New Dawn Mining Corp. (TSX: ND) announced that it has received an independent NI 43-101 compliant Mineral Reserve and Resource estimate for the Zimbabwe gold mining properties owned by Central African Gold plc.
As previously announced, New Dawn made its investment to acquire an 89% controlling interest in AIM-listed CAG in June 2010.
Highlights of New Dawn's Total Gold Reserves and Resources:
- 32% increase to New Dawn's total Mineral Reserves to 220,000 ounces of gold grading 3.81 g/t from 1,785,000 tons of mineralized material. The Mineral Reserves are comprised of Proven Mineral Reserves of 109,400 ounces of gold grading 3.69 g/t from 874,700 tons of mineralized material and Probable Mineral Reserves of 110,600 ounces of gold grading 3.78 g/t from 910,300 tons of mineralized material
- 92% increase to New Dawn's total Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) to 1,558,400 ounces of gold grading 2.37 g/t from 20,436,000 tons of mineralized material
- 54% increase to New Dawn's total Inferred Mineral Resources to 552,600 ounces of gold grading 4.95 g/t from 3,477,000 tons of mineralized material
New Dawn's investment in CAG is consistent with New Dawn's stated business objective to become a mid-tier gold producer and the 'in-country consolidator' of gold mining assets in Zimbabwe.
CAG has five principal gold properties in Zimbabwe (collectively, the "CAG Properties"): Dalny Mine, Golden Quarry Mine, Venice Mine, Camperdown Mine and Old Nic Mine. The Mineral Reserve and Resource estimates for the CAG Properties have an effective date of June 30, 2010, and are contained in a Technical Report effective as of June 30, 2010 (the "CAG Technical Report") prepared for New Dawn by Michael Othitis of Medusa Geo-Consulting LLC (the "Author"), who is an independent Qualified Person as defined by NI 43-101. The CAG Technical Report has been filed on SEDAR and is available on New Dawn's website.
"With New Dawn's June 2010 investment in CAG, and the new Mineral Resource estimates for the CAG properties announced today, the CAG acquisition has demonstrably and significantly increased New Dawn's gold resource base," commented Ian R. Saunders, President and CEO of New Dawn. "New Dawn now has both the gold resources and the mining capability to support a consolidated annualized production of 50,000 to 60,000 ounces of gold within the next 18 to 24 months, and we look to increase this to 100,000 ounces of annualized gold production within four to five years.
New Dawn's attributable interest resulting from its 89% interest in CAG consists of:
- Mineral Reserves of 52,700 ounces of gold grading 3.5 g/t from 464,000 tons of mineralized material. Proven Mineral Reserves are 37,500 ounces of gold grading 3.3 g/t from 350,700 tons of mineralized material and Probable Mineral Reserves are 15,200 ounces of gold grading 4.2 g/t from 113,300 tons of mineralized material
- Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) of 746,200 ounces of gold grading 1.5 g/t from 15,405,300 tons of mineralized material
- Inferred Mineral Resources of 193,500 ounces of gold grading 4.6 g/t from 1,314,400 tons of mineralized material
New Dawn's Mineral Reserves and Resources, Exclusive of CAG:
New Dawn's Mineral Reserves and Resources at the Turk/Angelus Mine in Zimbabwe as of June 30, 2009 were as follows:
- Mineral Reserves of 167,300 ounces of gold grading 3.92 g/t from 1,321,000 tons of mineralized material, comprised of proven mineral reserves of 71,900 ounces of gold grading 4.22 g/t from 524,000 tons of mineralized material and probable mineral reserves of 95,400 ounces of gold grading 3.72 g/t from 797,000 tons of mineralized material
- Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) of 812,200 ounces of gold grading 5.03 g/t from 5,031,000 tons of mineralized material
- Inferred Mineral Resources of 359,100 ounces of gold grading 5.17 g/t from 2,162,000 tons of mineralized material
Additional information concerning New Dawn's Mineral Reserves and Resources is set out in New Dawn's Annual Information Form dated December 17, 2009 in respect of the year ended September 30, 2009, a copy of which is available on SEDAR.
DETAILS OF CAG MINERAL RESERVES AND RESOURCES
CAG holds its interests in the Camperdown Mine and Old Nic Mine through its 100% owned Zimbabwe subsidiary, Olympus Gold Mines Limited, and holds its interests in the Dalny Complex, Golden Quarry Mine and Venice Complex through its 84.7% owned Zimbabwe subsidiary, Falcon Gold Zimbabwe Limited ("Falgold"). New Dawn, in turn, holds approximately 89% of the outstanding shares of CAG. New Dawn's attributable share of the Mineral Reserve and Resource estimates for the CAG Properties are as follows:
The Author visited the CAG Properties between November 17 and December 18, 2009. Since the Author's site visits, the CAG Properties have been mainly on care and maintenance, with very limited underground activity or production. The Mineral Reserve and Mineral Resource (MRMR) estimates previously compiled by CAG and Falgold were assessed, re-defined and re-calculated to comply with NI 43-101 standards.
Classification System Used To Define Mineral Resources and Mineral Reserves
The Mineral Reserves and Resources were estimated by arithmetic averages and no spatial techniques were used. Most calculations and tabulations were done on computerized spreadsheets and block mass estimations were calculated from section or plan measurements adjusted for dip and strike. All blocks were represented on long sections derived from geological interpretation of relevant plans and cross sections and all blocks have a back-up file containing the source data used to generate the Mineral Reserve and Resource estimates.
Mineral Reserve and Resource criteria require at least one payable (above the cut-off grade) intersection by drilling or crosscutting within a 30m horizontal and 30m vertical block for Inferred Mineral Resources, two intersections greater than 10m apart and not on the same elevation for Indicated Mineral Resources and six intercepts for Measured Mineral Resources. All drill and/or crosscut intersections must expose the full width of the mineralization. Currently, no intersections used to define Mineral Reserves and Resources are based on a geological mine model. The intercepts for Measured Mineral Resources come from stope preparation, crosscuts and any boreholes drilled through the block. All Mineral Resource and Reserve blocks are normally bounded horizontally by the main haulage levels, which are spaced 30m apart.
Mineral Reserves and Resources are delineated on a block model system either by diamond drilling or crosscutting to expose the full mineralization width. Full exposure of the mineralization is deemed important due to the variations in widths and the erratic distribution of gold values. Crosscuts are excavated to expose the full width of the mineralization and samples are taken along both sidewalls of the crosscuts.
Although the CAG Properties are currently on care and maintenance, they have a long operating history such that the fundamental technical issues that have been established over many years of operations are well understood. The Mineral Reserves and Resources estimated in the CAG Technical Report use this historical information as the basis for these estimates. Additionally, the cut-off grade estimates for the CAG Properties were assessed using historical cost data that were suitably adjusted to use as a base for current costs. These cut-off grades were considered by the Author of the CAG Report to be fair and reasonable.
The general criteria and methods used to review and validate each mine site were as follows:
- Review all mineral assays on longitudinal sections, geological plans and all available cross-sections pertaining to assays and diamond drilling intersections.
- Diamond drill holes were fundamentally used for exploration purposes only; as a result, investigations into core logging procedures and documentation were minimal.
- Check all Mineral Resource blocks for verification of source data and the compliance of reliable and proven gold reef mine definitions based on the JORC Code.
- Report on all available Mineral Resources that could be confirmed through either development, stoping or diamond drilling.
- No computer based geological packages were used with the exception of Golden Quarry.
- Inspections were carried out on block dimensions corrected for dip and strike to verify MRMR calculations in Falgold's spreadsheets.
- Check the integrity of the Mineral Resource and Reserve reporting system including spreadsheets used in the estimations.
- All available historical reports and exploration data relating to the respective Properties were examined and interpreted.
- Historical information on dilution and mining losses were observed.
- Review the mine to mill reconciliations (MCF) and past histories of Block Plan Factors (BPF) to confirm accuracy between the Reserve grades as opposed to the actual mined grade.
- Review the availability of pillar extraction based on previous experience on the locations and mining methods of extraction. This included operational issues leading to falls of ground and rock bursts, particularly as mining moves into deeper levels. Major cave-ins and flooding could also occur under extreme conditions that could potentially lead to consequential environmental problems during rehabilitation.
- Confirm the capping of high grades that was previously done using statistical methods.
- Cut-off (pay limit) grades were assessed using historical cost data, suitably adjusted for use as a base for current costs. These cut-off grades are considered to be fair and reasonable.
- Visits to assay laboratories to verify quality assurance and quality control from the competent person in charge. Standards, blanks and repeats were used historically and therefore assumed that the assay data was accurate as the GCF and GAF were within acceptable limits when the mines were operational.
- Physically checked the majority of the larger dumps to confirm their existence and to assess reported tonnages.
- Grades were confirmed from past documented reports on auguring and other metallurgical requirements for re-treatment.
- Physically checked the Camperdown open pit and reviewed available reports of pits that may have large tonnage, low grade potential.
- Locate all past reports pertaining to current and potential pits to assess previously stated grades. These grades were found to be reasonable.
The Camperdown Mine was previously mined as a combination of an open cast surface operation and a higher grade underground operation. The lower grade mineralized material from the surface mining was processed in a heap leach facility at Camperdown, while the higher grade mineralized material from both the open cast and the underground was transported to the Golden Quarry Mine processing plant. Historically about 10,000 tons of mineralized material was treated on a monthly basis at both the heap leach facility and at the Golden Quarry processing plant. The operation involved the typical heap leach techniques of passing a dilute cyanide solution sprayed onto a heap-leach pad with the pregnant solution passing through carbon columns (carbon loaded twice per month). The loaded carbon was eluted and gold was smelted off site. The heap leach recovery was approximately 0.3g/t.
During the time of the Author's site visit both the surface and underground activities were non-operational, as the mine was under care and maintenance, and the MRMR were assessed based on the following criteria:
Although the geological software package was not accessible, hardcopies of past reports, mine plans and additional spreadsheets of the open-pit outline including assay values generated a reasonable understanding and comprehension of the mineralization, economics, geology, diamond drilling and mining constraints to re-classify and report current MRMR. Since there was no pit design or plan for future mining, all previous open pit Reserves were kept but re-classified and reported as Resources. Given that the Collingwood underground workings were non-operational, all Mineral Reserves assigned in the past were transferred to Mineral Resources.
The cut-off grade estimate for Camperdown was assessed using historical cost data that were suitably adjusted for use as a base for current costs. These cut-off grades are also considered by the Author to be fair and reasonable.
Due to the termination of underground operations all Mineral Reserves assigned in the past were transferred to Mineral Resources.
The Wanderer Dump consists of 3.6m tonnes at an average grade of 0.64g/t. Until a milling plan has been devised to re-treat the slimes, this dump will continue to be classified as a Resource, but a provisional cut-off grade could be as low as 0.32g/t.
Almost without exception, the Dalny Complex mineralized deposits were mined utilizing narrow seam underground mining techniques. The mineralized material from underground was fed to a nearby processing plant where milling and liberation was followed by flotation. Historically, due to the deemed refractory nature of the mineralization, the flotation concentrates were roasted in an Edward's fluo-solids roaster to liberate the gold. The roasting plant was also used to recover gold from concentrates transported from the Venice Complex. All the free gold was recovered from the roaster product by gravity concentration and amalgamation. The remaining residues from the flotation and roaster operations were directly cyanided. A series of tests done in the late 1990's indicated that the mineralization was amenable to cyanidation without requiring flotation, provided that the residence time in contact with cyanide solution was adequate. The Dalny Mine, at its peak, mined and milled approximately 12,000 to 15,000 tons of mineralized material per month. The current installed crushing and milling capacity sustains approximately 3,000 tones per month. The overall recovery of Dalny Complex mineralized material is approximately 80% to 85%.
During the time of the Author's site visit underground mining activity had ceased. All the mines except Dalny (above 14 level) and Stella were flooded. Subsequently, the Dalny Complex MRMR were assessed by the Author based on the following criteria:
The Author physically checked the majority of the larger dumps to confirm their existence and to assess stated tonnages. Grades were confirmed from documented reports on auguring and other metallurgical requirements for re-treatment done by outside consultants.
Factors applied in converting slime Mineral Resources to Mineral Reserves:
Based on the geological interpretation and assessment by CAG's geologist, a 700m strike of open pit potential may exist above the Colne/Stella workings. The Author believes this to be a reasonable assumption, based on his assessment of these findings, coupled with his knowledge of the geology of the workings.
GOLDEN QUARRY MINE
The Golden Quarry mineralized deposit was initially mined as an open cast operation, but later mined from underground utilizing suitable mass mining techniques. The Golden Quarry processing plant was designed to treat approximately 18,000 tons of mineralized material per month. Prior to CAG acquiring ownership of the property, approximately 6,000 and 9,000 tons of mineralized material from Golden Quarry Mine and Camperdown Mine, respectively, was processed through the plant. The plant consists of a crushing plant, mills, leach tanks, and absorption columns. Grinding was performed with the addition of cyanide and lime to dissolve approximately 25% of the gold. The remainder of the gold was recovered in leach tanks and carbon absorption columns. Approximately 85% to 90% of the gold is recovered in the processing plant.
The Golden Quarry Mine was under care and maintenance at the time of the Author's site visit. Previous underground MRMR were estimated using Gemcom software in conjunction with geo-statistics, variography and kriging. All previous estimates were calculated by the Competent Persons at Falgold's Head Office in Bulawayo, Zimbabwe. During the site visit, the Author was informed that the Gemcom software and hence, the MRMR database, were inaccessible. Hard-copies of the Mineral Resources and Reserves up to 30 June 2010 including plans and past reports were all available on-site for the Author to review. Due to the termination of all underground operations, all Mineral Reserves assigned in the past were transferred to Mineral Resources. From the plans and sections available on-site a large proportion of the Mineral Resources were found to be confined to pillars that are still intact. The Mineral Resource estimates are based on the Author's prior knowledge of the mine and the historical mining grades.
Additionally, the cut-off grade estimate for the mine was assessed using historical cost data that were suitably adjusted for use as a base for current costs.
OLD NIC MINE
Mining at Old Nic Mine was conducted on a narrow, high grade gold seam utilizing jackhammers and underhand stoping techniques. The processing plant is set up to recover approximately 70% of the gold as "free gold" in gravity concentrators. The remaining gold is recovered in a conventional Carbon in Pulp plant. The overall recovery is set at 90%.
During the time of the Author's site visit the Old Nic mine was under care and maintenance. Old Nic's MRMR assessed by the Author is based on the following criteria:
By the implementation of new definitions, Indicated and Measured Mineral Resources that are situated within 50m of current development were converted to Probable and Proven Mineral Reserves, respectively, after applying modifying factors and provided economic viability was maintained, and if there was a proposed stoping plan showing the required development.
Due to limited underground drilling, Mineral Resources were estimated from development ends, crosscuts, and channel sampling. This data from development type work is generally more accurate than diamond drilling and thus the method would not reduce the confidence in the mineral inventory, but rather increase it.
Additionally, the cut-off grade estimate for Old Nic was assessed using historical cost data that were suitably adjusted for use as a base for current costs. This cut-off grade is considered by the Author to be fair and reasonable.
VENICE MINE COMPLEX
Mineralized material from Venice Mine was recovered from underground sources. The Venice Complex produced mineralized material of a refractory nature and direct cyanidation was not effective. A multitude of test work done through the years indicated that flotation with roasting of the concentrate produced the best results. Overall recoveries prior to Falgold closing the property were reported as being 65% to 70%.
The processing plant on site was capable of milling 18,000 tons per month. Much of the plant has been stripped out and used at the operations of other CAG Properties. In due course, and should operations resume, it is likely that a fit for purpose plant would be required at the Venice Mine.
At the time of the Author's site visit the Venice underground workings were flooded. Due to the closure of the mine in 2002, and as stipulated in the Mines and Minerals Act, all mine plans were submitted to the Zimbabwe Government Mining Engineer for archiving. It has subsequently been reported that some plans have been returned to the mine, allowing areas of potential to be investigated further. A report of the Mineral Resources and Reserves statement up to 2006 including plans, sections and past reports were all available on-site for the Author to review. Subsequently, MRMR for Venice were re-estimated to the new classification system. Due to the termination of underground operations, Mineral Reserves assigned in the past were transferred to Mineral Resources.
The cut-off grade estimate for Venice of 4.0g/t was assessed using historical cost data that were suitably adjusted for use as a base for current costs. This cut-off grade is considered by the Author to be fair and reasonable.
Due to flooding and closure of the mine, all Mineral Reserves previously reported in the 2006 schedule were transferred to Measured and Indicated Mineral Resources.
A visual inspection of the larger dumps served to confirm their existence, but no assessment of tonnages or grades was confirmed. Although grades, tonnages, auguring, and other metallurgical requirements for re-treatment had been done by outside consultants in the past, the Author was unable to verify the credibility of this information.
Verification of the exploration data compiled by CAG and Falgold on the CAG Properties was limited to a visual inspection of the core storage yard, core samples, assay laboratory, geological plans and sections, field trips, and discussions with key employees at Camperdown Mine, Dalny Complex, Golden Quarry Mine, Old Nic Mine and Venice Mine. No quality control measures were applied to this verification process. Historical exploration results and the integrity of other reports used in the CAG Technical Report were not audited or verified by the Author.
CAPITAL AND OPERATING COST ESTIMATES
New Dawn is currently undertaking a full and detailed review of the assets and operations of the CAG Properties. Until such time as this is completed New Dawn will not have estimates of the detailed capital and final operating costs. However, in the CAG Technical Report, the cut-off grades have been determined from historical cost and technical information that has been tested for applicability. The cut-off grades are deemed to be reasonable by the Author of the CAG Technical Report.
ECONOMIC ANALYSIS, PAYBACK and MINE LIFE
In absence of the final operating plan, it is not possible to do a final detailed economic analysis or calculate the payback on capital expended and the resultant life of mine.
When this review is complete, it will be determined whether the CAG Properties are development or production properties.
Source: New Dawn Mining Corp.