Drummond Basin gold deposits - The AusIMM · PDF fileTechnical Meeting: 12 September 2007,...

Technical Meeting:

12 September 2007, Brisbane, Australia

‘DRUMMOND BASIN GOLD DEPOSITS’

Southern Queensland Branch

Presented by: Andrew Vigar - Managing DirectorManaging Director,Drummond Gold LimitedDrummond Gold Limited

TodayToday’’s Presentations Presentation

►►GeologyGeology►►HistoryHistory►►Epithermal StylesEpithermal Styles►►Major Drummond DepositsMajor Drummond Deposits►►Drummond Gold LimitedDrummond Gold Limited

Geology Geology -- DevonianDevonian--Carboniferous Carboniferous PalaeogeographyPalaeogeography

Cycle 3

Carboniferous -Permian Intrusives

Cycle 1

Fault

Cycle 2volcanics & sediments

volcanics & sediments

sediments

DRUMMOND BASIN

MT COOLONLODEYANDAN

PAJINGO EPITHERMALSYSTEM

WIRRALIE

Geology Geology –– Regional GeologyRegional Geology

vvvvv vvvv

++++++v vv vv vv vv vv v

Cycle2 Bulgonunna Volcanics Mt Rankin Beds?StAnnsLanarthVolcanicsStAnns

LowerStAnnsGreybank

Volcanics

LowerStAnnsSedimentsYandanAndesiteSINTERS

Ukulunda Beds

YandanLoneSisterPajingo

Twin Hil ls?

WirralieGlen EvaMt Coolon

GraniteConglomerateMtWyattFormation

MtCoolonAndesitesSINTERSSINTERS

SilverHills+BimurraVolcanics

INITIALSINTER"H

ONSETOF VOLCAN A

HYDRO AACTI VY

GRANITEI

DEPOSITS.CDR7.M.SEED.AUGUST 1999

GRABENOVERFILL

GRABENFILL

vvv

vvvvv vvvv


Cycle 2 Bulgonunna Volcanics Mt Rankin Beds?St AnnsLanarthVolcanicsSt Anns

LowerSt AnnsGreybank

Volcanics

Lower St AnnsSedimentsYandanAndesiteSINTERS

Ukulunda Beds


Twin Hills?


Granite ConglomerateMt Wyatt Formation

Mt Coolon AndesitesSINTERSSINTERS

Silver Hills+Bimurra Volcanics


GRABENOVERFILL

GRABENFILL

vvv

vv

v v

v

vv

v

vv

vv

+ +++++ v v

v vv v

v vv vv v

WEST DRUMMOND EAST DRUMMONDDeposits Deposits

Cycle 2 BulgonunnaVolcanics

Mt Rankin Beds?St AnnsLanarthVolcanics St Anns

LowerSt Anns

Greybank

Volcanics

Lower St AnnsSediments

YandanAndesite

SINTERS

Ukulunda Beds

YandanLoneSister

Pajingo

Twin Hills?

WirralieGlen Eva

Mt Coolon

Granite Conglomerate

Mt Wyatt Formation

Mt Coolon Andesites

SINTERS

SINTERS

Silver Hills

+

Bimurra Volcanics

INITIAL RIFTING

SINTER "HORIZON"

ONSET OF FELSICVOLCANISM ANDHYDROTHERMAL

ACTIVITY

Porphyry Min?GRANITE INTRUSION

GRABENOVERFILL

GRABENFILL

Late Carb~ 299 Ma

Mid Carb.~ 318 Ma

Late Dev.Early Carb.~ 340 Ma

Mid-LateDevonian~398- 359

Ma

v v

v

vvvvv vvvv


Cycle2 Bulgonunna Volcanics Mt Rankin Beds?StAnnsLanarthVolcanicsStAnns

LowerStAnnsGreybank

Volcanics

LowerStAnnsSedimentsYandanAndesiteSINTERS

Ukulunda Beds


Twin Hil ls?


GraniteConglomerateMtWyattFormation

MtCoolonAndesitesSINTERSSINTERS

SilverHills+BimurraVolcanics

INITIALSINTER"H

ONSETOF VOLCAN A

HYDRO AACTI VY

GRANITEI


GRABENOVERFILL

GRABENFILL

vvv

vvvvv vvvv


Cycle 2 Bulgonunna Volcanics Mt Rankin Beds?St AnnsLanarthVolcanicsSt Anns

LowerSt AnnsGreybank

Volcanics

Lower St AnnsSedimentsYandanAndesiteSINTERS

Ukulunda Beds


Twin Hills?


Granite ConglomerateMt Wyatt Formation

Mt Coolon AndesitesSINTERSSINTERS

Silver Hills+Bimurra Volcanics


GRABENOVERFILL

GRABENFILL

vvv

vv

v v

v

vv

v

vv

vv

+ +++++

vv

v v

v

vv

v

vv

vv

+ +++++ v v

v vv v

v vv vv v

v vv v

v vv vv v

v v

WEST DRUMMOND EAST DRUMMONDDeposits Deposits

Cycle 2 BulgonunnaVolcanics

Mt Rankin Beds?St AnnsLanarthVolcanics St Anns

LowerSt Anns

Greybank

Volcanics

Lower St AnnsSediments

YandanAndesite

SINTERS

Ukulunda Beds

YandanLoneSister

Pajingo

Twin Hills?

WirralieGlen Eva

Mt Coolon

Granite Conglomerate

Mt Wyatt Formation

Mt Coolon Andesites

SINTERS

SINTERS

Silver Hills

+

Bimurra Volcanics

INITIAL RIFTING

SINTER "HORIZON"

ONSET OF FELSICVOLCANISM ANDHYDROTHERMAL

ACTIVITY

Porphyry Min?GRANITE INTRUSION

GRABENOVERFILL

GRABENFILL

Late Carb~ 299 Ma

Mid Carb.~ 318 Ma

Late Dev.Early Carb.~ 340 Ma

Mid-LateDevonian~398- 359

Ma

v v

v

History of the Major Known DepositsHistory of the Major Known Deposits►► Gold was discovered at Gold was discovered at YackamundaYackamunda in 1912 by Luke Reynolds, a station hand, who in 1912 by Luke Reynolds, a station hand, who

found visible gold in outcropping quartz seams. A 5found visible gold in outcropping quartz seams. A 5--head head stamperstamper battery was erected at battery was erected at Mt Mt CooloonCooloon in 1914. in 1914.

►► Ten years later, Gold Mines of Australia Ltd (Ten years later, Gold Mines of Australia Ltd (““GMAGMA””) exercised options over the CGMC ) exercised options over the CGMC assets, floating Mount Coolon Gold Mines NL (assets, floating Mount Coolon Gold Mines NL (““MCGM NLMCGM NL””) as the operating company in ) as the operating company in October 1931.October 1931.

►► Epithermal quartz veining was discovered at Epithermal quartz veining was discovered at PajingoPajingo by Ralph Porter of Duval Mining by Ralph Porter of Duval Mining Australia Ltd in October 1983. The Scott Lode was discovered in Australia Ltd in October 1983. The Scott Lode was discovered in outcrop in July 1984. outcrop in July 1984. The treatment plant was commissioned in September 1987. In 1991,The treatment plant was commissioned in September 1987. In 1991, ACM Gold Ltd ACM Gold Ltd farmed into the farmed into the PajingoPajingo project and discovered the nearby Cindy deposit, where Battle project and discovered the nearby Cindy deposit, where Battle Mountain completed resource drilling in 1993, which then lead toMountain completed resource drilling in 1993, which then lead to the the VearVear and and NacyNacydiscoveries under cover.discoveries under cover.

►► Geologists from ACM discovered the Geologists from ACM discovered the WirralieWirralie gold deposit in 1986 during followgold deposit in 1986 during follow--up of up of anomalous stream sediment sampling results. Open cut mining commanomalous stream sediment sampling results. Open cut mining commenced in November enced in November 1987 and gold production began in May 1988.1987 and gold production began in May 1988.

►► Western Mining Corporation Ltd discovered the Western Mining Corporation Ltd discovered the YandanYandan epithermal goldepithermal gold--silver deposit in silver deposit in early 1987 as a result of soil and rock chip sampling followearly 1987 as a result of soil and rock chip sampling follow--up of a single stream up of a single stream sediment sample. sediment sample. MLsMLs 1095 and 1096 were granted to WMC in June 1991. Ross Mining 1095 and 1096 were granted to WMC in June 1991. Ross Mining acquired the property in July 1992 as part of a mining lease andacquired the property in July 1992 as part of a mining lease and exploration permit exploration permit purchase from Poseidon Ltd and WMC. Ross Mining recalculated thepurchase from Poseidon Ltd and WMC. Ross Mining recalculated the proved and proved and probable reserves and committed to development in November 1992.probable reserves and committed to development in November 1992.

►► Au Au ±± Ag deposits formed in Ag deposits formed in magmaticmagmatic arc arc environments (including rifts) at elevated crustal environments (including rifts) at elevated crustal settings (less than 2km).settings (less than 2km).

►► Often associated with large volcanic and subOften associated with large volcanic and sub--volcanic complexes.volcanic complexes.

►► Higher level epithermal deposits are commonly Higher level epithermal deposits are commonly formed late in a formed late in a mineralisationmineralisation cycle.cycle.

►► May be telescoped upon deeper earlier formed May be telescoped upon deeper earlier formed deposits, including in some instances porphyry deposits, including in some instances porphyry systems which are older. Complex history.systems which are older. Complex history.

►► Telluride deposits important.Telluride deposits important.

Epithermal Gold StylesEpithermal Gold Styles

1 km

Hotsprings

Low sulphidationAu, Ag Boilin

g

Primary

neutralization

High sulphidationAu, Cu

Porphyry Cu (Mo, Au)

Meteoric

water

Crater lake

CO , HCl, S2CO , H S2 2

SO , HCl, CO2 2GEOTHERMAL SYSTEM

VOLCANIC-HYDROTHERMALSYSTEM

200j

600j

300j

300j

Saline magmatic fluidLiquid flow

Vapour ascent

NOR.PP08(After Mineral Resources Dept. Geological Survey of Japan)

Acidic fluid

High and Low High and Low SuphidationSuphidation

SCHEMATIC ALTERATION AND ORE MINERALZONATION PATTERNS

100

150

200

250

100

300

500

m c(Adularia - Sericite)

Low Sulphidation(Acid - Sulphate)

High Sulphidation

SiAl-K

Ill-Sm

Pr

PrPr

PrAd

Si

Ill IllSm

SmIll

K

KSiAl Al

electrumargentitesulphosaltsselenidesquartzadulariabase metal sulphidesargentitequartz

Au in pyAubaritealunite

enargitefree Aualunite

sulphosaltsbase metal sulphidesquartz

Ill IllP

NOR.PP10

Ad = adularia, A = alunite, Ill = illite, K = kaolinite, Pr = propyliticP = pyrophyllite, Si = silica, Sm = smectite

(Compiled from various examples and models)

Deposit types Deposit types –– examplesexamples

NenaNenaMineral HillMineral HillCracowCracow

Mt Mt KasiKasiEl IndioEl IndioVera NancyVera Nancy

El IndioEl IndioPorgeraPorgera Zone 7Zone 7TaupoTaupo

ProximalDistal

Deep

High

SOSO22

Low

HH22SSSulphidation

Distance from sourceMost photos from Corbett 2002

Shallow

STRUCTURAL SETTING OF GOLD STRUCTURAL SETTING OF GOLD DEPOSITS IN THE DRUMMONDDEPOSITS IN THE DRUMMOND

RightRight--hand jogs or bends on ENE transfer faults hand jogs or bends on ENE transfer faults where intersected by reactivated Ewhere intersected by reactivated E--W, NNW or NW, NNW or N--S S ‘‘basementbasement’’ structures eg Yandanstructures eg Yandan

RightRight--hand jogs or bends in the hand jogs or bends in the reactivated Ereactivated E--W W ‘‘basementbasement’’ faults, usually faults, usually where where they are intersected by ENE or NNW they are intersected by ENE or NNW faultsfaults egegWirralieWirralie, Scott Lode, Scott Lode

Steeper parts or leftSteeper parts or left--hand jogs or bends in NW hand jogs or bends in NW to NNW to NNW ‘‘normalnormal’’ faults, where intersected by faults, where intersected by reactivated Ereactivated E--W faults W faults egeg Mt Coolon, Vera Mt Coolon, Vera NancyNancy

Structural style of Mt Coolon, Yandan & Wirralie

The most significant deposits are low-sulphidation epithermal gold-silver deposits hosted by Cycle 1 sedimentary and volcanic rocks.

Significant gold-silver production has come from open cut and underground mining operations at;

1. Pajingo 2. Wirralie 3. Yandan 4. Mount Coolon

MAJOR DEPOSITSMAJOR DEPOSITSTownsville

DRUMMONDBASIN

BrisbaneQueensland

The only significant operating metalliferous mine is Pajingo (Newmont), which is currently Queensland’s largest gold producer.

1. Pajingo2. Mount Coolon3. Yandan 4. Wirralie

1. Pajingo1. PajingoTownsville

DRUMMONDBASIN

BrisbaneQueensland

PAJINGO –Mineralisation

• The epithermal gold mineralisation is located within quartz-adularia epithermal vein hosted by proximal andesitic volcanic rocks.

• The gold is fine-grained (5 to 150 microns) and mostly occurs as electrum within epithermal textured quartz veins or breccia containing quartz fragments/matrix.

PAJINGO – Regional Geology

Vera Nancy HG ORE

1. Pajingo 2. Mount Coolon3. Yandan 4. Wirralie

2. Mount Coolon2. Mount CoolonTownsville

DRUMMONDBASIN

BrisbaneQueensland

Mt Coolon (Koala) Mine ML Mt Coolon (Koala) Mine ML

► The Mt Coolon has 1930’s tailings, Koala pit Extension, underground and and strike extension exploration.

► The Mt Coolon (Koala) mine site is 2 km south of the town. ► The underground mine produced about 137,000 ounces of

gold at a recovered grade of 15.0 g/t Au from its discovery in 1912 to its final closure in 1939 and a further 50,000 oz open cut in 1995.

► RGC developed a 650m long 4x4 decline in 1987 connected to the old Main Shaft. Decline is still open.

► Ross Mining developed an open pit in 1995-96, yielding 275,000 tonnes of high-grade ore

► About 200,000 tonnes of old tailings at a grade of 1.6 g/tAu still remain (11,000 ounces).

► A scoping study into the underground in 1997 concluded it was marginal but viable with the gold price at A$450 oz.

► The open pit collapsed in 1996 with drilled-out ore still in the bottom.

2. Mount Coolon 2. Mount Coolon –– Regional GeologyRegional Geology

NS

>15g x m Au

>1g x m Au0 200m

MCDH007(No lode intersected)

MCDH008(No lode intersected)

0.8m @ 0.21m ppm Aufrom 242.65m

1000 mRL

800 mRL

600 mRL

>50g x m Au

KOALA ONE OPEN PIT

(No lode intersected)

MCDH009

MCDH011

(No lode intersected)MCDH015

Sullivan Fault Zone

(No lode intersected)MCDH014

Normandy Drill hole

Drill hole Pierce Point

Underground Workings

Open Pit

1. Pajingo 2. Mount Coolon3. Yandan4. Wirralie

3. Yandan3. YandanTownsville

DRUMMONDBASIN

BrisbaneQueensland

3. Yandan 3. Yandan -- MineralisationMineralisation

35

41

70

70

70

35

NORTH YANDAN FAULT ZONE

YANDAN FEEDER ZONE

SOUTH YANDAN FAULT ZONE

41 300 E

48 050 N

GNMN

100m

Silicification +/- quartz veinsQuartz-adularia-pyriteCarbonate+/- silicaCaladonite-sericite +/- fe oxideQuartz-carbonate veins

BrecciationStructure orientationBedding orientationQuartz vein - laminar chesty

LEGEND

YANINTERP.CDR7.M.GILBERT.MARCH 1998

YANDAN INTERPRETATION PLAN

YANDAN YANDAN -- GENTLE BEDDING IN AREAS OF LEAST GENTLE BEDDING IN AREAS OF LEAST FAULTINGFAULTING

3. Yandan 3. Yandan –– Alteration/TexturesAlteration/Textures

100mQuartz-adularia +/- pyrite

Weakly carbonate altered

>0.6g/t Au

>0.2g/t Au

Breccia

Laminar Quartz-Adularia Veins

Apparent bedding

Pit outline

LEGEND

YANCROSS.CDR7.M.GILBERT.MARCH 1998

YANDAN CROSS SECTION14 300 E

‘YANDAN FEEDER’ZONE

SOUTH YANDANFAULT ZONE

NORTH YANDANFAULT ZONE

YNDC 332

1. Pajingo 2. Mount Coolon3. Yandan 4. Wirralie

3. Wirralie3. WirralieTownsville

DRUMMONDBASIN

BrisbaneQueensland

3. Wirralie 3. Wirralie –– Mineralisation FeaturesMineralisation Features

• The Wirralie gold deposit is a low-grade (0.2–5g/t Au), low-sulphidation epithermal system.

Wirralie - Mine Lease

3. Wirralie 3. Wirralie –– Mineralisation Features Mineralisation Features

Wirralie - Pit B Veining

Location and Access of the tenement blocks held by MCGM. The town of Mt. Coolon is approximately 200km in a straight line from Mackay.

Drummond Gold LimitedDrummond Gold Limited

Table 1 DGL Project Areas & Prospect Groups

Project Area Prospect Group Prospect Areas Tenement Target

Eugenia Deposit & Extensions EPM 9310 Epithermal gold Eugenia

Regional Eugenia EPM 9310/9080 Koala Deposit & Extensions ML 1029 / 1086 Epithermal gold

Koala Regional Koala EPM 9310/9080

Badlands Badlands & Handy Andy EPM 9310/9080 Mesothermal gold

Mt Manaman Mt Manaman Porphyry EPM 9310/11814 Cu-Au porphyry

TPM Magnetite & Copper Gold EPM 11814 Skarn Glen Eva Deposit & Extensions ML 10227 Epithermal gold

Great Eastern Eastern Exploration EPM 9310/9080

9981/12257 Epithermal gold

Serpentine Creek Hills 1 to 12 EPM 12526/7 9310/13114 9080/13155

Epithermal gold Carlin gold Porphyry

MT COOLON

Verbena Verbena Sinter & Verbena South 9310/12112 Epithermal gold

North Conway Battery Hill, Blue Gum, Isabella, Booby Dazzler Epithermal gold

Mt David Porphyry, Skarn

Conway

Red Flag, Quartz Reef, Split Hill, Bustard Egg, Mill Hill, Big Sinter, Silica Valley, Wobegong & Alluvium

Epithermal gold

CONWAY

Bimurra Ramillies West, Bimurra East

EPM 7259

Epithermal gold

DRUMMOND SOUTH

Mt Violet Mt Violet Central, North and South EPMA 6470,16476,16526 Porphyry, Epithermal

MT COOLON WEST

Central, 5 Mile EPMA 16382 Porphyry, Skarn

DRUMMOND NORTH

EPMA 16474 Epithermal

MT COOLON GOLD MT COOLON GOLD MINESMINES

Drummond Gold Projects

Resources @ 30 June 2007Resources @ 30 June 2007

►► Preliminary Preliminary –– Koala resources currently under reviewKoala resources currently under review►► Not reserves (no dilution or loss)Not reserves (no dilution or loss)►► Increase 2006 drilling from 204k oz (+70k oz)Increase 2006 drilling from 204k oz (+70k oz)►► Cost of resource ounces 2006 = $20/ozCost of resource ounces 2006 = $20/oz►► InIn--situ 270koz x A$750/oz = A$202Msitu 270koz x A$750/oz = A$202M

cut-offt Au g/t Au oz t Au g/t Au oz t Au g/t Au oz Au g/t

Pit Extn 134,250 4.09 17,653 30,480 4.04 3,959 183,930 4.04 23,903 0.9underground 121,600 8.73 34,142 60,200 8.05 15,582 181,800 8.51 49,724tailings 218,400 1.61 11,305 218,400 1.61 11,305HectorinaTotal 474,250 4.14 63,101 90,680 6.70 19,541 584,130 4.52 84,932in pit mill 384,736 3.49 43,120 152,466 3.22 15,779 537,202 3.41 58,899 1.3in pit lg 138,494 0.97 4,306 32,520 1.05 1,102 171,014 0.98 5,408 0.7outside pit 502,261 1.55 25,093 921,021 2.39 70,748 1,423,282 2.09 95,841 0.7

Total 1,025,491 2.20 72,519 1,106,007 2.46 87,629 2,131,498 2.34 160,148Glen Eva below pit 72,934 8.71 20,426 21,128 7.28 4,947 94,062 8.39 25,373 5.0

1,572,675 3.09 156,046 1,217,815 2.86 112,117 2,809,690 2.99 270,453

indicated inferred total

Total

Koala

Eugenia

Project location

Central Processing FacilityCentral Processing Facility

► Target early production via a Central Processing Facility near Mt Coolon town and deposits.

► Feed by satellite mining operations using road haulage.► Access to power, water and tailings storage.► Ore is free-milling with high recoveries via CIL.► Low expected capital and operating costs.


Key Dates (proposed)Key Dates (proposed)►► Due Diligence completed 17Due Diligence completed 17thth SeptemberSeptember►► Lodge Prospectus Lodge Prospectus –– 2424thth SeptemberSeptember►► IPO Offer Opens IPO Offer Opens –– Monday 1Monday 1stst OctoberOctober►► IPO Offer Closes IPO Offer Closes –– Friday 26Friday 26thth OctoberOctober►► Expected ASX Listing Date Expected ASX Listing Date –– Tuesday 6Tuesday 6thth

November November

Contact DetailsContact Details►► Mt Coolon OfficeMt Coolon Office

Lot 1 Mill StreetLot 1 Mill StreetMt Coolon, Qld, 4804Mt Coolon, Qld, 4804Phone 07 4983 5577Phone 07 4983 5577

►► Brisbane OfficeBrisbane OfficeLevel 4, 67 St PaulLevel 4, 67 St Paul’’s Terraces TerraceSpring Hill, Qld, 4004Spring Hill, Qld, 4004Phone 07 3831 4712Phone 07 3831 4712

►► Email: Email: [email protected]@mtcoolon.com►► Web: Web: www.mtcoolon.comwww.mtcoolon.com


Drummond Basin gold deposits - The AusIMM · PDF fileTechnical Meeting: 12 September 2007,...

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