Mining & Exploration Projects

Philippines

CO-O OPERATIONS

1.1   The Co-O Mine

The Co-O underground mine is developed on a series of intermediate sulphidation, epithermal quartz veins and to date have been worked to approximately 350 metres (Level 8) below the adit level (Level 1) and Levels 9 and 10 are commencing. When the mine was originally developed in the late 1980s, three veins only had been discovered on the west side of the Oriental Fault (despite exploration drilling on the east side) and all mine development was carried out on the west side over approximately 600 metres of strike length.The mine was initially accessed through an adit for nearly 300 metres before encountering the mineralised veins. The height above sea level of the adit is 150 metres but for convenience this is now designated as Level I.

Drilling, which commenced in late 2004, intersected the vein system on the east side of the Oriental Fault and subsequently has delineated the vein system over a strike length of approximately 2,000 metres.

The L8 Shaft to Level 8 at 350 metres below surface became operational in January 2013. Two Cross – cuts measuring 3m x 3m to the south from the shaft have intersected the full vein set as each vein is intersected on-vein development commences to the East and West.

 ore pass is from Level 6 to Level 8 and from Level 7 to Level 8 are operational.

Additional detailed geological information is available in the announcement dated 14 August 2012 and available from 09 April 2015.

It is important to note that drilling of narrow epithermal veins at best generally provides only an indication of the presence of the gold mineralised vein and moderatley good quantitative data with respect to accurate grade and volume estimations for some or all of the following reasons:

·         Veins commonly pinch and swell over short strike lengths and may be brecciated or displaced by faults;

·         Gold distribution is commonly erratic, in shoots or controlled by structures within the vein; and

·         Drill core recovery can be reduced because of the brecciation and soft unconsolidated material and hence the recovered material may not be representative of the material drilled.

To convert resources to reserves, drilling is then followed by level and vertical development and infill drilling to support the initial drilling results, to provide a more accurate estimate of vein grades and grades and to facilitate the estimation of resources and conversion of Indicated Resources to Probable Reserves.

See the section on Narrow Vein Mining for more information.
 

 1.2 Gold Production

The production statistics are summarised in Table 1.

Table 1. Gold production statistics for Financial Year ended 30 June 2014 and 30 June 2015

Period Unit FY ended FY ended
30 Jun 2015 30 Jun 2014
Tonnes mined wet tonnes 659,495 521,899
Ore milled dry tonnes 582,311 460,004
Recovered grade gpt 5.61 4.76
Recovery % 93% 85%
Gold produced ounces 98,359 59,904
Cash costs (1) US$ $385 $418
Gold sold ounces

Note:

(1)       Net of development costs and includes royalties and local business taxes but no by-product credits.

  • The Company produced 98,359 ounces of gold for the year, compared to the previous year’s gold production of 59,904 ounces, at an average recovered grade of 5.61 g/t gold (2014: 4.76 g/t gold);
  • The average cash cost for the year of US$385 per ounce, was marginally lower than the previous year’s average cash costs of US$418 per ounce.

The increase in gold production is attributable to a combination of several factors:

  • Increase in mill throughput;
  • Improved head grades; and
  • Improved mill recoveries

 

 1.3    Resources and Reserves

               The Company’s current mineral resources and ore reserves for Co-O were previously announced in accordance with the guidelines of the JORC Code 2012 (Australasian Code for                                  Reporting of Exploration Results, Mineral Resources  and Ore  Reserves). Refer to announcement of 07 September 2015.

coo_fig1
Figure 1. Composite plan of Co-O – Level 8.
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coo_fig2
Figure 2. 3D model of the Co-O vein system.
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Photograph of the L8 Shaft.

 

1.4  Co-O Mine Exploration

Underground diamond drilling using 3 large drilling rigs continued during 2015, completing 61 holes for an advance of 25,400 metres. Drilling for 2015 -2017 will be conducted from 3 drill chambers on Level 8.

Drilling results are available in Quarterly Reports

1.5   Co-O Regional Exploration

A ground Induced Polarisation (“IP”),  Resisitivity (“RES”) and Ground Magnetics surveys were completed within the Co-O tenements including the Co-O mine environs. Data processing and interpretations have been completed.

Reconnaissance mapping and sampling programmes are ongoing at West Road 17 and South Agsao areas.