TIDMTSG
RNS Number : 5970P
Trans-Siberian Gold PLC
30 May 2018
Trans-Siberian Gold plc
("TSG" or the "Company")
Updated Mineral Resource
Trans-Siberian Gold plc (TSG.LN) announces an update of the
Mineral Resource estimate for the Asacha deposit in Kamchatka,
Russia.
The updated Mineral Resource estimate was conducted by Seequent
(formerly AGL) and classified according to the guidelines of the
JORC Code (2012).
Mineral Resource Summary
The Mineral Resource estimate for Asacha as of 31 December 2017
is shown in the following table:
Classification Zone '000 Au Ag Au Ag
tonnes (g/t) (g/t) ('000oz) ('000oz)
---------------- ------ -------- ------- ------- ---------- ----------
Measured Main 172 15 29 85 162
Indicated Main 435 21 67 299 933
Indicated East 3 56 30 6 3
Total M&I 611 20 56 391 1,098
Inferred Main 78 14 33 35 82
Inferred East 269 26 53 224 458
Total Inferred 345 23 48 260 540
------------------------ -------- ------- ------- ---------- ----------
Notes:
1. Resources are reported above 4g/t cut-off grade
2. Resources are reported exclusive of mining depletion, having
allowed for mining dilution to 31 Dec 2017.
3. Tonnage and grades have been rounded
The resource at Asacha occurs in two zones: the Main zone
(currently being mined) and East zone (not yet mined). The Main
zone comprises six defined veins, with the bulk of the resource
contained in two of these, QV1 and QV2, while the East zone is
comprised of three narrow vein structures.
The purpose of these annual updates is to incorporate new data
available from mining development, exploration drilling and to
account for mining depletion.
2017 Exploration
In 2017 the Company's continuing exploration programme included
underground channel sampling as well as diamond hole drilling. The
main areas of focus were:
-- Western targets - to test the potential to the west of the Main Zone
-- QV5 - infill drilling to a consistent 50m spacing along strike
-- Technical holes to determine contact of the overburden and host rock
-- New Exploration Target, QV18, some 450m east of the Main Zone
Figure1. Collar plan of drill holes
http://www.rns-pdf.londonstockexchange.com/rns/5970P_1-2018-5-29.pdf
Year-on-Year Comparison
The following table illustrates the changes between the Mineral
Resource estimate as of 31 December 2016 and the updated Mineral
Resource estimate as of 31 December 2017:
Description Au Ag
('000oz) ('000oz)
---------------------------------------- ---------- ----------
Resource Estimate as at 31 December
2016 693 1,760
Mining depletion -32 -56
Re-estimation of QV5 from new drilling
data (inferred) -4 -9
Difference due to model geometry
and grade estimation changes for
new data -7 -57
Resource Estimate as at 31 December
2017 651 1,638
---------------------------------------- ---------- ----------
A copy of the updated Mineral Resource estimate is available on
the Company's website at: http://www.trans-siberiangold.com
Competent Person Conclusion
The Competent Person, Ms. Carrie Nicholls, states:
"Based on the presence of the operating mine and mill, existing
mine economics, the potential for incremental development access to
deeper and more distal parts of the ore body, and the potential for
further exploration success, it is considered that all the vein
resources defined at Asacha have a reasonable prospect of eventual
economic extraction."
Dmitry Khilov, CEO of TSG, commented:
"The results of the annual review of our mineral resources show
no material changes and confirm high grades within the in-situ
resources. Adjustments to our resources due to mining depletion
remained the same year-on-year. Our continuing programme of work
indicates that there remains notable potential for the life of the
Asacha deposit."
Contacts: TSG
+44 (0) 7799
Stewart Dickson 694195
+44 (0) 207
Cantor Fitzgerald Europe 894 7000
David Porter
Competent Person
The updated Mineral Resource estimate was prepared by Ms. Carrie
Nicholls (Senior Evaluation Geologist, Seequent).
The information in this release that relates to the updated
Mineral Resource estimate is based on, and fairly represents,
information, which has been compiled by Ms. Nicholls.
Ms. Nicholls is a geologist with more than 15 years of
experience in geo-statistical analysis, geological modelling and
resource estimation. She has extensive experience in open pit gold
mining operations in Africa and Venezuela and has undertaken
geo-statistical and geological modelling work for a variety of
deposits including gold, copper and niobium. She holds a B.Sc.
(hons) degree in geology from Bristol University, UK and a M.Sc. in
Mineral Resources from the University of Wales, Cardiff, UK. She is
a member of the AusIMM and Geological Society of London.
Ms. Nicholls has sufficient experience relevant to the styles of
mineralisation and type of deposit under consideration and to the
activity that is being undertaken to qualify as a Competent Person,
as defined in the 2012 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Ms. Nicholls is a full time employee of Seequent and has
consented to the inclusion of the matters in this announcement
based on the information in the form and context in which it
appears.
About TSG
TSG is focused on low cost, high grade mining operations and
stable gold production from its 100% owned Asacha Gold Mine in Far
East Russia.
Additional information is available from the Company's website:
www.trans-siberiangold.com
Market Abuse Disclosure
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the
publication of this announcement via Regulatory Information Service
('RIS'), this inside information is now considered to be in the
public domain.
Technical Glossary
"cut-off grade" the lowest grade, or quality,
of mineralised material that
qualifies as economically mineable
and available in a given deposit.
May be defined on the basis
of economic evaluation, or on
physical or chemical attributes
that define an acceptable product
specification.
"g/t" grams per tonne
"Indicated a part of a Mineral Resource
mineral resource" for which tonnage, densities,
shape, physical characteristics,
grade and mineral content can
be estimated with a reasonable
level of confidence. It is based
on exploration, sampling and
testing information gathered
through appropriate techniques
from locations such as outcrops,
trenches, pits, workings and
drill holes. The locations are
too widely or inappropriately
spaced to confirm geological
and/or grade continuity but
are spaced closely enough for
continuity to be assumed
"Inferred mineral a part of a Mineral Resource
resource" for which tonnage, grade and
mineral content can be estimated
with a low level of confidence.
It is inferred from geological
evidence and assumed but not
verified geological and/or grade
continuity. It is based on information
gathered through appropriate
techniques from locations such
as outcrops, trenches, pits,
workings and drill holes which
may be limited or of uncertain
quality and reliability.
"JORC Code" the code for reporting of the
Australasian Joint Ore Reserves
Committee, which is sponsored
by the Australian mining industry
and its professional organisations.
The code is widely accepted
as a standard for professional
reporting purposes for reporting
of mineral resources and ore
reserves.
"Measured mineral A part of a Mineral Resource
resource" for which quantity, grade (or
quality), densities, shape,
and physical characteristics
are estimated with confidence
sufficient to allow the application
of Modifying Factors to support
detailed mine planning and evaluation
of the economic viability of
the deposit.
"Mineral Resource" a concentration or occurrence
of material of intrinsic economic
interest in or on the Earth's
crust in such form, quality
and quantity that there are
reasonable prospects for eventual
economic extraction. The location,
quantity, grade, geological
characteristics and continuity
of a Mineral Resource are known,
estimated or interpreted from
specific geological evidence
and knowledge. Mineral Resources
are sub-divided, in order of
increasing geological confidence,
into Inferred, Indicated and
Measured categories.
"Mineralisation" the process or processes by
which a mineral is introduced
into a rock, resulting in a
valuable or potentially valuable
deposit. It is a general term,
incorporating various types;
e.g., fissure filling, impregnation,
and replacement.
Appendix: JORC Code (2012 Edition) - Table 1
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria Commentary
Sampling
techniques * The Asacha mineral resource estimate is based on
diamond core drill sampling, as well as surface
channel sampling and underground face samples.
* Diamond drill core sampling has been carried out by
three different companies - CKGE in 1986-1990, TVX in
1994-1997, and TSG in 2004-2005 and again in 2012.
All core was sampled to geological boundaries around
logged vein intercepts, and used a nominal 1m sample
interval outside of this. CKGE analysed full core
samples, while TVX and TSG submitted half core
samples for analysis. Since 2012 TSG reverted to
whole core sample analysis as it was found that the
sawing process was not always accurate.
* Surface channel samples were collected by CKGE
between 1986 and 1990. Trenches were excavated down
to bedrock along the length of the vein exposure, and
samples collected by rock-chipping along lines
perpendicular to the vein. Sample intervals honour
vein boundaries or are of nominal 1m length. Lines
average 3m apart. The steps taken to ensure
representivity of the sample along the sampled lines
is not known.
* Underground samples are collected from development
drives, raises and walls by manual chipping along
lines. It is reported that earlier samples were
collected from a channel of nominal 5cm depth and
10cm width. However, the underground sampling
observed by Seequent was typical of most underground
sampling and involved collection by chipping along a
marked line, with attention paid to ensuring that the
volume collected is even along the axis of sampling
to minimise bias. Sampling is to geological
boundaries.
Drilling
techniques * All drill sampling is by diamond coring.
* Early diamond drill core sampling (1986-1990) by CKGE
used conventional (non-wireline) single tube coring
equipment. Core diameter ranged from 29 to 56mm.
After logging full core samples were submitted for
analysis. No photographs were taken.
* Diamond drilling between 1994 and 1997 by TVX used
wireline twin tube equipment to retrieve samples of
47.6mm diameter. Core was sampled to vein boundaries
or to 1m intervals. After logging, diamond saw cut
1/2 core samples were submitted for analysis.
* Drilling by TSG in 2004-2005, was done by AtlasCopco
(DIamec-26 rig) and Boart Longyear (LM55 and LF70
rigs). During 2012 and 2016 was done by Boart
Longyear LM75 rig.
* In 2017, the drilling was carried out by contractor
Kolymageo using a Boart Longyear LF90 rig. All
drilling was by wireline, using double tube barrels,
and was of NQ diameter.
* Core is not orientated.
Drill sample
recovery * Recovery information for earlier drill samples was
not available. Drill sample recovery of the 2004-2005
TSG drilling averages 98%.
* Core photos of holes drilled during 2012 from the
eastern zone show that while core is moderately
broken, the recovery is high with no systematic
losses in ore zones apparent. Drill core recovery for
the 2016 drilling campaign averages 99%. The poorest
recoveries within the 2016 dataset (
* The contractor is paid for metres drilled in order to
ensure quality over quantity the contract stipulates
core recovery of not less than 95% within the
mineralised zones and not less than 85% in the host
rock.
* The sample recovery is affected by the type of
structure and alteration of the zone intercepted.
Grades were much lower than expected from the
underground drilling campaign carried out in 2017.
The campaign targeted high grades shoots where the
veins are locally thickened and argillic alteration
is prevalent. It was observed in the core that the
mineralisation had been mostly washed out by the
drilling process therefore from March 2018, the core
diameter will be changed from NQ to HQ to help
alleviate the problem. Increasing the core diameter
would also produce a more representative sample for
the deposit type consisting of high grade narrow
veins.
* The issue of drill sample recovery was given
considerable attention in reports by previous authors,
as it was considered a possible source of bias in
early generation data. This issue remains
unresolvable, but the risk of any gross bias due to
core loss has been diminished significantly by
ongoing mining production and sampling, and is not
considered a source of significant risk to resource
estimates.
Logging
* Geological logging consists primarily of
identification of vein intersections.
* The logging is carried out on 1m intervals on
pre-printed sheets for the hole length of the core.
The following data is logged: core recovery, RQD,
hardness (on Mohs hardness scale), mineral
assemblages on a scale of 1-3, angle of veins, no. of
veins, % of veins. All core is photographed (wet).
* It would be valuable to TSG to consistently re-log
the host rock lithologies and construct a 3D model of
the host rock geology. TSG agree in principle to the
construction of a 3D geological model and though
there is no commitment to the re-logging of
historical core at this stage, they have agreed to
provide the geological data with all new verified
core in order to start the process of creating a 3D
model.
Sub-sampling
techniques * Whole core sampling commenced in 2012, prior to this
and sample half core was submitted which was cut by saw. The
preparation change to whole core was implemented based on the
inaccurate sawing of the core, which was in part
attributed to the NQ diameter, and loss of sample
from the process of sawing.
* Mineralised intervals are sent for assay with 3m of
host rock other side.
* The initial core sample weight is around 5-7kgs,
after the first crush in the laboratory, a 1kg sample
is taken for the assay. The remaining crushed core is
sent back to the core shed where it is retained for
3-4 years.
* Sample preparation of all drilling samples reportedly
conforms to a flowchart of drying, jaw crushing,
splitting pulverizing, and pulp aliquot selection.
Previous authors have examined the processes employed,
and conclude that they are appropriate and conform to
industry standard practices.
* The surface and underground channel sampling
undertaken by CKGE reportedly used the same procedure
as for diamond drilling.
* Underground channel sampling conducted by TSG since
mining commenced in 2010 has been processed at the
on-site laboratory. The sample preparation flowchart
is very similar to that used for diamond core:
o Drying at 105degC
o Jaw crush to 3mm
o Sample reduction to 2 x 0.5kg samples using rotary splitter
o Pulverise to 90% passing 75um using a continuous ring mill
* Seequent inspected the on-site laboratory and found
it to be clean, well equipped and diligently
operated.
* Seequent note that there is potential for cross
sample contamination in continuous ring mills. At
present no control is employed for assessing the
presence of this.
Quality
of assay * All CKGE diamond drill samples were analysed for Au
data and and Ag by the Geological Survey Laboratory in Milkovo,
laboratory Kamchatka. Samples were first analysed for Au by
tests X-ray spectral analysis, then all samples with
concentrations above detection also analysed by Fire
Assay (50g charge) with gravimetric finish.
* All TVX drill samples were analysed for Au and Ag by
KamchatGeologia Laboratory in Petropavlovsk,
Kamchatka, using the same procedure as for CKGE.
* TSG diamond drill samples were all analysed at
KamchatGeologia Laboratory using the same procedure
as for TVX samples.
* The quality of historic (pre-TSG) data has been
discussed in considerable detail in previous reports,
the most recent summary being Hatch (2006). Seequent
were not provided with any of the historic QC data,
and have not undertaken any further analysis. Hatch
(2006, p41) concluded that "it is unlikely that there
are any significant issues relating to the sample
preparation and analytical work completed by the
Milkovo and PK (KamchatGeologia) laboratories.
However, Hatch considers that significantly more
QA/QC data should have been collected and assessed as
the TVX programme progressed". Seequent agrees with
Hatch's assessment that 'both the sample preparation
and assaying procedures used for the CKGE and TVX
samples are appropriate for this ore-body. They are
consistent with industry practice'. In Seequent's
opinion this data is suitable for the purpose of
resource estimation and supports the levels of
classification applied.
* No information was available to Seequent regarding
TSG's 2004/2005 diamond drilling, and no information
specifically relating to 2012 drilling on the Eastern
zones is available either. Based on total drilling
metres, the diamond drill data acquired by TSG
(including the Eastern zone) comprises 41% of total
diamond drill metres. However, much of this drilling
is extensional and exploratory in nature and is not
directly included in resource estimates. When only
data immediately relevant to resource estimates are
considered, TSG diamond drill data makes up 10% of
holes, and 10% of total diamond core vein metres used
in estimation.
* The lack of QC data available for TSG's diamond
drilling is a concern. While there is no reason to
suspect the validity/quality of the TSG diamond drill
data, the lack of QA and QC data diminishes the
confidence that can be placed in this data. In
mitigation, the mining history and reconciliation do
not show any evidence of material problems in the
historic data. No biases are apparent in sampling as
diamond intercepts are progressively superseded by
channel sampling in the underground workings.
* Seequent have analysed the QC data collected during
analysis of TSG underground face samples at the
on-site laboratory. QC is managed by the laboratory.
* Accuracy is assessed using certified reference
materials (CRMs) inserted into batches at the rate of
2 per batch of 24 samples. Two CRM's were in use
during the period 2012-2015. Up until mid 2015
analyses of Au in CRM A and B showed the analytical
process to be stable and in control. In the latter
part of 2015, both CRM's show evidence of a decrease
in laboratory performance - the average assayed grade
trends downwards slightly and the variability
increase. The difference between certified (expected)
mean value and the average of actual assays is 7% for
the year for both CRM's. During 2016 no CRM were
submitted as none were available on site, new batches
from Australia took some time to get to site and CRM
submission resumed mid 2017. During 2017 the CRM
difference in means between the certified value and
TSG laboratory is between -5 and -3% for Au. The
laboratory shows a low bias which was also evident
from the pulp check assays submitted.
* TSG laboratory procedures only routinely assess the
precision of pulp aliquot selection - two aliquots
are assayed for each sample, and the results
averaged. Comparison of the two assays shows that
pulp homogeneity is good, with duplicate pairs having
a CV of 7%.
* During 2015 TSG submitted crusher duplicate samples
to the TSG on site laboratory and to Kamchatgeologia
(KCG) as umpire samples. The paired fire assays from
TSG laboratory indicate an absolute relative error in
sampling and assaying of 23% CV. The samples
submitted to KCG show a relative bias of +7%, with
TSG being lower than KCG. This, and the low value of
TSG CRM's with respect to certified mean, indicate
that there may be a slight low bias in on-site
laboratory assaying.
* During 2016 a batch of checks samples from the
eastern zone campaign were sent to Kamchatgeologia
laboratory, though the sample set was small (9
samples when sample swaps and very low samples were
excluded), the results indicate that the TSG
laboratory has a slight low bias (5% for Au and 5%
for Ag), though the coefficient of variation is very
similar from both laboratories.
* Repeat sampling of channels is now routinely carried
out to assess the average relative error present in
underground channel sampling. The CV achieved in 2017
were equal for both the original and the duplicate,
indicating excellent repeatability. The external
checks were sent to Irgiredmet Laboratory in Irkutsk
which indicated that there is a slight low bias at
the TSG laboratory.
* Since 2014, an assessment of contamination in sample
preparation was made by bracketing ore grade samples
with blank samples. During 2016, 1 out of 9 blank
samples submitted failed, albeit below cut-off. It is
recommended that this practice is not only continued
but is increased in frequency. However in 2017 no
samples were submitted, as they encountered far fewer
high grade samples and mining rates did not allow
repeat sampling to take place.
* Seequent re-iterate that a full QAQC programme
whereby blanks, CRM, pulp and coarse/rig duplicates
are submitted and analysed. The QAQC programme in
place is what the on-site laboratory conduct as part
of their own procedure. It is recommended that the
geology department initiate their own QAQC programme
for their sample submission to the laboratory and
external checks.
Verification
of sampling * No independent verification of significant
and assaying intersections was carried out by Seequent. Given the
status of Asacha as a producing mine this is not
considered necessary. Reconciliation to date does not
indicate any material problem with the accuracy of
diamond drill sampling.
* Twinning of diamond drill holes is not considered
necessary. Addition of successive generations of
drilling which in-fills, and at times repeats,
earlier holes, has not shown any major unexpected
(i.e. not explicable by inherent variability)
differences. In general holes separated by short
distances are more similar than holes separated by
larger distances. In addition, the grades indicated
by diamond drilling are largely confirmed by channel
sampling and mine production.
* All assay data provided by laboratories is provided
by email and are also printed out.
Location
of data * No information was provided on the survey datum used
points - this is still restricted information in Kamchatka.
TVX and TSG holes have been surveyed by the same
independent survey contractor (KamchatTISIZ), with a
reported accuracy of 3cm. Based on information in
previous reports, the CKGE holes were originally
surveyed in a different local coordinate system, but
KamchatTISIZ were able to resurvey 41 of the original
CKGE holes and used these to establish a
transformation to migrate all CKGE hole coordinates
into the new coordinate system.
* Downhole surveying of CKGE reportedly used a MIR36
survey instrument at 20m intervals. TVX era holes
were surveyed with a WelNav magnetic single shot
instrument, and TSG holes with a Reflex magnetic
single shot at intervals between 10 and 60m. No
natural sources of magnetic interference are
expected.
* Since commencement of mining, surveying of
development openings is carried out by the registered
mine surveyor. Geology staff locate channel collar
and path relative to the surveyed outline. It is
considered that underground channel sample locations
will be generally located with +/- 25cm of true
location.
* TSG measure the drillhole collar positions using
tachymeter Nikon Nivo 5 MW. Downhole survey
measurements were done using the REFLEX EZ-SHOT
survey instrument. On average surveys were taken
every 20m. Measurements are made at regular intervals
whilst drilling to track the orientation and final
measurements for the database are made when the hole
is complete. The local magnetic declination is used
to correct the azimuths measured.
* Due to experience with the local brown bears, the
collar locations are marked by approximately 2m metal
tubes, hammered in vertically, with a metal
identification tag. The tag includes the hole ID,
drillhole depth and date.
* The topographic survey was carried out by by
KamchatTISIZ JSC in 1997 and digitized in 2004 by
GEOSEIS Ltd on a scale of 1:1000 (Pulkovo 1942,
Gauss-Kruger projection, Area 27). The quality of
this survey is adequate.
Data spacing
and distribution * Surface and underground channels are spaced at
approximately 3m along drives. Diamond drill holes
vary in spacing. The areas of densest diamond
drilling are at roughly 25x50m on the main veins. On
the East veins the drilling varies from approximately
30x30m near surface extending to 50x75m at depth.
Veins have not been modelled unless continuity can be
confidently assumed. The veins updated for this model
are shown in relation to the new data in the figures
below.
http://www.rns-pdf.londonstockexchange.com/rns/5970P_2-2018-5-29.pdf
QV 1 and 2 with locations of drilling and channel sample data.
Orange locations indicate 2017 channel samples.
http://www.rns-pdf.londonstockexchange.com/rns/5970P_3-2018-5-29.pdf
QV 5 with locations of drilling data. Orange collars indicate 2017
drilling.
* Vein intersections have been composited in two ways:
o Firstly, all diamond drill holes and channel samples were composited
to a 1m (+/- 0.5m) interval. These were used to make grade estimates
in 3 dimensions above the base of mine development
o Secondly, all diamond holes and channel samples that traverse
the full width of the vein have been composited across the full
width of the vein, then multiplied by the horizontal width of the
intersection to create metal accumulations. Below the lowest level
of mine development, grades were estimated in 2 dimensions.
Orientation
of data * The veins mined at Asacha are sub-vertical. Diamond
in relation drill data from surface is generally angled to
to geological intersect the veins at moderate angles. Holes are
structure drilled from both east and west. A number of
intersections at acute angles have been excluded from
estimation. The uncertainty in the lateral location
of veins increases with depth below surface as holes
become longer and intersection angles more acute.
Sample
security * Underground channel and drill core samples are
processed and assayed on site.
* It is not known whether any special precautions were
taken to ensure security of diamond drill samples.
The site is remote, and all handling and transport of
bagged samples would have been undertaken by company
personnel.
Audits
or reviews * Data quality has been discussed in detail by a number
of previous authors. The most comprehensive treatment
was a review of previous work by Hatch in 2006 for
Standard Bank PLC (Hatch, 2006, Technical Review
Report, September 2006, Hatch_60915 PD Final Report
Oct2006.pdf) which draws on a number of earlier
reports.
* Hatch conclude that the lack of systematically
collected and presented data available to demonstrate
the quality of sampling and assaying is a weak point
in resource estimates. Seequent concur with this
view.
* Based on analysis of available historic data, and
review of current QAQC practices, Seequent are
satisfied that the data supplied are of sufficient
quality for the purposes of mineral resource
estimation and support the level of classification
applied to estimates. The commencement of mining and
processing and reasonable reconciliation between
prediction and production has significantly de-risked
the issue of data quality in estimating, classifying
and reporting Mineral Resources at Asacha.
* Seequent reiterate that compilation, analysis and
reporting of all existing QA/QC data for diamond
drilling at Asacha should remain a priority for TSG.
------------------ -----------------------------------------------------------------------------------------
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this
section.)
Criteria Commentary
Mineral
tenement * TSG operates on the basis of the license PTR11626BE
and land dated 07.08.2003 with amendments dated 06.04.2016
tenure with the aim of exploration and mining, including the
status related processing and use of waste. The license area
is 24 km(2) . The expiry date of the license is
01.09.2018. The company have launched an application
with the necessary documentation for an extension of
the license until 2024. It is expected to be renewed
by July 2018.
* There are no known impediments to the operation of
mining in this license area.
Exploration
done by * The Asacha deposit was discovered in 1973, and
other parties exploration work was undertaken by the state owned
Central Kamchatka Geological Expedition (CKGE)
between 1986 and 1990. In 1990 a mining licence was
granted to Trevozhnoe Zarevo (TZ), and in 1994 TVX
Gold Inc. (TVX) acquired a 50% stake in the company.
Exploration work was carried out by TVX between 1996
and 1998. In 2001 TSG acquired TVX's 50% stake in TZ,
and increased this to 90% in 2002. TSG acquired the
remaining 10% interest in TZ in two tranches; 2007
and 2010. TSG conducted geological exploration
drilling of the Main Zone in 2004-2005, and of the
Eastern Flank during 2012 and 2016. Mine development
on the Main Zone commenced in 2008, and mining
(extraction and stoping) started in the middle of
2011.
* The table overleaf summarises all drilling and
underground sampling done on the Asacha deposit:
http://www.rns-pdf.londonstockexchange.com/rns/5970P_4-2018-5-29.pdf
http://www.rns-pdf.londonstockexchange.com/rns/5970P_5-2018-5-29.pdf
Geology
* The Asacha gold deposit is located in the south-east
region of the Kamchatka Peninsula, far east Russia.
The Peninsula is a Tertiary volcanic arc that formed
due to the subduction of the north-westerly moving
Pacific plate. The morphology comprises a series of
NNE arc parallel structures defined by the alignment
of stratovolcanoes, many of which are still active. A
number of transverse faults offset the arc-parallel
structures, and in places these have been recognized
as hosts for mineralisation.
* Although a number of parallel vein systems have been
identified in the area, only two systems have been
explored in detail. First of them is referred to as
the Main Zone and it has been defined over strike
length of approximately 1500m and to depth of
approximately 300m in places. The second is the East
Zone, where the veins are generally narrower and less
continuous. For modelling purposes, the Main Zone has
been divided into several subsidiary veins that occur
as splays or splits. The veins are steeply dipping
and in places can be up to several meters thick.
* The Asacha deposit is classified as a
low-sulphidation quartz-adularia-sericite Au-Ag
epithermal vein system. The mineralisation is hosted
with N-S trending fault hosted structures. High grade
zones are usually associated with sulphide rich bands
(referred to as Ginguro bands). The Asacha ore
minerals are native gold and silver in the form of
polybasite and pyrargyrite. The main gangue minerals
include quartz and adularia, with significantly
smaller quantities of hydromicas, kaolinite,
montmorillonite, iron and manganese oxides and
chalcophile minerals.
Drill hole
Information * The table overleaf summarises the drillhole of
interest for QV 5, drilled during 2017:
http://www.rns-pdf.londonstockexchange.com/rns/5970P_6-2018-5-29.pdf
Data aggregation
methods * Exploration results are not being reported
separately. The exploration drilling carried out in
2017 on QV 5 of the Main Zone has been incorporated
within the mineral resource estimate. The mineralised
intersections were domained by wireframes and samples
were composited to 1m prior to estimation. A cut-off
of 4 g/t was used to domain the mineralised zone,
though below cut-off intersections were sometimes
included for continuity of the vein.
* Metal equivalents were not used in the reporting of
the mineral resource.
Relationship
between * The mineralisation at Asacha in general sub -vertical
mineralisation and exploration drilling aims to intercept the veins
widths as perpendicular as possible. The drilling is on
and intercept average orientated at a 50deg dip.
lengths
* The gold and silver mineralisation at Asacha is
mainly concentrated within the quartz-adularia veins
and is rarely found beyond their limits. Their lines
of contact with surrounding rocks are clearly
identified.
Diagrams
* Exploration results are not being reported
separately. The following figure shows the new
drilling as orange collars and the old drilling as
blue collars.
http://www.rns-pdf.londonstockexchange.com/rns/5970P_7-2018-5-29.pdf
Balanced
reporting * Exploration results are not being reported
separately. The results of the drilling were used to
update the reported Mineral Resources.
Other substantive
exploration * The results from a hydro-geological study which was
data carried out in 2016-2017 predicted that water inflows
to the 150m, 100m and 50m levels at 1 587 m(3) /hour,
2 614 m(3) /hr and 3640 m(3) /hr. This affects the
northern part of the Main Zone under the Semeyny
stream.
Further * No exploration programmes are planned for 2018.
work
------------------ -----------------------------------------------------------------------------
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2,
also apply to this section.)
Criteria Commentary
Database
integrity * Drilling data is stored in an unsecured Microsoft
Access database. Assay results are received
electronically, whilst other data is entered
manually.
* Validated data for use in estimates was provided in
ASCII comma delimited files. A few errors detected in
these files were fixed on advice from TSG.
* Seequent also validated data using the internal
consistency checks in the software packages
Leapfrog(R) Geo, Datamine and pre-2016 estimates in
Minesight. Visual checking was also used to detect
any anomalous hole collar locations, hole paths,
inconsistent geology etc.
Site visits
* Mike Stewart, at the time Principal Consultant,
Seequent (formerly QG Pty Ltd) visited Kamchatka
between 10th and 18th December 2012, and travelled to
the Asacha mining operation from 13-15(th) December.
Whilst on site Mike Stewart toured the underground
operations, processing plant, mine laboratory, mining
offices and core storage area. The remainder of the
time was spent in the TSG offices in Petropavlovsk
gathering data and discussing geology.
* Carrie Nicholls, Senior Consultant, visited Kamchatka
between 12-15(th) October 2017. The purpose of the
visit was, as Competent Person for the mineral
resource estimate to gain an understanding of the
complexities of the deposit to aid the modelling
process; review the processes carried out in relation
to the collection and processing of sample data; to
gain an understanding of their reconciliation process
and exploration strategy.
Geological
interpretation * The primary geological interpretation of Asacha was
provided by TSG in the form of coded drill hole
intercepts and digitised level plan interpretations
based on underground sampling and mapping.
* Veins intercepts are based on logging of quartz
combined with consideration of Au and Ag grades.
Veins are typically banded accumulations of quartz,
adularia, chalcedony, saccharoidal quartz, carbonate
and ginguro (smokey black bands of fine grained mixed
base metal sulphides). The banded habit of the
veining suggests a typical cyclic crack-seal
formation mechanism. The veins generally display hard
contacts with the surrounding host rock but in some
areas, the mineralisation extends as stockworks into
the host rock within the hangingwall and footwall and
also within clayey-brecciated zones. In this
situation a lower threshold of 6g/t is used for
defining veins.
* The vein system at Asacha is comprised of two main
veins (QV1 and QV2) with a number of smaller splay
structures. The confidence in interpretation of the
main structures is generally high, although
correlation may be complicated around splays and
towards the margins of veins. In general, vein
continuity was only assumed where intercepts could be
confidently correlated.
Dimensions
* The defined extent of mineralization on the Asacha
vein system is a little over 1.5km in strike and 400m
in vertical extent. The largest individual veins
defined within this system (QV1 and QV2) have strike
lengths of 1000m and outcrop at surface.
* In the eastern zone, mineralization is defined over
1km of strike extent, although individual veins have
a maximum strike of 500m. Veins in the eastern zone
are significantly thinner, and less well correlated
than in the main zone.
Estimation
and modelling * Geometric modelling of vein structures was carried
techniques out using the implicit modelling software Leapfrog(R)
Geo. Modelling of grades was carried out using Isatis
and Datamine geostatistical software.
* Two different approaches to modelling of grade were
employed:
* A 3D/2D boundary was delineated based loosely on the
lowest levels of development. Within this boundary
grades were estimated by 3D using Ordinary Kriging.
This method was adopted because numerous channel
samples do not cross the full width of the vein. The
orientation of both search and variogram was adjusted
for each block to match the local variations in the
orientation of the vein. In addition, QV 5 (main
zone) and QV25 in the east has been estimated in 3D.
The variograms modelled are typical of precious
metals:
-- Variogram Vein Nugget Sill Ranges (m) Sill Ranges (m)
(sph) (sph)
Dip Strike Across Dip Strike Across
---- ------- ------- ---- ------- -------
Au 10 0.26 0.14 7 8.4 1 0.60 30 48 5
----------- ----------------- ------- ------ ---- ------- ------- ------ ---- ------- -------
20, 21, 50 0.36 0.25 19 53 1.5 0.39 45 363 3.5
----------- ----------------- ------- ------ ---- ------- ------- ------ ---- ------- -------
30,40, 60, 25,
70, 80 0.33 0.25 14 16 1 0.42 50 80 5
----------- ----------------- ------- ------ ---- ------- ------- ------ ---- ------- -------
10, 20, 30, 40,
50, 60, 25, 70,
Ag 80 0.19 0.32 20 34 1 0.49 60 90 4.3
----------- ----------------- ------- ------ ---- ------- ------- ------ ---- ------- -------
The search parameters used for 3D estimation are in the table below:
Vein Dip Strike Across Min. Max 2(nd) Min. Max
samples samples search samples samples
volume
multiplier
----- ---- ------- ------- --------- --------- ----------- --------- -----------
10 75 75 15 4 24 2 4 24
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
20 75 75 15 4 24 2 4 24
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
21 75 75 15 4 24 N/A
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
25 100 200 30 4 24 2 2 24
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
30 90 90 15 4 24 N/A
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
40 75 75 15 4 24 N/A
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
50 100 250 20 4 24 N/A
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
60 75 75 20 4 24 N/A
----- ---- ------- ------- --------- --------- ----------- ----------- ---------
* Outside of the 3D boundary on the Main Zone and in
the East zone for QV 70 and 80, the veins are ideally
suited to be estimated in 2D. The vein grades were
estimated by Ordinary Kriging of Au metal, Ag metal
and horizontal thickness, then Au and Ag grades were
back calculated. Variogram models applied to all
veins are shown overleaf:
Variable Vein Nugget Nugget Sill Ranges Sill Ranges
(%) (sph) (sph)
---------- ------------ ------- ------- ------ ------------- ------ -------------
Dip Strike Dip Strike
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
AuM_Cut 10 260 17% 500 25 25 800 100 100
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
20,30,40,60 330 23% 485 18 18 610 50 50
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
70,80 660 33% 600 30 40 735 60 80
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
AgM_Cut 10 780 17% 1500 25 25 2400 100 100
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
20,30,40,60 1840 28% 2260 18 18 2440 50 50
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
70,80 0.5 50% 0.25 10 10 0.25 40 40
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
HThick 10 0.3 21% 0.4 20 20 0.7 50 120
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
20,30,40,60 0.3 21% 0.4 20 20 0.7 50 120
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
70,80 0.3 21% 0.4 20 20 0.7 50 50
---------- ------------ ------- ------- ------ ---- ------- ------ ---- -------
The search parameters used for the 2D estimation are in the table
below:
Vein Search # sectors Min/sector Max/Sector
----- ------------- ---------- ----------- -----------
Dip Strike
----- ---- ------- ---------- ----------- -----------
10 100 200 4 4 4
----- ---- ------- ---------- ----------- -----------
20 100 200 4 4 4
----- ---- ------- ---------- ----------- -----------
30 75 150 4 4 4
----- ---- ------- ---------- ----------- -----------
40 100 200 1 4 14
----- ---- ------- ---------- ----------- -----------
60 75 150 4 4 4
----- ---- ------- ---------- ----------- -----------
70 100 200 1 4 12
----- ---- ------- ---------- ----------- -----------
80 100 200 1 4 12
----- ---- ------- ---------- ----------- -----------
In both 2D and 3D estimates, top capping was applied to limit the
influence of extreme values:
Vein Cuts applied Cuts applied
code to vein accumulations to 1m composites
--------- ------------------------- --------------------
AuM AgM Au Ag
--------- ------------ ----------- --------- ---------
10 200 350 150 400
--------- ------------ ----------- --------- ---------
20 250 450 150 700
--------- ------------ ----------- --------- ---------
21
--------- ------------ ----------- --------- ---------
30/31/32 60 60 65 200
--------- ------------ ----------- --------- ---------
40 150
--------- ------------ ----------- --------- ---------
50
--------- ------------ ----------- --------- ---------
60 60 25 100 40
--------- ------------ ----------- --------- ---------
25
--------- ------------ ----------- --------- ---------
* The maximum distance of extrapolation of grades from
data points is limited by the vein interpretation.
Maximum extrapolation is to approximately 50m.
Moisture -- All tonnages are estimated on a dry basis.
Cut-off
parameters * Based on LOM mining and milling costs, the breakeven
grade is 4g/t Au. A minimum mining width of 1m also
applies. The breakeven metal content to meet these
constraints is thus 4m*g/t. In practice, the
proportion of resource below this threshold is
insignificant, and it is practically equivalent to
simply applying a 4g/t Au cut-off.
* No account is taken of the contribution of Ag in
consideration of cut-off.
Mining
factors * The Asacha resource is currently mined by a number of
or assumptions different development and stoping methods. Mining
practice is evolving with experience, and is adaptive
according to the local geological and geotechnical
conditions.
* The practical minimum mining width is approximately
1m.
* No mining dilution is applied to reporting of
resources.
* Based on the presence of the operating mine and mill,
existing mine economics, the potential for
incremental development access to deeper and more
distal parts of the orebody, and the potential for
further exploration success, it is considered that
all of the vein resources defined at Asacha have a
reasonable prospect of eventual economic extraction.
Metallurgical
factors * Milling experience to date has not encountered any
or assumptions substantive variation in metallurgical recovery which
would affect definition of resources. Asacha ore is
free milling with an average life to date recovery of
94% for Au and 78% for Ag.
Environmental
factors * There are no environmental factors that affect
or assumptions definition of mineral resources.
Bulk density -- A global bulk density of 2.48 is applied to all ore. This measurement
is based on around 160 core samples taken from the 1990's.
-- Due to the differing nature of the host rock and veins in the
southern end of the deposit, compared to the north, it is recommended
that check density measurements are made. The ground conditions
in the south are of poorer quality due to extensive faulting and
argillic alteration.
Classification
* Classification takes account of data quality,
confidence in geological interpretation and
confidence in block estimations. These aspects are
necessarily subjective.
* Measured Resources are restricted to areas that have
been developed above and below, or to a maximum
projection of 12m above or below development. In
addition, the slope of regression on accumulation
estimates is greater than 0.90. Only veins QV 10,
20, 21 and 30 have any resource classified as
Measured.
* To be classified as Indicated resource, blocks must
be within 25m of a diamond drill hole, or 25m above
or below development. This equates to a slope of
regression on accumulation estimates of >0.65. Part
of veins QV 10, 20 and 30, and the whole of veins QV
31, 32, 40, 60 and 70 were given a classification of
Indicated.
* In veins QV 10, 20 and 30, any part of the
interpreted vein limits not classified as Measured or
Indicated was given a classification of Inferred. In
addition, the whole of Veins QV 50, 80 or 25 were
classified as Inferred. There is insufficient
drilling in these veins to permit a higher level of
classification to be applied.
* Classifications were set using polygons digitised in
long section.
Audits
or reviews * This Mineral Resource was audited internally by Peter
Bloy.
* This Mineral Resource has not been audited
externally.
* A number of external reviews were undertaken of
mineral resource estimates conducted prior to
commencement of mining. They are not considered
relevant to the current estimates of the resource
remaining after 6 years of mining.
Discussion
of relative * The Mineral Resource has been reported in accordance
accuracy/ with the guidelines of the 2012 edition of the
confidence Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves and
reflects the relative accuracy of the Mineral
Resource estimates.
* The statements relate to global estimates of tonnes
and grade. The higher the level of classification
applied, the higher the local accuracy of resource
estimates.
* Comparison of reported production with the resource
estimates is broadly in line with expectation.
--------------- --------------------------------------------------------------------------------------------------------------
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contact rns@lseg.com or visit www.rns.com.
END
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