Avala Resources Announces Inferred Resource Estimate for Korkan East, Timok Gold Project
23 April 2014 - 11:28PM
Marketwired Canada
Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to
announce a resource estimate for the Korkan East deposit, which is part of its
Timok Gold Project located in Eastern Serbia.
Using a 2g/t in situ gold-equivalent cut-off grade (Au_Eq) the Korkan East
deposit contains in-situ inferred resources of 1.37 million tonnes at an average
grade of 3.4g/t gold (Au), 44 g/t silver (Ag), 0.6% lead (Pb), 0.5% zinc (Zn)
and 0.8% arsenic (As), for 147,000 ounces of Au, 1.919 million ounces of Ag,
8,300 tonnes of Pb and 7,100 tonnes of Zn. The resource estimate is based on 54
drill holes and 8,593 samples.
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TIMOK GOLD PROJECT
KORKAN EAST
INFERRED IN SITU RESOURCE ESTIMATE
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Cut-Off Tonnes Au_Eq Au Ag Pb Zn As S Au_Eq Au Ag Pb Zn
(Au_Eq)
g/t (mt) (g/t)(g/t)(g/t) (%) (%) (%) (%) (koz) (koz) (koz) (kt) (kt)
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MBX BRECCIA ZONE
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2.0 1.12 4.6 3.6 47 0.6 0.6 0.8 3.6 166 130 1,703 7.1 6.4
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S1/LMST
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2.0 0.25 2.9 2.2 27 0.5 0.3 0.9 2.8 23 18 215 1.1 0.7
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TOTAL INFERRED RESOURCES
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2.0 1.37 4.3 3.4 44 0.6 0.5 0.8 3.1 189 147 1,919 8.3 7.1
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Notes:
1. The effective date of the Korkan East mineral resource estimate is 31st
March 2014
2. The resource estimation has been completed by Chris Arnold MAusIMM
CP(Geo) of AMC Consultants Limited ("AMC").
3. The gold price for the Korkan East estimate is US$1300/oz. The location
and style of Korkan East suggests that an underground mining approach is
appropriate and a 2g/t Au_Eq cut off grade has been used to report the
resource estimate.
4. 2g/t Au_Eq cut off in-situ metal prices (Au US$1300/oz, Ag US$20/oz, Pb
US$2,000/t, Zn US$2,000/t).
5. 2g/t Au_Eq cut off: Au_Eq = ((Au g/t (i) 41.80)+(Ag ppm (i) 0.3858)+(Pb%
(i) 20.0) + (Zn% (i) 20.0))/41.80
6. Mineral resources, which are not mineral reserves, do not have
demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title,
taxation, sociopolitical, marketing, or other relevant issues.
7. The quantity and grade of reported inferred resources in this estimation
are uncertain in nature and there has been insufficient exploration to
define these inferred resources as indicated or measured mineral
resources.
8. Totals and average grades are subject to rounding to the appropriate
precision.
9. The mineral resource was estimated using the Canadian Institute of
Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral
Resources and Reserves, Definitions and Guidelines prepared by the CIM
Standing Committee on Reserve Definitions and adopted by the CIM
Council.
The Timok Gold Project, incorporating the Bigar Hill, Korkan, Kraku Pester and
Korkan East deposits, has a combined in-situ indicated resource estimated at
46.3 million tonnes at an average grade of 1.56 g/t Au for a total of 2.32
million ounces of Au. Additionally, a combined inferred resource of 10 million
tonnes at an average grade of 1.6 g/t Au for a total of 0.5 million ounces of Au
has been defined within the Timok Gold Project. The cut-off grade and the Au
price used for the Bigar Hill, Korkan, Kraku Pester estimates was 0.6 g/t and
US$1,250/oz, respectively and for Korkan East, 2.0 g/t and US$1300/oz,
respectively.
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TIMOK GOLD PROJECT
INDICATED AND INFERRED IN SITU RESOURCE ESTIMATES
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Deposit Indicated Inferred
----------------------------------------------------------------
Cut Off Million Million
Grade Million Au Ounces Million Au Ounces
(Au g/t) Tonnes (g/t) (Au) Tonnes (g/t) (Au)
----------------------------------------------------------------------------
Bigar Hill 0.6 25.48 1.63 1.34 1.6 1.6 0.08
Korkan 0.6 14.51 1.53 0.72 4.9 1.4 0.21
Kraku Pester 0.6 6.32 1.31 0.27 2.2 1.0 0.07
Korkan East 2.0 1.4 3.4 0.15
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Total 46.30 1.56 2.32 10.0 1.6 0.51
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The Korkan East deposit, in part, comprises a polymetallic style of
mineralization, containing elevated levels of gold, silver, lead, zinc and
arsenic. The volume of rock that contains Korkan East was initially assessed as
part of Korkan in the 2012 resource estimate. The Korkan East sector was
subsequently removed from the volume estimated in the 2013 resource update of
Korkan to enable the preparation of a separate polymetallic resource estimate,
which is reported upon here. Figure 1 shows the zone within which Korkan East
has been defined.
The Company is in the process of finalizing a preliminary economic assessment
("PEA") of its Timok Gold Project, which includes the Bigar Hill, Korkan and
Kraku Pester deposits. The Korkan East deposit will not be included in the PEA
at this stage. The results of the PEA should be available by the end of April.
Korkan Mineralization Style
-- The Korkan East sector is located immediately proximal to, and below the
northeast portion of the Korkan deposit; mineralization commences
approximately 170 meters below the surface. Refer to Figure 1 for the
location of Korkan East relative to the Korkan deposit.
-- The polymetallic mineralization has been defined over approximately 300
meters down-plunge and is up to 50 meters wide and 50 meters high. The
mineralization plunges approximately 30 degrees towards the northeast
and remains open down plunge. Refer to Figure 2 for a representative
cross section of Korkan East.
-- The gold and base metal mineralized rocks at Korkan East show
characteristic features of carbonate replacement deposits; the link with
the nearby lower temperature sediment-hosted gold is unclear at this
time.
-- Two styles of mineralisation were modelled, one at the lower limestone-
clastic sediment contact which is typically associated with brecciation
and carbonate replacement textures (MBX in the table above) and another
higher up in the stratigraphic sequence (MSSL in the table above).
-- A geological model was developed for use in resource estimation, along
with mineralized domains. In addition, a domain was modelled within
which significantly elevated levels of Ag, Pb, Zn and As are noted and
the domain was used in grade estimation for the Ag, Pb, Zn, As and S.
Drilling and Sampling
-- The source data for the Korkan East resource estimate is based on the
following drilling and sampling information:
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DRILLING DATA USED IN THE KORKAN EAST RESOURCE ESTIMATION
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Item DD DT RC Total
----------------------------------------------------------------------------
HOLES 34 1 19 54
METERS DRILLED 5,759.5 159.8 2,683 8,602.3
SAMPLES 5,751 159 2,683 8,593
AVERAGE RECOVERY 99% 98% 97% 98%
PRIMARY ASSAYS (Au) 5,751 159 2,683 8,593
BULK DENSITIES 1,310 47 1,357
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-- All drill holes have been down-hole surveyed at regular intervals; with
drill collars surveyed using DGPS or total station surveying methods.
The topographic surface is based on detailed DGPS and total station
surveying methods, with an average survey station spacing of
approximately 15 meters by 15 meters.
-- As per standard Avala data acquisition protocols, a full set of field
duplicates, lab duplicates and replicates, blanks and internationally
accredited assay standards have been routinely collected and inserted
into the sample sequence.
-- All drill hole assaying and bulk density measurements have been carried
out independently by SGS.
-- Please see the following link to view all Timok Gold Project drill holes
located spatially in three dimensions:
http://www.corebox.net/properties/timok-gold-project
Resource Estimation
-- The assay data was composited to a 2m down hole composite interval prior
to resource estimation. Ag, Pb and Zn were estimated using ordinary
kriging, while As, S and density were estimated using an inverse
distance squared grade weighting algorithm. No upper cut was applied
during grade estimation.
-- Au was estimated using ordinary kriging with indicator kriging using a
2g/t indicator cut off to define estimation domains along with an upper
grade cap of 20g/t.
-- The in-situ resource estimates are within the defined mineralized
wireframes and have been categorized as Inferred Resources.
Metallurgical Testwork
-- Korkan East testwork to date has been carried out on mineralized
material from diamond drill holes KODD058 and KODD100.
-- Based on petrographic studies, the predominant gangue minerals are
dolomite, calcite and quartz. The main sulfide minerals are pyrite,
arsenopyrite, sphalerite and galena. Silver is present as ruby silver
and possibly argentite. Fine grained gold is associated with sulfides.
-- Diagnostic leach testwork, including pre-oxidation, gravity recovery and
flotation testwork indicated that flotation is the optimal recovery
approach.
-- Metallurgical tests to date have indicated the following:
-- A marketable grade lead concentrate (53%) can be produced using a
coarse grind size (150um and 100um) while recovering most of the
silver.
-- A good grade zinc concentrate (13%) can be produced.
-- The majority of the gold (and arsenic) can be recovered between the
combination of the zinc cleaner tail and sulfide rougher
concentrate.
-- Further testwork is planned to refine the metallurgical flotation
parameters to optimise recovery and for use in scoping studies on the
Korkan East deposit.
Sampling and Analysis
The majority of soil samples have been assayed at the ALS Chemex laboratory,
Perth, Australia. More recent programs have been assayed at the SGS managed
laboratory at Chelopech in Bulgaria using a combination of ICP-OES and ICP-MS;
whereas gold has been assayed by low level detection fire assay method with an
AAS finish. The Company has established a laboratory facility at Bor, Eastern
Serbia which is independently managed by SGS. Trench samples were prepared at
the laboratory facility at Bor and the samples have been assayed at the SGS
managed laboratory at Chelopech in Bulgaria or the laboratory facility at Bor.
Diamond drill core has been prepared at the laboratory facility at Bor and
assayed at either the SGS managed laboratory at Chelopech in Bulgaria or the
assay laboratory at Bor. A one meter sampling interval has been used where
possible for the Timok Gold Project diamond drilling program. Half core is
routinely submitted to the laboratory for analysis. Reverse circulation drill
samples have been prepared at the laboratory facility at Bor and assayed at the
laboratory at Bor. A one meter sampling interval has been used for the Timok
Gold Project reverse circulation drilling program. Following Avala standard
quality assurance procedures, a full suite of field and laboratory duplicates
and replicates along with internationally accredited standards and blanks, have
been submitted with each batch of samples.
At the SGS managed assay facility in Bor, analysis of drill or trench samples
for gold is routinely carried out using a 50g fire assay charge with an AAS
finish. Silver, lead, zinc, copper and arsenic are analyzed using an aqua regia
digest (0.3g charge) followed by either an AAS or ICP-MS finish. Sulfur is
analyzed using an Eltra combustion furnace (0.2g charge).
Qualified Persons
The Bigar Hill, Korkan, Kraku Pester and Korkan East resource estimates were
undertaken by independent qualified person Chris Arnold MAusIMM CP(Geo) of AMC.
Mr. Arnold has reviewed and approved the contents of this press release insofar
as mineral resource estimates are concerned.
Metallurgical testwork summarised in this press release has been managed and
reviewed by an independent qualified person, Dr. Deepak Malhotra, SME-Registered
Member and President of Resource Development Inc. (RDi). Dr. Malhotra of RDi has
reviewed and approved the contents of this press release.
The technical information contained in this press release was prepared and
approved by Dr. Julian F. H. Barnes, FAusIMM, MAIG, a director of the Company
and special consultant. Dr. Barnes is a 'qualified person' within the meaning of
that term under NI 43-101.
About Avala Resources Ltd.: Avala Resources is a mineral exploration company
focused on the exploration and development of the Timok Gold Project in Eastern
Serbia. The Timok Gold Project comprises several targets, including the Korkan,
Bigar Hill, Kraku Pester and Korkan East deposits. Avala controls 100% of this
recently identified sediment-hosted gold belt which totals approximately 250
square kilometers. The common shares of Avala trade on the TSX Venture Exchange
under the symbol AVZ.
Avala had approximately $1.0 million in its treasury at March 31, 2014. Avala's
issued and outstanding share capital totals 254,492,223 common shares, of which
approximately 53.1% is held by Dundee Precious Metals Inc. (TSX:DPM).
Cautionary Statement Regarding Forward-Looking Information
This press release contains 'forward-looking information' within the meaning of
Canadian securities legislation. Forward looking information in this press
release includes information about the results and interpretation of the mineral
resource estimate, the results of additional metallurgical testwork, the timing
of the completion of the PEA, the nature of the mineralization of Korkan East,
and the results and interpretation of studies and exploration activities.
Mineral resources are not mineral reserves and do not have demonstrated economic
viability. "Inferred Resources" have a great amount of uncertainty as to their
existence, and economic and legal feasibility. Since forward-looking information
is based on assumptions and addresses future events and conditions, by its very
nature it involves risks and uncertainties. Actual results could differ
materially from those anticipated in the forward looking information for many
reasons including, but not limited to: changes in general economic conditions
and conditions in the financial markets; changes in demand and prices for gold;
legislative, environmental and other regulatory, political and competitive
developments; operational difficulties encountered in connection with the
activities of the Company; and the Company's financial condition. These and
other factors referred to in public disclosures and filings by the Company
should be considered carefully, and readers should not place undue reliance on
the Company's forward-looking information. The Company does not undertake to
update any forward-looking information, except as required by applicable
securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this press release.
Figures 1 and 2 are available at the following link:
http://media3.marketwire.com/docs/941179_figures.pdf
FOR FURTHER INFORMATION PLEASE CONTACT:
Avala Resources Ltd.
James Crombie, President and Chief Executive Officer
+1.450.640.0810
info@avalaresources.com
www.avalaresources.com
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