GOLD PROSPECTS
11 Dezember 2002 - 9:00AM
UK Regulatory
RNS Number:9099E
Griffin Mining Ld
11 December 2002
GRIFFIN MINING LIMITED
1 Berkeley Street, London, W1J 8DJ, United Kingdom
Telephone: + 44 (0)20 7016 8821 Facsimile: + 44 (0)20 7016 9124
E mail: griffin@griffinmining.com
11th December 2002
GOLD PRODUCTION CLOSER AT CAIJIAYING PROJECT
Griffin Mining Limited ("Griffin" or the "Company") has today announced,
following the successful zinc resource upgrade of its Chinese Caijiaying Project
announced on the 25th November 2002, further gold exploration results which give
growing confidence that the Company can develop substantial gold production from
its Caijiaying project and at an early stage in the project's development.
An independent consultant's report (attached) has shown that numerous gold
targets have been defined which have many features in common with world-class
epithermal gold districts. The work has defined targets at different stages of
definition, the first of which consists of the inferred gold resource of 2.61
million tonnes at 6.78 grams per tonne announced previously and defined by
independent consultants Micromine Pty Ltd Consulting Division ("Micromine") in
accordance with the guidelines set out in the Australian Code for Reporting of
Mineral Resources and Ore Reserves (The JORC Code). New data suggests that the
largest part of this 500,000 ounce resource is at the southern end of the
planned zinc mine in zone III at Caijiaying and can be accessed for infill
drilling while the decline for the zone III zinc mine is being developed. If
confirmed, this would allow parallel production of gold and zinc ore at very low
cost and within the first two years of operation. This is at a much earlier
stage than previously thought.
The consultant's report contains details of some of the best gold intersections
from the Zone III area such as:
8.00 metres @ 11.65 g/t gold & 31.13 g/t silver
8.45 metres @ 7.83 g/t gold & 25.94 g/t silver
5.44 metres @ 6.37 g/t gold & 23.97 g/t silver
5.35 metres @ 5.08 g/t gold & 18.85 g/t silver
3.93 metres @ 13.66 g/t gold & 32.34 g/t silver
3.70 metres @ 8.04 g/t gold & 36.24 g/t silver
3.90 metres @ 6.73 g/t gold & 26.41 g/t silver
2.00 metres @ 30.90 g/t gold & 39.00 g/t silver
2.00 metres @ 11.79 g/t gold & 15.00 g/t silver
There is also confirmation of several near-mine targets that warrant the next
stage of exploration as well as a number of promising regional targets which
give confidence that a large resource base can be developed over time. Two
large regional soil gold geochemical anomalies have also been defined where
there has been almost no previous testing. One zinc-exploration hole within one
of these anomalies intersected 4.47 metres at 5.53 grams per tonne gold which
indicates the anomaly's potential. The merit of these targets has been verified
by a renowned epithermal specialist, Dr Noel White.
Commenting on the latest exploration results, Chairman Mladen Ninkov said:
"As each set of new results are produced and correlated, the obvious conclusion
is that Caijiaying is a world-class zinc and gold mineralized area. We are now
working on a plan that will bring the Caijiaying project into production at the
earliest opportunity and develop both the zinc and gold resources. The latest
results are beginning to confirm my long-held belief that Caijiaying will
primarily be a gold producing area with the substantial bonus of an attached
large-scale zinc mine. I am delighted for our shareholders."
Griffin has commenced a feasibility study which it hopes to complete in the
first quarter of next year with the intention of beginning development of the
project next summer.
Further information
Mladen Ninkov - Chairman Telephone: +44(0)20 7016 8821
Roger Goodwin - Finance Director Telephone: +44(0)20 7016 8821
Charles Dampney - Charles Stanley Telephone: +44(0)20 7739 8200
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
CSA Australia Pty Ltd
Geological Consultants
A.C.N 077 165 532
Level 1
47 Burswood Road
Burswood
Western Australia 6100
Telephone: +61 8 9355 1677
Facsimile: +61 8 9355 1977
Date; 10 Dec-02
Ref; RC.96.02
The Directors
Griffin Mining Ltd
1 Berkeley Street
London W1J 8DJ
United Kingdom
Dear Sirs,
Caijiaying Project - Summary of Gold Potential
You have requested CSA to summarise our findings from the various field studies
that were completed last summer on this on the gold-exploration potential of the
project. We present below our summary which includes reference to the Inferred
Resource estimate within the Zone III deposit (that was announced in our
previous report 25th November, 2002) of 1.7Mt at 8.63g/t gold at a 4g/t minimum
cutoff.
Introduction
The gold potential of the Caijiaying Project has been well known since Griffin
became involved in the project in 1997. However, at that time the geological
controls on the distribution of the gold were not clear and the picture was
incomplete because the Chinese had not systematically analysed for gold due to
cost constraints. Since then, Griffin has completed a large re-sampling program
for gold (in 1998) and this, together with the 2002 drilling program and
development of a new geological model has led to a much better understanding of
the gold distribution within the Zone III deposit.
In addition to the work at Zone III, work has also progressed on regional
exploration in the area which has helped define the overall gold potential of
the project. This work has consisted of the recognition of an epithermal style
of mineralisation along the main regional fault structure and the definition of
coherent soil geochemical anomalies and drill- target areas. The results of
these surveys have now been compiled and interpreted and a number of early
conclusions can be drawn to direct further work.
In order to simplify the results we have described the potential in three main
categories, the "In-Mine Potential", the "Near-Mine Potential" and the "Regional
Potential". Before discussing the results it is necessary to understand the
main disposition of the various prospects and the epithermal gold model.
Epithermal Gold Model and Caijiaying Prospects
The Caijiaying Project zinc mineralisation is believed to have been emplaced
131-204 million years ago during a volcanic episode that affected ancient, 2.3
billion-year-old metamorphic rocks along a major northeast-trending structure.
The base-metal mineralisation is believed to have been caused by replacement of
certain horizons in the metamorphic rocks by hot metal-bearing solutions from
the volcanic system. Some gold may have been deposited at this time but the
main gold event is interpreted by recent studies to have occurred later as a
hot-spring or epithermal type of mineralisation towards the end of the volcanic
period. This type of epithermal mineralisation usually consists of gold and
silver (with minor base-metals) deposited in veins and breccias with extensive
alteration of the surrounding rock by the hot fluid. Epithermal deposits are a
relatively well understood type of gold deposit, mainly because they are much
sought after as they can contain bonanza grades of gold and/or silver. An
epithermal specialist, Dr Noel White, visited the Caijiaying area last summer
and confirmed the epithermal nature of the system and it's potential. Much of
the later work and this description has benefited from his advice.
According to Dr White, the textures exposed at Caijiaying are identical to some
of the most famous low-sulfidation gold deposits globally. For example:
* Mc Laughlin, USA (24.3 Mt @ 4.49g/t Au)
* Hishikari, Japan (3.2 Mt @ 63 g/t Au)
* Cerro Vanguardia, Argentina (13.0 Mt @ 9g/t Au & 108 g/t Ag)
Dr White also made analogies with epithermal deposits which contain high amounts
of base metals such as Comstock USA (9 million ounces of gold & 223 million
ounces of silver) and Pachua, Mexico (38,000t silver and 6.2 million ounces
gold).
The disposition of the main prospects at Caijiaying with respect to the
epithermal structures also needs to be understood. The Zone III deposit is 1km
long and occurs 1.25km north of a smaller prospect called Zone II where the
Chinese also discovered significant zinc and silver mineralisation The latter
deposit is adjacent to an important fault structure, the F45 Fault, which
contains the main epithermal vein and alteration textures.
Another deposit discovered by the Chinese is at Zone V, situated 900m northwest
of Zone II (and 1km southwest of Zone III). This contained some of the best
gold grades recorded in the early Chinese work but unfortunately has since been
mined by local artisinal miners (for about five years) and it is not known how
much of the original resource remains. The artisinal mining was stopped by the
authorities in 2001 and the workings are likely to be in reasonable condition
thus allowing further work to be done.
Once the epithermal nature of the Caijiaying gold mineralisation was recognized,
CSA conducted a structural study on the area and started assembling regional
information. This showed the relationships of the known deposits to the F45
Fault and has allowed a working structural model to be developed to explain the
location of mineralisation. Information on several new gold prospects in the
district was also uncovered which, together with the structural model developed
at Caijiaying, has provided a basis for exploring the known prospects and
targeting future areas for exploration.
In-Mine Potential
As indicated in the previous release on the upgraded resource estimates for Zone
III, we believe that there is good potential to define separate zones of the
deposit for mining gold ore (with minor base metals) within the planned zinc
mine. There would be obvious cost advantages in this policy.
The gold re-sampling program conducted by Griffin showed that, while most zinc
mineralisation within Zone III contains some low-grade gold (typically 0.25 -
0.5g/t), there are also areas where gold grades are much higher and occur with
only minor zinc. Table 1 illustrates this point well and shows that there are
many sub-economic zinc intervals that contain significant gold grades (eg note
ZK 317-11 with 2.51m of 0.05% Zn and 5.95 g/t Au).
Table 1. Caijiaying Zone III composite intersections of more than 2m above
3g/t gold (All analyses by Chinese except those marked CSA.)
HOLE FROM TO INTERVAL Zn% Pb% Ag g/t Au g/t Grid Grid Relative Comments
Northing Easting Level
ZK300-06 398.79 400.79 2 0.75 0.04 0.05 6.00 5404.367 40275.397 1111.231 E Zone
III
ZK307-04 142.67 144.93 2.26 6.64 0.03 16.50 8.97 5213.061 39670.854 1366.204
ZK307-25 141.41 143.82 2.41 2.58 0.03 31.00 3.46 5219.118 39665.537 1359.598
ZK307-26 154.59 163.04 8.45 2.47 0.04 25.94 7.83 5215.526 39844.814 1333.277
ZK311-25 74.62 76.64 2.02 2.10 3.92 5106.872 39568.509 1414.409
ZK311-31 52.77 56.22 3.45 5.83 0.06 17.45 4.60 5106.207 39623.485 1435.473 CSA
ZK311-34 148.7 151.3 2.6 11.12 0.02 14.77 9.83 5098.674 39605.849 1348.582 CSA
ZK313-09 161.37 164.22 2.85 2.69 0.35 11.68 5.60 5054.816 40151.347 1289.464
ZK313-09 185.51 187.58 2.07 1.85 0 21.00 3.67 5054.731 40150.933 1313.21
ZK313-13 159 161 2 10.15 0.02 15.00 11.79 5047.357 39636.764 1265.177 CSA
ZK313-13 220 222 2 3.90 0.02 5.5.00 6.15 5049.637 39625.553 1325.094 CSA
ZK313-14 115 117 2 8.30 0.05 39.00 30.90 5050.705 39568.935 1369.284 CSA
ZK313-14 118 126 8 5.74 0.14 31.13 11.65 5050.477 39570.057 1363.394 CSA
ZK315-03 159.87 163.8 3.93 7.12 0.06 32.34 13.66 4994.869 39920.181 1319.32
ZK315-06 63.53 66.09 2.56 6.08 0.26 7.10 4996.273 39565.545 1415.067
ZK315-17 262.94 268.29 5.35 5.40 0.04 18.85 5.08 4989.713 40458.739 1213.397
ZK315-22 190.31 192.76 2.45 5.48 0.02 68.70 7.33 4993.855 40030.205 1287.815
ZK315-26 167.46 170.45 2.99 4.25 0.02 16.00 3.75 4994.703 39875.424 1312.37
ZK315-27 323.63 327.33 3.7 10.31 0.02 36.24 8.04 4987.314 39888.739 1159.74
ZK315-33 501.75 504.05 2.3 1.31 0.30 46.00 4.34 4983.533 40570.73 980.716
ZK315-35 278.29 280.49 2.2 0.10 0.03 35.00 3.75 4991.327 40405.788 1198.174
ZK317-11 259.87 262.38 2.51 0.05 0.10 12.00 5.95 4949.14 40238.974 1211.198
ZK319-02 361.95 364.89 2.94 3.84 0.01 8.50 3.10 4888.535 40287.659 1111.805
ZK319-10 205.35 207.95 2.6 4.47 0.02 21.00 3.01 4893.527 39922.811 1270.813
ZK319-12 229.98 235.42 5.44 5.92 0.05 23.97 6.37 4890.934 39850.377 1247.287
ZK319-16 289.19 293.09 3.9 3.51 0.52 26.41 6.73 4887.106 39692.391 1190.234
ZK319-16 295.24 297.54 2.3 5.00 0.40 55.04 4.81 4886.871 39693.548 1185.118
ZK319-16 284.72 287.12 2.4 1.02 0.28 41.50 3.27 4887.34 39691.24 1195.32
ZK319-17 198.39 202.09 3.7 5.38 0.19 18.19 5.71 4891.372 39633.132 1281.015
The new geological interpretation that derived from last summer's drilling, and
which has resulted in such a large increase in the zinc resource at Zone III,
has also allowed a re-estimation of the gold content. This was announced in the
last report and is repeated here for completeness sake as it represents the most
advanced and readily accessible of the gold targets within the whole project.
The main results are presented again in Table 2. Although the total gold
resource estimate includes low-grade gold that occurs within the surrounding
zinc deposit, by considering only those parts above relatively high cut-offs (as
in Table 2), one gets an impression of the potential.
Table 2. Caijiaying Zone III Inferred Gold Resource at various cut-off grades
Gold Cut-Off in Tonnes Grade in g/t Au
g/t Au
3 2,610,000 6.78
4 1,675,000 8.63
5 1,265,000 9.99
It is difficult to be precise about the gold distribution and quantity because
the drill spacing would need to be closer for gold resource estimation.
However, a recent study has shown that in general, the higher gold grades occur
beneath the best zinc zones and the best gold mineralisation appears to be at
the south end of the deposit. Therefore the ideal plan is to further test the
gold zones while mining the upper zinc-rich parts. Since drilling more than a
few holes from the surface to confirm these targets would be prohibitively
expensive, it is planned to wait until they can be drilled more effectively and
cheaply from underground. A preliminary plan has now been drawn up to achieve
this which involves putting in a branch off the main decline as it is being
driven down towards the first zinc mining area. Underground drill rigs can then
be used on the branch decline to commence gold exploration well ahead of
commencing zinc production.
Near-Mine Potential
The most obvious near-mine target is the 1.2km long area between Zones II and
III. Now that the orientation of the Zone III mineralisation is understood to
trend grid north-south, it is reasonable to expect that it will continue across
the intervening ground and link up with Zone II which was already known to have
this orientation. It is also reasonable to expect that it will contain
significant gold potential like at Zone III. This area has been poorly tested
by previous Chinese drilling, particularly since most of holes were, with the
benefit of hindsight, oriented the wrong way. Despite this, hole ZK 223-03
intersected a combined interval of 93m at 3.68%Zn, 700m south of Zone III which
indicates the potential (most of core not analysed for gold).
Like the Zone III gold drilling, the Zone II - III target needs initial surface
testing to prove the target and it can then be infill drilled by a combination
of surface and underground exploration to reduce cost. Based on these
recommendations, Griffin now plans to undertake the first surface stage of this
program next spring.
Further evaluation of the Zone II deposit is also warranted as it could support
a separate zinc mine which would provide underground access to both zinc and
gold targets in this area. For instance a combined thickness of 33.37m at 8.06%
Zn in one hole (ZK200-03) and a high silver value of 9.3m at 285 g/t Ag recorded
in a surface trench demonstrate this potential.
Some further underground evaluation of the Zone V deposit is also justified to
determine how much ore remains after the artisinal mining period. It contained
some of the best gold values discovered by the Chinese as indicated in Table 3.
CSA has already made a preliminary underground survey of this mine when it was
being mined. This helped understand the orientation of mineralisation in the
area and like at Zone III, further work would best be done by underground
drilling.
Table 3. Caijiaying Zone V composite intersections of more than 2m above 3g/t
gold (All analyses by Chinese)
HOLE FROM TO INTERVAL Zn% Pb% Ag g/t Au g/t Grid Grid Relative Comments
Northing Easting Level
CM500(S) 40.5 43.7 3.2 11.8 11.73 546.81 27.51 4049.998 38734.529 1381.279 Underground
channel
sample
ZK10 87.11 89.45 2.34 4.65 0.47 85.77 12.97 4085.22 38634.42 1393.31
ZK500-03 217.41 220.16 2.75 0.34 0.17 10.00 5.14 4100.869 38587.916 1272.934
ZK500-04 188.57 190.57 2.0 4.51 1.32 46.66 10.07 4095.421 38610.818 1303.275
ZK500-14 338.88 342.43 3.55 2.10 1.52 49.25 3.05 4107.209 38568.77 1154.978
ZK504-03 357.28 359.36 2.08 0.37 0.10 4.08 6.95 4146.925 38770.8 1116.336
ZK515-01 240.9 242.98 2.08 0.66 0.51 45.00 3.85 3716.166 38415.652 1220.223 W Zone V
Regional Potential
The regional potential of the Caijiaying area is also considered very good,
particularly for gold and silver. The areas that are considered under this
heading are all associated with the important F45 Fault and are contained within
Griffin's surrounding exploration licence of 56 km2 as well as the relevant
parts of the original 11.3 km2 licence which contains the known deposits. These
licences cover 16.5km strike length of the F45 Fault.
Previous work along the F45 Fault by the Chinese consisted of shallow trenching
and some base-metal holes that occur close to it. However they did not
intersect any gold at surface (a typical feature of epithermal systems) but the
potential is indicated by one of the nearby drill holes (ZK 207-06; 75m north of
the fault) which intersected 4.47m at 5.53 g/t Au (from 379.5m; hole not
systematically assayed).
As mentioned above, the F45 Fault target has now been recognized as a major
epithermal structure. Last summer Griffin mapped two main zones of epithermal
veining each covering 5 km length by 1km width associated with the fault and
separated by a large valley just west of the Caijiaying deposits. A
shallow-soil, bulk-leach extractable gold (BLEG) survey was conducted over the
entire area (also last summer). Together with results from an earlier
orientation survey, and despite the fact that the soil is not a very suitable
sampling medium (commonly at least 50m of wind-blown sand), the surveys
successfully defined two large anomalous gold areas coincident with the mapped
veins. The western target area contains some values over 8 times background
(3.98 ppb Au against a local background of
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