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MOUNT MAGNET SOUTH NL ASX: MUM
1
MOUNT MAGNET SOUTH NL ASX: MUM
ABN 93 096 635 246
K i rk a lock a Go ld Pro jec tM ine ra l Resou rc e Upda te t o Comp ly w i t h JORC 2012 Gu ide l i nes
and Renego t i a t i on o f Conve r t i b l e No te Te rms
The Mineral Resource for the Kirkalocka Gold Project (“KGP”) has been updated to comply with the
JORC 2012 reporting guidelines.
There has been no change to the resource classification, quantities or grade since the December 2012
Mineral Resource release.
Table 1: September 2013 Mineral Resource Estimate
Category Tonnes (Mt) Grade (g/t Au) Gold (ounces)
Indicated 11.2 1.2 428,000
Inferred 3.8 1.0 119,000
TOTAL 15.0 1.1 548,000
CONVERTIBLE NOTE TERMS
The Company advises that it has renegotiated certain terms with the holder of convertible notes with a
face value of $1.5 million. A total of 10 million notes (convertible to 10 million shares) with a face value of
$1 million were redeemable by 27 August 2013, with the remaining 11.1 million notes (convertible to 11.1
million shares) with a face value of $0.5 million being redeemable on or before 17 January 2014. The
Company has redeemed the January 2014 notes by making a cash payment of $0.5 million. The
remaining $1 million will remain a loan until the Company’s annual general meeting in November 2013, at
which time shareholder approval will be sought for the issue of 66.67 million notes convertible to 66.67
million shares (at 1.5 cents each) on or before 31 July 2015 at an interest rate of 5% per annum in
settlement of the loan.
24 September 2013
MOUNT MAGNET SOUTH NL ASX: MUM
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KIRKALOCKA GOLD PROJECT – MINERAL RESOURCE
Mount Magnet South NL (ASX: MUM) (“the “Company”) has re-issued the Kirkalocka Gold Project
(“KGP”) Mineral Resource estimate to comply with the JORC 2012 guidelines.
In December 2012, the Company reported the KGP Mineral Resource in compliance with the JORC
2004 guidelines. This release provides additional information to align the resource with the JORC
2012 guidelines.
A total 5,986 drillholes totaling 183,496 m were used in the preparation of the resource estimate
including 113 diamond drillholes (HQ3 and NQ2 diameter) for 23,085 m, 5,371 Reverse Circulation
drillholes totaling 136,432 m, and 502 aircore holes totaling 23,979 m (used to inform laterite
estimate).
All diamond drillholes completed by the Company were sampled by cutting the core longitudinally in
half using diamond saws. Half core samples were placed in numbered calico bags and submitted to
the laboratory for analysis. The samples were typically taken at 1 m intervals except where the
samples crossed lithological boundaries. In this instance, the samples were terminated at the
lithological contact. All samples taken by the Company were greater than 30 cm in length. Historical
diamond core was also submitted as half core samples for analysis and was sampled using a similar
system to that currently used by the Company. Historical diamond core sample intervals within the
database range from 0.1 m to 4 m in length.
Reverse circulation (RC) drillholes carried out by the Company were typically sampled every metre
using a riffle or cone splitter to obtain a ~3 kg sub sample prior to submission to the laboratory for
assaying. The samples were collected in numbered calico bags and all the sampling information was
entered into a tablet computer and uploaded daily into the central acQuire database. Ninety nine
percent (99%) of reverse circulation samples are based on 1 m intervals. All samples were submitted
to Kalassay Laboratory (Kalassay) in Canning Vale, Western Australia for analysis with some check
analysis carried out at Ultratrace Laboratory in Perth. The main assaying method employed by the
Company is normal fire assay with a 40 g charge and AAS finish for gold. Review of historical records
indicates that a similar methodology was used by CRA and Equigold, however, an ICP OES finish on
a 40 g charge was also used during 2008.
Sampling and assaying quality assurance and quality control (QAQC) procedures were applied
routinely by the Company for all drilling carried out since 2008. They included:
Submittal of independent certified reference material (standards) with all sample batches at a
ratio of around 1 in 20.
MOUNT MAGNET SOUTH NL ASX: MUM
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Submittal of field duplicate samples at a ratio of 1 in 20.
Submittal of coarse blank material with all sample dispatches at a ratio of around 1 in 20.
Periodical re-submission of duplicate pulps to both the primary and the secondary laboratories.
Review of internal laboratory quality control standards.
Review of laboratory (analytical) duplicates.
Sieve testing to check grind size.
Sample recovery checks.
Unannounced laboratory inspections.
QC results indicate acceptable levels of precision and accuracy. Given the acceptable results for the
QAQC conducted by the Company and the good correlation between the historical and Company
drilling, the drilling and sampling data is considered acceptable for resource estimation.
The Company migrated historical data into an acQuire database in April 2011. The data collated after
April 2011 was processed from source data files into a separate acQuire database by acQuire
Managed Services (QMS). All historical data was managed by the Company Database Administrator.
The Company conducted an extensive database review, compilation and validation program of all
historical KGP drilling information in 2011. On completion of this review all data was migrated across
to the acQuire Database Model.
The Company carried out detailed validation of the dataset prior to running the December 2012
estimation. Independent reporting expert, Snowden Mining Industry Consultants Pty Ltd (“Snowden”)
carried out an additional basic statistical and visual validation prior to estimation. Two drillholes which
visually appeared erroneous were excluded from the final dataset.
The mineralisation in the KGP lies within a splay of the Mount Magnet Shear which runs parallel to the
eastern margin of the Wydgee–Meekatharra Greenstone Belt. The splay hosting the KGP gold deposit
is a 400 m wide brittle ductile shear zone localised along the contact between the metabasalt and
tonalite intrusive. The predominant orientation is north-northwest, defined in part locally by the
metabasalt-tonalite contact and the felsic intrusive orientation.
The regolith zone is comprised of five units. The topmost unit consists of transported overburden
material comprising quaternary sands, grits, gravel and clay. This unit is of variable thickness
between 0 m and 40 m, with an average thickness of 11 m. The in situ regolith consists of the shallow
supergene, upper saprolite, lower saprolite and saprock units.
MOUNT MAGNET SOUTH NL ASX: MUM
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The laterite is situated immediately below the transported overburden and consists of Tertiary age
transported ferruginous nodular gravels to nodular (pisolitic) duricrust of mottled laterite. The
mineralised laterite thickness ranges from 1 m to 4 m thick and has been defined over a 2 km strike
and 0.7 km plan width.
Within the upper portion of the saprolite unit there exists a distinctive white clay zone which is referred
to as the pallid zone. Recent drilling has proved the continuance of an extensive supergene zone that
occurs typically between 15 m and 20 m below the laterite horizon within the upper saprolite. The
supergene zone is extensive and has been interpreted over a north-south strike of 2 km and east-west
width of 100 m to 250 m. The supergene zone is best developed above the zones of continuous high
grade primary mineralisation.
The lower saprolite is distinguished from the upper saprolite by its generally darker appearance, with
fresh to altered green and purple mineral assemblages present within the rock mass, reflecting a
lesser degree of weathering/leaching compared to the upper saprolite.
The transitional zone comprises both lower saprolite and saprock. In most cases saprolite overlies
fresh rock; however, in some areas a saprock is present. Saprock exhibits some weathered
characteristics while retaining most of the fresh rock characteristics. Weathering within the saprock is
in general restricted to areas adjacent to fractures and jointing within the rockmass.
Mineralisation within the primary zone is hosted in tonalite and amphibolite (after basalt) which follow
the local structural trends. The mineralisation typically forms a series of shear hosted zones striking
north-northwest in the immediate vicinity of the existing Curara Well Open Pit with variable dips
ranging from 50° to 70° to the east. Barren, narrow felsic intrusives run parallel to stratigraphy and in
places cross cut in an east-west orientation.
The tonalite is characterised by coarse feldspar laths in a fine grained mafic groundmass. Gold is
commonly associated with quartz veining or strong alteration selvedges characterised by silica,
sericite, chlorite with pyrite and minor pyrrhotite proximal to felsic intrusives. Discrete mineralisation
shoots up to 20 m in width form predominantly along the tonalite contacts and parallel to the felsic
intrusives that converge to the south.
The metamorphosed and altered basalt makes up the bulk of the eastern country rock. Gold
mineralisation occurs with intense biotite, amphibole, quartz and fine disseminated sulphide (primarily
pyrite) alteration. Siliceous selvedges and increasing gold grades are proximal to the felsic intrusives.
Gold mineralisation follows the general dip of the foliation and is also present in late stage, flat lying,
narrow cross-cutting quartz veins dipping at 30° to the east.
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The laterites are typically between 1 m to 4 m thick and have been defined over a 2 km strike and 0.7
km plan width. The supergene mineralisation ranges up to 20 m in thickness and has been defined
over a 1.5 km strike and 0.2 km plan width. The main primary mineralisation (classified portion)
extends around 0.85 km along strike and 0.25 km plan width. The primary mineralisation extends to a
depth of 290 m below surface, which is 90 m below the existing open pit.
Interpretation comprises mineralisation envelopes (wireframes) for the laterite, supergene and primary
mineralisation which have been built based upon cross, long sectional and plan view structural
domaining, as well as indicator variography and leapfrog software at a 0.2 to 0.3 g/t Au nominal cut-off
grade. The surface laterite envelope was created in Leapfrog software using a flat search at a 0.3 g/t
Au cut-off. The laterite was subsequently manually adjusted to remove low grade edges and
incorporate additional hangingwall and footwall samples where the grade was above cut-off. Single
low grade intervals with above cut-off grades on either side were retained and a minimum width of 2 m
was imposed. The manual interpretation below the laterite identified potential supergene style
mineralisation both north and south of the existing pit. A sub-horizontal mineralisation domain persists
between 290 mRL and 305 mRL, typically located above primary mineralisation. The presence of
supergene mineralisation within the historical pit is consistent with the high grade material that was
encountered by Equigold during production between 2002 and 2003.
Grades for gold were estimated using Datamine software. Estimation was by ordinary block kriging
into 10 mE by 10 mN by 2.5 mRL parent cells using 1 m composites, which is the dominant sample
length. Kriging neighbourhood analysis was carried out to optimise the block size and estimation
parameters. Search ellipses and ranges were based on the continuity seen in the variograms. With
initial search pass ranges equivalent to around 90% of the variance for the laterite and supergene
domains and around the range of the variogram for the primary mineralisation domains.
For the northern and central areas of the deposit, the mineralised lodes were treated as hard
boundaries for estimation except for two lodes. These two domains were treated as soft boundaries
for estimation. For the southern area, the mineralised domains with similar orientation and grade
tenor were combined for estimation due to the small quantity of data in the individual lodes. The
estimation domains comprised the combined high grade lodes, the combined low grade lodes and the
combined supergene domains. For the northern and central area excluding the supergene, search
ellipses were orientated as per the variograms for each domain. For the southern area and the
supergene (in all areas), a dynamic anisotropy approach was used, whereby the true dip and azimuth
of the mineralised lodes was estimated into each block in the model and the search and variogram
orientations were locally adjusted to reflect the geological orientation. This method allows the
estimate to better reflect the changing orientation and undulating nature of some of these lodes along
strike. Blocks were estimated using a minimum of 12 with a maximum of 32 samples. A maximum of
MOUNT MAGNET SOUTH NL ASX: MUM
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3 composites was allowed per drillhole for the primary and supergene domains and 2 composites per
drillhole for the laterite. This restriction was set to prevent over smoothing in the downhole direction
and help retain the grade trends seen in the data. The restriction also ensures that at least 4 drillholes
are used to inform each block for the primary estimation and 6 drillholes for the laterite estimation.
The data distributions are highly skewed and typically have a high (>1.5) coefficient of variation (CV –
ratio of standard deviation to the mean). As a result, top cuts were applied to some domains to
prevent overestimation and smearing of the comparatively high values into surrounding blocks. Top
cuts were 40 to 60 g/t Au and impact on less than 1% of the grade population.
Final grade estimates were validated visually and statistically. Global mean estimated grades were
compared to the input composite data and sectional grade trend plots were generated. The model
validation indicates that there is a good local reproduction of the input grades in both the horizontal
and vertical directions. The grade estimate was reconciled to historical production information within
the historical pit area. Gold ounces reconciled to within 1%.
The estimate has been classified as an Indicated and Inferred Mineral Resource based on the integrity
of the data, the spatial continuity of the mineralisation as demonstrated by variography, and the quality
of the estimation. The classification for the northern and central area is restricted to within an open pit
optimisation shell to a depth of 290 m below surface. Snowden considers that the classification
applied is appropriate for this style of mineralisation.
Pit optimisation and metallurgical testwork to date indicates that the mineralisation is amenable to
open cut mining and processing through the KGP treatment plant, subject to gold price.
The September 2013 Mineral Resource estimate at the Kirkalocka Gold Project (KGP) is reported in
Table 1. Laterite mineralisation is reported above a 0.3 g/t Au cut-off and primary and supergene
mineralisation reported above a 0.5 g/t Au. The grade cut-offs for reporting are based on a
combination of the historical gold recoveries from the KGP CIP/CIL treatment plant and the
assumption the deposits will be mined using open cut methods.
Table 1: KGP September 2013 Mineral Resource Estimate
Category Tonnes (Mt) Grade (g/t Au) Gold (ounces)
Indicated 11.2 1.2 428,000
Inferred 3.8 1.0 119,000
TOTAL 15.0 1.1 548,000
MOUNT MAGNET SOUTH NL ASX: MUM
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For further information contact:
Alec Pismiris
Chairman
P: 08 9213 8900
M: 0402 212 532
E: Alec@cipartners.com.au
Graham Howard
General Manager – Projects
P: 08 9213 8900
M: 0418 920 556
E: graham@mountmagnet.com.au
Mount Magnet South NLABN 93 096 635 246
Level 1, 10 Outram St, West Perth, WA 6005
T + 61 8 9213 8900F + 61 8 9213 8901admin@mountmagnet.com.auwww.mountmagnet.com.au
Competent Person’s StatementsThe information in this report that relates to estimation, depletion and reporting of Mineral Resources is based on andfairly represents, information and supporting documentation compiled by Lynn Olssen who is a Member of TheAustralasian Institute of Mining and Metallurgy and a full time employee of Snowden Mining Industry Consultants Pty Ltd.Lynn Olssen has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and tothe activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘AustralasianCode for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Lynn Olssen consents to the inclusion inthe report of the matters based on the information in the form and context in which it appears.
The information in this report that relates to database compilation, geological interpretation and mineralisationwireframing, project parameters and costs and overall supervision and direction of Mineral Resource is based on and fairlyrepresents, information and supporting documentation compiled under the overall supervision and direction of GrahamHoward MAusIMM, who is a full time employee of Mount Magnet South NL. Graham Howard has sufficient experiencethat is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken toqualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration, Results,Mineral Resource and Ore Reserves (JORC, 2012). Graham Howard consents to the inclusion in this report of the mattersbased on the information in the form and context in which it appears.
.
MOUNT MAGNET SOUTH NL ASX: MUM
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APPENDIX 1 – ESTIMATION AND REPORTING OF MINERAL RESOURCES
Section 1 Sampling Techniques and Data
Criteria JORC Code explanation Commentary
Sampling
techniques
Nature and quality of sampling (eg cut channels, random chips, or
specific specialised industry standard measurement tools appropriate
to the minerals under investigation, such as down hole gamma
sondes, or handheld XRF instruments, etc). These examples should
not be taken as limiting the broad meaning of sampling.
Include reference to measures taken to ensure sample representivity
and the appropriate calibration of any measurement tools or systems
used.
Aspects of the determination of mineralisation that are Material to the
Public Report.
In cases where ‘industry standard’ work has been done this would be
relatively simple (eg ‘reverse circulation drilling was used to obtain 1
m samples from which 3 kg was pulverised to produce a 30 g charge
for fire assay’). In other cases more explanation may be required,
such as where there is coarse gold that has inherent sampling
problems. Unusual commodities or mineralisation types (eg
submarine nodules) may warrant disclosure of detailed information.
All diamond drillholes completed by the Company were sampled
by cutting the core longitudinally in half using diamond saws. If
an orientation line was present, then the core was cut to ensure
the orientation line was retained in the tray. Otherwise a cutting
line was generally marked by a geologist, taking account of the
dominant fabric of the rocks. Cross-cut marks were made at
sample limits and half core was returned to the trays for storage.
Half core samples were placed in numbered calico bags and
submitted to the laboratory for analysis. The samples were
typically taken at 1 m intervals except where the samples
crossed lithological boundaries. In this instance, the samples
were terminated at the lithological contact. All samples taken by
the Company were greater than 30 cm in length.
All sampling data was entered onto a tablet computer and
downloaded into the central acQuire database daily.
Historical diamond core was also submitted as half core samples
for analysis and has been sampled using a similar system to that
currently used by the Company.
Historical diamond core sample intervals within the database
range from 0.1 m to 4 m in length.
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Criteria JORC Code explanation Commentary
Reverse circulation (RC) drillholes carried out by the Company
were typically sampled every metre using a riffle or cone splitter
to obtain a ~3 kg sub sample prior to submission to the
laboratory for assaying. The samples were collected in
numbered calico bags and all the sampling information was
entered into a tablet computer and uploaded daily into the
central acQuire database.
Ninety nine percent (99%) of reverse circulation samples are
based on 1 m intervals.
All samples were submitted to Kalassay Laboratory (Kalassay) in
Canning Vale for analysis with some check analysis carried out
at Ultratrace Laboratory in Perth.
The main assaying method employed by the Company is normal
fire assay with a 40 g charge and AAS finish for gold.
Review of historical records indicates that a similar methodology
was used by CRA and Equigold, however, an ICP OES finish on
a 40 g charge was also used during 2008.
Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air
blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple
or standard tube, depth of diamond tails, face-sampling bit or other
type, whether core is oriented and if so, by what method, etc).
5,986 drillholes totaling 183,496 m were used in the preparation
of the resource estimate including:
o 113 diamond drillholes (HQ3 and NQ2 diameter) for
23,085 m.
o 5,371 Reverse Circulation drillholes totaling 136,432 m.
o 502 aircore holes totaling 23,979 (used to inform laterite
MOUNT MAGNET SOUTH NL ASX: MUM
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Criteria JORC Code explanation Commentary
estimate).
Diamond core is not orientated.
Drill sample
recovery
Method of recording and assessing core and chip sample recoveries
and results assessed.
Measures taken to maximise sample recovery and ensure
representative nature of the samples.
Whether a relationship exists between sample recovery and grade
and whether sample bias may have occurred due to preferential
loss/gain of fine/coarse material.
Diamond drill core recovery was generally excellent. Historical
diamond drilling stored onsite shows excellent recovery.
Diamond drilling conducted by the Company during 2011,
recorded average core recovery at over 99%.
Reverse circulation sample recoveries were also good. Sample
weights were monitored at the laboratory with average sample
weights exceeding 2.5 kg.
Logging Whether core and chip samples have been geologically and
geotechnically logged to a level of detail to support appropriate
Mineral Resource estimation, mining studies and metallurgical
studies.
Whether logging is qualitative or quantitative in nature. Core (or
costean, channel, etc) photography.
The total length and percentage of the relevant intersections logged.
Diamond core logging
All geological logging carried out by the Company since 2011
was saved directly into tablet computers using acquire core
logging procedures. The data was then downloaded onto the
main storage facility on the acquire server.
The main steps in the logging sequence were:
o Core was marked in 1 or 2 m intervals and core block
depths were checked.
o Core was geologically logged, over regular 1 or 2 m
intervals, for lithology, alteration, mineralisation and
structure, fracture frequency, orientation and style of
veining.
o Logs were downloaded daily into the main data storage
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Criteria JORC Code explanation Commentary
facility.
o All core trays were individually photographed.
Reverse circulation logging
Reverse circulation drillhole chips were logged directly into the
acQuire database using a tablet for data entry. The data was
then downloaded onto the main storage facility on the acquire
server.
The main steps in the logging sequence were:
o Chips were sieved on regular 1m intervals and put into
labelled chip trays.
o All of the chips were geologically logged.
o Logs were downloaded daily into the main data storage
facility.
o Chips trays for the 2008 to 2012 reverse circulation
drilling programs are stored on site at the KGP.
Sub-sampling
techniques and
sample preparation
If core, whether cut or sawn and whether quarter, half or all core
taken.
If non-core, whether riffled, tube sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature, quality and appropriateness of the
sample preparation technique.
Refer above to sampling techniques.
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Criteria JORC Code explanation Commentary
Quality control procedures adopted for all sub-sampling stages to
maximise representivity of samples.
Measures taken to ensure that the sampling is representative of the in
situ material collected, including for instance results for field
duplicate/second-half sampling.
Whether sample sizes are appropriate to the grain size of the material
being sampled.
Quality of assay
data and
laboratory tests
The nature, quality and appropriateness of the assaying and
laboratory procedures used and whether the technique is considered
partial or total.
For geophysical tools, spectrometers, handheld XRF instruments, etc,
the parameters used in determining the analysis including instrument
make and model, reading times, calibrations factors applied and their
derivation, etc.
Nature of quality control procedures adopted (eg standards, blanks,
duplicates, external laboratory checks) and whether acceptable levels
of accuracy (ie lack of bias) and precision have been established.
Sampling and assaying quality assurance and quality control
(QAQC) procedures were applied routinely by the Company for
all drilling carried out since 2008. They included:
o Submittal of independent certified reference material
(standards) with all sample batches at a ratio of around
1 in 20.
o Submittal of field duplicate samples at a ratio of 1 in 20.
o Submittal of coarse blank material with all sample
dispatches at a ratio of around 1 in 20.
o Periodical re-submission of duplicate pulps to both the
primary and the secondary laboratories.
o Review of internal laboratory quality control standards
o Review of laboratory (analytical) duplicates.
o Sieve testing to check grind size.
o Sample recovery checks.
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Criteria JORC Code explanation Commentary
o Unannounced laboratory inspections.
o The QAQC results indicate acceptable levels of
precision and accuracy.
Verification of
sampling and
assaying
The verification of significant intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data, data entry procedures, data
verification, data storage (physical and electronic) protocols.
Discuss any adjustment to assay data.
In March/April 2011 the Company had their historical data
migrated into an acQuire database. The data collated after April
2011 was processed from source data files into a separate
acQuire database by acQuire Managed Services (QMS). All
historical data has been compiled by the Company Database
Administrator.
The Company conducted an extensive database review,
compilation and validation program of all historical KGP drilling
information in 2011. On completion of this review all data was
migrated across to the acQuire Database Model.
The Company carried out detailed validation of the dataset prior
to running the resource estimation. Snowden carried out an
additional basic statistical and visual validation prior to
estimation. Two drillholes which visually appear erroneous were
excluded from the final dataset.
Given the acceptable results for the QAQC conducted by the
Company and the good correlation between the historical and
Company drilling, the drilling and sampling data is considered
acceptable for resource estimation.
Location of data Accuracy and quality of surveys used to locate drill holes (collar and
down-hole surveys), trenches, mine workings and other locations
Survey control.
MOUNT MAGNET SOUTH NL ASX: MUM
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Criteria JORC Code explanation Commentary
points used in Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic control.
A network of local control stations was established by contract
surveyors. Stations were established in local grid coordinates
and AHD (Australian Height Datum) levels. The stations were
referenced back to National Mapping Grid System MGA
(GDA94) zone 50.
Drillhole collar surveys
Historically, drillhole collars were marked out with tape and
aligned on compass bearings. More recent drilling positioned the
planned drillhole collars using a GPS on the MGA grid.
Final collar positions were typically picked up by contract
surveyors in batches, after drilling was completed.
Downhole surveying
All drillholes carried out by the Company between 2008 and
2011 were routinely surveyed downhole with Eastman single
shot survey cameras, typically at 30 m intervals downhole.
Historically, downhole survey was conducted only on deep
holes. Of the final database used for resource estimation, 92% of
the drillholes are less than 60 m in depth and 75% of those
drillholes greater than 60 m in depth contain downhole surveys.
Holes drilled during the period from July 2011 to August 2012
were also surveyed by gyroscope as a check of the Eastman
downhole survey method. The two methods were compared,
results showed that Eastman surveys for reverse circulation
drillholes gave accurate inclination measurements; however,
MOUNT MAGNET SOUTH NL ASX: MUM
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Criteria JORC Code explanation Commentary
azimuth data was erratic. Eastman surveys for diamond holes
were very accurate and comparable to those obtained using a
gyroscope. Where gyroscope information was obtained, this was
used in preference of Eastman derived survey data.
Topography and depletion surfaces
A digital terrain model (DTM) of the original topographic surface
was created by the Company based on historical and recent
collar and spot survey information.
Historical mining was depleted using a detailed surveyed DTM
describing the base of the previous open pit, together with three
DTMs for depleting the near surface laterite pits. An update of
the DTMs for depletion of the near surface laterite pits was
produced for the December 2012 estimate. These DTMs
reconstructed the laterite pits as defined by recent (October
2012) detailed survey pickup of the crest of the laterite pits,
together with the batter angle and floor surface where
rehabilitation had not taken place. Where rehabilitation back fill
was present, the base of the laterite depletion DTMs was set to
200 mm below the interpreted footwall of the modelled laterite
horizon. In two locations, where post mining the Company
drilling has intersected laterite mineralisation, the depletion
wireframe was elevated to account for the mineralisation that
has been left in the floor within the laterite pits. This remnant
material appears to be associated with production ramps left
MOUNT MAGNET SOUTH NL ASX: MUM
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Criteria JORC Code explanation Commentary
during the mining of the historical pits.
The depletion surfaces were used to code the mined areas from
the in-situ areas of the resource model. As the depletion
surfaces include surface waste landforms and ROM pad areas,
any material lying above the original topography but below the
depletion surfaces was coded separately to distinguish this
waste material. Similarly, the backfilled material that was used to
rehabilitate the laterite pits has been defined as the material
lying above the depletion surface and below the current
topography as defined by the recent topographic survey within
the vicinity of the historical laterite pits.
Data spacing and
distribution
Data spacing for reporting of Exploration Results.
Whether the data spacing and distribution is sufficient to establish the
degree of geological and grade continuity appropriate for the Mineral
Resource and Ore Reserve estimation procedure(s) and
classifications applied.
Whether sample compositing has been applied.
The final dataset used for resource estimation includes grade
control reverse circulation drilling within the mined out pit on a 5
mE by 10 mN spacing. Outside of the grade controlled areas the
drillhole spacing ranges from 25 mE by 25 mN to 50 mE by 50
mN over the majority of the mineralised area.
Samples have been composited to 1 m, which is the dominant
sample length, prior to estimation.
Orientation of data
in relation to
geological
structure
Whether the orientation of sampling achieves unbiased sampling of
possible structures and the extent to which this is known, considering
the deposit type.
If the relationship between the drilling orientation and the orientation
of key mineralised structures is considered to have introduced a
sampling bias, this should be assessed and reported if material.
The drilling data was orientated either to the east or west,
resulting in the majority of data being perpendicular to the strike
of the orebody. The orebody dips steeply to the east.
MOUNT MAGNET SOUTH NL ASX: MUM
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Criteria JORC Code explanation Commentary
Sample security The measures taken to ensure sample security. The Company sampling procedures include delivery to an offsite
laboratory on a regular basis. Each sample batch was
accompanied by a dispatch form recording:
o Job number.
o Number of samples.
o Sample numbers (including standards and duplicates).
o Required analytical methods.
o A job priority rating.
o Instructions for storage of residues.
Audits or reviews The results of any audits or reviews of sampling techniques and data. An internal Company audit was completed for the drilling
completed between 2011 to 2012 and found no material issues.
AMC completed a Technical Due diligence in August 2013 which
found no high risk issues.
Section 2 Reporting of Exploration Results
Criteria JORC Code explanation Commentary
Mineral tenement
and land tenure
status
Type, reference name/number, location and ownership including
agreements or material issues with third parties such as joint
ventures, partnerships, overriding royalties, native title interests,
historical sites, wilderness or national park and environmental
settings.
Mount Magnet South NL (the “Company”) is the current owner
and occupier of the Kirkalocka Gold Project (KGP). The KGP is
located on the Kirkalocka Pastoral Station, approximately 510
kilometres (km) northeast of Perth and approximately 70 km
south of Mount Magnet in the Mid-West Region of Western
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Criteria JORC Code explanation Commentary
The security of the tenure held at the time of reporting along with any
known impediments to obtaining a licence to operate in the area.
Australia (WA). The KGP is located on Mining Leases 59/232,
59/233 and 59/234 (M59/232, M59/233 and M59/234). The KGP
includes Kirkalocka Gold Mine (also known as the Curara Well
Deposit), which is an existing mine site that was operated by
Equigold NL (Equigold) between 2002 and 2008.
Exploration done
by other parties
Acknowledgment and appraisal of exploration by other parties. Drilling has been completed by multiple companies over a period
of 21 years.
CRA Exploration Pty Ltd commenced involvement in the project
in 1989 in joint venture with Austmin Gold NL (subsequently
taken over by Burmine Exploration NL). Burmine subsequently
merged with Sons of Gwalia Limited (SOG), with SOG later
acquiring all of the CRA interests in the project tenements.
CRA completed 63,734 m of drilling up until 1996 including:
o Rotary air blast - 11,088 m
o Aircore - 29,051 m
o Reverse circulation - 2,221 m
o Diamond core - 21,374 m
Sons of Gwalia Limited completed 41,391 m of drilling between
1997-2001 including:
o Rotary air blast - 17,653 m
o Aircore - 14,674 m
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Criteria JORC Code explanation Commentary
o Reverse circulation - 9,064 m
Further surface drilling was carried out by Equigold NL
(Equigold) between 2001 and 2008 during which time Equigold
mined the Curara Well Open Pit and nearby laterite pits. Drilling
during this period included extensive grade control drilling within
the pit area. Equigold completed 31,113.5 m of drilling between
2001-2008 including:
o Rotary air blast - 4,387
o Aircore - 2,935
o Reverse circulation - 19,619 m
o Diamond core - 765.8 m
Geology Deposit type, geological setting and style of mineralisation. Local geology and mineralisation
The mineralisation in the KGP lies within a splay of the Mount
Magnet Shear which runs parallel to the eastern margin of the
Wydgee–Meekatharra Greenstone Belt. The splay hosting the
Curara Well Gold Deposit is a 400 m wide brittle ductile shear
zone localised along the contact between the metabasalt and
tonalite intrusive. The predominant orientation is north-
northwest, defined in part locally by the metabasalt-tonalite
contact and the felsic intrusive orientation.
The regolith zone is comprised of five units. The topmost unit
consists of transported overburden material comprising
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Criteria JORC Code explanation Commentary
quaternary sands, grits, gravel and clay. This unit is of variable
thickness between 0 m and 40 m, with an average thickness of
11 m. The in situ regolith consists of the shallow supergene,
upper saprolite, lower saprolite and saprock units.
The laterite is situated immediately below the transported
overburden and consists of Tertiary age transported ferruginous
nodular gravels to nodular (pisolitic) duricrust of mottled laterite.
The mineralised laterite thickness ranges from 1 m to 4 m thick
and has been defined over a 2 km strike and 0.7 km plan width.
Within the upper portion of the saprolite unit there exists a
distinctive white clay zone which is referred to as the pallid zone.
Recent drilling has proved the continuance of an extensive
supergene zone that occurs typically between 15 m and 20 m
below the laterite horizon within the upper saprolite. The
supergene zone is extensive and has been interpreted over a
north-south strike of 2 km and east-west width of 100 m to 250
m. The supergene zone is best developed above the zones of
continuous high grade primary mineralisation.
The lower saprolite is distinguished from the upper saprolite by
its generally darker appearance, with fresh to altered green and
purple mineral assemblages present within the rock mass,
reflecting a lesser degree of weathering compared to the upper
saprolite.
The transitional zone comprises both lower saprolite and
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Criteria JORC Code explanation Commentary
saprock. In most cases saprolite overlies fresh rock; however, in
some areas a saprock is present. Saprock exhibits some
weathered characteristics while retaining most of the fresh rock
characteristics. Weathering within the saprock is in general
restricted to areas adjacent to fractures and jointing within the
rockmass.
Mineralisation within the primary zone is hosted in tonalite and
amphibolite (after basalt) which follow the local structural trends.
The mineralisation typically forms a series of stacked lenses
striking north-northwest in the immediate vicinity of the existing
Curara Well Open Pit with variable dips ranging from 50° to 70°
to the east. Barren, narrow felsic intrusives run parallel to
stratigraphy and in places cross cut in an east-west orientation.
The tonalite is characterised by coarse feldspar laths in a fine
grained mafic groundmass. Gold is commonly associated with
quartz veining or strong alteration selvedges characterised by
silica, sericite, chlorite with pyrite and minor pyrrhotite proximal
to felsic intrusives. Discrete lenses up to 20 m in width form
predominantly along the tonalite contacts and parallel to the
felsic intrusives that converge to the south. The majority of the
mineralization is concentrated toward this southern “keel”
position and is still open at depth.
The metamorphosed and altered basalt makes up the bulk of the
eastern and southern country rock. Gold mineralisation occurs
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Criteria JORC Code explanation Commentary
with intense biotite, amphibole, quartz and fine disseminated
sulphide (primarily pyrite) alteration. Siliceous selvedges and
increasing gold grades are proximal to the felsic intrusives. Gold
mineralisation follows the general dip of the foliation and is also
present in late stage flat lying narrow cross-cutting quartz veins
dipping at 30° to the east.
Drill hole
Information
A summary of all information material to the understanding of the
exploration results including a tabulation of the following information
for all Material drill holes:
o easting and northing of the drill hole collar;
o elevation or RL (Reduced Level – elevation above sea level in
metres) of the drill hole collar;
o dip and azimuth of the hole;
o down hole length and interception depth; and
o hole length.
If the exclusion of this information is justified on the basis that the
information is not Material and this exclusion does not detract from
the understanding of the report, the Competent Person should clearly
explain why this is the case.
Not applicable as exploration results are not being reported.
Data aggregation
methods
In reporting Exploration Results, weighting averaging techniques,
maximum and/or minimum grade truncations (eg cutting of high
grades) and cut-off grades are usually Material and should be stated.
Not applicable as exploration results are not being reported.
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Criteria JORC Code explanation Commentary
Where aggregate intercepts incorporate short lengths of high grade
results and longer lengths of low grade results, the procedure used
for such aggregation should be stated and some typical examples of
such aggregations should be shown in detail.
The assumptions used for any reporting of metal equivalent values
should be clearly stated.
Relationship
between
mineralisation
widths and
intercept lengths
These relationships are particularly important in the reporting of
Exploration Results.
If the geometry of the mineralisation with respect to the drill hole
angle is known, its nature should be reported.
If it is not known and only the down hole lengths are reported, there
should be a clear statement to this effect (eg ‘down hole length, true
width not known’).
Most drilling is perpendicular to the mineralisation and each
intersection interval is defined by geological domains, thus
reflecting true width of intersections.
Diagrams Appropriate maps and sections (with scales) and tabulations of
intercepts should be included for any significant discovery being
reported These should include, but not be limited to a plan view of
drill hole collar locations and appropriate sectional views.
Refer to main release.
Balanced reporting Where comprehensive reporting of all Exploration Results is not
practicable, representative reporting of both low and high grades
and/or widths should be practiced to avoid misleading reporting of
Exploration Results.
Not applicable as exploration results are not being reported.
Other substantive
exploration data
Other exploration data, if meaningful and material, should be reported
including (but not limited to): geological observations; geophysical
Company has completed a feasibility study that has evaluated
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Criteria JORC Code explanation Commentary
survey results; geochemical survey results; bulk samples – size and
method of treatment; metallurgical test results; bulk density,
groundwater, geotechnical and rock characteristics; potential
deleterious or contaminating substances.
items as detailed in the Ore Reserve section of this table.
Further work The nature and scale of planned further work (eg tests for lateral
extensions or depth extensions or large-scale step-out drilling).
Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling areas,
provided this information is not commercially sensitive.
No exploration work planned at this time however there is the
potential for further mineralisation to be defined with step out
drilling.
Section 3 Estimation and Reporting of Mineral Resources
Criteria JORC Code explanation Commentary
Database integrity Measures taken to ensure that data has not been corrupted by, for
example, transcription or keying errors, between its initial collection
and its use for Mineral Resource estimation purposes.
Data validation procedures used.
In March/April 2011 the Company had their historical data
(before April 2011) migrated into an acQuire database. The data
collated after April 2011 was processed from source data files
into a separate acQuire database by acQuire Managed Services
(QMS). The Company employs a database administrator to
manage the database.
Snowden carried out basic validation checks on the data
supplied by the Company prior to resource estimation. No
significant errors were identified by the validation.
Site visits Comment on any site visits undertaken by the Competent Person and
the outcome of those visits.
Multiple site visits completed by the Company competent person
between 2011 to 2013.
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Criteria JORC Code explanation Commentary
If no site visits have been undertaken indicate why this is the case. Snowden has not carried out a site visit as the Company is
taking responsibility for the database and geological model,
hence a site visit was not warranted.
Geologicalinterpretation
Confidence in (or conversely, the uncertainty of ) the geological
interpretation of the mineral deposit.
Nature of the data used and of any assumptions made.
The effect, if any, of alternative interpretations on Mineral Resource
estimation.
The use of geology in guiding and controlling Mineral Resource
estimation.
The factors affecting continuity both of grade and geology.
Interpretation comprises mineralisation envelopes (wireframes)
for the laterite, supergene and primary mineralisation which have
been built based upon cross, long sectional and plan view
structural domaining, as well as indicator variography and
leapfrog software.
The surface laterite envelope was created in Leapfrog software
using a flat search at a 0.3 g/t Au cut-off. The laterite was
subsequently manually adjusted to remove low grade edges and
incorporate additional hangingwall and footwall samples where
the grade was above cut-off. Single low grade intervals with
above cut-off grades on either side were retained and a
minimum width of 2 m was imposed.
The manual interpretation below the laterite identified potential
supergene style mineralisation both north and south of the
existing pit. A sub-horizontal mineralisation domain persists
between 290 mRL and 305 mRL, typically located above primary
mineralisation. The presence of supergene mineralisation within
the historical pit is consistent with the high grade material that
was encountered by Equigold during production between 2002
and 2003.
Dimensions The extent and variability of the Mineral Resource expressed as The laterites are typically between 1 m to 4 m thick and have
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Criteria JORC Code explanation Commentary
length (along strike or otherwise), plan width, and depth below
surface to the upper and lower limits of the Mineral Resource.
been defined over a 2 km strike and 0.7 km plan width.
The supergene mineralisation ranges up to 20 m in thickness
and has been defined over a 1.5 km strike and 0.2 km plan
width.
The main primary mineralisation (classified portion) extends
around 0.85 km along strike and 0.25 km plan width. The
primary mineralisation extends to a depth of 290 m below
surface, which is 90 m below the existing open pit.
Estimation andmodellingtechniques
The nature and appropriateness of the estimation technique(s)
applied and key assumptions, including treatment of extreme grade
values, domaining, interpolation parameters and maximum distance
of extrapolation from data points. If a computer assisted estimation
method was chosen include a description of computer software and
parameters used.
The availability of check estimates, previous estimates and/or mine
production records and whether the Mineral Resource estimate takes
appropriate account of such data.
The assumptions made regarding recovery of by-products.
Estimation of deleterious elements or other non-grade variables of
economic significance (eg sulphur for acid mine drainage
characterisation).
In the case of block model interpolation, the block size in relation to
the average sample spacing and the search employed.
Grades for gold were estimated using Datamine software.
Estimation was by ordinary block kriging into 10 mE by 10 mN by
2.5 mRL parent cells using 1 m composites, which is the
dominant sample length. Kriging neighbourhood analysis was
carried out to optimise the block size and estimation parameters.
Search ellipses and ranges were based on the continuity seen in
the variograms. With initial search pass ranges equivalent to
around 90% of the variance for the laterite and supergene
domains and around the range of the variogram for the primary
mineralisation domains.
For the northern and central areas of the deposit, the
mineralised lodes were treated as hard boundaries for estimation
except where lodes 10NW1 and 10NW2 merge into 10NNE1.
These two contacts were treated as soft boundaries for
estimation.
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Criteria JORC Code explanation Commentary
Any assumptions behind modelling of selective mining units.
Any assumptions about correlation between variables.
Description of how the geological interpretation was used to control
the resource estimates.
Discussion of basis for using or not using grade cutting or capping.
The process of validation, the checking process used, the comparison
of model data to drill hole data, and use of reconciliation data if
available.
For the southern area, the mineralised domains with similar
orientation and grade tenor were combined for estimation due to
the small quantity of data in the individual lodes. The estimation
domains comprised the combined high grade lodes, the
combined low grade lodes and the combined supergene
domains.
For the northern and central area excluding the supergene,
search ellipses were orientated as per the variograms for each
domain.
For the southern area and the supergene (in all areas), a
dynamic anisotropy approach was used, whereby the true dip
and azimuth of the mineralised lodes was estimated into each
block in the model and the search and variogram orientations
were locally adjusted to reflect the geological orientation. This
method allows the estimate to better reflect the changing
orientation and undulating nature of some of these lodes along
strike.
Blocks were estimated using a minimum of 12 with a maximum
of 32 samples. A maximum of 3 composites was allowed per
drillhole for the primary and supergene domains and 2
composites per drillhole for the laterite. This restriction was set
to prevent over smoothing in the downhole direction and help
retain the grade trends seen in the data. The restriction also
ensures that at least 4 drillholes are used to inform each block
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Criteria JORC Code explanation Commentary
for the primary estimation and 6 for the laterite estimation.
The data distributions are highly skewed and typically have a
high (>1.5) coefficient of variation (CV – ratio of standard
deviation to the mean). As a result, top cuts were applied to
some domains to prevent overestimation and smearing of the
comparatively high values into surrounding blocks. Top cuts
were 40 to 60 g/t Au and impact on less than 1% of the grade
population.
Final grade estimates were validated visually and statistically.
Global mean estimated grades were compared to the input
composite data and sectional grade trend plots were generated.
The model validation indicates that there is a good local
reproduction of the input grades in both the horizontal and
vertical directions.
The grade estimate was reconciled to historical production
information within the historical pit area. Gold ounces reconciled
to within 1%.
The November 2012 resource reported here has resulted in an
increase of around 16 koz compared to the previous, August
2012 Mineral Resource. This increase is mainly a result of the
additional drilling and an improvement in understanding of the
local geological controls on mineralisation which resulted in an
improvement in the geological model.
There are no deleterious elements in the orebody; as tested by
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Criteria JORC Code explanation Commentary
metalliferous testwork programs.
Moisture Whether the tonnages are estimated on a dry basis or with natural
moisture, and the method of determination of the moisture content.
Not applicable to this estimate – only dry mass considered.
Cut-off parameters The basis of the adopted cut-off grade(s) or quality parameters
applied.
Mineralisation defined at a 0.2 to 0.3 g/t Au nominal cut-off
grade. Laterite mineralisation reported above a 0.3 g/t Au cut-off
and primary mineralisation reported above a 0.5 g/t Au.
The grade cut-offs for reporting are based on a combination of
the historical gold recoveries from the KGP CIP/CIL treatment
plant and the assumption the deposits will be mined using open
cut methods.
Mining factors orassumptions
Assumptions made regarding possible mining methods, minimum
mining dimensions and internal (or, if applicable, external) mining
dilution. It is always necessary as part of the process of determining
reasonable prospects for eventual economic extraction to consider
potential mining methods, but the assumptions made regarding
mining methods and parameters when estimating Mineral Resources
may not always be rigorous. Where this is the case, this should be
reported with an explanation of the basis of the mining assumptions
made.
The mineralisation is amenable to open cut mining methodology
subject to gold price.
Metallurgicalfactors orassumptions
The basis for assumptions or predictions regarding metallurgical
amenability. It is always necessary as part of the process of
determining reasonable prospects for eventual economic extraction to
consider potential metallurgical methods, but the assumptions
regarding metallurgical treatment processes and parameters made
Metallurgical testwork results show that the mineralisation is
amendable to processing through the KGP treatment plant.
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Criteria JORC Code explanation Commentary
when reporting Mineral Resources may not always be rigorous.
Where this is the case, this should be reported with an explanation of
the basis of the metallurgical assumptions made.
Environmentalfactors orassumptions
Assumptions made regarding possible waste and process residue
disposal options. It is always necessary as part of the process of
determining reasonable prospects for eventual economic extraction to
consider the potential environmental impacts of the mining and
processing operation. While at this stage the determination of
potential environmental impacts, particularly for a greenfields project,
may not always be well advanced, the status of early consideration of
these potential environmental impacts should be reported. Where
these aspects have not been considered this should be reported with
an explanation of the environmental assumptions made.
Approvals granted for treatment plant and TSF1 construction
and land clearing.
Bulk density Whether assumed or determined. If assumed, the basis for the
assumptions. If determined, the method used, whether wet or dry, the
frequency of the measurements, the nature, size and
representativeness of the samples.
The bulk density for bulk material must have been measured by
methods that adequately account for void spaces (vugs, porosity,
etc), moisture and differences between rock and alteration zones
within the deposit.
Discuss assumptions for bulk density estimates used in the
evaluation process of the different materials.
In situ density ranges from 1.7 t/m3
for oxide to 2.85 t/m3
for
fresh basalt. Bulk density values are based on measurements
carried out by Equigold using diamond drilling samples taken in
1995 and verified by recent downhole gamma gamma density
surveys undertaken by the Company.
Historically, the physical measurements were performed on site
using intervals of core selected by the logging geologists as
representative of a particular lithology or alteration/mineralisation
type. A simple water immersion method referred to as the
MARCEY Technique was used for the measurements, where the
samples are dried and weighed in air then weighed in water.
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Criteria JORC Code explanation Commentary
Comparison of recent gamma logging values and historic
physical measures conducted by Equigold, show that results are
consistent.
Classification The basis for the classification of the Mineral Resources into varying
confidence categories.
Whether appropriate account has been taken of all relevant factors (ie
relative confidence in tonnage/grade estimations, reliability of input
data, confidence in continuity of geology and metal values, quality,
quantity and distribution of the data).
Whether the result appropriately reflects the Competent Person’s
view of the deposit.
The estimate has been classified as an Indicated and Inferred
Mineral Resource based on the integrity of the data, the spatial
continuity of the mineralisation as demonstrated by variography,
and the quality of the estimation.
The classification for the northern and central area is restricted
to within an open pit optimisation shell to a depth of 290 m below
surface
Snowden considers that the classification applied is appropriate
for this style of mineralisation.
Audits or reviews The results of any audits or reviews of Mineral Resource estimates. Resource completed by Snowden and internally peer reviewed.
Independently reviewed by the Company competent person.
AMC completed independent due diligence review 2013.
No material issues were found during these reviews.
Discussion ofrelative accuracy/confidence
Where appropriate a statement of the relative accuracy and
confidence level in the Mineral Resource estimate using an approach
or procedure deemed appropriate by the Competent Person. For
example, the application of statistical or geostatistical procedures to
quantify the relative accuracy of the resource within stated confidence
limits, or, if such an approach is not deemed appropriate, a qualitative
The Company carried out reconciliation showing the December
2012 Resource Estimate is within 1% gold ounces compared to
historical production.
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Criteria JORC Code explanation Commentary
discussion of the factors that could affect the relative accuracy and
confidence of the estimate.
The statement should specify whether it relates to global or local
estimates, and, if local, state the relevant tonnages, which should be
relevant to technical and economic evaluation. Documentation should
include assumptions made and the procedures used.
These statements of relative accuracy and confidence of the estimate
should be compared with production data, where available.
Recommended