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A1 Gold Mine

Introduction

The Company’s main project is the A1 Gold Mine within mining licence MIN 5294 located in Eastern Victoria, 23 kilometres south-southeast of Jamieson (Figure 1).   The A1 Mine is the second largest gold producer in the Woods Point-Walhalla Goldfield, having historically produced more than 620,000 oz. from 1861 up to 1992.   The A1 Gold Mine has been developed from the discovery outcrop down to greater than 700 metres in depth.   The lowest mine level is the 23 level, at 521 metres below the No. 7 ‘adit level’, being the current main decline access to the underground workings.

Geology and Mineralisation

The project area lies within the Woods Point–Walhalla Synclinorium structural domain of the Melbourne Zone, a northwest trending belt of tightly folded Early Devonian Walhalla Group sandy turbidites (Figure 1). The domain is bounded by the Enoch’s Point and Howe’s Creek Faults, both possible detachment-related splay structures that may have controlled the intrusion of the Woods Point Dyke Swarm and provided the conduits for gold bearing hydrothermal fluids.

Most gold mineralisation in the Woods Point to Gaffney’s Creek corridor occurs as structurally controlled shear-zone hosted dilational breccias and stringer quartz vein systems hosted by dioritic dyke bulges. The A1 Mine is central to this corridor, with gold mineralisation contained within the steeply dipping main southern diorite dyke bulge and a smaller northern diorite dyke. The dyke is cut and offset by a series of mainly reverse faults which host most of the gold mineralisation.

Gold is associated with intense quartz-ankerite-muscovite-sulphide wall rock alteration around dilational breccia veins with branching quartz-sulphidic stringer veins (Figure 2) or narrow veins (Figure 3) within reverse fault systems hosted by the dyke or where fault offsets show the dyke contact on one vein wall and metasedimentary rocks on the other.   Wide zones of quartz stinger veins and carbonate-sulphide altered wall rock are more amenable to bulk mining techniques.

Figure 1: Interpreted Regional Geology (GSV, 1:250 K Seamless Geology).

Figure 2: Typical dilational breccia mineralisation, 1410 North Drive.

Figure 3: Narrow high grade quartz vein with visible gold, 1410-880 air leg stope.

Mining

After 6 years of mine decline development, gold production commenced at the A1 Gold Mine in March 2016.   The mining method is predominantly mechanised long hole stoping of bulk mining resources supplemented by hand held air leg mining of high grade narrow vein shear zones.   Full scale production commenced in September 2016 from the 8352 longhole stope (Figure 4), defined during 2015/16, representing a major milestone for the Company since its ASX listing in 2012. Approximately 85,000 wet tonnes of ore was mined from the 8352 stope during 2016/17.

Development of the next long hole stope, called includes Folly’s North, commenced and is expected to produce in excess of 30,000 tonnes at just under 4 g/t (Figure 4).

Exploration Targets

Geological interpretation and modelling of historic mining and drilling data has identified a near-development Exploration Target of approximately 300,000 to 500,000 tonnes grading 3.8 to 5.6 g/t Au(4) (depending on the lower cut-off grade applied), within a broader mineralised zone referred to as the “Magenta Zone” (Figure 4).   The potential quality and grade of this and the other Exploration Targets shown in Figure 4 is conceptual in nature as there has been insufficient exploration to estimate a Mineral Resource.   It is uncertain if further exploration will result in the estimation of a Mineral Resource.

The Magenta Zone extends at depth below the existing long hole stopes at the A1 Gold Mine.   Recent drilling indicates the Magenta Zone is a broad steeply plunging zone of gold mineralisation containing a number of higher grade exploration targets potentially suitable for long hole stoping, including:

  • Victory North Exploration Target

    • approx. 50 – 70,000 tonnes grading 3.5 – 5g/t Au (4)

  • Mahoney’s Exploration Target

    • approx. 20 – 25,000 tonnes grading 3.5 to 4.5g/t Au (4), and

  • Queen’s Exploration Target

    • approx. 60 – 70,000 tonnes grading 6 – 7 g/t Au (4)

 

Subject to more positive drilling results, the Magenta Zone has the potential to make a significant impact to the overall mine life and particularly extend the future of the long hole stopes which provide the bulk of the tonnages mined from the A1 Gold Mine.

Figure 4: Long Section showing the Magenta Zone and relationship of Victory North, Mahoney’s and Queen’s Exploration Targets.

NB: Historical development shown in green. Historic stoping not shown to assist in viewing the area.

Investment Highlights

Advanced project on granted mining lease – fully operational mine site including underground development & infrastructure.

Mineral Resources in accordance with the JORC Code (2012) Indicated – 250,000 t @ 5.1 g/t for 41,200 oz Au Inferred – 1,170,000t @ 6.4 g/t for 240,000 oz Au.

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