The Asia Miner

OCT-DEC 2015

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

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Page 31 of 71

30 | ASIA Miner | October-December 2015 Indonesia TESTS have shown that waste rock from Augur Resources' pro- posed Randu Kuning mine at Wonogiri Gold Project in Central Java is highly suitable for a variety of stone aggregate uses. A preliminary market assessment shows that this rock could be sold into the re- gional aggregate market, turning waste into an asset. General ASTM standard rock quality tests were completed at PT Ge- oservices laboratory in Bekasi, West Java, on four bulk rock samples and three sub samples made from two waste rock composite samples collected from drill core within the conceptual open pit. Results indicate that the waste rock has the properties required to be highly suitable for a variety of aggregate uses including concrete. Specifc concrete design test work has not been completed as this is best done by the individual producers. The regional market study provided important information about cur- rent aggregate use within a 100km radius of the Wonogiri property. A total of 60 users and suppliers were visited during the survey and infor- mation compiled. The results suggest that aggregate production from a modest 150 tonnes/hour crusher could be absorbed into the regional market for a variety of uses without price disruption. It is also clear from the market study and related discussions with industry consultants that there is a strong demand for high quality aggregate throughout Java to supply ongoing and planned infra- structure projects as part of an extensive transportation upgrade initiative by the Indonesian Government. Augur is evaluating several aggregate production scenarios in- cluding initial production from standalone quarries outside the con- ceptual Randu Kuning open pit. This could provide a low capital cost opportunity to get early cashfow with which to advance devel- opment of Randu Kuning mine. Meanwhile, extension of the Wonogiri IUP exploration licence for two years ending January 2017 will allow for remaining fea- sibility work and environmental permitting to be completed at Randu Kuning without the associated added costs of having a Production IUP. Ongoing metallurgical test work by Augur on whole bulk grind samples of Randu Kuning ore composites has returned 54.3% re- covery of gold by gravity and 86.6% gold, 70.7% silver and 87.7% copper recovery by gravity plus fotation of gravity tailings. The test work also confrmed that tailings material will be non-acid forming and will be a net acid consumer, which indicates there will be no acid mine drainage concern for tailings. ONGOING drilling by Kingsrose Mining of Talang Santo deposit at Way Linggo Gold-Silver Project has resulted in a 27% increase in contained gold over the 2012 resource estimate. There is also signifcant potential for additional grade upside with further drilling and mine development as the ore body remains open at depth and along strike. As at June 30 there was a total resource of 1.4 million tonnes @ 8 grams/tonne gold and 22 grams/tonne silver for 360,000 ounces of gold and 1.012 million ounces of silver at the Talang Santo deposit. This represents an additional 77,000 ounces of gold over the 2012 estimate after allowing for mining depletion. Kingsrose says there is an opportunity to upgrade the inferred re- source of 739,000 tonnes @ 5.23 grams/tonne gold through further diamond drilling from the 5 Level. The total resource for Way Linggo project now totals 1.9 million tonnes @ 8.9 grams/tonne gold and 52 grams/tonne silver for 546,000 ounc- es of gold and 3.168 million ounces of silver. The resource upgrade represents the frst signifcant update to the resource since Talang Santo production began in July 2014. The pre-production resource was based on 83 diamond drill holes, where- as the updated resource adds another 39 diamond drill holes and more than 3200 development face samples to the data package. The most signifcant variance between the 2012 and 2015 resource is the signifcant uplift in grade and subsequent contained ounces. While components of this are increased data density and better defni- tion of higher-grade extensions to the mineralized zone via further drill- ing, the key driver is the ability to more completely sample gold-bearing clay during underground development. This clay is partially washed out during diamond drilling by drilling fuids and consequently areas that are signifcantly or totally informed by diamond drilling have a tendency to under-report contained gold within the system. The upgrade is well supported by mill head grade and gold produc- tion at Talang Santo, and is similar to the uplift seen during production at Way Linggo mine. Kingsrose managing director Scott Huffadine says, "This resource upgrade clearly demonstrates the increasing size and scale of Talang Santo's resource base. The fact that a large proportion remains in the inferred category bodes well for the work we have scheduled to infll and upgrade this category. This work will also support extension of the mine plan below the 6 Level. Importantly, the deepest intersection still shows strong structure and mineralization 150 metres below the 6 Level." Waste rock could become asset Operations at Talang Santo mine, which is part of the Way Linggo project in South Sumatra. Increase in Talang Santo resource

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