Mineral Resource Update – Asacha Gold Mine
Trans-Siberian Gold plc (TSG.LN), a low cost, high grade gold producer in Russia, announces an update of the Mineral Resource Estimate for the Asacha Gold Mine in Kamchatka, Far East Russia.
The mineral resource at Asacha occurs in two zones: Main zone (currently being mined) and East zone (not yet mined). The Main zone hosts six defined veins, with the majority of the resource contained in two of these, QV1 and QV2. Three veins have been defined in the separate East zone. The Main zone has a strike length of approximately 1,500m, whilst the East zone is approximately 400m.
The Mineral Resource Estimate (‘MRE’) for the Asacha Gold Mine was updated by Seequent UK Ltd (“SUKL”) as at 01
December 2019. SUKL has updated the Asacha deposit’s MRE at the end of every year from 2012. The purpose of these
updates is to incorporate new data available from exploration, drilling, mining development and to account for mining depletion.
The focus of the MRE has been to incorporate new resource drilling on QV1 and QV2 in the Main zone and QV25 in the East zone. As reported on 19 September and 22 October 2019, preliminary internal estimates indicated that the existing in-situ resource may have been overestimated. A complete re-analysis of the MRE model inputs has now been undertaken, resulting in a reduction to the MRE, due to multiple contributing factors such as new drilling data, updated vein interpretations, revision of estimation parameters (in particular top capping), additional mine induced sterilisation and a change to reporting by linear cut-off grade. SUKL’s full report is available on the Company’s website at: www.trans-siberiangold.com
Alexander Dorogov, Chief Executive Officer of TSG, commented:
“I am pleased with the work that the team at Asacha has done to update the Mineral Resource Estimate. We have invested heavily in improving our understanding of the ore body through a significant drilling campaign which confirms our expectations and provides the basis for better mine planning out to 2024. The resource will be supplemented by additional ounces targeted in an accelerated exploration programme as well as existing stockpiles. A new drilling campaign of approximately 8,000m around Vein 25 in the East Zone is already underway. We are confident that we have the time, capital and skills to upgrade the mineral resource at Asacha. Formal guidance for 2020 will follow shortly, but at this stage we anticipate annual gold production to be in line with recent years.”
Mineral Resource Estimate
The Mineral Resource Estimate, classified according to the guidelines of the JORC Code (2012), for theAsacha Gold Mine as at 01 December 2019 is shown in the following table:
1. Resources are reported above 4m*g/t Au cut-off grade
2. Resources are reported after mining depletion
3. Tonnage and grades have been rounded to reflect an appropriate level of precision
4. Rounding maymean that columns do not sumexactly
5. Mineral Resources are classified according to the definitions of the JORCCode
The total (Measured + Indicated + Inferred) declared Mineral Resource Estimate has decreased from 553,000oz Au and
1,314,000oz Ag reported as at 31st December 2018 to 313,000oz Au and 675,000oz Ag as at 01 December 2019.
The following table illustrates the change in the gold estimates for the Main zone and East zone:
|Resource Estimate as at 31 December 2018||553,052|
|Difference due to new data and interpretation||-84,448|
|Difference due to revised estimation parameters||-16,539|
|Resource Estimate as at 20 December 2019||312,558|
Mining depletion, Sterilisation & Rockfall
The Main zone was depleted in the usual manner and consistent with previous estimates. Additionally, this included areas
that TSG considered will not be mined due to stability issues and areas that are deemed uneconomic. In previous estimates, SUKL have included some remnant areas of mineralisation around the periphery of the upper levels of the mine. However,following the collapse of the older workings on Main zone there is no longer any realistic prospect that these areas of remnant mineralisation can be safely recovered due to geotechnical instability.
Difference due to data and interpretation (including drilling)
The mineral resource model has been updated to incorporate new diamond drilling on QV1 and QV2 in the Main zone and
QV25 in the East zone.
On the Main Zone, 94 core drill holes for 6,894m were drilled underground from the 100m to infill below 100m, targeting vein extensions on both QV1 and QV2. This represents a large increase in the amount of drilling available on Main Zone targets below the 100m level. In addition, 329.8m of channel sampling in 136 separate channels were collected, mainly from the north end of the Main Zone on QV1 at the 100m level, and from the southwards extensions of development on QV2 between 100 and 150m. In the Main Zone, gold mineralisation is becoming weaker and more erratic with depth, with an increase in the presence of base-metals minerals. This vertical zonation is typical of epithermal systems.
On the East Zone, 21 diamond drill holes targeted two veins, QV18 and QV25. Infill drilling on QV25 consisted of 19 drill holes totalling 4,752.5m and on QV18 two drill holes testing along strike vein extents totalling 450m. QV25 is a priority for TSG, as it is regarded to have the potential for exploitation in the near future.
Summary of 2019 drilling campaigns:
Figure 1. Long section looking west of 2019 drilling and sample data for Main Zone.
1. Red collars indicate 2019 data, blue pre-2019. 2019 drillhole traces in solid purple originating from100m.
Figure 2. 2019 Drilling on the East Zone, red collars indicate 2019 campaigns.
1. Red collars indicate 2019 data.
Figure 3. Long section viewof QV25 showing true width and grade of intersections.
1. 2019 drill hole traces in purple.
Difference due to estimation parameters
Top caps have historically been applied to the MRE to allow for the highly skewed grade distributions that typically occur in epithermal deposits, with annual reconciliation against production used to validate the choice of cap value. Over the previous 12 months, as mining progressed into less well drilled and lower grade parts of the Main Zone below the 150m level, more localized reconciliation against production sampling indicated that mineral resources were locally overestimated, likely due to insufficient constraint on high grade samples. A complete re-analysis of estimation parameters for all veins was undertaken, in particular the treatment of extreme grades through top-capping. Consequently, a more stringent top capping has been used for this estimate than in previous models.
Previously SUKL have reported the in-situ resource using an Au grade cut-off of 4g/t. In the lower levels of the mine, veins are thinner, and it is more appropriate to apply a dual cut-off on both contained metal (linear grade=grade*thickness) and grade.
The updated MRE is reported above a dual cut-off of 4m*g/t (vein thickness*Au grade) and 4 g/t Au. The effect of this change is minimal.
The Group will be conducting both underground and surface drilling campaigns during 2020. A total of approximately 22,000m of surface drilling will target the lateral extents of the Main zone and QV25. A further 2,000m of underground drilling will be conducted on the Main zone at depth.
SKUL have classified QV18 and QV25 as Exploration Targets  with the potential for ranges of:
· QV18: 33,000t to 270,000t at a grade of between 3.5g/t and 5g/t; and
· QV25: 30,000t to 60,000t at a grade of between 15 to 35g/t
The potential quantity and grade of the Exploration Target material is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
The low sulphidation epithermal style of mineralisation found at the Asacha Gold Mine is favourable for high-grade deposits.
The Asacha licence area and the regional district more widely remains under-explored which the Company believes presents an opportunity to define local, near mine extensions to mineralisation and exploration targets. As such, the Company expects to increase the scope and scale of its exploration activities. Additional details of the Company’s exploration plan will bepublished shortly.
The Rodnikova deposit is not reflected in this Mineral Resource Estimate. The Company has engaged a different Competent Person to prepare a Mineral Resource Estimate to be reported in accordance with the JORC Code (2012), which should be complete in January 2020.