Lewis Ponds Zinc-Gold Project

Redefining a historic high-grade zinc-gold mine as a bulk-tonnage open pit operation

Highlights

  • Major development project with significant base metal-gold open-pit potential, with orogenic gold and base metal mineralisation defined which is very similar to other large deposits in the region
  • Historic mine site, extensive workings
  • Several kilometres strike
  • Broad mineralisation intercepts
  • Unsampled mineralised drill core
  • Main resource on freehold land owned by Ardea
  • Bulk tonnage Exploration Target defined
  • Lewis Ponds Main Zone and Tom’s Zone main shaft mullock sampling by Ardea returned assays of 9.9–12.1g/t gold and 272–539g/t silver, possible epithermal mineralised affinity

The breakdown for the full Lewis Ponds resource categories is as follows:

Resource Category Quantity (Mt) Zn(%) Cu (%) Pb (%) Au (g/t) Ag (g/t)
Indicated Main Zone 5.82 2.1 0.1 1.1 1.5 59
Tom’s Zone 0.54 5.5 0.3 3.8 1.7 172
Total Indicated 6.35 2.4 0.2 1.4 1.5 68
Inferred Main Zone 0.17 1.7 0.1 0.8 0.9 47
Tom’s Zone 0.10 5.0 0.2 3.6 1.4 174
Total Inferred 0.27 3.0 0.1 1.9 1.1 96
Total Mineral Resource 6.62 2.4 0.2 1.4 1.5 69

Bulk tonnage model for exploration and development

At Lewis Ponds, “the mineralisation is accepted as Volcanogenic Massive Sulphide (VMS) type” (Prospectus, page 46). The mineralisation as described is multiple lenses (1, 2 and 3) of massive stratabound base metal sulphides hosted within the Anson Formation pyritic siltstones. Exploration has historically been on the basis of a narrow high grade underground mining model, and has generated a mineral resource totaling 6.6Mt at 1.5g/t gold and 2.4% zinc estimated at a 3% ZnEq cut-off grade (refer Prospectus Table 3.2 for full description of resource status).

As noted in the Prospectus (page 44), Lewis Ponds “occurs on the Lewis Ponds Fault; a subsidiary fault to the Godolphin Fault. The region is well known for being prospective for a variety of deposit types, especially VMS deposits and orogenic gold deposits.”

Having now completed regional geological orientation programs in the Lewis Ponds area, it is clear that Lewis Ponds has a significant potential for orogenic gold deposits of the style of Regis Resources’ McPhillamys deposit, located “15km south along the Godolphin Fault” from Lewis Ponds (Prospectus page 44).

As well as the traditional zinc-dominant VMS model, there is now a requirement to additionally evaluate Lewis Ponds as a bulk tonnage orogenic gold-base metal system, with the clear mining model being McPhillamys (resource 73Mt at 0.93g/t Au at 0.4g/t Au cut-off grade, Regis Resources, 31 March 2015).

There are very clear geo-metallurgical associations at Lewis Ponds, possibly representing separate mineralising events, in order of abundance:

  1. Dominant Zn-Pb-Ag-Au (stringer dominant but significant massive sulphide interbands).
  2. Au-Ag only (which is poorly sampled, thus difficult to quantify as an orogenic gold system).
  3. Minor Zn-Pb only.
  4. Rare Cu only, always in the footwall.

Lewis Ponds mineralisation is dominantly a 20-50 metre wide stringer (shear vein) system with 2-10 metre thick bands of massive Zn-Pb-Ag-Au mineralisation able to carry sub-grade stringers, with typically 2-5 m internal waste bands.

The mining implications for Lewis Ponds are:

  • Drill intercepts are required to be bulked into broad lower grade intervals of the McPhillamys style, using a 1% ZnEq cut-off (approximately 0.5g/t AuEq).
  • Open-pit bulk mining is more likely to be feasible, given the favourable Lewis Ponds strip ratios and consistent shallow high-grade mineralised occurrences.

At Lewis Ponds, the bulk tonnage potential is confirmed in Prospectus Figure 3.3 (refer gold-equivalent calculation), with the following gold-equivalent intercepts on Section 940mN representative of the overall Lewis Ponds mineralised system.

  • Western Lode
    • TLPRC-02 90m at 1.02g/t AuEq from 18m
    • SLP-7 27m at 1.59g/t AuEq from 62m
    • TLPD-02W 30m at 2.44g/t AuEq from 271m
  • Central Lode
    • LPRC-32 54m at 1.72g/t AuEq from 26m
    • TLPD-40 37m at 0.92g/t AuEq from 199m
  • Eastern Lode
    • TLPD-40 68m at 0.97g/t AuEq from 57m

Having now completed field reconnaissance, it is felt that Lewis Ponds is better evaluated as a base metal-gold stringer system. Table 2 summarises the more significant “bulk-tonnage” intercepts at Lewis Ponds. More detailed drill intercept data has been previously published by TriAusMin Limited in ASX announcements between 2002 to 2014 (Prospectus page 71) and these reports may be obtained from Ardea.

From reviewing available drill core at site and archived core photographs, it is clear that extensive zones of sericite-pyrite alteration (potential gold mineralised host) have not been sampled. There is thus a requirement to cut and sample this core (assuming the individual core is still available), with the potential to establish “McPhillamy-style” mineralised systems.

The Ardea intention is to drill a single orientated core hole on Sections 1000mN, 800mN, 600mN and 400mN, and all available core on these 200 metre spaced sections will be re-logged, re-photographed and assayed.

This program will act as a control to allow a resource update based on bulk-tonnage parameters. The known high grade zone extends from Section 300mN to Section 1500mN and ultimately all historic drill holes within this zone will require re-logging and assay. This requirement was not anticipated within the Prospectus work program and has arisen through field studies subsequent to November 2016 Prospectus lodgment.

Field exploration results

Whilst siting drill collars for the initial proposed Ardea drill program, a suite of samples was collected as a first pass in defining Lewis Ponds geo-metallurgical types (GeoMet study). At the old Lewis Ponds Main Zone and Tom’s Zone main shafts, the main producers in the field, it was apparent that the dominant shaft mullock at both locations (600m apart along strike) is a distinctive white vuggy quartz-pyrite “sinter” (which appeared to have the appearance of epithermal style mineralization).

Table 3 – Lewis Ponds Rock chip sampling
Location Sample No Au (g/t) Ag (g/t) Zn (%) Pb (%) Cu (%) As (ppm) Sb (ppm)
Lewis Ponds Main Zone shaft LP01300 9.9 539 0.05 1.6 0.30 1030 2650
Tom’s Zone shaft LP01301 12.1 272 0.09 2.7 0.01 90 74

The high-grade Au-Ag with anomalous As-Sb is consistent with epithermal style mineralisation, and the low base metal values are not indicative of a VMS setting at the shaft areas.

Base metal and gold production is unknown for the Lewis Ponds shaft. Toms produced 30,000 tonnes of pyrite ore for sulphuric acid production. It is puzzling that such high grade precious metal mineralisation remains at both locations as shaft mullock and was not treated in the historic operation.

This mineralisation style was not predicted within the Prospectus and is of significant economic potential. In particular, “Gold Stringer” is a geo-metallurgical type recognized in Ardea’s work but not described in historic Lewis Ponds records.

Drill approval environmental submissions are being prepared, with Department of Resources and Energy approvals anticipated in time for February 2017 drilling.

Table 2 Lewis Ponds – Polymetallic-Gold Stringer Zones, Significant Intercepts
Hole ID East (local) North (local) From (m) To (m) Width (m) Au (g/t) Ag (g/t) Cu (%) Pb (%) Zn (%) ZnEq¹ AuEq² m.ZnEq³ Geo Met
LPRC-6 -82 906 31 73 42 0.48 34 0.13 0.65 1.78 3.6 2.8 150.4 PS
LPRC-17 -68 830 5 68 63 0.70 18 1.04 2.2 1.7 138.8 PS
LPRC-21 -88 876 26 60 34 0.71 50 2.17 3.9 3.0 131.2 PS
LPRC-32 -105 940 26 80 54 0.49 34 1.54 2.7 2.1 145.2 PS
TLPD-03 -47 1146 163 250 87 0.44 23 0.06 0.47 1.08 2.4 1.9 210.1 PS
TLPD-04 -61 1316 178 203 25 3.12 105 0.26 2.14 3.59 11.0 8.8 275.9 PS
TLPD-06A 21 1235 290 395 105 0.94 50 0.14 0.85 1.89 4.7 3.7 489.9 PS
TLPD-08 -51 1456 161 408 247 0.08 8 0.02 0.11 0.27 0.6 0.5 151.1 PS
TLPD-09A 17 1205 248 370 122 0.37 9 0.04 0.22 0.47 1.3 1.0 157.1 PS
TLPD-12 103 1312 419 559 140 1.53 52 0.10 1.45 2.20 6.1 4.8 850.4 PS
TLPD-12W 103 1312 405 453 48 0.80 29 0.06 0.47 0.92 2.8 2.2 134.3 PS
TLPD-12W3 103 1312 398 506 108 0.29 13 0.05 0.28 0.64 1.5 1.2 159.3 PS
TLPD-15 74 1361 433 528 95 0.77 27 0.04 0.40 0.69 2.4 2.0 230.6 PS
TLPD-18 80 1240 333 436 103 0.28 11 0.03 0.35 0.51 1.3 1.1 137.4 PS
TLPD-19 97 1117 236 349 113 0.14 14 0.02 0.30 0.58 1.2 1.0 138.8 PS
TLPD-20 72 1362 347 420 73 1.33 38 0.08 0.64 1.15 4.0 3.2 290.7 PS
TLPD-21W 74 1361 409 510 101 1.03 38 0.07 0.60 1.01 3.4 2.7 345.3 PS
TLPD-30 69 1491 569 760 191 0.15 9 0.02 0.14 0.22 0.7 0.6 131.6 PS
TLPD-32 196 1386 484 558 74 0.37 24 0.06 0.49 0.87 2.1 1.7 158.9 PS
TLPD-34 3 1231 232 298 66 0.40 23 0.08 0.35 0.81 2.0 1.6 134.4 PS
TLPD-36 -68 1311 194 220 26 2.35 162 0.17 2.07 3.20 10.4 8.4 270.3 PS
TLPD-37 -108 1213 147 184 37 1.24 35 0.10 0.68 1.33 4.1 3.2 150.4 PS
TLPD-40 -4 938 56 245 189 0.05 5 0.05 0.21 0.54 0.9 0.7 172.5 PS
TLPD-41 86 759 165 262 97 0.30 10 0.06 0.38 0.78 1.7 1.3 162.5 PS
TLPD-46A 103 476 107 131 24 0.65 33 0.10 1.63 2.70 5.3 4.2 127.2 PS
TLPD-51A 152 421 474 510 36 1.24 179 0.28 3.62 4.49 11.8 9.5 423.7 PM
TLPD-51AW1 152 421 474 503 29 1.15 100 0.12 1.53 2.30 6.6 5.3 190.1 PM
TLPD51AW2 152 421 321 399 78 0.22 22 0.05 0.89 1.44 2.7 2.2 213.2 PS
TLPD-51AW3 152 421 388 402 14 1.10 95 0.14 4.33 5.87 11.9 9.4 166.2 PM
TLPD-53 106 463 221 321 100 0.25 27 0.06 1.16 1.90 3.5 2.8 351.4 PS
TLPD-62 145 353 287 394 107 0.16 14 0.03 0.32 0.68 1.4 1.1 145.5 PS
TLPDD04002 -13 1268 238 309 71 0.64 27 0.07 0.52 1.11 2.8 2.2 198.8 PS
TLPRC04010 -68 999 82 174 92 0.20 25 0.10 0.54 1.38 2.6 2.0 236.1 PS
TLPRC-02 -124 968 18 129 111 0.26 14 0.06 0.24 0.56 1.4 1.1 151.4 PS
TLPRC-04 -90 877 19 68 49 0.46 44 0.10 0.52 0.77 2.6 2.1 126.0 PS

Geo-Metallurgy (GeoMet) – PS Polymetallic Stringer, PM Polymetallic Massive, CS Copper Stringer (no intercepts are significant), GS Gold Stringer (no intercepts are significant)

Zn Cu Pb Au Ag
Metal prices US$ (21 Dec 2016) 2617 5488 2177 1133 16

¹ Zinc Equivalent Estimate

Recovery for ZnEq calc 100% 80% 80% 90% 80%
ZnEq recov multiply factor 1.000 1.678 0.665 1.253 0.016

² Gold Equivalent Estimate

Recovery for AuEq calc 80% 80% 80% 100% 80%
AuEq recov multiply factor 0.575 1.205 0.478 1.000 0.011

³ m.ZnEq = intercept width x ZnEq value

Scoping study level financial model for a 1.5Mtpa open-pit with base metal float circuit indicates 1.6% ZnEq is a suitable break-even cut-off grade.

Exploration target

In consideration of the broad mineralised intercepts over a strike length of 1.15km between Section 350mN and Section1500mN, the initial Lewis Ponds Exploration Target is estimated at 15 - 25Mt at 2.2 - 3.7% ZnEq (1.2 -2.0g/t AuEq)⁴ (see Table 2 for values used in defining zinc and gold equivalents). The estimated breakeven mining grade is 1.6% ZnEq.

⁴ An Exploration Target is a term used within the JORC2012 Code for an estimate of the exploration potential of a mineral deposit. As used in this release the stated Exploration Target is based upon the parameters described in the text, however the potential quantity and grade is conceptual in nature and there is insufficient information to estimate a Mineral Resource and it remains uncertain if further exploration will result in the estimation of a Mineral Resource in this area of drilling.

The potential quantity and grade is conceptual in nature, and there has been insufficient exploration based on the “bulk-tonnage” concept to estimate a mineral resource and it is uncertain if further exploration will result in the estimation of a “bulk tonnage” mineral resource.

The system is open north and south along strike within areas of historic workings and soil geochemical anomalism. Significantly, there are extensive runs of historic drill core with no assays at all or only base metal assays (i.e. no gold assays).

Commonly within the Lewis Ponds lode envelopes, the runs of non-assayed material correspond to core photography which clearly shows the core is altered and likely mineralised. These intervals are ascribed nil grade within intercept calculations, meaning the Exploration Target grade is likely under-estimated.

Funds raised under Ardea’s initial public offer will be used, amongst other things, to test the exploration target through diamond drilling on 100 metre spaced sections over the next 12 months.

Historic TriAusMin Lewis Ponds announcements

  File Date File Size
TriAusMin Commences Diamond Drilling Program at Mt Nicholas in New South Wales, Australia 25 Mar 2014 29 KB
TriAusMin Expands Open Pit Potential at Lewis Ponds Project in Australia 15 Dec 2011 767 KB
TriAusMin Commences Drilling on Lewis Ponds Base and Precious Metal Project, New South Wales, Australia 3 Nov 2011 227 KB
TriAusMin Moves Forward with $3 Million Program at Woodlawn and Lewis Ponds Projects in Australia 23 Feb 2011 24 KB
Lewis Ponds Project Presentation Nov 2010 332 KB
Targets Identified for Exploration at Lewis Ponds Gold Project 8 July 2010 89 KB
Tri Origin Commences Airborne Geophysical Survey of Lewis Ponds 23 Feb 2010 45 KB