Geological Resources – Sao Chico

Sao Chico came under the control of the Company following the acquisition of Kenai Resources Ltd in July 2013.

Kenai Resources Limited issued a Technical Report entitled “Mineral Resource Estimate on the Sao Chico Gold Project, Brazil” dated October 15, 2012 and authored by Mr A.J. Tunningley, MGEOL (Hons), MAusIMM (CP), MSEG, and Mr B. Ackroyd, BSc (Geo), MAIG in accordance with Canadian National Instrument 43-101 relating to the Sao Chico gold project (“the Sao Chico Technical Report”).

The Sao Chico Technical Report established an independent mineral resource based on the results of 22 diamond drill holes totalling 3,268 metres undertaken by Kenai in late 2011. The NI 43-101 mineral resources are as follows:

Resources Tonnage Gold g/t Contained Gold ounces
Measured 5,064 32.46 5,269
Indicated 21,423 29.14 20,006
TOTAL Measured + Indicated 26,487 29.77 25,275
Total Inferred Resources 85,577 26.03 71,385

* Mineral resource has been depleted for Underground Development (Main Vein)

** Mineral resources are not Mineral Reserves and do not have demonstrated economic viability.

1)     No cut-off grades have been applied to the block model in deriving the Mineral resource reported above given insufficient drilling data.

2)     The Mineral Resource Estimate for the Sao Chico Gold Project was constrained within lithological and grade based solids.  No optimisation studies have been applied to this high-grade, steeply dipping mineralisation.

3)     Mineral Resources for the Sao Chico Gold Project have been classified according to the “CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines (Update 2011) by Bradley Ackroyd (BSc(Geo) MAIG an independent Qualified Person as defined by National Instrument 43-101.

In late May 2013, Serabi commenced a second drilling campaign which was completed in October 2013 for a total of 6,070 metres over 38 drill holes.  The programme initially targeted the geological resource defined from the 2011 drilling upon the high grade Main Vein.  Twenty one (21) infill and step out holes totalling 4,950m were completed.  This exploration programme has been supplemented by a ground geophysics Induced Polarisation (“IP”) survey which commenced early in August 2013 and was completed in September 2013.  Results from a further 5 shallow holes totalling approximately 500 metres that targeted the Highway Vein were also very encouraging and reinforced managements view of the potential for increased resource potential at Sao Chico.

Results from the 21 holes drilled into the Main Vein have returned a series of high grade gold intersections including ten intercepts in excess of 100 g/t of gold.  The drilling intercepted a continuous zone of alteration and quartz sulphide veins beneath and along strike from the previous resource drilling campaign.   Drilling at the Highway Vein resulted in four holes out of the five producing near surface intersections (less than 85 meters down the hole) in excess of 25g/t.

In 2015 following development on the Sao Chico main lode, a further exploration diamond drill programme was completed by Serabi to augment the existing drill information and attempt to extend the mineralised lodes defined by previous drilling. Work completed in 2015 included:

  • 42 diamond drill holes totalling 7,204m (15-SC-67 to 15-SC-108)
  • Paragenetic studies on mine ore samples including detailed petrological descriptions, SEM and QemScan analysis.
  • Geochemical correlation analysis of 28 ore samples.

The drilling focussed on the Western and Main zones with 3 holes targeting the Highway Zone.