Download pdf - Kroonstad Exploration Work Programme - Shango Solutions · discussions with its geological consultant, Shango, to apply for an exploration right over its existing Kroonstad TCP. In

HHK House North Tel: +27 (0)11 411 1191 Block D Fax: +27 (0)86 661 9323 Cnr Ruth Cres. & Ethel Ave. Northcliff Ext. 12 Johannesburg

Email: [email protected] [email protected] Registration No: 2015/366114/07

Directors

N Warburton, T Pieters, S O’Shea, R Monageng, S Mngomezulu, S Lowe

Kroonstad Exploration Work Programme

28 February 2020

mailto:[email protected]

mailto:[email protected]


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28 February 2020

White Rivers Exploration

Tel. 079 881 9323

Mr. Stephen O Shea

Director

E-Mail: [email protected]

Mr. Theo Pieters

Director

E-Mail: [email protected]

Compiled on behalf of Western Allen Ridge Gold Mines:

Ms. Athena Govender

Principal Geologist

Shango Solutions

Tel. (011) 678 6504

E-mail: [email protected]

Reviewed by:

Dr. Jochen Schweitzer Ms Stefanie Weise

Principal Geologist Principal Geologist

Shango Solutions Shango Solutions

Tel. (011) 678 6504 Tel. (011) 678 6504

E-mail: [email protected] E-mail: [email protected]


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Contents

1 Introduction ............................................................................................................ 1

2 Particulars of the Applicant .................................................................................... 1

3 Description of Land or Area ................................................................................... 2

3.1 Copies of Title Deeds ............................................................................................. 3

4 Existing Rights or Permits ...................................................................................... 4

4.1 Period for which the Right is Required ................................................................... 4

5 Proof of Compliance with Terms and Conditions of the TCP .................................. 4

6 Exploration Work Programme Activities ................................................................. 6

6.1 A Description of the Exploration Method or Methods to be Implemented ............... 7

7 Estimated Expenditure ..........................................................................................11

8 Proof of Technical Ability ......................................................................................12

9 Statement of Technical Motivation ........................................................................12

10 Proof of Financial Ability .......................................................................................17

11 Conclusions ..........................................................................................................17

Appendix A: Company Documents .......................................................................................19

Appendix B: Land Description ..............................................................................................20

Appendix C: Property Details................................................................................................21

Appendix D: Technical Ability ...............................................................................................22

Appendix E: Financial Ability ................................................................................................23

Figures

Figure 1: Plan depicting the Kroonstad TCP area. ................................................................. 1

Figure 2: Regulation 2(2) plan of the application area. .......................................................... 2

Figure 3: Geological model of the area including the Kroonstad TCP ...................................12

Figure 4: Block model showing the pre-Karoo geological structure. ......................................13

Figure 5: A geological map showing the distribution of pre-Karoo formations. ......................14

Figure 6: The pre-Karoo geology of WRE’s Kroonstad TCP. ................................................15

Figure 7: Image illustrating the distribution of AGA boreholes...............................................16

Figure 8: Seismic lines (in blue and purple) across the Kroonstad TCP. ...............................17


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Tables

Table 1: List of farms and portions which form part of the exploration area. .......................... 3

Table 2: Prospecting Right held by Western Allen Ridge. ...................................................... 4

Table 3: TCP activities as indicated in the third quarter progress update. .............................. 4

Table 4: TCP reports submitted. ............................................................................................ 5

Table 5: Outline of work to be conducted............................................................................... 6

Table 6: Estimated expenditure. ...........................................................................................11


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1 Introduction

Western Allen Ridge Gold Mines (Pty) Ltd (Western Allen Ridge), a subsidiary of White

Rivers Exploration (WRE), has been granted a Technical Co-operation Permit (TCP) over a

target area 15 km east of Kroonstad in the Free State Province (Figure 1). The TCP was

granted on 9 May 2019 (PASA Reference No: 12/2/167 TCP). During the third quarter of the

TCP activities, Western Allen Ridge has chosen to apply for an exploration right over the

existing area.

Figure 1: Plan depicting the Kroonstad TCP area.

2 Particulars of the Applicant

Name of Company: Western Allen Ridge Gold Mines (Pty) Ltd (Referred to as Western

Allen Ridge)

Registration No: 2015/366114/07

Directors: Neil Warburton, Simangele Esther Annmaria Mngomezulu, Cornelius

Theodorus Pieters, Stephen Timothy O’Shea and Refilwe Tshepo

Monageng


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Physical Address: HHK House North Block D, Cnr Ruth Crescent and Ethel Ave,

Northcliff Ext 12, 2195

Postal Address: P.O. Box 2591, Cresta, 2118, South Africa

Telephone: +27 (0)11 431 1191

Cell: +27 (0)79 881 9323 / (0) 79 881 9321

Fax: +27 (0) 11 431 1193 / 086 661 9323

Email Address: [email protected]

See Appendix A for all legally required documentation as listed in the exploration right check

list.

3 Description of Land or Area

The application area comprises 33 605.29 hectares of land, located in the Free State

Province (Figure 2). Farms and portions included in the application area are tabulated in

Table 1. See Appendix B for full descriptions as per the Form M.

Figure 2: Regulation 2(2) plan of the application area.


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Table 1: List of farms and portions which form part of the exploration area.

3.1 Copies of Title Deeds

All property details and copies of title deeds are included in Appendix C. These details have

been obtained via the WinDeed website (https://www.windeed.co.za/). Some certified copies

of the title deeds could not be obtained as these were not available (indicated as not

scanned on the website) on the WinDeed website. A note has been made where these are

missing, although all property details have been compiled.

https://www.windeed.co.za/


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4 Existing Rights or Permits

Western Allen Ridge holds one existing executed prospecting right with the Department of

Minerals Resources and Energy, as detailed in Table 2.

Table 2: Executed Prospecting Right held by Western Allen Ridge.

5 Period for which the Right is Required

The period for which the right is applied for is 3 Years.

6 Proof of Compliance with Terms and Conditions of the TCP

During the third quarter of the Kroonstad TCP, the board of Western Allen Ridge was in

discussions with its geological consultant, Shango, to apply for an exploration right over its

existing Kroonstad TCP. In the last TCP report update (20 January 2020), Phase 1 as

indicated in Table 3 was completed. Phases 2-5 was indicated to be put on hold and to be

incorporated into the activities list for the exploration work programme. Since then Phases 2-

5 have now formed part of the exploration activities for the exploration work programme.

Table 3: TCP activities as indicated in the third quarter progress update.

Company Right Name PR Number Location Region

Western Allen

Ridge

Ventersburg

Consolidated

(FS) 30/5/1/1/2/10489

PRVentersburg Welkom


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The applicant has submitted three TCP quarterly reports detailed in Table 4.

Table 4: TCP reports submitted.

A Technical Advisory Committee Meeting (TACM) is scheduled bi-annually at PASA’s offices

in Cape Town. A TACM was to be scheduled on 31st of January 2020. Due to Western Allen

Ridge’s decision to apply for an exploration right over the Kroonstad TCP, the board humbly

requested that the TACM meeting be scheduled on dates that will coincide with the

submission of the exploration right application.

Name of Report Reporting Period

Technical Cooperation Report for the First Quarter

Kroonstad TCP, PASA Reference No. 12-2-167May 2019 to July 2019

Technical Cooperation Report for the Second Quarter

Kroonstad TCP, PASA Reference No. 12-2-167August 2019 to October 2019

Technical Cooperation Report for the Third Quarter,

Kroonstad TCP, PASA Reference No. 12-2-167November 2019 to January 2020


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7 Exploration Work Programme Activities

Table 5 indicates the activities to be conducted over the three-year programme. Further detail on activities are supplied in Section 7.1.

Table 5: Outline of work to be conducted.

Phase Duration

Establish MS Access database for capture

Capture and QA/QC wells

Convert data from wells to GIS format

Analyse captured data via the GIS interface by plotting depth, gas shows,

gas value maps etc.

Finalise pre-Karoo topographic map 1.2 Utilise all captured data via cross sections to establish a pre-Karoo map

Import all data into geological model

Run various QA/QC protocols on data in 3D

Update stratigraphic layers with the new data

Create gas contour layer

Compare previous well locations to geological model and determine if wells

could intersect optimal gas exposures

Quotations for well drilling 2.1 1 weekContact companies for quotations on gas drilling and geophysical logging

and evaluate quotes for suitability

1 week Contact landowners in preparation for activities

1 week Establish site security and access

1 week Setup of drill rigs for drilling

Drill 2 wells

Well schematic, drilling and cementation plan and well control plan for

approval by PASA prior to commencing works. Drilling of 2 wells with casing

and cementation according to industry standards. Management of drill

programme

Evaluate drilled wells (logging and sampling)

Measure gas emitting from wells, log (includes downhole surveys,

geophysical logs (density, caliper, gamma ray, packer tests, neutron

porosity, optic and acoustic televiewer) and dip meter data), sample and

photograph core

Rehabilitation of well sites Rehabilitation of the well drill sites

Conduct lab analyses of gas samples 2.3 Analyses for CH4, He, H2, CO2, C2H6, C3H8,C4H10, N2, O2 and CO

Update 3D geological model based on information

from well intersections2 months Add drilling information to geological model

Analysis of data 1 month Construct GIS layers/maps for analysis of data

1 week Contact landowners in preparation for activities


1 week Set up of drill rigs for drilling

Drill 2 wells



and cementation. Management of drill programme.





photograph core


Conduct lab analyses of gas samples 3.3 Analyses for CH4, He, H2, CO2, C2H6, C3H8,C4H10, N2, O2 and CO


from well intersectionsAdd drilling information to geological model

Interpretation and analysis of all data collectedHolistic view of all data collected and Construct GIS layers/maps for analysis

of data

Re-evaluation of exploration programme/Concept

study1 month Perform high-level economic feasibility investigation

3.2

3.4

Year Activity Planned Method

3

3 months

Time Frame

2

8 months

8 months

2 months

6 months

3 months

1.1

1.3

The continuation of successive phases will depend on the successful conclusion of the previous phase

Data capture of additional historical wells to

identify gas bearing horizons

Update GIS database

Update 3D geological model

Re-evaluate gas targets and refine exploration

strategy

1

Site establishment for drilling

Site establishment for drilling 3.1

1.4

2.2

2.4


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7.1 A Description of the Exploration Method or Methods to be Implemented

Phase 1.1: [Year One; Duration: 3 months]

Phase 1.1 includes the establishment of an MS Access database and capturing of additional

borehole information into the database. Borehole data will go through a QA/QC process

before incorporation into GIS format. GIS data will be analysed for various parameters

relating to gas.

Phase 1.2 and Phase 1.3: [Year One; Duration: 6 months]

2D and 3D geological modelling will be conducted during these phases. The 2D geological

modelling includes the contouring various gas parameters and establishing geological cross

sections over the area of interest. These cross sections will be utilised to update and refine

the 3D geological modelling. This includes revising stratigraphic layers and QA/QC of

information. These two phases will run concurrently.

Phase 1.4: [Year One; Duration: 3 months]

During Phase 4 gas contour plans will be constructed utilising the 3D geological model. The

exploration strategy will be refined based on the outcomes of the modelling and targets may

be redefined to intersect optimal gas exposures.

Phase 2.1: [Year Two; Duration: 1 week]

Exploration drilling is planned for year two of this exploration work programme under which

two gas wells are planned. During this phase, further comparable quotations for the entire

drilling process will be obtained and a vendor appointed.

Phase 2.2 and Phase 2.3: [Year Two; Duration: 8 months and 3 weeks]

Phases 2.2 and 2.3 will run concurrently, commencing with site establishment. This will

include contacting landowners for preparation of activities and access to the property (a

number of existing roads and farm tracks already traverse the proposed prospecting site,

and where practical, these roads will be utilised), accompanied by site security and set up of

drill rigs. It is unknown if there are any water boreholes situated on-site and if access and

supply will be granted by landowners. It is anticipated that water brought onto site will be

sourced from the Local Municipality. Water will be trucked from these sources to the

identified drill sites.


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A well schematic, drilling and cementation plan and well control plan will be established for

approval by PASA prior to any activities being undertaken for these phases.

Drilling will be conducted in a competent and environmentally responsible manner including

rehabilitation of the well sites to their original state. Environmental rehabilitation measures

will be included in the contract with the drilling company. Preceding well cementation the

designated agency will be informed to enable an authorised person to be present.

The drilling process will be managed in a competent manner and will involve the following

activities:

1) Call for drill tenders

2) Review the registration, incorporation, employment equity and BEE of the drilling

company

3) Confirm the good financial standing of the drilling company

4) Establishment of confidentiality agreements and management of conflicts of interest

that the drilling company may have

5) Review the drilling company’s approach to Mines, Health and Safety issues

6) Select drilling company

7) Award of the drilling contract

8) Construction of well schematics, drilling and cementation plans and well control plans

for established for approval by PASA.

9) Obtain permission to access the property

10) Forward special instructions to the drilling company regarding power, water,

environmental, safety and security

11) Finalise the initial well positions

12) Plan access roads, crew accommodation and site security

13) Environmental assessment of drill sites

14) Preparation of drilling sites

15) Establish water source for drilling

16) Plan health and safety issues and establish a safe working code specific to the area

17) Monitor and control the drilling process

18) Ensure secure core storage and sampling facilities

19) Set QA/QC sampling procedures in place samples

20) Undertake site rehabilitation and well capping and cementation procedures according

to law

21) Take pictures before and after rehabilitation


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22) Compile preliminary analysis report on the start date of the drilling programme

A strict QA/QC programme will be conducted by the internal Qualified Person

(QP)/Exploration Manager:

1) Quality of drilling programme

2) Survey of well collars

3) Sample management

4) Geophysical logging procedures

5) Chain of custody for transport of samples to laboratory

6) Applicable lab analysis method to be utilised for gas

7) Database management

Accompanying the drilling of the wells will be down hole surveys and geophysical logging

(density, caliper, gamma ray, neutron porosity and optical or acoustic televiewer logs).

Packer tests will be used to identify flow rate per depth interval. Samples will be taken and

sent for lab analyses of CH4, He, H2, CO2, C2H6, C3H8, C4H10, N2, O2 and CO.

Phase 2.4: [Year Two; Duration: 3 months]

All drilling information will be added to the 3D geological model to update information in this

model. Newly drilled data will be analysed for gas potential utilising all parameters collected

in the field.

Phase 3.1: [Year Three; Duration: 1 month]

Should the drilling programme prove to be successful in Year two, an additional two holes

will be considered for Year three. It is imperative to note that the drilling in Year three is

dependent on positive outcomes from the drilling in Year two. If outcomes are positive,

Landowner permissions, site preparation and security access will commence.

Phase 3.2 and Phase 3.3: [Year Three; Duration: 8 months]

Phases 3.2 and 3.3 encompass the drilling and the reader is referred to the detail above for

phases two and three in year two of the work programme.

Phase 3.4: [Year Three; Duration: 3 months]

The drilling data from the previous phases will be utilised to further update and refine the 3D

geological model. All data collected thus far will be analysed as a holistic view and plans will


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be constructed to further refine the gas parameter information collected. The programme will

be re-evaluated at this stage to confirm gas potential.


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8 Estimated Expenditure

Table 6: Estimated expenditure.

Phase Duration

Establish MS Access database for capture

Capture and QA/QC wells

Convert data from wells to GIS format

Analyse captured data via the GIS interface by plotting depth, gas shows,

gas value maps etc.

Finalise pre-Karoo topographic map 1.2 Utilise all captured data via cross sections to establish a pre-Karoo map

Import all data into geological model

Run various QA/QC protocols on data in 3D

Update stratigraphic layers with the new data

Create gas contour layer

Compare previous well locations to geological model and determine if wells

could intersect optimal gas exposures

900 000

Quotations for well drilling 2.1 1 weekContact companies for quotations on gas drilling and geophysical logging

and evaluate quotes for suitability15 000

1 week Contact landowners in preparation for activities 5 000


1 week Setup of drill rigs for drilling

Drill 2 wells



and cementation according to industry standards. Management of drill

programme





photograph core


Conduct lab analyses of gas samples 2.3 Analyses for CH4, He, H2, CO2, C2H6, C3H8,C4H10, N2, O2 and CO 19 000


from well intersections2 months Add drilling information to geological model 66 000

Analysis of data 1 month Construct GIS layers/maps for analysis of data 32 000

11 473 714

1 week Contact landowners in preparation for activities 5 000


1 week Set up of drill rigs for drilling

Drill 2 wells



and cementation. Management of drill programme.





photograph core


Conduct lab analyses of gas samples 3.3 Analyses for CH4, He, H2, CO2, C2H6, C3H8,C4H10, N2, O2 and CO 19 000


from well intersectionsAdd drilling information to geological model 66 000

Interpretation and analysis of all data collectedHolistic view of all data collected and construct GIS layers/maps for analysis

of data120 000

Re-evaluation of exploration programme/Concept

Study1 month Perform high-level economic feasibility investigation 65 000

11 611 714

23 985 428

Subtotal Year 3

Grand Total for 3 Years

The continuation of successive phases will depend on the successful conclusion of the previous phase

Subtotal Year 2

3

Site establishment for drilling 3.1

11 336 714

8 months

2 months

3.2

3.4

Subtotal Year 1

2

Site establishment for drilling

11 336 714

8 months

2.2

2.4

Year Activity PlannedTime Frame

Method Costing (ZAR)

1

Data capture of additional historical wells to

identify gas bearing horizons

3 months 500 000

Update GIS database

6 months

400 000

Update 3D geological model

Re-evaluate gas targets and refine exploration

strategy3 months

1.1

1.3

1.4


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9 Proof of Technical Ability

See Appendix D for letter and curriculum vitae of the company’s technical abilities.

10 Statement of Technical Motivation

Historically, the Kroonstad project area was explored for gold and gas by WRE. WRE held

both a prospecting right and a TCP over the project area. The desktop activities that were

carried out in the Kroonstad area indicated promising gold intersections in the Kimberley

Group of reefs. A few of the boreholes intersected gas as well and it was believed that gas

could form a useful co-product along with gold as it could provide a source of energy for the

mining operations in the area. WRE collected summary borehole logs for many of the

boreholes drilled in the area from the Council for Geoscience (CGS) and used these

boreholes to build a low resolution 3D geological model of the project area (Figure 3 and

Figure 4).

Figure 3: Geological model of the area including the Kroonstad TCP (outlined in red) and the Smaldeel Gasfield outlined in black. The scale is in meters.


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Figure 4: Block model showing the pre-Karoo geological structure of the Kroonstad TCP (outlined in red) and surroundings. The historic Smaldeel Gasfield is outlined in black; scale in metres.

Based on the outcomes of the geological model WRE were of the opinion that the Kroonstad

TCP area held considerable promise as a gasfield because the geological formations that

are present are very similar to those in the Evander Goldfield which has yielded large

quantities of gas since its discovery in 1955. In addition, the TCP area lies very close to the

helium-rich Smaldeel Gasfield (Figure 3 and Figure 4) which is characterised by:

a) pre-Karoo topographic highs

b) pre-Karoo rocks belonging to the West Rand Group

c) close proximity to a fault

d) close proximity to a prominent late – or post-Karoo dyke

Based on the findings from the geological model of the Kroonstad TCP preliminary gas

targets were delineated for future exploration (Figure 5).


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Figure 5: A geological map showing the distribution of pre-Karoo formations in and around the Kroonstad TCP. Recommended gas targets are outlined in purple; scale in metres.

Subsequently, WRE also undertook a provisional evaluation of the Kroonstad prospecting

right project area as a gold exploration target and the results were extremely promising. The

geological analysis also indicated that the area to the south of the boundary in Figure 1 was

also of interest from the point of view of gold exploration and accordingly modified the

boundaries of its gold prospecting area (Figure 6).


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Figure 6: The pre-Karoo geology of WRE’s Kroonstad TCP (in red) and the newly extended gold prospecting right (in black).

Based on the results of the desktop studies WRE approached AngloGold Ashanti (AGA) who

had conducted a significant amount of drilling in the area and obtained detailed borehole

logs and seismic information. The purpose for acquiring this data is to improve the resolution

of the geological model for the purpose of gas exploration.

The borehole logs provided by AGA were copied and provisionally assessed in preparation

for capture into a searchable electronic database. These records contained detailed

geological information and also include the drilling logs in which records of gas intersections

are detailed. A map showing the distribution of these boreholes as well as the tenement

boundaries are shown in Figure 7. The locations of the seismic lines relative to the

Kroonstad prospecting right and TCP are detailed in Figure 8.


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Figure 7: Image illustrating the distribution of AGA boreholes over Western Allen Ridge’s Kroonstad TCP (outlined in red) and WRE's gold prospecting right (outlined in black).


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Figure 8: Seismic lines (in blue and purple) across the Kroonstad TCP (outlined in red) and WRE's gold prospecting right (outlined in black).

The seismic data acquired from AGA was sent to HiSeis in Perth where it was reprocessed.

One of the seismic lines (DE-82) covers the full length of the TCP area (Figure 8).

11 Proof of Financial Ability

All relevant financial statements are provided in Appendix E.

12 Conclusions

Western Allen Ridge Gold Mines (Pty) Ltd (Western Allen Ridge), a subsidiary of White

Rivers Exploration (WRE), has been granted a Technical Co-operation Permit (TCP) over a

target area 15 km east of Kroonstad in the Free State Province. Historically, the Kroonstad

project area was explored for gold and gas by WRE. WRE held both a prospecting right and

a TCP (PASA Reference No: 12/2/167 TCP) over the project area.

Previous desktop activities that were carried out by Shango Solutions (Shango) in the

Kroonstad area indicated promising gold intersections in the Kimberley group of reefs. A few


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of the boreholes intersected gas as well and it was proposed that gas could form a useful co-

product along with gold as it could provide a source of energy for the mining operations in

the area. Summary borehole logs were acquired from the CGS from which a low-resolution

3D geological model of the project area was developed. The outcomes of the desktop

activities and the preliminary geological model provided positive indications that the

Kroonstad TCP is prospective. Based on the findings from the geological model of the

Kroonstad TCP preliminary gas targets were delineated for future exploration (Figure 5).

Based on the results of the desktop studies WRE approached AngloGold Ashanti (AGA) who

had conducted a significant amount of drilling in the area and obtained detailed borehole

logs and seismic information. The purpose for acquiring this data is to improve the resolution

of the geological model for the purpose of gold and gas exploration. The seismic lines have

been re-processed. The borehole logs have been scanned and have been prepared for

capturing. WRE are currently reviewing a proposal to capture the data from which the

geological model and the previously delineated target areas will be re-evaluated on behalf of

Western Allen Ridge (Figure 7).

During the third quarter the board of Western Allen Ridge was in discussions with its

geological consultant, Shango, to apply for an exploration right over its existing Kroonstad

TCP. A cost and time estimate have been submitted to Western Allen Ridge for an

exploration right application. To date, the desktop study activities that have been conducted

thus far have been successfully executed according to the budgetary framework submitted

to PASA (Table 3) for Phase 1. Phases 2-5 have been incorporated into the exploration work

programme.


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Appendix A: Company Documents


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Appendix B: Land Description


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Appendix C: Property Details


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Appendix D: Technical Ability


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Appendix E: Financial Ability