Avala Resources Announces Inferred Resource Estimate for Korkan
East, Timok Gold Project
LONGUEUIL, QUEBEC--(Marketwired - Apr 23, 2014) - Avala
Resources Ltd. (TSX-VENTURE:AVZ) (the "Company" or "Avala") is
pleased to announce a resource estimate for the Korkan East
deposit, which is part of its Timok Gold Project located in Eastern
Serbia.
Using a 2g/t in situ gold-equivalent cut-off grade (Au_Eq) the
Korkan East deposit contains in-situ inferred resources of 1.37
million tonnes at an average grade of 3.4g/t gold (Au), 44 g/t
silver (Ag), 0.6% lead (Pb), 0.5% zinc (Zn) and 0.8% arsenic (As),
for 147,000 ounces of Au, 1.919 million ounces of Ag, 8,300 tonnes
of Pb and 7,100 tonnes of Zn. The resource estimate is based on 54
drill holes and 8,593 samples.
TIMOK GOLD PROJECT |
KORKAN EAST |
INFERRED IN SITU RESOURCE ESTIMATE |
Cut-Off |
Tonnes |
Au_Eq |
Au |
Ag |
Pb |
Zn |
As |
S |
Au_Eq |
Au |
Ag |
Pb |
Zn |
(Au_Eq) g/t |
(mt) |
(g/t) |
(g/t) |
(g/t) |
(%) |
(%) |
(%) |
(%) |
(koz) |
(koz) |
(koz) |
(kt) |
(kt) |
MBX BRECCIA ZONE |
2.0 |
1.12 |
4.6 |
3.6 |
47 |
0.6 |
0.6 |
0.8 |
3.6 |
166 |
130 |
1,703 |
7.1 |
6.4 |
S1/LMST |
2.0 |
0.25 |
2.9 |
2.2 |
27 |
0.5 |
0.3 |
0.9 |
2.8 |
23 |
18 |
215 |
1.1 |
0.7 |
TOTAL INFERRED RESOURCES |
2.0 |
1.37 |
4.3 |
3.4 |
44 |
0.6 |
0.5 |
0.8 |
3.1 |
189 |
147 |
1,919 |
8.3 |
7.1 |
Notes:
- The effective date of the Korkan East mineral resource
estimate is 31st March 2014
- The resource estimation has been completed by Chris Arnold
MAusIMM CP(Geo) of AMC Consultants Limited ("AMC").
- The gold price for the Korkan East estimate is US$1300/oz. The
location and style of Korkan East suggests that an underground
mining approach is appropriate and a 2g/t Au_Eq cut off grade has
been used to report the resource estimate.
- 2g/t Au_Eq cut off in-situ metal prices (Au US$1300/oz, Ag
US$20/oz, Pb US$2,000/t, Zn US$2,000/t).
- 2g/t Au_Eq cut off: Au_Eq = ((Au g/t * 41.80)+(Ag ppm *
0.3858)+(Pb% * 20.0) + (Zn% * 20.0))/41.80
- Mineral resources, which are not mineral reserves, do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
title, taxation, sociopolitical, marketing, or other relevant
issues.
- The quantity and grade of reported inferred resources in this
estimation are uncertain in nature and there has been insufficient
exploration to define these inferred resources as indicated or
measured mineral resources.
- Totals and average grades are subject to rounding to the
appropriate precision.
- The mineral resource was estimated using the Canadian Institute
of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral
Resources and Reserves, Definitions and Guidelines prepared by the
CIM Standing Committee on Reserve Definitions and adopted by the
CIM Council.
The Timok Gold Project, incorporating the Bigar Hill, Korkan,
Kraku Pester and Korkan East deposits, has a combined in-situ
indicated resource estimated at 46.3 million tonnes at an average
grade of 1.56 g/t Au for a total of 2.32 million ounces of Au.
Additionally, a combined inferred resource of 10 million tonnes at
an average grade of 1.6 g/t Au for a total of 0.5 million ounces of
Au has been defined within the Timok Gold Project. The cut-off
grade and the Au price used for the Bigar Hill, Korkan, Kraku
Pester estimates was 0.6 g/t and US$1,250/oz, respectively and for
Korkan East, 2.0 g/t and US$1300/oz, respectively.
TIMOK GOLD PROJECT |
INDICATED AND INFERRED IN SITU RESOURCE ESTIMATES |
Deposit |
|
Indicated |
Inferred |
Cut Off Grade (Au g/t) |
Million Tonnes |
Au (g/t) |
Million Ounces (Au) |
Million Tonnes |
Au (g/t) |
Million Ounces (Au) |
Bigar Hill |
0.6 |
25.48 |
1.63 |
1.34 |
1.6 |
1.6 |
0.08 |
Korkan |
0.6 |
14.51 |
1.53 |
0.72 |
4.9 |
1.4 |
0.21 |
Kraku Pester |
0.6 |
6.32 |
1.31 |
0.27 |
2.2 |
1.0 |
0.07 |
Korkan East |
2.0 |
|
|
|
1.4 |
3.4 |
0.15 |
Total |
|
46.30 |
1.56 |
2.32 |
10.0 |
1.6 |
0.51 |
The Korkan East deposit, in part, comprises a polymetallic style
of mineralization, containing elevated levels of gold, silver,
lead, zinc and arsenic. The volume of rock that contains Korkan
East was initially assessed as part of Korkan in the 2012 resource
estimate. The Korkan East sector was subsequently removed from the
volume estimated in the 2013 resource update of Korkan to enable
the preparation of a separate polymetallic resource estimate, which
is reported upon here. Figure 1 shows the zone within which Korkan
East has been defined.
The Company is in the process of finalizing a preliminary
economic assessment ("PEA") of its Timok Gold Project, which
includes the Bigar Hill, Korkan and Kraku Pester deposits. The
Korkan East deposit will not be included in the PEA at this stage.
The results of the PEA should be available by the end of April.
Korkan Mineralization
Style
- The Korkan East sector is located immediately proximal to, and
below the northeast portion of the Korkan deposit; mineralization
commences approximately 170 meters below the surface. Refer to
Figure 1 for the location of Korkan East relative to the Korkan
deposit.
- The polymetallic mineralization has been defined over
approximately 300 meters down-plunge and is up to 50 meters wide
and 50 meters high. The mineralization plunges approximately 30
degrees towards the northeast and remains open down plunge. Refer
to Figure 2 for a representative cross section of Korkan East.
- The gold and base metal mineralized rocks at Korkan East show
characteristic features of carbonate replacement deposits; the link
with the nearby lower temperature sediment-hosted gold is unclear
at this time.
- Two styles of mineralisation were modelled, one at the lower
limestone-clastic sediment contact which is typically associated
with brecciation and carbonate replacement textures (MBX in the
table above) and another higher up in the stratigraphic sequence
(MSSL in the table above).
- A geological model was developed for use in resource
estimation, along with mineralized domains. In addition, a domain
was modelled within which significantly elevated levels of Ag, Pb,
Zn and As are noted and the domain was used in grade estimation for
the Ag, Pb, Zn, As and S.
Drilling and
Sampling
- The source data for the Korkan East resource estimate is based
on the following drilling and sampling information:
DRILLING DATA USED IN THE KORKAN EAST RESOURCE
ESTIMATION |
Item |
DD |
DT |
RC |
Total |
HOLES |
34 |
1 |
19 |
54 |
METERS DRILLED |
5,759.5 |
159.8 |
2,683 |
8,602.3 |
SAMPLES |
5,751 |
159 |
2,683 |
8,593 |
AVERAGE RECOVERY |
99% |
98% |
97% |
98% |
PRIMARY ASSAYS (Au) |
5,751 |
159 |
2,683 |
8,593 |
BULK DENSITIES |
1,310 |
47 |
|
1,357 |
- All drill holes have been down-hole surveyed at regular
intervals; with drill collars surveyed using DGPS or total station
surveying methods. The topographic surface is based on detailed
DGPS and total station surveying methods, with an average survey
station spacing of approximately 15 meters by 15 meters.
- As per standard Avala data acquisition protocols, a full set of
field duplicates, lab duplicates and replicates, blanks and
internationally accredited assay standards have been routinely
collected and inserted into the sample sequence.
- All drill hole assaying and bulk density measurements have been
carried out independently by SGS.
- Please see the following link to view all Timok Gold Project
drill holes located spatially in three dimensions:
http://www.corebox.net/properties/timok-gold-project
Resource
Estimation
- The assay data was composited to a 2m down hole composite
interval prior to resource estimation. Ag, Pb and Zn were estimated
using ordinary kriging, while As, S and density were estimated
using an inverse distance squared grade weighting algorithm. No
upper cut was applied during grade estimation.
- Au was estimated using ordinary kriging with indicator kriging
using a 2g/t indicator cut off to define estimation domains along
with an upper grade cap of 20g/t.
- The in-situ resource estimates are within the defined
mineralized wireframes and have been categorized as Inferred
Resources.
Metallurgical
Testwork
- Korkan East testwork to date has been carried out on
mineralized material from diamond drill holes KODD058 and
KODD100.
- Based on petrographic studies, the predominant gangue minerals
are dolomite, calcite and quartz. The main sulfide minerals are
pyrite, arsenopyrite, sphalerite and galena. Silver is present as
ruby silver and possibly argentite. Fine grained gold is associated
with sulfides.
- Diagnostic leach testwork, including pre-oxidation, gravity
recovery and flotation testwork indicated that flotation is the
optimal recovery approach.
- Metallurgical tests to date have indicated the following:
- A marketable grade lead concentrate (53%) can be produced using
a coarse grind size (150um and 100um) while recovering most of the
silver.
- A good grade zinc concentrate (13%) can be produced.
- The majority of the gold (and arsenic) can be recovered between
the combination of the zinc cleaner tail and sulfide rougher
concentrate.
- Further testwork is planned to refine the metallurgical
flotation parameters to optimise recovery and for use in scoping
studies on the Korkan East deposit.
Sampling and
Analysis
The majority of soil samples have been assayed at the ALS Chemex
laboratory, Perth, Australia. More recent programs have been
assayed at the SGS managed laboratory at Chelopech in Bulgaria
using a combination of ICP-OES and ICP-MS; whereas gold has been
assayed by low level detection fire assay method with an AAS
finish. The Company has established a laboratory facility at Bor,
Eastern Serbia which is independently managed by SGS. Trench
samples were prepared at the laboratory facility at Bor and the
samples have been assayed at the SGS managed laboratory at
Chelopech in Bulgaria or the laboratory facility at Bor. Diamond
drill core has been prepared at the laboratory facility at Bor and
assayed at either the SGS managed laboratory at Chelopech in
Bulgaria or the assay laboratory at Bor. A one meter sampling
interval has been used where possible for the Timok Gold Project
diamond drilling program. Half core is routinely submitted to the
laboratory for analysis. Reverse circulation drill samples have
been prepared at the laboratory facility at Bor and assayed at the
laboratory at Bor. A one meter sampling interval has been used for
the Timok Gold Project reverse circulation drilling program.
Following Avala standard quality assurance procedures, a full suite
of field and laboratory duplicates and replicates along with
internationally accredited standards and blanks, have been
submitted with each batch of samples.
At the SGS managed assay facility in Bor, analysis of drill or
trench samples for gold is routinely carried out using a 50g fire
assay charge with an AAS finish. Silver, lead, zinc, copper and
arsenic are analyzed using an aqua regia digest (0.3g charge)
followed by either an AAS or ICP-MS finish. Sulfur is analyzed
using an Eltra combustion furnace (0.2g charge).
Qualified
Persons
The Bigar Hill, Korkan, Kraku Pester and Korkan East resource
estimates were undertaken by independent qualified person Chris
Arnold MAusIMM CP(Geo) of AMC. Mr. Arnold has reviewed and approved
the contents of this press release insofar as mineral resource
estimates are concerned.
Metallurgical testwork summarised in this press release has been
managed and reviewed by an independent qualified person, Dr. Deepak
Malhotra, SME-Registered Member and President of Resource
Development Inc. (RDi). Dr. Malhotra of RDi has reviewed and
approved the contents of this press release.
The technical information contained in this press release was
prepared and approved by Dr. Julian F. H. Barnes, FAusIMM, MAIG, a
director of the Company and special consultant. Dr. Barnes is a
'qualified person' within the meaning of that term under NI
43-101.
About Avala Resources Ltd.: Avala Resources is a mineral
exploration company focused on the exploration and development of
the Timok Gold Project in Eastern Serbia. The Timok Gold Project
comprises several targets, including the Korkan, Bigar Hill, Kraku
Pester and Korkan East deposits. Avala controls 100% of this
recently identified sediment-hosted gold belt which totals
approximately 250 square kilometers. The common shares of Avala
trade on the TSX Venture Exchange under the symbol AVZ.
Avala had approximately $1.0 million in its treasury at March
31, 2014. Avala's issued and outstanding share capital totals
254,492,223 common shares, of which approximately 53.1% is held by
Dundee Precious Metals Inc. (TSX:DPM).
Cautionary Statement Regarding Forward-Looking
Information
This press release contains 'forward-looking information'
within the meaning of Canadian securities legislation. Forward
looking information in this press release includes information
about the results and interpretation of the mineral resource
estimate, the results of additional metallurgical testwork, the
timing of the completion of the PEA, the nature of the
mineralization of Korkan East, and the results and interpretation
of studies and exploration activities. Mineral resources are not
mineral reserves and do not have demonstrated economic viability.
"Inferred Resources" have a great amount of uncertainty as to their
existence, and economic and legal feasibility. Since
forward-looking information is based on assumptions and addresses
future events and conditions, by its very nature it involves risks
and uncertainties. Actual results could differ materially from
those anticipated in the forward looking information for many
reasons including, but not limited to: changes in general economic
conditions and conditions in the financial markets; changes in
demand and prices for gold; legislative, environmental and other
regulatory, political and competitive developments; operational
difficulties encountered in connection with the activities of the
Company; and the Company's financial condition. These and other
factors referred to in public disclosures and filings by the
Company should be considered carefully, and readers should not
place undue reliance on the Company's forward-looking information.
The Company does not undertake to update any forward-looking
information, except as required by applicable securities
laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
Figures 1 and 2 are available at the following link:
http://media3.marketwire.com/docs/941179_figures.pdf
Avala Resources Ltd.James Crombie, President and Chief Executive
Officer+1.450.640.0810info@avalaresources.comwww.avalaresources.com
Avala Resources Ltd. (TSXV:AVZ)
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