T’Boli Gold-Silver Mine
Cadan’s major gold-silver project is its T’Boli gold-silver mine. This is a typical epithermal, high-grade, narrow vein system with regional potential for 2-5M oz of gold and 8-25M oz of silver.
On May 11, 2010, the Company released an updated NI 43-101 Technical Report prepared by Mr. Kevin Shultz FAusIMM (CP) a consulting mining engineer and geologist and Fellow of the Australasian Institute of Mining & Metallurgy (Chartered Professional) with more than 35 years experience in Australia, Western USA, Canada, Papua New Guinea Tanzania and other African countries.
The Technical Report upgraded the historic inferred mineral resource to both Indicated and Inferred categories for gold only and outlined the potential significant additional gold-silver mineralization.
Highlights of the updated NI 43-101 compliant resource:
- 56% increase in gold grade
- Indicated Category: 886,000t @ 8.6 g/t gold for some 240,000 oz
- Inferred Category: 434,000t @ 8.6 g/t gold for some 120,000 oz
- Regional “conceptual and order of magnitude” regional potential for 2-5Moz of gold and 8-25M oz of silver.
Gold Resource Table
| INDICATED* | INFERRED* | |||||
|---|---|---|---|---|---|---|
| Vein | Tonnes1 | g/t 2 | Kg | Tonnes3 | g/t4 | kg |
| South | 343,700 | 9.4 | 3,230 | 170,000 | 9.4 | 1,600 |
| North-A | 371,100 | 7.1 | 2,630 | 189,000 | 7.0 | 1,320 |
| North-B | 151,200 | 10.5 | 1,590 | 75,000 | 10.5 | 790 |
| Totals5 | 866,0005 | 8.6 | 7,4505 | 434,0005 | 8.5 | 3,7105 |
*Estimates are as of November 28, 2009 and are for gold only. The NI 43-101 Inferred Resource reported by Cooper (2002) established silver/gold ratios ranging from 2:1 to 6:1 and averaging approximately 4:1.
Notes:
- Estimated from polygons constructed on longitudinal sections around the veins in (a) underground tunnel workings surveyed and sampled by Eastern, (b) Cadan’s current underground workings and (c) diamond drill intersections – with nominal 1m vein widths except where drill intersections indicate otherwise, and assumed SG of 2.5.
- Assignment of grades to polygons based on perusal of assay results for (a) tunnel samples (diluted to 1m width with the wall rock assigned a grade of 0.5g/t Au and 40g/t Au top cut), (b) Cadan’s sampling results from current underground workings and (c) vein intersection assay results in drill holes within the polygons – acceptable practice in operating narrow vein gold mines.
- Projection of “Indicated” polygons nominally 50m down dip and along strike into areas with obvious potential but no data.
- Grades assigned at the average grade of polygons making up the “Data Supported” estimates.
- Includes 25% mining dilution at 0.5g/t Au.
Significant Regional Potential
The surrounding area including Lam Asam, Lamtangan, Tinago are targets to be assessed for additional resources in due course, as is the depth potential of the T’Boli North and South vein sets. Based on information collected by Cadan over a period of 10 years, including geophysical, geochemical, underground geological mapping, surface mapping and comparison with other classic epithermal quartz carbonate systems in the region, the “conceptual or order of magnitude” potential tonnage range of some 11Mt to 27Mt, with a potential grade range from 5.5 g/t gold to 8.6 g/t gold and 21 g/t silver and 30 g/t silver giving a potential metal content between 2-5 m oz of gold and 8-25 m oz silver.
The potential quantity and grade should be considered as conceptual in nature, and there has been insufficient exploration to define a mineral resource in accordance with National Instrument 43-101. It is uncertain whether further exploration will result in the regional targets being delineated as a mineral resource.
December 23 2002 NI 43-101
A NI 43-101 Technical Report dated December 23 2002 gave the Tboli Gold Silver Mine an inferred mineral resource of 2.4Mt @ 5.5 g/t gold and 21 g/t silver for some 420,000 ounces of gold and 1.6M ounces of silver.
This National Instrument, 43-101, Compliant Inferred Resource stems from the JORC Inferred Resource that included 23 diamond drill holes totaling 7,057 meters and 131 adits that were mapped, surveyed and sampled.
Approval and Permits
The T’Boli Gold-Silver Project lies within the approved Mineral Production Sharing Agreement (“MPSA”) 090-97-XI, covering some 84.20 ha, that was granted November 1997. The company’s exploration / development is approved and its processing plant is fully permitted.
Trial Test Processing
In March 2010 Cadan commenced a trial test program with its recently constructed mill and plant. The first phase used lower grade material and was completed in late April. Complete results including consumable consumption and gold and silver recoveries are being computed. The next planned phase is to progressively increase the grade from exploration / development operations to confirm actual gold and silver grade in line with last test results of 11.06 g/t gold and 38 g/t silver. The mineralized material wil be stock piled until sufficient tones are available.
Construction of the crushing circuit is complete. Test and pre-commissioning is underway. Once commissioned for ongoing commercial production it will have capacity to achieve a targeted 250–300 tonnes per day.
Current internal projected cost of production ranges between US$300 and US$350 an ounce based on existing costs, excluding amortization, for labor, explosives, electricity, fuel, equipment, consumables and maintenance. Cadan cautions that the above calculations are subject to the commencement of full commercial production, which remains subject to various pre-conditions being met and accordingly Cadan cannot be certain of the timing of commencement, or the results, of commercial production. In addition, costs are based on current and known conditions and may not reflect actual costs.
Underground exploration and development of three known vein systems continues, with an exploration-production decline now having reached North Vein B, North Vein A and now advancing towards the gold-rich South Vein.
Also regional exploration continues of known gold-silver areas including North veins C, D, E and F, Lam Asam, Tinago and Lamtangan.
Exploration also occurs on the T’Boli copper soil and coincident magnetic anomaly that covers an area of 1,000m x 1000m, located some 1.7km WNW of the defined gold-silver resource. An earlier geophysical survey returned low chargeability in the area which may indicate a deep seated target. A future helicopter-borne geophysical survey may provide a more precise location of the target.
The table below highlights results from ongoing underground vein sampling over veins, ranging in widths from 40cm to 150 cm, all located within an area of the Northern Vein System, now identified for near term bulk testing to determine gold and silver grades as part of a possible larger underground resource.
| Sample No. | Gold g/t | Silver g/t | Width cm |
|---|---|---|---|
| TMC12 | 5.82 | 32.86 | 80 |
| TMC13 | 9.77 | 10.69 | 50 |
| TMC15 | 9.85 | 13.92 | 40 |
| TMC16 | 8.47 | 25.93 | 60 |
| TMC17 | 61.84 | 35.16 | 40 |
| TMC18 | 17.30 | 190.14 | 60 |
| TMC19 | 10.29 | 159.38 | 40 |
| TMC20 | 32.44 | 182.45 | 60 |
| TMC21 | 58.04 | 159.38 | 60 |
Past Drill Intersections
Some highlights of past drill intersections.
| DDH | Meter | Au g/t | Includes Au / g/t | Meter |
|---|---|---|---|---|
| 22 | 4 | 5.3 | 17.9 | 1 |
| 18 | 8 | 4.5 | 10.5 | 3 |
| 1 | 16 | 2.4 | 7.1 | 2 |
| 8 | 12 | 7.1 | 18.7 | 4 |
| 3 | 4 | 13.4 | ||
| 3 | 8 | 15.2 | ||
| 6 | 10 | 3.6 | 6 | 5 |
Background
The T’Boli project area is underlain by dacitic to andesitic, locally basaltic, agglomerates, tuffs and flows of the Mt. Parker volcano and intruded by high level dacite porphyry of the Malibato Intrusive.
The main focus of exploration interest is the structural corridor defined by the northwesterly trending Kematu and Desawu Faults. This fault corridor marks the southern margin of the Malibato Intrusive and is made up of a complex of high level dacite porphyry and tuffaceous material.
A system of en echelon structural zones, striking east-west, cuts through both the porphyry and tuffs. These structures appear to be confined by the northwest trending Kematu and Desawu Faults and may represent the main pathways for upward movement of fluids in the late stages of the evolution of the volcanic system.
Two major zones of alteration have been identified so far: the T’Boli Zone, which runs through the main workings from east to west, and the Lam Asam Zone, which passes through Blangas to the Lam Asam area of workings.
The T’Boli Zone is centered on a high grade epithermal stockwork vein system and is the subject containing the resource. At least three main high grade veins are located in the two stockwork zones (South Vein Set and North Vein Set), each with their associated mineralized alteration envelope.
T’Boli is an epithermal vein and stockwork system carrying gold and silver and is thought to be of the carbonate base metal hot spring style as defined by Leach and Corbett. In carbonate base metal hot spring style systems, gold is associated with base metal introduction and is silver rich. These systems are regarded as developing at intermediate levels between porphyry and shallow epithermal systems. Carbonate base metal hot spring style systems are known throughout the SW Pacific and this class of mineralization includes Acupan, Porgera, Wau, Kelian, Mt Kare and Gold Ridge, which are all multi-million ounce deposits.
A structural corridor between the Kematu and Desawu faults is the main focus of exploration interest where two main zones of alteration and gold mineralization have been identified, referred to as the T’Boli Zone and Lam Asam Zone. The mineralized zones are hosted in a complex of high level dacite porphyry and tuffaceous material. To date, detailed exploration has been confined to the T’Boli zone.
The South Vein Set is hosted in tuff, close to the contact with the porphyry, in an area of more intense alteration associated with disseminated pyrite. Veining is complex and gold is also disseminated in the host rocks. Small scale mining activity has been concentrated in rich veins along this diffuse contact between dacite porphyry and the tuff. The vein set can be traced over a strike length of some 700 meters, with widths of up to 30 meters. The North Vein Set bifurcates into North A and North B veins, and is hosted in competent altered dacite porphyry that is less altered and pyrite mineralized than the South Vein Set. Gold is commonly contained in discrete veins a few cm to 50cm thick. Intervening rock is generally weakly mineralized.
The North A vein set is approx 10 metres wide and has been traced over a strike length of 400m. The North B set has been traced for 800m at and average width of 30m.
Gold is associated with silver, including silver tellurides. Silver varies in its ratio to gold according to several factors, and is of economic interest.
Four other vein sets have been identified to the north, namely North Veins C, D, E & F.