G-Resources seeks to upgrade resource estimates at Martabe mine

Hong Kong-listed G-Resources Group Limited said it was seeking to upgrade the resource estimates at its Martabe gold and silver mine in North Sumatra, a pre-cursor for a revision of reserve estimates.

The company said in an operational update statement that it is also conducting regional exploration targets at the Tani Hill, Tango Papa and Rantau Panjang prospects. ?Drilling has been conducted on extensions to known resources at the Purnama, Ramba Joring and Tor Uluala deposits,? the company said in the statement issued Wednesday.

G-Resources provides the following updates in the statement.

Ramba Joring Resource Upgrade and Extension
Ramba Joring currently has an estimated Mineral Resource (Inferred and Indicated) consisting of 38 million tons at average grade of 1.0 g/t gold and 4 g/t silver, with total contained metal content of 1.2 million ounces of gold and 5.0 million ounces of silver. From this Resource, a Probable Reserve is estimated with 5.2 million tons at average grade of 1.8 g/t gold and 4.4 g/t silver and total contained metal content of 0.29 million ounces of gold and 0.7 million ounces of silver. Ramba Joring is north of and adjacent to the Purnama Open Pit.

Over the past three months, Ramba Joring has been drilled for extensions of the known deposit both within and outside the current Ore Reserve pit shell. It is anticipated the results of recent work should both increase the Mineral Resource and improve the Ore Reserve economics by defining additional mineralization in material that was previously waste, and by adding additional mineralized zones to the deposit. This work is the precursor to a revised Mineral Resource Estimate to be completed in 2015, which may then be used for a revised Ore Reserve Estimate.

Tor Uluala Resource Upgrade and Extension
Tor Uluala currently has an inferred resource consisting of 32 million tons at average grade of 0.9 g/t gold and 8 g/t silver, with total contained metal content of 0.9 million ounces of gold and 7.8 million ounces of silver. Tor Uluala is located approximately one kilometer north of Purnama and is adjacent to Ramba Joring, leading to a proposed eventual mining sequence northwards through Ramba Joring, Tor Uluala and eventually to Uluala Hulu. A consulting group has been engaged to complete an updated Mineral Resource Estimate for Tor Uluala for release in late 2015.

The gold and silver mineralization at Tor Uluala is drilled to a wide spacing and there is potential to expand the Mineral Resource and improve the grade and eventual mining economics with closer spaced samples. To this end, a program of drilling and surface trench sampling has been in progress commencing mid-2014.

Tani Hill
Tani Hill is located in the Gambir-Kapur District, 20 kilometers south of Martabe. Tani Hill has been drilled previously with no indications of a porphyry copper or economic gold system in the areas targeted. However, recent mapping showed a significant extent of altered rock typical of a higher temperature mineral system than previously recognized, i.e. trending more towards a high temperature porphyry copper style system than an epithermal gold system. The alteration identified included disseminated and veined magnetite, silica (as pervasive alteration and quartz veins) actinolite, chlorite, and pyrite. Minor garnet, secondary biotite and trace chalcopyrite occur locally. The area is anomalous in copper. Molybdenum and gold in rock samples and soil samples.

A drilling program consisting of three, 600-meter deep diamond drill holes is currently being drilled. Assay results from the first hole have been received, with a best result of 3.0m @ 0.2% Cu from 385-387 meters down the hole. The second hole has been completed with traces of disseminated and vein hosted chalcopyrite confirmed through spot analysis for copper with a hand held XRF analyser. Assay results for the second hole have not been received but it is likely the chalcopyrite in the second drill hole will not be of economic grade. The third and final hole in the program is underway.

At this stage, it is unclear whether this system was emplaced by a large scale metasomatic alteration event around a barren intrusive or if it represents a peripheral alteration zone to a mineralized buried porphyry copper deposit.

Tango Papa
Tango Papa is located 25 kilometers north of Martabe. In 2013, two diamond drill holes were completed to test buried porphyry copper-gold targets, neither of which returned significant results.

Recent field work and conceptual modeling at Tango Papa has defined new gold and porphyry copper targets which are currently being drilled. A program of two, 600m deep holes is underway with the first hole completed on 11 July 2015. The first hole was targeted on a gold bearing, advanced argillic and silica altered breccia at surface (spot gold values up to 1.25 g/t). The second hole is testing a conceptual target of a buried porphyry copper model based on the results of surface geochemistry, airborne magnetics and recognition of high temperature alteration minerals such as topaz in spectral analysis of surface samples.

The first hole intersected various alteration assemblages including argillic advanced argillic and vuggy silica alteration. Assays have not yet been received.

Tango Papa lies within an area designated by the Indonesian Government as Protected Forest. Specific laws and regulations apply for development of mining projects in protected forest areas. G-Resources is fully permitted to conduct exploration within this area, and as the project is not at mining stage these laws and regulations are not yet applied.

Rantau Panjang
Rantau Panjang is approximately 80 kilometers south of Martabe. Gold potential at Rantau Panjang is indicated by previous stream sediment geochemistry and by a small number of illegal miners working alluvial gold in creeks and rivers. Gold and copper bearing magnetite skarns occur in the area surrounding the prospect and the geology is permissive for epithermal targets and porphyry copper-gold systems.

A helicopter borne electromagnetic and magnetometer survey is planned to commence in August 2015. A similar technique was used in 2004 to explore other parts of the Contract of Work, and was found to be very efficient at locating ?Martabe style? epithermal systems within hundreds of meters of the surface. The electromagnetic system to be used at Rantau Panjang is more powerful and should have greater depth penetration than the systems used previously.

The survey will be followed by detailed ground work on targets generated by the geophysics and a review of previous regional stream sediment geochemistry.

Editing by Reiner Simanjuntak