Robust updates Romang gold project
Friday, January 31 2014 - 07:29 AM WIB
Exploration and Drilling Activities
The Company continued its stepped up drilling program during the Quarter with seven diamond drill rigs continuing to operate across four major prospects. Drillholes were designed to test new prospects and target infill and step-out drilling around the current resource area.
The geological understanding of the Lakuwahi Project continued to evolve during the Quarter as more data became available from the drilling. As was reported in the previous Quarter, a review of geological data in early 2013 had resulted in recognition of the Lakuwahi Project as a major new precious + base metal volcanogenic deposit.
Ongoing drilling in the non-outcropping basin at Batu Perak, downslope from Purple Heart, continued to intersect a barite-rich horizon with higher-grade gold and silver-rich polymetallic mineralisation.
The geology of the Batu Perak discovery is distinctly different from the majority of earlier base metal intersections at Lakuwahi with high-grade mineralisation occurring at the contact between lower Lakuwahi Volcanic rocks and younger Upper Volcanics and sedimentary rock units. The style of mineralisation is considered to be exhalative: base and precious metals, along with abundant barium deposited on, or just below, the ancient seabed. The closest analogy is perhaps the rich Kuroko-type deposits in Japan but there are many other ancient and modern deposits, some of great economic importance, which are also considered to be exhalative in origin. Collectively they are known as Volcanogenic Massive Sulphide or VMS deposits
Drilling has confirmed there is a high degree of continuity of the exhalative horizon between drillholes with the zone open in all directions suggesting the basin could be host to a significant VMS-style deposit. Intensity of drilling in the basin will be increased during the last Quarter of 2013.
As with most Kuroko-style deposits, lower grade, stockwork-style mineralisation (Kuroko-style Stockwork), underlies the exhalative layer throughout the basin, This zone varies from 10m to over 40m in thickness and is also showing good continuity throughout the basin.
The discovery of higher-grade precious metal-rich polymetallic deposits in a non-outcropping basin at Batu Perak means there is potential to move straight to a larger project with possibly more efficient processes for the recovery of all metals within Lakuwahi. This has been a significant step forward for the project, which had previously been greatly influenced by the target of developing a heap-leach operation to treat oxide and transition ore.
Quartz vein and breccia-hosted Au-Ag +/- base metal mineralisation in Lakuwahi, which has been outlined at the Batu Mas, Batu Hitam, Batu Putih and Batu Jagung Prospects, is now recognised as Kuroko-style stockwork mineralisation which underlies the mineralised, barite-rich paleo-surface horizon at the top of the Lakuwahi Volcanics. All these zones of stockworking represent areas of significant fluid flow for hydrothermal fluids reaching the palaeo seafloor.
Although the VMS horizon has often been removed by erosion in the outcropping prospects the underlying Kuroko-style stockwork mineralisation still offers significant potential for large polymetallic deposits (base + precious metals).
A total of 36 drillholes were commenced and completed during the Quarter and in addition, two drillholes commenced in the previous Quarter were completed and 5 drillholes commenced in this Quarter were still in progress at the end of the Quarter. A total of 4,216.10 metres were drilled with 3369 core samples and 1398 other samples (check, bulk density, CN leach) collected and sent to Intertek Laboratories in Jakarta for analysis. Results are still awaited for some of the drill samples.
Batu Perak Prospect
Drilling continued during the Quarter in the Purple Heart anomaly at the Batu Perak Prospect. Batu Perak is a significant soil anomaly, which covers outcropping Lakuwahi Volcanics and a faultbounded basin represented by relatively flat, non-outcropping terrain.
Results became available for an additional 2 drillholes into Purple Heart (LWD 324 & 328) which confirmed they all intersected potentially economic intervals of Au/Ag + BM mineralisation.
Several of the intersections were significantly wide such as for LWD324:
51m at 1.41 g/t AuEq1 & 1.94% BM2 from 0m (0.73 g/t Au, 36 g/t Ag, 0.29% Cu, 0.84% Pb, 0.80% Zn); including
14m at 1.67 g/t AuEq & 1.14% BM from 2m (1.01 g/t Au, 35 g/t Ag, 0.34% Cu, 0.62% Pb, 0.18% Zn 13m at 1.69 g/t AuEq & 4.24% BM from 36m (0.65 g/t Au, 55 g/t Ag, 0.53% Cu, 1.72% Pb, 1.99% Zn)
Intersections for LWD328 included:
108m at 0.51 g/t AuEq1 & 0.52% BM2 from 0m (0.38 g/t Au, 7 g/t Ag, 0.02% Cu, 0.16% Pb, 0.34% Zn); including
12m at 1.19 g/t AuEq & 1.10% BM from 0m (0.69 g/t Au, 26 g/t Ag, 0.07% Cu, 0.54% Pb, 0.49% Zn)
Purple Heart is interpreted as an uplifted and eroded section of the Batu Perak system where the paleo-surface has been removed and the underlying quartz stockwork and breccia feeder zones are exposed.
The intersection in LWD 324 is particularly significant as it demonstrates the Purple Heart zone remains strongly mineralised at the northern-most limit of the current drilling pattern. This, combined with the orientation of the mineralised outcrops and geophysical evidence, suggests that there may be potential for a continuous zone of mineralisation beneath thin limestone cover, between Purple Heart and Batu Mas.
Batu Perak Flats Prospect (Perak Basin)
The non-outcropping basin lying to the southeast of Batu Perak?s ?Purple Heart? prospect is interpreted as having undergone less uplift than surrounding outcropping prospects.
As a result it contains the only fully preserved geological section of the Lakuwahi Volcanic Hydrothermal system because it has not been subjected to erosion.
The top of the Lakuwahi Volcanics is marked by a thin, barite-rich horizon varying from granular (?barite sand?) to brecciated in texture. The horizon is consistent throughout the basin in all drillholes to date and is horizontal to very slightly dipping in nature. The horizon is interpreted as being exhalative in origin.
Assay results were received for four drillholes in the Perak Basin, with all drillholes returning significant intervals of mineralisation with high-grade sub intervals.
Batu Putih
Batu Putih is a northwest trending prospect located to the immediate north of the Batu Mas Oxide Resource. It has strongly anomalous geological, geochemical and geophysical signatures and drilling during the quarter has confirmed its high potential for precious metal mineralisation (see figure 1).
Assay results from three drillholes during the Quarter have highlighted the potential for defining a resource of high-grade silver mineralisation. Drill holes LWD 327 and 343 are particularly significant as they intersected a very broad zone of silver mineralisation at the north-western limit of drilling; the trend remains open for further discovery to the northwest. The intersection in hole LWD 327 is summarised below:
142m @ 40 g/t Ag from 9m; including
21m @ 76 g/t Ag from 62m; and 11m @ 109 g/t Ag from 65m; and 8m @ 166 g/t Ag from 106m
129m at 61 g/t Ag from 7m; including
58.9m at 122 g/t Ag from 8m; and 22.2m at 194 g/t Ag from 9m; and 13.0m @ 130 g/t Ag from 49.4m
Mineralisation at Batu Putih differs from the adjacent Batu Mas Prospect in that it has very high silver grades and has only very weak associated gold. The host rocks are intensely altered and leached with characteristics more alike a high-sulphidation hydrothermal system. Batu Putih and Batu Jagung share a very high-grade silver nature of mineralisation relative to the other prospects at Lakuwahi, although results are still preliminary these two prospects appear to define a northerly silver enriched nature of the Lakuwahi hydrothermal system.
Other Prospects
Several drillholes were completed at Batu Hitam, Manganese Valley and other drillholes were commenced at Batu Mas. The results from these holes will be reported in the following Quarter after assay results have been received.
Development Activities
The internal Scoping Study on the shallow oxide/transition ores at Lakuwahi has been completed.Conclusions are that the ore leaches well and the heap leach process can be used to extract the near surface gold and silver rich ore, with gold recoveries exceeding 80%. Additional ore reserves at higher grades or higher precious metals prices are needed to ensure the next steps in development using this approach.
The heap leach approach has been superseded by taking a more holistic approach to the project. Further discoveries of base metal sulphides at relatively shallow depths have given additional impetus to the idea of floating all of the ore from the outset at a higher throughput. It is believed a more robust development case can be made, if all low-grade ore is upgraded by gravity or heavy media to achieve this higher throughput.
Test work on sulphide ore in the past has demonstrated very positive heavy media results for upgrading marginal copper/lead/zinc/gold/silver ore from Lakuwahi. All metal grades more than doubled, with less than 20% loss to tails. It is expected low-grade oxide ore will yield a similar result, though this still needs to be proven by test work.
Increasingly, higher-grade sulphides being discovered adjacent to and within the Lakuwahi caldera during the quarter provides further encouragement for the inclusion of a flotation plant in the initial processing plant. By a combination of direct feeding the higher-grade base metal ores and upgrading the lower grade material by gravity, a simple flowsheet can be using flotation to produce a bulk multimetal concentrate. By re-grinding and cyanide leaching this concentrate to extract gold and silver for local refining, the remainder can be either sold as a bulk base metal concentrate or further processed and cleaned into marketable concentrates of copper, lead and zinc.
Metallurgical test work has commenced on this circuit and to specifically identify if oxides can be treated in a similar fashion. Results will be known in the December quarter.
Environmental base line studies continued on the island during the September quarter. Flora and fauna surveys are complete and the the University of Pattimurra team from Ambon requires just one more visit to complete the marine survey. This will be done in the December quarter, when sea conditions are expected to be calm. Preparations continue on the AMDAL terms of reference.
Marketing studies on the sale of high-grade manganese products continued during the quarter. Chinese buyers have shown strong interest in purchasing the DSO (direct shipping ore) product containing around 46% Mn and low iron and silica. Further test work is being undertaken to determine the total reserves present and to ensure that there are no deleterious elements which could affecting marketing strategy. To date results are very encouraging.
Community Relations
This quarter saw a re-commitment of the community Partnership Agreement on Romang Island, the overarching guiding document for company and community cooperation and responsibilities. Under this agreement land access for exploration strengthened and the company committed to on-going training and employment of the local workforce, standardising compensation systems, accelerating community benefit programs (especially infrastructure), and building community capacity around governance to cope with an increasingly commercially engaged population.
Community benefit highlights for the quarter included completion of the village water and sanitation rehabilitation project, the establishment of a community based water supply and maintenance governing body, the commercial supply of water to visiting ships, and the establishment of the first fully trained women?s micro-credit group.
Outlook for next Quarter
Robust plans to continue its drilling program at its current high level of seven drill rigs and will increase to eight where possible. Two to three drill rigs will continue to test the exciting Batu Perak prospect from the outcropping stockwork mineralisation at Purple Heart to the significant developing VMS resource in the Perak Basin.
Two drill rigs will continue to define the extent of the manganese resource in Manganese Valley. Other rigs will be variously deployed on the Batu Mas, Batu Hitam and Batu Putih Prospects. All drilling will be focussed on defining and extending known mineralisation with activity planned to continue unabated until the end of the year after which all data will be used for an updated JORC resource estimation, which will be reported in early 2014.
Further metallurgical test work will be conducted to confirm that bulk flotation is the best way forward for the recovery of base and precious metals from the Lakuwahi project. (end of excerpt)