Study produces three-fold increase in gold resource estimate for Nevada project

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20 Dec 2016

Aorere Resources’ proposed Nevada gold investment is showing three times the gold resources previously estimated, following updated resource modelling.

The company announced today a significant increase in the Mineral Resource estimate to 1,069,000 ounces at a gold grade of 6.3 grams per tonne on a combined indicated and inferred basis.

The company has also secured an extension for the exclusive purchase agreement until the end of January 2017.

“Aorere’s investment in a detailed technical assessment and new resource modelling has demonstrated that this project has the potential to become a significant mine in resource-rich, mine-friendly Nevada, USA", Chief Executive Chris Castle said.

In a filing to NZX Aorere has announced that:

• Updated resource modelling, incorporating diamond drilling at depth, has increased the JORC 2012 compliant Mineral Resources to 1,069,000 ounces of gold historical resources from 320,000 ounces in the previous, NI 43-101 compliant technical report.
• Mineralization is contained in steeply dipping quartz-sulphide shears from surface.
• Multiple targets have been identified along extensions and potential new shears show scope for increasing the resources significantly.
• Aorere has extended its right to purchase the Fondaway Canyon Gold Project and ten other exploration assets in the AIM package until 30 January 2017.

Aorere, (NZX AOR), a New Zealand-based mineral/oil and gas explorer, has carried out a Mineral Resource estimation for its Fondaway Project, and reports 2.05M tonnes at an average grade of 6.18 g/t gold (0.18 oz/t), containing 409,000 ounces gold in the Indicated category, and 3.2M tonnes at an average grade of 6.4 g/t gold (0.19 oz/t) containing 660,000 ounces of gold in the Inferred category.

These Mineral Resource estimates are classified and reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The Joint Ore Reserves Committee Code — JORC 2012 Edition). A summary is contained in Table A, with details in Table B and Appendix 1, sections 1, 2, and 3.

The Fondaway Canyon mineralization is contained in a series of 12 steeply dipping en-echelon quartz-sulphide shears outcropping at surface and extending laterally over 1200m (4000ft), with drill-proven depth extensions to > 400m (1300ft). The bulk of the resources are hosted by the Paperweight, Half-moon and Colorado zones, with the remainder in parallel veins or splays of the major vein/shears identified.

The current Mineral Resource estimate relates only to the eastern half of the 4000m (13,000ft) east-west striking mineralized system, with significant exploration potential remaining both in the eastern section, and relatively untested western zone.

The Mineral Resource estimates were undertaken by Reno-based independent consultants Techbase International, Ltd (Michael Norred) with geological input from NZ based Wairaka Rock Services Limited (Simon Henderson).

In May 2016, NGL, a wholly owned subsidiary of Aorere, entered into a conditional term sheet, securing the exclusive right to acquire American Innovative Minerals (AIM) in Nevada, USA, for the agreed purchase price of US$2 million. AIM holds the rights to the Fondaway Canyon Gold Project, as well as a number of other advanced and early-stage mining and exploration projects.

Under the updated term sheet, NGL has secured exclusivity to acquire AIM until 30 January 2017. Further details regarding AIM and the Fondaway Project were released to market on 16 and 26 May 2016 and are available on Aorere’s website: www.aorereresources.co.nz.

Chris Castle
Chief Executive Officer
Tel. 64 (021) 558 185
chris@widespread.co.nz

Additional information as required by ASX Listing Rules para 5.8 when reporting Mineral Resources (Also refer to Appendix 1, Sections 1, 2 and 3):

Table A: Fondaway Canyon December 2016 Mineral Resources Estimate

Resource Category	Tonnes(1) (t)	Grade, (g/t) Au	Ounces(2), (oz) Au	Type
Indicated	2,050,000	6.18	409,000	UG/Sulphide
Inferred	3,200,000	6.4	660,000	UG/Sulphide
1 Resource based on cut-off of 1.8m horizontal width >= 3.43 g/t
2 Rounding differences may occur

Notes:

1. Mineral Resources reported on a dry, in-situ basis.
2. The Statement of Estimates of Mineral Resources has been compiled by Mr. Michael Norred, who is a full-time employee of Techbase International, and a Registered Member of the SME.  Mr. Norred has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration, and to the activity that he has undertaken, to qualify as a Competent Person as defined in the JORC Code (2012).
3. All Mineral Resources figures reported in the table above represent estimates at 12th December, 2016.  Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape, and continuity of the occurrence, and on the available sampling results.  The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate.  Rounding may cause computational discrepancies.
4. Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The Joint Ore Reserves Committee Code – JORC 2012 Edition).
5. Reporting cut-off grade of 3.43 g/t (0.100 oz/t) selected based on capital and operating costs estimated for the April, 2016 “Fondaway Canyon Project Scoping Report”.  A break-even cut-off grade was estimated to be approximately 3.43 g/t (0.100 oz/t), based on projects of similar size, a trailing average price of $1,227, a metallurgical recovery of 90%, and an underground mining method suitable for steeply-dipping veins.

Geology and Geological Interpretation

Gold Mineralization is localised along a 3,200m (2mile) east-northeast trending and steeply south- dipping structures developed within fine grained Triassic carbonaceous siliciclastic sedimentary rocks and Jurassic limestone, cut by Tertiary (Eocene) dykes.

The vertical extent of the gold mineralization is greater than 450m (1,500 feet) based on diamond drilling (2002) and the most persistent vein strike length is 1,100m (3,700 feet) on the Paperweight – Hamburger Hill Zone. Vein width is commonly 1.5m -6m (5 - 20 feet) wide.

Gold is spatially associated with quartz veining and breccia cement structures or shears, and occurs abundantly as inclusions and intergrowths with and within Fe-sulphide, and quartz stockwork fracture filling within the wall-rock shale and siltstone.

Sampling and Sub-sampling Techniques

For each of the drill programs, the RC samples were collected at the drill rigs, using industry-standard practices, under the supervision of the mining company geologists.  Reverse circulation samples were split with a Jones splitter when dry and a rotary splitter when wet.  Duplicate RC samples were taken from the rotary splitter at the drill rig.

The core samples were split at important geological contacts, and into equal, typically 1.5m (5 ft) lengths within the geology, under the supervision of the mining company geologists.  Competent core was sawn in half for analysis, and core that was broken into rubble had approximately half selected by the geologist.  In either case, the remainder of the core was left in labeled core boxes.

The samples were prepared and assayed by reputable, certified laboratories.  The labs included American Assay (Reno, NV), Chemex Labs (Sparks, NV), Cone Geochemical (Lakewood, CO), GD Resources (Sparks, NV), Geochemical Services (Reno, NV), and Shasta Analytical (Redding, CA). 

Samples were dried, then crushed (typically >85% 6-mesh), then Jones riffle-split to obtain ½ to 1 pound splits, with the remainder of the crushed material saved as a coarse reject. The splits were then ring and puck pulverized to 120 to 150 mesh, and stored in a labeled packet.

Assays were all of 30 gram (one assay ton) splits, fire-assayed for total gold, with an A.A. or gravimetric finish.  The remainder of the pulverized pulp was saved for check assays.

Drilling Techniques

All of the drilling considered for this report was historic.  Drilling records from previous operators indicate some 728 holes have been drilled at Fondaway Canyon, including Core, Reverse circulation (RC), and air track holes, totaling over 67,600m (222,000 ft) according to some previous reports.

The air track holes were deemed to be unreliable for estimation, and some holes were drilled away from Fondaway Canyon, or were drilled for other purposes.  In addition, some records have not yet been found in the historic files (to date, all of the “missing” holes have been determined to have been located well away from the area modeled for this Resource estimate.  In all, 591 holes were validated for Resource estimation, with coordinate information and downhole assays.  These included 8411m (27,595 ft) of core drilling in 49 holes and 40,675m (133,448 ft) of RC drilling in 551 holes.   

The drilling contractors used by previous operators include Boyles Brothers, Coates, Drift, Eklund, Ponderosa, and Rough Country.   The authors’ observation of the diamond core as viewed and as documented show good recovery in the mineralised zone. The reverse circulation drilling completed shows no record of drilling problems in the mineralised zones.

Mineral Resource Classification Criteria

The Mineral Resources were classified as Indicated and Inferred Mineral Resource based on data quality, sample spacing, and lode continuity. The Indicated Mineral Resource was estimated within a 30.5m (100 ft) radius of influence from the vein intercepts, on a plane parallel to the strike of the vein.  The Inferred Mineral Resource was estimated for a region greater than the 30.5m (100 ft) radius, and within a 91.4m (300 ft) radius of influence from the vein intercepts, for veins that showed good continuity.  No Inferred Mineral Resources were estimated for some of the minor veins that had fewer, more isolated intercepts.

Sample Analysis Method

The samples were prepared and assayed by reputable, certified laboratories.  The labs included American Assay (Reno, NV), Chemex Labs (Sparks, NV), Cone Geochemical (Lakewood, CO), GD Resources (Sparks, NV), Geochemical Services (Reno, NV), and Shasta Analytical (Redding, CA).  Assays were all of 30 gram (one assay ton) samples, fire-assayed for total gold, with an A.A. or gravimetric finish.  

Check assays and duplicate/resplit assays were run systematically, with check assays on approximately 5% of the total assays, including approximately 23% of the assays over 3.43 g/t (0.100 oz/t).  Duplicate assays were run on slightly less than 1% of the total assays, including approximately 14% of the assays over 3.43 g/t (0.100 oz/t).  Consistency was good for the check assays and duplicates, with correlations greater than 98% in each case.

Estimation Methodology

The Mineral Resource was estimated for each vein using polygonal estimation on drill intercepts projected onto a vertical long-section parallel to the average strike direction of that vein.   Techbase Version 2015 software was used to perform the estimation.  A 30.5m (100 ft) radius was chosen for the Indicated Resources, with the radius expanded to 91.4m (300 ft) for the Inferred Resources.  The polygons were truncated at faults known to limit the extent of the mineralization. 

The area of each polygon was multiplied by the horizontal thickness of the drill intercept, and then by density to get tonnes.  The gold grade for each polygon was the length-weighted average of the drill hole assays in the intercept.

The polygonal estimation technique is the same method used in the previous, NI 43-101 compliant technical report (Strachan, 2003).  The significant differences arise from the number of drill holes used, including deeper core drilling from 2002, and the hand-drawn polygons used previously vs the computer-generated polygons used for this estimate.

Cut-off Grades

The Mineral Resources are reported at a cut-off of 3.43 g/t (0.100 oz/t), over a minimum horizontal width of 1.8m (6 ft), based on capital and operating costs estimated for the April, 2016 “Fondaway Canyon Project Scoping Report”. A break-even cut-off grade was estimated to be approximately 3.43 g/t (0.100 oz/t), based on projects of similar size, a trailing average price of $1,227, a metallurgical recovery of 90%, and an underground mining method suitable for steeply-dipping veins.

Mining and Metallurgical Methods and Parameters

At this stage, a specific mining method has not been selected, but a minimum horizontal with of 1.8m (6 ft) was considered reasonable for an underground mining operation designed to produce approximately 1000 tonnes per day. Narrower vein widths were increased to 1.8m, using adjacent assays for the diluting grade. For the in-situ Resource estimation, no assumptions were made regarding mining losses or dilution.

No specific processing method or process flowsheet has been selected for the Fondaway Canyon project. An overall recovery factor of 90% was assumed to be reasonable for estimated a break-even cut-off grade, considering historic metallurgical testing with recoveries up to 86 to 95% in one series of tests, and combined total recoveries over 94% in another series.

Environmental Studies, Permitting and Social or Community Impact

Drilling and bulk sampling programs that create surface disturbance of less than five acres are “Notice level” activities with Bureau of Land and Mining. The two BLM Notices in the files show these permits can be obtained at Fondaway in a reasonable timeframe.

Nevada has an orderly and well-defined permitting process in cooperation with the Federal Government. These range from a Special Use Permit at the County level to an Environmental Assessment (EA) or Environmental Impact Statement (EIS) at the Federal level. There are no known barriers to these permits at Fondaway Canyon.

Fondaway Canyon Project holds permits to appropriate water from the Nevada Division of Water Resources, Permit No. 52442 & Permit No. 52786.

The Stillwater Range Wilderness Study Area (WSA) surrounds the Fondaway Canyon project on three sides. The EIS prepared by the BLM in 1987 recommended the entire WSA as “nonsuitable for wilderness designation”. The key reasons for this being significant mineral and energy potential over the majority of the WSA, and that the WSA does not contain features, such as vegetation, scenery, wildlife, geology and historic features significant enough to balance such a loss of opportunities and warrant its designation as wilderness.

Nevada is a major mining district in USA, and the fifth largest gold producer in the world based on annual production (Ressell 2015). The Project benefits from excellent regional infrastructure including good quality bituminised and non-bituminised roads, easy access to water, a nearby regional town (Fallon), and access to mining equipment, assay and metallurgical laboratories, and experienced mining personnel.

References

All references to Mineral Resources Estimates pertaining to this current media release dated 20 December 2016 are defined based on recently completed studies.

Fondaway Canyon is an early‐stage exploration project and, except for historical estimates noted in the Report (as defined below), the Mineral Resource estimates are as defined by JORC 2012 Code.

NI 43‐101 technical report prepared for a previous operator entitled, "Proposals to Upgrade South Pit, Deep Dive, Half Moon, Paperweight, and Hamburger Hill to a Measured Gold Resource, Fondaway Canyon, Churchill County, Nevada (Amended)”; prepared by Strachan, D. CPG; September 2003; was prepared forRoyal Standard Minerals Inc. As at the date of the Report, Mr. Strachan was a “Qualified Person” as defined by NI 43‐101.

Economic estimates reported previously are based on “Fondaway Canyon Project Scoping Report, Churchill County, Nevada, USA”; prepared for Aorere Resources, Limited, Wellington, New Zealand April 19, 2016 by: Michael Norred, President of Techbase International, Ltd. P.O. Pox 18820; Reno, NV 89511. As at the date of the Report, Mr. Norred was a “Qualified Person” as defined by NI 43‐101.

About Aorere

Aorere Resources Limited (NZX AOR) invests in selected early stage minerals, and oil and gas projects, building shareholder value as projects advance. Aorere has a track record of seeding and developing mineral projects such as Ban Phuc Nickel Mine (AMR), and Chatham Rock Phosphate (CRP). Chatham Rock Phosphate with mining partner Boskalis has a granted mining permit off the Chatham Rise east of central New Zealand, and is in the process of re-applying for resource consents to operate in this marine environment.

Table B: Fondaway Canyon December 2016 Mineral Resources Estimate by Zone

Indicated Resources			Inferred Resources
Zone	Tonnes1 (t)	Grade (g/t) Au	Ounces2 (oz) Au	Tonnes1 (t)	Grade (g/t) Au	Ounces2 (oz) Au
Half Moon	423,000	6.37	86,800	580,000	6.4	119,000
Hanging Wall	43,000	5.35	7,300
Sub-total	466,000	6.28	94,100	580,000	6.4	119,000
Paperweight	598,000	6.14	118,100	990,000	6.1	196,000
Paperweight FW	138,000	6.58	29,200
White Coat	96,000	5.51	17,000	300,000	5.5	53,000
Bellview	107,000	5.42	18,700	150,000	5.4	26,000
W Paperweight	118,000	6.97	26,600	230,000	7	51,000
Sub-total	1,057,000	6.16	209,600	1,670,000	6.1	326,000
Colorado	207,000	7.63	50,800	450,000	7.6	109,000
Colorado FW	49,000	4.57	7,200
Colorado West	101,000	4.41	14,400
Sub-total	357,000	6.3	72,400	450,000	7.6	109,000
Silicon Ridge	51,000	3.83	6,300	90,000	3.8	11,000
Hamburger Hill	123,000	6.6	26,100	440,000	6.6	93,000
Sub-total	174,000	5.79	32,400	530,000	6.1	104,000
Total Resource	2,050,000	6.18	409,000	3,200,000	6.4	660,000
1 Resource based on cut-off of 1.8m horizontal width >= 3.43 g/t 2 Rounding differences may occur

 Notes:

1. Mineral Resources reported on a dry, in-situ basis.
2. The Statement of Estimates of Mineral Resources has been compiled by Mr. Michael Norred, who is a full-time employee of Techbase International, and a Registered Member of the SME. Mr. Norred has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration, and to the activity that he has undertaken, to qualify as a Competent Person as defined in the JORC Code (2012).
3. All Mineral Resources figures reported in the table above represent estimates at 12th December, 2016. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape, and continuity of the occurrence, and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause computational discrepancies.
4. Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The Joint Ore Reserves Committee Code – JORC 2012 Edition).
5. Reporting cut-off grade of 3.43 g/t (0.100 oz/t) selected based on capital and operating costs estimated for the April, 2016 “Fondaway Canyon Project Scoping Report”. A break-even cut-off grade was estimated to be approximately 3.43 g/t (0.100 oz/t), based on projects of similar size, a trailing average price of $1,227, a metallurgical recovery of 90%, and an underground mining method suitable for steeply-dipping veins.

Competent Persons' Statements

The scientific and technical information in this report that relates to the geology of the deposits and exploration results is based on information compiled by Mr. Simon Henderson, MSc Geology (CODES), an AusIMM Chartered Professional under the Discipline of Geology, and a Competent Person as defined by the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Henderson has reviewed and approved the contents of this media release.

The scientific and technical information in this report that relates to the in-situ Mineral Resource estimates is based on information compiled by Mr. Michael Norred, who is President of Techbase International, Ltd. Mr. Norred, a Registered Member of the SME, is a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Norred has reviewed and approved the disclosure of all scientific or technical information contained in this announcement that relates to the Mineral Resources estimate.

Forward-Looking Statements

This release contains forward looking statements. Forward-looking statements and information are not historical facts, are made as of the date of this release, and include, but are not limited to, statements regarding discussions of future plans, guidance, projections, objectives, estimates and forecasts and statements as to AOR's expectations with respect to, among other things, mineral properties and the matters described in this release.

These forward looking statements involve numerous risks and uncertainties and actual results may vary. Important factors that may cause actual results to vary include without limitation, the timing and receipt of certain approvals, changes in commodity prices, changes in interest and currency exchange rates, risks inherent in exploration results, timing and success, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), changes in development or mining plans due to changes in logistical, technical or other factors, unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications, cost escalation, unavailability of materials, equipment and third party contractors, delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), political risk, social unrest, and changes in general economic conditions or conditions in the financial markets.

Figure 1: Fondaway Canyon Project

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Appendix 1 - JORC Code 2012 Tables

The following tables are provided to ensure compliance with the JORC 2012 requirements for the reporting of exploration results, Mineral Resources, and Ore Reserves.

Please see full PDF press release for JORC Code tables.