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Drilling at the Mpokoto Gold Project
Armadale, the AIM quoted investment company focused on natural resources projects in Africa, has commenced a 2,500m drilling programme in late July and undertake further analysis of the geological work conducted to-date with a view to increasing the current 678,000oz gold resource and optimising the already compelling economics of the Mpokoto Gold Project in the Katanga Province of the Democratic Republic of Congo.
The Project continues to be advanced towards commercial production, which is targeted to commence H1 2016.
Highlights:
– 2,500m Reverse Circulation drilling programme to commence late July to further explore:
– Newly identified Exploration Target areas located along-strike and down dip from known mineralisation – targeting an additional 120,000 to 150,000 oz Au from 2.4Mt to 3.0Mt at a grade of 1.25 to 1.5g/t Au
– Extensions of high grade mineralisation in sheared altered mafic rocks intersected in drill hole MPDD0064, which intercepted 27.9 metres @ 7.8 Au g/t in addition to laterally continuous zones of mineralisation
– Results of further drilling have potential for material enhancements to current pit models and economic fundamentals of the Project which has a current Total Mineral Resource of 678,000oz Au from 14.58 million tonnes @ 1.45g/t Au at a cut-off grade of 0.5g/t
– Mpokoto has demonstrated a post-tax net present value of US$55.3 million, US$20m of proposed financing and a defined development strategy to rapidly advance the Project through to low capex, low opex gold production in H1 2016
– Definitive Feasibility Study is currently being finalised following Heads of Agreement with Africa Mining Contracting Services group with a view to funding, developing, constructing and operating Mpokoto
Peter Marks, Chairman of Armadale, said, “Following the completion of the Heads of Agreement pursuant to which A-MCS proposes to provide US$20m of financing, as well as work with Armadale to develop, construct and operate Mpokoto, we are working hard to finalise the Definitive Feasibility Study with A-MCS. We are now also commissioning a further 2,500 drilling programme to explore the exploration targets previously identified by our geological consultants. We believe this has the potential to significantly enhance the current pit models and economic fundamentals of Mpokoto, which continues to develop in line with our expectations of being able to deliver a low capex, low opex commercial gold mining project in the near future.”
Proposed Work Programme
The proposed 2,500m drilling programme will have several objectives including targeting primary and down dip mineralisation beyond the planned present optimised pit limits. In particular, the recent work by CSA has highlighted the possibility of extensions of high grade mineralisation in sheared altered mafic rocks intersected in drill hole MPDD0064, which intercepted 27.9 metres@ 7.8 Au g/t. In addition, the geological work points toward laterally continuous zones of mineralisation. Further drilling will target near-surface “along strike mineralisation” which has the potential to substantially extend planned pits to the north-west.
An Exploration Target of between 2.4Mt to 3.0Mt at a grade of 1.25 to 1.5g/t Au for an additional 120,000 to 150,000 ounces of gold has been identified and the Company hopes to bring these ounces “to book” in the planned drilling programme. The programme is expected to commence during the next few weeks and is expected to take 8-12 weeks to complete, depending on conditions and number of drill rigs available.
The geological review completed in 2014 revealed a strong structural control on the origin and geometry of mineralisation. The implication is that the extension of mineralisation can be extrapolated and targeted with a higher degree of confidence from known mineralised intercepts. This concept is at the base of the proposed drilling work for the expansion of the resource to the north-west. Work in this area should be implemented by way of step out drilling from the current most north-western drilling traverse on nominally 50m spacing, so that the drilling can be adjusted in line with the intersection of mineralisation. Up to 400m strike length of stacked mineralisation lenses can potentially be added to the resource base. Initially the near-surface mineralisation should be targeted to a depth of 75m.
Two target areas of a more conceptual nature but with a potentially significant impact on the economics of the project were interpreted in the vicinity of the “fault” and MPDD0064 drill hole.
The proposed work programme is structured according to the highest immediate effect it potentially can have to the current Mineral Resource base for Mpokoto. The following ranking is proposed:
1. Drilling to support the conversion of all Inferred classified resource to Indicated category
2. Convert Exploration Targets to classified resource status
3. Expand oxide resources where they are not closed off
4. Test with targeted drill holes structural and/or stratigraphic drill holes the depth continuity of primary mineralisation, and
5. Target high-grade primary mineralisation in mafic host rock
6. Work Programme for Area 4 and 3
7. Resource areas 4 and 3 are economically important parts of the Mpokoto deposit area and are both, in terms of upside to potential expansion and with regard to targeting new mineralisation concepts relevant.
