Potential for Toll Treatment and Rights Issue
Sydney, Feb 22, 2013 AEST (ABN Newswire) - Vector Resources (
ASX:VEC) is pleased to announce that it is finalising studies aimed atestablishing a potentially lucrative toll treatment operation at its Gwendolyn Gold Project near Southern Cross in WA.
The studies will assess the technical and financial viability of toll treating ore from the high-grade lodes at Gwendolyn. This will include a detailed review of the Gwendolyn resource to ensure the model is optimised for a high-grade toll treatment project.
As part of this, Vector has held advanced discussions with a nearby processor, the details of which will be disclosed when the findings of the studies are available.
To help fund the studies and other work at Gwendolyn, Vector will undertake a one-for-two rights issue at 3c per share to raise $3.9 million.
Vector believes that a toll treatment project has the potential to generate far superior returns for shareholders than a conventional project development.
The Company believes the financial advantages of this option are also boosted by the ability to target Gwendolyn's high-grade lodes, which will further reduce operating costs, maximising margins and cash generation.
In comparison to previously reported resource estimates, the latest resource model (Figure 1) is the most comprehensive and detailed resource model constructed to-date.
The new resource model on Gwendolyn has delineated five different mineralisation domains, compared with the previous single domain. The identified geological, alteration and structural controls were used to constrain this current resource model. These five domains are as follows:
the main, laterite, pods, flats, and fault lode domains.
The high grade 'flats' domain is possibly caused by gold leaching out from the water table within the oxide zone. The 'pods' are discontinuous mineralised entities separate from the main domain and there were more pods intersected with the additional drilling above the main domain. The 'main' domain is still dipping approximately 30 degrees to the west and having a shallow plunge to the SW. It has been classified as a low grade shear zone domain which bears most of the mineralisation in Gwendolyn. The 'laterite' zone is a low grade flat lying zone, located just above the main zone.
The domain identified recently with additional drilling was the 'high grade lodes' or blow out zones running along a series of structural faults striking in a NW and NNW direction cross cutting the main fault running NE-SW. The mineralisation on these structures as tested appeared discontinuous and with high variability in gold grades. This domain was isolated from the surrounding domains in order to prevent the high grades present in this geological domain from influencing the surrounding domains. The majority of these identified blow out zones are in the shallow portion of the oxide zone.
The method used for estimating the latest resource model is Ordinary Kriging. The uncut total resource for this geologically constrained model is 6,018,000 tonnes at an Au grade of 1.0g/t containing 193,000 oz of gold. The capped total for this resource as reported by Ravensgate Mining Industry Consultants (Ravensgate) is 6,018,000 tonnes at an Au grade of 0.8g/t containing 149,500 ounces. The capped values for this resource from Ravensgate differ for each domain as shown (Table 1). With the improved understanding of the mineralisation controls a capped value was used for each domain using a 99th percentile analysis of each domain.
The resource using the capped values and a 1.0g/t bottom cut is represented below in table 2 which Ravensgate has estimated a total mineral resource at a 1.0 g/t cut-off and using the 99 percentile capped values for the Gwendolyn Project of 1.297Mt at an average grade above of 2.0g/t for 84,900 ounces of metal. The total resource consists of Indicated Mineral Resources of 0.790Mt at 1.6g/t Au for 39,800 ounces and an additional Inferred Mineral Resource of 0.507Mt at 2.8g/t Au for 45,100 ounces using a cut-off of 1.0g/t Au (Table 2) for the Gwendolyn Project.
Totals have been rounded to two significant figures from actual calculated results and rounded in accordance with JORC Code resource estimation guidelines and so total ounce 'errors' occur if multiplying summary table figures for the Gwendolyn Project. All resource modelling and interpretation has been undertaken in the local grid for Gwendolyn. The current resource based on the geological, alteration and structurally controlled domains is represented in (Figure 1).
Major factors influencing the current mineral resource estimate include:
- Previous mineral resource estimates did not make use of geological lithologies to domain the data. Leapfrog software was previously used to provide a generic mineralised grade shell as opposed to the current geological domaining undertaken by Vector geological staff.
- A top cut of 32.0g/t was globally applied in the historical mineral resource estimate. In the current mineral resource estimate, the data populations from each geological domain are treated separately. This results in differing top cap values being applied in order to mitigate the influence of extreme outlier samples in these geological domains as represented in (Table 1).
DATA SOURCES
All the information upon which this report and mineral resource estimate is based was received from Mr Arnel Mendoza, Exploration Manager, Vector Resources Limited. The data was supplied to Ravensgate in the form of a MS Access Database managed by Geobase Australia Pty Ltd. The data appears to be in good order and well-structured containing tabs for the drill hole collars, down-hole surveys, assays, lithology logging and various other parameters.
Drilling Data
In all a total of 785 drill holes (Table 2) were supplied to Ravensgate by Geobase Australia comprising 56 Air Core ("AC"), 19 Diamond Drill ("DD"), 544 Reverse Circulation ("RC") and 166 Rotary Air Blast ("RAB") drill holes. All RAB drilling was excluded for the purposes of grade interpolation but were used to assist in the generation of the mineralised domains.
Drill hole spacing varies from approximately 15 to 25 metres along the fence lines with the fence lines typically spaced at 20 to 30 meters apart. Drill-holes were typically inclined at 60 degrees on grid east azimuths with some shallower vertical drill holes.
Bulk Density
Bulk densities are based on composite bulk density samples from eight drill holes. These bulk density values were used as guidance for the range of bulk density values to be expected. Bulk density values were assigned to the resource model as indicated in (Table 3).
Compositing, Spatial Domaining and Statistical Analysis
All RAB drill holes have been excluded from the statistical analysis process. The drill hole samples have been composited to 1.0 metre sample intervals as this was the predominant sample interval of the RC, DD and AC drill holes. The statistics of the un-composited samples within the mineralised domains is provided in Table 4.
BLOCK MODEL
For the Gwendolyn Gold Project, geostatistics, block modelling and grade estimation was completed by Ravensgate using Datamine Studio 3 software.
Block Model Size Selection
After carefully considering the drilling and sample densities present at the Gwendolyn Gold Project Area, it was decided that the optimal estimation block size to be used for the resource estimation and block modelling was a primary block size of 5m (X) by 10m (Y) by 2 m (Z). Subcelling was allowed with a maximum of 3 splits allowed in each direction for the parent cell.
Block Model Interpolation Technique Selection
The resource was estimated using Ordinary Kriging interpolation with nugget and sill values based on the analysis of the down hole variograms for each individual mineralised domain.
Estimation search ellipses and variogram search parameters were orientated to reflect the geometry of the mineralised domains as tabulated in (Table 5).
Grade Estimation
Gold item values have been interpolated using Ordinary Kriging (OK) using a standard version of Datamine Studio 3 software which is one of the geology and mine planning packages used at Ravensgate. For all of the mineralised domains at Gwendolyn, it was possible to assign specific nugget and variance parameters derived from down-hole and other variogram analysis.
The search volumes per mineralised domain approximated the variogram axes length. The first search volume approximates the range of the variogram, the second search volume is of the same spatial extent but has the minimum number of samples reduced to half of those used in search volume 1. The third volume is intended to fill any remaining blocks not filled in the previous passes and is expanded until the last blocks on the extremities are filled.
Graphical representation of the estimated grade distribution within the 'LATERITE' domain is provided in (Figure 2) and within the remaining domains in (Figure 3).
Mineral Resource Classification
The JORC Code outlines a range of assessment criteria dependent on the quality of several important data inputs. The most important of these inputs are related to factors that include amongst others, the following:
- Adequate levels of drilling and sample density;
- Precise drilling and sampling technique;
- Regular checking of assay data quality;
- Adequate survey control for drill-holes and sample points;
- Reliable estimation and allowance for variability of specific gravity;
- Consistent and accurate logging of drill-hole data;
- Precise definition and modelling of ore zones with reference to geology;
- Thorough reviews of deposit statistics;
- Realistic application of grade cut-offs and area of influence restrictions;
- Correct application of interpolation techniques;
- Thorough analysis of all modelling parameters and the results derived; and
- The minimisation of all assumptions where possible.
Resource classification at the Gwendolyn Gold Project was based on a resource quality item, RESCAT coded into the block model during post processing. The RESCAT item uses a matrix based on the Number of Samples used to estimate a block (NS), the Search Volume used for selecting samples ('SV'), the kriging variance for each block interpolation (KV), the Number of Drill holes used to estimate a resource model cell (N-BHID) and the Transformed Distance of the samples from the sample centre (TD). The thresholds for each of these items are shown in (Table 6) and were selected based on histogram analysis, statistical analysis and sample spacing of the data set.
Ravensgate is of the opinion that this methodology conforms to the Guidelines of the JORC Code (2004).
The complete Ravensgate resource report will be available on the Company's website.
Comparisons of various resource models, uncut and capped.
The previous SRK resource model (Figure 5) that was reported on December 2011 was based on a simplistic Leapfrog model with a wireframe based on grades with little or no geological control to constrain the mineralisation in Gwendolyn. The 0.2g/t mineralisation domain inferred mineral resource was estimated at 1,214,000 at an Au grade of 2.71g/t with 106,000 oz of gold excluding the tailings indicated mineral resource of 238,000 tonnes at an Au grade of 0.7g/t containing 5,600 oz. Estimation method used was Ordinary Kriging and Inverse Distance techniques for the domain and tailings, respectively.
The in-house model (Figure 6) reported in June 2012 has a marked improvement in understanding of the resource compared with the previous SRK model with the addition of approximately 1/2 the phase 3 drilling, which was testing the extensions of the ore envelope as well as infill drilling to upgrade the resource category for both unclassified and inferred resource. The mineralisation halo of 0.2 g/t cut off was also used to wireframe the resource model with the additional drilling. The estimation method used for this in house resource was Inverse Distance cubed. The resource model was upgraded by creating wireframes generated in house using Micromine although no geological control was used at this stage as the re-logging of RC rock chips from both phase 2 and part of phase 3 was still incomplete at the time.
View the complete Vector Resources announcement at the link below:
http://media.abnnewswire.net/media/en/docs/ASX-VEC-625808.pdf
Contact
Vector Resources Limited
T: +61-2-6389-5750
E: contact@vectorresources.com.au
WWW: www.vectorresources.com.au
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