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Code CMM Source ASX

Karlawinda gold project is located in Western Australia, 65 km southeast of the town of Newman.

Gold mineralization at the Francopan Prospect was originally discovered by WMC Resources Ltd in 2005. The project was subsequently acquired by Independence Group (IGO) in 2008 resulting in the discovery of the significant Bibra Gold Deposit in 2009.

Figure 1: Karlawinda Gold Project Tenement Location Map. Granted Mining Lease shown in green outline.
Figure 1: Karlawinda Gold Project Tenement Location Map. Granted Mining Lease shown in green outline.

At the time of acquisition of the Karlawinda project from IGO, approximately $12 million had already been spent on resource evaluation activities (RC and diamond drilling, assays, geotechnical assessments and resource modelling), pre-feasibility activities (Including: metallurgical testwork, conceptual mining designs, hydrology, baseline environmental studies, process plant design and power supply), and initial programs of regional exploration (aircore drilling, geochemical surveys and geophysical survey). The project area has been the subject of heritage surveys with a number of heritage agreements in place and is located close to key infrastructure and mining support services including the major mining centre of Newman.

Subsequent work by Capricorn in 2016 has included two RC drilling programmes at the Bibra deposit of 10,000m and 72,000m respectively, completion of a Scoping Study in July 2016, and commencement of a definitive Feasibility Study (DFS) which is scheduled for completion by July 2017.

Importantly, a Native Title Access Agreement was signed with the Nyiyaparli People in November 2016, followed by the grant of Mining Lease M52/1070, also in November 2016.

The Bibra deposit is hosted within a thick, shallow-dipping gold mineralised structure which is amenable to low-cost open pit mining with mineralisation starting close to the surface. The deposit remains open in down-plunge positions and potential exists for strike extensions and stacked mineralised lodes. In 2012, A JORC 2012 inferred resource of 18 million tonnes @ 1.1g/t Au for 650,800oz Au was estimated by IGO. Drilling by IGO includes 43 diamond drillholes (5375m) and 266 RC holes (42,500m). Following a 10,000m extensional RC drilling campaign by Capricorn in early 2016, the resource was upgraded to 25.5 million tonnes @ 1.1g/t for 914,000 oz Au, this resource reporting inside an optimised open pit using a A$1750/oz gold price.

Figure 2: Bibra Gold Deposit – Resource Block Model (Blue: $A1750 optimal pit shell, Brown: Laterite resource, Yellow: Saprolite and Fresh resource)
Figure 2: Bibra Gold Deposit – Resource Block Model
(Blue: $A1750 optimal pit shell, Brown: Laterite resource, Yellow: Saprolite and Fresh resource)

Bibra is part of a large-scale Archaean aged gold mineralized system. The resource is hosted within a package of deformed meta-sediments which has developed on at least two parallel, shallow dipping structures; supergene oxide mineralization has developed over the structures close to surface. The primary mineralization is strata-bound with lineations identified as controlling higher-grade shoots. The deposit is oxidized to average depths of 50-70m. Significantly, a gold-enriched, horizontal laterite zone lies within 15m of surface, containing 2.1 million tonnes @ 1.3 g/t Au for 85,000oz (within the abovementioned 914,000 oz resource). The shallow dipping (25-30 degrees from horizontal) nature of mineralisation is amenable to efficient open-pit mining and relatively low waste: ore stripping ratios.

Figure 3: Example of Bibra primary gold mineralisation
Figure 3: Example of Bibra primary gold mineralisation

 

Figure 4: Example of Bibra laterite gold mineralisation
Figure 4: Example of Bibra laterite gold mineralisation
Figure 5: Bibra deposit ounces per vertical metre
Figure 5: Bibra deposit ounces per vertical metre
Figure 6: Bibra Cross Section 200100mN
Figure 6: Bibra Cross Section 200100mN
Figure 7: Drill hole locations November 2016
Figure 7: Drill hole locations November 2016

Bibra Scoping Study and DFS

The Company built on the updated June 2016 Resource Estimate and extensive data available from previous studies by IGO and their consultants, and completed a Scoping study on the Bibra gold project in July 2016. An experienced Project Manager, mining engineer Neville Bergin was appointed for this task, which has continued on immediately into the current DFS (due for completion June 2017).

The Scoping Study envisaged an open pit development to a depth of 220m, with an on-site gravity and CIL processing plant with 3 million tonnes/year throughput capacity. Plant design was by Mintrex, who have substantial experience in the design and construction of similar plants in Australia and Africa.

The DFS will include a substantial RC (reverse circulation) drill-out of the Bibra resource estimate, which was completed in December 2016, with an updated Resource estimate expected in the March 2017 quarter. Other DFS activities underway or completed include drill-testing some gold targets adjacent to Bibra, Diamond drilling at Bibra (for resource certainty, collection of metallurgical samples and for geotechnical analysis), Civil Geotechnical studies, Water Borefield drilling and pump-testing, comprehensive metallurgical testwork, mining studies, environmental studies, economic modelling and permitting.

Drilling in late 2016 outside of the Bibra deposit has included the identification of similar-styled mineralisation at several prospects including Portrush, Easky and Southern Corridor. None of these mineralised zones were included in the June 2016 resource estimate, but will be modelled and evaluated for the next resource estimation.

Francopan Gold Prospect

The Francopan Gold Prospect is located approximately 5km south east of the Bibra Gold Deposit (Figure 8) and demonstrates the potential size of the gold mineralizing system at Karlawinda. The mineralization is covered by the northern margin of the Bangemall Basin (younger, Proterozoic-aged sedimentary rocks).

Limited broad spaced drilling beneath 120m of the cover sequence has intersected broad zones of mineralization containing narrower higher-grade intervals (Figure 8). Some holes have intersected a second, deeper mineralised sequence, including zones of 15m @ 3 g/t gold and 6m @ 3g/t gold in hole KBD25 (Figure 9 below). Francopan will be targeted to define the size of the mineralized system, determine whether there is a connection with the Bibra Deposit and identify high-grade areas that can be assessed for underground mining opportunities.

Figure 8: Bibra and Francopan mineralisation, drilling, regional aeromagnetics
Figure 8: Bibra and Francopan mineralisation, drilling, regional aeromagnetics
Figure 9: Francopan Prospect Interpreted Geological Cross Section
Figure 9: Francopan Prospect Interpreted Geological Cross Section

Regional Exploration Potential

The Karlawinda Project remains largely unexplored. Since the discovery of the Bibra Deposit the focus has largely been on detailed assessment of that resource. Regional exploration remains at an early stage and is limited to wide spaced aircore drilling, surface geochemistry and programs of geophysics.

Despite the limited nature of the regional exploration a series of priority targets have been identified for immediate follow-up work. Results of over 2g/t Au are reported from shallow aircore drilling (refer Figure 7); testing these targets will be the focus of exploration programmes in 2017.