TECHNICAL REPORT - QUARTER ENDED 30TH SEPTEMBER 2005
[Also available as a PDF File (328K)]
1. SUMMARY & COMMENTS
Macmin Silver Ltd (Macmin) is a silver focused company whose primary project is the Texas Silver Project, S.E. Queensland, Australia. Macmin has exposure to gold by way of a 27% equity in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and TasGold Ltd.
- Construction activity continued at Twin Hills during the quarter with the laying and welding of the High Density Polyethylene (HPDE) liner over the heap leach pad and leach ponds.
- Final designs of the dam wall and spillway for the Storm Containment Dam were completed. Preliminary vegetation clearing was undertaken and geotechnical investigations of bedrock below the proposed dam wall were carried out.
- The exercise of listed MMNOA options raised $1,006,592 (before costs). The balance of those options expired on 20 September 2005.
- A placement to investors of shares and options on October 11 raised $1,689,200 (before costs).
- NGG announced significant intervals of high grade molybdenum assays from trenching at the Simuku Project, PNG.
2. TEXAS SILVER MINES PTY LTD
The Texas Project (EPMs 8854, 11455, and 12858; ML 5932 and ML 50161) is located 100km west of Stanthorpe. Texas Silver Mines Pty Ltd is a wholly owned subsidiary of Macmin Silver Ltd.
2.1 Twin Hills (ML 50161) - Development Activities
- Construction work continued at the Twin Hills minesite throughout the quarter. Final shaping of the leach pad and ponds area was undertaken prior to the laying and welding of the High Density Polyethylene (HPDE) liner.
- Final designs of the dam wall and spillway for the storm containment dam were finalized by the engineering consultants. Vegetation clearing in the base of the dam has been carried out and geotechnical investigations of the bedrock below the proposed dam wall were undertaken.
- A further forty (40) tonnes of crushed ore is being prepared for leaching test work.
- A programme of ‘grade control' drilling was carried out over the central part of the Twin Hills orebody. This drilling was aimed at delineating the initial 200,000 tonnes of ore to be extracted. This programme was very successful in providing in data for mine planning purposes and will therefore be continued over the bulk of the orebody prior to surface disturbance by mining.
2.2 Exploration DrillingA programme of percussion drilling comprising seventeen (17) drill holes for a total of 745 metres was undertaken at the Toolbox Prospect, approximately 3.5km north of Twin Hills. This programme tested a low level base metal anomaly previously defined by soil geochemistry. Assay results have not been received from this programme.
The following releases were made to ASX in the third quarter of 2005:
17th August 2005 "TWIN HILLS SILVER MINE CONSTRUCTION UPDATE
The progress of construction undertaken around the Twin Hills mine site is highlighted in a series of photos which form part of this update.
- Unseasonal wet conditions in late June and throughout July have delayed the final shaping of the leach ponds and pad area until this week. Ground conditions for the laying and welding of the High Density Polyethylene (HDPE) liner have to be very dry to ensure quality welding and the integrity of the seams. The HPDE liner has been delivered to site and will be laid once a contractor ‘crew' is available.
- The requirement for crushed and screened ‘products' to be used during the construction activity has resulted in the commissioning of the Extec crushing and screening plant units. Waste rock and alluvium source materials, located within the Twin Hills Mining Lease, have been utilised for this purpose. As an example, one of these products is being used as the underlay protection layer for the HDPE liner on the leach pads and in the process ponds.
- Test work on the thirty (30) tonne silver ore sample extracted from a small surface slot near the top of the Twin Hills ore deposit is ongoing. Whilst a quantity of silver powder has been obtained, tests are in progress to optimise the leaching, stripping and purity of the silver powder.
- A programme of ‘grade control' drilling is currently being undertaken over the central part of the Twin Hills ore body. The aim of this drilling is to delineate the initial 200,000 tonnes of ore to be extracted from the deposit. Once this ore is mined, crushed and agglomerated, it will be stacked in 50,000 tonne cells on the heap leach pad where it will undergo leaching. These ‘pregnant' solutions from the heaps will be pumped through the electrowinning circuit as part of the commissioning phase to optimise the production of the silver powder product.
- Delays encountered during the construction phase, including wet weather and longer than anticipated lead times in sourcing all the components for the crushing (ex UK) and stacking circuits have meant that the construction phase has been extended. We had initially hoped to finish construction by October, but now believe that construction will be completed prior to the end of 2005.
The rise in the silver price over the last six months has not advanced as strongly as we might have anticipated, but is rising nonetheless. It has always been the intention of the Company to commence silver production once a strong up-trending silver price is in place; as the management is committed to maximising shareholder value from the development of the present reserves. The delays incurred to-date are not expected to adversely impact on the project.Our present schedule is to complete construction towards the end of 2005, commission the plant in early 2006 with full production (subject to silver price) soon thereafter."
14th September 2005
"GRADE CONTROL DRILLING AT TWIN HILLS CONFIRMS CONTINUITY OF SILVER ORE
A campaign of ‘grade control' drilling will be completed over the central part of the Twin Hills silver ore deposit this week. This drilling infilled the previous ‘reserve status' drilling on a 6m by 6m block basis over the top 10-15m of the deposit and is aimed at delineating the initial 200,000 tonnes of ore to be extracted.
Assay results from ALS Chemex Laboratories in Brisbane have been received for approximately 70% of this programme and are tabulated in the attached table. Although these results do not add to the ‘reserves' base at Twin Hills, the consistent high tenor of values over significant widths provide added confidence about the continuity of silver ore in the upper part of the orebody.
Once the construction phase at Twin Hills is completed, currently scheduled to be the end of 2005, the ore defined in this grade control programme will be blasted and mined. Then it will be crushed and agglomerated prior to being stacked in 50,000 tonne cells on the heap leach pad, where it will undergo leaching. Solutions from the heaps will be pumped through the electrowinning circuit as part of the commissioning phase to optimise the production of the silver powder product."
17th October 2005
"FINAL RESULTS FROM INITIAL CAMPAIGN OF ‘GRADE CONTROL' DRILLING
AT TWIN HILLS
On September 14, a release to ASX provided assay results for 70% of the recently completed ‘grade control' drilling at the Twin Hills Silver Mine.
The remaining 30% of results has now been received and mineralised intervals exceeding 60g/t silver are tabulated.
The highest individual assay in the programme was encountered in Hole GTH053 where 2m at 1,390g/t silver was intersected between 18 and 20m downhole, whilst the best mineralised intercept occurred in GTH064, which averaged 20m at 366g/t silver over the entire hole.
This initial campaign of ‘grade control' drilling was planned to in-fill the previous ‘reserve status' drilling on a 6m x 6m block basis over the top 10-15m of the deposit in the central area, where the initial 200,000 tonnes of ore is to be extracted.
The success of truck mounted drilling programme, in providing detailed geological data for mine planning purposes, has meant that this programme will be continued over the bulk of the orebody in the near future. Accessing the area to be drilled, prior to surface disturbance by mining, is proving to be a time/cost effective way of obtaining a large amount of assay data to optimise mine planning prior to start-up of the operation."
3. CORPORATE
The following releases were made to ASX in the third quarter of 2005:
12th August 2005
"EXERCISE OF OPTIONS
The Directors advise that a total of 20,000 fully paid ordinary shares were issued today at an issue price of 12 cents each pursuant to the exercise of 20,000 MMNOA options expiring 20 September 2005."
9th September 2005
"EXERCISE OF OPTIONS
The Directors advise that a total of 186,200 fully paid ordinary shares were issued today at an issue price of 12 cents each pursuant to the exercise of 186,200 MMNOA options expiring 20 September 2005."
22nd September 2005
"ALLOTMENT OF SHARES PURSUANT TO EXERCISE OF MMNOA OPTIONS
The Company will, subject to clearing of funds, issue 8,182,065 shares pursuant to the exercise of MMNOA options which expired on 20 September 2005. The issue is expected to occur next Wednesday 28 September 2005.
The exercise of options at 12 cents has raised $981,847.80 before costs."
11th October 2005
"ISSUE OF SHARES AND OPTIONS PRIVATE PLACEMENTS FINALISED
The Company has completed the issue of 14,076,667 shares and 4,692,222 free attaching MMNO options to 17 placees that was announced on 4 October 2005."
4. INVESTMENTS
Macmin maintains equity investments in the following public companies with exposure to the precious and base metals sectors. Information and releases about these companies' activities can be found on each company's website.
Company
| Shares
| Options
| Market Value
30 September 2005
|
New Guinea Gold Corporation (TSX)
www.newguineagold.ca
| 17,596,520
| -
| $5,320,000
|
Malachite Resources NL
www.malachite.com.au
| 1,500,000
| 750,000
| $165,000
|
TasGold Ltd
www.tasgold.com.au
| 1,698,157
| 1,437,500
| $270,220
|
5. NEW GUINEA GOLD CORPORATION
Two of the more significant releases by New Guinea Gold during the quarter are included as follows:
15th September 2005
"NEW GUINEA GOLD ANNOUNCES RESOURCES ESTIMATES AT SINIVIT GOLD PROJECT
Vancouver, September 15, 2005. New Guinea Gold (NGG:TSX-V) is pleased to announce mineral resource estimates for the Sinivit gold deposit in Papua New Guinea. These resources were defined, in part, by 122 diamond drill holes totalling 18,067 metres, and 75 reverse circulation percussion (RC) holes totaling 2,987 metres. The drilling emphasized a strike length of approximately 1,000 metres covering the Southern Oxide Zone (9810 N to 10000 N), the Central Oxide Zone (10000 N to 10180 N), the Northern Sulphide Zone (10180 N to 10400 N) and the Northern Oxide Zone (10400 N to 10550 N).
Mineral Resource Estimate:
The following tables shows the Indicated Mineral Resource and Inferred Mineral Resource estimates for the Sinivit deposit.
Category
| Tonnes
| Gold (g/t)
| Contained gold
|
Indicated - Oxide
| 413,000
| 4.4
| 58,000
|
Indicated - Sulphide
| 300,000
| 7.6
| 74,000
|
Indicated - TOTAL
| 713,000
| 5.7
| 132,000
|
Inferred - TOTAL
| 340,000
| 3.2
| 35,000
|
Mineral resources that are not reserves do not have demonstrated economic viability. Measured and indicated mineral resources are that part of a mineral resource for which quantity and grade can be estimated with a level of confidence sufficient to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. An inferred mineral resource is that part of a mineral resource for which quantity and grade can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified.
The resource estimate has been confirmed by Project Geoscience Pty Ltd, which is independent of New Guinea Gold and is classified to conform to the CIM definitions referred to in National Instrument 43-101. Ralph Stagg, B.Sc, M.Sc, F.AusIMM, CP, DIC, MIMMM, C.Eng, who has 35 years experience in the exploration, mining, engineering and investment fields served as the Independent Qualified Person responsible for this estimate and the preparation of the independent report in accordance with NI 43-101.
Project Geoscience Pty Ltd has reviewed this disclosure and consents to its release. Ralph Stagg, the independent Qualified Person has reviewed the data and the work by other independent and non-independent Qualified Persons, agrees with the mineral resource estimates and concurs with the estimated reported. The Independent Report will be filed on Sedar within 30 days.
Mr. Stagg visited the property on August 23, 2005 and inspected the mineralized outcrops, drill sites, drill core and other on-going activities such as preparation of haul roads, vat leach sites, etc. Mr. Stagg reviewed all aspects of the resource estimates including, but not limited to the following;
- Geology, deposit type and mineralisation
- Weathering
- Drilling, including compilation of all drill holes and trenches by cross-section, used in the estimate
- Sampling methods and details
- Factors effecting reliability of samples
- Sample preparation, analyses and security
- Assay procedures, quality and checking
- Quality control and verification procedures
- Mineral processing and metallurgical testing
- Methodologies of resource estimation
- Categorization of resources
- Permitting
- Capital and operating costs
- Economic analysis
These items are all dealt with in detail in the "Technical Report on the Sinivit Property, Papua New Guinea" by R.N. Stagg B Sc, MSc, DIC, FAusIMM, CP, MIMMM, CEng, which will be lodged on Sedar within 30 days.
Background
The Sinivit Gold Project is located 50km south-southwest of Rabaul in the East New Britain Province, Papua New Guinea. It can be accessed by road from the town of Kokopo and port of Rabaul. A jet airport at Kokopo has several daily flights to Port Moresby and Lae. The Company announced on June 16, 2005 that all approvals had been received from the Papua New Guinea Government in respect to commencing development of the Sinivit Gold project.
Historic resources were included in an independent feasibility study on the Sinivit gold deposit by Ausenco Ltd, a Brisbane, Australia engineering company, dated 11 December 1995. These resources were estimated by independent and non-independent Qualified Persons under the supervision of Robert D. McNeil, B.Sc. Honours, MSc. Fellow of the Australian Institute of Mining and Metallurgy and Dr David Lindley, B.Sc. Honours, Ph.D. Member of the Australian Institute of Geoscientists, both of whom are Qualified Persons as defined by N.I. 43-101 and both persons consent to this public disclosure. Mr McNeil is now chairman/CEO and Dr Lindley is Exploration Vice President of New Guinea Gold Corporation. These resources have an effective date of September 12th 2005, are now considered current, and comply with the requirements of N.I. 43-101.
New Guinea Gold has an active exploration/development progam with the objective of defining additional gold mineralisation. The known mineralisation is open at depth and there are numerous other, as yet unexplored targets within the Sinivit properties. The potential to increase mineralisation at the project has been described in the independent Technical Reports by Peter Christopher, PHD, P. Eng, which is available at www.newguineagold.ca.
The Company commenced development at Sinivit in July 2005 based on the historical estimates of reserves and resources in the 1995 independent Feasibility Study prepared by Ausenco Ltd of Brisbane, and an update of this historical feasibility study. Investors are cautioned that the development is proceeding in the absence of a feasibility study prepared by an independent Qualified Person that determines and supports the economic viability of the project, and, as such, the financial risk of the project may be higher.
Key Assumptions, Parameters and Methods Used to Prepare the Mineral Resource Estimate
Deposit Description
Both oxide and sulphide vein resources are present in the project area. Gold and silver bearing oxidised vein material forms, on average, a 30 m thick surficial zone overlying gold-copper-silver-telluride bearing veins. Supergene oxidation has typically resulted in the total removal of copper and tellurides and the partial leaching of gold and silver from primary mineralisation. Oxide resources have been identified in the Sinivit vein (Southern, Central, and Northern Oxide Zones), and the Kavursuki vein. Work to date has delineated a sulphide resource in the Sinivit vein (Northern Sulphide Zone).
Downhole Survey
All drill holes were surveyed for dip and azimuth at the collar, and six holes have been surveyed downhole. The dip and strike of these downhole surveyed holes differs very little from that measured at the collar. For example, hole WDD035 is 220 metres long. Its dip dropped from 60° to 64°, and its azimuth from 105° to 108° over the full hole length.
Drilling
Since 1984, the Sinivit Prospect has been under intermittent, though often intensive investigation. As well as trenching, detailed mapping and sampling, a total of 122 diamond drill holes have been put down for 17,775 metres, and 62 reverse circulation percussion (RC) holes for 2,600 metres.
The drilling has been concentrated within a strike length of approximately 1,000 metres covering the Southern Oxide Zone (9810 N to 10000 N), the Central Oxide Zone (10000 N to 10180 N), the Northern Sulphide Zone (10180 N to 10400 N) and the Northern Oxide Zone (10400 N to 10550 N).
Trench Sampling
A series of trench samples were taken across the Central reef in the Southern and Northern Oxide Zones. Bulldozed cuts across the zones of massive resistant silicification were facilitated in areas where intense post-mineralisation cross-fracturing has imparted brittle fracturing. Trenches were along bulldozed cuts and allowed recovery of samples from surface to around 2 metres depth into the reef. Although designed to sample across the reef the trenches did include samples both along and across strike.
In many of the trenches, individual and average grades are significantly higher than the grades obtained from drill holes directly beneath them. Since the trenches were sampled in, along and across strike, and care was taken to collect the full sample interval, the trenches returned reliable "bulk" grades. One possible reason for the discrepancy between the drill and trench samples could be that the drill holes may have followed down along the weakened zones of cross fracturing rather than drilling through the un-fractured mineralisation. It is likely that the fractures would exhibit more intense leaching than the surrounding un-fractured ground.
Assaying and Sample Preparation
Conventional RC drilling sampling was carried out, with samples collected in a bag which allowed dewatering by overflow, and diffusion through the bag surface.
On site preparation included drying, weighing and riffle splitting into one quarter/three quarter splits. Consecutive one quarter splits were combined and dispatched until mid 1986 to Pilbara Laboratories in Lae, then after this date to PNG Analytical, also in Lae.
At the laboratory, the sample was first crushed to -40 mesh by a roll mill, then to -60 mesh by a Keegor mill.
Finally, the sample was pulverised to -150 mesh, and gold values derived by fire assay of a 50 gram charge, with atomic absorption spectrophotometer (AAS) finish.
If assays of +0.5g/t Au were obtained, a second quarter split on an individual metre basis was submitted for analysis.
Diamond drill half core samples submitted to the laboratory were prepared in the same way, except that a preliminary jaw crushing stage was introduced.
All gold determinations to March 1987 were completed on 50 gram charges. During March 1987, trial analyses of both 50 gram charge and 25 gram charge determinations were completed on 50 samples, ranging in gold content from below the assay detection limit to 12g/t Au.
The results showed close correlation, after which the laboratory routinely completed gold analyses on 25 gram charges on all Sinivit samples.
Check Assays
Interlaboratory checks were completed during September 1986 and July 1987. The July 1987 check included in excess of 300 samples, with determinations done on a 50 gram charge basis by the check laboratory versus 25 gram charges by the initial laboratory.
Standards have been used since October 1985 on a one in ten basis. Up to the end of 1986, three standards: < 0.01g/t Au, 0.9g/t Au and 4.9g/t Au were rotated. Commencing 1987, six standards were used, at least two assaying 2.5g/t Au, two assaying 8g/t Au and one assaying < 0.1g/t Au.
Basic Statistics for Oxide Indicated Resource
The drill hole gold assays were composited on 2 metre intervals to correspond to the probable mining bench height and preliminary statistical analyses were conducted. In order to eliminate potential along strike variations the data was grouped into two sets. The Southern and Central Oxide Zones formed one set while the Northern Oxide Zone formed the other. The geological structure is too complex to allow detailed definition of the economic grade zones at this stage so the "ore" zones were selected by a visual assessment of the grade separating mineralised zones from the background mineralisation. This was 0.30 g/t Au for the Southern and Central Oxide Zones and 0.40 g/t Au for the Northern Oxide Zone. Statistics for the two areas are summarised in Table 3.4.
Table 3.4 Oxide Zone Statistics
| Southern and Central
Oxide Zones
| Northern Oxide Zone
|
No. of 2 m Composites
| 527
| 31
|
Minimum Assay
| 0.30
| 0.40
|
Maximum Assay
| 50.40
| 37.96
|
Mean
| 2.47
| 3.35
|
Variance
| 20.26
| 56.25
|
Standard Deviation
| 4.50
| 7.50
|
Coefficient of Variance
| 1.82
| 2.24
|
The spread of values for the Southern and Central Oxide Zones are typical of many gold deposits. A coefficient of variance below 2.00 for gold is not excessive. Results from the Northern Oxide Zone are much more scattered. This is probably due to the small number of composites which is too low to allow useful analysis of grade distribution.
Grade frequency histograms and cumulative frequency plots were prepared for both populations. Each showed a major skew to the lower grades, even using log transformed data. This is despite the fact that lower grade limits were applied in both cases. Much more detailed examination of the drilling data is required to determine the reasons for this skewed distribution. It may be, for example, that the holes have followed down leached fractured zones. However the data in its current form is not suitable for detailed geostatistical analysis.
In Situ Bulk Density
Specific gravity measurements were made on approximately 130 core and rock chip samples during September and October 1995. These samples were selected from surface to 30 metres depth from each of the Southern, Central and Northern Oxide Zones. Nearly all of the samples were closely clustered around an average of 2.61 t/m³. This agrees well with the average specific gravity of quartz at 2.65 t/m³.
Specific gravity used for the Sulphide Indicated/Inferred Resources and the Oxide Resource at Kavursuki was 2.5.
Computer Database and Modelling System
Orebody modelling, resource estimation and mine design were carried out using SURPAC 2000 software. A SURPAC database was compiled incorporating:
- Drill hole collar coordinates and levels in the local grid system.
- Drill hole types (reverse circulation or diamond core).
- Drill hole dips and azimuths.
- Gold primary and repeat assays and an average of the two used in the resource modelling.
- Copper assays.
- Silver assays.
A topographic model was prepared by digitising contours from the most recent aerial photography. It was later noted that this photography was impeded by the dense tree canopy and is not accurate in places. The surveyed drill hole collars were included in the model to improve its accuracy.
Geological In Situ Resource Estimation.
Geological interpretation and delineation of the quartz veins was undertaken by Dr David Lindley.
Definition of the grade zones within the geological boundaries and subsequent sectional modelling of the resource and reserve in SURPAC was undertaken by John Wyche of Australian Mine Design and Development Pty Ltd.
Resource Estimation Procedure
The following steps were carried out in the resource estimation:
- East-west section lines were defined along the baseline to group the drill hole and trench data as closely as possible within the known fault blocks.
- Drill hole cross sections were extracted on the defined lines showing hole name, hole trace, average gold grade and copper grade in each uncomposited sample interval.
- Topography cross sections were taken through the topography model on each of the section lines.
- Cross section plots showing the drill hole data and topography were produced at 1:250 scale on each section line.
- The reef structures were drawn onto the sections using data from the original drill logs and outcrop mapping.
- A cut off grade of 0.5g/t gold was chosen as it appears to provide adequate definition of the mineralised zones while still being at the lower end of potentially economic grade.
- Resource polygons were marked out on each section by following the 0.5 g/t gold envelopes within the interpreted quartz reef structures. The shape of the polygons takes into account:
- The occurrence of cross faulting as logged in trenches, core, or as interpreted from drilling difficulties.
- The occurrence of cross cutting dykes.
- Topography.
- Polygonal interpretations on adjacent sections.
- Where polygons were defined by more than one drill hole they were split half way between the drill holes to limit the grade interpolation distance.
- Polygons were not generally extended more than 10 metres up or down dip from the last hole on a section. This distance is probably less than the range of continuity in the mineralisation but the structural complexity of the deposit limits confidence in the extrapolation of the mineralised pods.
- Each section was assigned an along strike width of influence extending half way to the sections either side. The two end sections (9810 N and 10550 N) were extrapolated 20 metres beyond the section plane.
- Normally at this stage the polygon areas on each section would be multiplied by the along strike width of influence to calculate the ore volume. However the steep topography at Sinivit could give rise to major volume errors with ore being extrapolated into air. The following procedure was used to clip the orebody model against topography:
- Each section polygon was sliced at 2 metre vertical intervals. The slices were extended half way to each adjacent section to form rectangles in plan view with along strike lengths equal to the section widths of influence.
- The rectangles carry the grades of the polygon from which they were extended. The result is a sort of block model made up of rectangles defining the ore zones on each 2 metre bench.
- The topography model was contoured at the same 2 metre vertical interval and the contours were used to clip off the parts of the interpolated/extrapolated ore rectangles which had been extended beyond natural surface.
- Each bench was given a vertical width of influence of 2 metres. It was thus possible to multiply the areas of the slipped rectangles by 2 metres to calculate an ore volume. This was multiplied by the oxide ore bulk density of 2.61 t/m³ to calculate the ore tonnage.
- The gold and copper grades for each clipped rectangle were combined as tonnage weighted averages for each bench and each zone.
Resource CategoriesResource categories are designed to give interested parties a measure of the confidence with which the resource tonnes and grade have been estimated. Much of the Sinivit resource has been drilled at less than 25 metre centres. Such a close spacing combined with the procedures already noted, is used, this would normally assist in the classification of a measured resource but three main factors prevent this.Steep topography makes drilling of regular section lines impossible. This makes interpretation of mineralisation and structures more uncertain. - Frequent, irregular cross faulting decreases confidence in interpolation and extrapolation of structures.
- Discrepancies in grade between trench samples and adjacent drill holes remain unexplained.
However, on the one section of exposed reef which has been thoroughly mapped and sampled the structure and gold distribution is well understood and this model is consistent with the ore polygons delineated on each section. An adequate model exists for the structure of the host system and the distribution of gold within it but the small scale of the structures and the irregularity of the drilling make it impossible to fully define each intersected zone of mineralisation. For this reason the entire resource model is classed as indicated.
Diamond Twin Holes
Diamond twins were completed adjacent two reverse circulation holes during the 1986 program; viz: WDP010/WDP022 and WDP004/WDP021. These holes were collared within 2 to 4 m of each other and 100% core recovery was obtained from cored holes. Comparison of the Au results from these holes by J. Whyce and I.D. Lindley, indicate a "perfect" match in downhole reverse circulation geochemistry with respect to that of the corresponding drill hole.
Check Sampling by New Guinea Gold Corporation
A program of surface and drill core check sampling was completed in January 2004 on the Northern, Central and Southern Oxide and North Sulphide Zones of the Sinivit deposit. These results confirm the reliability of the original drill assays. In addition a 13.20m core assay (7.15 to 20.35m down-hole) was split into 10 splits to study the "nugget effect", if any, of the Sinivit oxide ore. The original assay was 12.4 g/t gold and the splits assayed as follows: 14.85, 18.4, 15.45, 15.4, 18.25, 7.47, 18.45, 6.8, 6.85, 7.53 (average -13.0 g/t gold). These results show there can be significant variation between splits, but the average grade is similar to the original grade.
Four large bulk samples (60-100kgs) were collected from surface trenches to check the tenor of gold at the surface. Each sample was crushed and split into 10 separate samples to check for the "nugget effect" and assay repeatability. The results confirm extensive gold at the surface and show there is relatively minor variation between splits and only minor "nugget effect".
Open Pit Design
The resource model was modified to account for mining dilution and a set of three pits was designed to maximise gold recovery in low copper oxide mineralisation. The goals of these designs were to extract as much gold mineralisation above the 0.5 g/t Au cut off as possible while minimising the volume of high copper mineralisation exposed and keeping the waste : ore ratio as low as possible.
Geotechnical
The geotechnical design parameters were selected on the following premises:
- The mineralisation zones occur in two, and sometimes three, quartz reef structures which run the full strike length of the deposit. These reefs provide reinforcement to the rock mass.
- Although there is an extensive blanket of very weak oxidised clay material the majority of the rock mass outside the reefs comprises tuffs of moderate to competent strength.
- Most of the structures are near vertical.
- Bulldozer cuttings with near vertical walls of eight to ten metres height have stood for nearly ten years.
- Natural slopes of greater than 1 in 1 are not uncommon.
- The occurrence of high copper grades at shallow depths limits the pits to 30 metres depth.
- The pits will have short lives, generally less than one year each.
The overall pit wall slope selected is 62° which is formed by a face slope of 70° with a 4 metre berm every 16 metre vertically. This slope is flattened in places by the inclusion of ramps and widened ore benches.
Metallurgical Testwork
There are two distinct mineralisation types - oxide and sulphide.
Metallurgical testwork on the Sinivit oxide deposits has been undertaken by a number of groups including City Resources, Warman Laboratories, Ed Newman & Associates and the Julius Kruttschmitt Research Centre. Ed Newman & Associates prepared a review of testwork in July 1994. The gold mineralogy of the oxidised mineralisation is not clear, but cyanide leach liquor assays contain low levels of tellurium, arsenic and copper, suggesting extensive oxidation and remobilisation of gold into leachable forms.
Bond Work Index determinations were completed on oxide ore samples indicating an index of 11.2 KWh/tonne which is low for quartz type materials. The ore is indicated to be composed of many fracture planes.
Column leach testwork carried out in 2003 - 2004 by Macmin and AMMTEC have indicated that material crushed to minus 12.5 mm is leachable in cyanide. Recoveries up to 92 % were obtained with cyanide consumptions of 0.65 kg/t. Ammtec's figure of 88% has been adopted. This has indicated that vat or heap leaching is a viable option for recovery of gold from the oxide material.
Data suggests that gold in sulphide mineralisation is mainly present as gold telluride which is refractory to cyanide leaching. There is sufficient sulphide mineralisation testwork available, however, to show that a flowsheet involving a simple flotation scheme, in a low cost flotation cell such as the Jameson cell, followed by shipment to Mt Isa (or other smelter) for treatment in the copper Isasmelt vessel would be feasible. The presence of an existing infrastructure to mine the oxidized ore, should make this option feasible."
3rd October 2005
"MOLYBDENUM TRENCH INTERSECTION AT SIMUKU
INCREASED TO 72m GRADING 1664ppm MOLYBDENUM
Vancouver 3rd October 2005. The molybdenum in bulldozer trench at the Simuku porphyry copper/molybdenum/gold prospect has increased from the previously reported 21m @ 1513ppm molybdenum to 72m @ 1664ppm molybdenum. This section is within a longer, lower grade section of 132m @ 989ppm molybdenum. These are very significant results - for example at the current molybdenum price of approximately US$35/lb, 1664ppm molybdenum has a value of US$115/tonne of rock (at present prices equivalent to 7.7g/t gold, not including copper and/or gold credits). Shareholders and investors are cautioned that molybdenum is at near record high prices, these prices may not be sustained in the future and that the comparison with gold is for information only as the treatment and recovery of molybdenum from molybdenum mineralisation is often more difficult and more costly than the recovery and treatment of gold mineralisation.
The Simuku prospect in West New Britain is owned 90% by New Guinea Gold Corporation (NGG-TSX.V) and 10% W.S. Yeaman. It is a large porphyry copper system with associated molybdenum and gold mineralisation. Detailed information on the property can be found in a Press Release dated 12 September 2005, and in the Independent report at www.newguineagold.ca .
The intersection described above is part of a 20km bulldozer trenching program, for which approximately one third of samples are still pending. The trenches were channel sampled at 3m intervals, approximately 3 to 4kg of sample collected and the samples were shipped to accredited laboratory, ALS-Chemex, in Townsville Australia for analysis. The results quoted above are molybdenum by the XRF method.
The trench intersection above is situated 250m NE of drill hole SMD002. It comprises a trench which partly encircles a ridge, i.e the trench passes along one side of the ridge around the top and along the far side. The trench suggests an area of mineralisation of at least 75m by 75m and is open on three sides. The nearest trench to the north is 200m distant. Management believe this is a significant area of molybdenum mineralisation.
Within the 72m @ 1664 molybdenum are several higher grade intervals:
- 15m @ 3035ppm molybdenum
- 6m @ 2582ppm molybdenum
- 24m @ 1820ppm molybdenum
Approximately 4,000 samples have been collected in this program but all results will not be available, collated and assessed for at least 6 weeks."D.M. O'Neill
MANAGING DIRECTOR 
MMN 
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