IDC Measured Indicated Resource Doubles 2.5Moz Gold Equivalent
Sydney, July 10, 2013 AEST (ABN Newswire) - Indochine Mining Limited (
ASX:IDC) ("Indochine") is pleased to confirm improved project confidence with an updated Mineral Resource estimate undertaken by Anthony Burgess and AMC Consultants Pty Ltd for the Indochine's Mt Kare Gold-Silver project located in Papua New Guinea.
The total Mineral Resource is estimated at 42.5 Million tonnes (Mt) grading 1.54 g/t gold (Au) and 13.5 g/t silver (Ag) for 2.11 Million ounces gold (Moz) or 2.45 Moz gold equivalent(1), a 20% increase in gold ounces (350,000 oz) compared to the prior 2011 resource estimate (Table 1).
A key outcome from the latest resource estimate is a significant increase in the higher confidence Measured and Indicated Resource categories to 28.4 Mt at 1.68 g/t Au and 17.2 g/t Ag for a total of 1.53 Moz gold (1.82 Moz gold equivalent(1)). This represents a 120% increase in gold ounces compared to the Indicated category of the prior 2011 resource estimate (Table 1).
CEO commentary
"We are pleased to have reached this key milestone in the ongoing development of the Mt. Kare goldsilver project," Indochine's CEO Stephen Promnitz commented. "The major increase in quality of the resource estimate is significant as we have delivered a 120% increase in the Measured and Indicated material, providing confidence to progress development."
"Importantly, this resource estimate includes 400,000 ounces of gold at 5.4 g/t from the recently explored higher grade WRZ and BZ zones. Alternative modelling of the two high grade zones was conducted using uncapped analytical results, at a cut-off grade of 2.0 g/t Au (instead of 0.5 g/t Au). Results for the high grade zones showed almost twice the grade, at 10 g/t Au for 500,000 ounces gold equivalent in 40% less tonnes. At a higher cutoff grade of 6.0 g/t Au, initial modelling suggests grades of nearly 20 g/t Au.
This could allow for the rapid development of an exploration adit to further drill high grade zones and potentially fast-track development at lower capital costs, with an improved return on investment in comparison with last year's PFS. This is how the adjoining Porgera gold mine started" "The other key aspect is that we have defined a larger resource of oxidised material near to surface (380,000 oz in 10 Mt at 1.2 g/t Au), which could be expanded, allowing for staged development."
"Fourteen other anomalies have been identified, but not drilled yet, within the Mt Kare licence, with two targets showing gold in stream samples. Given the similarities to Porgera, a much larger mineralised system is indicated to exist at Mt Kare."
"Our priority is to consider multiple options for accelerated, lower cost development, factoring in a gold price more aligned to current levels, while exploring the high grade zones."
Summary
- This Resource estimate provides greater confidence in the Mt. Kare deposit and indicates that the company has multiple staged development options for entering production.
- The Company could consider accelerating production by development of an underground project on high grade zones or alternatively scalable surface mining. More rapid development should be possible with underground operations at substantially lower capital costs, similar to the original startup of the adjoining Porgera gold mine.
- The minor reduction in the global grade of the total Mineral Resource is due to the inclusion of larger volumes of lower grade material near the fringes of the resource zones and the tight domains around high grade zones which restrict the positive influence of high grades.
- Detailed analysis of the resource update with the geology, estimation methodology and accompanying tables are in the related release titled "Explanatory Notes to the Resource Update of Indochine's Mt Kare Project PNG".
Notes
1) Gold equivalent grades (AuEq) are calculated based on a gold price of US$1200/oz and a silver price of US$22/oz, or 54.55 silver ounces per 1 gold ounce; this does not consider metallurgy recovery factors.
2) Cut-off grades and capping: A lower cut-off of 0.5 g/t Au was used based on the data distribution. Capping strategy utilised: In low grade domains, analyses capped at 30 g/t Au, 250 g/t Ag; Upper Zone and high grade domains at 50 g/t Au, 500 g/t Ag.
3) Material classified as Measured and Indicated Resources are wireframed gold mineralisation based on the 2013 block model considering an average distance between drilling of 25m and 50m among other criteria. It is considered that this category material has a high probability of being economically extracted, including comparisons with a previously modelled PFS open pit shell based on various assumptions including the prior 2011 resource. Mineralisation beyond an average distance between drilling of 80m was not included within the lowest category of Inferred Resource.
4) Rounded estimates are used, which may cause apparent discrepancies in totals. Significant figures do not imply precision.
5) The resources have been reported in compliance with the JORC (2004) code.
To view Tables and Charts, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-IDC-744309.pdf
Contact
Indochine Mining Limited
T: +61-2-8246-7007
F: +61-2-8246-7005
WWW: www.indochinemining.com
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