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Table 1. Chinese-classified estimation resources for the Lixian Project. |
Liba Licence
The Zhao Gou deposit within the Lixian Project was selected to be the first of several deposits to be drill tested during 2007/08 resulting in the announcement on 30 June 2008 of an Inferred Mineral Resource in accordance with the JORC-Code reporting guidelines. The Mineral Resource comprised 18.9 million tonnes at an average grade of 1.8 grams per tonne for 1.1 million ounces of contained gold.
In July 2009 the Company announced the completion of the update and upgrade of the JORC reported Mineral Resource estimate for the Zhao Gou deposit at Lixian. The Indicated and Inferred Mineral Resource estimate comprises of 32.78 million tonnes at 1.5g/t Au for 1.62 million ounces of contained gold using a cut-off grade of 0.5g/t Au, within the company’s Liba license (Figure 1). This Mineral Resource represents an increase of 47% in contained ounces from the mineral resource estimate reported 12 months ago.
The Zhao Gou resource remains open in all directions including in the hanging wall and footwall zones, where it appears a cyclic repetition of the mineralisation may also be developing.
The Company has continued an active development and exploration programme aimed at quickly expanding and increasing the Zhao Gou resource in the first instance. Subsequently, the Company will prioritise the remaining outcropping deposits that were defined by previous workers with the overall objective of continuing to maximise the JORC-Code compliant resource status and enhancing the economics of the project.
Following exploration success and tartgeting early development of the Lixian Project, operations at site have commenced an underground access refurbishment program and established a mining department to assess development options.
Mineralisation at Lixian is considered amenable to both open pit and underground mining and preliminary scoping studies on the partial resource announced at Zhao Gou indicate that a significant proportion of the deposit could be extracted by open pit with strip ratios in the order of 4 to 1. These studies will be repeated as the resource is extended with detailed feasibility and environmental studies being undertaken over the next 12 to 18 months.
In the meantime, the Company plans to secure a mining licence with the commencement of a Stage 1 Production Plant which it anticipates will provide early production within 12 months and form the basis for an expanded production scenario using the results of recent resource drilling.
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| Drill rigs in operation at Zhao Gou |
Zhoa Gou Mineral Resource and Geology
Gold mineralisation within the Lixian Project is fine grained and associated with pyrite and lesser arsenopyrite in a major shear system within sandstones and siltstones of the Qinling Orogenic Belt in central-west China. The deposits are controlled by shearing and while they show similarities with Carlin-style mineralisation they do not contain preg-robbing carbon or other deleterious elements.
The results of drilling and geological investigation to date demonstrate the continuity and scale of gold mineralisation, as well as the development of thick high-grade mineralised zones within the deposits. The mineralisation at Zhao Gou is found in sub-vertical domains in brittle shear zones, sympathetic and parallel fractures in the hanging wall and along bedding as replacement of carbonate rich sandstones adjacent to the shears. These mineralised systems are seen repeated extensively in other deposits within the Liba lease.
The initial Inferred Mineral Resource estimate to JORC-Code compliant reporting standards for the Zhao Gou deposit was based on drilling undertaken to June 2008. This Stage 1 Mineral Resource covers a strike length of 440 metres and extends approximately 250 metres below surface. Importantly, known surface mineralisation of the Zhao Gou deposit extends over 800 metres along strike to the east and west of this Stage 1 Mineral Resource.
The mineralisation remains open both along strike and at depth (see Figure 7) and attention is drawn to the drill assay results in the sections bounding the resource to the east and west (see Figures 5 and 6). This includes drill results announced on 11 August 2008 of 115.7m at 3.96g/t Au in ZG5370DD4 on Section 5370E and 43.3m at 5.32g/t Au in ZG5410DD1 on Section 5410E which suggests that the mineralisation strengthens to the east. Both of these sections were included in the Mineral Resource.
On 15 September 2008, the Company announced the receipt of additional drillhole results that had been pending for these sections at the time the JORC-Code Inferred Mineral Resource was calculated. The results were outstanding and included 172m at 3.06 g/t Au containing 68m at 6.16 g/t Au from a vertical metallurgical drillhole ZG5370DD5. This and drillholes ZG5370DD6 and ZG5410DD3, while located within the Mineral Resource outline, were not included the Mineral Resource grade estimate.
In July 2009 the Company announced an increase in the Zhao Gou Mineral Resource to 1.62Moz of contained gold. The Indicated and Inferred Mineral Resource estimate comprises of 32.78 million tonnes at 1.5g/t Au for 1.62 million ounces of contained gold using a cut-off grade of 0.5g/t Au, within the Company's LiBa license (Figure 1). This Mineral Resource represents an increase of 47% in contained ounces from the mineral resource estimate reported 12 months ago.
The update covers a strike length of 640 metres and extends to a depth of 375 metres below surface. The known surface mineralisation of the Zhao Gou deposit extends over 800 metres along strike and remains open along strike and depth (Figures 2 & 3).
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| Figure 1. General geology and gold deposits within the Liba license area of the Lixian Gold Project |
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| Figure 2. Plan view showing portion containing the Indicated and Inferred Mineral Resource estimate. The resource remains open to the east and west. |
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| Figure 3. Drill section 5370mE on the eastern margin of the Mineral Resource showing the geological domains. The resource remains open at depth. |
The resource data was obtained from 93 drill holes (55 drill holes were used in the 2008 Mineral Resource estimate) predominantly on a 40 metre x 40 metre spacing with some infill at 40 metre x 20 metre spacing in addition to surface and underground mapping.
The cut-off grades from 0.3 g/t Au to 1.0 g/t Au and the resulting resource estimates are summaried in Table 2 below.
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| Table 2. 2009 Zhao Gou Deposit Mineral Resource Estimate - Indicated and Inferred |
Zhoa Gou Mineral Resource and Geology
Jinshan Licence
The TaoPing-Jinshan lease area can be described as a sequence of flat lying thrust zones comprising moderate to highly-deformed ductile units interlayered between deformed schists and phyllites within the Qinlin fold belt. The ductile unit contains mylonites which vary in deformation intensity from boudinaged quartz lozenges to ribbon-quartz layers.
A series of NNW trending faults which cut the ductile sheer zone were the main conduits to mineralisation. The fault zones provided a pathway for auriferous fluids to migrate upwards reacting with favourable horizons within the deformed metaporphic layers to propagate and precipitate a series of late stage sub-parallel sheeted gold bearing quartz veins.
The mineralisation event can be strongly correlated to the occurrence of quartz and quartz-carbonate veining, commonly associated with quartz-sericite alteration halos that encroach on the surrounding rocks for 10’s of metres adjacent to the fracturing and veining.
Drilling has previously been conducted to identify the mineralised belt and to understand the geological and structural controls that formed the east-west orientated, 1.6km long occurrence of gold mineralisation, previously identified by the Joint Venture partners, the Brigade of the Gansu Non-ferrous Geological Exploration Bureau (3GG). The drill holes were collared as part of the infill and extensional drilling program proposed by the JV partners and as required by Chinese licensing regulation to upgrade the current TaoPing-Jinshan licence from Exploration to Detailed Exploration status.
The current drilling has shown that gold is associated with pervasive alteration, which is lithologically controlled and occurs over 1.6km in an east-west direction. The extent of the primary mineralising episode event associated with the NNW faults is currently being investigated. At the Jinshan Licence drilling along the long extensional mineralised belt has targeted the No. 30 orebody.
The gold mineralisation itself is fine grained and is associated with pyrite and equal amounts of arsenopyrite.
The completed holes are located in the eastern section of the deposit and are shown on the regional geological map, (Figure 4).
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| Figure 4. Location of the detailed drill out (green box) as propsed by the 3GG. This area targets the No 30 ore body which forms part of the 1.6km mineralised strike of the JinShan deposit. |
In January 2009 the Company announced further excellent results from it's drilling program at the Jinshan gold deposit, targeting the No. 30 orebody.
Composited intercepts show significant intersections above a cut-off grade of 0.5g/t Au, inclusive of internal sub-grade mineralisation of up to four meters. Within these intersections notable high-grade sections are highted in table 3 below.
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| Table 3. Highlights from the diamond core drill hole results announced January 2009. |