007 Jorc Code Castlemaine PDF

Estimation of Victorian Gold Deposits
using JORC Code Guidelines

Our Castlemaine Experience
JORC Workshop
19th Nov 08
JORC Workshop The Castlemaine Experience
Page 1 19 Nov 08
Main JORC issue Vic Gold

NUGGET EFFECT
Gold grade accuracy and continuity at all
levels of confidence
Q. High data resources (mines) can have reduced
geological risk but not necessarily substantially
reduced gold grade risks how does JORC Code
help to define error margins in these cases?
Page 2 19 Nov 08
Gold Deposit Classifications:

Mining Potential
many variables unknown or untested
Drill more
Holes =
more info
Chewton Deposit
Inferred Resource
Underground
sampling
required
Mining Likely
All variables known
JORC Code 2004
Page 3 19 Nov 08
Estimate preparation
2 Resource Consultancies used
- first request is to see diamond core
- both advised a case for inferred estimation
Geological principles important
However recommended seeking geostatistical accuracy
- Full core samples v core
- HQ or PQ core at 600-700m hole depths
- SFA lab method adopted as routine
- Typical to exhaustive QA tests
Page 4 19 Nov 08
JORC v NI 43-101
Initially recommended N43-101 as more regimented
process for documenting our estimate,
Lodge a detailed report on SEDAR website,
Technically no different, but more proscriptive & thus
longer in report prep
Hard to determine what levels of engineering info may
be required considered to complex for an Inferred
Resource
Time to submit full report would stretch limited
resources,
Favoured the local code & guidelines..
Page 5 19 Nov 08
Chewton Anticline
Resource Estimate
Drill based estimate
Inferred classification,
Wireframe estimated tonnage, assumes grade,

Analogy with Wattle Gully allows assumption,
JORC Principles
Transparency,
Materiality,
Competence
Page 6 19 Nov 08
Define the quality issues

to validate estimate core must be retained
Extensive QA/QC tests just characterise the
nugget effect but not overcome it or allow
drill assays to be used in a traditional statistical
manner
Cost prohibitive HQ or PQ core low benefit
only bulk tonnages provide accurate grades
drill assays still couldnt be used statistically
Page 7 19 Nov 08
Envelope Assay Grades

N=916
Average 2.62 g/t Au
West Dip Lode
Truck Sample Grades

N=1528
Wt. Average 12.09 g/t Au
Drill Assay Av. Au g/t
Stope Samples Wt. Ave Au g/t
Horse
0.11
7.29
Panda
6.74
21.45
Wolf
n/a
n/a
Mink
3.07
11.79
Sheep
0.69
11.28
Lynx
1.32
4.36
12.41
20.14
Lode Envelope
2.62
12.29
West Lodes
3.8
12.09
Phantom ***
*** 0.63g/t if outlier removed
West Lode Drill Assay Grades

N=491
Average 3.8 g/t Au
2.15g/t if one outlier removed!
Wattle Gully Mine Studies

Mine headgrade :
~12 g/t Au
Page 8 19 Nov 08
Wattle Gully Fault Reef
Stacked set of faults and reef quartz

Up to 15m wide, typically 3-5m mining widths
Laminated seams and pug internal and on fault margins
5 metres
Photo S. Cox
Page 9 19 Nov 08
Wattle Gully Spur Veins

Significant amounts of
stockwork quartz veining
Massive spur stockworks
Spur splays off Fault Reef Quartz
Photo S. Cox
2.5 metres
3 metres
Photo S. Cox
Page 10 19 Nov 08
Mine Study
Significant time spent viewing UG core
Relationship between textural & mineralogical proxies
and grade established
Confirmed by old miners & geologists
Truck sample grade structure tested none except
high grade spatially associated with major faults
Density of quartz veining is of primary importance
Page 11 19 Nov 08
Chewton discovery
Wattle Gully
Mine
0.7m @ 4.7
0.5m @ 25.5
0.7m @ 28.9
0.6m @ 3.6
Chewton
Prospect
0.8m @ 316
0.7m @ 2.5
0.4m @ 1.15
Page 12 19 Nov 08
Chewton Anticline Mineralisation

8 Major W-dipping faults
~500m deep, 700m strike
Reef ave. 3.6m wide
Spur ave. 4.5m wide
Greatest
extrapolation
distance
Page 13 19 Nov 08
Good Structural Continuity
Lode models
terminate at
bounding sections
Page 14 19 Nov 08
Chewton Deposit
Page 15 19 Nov 08
The Chewton Deposit
3Mt @ 5.2g/t (500,000oz) Pre-mining

1.1Mt @ 10.3g/t (375,000oz) Mined
(1934-89)
0.6Mt @ 4g/t to 7g/t Au (mean 5.7g/t

=112,000oz) Remnant Inferred Resource
Phillips Reef
40,000oz mined
Pre-1900s
Inferred Resource
Mean: 2.1Mt @ 8.3g/t (574,000oz)
Estimation Range;
2.1Mt @ 6.0g/t to
3.1Mt @ 9.1g/t Au
Page 16 19 Nov 08
Grade estimation
Geological gold proxies supplement drill assay info
Intersections estimated into grade ranges :
Lodes cut to > 5g/t Au
South Wattle Gully Mines
0-2 g/t
2-5 g/t
5-8 g/t
8-15 g/t
> 15 g/t
Page 17 19 Nov 08
Coarse Gold / High Nugget Effect
Gold
Gold
Gold
Gold
Variable Drill grades between holes
Highly variable pulp repeats
and within holes

Page 18 19 Nov 08
Sampling tests
Quartz Wash assaying
Pulp umpire repeats
Laser ablation Gold Fingerprinting Study

confirms gold geochem as near-identical at
Wattle Gully mine as that in Chewton drillholes
SFA vs FA50g analysis

Pulverisation Homogeneity (% passing 75um)
Entire sample multiple FA50g bulk residue analysis
Entire sample multiple SFA bulk residue analysis
Multiple screen sizings to characterise gold particle sizes
Field Duplicates (1/2 core)
Drill assay variability confirms and characterises the nugget
effect in Chewton as consistent with that known for Wattle Gully
Page 19 19 Nov 08
Wattle Gully Mine Sample Assays

Ave. = 10.4dwt/t = 16.2g/t
n = 892
Grade (Dwt) 200-600 Tonne Samples - Wattle Gully
250
120.00%
100.00%
200
80.00%
150
Frequenc
Grade frequency plot

Wattle Gully stope assays
60.00%
100
40.00%
50
20.00%
0
More
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
0.00%
Bin
Figure 20. Wattle Gully truck sample data frequency distribution graph only 200-600t support
Page 20 19 Nov 08
Wattle Gully Drill Sample Assays

n = 1089
Drill assay in WG Envelope - All lodes
120.00%
500
450
100.00%
400
Frequenc
350
80.00%
300
60.00%
250
200
40.00%
150
100
20.00%
50
20
M
or
e
19
18
17
16
15
14
13
12
11
10
0.00%
Bin Grade
Figure 23. Frequency histogram of drill assays in Wattle Gully mineralisation envelope all lodes
Page 21 19 Nov 08
Chewton Drill Assays

120%
700
600
100%
500
80%

All Chewton Deposit drill assays
400
60%
300
40%
200
20%
100
0%
0
10
11
12
13
14
15
16
17
18
19
20 More
Page 22 19 Nov 08
Chewton Drill Assays - Lodes

120%
400
Ave = 0.75g/t Au, length weighted average = 0.76g/t Au
n = 633
350
100%
300
80%
250

Lode only drill assays
200
60%
150
40%
100
20%
50
20
M
or
e
19
18
17
16
15
14
13
12
11
10
0%
Page 23 19 Nov 08
Grade Proxies:
Table 27. Grade Ranges and geological and geochemical gold proxy criteria used to estimate drill intersection gold grades.
Grade
Class
Coarse
Gold
Gold Assays
Stylolitic Textures
Composite weighted
average
can
be
below detection limit
No stylolitic texture,
except the occasional
class 1
individual
grade
>0.01g/t or presence
of coarse au
Preferably at least
class 1 veins, with
rarely class 2
Class 1 or 2
Majority of quartz
stylolitic,
with
a
mixture of class 2
and 1
Class 1 or 2
5-8g/t Au
>0.03 g/t unless

there is less than two
samples, or coarse
gold
Majority, if not all the

quartz stylolitic, some
class 3, and the
majority class 2.
Class 1 or 2
8-15g/t Au
Composite weighted
average grade over
0.5g/t, or visible gold
(class 2 coarse Au)
Composite
>0.5g/t
All stylolitic quartz at

class 3 level
Class 1 or 2
0-2g/t Au
2-5g/t Au
>15g/t Au
grade
Quartz
Volume
<15%
Base Metal Sulphides
Arsenic
Pyrite present in host

rock
wt average
<100ppm
Mean
Grade
1 g/t Au
>15%
Pyrite, and possibly the

presence
of
other
sulphide minerals
wt average
>100ppm
>30% quartz,
unless interval
>5m,
then
>15%
Pyrite, and possibly the

presence
of
other
sulphide minerals
wt average
>250ppm
>35% quartz
Presence of Sphalerite
&/or
Galena;
&/or
elevated Zn (>170ppm)
& Pb (80ppm) levels
wt average
over
500ppm
Presence of Sphalerite
&/or
Galena;
&/or
elevated Zn (>170ppm)
& Pb (80ppm)
wt average
over
1000ppm
>50% quartz
3.5 g/t Au
6.5 g/t Au
11.5 g/t Au
>15 g/t Au
Page 24 19 Nov 08
Explain grade estimation method
Page 25 19 Nov 08
Method:
Each assay interval is proxy estimated,
Lode boundaries are selected,
Boundaries validated using quartz volumes and
0.8m
2-5g/t
0.9m
0-2g/t
0.7m
2-5g/t
0.8m
8-15g/t
0.7m
2-5g/t
0.9m
5-8g/t
0.8m
5-8g/t
Spur
Lode
Min 1.3 g/t
Median 2.6 g/t
Max 3.9 g/t
cross checked by alternate staff,
Estimated grades are length-weight composited

within lode boundaries to gain final range and
median,
Like lodes have grades averaged and applied to

entire volume of lode.
Reef
Lode
Min 6.3 g/t
Median 8.8 g/t
Max 11.3 g/t
Page 26 19 Nov 08
Table 26. Summary of proxy grade estimators and drill assay grades by gold grade ranges used.
Grade Range Class
0-2g/t Au
2-5g/t Au
5-8g/t Au
8-15g/t Au
>15g/t
10
26
Coarse Au % of Ints
0.0%
30.0%
42.3%
66.7%
Stylolites % of Ints >1.5
30.0%
30.0%
57.7%
100.0%
Base Metals % of Ints
30.0%
10.0%
23.1%
66.7%
wt% qtz in grade range
14.0%
25.9%
40.1%
51.4%
wt% Au(drill) in range
0.01
0.02
5.20
0.69
Reef Drill Min Grade
0.17
0.01
0.01
0.38
Reef Drill Max Grade
0.17
0.33
1.03
0.89
Reef Drill Max (outlier)
0.55
0.33
33.5
1.96
41
23
Coarse Au % of Ints
32%
47.8%
25.0%
Stylolites % of Ints >1.5
2%
43.5%
50.0%
Base Metals % of Ints
12%
26.1%
50.0%
wt% qtz in grade range
15.1%
22.3%
30.6%
wt% Au(drill) in range
0.05
0.01
0.01
Spur Drill Min Grade
0.01
0.01
0.04
Spur Drill Max Grade
0.48
0.54
0.21
Spur Drill Max (outlier)
4.25
1.55
0.21
Reef Lodes intersections
Spur Set Lodes intersectns
Page 27 19 Nov 08
Remnant Resource Estimate

Existing geological plans & sections
- mine survey accurate
Decline Mining to access remnant ore in 1992 - UG DDH info, quartz locations
- interpreted insitu mineralisation
- very detailed UG mapping
Mining
stopped
here
Same proxies used

Same grade range estimations for resource volumes
Page 28 19 Nov 08
Expert opinion gives confidence to CPs re the style of min. & est. method
Outcome:
Page 29 19 Nov 08
Overcoming Coarse Gold issues

Inferred Resources can be calculated in high nugget
systems if you know the structural geology well enough
Proxy measures for gold grade are useful
- better decision making tool
use ongoing QA/QC tests to characterise nugget effect
use of SFA of entire sample pulp max sample volumes
Transparency in methodology and reporting
Drill for structure & min characterisation approach
- U/G development required for accurate grades
Detail risk/uncertainty in report, summarise risk in the
report announcement
Page 30 19 Nov 08
Risk Table
Table 30. Chewton Deposit - resource risk profile
Risk
Comment
Core data (logging, survey, etc)
Overall core quality is very good. Good geological database from the core.
Collar and hole surveys good.
Density
Density measurements are acceptable.
Sample collection
Core split in half which imparts some sampling error due to loss/or missed
gold particles.
Sample preparation, assay and QAQC system
Strong sampling programme with QAQC. Inherent issues of coarse gold

particles impart various sampling errors.
Geological interpretation
Strong geological interpretation for each section, with assumed global

continuity between each based on historical knowledge.
Grade estimate
Assay samples understate likely true grade. Estimation method based on

using proxies for gold developed during the operation of the former Wattle
Gully mine.
Tonnage estimate
Wide spaced drilling, with global continuity projection between sections.
Resource extension
Good scope for defining further resources, but some risk that expectations
may not be realised.
Mining viability
Economic viability reasonably assumed. However, local of shoots unknown

and mining will need to consider issues of selectivity, recovery and dilution.
Current high-gold price positive for the project.
Metallurgical extraction viability
Historical data shows high gold recoveries by gravity.
Environmental/planning/licensing issues
No particular issues present here. Environmental issues are sensitive, but

pose not great project risk with correct management.
Factor
Overall rating
(4) 5
High overall resource risk.
Should this be in every resource report announcement?

Page 31 19 Nov 08
The Market what is understood?

Grade ranges:
the market doesnt want or cant comprehend a range of
outcomes
Media summarises to the median outcome or less
(add remnant and Chewton ozs & report grade from Chewton estimate!)
Eg. Finance group engineer with calculator (LxWxHxgrade =

pre-JORC estimation answer) now I can get into this
company ahead of the market
Eg. Site visit by Vic gold company; Q. why if you estimate
using ranges did you announce a grade to one decimal
place? A. We didnt
Page 32 19 Nov 08
North Quartz Hill

9Multiple structures
9Stacked QVs
9Historical mining
9Gold geochemistry
9Textural proxies
Market significance
was released in
quarterly report
Page 33 19 Nov 08
North Quartz Hill

After assay effect
One high assay =
Market didnt understand
the geological context
when quartz type, volume
and degree of faulting were
first announced
..could only relate to assay
without WG analogy how do
we convey resource potential
of this mineralisation?
Page 34 19 Nov 08
Conclusions
CPs have sufficient confidence in the structural geology
Have reasonable confidence that faults will host gold bearing
quartz and that the resource has reasonable potential for
economic mining in whole or part,
A more than detailed enough (171pages + appendix) report exists
as support for the announcement
Announcement summarises all material information and is
transparent; in particular the method of using proxies for grade
estimation which the CPs have suitably low confidence in,
Announcement of report outcomes were closely accompanied
with release (&ppts) placing result in context
(ie. too higher capital risk to warrant further drilling or underground sampling)
Market response was measured accepting/expecting the

Inferred category (?)
Page 35 19 Nov 08
Discussion items:
Using geophysical data to infer resources
Need for pre-resource classification?
Education/explanation of what grade ranges are.
Does each resource/reserve announcement need a
table of definitions which include the
classifications?
Also a table of risk levels?
Page 36 19 Nov 08
JORC Code Inferred Resource
Page 37 19 Nov 08

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Estimation of Victorian Gold Deposits

using JORC Code Guidelines

JORC Workshop The Castlemaine Experience

Main JORC issue Vic Gold

JORC Workshop The Castlemaine Experience

Gold Deposit Classifications:

JORC Code 2004

JORC Workshop The Castlemaine Experience

JORC Workshop The Castlemaine Experience

Wireframe estimated tonnage, assumes grade,

Define the quality issues

Envelope Assay Grades

Truck Sample Grades

Drill Assay Av. Au g/t

Stope Samples Wt. Ave Au g/t

*** 0.63g/t if outlier removed

West Lode Drill Assay Grades

JORC Workshop The Castlemaine Experience

Wattle Gully Mine Studies

Wattle Gully Fault Reef

Stacked set of faults and reef quartz

Wattle Gully Spur Veins

JORC Workshop The Castlemaine Experience

JORC Workshop The Castlemaine Experience

Chewton Anticline Mineralisation

Good Structural Continuity

JORC Workshop The Castlemaine Experience

JORC Workshop The Castlemaine Experience

The Chewton Deposit

3Mt @ 5.2g/t (500,000oz) Pre-mining

0.6Mt @ 4g/t to 7g/t Au (mean 5.7g/t

JORC Workshop The Castlemaine Experience

South Wattle Gully Mines

JORC Workshop The Castlemaine Experience

Coarse Gold / High Nugget Effect

Variable Drill grades between holes

Highly variable pulp repeats

and within holes

Laser ablation Gold Fingerprinting Study

SFA vs FA50g analysis

Wattle Gully Mine Sample Assays

Grade (Dwt) 200-600 Tonne Samples - Wattle Gully

Grade frequency plot

Wattle Gully Drill Sample Assays

Drill assay in WG Envelope - All lodes

Chewton Drill Assays

Grade frequency plot

JORC Workshop The Castlemaine Experience

Chewton Drill Assays - Lodes

Grade frequency plot

JORC Workshop The Castlemaine Experience

>0.03 g/t unless

Majority, if not all the

All stylolitic quartz at

JORC Workshop The Castlemaine Experience

Base Metal Sulphides

Pyrite present in host

Pyrite, and possibly the

Pyrite, and possibly the

Explain grade estimation method

JORC Workshop The Castlemaine Experience

Each assay interval is proxy estimated,