Leonora Gold Project

The Leonora Gold Project hosting the Mertondale, Cardinia and Raeside Gold deposits, is located in the Mt Margaret Mineral Field in the centre of the Eastern Goldfields, Province of West Australia, positioned approximately 20-40km NE of Leonora and 800 km ENE of Perth. The tenement group (1 EL’s, 72 PL’s, and 24 ML’s) cover an area of approximately 300 km2. The project is referred to as the Leonora Gold Project (LGP).

The current Indicated and Inferred Gold Resource of 11.83Mt @ 1.9g/t Au for 721,000 oz (JORC 2012) as reported by Kin Mining (11/5/2015:ASX) Announcement is contained within 17 separate gold deposits that occur within three project areas namely:

• Mertondale (395,000 oz)
• Cardinia (193,300 oz)
• Raeside (134,000 oz)

Regional geo plan with All tenementsFigure 1 – Location Plan of the Cardinia Mertondale Project area and Kin’s surrounding tenure 

An additional 282,000 oz of gold has been classified as Inferred, outside and adjacent to the currently optimised pit shells. The LGP is located in the Eastern Goldfields Province of WA in a district that hosts several operating (+3M oz) gold mines (i.e. Sons of Gwalia, Wallaby and Granny Smith) the depth potential of the LGP gold deposits has never been evaluated.

Kin secured and acquired the LGP for a total consideration of $2.7 million, equating to an acquisition cost of $2.63 per resource ounce. For an updated statement with respect to the asset transaction (see KIN ASX announcement on the 21st October 2014).

Pre-feasibility studies conducted by Previous owner, Navigator Resources in 2009 were completed for the  majority of the total Mineral Resource and demonstrated an economically viable project utilising low risk open pit development of near-surface, oxide ore with the flexibility of higher grade “starter pits” i.e. Bruno Lewis (Cardinia) and Tonto (Mertondale).

Over 70% of the resources are classified in the upper Indicated category and extensive mine planning and development work has already been finalised with pit optimisations completed for each of the key deposits.

Project Geology

The Leonora Gold Project (LGP) is located within the Eastern Goldfields Province (EGP), the eastern-most subdivision of the Archaean Yilgarn Block. The EGP comprises volcanic and sedimentary greenstones that have been extensively folded, metamorphosed to low or medium grade, extensively intruded by granitoids and subject to major faulting events along northerly and NNW trends. The EGP greenstones are divided into several terranes at Leonora including Malcolm, Murrin Murrin and Laverton; the Mertondale – Cardinia Project covers the Murrin Murrin Greenstone Belt, a major regional structure, The north striking Mertondale Shear Zone (MSZ) is covered by most of the tenement package.

The Mertondale Shear Zone (MSZ), a major regional North-South trending structure which is regarded as a splay off the Keith Kilkenny Lineament, contains all the identified gold mineralisation in the Mertondale region. Outcrop is poor and a deep wreathing profile has developed over most of the area, typically to depths of 40-70m.

The Mertondale prospects comprise over 12km of strike from Merton’s Reward (Mertondale 1) in the south to Mertondale 5 in the north. Merton’s Reward (Mert’s), Mertondale 2 and Mertondale 3/4 are contained within the eastern branch of the MSZ and extend over approximately 3km of strike, whilst Quicksilver, Tonto, Eclipse and Mertondale 5 are all contained within the western branch of the MSZ and extend over approximately 9km of strike. These deposits lie along two independent parallel major shear structures that are spatially 500m apart, the two branches are referred to as the MSZ.

Mertons Reward

Figure 2 – Photograph of Merton’s Reward open cut; note the historic shaft on the left.

The Mertondale area consists of a central felsic volcanic sequence constrained on either side by tholeiitic basalt-dolerite-carbonaceous shale ± felsic porphyry sequences. The western and eastern shear zone branches, of the MSZ, are generally positioned near the felsic volcanic/mafic contacts. At Mertondale the outcrop is poor and depth of oxidation variable, being shallow (<5m) at Mert’s Reward whilst deep (to 80m) at Eclipse, with a combination of depletion zones and the presence of Permian Sediments masking the regolith and bedrock geochemistry. Some large Proterozoic dykes cross cut the sequence.

At the historic Merton’s Reward underground mine (averaging +20 g/t Au) two types of lode were mined – shear hosted lodes and intershear lodes. Shear lodes consist of steeply dipping bodies (<1m wide) which are confined to shear zones. They are continuous along strike and down dip (50-100m) and often average >30 g/t Au. The lodes are highly cleaved parallel to their dip and strike, with quartz-carbonate veinlets parallel to cleavage. Gold mineralisation is usually associated with finely disseminated pyritic-arsenopyrite sulphides (5-10%) in sheared sericitised carbonated basalt.

Mertondale 2

Figure 3 – Photograph of the partly mined Mertondale 2 shallow open pit, looking NW

Intershear lodes are narrow, flat to moderately (0°-30°) to (40°-60°) E to NE dipping auriferous quartz veins. The veins attain a maximum thickness of 40cm and are hosted by a highly carbonated, pyritic alteration selvage (up to 12m thick). The vein selvages contain up to 20% pyrite, 5% arsenopyrite and, on occasion, up to 90% ankerite and/or siderite.

Gold mineralisation in the central quartz veinlet is usually >30 g/t Au. The selvage may grade up to 8 g/t Au. The lodes persist for up to 40m along strike and are usually truncated on their eastern and western edges by steep dipping shears and ‘shear lodes’. There is evidence of contemporaneous lode development and in some cases intershear lodes overprint shear lodes.

The Mertondale 2 Pit is located between Merton’s Reward and Mertondale 3/4. The style of mineralisation at Mertondale 2 is similar and closely associated with that at Mert’s Reward.

The Mertondale 3/4 deposits are positioned within the basalts associated with the MSZ. Structurally the mineralisation is confined to a series of steeply easterly dipping locally folded lenses of gold mineralisation over at least 900m of strike. Mineralised lenses (200-300m in length along strike and up to 35m thick) generally straddle the hanging wall porphyry-basalt contact. The mineralised lenses are “cigar shaped bodies” that follow the foliation plane, generally the widest gold mineralisation is adjacent to the thickest porphyry. All mineralisation zones contain pyrite and arsenopyrite, locally sulphide content can be up to 30% however most lenses average 5-10% sulphides.

Mertondale 3-4

Figure 4 – Photograph of Mertondale 3/4 open pit. Looking north

Further north and immediately south of Tonto the Quicksilver prospect covers over a strike length of 5km on the western branch of the MSZ. The western branch of the fault zone typically contains black mafic mylonite, black shale, shale-quartz-dolerite, basalt, basaltic andesite and a rhyolitic derived felsic volcanics to the east. Felsic porphyries  intrude the shear zone at irregular intervals. Gold mineralisation is often located near the sub-vertical mafic-felsic contact. Sulphidic black shales are regularly observed near the mineralisation.

The Tonto Prospect, also positioned on the western branch of the MSZ, extends over a strike length of 1km between the Quicksilver and the Eclipse Prospects. Lithologies at Tonto and Quicksilver are similar. The deposits comprise black mafic mylonite, black shale, shale, quartz diorite, basalt, basaltic andesite and felsic volcanics. Gold mineralisation displays no obvious association with sulphide content, quartz veining or alteration (graphite and sericite).

The steeply dipping high grade lode (80°W) appears to be structurally controlled with a shallow southerly plunge. Changes in lithology and grade correspond to NE-SW striking cross faulting. The footwall (F/W) consists of a massive quartz dolerite; the unit is bleached or carbonated along the mylonitic contact and gradually grades into a strongly chloritic bleached quartz dolerite, this F/W unit is effectively barren.

LGP tenure with Mineral Resource location

Figure 5 – Leonora Gold Project tenure with Mineral Resource Locations

The Eclipse Prospect covers 2k m of strike along the western branch of the MSZ, immediately north of Tonto and south of Mertondale 5.

Geological units change to the north along the MSZ, at Eclipse the mafic mylonite is discontinuous and the quartz dolerite is not restricted to the foot wall appearing within the central mafic unit regularly. A shale unit is also commonplace throughout Eclipse.

A shallow, flat dipping to horizontal 150m long high grade, sulphidic quartz vein, displaying fresh arsenopyrite and pyrite (with high gold values) is positioned in the southern to central portion of the prospect. At the northern end a felsic volcanic unit is common alternating with the mafics. A granite/porphyry intrusive is also present together with relatively unsheared talcose chloritic basalt (high magnesium basalt) that is traceable along the western margin of the shear. The northern end of the Eclipse Prospect is altered with fresh sulphides at depth forming a distinctive gossan in the oxide profile.

Further north the Mertondale 5 Prospect extends over a strike length of about 1.5km immediately north of Eclipse on the western branch of the MSZ. Gold mineralisation is hosted by a narrow (5-15m wide) north-south striking sequence of intensely weathered carbonate/ sericite schists, graphitic schists and quartz-feldspar porphyry. The host rock is confined to the west by chloritised/carbonated basalts and to the east by quartz feldspar porphyries, containing up to 50% pyrite, and some graphitic schists with high percentages of pyrite. The foot wall is defined by moderately sheared, green chlorite/carbonate basalts. The hanging wall sequence, intensely altered quartz feldspar porphyry, is less well defined with mixed mafic rocks along the contact.

The Cardinia Project tenements overlie a sequence of intermediate, mafic and felsic volcanic lithologies and locally derived epiclastic sediments that strike 345° and dip west at 30°- 40°.

This greenstone sequence is located on the western limb of the regionally faulted south plunging Benalla Anticline. Minor felsic porphyries and lamprophyre lithologies are mapped within and adjacent to the Bruno-Lewis  areas. The eastern edge of the Bruno-Lewis  system has been intruded by a dolerite sill. At Lewis these intrusives are often associated with mafic-felsic contacts. At Lewis mineralised structures are evident as quartz-ironstone veining.

Primary gold mineralisation is associated with zones of increased shearing in association with the mafic and felsic contacts. Disseminated carbonate-sericite-quartz-pyrite alteration zones are evident adjacent to the gold mineralisation which is characterised by increased quartz veining, silicification and shearing.

Supergene enrichment occurs beneath the depletion zones (20-50m), and the area is deeply weathered. In the Bruno-Lewis-Kyte area gold mineralisation is associated with flat lying shallow dipping supergene features that cut across all lithologies without any obvious effects on the consistent grade.

Mineralised zones at Helen’s and Rangoon (NE of Cardinia) are more sub-vertical and associated with narrow (<5m wide) steeply dipping zones of shearing and quartz vein development. Mineralisation trends NNW or north-south. At Helen’s the mineralisation zones are generally confined to the mafics but close to the felsic volcanic/sediment contact. At Rangoon the shear zones are in felsic volcanics/sediments but close to the mafic contact.

The Gambier Lass tenements are located west of the Keith Kilkenny Tectonic Zone within a highly sheared granitoid faulted against a deformed granitoid pebble conglomerate unit on the eastern limb of the Malcolm Anticline. The conglomerate is interpreted to represent a fault scarp conglomerate derived from the massive granitoid further to the east.

Gold mineralisation is associated with moderately dipping (40°- 50°) quartz veins in a major NW trending shear zone within the conglomerate. Similarly oriented mineralised quartz vein systems occur at North and South Gambier. The quartz veins are hosted within pervasively foliated granitoid and related fault scarp material (quartz-sericite schists) that displays intense but narrow sericite-carbonate alteration at the vein margins. Minor pyrite alteration is associated with the gold mineralisation.

Mineralisation within the Raeside prospect is hosted by a mixed package of fine grained sediments and a quartz dolerite unit. The dolerite is sill like in nature, and roughly conforms to observed bedding trends. The dolerite is fine to medium grained with extensive chlorite alteration. Discontinuities and breaks in the diamond core are primarily orientated along foliation planes, and slickensides are prominent throughout.

Gold mineralisation is hosted in a series of stacked, irregular, sub-parallel structures which dip shallowly to the east. Higher gold grades are generally associated with increased quartz/carbonate veining and varying levels of iron alteration. Veins are predominantly stockwork in nature and widths of massive veining are generally less than a metre.

Mineral Resources

Kin Mining NL has estimated the open pit Mineral Resources for the Mertondale, Cardinia, and Raeside deposits

The Mineral Resources have primarily been generated and reported by independent external consultants and Kin staff in accordance with the guidelines of the 2012 JORC Code.

The Mertondale and Raeside Mineral Resources were estimated by McDonald Speijers Pty Ltd in January 2009 and March 2009 respectively. The estimation was completed using a “recovered fraction” technique. Recovered fraction is a probabilistic technique that estimates the volumetric proportion of each block likely to be above a particular grade.

The Cardinia Mineral Resources were originally estimated by Runge Limited in January 2009 using ordinary kriging interpolation constrained within mineralisation envelopes prepared at a nominal 0.2 g/t gold cut-off grade.

Kin Mining has reviewed and confirmed the historic mineral resources.

The resources are grouped into the following project areas.

• Mertondale – 5.59Mt @ 2.2g/t Au for 395,000 oz of gold
• Cardinia –       4.66Mt @ 1.3g/t Au for 193,300 oz of gold
Raeside –        1.57Mt @ 2.6g/t Au for 134,000 oz of gold

 

The calculation resulted in a combined total Indicated and Inferred Mineral Resource of 11.83 Mt @ 1.9 g/t Au for 721,000 ounces of gold (Table 1).

LEONORA GOLD PROJECT MINERAL RESOURCES

Table 1– Leonora Gold Project Mineral Resources (reported in accordance with the 2012 JORC Code).

LGP Table