Release: Avocet Mining: Indonesian exploration update
Monday, July 11 2005 - 06:07 AM WIB
July 11, 2005 ? Avocet Mining is pleased to announce continued exploration success from a number of projects in Indonesia. The activities of the Company?s exploration team in Indonesia expanded during the year to 31 March 2005 following the commencement of mining at the Riska deposit at the North Lanut mine on the Mongondow Contract of Work (CoW) in North Sulawesi. Our exploration focus has been on developing and assessing new gold targets in this CoW and throughout the country.
Many of the development programmes discussed below are relatively early stage and until further results are available the directors are unable to assess fully the potential of these properties.
Mongondow Contract of Work
The main effort in the area of the North Lanut mine has been on in-fill drilling of the Effendi deposit in order to convert its resources to ore reserves. The team drilled 3,917 metres of diamond drilling at Effendi and increased its estimated resource by 16,000 ounces to 118,000 ounces. Table 1 summarises the significant intersections, including 68m at 2.49 g/t Au, 18m at 9.03 g/t, 22m at 3.72 g/t and 24.9m at 3.12 g/t Au. The resource model only used drillholes up to EFD167. Therefore the high-grade intercepts in later holes will result in an upgrade of the resource. Examples of these include 57m at 2.99 g/t Au, 65m at 2.54 g/t Au, 15m at 7.70 g/t Au and 26m at 4.39 g/t Au.
Elsewhere in the North Lanut area, the team has completed the evaluation of the Talugon vein deposit drilled earlier in 2004 and has identified an inferred resource of 50,000 ounces of gold. They also generated drill targets beneath post-mineralisation pyroclastic cover to the north of Riska.
The Company has targeted the Bakan district, approximately 25km from North Lanut, as the main new initiative in the Mongondow CoW. This is a large high sulphidation epithermal system tested briefly by Newmont in the mid 1990s. Our exploration team conducted additional mapping and IP dipole-dipole surveys in 2004. This resulted in a reinterpreted geological model that suggests that the district has the potential for two or three Riska-style and sized deposits. The team identified a large, 100-200 x 1,200 metre zone of low-grade intense silica-alunite and massive to vuggy silica alteration covering several prospects on the Main Ridge. Three smaller, but higher-grade zones occur elsewhere in the district at the Camp (80-100 x 250 metres), Durian (20-60 x 600 metres) and Osela (20-60 x 500 metres) prospects.
The Company has completed 2,257 metres of diamond drilling at the Main Ridge, Camp and Durian prospects this year. Table 2 summarises the significant trench and drillhole results. 200-metre spaced scout drillholes on the Main Ridge have shown that the deposit is consistently altered to a depth of 150-250 metres. It is much larger and more deeply oxidised than the system at North Lanut. However, drillhole intercepts to date have been disappointing (best intercept of 15.2m at 1.32 g/t Au). Drilling results are more encouraging for the Camp and Durian prospects, including 102m at 1.63 g/t Au at Camp and 81m at 1.25 g/t Au at Durian. Trenching at Osela over the last few months has identified two NE-striking silicified bodies over a strike length of 500 metres with significant results of 5.2m at 41.3 g/t Au, 24.5m at 4.23 g/t Au, 36m at 2.75 g/t Au and 16m at 4.31 g/t Au. We are currently drilling at Osela.
Our district-scale programme continues to identify significant targets. Most recently, the team has identified a low sulphidation epithermal vein system at Pusian. The main vein, Oboy, has been mapped over a strike length of 600 metres and there are indications that this will double. The vein varies from 10 to 25 metres in width. Trenches have identified zones of 8.80m at 4.13 g/t, 16.1m at 6.41 g/t (including 4.60m at 16.4 g/t), and 11.3m at 4.06 g/t Au (Table 3). We are also currently drilling at Pusian.
South Sulawesi SIPP
Avocet is maintaining an active generative programme in Indonesia, which has generated several potential acquisition targets. Earlier in 2005, the Company targeted a prospective area in South Sulawesi to the north of the 1.5 million ounce Awak Mas deposit. Local district governments have approved exploration permits under the SIPP system over an area of 115,000 hectares. The South Sulawesi project includes three main grass roots projects, including a Penjom-like system at Mangkaluku. Previous explorers reported trench sections of 23.8m at 6.56 g/t Au, 9m at 40.7 g/t Au, 18m at 8.99 g/t Au, and 7.9m at 10.5 g/t Au in an area of 150 x 500 metres. Scout drilling returned intersections of 8.4m at 7.47 g/t Au and 2m at 11.2 g/t Au. Fieldwork commenced in April 2005.
Idenburg Contract of Work
A longer term initiative has been the evaluation and joint venture of the 6th generation Idenburg CoW in a highly prospective mineralised belt in eastern West Papua Province (14 December 2004 press release). Avocet signed a joint venture agreement in December that provides a mechanism to earn 51 per cent of the CoW Company, PT Iriana Mutiara Idenburg, by expending US$2.5 million within a two year timeframe. The Company has spent over US$900,000 on due diligence and initial exploration work to date. This will count towards the earn-in expenditure.
The Idenburg CoW covers an area of very complex geology in the low foothills to the north of the Jayawijaya Range some 120 kilometres to the south of the provincial capital of Jayapura, which is situated on the northern coast. The project area is accessible by road.
Avocet?s priority is on fast-tracking the property to the resource definition stage. To this end, we have identified an area between Afley and Sua (reported as Kali Sua Sinta in our 14 December 2004 release), as the main exploration target. The Company?s due diligence programme in 2004 identified an area of 300 x 350 metres of high grade gold mineralisation. Recent work has grown this by roughly 50 per cent to 350 x 500 metres through additional trenching results that include 6m at 43.7 g/t Au, 2m at 83.9 g/t Au, 7m at 22.8 g/t Au and 8m at 4.50 g/t Au. Scout drilling commenced in early June.
Gold mineralisation is associated with proximal quartz-sericite-chlorite-pyrite alteration in a sequence of shallow dipping and variably foliated diorite intrusions and basalt dykes. Distal alteration is dominated by chlorite-pyrite. This rock crops out only rarely, which limits our ability to rapidly identify additional targets. Mapping traverses along the ridges and streams in the Afley-Sua District frequently identify float boulders that assay in excess of 10 g/t Au and commonly over 100 g/t Au. Recent district-scale work has identified mineralisation at Sikrima Ridge (200 g/t Au, 174 g/t Au, 166 g/t Au and 102 g/t Au in float, 3m at 13.0 g/t Au in trench) and Silia Creek (260 g/t Au and 49.8 g/t Au in float).
To date, we have visited less than 20 per cent of the Afley-Sua area and identified four interesting new gold targets. This highlights the unexplored, but highly prospective nature of the Idenburg property; and the potential to discover a multi-million ounce, high-grade (7-10 g/t Au) district. Importantly, preliminary metallurgical test work has shown that gold recoveries exceeding 95% can be achieved by conventional carbon-in-leach (CIL) processes.
Avocet is a mining company listed on the AIM market of the London Stock Exchange. The Company?s principal activities are gold mining and exploration in Malaysia (as 100% owner of the Penjom mine, the country?s largest gold producer), Tajikistan (as 75% owner of JV Zeravshan LLC, Tajikistan?s principal gold mining company), and Indonesia (as 80% owner of the North Lanut mine in North Sulawesi). The Company will be announcing its preliminary results for the year ended 31 March 2005 on 13 July 2005. (end of release)