ZANI-KODO

Zani-Kodo is a joint venture with SOKIMO, the state-owned Office des Mines d'Or de Kilomoto. We hold an 80% stake in this resource that covers 1,605km2 in this new gold province of North East DRC. Randgold's Kibali mine (22M oz) sits 60km NW, and Mogbwau deposit (5M oz) 30km SW, of Zani-Kodo.

 

RESOURCE SUMMARY

Category Cut off (g/t) Tonnes (t) Grade (g/t) Gold (oz)
Indicated 0.5 6,302,000 3.25 659,000
Inferred 0.5 31,720,000 2.27 2,313,000
Total   38,022,000 2.43 2,973,000

 A detailed breakdown by resources is in the Exploration & Resource section below.

OVERVIEW

During 2016, senior management have been actively re-engaging with the DRC government to validate mine licences. As part of this process, a pre-feasibility study was provided to the DRC Minister for Mines and we await final approval. Environmental and community mining licences and OHADA compliance has been progressed. Essential equipment for a gravity plant has been ordered and assembled with a view to starting a basic operation as soon as possible in 2017. With over 600,000 oz already defined at Kodo Main, an open pit mining operation could generate sufficient cashflow for subsequent exploration and upgrading of the existing known deposits and other targets within the wider licence area.

It is anticipated that initial extraction will be low-cost surface work that will then finance underground production. The area of interest has little significant infrastructure; the areas to the south and north have roads and power links associated with other established operations, raising the possibility of being able to link with established infrastructure from neighbouring operations such as Randgold’s Kibali Project.

Initial test work on Kodo Main orebody shows ore is non-refractory and a higher than 90% gold extraction was obtained across all recovery methods tested.

 

Phasing strategy

Phase 1: Open pit gravity plant
Phase 2: Feasibility Study
  Convert inferred resources to measured
Phase 3: A JV partnership to scope and build CIL Plant
  Exploration programme to reach 5Moz within 2 or 3 years

 

Process Route Gold Recovery (%)
CIL on milled ROM 96.4
Gravity and leach 94.16
Normal flotation and leach 95.61
Flash flotation and leach 91.43
Gravity, flotation on gravity tails, and leach on concentrate tails 94.13

 

Area target planning

Exploration triangles since 2007 show the progress made in identifying and appraising targets, which has allowed individual targets to be rapidly brought to resource status.

zani-kodo_triangles@2x

Exploration triangles, Zani-Kodo project from initial exploration. 



Resources forecasting

On the basis of experience to date, management is confident that it can increase Zani-Kodo resource at a rate of c 1Moz per annum to reach at least 5Moz within 2 or 3 years of starting a new drilling programme, and up to 10Moz in 5 years - up to 70% of which could be convertible into reserves. 

 
resources_indicated_inferred@2x

Resource (indicated & inferred) progress since 2008 across Zani-Kodo licences and a projection to increase this over time once mining operations commence. 

zani-kodo_exploration_map@2x

 

Sub area Category  Tonnes (t) Grade (g/t) Gold (oz)
Kodo Main Indicated 4,799,487 3.33 560,197
Kodo Main Inferred 10,330,969 2.27 1,169,293
Lelumodi Indicated 1,118,644 2.43 74,079
Lelumodi Inferred 8,154,092 1,81 474,563
Lelumodi North Inferred 1,150,062 2.43 86,532
Badolite Inferred 2,806,940 2.34 211,197
    9,683,455 1.28 398,547
 Total   38,043,649 2.43 2,974,900

The effective date for the Zani–Kodo resource statement is September 2013

zani-kodo_resource_breakdown@2x

 

The deposits are hosted in NNW trending banded iron formations where gold is associated with the sulphide minerals: pyrrhotite and arsenopyrite. Gold is non-refractory and occurs either as free particles or along the grain margins of the sulphide minerals.

The project area covers four licences with a combined area of 1605 km2. Resource estimates dated September 2013 show an overall total of almost 3m oz of gold, of which around 20% (634 koz) is classed as “indicated”, with the balance, “inferred”, located in 5 deposits – Kodo Main, Lelumodi, Lelumodi North, Le Badolite and Zani Central. This area contains several old Belgian operations that were worked from the 1930s to the 1960s when the Belgium colonial era ended and the country’s first civil war started. These operations consisted of one small open pit and a single shaft-accessed underground mine. Total historical production at Zani-Kodo is estimated at 572,000t at 6.5g/t (mining high-grade veins), but was abandoned during the civil war in 1964.

The company has undertaken an extensive aeromagnetic survey that, in conjunction with field studies, has identified several target areas. The initial focus of exploration has been along the 9km Zani-Kodo trend, which hosts known mineralisation at Kodo (Kodo Main Zone) and two target areas at Le Badolite and Zani Central. At Kodo Main, the mineralised zone has been defined over a strike length of 700m and is up to 30m wide. The Main Zone consists of quartz veins, breccias and silicification in sheared meta sediments and banded iron formation with gold associated with sulphides. The current resource definition at Kodo Main is focused on a 700m strike length and around the historic Kodo mine. To date, a resource of 1.4Moz of gold has been calculated at Kodo Main alone. Geological mapping and exploration activity is ongoing and additional targets are currently being drilled along the trend to the south of Zani Central. A further 5km of the trend to the south – which shares the same magnetic stratigraphy as the north – remains to be tested.

The Zani-Kodo trend is defined by the sheared hanging wall contact between a competent footwall metagreywacke and a banded iron formation/metasiltstone hanging wall sequence. At Kodo, a well-defined, stacked thrust system has been defined which accounts for the enhanced mineralisation. At Badolite and Zani Central, broader, lower grade zones occur along the contact zone. The Zani-Kodo trend is post-dated by a series of late north-east trending normal faults which offset it locally, notably along the Aru River and between Badolite and Zani Central.

Mineralisation at Kodo remains completely open at depth and based on the excellent geological continuity and in accordance with the transition towards JORC 2012 requirements, a 4th (Exploration Target) classification has been introduced for additional deep extensions at Zani-Kodo. This projected target is anticipated to be in the range of 1.3 to 2.3 Mt at an average grade of 3 to 4 g/t.

To date, some 70,000m of diamond core drilling has been completed at Zani-Kodo. The average width of the shoot is 5-10m at a grade of c 4g/t at Kodo Main and 1.5-2.5g/t at Badolite and Zani Central.

Metallurgically, the gold is associated with pyrrhotite, and arsenopyrite within a quartz host. As much as 70% of the gold is estimated to be recoverable by gravity, with total recovery anticipated at 90%.

 

zani-kodo_photo@2x

licenced_area_map@2x

 

Figure 1: Distribution of Kibalian age greenstone belts with locations of major gold deposits. N.B: DRC and Tanzanian belts separated by younger East African rift.

The licence area is situated in the same Archaean greenstone belt that hosts the giant Kibali project (>20Moz) 60km to the NW and the Mongbwalu Project (5Moz) 30km to the SW (Figure 2).

Kodo Main

Drilling commenced at the site of the old Kodo mine in April 2007. To date, a total of 56,000m has been drilled at this location. Mineralisation has been identified to a vertical depth of 450m.

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Le Badolite

The Zani-Kodo trend is post-dated by a series of late north-east trending normal faults which offset it locally, notably along the Aru River and between Badolite and Zani Central.

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Lelumodi North

Limited drilling has been carried out at the northern strike extension of Lelumodi (Lelumodi North, Figure 20). Broad mineralized zones have been successfully identified, with a best intersection of 43m @ 2.12g/t.

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Zani Central

Exploration drilling has been completed at the Zani Central target to the south of Badolite. Artisanal workings are present at surface (Fig. 15) here, as well as two historical exploration audits.

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Lelumodi

The 600,000 oz of “inferred” resources within the Lelumodi deposits lie 4 km south-east of Kodo Main, extend over more than 350 metres of strike and coincide with a major gold in soil geochemical anomaly.

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