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Griffin Mining Ld (GFM)

  Print          Annual reports

Tuesday 26 January, 2021

Griffin Mining Ld

Zone II Resource

RNS Number : 8958M
Griffin Mining Ld
26 January 2021
 

 

GRIFFIN MINING LIMITED

8th Floor, Royal Trust House, 54-56 Jermyn Street, London. SW1Y 6LX, United Kingdom

Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773

E mail: [email protected]

 

Substantially Increased Zone II Resource at Recently Granted Mining Licence Area

 

107% Increase in the Mineral Resource at Just Zone II

 

$7.1 Billion Metal in Situ in Just Zone II

 

Mineral Resource Estimates for Currently Mined Zone III Area

and New Zones V & VIII Areas to be Announced in Near Future

 

 

26th January 2021

 

Griffin Mining Limited ("Griffin" or the "Company") is delighted to announce a significant increase to the Zone II Mineral Resource at the Caijiaying Mine. These additional Indicated and Inferred Mineral Resources are located immediately adjacent to the south of Zone III and within the recently approved Mining Licence (See Company Announcement "Issue of New Mining Licence" dated 4th January 2021).

These new resources, which are reported in compliance with The JORC Code, are in addition to the Zone III Mineral Resource currently being mined at the Caijiaying Zinc-Gold deposit. The highlights include:

· 1.49 million tonnes of Zinc Metal (from 0.638 million tonnes)

· 463,000 ounces of Gold (from 164,000 ounces)

· 36.8 million ounces of Silver (from 15.5 million ounces)

The new Zone II Indicated and Inferred Mineral Resource estimate comprises  40.7 Mt at 3.7% Zn, 0.9% Pb, 28.4 g/t Ag and 0.4 g/t Au, resulting in total contained metals of approximately 1.49 Mt of zinc metal, 36.Moz of silver metal, and 0.46 Moz of gold metal.

This is an increase of 21.1 Mt (107%) from the previously reported Zone II Mineral Resource of 19.6 Mt at 3.3% Zn, 0.7% Pb, 24.6 g/t Ag and 0.3 g/t Au (Company Annual Report "Results for 2018 and Annual Report and Accounts" dated 30th April 2019).

Regarding the contained metal this is an increase from approximately 0.6 Mt to 1.5 Mt of zinc metal, from 0.14 Mt  to 0.38 Mt of lead, from 15.5 Moz to 36.8 Moz of silver and from 0.16 Moz to 0.46 Moz of gold.

The large increase in resources at Zone II is the result of the significantly improved geological understanding of the structural controls on mineralisation, and on mineralogical associations gained from the extensive work over many years, together with a more recent detailed re-logging and assaying review of selected areas within Zone II. As underground access and mining activities progress into 2021, further improvements to the geological model are expected.

Further information in relation to the Mineral Resource estimate is set out in the appendix to this announcement.

Chairman Mladen Ninkov said "The substantial increase to the yet unmined Zone II resource justifies the long wait for the new Mining Licence and guarantees the increased mining throughput and mine life of Caijiaying for decades to come. I couldn't be happier for the shareholders of the Company who have waited so patiently and so eagerly for this day. We look forward now to the estimation and announcement of the total global Caijiaying resource in the near future ."

COMPETENT PERSON STATEMENT

The information in this announcement that relates to Mineral Resources is based on, and fairly reflects, information compiled by Mr Serikjan Urbisinov a Competent Person, who is a Member of the Australian Institute of Geoscientists. Mr Serikjan Urbisinov is a full-time employee of CSA Global Pty Ltd. Mr Serikjan Urbisinov has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr Serikjan Urbisinov consents to the disclosure of the information in this announcement of the matters based on his information in the form and context in which it appears.

 

*The insitu metal value is the result of the Company's' assessment and does not consider modifying factors such as the cost of metal extraction and recovery.

 

Further information

 

Griffin Mining Limited

Mladen Ninkov - Chairman  Telephone: +44(0)20 7629 7772

Roger Goodwin - Finance Director

 

Panmure Gordon (UK) Limited   Telephone: +44 (0)20 7886 2500

  John Prior

  Joanna Langley

 

Berenberg  Telephone: +44(0)20 3207 7800

    Matthew Armitt

Jennifer Wyllie

Deltir Elezi

 

Blytheweigh

  Tim Blythe  Telephone: +44(0)20 7138 3205

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

 

Griffin Mining Limited's shares are quoted on the Alternative Investment Market (AIM) of the London Stock Exchange (symbol GFM).

The Company's news releases are available on the Company's web site: www.griffinmining.com

 



Appendix A

Caijiaying Zone II Updated Resource Statement and Parameters

Griffin Mining Ltd (Griffin) requested CSA Global Pty Ltd (CSA Global), an ERM Group company, to prepare an updated Mineral Resource estimate for Zone II of their Caijiaying Zinc-Gold deposit (Caijiaying), located in Hebei Province, People's Republic of China.

 

The new Mineral Resource estimate comprises 40.7 Mt at 3.7% Zn and 0.4 g/t Au, and contains approximately 1,486 kt of zinc metal and 463 koz of gold metal. This is an increase of 21.1 Mt (comprising 848 kt contained zinc and 298 koz of contained gold) since the Zone II Mineral Resources were last reported on 31st December 2018 (based on a Mineral Resource estimate carried out in 2013). The updated Mineral Resource estimate for Zone II of the Caijiaying deposit is shown in Table 1.

 

The Mineral Resource estimate is reported in accordance with The JORC Code*. JORC Code Table 1 is attached to this memorandum.

 

The Mineral Resource estimate is based on 163 underground diamond drill holes and 337 surface drill holes. Mineralisation wireframes were interpreted by CSA Global in consultation with Griffin geologists using a nominal 1% Zn cut-off grade ("Zinc Domains"). The Zinc Domains are reported in Table 1. The mineralisation wireframes were used to domain samples, and to then constrain estimation within a 3D block model. Grade interpolation was carried out by ordinary kriging methods.

 

The Mineral Resource estimate includes 2.77 Mt of oxidised resource that may require modifications to the processing circuit to enable satisfactory recoveries.

 

The Mineral Resource has been depleted using a three-dimensional survey "As-Built" wireframe which represents the mined-out voids as of January 2021. To date, there has been no stoping of the material defined in the Zone II Mineral Resource estimate.

 

The previous Mineral Resource estimate first reported in 2013 is shown in Table 2. The tonnage for the new updated Zone II Mineral Resource has increased by over 100% and the contained zinc metal has increased by over 130%.

 

A plan showing the new Zone II mineralisation wireframes is shown in Figure 1. There is already some underground access from the existing Zone III Decline via the 1453 development drive. Zone II sits just to the south of Zone III, which is currently in production.

 

 * Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

 


Table 1: Mineral Resource estimate for Zone II as of 14th January 2021

Mineral Resources Reported at a Cut-Off Grade of 1.0% Zinc

Zone

JORC Classification

Tonnes

(Mt)

Zn

(%)

Pb

(%)

Ag

(g/t)

Au

(g/t)

Zn

Metal (t)

Pb

Metal (t)

Ag

(oz)

Au

(oz)


Measured










Zone II

Indicated

1.21

2.9

0.5

19.3

0.3

35,023

5,886

751,155

10,489

Oxide

Inferred

1.56

2.5

0.5

16.5

0.1

38,817

8,027

830,000

6,674


Sub-Total

2.77

2.7

0.5

17.7

0.2

73,840

13,912

1,581,155

17,163



Measured











Indicated

11.53

3.8

0.9

27.2

0.3

435,919

109,157

10,084,929

96,145

Zone II

Inferred

26.38

3.7

1.0

30.0

0.4

976,672

253,222

25,108,309

349,567

Fresh

Sub-Total

37.91

3.7

1.0

29.2

0.4

1,412,591

362,378

35,193,238

445,712



Measured










Zone II

Indicated

12.74

3.7

0.9

26.5

0.3

470,942

115,042

10,836,084

106,633

Total

Inferred

27.94

3.6

1.0

29.3

0.4

1,015,489

261,248

25,938,310

356,241


Total

40.68

3.7

0.9

28.4

0.4

1,486,431

376,291

36,774,393

462,875

 

Table 2: Caijiaying Zone II Mineral Resource estimates as of June 2013

 

Caijiaying Zone II Remaining Mineral Resources June 2013 (grade tonnage reported above a cut-off grade of 1.0% Zn)

 

Zone

JORC Classification

Tonnes

(Mt)

Zn

(%)

Pb

(%)

Ag

(g/t)

Au

(g/t)

Zn

Metal (t)

Pb

Metal (t)

Ag

(oz)

Au

(oz)

 


 


Measured










Zone II

Indicated

4.06

3

0.7

24.9

0.3

123,000

27,000

3,242,800

39,300


Inferred

15.57

3.3

0.8

24.5

0.3

516,000

117,000

12,276,700

124,200


Sub-total

19.63

3.3

0.7

24.6

0.3

638,000

144,000

15,519,600

163,500

 

 

 


 

 

Figure 1: Plan showing Zone II mineralisation wireframes, with mine workings, and the southern end of Zone III (at the very top of the plan)


Glossary of key terms

 

CSA Global

CSA Global Pty Ltd. A private consulting firm providing technical and management services to the global mining industry.

cut-off

The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification.

deposit

Natural accumulations of minerals in the earth crust, in form of one or several mineral bodies which can be extracted at the present time or in an immediate future.

diamond drill hole

Method of obtaining cylindrical core of rock by drilling with a diamond-set or diamond-impregnated bit.

g/t

Grams per tonne - a unit of measurement used to express the concentration of an element within a mass of another (same as parts per million).

Indicated Mineral Resources

That part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.

Inferred Mineral Resources

That part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

JORC

An acronym for Joint Ore Reserves Committee. by The Australasian Institute of Mining and Metallurgy (The AusIMM) and the Australian Institute of Geoscientists (AIG) and is binding on members of those organisations. The Code is endorsed by the Minerals Council of Australia and the Financial Services Institute of Australasia as a contribution to good practice. The Code has also been adopted by and included in the listing rules of the Australian Securities Exchange (ASX) and the New Zealand Stock Exchange (NZX)., the purpose of which is to set the regulatory enforceable standards or a Code of Practice for the public reporting of Exploration Results, Mineral Resources and Ore Reserves.

Measured Mineral Resources

That part of a Mineral Resource for which quantity, grade (or quality), densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.

Mineral Resources

A concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

 



 

JORC Code, 2012 Edition - Table 1

Section 1: Sampling Techniques and Data

Criteria

JORC Code explanation

Commentary

Sampling techniques

Nature and quality of sampling (e.g., cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as downhole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

The sample database is made up of surface diamond drilling, underground diamond drilling and surface reverse circulation (RC) drilling.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Diamond core was cut in half using a diamond saw, with the cut line determined by the mineralisation angles. RC samples were split through a riffle splitter.

Aspects of the determination of mineralisation that are Material to the Public Report.

In cases where 'industry standard' work has been done this would be relatively simple (e.g., 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases, more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g., submarine nodules) may warrant disclosure of detailed information.

Diamond holes were sampled after standard logging and photography. Sampling intervals were 0.5-1.5 m with 1.0 m being the most common interval. RC drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 50 g charge for fire assay and a 20 g charge for base metal assay.

 

 

Drilling techniques

Drill type (e.g., core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g., core diameter, triple or standard tube, depth of diamond tails, face-sampling bit, or other type, whether core is oriented and if so, by what method, etc.).

Drilling was completed using a face sampling hammer (RC) or NQ2/BQ size diamond core. All holes were surveyed upon completion of drilling using single/multi-shot electronic or mechanical survey cameras.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Core recovery is measured for diamond core by measuring the length of core for each core run. This is recorded in a table called GEOTECH. There is no recovery recorded for RC holes, but these constitute only 50 holes within the Mineral Resource and have been mainly used to provide information about the depth of overburden.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Diamond coring is carried out using equipment in good working order to ensure no loss of core. Core loss during drilling is noted on a core block placed into the core tray, and then discussed with the geologist. Core loss is generally rare and related to fault zones away from the mineralisation. RC sample recovery was maximised by using a modern rig with sufficient air to keep the hole dry.

Relationship between sample recovery and grade/sample bias.

This analysis was not carried out because core recovery has generally been high through the mineralised zones.

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

All RC samples were geologically logged to record weathering, regolith, rock type, colour, alteration, mineralisation, structure and texture and any other notable features that are present. All diamond core was logged for structure, and geologically logged using the same system as that for RC.

The logging information was recorded into Microsoft (MS) Excel format on paper and then transferred into the company's drilling database once the log was complete. Since 2017 core logging has been directly into MS Excel sheets on laptop computers.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

Logging was qualitative; however, the geologists also record visual quantitative mineral percentage ranges for the sulphide minerals present.

Diamond core was photographed wet, one core tray at a time using a standardised photography jig.

Samples from RC holes were archived in standard 20 m plastic chip trays.

The total length and percentage of the relevant intersections logged.

All holes and intersections have been logged.

Subsampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

Core samples were taken from half core, cut using a diamond core saw. The remainder of the core was retained in core trays tagged with a hole number and metre mark.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

RC samples were cone split to a nominal 2.5 kg to 3 kg sample weight. The drilling method was designed to maximise sample recovery and delivery of a clean, representative sample into the calico bag.

Where possible all RC samples were drilled dry to maximise recovery. The use of a booster and auxiliary compressor provide dry sample for depths below the water table.

Sample condition was recorded (wet, dry or damp) at the time of sampling and recorded in the database.

Samples were collected in a pre-numbered calico bag bearing a unique sample ID. Samples were crushed to 75 m at the laboratory and riffle split (if required) to a maximum 3 kg sample weight. Gold analysis was determined by a 50 g fire assay with an inductively coupled plasma-optical emission spectrometry (ICP-OES) or atomic absorption spectroscopy (AAS) finish.

For all sample types, the nature, quality and appropriateness of the sample preparation technique

The assay laboratories' sample preparation procedures follow industry best practice, with techniques and practices that are appropriate for this style of mineralisation. Pulp duplicates were taken at the pulverising stage and selective repeats conducted at the laboratories' discretion.

Quality control procedures adopted for all subsampling stages to maximise representivity of samples.

Cut lines are marked on diamond drill core to ensure that the core to minimise bias when cutting.

The RC drilling was carried out several years ago, and no documentation remains on QAQC of subsampling. RC samples are not material to this Mineral Resource estimate (MRE).

Measures taken to ensure that the sampling is representative of the in-situ material collected, including for instance results for field duplicate/second-half sampling.

HHA inserts approximately three standards and three blanks for every 100 samples. Field duplicates were collected from the cone splitter on the rig for RC samples at a frequency of one duplicate every 20 samples, excluding the 100th sample as this was a standard. Diamond core duplicates were not taken during this drilling program.

Regular reviews of the sampling were carried out by the supervising geologist and senior field staff, to ensure all procedures were followed and best industry practice carried out.

Whether sample sizes are appropriate to the grain size of the material being sampled.

The sample sizes were appropriate for the type, style and consistency of mineralisation encountered during this phase of exploration.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

A combination of assay laboratories has been used over the life of the project. HUA-AO is the site laboratory. Intertek and SGS are independent commercial laboratories in China. All samples were assayed for zinc, lead, silver and gold. Zinc, lead and silver were by four-acid digest of a 0.5 g subsample with atomic absorption spectroscopy (AAS) finish, or inductively couple plasma-optical emission spectrometry (ICP-OES) finish in the case of SGS. The HUA-AO laboratory carried out gold analysis using four-acid digest of a 20 g subsample, following by carbon absorption, washing and second acid digest before AAS finish. Intertek and SGS used 30 g fire assay for gold.

In 2019 selected holes were analysed for whole rock geochemistry. This analysis was carried out by Intertek in Perth, with sample preparation at SGS in Tianjin. The analysis was four-acid digest, followed by inductively couple plasma-mass spectrometry (ICP-MS) determination.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

No geophysical tools, spectrometers were used. Handheld x-ray fluorescence (XRF) instruments are used; however, the values were only used to support geological modelling of the lithology. The values were not used for grade estimation.

Nature of quality control procedures adopted and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

The QAQC process described above was sufficient to establish acceptable levels of accuracy and precision. All results from assay standards and duplicates were scrutinised to ensure they fell within acceptable tolerances.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

Primary data is sent in digital format to the company's Database Administrator (DBA) as often as was practicable. The DBA imports the data into a GeoBank (MS SQL) database, with assay results merged into the database upon receipt from the laboratory. Once loaded, data was extracted for verification by the geologist in charge of the project.

The use of twinned holes.

Twinned holes have not been drilled at Caijiaying because the MRE is predominantly based on diamond drillholes with demonstrated good recovery through the ore zones. Several years of production from the adjacent Zone III orebody gives confidence to the geometry and persistence of mineralisation.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

All primary data is collected on paper logs, which are filed and stored. Procedures are documented for data recording and entry. Data from paper logs is transferred to MS Excel files and then imported into GeoBank drillhole database. A back up of the database is maintained in CSA Global's Perth office. Since 2017, logging has been directly into MS Excel tables on a laptop. These files are transferred to a server. The server has a backup system.

Discuss any adjustment to assay data.

No adjustments were made to any current or historical data. If data could not be validated to a reasonable level of certainty it was not used in any resource estimations.

Location of data points

Accuracy and quality of surveys used to locate drillholes (collar and downhole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Surface RC drill collars were surveyed after completion, using a differential global positioning system (GPS) instrument. Downhole RC surveys were completed using a mechanical single-shot survey camera. Underground holes were surveyed by mine surveyors using a total station theodolite. Downhole surveys were completed using single/multi-shot electronic survey instruments or single-shot survey camera. Downhole surveys are recorded relative to magnetic north. Corrections are made, depending on the year of survey, for magnetic declination, to give azimuths in terms of the HHA mine grid system.

Specification of the grid system used.

All coordinates and bearings use the HHA mine grid system.

Quality and adequacy of topographic control.

The quality of the topographic control is considered to be sufficient. The mine is in operation and has a site-based survey department. Their work is of good quality, supported by development breakthroughs occurring as expected; being able to connect two drives being developed towards each other and so on.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

The data spacing is irregular, with a clustering in the main part of the mine, but average spacings are approximately 40 m x 40 m.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

The Competent Person believes that the mineralised domains have sufficient geological and grade continuity to support the classification applied to the Mineral Resource given the current drill pattern.

Mineral Resource estimation procedures are also considered appropriate give the quantity of data available and style of mineralisation under consideration.

Sample compositing

Sample composites have not been used.

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

Drilling was designed based on known geological models, field mapping, verified historical data and cross-sectional interpretation.

Drillholes oriented at right angles to strike of deposit, with dip optimised for drill capabilities and the dip of the orebody.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

This is not considered to be a material factor because of the style of mineralisation and the use of underground drill fans to intersect the mineralisation at various angles.

Sample Security

The measures taken to ensure sample security.

All samples were reconciled against the sample submission with any omissions or variations reported to back to the logging geologists.

All samples were bagged in a tied numbered calico bag, grouped into green plastic bags. The bags were placed into cages with a sample submission sheet and delivered directly from site to the SGS and Intertek laboratories in Beijing and Tianjin by HHA personnel.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

An audit of the underground mining geology systems, including sampling, was carried out in 2018 by Aaron Meakin of CSA Global. This included work on ideal sample spacing. In general, this audit supported current practice.

 

Section 2: Reporting of Exploration Results

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

Griffin Mining Ltd, through a wholly owned subsidiary, owns 88.8% of HHA which owns the Caijiaying Mine. "The Zone II Mining licence is located at the Caijiaying Mine approximately 250 kilometres by road,

north-west of Beijing in Hebei Province in the People's

Republic of China.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Zone II Mining Licence has been granted See Company Announcement "Issue of New Mining Licence" dated 4th January 2021.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

All exploration has been undertaken by HHA or the Third Geological Brigade of Hebei who now form part of the Hua-Ao Joint Venture.

Geology

Deposit type, geological setting and style of mineralisation.

Mineralisation at Caijiaying is believed to be related to a Jurassic igneous event that affected the 2.3 billion-year-old metamorphic basement rocks. Base metal and gold mineralisation associated with Jurassic intrusives have replaced favourable horizons in the metamorphic rocks, most notably calcsilicates and marble. Porphyry sills and dykes intruding along faults have then cut across the sequence.

Drillhole information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drillholes:

easting and northing of the drillhole collar

elevation or RL (Reduced Level - elevation above sea level in metres) of the drillhole collar

dip and azimuth of the hole

downhole length and interception depth

hole length.

Exploration results are not being reported.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Exploration results are not being reported.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g., cutting of high grades) and cut-off grades are usually Material and should be stated.

Exploration results are not being reported.

Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low-grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

Exploration results are not being reported.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

Exploration results are not being reported.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

Exploration results are not being reported.

If the geometry of the mineralisation with respect to the drillhole angle is known, its nature should be reported.

Holes were drilled orthogonal to mineralisation as much as possible; however, the exact relationship between intercept width and true width cannot be estimated exactly in all cases.

If it is not known and only the downhole lengths are reported, there should be a clear statement to this effect (e.g. 'downhole length, true width not known').

Exploration results are not being reported.

Diagrams

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drillhole collar locations and appropriate sectional views.

Exploration results are not being reported.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Exploration results are not being reported.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

No substantive exploration data not already mentioned in this table has been used in the preparation of this MRE.

 

Further work

The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).

Further work will be focused on infilling mineralisation to upgrade to a higher Mineral Resource classification and testing for dip extensions and strike extensions.

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Exploration results are not being reported.

Section 3: Estimation and Reporting of Mineral Resources

Criteria

JORC Code explanation

Commentary

Database integrity

Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

Logging information was originally recorded on paper, then entered into MS Excel format and then sent to the company's DBA once the log was complete. Since 2017, logging has been on laptops directly into MS Excel tables.

Collar surveys were received electronically from surveyors.

Downhole surveys (underground holes only) were received electronically from the drilling company with surface drilling surveys being entered first on paper then into MS Excel format before loading into the database.

Laboratory analysis results were received electronically and loaded straight into the database.

Data validation procedures used.

The company's DBA imports all electronic data received into a GeoBank database with database configuration support from CSA Global consultants.

The Geobank database is a MS SQL Server database, which is relational and normalised. As a result of normalisation, the following data integrity categories exist:

Entity integrity: No duplicate rows in a table, eliminated redundancy and chance of error.

Domain integrity: Enforces valid entries for a given column by restricting the type, the format or a range of values.

Referential integrity: Rows cannot be deleted which are used by other records.

User-defined integrity: Logging rules and validation codes set up by the company.

Data extracted from the database was validated visually in Micromine software and when using the data any errors regarding incorrect locations, missing collar information, logging, sampling and downhole survey data and overlapping intervals are highlighted.

Site visits

Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

Aaron Meakin, a current CSA Global consultant, spent approximately two weeks on site in 2018. In this time, discussions were held regarding the geological controls to the mineralisation, and data collection protocols were reviewed.

If no site visits have been undertaken indicate why this is the case.

Not applicable.

Geological interpretation

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

There is a reasonable level of confidence in the geological interpretation of the mineralisation that is traceable over numerous drillholes and drill sections both for underground and surface drilling.

Nature of the data used and of any assumptions made.

Surface mapping of mineralised outcrop, underground workings, drillhole intercept logging, assay results and detailed geological logging have formed basis for the geological interpretation.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

Geological continuity is implied between drillholes and conforms well to the anticipated geological model based on the interpretation of regional and local geology, and its association with mineralisation. The data does not readily offer alternative interpretations. In places, the precise limits and geometry cannot be absolutely defined due to the limitations of the current drill coverage and the structural complexity. Further work is required to better define the geometry and limits of the mineralised zones, but no significant downside changes to the interpreted mineralised volume are anticipated.

The use of geology in guiding and controlling Mineral Resource estimation.

The grade and lithological interpretation form the basis for the modelling. Lithological envelopes defining the prospective mineralisation within which the grade estimation have been completed.

The factors affecting continuity both of grade and geology.

The mineralisation is hosted within the Proterozoic basement rock. Chang et al. (2009) described the mineralisation, which is dominated by zinc, in detail and categorised three distinct styles: breccias, skarns, and banded mineralisation. Brecciated zones are composed of angular clasts of sericite, chlorite, siderite and pyrite altered basement rock, and yields the most common style of mineralisation. Skarns are typically massive, associated with retrograde alteration, and characterised by replacement skarn mineralogies such as quartz, siderite, calcite, other carbonates, chlorite and sometimes sphalerite. Banded ore is present only in minor amounts and considered the result of uninhibited mineral growth inside previously leached and dissolved carbonate zones.

Dimensions

The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

The Mineral Resource has a strike length of 1,300 m, a width of 800 m and extends from 10 m below surface to 700 m below surface.

Estimation

and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

Grade estimation was carried out using the geostatistical method of ordinary kriging. The methods use estimation parameters defined by variography. The 1 m composite top-cut dataset was used for the grade interpolation. Estimation of the resource was competed using Micromine. The mineralisation domains, resource category and porphyry dykes were coded to the block model. Density data was also imported into Micromine software and was also applied using a regression formula relating to the zinc grade.

The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

CSA Global carried out an MRE for Griffin Mining in 2011. Since that time 116 new underground diamond drill holes have been completed and mapping was carried out, resulting in an improved geological model. The new estimate shows a growth of 21.1 Mt, 848Kt contained zinc and 298 koz of contained gold.

No check estimates were carried out, because the methods are similar to those used on the Zone III estimate, where current production reconciles well with the estimate.

Zone II is not in production, so there are no mine production records.

The assumptions made regarding recovery of by-products.

The processing plant currently produces a zinc and a lead concentrate. Credits are paid for gold and silver in the lead concentrate. The MRE includes gold, silver and lead.

Estimation of deleterious elements or other non-grade variables of economic significance (e.g., sulphur for acid mine drainage characterisation).

No potentially deleterious elements have been considered. The processing plant is currently operating, and no deleterious elements are reported as causing concern.

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

A 3D block model was generated to enable grade estimation. The selected block size was based on the geometry of the domain interpretation and the data configuration. A block model was created using 5.0 mE x 10.0 mN x 5.0 mRL parent blocks. Sub-cells were generated down to 1 mE x 2 mN x 1 mRL as appropriate to honour wireframe domains and geological interpretations during model construction.

Any assumptions behind modelling of selective mining units.

No selective mining units were assumed in this estimate.

Any assumptions about correlation between variables.

No strong correlations were found between the grade variables.

Description of how the geological interpretation was used to control the resource estimates.

The lower cut-off grades of 1.0% Zn for Zn domains defined the mineralised envelopes. Hard boundaries between the grade envelopes were used to select sample populations for grade estimation.

Discussion of basis for using or not using grade cutting or capping.

Top cuts were used to treat the high-grade outliers of the domains. Top cuts were based on review of the domain histogram and log probability plot.

The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

Validation of the block model consisted of comparison of the block model volume to the wireframe volume. Grade estimates were validated by statistical comparison with the drill data, visual comparison of grade trends in the model with the drill data trends. Additionally, swath plots were generated to verify block model grades vs drillhole grades along easting, northing and elevation slices.

Moisture

Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

Tonnages are estimated on a dry basis.

Cut-off parameters

The basis of the adopted cut-off grade(s) or quality parameters applied.

The Mineral Resource has been reported above a 1% Zn cut-off grade.

Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

Caijiaying is being mined by underground methods.

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

Caijiaying is being mined by underground methods and processed in a conventional flotation processing plant. It currently produces zinc and lead concentrates that are sold to smelters. This demonstrates that the ore can be treated.

Environmental factors or assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

Zone III of the mine is in production and has all environmental permits in place. The Zone III mining licence extends down to 1000 mRL. There are processes in place in Chinese mining law to allow this to be extended deeper.

Zone II is within the granted Mining Licence See Company Announcement "Issue of New Mining Licence" dated 4th January 2021. This mining licence extends down to 968 mRL.

 

Bulk density

Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

Density measurements were conducted via the standard water immersion technique. Data was only available for early-stage operations (drillholes UGCJY-001 to UGCJY-827) and late-stage operations (drillholes UGCJY-1318 to UGCJY-2013). No density data was collected between drillholes UGCJY-827 and UGCJY-1318, which correlates with the period from March 2007 to January 2010. A regression formula was developed to relate density to zinc grade, and this has been applied for Zone III.

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Some porosity can be expected; however, the bulk density assigned is considered to be reasonable.

Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

In Zone II, bulk density was assigned using a regression formula, based on the zinc grade.

Classification

The basis for the classification of the Mineral Resources into varying confidence categories.

The Mineral Resource was classified as Inferred and Indicated, taking into account the level of geological understanding of the deposit, quality of samples, density data, drillhole spacing and sampling and assaying processes.

Whether appropriate account has been taken of all relevant factors (i.e., relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

The following initial classification approach was adopted:

The resource was classed as Inferred if the average weighted sample distance was greater than 50 m.

The resource was classed as Indicated if the average weighted sample distance was between 25 m and 50 m. If the numbers of drillholes -<2 then Indicated resources were downgraded to Inferred.

The initial classification was reviewed visually. Based on the initial classification, a solid Indicated was created to define Indicated Mineral Resources. This defined resource categories based on a combination of data density and geological confidence.

Whether the result appropriately reflects the Competent Person's view of the deposit.

The MRE appropriately reflects the view of the Competent Person.

Audits or reviews

The results of any audits or reviews of Mineral Resource estimates.

Internal audits were completed by CSA Global which verified the technical inputs, methodology, parameters and results of the estimate.

Discussion of relative accuracy/ confidence

Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

The Mineral Resource accuracy is communicated through the classification assigned to this Mineral Resource.

The MRE has been classified in accordance with the JORC Code (2012 Edition) using a qualitative approach. All factors that have been considered have been adequately communicated in Section 1 and Section 3 of this table.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

The Mineral Resource statement relates to a global tonnage and grade estimate. Grade estimates have been made for each block in the block model.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

No production data is available.

 

 

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