Resources & Reserves Statement
The following statement of Mineral Resources and Ore Reserves conforms to the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (JORC code) 2004 Edition. The Mineral Resources are inclusive of those Mineral Resources modified to produce the Ore Reserves. All tonnages reported are dry metric tonnes. Minor discrepancies may occur due to rounding to appropriate significant figures.
Mineral Resources
Ore Reserves
Competent Persons' Statement – Exploration Results and Mineral Resources The information in this public report that relates to Exploration Results and Mineral Resources is based on, and accurately reflects, information compiled by Mr Rodney Fraser for the Kangaroo Flat Mine and Mr Raul Hollinger for the Henty Gold Mine. Mr Fraser is a Member of the Australian Institute of Geoscientists. Mr Hollinger is a Member of both the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Both Mr Hollinger and Mr Fraser are full time employees of the Company and have more than five years experience in the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Both Mr Fraser and Mr Hollinger have given prior written consent to the inclusion in this report of the matters based on their respective information in the form and context in which it appears.
Competent Persons' Statement – Ore Reserves The information in this public report that relates to Ore Reserves is based on, and accurately reflects, information compiled by Mr Rob McLean for the Kangaroo Flat Mine and Mr Matt Daly for the Henty Gold Mine. Both Mr McLean and Mr Daly are Members of the Australasian Institute of Mining and Metallurgy. Both Mr McLean and Mr Daly are full time employees of the Company and have more than five years experience in the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr McLean and Mr Daly have given prior written consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.
Notes
Mineral Resources
1. Kangaroo Flat Mine
During late 2008 and early 2009 the Company conducted a trial mining program of the Gill reef which generated data that could be reconciled with grade estimates using varying techniques. This was done to determine the suitability of various techniques in a coarse gold deposit.
There are four techniques used for Mineral Resource estimation at the Kangaroo Flat Mine. The preferred method is Inverse Distance which requires a detailed level of drilling as well as reasonable geological continuity. The polygonal or nearest neighbour method is used for reefs that have less obvious grade continuity. This may be the result of the sample density or due to the type of reef. This method involves assigning a “score” to each drill intercept and is based on the physical features observed in drill core. The historic and recent mining method is used in areas where there is insufficient data for a block model, however there is sufficient information available from nearby development. The details for these methods are described below.
(i) Inverse distance weighted.
The inverse distance weighted estimation technique used either a half or one metre composite assay data coded by reef wireframes (known as domains). The estimation process was constrained to populate blocks, within a block model, using composite data from the same domain. A distance power of 0 was used, negating the effect of the sample distance. A top cut of 150 g/t gold of raw assay grades was determined by statistical analysis of assay data and is represented by a significant inflection on a cumulative grade plot. The orebody is modelled by geological interpretation and all assays and blocks within the reef geometry were utilized and hence a cut-off value was not applied.
(ii) Polygonal Method using "scorecard" grade estimates
A polygonal grade estimation approach was used with individual wireframes created around each drill hole domain in the resource wireframe. The blocks centred within a particular drill hole domain are attributed the scorecard visual, assay and combined scores from the drill hole intercept. The block model treats the scorecard scores as pseudo-assays to estimate the tonnes and grade of the reef. A range of plus and minus 2 g/t gold is then applied to indicate the uncertainty of the grade.
(iii) Nearest Neighbour Method using “scorecard” grade estimates
A nearest neighbour grade estimation was made using the intercept scorecard data (visual, assay and total scores). These values were then composited to one metre intervals. Composited data resulted in a more representative estimate, especially for holes drilled at high angles to mineralisation. The block closest to the composited data was populated with that value. A range of plus and minus 2 g/t gold is then applied to indicate the uncertainty of the grade.
The key geological features that are identified visually and contribute to the scorecard method are:
- Quartz abundance - Quartz is the sole host of the gold, therefore the more quartz there is in an intercept the greater the chance of there being gold in that intercept.
- Quartz texture - A quartz intercept with a large number of fluid flow phases (called stylolites or laminations) will have a greater chance of containing gold-bearing phases than plain white featureless quartz.
- Gold abundance – The gold in Bendigo generally occurs as large (>1 mm) nuggets which are visible when intersected in drill core. Hence, the relative abundance and size of visible gold particles in an intercept will have a significant bearing on the estimated grade of the reef.
- Sulphide abundance – A number of other minerals were typically deposited at the same time as the gold. These minerals comprise arsenopyrite, sphalerite and galena. The presence of these are very closely associated with gold and indicate strong gold mineralisation
The assays are also evaluated and the intersections are assigned a score. These are combined with the visual score to produce a final score, which is correlated with arbitrary gold grade ranges based on mining experience.
(iv) Historic and recent mining and production data
This method has been applied where the geological continuity of the reef has been proven by mine development. The grade continuity of the reef has been inferred by use of production data of mined areas contiguous with the current resource. A range of plus and minus 2 g/t gold is then applied to indicate the uncertainty of the grade.
2. Henty Gold Mine
Estimation of Mineral Resources at the Henty Mine utilises diamond drill assays from within mineralised zones. All samples are composited to 1 metre intervals within the geological boundaries, with top cuts applied to all datasets. Mineral Resource grade estimates were derived by ordinary kriging. A bulk density of 2.8 t/m3 has been applied.
Ore Reserves
Probable Ore Reserves have been estimated by creating planned practical mining shapes appropriate for the Indicated Resources. The design of these shapes is based on guidelines for minimum mining widths which vary according to the width of the mineralised zone and the planned mining method. The recoverable Mineral Resources and planned dilution within each mining shape provides the tonnage and grade estimate for that shape. Factors are also applied for each mining method with respect to external dilution. This dilution is incorporated into the tonnage and grade estimate. Economic criteria including a gold price of A$1250 per ounce and current site unit costs for mining, processing and administration, adjusted for specific conditions, are applied to each diluted Mineral Resource to test its viability prior to inclusion within the Ore Reserve estimate.
