History

Siana has had three mining episodes to date. The deposit was subject to small scale mining for an extended period of time leading up to the commencement of underground mining by Suricon Consolidated Mining in the late 1930’s. Mining via a shaft access was undertaken on a continuous basis between 1938 up until 1960, yeidling overall production of 1,600,000 tonnes at an estimated head grade of 11.8g/t. Mining was very labour intensive and due to inclement ground conditions the dominant mining method employed was square set stoping.

Mining ceased for 20 years and production was recommenced in 1980 by Suricon. This phase employed open pit mining techniques. Production was sustained for 11 years ceasing in 1991 with the collapse of the east wall of the pit covering the ore in the pit floor. An estimated 3,300,000 tonnes at an average head grade of 3.6g/t were mined during this period.  Nearly a million ounces of gold has been extracted before Red 5 Limited aquired the project.

Greenstone  Resources  Corporation (Red 5 Limited’s Philippines subsidiary) acquired the project in 2003 and proceeded with exploratory drilling until sufficient mineralisation was delineated allowing a feasibility study to be undertaken. This work laid the foundation for a new mine development, one of only two hard rock mines to have been developed in the Philippines in the last 30 years at the time.

With feasibility  and permitting completed in 2009 site construction activities commenced in 2010. The project feasibility proposed open pit mining to be employed to deepen the existing open pit by a further 100m making for an ultimate 200m deep pit, with underground mining to follow thereafter.  The company initially proposed a throughput of 750,000 tonnes per annum however during financing it was decided to commit to a larger SAG mill enabling a though put of 1,100,000 to be achieved. In April 2013 the processing plant was operating at close to full capacity.

Regional Geology

The Philippine Islands consists of an archipelago which forms part of the Western Circum-Pacific Rim or ‘Ring of Fire’. The archipelago is an Island Arc system at the junction of three major crustal plates, brought together by strike-slip fault displacement convergence and interaction since the late Mesozoic time (150 million years ago).

The archipelago forms a 300-600km wide mobile belt, a broad zone of very active deformation, seismicity and volcanism, the result of two opposing and convergent systems.  To the east, the Philippine Sea plate is being thrust westwards along the westerly dipping Philippine/East Luzon Trench subduction zone while to the west the South China Sea plate is being downthrust eastwards along the easterly dipping Manila, Sulu-Negros and Cotabato trenches (Figure 1). The Surigao del Norte region is interpreted to be northernmost tip of the Eastern Mindanao Island Arc System.

The Philippine archipelago forms one of the world’s premier porphyry and epithermal mineralised provinces.  Several significant porphyry copper-gold deposits are known within the Philippines which have been subject to past or present mining.  The bulk of the known deposits are found along mobile orogenic belts, generally associated with shearing and/or intrusive episodes involving the intrusion of plutonic and hypabyssal rock types such as diorites, andesitic porphyries, dolerites and granodiorites.  Mineralisation is found in both the intrusives and the adjacent meta-sedimentary country rocks, mostly Cretaceous and Tertiary metavolcanics and interbedded metasediments.  The mineralising events are typically Miocene in age (20My) but range from Cretaceous to Pliocene.

Major tectonic terranes and plate tectonic structures of the Philippines and associated volcanism

Local Geology and Structure

The Philippines Rift Zone, a major sinistral or left lateral, strike-slip system, runs 1,200km north-south through the central portion of the mobile belt from Luzon in the north to Mindanao in the south.  Sinistral displacement along the fault could exceed 200km. Typical horst and graben strike-slip faulting is observed along the mobile fault zone.

The Siana deposit is located sub parallel to the Surigao Valley Fault, a major North north-west  - South south-east trending structure which forms part of the major Philippine Fault or Rift Zone (Figure 2).  The Philippines Rift Zone is associated with numerous epithermal gold and porphyry-style copper gold mineral deposits throughout the Philippines.

Figure 2 Siana Gold Mine location shown sub parallel to the Surigao Valley Fault

 

The country rocks in the Siana area comprise a basement sequence of pre-Tertiary schists, metasediments and ultramafic volcanics overlain by Oligocene clastic sediments, limestones, and volcaniclastics, Miocene and Pliocene basalts, volcaniclastics, limestones and intrusive andesites, with a younger Pleistocene cover sequence of sediments, conglomerates and volcanics.  The gold mineralisation is typically associated with mid to upper Miocene intrusions and hydrothermal events.

There has been recurrent movement along the Philippine fault zone forming sub-parallel systems and later stage conjugate North East trending splays which act as conduits and locating structures for mineralising fluids.  The Siana deposit is located along one such structure, with the Surigao Valley Fault being the major first order structure and North East splays the second order fluid pathways.  Several other gold and or copper – gold prospects in the immediate district appear associated with the same structures or associated conjugate faults and structures.

Figure 3 Local Geology and Structure of the Siana Prospect

 

Pervasive potassic hydrothermal alteration has obscured many of the original sedimentary (carbonate) and volcanic host lithologies.  Rock types are largely replaced by clay minerals (montmorillonite, illite and kaolinite), hydrothermal quartz, and carbonate and minor base metal sulphides and pyrite.

From west to east, the stratigraphy at Siana can be grouped into three principal lithological domains:

  • Western Zone - Domain 100 - west dipping volcaniclastics, sediments and interbedded basalts
  • Central Zone - Domain 200 - a 20-80m wide vertically-dipping central carbonate-rich assemblage of limestone, carbonaceous mudstone, siltstone, sandstone, volcanics and volcaniclastic tuffs and debris, commonly strongly brecciated and with pervasive hydrothermal alteration
  • Eastern Zone - Domain 400 - eastern basalt assemblage, with some interbedded sediments and breccias.

The western sequence is typically barren.  The central sequence is strongly mineralised where brecciated and altered, and is also referred to as the Main Ore Zone.  Mineralisation also occurs within the eastern basalt, generally along more restricted zones of shearing, alteration and brecciation.  The three major domains are interpreted as being separated by major faults.
Part of Domain 200 has been subject to former underground mining and drill holes through this area typically intersect sheared and brecciated rock, interpreted as collapsed and re-compacted pillars, together with occasional cavities and old timber supports; this zone is known as the Caved Zone and for the purpose of resource estimation and modelling has been designated Domain 700.
Three relatively minor zones have also been defined:

  • Western Basalt - Domain 300 - a thin zone of mixed basalt and sediment immediately west of the Central Zone
  • Eastern Mudstone - Domain 500 - a generally barren black mudstone unit underlying the Central Zone

Porphyry - Domain 600 - a generally barren intrusive feldspar porphyry, which tends to occur along the eastern margin of the Central Zone, or within the Eastern Basalt.

Mineralisation

Gold mineralisation at Siana is largely located within the altered and brecciated volcanics, volcaniclastics and carbonates of the Central Zone.  The central mineralised zone can be up to 80m wide, with a strike of 300-400m; commonly the principal high grade lodes are 5-10m wide with intervening lower grade material.  Sectional interpretation show three discrete lodes at depth, with a further seven lodes defined within the eastern basalts.  The lodes vary in thickness and continuity, and mineralisation can also occur between the defined lodes, making precise correlation difficult.

The mineralisation within the eastern basalts tends to be more restricted and associated with particular zones of alteration; alteration zones can be up to 10m wide and extend along strike for up to 140m; hard fresh basalt is generally barren.  Significant mineralisation stringers and anastomosing veins can occur between the main lodes which, provided they are of sufficient grade and extent, should also be recoverable through detailed open pit grade control

The ore has been mined to a depth of around 90m below surface in the former open pit.  Some underground workings extend to 300m depth but the principal zone of underground extraction is above 200m.  Deep drilling beneath the open pit and old workings has confirmed that mineralisation is still open at depths of 550m below surface, but appears to narrow to the south.

Gold mineralisation is typically associated with pyrite and base metal sulphides, principally sphalerite and galena, and with soft, argillised, carbonate-altered breccias with quartz veinlets.  The breccia clasts are generally volcaniclastics, altered to clay-carbonate assemblages.  During the former underground mining operations a massive sulphide zone was worked between the 400-700 foot levels, and lead and zinc grades were reported as averaging 2-3%, but Red 5 drilling has intersected only occasional coarse crystalline sulphides.

Pyrite is the most abundant sulphide, typically disseminated as fine <0.2mm crystals.  Detailed scanning has failed to reveal any fine inclusions of gold in pyrite.  Sphalerite and galena occur in fine to moderately coarse grains with occasional coarse aggregates; chalcopyrite is relatively minor.  Carbonaceous material has been reported in some of the historical data. 

Gold is fine grained, generally less than 75 microns, and well distributed within the altered host rocks.  Occurrences of visible gold are rare.  Testwork indicates that the gold is free milling and associated with hydrothermal quartz, carbonates and sulphides.  Historic gravity recovery of gold averaged 30%.

Silver is present with gold as electrum, as native silver and in pyrargyrite.

 

Figure 4 Typical Cross Section through the Siana Gold Mine looking North

Mining Method

Mining at Siana comprises an open  pit development for the first half of the mine life followed thereafter by a transition to underground mining.

The initial open pit mining phase revolves around cutting back the walls of the open pit and mining the ore at the bottom with the first 12 months of mining being carried out concurrent with dewatering. Mining utilises a large fleet of relatively small scale equipment readily amenable to handling the soft muddy ground conditions. Excavators of between 20 and 75t are used to load a fleet of up to 28 40t articulated dump trucks. Drill and blast is used to fragment the harder rock types using small track drills drilling both 89 and 102mm holes. Principally ANFO  is used as the blasting medium but packaged explosives are required where water inflows dictate.

Significant features of the open pit are geotechnical and hydrological features. The host rocks are permeable and in places rich in clay. For this reason ground water from rainfall around the mine reports to the open pit readily. The mine can see up to 700 l/second of water inflow in peak periods. This means the mines dewatering strategy is paramount to success. A fence comprising some 8 dewatering bores is now installed around the pit perimeter to combat water inflows allowing the water table to be maintained below the pit bottom thus creating a dry working environment. Utilising dewatering bores has the added benefit of keeping the walls of the pit dry which aids wall stability, as  well as, minimising the requirement for settling of water to remove sediment prior to discharge into the surrounding rivers. The SIANA open pit walls are relatively shallow at between 32 and 40 degrees as an overall slope angle. Constant monitoring of the walls ensures the safety of all employees.

Underground mining is expected to commence prior to completion of Open Pit Mining.  Access to the ore body will be achieved via excavation of a inclined tunnel (known as a decline) which will spiral down adjacent to the mineralisation with regular access points established to the ore body to allow ore extraction. Mining is proposed to be carried out with mechanised drill and blast methods and potentially using rock cutting machines. Further work to delineate the mineralisation and confirm the appropriateness of mining methods will be undertaken in the near future.

 

 

 

 

Processing Method

The gold at Siana is extracted using a standard carbon in pulp circuit.

The mineralisation is invariably soft with a high clay content requiring a much lower energy input into grinding from that at many other mines. The ore is crushed in a standard jaw crusher down to minus 150mm and either stockpiled or transferred directly to the 2.8MW SAG mill, with lime added prior to grinding. The SAG mill reduces the particle size to 80% passing 75 micron prior to the slurry being discharged into the CIP tanks. With cyanide addition the gold and silver dissolves and adsorbs on the carbon. The carbon is progressively removed once the gold and silver concentrations reach a certain threshold. Then  a process known as carbon stripping is undertaken which involves reversing the process to see the gold and silver  be liberated into a soluble form in a separate circuit and then ultimately returned back into a solid in an electrowinning cell ie plating the gold and silver onto a cathode, in our case this being steel wool.

 The final step being this solid powder product being smelted to remove trace metals, leaving a solid bar of gold and silver.

The gold is removed from site via regular shipment using a helicopter.

Tailings, the leftover ground material devoid of precious metals firstly undergoes cyanide detoxification to remove any remnant cyanide then is deposited in the tailings dam adjacent to the processing plant.

Plans are proposed to change this simplistic methodology of tailings deposition to see removal of a significant portion of the available water from the slurry using mechanical means to make a much denser product with a consistency of  a paste. The paste is proposed to be mixed with cement to end up as a solid by-product. The advantages of doing so being to ensure long term stability of the tailings dam making it resistant to the high rainfall the area receives and prevent the potential for liquefaction and escape to the environment which may result given the high seismicity in the Philippines region.

 

 

                                                     

Process Plant Flow Sheet

 

Resources and Reserves

The Mineral Resource, calculated in accordance with JORC guidelines is 12.6Mt at 3.3g/t gold and 5.5g/t silver for 1,318,000 ounces of gold and 2,222,000 ounces of silver.

A cut-off grade of 0.8g/t gold was used to define the Mineral Resource in the open pit and 2.0g/t gold was used for the cut-off grade in the underground portion of the deposit.

The Ore Reserve of the Siana Project has been depleted to the end of month survey at the end of June 2013 to reflect open pit mining, and includes the ROM pad surface stockpile. It has been updated to reflect the September 2011 Mineral Resource and therefore reflects an open pit currently being implemented based on a gold price of US$650 per ounce and an underground mining operation following the completion of the open pit phase.

 

Mineral Resource (depleted to the end of June 2013)
Category Tonnes Gold Grade Contained Gold Silver Grade Contained Silver
  (million) (g/t) ('000 oz) (g/t) ('000 oz)
Indicated Reserve          
Open Pit 9.3 2.5 740 4.2

1,254

Underground 0.9 6.7 199 12.2 359
Total Indicated Resource 10.2 2.9 939 4.9 1,613
Inferred Resource          
Open Pit 1.2 2.7 104 4.5 176
Underground 1.1 7.6 276 12.1 433
Total Inferred Resource 2.3 5.0 380 8.1 609
Total Mineral Resource 12.6 3.3 1,318 5.5 2,222

Note: contains minor rounding adjustments; open pit cut-off grade 0.8g/t Au.

Underground resources are defined as the region below the optimised open pit at a US$900 gold price (nominally below -270mRL) using a >2g/t Au cut-off

 

Ore Reserve (as at June 2013)
Category Tonnes Gold Grade Contained Gold Silver Grade Contained Silver
  (million) (g/t) ('000 oz) (g/t) ('000 oz)
Probable Reserve          
Open Pit 3.59 2.79 322 5.7 658
Underground 1.94 5.82 363 9.1 566
Stockpiles 0.04 2.80 4 4.9  
Total Ore Reserve 5.57 3.83 689 6.8 1,224

Note: contains minor rounding adjustments; open pit cut-off grade 0.9g/t Au.

Underground reserves are defined as the region below the open pit using a >2g/t Au cut-off and does not include a crown pillar beneath the open pit

Mineral Resource
Mineral Resource estimates described in this report are consistent with the guidelines and definitions of the 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code). They are assumed to have a reasonable prospect for eventual economic extraction accordingto the analysis of the known data and from which Ore Reserves have been derived by the application of appropriate Modifying Factors including mining, metallurgical, economic, marketing, legal, environmental, social and governmental considerations.

Open Pit Mineral Resource

The open pit Mineral Resource was estimated by Hellman & Schofield Pty Ltd using the method of Multiple Indicator Kriging with block support correction.
 
Underground Mineral Resource
The underground Mineral Resource was estimated by Cube Consulting Pty Ltd based on drill data available at December 2008. The Mineral Resource remains open to the north, south and at depth below 500 metres vertical.
 
Ore Reserve
The Ore Reserve extends to approximately 400 metres below surface. 
 
Competent Person Declaration
The information in this Public Report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on, and accurately reflects, information compiled by Mr Rohan D Williams who was at the time a full-time employee of Red 5 Limited and is a Member of The Australasian Institute of Mining and Metallurgy.
Mr Williams has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).

 

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