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Code CMM Source ASX

The Karlawinda gold project is in Western Australia, located 65 km southeast of the town of Newman. The project area is close to key infrastructure and mining support services. In Nov 2017, total Resources (JORC 2012) for the project were estimated at”

38.3million tonnes @ 1.1g/t Au for 1,326,000 ounces of gold

Gold mineralisation 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. Capricorn acquired the project in February 2016.

 

Figure 1: Karlawinda Gold Project Tenement Location Map

 

At the time of acquisition of Karlawinda from IGO by Capricorn, approximately A$12 million had been spent on regional exploration, resource evaluation and prefeasibility activities.
Subsequent work by Capricorn in 2016 included over 80,000m of RC and Diamond drilling at the Bibra Deposit and the completion of a Scoping Study in July 2016.

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

In August 2017, a maiden Reserve (JORC 2012) was estimated for the Bibra Deposit comprising:

 21 million tonnes @ 1.06g/t Au for 713,000 ounces of gold

The Ore Reserve is contained within a detailed, staged open pit design with a stage one stripping ratio of 2.9:1 and a life of mine (LOM) stripping ratio of 4.7:1. The stage one pit shells contain predominantly laterite and oxide mineralisation.

 

Figure 2: Bibra Deposit, Geology, mineralisation and target areas with the Feasibility Study final Stage3 pit outline (Reserves) and outline of A$1750 resource shell

 

A Feasibility Study on development of the Bibra deposit was completed in October 2017. The study is based on a single large open pit deposit feeding a 3Mtpa CIL processing plant, producing approximately 100,000oz/pa at an average AISC of $A1025/oz over an initial mine life of approximately 6.5 years.

Optimisation studies, permitting and financing discussions with debt providers are ongoing during the first half of 2018 with a final investment decision and commencement of construction anticipated in mid-2019 and first gold production targeted in mid-2019.

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

Bibra is part of a large-scale Archaean-aged gold mineralized system. The deposit is hosted within a package of deformed volcanic and meta-sedimentary rocks, mineralisation has developed on at least three parallel, shallow dipping structures; supergene laterite and oxide mineralization has developed close to surface.

The deposit is oxidized to average depths of 50-70m. Significantly, a gold-enriched, horizontal laterite zone lies within 15m of surface. 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: Bibra Cross Section 200100mN

 

Bibra Resources and Reserves

An updated Resource estimation was undertaken in November 2017 with the total Mineral Resource estimated at 38.3 million tonnes @ 1.1g/t Au for 1,326,000 ounces of gold. This represented an increase of 20% from the previous April 2017 Mineral Resource estimate and also resulted in 25% of the Resource being reported in the highest confidence Measured Resource category for the first time.

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Notes on the November 2017 Mineral Resource Estimate:
1. Discrepancy in summation may occur due to roundings
2. The mineralisation has been wireframe modelled using a 0.3g/t Au assay cut-off grade. The Mineral Resource estimate has been reported above a block grade of 0.5g/t Au.
3. The Mineral Resource has been constrained by a A$1750/ounce optimised pit shell.
4. Ordinary kriging was used for grade estimation utilising Surpac software v6.6.2.
5. Grade estimation was constrained to blocks within each of the mineralised wireframes.
6. See ASX announcements dated 4th July 2016 and 10th April 2017 for previous resource announcements.
7. See ASX announcement dated 7th August 2017 for previous Ore Reserve announcement.

 

In August 2017 a maiden Ore Reserve estimation was undertaken based on the April 2017 Resource estimation. A revised Reserve estimate will be undertaken in the June 2018 Quarter.

Notes on the August 2017 Ore Reserve Estimate:
1. Refer to ASX anouncement of 7/08/2017 full details
2. Reserves are a subset of Resources.
3. Ore Reserves conform with and use the JORC 2012 Code definitions.
4. Ore Reserves are calculated using a gold price of A$1500/ounce.
5. Ore Reserves are calculated using a cut-off grade between 0.40g/t and 0.47g/t Au.
6. Mining dilution, estimated by modelling to a Selective Mining Unit (SMU) with dimensions of 5m x6.25m x2.5m result in a reduction of 13% of reportable Au ounces.
7. All figures are rounded to reflect appropriate levels of confidence which may result in apparent errors of summation.

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. Outside of Bibra and the original Francopan discovery (81m @ 1.2 g/t Au) regional exploration remains at an early stage and is limited to wide spaced aircore drilling, surface geochemistry and programs of geophysics.

Figure 9: Francopan Prospect Interpreted Geological Cross Section
Figure 4: Francopan Prospect Interpreted Geological Cross Section