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 35 of 71

34 | ASIA Miner | October-December 2015 Philippines SOLID progress is being made with the ramp-up of commercial gold production from Red 5 Limited's Siana Gold Project in the Phil- ippines. During July there were 4916 ounces of gold recovered from the processing of 64,567 tonnes of ore, a performance that refects an increase in mine grade from the bottom of the open pit. The July production compared with production of 11,007 ounces for the June 2015 quarter and 23,645 ounces for the fnancial year, which refected production only for the second half after operations restarted in January 2015. Reconciliations of ore tonnes and grade continue to exceed ex- pectations against the block model which is considered to be a positive indication for the grade profle of the open pit over the next 18 months. This strong production effort was achieved despite the material movement in the east wall of the open pit in early July. Red 5 has maintained its production guidance for the September quarter of 11,000-13,000 ounces and approximately 40,000 ounces for the 2016 fnancial year. In a company statement in late August, Red 5 said that a total of 32,839 tonnes @ 2.61 grams/tonne of ore and 155,922 bank cubic metres (BCM) of waste was moved ex-pit during the month of July. An additional 104,279 BCM of waste material, mainly relating to the east perimeter drain, was also moved during the month. Ore stockpiles on hand at the end of July 2015 totalled about 52,000 tonnes, compared with about 87,000 tonnes at the end of the June quarter. Reds 5 said excellent progress had been made with the removal of sloughed material at the eastern pit wall and re-siting of the perimeter ring drain on the eastern side of the open pit was also advancing well. The Siana processing plant continues to perform strongly with a total of 64,567 tonnes of ore processed for the month of July while good progress is being made with construction of the stage 2 em- bankment lifts for the high density polyethylene lined Tailing Storage Facility (TSF5) together with TSF3. Mining activity at Siana has been focused on open pit mining of the Stage III pit design and associated remediation of the eastern wall, the east perimeter ring drain, Stage II of the open pit design as the immediate source of ore, and Stage IV as resources allow. RED Mountain Mining has received exceptional surface gold results from sampling of proposed extensions of the South West Breccia (SWB) Main Lode and Hangingwall Lode on its Lobo Prospect at the Batangas Gold Project in southern Luzon, the Philippines. The rock-chip sampling results include 90.4 grams/tonne, 23.1 grams/ tonne and 17.9 grams/tonne gold. The results have extended the SWB Lode drilling targets. The majority of the results are from sampling surface outcrops and semi-residual boulders that occur along southwest strike pro- jections of the SWB Hangingwall Lode and Main Lode and indicate a potential link with the Japanese Tunnel zone, 140 metres south- west of SWB. In addition, a single sample from an outcropping lode northwest and potentially parallel to the Limestone and new Tama- rind targets, 500 metres southwest of SWB, produced a very high grade result of 31.7 grams/tonne. Red Mountain said trenching to bedrock would be carried out to determine the width and average grade of these new occurrences before drilling to potentially defne additional gold resources. The objective of the current program is to locate all near-surface, high-grade zones at SWB to allow drilling and a new resource up- date before fnalizing the defnitive feasibility study. SWB already hosts a high-grade resource of 221,000 tonnes at 6.3 grams/tonne gold. Red Mountain's managing director Jon Dugdale says, "We're ob- viously encouraged by these high grade gold numbers that come at a strategic time for us as we plan our next drilling campaign. We are also looking forward to drilling the new Tamarind target which offers potential for a new SWB-sized system based on the size of the soil anomaly in that area." The new Tamarind gold and silver target is up-slope, and in the footwall of the Limestone target. Red Mountain believes the new anomaly could be as big as the SWB anomaly and says it is pro- jected to continue under the limestone cover. Jon Dugdale says, "The Batangas/Lobo project continues to offer up exciting high-grade targets, and Tamarind is no exception. "It is associated with a multi-element soil anomaly and we only just detected it on the edge of younger limestone cover. "The possibility that Tamarind is the main SWB lode, in the footwall of previous exceptionally high grades, only adds to the potential. Drilling has been planned to test this exciting new target as soon as possible." New interpretations suggest Limestone is a hangingwall lode, possibly a down-faulted wedge, displaced from the main or footwall lode by a normal fault. Potential to extend SWB resource Mining activities at the western wall cut-back of Red 5's Siana Gold Project open pit. Solid progress with Siana ramp-up

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