Notes:
- Mineral Resources reported on a dry, in-situ basis.
- 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).
- 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.
- 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).
- 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
