional Resources: 120mt @ 1.1 g/t for 4.3 moz (indicated) and
town of Bolgatanga, Upper East region, Ghana 84mt @ 1.2 g/t for 3.1 moz (inferred)

Current owner: Cardinal Resources Ltd Reserves: N/A

Discovery date: 2013 Economic studies: Scoping study scheduled for release
before the end of 2017
Geology: The Namdini gold deposit has many characteristics
typical of mesothermal Birimian gold deposits in West Africa. Development status: Scoping study
The gold mineralisation is strongly structurally controlled,
with evidence for a protracted, multi-phase deformation Comment: At 7 moz, Namdini is the first major new gold
history. Based on structural observations, the timing of the discovery in Ghana since 2009. Its discovery came as a
gold mineralisation is late in the first phase of deformation result of 69,000m of drilling conducted by Cardinal since
after all host lithologies were in place and possibly extended the project was acquired in 2013. The district’s gold mining
into the second, intense phase of deformation. The deposit history dates back to the 1930s but since the 1990s it has
appears to be located in an oblique, sinistral structure in a been designated by the Ghanaian Government as a small-
regionally extensive deformation zone. All host lithologies scale mining area. This decision led to a lack of systematic,
(metasediments, tuffs, metavolcaniclastics, granite/ modern exploration prior to Cardinal’s arrival and possibly
tonalite and diorite) are intensely deformed and show the prevented earlier discovery. Once gold mineralisation
same sequence of alteration assemblages. The alteration at Namdini was identified from surface prospecting,
assemblages of chlorite-muscovite-sericite-carbonate- consolidation of adjacent small-scale mining licenses
quartz-sulphides suggest a typical Birimian metamorphism enabled RC and diamond drilling to rapidly delineate a major
of lower amphibolite grade. Mineragraphic analysis has gold deposit. Further systematic exploration within the belt
shown that very fine-grained gold is dominantly associated hosting Namdini is likely to locate further gold discoveries.
with, and as inclusions within, disseminated, commonly Cardinal has now been granted a large scale mining licence
zoned sulphides and to a much lesser extent, silicates. over a 15-year period. The company expects to complete a
As a result, significant, wide mineralised intersections of scoping study before the end of the year and will continue
disseminated gold are typical at Namdini, especially when with exploration, with 11 drill rigs currently operating at both
assessed at likely levels of mining selectivity and cut-off Namdini and on regional targets.
grades. Free gold and visible gold is rare.

Page 45

NEWGENGOLD PREVIEW

NAME: MOOSE RIVER Resources: 10.1mt @ 1.5 g/t for 480,000oz (measured-
indicated) and 1.6mt @ 1.5 g/t for 77,000oz (inferred)
Location: 110km north-east of Halifax, Nova Scotia, Canada
Reserves: N/A
Current owner: Atlantic Gold Corp
Economic studies: Feasibility study (2015)
Discovery date: 2002
Throughput: 2 mtpa
Geology: The Touquoy gold deposit is a shale-
hosted, disseminated gold deposit, located in the Meguma Production: 87,000 ozpa
Group, a sequence of Cambro-Ordovician sandstones and
mudstones which underlies about half of the province of Capex: $C137 million
Nova Scotia. Since the mid-1800s, about 60 underground
gold deposits within the Meguma Group have been mined, NPV: $US236 million
for an aggregate documented production of about 1.4 moz,
however, in contrast to these quartz vein deposits, gold at IRR: 34.9%
Touquoy is disseminated throughout the argillaceous host
rocks rather than concentrated in narrow quartz veins within AISC: $US690/oz
barren greywackes. This couldn’t be the only such deposit
within the Meguma. Typical ‘Meguma-style’ high-grade, Development status: First ore was put through the mill in
narrow-vein, nuggetty gold mineralisation was frequently mid-September 2017 with first gold expected by the end of
encountered. The host sediments, now referred to as the the month
Meguma Supergroup or the Meguma Terrane, comprise
a lower quartzite (greywacke) sequence – the Goldenville Comment: The discovery of the Touquoy gold deposit as part
Group – overlain by a sequence of slates (argillites) – the of the Moose River Consolidated Mine, has been a discovery
Halifax Group. The Goldenville Group is of an early to mid- in increments perfected by the introduction of insight derived
Cambrian age and the Halifax Group a late Cambrian to mid- from successful implementation of open pit gold mining
Ordovician age. They are intruded by substantial volumes of in the West Australian Eastern Goldfields. Whereas the
granite (Devonian-Carboniferous) and importantly, are folded number of open pit gold mines developed and operated
along east-west striking, sub-horizontally plunging anticline- in Canada’s glaciated terrain could be almost counted on
syncline couplets with fold axes mappable along strike over one hand, hundreds of open pits and scores of processing
tens of kilometres. Fold wavelengths, across strike, are in the plants have successfully operated in the deeply weathered,
order of 4km. arid terrain of the Eastern Goldfields since the early 1980s.
These latter operations have spawned and refined a specific
expertise readily applicable to the opportunity presented
at Moose River Gold Mines. Atlantic Gold is set to be the

beneficiary of this expertise
with production from Touquoy
starting in September. It will be
the first of what Atlantic hopes
will be a series of small open
pits within trucking distance of
a central processing plant.

Page 46

NAME: NYANZAGA

Location: 50km south-west of Mwanza, northern Tanzania Resources: 23.7mt @ 4.03 g/t for 3.01 moz

Current owner: OreCorp Ltd (earning 51%)/Acacia Mining Reserves: N/A
plc (49%)
Economic studies: PFS (March 2017)
Discovery date: 1996
Throughput: 4 mtpa
Geology: The project is situated on the north-eastern flank
of the Sukumaland Greenstone Belt. Rock sequences Production: 213,000 ozpa
comprise Nyanzian-aged sequences of mafic volcanics in
the far south-west and BIFs, tuffs, mudstone, sandstone Capex: $US287 million
and epiclastics of general volcanogenic origin and massive
sulphide lenses and volcanics of rhyodacitic to andesitic AISC: $US858/oz
composition. The country rock suites at Nyanzaga show
a dacitic to andesitic volcanogenic composition. The Development status: DFS set for completion before the
deposit is a hybrid orogenic gold deposit of a brittle, pipe- end of 2017
like nature with overprinting marginal and internal brittle-
ductile, higher gold grade zones with lateral stratabound Comment: After 18 years spent largely as a secondary
replacement character. A large, low-grade, part-brecciated project, Nyanzaga was given a new lease on life with the
carbonate-pyrite alteration system lies between the marginal arrival of the Craig Williams/Matthew Yates-led OreCorp
structures. This part of the system exhibits open-spaced in 2015. The ASX-listed junior entered the JV with Acacia
vein textures and a coherent intrusive-related geochemical looking to improve grade, drop tonnes and retain ounces
signature of As-Ag-Mo-Sb-W-B carbonate halo about the with an objective of defining a project that could be economic
gold mineralisation. The geochemical signature is indicative at prevailing metal prices. To achieve this, the company
of an intrusion-related system contribution. The alteration focused on gaining a better understanding of the controls
zones transect all lithology types as they move upwards on higher grade portions of the alteration system. The
through the folded and faulted sequences. The conduit for work transformed Nyanzaga from a very large, low-grade
the sulphidation and epigenetic auriferous fluid pathways are resource into a moderately large, higher grade resource that
steeply-dipping structures that offset the folded Nyanzaga is more likely to be economically viable in the current global
hinge zone. These structures in conjunction with the chert environment. OreCorp attracted plenty of market support
and sandstone stratabound-hosted material contain the but the Tanzanian Government’s introduction of new mining
higher gold grades at Nyanzaga. legislation in June stalled development. While the DFS is
still on track, Nyanzaga’s future remains uncertain while the
political situation in Tanzania plays out.

Page 47

NEWGENGOLD PREVIEW

NAME: DEAD BULLOCK SOAK Dead Bullock Soak included 1.8 moz from open pits and 6.1
moz from underground, with remaining ore reserves (4.5
Location: Tanami Desert, Northern Territory, Australia moz) and mineral resources (1.1 moz) giving a total high
Current owner: Newmont Mining Corp confidence endowment of 13.5 moz. With resource and
Discovery date: Federation South (2013); Liberator (2016) reserve additions of 3.9 moz and 3.5 moz respectively in
Resources: 650,000oz @ 6.5 g/t the last four years, these endowment figures make the Dead
Reserves: 4.5 moz Bullock Soak gold deposits one of the largest and fastest
Economic studies: N/A growing gold occurrences in Australia.
Development status: In production
Comment: At December 2016, historic production from

NAME: HOPE BAY Resources: 17.84mt @ 8.6 g/t for 4.91 moz (measured-
indicated) and 7.45mt @ 7.1 g/t for 1.69 moz (inferred)
Location: Nunavat, Canada
Reserves: 14.53mt @ 7.7 g/t for 3.61 moz
Current owner: TMAC Resources Inc
Economic studies: PFS (2015)
Discovery date: 1988
Throughput: 750,000 tpa
Geology: Mineralisation is hosted in an 80km-long Archean
greenstone belt with three known deposit trends – Doris Production: 160,000 ozpa
and Madrid in the north and Boston in the south. The belt
is bisected by the roughly north-south oriented Hope Bay Capex: $C334 million
Deformation Zone (HBDZ) down its axis. Mineralisation
is typically hosted in trends along splays and lower order NPV: $C848 million
structures both on the east and west sides of the HBDZ.
Doris trend mineralisation is associated with sub-vertical IRR: 44%
structures over a strike length of 2.5km. Gold-bearing,
quartz-carbonate veining and associated intense alteration AISC: $US785/oz
and fabric development occur in mafic metavolcanic host
rocks. Mineralisation on the 6km-long Madrid trend is hosted Development status: First gold poured February 2017
in silicified and sulphide-bearing breccia intruded into the
altered mafic metavolcanic rocks on the north side of the Comment: Having been found by BHP Ltd and pushed
Madrid Deformation Zone.The Boston trend mineralisation is along the development curve by Newmont Mining, Hope
hosted in a bimodal assemblage of mafic and felsic volcanic Bay eventually found its feet under TMAC after the Canadian
rocks with associated sedimentary rocks. Mineralisation company acquired it in late 2012. Within two years TMAC
occurs in three zones in sub-vertical horizons of extensive had listed on the TSX and raised nearly $C400 million in
hydrothermal alteration within a large, iron-rich, carbonate- equity and debt to build the project. Commercial production
altered shear zone. was declared in May 2017.

Page 48

NAME: ALTURAS

Location: 220km east of La Serena, Chile Comment: Alturas is the latest in a series of world-class
discoveries in the prolific El Indio belt in northern Chile.
Current owner: Barrick Gold Corp The El Indio belt has been the focus of over 30 years of
exploration by many experienced explorers, resulting in a
Discovery date: 2015 series of world-class gold discoveries. These discoveries
have evolved from outcropping high sulfidation veins,
Geology: Alturas is an oxidised high sulfidation epithermal to basement granite-hosted deposits, to felsic volcanic
system hosted in a mid- to upper-Miocene volcanic and hosted disseminated deposits and most recently the semi-
volcanoclastic sequence of dacitic composition. The concealed Alturas deposit, announced in 2015, reflecting
deposit is spatially associated with multiple, coalescing the global trend towards concealed discoveries. The Alturas
phreatomagmatic breccia centres which form a diatreme discovery team credits the collaboration between diverse
complex 500m by 500m by 300m in size. The hydrothermal geoscientists as the most important aspect of the discovery
alteration zone is 3km by 3km and characterised by advanced process.“Field geologists, with the continual support of highly
argillic alteration. Alteration is zoned from vuggy silica in the qualified technical specialists and a discovery track record,
centre of a quartz-alunite envelope, overprinted by several were motivated to collaborate in a robust, multidisciplinary,
subsequent silicification events. Gold-silver mineralisation is discovery driven team. Global corporate budgetary support
associated with distinct silicification events which overprint for project continuation through the exploration stages and
phreatomagmatic breccias and their contacts and host rocks for implementation of new and innovative technologies all
at depths of 100-200m. Evidence of mineralisation on the contributed to the discovery,” the papers authors said.
surface is scarce due to a high degree of preservation of the
hydrothermal system. Mineralisation and silicification show
a very good correlation to resistivity highs, as measured by
electrical geophysics.

Resources: 21mt @ 1 g/t for 6.8 moz

Reserves: N/A

Economic studies: N/A

Development status: Scoping study in progress

Page 49

LATIN AMERICA

Blank slate spurs Orinoco

by Michael Washbourne

New chief executive Craig Dawson arrived at Orinoco Operations have restarted at Orinoco’s Cascavel mine in Brazil
Gold Ltd armed with a “blank sheet of paper” as part of
his strategy for restarting operations at the Cascavel mine processing plant required an expensive reconfiguration.
in Brazil.
“When I came on board, my view very quickly was the plant
Operations were suspended last October – only two months was actually performing OK,” he said. “If you put in decent
after the start of first production – due to some major grade material at the front end, then you’ll get a reasonable
technical issues with the mine and a severe lack of working result out the back end.”
capital.
One of the key attractions of Orinoco for Dawson was its
Dawson initially joined the company in March as chief lucrative earn-in agreement with AngloGold Ashanti Ltd,
operating officer to assess the merits of a potential restart, with the major snaring 15% of the ASX-listed junior via a $6
but was promoted to the chief executive’s seat in May as part million investment earlier this year.
of a board and management restructure.
In recent months, AngloGold has lifted its stake to 18.1%
“It’s been a long, hard road to get to where we are, but we through an agreement to underwrite a $4.98 million
believe we’re making solid progress now,” Dawson told GMJ. entitlement issue. AngloGold is also set to acquire up to 70%
of Orinoco’s broader Faina goldfields project, which hosts
“The mine is performing better than it did last year. A lot of Cascavel and the mothballed Sertão mine, from a $US9.5
what we’ve done to date has really been about steadying up million exploration spend over a three-year period.
the mine from a development perspective. We’ve changed
the entire mining methodology.” “That was a process which was two years in the making, but
we eventually got Anglo over the line,” Dawson said.
Mine development for September was on track to surpass
the 130.5m achieved in August, with 75m advanced over the “Our in-country exploration team went to university with
first 15 days of the month, despite operations being slightly the Anglo team so there’s already a very good working
interrupted when some personnel were required to help fight relationship between the two groups, and Anglo certainly
bushfires close to the mine. has experience in this neck of the woods and this style of
setting as far as greenstone belts go.
Small-scale stoping trials are continuing with the aim of
optimising the drill-and-blast parameters for the planned “They are pretty excited by it, we’re pretty excited by it and
“slash” stoping method. I think us being able to leverage off some of their expertise
and certainly their buying power and that sort of stuff is a
“When we restarted operations this year, it wasn’t a case of benefit to us.”
just coming back, turning the key and restarting,” Dawson
said. At the time of print, Orinoco was conducting geophysical
work over the Antena/Xupe projects as well as preparing for
“We’ve gone back in with a blank sheet of paper, redesigned an upcoming drilling campaign at Sertão, which the company
the mine and allowed for the implementation and introduction acquired from Troy Resources Ltd in 2014.
of more modern LHD-style equipment, and that will certainly
give us longer term productivity benefits. “We certainly see the longer term future of this project is
in the exploration and we would hope to be well and truly
“We’ve really only just started to get into the ore development drilling holes before the end of the year,” Dawson said.
and I expect we’ll start to scope in earnest probably mid-
quarter. So, from a mining perspective, we are still very much
in the development phase.”

Commissioning of the new on-site laboratory is also
progressing while the company continues to negotiate
with the Brazilian authorities over the requisite licences to
purchase and store the necessary chemicals.

The processing plant was reopened in late August following
“low scale, low capex” modifications, with the average
throughput of 22 tph now exceeding the budgeted rate of
15 tph.

Dawson said those modifications quashed rumours the

Page 50