Fergusson Island, PNG

Location of EL 2180 (Wapolu) and EL 1972 (Gameta)

The two properties have been explored for gold since the early 1980’s during which time a total of 195 reverse circulation (“RC”) holes (10,179m) and 33 diamond holes (4,181m) have been drilled at Gameta and  296 RC and air core holes (11,646m) and 97 diamond holes (6,401m) have been drilled at Wapolu  

On the strength of a feasibility study completed in 1993 on the Wapolu Deposit by Macmin / Union Resources based on their 1992 resource model, a mining operation was initiated at Wapolu in December 1995.  The two principal deposits at Wapolu consist wholly of oxide ore (Dagwalala), or predominantly of oxide ore with subordinate underlying primary ore (Didigayagaya).  Dagwalala is distinctive, as the host rock is interpreted to be a talus breccia thought to have formed through slippage on the Detachment Fault Zone.

The operation was based on an estimated mining reserve of 2.0 Mt at 2.4 g/t Au and was planned to process 500,000 tonnes per annum for a 4 year mine life.  Following crushing and grinding the process plant combined CIP (200,000 tpa) and NaCN vat leach (300,000 tpa) with overall gold recoveries predicted to be approximately 80%, resulting in roughly 30,000 ounces per year gold recovery.  Mining was abandoned in 1997 due to poor performance arising from lower processing throughput than budgeted (including unforseen bouldery and clayey feed problems), and lower feed head grade and lower gold recovery than was predicted .

Because it was recognised that aside from shallow oxidized material in which the gold is free-milling, much of the ore in the Project area is refractory.  Following the unsuccessful attempt to mine at Wapolu, the Canadian bacterial leaching company BacTech Mining Corporation was contracted to bench test bio-oxidation (flotation and bacterial leaching) to liberate the gold from the Project area’s common fine-grained sulphide prior to cyanidation.  The results were positive.

Assessments by CGN of mining at Fergusson Island indicates that both the Wapolu and Gameta ore bodies could be mined by selective open cut mining techniques.  Indications are that the ore is relatively soft and will require paddock blasting to loosen the material sufficiently for loading and hauling by typical excavator and truck operation.  

After a recent  review  of the Fergusson Island Project by CGN, the following key observations are made.
 

1. Fergusson Island mineral resources are mainly refractory, except for about one half of the Wapolu project.
2. A diamond drilling program at Gameta is needed to test the potential at depth for additional mineral resources, to extend and upgrade the categorisation of the existing JORC  Inferred Mineral Resource to a target of 400,000 to 500,000 contained gold ounces, and to provide information about the lithology, the characterisation and variability of mineralisation, about which little is recorded, and to provide Albion Process testwork samples from drillhole intercepts judged as representative of the project.
3. The Albion Process appears a worthwhile potential processing route for treating Fergusson Island sulphide flotation concentrates but it is not the only realistic option, and the likely tonnage scale of mining and mineral processing operations cannot yet be confidently indicated.  The tonnage scale of a potential future mineral processing plant will depend on the ultimate scale of mineral resources.  The Albion Process would be located outside Fergusson Island.  
4. The Albion Process appears an attractive option, justifying further investigation by way of testwork at the Core Resources laboratory in Brisbane.  This will require fresh, representative samples.  Relatively minor Gameta project testwork, while encouraging, was done in 2004 with 7 year old samples and was of a quite restricted nature
5. There appears to be potential for the sale of Gameta sulphide flotation concentrates to an offshore smelter/refinery .

Gameta Resource Estimate
In 2010 H&S Consultants developed a JORC-compliant Inferred Mineral Resources estimate for the Gameta Deposit that differs from their above 2005 estimate based on additional diamond drilling that extended mineralisation below the shallower RC holes, and also on the downward factoring of RC gold grades based on an element of uncertainty regarding the information on the RC drilling.  The Inferred resource using multiple indicator kriging and a 1.0 g/t Au cut-off grade was 5.1 Mt at 1.8 g/t Au for 295,000 ounces of gold.