EXPLORATION ACTIVITIES
The Lero project land holding is now in excess of 2,200 sq km and is considered by the SMD geologists to be highly prospective – a suggestion supported by the extensive artisanal workings
Exploration activities for the first half of 2004 involved the continuation of the BFS. Activities for the second half of the year were focused on infill drilling within and around the optimised pit shells to ensure a better understanding of both the geology and the controls on mineralization.
The Lero project land holding is now in excess of 2,200 sq km and is considered by the SMD geologists to be highly prospective - a suggetion supported by extensive artisanal
workings.
LEFA Corridor Exploration
Exploration in the LEFA corridor during 2004 continued to focus on the two main deposits of Lero-Karta and Fayalala with less work being carried out on the smaller deposits of Kankarta, Banko, Tambico and Folokadi.
Drilling at Lero-Karta concentrated on infill and extension drilling along both strike and down dip at Lero, Karta and Karta 4 pits with the results delineating the continuation of the mineralization beneath these pits. Drilling to the south of the Lero pit identified a previously unknown high grade structure sub-parallel to the Lero mineralization namely Lero South. Follow up drilling in all directions proved this structure to be continuous both along strike and dip and of a high tenor of gold mineralization. Approximately 225 meters of strike length has been defined with mineralization open to the west and at depth with drilling defining mineralization to a true depth of 100m. Hole number LKC0454 was the discovery hole for this orebody and returned 26 meters with 13.75 g/t (Fig.1).
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Also close to Lero-Karta, to the west of Camp de Base returned significant grades with mineralization proven over a strike length of 600 meters. It is hypothesised that this orebody is continuous through Camp de Base but access is a problem due to existing infrastructure. Mineralization is still open along strike to the West with LKC0556 returning an intersection of 28 meters at 3.35 g/t and LKC0513 with an intersection of 19 meters with 3.46 g/t on the last line along strike. Drilling at Fayalala targeted multiple orebodies within this complex system of mineralization, in and around the Fayalala pit. A programme of near surface reverse circulation (RC) drilling at Bofeko to the south-west of the Fayalala pit has identified a mineralized structure returning very encouraging grades, at consistent widths and with mineralization continuing at depth. The mineralization at Bofeko is completely open to the south-east with the last two holes along strike returning an intersection of 10 meters with 3.88 g/t in hole number BOC0127 and 7 meters with 3.0 g/t in BOC0129, less than 40m deep vertically.
Drilling at Fayalala also targeted the Fayalala fault, with mining identifying this structure previously thought to be an un-mineralized primary feeder structure to the mineralization at Fayalala. Drilling to the east, in difficult topography, has shown this structure to be continuous immediately adjacent to the current pit and further out to the east the existence of a satellite resource named Fayalala Far East has been identified. Follow up drilling at Fayalala Far East significantly increased the understanding of this resource and its similarities to Fayalala.
At Kankarta further RC and diamond drilling completed during the year displayed a continuation of mineralization to the west along an 080 degree structure, strengthening the already robust model of mineralization in this area. Deeper drilling confirmed mineralization at depth with the deposit still open along strike with potential between Kankarta and Pharmacie. Early in the year a program of RC and diamond drilling was completed at the high grade Banko deposit. These results were encouraging and illustrated Banko mineralization continuing along the structure, now identified as the Fayalala Fault.
Regional Exploration
With the build up of our knowledge base within the LEFA Corridor and surrounding exploration permits, 2004 saw the development of a significant number of prospects. Regional efforts were concentrated within a 10 kilometre radius of the LEFA Corridor and high tenor gold anomalies were defined such as Sikasso, Solabe, Siguirini, Boubere, Dar Salaam and the airstrip. The most significant of these is the Sikasso prospect some 7 kilometres east of Fayalala and the processing plant site. Sikasso is the most prominent prospect and holds the potential to impact on future operations. Drill intercepts of 14 meters at 2.68 g/t from 14 meters depth, and 19 meters at 1.1 g/t from 82 meter depth, potentially defining in excess of a 400 meter strike of insitu mineralization.
Other prospects within the 10 kilometre radius continue to return positive drill intercepts over broad areas ranging from 0.5 to 20 g/t, with intersections varying from 2 to 18 metres in both laterite and saprolite material. Continued work is warranted where such broad areas of highly anomalous intercepts are evident. These could also significantly compliment future operations.
Looking at areas beyond 10 kilometres from the new CIL plant, reinterpretation of the Banora resource (1,150,000 tonnes grading at 1.8 g/t gold for 65,000 ounces) has opened the possibility for several repetitions of the Banora structure called Filon de Anciens located 33 kilometres south-west of Fayalala. Close to the regional target known as the Matagania alluvial resource is the highly anomalous Diguili area which is returning intercepts that range from 2 to 12 meters at 0.5 to 48.6 g/t, in both saprolite and laterite. These two targets are located 9 kilometres south and 7 kilometres east of Banora respectively. With these three very significant prospects in close proximity to each other, further work is considered to be warranted in investigating the potential of a second mining area within the LEFA corridor.
Exploration Expenditure
The exploration expenditure for the year totalled US$15.1 million, of which US$1.8 million was spent on regional exploration outside the LEFA corridor and drilling and assaying costs accounted for the majority of the costs.
Resources
The resource statement as at December 31, 2004, for the Lero project shows measured and indicated resources of 68.1 million tonnes at 1.6 g/t for 3.4 million ounces. In addition there are inferred resources of 19.3 million tonnes at 1.4 g/t for 0.9 million ounces.
Ongoing efforts to improve data quality and geological models have resulted in 79 per cent of the total resources being classified in the higher confidence, measured and indicated, categories as defined by Australian JORC Code by the independent resource consultants, RSG Global.
Reserves
The reserve statement as of March 2005, shows a proven and probable reserve of 40.5 million tonnes of ore at an average grade of 1.7 g/t containing 2.3 million ounces of gold. The updated reserve is a significant increase from the 0.3 million ounces previously released on December 31, 2002, and represents a further key milestone in the proposed four-fold expansion of gold output from current operations. The new mineral reserves assume the purchase of the Kelian plant.
View details of the new reserves>>
Planned Work for 2005
The exploration program during the first half of 2005 will be directed towards continued reserve definition drilling.
Ongoing exploration within the LEFA Corridor (Fig. 4) will look to expand the higher-grade areas at Lero South, Camp de Base and Bofeko, providing higher grade mill feed in the early years of the new project. In the second half of 2005, exploration drilling will search for additional high quality resource ounces within and adjacent to the LEFA corridor. Running in parallel, regional exploration aims to consolidate and convert known prospects into resources whilst at the same time, continue the regional perspective in an attempt to potentially define further areas of significant gold endowment. .Ongoing exploration within the LEFA Corridor (Fig. 4) will look to expand the higher-grade areas at Lero South, Camp de Base and Bofeko, providing higher grade mill feed in the early years of the new project. In the second half of 2005, exploration drilling will search for additional high quality resource ounces within and adjacent to the LEFA corridor. Running in parallel, regional exploration aims to consolidate and convert known prospects into resources whilst at the same time, continue the regional perspective in an attempt to potentially define further areas of significant gold endowment.
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