Pasofino Gold Announces Feasibility Study Results for the Dugbe Gold Open Pit Project in Liberia

Date/time : 2022-06-13 08:17 AM
Symbol :

VEIN

Company : Pasofino Gold Limited
Price : 0.89
Market cap : 36,599,350
O/S : 41,122,865
Exchange :

TSXV

Industry :

Gold

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Pasofino Gold Announces Feasibility Study Results for the Dugbe Gold Open Pit Project in Liberia

Pre-Tax NPV5% of USD690 million, Pre-Tax IRR of 26.35% and AISC of USD1,005/oz
2.27Moz gold production over a 14-year mine life, producing 200,000 oz per annum in the first 5 years
Upon filing of the Feasibility Study on SEDAR Pasofino can deliver an Option Satisfaction Notice confirming that it has satisfied the requirements to earn its 49% interest in the project

Toronto, Ontario--(Newsfile Corp. - June 13, 2022) - Pasofino Gold Limited (TSXV: VEIN) (OTCQB: EFRGF) (FSE: N07) ("Pasofino" or the "Company") is pleased to announce the results of the Dugbe Project Feasibility Study (FS), which is located in Southern Liberia. The FS was prepared by the Company's lead engineers, DRA Global (South Africa), in accordance with Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").

As per NI 43-101 the Feasibility Study will be filed by Pasofino at www.sedar.com within 45 days of this news release. Subject to the filing by Pasofino of the Feasibility Study under Pasofino's profile at www.sedar.com and final administrative documentation, Hummingbird Resources Plc ("Hummingbird") has confirmed that the FS has been carried out to the agreed standards and will satisfy the technical requirements to allow Pasofino to earn its 49% economic interest in the Project (prior to the issuance of the Government of Liberia's 10% carried interest).

HIGHLIGHTS

  • Strong financial metrics:
  • Pre-tax NPV5% of USD690M (USD530M post-tax), 26.35% IRR (23.6% post-tax) at a base gold price of USD1,700/oz.
  • Fast capital payback of approximately 3.5 years from start of production:
  • Life of mine (LOM) All In Sustaining Cost (AISC) of USD1,005oz and USD29/t cash cost[1] .
  • Pre-production capital requirement of USD397M excluding owners' costs for a 5Mtpa processing plant.
  • Large Mineral Reserve with potential for expansion:
  • 2.27Moz gold produced over a 14-year LOM.
  • Average annual production of 200,000oz for the first 5 years.
  • 2.76Moz of Mineral Reserves.
  • Additional 67koz of Inferred Mineral Resources within the FS pit and immediate sidewalls which have not been included in the Mineral Reserves.
  • Simple project with economies of scale:
  • LOM strip ratio of 4.21:1 highlighted by a low 3.56:1 ratio in the first five years.
  • Simple (Gravity-CIL) process flow sheet which enhances project economics.
  • Low power costs of USD0.175/kWh, with opportunities for long-term savings with alternative renewable energy sources.

PASOFINO EARN-IN UPDATE

Subject to the filing by Pasofino of the FS under Pasofino's profile at www.sedar.com, and final administrative documentation, Hummingbird has confirmed that the FS has been carried out to the agreed standards and will satisfy the technical requirements to allow Pasofino to earn its 49% economic interest in the Project (prior to the issuance of the Government of Liberia's 10% carried interest). Further, both Pasofino and Hummingbird will have the right to exercise the option to consolidate ownership by converting Hummingbird's 51% ownership of the Project for a 51% shareholding in Pasofino, such that Pasofino would own 100% of the Project (prior to the government of Liberia's 10% carried interest), subject to the receipt of all required approvals including the TSX Venture Exchange.

ENVIRONMENT, SOCIAL AND GOVERNANCE

Environmental and social impact assessment (ESIA) process nearing completion with submission to the EPA expected in June 2022.

Build, own, operate and transfer (BOOT) liquified natural gas (LNG) thermal power and owner's photovoltaic (PV)/battery energy storage solution power supply mix. Substantial reduction in predicted greenhouse gas emissions, including approximately 25% fewer tonnes carbon dioxide equivalent (tCO2e) compared to using only a conventional HFO thermal power plant.

Multiple rounds of ESIA stakeholder engagement, along with ongoing relationship building by the Hummingbird Liberia (HBL) team, leading to general acceptance of the project whilst recognising high community expectations.

INFRUSTRUCTURE-READY PROJECT

  • Only 76km by road from the Port of Greenville to the Dugbe Project, which was repaired and improved as part of the FS process.
  • All build and operational cargo to be transported through the operating Port of Greenville.
  • Government supported berthing rights at the Port of Greenville for the Project.
  • Tuzon and Dugbe F deposits are 4km apart, serviced by a central processing plant.
  • LNG power generation hybridised with solar PV power generation to produce an estimated levelised cost of energy of USD 175.10/MWh.

PASOFINO CEO IAN STALKER COMMENTS

"I am extremely pleased with the outcome of the FS, particularly given the current environment of higher raw material, capital and energy costs as a result of inflation and other global dislocations. We are truly in the 'eye of the storm' on Capex estimations and hence it is reasonable to expect going forward to the FEED Phase that as world-wide business conditions settle down significant savings can be made against this Capital Estimate that will naturally enhance overall Project economics. The Dugbe Gold Project is now a significant, viable and economically robust gold project, with substantial exploration upside potential to improve upon the already large 4Moz Resources base.

LOM. metallurgical recovery for the Study has been set at 83%, leaving significant upside that can be brought to account as gold price rises and Capex cost associated with further process recovery steps reduces. It is worth noting a 2% increase in overall recovery enhances the Project NPV by up to USD52M.

Most importantly, Pasofino is in a position to pursue strategic alternatives to maximise shareholder value now that a key milestone of a detailed and economically robust FS is available."

HUMMINGBIRD RESOURCES PLC CEO DAN BETTS COMMENTS

"We are delighted to receive the results from the robust FS that has been led by Pasofino. The FS has been conducted to a high standard and has seen a complete remodelling of the Resource base, to now showcase a significant 2.76Moz Reserve base, long LOM of 14 years with upside given the material exploration potential available and a low AISC profile of USD1,005/oz to underpin a gold mine of material value. We look forward to now working with Pasofino to conduct a strategic review of our options to best realise the maximum value of Dugbe for all stakeholders."

The FS was prepared in accordance with Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").

The reader is advised that the FS summarised in this news release is intended to provide only a high-level review of the project potential and design options. The FS mine plan and economic model include numerous assumptions and the use of Measured and Indicated mineral resources only.

PROJECT DESCRIPTION AND LOCATION

The Project is located in south-eastern Liberia, approximately 76km east of Greenville and 240km south-east of the capital Monrovia-Figure 1. The combined Project covers an area of 2,559km2 and is defined within a single Mineral Development Agreement (MDA), effective in April 2019, valid for 25 years. The centre of the Project has an approximate latitude of 5.093º and longitude of -8.502º. The Tuzon and Dugbe F deposits are approximately 4km apart.

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Figure 1. Project location in Liberia

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The Project is located in an undeveloped area of Liberia, with one main access road, recently upgraded by the mine, and several villages. Most people in the area engage in artisanal and small-scale mining (ASM), hunting and/or small-scale farming. No utilities such as power and water are available.

The area is primarily rainforest over low rolling hills. The region is drained by three major rivers, the Dugbe River in the south-east, the Geebo River that runs between the two deposits, and the Nyenmon River in the west. Sapo National Park is approximately 15km north of the Project area with the Grand Kru - River Gee proposed Protected Area approximately 10-20km to the south-east.

A wide range of plant and animal species that are endemic and/or of conservation importance are present in the forests. The climate is typically tropical, with high humidity, daytime temperatures and rainfall. The nearest town of consequence is Greenville, the Sinoe County capital, which has a basic port and a palm oil processing centre, but no grid-scale utilities.

GEOLOGY AND MINERALISATION

The Project is located just south of the inferred boundary between the Archean Liberian Age Province (3000-2500 Ma) which covers the northern two-thirds of Liberia and the Paleo Proterozoic Birimian aged rocks (2166 ±66 Ma) to the south-east-Figure 2. The regional scale ENE-WSW oriented Dugbe Shear Zone bisects the Project area passing just south of the deposits. The dominant lithologies in the project area are granulite facies gneisses, migmatites and younger crosscutting granitoids and pegmatites.

Mineralogical investigations suggest that the Tuzon and Dugbe F deposits in their current form resulted from the deformation and metamorphism of a single pre-existing gold deposit. Gold pre-dates peak metamorphic conditions and therefore differs from most typical Birimian deposits where mineralisation is largely associated with late transcurrent shearing. The deposits may more appropriately be compared to granulite facies gold deposits, which are found in cratonic regions in Canada, Australia and China.

Tropical weathering has produced a lateritic profile of 1m to approximately 15m thick. The contact between weathered material and fresh rock is abrupt, the transitional layer being poorly developed generally less than 1m thick.

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Figure 2. The Dugbe Project and location of the Tuzon and Dugbe F deposits

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Tuzon Deposit

The Tuzon deposit has a length of 1,800m and is up to 375m wide with a general strike of 030°. The deposit outcrops at surface over most its strike length and the deepest part of the current Mineral Resource Estimate (MRE) is approximately 390m below surface.

The deposit is hosted by a gently south-west plunging refolded synform as shown in cross-section in Figure 3. Minor zones or selvages of mineralised gneiss are found within the core of the fold in some areas. The rock types and their sequence from footwall upwards are as follows.

  • Footwall gneiss: thick orthopyroxene gneiss (OXG) unit mostly without sulphide but with some non-gold bearing orthopyroxene-sulphide gneiss (OSG) layers and with lesser orthopyroxene-garnet gneiss (OGG).
  • Mineralised layer: The upper part of the above carries more sulphide and is referred to as orthopyroxene-sulphide gneiss (OSG) and is gold-mineralised.
  • Hanging wall gneiss: thick unmineralized interval of OGG, feldspar-biotite gneiss (FBG) and feldspar garnet gneiss (FGG).

The gold mineralized layer at Tuzon is variable in thickness from less than 10m to approximately 100m at the hinge of the main synform. It is comprised of an inner zone with higher grade (>= 0.8-1.0g/t Au) and an outer zone which grades between 0.4 and 0.8g/t Au, as is illustrated in Figure 3. Pegmatites are abundant and maybe concordant with the dominant foliation or cross-cutting.

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Figure 3. Cross-section through Tuzon looking north-east showing the block model and drillhole intersections. Cross-cutting pegmatites are shown

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Dugbe F Deposit

The Dugbe F deposit has a surface footprint of approximately 3,400 x 1,500m. The deposit is hosted by a single layer with overall gentle (5-20°) SE dip. The sequence of rocks is the same as Tuzon. The mineralized layer has a thickness ranging from less than 1m up to 20m, with an average of 10-12m. It is undulating and affected by relatively localised isoclinal or near-isoclinal recumbent folds which cause thickening and repetition of the mineralisation.

Gold Mineralisation

The gold mineralisation at both deposits is spatially associated with elevated levels of sulphide, principally pyrrhotite and arsenopyrite. Chalcopyrite may be observed. The sulphides are finely disseminated, but also occur as coarser angular blebs, thin folded monomineralic laminae and stringers typically parallel with the dominant S1/S2 foliation. Grade is generally higher at the centre of the mineralised layer. Gold mineralisation is thought to be controlled by the S1 or S2 foliation which was later affected by the D3 event.

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Figure 4. Typical orthopyroxene sulphide gneiss (OSG) host rock. All metre lengths in this tray contain between 2 and 3g/t Au

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The gold mineralogy consists of four main types: electrum (Au, Ag), gold amalgam (Au, Ag, Hg), native gold and maldonite (Au2Bi). Most of the gold is fine (<10μm with most <5μm) and is at external and internal grain boundaries or lying along alteration patches within the grains.

EXPLORATION DATA

A large amount of surface exploration was carried out by Hummingbird across the Project between 2006 and 2014 which led to the discovery of the Dugbe F and Tuzon deposits. From 2009 until 2014 exploration resource drilling was carried out at Dugbe F. After the discovery of Tuzon, exploration resource drilling was carried out there between April 2011 and January 2014. Table 1 and Table 2 summarises the drillholes used for the Dugbe F and Tuzon MRE, all of which were diamond core drillholes (DD).

Table 1. Summary of drilling completed at Tuzon

Drilling Phase DatesHolesTypeNO. holesMetres
1Aug 2011 - April 2012TDC001 - TDC072DD7115,480
2July 2012TDC073- TDC077DD51,253
3Jan 2013 - July 2013TDC078 - TDC140DD5915,186
4Aug 2013 - Jan 2014TDC141 - TDC157 DD172,253
5April 2020 - May 2020TDC174 - TDC191DD236,675
Total


17540,847

 

Notes:

1. TDC158 to TDC173 are at the tailings area, not within MRE area.
2. Phase 5 excludes the metres belonging to the upper part of five previous holes which were deepened.

Table 2. Summary of drilling completed at Dugbe F

Drilling PhaseDatesHolesTypeNO. HolesMetres
1Feb 2009 - May 2009DFDC001 - DFDC007DD7520
2Feb 2010 - Oct 2010DFDC008 - DFDC093DD8513,462
3Feb 2011 - Sep 2011DFDC094 - DFDC264DD16818,343
4Jun 2012 - Jul 2012DFDC265 - DFDC280DD161,135
5Feb 2014 - Mar2014DFDC281 - DFDC333DD531,200
6Jan 2021 - May 2021DFDC334 - DFDC415DD846,938
Total


41341,598

 

Notes:

1. Phase 5 metres excludes the metres belonging to the upper part of two previous holes which were deepened.

Core sampling was undertaken using a nominal 1 to 2m sampling interval. Between 2009 and 2014 samples were either prepared at ALS Monrovia and assayed at ALS Ireland or prepared and assayed at SGS Monrovia. For the drilling 2020 onwards, samples were initially shipped to ALS in Yamoussoukro in Ivory Coast then analysed at ALS Ouagadougou in Burkina Faso or ALS in Kumasi in Ghana. Later, a preparation laboratory in Monrovia, Liberia Geochemical Services (LGS), was used, from which the pulp samples were sent to ALS in Kumasi.

Quality Assurance and Quality Control (QA-QC) measures included the use of certified reference materials (CRMs), blanks, pulp and field duplicates, and umpire laboratory duplicates. One of each of these sample types was inserted into every 20 samples. Site visits have been made by SRK's Independent Qualified Persons. Martin Pittuck observed the drilling and sampling procedures used from 6 to 11 June 2013. SRK's Colin Rawbone visited the Project from 9 to 12 March 2021, to observe the drilling, logging and sampling procedures and to inspect the sample preparation laboratory in Monrovia.

MINERAL RESOURCE ESTIMATE FOR TUZON

SRK constructed wireframe geological models comprising a base of oxide surface, the unmineralised pegmatite bodies and the mineralisation domains. A low-grade (LG) mineralisation wireframe was made based on changes in elevated gold grade (typically coincident at >= 0.3 to 0.4g/t). SRK also modelled an internal high-grade (HG) domain within the LG mineralisation wireframe based on a threshold of >= 0.8 to 1.0g/t. This is illustrated in Figure 5 below. In addition to the main LG and the HG domain within it, models were created for four minor low-grade domains referred to as D, F, G and H.

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Figure 5. 3D view of the Tuzon geological wireframes, looking south-east (along the F3 axes)

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SRK created 2.0m composites of the drilling data and applied a 15g/t Au cap to the high-grade domain only. Snowdon Supervisor Software was used for geostatistical analysis. Experimental semi-variograms were reviewed for the mineralised domains in the along-strike, down-dip and across-strike orientations. Omni-directional structures were selected for fitting of the final variogram models for the HG and combined LG domain.

Based on 578 density samples for Tuzon, the following bulk densities were determined for use for the MRE: Mineralised gneiss: variable density, whereby the average of 2.78g/cm3 is factored (reduced) according to increasing pegmatite content. Pegmatite: Average density value of 2.62g/cm3. All oxide material: Average density value of 2.20g/cm3.

A block model was created based on UTM coordinates with dimensions of 10 x 10 x 10m (x, y and z). Sub-blocking was allowed along the boundaries. Ordinary Kriging (OK) was used for the grade interpolation of gold and search ellipses were orientated to follow the trend of the mineralisation domain using Leapfrog Geo (Leapfrog) software's Variable Orientation tool. Validation was by use of swath plots, visual inspection and comparative statistics. SRK classified the Tuzon Mineral Resource as:

Indicated where there is reasonable level of geological confidence in well-drilled areas of the model with 80m coverage or better.

Inferred in areas of lower geological confidence, where blocks are typically within 100m of sample data.

MINERAL RESOURCE ESTIMATE FOR DUGBE F

The procedures were mostly the same as those used for Tuzon. Only a single mineralised domain was created using an approximate 0.4g/t Au threshold. Being a relatively thin layer, lower grades were incorporated where required to ensure geological continuity of the layer. A single 5-10m thick late-stage dolerite dyke is present at Dugbe F passing the deposit from south-east to north-west.

Based on log histograms and visual-spatial review of the composite data, no high-grade capping was applied to composite samples. The block model was created with parent block size of 20 x 20 x 2 (x, y and z). Sub-blocking was allowed along the boundaries of the model. As at Tuzon, OK was used for the grade interpolation and Leapfrog's Variable Orientation tool. Figure 6 illustrates the block model for part of the deposit with a recumbent fold.

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Figure 6. Cross-section through one of the folds at Dugbe F showing the block model

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Within zones of tight re-folding separate fold limbs were assigned variable search ellipse orientations separately (where necessary), to ensure appropriate representation of search ellipses at fold hinges.

A total of some 2,491 density measurements were used to define host and waste densities as follows: Mineralised gneiss variable density, whereby the average of 2.78g/cm3 is factored (reduced) according to increasing pegmatite content. Pegmatite: Average density value of 2.64g/cm3. Dolerite dyke: Average density value of 2.91g/cm3. All oxide material: Average density value of 2.25g/cm3.

Mineral Resources were classified as follows and included a small area of Measured category in an area of close-spaced drilling. Measured: The block grades are based on multiple drillhole intercepts, and there is typically 25-50m drillhole coverage and good continuity shown by both assay grades and geological wireframes. Indicated Mineral Resources were where SRK has a reasonable level of geological confidence in well-drilled areas of the model (with 80m coverage or better) and typically up to 40m beyond these areas. Inferred was applied to areas with lower geological confidence, where blocks are typically within 100m of sample data.

MINERAL RESOURCE STATEMENT

Reasonable Prospects for Eventual Economic Extraction

For both deposits, reasonable prospects for eventual economic extraction were established based on open pit mining satisfied by means of a conceptual pit shell. All blocks outside the pits were excluded from the Mineral Resource Estimate. Key parameters used for the pit shells were: Gold price of USD1700/oz Au, overall slope angle of 55 degrees, dilution of 10%, recovery of 90%, mining costs of USD1.93 per tonne for waste and USD 2.24 and USD 2.84 per tonne for Tuzon and Dugbe F respectively.

Combined Mineral Resource Estimate Statement

The combined statement for both deposits is provided in Table 3 subdivided using a 0.5g/t Au grade category and reported above a lower 'marginal' cut-off grade. Within the 0.5 g/t Au grade category, the Measured and Indicated tonnage is 75.2Mt grading 1.37g/t Au containing 3.31Moz gold plus an Inferred tonnage of 14.9Mt at 1.23g/t Au containing 588 thousand ounces (koz) gold. Although not shown as a grade category in Table 3, above a 1.0g/t Au cut-off, the combined Measured and Indicated part of the MRE is 2.88 million ounces (Moz) of gold contained in 56.6 million tonnes (Mt) grading 1.58 grams per tonne (g/t), mostly hosted within the HG domain at Tuzon.

Table 3. Mineral Resource Estimate effective 17 November 2021

  
ClassificationTonnage (Mt)Grade (Au g/t)Contained Gold (koz)
Subtotal above 0.5 g/t Au Tuzon depositMeasured ---
Indicated53.21.402,396
Measured & Indicated53.21.402,396
Inferred7.51.13270
Dugbe F depositMeasured 1.21.4456
Indicated20.81.28860
Measured & Indicated22.11.29916
Inferred7.41.34317
SubtotalMeasured 1.21.4456
Indicated74.01.373,256
Measured & Indicated75.21.373,312
Inferred14.91.23588
Subtotal MRE for material between the marginal cut-off grade and 0.5 g/t AuTuzon depositMeasured ---
Indicated5.80.4381
Measured & Indicated5.80.4381
Inferred2.00.4429
Dugbe F depositMeasured ---
Indicated0.20.453
Measured & Indicated0.20.453
Inferred0.010.440.2
SubtotalMeasured ---
Indicated6.00.4384
Measured & Indicated6.00.4384
Inferred2.10.4429
Total MRE - the above subtotals combinedTuzon depositMeasured


Indicated59.01.312,477
Measured + Indicated59.01.312,477
Inferred9.50.98300
Dugbe F depositMeasured 1.21.4456
Indicated21.01.28863
Measured + Indicated22.21.29919
Inferred7.401.33318
TOTALMeasured 1.21.4456
Indicated80.01.303,340
Measured + Indicated81.21.303,396
Inferred16.91.13617

 

Notes:

1. The effective date of the Mineral Resource Estimate is 17 November 2021.
2. The marginal cut-off grades for Tuzon are 0.34g/t Au for fresh material and 0.39g/t Au for weathered material. The marginal cut-off grades for Dugbe F are 0.36g/t Au for fresh material and 0.40g/t Au for weathered material.
3. Rounding errors may be evident when combining totals in the table but are immaterial.
4. The Qualified Person is Mr. Martin Pittuck (CEng, MIMMM).
5. The Mineral Resource has been classified under the guidelines of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and undertaken within the context of the Canadian Securities Administrators' National Instrument 43-101 (NI 43-101).
6. Mineral Resources are not Mineral Reserves and have no demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing or other relevant issues.
7. Mineral Resource estimates are stated within conceptual pit shells that have been used to define Reasonable Prospects for Eventual Economic Extraction (RPEEE). The pit shells used the following main parameters: (i) Au price of US$1700/ounce; (ii) plant recovery of 90%; and (iii) mean specific gravity of 2.78t/m3 for mineralised gneiss and 2.64t/m-3 for pegmatite in fresh rock and 2.1t/m3 for oxide material.

OPPORTUNITIES TO EXPAND AND DISCOVER ADDITIONAL DEPOSITS

Both deposits extend beyond the MRE pit shell and there is opportunity to expand the high-grade zone at Tuzon beyond its current modelled extent -Figure 7. At Tuzon, the 'SE limb' warrants additional drilling to test the potential for extending this further. The last drillhole on this limb was TDC186 which intersected 17.3m with an average grade of 2.70g/t Au.

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Figure 7. 3D view of the Tuzon MRE block model showing the opportunity for expansion of the deposit to the south-west

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There is also potential to identify additional deposits. At the Dugbe Shear Zone (DSZ) target 6km south-west along strike from Tuzon -Figure 8, rock chip samples from outcrops returned up to 3.07g/t Au. These were collected as part of mapping following up on results from trench TZTR091, which returned an interval of 36m with an average grade of 0.60g/t Au. The next step at the DSZ target is to undertake drill testing.

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Figure 8. Map showing targets along strike from Tuzon

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MINERAL RESERVE ESTIMATE

The Mineral Reserve Estimate (MRev) has been prepared as part of the Dugbe FS completed by DRA, using the CIM definitions and guidelines adopted in May 2014 (CIM, 2014) and procedures for classifying the reported Mineral Reserves were undertaken within the context of the Canadian Securities Administrators' National Instrument 43-101 (NI 43-101)-Table 4.

The Mineral Reserves were derived from the MREs and the block models presented in the Mineral Resource section. The Mineral Reserves are based on the Measured and Indicated Mineral Resources that have been identified as being economically extractable and which incorporate mining losses and dilution. A summary of the Mineral Reserves by deposit is shown in the table below.

Though not considered for the Mineral Reserve Estimate there are Inferred Mineral Resources within the FS pit and in immediate proximity to it. This material comprises 1.7 Mt at an average grade of 1.25 g/t Au containing 67 koz and may be converted to Indicated Mineral Resources with a relatively small number of additional drillholes. If this is realised, they may then contribute additional material to future Mineral Reserve Estimates.

Table 4. Mineral Reserve Estimate effective 1 May 2022