The Company's Mt Kasi Gold Project is located on the south coast of Vanua Levu, Fiji's second largest island, which is a four hour flight from the east coast of Australia. The logistics of the area are good with road access to the nearby town, port and airport of Savusavu via 70 kilometres of bitumen and gravel roads. Savusavu is a popular tourist destination with a population of around 3,000 people, and is the second-largest town on Vanua Levu (population 130,000). The mine site is some 300m above sea level and can also be accessed via Savusavu Bay, located 4km by road from the mouth of the Yanawai River.
The Company's tenements comprise granted mining and prospecting leases that cover approximately 360km2, with a further 40km2 under application. The tenements at Mt Kasi cover a geologically similar suite of volcanic rocks to those that host the world class epithermal Vatukoula gold deposit in the main Fiji island of Viti Levu (>10Moz gold), and the giant epithermal gold deposits on Lihir Island, PNG (>30Moz gold,) as well other high sulfidation mineralising systems including the Lepanto gold deposit in the Philippines.
Geological Setting
The epithermal style of mineralisation that typifies many gold deposits in the Pacific "Rim of Fire": can be divided into two main groups; high sulfidation and low sulfidation styles. The high sulfidation gold mineralisation style is typified by close proximity to a magmatic source and association with high level advanced argillic–alunite±pyrophyllite alteration as well as indicator minerals such as enargite, telluride, barite and/or gypsum. The mineralisation is typically hosted by faults/fractures and/or syn-volcanic breccias in the volcanic country rock and can be underlain by a porphyry copper–gold mineralised system at depth. In contrast, the low sulfidation gold–silver mineralisation usually occurs more distally to the magmatic source and is distinguished by opaline/chalcedony sintery alteration in the upper levels and banded quartz±carbonate±adularia at lower levels. There is good potential for bonanza gold–silver mineralisation associated with dilational structural settings. Lead and zinc sulfides and silver–rich caps are more likely to be associated with this mineralisation style.Mt Kasi Geology
The Mt Kasi area hosts both high and low sulfidation gold mineralisation styles that are capable of producing large gold deposits based on well documented examples around the world.The Mt Kasi deposit occurs within a significant and under-explored structural corridor (Figure 1), which extends for some 10km and lies tangential to the interpreted collapsed margin of earlier calderas. A possible radial fracture pattern within the interpreted caldera has also been postulated, associated with later-stage intrusive volcanism.
Gold mineralisation at Mt Kasi is associated with an extensive high-sulfidation epithermal gold mineralising system, grading to low sulfidation mineralisation locally and at flanking deposits. Epithermal gold deposits are typically vertically zoned and occur in structurally prepared host rocks, usually basaltic to intermediate volcanics.
The deposit is hosted by andesitic to basaltic volcanic flows and breccias of the late Miocene to Pliocene Natewa Group that has been intruded by andesitic to dacitic plugs. The mineralisation at Mineral Hill is recognized as a high sulfidation epithermal style occurring within a NNW trending structure – the Mt Kasi fault zone, which has been remobilised and brecciated, providing the host for subsequent gold mineralising events. The presence of dacite plugs at Mt Kasi confirms that the mineralisation occurs proximally to a volcanic centre typical of a high sulfidation epithermal system. There is also strong evidence that the mineralisation at Mineral Hill also represents the top of the epithermal system.
The westerly dipping (50-60 degrees) silicified breccia host is 5 to 20 m wide and is intersected by a series of crosscutting E–W to WNW–ESE trending faults that have effectively acted as dilational jogs controlling higher-grade upflow zones in the mineralised zone. Gold mineralisation is associated with quartz kaolinite-pyrite-barite vein and alteration assemblages and is locally associated with brecciation of the volcanic host. A deep-seated magnetic anomaly in the region may represent a buried intrusive that could be the source for the hydrothermal fluids. The Company believes that there is scope for a very deep window for gold mineralising events within the Mt Kasi system at depth, and at two other known high sulfidation centres within the Company's lease holdings.
Exploration Potential
Based on the favourable geological setting and the presence of numerous insufficiently tested gold occurrences, the Directors believe that the Mt Kasi tenements have the potential to host a multi-million oz gold resource. The identification of both low and high sulfidation epithermal gold systems in the high potassium basaltic to andestic volcanics of the Natewa Group, intersected at a high erosional level by the current land surface, greatly enhances the potential for buried gold mineralisation and possibly porphyry-style gold–copper mineralisation at depth. The tendency to a high potassium composition for the tholeiitic Natewa basaltic and andesitic volcanics is consistent with the high potassium volcanics associated with epithermal gold mineralisation at Vatukoula on the main island of Viti Levu in Fiji as well as the major Lihir deposit in PNG.2004/2005 Drilling
The Company completed a 9,000m program of RC and diamond drilling in early 2005, the first drilling to be carried out since 1996. The programme focused primarily on extensions to the Mineral Hill deposit.Significantly, the drilling campaign confirmed that the Main Zone at Mt Kasi extends over a strike length of at least 2.2 km and that the mineralised system is open to the north and south, with both areas open at depth. The distribution and grade of gold currently defined over a 3 km portion of the structural corridor highlights the potential for substantial accumulations of gold within the Mt Kasi mineralised system, within the under-explored interior of the Company's lease holding. Results from Mineral Hill also demonstrate the potential for significant high grade zones of mineralization distributed at surface and at depth throughout the system.
In August 2005, independent consultants RSG Global completed a new mineral resource estimate for the Mineral Hill deposit. The total resource position estimated in accordance with JORC guidelines is now 3.4Mt @ 2.2 g/t for 240,000 ounces of gold in the Indicated and Inferred categories, based on a 1.0 g/t cut-off for the main zone at Mineral Hill.
A review of the methodology and approach adopted by RSG Global in generating the estimate of resources has highlighted the following in respect of the new model:
- it has been constrained by defined geological boundaries; the previous model was unconstrained;
- historical underground data has been excluded for grade estimation purposes;
- a bulk density figure of 2.5 gm/cc for the core of the Main Zone, pursuant to additional specific gravity testwork conducted more recently by the Company;
- it makes allowance for the possible removal of estimated stoped volumes from historical underground production;
- the new model utilizes a top-cut of 30 g/t gold for composite data, earlier models were uncut.
Follow up to 2004/2005 Drilling
The Company's exploration strategy is to drill test near minesite and regional targets that have the potential to provide not only incremental ore tonnages within a 5-10 km trucking distance of a processing plant at Mineral Hill, but also open cut deposits with significant dimensions and attractive economics in the context of established mine infrastructure.An initial 5,000 metre drilling programme is planned for mid 2006, comprising RC and diamond drilling to follow up on the results of the 2004/2005 programme and to test regional targets within close proximity to the main deposit at Mineral Hill.
Paro Prospect
2004/2005 RC drilling conducted at the Paro Prospect, 650m north of the Mineral Hill deposit, confirms a shallow, easily mineable zone of gold mineralisation which appears to be increasing in width and at depth, generally below the oxidation profile. This suggests that deeper, high grade mineralisation could be targeted further south down-plunge toward the main deposit at Mineral Hill.
The drilling to date has defined a subvertical to west dipping siliceous breccia zone of 7 metres true width within a 15 metre wide clay-altered zone containing anomalous gold values.
Hole PARC012 on section 5750mN, returned an intercept of 5m @ 27.43 g/t Au from 57m – including 1m @ 116.5 g/t Au from 57m. This hole was targeted to intersect mineralisation below previously reported Hole PARC006, which returned 4m @ 19.82 g/t Au from 51m. This hole also intersected zones of mineralisation west and east of a central high grade core of Paro, across a zone of alteration widening with depth. Each of the central, western and eastern zones of mineralisation is open at depth and the mineralization remains open to the north.
Around 250m of the planned drill programme will include follow up drilling on the Paro prospect, with the probability of a further 150m hole if the south plunging model is consistent with results.
Regional Gold Targets
In addition to follow-up drilling arising from the 2004/2005 campaign, the Company has completed a regional review of exploration prospects within its tenement holding and ranked the most advanced of the gold targets for immediate drill testing. The principal targets are discussed below.Cresswells Prospect
The Cresswells prospect (locally known as Vakadrakala) is situated 4 km northwest of Mt Kasi, and was the site of the first known gold discovery and the first mining lease to be granted in Fiji in 1928.Cresswells is dominated by a principally andesitic fragmental unit striking approximately north-south and dipping flatly to the east. The fragmental unit is intruded by a series of basalt/gabbro dykes trending north and dipping steeply to the west. Gold mineralisation appears to be associated narrow quartz-manganese veins, and appear to be consistent with high level low-sulfidation epithermal veins, with minor alteration along the vein margins
Modern exploration commenced in the mid 1970's, with significant stream sample anomalies leading to grid based soil sampling in the area, revealing a large diffuse soil gold anomaly. Visible gold was panned in more detailed creek sampling, and follow up close-spaced (50 x 25m) returned high gold values in areas proximal to ridges surrounding Echo Creek and its tributaries. Shallow auger drilling returned values up to 76 g/t Au.
A 100 metre wide by 500 metre long anomalous zone has been defined by mapping and geochemistry, as demonstrated by variably spaced trenches with gold grades including 30m @ 5.1 g/t and 20m @ 7.8 g/t. A sub-parallel structure exists to the east of the main anomaly, over an open-ended area with a trench grading 25m @ 7.8 g/t gold (Figure 3).
Cresswells has never been drilled, and the Company currently plans to drill approximately 30 holes for 2,500m drilling advance, with the full meterage being contingent upon the initial results from the first 10 holes (750m). it is proposed that drilling will cover the initial zones of interest on 50m spacings.
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Figure Three |
Figure Four |
Waidamudamu Prospect
After the initial discovery of gold-bearing boulders in the Yanawai River in November 1929, several gold-bearing quartz veins were discovered on the Waidamudamu ridge top, some 465m above sea level, and 1.4km east of Mt Kasi. In the early 1930's the Vatukasia Mining Company drove a number of exploratory drives and adits into the vein system, and historical records indicate that significant intersections (estimates include 100m @ 10.8 g/t Au; 50m @ 20.3 g/t Au, and 55m @ 8.3 g/t Au) were recorded from drive samples over widths of between 0.8 and 1.6m taken along the roof of these workings (Figure 4).Development at Waidamudamu was interrupted by the discovery of gold mineralisation at the adjacent Mt Kasi in 1932, and no further work was undertaken until Anglo resampled the adits and subsequently drilled 9 diamond holes between 1979 and 1981. Unfortunately the Anglo drill results were inconclusive due to very low core recoveries. The Anglo adit sampling supported the high grade and continuous nature of the historical sampling and is summarised below:
Adit 1: 52m @ 15.9 g/t Au
Adit 2: 20m @ 6.4 g/t Au and 31m @ 9.6 g/t Au
Adit 4: 55m @ 6.2 g/t Au and 35m @ 18.9 g/t Au
Adit 9: 80m @ 4.7 g/t Au
Newmont drilled two holes in 1984, prior to a mapping and structural geology review exercise, and after conducting surface geochemistry, including the excavation of several surface costeans containing gold up to 12m @ 5.9 g/t Au, followed by two further holes in 1988. Three later RC holes were drilled by Pacific Islands Gold NL in 1994, which extended the known mineralisation and left the system open in all directions.
The Waidamudamu mineralisation is of a low sulfidation epithermal nature, with several planar 1-3m wide quartz-manganese veins within the system, which has been traced over a strike length of over 500m and a vertical range of 150m. The veins consist of banded and colloform-textured silica, grading to crystalline vuggy silica in some outcrop. Newmont noted two vein zones; a Main and Eastern zone, and postulated some post mineralisation faulting. A recent re-interpretation of the data has highlighted the likelihood of a separate parallel vein set further east, and indicates that previous drilling has inadequately tested the system in many cases.
The Company plans a 7-hole 750m programme to test extensions of the mineralization along strike to the north and south.
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Figure Five: Naduna Prospect, Vanua Levu, Fiji Islands |
Naduna Prospect
Naduna is interpreted to lie at the southern end of the Mt Kasi structural corridor (Figure 5), close to sea level near the mouth of the Yanawai River. It was worked by prospectors in the 1930's, who drove three small shallow adits into the side of a low hill shedding eluvial gold.Surface trenching shows a broad blanket of gold-bearing soil and eluvial material overlying the in situ mineralisation. Better trenching results include:
40m @ 2.58 g/t Au
24m @ 2.83 g/t Au
16m @ 3.50 g/t Au
Rock chip sampling of old underground workings returned a best intersection of 12m @ 28.4 g/t gold (including 4m @ 81.4g/t gold), which highlight the potential for very high grade local zones of gold mineralisation.
Mineralisation consists of a relatively well defined puggy clay fault zones within silicified pyrite rich basalts and andesites. Outside of the mineralised zone a series of vesicular and amygdaloidal basalts, andesites and lapilli tuffs were encountered. The mineralised zone strikes approximately east-west and dips at between 40 and 50 degrees to the south. A major fault appears to offset mineralisation in the west, and from the surface geochemistry, it appears possible the mineralised block has been displaced further south.
The Company plans to drill 8 holes for 500m targeting an untested parallel zone to the west of the main zone.
Nasoni Prospect
The Nasoni trend is located 1.5 km southeast of the Mineral Hill soil trend and is interpreted to be on a major parallel structurel, and along strike along a ridge line south of the Waidamudamu prospect. Nasoni is a major gold in soil anomaly that is 600m long by 250m wide, as defined by a 100 ppb gold contour, with a peak soil result of 6.5 g/t gold.|
Figure Six: Nasoni Prospect, Vanua Levu, Fiji Islands |
Other Drill Targets
Ongoing regional exploration is also expected to generate new drill targets. Advanced prospects that warrant drill testing include:Vuniroro Levu
A onceptual target at Vuniroro Levu, approximately 300m north of any previous drilling along the Mt Kasi corridor, where a silicified ridge with flanking anomalous argillic alteration; a hole is planned to be drilled as part of the proposed programme.Tavea and Savuni Creek
Located on the perimeter of a large, elevated circular alteration zone, recovered float samples grading up to 74g/t gold; the source remains undiscovered, further work is planned;Naravuka
Anomalous boulder float returned several values in excess of 300g/t gold; the source also remains undiscovered, and further work is planned.Ongoing work will also include a data compilation exercise to bring together regional data generated by previous explorers, and auger sampling programmes and geological mapping. Results from planned soil auger geochemical sampling and geological mapping will be used to prioritise further exploration targets.
Exploration Programme Planning
The Company's exploration and evaluation programme has been prepared internally by Mr Craig Hall, General Manager, Exploration and Project Development. Mr Hall is a member of the Australasian Institute of Mining and Metallurgy and of the Australian Institute of Geoscientists. The drilling programme, including the distribution of drill holes, type of hole, hole depth, budget and the general approach adopted by the Company to the development of the project are to be reviewed by an external independent consulting geologist prior to commencement to ensure that the programme is reasonable and appropriate given the status of the project and the objectives of the programme.Existing Infrastructure
Should the project proceed to prefeasibility stage, much of the infrastructure necessary to recommence mining and gold production is already in place. In-situ facilities include:- mine road access;
- CIP processing plant sub structure (note: plant is on care and maintenance and requires substantial upgrade or more likely replacement);
- tailings dam adequate for initial mine life based on the current resource position;
- office and administration facilities;
- workshop and laboratory buildings;
- accommodation and dining facilities;
- communications facilities (upgrade required), and
- drill core storage facilities etc.
Environmental Protection Plan
The Company has continued to conduct environmental monitoring and accumulate data for baseline studies; previous studies approved by local environmental authorities are available and will help to expedite the update of a comprehensive environmental protection plan.Local Landowner Relations
Previously negotiated compensation agreements with local landowners have been maintained as have harmonious relationships with local landowning groups. Access agreements negotiated with local landowner groups are in place through to 2009. Under these agreements, landowners receive annual fixed rentals plus production royalties of F$2.00 (approximately A$1.60 at current exchange rate at date of writing of F$1.00 = A$0.80) per ounce of gold Royalties are to be paid into agreed education trust funds to be used exclusively for the future education of children in local villages. In addition a 3.0% gross royalty (when gold is above USD $330 per oz) is collected by the Mineral Resources Department ("MRD"), with two thirds of this (or 2.0%) distributed to the landowners through Native Lands Trust Board ("NLTB").
Diamond Drilling at Paro - Shift Change, July 2006
Note: The technical aspects of this communication pertaining to the Mt Kasi project have been compiled by Mr Craig R Hall, M Aus IMM, MAIG. Mr Hall is an employee of a subsidiary of Burdekin Pacific Limited and has sufficient expertise relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Hall consents to the inclusion in this report of the matters referred to based on the information being in the form and context in which it appears.