The Asia Miner

SEP-OCT 2014

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 34 of 91

September/October 2014 | ASIA Miner | 33 Papua New Guinea AS part of a comprehensive review of the known resource at Maren- go Mining's Yandera Copper Project a new structural model that con- trols mineralization is becoming evident. This new understanding is being used by Marengo to predict where new discoveries and an increase of grade are likely to occur. This new model has been used to great effect and has resulted in new discoveries of potentially higher grade outcrops at Rima Block. Extensive mapping and sampling in this area has revealed potential wide zones of mineralization and alteration. These discoveries have given Marengo's new management team confdence that new and potentially higher grade mineralization can be found and brought into additional resources through implementa- tion of an intensive geologic work program. This work was undertaken as part of a comprehensive review of all aspects of the feasibility work. Marengo committed to a feasibility study for development of Yandera in 2008 based on its published copper resource, the prevailing copper price and state of global f- nancial markets at the time. Since then resource markets have increasingly become more com- petitive, with the copper price falling, funding for exploration and de- velopment decreasing, and capital and operating costs escalating, bringing into question the economic viability of development of the 2012 resource. Marengo initiated optimization programs on the resource by com- pleting a 9-hole drilling program at Dimbi in 2013, targeting higher grade mineralization. Separately, it also looked at different throughput scenarios in a bid to improve the overall economics. During the 2014 June quarter the company's management com- pleted a comprehensive review of all aspects of the feasibility work and concluded that, although progress had been made, and fur- ther optimization of the resource and development options had been considered, the project would not currently yield the eco- nomics desired and, therefore, the feasibility work would not be completed. However, during inspection of the 2012 resource, and further drilling, mapping and survey programs completed since, manage- ment remains positive about the mineral potential. Management recognizes that new and better resources are re- quired to elevate the deposit to one that is economically robust and is implementing a three year plan. This year it is focusing on un- derstanding new ideas and pursuing potential new discoveries. This is being carried out through training, comprehensive data and feld reviews, mapping and sampling of new areas, and potentially explor- atory drilling. Year two will include a larger scale mapping and sampling pro- gram to continue to defne new targets, which will be prioritized and drilled after completion of drilling and feld studies. Year three is intended to be used for proving up new resources and complet- ing an updated resource model, as well as potentially fnalizing an updated feasibility study. Refocus for Marengo at Yandera VERY signifcant high grade weighted average and individual gold intersections have been re- turned from trenching at the Lower Zone of the Swit Kia prospect within Frontier Resources' Bu- lago exploration licence. The assay results come from nine continuous Jackhammer trenches and four outcrop exposures. The trenches and outcrops demonstrate 180 metres strike length of generally very high grade gold with possible extensions to 470 metres and further possible extensions to more than 1200 metres. The Lower Zone assay results included peaks of 0.4 metres grading 293.5 grams/tonne gold and 0.3 metres @ 197.0 grams/tonne. These results were about 30 metres apart on the same structure. There were 11 samples with greater than 25 grams/tonne and 13 additional assays greater than 1.0 grams/tonne. Frontier also received very high grade gold re- sults from the Upper Zone at Swit Kia with 13 samples at greater than 100 grams/tonne. The Upper Zone is about 70 metres north of the Low- er Zone. Frontier says the Lower Zone was not sampled as systematically as the Upper Zone due to the original exploration program planning and subsequent time constraints in the feld. The maximum strike length of both zones will be better defned with additional trenching. Drill testing is strongly warranted and will be under- taken when possible. Frontier has established an exploration target for Swit Kia or 220,000 tonnes minimum to 20 million tonnes maximum. Frontier's chairman and managing director Peter McNeil says, "The exploration program conducted at the Lower Zone, like the Upper Zone, was an outstanding success. The Lower Zone's East Creek strike extension returned 3.0 metres grading 45.17 grams/tonne gold and there were also results such as 0.4 me- tres grading 293.5 grams/tonne about 80 metres west, plus 2.0 metres @ 37.0 grams/ tonne a further 40 metres west, 2.0 metres @ 41.5 grams/tonne a further 15 metres west, and other very good gold results. "The strike length of the Lower Zone will be properly defned with additional trenching in sev- eral maximum strike extension areas, plus infll trenching on known area to better demonstrate the continuity and grade of the high-grade gold mineralization. This work will further demonstrate the excellent overall prospectivity and ultimate resource potential of the Lower Zone. "Drill testing is strongly warranted in both zones. Frontier will attempt to determine the dimensions of the high grade gold mineralization as soon as possible and will accomplish this with one of the company's diamond core drilling rigs that will be shipped from Kimbe to Lae and on to Bulago. The new airstrip being built by the landowners is having necessary drainage ditches dug at the moment." Signifcant Bulago trenching results Frontier's senior feld technician Ronnie Kevin prepar- ing to sample an outcrop at the Swit Kia prospect.

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