January 2004
Sampling For Gold
Francis Pitard
Francis Pitard Sampling Consultants
14800 Tejon Street Broomfield,
Colorado 80020 USA
Email: fpsc@aol.com
Everyone is aware of problems created by a bias when using non-optimized sampling protocols for gold, but poor precision may be as bad. Poor precision is responsible for grade reconciliation problems between the geological model, the mine, and the mill. These accuracy and precision difficulties are minimized when sampling protocols are carefully optimized, and are correctly implemented with appropriate sampling equipment. I present a course which offers a solid foundation on the sampling theory and sampling practice of gold, including the most recent developments in this field. My course is a reference for managers of gold projects.
February 2004
"I Never Met a Rhyolite I Didn't Like - Some of the Geology in Economic Geology" An expanded version of the 2003 Society of Economic Geologists Presidential Address
Jonathan G. Price
State Geologist and Director
Nevada Bureau of Mines and Geology
Rhyolites and their deep-seated chemical equivalents, granites, are the most interesting rocks. They provide good examples of why it is important to look carefully at fresh rocks in terms of field relations, mineralogy, petrography, petrology, geochemistry, and alteration processes. Because of their evolved geochemisty, they commonly are important in terms of ore-forming processes. They are almost certainly the source of metal in many beryllium and lithium deposits and the source of heat for many other hydrothermal systems. From other perspectives, they have the capacity of destroying civilizations, and their geochemistry is relevant to public policy decisions.
March 2004
The Vicuña Exploration Project of Tenke Mining Corp.
A Complex High Sulfidation Breccia Environment in the South -
Central Andes
Peter Drobeck, President, Drobeck Exploration & Development, Inc.
The Vicuña Exploration Project occurs in the high Cordillera, along the Chile - Argentina border, about half way between the south end of the "Maricunga Gold Belt" and the "El Indio Gold Belt". The project lies within a region which had previously been referred to by many workers in Chile as "The Gap" between the two prolific mineral belts (due to the lack of identified mineralization in this 120-km long portion of the high Andes). The industry's poor perception of this "gap" was in part due to existing regional geologic maps showing this region as a cross-arc horst of basement Paleozoic rocks between the Oligocene - Pliocene volcanic belts preserved in the mineral belts to the north and south. In the late 1990's it was learned that many of the rocks which host the prolific Pascua-Lama district (60 km south of Vicuña) were in fact basement Paleozoic rocks (not Tertiary volcanics), despite the late Miocene age of this high sulfidation ("HS") epithermal gold-silver-copper district. The late Miocene volcanic field related to the Pascua-Lama district is actually very small, with a preserved thickness of less than 200m in most places, and a horizontal extent less than 20km2. The realization that a world class HS Epithermal precious metal deposit could form mostly in "basement" rocks led to a renewed exploration campaign in the "Gap" (which is now informally referred to as the "Link").
Mapping by Tenke Mining Co. geologists in 1999 - 2000 at the Vicuña Project showed that there is a small, local volcanic field with a surface area less than 25 km2, and which is on the order of 50 to 150m thick in most places. These volcanics thicken to over 500m near their inferred vent. This inferred source is breccia complex, with a variety of breccia textures that have been interpreted to represent an eruptive complex or diatreme. Evidence for this feature includes facies changes in the related Miocene (?) tuffs, complex breccia textures which change rapidly over meters and tens of meters, a zonal arrangement of "crumble" breccias near the breccia margin with milled breccias and "tuffisite" in the core, multiple stages of brecciation interrelated with mineralization, vertically fluidized pebble dikes and tuffisite, and fossilized wood fragments in the breccias.
Surface alteration mapping, quantitative PIMA alteration mineralogy mapping, geochemistry, and drilling have defined a horizontally and vertically zoned alteration system at Vicuña which is similar to many HS epithermal districts. The alteration system is on the order of 18km2 in surface area and is known to have a minimum vertical extent of 900m. The center of this system as presently known consists of the breccia complex with multistage vuggy silica - quartz+alunite - alunite+pyrite+enargite in the sulfide zone, all of which are severely oxidized and leached near surface. It is unclear how much of the leaching and oxidation are hypogene vs. supergene.
Mineralization discovered to date at Vicuña includes oxidized Cu mineralization near surface (primarily as chalcanthite), mixed mineralization near the oxide / sulfide boundary (primarily chalcocite - chalcanthite - pyrite) and sulfide mineralization in the bottoms of some drill holes (enargite - covellite - pyrite). Oxide Cu grades are in the range of 0.2 to 1.4% Cu, mixed grades are in the range of 0.2 to 1.2% Cu, and sulfide grades are in the range of 0.2 to 0.9% Cu - all over many tens of meters drilled lengths. The mineralization is closely associated with the breccia complex and its margin. This mineralization has been traced over a 2 km length and 0.8 km width, although the mineralization is erratically developed within this envelope. Silver grades appear to be localized along structures and/or the paleo-boiling horizon (best intercept 44m @ 192 ppm Ag). Gold grades are locally higher in structures (i.e. 4 m @ 4.9 ppm Au), but mostly occur as a widely-dispersed dissemination in the range of 0.1 to 0.5 ppm Au. The different spatial distribution of gold, silver, and copper suggests they were emplaced in distinct stages.
April 2004
Sampling and Assaying Factors and Ore Reserves At the Brimstone
Deposit- Crofoot-Lewis Mine, Nevada
Warren Bates, Vista Gold Corp.
The Hycroft Mine, owned by Vista Gold Corp. ("Vista") is located 54 miles west of Winnemucca, Nevada, and has produced in excess of one million ounces of gold and two million ounces of silver from an open-pit heap leach operation.
The Hycroft Mine is located in the Basin and Range physiographic province, on the western flank of the Kamma Mountains. The Black Rock desert lies to the west.
Since 1985, Vista and its predecessors have discovered some 113 millions tons of oxide reserves containing approximately 2.5 million ounces of gold, of which, over 1.05 million ounces have been recovered to date.
The Hycroft Mine consists of Tertiary- to Recent-age, fault-controlled, low-sulfidation gold deposits that occur over an area measuring 3 miles in a north-south direction by 1.5 miles in an east-west direction. Mineralization extends to depths of less than 330 feet in the outcropping to near-outcropping portion of the Bay deposit on the northwest side of the property and to over 1200 feet in the Brimstone deposit in the eastern portion of the property.
Four major north-northeast-trending, west-dipping, normal fault zones broadly control gold mineralization and subsequent oxidation. From west to east, these fault zones are referred to as the Central, Boneyard, Albert and East faults.
Modern gold mining commenced in the area in 1983 with a small heap-leach gold mine known as the Lewis Mine. Hycroft production from 1988-1995 was from the Central Fault Pit, and totaled 66.8 million short tons at a cyanide-soluble grade of .016 opt. Au. Central Fault production has reached 871,000 ounces of gold.
Vista began mining the Brimstone Deposit, located one mile east of the Central Fault Pit, in April 1996. Mining operations continued at the Hycroft Mine until December 1998 when mining was halted due to low gold prices (below $300 per ounce). Leaching and recovery of gold and silver have continued into 2004. Brimstone mine production has totaled 15.4 million tons of oxide run-of-mine at a cyanide soluble grade of .0143 opt., from which 182,330 ounces have been recovered. At the time of closure, the 1995 Brimstone resource model would not produce an economic pit.
During mining of the north portion of the Brimstone Deposit,
Hycroft encountered 26% more gold than was predicted from the
1995 reserve model. The reasons for this apparent windfall appear
to be the following;
- The samples collected during exploration reverse-circulation drilling were biased low, as a consequence of preferential loss of fines in the highly permeable oxidized and acid leached portions of the Brimstone Deposit. Exploration drilling was performed wet, and sample-collection buckets were allowed to overflow, without adequate effort to capture the fines. In such circumstances, if the fine fraction has a higher grade than the rest of the sample, the sample will have a low bias, relative to what would be obtained from a properly collected, representative sample. To test its hypothesis, Hycroft screened blast-hole samples and assayed the various size fractions. The finest-size fraction was found to have a higher average grade than other size fractions. This led to the full reassessment of the exploration drilling, including a twin drill-hole program.
- In some samples, the presence of native sulfur interfered with the cyanide-gold-assay procedure, resulting in understated gold assays.
- Re-logging all available reverse-circulation chip trays by Vista geologists; re-interpreting geologic domains.
- Comparing exploration drill composites to nearest blast holes in the mined area of the pit;
- Drilling dry reverse-circulation twin drill-holes with enhanced methods to improve recovery of fines;
- Analyzing the results of twinned drill holes to derive factors for the adjustment of historic exploration drilling;
- Analyzing the historic drilling to derive adjustments for cyanide-soluble-gold assays where native sulfur is present; and
- Validating and calibrating the adjustment factors by modeling with adjusted exploration data and then comparing grade and tonnage to actual results from the mined portion of the Brimstone Deposit.
During 1999, Vista geologists re-logged 410 drill holes in
the Brimstone Deposit and approximately 160 drill holes in the
Albert Deposit. A comprehensive logging system was used for lithology,
structure, alteration, oxidation, and the presence and quantity
of sulfur.
Eleven reverse-circulation holes, twins to existing reverse circulation
holes, were drilled in 1999 to test the hypothesis that previous
reverse-circulation drilling had underestimated gold grades. The
twin drilling was done dry, using a triple-cyclone sampling system
and tricone and center-return hammer bits. Sample recovery in
mineralized intervals averaged 61%, higher than typical for reverse
circulation drilling, and considerably higher than for past Brimstone
drilling. New holes returned higher fire and cyanide-soluble-gold
grades than the original holes over most intervals
Ultimately, the analysis of the twin-drilling program and the
correlation of actual mine yield to exploration data led to the
determination that pre-1999 reverse-circulation drilling consistently
showed a low bias, and that the probable cause of the low bias
was loss of fines. In addition, cyanide-soluble-gold assay values
are depressed in samples containing visible native sulfur.
To develop a new grade model for Brimstone, an assaying correction
factor was applied to cyanide-soluble-gold assays that adjusted
for the presence of native sulfur. Average sampling correction
factors were derived for the two principal ore types and applied
to the historical cyanide-soluble and fire assays to compensate
for historical sampling problems. The adjusted cyanide-soluble-gold
assays were then validated by comparing bench composites of these
assays to blast holes for that segment of the deposit already
mined.
Assay corrections were applied only to the acid-leach- and
oxide-gold assays: a factor of 1.40 was used for cyanide-soluble-gold
assays on acid-leach samples, a factor of 1.39 was used for fire-assay-gold
assays on acid-leach samples, and a factor of 1.19 was used for
both cyanide-soluble-gold assays and fire-assay-gold assays for
oxide samples. The resulting corrected data was used to construct
a new block model, which in turn was used to derive a new resource
estimate and estimates of mineable reserves.
A resource model was built by MRDI for the Brimstone-Albert
zones using multiple indicator kriging ("MIK") constrained
by geological domains. The adjusted cyanide-soluble-gold and fire-assay-gold
values were used throughout for their respective models.
The cyanide-soluble-gold model was validated by MRDI using the
blast-hole data from the existing Brimstone Pit. The resource
model produced results that compared very well with the blast
holes for the mined-out area. When 30-foot-bench plans of the
resource model were visually compared to actual blast-hole level
plans, the distribution of grades in the resource model was in
excellent agreement with blast-hole grades.
Vista engineers conducted several floating-cone iterations
to generate a rough pit design.
The contents of the Brimstone pits and the Resource estimate are
summarized in Table 1.
|
Table 1 Brimstone Ore Reserves and Resources |
||||||||
|
Cutoff |
Ore Tons |
CN Au |
FA Au |
CN Au |
FA Au |
Waste |
Strip |
|
|
Resource |
0.005 |
55,968,000 |
0.0134 |
0.0184 |
752,000 |
1,030,000 |
N/A |
N/A |
|
P & P |
0.005 |
23,958,000 |
0.0152 |
0.0207 |
365,750 |
495,112 |
30,477,260 |
1.27 |
|
P & P |
0.005 |
26,141,000 |
0.0149 |
0.0202 |
390,185 |
527,823 |
32,304,324 |
1.24 |
|
Mineable |
0.005 |
31,373,000 |
0.0145 |
0.0198 |
456,419 |
621,722 |
38,966,696 |
1.24 |
Currently Vista is completing new reserves and resources for
Brimstone under today's gold prices.
The study shows that low-grade gold deposits can be just as
difficult to accurately estimate as high grade deposits, and the
sensitivity of low grade deposits to gold price is an exacerbating
factor in determining their value.
The major components of the underestimation of grade at Hycroft;
loss of fines in oxidized and acid-leached ore, and the presence
of native sulfur can be dealt with by improved sampling techniques
and careful chip-logging.
May 2004 Technical Presentation
Geophysics in 2030; A Snapshot of 5th Generation Exploration
Ken Witherly
Condor Consulting, Inc.
2201 Kipling Street, Suite 150
Lakewood CO 80215
www.condorconsult.com
Over the next quarter century, exploration geophysics will change to keep pace with the needs of the mining industry much as it has since the end of World War II when the modern geophysical exploration began. If we could drop in on 2030 and see how geophysics of the day is being practiced, much of the basic sensor technology will of course, look very similar to what is in use today; it takes a lot longer than 25 years for the laws of physics to change. What will be different however, is essentially everything past how the basic measurements are obtained in terms of the acquisition systems, data processing, analysis and of course, who in society actually performs this work.
September 2004 Technical Presentation
Geology, Tectonics and Mineral Occurrences of Central Lapland,
Finland:
Exploration Potential for Iron-oxide-Copper-Gold (IOCG) Deposits
Craig Horlacher, Principal Geologist Silver Crescent Exploration
Inc.,
Lakewood, Colorado
The metallogeny of northern Finland is presented in the context of regional geophysics, geology and tectonics. The talk focuses on mineral deposits hosted in Paleoproterozoic lithologies that were deformed and metamorphosed during the Lapland-Kola (2.0-1.9 Ga) and Svecofennian (1.9-1.75 Ga) orogenies.
Regional compilation of data from northern Finland reveals an array of mineral deposit-types including, mesothermal gold veins, magmatic iron deposits, volcanogenic massive sulfide deposits and banded iron formations. The compilation was based on information available from the Geological Survey of Finland, including GIS data sets, original drill logs (13,000 m) and selected core samples.
An intriguing group of epigenetic iron and copper deposits are co-regional with the above deposit-types. In the Finnish literature, these have been variably classified as hydrothermal, skarn or metasomatic deposits. They contain predominantly low-TiO2 magnetite (< 2% TiO2) with subordinate sulfide minerals (Cu ≤ and locally, minor gold ≤ 1ppm). Fabrics in the mineralized rock range from massive-unbrecciated to highly deformed-brecciated. Regionally extensive, sodic alteration (albite-scapolite) surrounds many deposits; particularly those hosed in siliciclastic units of the pre-orogenic Sodankyka Group. Potassic (biotite or KF) alteration forms more restricted zones closer to mineralization in some deposits. The geological setting of individual deposits suggests formation during both pre-Svecofennian extension and later, during compressional tectonism associated with the Lapland-Kola and Svecofennian Orogenies.
Observed mineralogy and rock alteration suggest that some of these occurrences have affinity to IOCG deposits. As exploration for IOCG deposits is on going in the region, it is valuable to compare and contrast the physical characteristics, including grade-tonnage relationships, of major IOCG deposits to the iron and copper deposits in northern Finland. As a result of this generative study, the IOCG mineral potential of most areas is downgraded while several areas remain favorably prospective.
October 2004 Technical Presentation
Laser Drilling - Star Wars on Earth
Dr. Ramona M. Graves
Associate Professor of Petroleum Engineering
Department of Petroleum Engineering
Colorado School of Mines
In 1994, a congressional mandate to transfer cold war military defense technologies to American industry opened the door for the Petroleum Engineering Department at the Colorado School of Mines to begin an investigation of applying "Star War" laser technology to drill and complete oil and natural gas wells. The Gas Research Institute (now the Gas Technology Institute) in Chicago, Illinois funded the first phase of this research.
Characteristics of the laser drilling system make it friendlier to the environment than current state-of-the-art drilling systems. Drilling is faster so the system is on location for a shorter period of time, thus minimizing interruptions to the natural ecosystems and reducing drilling objections for local residents. It is envisioned that the laser system would have a smaller environmental footprint and the use of hazardous chemical would be greatly reduced.
This experimental research was conducted using two types of military lasers: the Chemical Oxygen Iodine Laser (COIL) and the Mid-Infrared Advanced Chemical Laser (MIRACL). The COIL was developed at the U.S. Air Force Research Laboratory, Kirtland Air Force Base, Albuquerque, New Mexico. The size of the COIL has been reduced and optimized as part of the Airborne Laser (ABL) research project. Because of its tactical capabilities, it will be placed onboard a Boeing 747 aircraft and used to track and destroy missiles. The MIRACL is located at the U.S. Army's High Energy Laser Systems Test Facility in White Sands, New Mexico. The MIRACL was tested first because it is the most powerful laser in the Western Hemisphere. It has an output power that can exceed 1200 kW.
According to a GRI study conducted in 1995, 50% of the drilling
time is spent on making hole, 25% of the time on tripping, and
25% of the time on casing/cementing. Currently using best practices,
the average drilling rate is about 35 ft/hr. Drilling with lasers
has achieved rates of penetration of over 450 ft/hr and has proven
very effective in drilling hard rocks such as granite. Major reductions
in drilling costs can be obtained by drilling faster and reducing
requirements for drill string removal, bit replacement and setting
casing.
Techniques used in the analysis of the rocks include: 1) Petrographic thin sections to determine mineral transformations, and fragmentation and tortuousity fractal dimensions for the calculations of permeability and porosity around lased holes; 2) Computerized Tomography (CT) imaging to calculate volume of rock removed, and pixel density and porosity; 3) Simultaneous Thermal Analysis (STA) to determine thermal properties of rocks such as reaction kinetics, clay disassociation, melting temperature, heat conductivity, and specific heat capacity; 4) Spectroscopic measurements to determine the absorption coefficient of rocks for particular lasers; 5) Scanning Electron Microscope - Energy Dispersive Spectrometer (SEM-EDS) to map laser-induced microfractures and mineralogical transformations around the lased areas; 6) X-Ray Fluorescence (XRF) and Coulometeric Analysis to determine major oxides, trace element, and carbon content of rocks; 7) Pressure-Decay Profile Permeameter (PDPK) to map point permeability around lased areas.
Depending on funding, the goal is to begin prototype development in 2005.
November 2004 Technical Presentation
Geology and Exploration of the El Morro Copper-Gold Project
Third Region, Chile
Mark A. Petersen, Metallica Resources Inc.
with contributions from Piotr Paleczek, Noranda Chile Ltda.
The El Morro Project represents a relatively new and emerging copper-gold porphyry district in northern Chile. It is the southernmost expression of the Chilean Eocene - Oligocene copper porphyries, and includes the La Fortuna deposit, the only gold - rich copper porphyry that is currently of economic importance in Chile. Moreover its discovery effectively extends the Eocene - Oligocene porphyry copper belt another 300 kilometers to the south.
The El Morro project is located in the Third Region of the Atacama, approximately 650 kilometers north of Santiago and 140 kilometers east of the city of Vallenar. Local elevations range between 3,800 and 4,200 meters above sea level. The project is held under a joint venture agreement between Metallica Resources Inc. and Noranda Chile Ltda. Noranda is the project operator and is working to earn a 70 percent ownership interest in the property.
The El Morro property is situated within a 15 by 30 km north - south trending graben consisting of Paleozoic to Permo - Triassic basement rocks. The western edge of the graben is interpreted to correspond to the southern extension of the Domeyko fault system, the main controlling feature for the northern Chile Eocene - Oligocene copper porphyry belt. Within the graben, basement rocks are principally covered by Mesozoic and Cenozoic stratified sedimentary and volcanic rocks. The older sediments are assigned to the Quebrada Monardes formation of Upper Jurassic - Lower Cretaceous age, whereas the overlying volcanic - pyroclastic units are Paleocene - Eocene in age. At El Morro, these units are intruded by a cluster of weakly oxidized calc-alkalic granodioritic to dioritic porphyritic stocks and dikes that have been emplaced at the intersection of two major NNE and WNW-trending regional fault systems. Isotopic age dating of both the intrusives and related porphyry-style alteration minerals indicate Eocene - Oligocene ages ranging from 42Ma to 32Ma. Miocene age dacitic ignimbrites, dated at 22 Ma, and Atacama gravels locally overlie all older rock types, and may conceal additional prospective porphyry centers.
Four main centers of mineralization are exposed within the El Morro property. In order of increasing depth within the porphyry environment, they include Cantarito, the namesake El Morro target, La Fortuna, and El Negro. Each of these areas is unique with respect to its alteration mineralization style and relationship to a porphyry source.
The epithermal environment is represented by the Cantarito zone, located 700 meters east of La Fortuna. Here a system of high sulfidation gold veins is emplaced along a NW-trending fault system and hosted within Jurassic age tuffs. Isotopic K-Ar dating of alunite from Cantarito indicates an age of approximately 32.1 Ma. Despite hosting local bonanza gold grades, attempts to develop an economic resource at Cantarito have largely failed due to the erratic distribution of gold grades.
At El Morro, porphyry-related(?) copper gold mineralization occurs within a secondary supergene blanket (pyrite-chalcocite) and an underlying zone of hypogene sulfides (pyrite chalcopyrite) developed beneath an immature goethitic / jarositic leached cap. Mineralization centers on a zone of potassic alteration (secondary biotite + quartz) that is surrounded by a broader zone of illite - kaolinite alteration. Porphyry style stockwork veining is limited to locally developed late sheeted "D" veins along major structures. All of the mineralization in the El Morro target is hosted within pre-mineral epiclastic sedimentary rocks; a porphyry source for the El Morro mineralization has not yet been identified. Moreover no accurate age dates have been established for the El Morro mineralization, however, based on age dates for La Fortuna and El Negro, the El Morro target is inferred to be on the order of 35 to 37 Ma in age.
At La Fortuna, copper gold mineralization occurs within a subvertical porphyry stock of quartz monzonitic to dioritic composition. Mutli-phase stockwork vein mineralization is associated with an alteration assemblage consisting of strong potassic biotite - magnetite dominant potassic phase, overprinted by intermediate argillic (illite smectite chlorite), and later phyllic (sericite pyrite - tourmaline) phases. Copper - gold mineralization is primarily hosted within an early "A" vein assemblage that is characterized by at least four styles of magnetite - sulfide veining, however, a detailed vein paragenesis has not yet been established.
Whole-rock age at La Fortuna dating indicates an age of 35.3 Ma, and serves as the best estimate for the timing of copper-gold mineralization. The porphyry-related assembalge is overprinted by a later phase of high sulfidation style advanced argillic alteration (dickite - pyrophyllite - alunite - silica) that has been dated at approximately 32.8 Ma, an age consistent with the epithermal veins at Cantarito. Potentially economic copper - gold mineralization at La Fortuna occurs within an upper near-surface supergene blanket (103 Mt @ 0.71% Cu, 0.35 g/t Au) and a deeper body of primary hypogene mineralization (362 Mt @ 0.58% Cu, 0.54 g/t Au). Compared with other Chilean copper porphyries, La Fortuna is unique with respect to both its overall gold content and hypogene metal grades.
The El Negro porphyry is a granodioritic stock that has been overprinted by an assemblage of strong potassic (biotite K-spar magnetite +/- apatite) alteration in association with a weakly developed quartz vein stockwork. Copper gold mineralization occurs as hypogene chalcopyrite+/-bornite+/- molybdenite; a supergene copper blanket is absent at El Negro. The style of alteration and mineralization suggest that El Negro represents the deeper roots of a substantially eroded porphyry system.
Prior to the 1990's historic mining activity in the El Morro area was limited to intermittent small-scale underground mining of secondary enriched copper - gold mineralization and bonanza grade gold veins in the Cerro La Fortuna area. In 1993 grass roots exploration by BHP recognized the area as part of a larger cluster of Oligocene age copper - gold porphyries and related high sulfidation gold mineralization that are hosted within Permo - Triassic sedimentary and volcanic rocks. BHP's program involved a combination of airborne magnetics and ground-based TEM followed by approximately 5,043 meters in 29 holes. BHP's focus was two-fold: to explore for concealed secondary enrichment blanket(s) beneath Tertiary gravels in the area, and to test the extent and continuity of bonanza grade gold mineralization in outcropping veins and breccias around Cerro La Fortuna. A significant outcome of this work was the publication of an excellent description of the geology for the La Fortuna area by the BHP project geologists at the time (SEG Special Publication No. 5 - Ch 7).
In 1996 Metallica Resources acquired the property through an option agreement for BHP's concessions at La Fortuna and by staking additional claims over the adjoining El Morro area to the west. A second option agreement for additional ground held by a private owner was signed in 1997. Metallica's primary interest at the time was in the area's gold potential, focusing on the high sulfidation veins around Cerro La Fortuna. In addition, mapping and sampling on the new El Morro concessions identified a large low grade gold anomaly (~50 to 100 ppb Au) in a goethitic / jarositic leached cap hosted within weakly altered conglomerates and volcanic sandstones. Metallica's exploration program involved a combination of detailed geologic mapping, talus and trench sampling, ground magnetics, and a dipole-dipole IP survey. In March 1999 the company completed a first pass drilling campaign totaling 3,463 meters in seventeen holes. The program yielded mixed results for the high sulfidation gold targets around La Fortuna, but at El Morro the second of seven planned holes, intercepted 170 meters averaging 0.83% copper and 0.26 g/t gold. This hole proved to be the discovery hole for the El Morro deposit, and based on the combined results for the seven holes drilled, a possible resource on the order of 100 Mt averaging 0.30 - 0.40% copper and 0.10 - 0.20 g/t gold was envisioned. It was at this point that Metallica decided to offer the project to potentially interested copper companies.
In September 1999, Metallica entered into a joint venture agreement with Noranda Chile Ltda. whereby Noranda acquired the option to earn a 70% interest in the property. Noranda's exploration program has involved a combination of property-wide field mapping, geochemical sampling, and ground magnetics and IP surveys. These were coupled with an aggressive campaign to drill selected targets. Noranda's persistence eventually paid off with the discovery of the La Fortuna deposit in February 2001. It is worth noting that prior to Noranda's drilling of the discovery hole at La Fortuna, a total of 16,656 meters in 74 holes had been drilled on the El Morro property. This is primarily due part to the relatively small target area (800 by 400 meters) and mostly buried top of the La Fortuna porphyry.
In 2002 and Noranda reported an inferred resource for the La Fortuna deposit of 465 Mt averaging 0.61% copper and 0.50 g/t gold at a lower cut-off grade of 0.40% copper. In 2003, the company reported inferred resources at El Morro to contain 45 Mt averaging 0.50% copper and 0.18 g/t gold, likewise at a 0.40% copper cut-off. While the bulk of these resources are contained within the La Fortuna porphyry intrusive, the as-yet unidentified porphyry source to mineralization there represents additional upside for the project.
Since the end of 2002 when Noranda had met its exploration commitment to the joint venture agreement, no further exploration activity has been conducted on the El Morro project. However, the company has recently resumed exploration with the initiation of an 8,000 meter core drilling program aimed at better defining the distribution of copper and gold grades within the La Fortuna deposit. Noranda currently has the option to complete its 70% earn-in by making a US$10 million cash payment to Metallica by September 2005. The Metallica-Noranda joint venture agreement also calls for the completion of a final feasibility study by September 2007.
December 2004 Technical Presentation
Newmont's Ahafo and Akyem Projects, Ghana Changing Perspective, Growin Reserves
Cindy L. Williams, Seth Ako, Piet Knoetze, and Joe Collins
Newmont Resource Development and Engineering Team
New ideas and changing perspectives are driving development of Newmont Mining Corporation's Ahafo and Akyem projects in Ghana. Reported 2002 reserves of 4.9 million ounces surged to 11.9 million ounces in 2003. Continued rapid reserve growth is anticipated in 2004.
In 2002, both Ahafo and Akyem were economic with feasibility studies completed. However, both projects became more robust a year later after reserves had doubled.
The increased reserve was driven by a change in context and perspective. An increasing gold price environment and Newmont's owner operator philosophy drove scoping models that suggested significant upside potential. The models justified further drilling and a complete geologic re-evaluation. Over 300,000m of relogging produced new three-dimensional geologic interpretations of all twelve deposits and identified exceptional exploration potential.
The two project areas are hosted by shear zones in separate northeast-trending Early Proterozoic volcanic belts. Relogging led to the identification of late brittle textures as the key control to gold mineralization. Subsequent modeling of late brittle deformation zones lead to enhanced understanding of south-plunging high-grade shoots in late left lateral strike slip fault zones (Figure 1 and 2). Follow up of new target concepts with roughly 250,000m of drilling in 2003and 2004 more than doubled reserves at year-end 2003, with optimism for continued expansion at year-end 2004.
With improved project economics driven by increased reserves, the decision to construct the Ahafo project was made in late 2003. A feasibility update is in progress for a late 2004 Akyem construction decision.
Figure 1.
Cross section of the Kenyase Central deposit at Ahafo showing
expansion of high grade mineralization from a plunging high grade
shoot at depth.
Figure 2.
Inclined long section of the Kenyase Central deposit at Ahafo showing expansion of high grade mineralization as a steeply south plunging high grade shoot.