mineral resource grows at menzies gold project · 2016-03-07 · mineral resource grows at menzies...

ASX CODE: IRC Head Office: 163 Stirling Highway Nedlands WA 6009

Postal: PO Box 1104, Nedlands WA 6909 T +61 8 9386 9534 F +61 8 9389 1597 E [email protected] W www.intermin.com.au

ACN 007 761 186 ABN 88 007 761 186

ASX/Media Release Dated: 8 March 2016

MINERAL RESOURCE GROWS AT MENZIES GOLD PROJECT

HIGHLIGHTS

Recent drilling data validated and incorporated into geological database1

Resource modelling completed at Pericles, Yunndaga, Bellenger and Warrior

Mineral Resources at Menzies grow from 75,000oz to 171,310oz2, up 130%

Near surface oxide ore has potential for free dig open cut mining

Multiple high grade shoots identified below the current Resource envelopes

Follow up and extensional drilling program planned to commence in March targeting high grade underground resources to augment current inventory

Selkirk and Aspacia will be the initial focus with Yunndaga and Pericles to follow in the September Quarter

Mine optimisation work commenced for incorporation into mine development plan

Resources at Menzies within 7km corridor, in close proximity to proposed centralised processing facility

Total Mineral Resources for Intermin now stand at 314,370oz at 2.65g/t2

Table 1: Menzies gold project- Summary of Mineral Resources (see also Appendix 1)

Deposit (>1 g/t Au)

Measured Resource Indicated Resource Inferred Resource Total Resource

Mt Au

(g/t) Oz Mt Au

(g/t) Oz Mt

Au (g/t)

Oz Mt Au

(g/t) Oz

Pericles 0.53 2.49 42,500 0.53 2.49 42,500

Yunndaga 1.58 2.03 103,000 1.58 2.03 103,000

Bellenger 0.24 2.63 19,900 0.24 2.63 19,900

Warrior 0.07 2.49 5,910 0.07 2.49 5,900

TOTAL 0.77 2.52 62,400 1.65 2.05 108,910 2.42 2.20 171,310

“The 2015 exploration and validation programs have delivered excellent results and enabled significant Resource growth at Menzies. The work ahead of us now is to grow our high grade underground inventory and the deeper drilling results reported this year provide us with great opportunity to achieve this in 2016,” Managing Director Jon Price said.

“Our aim is to develop a 3-5 year mine plan to support the installation of a simple, small tonnage high grade processing plant that will become a strategic asset for the region and we look forward to updating you on the PFS that is underway,” Mr Price said.

Overview

ASX CODE

IRC

CURRENT SHARE PRICE

$0.07

SHARES ON ISSUE

155.7M

OPTIONS (IRCO)

19.5M ($0.075)

5.0M ($0.075)

MARKET CAP

~10.9M (undiluted)

BOARD

Peter Hunt Chairman

Robin Dean Non-Executive Director

Jon Price Managing Director

Michael Ruane Non-Executive Director

COMPANY SECRETARY

Bianca Taveira

INVESTOR/MEDIA ENQUIRIES

Jon Price

Lorry Hughes

KEY PROJECTS

Binduli North Gold Project Menzies Gold Project

Goongarrie Project

WEBSITE

www.intermin.com.au

1 As announced to the ASX on 29 June and 25 November 2015 and 13 January and 8 February 2016 2 See also Qualification and Competent Persons Statement on pages 14 and Appendix 1

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Intermin Resources Limited (ASX: IRC) (“Intermin” or the “Company”) is pleased to announce updated Mineral Resources for the 100% owned Menzies gold project (Figure 1). Extensive drilling has been completed at the project including Intermin’s recent infill, extensional and validation programs totalling 54 Reverse Circulation (“RC”) holes for 4,814 metres completed during 2014 and 2015. All data was validated and entered into the geological database for evaluation and Resource compilation by independent consultant Coxsrocks Pty Ltd.

Intermin’s updated Mineral Resources (JORC 2012) for Menzies now stands at:

2.42Mt at 2.20g/t Au for 171,310oz (>1.0g/t Au lower grade cut-off)

This represents a 130% increase on the Mineral Resources of 75,000oz as announced to the ASX on 30 March 2012 and comprises updated Resources for Pericles and new Resources for Yunndaga, Bellenger and Warrior.

Figure 1: Intermin’s Menzies and Kalgoorlie project locations, geology and infrastructure

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Total Mineral Resources for Intermin now stand at 3.69Mt at 2.65g/t Au for 314,370oz. The Menzies projects are within a 14km strike corridor located 130km north of Kalgoorlie, Western Australia (Figure 2) where significant past production from high-grade open pit and underground mines has occurred up to the late 1990s.

Figure 2: Menzies prospect locations, Resources summary and regional geology

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Menzies Gold Project Geological summary and drilling parameters

Menzies is located in the Eastern Goldfields Province of the Archaean Yilgarn Craton. The greenstone belt divides at Menzies into a western section continuing to the northwest and an eastern section continuing northwards to Twin Hills. The greenstone sequence consists of a lower ultramafic formation to the west overlain by meta-sedimentary rocks which are overlain by mafic intrusives and extrusives to the east. Included in the greenstone belt are the major shear zones, the Menzies Shear Zone and the Moriarty Shear Zone, which impart a strong foliation and lineation to the underlying rock. The Menzies Shear Zone can be traced south wards to the Bardoc Deformation Zone approximately 50kms south. Metamorphic grade is high in the amphibolite facies with porphyroblastic grain textures, marked schistosity and mineral lineations. A southerly plunging fabric is apparent in the Menzies area, where well foliated basalts, sedimentary rocks, mafic and ultramafic contacts are economically significant. In general ore zones have shallow westerly dips and alteration assemblages, comprising biotite, silica, pyrrhotite, pyrite, galena, sphalerite, arsenopyrite and chalcopyrite are typical in areas of stronger gold mineralisation. Cross cutting features and felsic porphyry intrusives are also important in terms of hosting gold mineralisation. Figure 2 shows the tenements with major geological rock units.

Menzies is typically marked by extensive sub parallel historical gold workings along and proximal to the major shear zones and splays. Up until WW1, approximately 653,000oz was mined underground, mostly from the First Hit, Lady Shenton and Yunndaga underground mines. The Yunndaga Mine reached a maximum depth of 600 vertical metres. Since then, recent open cut mining in the 1990’s has delivered an additional 143,000oz with most of the ore being treated at the Paddington Gold Mine. The most recent Menzies RC drilling programs were completed by Kalgoorlie based K & J Drilling Services and Kennedy Drilling in 2014 and 2015. All drilling programs utilised face sampling hammers to collect the down-hole chip samples. Samples from the RC drilling were collected over 1m downhole intervals and reduced via cone splitter to produce a 3Kg sub-sample. 99% of the samples reported to the splitting device dry. Any wet samples were split through the cone splitter which was washed and dried with compressed air after each sample. RC samples were collected into pre-numbered calico bags at the rig by drilling personnel and Intermin’s geologist or field assistant cross checked the bag number against the drill string interval. 4m composite spear samples were first analysed and intervals greater than 0.25ppm Au were assayed on a single metre basis. Laboratories in Perth were used for Intermin’s assaying programs and gold values determined primarily by Aqua Regia digest with fire assay checks. The accuracy is to within 0.01 pm Au. Laboratories completed internal standard regimes and re-assayed approximately every 20th sample or when the result exceeded 1.0 ppm Au. The overall performance of the labs and analysis is considered acceptable. RC sample chips were geologically logged to a level of detail to support reporting of Exploration Results. Logging was both qualitative and quantitative; full descriptions of lithologies, alteration, and oxidation were noted on log sheets as well as percentage estimates of alteration minerals present, veining, and/or any sulphide minerals present.

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All drillhole collars were surveyed using GPS (+/- 5m) by field staff and then subsequently prior to Resource compilation by a registered surveyor using differential RTK-GPS. Downhole surveys were routinely taken by the drilling contractors on holes greater than 80m depth. All drilling was planned and surveyed using MGA94_Zone51 grid.

Menzies Project

Pericles As announced on the 25 November 2015, 13 January 2016, infill and extensional drill programs were completed at Pericles with 17 holes totalling 1,034 metres drilled. The aim of the program was to test further extensions to the mineralisation along strike and at depth and upgrade Inferred Resources to Indicated Resources to facilitate estimation of Reserves.

Figure 3: Pericles schematic drilling and preliminary pit cross section

In general gold mineralisation at Menzies takes the form of W-WSW dipping, south-easterly plunging shoots. Regionally, gold tends to occur in narrow shears and is often precipitated in and/or adjacent to quartz-sulphide rich veins +/- (epidote, muscovite, and biotite at margins). Four main mineralised shears (veins) are present within the Pericles deposit with a consistent 318-320 degree strike direction and a dip of 40-45 degrees to the south west. The structures are generally reasonably narrow and average approximately 3-4 metres true thickness.

Open

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Significant mineralisation intercepted included 5m at 10.1g/t Au from 35m including 1m at 42.0g/t Au from 35m, 5m at 7.3g/t from 23 m including 1m at 25.5g/t Au from 23m, 2m at 4.6g/t Au from 22m, 1m at 15.6g/t Au from 18m, 5m at 2.9g/t Au from 43m and 3m at 2.1g/t Au from 56m. All new data was validated and incorporated into the geological model resulting in an updated (JORC 2012) Mineral Resource of 0.53Mt at 2.49g/t Au for 42,500 ounces. Approximately 25% of the Resource tonnage is characterised as oxide or “free-dig” material and is amenable to low cost open pit mining techniques (Table 2). Table 2: Intermin Resources Ltd - Summary of the Pericles Mineral Resource

Indicated Oxide Oxide Fresh Fresh Total Total Total

Resource Tonnes Au g/t Tonnes Au g/t Tonnes Au g/t Ounces

1.0 g/t Cut off 126,000 2.19 404,000 2.59 530,000 2.49 42,500

Immediately along strike to the south from the Pericles prospect is the historic Lady Shenton open pit and underground mine including the Big Babe prospect (Figure 2). Extensive underground mining occurred at Lady Shenton with underground workings extending to a vertical depth of 280m to recover 185,000t @ 32g/t Au for 190,332oz. A further 345,000t @ 2.62g/t Au for 26,164oz was mined in the 1990’s via open pit. Intermin has identified significant mineralisation at both these prospects however further drilling and geological interpretation is required in order to compile a JORC Compliant Resource Estimate.

Yunndaga As announced on the 25 November 2015, 13 January 2016, a validation drill program was completed at Yunndaga with 4 holes totalling 512 metres drilled. The aim of the program was to confirm historic drilling completed in the 1980s and 1990s to enable an updated JORC 2012 Mineral Resource to be compiled. Gold mineralisation at Yunndaga is hosted within a sheared biotite-quartz-chlorite alteration zone. The host rock comprises a sheared and partly silicified, sulphidic quartzose-metasedimentary unit between a hanging wall black shale unit to the west and a footwall amphibolite unit to the east. Quartz veining is strongly associated with gold mineralisation and occurs predominantly in the hanging wall on the metasediment amphibolite contact. Weaker, lower grade gold mineralisation also occurs within biotite amphibolite and quartz veined sericitic shales. The Yunndaga Mineral Resource has been compiled as a diluted open pit resource to allow initial assessment of the potential for an economic cut back to the existing open pit. Further work on the location and geometry of the multiple high grade ore shoots is required prior to conducting an underground mining assessment. Mineralisation is open along strike, at depth and within some underground workings where drive mining was undertaken without stoping.

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Figure 4: Yunndaga long section showing March 2016 updated resource blocks and historic mining

Bellenger As announced on the 25 November 2015, 13 January 2016 and 8 February 2016, infill, validation and extensional drill programs were completed at Lady Harriet and Bellenger with 16 holes totalling 1,079 metres drilled. The aim of the program was to test further extensions to the mineralisation along strike and at depth, validate historic drill holes completed in the 1980s and 1990s and enable a new JORC 2012 Mineral Resource to be compiled. The Bellenger prospect is located immediately along strike to the south from the Lady Harriet open pit and appears to be similar to the Lady Shenton gold deposit whereby gold is associated with felsic porphyries that have intruded along cross-cutting fractures in amphibolites and also along contacts between ultramafic and mafic rocks. Primary gold has also been logged as thin quartz veinlets hosted by silica and chlorite altered sheared amphibolites. Pyrite is observed as a minor accessory mineral. A mineralised shear system extends both north and south from the Lady Harriet deposit and Bellenger is located to the south. Approximately 70% of the Bellenger Resource tonnage is characterised as oxide or transitional material and is amenable to low cost open pit mining techniques (Table 3). Significant mineralisation intercepted at Bellenger included 1m @ 6.56g/t from 52m, 3m @ 2.51g/t from 13m, 2m @ 11.55g/t Au from 23m and 3m @ 2.91g/t from 87m including 1m @ 6.97g/t.

Yunndaga Open Pit (1997-99) 64,301oz @ 2.5g/t Au

Yunndaga Underground Workings

(1896-1914) 270,580oz @ 16.0g/t Au

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Figure 5: Bellenger and Warrior location plan showing March 2016 updated resource blocks The Resource consists of a Northern Zone (immediately adjacent and south of the Lady Harriet pit) and the Southern Zone, approximately 300m further south along strike (Figure 5). Table 3: Intermin Resources Ltd - Summary of the Bellenger Mineral Resource

Indicated Ox/Tran Ox/Tran Fresh Fresh Total Total Total


1.0 g/t Cut off 171,000 2.47 65,000 3.05 240,000 2.63 19,900

Warrior The Warrior prospect appears to have a number of geological similarities to the nearby Lady Harriet Gold Mine 200m to the south, whereby the mineralisation is found within narrow quartz veins in amphibolitic host rocks.

1,200m

Bellenger

Lady Harriet Pit

Warrior

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The Warrior prospect comprises a small Inferred Mineral Resource based on a total of 17 historic RC holes for 1,174 metres. No drilling has been completed in this immediate area by Intermin and the resource is classified as Inferred. Additional infill drilling on a number of sections in the vicinity of the higher grades would be expected to add additional confidence in the resource and lead to an elevation in the resource category to Indicated. The resource area comprises a higher grade northern zone and a lower grade southern zone (Figure 5). It is noted that a significant proportion of the tonnes (and grade) are based on one intersection from MZWR230 which returned an intersection of 8m @ 7.0 g/t Au from 62-70 metres depth. The resource estimate is defined as Inferred and was classified in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012). The classification of Mineral Resources was completed by Simon Coxhell and was based principally on data density, representativeness of sampling, geological confidence criteria and grade distribution. Significant historic mineralisation intercepted at Warrior included 12m @ 2.80g/t from 39m, 19m @ 2.18g/t from 59m, 6m @ 1.69g/t from 36m and 8m @ 7.03g/t from 62m. Table 4: Intermin Resources Ltd - Summary of the Warrior Mineral Resource

Inferred Ox/Tran Ox/Tran Fresh Fresh Total Total Total


1.0 g/t Cut off 32,000 2.12 42,000 2.78 74,000 2.49 5,900

Strong potential exists to expand the existing open pit resources at Bellenger, Lady Harriet and Warrior along strike, in parallel lodes and at depth. Recent RC drilling results from Lady Harriet support this with results including 3m @ 9.68g/t from 7m including 1m @ 24.96g/t and 4m @ 16.80g/t from 44m including 2m @ 32.37g/t not included in a Mineral Resource. Further drilling is required.

Optimisation studies and follow up drilling plans

The new and updated Mineral Resources will now form part of mine optimisation studies for incorporation into the Menzies Pre-Feasibility Study (PFS). The PFS is investigating the establishment of a 300,000tpa processing plant at Menzies to treat both Intermin’s ore within a 7km radius and potentially other third party material in the region.

The next drilling campaign at Menzies is planned to commence next Quarter and will focus on high grade underground targets at Selkirk, Aspacia and Pericles. The aim is to define sufficient high grade mining inventory to add to the shallow lower grade material in the current Resource to generate a 3-5yr mine plan to trigger mine development and plant installation. Recent very high grade intercepts at Selkirk (3m at 88.6g/t Au from 84m) and Pericles (3m at 20.1g/t Au from 106m) and historic data from Aspacia have provided high priority targets for follow up.

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About Intermin Intermin is a gold exploration and development company focussed on the Kalgoorlie and Menzies areas of Western Australia which are host to some of Australia’s richest gold deposits. The Company’s flagship projects are the 100% owned Menzies and Teal projects which host significant mineralisation and have the potential to be mined via open cut and underground methods. Perth and Menzies-based Intermin is aiming to significantly grow its JORC-Compliant Mineral Resources, complete definitive feasibility studies on core projects and build a sustainable development pipeline. Intermin is targeting the definition of significant high grade open cut and underground gold deposits, has acquired highly prospective tenure and will continue to actively pursue consolidation and value-adding joint venture opportunities for the benefit of all stakeholders.

Intermin Resources Limited – Summary of Gold Mineral Resources

Deposit (1g/t cut-off)

Measured Resource Indicated Resource Inferred Resource Total Resource

Mt Au (g/t) Oz Mt Au (g/t) Oz Mt Au (g/t) Oz Mt Au (g/t) Oz

Menzies

Pericles 0.53 2.49 42,500 0.53 2.49 42,500

Yunndaga 1.58 2.03 103,000 1.58 2.03 103,000

Bellenger 0.24 2.63 19,900 0.24 2.63 19,900

Warrior 0.07 2.49 5,910 0.07 2.49 5,910

Kalgoorlie

Teal 0.33 3.04 32,530 0.57 2.34 42,752 0.90 2.59 75,282

Wiluna Calcines 0.37 5.01 67,778 0.37 5.01 67,778

TOTAL 0.33 3.04 32,530 1.71 3.14 172,930 1.65 2.05 108,910 3.69 2.65 314,370

Notes: 1. Competent Persons Statement - The information in this report that relates to Exploration results, Mineral Resources or Ore Reserves is based on information compiled by Mr David O’Farrell and Simon Coxhell. Both are Members of the Australasian Institute of Mining and Metallurgy and are consultants to Intermin Resources Limited. The information was prepared and first disclosed under the JORC Code 2004. It has not been updated since (unless indicated) to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Mr O’Farrell and Mr Coxhell have sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that they are undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Mr O’Farrell and Mr Coxhell consent to the inclusion in this report of the matters based on their information in the form and context in which they appear. 2. Forward Looking Statements - No representation or warranty is made as to the accuracy, completeness or reliability of the information contained in this release. Any forward looking statements in this release are prepared on the basis of a number of assumptions which may prove to be incorrect and the current intention, plans, expectations and beliefs about future events are subject to risks, uncertainties and other factors, many of which are outside of Intermin Resources Limited’s control. Important factors that could cause actual results to differ materially from the assumptions or expectations expressed or implied in this release include known and unknown risks. Because actual results could differ materially to the assumptions made and Intermin Resources Limited’s current intention, plans, expectations and beliefs about the future, you are urged to view all forward looking statements contained in this release with caution. The release should not be relied upon as a recommendation or forecast by Intermin Resources Limited. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

Visit us at www.intermin.com.au For further information, please contact: Investors/Media Jon Price, Managing Director Lorry Hughes, Corporate Development Manager Office: +61 8 9386 9534 Office: +61 8 9386 9534 [email protected] [email protected]

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Appendix 1

Menzies Project Pericles, Big Babe, Lady Shenton, Warrior, Bellenger and Yunndaga Deposits

JORC Code (2012) Table 1 Section 1, 2 and 3

Exploration results at Menzies were reported by Intermin and released to the ASX during 2009 to 2016. Mr David O’Farrell, Exploration Manager of Intermin compiled the information in Section 1 and Section 2 of the following JORC Table 1 and is the Competent Person for those sections. Mr Simon Coxhell, an independent consultant to Intermin compiled the information in Section 3 of the following JORC Table 1 and is the Competent Person for that section. The following Table and Sections are provided to ensure compliance with the JORC Code (2012 edition) requirements for the reporting of Mineral Resources. For further detail, please refer to the announcements made to the ASX on March 30 2012, 29 June 2015, 25 November 2015, 13 January 2016 and 8 February 2016.

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised 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.

The deposit has been drilled using Rotary Air Blast (RAB), Air Core (AC), Reverse Circulation (RC) and Diamond (DD) drilling over numerous campaigns by several companies and currently by Intermin. The majority of drill holes have a dip of -60° towards the east. 4m composite samples taken with a 450mm x 50mm PVC spear being thrust to the bottom of the sample bag. 1m single splits taken using riffle splitter. Average sample weights about 1.5-2kg.

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

Regular air & manual cleaning of cyclone to remove hung up clays. Standards & replicate assays taken by the laboratory. Sample procedures followed by historic operators are assumed to be in line with industry standards at the time. Current QAQC protocols include the insertion of appropriate commercial standards. Based on statistical analysis of these results, there is no evidence to suggest the samples are not representative.

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 (e.g. ‘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

RC chips were geologically logged over 1m intervals, initially sampled over 4m composite intervals and then specific anomalous intervals were sampled over 1m intervals. Depending on the hole depth, the maximum interval was 4, and minimum was 1m. Samples assayed for Au only. Drilling of mainly quartz-sulphide hosted gold at Pericles, Bellenger, Lady Harriet, Warrior and Yunndaga. Previous assaying of these zones of mineralisation has indicated that 4m composite results often display some highly variable correlation with individual 1m splits, which is indicative of the high nugget effect.

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(e.g. submarine nodules) may warrant disclosure of detailed information.

Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. 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).

Reverse Circulation with a 4.5” face sampling hammer bit.

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

RC recovery and meterage was assessed by comparing drill chip volumes (sample bags) for individual meters. Good recoveries were recorded. Routine check for correct sample depths are undertaken every rod (6m)

RC sample recoveries were visually checked for recovery, moisture and contamination. The cyclone was routinely cleaned ensuring no material build up.

Due to the good drilling conditions around the sample interval (dry) the geologist believes the samples are representative, some bias would occur in the advent of poor sample recovery (which was not seen).

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.

Drill chip logging was completed on one metre intervals at the rig by the geologist. The log was made to standard logging descriptive sheets, and transferred into Micromine computer once back at the office.

Logging was qualitative in nature.

100% of all meterages were geologically logged. Some historic holes haven’t been 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

RC samples taken.

RC samples were collected from the drill rig by spearing each 1m collection bag and compiling a 4m composite sample. Single splits were automatically taken by emptying the bulk sample bag into a riffle splitter. Samples collected in mineralisation were all dry.

For Intermin samples, no duplicate 4m composites were taken in the field. 1m samples were submitted to Nagrom, ALS or Aurum Laboratories in Perth.

Samples were consistent and weighed approximately 1.5-2.0 kg and it is common practice to review 1m results and then review sampling procedures to suit.

Once samples arrived in Perth, further work including duplicates and QC was undertaken at the laboratory. Intermin has determined sufficient drill data density is demonstrated at the Pericles, Big Babe, Lady Shenton, Warrior, Bellenger and Yunndaga prospects and Mineral

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the grain size of the material being sampled.

Resource Estimate have been completed.

Mineralisation is located in weathered clays, sometimes saprolitic, transitional and fresh rock and the sample size is standard practice in the WA Goldfields to ensure representivity. Quartz and minor sulphides were observed which is consistent with narrow vein quartz and shear-hosted mineralisation known to occur in the Menzies region.

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 (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

The most recent 1m and 4m composite samples were assayed by Aqua Regia (ICP008) with a Fire Assay check (FA50) by Nagrom Accredited Labs (Perth) for gold only and is considered a partial digest. Work undertaken at ALS and Aurum utilised the same methods above.

No geophysical assay tools were used.

Laboratory QA/QC involves the use of internal lab standards using certified reference material, blanks, splits and replicates as part of the in-house procedures. QC results (blanks, duplicates, standards) were in line with commercial procedures, reproducibility and accuracy. Aqua regia digestion and fire assay (FA50) checks were used.

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 (physical and electronic) protocols.

Discuss any adjustment to assay data.

Work was supervised by senior Nagrom, ALS or Aurum staff experienced in metals assaying. QC data reports confirming the sample quality are supplied.

No twin holes undertaken.

Data storage as PDF/XL files on company PC in Perth office.

No data was adjusted.

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.

All drill collar locations were initially surveyed using a hand held Garmin GPS, accurate to within 3-5m. These holes were later surveyed more accurately using a RTK-GPS system by a contracted surveyor and data used in the Mineral Resource Estimate. Holes were drilled on a close grid in places and wider in less advanced areas in accordance with collar coordinates tables supplied with the initial ASX releases. The grid system used is MGA94 Zone 51. All reported coordinates are referenced to this grid. The topography was relatively flat.

Grid MGA94 Zone 51.

Topography was fairly flat, small differences in elevation between drill holes will have little effect on mineralisation widths on initial interpretation. The topographic surface has been sourced from historic data used during the operation of the mine. It is considered to be of sufficient quality to be valid for this stage of exploration.

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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.

Holes were variably spaced and were consistent with industry standard resource style drilling in accordance with the collar coordinates tables supplied with the initial ASX releases.

The hole spacing was determined by Intermin to be sufficient when combined with confirmed historic drilling results to define mineralisation classified as JORC compliant as stated in the Resource Summary Table 1. The sample spacing and the appropriateness of each hole to be included to make up data points for a Mineral Resource has been determined. More drilling is required to classify Measured Resource Estimates.

These assays are from 1m length sample intervals down hole.

Orientation of data in relation to geological structure

Whether the orientation of sampling 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.

No, drilling 60 degree angle holes is routine in the eastern goldfields, true widths are often calculated depending upon the geometry. In this case the intercept width is very close to the true width.

The relationship between the drilling orientation and the orientation of mineralised structures is not considered to have introduced a sampling bias. Given the style of mineralisation and drill spacing/method, it is the most common routine for delineating shallow gold resources in Australia.

Sample security The measures taken to ensure sample security.

Samples were collected on site under supervision of the responsible geologist. The work site is on pastoral station. Visitors need permission to visit site. Once collected samples were wrapped and transported to Kalgoorlie for loading and transport to Perth (Nagrom, ALS or Aurum). Dispatch and consignment notes were delivered and checked for discrepancies.

Audits or reviews

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

No Audits have been commissioned. Coxsrocks Pty Ltd has reviewed the sampling procedure and approved its use.

Section 2 Reporting of Exploration Results


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.

Mining Lease M29/153 (WA) for Pericles, Bellenger and Lady Harriet prospects. M29/88 and M29/184 for Yunndaga prospect. No third party JV partners involved.

The tenements are in good standing and no known impediments exist.

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Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Previous workers in the area include Pancontinental Mining, Rox Resources, Regal Resources and Heron Resources. Several open cut mines were drilled and commissioned in the 1980’s and 1990’s. Extensive underground mining was undertaken from the 1890’s – 1940’s across the leases and it is estimated that historic exploration was often undertaken via blind shafts initially.

Geology Deposit type, geological setting and style of mineralisation.

Archean quartz and shear hosted lode and supergene gold.

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:

easting and northing of the drill hole collar

elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

dip and azimuth of the hole

down hole length and interception depth

hole length.

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.

Not applicable however Intermin drilling results have been all released and reported to the ASX.

No information is excluded.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. 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.

No weighting or averaging calculations were made, assays reported and compiled on the “first assay received” basis.

Cut off grades were routinely applied and was incorporated in the resource calculations.

No metal equivalent calculations were applied.

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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 (e.g. ‘down hole length, true width not known’).

Mineralisation is generally west dipping at about 50 degrees. Individual ore shoot geometry varies to subvertical in some areas and this has been captured and modelled accordingly with wireframe interpretations. Given the spacing of the holes, it was deemed adequate to portray the interpreted ore zones.

Drill intercepts and true width appear to be very close to each other, or within reason allowing for the minimum intercept width of 1m. Intermin estimates that the true width is variable but probably close to 100% of the intercepted width.

Given the nature of RC drilling, the minimum width and assay is 1m. Diamond core is best used to determine cm scale mineralisation widths. Intermin downhole intercepts have been tabulated in previously ASX releases. True intercepts are not known however the downhole intercepts appear to represent very close to true width given the orientation of the drilling.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Summary maps and figures have been included in this release to describe the locations and orientations of the Mineral Resource Estimates.

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.

• Intermin drilling results have been routinely shown in releases >0.50g/t for individual 1m intervals for the Pericles, Bellenger, Lady Harriet and Yunndaga prospects. For compilation of resource estimates all data is evaluated from the database to form the basis of mineralisation outlines

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.

See details from previous ASX releases from Intermin Resources Limited (ASX; IRC) over the last 8 years dealing with drilling and work activities at the Lady Shenton NW (Pericles), Lady Harriet, Bellenger, Yunndaga and numerous other similar prospects within the mining leases. These can be accessed via the internet.

Further work The nature and scale of planned further work (e.g. 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

Scoping engineering studies will be undertaken using the updated Mineral Resource Estimates to determine areas that have economic potential. Additional drilling is planned at all the prospects with resource estimates to expand resources at depth and along strike when funding is approved.

Commercially sensitive.

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future drilling areas, provided this information is not commercially sensitive.

Section 3 Estimation and Reporting of Mineral Resources


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.

For Intermin drilling geological and field data is collected using hand written logs. Historical drilling data has been captured from historical drill logs where available.

The data is verified by company geologists before the data is transcribed into Micromine software and reviewed for accuracy against the planned details and validated using Micromine programs. The resource is based on a reasonable level of accuracy in the historical work, there have been several reports and independent due diligence and QA/QC studies that have lent credibility to the previous work.

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.

Company geologists have made numerous site visits to the project area to conduct the drilling for numerous drilling programs. David O’Farrell and Simon Coxhell the Competent Persons have visited the site numerous times and while drilling programs have been undertaken. Inspections of procedures have been made throughout Intermin drilling and sampling programs.

Not applicable

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.

The confidence in the geological interpretation is high, gold mineralisation is associated with quartz veins in narrow 1-4m wide shoots. The mineralisation zones are typically defined by a 0.3 g/t Au mineralised envelope which was then wireframed. Continuity between sections is considered reasonable and reliable.

The data used to construct the geological model included was based on historic mining, assay and geological data. This was imported into Micromine.

The deposits all consist of west dipping lodes with a southerly plunge. Infill drilling has supported and refined the model and the current interpretation is considered robust.

Widespread drilling and geological mapping of the sparse outcrops of host rocks have supported the estimate.

Infill drilling has confirmed geological and grade continuity.

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.

Pericles; - The Mineral Resource area extends over an intermittent strike length of 450m an average 70m vertical interval from 4220mRL to 350mRL. Warrior; - The Mineral Resource area extends over an intermittent strike length of 200m and includes an average 70m vertical interval from 410mRL to 340mRL. Bellenger; - The Mineral Resource area extends over an intermittent strike length of 500 and includes an average 60m

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within a vertical interval from 420mRL to 3255mRL. Yunndaga; - The Mineral Resource area extends over an intermittent strike length of 820m and includes 30m to 110m vertical interval from the 385mRL to 200mRL. The deposits all remain open at depth with strike potential. Other potential gold lenses have not been tested adequately.

Estimation and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of 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.

Grade estimation using Inverse Distance squared (ID2) was completed using Micromine V12 modelling software for the resource interpolation. Drill grid spacing ranges is typically around 20 metres.

Drillhole sample data was flagged using domain codes generated from three dimensional mineralisation domains and then used to create the composite files. 1m assay composites were used. The influence of extreme grade outliers was reduced by top-cutting. The top cut was determined by using a combination of grade histograms, log probability plots and CV’s. Wireframe domains were based on a 0.3g/t Au mineralised envelope. Minimum block size was 5m x 5m x 2.5m. The CoxRocks Yunndaga OBM was compared successfully to a block model from Paddington Resources created back in 1998.

No by-products were considered.

No deleterious elements are present.

Minimum block size was 5m x 5m x 2.5m. A 15g/t cut was universally applied, regardless of the domain. Search setting was modelled on a search ellipse using ID2 dipping west about 50 degree with a southern plunge of 45 degree.

No selective mining units were assumed in this estimate.

There was no correlation between variables (only gold estimated).

Geological interpretations were completed on 20m sections, using resource drilling. 3D wireframes where then constructed around these interpretations, creating 14 domains. In addition to these mineralised domains, a base of oxidation and top of fresh rock was also used.

The grade cut of 15 g/t Au was based on the grade distribution characteristics of the single split assays. Log-probability graphs revealed an inflection point around 15g/t where the high grade samples deviated. In total 37 samples were cut which reduced the coefficient of variation to within acceptable levels.

The Intermin block models were compared against the historic resource/block models from preliminary models by Coxrocks where available for the Pericles, Bellenger, and Yunndaga prospects.

No reconciliation data was available as all the resources are unmined.

Moisture Whether the tonnages are estimated on The resource tonnage is reported using dry bulk density. This

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a dry basis or with natural moisture, and the method of determination of the moisture content.

was based on Intermin’s data that indicated the wet specific gravity of oxidised basalt as derived from core testing to be 2.26 and fresh basalt to be 2.96. Intermin used 1.8 for oxidised, 2.2 for transitional and 2.6 for fresh rock. The Specific gravity values are also consistent wih industry standards at other mines located in the Eastern Goldfields.

Cut-off parameters

The basis of the adopted cut-off grade(s) or quality parameters applied.

The Gold Mineral Resources are reported inside the mineralisation wireframe that was constructed at a 0.3g/t Au cut-off and then further constrained to 1.0 and 0..5g/t Au cutoff during estimation.

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.

Mining of the deposits as they are currently understood known will be initially by open cut mining. Possibly Yunndaga could be accessed from an underground decline if enough additional resources are discovered. Smaller machinery would be utilised in the ore zone as mining will be more selective. Underground potential is definitively present however additional drilling is required to test zones at depth before an underground mining assessment can be made.

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.

Metallurgical testwork has been conducted but not viewed. Reference was made to historic performance of the historic mines and a very high gravity component has been noted.

Environmental 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

Ore would be mined from the deposits and transported to a central processing facility on the leases or a 3rd party facility offsite. The deposits are all located on granted mining leases and there has been extensive land disturbance immediately adjacent and surrounding the deposits. Mine tailings could be deposited in abandoned pits or at other sites where the ore is processed. F

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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 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.

Bulk density has also been revised from earlier…

The method used an air dried half core sample which was weighed in air and then immersed in water. Porous samples were sealed with bees wax. Minor outliers were removed to arrive at an average value.

Values for the ore categories as determined are: Oxide 1.80 t/m3

Transitional 2.20 t/m3

Fresh 2.60 t/m3

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.

Mineral Resources have been classified on the basis of confidence in the geological and grade continuity using the drilling density, geological model, pass in which the gold was estimated and the distance to sample selections.

Indicated Mineral Resources have been defined generally in areas of 20m by 10m drill spacing. Ore outlines that had lower confidence in continuity were ignored and not categorised as inferred. The oxide zone is shallow at Menzies being just 30m on average. Overall the high drill density and number of holes defining a reasonably consistent ore zone(s), rather than ore type, is the main factor influencing the resource category.

As described above the Mineral Resource classification has been based on the quality of the data collected (geology, survey and assay data) the density of the data, grade estimation quality and geological/ mineralisation model.

The reported resource estimates are consistent with the view of the deposits by the Competent Person.

Audits or reviews

The results of any audits or reviews of Mineral Resource estimates.

An external review has been carried out by David O’Farrell on Mr Simon Coxhell’s work, which include an analysis of the sections and wireframe validation, resource estimation methodology and validation.

Discussion of relative

Where appropriate a statement of the relative accuracy and confidence level in

The relative accuracy of the Mineral Resource Estimates is reflected in the reporting of the Mineral Resource as per the

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accuracy/ confidence

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.

guideline of the 2012 JORC code. The classification is supported by a sound understanding of the geology of the deposit, the drill hole spacing, historic mining data and a reasonable dataset supporting the density used in the resource model. Both competent persons have over 20 years’ experience, with several years working in the region.

The statement relates to the global estimate of tonnes and grade.

Significant historical production has been reported at Lady Shenton, Lady Harriet and Yunndaga from both initial underground methods dating back to 1890’s and open cut methods in the 1990’s.

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mineral resource grows at menzies gold project · 2016-03-07 · mineral resource grows at menzies...

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