January 2012 Resource Update
Level plan grade distribution video – January 2012 Resource Update
The January 2012 Amulsar mineral resource estimate has an increase of 1.0 million gold ounces in the indicated category when compared to the May 2010 resource estimate. The additional infill drilling has moved ounces from the inferred to the indicated categories with a subsequent reduction of ounces in the inferred category. Overall, there is a 28% increase in the contained gold ounces in the January 2012 mineral resource. A comparison of two mineral resources tonnes and grade at a 0.40 g/t gold cutoff are shown in Table 1. It should be noted that the May 2010 mineral resource is a model contained tabulation and the January 2012 is a mineral resource within a cone geometry in order to assure a reasonable expectation of extraction as defined by the CIM standards for reporting mineral resources. The January 2012 mineral resource comprises 99% of the model contained gold mineralization at the 0.40 g/t cutoff.
Table 1 Comparison of January 2012 and May 2010 Amulsar Mineral Resource Estimate Using a 0.40 g/t Au Cutoff Grade
The current mineral resource is based on 207 core holes (26,826 meters of drilling) and 458 reverse circulation (RC) holes (62,957 meters) for a total of 665 exploration drill holes totally 89,783 meters. Of this drilling, about 35,000 meters was drilled since the 2010 mineral resource estimate.
The Amulsar mineral resource is contained within three deposit areas: Tigranes, Artavasdes (which are adjacent to each other) and Erato which lies 900m northwest of the other two. Table 2 shows the split of the mineral resource between the two areas. This is the first estimate which has indicated mineral resource for Erato.
Table 2 January 2012 Mineral Resource Estimate by Gold Cutoffs
The mineral resource is within an open pit geometry based on US$1300/oz gold price and current estimates of project operating costs and gold recovery. At the 0.40 g/t gold cutoff grade, 99 percent of the global gold ounce estimate lies within this open pit geometry, thus indicating the robustness of this mineral resource.
A block model using a 10m x 10m block size in plan and 10m vertical was coded for lithology and alteration based on interpretations provided by Lydian. The drill hole data was composited to 10m composites for the estimation of gold and silver into the block model. Variogram ranges are +- 50m In Tigranes and Artavasdes and +- 100m in Erato, depending on orientation. No strong orientation directions were noted, but visually a WNW – ESE trend is seen in the western part of Artavastes. Other areas show local variations in grade with high grade pods surrounded by lower grade halos which combine into mineralized zones. The search distances used for the gold and silver estimates are 50m spherical search in Tigranes and Artavasdes and 100m in Erato. The grade estimates used a minimum of one and maximum of twelve 10m composites with an inverse distance weighting factor to the eight power. Other estimation runs using ordinary kriging (OK) and nearest neighbor polygons (NNP) show the very similar contained ounces, but the OK overstated tonnes and understated grade and the NNP did the opposite by understating tonnes and overstating grade.
In Tigranes and Artavesdes, the indicated classification required three or more drill holes within the search ellipse and if less than three holes the estimation was inferred. In Erato with the wider spaced drilling, the classification approach was the same with two added restrictions: a) an indicated block had to have a drill hole within 50m from the block center, and b) a minimum of two drill hole composites were required to define the inferred resource.