mineral resource estimate for frasers gold deposit jorc resource.pdf · mineral resource estimate...

Date: 13 March 2014 Report No: R141.2014

Minera l Resource Est imate

H A N K I N G G O L D M I N I N G PT Y LT D

Mineral Resource Estimate for Frasers Gold Deposit

Southern Cross

Western Australia

By Bielin Shi

PhD, MSc, MAusIMM MAIG

For: Approved: Hanking Gold Mining Pty Ltd Level 29, 77 St Georges Terrace Perth, WA 6000 Australia Aaron Green Operations Manager

Hanking Gold Mining Pty Ltd Mineral Resource Estimate for Frasers Gold Deposit

Report No: R141.2014 I

Executive Summary

CSA Global Pty Ltd (CSA) was engaged by Hanking Gold Mining Pty Ltd (Hanking) to complete

a Mineral Resource estimate for the Frasers Gold deposit. The Frasers deposit is located

immediately south of the Southern Cross township and approximately 30km north-west of

the Marvel Loch Mill, Western Australia.

The Frasers deposit occurs within the moderately to steeply west-dipping, NNW-trending

regional Fraser-Corinthia Shear Zone extending over 1.5km in strike length. Gold occurs in

lodes hosted by pyrrhotite-rich and potassically-altered mafics, ultramafics and banded iron

formations (BIF). This major regional shear zone is also host to several other significant

deposits in the Southern Cross region.

The Mineral Resource estimate for Frasers is based on total 1,457 drill holes, including 28

holes completed by Hanking in late 2013. 61 RAB holes have been excluded from the

resource estimation.

The wireframes for mineralisation are modelled based on geological interpretation by CSA.

The mineralisation within them has been delineated using lithology and gold (Au) grade of

0.3g/t. A 1m composite data set for individual lodes was used for variography analysis and

estimation. For continuity purposes, adjacent drill holes and sections were used to refine the

geological relationship and to reduce the saw-tooth effect to the modelling.

A block model was created using 2.0mE by 10.0mN by 5.0mRL parent blocks. Ordinary

Kriging (OK) was used to estimate 3D blocks. Quantitative Kriging Neighbourhood Analysis

(QKNA) was used to optimise parameters for the Kriging search strategies.

The Frasers Mineral Resource has been classified and reported in accordance with the

Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves

(JORC Code, 2012 Edition). The Mineral Resource classification is based on confidence in the

geological interpretation, drill spacing and geostatistical measures. The updated Mineral

Resources have been depleted by the open pits and underground development:

“DTM_topo” and “DTM_DEPLETED” provided by Hanking. An optimization open pit shell

(fra_pb_1) for Frasers South deposit provided by Hanking has been assigned into the block

model. The Mineral Resources within the pit shell has been reported at above a cut-off

grade of 1.0 g/t Au and the materials below the pit shell have been reported at above a cut-

off grade of 2.5g/t Au. A full summary of the Mineral Resource is shown in Table 1.


Report No: R141.2014 II

Table 1: Mineral Resource Estimate Results for Frasers

Mineral Resources February 2014 Grade Tonnage Reported above a Cut off Grade of 1.0 g/t Au

Within Designed Pit Shell - "fra_pb_1"

Deposit Category Tonnes

(t) Au (g/t)

Au Metal (Oz)

Frasers Indicated 350,755 3.7 42,000

Total 350,755 3.7 42,000


Below Designed Pit Shell - "fra_pb_1"


(t) Au (g/t)

Au Metal (Oz)

Frasers

Indicated 766,000 5.0 123,000

Inferred 1,474,000 6.1 289,000

Total 2,240,000 5.7 412,000

Note: The CSA Mineral Resource was estimated within constraining wireframe solids provided by

Hanking with a nominal lower cut-off grade of 0.3g/t Au. Ordinary Kriging technique with high grade

treatment was used. The resource is quoted from blocks above the specified gold cut-off grade.

The density values were assigned to the block model as outlined in Table 2.

Table 2: Densities Assigned to the Block Model.

Description Density (g/cm³ )

All Material / Oxidised 2.30

Mafic mineralisation /Fresh 2.90

BIF & Greenstone S_FW mineralisation/Fresh 3.10

Pegmatite / Fresh 2.62

Statistical and visual assessment of the block model was undertaken to assess successful

application of the various estimation passes, to ensure that as far as the data allowed, all

blocks within domains were correctly estimated. Each domain is checked against the

composited data used in the estimation process.

The onscreen validation process involved comparing block estimates and composites grades

in cross section. Swath plots show that generally good agreement is observed between the

data and block model mean grade for all variables for easting, northing and RL slices. The


Report No: R141.2014 III

block model validation process shows that the block model estimates follow the trend of the

1m composite grades across the deposit.

Recommendations

CSA recommendations for further work programs include;

1. The ongoing collection of orientation data to allow a better geotechnical

understanding of the geology and structure of the deposit is recommended.

2. Keep maintaining the current QA-QC procedures to ensure high quality data is

available for subsequent resource upgrades.

3. The updated Mineral Resource shows about 60% of material classified as Inferred

category. This material is an immediate target for resource category upgrading

through further drilling.

4. Improvement of geological understanding, fault controls and lithology

interpretations for the future resource modelling.

Conclusions

The validity of the database used for the Mineral Resources estimate of mineralisation at the

Frasers deposit has been confirmed via checks for internal consistency and accuracy. As a

result of these checks the author considers that the drill hole data has been adequately

validated with satisfactory data QA-QC analysis and is appropriate for use in the estimation

of Measured, Indicated and Inferred Mineral Resources which are the subject of this

technical report.

In CSA’s opinion, the current Mineral Resource model provides a robust global estimate of

the in-situ gold mineralisation at the Frasers deposit.


Report No: R141.2014 IV

Contents

Executive Summary .....................................................................................................................I Recommendations ............................................................................................................................... III

Drill Program Quality Management................................................... Error! Bookmark not defined. Conclusions .......................................................................................................................................... III

Contents ................................................................................................................................... IV 1 Introduction ........................................................................................................................1

1.1 CSA Independence .................................................................................................................. 1 1.2 Information Basis of this Report ............................................................................................. 1 1.3 CSA and Authors ..................................................................................................................... 2 1.4 Warranties .............................................................................................................................. 2 1.5 Reliance to Other Experts ....................................................................................................... 2

2 Property Description and Location .....................................................................................4 2.1 Project Location and Tenement Status ................................................................................... 4 2.2 Local Infrastructure and Services ............................................................................................ 5

3 History .................................................................................................................................6 3.1 Exploration and Mining History .............................................................................................. 6 3.2 Resource Estimate .................................................................................................................. 7 3.3 Resource Estimate Comparison .............................................................................................. 8

4 Geological Setting................................................................................................................9 4.1 Regional Geology .................................................................................................................... 9 4.2 Local Geology ........................................................................................................................ 11 4.3 Deposit Geology .................................................................................................................... 11

5 Mineralisation .................................................................................................................. 13 5.1 Scholls Lode ........................................................................................................................... 13 5.2 Frasers Lode .......................................................................................................................... 14 5.3 Greenstone Lode ................................................................................................................... 14 5.4 Banded Iron Formation (BIF) ................................................................................................. 14 5.5 Late Stage Structures ............................................................................................................ 14

6 Drilling and Sampling........................................................................................................ 15 6.1 2011-2012 Drilling ................................................................................................................. 15

6.1.1 Drilling Protocols and Practice .......................................................................................... 15 6.1.2 Geological Logging ............................................................................................................ 15 6.1.3 Sampling and Analysis ...................................................................................................... 16 6.1.4 QA/QC Programmes ......................................................................................................... 16

6.2 2013 Drilling .......................................................................................................................... 16 6.2.1 Drilling Protocols and Practice .......................................................................................... 16 6.2.2 Geological Logging ............................................................................................................ 17 6.2.3 Sampling and Analysis ...................................................................................................... 18 6.2.4 QA/QC Programmes ......................................................................................................... 18

7 Data Set ............................................................................................................................ 19 7.1 Drill Hole Validation .............................................................................................................. 19

7.1.1 Drill Holes .......................................................................................................................... 19 7.2 QAQC Analysis ....................................................................................................................... 20

7.2.1 Reference Standards ......................................................................................................... 20 7.2.2 Blanks ................................................................................................................................ 21 7.2.3 Duplicates ......................................................................................................................... 21 7.2.4 Lab Repeats....................................................................................................................... 22 7.2.5 Field Repeats .................................................................................................................... 22

8 Mineral Resource Estimate .............................................................................................. 24 8.1 Database ............................................................................................................................... 24


Report No: R141.2014 V

8.1.1 Database Validation .......................................................................................................... 24 8.1.2 Data Summary .................................................................................................................. 25 8.1.3 Analytical Quality Control Procedures and Data .............................................................. 25

8.2 Input Data ............................................................................................................................. 26 8.2.1 Data Set ............................................................................................................................ 26 8.2.2 Geological and Mineralisation Interpretation .................................................................. 26

8.3 Spatial Statistics .................................................................................................................... 29 8.3.1 Data Preparation .............................................................................................................. 29 8.3.2 Selection of Composite Length ......................................................................................... 30 8.3.3 Statistical Analysis of 1m Composites............................................................................... 30 8.3.4 Spatial De-clustering ......................................................................................................... 35

8.4 Variography Analysis ............................................................................................................. 36 8.4.1 Objectives ......................................................................................................................... 36 8.4.2 Variography Analysis Procedure ....................................................................................... 36

8.5 Block Model Construction ..................................................................................................... 39 8.6 Grade Interpolation .............................................................................................................. 40

8.6.1 Kriging Neighbourhood Analysis ....................................................................................... 40 8.7 Estimation Technique and Parameters ................................................................................. 41 8.8 Block Model Validation ......................................................................................................... 42

8.8.1 Onscreen Validation ......................................................................................................... 43 8.8.2 Plots Validation of Interpolated Grades ........................................................................... 44 8.8.3 Smoothing Effects of Grade Interpolation ........................................................................ 46

8.9 Density Assignment ............................................................................................................... 47 8.10 Resource Classification.......................................................................................................... 47

8.10.1 Data Quality .................................................................................................................... 48 8.10.2 Drill Spacing .................................................................................................................... 48 8.10.3 Modelling Technique ...................................................................................................... 48 8.10.4 Estimation Properties ..................................................................................................... 48

8.11 Mineral Resource Estimate ................................................................................................... 49 8.11.1 Mineral Resource Summary ........................................................................................... 49 8.11.2 Grade Tonnage Curve ..................................................................................................... 50 8.11.3 Comparison ..................................................................................................................... 52 8.11.4 Exploration Potential ...................................................................................................... 52

9 Interpretation & Conclusions ........................................................................................... 53 10 Recommendations ........................................................................................................ 54 11 References .................................................................................................................... 55 12 Date and Signature Page .............................................................................................. 56 Appendix 1: JORC Table 1 Compliance ................................................................................... 57

Section 1 Sampling Techniques and Data ........................................................................................... 57 Section 2 Reporting of Exploration Results ........................................................................................ 62 Section 3 Estimation and Reporting of Mineral Resources ................................................................ 65 Section 4 Estimation and Reporting of Ore Reserves - –Not Applicable ............................................ 71

Appendix 2: Client Files .......................................................................................................... 72 Wireframes ......................................................................................................................................... 72 Block Model ........................................................................................................................................ 72 Data .................................................................................................................................................... 72 Surfaces and Workings ....................................................................................................................... 72 Reports & Spreadsheets ..................................................................................................................... 73

Appendix 3: Hanking Sampling Procedure ............................................................................. 74

Figures

Figure 1: Location of the Frasers Project. ................................................................................................ 4 Figure 2: Frasers Project Tenements. ...................................................................................................... 5 Figure 3: Long Section of Frasers Open Pit and Underground Adjacent to Frasers South ...................... 7


Report No: R141.2014 VI

Figure 4: Geology Subdivision for Yilgarn Craton .................................................................................... 9 Figure 5: Southern Cross Province Geology Map. ................................................................................. 10 Figure 6: Simplified Geological Map of Frasers Gold Deposit (Green-Mafic; Pink-

Ultramafics; Blue-Metasediments with BIF) .......................................................................... 12 Figure 7: Schematic Cross section - view to the north showing relative position of the three

minersalisation domains in the main Frasers deposit (12040mN local gird) ........................ 13 Figure 8: Long Section showing Distribution of Gold (Gram-Metres) and 2011/2012 Drill

Holes. ..................................................................................................................................... 15 Figure 9: Frasers South Drilled Holes Position ....................................................................................... 17 Figure 10: Certified Reference Standard G313-6; Results 2013 Drilling. Vertical Axis Au

(ppm). .................................................................................................................................... 20 Figure 11: Certified Reference Standard G912-4. .................................................................................. 21 Figure 12: Blank Analysis Results. .......................................................................................................... 21 Figure 13: Scatter Plot; Primary versus Lab Duplicates. ........................................................................ 22 Figure 14: Scatter Plot. Primary versus Field Duplicates ....................................................................... 23 Figure 15: Plan View on Collar Location Data of Frasers Deposit (In Local Grid) ................................... 26 Figure 16: Plane View on Extents of the Modelled Mineralised Domains for Frasers Deposit. ............ 28 Figure 17: 3D View on Extents of the Modelled Mineralised Domains for Frasers Deposit .................. 29 Figure 18: Section View of Mineralisation Interpretation (11100N) ..................................................... 29 Figure 19: 1m Composite of Au Probability Plots of BIF (Domain 10-50). ............................................. 32 Figure 20: 1m Composite of Au Probability Plots of Greenstone North (Domain 60-100). .................. 33 Figure 21: 1m Composite of Au Probability Plots of Greenstone South (Domain 110-191). ................ 33 Figure 22: 1m Composite of Au Probability Plots of Scholls (Domain 200-220). ................................... 34 Figure 23: Variogram Plots and Parameters of Domain 50. .................................................................. 38 Figure 24: Variogram Plots and Parameters of Domain 60 ................................................................... 38 Figure 25: Variogram Plots and Parameters of Domain 110. ................................................................ 39 Figure 26: Cross Section for Block Model Validation (11060N) ............................................................. 43 Figure 27: Cross Section for Block Model Validation (11160N) ............................................................. 44 Figure 28: Cross Section for Block Model Validation (12500N) ............................................................. 44 Figure 29: Au Estimate Validation Plot of Declustered in Easting, Northing and Elevation

Directions of Domain 50. ....................................................................................................... 45 Figure 30: Au Estimate Validation Plot of Declustered in Easting, Northing and Elevation

Directions of Domain 60-70 ................................................................................................... 46 Figure 31: Au Estimate Validation Plot of Declustered in Easting, Northing and Elevation

Directions of Domain 110-120 ............................................................................................... 46 Figure 32: Long Section View of Frasers remaining Mineral Resources with drill holes. ...................... 49 Figure 33: 3D View of Frasers remaining Mineral Resources with drill holes ....................................... 49 Figure 34: Gold Grade -Tannage Curve for Frasers Remaining Mineral Resources. .............................. 51

Tables

Table 1: Mineral Resource Estimate Results for Frasers ......................................................................... II Table 2: Densities Assigned to the Block Model. ..................................................................................... II Table 3: Frasers Historic Production Figures (estimated by St Barbara, 2012) ....................................... 6 Table 4: Frasers Mineral Resource Summary (estimated by St Barbara, January 2012) ......................... 7 Table 5: Frasers Mineral Resource Summary (estimated by St Barbara, May 2012) .............................. 7 Table 6: Comparison of Undepleted Mineral Resource Estimates at the Cut-off Grade of 2.5

g/t Au ....................................................................................................................................... 8 Table 7: Frasers Drill Holes Summary .................................................................................................... 20 Table 8: Summary of Negatives in the Database ................................................................................... 25 Table 9: Frasers Database Summary ..................................................................................................... 25 Table 10: Domain Coding and Wireframes ............................................................................................ 27 Table 11: Statistics for 1m Composite by Domain ................................................................................. 31 Table 12: High Grade Cut Analysis and Effects ...................................................................................... 35 Table 13: The Parameters Used for Variogram Generation .................................................................. 36 Table 14: Normalised Variogram Model Parameters ............................................................................ 39


Report No: R141.2014 VII

Table 15: The Geometry Summary of Block Models ............................................................................. 40 Table 16: Densities Assigned to the Block Model. ................................................................................. 40 Table 17: Sample Search Parameters for Ordinary Kriging Estimations. ............................................... 42 Table 18: Remaining Mineral Resource Estimate Results for the Frasers Deposit. ............................... 50 Table 19: Frasers Remaining Resource Grade and Tonnage Tabulations .............................................. 51 Table 20: Comparison of Undepleted Mineral Resource Estimates at the Cut-Off Grade of

2.5 G/T Au .............................................................................................................................. 52

Appendices

Appendix 1: JORC Table 1 Compliance .................................................................................................. 57 Appendix 2: Client Files ......................................................................................................................... 72 Appendix 3: Hanking Sampling Procedure ............................................................................................ 74


Report No: R141.2014 1

1 Introduction

This technical report has been commissioned by Hanking Gold Mining Pty Limited (Hanking)

for the purpose of up-dating the Company’s investors with regard to its Southern Cross Gold

Project in Western Australia. The report conforms to the Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore reserves (The JORC Code, 2012 Edition).

CSA Global Pty Ltd (CSA) has prepared this report under the supervision of Dr Bielin Shi. The

report is based on data and information gathered by Hanking and supplied to CSA as of the

24th January 2014. Dr Bielin Shi is the Competent Person responsible for the preparation of

this report and the resource estimation. The author is a professional geologist, with

extensive experience in the exploration and evaluation of mineral properties in Australia and

overseas.

1.1 CSA Independence

Neither CSA nor any of the authors of this report have any material present or contingent

interest in the outcome of this report, nor do they have any pecuniary or other interest that

could be reasonably regarded as being capable of affecting their independence or that of

CSA.

CSA’s fee for completing this report is based on its normal professional daily rates plus

reimbursement of incidental expenses. The payment of that professional fee is not

contingent upon the outcome of the report. CSA has no beneficial interest in the outcome of

the technical assessment and believe that the outcome is not relevant to affecting its

independence.

1.2 Information Basis of this Report

CSA has derived the technical information which forms the basis of its report on information

provided by Hanking. CSA has supplemented this information where necessary with

information from its own extensive regional geological database. However, where

discrepancies arise and no alternative comments are provided, data and interpretations

provided by Hanking prevail in this report. The past exploration history for these tenements

has been derived from previous explorer’s reports, as provided by Hanking. CSA have not

conducted its own independent searches.

Based on the database provided by Hanking, CSA has produced the Mineral Resource

estimate for the Frasers deposit which has been classified and reported in accordance with

the JORC Code (2012 Edition). Resource classification is based on the geological confidence

and interpretation, data QAQC, drill spacing and geostatistical measures and it is CSA’s

opinion that the current resource model represents a robust global estimate of the in situ

gold mineralisation for the project.



1.3 CSA and Authors

CSA is a privately-owned consulting company that provides multi-disciplinary services to our

clients in the global resources industry. Our services cover all aspects of the mining industry

from project generation, to exploration, evaluation development, operations and corporate

advice CSA is an Australian-owned company providing geological and mining consulting

services to the mineral resource sector. The organisation is well resourced with an

established office in Perth, Western Australia and has undertaken work for a number of

substantial international mining houses. CSA comprises a team of technical professionals

dedicated to providing excellence of service in their field of expertise. CSA’s independence is

ensured by the fact that it holds no equity in any project. This permits CSA to provide its

clients with conflict-free and objective recommendations on crucial judgment issues. CSA

has a demonstrated track record in undertaking independent assessments of resources and

reserves, project evaluations and audits, Competent Persons Reports (CPR), independent

audits and pre-feasibility studies to bankable standards on behalf of exploration and mining

companies and financial institutions worldwide. This report was prepared by consultants

sourced from the CSA office in Perth (Australia). These consultants are specialists in the

fields of Economic Geology, Project Analysis and Due Diligence, and Resource Evaluation.

Dr Bielin Shi (PhD, MSc, MAusIMM, MAIG) – Principal Resource Geologist.

Dr Shi is a geologist with high level experience in economic and mining geology, resource

estimation and applied geostatistics. Bielin has worldwide operational expertise in

exploration and mine projects and has worked on commodities including Iron Ore, Gold,

Copper, Lead & Zinc, Tin, Nickel-Cobalt, PGM, Bauxite and Coal, across geological and

resource modelling. Bielin is a full member of the Australasian Institute of Mining and

Metallurgy (MAusIMM) and Australia Institute of Geoscientists (MAIG), and has extensive

experience in the provision of Independent Technical Assessments (ITA) and CPRs for Initial

Public Offerings (IPO) and other documents on the Australian Stock Exchange (ASX), Hong

Kong Stock Exchange (HKSE), Toronto Stock Exchange (TSX) and London Stock Exchange’s

Alternative Investment Market (AIM). Dr Shi is fluent in Chinese and English. He conducted

the field-based assessment of Hanking’ mineral assets and is the primary author for this

report.

1.4 Warranties

Hanking has represented in writing to CSA that full disclosure has been made of all material

information and that, to the best of their knowledge and understanding, such information is

complete, accurate and true.

1.5 Reliance to Other Experts

CSA has based this Mineral Resource estimate report on information provided by Hanking

and the reference listed in Section 11. This report relies on other experts for the description

of project tenure, regional geology and environmental considerations. The report includes

third party technical reports and relevant published and unpublished third party

information. CSA has made all reasonable endeavours, including a review of the Hanking

data, to confirm the authenticity and completeness of the technical data on which this



report is based, however CSA cannot guarantee the authenticity or completeness of such

third party information.

The report author is not qualified to comment on any legal, environmental, political or other

issues relating to the status of the Frasers tenements, or for any marketing and mining

considerations related to the economic viability of the Frasers mineralisation.



2 Property Description and Location

2.1 Project Location and Tenement Status

The Frasers gold deposit is located immediately south of the Southern Cross township and

approximately 30km north-west of the Marvel Loch Mill, Western Australia (Figure 1). The

Frasers deposit occurs within the moderately to steeply west-dipping, NNW-trending

regional Fraser-Corinthia Shear Zone extending over 1.5km in strike length. Gold occurs in

lodes hosted by pyrrhotite-rich and potassically-altered mafics, ultramafics and banded iron

formations (BIF). This major regional shear zone is also host to several other significant

deposits in the Southern Cross region.

Figure 1: Location of the Frasers Project.

Figure 2 shows the Hanking tenements.



Figure 2: Frasers Project Tenements.

2.2 Local Infrastructure and Services

Hanking has an exploration base in Southern Cross which provides support for the Frasers

and regional exploration activities. The town of Southern Cross has small scale, local service

infrastructure such as power, water and sewerage and limited retail/fuel suppliers.

The mining operations currently comprise only the Marvel Loch underground development,

30 km south of Southern Cross, but the tenement package also covers a number of former

significant open pit and underground gold producers, including Copperhead and Yilgarn Star

having produced more than 1Moz of gold each, Golden Pig and Frasers have produced over

500,000oz each, with Nevoria production being in excess of 400,000oz.



3 History

3.1 Exploration and Mining History

The Frasers deposit area has a relatively long exploration history.

The Frasers deposit was discovered in 1888 by Mr Hugh Fraser, and became the first

underground gold mine in Western Australia. Golden Valley Mines NL obtained the Frasers

leases in 1980, and the production was first from underground and then open pit mining in

1988. Burmine Operations Pty Ltd purchased 55% interest in 1992 in a joint venture with

Golden Valley Mines and assumed management of the operations. Open pit mining was

completed in 1992, at which time workings extended over 1.2km in length, 250m in width

and to 110m below surface. Sons of Gwalia (SGW) purchased the Frasers leases in 1996 and

continued underground mining until 1997. The underground mine was developed to 280m

below surface in the central area, with workings spanning from 11,173mN in the south to

12,700mN in the north. The historical production of gold in this mine was 493,000 Oz (Table

3).

Table 3: Frasers Historic Production Figures (estimated by St Barbara, 2012)

Year Tonnes Grade (Au g/t) Ounces

Pre 1940 (U/G) 684,000 13.0 286,000

1988 - 1997 (O/P & U/G) 2,143,000 3.0 207,000

Total 2,827,000 5.4 493,000

St Barbara Limited acquired the project in April 2004 as part of the purchase of the Sons of

Gwalia (SGW) Gold Division. Several reviews of the Frasers deposit have been carried out

since this time, focusing mainly on the southern extension to the existing mine.

Development of the Level 4 drive (90mbs) to the south of 11,400mN was abandoned around

11,173mN due to water ingress. Two rises were attempted by SGW, but were also

abandoned due to the water problem. Thus any high grade material in this area has not

been stopped out above the 4 level (Figure 3, Bamforth, 2006). In the Frasers South area, the

Day Dawn Shaft was established down to approximately 100m below surface at 11,320mN,

5,075mE. Stoping extents from the Day Dawn shaft are unknown but are not believed to be

extensive (Bamforth, 2006).



Figure 3: Long Section of Frasers Open Pit and Underground Adjacent to Frasers South

3.2 Resource Estimate

The 2009 Expected Value Analysis by Harrisson and McArthur (Harrisson, 2009) identified

Frasers depth and strike extensions as possible targets in the Southern Cross region offering

the Company a good opportunity to generate significant value. Three phases of drilling were

completed by St Barbara during 2011 and early 2012 confirming that the deposit is open

down plunge and along strike to the south of the existing mine. As literature and digital data

searches failed to locate any Resource estimates for the original Frasers deposit, work was

completed in January 2012 (Jagodzinski, 2012b) on the entire historic Frasers dataset

resulting in a total Unclassified Mineral Resource Estimate at a 2.5g/t cut-off grade of

1,518kT @ 5.4g/t Au containing 264kOz of gold (Table 4).

Table 4: Frasers Mineral Resource Summary (estimated by St Barbara, January 2012)

Cut-off (Au g/t)

Category Tonnes Grade (Au g/t) Ounces

2.5 Unclassified 1,518,000 5.4 264,000

Total 1,518,000 5.4 264,000

St Barbara conducted a Mineral Resource update for Frasers deposit with new drilling results

in May 2012. The Mineral Resources were classified and reported in accordance with the

JORC Code 2004. The total Indicated and Inferred Frasers Mineral Resource Estimate at a

2.5g/t Au cut-off grade was 2,122kT @ 5.2g/t Au containing 355kOz (Table 5).

Table 5: Frasers Mineral Resource Summary (estimated by St Barbara, May 2012)

Cut-off (Au g/t)

Category Tonnes Grade (Au g/t) Ounces

2.5

Indicated 336,000 5.5 59,000

Inferred 1,786,000 5.1 296,000

Total 2,122,000 5.2 355,000



3.3 Resource Estimate Comparison

Compared to the 2012 Model, the current model (remaining material) has increased

tonnages of Indicated material with the contribution of the recent new exploration drill

holes data and the new wireframe interpretations. Specifically, the tonnage increases 15%;

the grades of the updated resources increase by approximately 9%; and gold metal increases

25%. The following table presents the details of the comparisons based on the resource

numbers are undepleted in respect to mining (Table 6).

Table 6: Comparison of Undepleted Mineral Resource Estimates at the Cut-off Grade of

2.5 g/t Au

Category

CSA Mineral Resources February 2014 (OK)

St Barbara Mineral Resources May 2012 reported (OK)

Comparison

Tonnes (Mt)

Au (g/t) Au

Metal (Oz) Tonnes

(Mt) Au (g/t)

Au Metal (Oz)

Tonnes (Mt)

Au (g/t) Au

Metal (Oz)

Indicated 0.97 5.0 156,000 0.34 5.5 59,000 188% -9% 164%

Inferred 1.47 6.1 289,000 1.79 5.1 296,000 -17% 20% -2%

Total 2.44 5.7 445,000 2.12 5.2 355,000 15% 9% 25%



4 Geological Setting

4.1 Regional Geology

The Yilgarn Archean craton, one of the most productive mineral provinces in the world, can

be subdivided into six terranes (Figure 4). Southern Cross province, in the central of the

Yilgarn craton, is near the boundary between the South west Terrane and the Youanmi

Terrane. Several Archean greenstone belts have been formed in Southern Cross province;

however, the Mavel Loch greenstone belt, which contains all the operations for Hanking, is

the biggest one. The operations with over 1 Moz endowment in this belt include Marvel

Loch, Bullfinch, Yilgarn Star, and Bounty farther south. So far, about 200 t Au has been

produced from Southern Cross province.

Figure 4: Geology Subdivision for Yilgarn Craton

There are two main types of rocks occurred in Southern Cross, namely the granitoid

intrusives and the greenstone rocks (Figure 5). The greenstone rocks, from bottom to top,

comprise meta-ultramafic rocks (i.e. komatiite, tholeiite ), meta-mafic rocks (i.e. high Mg

basalt, basalt), and meta sedimentary rocks (i.e. pelite, meta sandstone). Thin layers of BIF

can be developed within the sequences. Intrusions discovered inside the greenstone belts

include dolerite, felsic porphyries, syenogranites, and post mineralization pegmatites. The

granitoid domes outside of the greenstone belt include the Ghooli Dome to the NE and

Parker Dome to the SE.


Report No: R141.2014 10

Figure 5: Southern Cross Province Geology Map.

The regional metamorphism in this area is dominated by amphibolite. Upper greenschist

metamorphism has been found at the north of Copperhead and the south of Bounty mine.


Report No: R141.2014 11

The rocks that close to the domes and the granitoids gneiss rocks have been through

granulite metamorphism (Mueller, 1997; Ahmat, 1986).

Three principle deformation events have been recognized. The first of these (D1) is defined

as an early thrusting event that was responsible for stratigraphic stacking of the BIF.

Subsequent deformation during D2 as a result of NE-SW compression produced tight,

inclined and recumbent folding, and transitional shear zones. Deformation continued during

D3 with the stress field rotating towards E-W. Earlier structures were reactivated during D3

with variable normal and reverse movement, initially with a dextral strike slip component

but later with a sinistral strike slip overprint as the stress field re-oriented towards E-W.

Intersections between D3 and D2 deformations are usually highly prospective for the gold

mineralisation.

4.2 Local Geology

The Frasers deposit occurs within the Frasers-Corinthia shear zones. Three mineralisation

domains have been discovered, which are, from west to east, Greenstone, Frasers and

Scholls. Greenstone is the most consistently present lode in the Frasers South area. The gold

mineralisation occurs at the boundary between mafic schist and ultramafic schist. Alteration

halos are generally thin, and the predominant alterations are the inner calc-silicate

alteration, and outer zone of biotite alteration. Silicification and sulphidation also occur

locally. Hematite alteration is prevalent at the oxidized mineralization zone. The ore minerals

include native gold, pyrrhotite, pyrite, magnetite, arsenopyrite and chalcopyrite.

4.3 Deposit Geology

The Frasers gold deposit is located along the boundary between mafic and predominantly

ultramafic sequences within the regional Fraser-Corinthia Shear Zone. Within the Frasers

mine area the shear zone varies in width between 20m to 80m and dips 55° to 60° local grid

west. At this scale the boundary between mafic and ultramafic lithologies is not observed as

a sharp contact but rather a broad zone (20 - 80m wide) of structurally interlayered lenses of

mafic schist, ultramafic schist and sulphide-rich banded iron formation (BIF). Lithologies in

the deposit area are typical of a greenstone sequence - dominantly banded chlorite-

actinolite (+/- biotite) altered mafics with minor sedimentary units, amphibole-magnetite

rich ultramafic interflows, and occasional late stage pegmatitic intrusives (McDwyer, 2012).

A geological map of the Frasers gold project is presented in Figure 6.


Report No: R141.2014 12

Figure 6: Simplified Geological Map of Frasers Gold Deposit (Green-Mafic; Pink-Ultramafics; Blue-Metasediments with BIF)


Report No: R141.2014 13

5 Mineralisation

Gold mineralisation is both structurally and lithologically controlled and occurs in a series of

stepped lodes. In the main part of the mine these are the Scholls, Frasers and Greenstone

Lodes (Figure 7). An interpreted shallow to moderate plunge (20° to 40° local grid south to

south-southwest) to the mineralisation is supported by distribution of gold grades in long

section. Lodes are made up of stacks of lens-shaped mineralisation that amalgamate to form

a single lode, with individual lenses between 80m to 140m in vertical extent (Iliff, 1997).

Figure 7: Schematic Cross section - view to the north showing relative position of the three mineralisation domains in the main Frasers deposit (12,040mN local gird)

5.1 Scholls Lode

Scholls Lode is the most easterly (footwall) zone of mineralisation and is hosted within a

sequence of interlayered mafics and ultramafics. It has a strike length of approximately 90m,

is up to 4m wide and extends to approximately 100m in depth. The lode consists of

deformed quartz veins in a brittle-ductile structure with mineralisation associated with the

quartz veins ± sulphides, rare galena and scheelite (Illif, 1997).


Report No: R141.2014 14

5.2 Frasers Lode

Frasers Lode is in a hanging-wall position to Scholls Lode and is similar in that it consists of

deformed quartz veins within a brittle-ductile structure and has a gold and pyrrhotite

association with tremolite-actinolite selvages on veins. Frasers Lode, however, is more

intensely deformed and gold grades extend locally across the Frasers and Greenstone Lode

boundaries (Illif, 1995). Frasers Lode was historically exploited in the open pit between

11,900mN and 12,160mN but has not been observed outside of this area.

5.3 Greenstone Lode

Greenstone Lode is the most westerly (hangingwall) zone of mineralisation and is hosted

within the highly ductile shear zone at the contact between mafic and predominantly

ultramafic lithologies. Mineralisation is typically associated with strongly schistose, quartz-

carbonate-diopside altered, phlogopite amphibolites and is generally more sulphidic than

the other lodes, with pyrrhotite the predominant sulphide species. Greenstone Lode is the

most continuous and most deformed of the mineralised systems and is present throughout

the entire length of the mine (Iliff, 1997).

Greenstone Lode is the most consistently present mineralisation in the Frasers South area.

Here the lode is well developed and consists of sheared, potassically altered mafics with

diopside veining and weak sulphides (pyrrhotite-pyrite-chalcopyrite). Sulphide content

increases with quartz vein intensity, although these zones tend to be narrow (<0.5 metres).

The lode also incorporates a number of amphibole-silica altered Banded Iron (BIF) horizons

with variable amounts (weak-moderate) of pyrrhotite and pyrite (McDwyer, 2012).

5.4 Banded Iron Formation (BIF)

BIF occurs as structurally complex lenses within lodes, as well in a hangingwall position in the

Fraser-Corinthia Shear Zone, where it acts as a good host for gold mineralisation. The

mineralised BIF is highly (amphibole-silica) altered with a strong quartz-pyrrhotite

association and visible gold.

5.5 Late Stage Structures

Two post-mineralisation regional NNE-SSW trending strike-slip dextral faults occur within the

Frasers and Frasers South area (Bogacz, 1990). The Lake Polaris Fault displaces the lodes

approximately 50m horizontally to the NNE at the boundary between the original Frasers Pit

and the Frasers South Extension Pit. Displacement along the Day Dawn Fault to the south

has not been quantified – drilling south of this fault is shallow and sparse and it is possible

that the holes were not collared far enough to the west to account for the fault

displacement. Occasional, late stage narrow pegmatite dykes cut across the mineralisation.


Report No: R141.2014 15

6 Drilling and Sampling

6.1 2011-2012 Drilling

Three phases of diamond drilling from the surface totalling 22 holes for 9,221.28m were

completed by St Barbara during 2011 and early 2012 to test for down-plunge depth and

strike extensions to the Frasers deposit. Figure 8 shows the location of these drill holes in

long section and the distribution of gold (gram-metres).

Figure 8: Long Section showing Distribution of Gold (Gram-Metres) and 2011/2012 Drill Holes.

6.1.1 Drilling Protocols and Practice

All holes were established using a mud roller to drill through transported clays. Holes were

then progressed using a HQ3 bit, reducing in size to NQ2 once competent ground was

intersected. Core recovery was measured for each hole and no recovery issues were

observed through any of the mineralised zones.

All collars were surveyed using a DGPS survey instrument operated by St Barbara employees.

During drilling, downhole surveys were conducted every 30m using a REFLEX Multi-Shot tool

supplied by the drilling company. On completion of each hole, a single continuous Gyro

survey was conducted by a surveying contractor providing a dip and azimuth reading every

5m down the hole.

Details of drilling protocols and practice for all three phases of drilling are described in

McDwyer, 2012. The drilling protocols that were employed for these drilling programmes

have been reviewed and are considered acceptable and appropriate for this style of deposit

and no material issues were encountered.

6.1.2 Geological Logging

All holes were geologically logged in detail using the standard St Barbara logging codes and

structural measurements of core were also taken. Capture of magnetic susceptibility data

was introduced at the start of the phase 3 programme to aid geological logging.


Report No: R141.2014 16

The detail and quality of the geological logging is considered to be appropriate for this style

of deposit.

6.1.3 Sampling and Analysis

Drill core was sampled based on alteration or lithological contacts with samples typically

taken at 1m intervals. Core was split using a diamond saw and the upper or right-hand side

of the core was submitted for sample analysis, with each 1m of half core providing between

2.5–3 kg of sample material.

Sample preparation and analysis was completed by Kalassay (Kalgoorlie) following the

protocols outlined in McDwyer, 2012. The sampling and analysis protocols that were

employed during these drilling programmes are considered appropriate for this style of

deposit.

6.1.4 QA/QC Programmes

The QAQC protocols implemented for all three Frasers drilling programmes were:

1. Insertion of one commercial batch standard per approximately 20 half core

samples.

2. Re-assaying of ore interval pulps by an umpire laboratory.

3. Quarter core field duplicates (phase 3 only).

A review of all QAQC results presented in McDwyer, 2012 did not indicate any sampling or

analytical issues with the 2011-2012 data.

6.2 2013 Drilling

Two phases of diamond drilling from the surface totalling 53 holes have been designed for

targeting Frasers South area since Hanking acquired the Southern Cross operation from St

Barbara in April 2013.

6.2.1 Drilling Protocols and Practice

28 holes for 4,238.2m were completed by Hanking during August 2013 and December 2013

to test for down-plunge depth and strike extensions to the Frasers South deposit and to

upgrade the Inferred and unclassified resources. The drillhole collar positions of the 28 holes

have been picked up by differential GPS, the locations are shown in Figure 9. During drilling,

downhole surveys were conducted every 30m using a REFLEX Multi-Shot tool supplied by the

drilling company. On completion of each hole, a single continuous Gyro survey was

conducted by a surveying contractor providing a dip and azimuth reading every 5m down the

hole.

Details of drilling protocols and practice for the drilling program are summarised in Yuxing

Xue, 2014. The drilling protocols that were employed for these drilling programmes have


Report No: R141.2014 17

been reviewed by CSA and are considered acceptable and appropriate for this style of

deposit and no material issues were encountered

6.2.2 Geological Logging

All holes were geologically logged in detail using the standard Hanking logging codes and

structural measurements of core were also taken. Capture of magnetic susceptibility data

was introduced at the start of the drilling programme to aid geological logging.

Figure 9: Frasers South – Hanking drill hole locations


Report No: R141.2014 18

6.2.3 Sampling and Analysis

Drill core was sampled based on alteration or lithological contacts with samples typically

taken at 1m intervals. Core was split using a diamond saw and the upper or right-hand side

of the core was submitted for sample analysis, with each one metre of half core providing

between 2.5–3 kg of sample. Samples were bagged and ticketed at the core yard, then

stored in a secure shed dispatched to Intertek Laboratory (Kalgoorlie).

Sample preparation and analysis was completed by Intertek Laboratory (Kalgoorlie)

following the protocols outlined in McDwyer, 2012. The sampling and analysis protocols that

were employed during these drilling programmes are considered appropriate for this style of

deposit. The preferred assay technique was Fire Assay.

6.2.4 QA/QC Programmes

The QAQC protocols implemented for the Frasers South drilling programme were:

1. Insertion of one commercial batch standard per approximately 20 half core

samples.

2. Re-assaying of ore interval pulps by an umpire laboratory.

3. Quarter core field duplicates.

A review of all QAQC results did not indicate any sampling or analytical issues with the 2013 data.


Report No: R141.2014 19

7 Data Set

7.1 Drill Hole Validation

Hanking provided CSA with a drillhole dataset, containing collars, down hole surveys, assays

and lithology.

Data set was compiled from several legacy databases and combined with the 2011-2012 St

Barbara drilling data and 2013 Hanking drilling to create a single database for this resource

estimate. The resource development and underground drilling was completed by a number

of companies extending back to the early 1900’s consisting of various drill, sample and

analytical types. The majority of the holes in the dataset were drilled after 1980. Details of

sampling and analytical techniques of holes in the legacy dataset are unknown.

Data was validated and any obvious errors were corrected. Several holes in the Frasers

South area had incorrect elevations (up to 16m) and these were corrected based on a DGPS

survey of the area in 2011 by St Barbara. A significant number of the early underground drill

holes had only nominal coordinates. It was decided to include this data in the estimate and

the coordinates were changed to reflect a more realistic underground drilling pattern. All

underground diamond drill holes and most of the surface RC holes have not been surveyed

downhole. Whilst this could have an impact on the resource locally, it is not considered to

have any material effect on the global resource.

A number of holes from the dataset were excluded from the estimation. These are tagged in

the Collar table of the database as 'Removed'. They included early deep holes with

suspicious or no downhole surveys, holes with no assay data, and some underground drill

holes that were selectively sampled inside the lode boundary, which would significantly bias

the estimation. Six government diamond holes drilled in 1913-1914 were filtered out of the

dataset due to their age, sampling protocol and unreliable downhole survey control.

Whilst digital capture of geological information from original logs lacked detail (typically

containing only the main lithologies, oxidation and presence of sulphides and quartz), it was

considered sufficient to reliably interpret the mineralisation. Random checks of original logs

indicated lithologies were generally captured accurately with the exception of a few surface

RC holes south of the mine (FSP*) where banded mafic amphibolite was coded as ultramafic.

It was not considered critical to this resource estimate to correct these errors.

The validation processes applied and the resulting dataset used to estimate the resource are

considered acceptable.

7.1.1 Drill Holes

The Mineral Resource estimate is is based on 912 diamond drill holes, 469 RC drill holes and

15 other holes completed until 2013. RAB holes have been excluded from the resource

estimation. The drilling is primarily on a 20m by 20m, grading to a 30m by 40m patterns at

depth. All holes were planned with dips between 60° and 65°.


Report No: R141.2014 20

Basic drillhole statistics are provided in Table 7.

Table 7: Frasers Drill Holes Summary

Hole Type Drill holes received Drill holes

removed for modelling Drill holes

used for modelling

DDH 1,042 135 907

RAB 61

61

RC 466 3 463

NR 16 1 15

RC/DDH 5

5

RC/ 15 9 6

Total 1,605 148 1,457

7.2 QAQC Analysis

QAQC results from the 2013 drilling programme are presented below.

7.2.1 Reference Standards

The result from the 2013 reference standards analyses support each other and provide

reasonably high confidence levels for the Mineral Resource estimate and allows the resource

to be classified according to the JORC Code 2012 Edition.

Hanking Reference standard G313-6 results are presented in Figure 10. This reference

standard has failed on two occasions against Hankings’ criteria, however on most occasions

it has performed well and the assay results from adjacent drill hole samples can be given

reasonable confidence levels.

Figure 10: Certified Reference Standard G313-6; Results 2013 Drilling. Vertical Axis Au (ppm).

For reference standard G912-4; results are presented in Figure 11. This standard has

performed well and the assay results from adjacent drill hole samples can be given high

confidence.


Report No: R141.2014 21

Figure 11: Certified Reference Standard G912-4.

7.2.2 Blanks

There is no significant level of contamination is identified with a minor anomalous Au grades

up to 0.02 g/t (Figure 12).

Figure 12: Blank Analysis Results.

7.2.3 Duplicates

Field duplicates were selected at 40m intervals. The duplicates were sampled at the same

time as the primary samples. The main purpose of taking field duplicate samples is to check

overall sampling and analytical precision. If the results demonstrate lack of correlation

between the primary and duplicate assays, then the error could be anywhere within the

sampling, sample preparation or analytical stream. The use of prep and pulp duplicates will

assist in narrowing down where the errors occur. CSA recommend Hanking select a series of

sample and pulp rejects from the laboratory and have these re-analysed for completeness.

Results from the laboratory and field duplicates are presented as a QQ plot (Figure 13) and

as a scatter plot (Figure 14). Only 60 field duplicate samples were analysed and the results

should be considered in light of this.

A QQ plot accumulates both sets of data into decile bins, and plots these as a scatter plot.

The scatter plot demonstrates good correlation between the primary and duplicate assays

up to 0.5g/t Au (500ppb), after which a bias is observed where the duplicates exhibit a


Report No: R141.2014 22

higher grade than the primary assay. It cannot be determined from this data if the bias is due

to a sampling error, sample preparation or analyses issues, or inherent nugget effect within

the samples. The latter is considered most likely.

7.2.4 Lab Repeats

Hanking has not requested laboratory prep duplicates, or pulp duplicates from pulp rejects.

CSA (2013) reviewed laboratory repeats and commented that there was good agreement

with the original assays.

Figure 13: Scatter Plot; Primary versus Lab Duplicates.

7.2.5 Field Repeats

CSA (2013) reviewed field repeats and commented that there was good agreement with the

original assays, although the data set was reasonably small and there were a couple of

obvious outliers that should be checked.


Report No: R141.2014 23

Figure 14: Scatter Plot. Primary versus Field Duplicates


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8 Mineral Resource Estimate

The following sections detail the work carried out on the Frasers deposit by CSA. The work

includes:

• Data validation, QAQC checking

• Geological and mineralisation interpretation, determining suitable spatial domains

for statistical work;

• Digitising the sectional interpretation;

• 3D wireframe modelling of the interpretation;

• Spatial statistics, data preparation, wireframe assigning, data compositing;

• Top cut assessments for the composites by domain;

• Variography analysis;

• Quantitative Kriging neighbourhood analysis (QKNA);

• Building and interpolating ore block model and waste block model;

• Block model validation; and

• Mineral Resource classification and reporting.

8.1 Database

8.1.1 Database Validation

During preparation for estimation, the following validation steps were undertaken:

• Missing collar co-ordinates, hole depths, missing down hole surveys; miss matched

collar, survey or assay depths; or over lapping intervals;

• Missing or overlapping intervals for geology or assay interval data.

Primary assays fields were checked for missing assays, negative values and zero values (See

Table 8)

• Negative assays which were determined to be below detection were replaced with

a positive value of 0.001 g/t;

• Empty assays which were due to incomplete samples or missing core/chips were

left as null samples. These will have no impact on interpolation, and the


Report No: R141.2014 25

assumption is that the grade of these missing values is similar to that of

neighbouring samples, and that local block interpolation will generate

representative estimates based on neighbouring data contained in the search

ellipse;

• Zero grade values were replaced with nulls if determined to be true missing data,

or a below detection positive value (0.005) otherwise.

Table 8: Summary of Negatives in the Database

Frasers

Au_ppm Frequency

0 132

Missing (Empty) 2,263

8.1.2 Data Summary

Original data files were exported from the CSA database as Micromine DAT files. Data

manipulation and wireframe interpretation was carried out. Data was then exported to

Datamine and Comma Separated Value (csv) files. Datamine macros were used to import

composite data and modelling parameters, followed by macros using the ESTIMA process to

estimate block grades using cut, uncut and flattening methods.

A summary of the Micromine database is shown below in Table 9.

Table 9: Frasers Database Summary

Database Name Date Created Database Type Average Drilling Grid

Frasers 25-Jan-14 Micromine DAT files 20.0m x 20.0m

File Name Description

Collars All.DAT Collar data

Surveys All.DAT Downhole surveying data

Assays All.DAT Sample assay data

Geol_All.DAT Geological and lithological data

8.1.3 Analytical Quality Control Procedures and Data

CSA has reviewed the sampling, sample preparation and assaying procedures. The results for

Standards, Blanks and duplicates analysis are within the accuracy limits for these analytical

techniques and, on the whole, show the quality of the analytical work to be satisfactory.


Report No: R141.2014 26

8.2 Input Data

8.2.1 Data Set

The original data was imported into Micromine and Datamine for the modelling process.

Collar data as used in the Frasers resource estimation is illustrated below (Figure 15).

Figure 15: Plan View on Collar Location Data of Frasers Deposit (In Local Grid)

8.2.2 Geological and Mineralisation Interpretation

CSA has conducted mineralisation interpretation for the Frasers South deposit by individual

sections in Micromine.

Individual lodes were interpreted on 20m spacing (closing in to 10m where the drill spacing

allowed) based on both geological logging and gold grade. Key geological characteristics

used to determine lode boundaries in conjunction with grade included presence of ‘banding’


Report No: R141.2014 27

or shearing in the mafics and ultramafics, presence of quartz, especially in Frasers and

Scholls Lodes, and presence of sulphides (particularly pyrrhotite) and visible gold.

Occasionally BIF was logged within a lode boundary and was included as part of that lode.

Interpretation of individual lodes was also aided by descriptions and sketches found in the

literature as well as the position of the underground workings (reasonably presuming that

most of the development would have followed the lodes).

A single continuous outline was digitised around each mineralised lode. This necessitated

including some internal low grade and waste material within the wireframes for continuity.

Literature descriptions and observations from the drilling data support the existence of

discrete higher grade lenses within the mineralised lodes. As the deposit is being reviewed

primarily as an underground mining opportunity, higher grade lenses or shoots were

modelled within the Greenstone N, Greenstone S and Scholls Lodes as separate domains.

These were interpreted to have a moderately south-plunging geometry as described in the

literature and observed from grade distribution in long section.

The deposit is modelled based on geological interpretation and delineation of the

mineralisation predominantly by grade and where possible alteration type, alteration

intensity and veining. The wireframes were constructed based upon the previous

interpretations with a minimum cut-off grade of 0.3g/t of Au by St Barbara resource

geologist in 2012. Figure 16 to Figure 18 show the model of mineralised domains. Table 10

presents the whole wireframes and domain codes for Mineral Resource estimation.

Table 10: Domain Coding and Wireframes

Domain Code Domain Description Wireframe Name

10 BIF1 BIF1.dxf

20 BIF2 BIF2.dxf

30 BIF3 BIF3.dxf

40 BIF4 BIF4.dxf

50 FRASERS FRASERS.dxf

60 GREENSTONE N GREENSTONE N.dxf

70 HIGH GRADE GREENSTONE N HIGH GRADE GREENSTONE N.dxf

80 GREENSTONE N_FW1 GREENSTONE N_FW1.dxf

90 GREENSTONE N_FW2 GREENSTONE N_FW2.dxf

100 GREENSTONE N_HW2 GREENSTONE N_HW2.dxf

110 GREENSTONE S GREENSTONE S.dxf

120 HIGH GRADE GREENSTONE S_FW HIGH GRADE GREENSTONE S_FW.dxf

130 HIGH GRADE GREENSTONE S_HW HIGH GRADE GREENSTONE S_HW.dxf

140 GREENSTONE S_FW1 GREENSTONE S_FW1.dxf




170 GREENSTONE S_HW1 GREENSTONE S_HW1.dxf



Report No: R141.2014 28

Domain Code Domain Description Wireframe Name



200 SCHOLLS1 SCHOLLS1.dxf

210 HIGH GRADE SCHOLLS1 HIGH GRADE SCHOLLS1.dxf

220 SCHOLLS1B SCHOLLS1B.dxf

Figure 16: Plane View on Extents of the Modelled Mineralised Domains for Frasers Deposit.


Report No: R141.2014 29

Figure 17: 3D View on Extents of the Modelled Mineralised Domains for Frasers Deposit

Figure 18: Section View of Mineralisation Interpretation (11,100mN)

8.3 Spatial Statistics

8.3.1 Data Preparation

General aspects of data preparation used in the Mineral Resource estimation are as follows:


Report No: R141.2014 30

• Examination of raw sample lengths and selection of composite length.

• Compositing data to 1m down-hole lengths, breaking the compositing at geological

boundaries.

8.3.2 Selection of Composite Length

Analysis of the exploration data intervals shows the majority of the raw sample intervals are

1m in length. A composite interval of 1m has been chosen to maintain the differentiation of

both the lodes and the high grade zones within the individual domains for the Frasers

deposit.

Compositing was completed to honour the geological boundaries of the mineralised lode by

breaking the composites at the lode boundaries. Only diamond and RC holes were used in

the analysis and estimate.

8.3.3 Statistical Analysis of 1m Composites

The statistical analysis examined the distributions of the composited Au grade within each

domain, particularly the upper tail of the distributions. The statistical summary for 1m

composites of Au are provided in Table 11. The probability plots by domain are shown in

Figure 19 to Figure 22.


Report No: R141.2014 31

Table 11: Statistics for 1m Composite by Domain

Univariate statistics for 1m composites

Domain No. Obs. Minimum Maximum Mean Median Stand. Dev. Variance Coeff Var

10 12 0.41 27.40 5.82 2.71 7.65 58.54 1.31

20 29 0.01 16.69 2.81 1.68 3.57 12.77 1.27

30 20 0.08 43.90 8.76 4.02 11.09 123.02 1.27

40 60 0.06 43.16 4.25 1.17 7.50 56.30 1.77

50 780 0.01 99.60 3.40 0.90 8.72 76.08 2.57

60 3241 0.01 462.06 2.27 0.68 8.22 67.59 3.62

70 871 0.01 95.40 4.03 2.04 6.44 41.54 1.60

80 77 0.06 59.90 3.27 1.14 7.25 52.59 2.22

90 16 0.01 52.09 12.23 6.41 15.71 246.76 1.28

100 137 0.01 26.30 1.46 0.63 2.86 8.19 1.96

110 3079 0.01 140.46 1.99 0.66 5.87 34.45 2.96

120 436 0.01 77.33 6.75 3.38 9.39 88.19 1.39

130 38 0.04 31.68 7.63 4.61 7.74 59.95 1.01

140 49 0.04 6.45 1.91 1.38 1.51 2.27 0.79

150 220 0.01 35.41 3.69 2.06 4.90 23.97 1.33

160 224 0.01 82.54 3.07 1.15 6.54 42.73 2.13

161 13 0.01 15.80 2.40 1.35 3.55 12.62 1.48

170 292 0.01 59.00 2.91 1.03 6.45 41.66 2.22

180 42 0.04 128.23 7.06 2.94 20.23 409.15 2.87

190 9 0.12 24.08 3.90 1.06 7.31 53.50 1.88

191 120 0.04 68.10 2.70 1.14 6.63 43.99 2.46

200 458 0.01 193.00 4.38 0.93 14.84 220.29 3.39

210 171 0.04 360.66 8.43 4.33 28.23 797.15 3.35

220 10 0.01 82.56 15.79 3.93 24.43 596.63 1.55

De-clustered statistics for 1m composites using 35 × 35 × 10 cell de-clustering

Domain No. Obs. Minimum Maximum Mean Median Stand. Dev. Variance Coeff Var

10 12 0.41 27.40 4.96 2.37 6.58 43.28 1.33

20 29 0.01 16.69 1.98 0.97 3.01 9.07 1.52

30 20 0.08 43.90 9.60 5.20 11.31 127.81 1.18

40 60 0.06 43.16 3.83 1.17 7.00 49.00 1.83

50 780 0.01 99.60 3.78 1.16 9.16 83.83 2.43

60 3241 0.01 462.06 3.00 1.03 10.51 110.46 3.50

70 871 0.01 95.40 5.23 3.22 7.46 55.70 1.43

80 77 0.06 59.90 2.99 0.98 7.66 58.64 2.56

90 16 0.01 52.09 9.72 5.67 13.90 193.26 1.43

100 137 0.01 26.30 1.56 0.99 2.77 7.67 1.77

110 3079 0.01 140.46 2.27 0.82 5.88 34.59 2.59


Report No: R141.2014 32

120 436 0.01 77.33 5.82 3.34 8.01 64.10 1.38

130 38 0.04 31.68 5.38 2.54 6.82 46.48 1.27

140 49 0.04 6.45 1.69 1.09 1.49 2.23 0.88

150 220 0.01 35.41 4.18 2.26 4.72 22.29 1.13

160 224 0.01 82.54 3.97 1.47 7.53 56.70 1.90

161 13 0.01 15.80 2.67 1.26 4.23 17.93 1.59

170 292 0.01 59.00 2.24 0.94 5.25 27.59 2.34

180 42 0.04 128.23 5.19 3.02 12.98 168.35 2.50

190 9 0.12 24.08 7.76 1.60 10.36 107.40 1.34

191 120 0.04 68.10 3.06 1.48 6.80 46.30 2.22

200 458 0.01 193.00 3.87 1.24 9.91 98.16 2.56

210 171 0.04 360.66 6.38 4.02 18.02 324.74 2.83

220 10 0.01 82.56 17.91 14.59 18.20 331.29 1.02

The data distribution is highly positive skewed which is typical of many gold deposits. The

coefficient of variation (‘CV’), which is calculated by dividing the standard deviation by the

mean grade, is moderately high indicating that high grade composites are materially

influencing the statistics and that outlier data may be present.

A review of the high grade data was completed to assess the need for high grade cutting.

The review included the following:

• Review of the histograms and log probability plots to determine potential outliers.

• Review of ranked data and the relative contribution of each datum to the mean

and variance of the data set.

• A review of the relative clustering of potential outlier composites.

Figure 19: 1m Composite of Au Probability Plots of BIF (Domain 10-50).


Report No: R141.2014 33

Figure 20: 1m Composite of Au Probability Plots of Greenstone North (Domain 60-100).

Figure 21: 1m Composite of Au Probability Plots of Greenstone South (Domain 110-191).


Report No: R141.2014 34

Figure 22: 1m Composite of Au Probability Plots of Scholls (Domain 200-220).

Based on the above review, high grade cuts have been applied to the composite data set

used in grade estimation (Table 12). A relatively small proportion of composites have been

adjusted with the mean reduction for each domain noted resulting from the application of a

high grade cut.


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Table 12: High Grade Cut Analysis and Effects

Domain Composite

Number Top Cut (Au g/t)

Metal Cut estimated

Data Cut Data Cut Numbers

Comments

10 12 10 3.62% 8.33% 1 Cluster of higher grade outliers



















190 9

no Top Cut




220 10

no Top Cut

8.3.4 Spatial De-clustering

De-clustering is necessary to ensure that there is no bias due to data clustering when such

statistics are compared to the kriging results. CSA performed statistical analysis of Au grades

with the cell de-clustering approach. Cell de-clustering used a normal window size of 35m by

35m by 10m, which is a reasonable window size selection for the drilling density. The results

are summarised in Table 11, which show a moderate level of clustering with more significant

impact on Au grade estimate for Greenstone South and hangingwall domains.


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8.4 Variography Analysis

8.4.1 Objectives

Variography is used to describe the spatial variability or correlation of the attribute (Au).

The spatial variability is traditionally measured by means of a variogram, which is generated

by determining the averaged squared difference of data points at a nominated distance (h),

or lag (Srivastava and Isaacs, 1989). The averaged squared difference (variogram or γ(h)) for

each lag distance is plotted on a bivariate plot, where the X-axis is the lag distance and the Y-

axis represents the average squared differences (γ(h)) for the nominated lag distance.

The objectives of the variography analysis are to:

• establish the directions of major grade continuity for Au in the mineralised

domains; and

• provide variogram model parameters for use in geostatistical grade interpolation

8.4.2 Variography Analysis Procedure

Variography and evaluation of suitable estimation parameters based on the final variogram

models were undertaken using Isatis software. The variography analysis was based on the

1m composites for major domains.

Variography has been carried out using a three-dimensional directional. The angular and

distance search tolerances used are provided in (Table 13) which illustrates the various

tolerances for directional variogram calculation.

Down hole variograms are used to determine the nugget effect, then a fan of horizontal

variograms is used to select major and semi-major variograms; these will usually be aligned

with (major) and at right angles (semi-major) to the strike of the mineralised domains. A

vertical or down hole variogram can then be used for the down-dip direction.

Table 13: The Parameters Used for Variogram Generation

Parameter Value

Start Azimuth (ang) 0°

End Azimuth 175°

Step Azimuth 5°

Horizontal Angle Tolerance (atol) 15°

Horizontal Angular Increment 5°

Lag Distance (xlag) 10m

Lag Tolerance (xltol) 5m

NB: Azimuth (horizontal direction vector) is defined as a clockwise bearing from grid north (0°).

Plunge (vertical direction vector) is defined from the horizontal plane (0°), where a negative plunge is

down and positive is up.


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An overview of the variography procedure for 1m composite dataset is as follows:

• 1m composite of major domains with top cut dataset were applied for the

variography analysis;

• The nugget variances were modelled from the down hole variograms based on a

1m lag interval;

• Variograms were generated with a 10m lag interval and used to select major and

semi-major variograms, with 5° increments horizontally to provide complete vector

coverage in 2D;

• Normal variograms were used as these generally produced the clearest variogram

structure compared to absolute variograms and pair-wise relative variograms;

• Variogram map trends were related back to the expected geological continuity

directions. Orientations were modelled consistent with the interpretations and

supported by the continuity trends indicated by the variography and geological

understanding;

• The two orthogonal orientations which best reflected the major and semi major

axes of continuity were selected; A vertical or down hole variogram can then be

used for the minor direction.

The variograms were calculated for ‘Au_Cut’ using the above approach. Variogram modelling

was then carried out approach for major domains, the parameters were used for other

minor domain estimation; in general, a double spherical scheme model was adequate to

represent the raw variograms and defined the shorter and longer scale variability. As a final

step, the variogram models were normalised to a variance of 1 to facilitate comparison of

Kriging variances after interpolation.

Nugget effects in the major lodes are typically over 40 - 50%, which is moderate to high for a

gold deposit and illustrates the high skewed grade distribution of the 1m composite data as

used for variogram calculation. Major ranges are mainly 50m, with a limited range across the

mineralisation of typically 15m.

The variogram plots of main lodes have been shown in Figure 23 to Figure 25. Table 14

presents the variogram parameters of main lodes. The variogram parameters were used the

minor lode estimation.


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Figure 23: Variogram Plots and Parameters of Domain 50.

Figure 24: Variogram Plots and Parameters of Domain 60


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Figure 25: Variogram Plots and Parameters of Domain 110.

Table 14: Normalised Variogram Model Parameters

Domain Direction Nugget C1 C2 Sill Range1 Range2

50

Across-Strike X 0.45 0.36 0.20 1.00 5.75 45.54

Along-strike Y 0.45 0.36 0.20 1.00 5.72 45.54

Down-dip Z 0.45 0.36 0.20 1.00 2.59 10.88

60

Across-Strike X 0.53 0.21 0.26 1.00 39.10 13.94

Along-strike Y 0.53 0.21 0.26 1.00 51.07 8.44

Down-dip Z 0.53 0.21 0.26 1.00 2.19 9.86

110

Across-Strike X 0.41 0.37 0.22 1.00 16.00 35.00

Along-strike Y 0.41 0.37 0.22 1.00 20.00 100.00

Down-dip Z 0.41 0.37 0.22 1.00 3.00 11.00

8.5 Block Model Construction

A three dimensional block model was generated to enable grade estimation. The selected

block size was based on the geometry of the domain interpretation and the data

configuration. A parent block size of 2mE by 10mN by 5mRL was selected with sub-blocking

to a 0.2mE by 10mN by 0.5mRL cell size to improve volume representation of the

interpreted wireframe models. Sufficient variables were included in the block model

construction to enable grade estimation and reporting.

Sub-cells were generated as appropriate to honour wireframe domains and regolith

interpretations during model construction.


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The block model construction parameters are displayed in Table 15.

Table 15: The Geometry Summary of Block Models

Attribute East North RL

Min 4,500 10,750 800

Max 5,400 12,750 1,400

parent size 2 10 5

Sub size (SMU) 0.2 1 0.5

Block numbers 450 200 120

The mineralisation domains, lithology, modelled oxidation and deplete portion were coded

to the block model. The density values were assigned to the block model based on the

regolith logging data provided by Hanking (Table 16).

Table 16: Densities Assigned to the Block Model.

Description Density (g/cm³ )

All Material / Oxidised 2.30

Mafic mineralisation /Fresh 2.90

BIF & Greenstone S_FW mineralisation/Fresh 3.10

Pegmatite / Fresh 2.62

8.6 Grade Interpolation

Grade estimation of the Frasers deposit was carried out using OK geostatistical interpolation

methods. The methods use estimation parameters defined by the variography parameters.

A 1m composite using the top-cut dataset was used for the grade interpolation. Estimation

of the resource was completed using Datamine v3.17 software.

The final block model was created as a Datamine v3.17 format model and exported to

Micromine for validation and classification.

8.6.1 Kriging Neighbourhood Analysis

Quantitative Kriging Neighbourhood analysis (QKNA) was undertaken on a subset of blocks

in the main domains to establish optimum search and minimum/maximum composite

parameters. Goodness-of-fit statistics are generated to assess the efficiency of the various

parameters. The primary statistics used are the Kriging efficiency and the slope of

regression.

A general summary of the main steps is provided:

• Run QKNA for a range of potential Kriging neighbourhoods;

• Produce summary graphs for QKNA criteria (Kriging slope of regression, sum of

negative Kriging weights, Kriging efficiency);


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• Select Kriging neighbourhoods as per QKNA optimisation theory.

Note: The Kriging efficiency is calculated as (block variance-Kriging variance)/block variance,

where block variance is the total sill less the variance contained within a block.

The slope of regression is calculated as (block variance – Kriging variance + µ)/ (block

variance – Kriging variance + 2µ).

Kriging efficiency (KE) calculates the overlap expected between the estimated block grade

histogram and the ‘true’ block grade histogram. A high efficiency indicates a good match

between estimated and ‘true’ grades, while as parameters become less optimal, KE drops.

The slope of regression estimates the correlation between estimated and ‘true’ grades; a

value closer to 1.0 indicates a good fit. In addition, other statistics, such as the percentage of

negative weights generated in a Kriging plan can be considered.

A number of key input parameters can be tested in this way, including:

• Block size.

• Number of discretisation points.

• Search ellipse dimensions.

Minimum and maximum sample numbers in a search plan.

8.7 Estimation Technique and Parameters

OK interpolation methods were used for the current resource estimation. The Micromine

format rock and grade models and composite data files were exported to Datamine software

to use the ESTIMA interpolation process. It is considered that Datamine software offers the

most robust and flexible resource estimation software, providing maximum control over all

the parameters which are used to drive the estimation process. Results are also reproducible

and auditable through extensive use of macros and parameter files to control the process.

Sample search neighbourhoods have been optimised based on kriging statistics. Several

data configurations (block locations and accompanying data spacing) were considered in this

optimisation process. Minimum number of samples, numbers of drill holes, and search

distances are determined by drill pattern spacing, and the geometry of the mineralised

lodes.

The kriging plan parameters used for grade interpolation are summarised in Table 17.

Specific search ellipsoid rotations were used for each domain reflecting the domain

variography orientations. A 3-pass kriging plan was used to estimate blocks which did not

receive a grade estimate in a previous pass. Search ellipsoid dimensions were selected in

relation to the nominal drill hole data spacing and identified variogram ranges.

The estimation parameters of the selected Kriging neighbourhoods by domain used in the

OK are summarised as follows:


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• A three-pass estimation strategy was implemented wherein each successive

estimate is completed with expanded sample searches and relaxed composite

collection criteria.

• To minimise the effect of data clustering, a limit of 4 composites per drillhole was

implemented.

• Block discretisation of 2Em x 5Nm x 2RLm points was used.

• The estimation has been completed based on the parent cell (i.e. sub-cells have

identical grades to each other based on the parent cell).

Table 17: Sample Search Parameters for Ordinary Kriging Estimations.

8.8 Block Model Validation

Statistical and visual assessment of the block model was undertaken to assess successful

application of the various estimation passes, to ensure that as far as the data allowed all

blocks within domains were estimated and the model estimates considered acceptable.


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8.8.1 Onscreen Validation

Each lode is checked against the composited data used in the estimation process. The

onscreen validation process involved comparing block estimates and composites grades in

cross section.

The onscreen validation sections showed a strong correlation between the block and

composite drill hole grade;

There were no un-estimated blocks present within the ore lodes.

Example sections are shown below (Figure 26 to Figure 28).

Figure 26: Cross Section for Block Model Validation (11,060mN)


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8.8.2 Plots Validation of Interpolated Grades

The process involved averaging both the blocks and samples in panels of 10 m (easting) by

20 m (northing) by 10 m (RL) for the Frasers deposit. Comparisons were made along Easting,

Northing and RL slices for the entire deposit are presented in Figure 29 to Figure 31.

The observations are summarised as:


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• Generally good agreement is observed between the data and block model mean

grade for all variables for easting, northing and RL slices. For average grade

conformance, all domains in low grades and high grades display comparable

performance relative to the data;

• QQ and scatter plots for the averaged sample data vs. block model results show

deviation from the 45° line, with overstatement of low grades and understatement

of high grades by the block model. This is a natural expected behaviour of moving

from sample size data to a much bigger volume as represented by Kriged models.

This effect is more pronounced for the low grade mineralisation for which

smoothing is higher;

• The grades calculated from the individual estimated blocks and composite assay

dataset compared reasonably well globally and for all mineralised domains.

Overall, the plot validation process shows that the block model estimates follow the trend of

the 1m composite grades across the deposit. Estimation smoothing is present to a larger

degree in low grade areas, but is more controlled in the more constrained mineralised zones.

The resource at Frasers can be fairly represented as a global Mineral Resource estimate.

Figure 29: Au Estimate Validation Plot of Declustered in Easting, Northing and Elevation Directions of Domain 50.


Report No: R141.2014 46

Figure 30: Au Estimate Validation Plot of Declustered in Easting, Northing and Elevation Directions of Domain 60-70

Figure 31: Au Estimate Validation Plot of Declustered in Easting, Northing and Elevation Directions of Domain 110-120

8.8.3 Smoothing Effects of Grade Interpolation

Estimated average block grades produced by linear interpolation methods (such as Inverse

Distance and Ordinary Block Kriging) may introduce some degree of smoothing of grade and

consequent conditional bias, i.e. the over-estimation of low grades and under-estimation of

high grades. Ideally, the interpolation procedure should honour the contact between the

mineable ore and the surrounding lower grade mineralisation or waste rock. This would

avoid smoothing of the grade across boundaries, providing more realistic estimates.


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8.9 Density Assignment

The fixed density values were assigned into the block model for each regolith unit. The

density values are based on physical and geophysical measurements provided by Hanking.

Table 16 presents the density values were assigned into the block models.

8.10 Resource Classification

The Frasers Mineral Resource has been classified and reported in accordance with The

Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code, 2012

Edition). Resource classification is based on confidence in the geological domaining, drill

spacing and geostatistical measures.

The initial classification process was based on an interpolation distance and minimum

samples within the search ellipse as defined by the Micromine macro. The main

components of the macro are summarised as follows:

Initial classification:

• The resource was classed as Inferred if the average weighted sample distance was

greater than 50m.

• The resource was classed as Indicated if the average weighted sample distance was

between 30m and 50m.

• The resource was classed as Measured if the average weighted sample distance

was less than 30m.

• If the numbers of drill holes -< 2 then the Measured and Indicated resources were

downgraded one class.

The initial classification was reviewed visually. Based on the initial classification, two solids

rescat_ind and rescat_inf were created to define Indicated and Inferred resources. This

defined resource categories based on a combination of data density and geological

confidence.

The resource classification codes in the model are as follows:

Indicated Resource (class = 2)

Inferred Resource (class = 3)

Unclassified Resource (class = 4)

A range of criteria has been considered in determining the classification including:

• Geological continuity;

• Data quality

• Drill hole spacing


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• Modelling technique

• Estimation parameters including search strategy, number of samples, average

distance to samples to blocks and relative Kriging variance.

8.10.1 Data Quality

Resource classification is based on data collected and stored in the central Hanking

database, provided to CSA for the resource estimation. It is considered that drilling

techniques, survey, sampling and sample preparation, analytical techniques and database

management and validation are well within industry standards.

8.10.2 Drill Spacing

Drill hole location plots have been utilised to ensure the drilling spacing meets the expected

minimum requirements for resource classification. Measured material is defined where

drilling is typically 20m to 30m spaced, and where lode continuity confidence is high.

Indicated material is defined where drilling is typically 30 to 50m spaced, and where lode

continuity confidence is high. Inferred material lies beyond the indicated boundaries and

within the wireframe domains.

8.10.3 Modelling Technique

A conventional 3D OK modelling technique has been used, with an unfolding methodology

applied to provide a dynamic element to the allocation of search ellipses. The modelling

technique is suitable to the domains being estimated allowing reasonable expectation of

mining selectivity across the mineralised domain.

8.10.4 Estimation Properties

Information from the estimation process, including search pass, number of composites used

in the search ellipse and Kriging variance are all used in conjunction with drill spacing to

finalise classification domains.

Figure 32 and Figure 33 show the Mineral Resource classification for the Frasers model.


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Figure 32: Long Section View of Frasers remaining Mineral Resources with drill holes.

(Model with drill holes (blue-Indicated; green-Inferred; grey-Unclassified).

Figure 33: 3D View of Frasers remaining Mineral Resources with drill holes

(blue-Indicated; green-Inferred; grey-Unclassified).

8.11 Mineral Resource Estimate

8.11.1 Mineral Resource Summary

The Frasers Mineral Resource has been classified and reported in accordance with The

Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code, 2012


Report No: R141.2014 50

Edition). Mineral Resource classification is based on confidence in the geological domaining,

drill spacing and geostatistical analysis. The updated Mineral Resources have been depleted

by the open pits and underground development: “DTM_topo” and “DTM_DEPLETED”

provided by Hanking. An optimization open pit shell (fra_pb_1) for Frasers South deposit

provided by Hanking has been assigned into the block model. The Mineral Resource within

the pit shell has been reported at above a cut-off grade of 1.0 g/t Au and the materials

below the pit shell have been reported at above a cut-off grade of 2.5g/t Au. A full summary

of the Mineral Resource is shown in Table 18.

Table 18: Remaining Mineral Resource Estimate Results for the Frasers Deposit.


Within Designed Pit Shell - "fra_pb_1"


(t) Au (g/t)

Au Metal (Oz)

Frasers Indicated 350,755 3.7 42,000

Total 350,755 3.7 42,000


Below Designed Pit Shell - "fra_pb_1"


(t) Au (g/t)

Au Metal (Oz)

Frasers

Indicated 766,000 5.0 123,000

Inferred 1,474,000 6.1 289,000

Total 2,240,000 5.7 412,000

Note: The CSA Mineral Resource was estimated within constraining wireframe solids based on a

nominal lower cut-off grade of 0.3g/t Au. Ordinary Kriging technique with high grade treatment was

used. The resource is quoted from blocks above the specified gold cut-off grade.

8.11.2 Grade Tonnage Curve

Detailed resource tabulation and grade tonnage curves for Frasers deposit are presented in

the following figure and table (Table 19 and Figure 34).


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Table 19: Frasers Remaining Resource Grade and Tonnage Tabulations

Gold Mineral Resource - Frasers2014 - Grade Tonnage Table

Au Cut off (g/t) Million Tonnes Au Grade (g/t) Gold (Oz)

0.0 6.22 2.9 572,000

0.1 5.87 3.0 572,000

0.2 5.83 3.0 572,000

0.3 5.73 3.1 571,000

0.4 5.60 3.2 569,000

0.5 5.43 3.2 567,000

0.6 5.22 3.4 563,000

0.7 5.02 3.5 559,000

0.8 4.77 3.6 553,000

0.9 4.42 3.8 543,000

1.0 4.21 4.0 537,000

1.2 3.81 4.3 523,000

1.3 3.65 4.4 516,000

1.4 3.50 4.5 510,000

1.5 3.37 4.7 504,000

2.0 2.87 5.2 476,000

2.5 2.44 5.7 445,000

3.0 2.15 6.1 419,000

3.5 1.73 6.8 376,000

4.0 1.48 7.3 345,000

4.5 1.26 7.8 315,000

Figure 34: Gold Grade -Tannage Curve for Frasers Remaining Mineral Resources.


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8.11.3 Comparison

St Barbara conducted resource estimation for Frasers deposit in May 2012 using OK

interpolation method. Compared to the 2012 Model, the current model (remaining material)

has increased tonnages of Indicated material with the contribution of the recent new

exploration drill holes data and the new wireframe interpretations. Specifically, the tonnage

increases 15%; the grades of the updated resources increase by approximately 9%; and gold

metal increases 25%. Table 20 presents the details of the comparisons based on the

resource numbers are undepleted in respect to mining.

Table 20: Comparison of Undepleted Mineral Resource Estimates at the Cut-Off Grade of

2.5 g/t Au

Category

CSA Mineral Resources February 2014 (OK)

St Barbara Mineral Resources May 2012 reported (OK)

Comparison

Tonnes (Mt)

Au (g/t) Au

Metal (Oz) Tonnes

(Mt) Au (g/t)

Au Metal (Oz)

Tonnes (Mt)

Au (g/t) Au

Metal (Oz)

Indicated 0.97 5.0 156,000 0.34 5.5 59,000 188% -9% 164%

Inferred 1.47 6.1 289,000 1.79 5.1 296,000 -17% 20% -2%

Total 2.44 5.7 445,000 2.12 5.2 355,000 15% 9% 25%

8.11.4 Exploration Potential

The potential for the identification of additional resources in the Frasers area is good. A

total of 1.5 Mt @ 6.0 g/t Au has been estimated as Inferred at a 2.5g/t Au cut-off grade, this

in itself offers immediate targets for closer spaced drilling which are likely to upgrade this

resource.

There also remains good potential for discovery of additional resources along Frasers deposit

areas as extensions. Gold mineralisation is both structurally and lithologically controlled and

occurs in a series of stepped lodes. The mineralised veins form part of a more extensive

array of quartz tension veins developed within the regional D2 fault corridor, and lay almost

in contact with the highly strained mafic and ultramafic rock units that mark the potential for

gold mineralisation.


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9 Interpretation & Conclusions

The current Mineral Resource model represents a robust global estimate of the in-situ

remaining gold mineralisation for the Frasers deposit.

It is recommended to use optimised pit shells as a guide to create drilling programmes that

maximise the conversion from lower category resources (Inferred to Indicated) and reduces

mining risk attributed to data density and quality. Careful consideration of mining dilution is

warranted as it seems to be hard to exclude much of the internal waste between the lodes.

Drilling, sampling, assay and QAQC methods were described in detail in Hanking’s reports.

With respect to Mineral Resources estimated at the Frasers deposit, CSA has concluded that

the geological interpretation for geology, weathering and mineralisation domains at Frasers

Gold deposits are adequate for the estimation of Indicated and Inferred Mineral Resources.


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10 Recommendations

The following work programmes are recommended or are in progress for the Frasers Project.

1. The updated MRE shows a substantial volume of material classified as Inferred and

‘unclassified’. This material is an immediate target for resource category

upgrading.

2. CSA recommends collecting orientation data to allow a better understanding of the

geology and structural controls on mineralisation of the deposit.

3. CSA recommends maintaining the current QA-QC procedures to ensure high quality

data is available for subsequent resource upgrades.

4. CSA also noted that some supplied interpreted strings and wireframe models are

not snapped to corresponding drillhole intervals. That could result in incorrect data

coding. CSA recommends that industry adopted methodology is used for

interpretation.


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11 References

St Barbara Ltd (2012): St Barbara Limited Resource Report – Frasers May 2012.

Hanking Gold Mining Pty Ltd (2014): Frasers South Drilling Program Summary.


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12 Date and Signature Page

The following people are responsible for supervising and/or preparing this report:

Certificates

I, Bielin Shi, do hereby certify that:

1. I am a Principal Consultant with CSA Global Pty Ltd.

2. This certificate applies to the Mineral Resource report entitled “Frasers Gold

Deposit” dated February 2014.

3. I am a professional geologist having graduated with a PhD from The University of

Melbourne, Australia, majoring in economic geology and geochemistry.

4. I am a Member of the Australasian Institute of Mining and Metallurgy.

5. I have worked as a geologist for a total of thirty years since my graduation from

university.

6. I am responsible for the preparation of the Mineral Resource estimation.

7. I am independent of Hanking Gold Mining Pty Ltd.

8. As of the date of this certificate, to the best of my knowledge, information and

belief, the Resource Report contains all scientific and technical information that is

required for be disclosed to make the Resource Report not misleading.

Signed and dated this 13th day of March, 2014 at Perth, Western Australia, Australia.

Dr Bielin Shi

Principal Resource Geologist

CSA Global Pty Ltd


Report No: R141.2014 57

Appendix 1: JORC Table 1 Compliance

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialized industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample representatively and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report.

In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

The Frasers South deposit was drilled in the most recent program on a nominal 20m by 20m and 10m by 8m spacing in areas lacking sufficient drill data. A total of 23 diamond drill holes and 5 RC drill holes completed in 2013 for 4,238.2m. The drilling programs were infill drilling holes to optimally intersect the mineralised zones.

Sampling was carried out under Hanking’s supervision according to its QAQC protocols and procedures. This included the use of field duplicates, commercially prepared blanks and certified reference materials.

The orientation of the mineralisation had been determined by mapping and previous diamond and RC drilling. This was confirmed in the latest drilling campaign.

Drill core was split to produce samples ranging from 2.5 to 3.5kg in weight. In the assay laboratory the samples were crushed pulverised and subsampled to produce a 50g charge for fire assaying with an AAS finish. This gave a total determination of Au.

Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

Drilling was carried out using the HQ size Diamond core and Reverse Circulation method with a face sampling hammer of a nominal 143mm diameter.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether

A record of qualitative sample recovery and moisture content was recorded by field assistants under the supervision of the rig geologist.

Weight checks were done periodically at the rig. Overall sample weight and quality was


Report No: R141.2014 58


sample bias may have occurred due to preferential loss/gain of fine/coarse material.

good to very good. The rig geologist closely monitored the rig to ensure the entire sample was collected in both bulk plastic & calico bag prior to removal from the cyclone splitter, and action was taken if sample weights showed marked variations.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

The total length and percentage of the relevant intersections logged.

All drill cores and RC chips were logged at the drill-rig-site for main/subordinate lithology, colour, grainsize, regolith, alteration, oxidation and mineralisation.

Geological logging is both qualitative and quantitative in nature. The lithology, colour, grain size, regolith, alteration, oxidation, veining and mineralisation were recorded. Sulphide and vein content were logged as a percentage of the interval. Representative chips were collected in chip trays for each 1m interval and retained on site (no photographs).

All of the drilling was geologically logged.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.

The diamond drill core was sawn into half core and sampled about 1m length.

The RC samples were sub-sampled using a rig mounted, self-levelling cone splitter. The vast majority of the samples were dry with rare moist and wet samples recorded on the sampling sheet.

The sample preparation followed industry best practice in sample preparation involving oven drying and pulverisation of the entire ~3kg sub-sample using LM5 grinding mills to a grind size of 85% passing less than 75 microns.

Field duplicates were collected and assessed to determine cone splitter repeatability; results showed reasonable repeatability.

Commercially prepared and certified reference materials (standards and blanks) along with field duplicates were


Report No: R141.2014 59


inserted at a ratio of 1:20 into the sample string. The QAQC results from this program were considered to be acceptable.

Sample recoveries were recorded by Hanking's field staff. Apertures in the cone splitter were adjusted to maintain a sample weight between 2.5 and 3.5kg. Periodic sample weighing was carried out to ensure an even split between duplicate samples by the cone splitter.

The sample sizes are considered to be appropriate and to correctly represent mineralisation at the deposit based on the style of mineralisation (lode/ mesothermal gold), the thickness and consistency of the intersections, the sampling methodology and assay ranges returned for gold.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

A 50g charge for the Fire Assaying was employed. This is considered to be an appropriate sub-sample size for a total determination of gold.

No geophysical tools were used to determine any element concentrations.

Sample preparation checks for fineness were carried out by the laboratory as part of their internal procedures to ensure the grind size of 85% passing 75 micron was achieved. Laboratory quality control involved the use of certified reference material, blanks, splits and replicates as part of the in house procedures. These results were used along with Hanking’s quality control data to illustrate that there was no systematic bias and that results had an acceptable level of precision and accuracy.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The use of twinned holes.

Documentation of primary data, data entry procedures, data verification, data storage

The Senior Exploration Geologist from Hanking has visually verified the significant intersections using material collected in the diamond cores and RC chip trays.


Report No: R141.2014 60


(physical and electronic) protocols.

Discuss any adjustment to assay data. No twinned holes were drilled

at the Frasers deposit in 2013;

The primary data was collected by using Field Marshal™ logging software that was installed on a Toughbook™. This software contained standard lookup tables for the logging codes. The collected data was subsequently validated according to Hanking’s procedures prior to being sent to Maxwell Geoservices. At this point further validations were carried out prior to uploading the data into a SQL database.

No adjustments were made to the assay data.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

Post drilling a hand-held GPS was used to record the drill hole coordinates. These locations were used by Hanking's Mine Surveyors who employed a Real Time Kinematic (RTK) Differential GPS to pick up the collar of the holes. The RTK method provides positional precision up to 10mm. Down-hole surveys were carried out every 30m using a Camteq Electronic Multi-shot camera. Regular re-surveying was carried out to check the quality of readings.

All work was carried out in the Geocentric Datum of Australia 1994 (GDA94) within the zone 51 projection.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

This programme of resource definition drilling conducted at the Frasers deposit was on an approximate 20m by 20m spacing, along strike and down dip.

20m by 20m spacing at the Frasers South deposit has been considered sufficient to establish geological and grade continuity according to the Australian JORC 2012 code; This code has been used as a reference on reporting results to the ASX and the public.

No compositing has been applied to the exploration samples.

Orientation of data Whether the orientation of sampling Pit mapping and structural


Report No: R141.2014 61


in relation to geological structure

achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

measurements have been taken at the Frasers deposit and they confirm the orientation of mineralisation defined by the drilling. Based upon the above information the drilling for both programs has been largely perpendicular to the mineralisation with some minor exceptions due to constraints enforced by mining activities and infrastructure.

No significant orientation bias has been identified in the data at this point.

Sample security The measures taken to ensure sample security.

Once the samples had been collected and checked by the field staff they were placed into polyweave bags. These samples were then taken to a secure laydown area at the Frasers mine site. Toll Priority transported the samples to Perth to the assay laboratory who stored them in a locked yard. A series of well tested digital and paper tracking mechanisms were used by Hanking to track the progress of the sample batches.

Audits or reviews The results of any audits or reviews of sampling techniques and data.

An external review was carried out by CSA in July 2012. The sampling techniques and quality of samples were found to be satisfactory.


Report No: R141.2014 62

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)


Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Frasers deposit is located in both M77/0066 mining licences. Hanking Gold Mining Limited has a 100% interest in this tenement.

The tenement is in good standing with no known impediments.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Exploration by other parties has been reviewed and taken into account when exploring. Previous parties conducted rock chip sampling, mapping and drilling. This report only concerns exploration results collected by Hanking.

Geology Deposit type, geological setting and style of mineralisation.

Gold mineralisation is both structurally and lithologically controlled and occurs in a series of stepped lodes The Frasers gold deposit is located along the boundary between mafic and predominantly ultramafic sequences within the regional Fraser-Corinthia Shear Zone. Lithologies in the deposit area are typical of a greenstone sequence - dominantly banded chlorite-actinolite (+/- biotite) altered mafics with minor sedimentary units, amphibole-magnetite rich ultramafic interflows, and occasional late stage pegmatitic intrusives.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole

collar o elevation or RL (Reduced Level –

elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole o down hole length and interception

depth o hole length.

Refer to Tables 1 & 2 and Section 1.


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If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

All of the reported intersections have a lower cut-off of 0.5g/t with a maximum internal dilution of two consecutive samples. No top-cuts were applied. Individual 1m results >1 g/t Au are also included.

Higher grade (generally >5g/t) intervals within results were reported alongside the overall intersection, where a substantial proportion of the total gold in an intersection was contained within the high-grade sub-interval(s) or grades were materially higher than adjacent assays. For example, in a run of 1-2 g/t results, assays over 5.0 g/t Au would be reported as a sub-interval; in a run of 2-6 g/t assays, results >10 g/t Au would be reported as a sub-interval. In these instances generally a maximum internal dilution of two consecutive samples was used. No top cuts were applied.

No metal equivalents were used.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

The main zone of mineralisation at the Frasers deposit is a broadly 310 degrees-trending structure that dips approximately 65 degrees to the south-west. Slightly obliquely striking mineralisation is most strongly formed in the footwall but also exists in the hangingwall to the main zone.

Drill holes, where possible were designed to be perpendicular to the lodes, however, in some cases local infrastructure inhibited this.

All of the intersections are given in down hole metre lengths.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant

Refer to the individual diagrams in the body of text.


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discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Balanced reporting Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

All results were reported for the entire drill programs.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

No other exploration data that has been collected is considered to be meaningful or material to this announcement.

Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Currently, 4000m further Phase II resource definition diamond and RC drilling is planned for the Frasers deposit.

Refer to the diagrams in the body of text.

Follow up drilling is currently being finalised so is not shown.


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Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)


Database integrity Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

Data validation procedures used.

The database is maintained by site personnel.

The exploration database used for the resource estimation has been validated and considered accurate.

Site visits Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

If no site visits have been undertaken indicate why this is the case.

Competent Person for this update is a full time employee of CSA Global and undertakes regular site visits ensuring industry standards of the Mineral Resource estimation process from sampling through to final block model.

Geological interpretation

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

Nature of the data used and of any assumptions made.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

The use of geology in guiding and controlling Mineral Resource estimation.

The factors affecting continuity both of grade and geology.

Geological and mineralisation interpretations were completed by CSA geologist. The wireframes were generated based on cross sections widths of 20m – 20m spacing. This was based on exploration and grade control drilling patterns.

Mineralisation cut-off grades of 0.3g/t Au combined with the geological logging were used to define the mineralised envelopes.

The geological interpretation of mineralised boundaries is considered robust and alternative interpretations do not have the potential to impact significantly on the Mineral Resources.

Dimensions The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

The Frasers deposit mineralisation extends from 201,750mE to 203,500mE, 7,567,300mN to 7,568,750mN, and 200m below surface.

The deposit with multiple lodes generally strikes towards NE with a strike length of approximately 2,000m, dipping towards the northwest at 30° -35° with and having a vertical extent of about 200m.

Estimation and modelling

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of

1m composites was created and used for the statistical, variography analyses and


Report No: R141.2014 66


techniques extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

The assumptions made regarding recovery of by-products.

Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

Any assumptions behind modelling of selective mining units.

Any assumptions about correlation between variables.

Description of how the geological interpretation was used to control the resource estimates.

Discussion of basis for using or not using grade cutting or capping.

The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

estimation.

Thorough univariate statistical analysis of density weighted, 1m, mineralogy flagged, downhole composites has been completed for gold and for all lodes and top-cuts established where applicable.

Statistical analysis indicated that outlier management was crucial to prevent severe high grade smearing that could result in potential overestimation for some elements. The approach used has been capping (Top-cuts were defined by domain following thorough examinations of histograms, probability curves and the spatial locations of the outliers). Top cuts ranged from 5g/t to 100g/t based on analysis of individual lodes statistics.

Variogram modelling completed within Isatis™ software and used to define the characterization of the spatial continuity of gold within all lodes and parameters used for the interpolation process. Variogram model are cross-validated to ensure parameters are accurate.

Quantitative Kriging Neighbourhood analysis (QKNA) using goodness of fit statistics to optimize estimation parameters has been undertaken. Parameters optimised include block size, search parameters, number of samples (minimum and maximum) and block descritization.

Directional ranges have been determined from variogram modelling and are used to constrain the search distances used in block interpolation, incorporating geologists’ interpretation of ore geometry and continuity. Estimation search strategies implemented have sought to ensure robust estimates while minimising conditional bias. Three search estimation runs are used with initial short-search runs extending the sample influence in later runs.

Block estimation has been


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completed within Datamine™ Studio 3 Resource Modelling software. Three dimensional mineralisation wireframes were completed within Micromine™ software and imported into Datamine™. These wireframes are used as hard boundaries for the interpolation.

Ordinary Kriging using a local dynamic anisotropy search is used for block grade estimates using uniquely coded 1m composite data for respective lodes.

All block estimates are based on interpolation into parent blocks. Parent block estimates are then assigned to sub-blocks. Mineral Resource estimation does not include any form of dilution.

Block model extends from local grid 4,780mE to 5,400mE, 10,800mN to 12,700mN and vertical from800mRL to 1,4000mRL.

Only a signal variable gold was estimated.

No selective mining units were assumed in this estimate.

Standard model validation has been completed using visual and numerical methods and formal peer review sessions by key geology staff.

Mineral Resource Model has been validated visually against the input composite/raw drillhole data with sufficient spot checks carried out on a number of block estimates on sections and plans.

Easting, northing and elevation swath plots have been generated to check input composited assay means for block estimates within swath windows.

A comparison of block volume weighted mean versus the drillhole cell de-clustered mean grade of the composited data was undertaken.

Efficiency models using block Kriging Efficiencies (KE) and Slope of Regression (ZZ) were used to quantitatively measure estimation quality to ensure the


Report No: R141.2014 68


desired level of quality of estimation.

Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

Tonnages are estimated on a dry basis.

Cut-off parameters The basis of the adopted cut-off grade(s) or quality parameters applied.

The resource is not constrained by economic cut off grades.

The nominal 0.3g/t Au boundary applied to the mineralisation zone is based on analysis of the sample population and local geology.

Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

The Frasers South deposit is being designed by open pit. The approximate dimensions of the open pit at completion will be 430m length, 160m wide and 70m deep. Mining comprises conventional backhoe excavator methods with ore being mined in 5m benches on 2.5m flitches.

Detailed mine plans are in place and mining is occurring.

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

The qualitative assessment of sandstone and clay content of the mineralised zones has been built into the model. Relative sandstone and clay content affects the processing of the ore.

Assumptions are based on DFS metallurgical test work and ongoing monitoring of the Frasers processing plant ramp up.

Environmen-tal factors or assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental

The Frasers project is constructed with a fully lined Tailings Storage Facility and all Sulphide material mined from the operation will be processed in the concentrator, eliminating any PAF on the waste dumps.


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assumptions made.

Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

Most Dry Bulk Density determinations have come from samples of the diamond drill holes over a range of RL’s. A small number have been taken on diamond drill core.

They have been determined using industry standard methods of dried/sealed weight of core or rock sample in water versus the dry weight in air.

Classification The basis for the classification of the Mineral Resources into varying confidence categories.

Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

Whether the result appropriately reflects the Competent Person’s view of the deposit.

The Frasers Mineral Resources have been classified and reported in accordance with The Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code 2012 Version). Resource classification is based on confidence in the geological domaining, drill spacing and geostatistical measures.

The initial classification process was based on an interpolation distance and minimum samples within the search ellipse as defined by the Micromine macro. The main components of the macro are summarised as follows:

Initial classification: - The resource was classed

as Inferred if the average weighted sample distance was greater than 50 m.

- The resource was classed as Indicated if the average weighted sample distance was between 25 m and 50 m.

- Numbers of drill holes -< 2 Indicated and Inferred resources downgraded one class.

The initial classification was reviewed visually. Based on the initial classification, three solids rescat_ind and rescat_inf were created to define Measured, Indicated and Inferred resources. This defined resource categories based on a combination of data


Report No: R141.2014 70


density and geological confidence.

Audits or reviews The results of any audits or reviews of Mineral Resource estimates.

This Mineral Resource and estimation procedures have been internal reviewed in CSA. This Mineral Resource has not been audited externally.

The process for geological modelling, estimation and reporting of Mineral Resources is industry standard and has been subject to an independent external review. CSA Global undertook a peer review during 5th – 6th February 2014 and found the process to be industry standard with minor recommendations as part of continuous improvement.

Discussion of relative accuracy/ confidence

Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

Mineral Resources has been reported in accordance with the guidelines of the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and reflects the relative accuracy of the Mineral Resources estimates.

The current Mineral Resource model represents a robust global estimate of the in-situ remaining gold mineralisation for the Frasers deposit.

Existing operating reports of achieved production verse estimate is positive. Further data will be monitored as the mine ramps up to full scale operations.

It is recommended to use optimised pit shells as a guide to create drilling programmes that maximise the conversion from lower category resources (Inferred to Indicated) and reduces mining risk attributed to data density and quality. Careful consideration of mining dilution is warranted, it seems to be hard to exclude much of the internal waste between the lodes.


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Section 4 Estimation and Reporting of Ore Reserves - –Not Applicable

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this

section.)



Report No: R141.2014 72

Appendix 2: Client Files

Wireframes

BIF1.dxf

BIF2.dxf

BIF3.dxf

BIF4.dxf

FRASERS.dxf

GREENSTONE N.dxf

HIGH GRADE GREENSTONE N.dxf

GREENSTONE N_FW1.dxf

GREENSTONE N_FW2.dxf

GREENSTONE N_HW2.dxf

GREENSTONE S.dxf

HIGH GRADE GREENSTONE S_FW.dxf

HIGH GRADE GREENSTONE S_HW.dxf

GREENSTONE S_FW1.dxf




GREENSTONE S_HW1.dxf




SCHOLLS1.dxf

HIGH GRADE SCHOLLS1.dxf

SCHOLLS1B.dxf

DTM_rescat_ind.dxf

DTM_rescat_inf.dxf

Geology_PEGMATITE.dxf

Block Model

• Frasers_model_ok_full20140226

Data

• 1m_composites_ore

Surfaces and Workings

• DTP_Topo


Report No: R141.2014 73

• Geology_OXIDATION

• Frasers_UG_MHD

• DTM_DEPLETED

• Geology_DAY_DAWN_FAULT

Reports & Spreadsheets

• Frasers Mineral Resource Estimate for Hanking Gold Mining Ltd

• Frasers_resource_table_Feb2014Draft2

• Frasers_Grade_Tonnage_Feb2014Draft2

• Frasers block model attributes


Report No: R141.2014 74

Appendix 3: Hanking Sampling Procedure

Objective

To outline the sampling procedure and responsibilities of Field Technicians for work

conducted on the RC drill rig.

Background

During RC drilling programs, sampling is conducted by the Field Technician. The

samples must be of the highest possible quality, as these samples are then sent to the

laboratory to determine metal content, which assists the geologist to locate ore zones

and delineate gold resources.

Hazards

Trip hazards

Injury from high-pressure hoses and drilling machinery

Hearing loss due to lack of hearing protection

Exposure to airborne contaminants

Sunburn

PPE

Hardhat and Brim

Safety glasses

Hearing protection

Safety boots

Dust mask

Sunscreen

Procedure

Check the drill hole location, ensuring that the hole location details are correct

on the survey peg.

Make sure splitter produces a 2-3kg representative sample, which is collected

in a calico bag. Weigh calico bags at start of program to ensure the splitter is

setup correctly.

Ensure that the calico bags with correct sample numbers are ready to go before

the start of each hole and that the corresponding sample book is correctly filled

out.


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Check that there is sufficient area for the samples to be in rows of 20, with gaps

every second row sufficient to be able to walk up between rows. Consult

geologist for estimate of hole depth.

Every 1metre interval will be produced directly from the rigs cyclone/splitter,

set up into a calico sample bag, the remainder of the sample is placed in (1m)

green bags on the ground.

Composite, standards and duplicate samples are taken when instructed to do so

by the rig geologist (see below).

For composites, a pipe spear must be used when taking samples from the green

bags and the following should be adhered to:

Tilt the bag to loosen the sample Spear through the bag in a number of

directions, ensuring that the bottom of the bag is always reached.

Also ensure the spear is clean before moving onto the next pile.

Regularly check the samples for contamination during drilling.

Advise the driller and geologist if contamination is observed in the samples, so

the cyclone is cleaned more regularly. Often this will look like curved lumps

of clays (this is a sign of sample coating and build up inside the cyclone).

A permanent record of each RC hole is kept by filling out the Sample book.

The correct details for each hole are recorded in the Sample book. Every metre

is written against the corresponding sample numbers in neat legible writing.

Ensure that sample books are written up as drilling proceeds, recording wet,

contaminated, missing samples and the location of blank samples, standards

and duplicates.

If the depth down hole and the sample sheet numbers do not correspond, the

error should be sorted out immediately, even if it means shutting the rig down.

If the problem is with the driller, then get the driller involved immediately.

The down hole depth and sample number checks should be carried out at the

end of each rod.

Extreme care should be taken to ensure that samples are taken from the correct

intervals.

Standards, Blanks & Field duplicates

These are inserted into the sample sequence so the geologists can check the quality of the

lab’s assay work. Standards test for the calibration of lab equipment and Blanks help pick up

on any potential contamination.

1 standard, blank (packet/ sand blank) or field duplicate inserted to the sample sequence

every 20 meters, in the following order in a repeating cycle over the depth of the hole:

Field dup

Standard or blank in random selection (but obviously note which used on

sampling sheet). Alternate between the Blank in the packet and the Sand Blank.

Back to step 1

So for a 120m hole, the following would be collected:

19-20m Field dup


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39-40m Standard or blank in random selection

59-60m Field Dup

79-80m Standard or blank in random selection

99-100m Field dup

119-120m Standard or blank in random selection.

Make sure you record which standard or blank is inserted, this is critical!

Calico’s should be placed into polyweave bags, 5 per poly bag: poly bags need to

have written on them what samples are in them and labelled for example:

Each afternoon the polys (with the Calicos in them) from the days drilling are to be

dropped off at exploration camp, in sample order and leaving a gap between each

hole.

Once sufficient amount samples have been collected these are to be transferred to the

“Bulka Bags” at the Frasers mine laydown area. Sample ID to be recorded on Bulka

Bag and on sample dispatch form.

Once the hole is completed and the rig has moved to the next drill site, ensure that the

correct details (Hole ID, northing, easting, coordinate system, dip, azimuth and depth)

are written on the collar pipe and hole peg of the hole just completed, and that the

hole is capped with a concrete plug.

All rubbish must be removed from the site. It is the fieldies’ responsibility to make

sure the site is clean. Make sure the drillers take their rubbish with them.

Ensure the driller is always aware of the location of the next hole, its dip, azimuth and

depth.

Rig crews must have their vehicle ready for the next days’ work, especially if

there is a changeover i.e. –bags, plugs, sample, sheets, markers, flagging, tape, blank

samples, etc everything that will be needed the next day!

Procedure for green plastic retention samples

If the green bags are to be moved before dumping, make sure that you are familiar

with heavy lifting and trailer towing procedures before starting

All green sample bags must be removed from drill sites and relocated to the

designated bag farm for that area. To achieve this each hole is to be stacked on the

trailer in order and then taken to the bag farm and laid in the order they were drilled.

A peg is to be put at the start of each hole with the hole number on it

Try to keep the holes in the order they were drilled in the farm where possible as well

The selected intervals for re-sampling should be done with a clean riffle splitter that is

setup on level ground.


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Laboratory Sample Preparation Procedure

The flow chart below represents the procedure for sample preparation in the laboratory.

Receive, Sort and

Reconcile samples

Dry for up to 24 hrs

< 111oC

Jaw crush <3 mm - Diamond, Rock and Oversized material

< 3kg

>3kg

Riffle split

to 2 - 3kg

Pulverise to 85% passing >75 µm

Pulverised Residue

Pulverised Residue

Lab Services

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