Maiden JORC Gold Resource at HGZ Project
Maiden JORC Gold Resource at HGZ Project
Sydney, Nov 14, 2016 AEST (ABN Newswire) - Crater Gold Mining Limited (ASX:CGN) (or the Company) is pleased to announce a maiden inferred resource estimate reported in accordance with JORC guidelines for its HGZ gold mining project, part of the Crater Mountain Project in Papua New Guinea (PNG) of 44,500 tonnes at 11.9 g/t for 17,100 ounces of gold (cut- off grade of 5 g/t Au).

Highlights:

- High grade JORC gold resource

- Potential to increase gold resource substantially

- 3 major gold veins identified contain the majority of the gold

- Drilling programme to target extensions of identified high grade veins

With the project already being in production and having gold processing facilities on site, the maiden resource paves the way for increased production with minimal additional capital expenditure or development time.

The initial Inferred Resource at HGZ comprises:

Resource Category     Tonnes  Grade(Au g/t) Gold Oz 
Inferred - cut-off 
of 5g/t au             44,500    11.9        17,100 

Within this resource 
at a higher cut-off of
 > 7.5g/t Au           23,500     17.2       13,000 

As part of the resource definition, mapping of the HGZ showed three distinct major high grade gold veins Figure 1. The three veins are closely linked and are estimated to carry 11,800 ounces of gold. The Company will now refine the mining method for maximum gold extraction from the higher cut-off grade of 7.5g/t Au implementing a revised, more focussed mining plan.

This will allow more efficient, targeted gold production The mining plan will be implemented, with the development of the 1930 Level via a new adit which is currently being established.

CGN's Technical Director, Richard Johnson commented:

"This maiden resource marks a significant milestone for the Company, confirming the potential for profitable gold mining from the HGZ project. The report also provides us with more detail of the high grade veins enabling us to target more selective mining of the 3 main high grade veins. going forward. Whilst the initial JORC resource may seem modest, the gold is accessible and all infrastructure is in place, allowing the Company to move quickly to mining of the 3 veins as well as other cross cutting structures.'

The maiden resource estimate only considers the HGZ as identified to date. Development of the 1930 Level will pass through approximately 100m of previously unexplored ground adjacent to the high-grade zone. This area is considered prospective for finding additional gold bearing structures.

The potential to increase the resource is also considered substantial given that drilling to date has mostly been confined to a maximum depth of 75m from surface (Figure 2 in link below). However there is also evidence from drilling that gold is encountered at least to a depth of 128m from surface (NEV022) The Company plans to commence in-fill drilling from the 1930 level which is currently under development as recommended.

The resource estimate was completed by Ian Taylor, (AusIMM(CP)) of Mining Associates.

The Nevera Prospect was visited by Mr Ian Taylor during the period 26th to 30th September 2016. In the course of the site visit, Mr Taylor viewed mineralised drill core and examined the drill core, processing and storage facilities. He also toured the underground workings, inspecting geology in the backs and walls of underground drives.

From this, he provided a report including the resources estimate, mapping details of high grade veins and recommendations.

Recommendations

Mr Taylor states in his report to the Company that there is an opportunity to expand the resource along strike and laterally with further drilling and mapping, and also to improve the confidence of the mineral resources internally by infill drilling and development. Lateral drilling to extend resources should be targeted based on existing intersections and understanding of cross structures and the steeply plunging shoots from the newly developed working pad at the 1930 level. Infill drilling should confirm the strike continuity of vein systems particularly following up intersections identified in the deep drill hole NEV022. Infill drilling and further channel sampling is required to increase level of the resource categories.

An opportunity exists for deeper drilling targeting the high grade shoots during development of the 1930 m RL adit. A drill cuddy could be cut at 9280980 mN and 287990mE (1934 mRL) to provide a suitable platform for 4 to 8 holes (Table 1 & Figure 3 in link below) targeting the extensions of identified high grade shoots, particularly veins N1 and L1.

HGZ independent technical review.

Previously, following a site visit in mid-September 2013 by Mining Associates (MA) principal Mr Andrew Vigar, concluded that the target for the HGZ project based on selective underground mining may be stated as:

HGZ Target - 50 to 250 kt @ 13 to 30 g/t Au for 60 to 100k Oz of contained Au

MA stated "It is likely that similar independent high grade gold deposits may be repeated at several places as splays off key structures over a potential area of at least 1400m by 700m." MA did caution that the potential quantity and grade was conceptual in nature. MA was commissioned by the Company to delineate a target for the HGZ area In its report, MA stated that the HGZ Target was defined by a 100m radius circle centred on the area of artisanal workings. (Figure 2 in link below)

Mixing Zone Project

While the current focus remains on the HGZ mine, there remains potential to increase the resource of 24Mt at 1.0 g/t Au for 790,000 ounces (which includes 9.4Mt at 1.46 g/t using a 1.0 g/t Au cut-off for 440,000 ozs) at the nearby Mixing Zone (MZ) Project at Crater Mountain (refer ASX Release of 24 November 2011: "Crater Mt - Initial Resource Estimate". This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. The Company is not aware of any new information or data that materially affects the information contained in that ASX release. All material assumptions and technical parameters underpinning the resource estimate continue to apply and have not materially changed).

The MZ project lies entirely within the Company's ML 510. This offers scope for fast tracking the development of the MZ project.

Crater Mountain is located 50 km southwest of Goroka in the Eastern Highlands Province of PNG. Formerly a tier-1 BHP asset, there has been in excess of 14,500 metres of diamond drilling to date, the majority focussed on the Nevera prospect, which hosts the HGZ mine.

To view tables and figures, please visit:
http://abnnewswire.net/lnk/0VRWB2B4


About Crater Gold Mining

Crater Gold Mining Limited (ASX:CGN) is engaged in the exploration, evaluation and exploitation of gold and other base metal projects. The Company's segments include Croydon, Fergusson Island and Crater Mountain. The Croydon project consists of two sub-projects in far North West Queensland, the Croydon Polymetallic Project and the Croydon Gold Project. The Fergusson Island project consists of two gold exploration projects at Wapolu and Gameta on Fergusson Island, in Milne Bay province, Papua New Guinea. The Gameta Deposit lies within exploration license (EL) 1972. It is located on the northeast coast of Fergusson Island. The Wapolu Deposit lies within EL 2180. The Crater Mountain is an exploration and production project located in the Papua New Guinea Highlands approximately 50 kilometers southwest of Goroka. The project consists of three contiguous ELs, straddling the border between the Chimbu and Eastern Highland Provinces.

 


Contact

Russ Parker
Managing Director

Richard Johnson
Technical Director

Email: info@cratergold.com.au



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