3rd Apr 2012 07:00
3rd April 2012
African Barrick Gold plc (the "Company" or "ABG") Nyanzaga Resource Continues to Grow Total Resource now 3.75Moz Au Indicated and 0.85Moz Au Inferred
ABG is pleased to announce a further uplift to the previously declared Mineral Resource estimate for the Nyanzaga Project, with the addition of the Kilimani zone. This continues to increase our confidence that the Nyanzaga project, which comprises the Tusker and Kilimani mineralised zones, has the potential to become our next mine in Tanzania.
The inclusion of this near surface, oxide resource in the Kilimani zone and the further expansion of the overall in-pit resource should improve the overall project economics with additional production at the start of the mine life.
The in-pit resource has been increased by a further 0.5Moz and is now in excess of 4.6Moz Au, consisting of 3.75Moz at 1.42g/t Au Indicated and 0.85Moz at 1.81g/t Au Inferred. The updated modelling now confirms the opportunity to exploit the Tusker and Kilimani mineralised zones in a single open pit, and is another highly encouraging step in the Company's overall strategy of realising the potential of its existing portfolio of high quality assets.
Since announcing the updated mineral resource for the Nyanzaga project in January 2012, desktop scoping work has focused on the modelling of the Kilimani near-surface resource, whilst field activities have focused on continuing geotechnical, hydrology and metallurgical drill programmes to allow us to better constrain the open pit model. As a result of the addition of the Kilimani resource we have been able to re-model the open pit resource, which has resulted in a larger, single pit incorporating both the Tusker and Kilimani resource areas.
Commenting on the expanded Mineral Resource at Nyanzaga, CEO Greg Hawkins said: "The addition of near surface, oxide ounces and resulting further expansion of the overall deposit further increases our confidence in the potential for Nyanzaga to become our next mine in Tanzania. Not only does it add to the overall scale of the deposit but it further improves the economics with an improved production profile early on in the life of the project."
The following table details the in-pit Mineral Resources, which have been developed and are reported in accordance with Canadian National Instrument 43-101.
Table 1: Mineral Resource Estimation for the Nyanzaga Project
Tusker Zone Indicated Inferred Tonnes Au (g/t) Ounces Tonnes Au (g/t) Ounces (Mt) (Moz) (Mt) (Moz) Oxide 2.61 1.46 0.12 Transition 0.85 1.52 0.04 0.05 1.35 0.002 Fresh 74.71 1.44 3.46 12.95 1.91 0.80 Total 78.16 1.44 3.63 13.00 1.91 0.80 Kilimani Zone Indicated Inferred Tonnes Au (g/t) Ounces Tonnes Au (g/t) Ounces (Mt) (Moz) (Mt) (Moz) Oxide 3.35 1.00 0.11 0.72 0.98 0.02 Transition 0.36 0.96 0.01 0.64 1.04 0.02 Fresh 0.04 1.13 0.002 0.30 0.90 0.01 Total 3.75 1.00 0.12 1.66 0.99 0.05 Nyanzaga Indicated Inferred (Tusker + Kilimani) Tonnes Au (g/t) Ounces Tonnes Au (g/t) Ounces (Mt) (Moz) (Mt) (Moz) Oxide 5.96 1.20 0.23 0.72 0.98 0.02 Transition 1.21 1.35 0.05 0.69 1.07 0.02 Fresh 74.75 1.44 3.47 13.26 1.89 0.81 Total 81.92 1.42 3.75 14.7 1.81 0.85
(1) ABG owns 100% of the prospecting licences encompassing the Nyanzaga resource area through wholly owned Tanzanian subsidiaries
(2) Estimated at a 0.45g/t Au cut-off
(3) Base case gold price of $1,400 per ounce and an estimated recovery of 86%
(4) Totals may not add due to rounding
(5) Mineral resources that are not mineral reserves have not demonstrated economic viability
(6) See `Note to mineral resource estimates' at the end of this release for information on the calculation of mineral resources estimates and definitions.
The following table provides a breakdown of the in-pit Mineral Resources at varying cut-off grades.
Table 2: Mineral Resource Estimation for the Nyanzaga Project:
Cut-off Indicated Inferred (g/t) Tonnes Au (g/t) Ounces Tonnes Au (g/t) Ounces (Moz) (Moz) (Mt) (Mt) 0.45 81.92 1.42 3.75 14.66 1.81 0.85 0.75 62.26 1.68 3.36 10.00 2.38 0.76 1.00 45.93 1.97 2.90 7.75 2.81 0.70 1.50 25.88 2.54 2.12 5.06 3.66 0.60 2.00 15.09 3.13 1.52 3.85 4.27 0.53 2.50 8.70 3.79 1.06 2.91 4.93 0.46 3.00 5.74 4.35 0.80 2.35 5.46 0.41
(1) ABG owns 100% of the prospecting licences encompassing the Tusker resource area through wholly owned Tanzanian subsidiaries
(2) Base case gold price of $1,400 per ounce and an estimated recovery of 86%
(3) Totals may not add due to rounding
(4) Mineral resources that are not mineral reserves have not demonstrated economic viability
(5) See `Note to mineral resource estimates' at the end of this release for information on the calculation of mineral resources estimates and definitions.
At the same time, we continue to receive encouraging assay results for infill and step-out drilling completed in late 2011 and earlier this year that show excellent continuity from the broader spaced drilling. Recent results include intersections of:
* NYZRCDD0506: 307m @ 1.57g/t Au from 218m, including 3m @ 64.7g/t Au from 441m * NYZRCDD0509: 345m @ 1.52g/t Au from 329m, including 15.96m @ 5.39g/t Au from 532m * NYZRCDD0510: 150m @ 2.68g/t Au from 262m, including 13m @ 20.2g/t Au from 392m and 135m @ 2.60g/t Au from 448m, including 14m @ 9.28g/t Au from 459m * NYZRCDD0512: 244m @ 1.28g/t Au from 244m and 159m @ 2.06g/t Au from 515m, including 9m @ 8.99g/t Au from 524m * NYZRCDD0514: 102m @ 1.82g/t Au from 343m, including 10m @ 4.03g/t Au from 358m
At Kilimani, the two hydrological holes drilled to date as part of the scoping study work have both returned significant results from shallow depths including intersections of:
* NYZRCDDHY0006: 2m @ 22.75g/t Au from 23m
* NYZRCDDHY0011: 24m @ 1.32g/t Au from 4m.
Further exploration drilling commenced on schedule during March, with the objective of defining high grade underground resources at depth at Tusker, as well as testing further near surface targets around both the Kilimani and Tusker resource areas. At the same time, the scoping study for the project continues, with the current work programme focusing on the completion of geotechnical drilling and metallurgical modelling across the potential newly defined open-pit area, infrastructure trade-off studies, environmental and social baseline studies and licensing for the project.
About the Nyanzaga Project
The Nyanzaga Project is located within the Sengerema District, Mwanza region, approximately 35km northeast of the Bulyanhulu mine and is comprised of the Tusker and Kilimani resource areas, which form a single open-pit, and numerous regional exploration prospects.
Nyanzaga lies on the northeastern flank of the Sukumaland Archaean Greenstone Belt consisting of a granite-greenstone terrain. The Nyanzian greenstone system consists mainly of mafic volcanic rocks and sediments typical of greenstone belts of the central Congo Craton. The rocks are divided into a lower series (primarily basalt, andesite and dacite lavas) and an upper series of sediments (banded iron formation, re-crystallised chert, felsic lavas, tuff, ferruginous chert and mudstone).
The greenstones are generally metamorphosed to greenschist facies and they are folded about steeply dipping axial planes. The interpreted geological sequence appears largely consistent down dip and along strike. Host lithologies for gold mineralisation in the Tusker deposit are predominantly chert, siltstone and sandstone units of the upper series of the Nyanzian, associated with stockwork quartz, and quartz-carbonate vein arrays. Mineralised veins appear to have no preferred orientation with late stage silica veining and breccias assaying higher than average gold grades for the bulk of the deposit. The Tusker mineralised system displays extensive and strong carbonate alteration that extends well beyond the gold mineralisation, with silica-carbonate-pyrite-pyrrhotite-arsenopyrite alteration associated with zones of gold mineralisation.
Figure 1 - Leapfrog screenshot looking east, showing new resource open-pit design incorporating Kilimani mineralisation, and planned deep drilling at Nyanzaga targeting underground resources. Note also the higher grade near surface mineralisation on north end of Tusker Hill.
[For picture see www.africanbarrickgold.com]
Figure 2 (below) shows the drill hole location plan for the Tusker-Kilimani deposits and the surface outline of the revised resource open pit, whilst Figures 3 & 4 show typical east-west cross sections through the Tusker deposit with selected recent drill results shown from infill drilling. Higher grade gold mineralisation has been intersected at depths greater than 600 metres, and the current work programme includes further drilling to review the economic potential for these deeper zones.
Figure 2: Nyanzaga Project, drill hole location plan with new optimised $1,400/ oz open pit including Kilimani mineralisation, and showing the location of cross sections included as Figure 3 and 4 where recent infill drilling continues to show excellent grade and width continuity of higher grade zones.
[For picture see www.africanbarrickgold.com]
Figure 3: Nyanzaga Project, Tusker Deposit Cross Section 2,400mN showing $1400/ oz resource pit outline and recent infill drilling results for hole NYZRCDD0510, which included several higher grade zones including 15m @ 17.8g/t Au from 392m and 18m @ 7.59g/t Au from 455m (down hole width and depths)
[For picture see www.africanbarrickgold.com]
Figure 4: Nyanzaga Project, Tusker Deposit Cross Section 2,480mN showing $1400/ oz resource pit outline and recent infill drilling results for hole NYZRCDD0509, which included several higher grade zones including 15.96m @ 5.39g /t Au from 329m and 45m @ 4.87g/t Au from 591m (down hole width and depths)
[For picture see www.africanbarrickgold.com]
ENQUIRIES
For further information contact:
African Barrick Gold plc +44 (0)207 129 7150
Andrew Wray, Head of Corporate Development & Investor Relations
Giles Blackham, Investor Relations Manager
RLM Finsbury +44 (0)20 7251 3801 Charles ChichesterAbout ABG
ABG is Tanzania's largest gold producer and one of the five largest gold producers in Africa. We have four producing mines, all located in northwest Tanzania, and several exploration projects at various stages of development. With a high-quality asset base, solid growth opportunities and a clear strategy, we have the objective of increasing our existing production to one million ounces per year by 2014.
We aim to achieve this by:
* driving operating efficiencies to optimise production from our existing asset base; * growing through near mine expansion and development of advanced-stage projects; and * organic greenfield growth and acquisitions in Africa.
Maintaining our licence to operate through acting responsibly in relation to our people, the environment and the communities in which we operate is central to achieving our objectives.
ABG is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange under the symbol ABG and have a secondary listing on the Dar es Salaam Stock Exchange. Historically and prior to our initial public offering (IPO), our operations comprised the Tanzanian gold mining business of Barrick Gold Corporation (Barrick), our majority shareholder. ABG reports in US dollars in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report.
Note on estimation techniques
A block model was created in the Surpac software to estimate grades and define classification of the resource. Block size were defined as 10x10x5 meters, utilising a nominal 0.45g/t cut-off hard boundary. Domains were defined based on the interpreted lithological units of the deposit. The Ordinary Kriging algorithm was used to estimate gold into each of the blocks after which the blocks were classified into Indicated and Inferred.
In order to constrain the resource estimate, a conceptual pit shell was developed using Datamine software to identify those parts of the block model that have reasonable prospects for eventual economic extraction. Parameters used in Whittle optimisation were: US$3.17 per tonne mining cost; US$1400 per oz gold price; 86% process recovery; US$12.00 per tonne process cost; overall slope angle of 48°.
Note to mineral resource estimates
Information in this announcement relating to Mineral Resources is based on resource block models compiled by Patrick Adams, who is a Qualified Person for Cube Consulting Proprietary Limited. Mineral resources estimates contained in this announcement have been calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for the mineral resources estimates. Calculations have been reviewed, verified (including estimation methodology, sampling, analytical and test data) and compiled by ABG personnel under the supervision of ABG Qualified Person: Richard Adofo, Corporate Manager, Geology. However, the figures stated are estimates and no assurances can be given that the indicated quantities of metal will be produced. Mineral Resources have been calculated using an assumed long-term average gold price of US$ 1400 per ounce. Resource estimates can change and tend to be influenced mostly by new information pertaining to the understanding of the deposit and secondly the conversion to ore reserves. In addition, estimates of inferred mineral resources may not form the basis of an economic analysis and it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded into mineral reserves.
An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Forward-looking statements
This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of ABG in any jurisdiction.
This announcement includes "forward-looking statements" that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "plans," "expects," "anticipates," "believes," "intends," "estimates" and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of ABG, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements. Factors that could cause or contribute to differences between the actual results, performance and achievements of ABG include, but are not limited to, political, economic and business conditions, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices, changes in regulation, currency fluctuations (including the US dollar, South African rand and Tanzanian shilling exchange rates), ABG's ability to successfully integrate future acquisitions, ABG's ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to timely and successfully process its mineral reserves, risk of trespass, theft and vandalism, changes in its business strategy as well as risks and hazards associated with the business of mineral exploration, development, mining and production. Although ABG's management believes that the expectations reflected in such forward-looking statements are reasonable, ABG cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward looking statements in this announcement. Any forward-looking statements in this announcement only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, ABG explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in ABG's expectations or to reflect events or circumstances after the date of this announcement. Nothing in this announcement should be construed as a profit forecast or estimate.
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