Avnel reports Indicated Mineral Resources of 119,000 ounces of gold at a diluted grade of 3.34 g/t at the Kalanako deposit at $1,400/oz
(Thomson Reuters ONE) -
ST. PETER PORT, Guernsey, June 05, 2017 (GLOBE NEWSWIRE) -- Avnel Gold Mining
Limited ("Avnel" or the "Company") (TSX:AVK) is announcing an updated Mineral
Resource for the Kalanako deposit located 2.5km northeast of the Kalana Main
Project in south-western Mali.
Highlights:
* In Situ Recoverable Mineral Resource increased by 67% with 114,000 oz/Au at
a grade of 4.61 g/t at a gold price of $1,400/oz
* The confidence in the previously identified Mineral Resource has been
upgraded into Indicated categories
* Local estimates of internal and external dilution have been modelled and
used during the whittle evaluation process
* Indicated Diluted Resources of 119,000 oz/Au at a diluted grade of 3.34
g/t Au (Internal and external dilution adds 0.34 Mt at 0.46 g/t for
5,000/oz)
Howard Miller, Avnel's Chairman and CEO said, "I am pleased to report the
Mineral Resource for the Kalanako deposit has been increased by two thirds. The
119,000 oz/Au of Indicated resources at a diluted grade of 3.34 g/t Au adds
great value to the Kalana Main Project. Over the fact that Kalanako could add up
to one year of production with a lower cost free digging high grade material,
this result highlights the significant exploration potential of the Kalana
permit."
"The addition of Kalanako into our mine plan will profoundly enhance the robust
economics displayed in our optimized feasibility study. The Whittle 4X
optimisation suggests that, at a $1,400 gold price, the net undiscounted cash
flow generated from Kalanako ore processed by the proposed Kalana Main milling
facilities would be in the order of US$70 million before additional capital
costs. To date, we have tested only 700m (true distance) of the 5.2km
geophysical structure. We are highly confident that with today's updated
Kalanako resource, Avnel is in the early stages of the identifying true size of
the deposit," Miller added.
Kalanako drilling database and previous estimate
Located less than 3 km northeast of the Kalana Main Project and the milling
facilities proposed in the Optimised Definitive Feasibility Study, the Kalanako
prospect is an area of historic traditional mining activity (Figures 1 & 2).
Several mineralised trends have been established from RC and diamond drilling at
Kalanako, resulting in a single northwest-southeast corridor of 1,500m by 250m.
These mineralised zones are typically less than 5-15m wide and appear to be
steeply dipping to the northeast, and often contain high-grade intercepts in the
oxide part of the deposit (Figure 3 & 4).
The vertical depth of saprolite and saprock is between 70m and 130m, much deeper
than that observed at Kalana. Diamond drilling at Kalanako intersected numerous
high strain zones, packets of densely laminated quartz veins or vein stockwork
with sulphides and locally highly altered and mineralised felsic intrusive
rocks. Mineralisation is associated with these felsic intrusive rocks or quartz
stockwork that occur along northwest-southeast striking shear zones, parallel or
less than 10° in azimuth from the main geophysical structure illustrated by the
magnetic and IP surveys.
The March 2015 Mineral Resource for the Kalanako deposit was based upon
information from 46 diamond drill holes and 232 RC drillholes (Figure 1).
Historical drill-hole intersections were independently summarised and press-
released in October 2016. The Kalanako Mineral Resource Statement completed by
Denny Jones (Pty) Limited, has been reported above a cut-off grade of 0.9 g/t
Au, and is summarised as follows:
* March 2015 Inferred in-situ resource of 69,000 ozs (0.38 Mt grading 5.55 g/t
Au)
An infill drilling programme of 8,635 meters (82 RC holes, Figure 1) was
successfully completed in December 2016, on time and on budget and with an
excellent productivity and safety record (no Lost Time Injury). This programme
was focused on the saprolite and saprock weathered domains (drill-hole depth of
50-175m). The Kalanako 2016 drilling campaign was initially designed to improve
grade continuity infilling the in-pit resource in order to upgrade resource
classification. Using historical data as a guide, additional holes had been
considered to collect information for the mineralised zones between these
resource pits in order to increase the total amount of resources. Drill-Hole
intersections were independently summarised and press-released in February and
March 2017.
Kalanako May 2017 Mineral Resource Estimate
The pit-constrained in situ Mineral Resource for Kalanako has increased by two
thirds to 114,000 oz/Au since 2015 while maintaining a recoverable cut-off grade
of 0.9 g/t Au and utilising a lower gold price of $1,400/oz (down from
$1,500/oz) to define the limits of the mineral resource. This increase is
attributable to a 67% increase in contained ounces, a 103% increase in tonnes,
and a 17% decrease in average grade relative to the March 2015 MRE. The increase
to the in situ Mineral Resource is largely attributable to the expansion of the
pit shell (Figures 1 & 2) as a result of better intersections from the 2016 DH
database and the 2016 drilling into central and south portions of the deposit
outside the previous resources pit shell (Figure 1). The decrease in grade is
directly attributable to the more dense drilling pattern, which has constrained
the grade better than in the 2015 block model. The more dense drilling pattern
and the better grade continuity is at the origin of the significant upgrading of
the Inferred Mineral Resource into the Indicated category, which demonstrates a
significant increase in the overall confidence in the Mineral Resource.
Kalanako In Situ Mineral Resource Estimate Above a 0.9 g/t Au Cut-off Grade
Mineral Resource Tonnes Grade Contained Gold
Classification (million tonnes) (g/t Au) (thousand oz)
Measured - - -
Indicated 0.77 4.61 114
Measured + Indicated 0.77 4.61 114
1 - Mineral Resources are disclosed on a total project basis at 100%. Avnel owns
an 80% equity interest in SOMIKA, the Malian company that owns the Kalana
Exploitation Permit.
2 - Some figures in this table may not compute due to rounding and truncation.
Kalanako May 2017 Diluted Mineral Resource Estimate and cut-off grades
An important contribution to the Mineral Resource estimation process since March
2015 is an improvement to the estimation of dilution. The addition of estimated
local dilution compared to the global dilution assumption of 35% utilised in
2015 has resulted in the exclusion of some lower grade and narrow mineralisation
and improvement of the most robust wide mineralisations. From the drilling
information, significant intersections (SID) were defined where the grade of the
intersection exceeded the cut-off grade being examined whilst incorporating no
more than two metres of dilution within the intersection. This allowed an
assessment of internal dilution expected in a mining package by comparing the
total number of metres within the SID intercepts with the number of metres from
the one metre composite assay data exceeding the cut-off grade from the same
drill data. Once significant intersections had been defined (inclusive of
internal dilution), 0.5m (0.25m true thickness) was added to the top and bottom
of the SID intersections to form SIDEX intersections (inclusive of external
dilution).
As detailed in the tables below, the pit-constrained diluted Indicated Mineral
Resource above the diluted cut-off grade is currently estimated at 1.11 Million
tonnes at a diluted grade of 3.34 g/t Au containing 119,000 ozs with an
estimated global dilution of 44%. Internal and external dilution adds 0.34 Mt at
0.46 g/t (5,000/oz) to the in situ recoverable resource.
A breakdown of the diluted Mineral Resource by classification and oxidation
state is presented in the following table:
Kalanako Deposit Diluted Mineral Resource Above a 0.9 g/t Au Cut-off Grade
Tonnes Grade Contained Gold
(million tonnes) (g/t Au) (thousand oz)
INDICATED RESOURCE
Laterite + Mottled zone 0.02 3.37 2
Saprolite 0.88 3.33 94
Saprock 0.21 3.39 23
TOTAL 1.11 3.34 119
1 - Mineral Resources are disclosed on a total project basis at 100%. Avnel Gold
owns an 80% equity interest in SOMIKA, the Malian company that owns the Kalana
Exploitation Permit.
2 - Some amounts in this table may not compute due to rounding and truncation.
The Kalanako recoverable resource has been modelled for a range of cut-off
grades from 0.7 g/t Au to 0.9 g/t Au. Each model has received is own dilution
model based on the significant intersection approach previously developed for
the Kalana Main deposit. Resulting whittle optimisations have shown a strong
stability of the resource no matter which cut-off grade is chosen to define the
recoverable resource. In the absence of a more detailed study of the Kalanako
mineralisation, the 0.9 g/t Au cut-off grade has been chosen for consistency
with the March 2015 mineral resource as previously reported.
Kalanako Mineral Resource Dilution Estimate(1,2)
Cut- Resource Resource Internal Internal External External Diluted Diluted Contained
off Tonnes Grade Dilution Dilution Dilution Dilution Tonnes Grade Ounces
Grade
(g/t) (million) (g/t Au) (%) (g/t Au) (%) (g/t Au) (million) (g/t (000 )
Au)
0.9 0.77 4.61 28.8 % 0.48 11.5 % 0.36 1.11 3.34 119
0.8 0.85 4.28 27.3 % 0.45 10.9 % 0.31 1.20 3.14 121
0.7 0.94 3.93 25.7 % 0.39 10.1 % 0.27 1.30 2.94 123
1 - Mineral Resources are disclosed on a total project basis at 100%. Avnel owns
an 80% equity interest in SOMIKA, the Malian company that owns the Kalana
Exploitation Permit.
2 - Some figures in this table may not compute due to rounding and truncation.
Prospects of Eventual Economic Extraction Criteria & Mineral Resource
Classification
All Mineral Resources are pit constrained and are classified as Measured,
Indicated, or Inferred Resources in accordance with the CIM Standards on Mineral
Resources and Reserves, Definitions, and Guidelines prepared by the CIM Standing
Committee on Reserve Definitions and adopted by the CIM Council. The Kalanako
deposit is located close to the Kalana Main deposit, and it is expected to incur
similar mining and processing costs, and share overhead costs with the Kalana
Main Project. External dilution was modelled as 25cm additional skin, which is
considered reasonable as Kalanako is 100% weathered, is steeply dipping
mineralisation, and could be mined using the 140t scale excavators proposed for
Kalana Main.
Classification of parts of the Mineral Resource was applied based upon data
quality, confidence in the geological interpretation, and grade and geological
variability. Parts of the resource model classified as a part of the Mineral
Resource exceed a diluted cut-off grade of 0.9 g/t Au and fall within a
Whittle4X evaluation shell that was used to test for the reasonableness of
economic extraction. Areas informed by 25m by 32.5m spaced drilling (approximate
dimensions) from the Avnel or IAMGOLD drilling, where there is a reasonable
level of confidence in the geological information, interpretation and grade
estimate, and were estimated with a minimum of 8 samples have been classified as
Indicated Resource. Areas where there is no informing data and/or are lower
grade material that is outside of the mineralised interpretation or fall outside
of the whittle shell are not classified as a part of the Mineral Resource.
Kalanako upside potential
A large part of the Kalanako prospect remains undrilled. The drilled portion of
Kalanako (1,500m per 250m oblique corridor) is oblique to the main geophysical
structure. It corresponds to only 700m (true distance) of a 5.2km long
geophysical structure (Figure 5) defined inter-alia as a sharp contact between
low and high IP gradient domains. The Kalanako resource is open along the
structure defined by the geophysical anomaly. Some large collapses above old
artisanal underground developments in the north and more modern artisanal pits
in the south, and recent quartz sampling results highlight the continuity of the
mineralisation and the resulting high potential of this main northwest-southeast
5.2km long structure. Future drilling campaigns would target other areas along
the same geophysical structure.
Corporate Exploration Strategy
In addition to the resource defined at Kalanako and at Kalana, we see
significant potential to add satellite deposits on our existing permit.
Additional resources would allow Avnel to increase the production profile
outlined in the DFS-OFS. The mill proposed in Avnel's DFS-OFS can process 25%
more saprolite ore than fresh rock due to the relative ease of processing
saprolite through the crushing and grinding circuit. As Avnel progresses into
construction, it plans on continuing to add to the quantity and quality of its
mineral inventory through exploration work focusing on the soft saprolite high
grade ore. The aim is to increase planned gold production and reduce the total
cash cost per ounce by using satellite targets to supplement the Kalana ore. The
high-grade and close proximity to Kalana makes Kalanako our highest priority
advanced stage exploration target. Indicative schedules show that the Kalanako
saprolite would be mined in preference to lower grade fresh ore from Kalana Main
over a two to three-year period. As a supplemental deposit to Kalana Main,
Kalanako could help extend the mine life or increase average gold production.
Ongoing Geological Work Progressing Our Exploration Portfolio
As Avnel commences construction on Kalana Main we will be accelerating our
regional geology program to progress our portfolio of exploration targets. To
date, only 3 of our 30 targets have been partially drill tested. Exploration
work is being conducted to evaluate and rank our premier targets.
A first group of 8 prospects (Bandiala, Tonda, Solomanina River, Solomanina
Central and Solomanina South, Sanékourou, Dadiougoubala, Dabaran North, Dabaran
South and Kodialani, which is the NW extension of Kalanako) have been selected
for an advanced geochemical survey. Sampling grids (5x5m or 10x10m) have been
implemented to sample the rejected quartz and tailing domes produced by
historical and traditional mining activities in order to localise the ore shoot
inside these large prospects. A grand total of 10,410 tailing dome samples and
2,425 quartz samples have been collected on 7 of the prospects named above
(Dabaran South sampling being in progress). Results from Tonda (823 domes and
26 quartz), Bandiala (1409 domes and 170 quartz) have been fully received while
results from Solomanina (2 zones out of 3; 2088 domes and 474 quartz) and
Sanékourou (684 domes and 229 quartz) have been partially received. Results
received to date were QAQC validated and are very encouraging.
Exploration and QA/QC Programmes
Exploration programmes are conducted under the supervision of Dr Olivier
Féménias, EurGeol 1115, Avnel's Vice-President, Geology. Dr Féménias, is a
Qualified Person as defined by National Instrument 43-101 of the Canadian
Securities Administrators. Strict sampling and QA/QC protocol are followed,
including the insertion of standards, blanks, and duplicates on a regular basis
as well as laboratory visit by senior geologists. Sample intervals are usually
1.0m. Samples are prepared on site and collected by BIGS Global Burkina SARL
("BIGS Global") and transported to Ouagadougou in Burkina Faso for analysis.
Analytical method is a 2-kilogram bottle-roll cyanidation using a LeachWELL
catalyst. The leach residues from all samples with a grade in excess of 0.1 g/t
Au were prepared by BIGS Global and split to 50 grams and then analysed by
standard Fire Assay.
Qualified Persons
The Mineral Resource estimates reported in this news release were prepared by
Mr. Ivor Jones, (BSc. Hons), MSc, FAusIMM, CP Geo., of Denny Jones Pty Ltd., who
is an independent Qualified Person as defined under National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101"). All Mineral
Resources reported have been prepared in accordance with the CIM Standards on
Mineral Resources and Reserves, Definitions and Guidelines. Mr. Jones has
reviewed and approved the contents of this news release.
The mining dilution assumption and the whittle optimisation processed to
generate the $1,400/oz pit shell used to constrain the resource estimate has
been supervised by Mr. Allan Earl, Associateship in Mining Engineering, FAusIMM
of Snowden Mining Industry Consultants. Mr. Allan Earl is an independent
Qualified Person as defined by NI 43-101. Mr. Earl has reviewed and approved the
contents of this news release.
Mr. Roy Meade, BSc (Honours) Mining Engineering and Professional Engineer (UK),
President of Avnel Gold Mining Limited is a Qualified Person as defined by NI
43-101. Mr. Meade has reviewed and approved the contents of this news release.
Dr. Olivier Féménias, MSc, PhD, DSc, EurGeol 1115, Vice-President, Geology for
Avnel Gold Mining Limited is a Qualified Person as defined by NI 43-101. Dr.
Féménias has reviewed and approved the contents of this news release.
About Avnel Gold
Avnel Gold is a TSX-listed gold mining, exploration and development company with
operations in south-western Mali in West Africa. The Company's focus is to
develop its 80%-owned Kalana Main Project from a small underground mine into a
low-cost, high-grade, open pit mining operation. The Company is also advancing
exploration on several nearby satellite deposits on the 387 km² 30-year Kalana
Exploitation Permit.
On January 9, 2017, the Company reported the results of an Optimized Feasibility
Study ("OFS") prepared by Snowden Mining Industry Consultants. The OFS outlines
an 18-year open-pit mine life at the Kalana Main Project recovering 1.82 million
ozs of gold at an average "all-in sustaining cost" of $561/oz over the first
five years of steady state production and $730/oz over the life of mine with an
initial capital cost of $171 million. Utilising a gold price of $1,200/oz and a
5% discount rate, the OFS reported a net present value ("NPV") of $321 million
after-tax and imputed interest, and an internal rate of return ("IRR") of 50% on
a 100% project basis.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained in this news release.
CAUTIONARY STATEMENTS
Forward-Looking Statements
This news release includes certain "forward-looking statements". All statements,
other than statements of historical fact, included in this release, including
the future plans and objectives of Avnel Gold, are forward-looking statements
that involve various risks and uncertainties. There can be no assurance that
forward-looking statements will prove to be accurate and actual results and
future events could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ materially from
Avnel Gold's expectations include, among others, risks related to international
operations, the actual results of current exploration activities, conclusions of
economic evaluations and changes in project parameters as plans continue to be
refined as well as future prices of gold and silver, as well as those factors
discussed in the section entitled "Risk Factors" in Avnel Gold's most recently
completed Annual Information Form, which is available on SEDAR (www.sedar.com).
Although Avnel Gold has attempted to identify important factors that could cause
actual results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate as actual results and
future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
Technical Information
Except where indicated, the disclosure contained or incorporated into this news
release of an economic, scientific or technical nature, has been summarised or
extracted from the National Instrument 43-101 - Standards of Disclosure for
Mineral Projects("NI43-101") compliant technical report titled "NI43-101
Technical Report on Kalana Main Project", dated effective 30 March 2016 (the
"Kalana Technical Report"), prepared by Snowden Mining Industry Consultants
(Pty) Ltd. ("Snowden"), Denny Jones Ltd ("Denny Jones"), DRA Projects SA (Pty)
Ltd ("DRA") and Epoch Resources (Pty) Ltd ("Epoch Resources"). The Kalana
Technical Report was prepared under the supervision of Mr. Allan Earl (Executive
Consultant - Mining Engineering of Snowden), Mr. Ivor Jones (Executive
Consultant - Applied Geosciences of Denny Jones (Pty) Limited), Mr. Glenn
Bezuidenhout (Principal Process Engineer of DRA), Mr. Sybrand van der Spuy
(Civil Engineer of DRA), Mr. Guy Wiid (Principal Consultant -Tailings and Waste
Rock Facilities of Epoch Resources), and Mr. Stephanus (Fanie) Coetzee
(Principal Consultant -Environmental and Social of Epoch Resources), all of whom
are independent "Qualified Persons" as such term is defined in NI 43-101.
Readers should consult the Kalana Technical Report to obtain further particulars
regarding the Kalana Project, which contains the Kalana Main Project, the Kalana
Mine, plus a number of mineral exploration prospects. The Company filed the
Kalana Technical Report in support of the Feasibility Study and the ESIA on
SEDAR on May 6, 2016.
To view Figure 1: Kalanako Drilling pattern, zones and pit shells, please visit
the following link:
http://www.globenewswire.com/NewsRoom/AttachmentNg/22a7f489-fe60-4c9e-92b8-
f26127310754
To view Figure 2: Kalanako mineralisations, historical traditional mining and
resource pit shells, please visit the following link:
http://www.globenewswire.com/NewsRoom/AttachmentNg/1a5051f9-7e72-4be3-a1b5-
89ab639506d3
To view Figure 3: Kalanako section 1195250 (Zone North-West), please visit the
following link:
http://www.globenewswire.com/NewsRoom/AttachmentNg/c1f7fffa-0c74-47fb-8dfc-
ffc1992c3f22
To view Figure 4: Kalanako section 1194900 (Zone South), please visit the
following link:
http://www.globenewswire.com/NewsRoom/AttachmentNg/df5404ab-
7ed9-4243-9d77-935370085120
To view Figure 5: Kalanako drilled area and resources on the 5.2km long
geophysical trend, please visit the following link:
http://www.globenewswire.com/NewsRoom/AttachmentNg/f7a362c9-9ee3-4241-a08d-
d6bf69d8f8e0
For further information, please contact:
Howard Miller
Chairman and CEO
Phone: +44 207 589 9082
UK Mobile: +44 7768 696129
Canadian Mobile: +1 (416) 726 8174
Email: howard(at)hbmiller.co.uk
Ian McDonald
Vice-President, Corporate Development
Phone : +1 647 407 2515
Email: imcdonald(at)avnelgold.com
www.avnelgold.com
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Avnel Gold Mining Limited via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 05.06.2017 - 12:00 Uhr
Sprache: Deutsch
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