KEFI Gold and Copper (LON:KEFI), the gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has presented the maiden Mineral Resource for the Hawiah Project, located in Saudi Arabia.
Highlights
· Maiden Hawiah Inferred Mineral Resource Estimate (“MRE”) of 19.3 million tonnes (“Mt”) at 0.9% copper, 0.8% zinc, 0.6 g/t gold and 10.3g/t silver
· Mineralisation remains open at depth
· High grade zones outside of current Mineral Resource, targeted in next drilling phase
· Internal Preliminary Economic Assessment targeted for September 2020
Harry Anagnostaras-Adams, Executive Chairman of KEFI Gold and Copper, commented:
“This maiden copper-zinc-gold-silver Mineral Resource is consistent with the guidance issued over the past few months and demonstrates the significant scale and quality of the Hawiah deposit.
“Despite a number of challenges brought on by the COVID-19 pandemic, our team has been able to deliver this initial resource less than a year after drilling commenced at Hawiah.
“The Hawiah deposit remains open and further drilling has the potential to result in a larger Mineral Resource in due course. We are particularly keen to test for depth extensions of the identified higher-grade zones.
“We look forward to the outcomes of the internal PEA, expected to be completed in September 2020. Our team is excited to be progressing Hawiah towards potential development and especially when the prices for copper, zinc, gold and silver are all increasing strongly.”
KEFI’s operations in Saudi Arabia are conducted through its 34% owned joint venture company, Gold and Minerals Co. Limited (“G&M”), where KEFI is the operating partner.
G&M appointed SRK Consulting (UK) Ltd (“SRK”) as the independent Consultants and Competent Person for the preparation of the MRE and to undertake an internal PEA study for Hawiah. These studies will facilitate the planning of further exploration drilling and potential development activities at Hawiah.
The maiden MRE for Hawiah totals 19.3Mt at 0.9% copper, 0.8% zinc, 0.6g/t gold and 10.3g/t silver as summarised in the table below, all reported in the Inferred category.
| Grade | Metal Content | |||||||||
| Mineral Resource | Material Type | |||||||||
| Category | Tonnes (Mt) | Cu | Zn | Au (g/t) | Ag (g/t) | Cu (kt) | Zn (kt) | Au (koz) | Ag (koz) | |
| (%) | (%) | |||||||||
| Inferred | Oxide, Open Pit | 0.1 | 0.1 | 0.03 | 1.7 | 3.9 | 0.1 | 0.04 | 7 | 16 |
| Transition, Underground | 2 | 1.1 | 0.8 | 0.7 | 12 | 21 | 16 | 45 | 763 | |
| Fresh, Underground | 17.2 | 0.9 | 0.8 | 0.5 | 10.1 | 147 | 141 | 297 | 5,595 | |
| Total | 19.3 | 0.9 | 0.8 | 0.6 | 10.3 | 168 | 157 | 349 | 6,373 |
Notes:
(1) Mineral Resources are not Ore Reserves and do not have demonstrated economic viability.
(2) All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, SRK does not consider them to be material.
(3) G&M is a joint venture partnership between ARTAR and KEFI. The Exploration Licence is held by ARTAR, under the terms of the G&M Joint Venture agreement. ARTAR currently has a 66% share of the Project, with the remainder (34%) owned by KEFI, where KEFI is the operating partner. The MRE is reported on a 100% basis.
(4) The standard adopted in respect of the reporting of Mineral Resources for the Project is in accordance with the guidelines of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).
(5) SRK reasonably expects portions of the Hawiah deposit to be amenable to underground and open pit mining methods:
a. Open pit Mineral Resources are constrained to the oxide domain, within a Whittle optimised pit and reported based on an Resource Net Smelter Return (“NSR”) cut-off which considers processing costs and G&A costs totalling USD12/t for oxide. Pit slope angles within the oxide were defined from geotechnical observations and set to 40°.
b. Underground Mineral Resources are constrained to the transition and fresh domains, reported from within an underground reporting volume derived from underground stope optimisation wireframes (with 2m minimum mining width, and appropriate stope dimensions) and a NSR cut-off which considers mining, processing and G&A costs and 15% total dilution, totalling USD53/t for both transition and fresh material. Oxide material is currently excluded from the underground Mineral Resource reporting due to it being close to surface, its highly-weathered nature and associated uncertainty with respect to stability during underground mining.
(6) The Resource NSR cut-off calculation has been determined based on metal price forecasts*, metallurgical recovery assumptions ** based on similar deposit types located within Saudi Arabia and SRK’s experience, mining costs, processing costs, general and administrative (G&A) costs, and other NSR factors. The final Resource NSR calculation is based on average assumptions for the deposit and applied using the following formulae:
a. Resource NSR (USD) for oxide material = (CU_PCT*0)+(ZN_PCT*0)+(AU_PPM*39.5741)+(AG_PPM*0.1157)
b. Resource NSR (USD) for transition and fresh material = (CU_PCT*61.2828)+(ZN_PCT*17.5982)+(AU_PPM*34.9100)+(AG_PPM*0.5058)
* Metal price forecasts (with ~30% uplift for assessing Mineral Resources) considered for the calculation of Resource NSR (USD): Gold (USD1,650/oz), Silver (USD24.8/oz), Copper (USD8,450/t), Zinc (USD3,000/t).
** Resource NSR cut-off calculations assume average metallurgical recoveries of Copper (0%), Zinc (0%), Gold (75%), Silver (15%) for oxide, and Copper (87%), Zinc (85%), Gold (69%), Silver (69%) for transition and fresh (sulphide) material.
(7) No metallurgical testwork has been completed for the Hawiah Project; however, metallurgical parameters have been approximated based on geological observations and petrographic assessment and similar deposit types/styles located within Saudi Arabia and SRK’s experience. Once testwork is completed, if the metallurgical recovery results change significantly from the current approximated values, this would impact the parameters used to report the Mineral Resource, which, in turn, could also impact the tonnages and grades considered to have ‘reasonable prospects for eventual economic extraction’ for reporting in the Mineral Resource Statement.
The MRE is based on 12,027 metres of diamond drilling completed since September 2019 and is reported in accordance with the Australasian Code for the Reporting of Exploration Targets, Mineral Resources and Ore Reserves, The JORC Code (2012).
Trenching, supported by surface diamond drilling have consistently intersected copper-zinc-gold-silver mineralisation contained within massive sulphides over 4 kilometres of strike length. Three distinct zones, or lodes of massive sulphides have been defined to date and are the focus of the MRE.
The Hawiah deposit has only been drill tested to a vertical depth of 350 metres below surface and it remains open at depth. Elevated copper and gold grades have been intersected at depth.
An internal PEA based on this MRE as guidance for further drilling and project development is planned to be completed in September 2020.
