The North Kao deposit represents the contiguous northern extension of the Kao deposit- the largest of five deposits within the Karma Mine Plan1.
"In our view, Karma is one of the premium development-stage, shovel-ready projects globally due to its low-cost production attributes, strong growth profile, metallurgy and jurisdiction," stated Mark O’Dea, Executive Chairman of True Gold. "We have already built the foundation to become a leading mid-tier gold producer, including the receipt of key mining permits and a strong treasury to fund development, with North Kao clearly demonstrating the potential to boost our production profile."
North Kao Highlights:
North Kao Resource: Total In-pit Inferred Mineral Resource (oxide, transition and sulphide) of 1,662,000 ounces gold (Au), contained within 47.8 million tonnes (Mt) at an average grade of 1.08 grams/tonne gold (g/t Au).
North Kao Leachable Material (included in total resource): Total In-pit Inferred Mineral Resource of 423,000 ounces of leachable gold (oxide and transition) contained within 16.4 Mt at an average grade of 0.80 g/t Au. This complements the current Probable Mineral Reserves at the adjacent Kao Deposit, which hosts 340,000 ounces Au contained within 10.9 Mt at 0.96 g/t Au.
Metallurgy: 137 bottle roll tests indicate excellent metallurgical recoveries averaging 96% and 92% respectively for the oxidized and transition material. Feasibility metallurgical results for the adjacent Kao deposit established that bottle roll test results are highly indicative of the ultimate column test work results.
Deep Leachable Horizon: The combination of an exceptionally deep (~120 m) weathering profile, along with the shallow dip (~30 degrees), and near surface nature of mineralization makes North Kao amenable to open pit mining with additional potential mineralization down dip.
Confirms Organic Growth: North Kao extends the Kao deposit more than 1.6 km to the north, demonstrating the exceptional continuity of this mineralized system and exemplifies both Karma’s leachable resource growth potential and its potential for a systematic approach to production expansion.
"The discovery of high-quality, near-surface oxide material that could potentially add to our current open pit mineral reserves is a key part of our growth strategy," stated Dwayne Melrose, President and CEO, True Gold. "The simple and flexible mine plan at Karma, as laid out in our Feasibility Study, is specifically designed to integrate opportunities such as North Kao, as new potential mining centres emerge across the Karma Project. In addition to our success at North Kao, discoveries at four other target areas have the potential to meaningfully add to our current resource base through further drilling."
True Gold will initiate a Preliminary Economic Assessment on the new North Kao resource to evaluate the potential economic impacts of an increased production profile and/or the potential to extend the mine life laid out in the Karma Feasibility Study. The overall Karma project area remains largely under-explored and True Gold will continue to pursue the near term goal of adding reserves and resources of near surface leachable material.
Metallurgy
Results from 137 bottle roll tests on sample rejects from the North Kao drilling, crushed to a P85 of 75 um, mirror the Karma feasibility results for the Kao deposit, with average oxide and transition recoveries of 96% and 92%, respectively. Metallurgical test work in the Karma feasibility study showed a strong correlation between column leach and bottle roll tests, such that the column tests yielded comparable results to bottle rolls between 75 um and 1.7 mm. North Kao is expected to perform in a metallurgically similar manner to the Kao deposit, due to its identical geological setting and enhanced weathering profile.
Mineralization
The North Kao deposit is predominantly intrusive-hosted and consists of a stacked sequence of structurally-controlled tabular bodies, defined by pervasive quartz-sericite-pyrite (QSP) alteration, breccia and locally distributed stockwork, shear and extension QSP veins. Gold is closely associated with each of these features, with the breccia and QSP veins carrying the highest grades. Sediment-hosted mineralization is more vein-dominated and localized at intrusive contacts, either with the main granodiorite intrusion, or related felsic dykes.
Mineralized zones are up to 86 metres thick and exhibit extraordinary lateral continuity over 1.6 km along strike and more than 1.0 km down-dip. In comparison to the Kao deposit, the zones at North Kao tend to be slightly narrower and higher grade, such that the grade thickness profiles of each deposit are nearly indistinguishable.
The weathering profile is extensive at the North Kao deposit, gradually deepening from approximately 60 to 120 metres from south to north, which results in almost twice the leachable resource ounces per horizontal metre of strike length when compared to the Kao deposit.
Resource Model
The resource model is based on 161 new drill holes (43 core holes, 118 reverse circulation holes) drilled on a regular grid spacing of 100 x 100 metres. The intrusive-hosted mineralization occurs within seven stacked tabular zones that were modeled using the vein modeling tool in Leapfrog Geo software. Mineralized intervals were selected using a nominal cut-off of 0.2 g/t Au on samples for inclusion, as well as, for the grade for the full composited interval. Three of the seven zones exhibit good continuity across the entire strike length of the deposit within the intrusive rocks. The other four zones are more locally developed.
Sediment-hosted mineralized domains are more irregular in shape and distribution and were therefore modeled using a Leapfrog interpolation on indicators representing mineralized (1) and unmineralized (0) material, using a threshold of 0.2 g/t Au. These zones account for less than 5% of the modeled mineralization.
The mineralized zones all have a broadly consistent shallow dip at approximately 10 degrees to the east, but selected intervals show vertical offset that are clearly fault-controlled in some areas, but may also reflect local undulations in the mineralized bodies in other areas. Two major faults are included in the model with vertical offsets of up to 70 metres. The largest offset is on a northwest trending fault that is parallel to the high grade northwest trending structure in the main Kao deposit, and hosts one of the best intercepts to date (KAO13DD-233: 1.5 g/t Au over 90 metres, see news release dated January 21, 2014).
Estimation Methods
Sample assays were composited to 2 metre intervals within the mineralization wireframes. Mineralized domains were capped at 5 or 8 g/t Au, depending on the grade profile of each individual zone. Four of the zones did not require capping, and a total of 6 out of 2,037 samples were capped, amounting to a metal reduction of approximately 4%.
Grades were interpolated into a 5 x 5 x 5 metre block model using ID3 weighting in three passes. The first pass used a search radius of 50 x 50 x 10 metres, a minimum of 3 samples and maximum of 12, with a maximum of 2 samples per drill hole. The second pass used a search radius of 50 x 50 x 10 metres, a minimum of 2 samples and maximum of 12, with a maximum of 2 samples per drill hole. The third pass used a search radius of 200 x 200 x 40 metres, a minimum of 1 sample and maximum of 12, with no constraint on the number of samples per drill hole.
Validations were done using comparisons with ID2 and nearest-neighbour models, visual and statistical comparisons between block grades and composite grades, and swath plots. Block grades show an acceptable degree of smoothing compared to the composites, with approximately 15% lower average grade.
Due to the wide spacing of the drill holes, all blocks are classified as Inferred.
Mineral Resources are reported within an optimized pit shell that was optimized using the following parameters: Au: $1,557/oz, Refining: $4.60/oz, Royalty: 4%, oxide recovery: 90%, transition recovery: 80%, sulphide recovery: 85%, oxide mining: $1.61/tonne mined, transition mining: $1.94/tonne mined, sulphide mining: $2.05/tonne mined, oxide/transition process: $7.25/tonne milled, sulphide process: $19/tonne milled, G&A: $1.35/tonne milled, pit slopes: 50 degrees.
