Major Resource and Reserve Upgrade for Ravenswood

Data have been compiled into a relational SQL database. The setup of this database precludes the loading of data which do not meet the required validation protocols. The data is managed using Maxell Geoservices' DataShed^TM drill hole management software using SQL database techniques. Validation checks are conducted using SQL and DataShed relational database standards.  Data has also been checked against original hard copies for 75% of the data, and where possible, loaded from original data sources.

Carpentaria Gold Pty Ltd carried out the following basic validation checks on the data supplied prior to resource estimation:

·      Drill holes with overlapping sample intervals.

·      Sample intervals with no assay data. Duplicate records.

·      Assay grade ranges.

·      Collar coordinates ranges.

·      Valid hole orientation data.

There are no significant issues with the data.

The Competent Persons have conducted numerous site visits to the Ravenswood Project Qld.

All aspects of drilling, sampling and mining are considered by the Competent Persons to be of a high industry standard.

Buck Reef West / Sarsfield-Nolans Deposit lies within the northern part of the Thomson fold belt which forms part of the Charters Towers province, in a tight cluster of calc-alkaline intrusives of Ordovician to Devonian age known as the Ravenswood Batholiths.  Individual intrusive compositions vary from adamellite to diorite: - granite and granodiorite are the most common.  The Buck Reef West / Sarsfield gold deposit is located within and around the junction of three prominent fault systems.

At each deposit weathered zone persists to an average of 15 metres below surface.  Supergene effects are restricted to a discontinuous horizon within a partially oxidised zone less than 5 metres thick.

At least 95% of gold is located within a network of flatly dipping sulphide-quartz veins.  Movement on the faults has controlled dilation within the veins, and at least 17 different structural movements and alteration events have reactivated the vein.  Veins (20mm to 250mm thick) are typically associated with a phyllic alteration selvedge up to 500mm wide.  Vein mineralogy is sulphide dominant with quartz and calcite constituting the major gangue phases.  Total sulphide content of the ore is less than 5% with the most common phases being pyrite, pyrrhotite, sphalerite and chalcopyrite.  Gold occurs as mostly sub 50 micron free milling grains on fractures and sulphide mineral boundaries.

Historic production figures from 1870 to 1918 and then 1987 to 2005 indicate approximately 400 koz of gold was recovered from underground mining methods.

Geologically, the Buck Reef West and Sarsfield-Nolans resource modelling was divided into several domains based on geological structures/ lithologies and gold distribution. 

The Buck Reef West domain interpretation comprises a broad, moderately dipping envelope with a locally developed higher grade footwall zone which is cross cut y two sub-vertical north-northeast trending, commonly higher grade zones.  They are named; Background, Main envelope - lower grade zone, Main envelope - higher grade footwall zone, Eastern vertical zone and Western vertical zone.

The Sarsfield-Nolans area mineralised domains comprise a main moderately northerly dipping envelope representing the general Sarsfield-Nolans trend, and several variably oriented and cross-cutting zones in the Sarsfield area.  They are named; East background, Main envelope, Bell zone, Keel zone, Buck Reef trend and West background..

The Sarsfield deposit outcrop over a 900 by 900 metre area with mineral resources defined to a depth of approximately 650 metres below pre-mining land surface.  The Nolans deposit extends in an eastward direction from the Sarsfield deposit for 1.7 kilometres with mineral resources estimated to a depth of 330 metres below pre-mining land surface. The Buck Reef deposit is centred 500 metres south west of Sarsfield deposit and outcrops over an area of 500 by 800 with mineral resources defined to a depth of approximately 600 metres.

MPR used the method of Multiple Indicator Kriging (MIK) with block support adjustment to estimate gold resources into blocks with dimensions of 25m (east) by 20m (north) by 10m (elevation). MIK of gold grades used indicator variography based on either the two metre (Buck Reef) or five metre (Sarsfield and Nolans) resource composite sample grades. Gold grade continuity was characterised by indicator variograms at 14 indicator thresholds spanning the global range of grades. A block support adjustment was used to estimate the recoverable gold resources at each deposit. The shape of the local block gold grade distribution has been assumed lognormal and an additional adjustment for the "Information Effect" has been applied to arrive at the final Mineral Resource estimates.

MIK was used as the preferred method for estimation of gold resources at Ravenswood as the approach has been demonstrated to work well in a large number of deposits of diverse geological styles. The gold mineralisation seen at the Ravenswood deposits is typical of that seen in most structurally controlled gold deposits where the MIK method has been found to be of most benefit.

Data viewing, compositing and wire-framing were performed using MicromineTM software.  Exploratory data analysis, variogram calculation and modelling, and resource estimation have been performed using FSSI Consultant (Australia) Pty Ltd GS3MTM software.  GS3MTM is designed specifically for estimation of recoverable resources using MIK methodology.

Open pit and underground mining has occurred at Buck Reef West and Sarsfield by previous owners of the project.  Where appropriate the resource estimate takes into account historic production using wireframes that represent the open cut pit and the underground stoping voids.

Gold is the only economic metal estimated in the current model with no by-products or deleterious elements modelled.

The selected resource model blocks had dimensions of 25mE by 20mN by 10mRL and were used as this approximates the average drill spacing in the modelled resource areas.  Initially a three pass (Sarsfield-Nolans) or four pass (Buck Reef West) octant search strategy was used to define the local neighbourhood data used in the kriging to produce confidence categories.  The highest confidence blocks at Buck Reef West are estimated using search radii of 40mE by 40mN by 10mRL and a minimum of 16 data coming from a minimum of 4 octants.  For Sarsfield-Nolans the highest confidence blocks are estimated using search radii of 40 mE by 30 mN by 20 mRL and a minimum of 16 data coming from a minimum of 4 octants.  The second and third pass for both estimates used an expanded search of 50% with 16 and 8 minimum data and 4 and 2 minimum octants, respectively.  The final pass for Buck Reef West used an expanded search of 100% (from the first pass) with 8 minimum data from a minimum of 2 octants.  All estimation passes use a maximum of 48 data. 

For Buck Reef West, confidence categories were assigned to model panels by estimation search pass and an additional set of east-west sectional polygons outlining areas of closer spaced drilling. The search pass 1 blocks outside these polygons were downgraded to Indicated.  For the Sarsfield-Nolans area, confidence categories were assigned directly from search passes.

Mineralised domain wire-frames were used to flag resource composites and code domain proportions to the block model.  A further division of the model domains into oxide and fresh rock is applied by triangulated surfaces interpreted from the logging of the drill samples. 

All class grades were determined from bin mean grades with the exception of the upper bins, which were reviewed on a case by case basis and bin grades selected from the bin mean, or median.  This approach was adopted to reduce the impact of a small number of outlier composites and is considered appropriated for MIK modelling of highly variable mineralisation such as Greater Sarsfield. 

The gold resource estimates include a variance adjustment to give estimates of recoverable resources above gold cut-off grades for selective mining (SMU) dimensions of 5 mE by 5 mN by 5 mRL.  The variance adjustments were estimated from the gold grade variogram models and were applied using the direct lognormal method and the adjustment factor.

Visual validation of grade trends and gold distributions was carried out.

All tonnages are estimated on a dry basis.

The Mineral Resource has been reported at a 0.3 g/t Au grade cut-off for Buck Reef West and Sarsfield-Nolans deposits.  This cut off was chosen as the insitu marginal cut- grade estimation, using current Ravenswood economic parameters applicable for open cut mining methods.

Mining methods for the extraction of gold at Buck Reef West and Sarsfield-Nolans has primarily been by open pit and underground methods.  It is anticipated that large scale open pit mining methods will be applied for the remaining resources.  Grade control of mining blocks will be based on sampling from high quality reverse circulation drilling spaced at approximately 5mE by 12.5mN with samples taken at 1.5 metre intervals down-hole.

The Buck Reef West and Sarsfield pits were mined historically using routine open pit mining methods with a backhoe type excavator to excavate benches. Beneath the open cut, open stope underground mining methods were used historically dating back to 1870.

Historically, (1870-1918) + recent (1987-2005) production, totaled around 400koz of high grade gold.

The crushing circuit at the Nolans Plant treating Buck Reef West and Sarsfield-Nolans ore will use either two or three stage crushing depending on the gold grade of the material being delivered.

Gold is recovered using crushing, milling (SAG + ball), gravity circuit (Knelson Concentrator), and a CIL circuit.

Gold is recovered from loaded carbon in a four tonne capacity AARL elution plant.  Gold is then deposited on to stainless steel cathodes in an electrolytic circuit.

Gold will be poured into dore bars, containing approximately 80% gold and 20% silver.

The dore bars are sent to the Perth Mint for refining.

The Buck Reef West and Sarsfield-Nolans deposits at Ravenswood are adjacent to the Nolans plant site.  Ore from the Mt Wright underground mine is also trucked to the plant for extraction and refining of gold.  The tailings from this mineral processing are discharged into the Sarsfield Open Pit.  These tailings are potentially acid forming and subaqueous settlement beneath a pit lake (water cover) prevents the oxidation of the stored tailings.  Future processing operations may utilise a dry stacked tailings storage facility which combines a waste landform with filtered tailings in a lined facility and subsequently covered by mine waste material.

Carpentaria Gold Pty Ltd (CG) originally initiated the Environmental Approval process required to reopen the Sarsfield pit in July 2011.  A draft Environmental Impact Statement (EIS) was submitted in July 2012 and then progressed through the submission process until being suspended pending further design changes.  A revised EIS was submitted in March 2014 and then progressed through the EIS completion phase with the Department of the Environment and Heritage Protection (DEHP) issuing an EIS Assessment Report in June 2014.

The Sarsfield Expansion Project EIS Assessment Report concluded that the project would be suitable, provided CG thoroughly addressed certain outstanding matters which principally related to:

-       impacts to human health and safety and social well-being in the Ravenswood community

-       impacts to groundwater and surface water

-       the ability of the proposal to comply with appropriate environmental outcomes.

Following review of the feedback from the DEHP, a number of key changes were made to the Sarsfield Expansion Project to address some of the key issues raised in the EIS Assessment Report.  These key changes include:

·      A modification of the proposed tailings management system which now includes a Dry Stack Tailings Storage Facility (DSTSF) within and adjacent to the existing Nolans Pit;

·      A change to the project footprint area due to a reduction in the Waste Rock Dump (WRD) footprint and location of the DSTSF (reduced in volume due to dry stacking), in an area of existing land disturbance; and

·      A plan to manage accumulated legacy water in the Sarsfield Pit using a Reverse Osmosis (RO) Plant, instead of evaporative fans as originally proposed.

Some waste rock from future mining of a cut-back at Buck Reef West / Sarsfield may be potentially-acid forming while the majority of waste rock will be non-acid forming.  Waste rock dumping has been scheduled, along with encapsulation designs and optimization determined to minimize the risk of acid forming conditions from the waste rock dumping landform.  The rehabilitation plan of that landform is also a key control.

Tailings generated from the overall life of mining from a Buck Reef West / Sarsfield cutback would not have a net acid forming potential and will be placed in the regulated dry storage facility over the Nolans pit.

A substantial population of rock density (SG) measurements for the Buck Reef West / Sarsfield-Nolans deposits were collected by BPB Slimline Services in 2 campaigns during 1995-1996.  Gamma-gamma density logging was collected from a total of 14 drill holes with samples taken at 10cm intervals over a combined total length of 2,900 metres.

A total of 2,551 readings were made of fresh rock from which an average value of 2.781 was calculated.

·      Minimum Value 2.365

·      Maximum Value 3.002

·      Average Value 2.781

·      Median Value 2.78

·      Std. Deviation 0.05019

A typical dry bulk density of 2.78 t/bcm has been used for fresh material and 2.40 t/bcm for oxidised material...

The Resource model uses primarily a classification scheme producing a resource code based on the number and location of gold composites used to estimate proportions and gold grade of each block. This is based on the principle that larger numbers of composites, which are more evenly distributed within the search neighbourhood, will provide a more reliable estimate. 

The strategy adopted in the current study uses category 1 and 2 from the 3 pass octant search strategy as Measured and Indicated, respectively, and category 3 as Inferred.  This results in a geologically sensible classification whereby Category 1 and 2 are surrounded by data in close proximity. Category 3 blocks may occur on the peripheries of drilling but are still related to drilling data within reasonable distances. 

The Mineral Resource classification method which is described above has also been based on the quality of the data collected (geology, survey and assaying data), the density of data, the confidence in the geological models and mineralisation model, and the grade estimation quality.

The reported Mineral Resource estimate is consistent with the Competent Person's view of the deposits.

No external audits or independent reviews have been undertaken on the current Mineral Resource estimates.  As this deposit was mined previously by Resolute Mining Limited from 2004 to 2009 significant internal experience can be drawn on.

The relative accuracy of the Mineral Resource estimate is reflected in the reporting of Measured, Indicated and Inferred categories as defined by 2012 JORC Code guidelines. 

The resource's relative accuracy is based on data quality, data quantity, geological confidence and the estimation accuracy.

The precision of the estimation is globally acceptable with the assumption that at a mining level more detailed grade control drilling and sampling will be undertaken.

In the Competent person's view the geostatistical techniques applied to estimate the Buck Reef West and Sarsfield-Nolans deposits are deemed appropriate for the anticipated large scale, open cut mining method proposed.