Zijinshan project exploration results
Zen International Resources Ltd ZQP
Shares issued 8,662,367 Oct 7 close $1.18
Tue 7 Oct 97 News Release
M. Catherine McLeod-Seltzer reports
Exploration has commenced which will test the significant upside potential
of the Zijinshan copper-gold porphyry deposit in Fujian Province, China.
In a news release in Stockwatch July 8 1997, the company released an ore
reserve estimate prepared by Exa-Min Resource Industry Consultants,
Brisbane Australia, using the existing Chinese data. The results were as
follows:
IN SITU GEOLOGICAL RESOURCE
GOLD ZONE
Cut-off Average
grade Million grade Million
(g/T) tonnes (g/T) ounces
------- ------- ------- -------
1.0 29 1.48 1.4
0.8 44 1.27 1.8
0.5 91 0.94 2.8
0.3 141 0.75 3.4
IN SITU GEOLOGICAL RESOURCE
COPPER ZONE
Cut-off Average
grade Million grade
(%) tonnes (%)
------- ------- -------
1.0 13 1.41
0.8 27 1.15
0.5 113 0.74
0.3 356 0.49
Work subsequent to the above reserve estimate has indicated significant
upside potential both on the Zijinshan (ZJS) deposit itself and in at least
four additional prospects located within the exploration licence.
ZIJINSHAN PROJECT UPSIDE POTENTIAL
The existing 92,000m of drilling performed previously was all essentially
vertical and therefore the higher grade sub-vertical mineralized fractures
may be underestimated. All of the surface workings are observed to be at
the intersection of sub-vertical structures and intermediate NE dipping
structures which appear to localize higher grade mineralization.
Assay results from horizontal underground sampling in horizontal adits show
hat grades are significantly higher than the grades indicated from the
vertical diamond drill holes on which the current resources estimation is
based. Zen will evaluate the significance of the higher grades to the
overall resource, with structural mapping and selected re-sampling. If this
bias towards underestimating the deposit by the drilling of only vertical
holes is confirmed, then this further warrants the need for incline
drilling and offers the chance for a significant increase in grade for the
whole deposit. This is likely to be the single most important factor in
readily enhancing the economics of the deposit.
A 10 gram sample charge was used for gold assay and this was only increased
to a 20 gram sample charge late in the Chinese program, so it is possible
that the small charges used may underestimate the gold content.
Results from check assaying in Canada, prior to Zen's involvement, using a
30 gram assay charge, suggest a previous 12% underestimate of gold content
on the basis of only about 300 samples.
Much of the core was unassayed and this was assigned a value of zero in the
above ore reserve calculation. In fact, much of the unassayed core does
contain mineralization, some of which will become ore upon assay data being
received, thus increasing the ore reserves and decreasing the strip ratio.
The Zijinshan gold deposit is open to the west and to the south,
particularly for heap leach ore. The copper deposit also has potential for
extension to the northeast in the near surface.
A second prospect called Little Gold Mountain (Xiaojinshan or XJS), which
is immediately adjacent to the northeast of Zijinshan offers possibility of
being linked to the Zijinshan pit. It is encouraging that of the only four
drill holes in XJS, all encountered gold and copper mineralization. More
work will be done by Zen to determine XJS's potential but it is also
encouraging that small scale local heap leach operations are currently in
progress on this prospect indicating potentially economic grades.
No credit has been given by Zen in the ore reserve for gold content in the
copper orebody, although minor amounts of composite assaying in the copper
zone confirm the presence of gold values of the order of 0.15 to 0.3 g/t
which could offer a significant gold byproduct credits. Additionally, there
is significant potential for higher grade gold zones dissociated from the
higher grade copper zones, which have not been assayed.
Much of the copper in the reserve is acid soluble thus offering the
potential for SXEW with its significantly reduced transport and smelting
cost. The possibility of heap leaching the copper as well as the gold, thus
reducing drastically the capital and operating costs, is also being
evaluated by Zen.
EXPLORATION
Currently, the company is completing due diligence on the main ZJS deposit
including sending 1,200 selected check samples from stored sample pulps to
Canada for re-assay. These will check the full range of assay values as
well as the various time periods through the six-year ZJS evaluation
performed by Zen's Chinese partner from 1987 to 1992. Ninety-two thousand
metres of core is currently being re-logged with approximately one-third
completed to date. The company is reviewing all existing data, including
the sampling and assaying methods and check assaying procedures previously
employed and is preparing to cut the previous unsplit drill core intervals.
Zen is also re-mapping the ZJS deposit concentrating on structural
orientations to determine optimal directions for incline drilling.
Zen is also reviewing data on the eleven other gold and copper prospects
within the 60 sq km ZJS joint venture areas. These programs will take
approximately four months to complete.
The next phase of exploration will include 5,000m of diamond drilling which
will include twinning existing vertical drill holes to test the possibility
of underestimating the higher grade zones that usually have poor core
recoveries and incline drilling to test for bias in the existing assay data
base. A revised ore reserve figure will then be prepared.
Upon completion of this 5,000m program, further in-fill and step-out
drilling will be commenced. At present 20,000m has been budgeted for this
phase but could be increased depending upon the results of previous phase
especially if the vertical fracture sets are proved to be of significance
in enhancing grade.
Metallurgical studies will be carried out on the full range of ore types.
Gold leachability has already been demonstrated through extensive trial
mining in the oxide zone at a high recovery rate of up to 80% after only 30
days irrigation. Further testing for acid soluble copper will be carried
out to confirm previous bulk metallurgical tests which gave 92% recovery by
flotation and 90% copper recovery by solvent extraction of the copper
concentrate. Solvent extraction and heap leach potential will be examined
for the copper ores. At the completion of this program, the reserve figure
will be further revised and will lead to completion of a full feasibility
study. If it is feasible to recover copper by heap leaching, capital and
operating costs will be drastically reduced which will significantly
enhance the economics of the project.
Simultaneously with these programs, Zen will be conducting exploration on
several additional prospects held within the ZJS lease.
The inaugural board meeting of the joint venture company to develop the
Zijinshan deposit, was held in China on September 9. This meeting attended
to all of the legal requirements relating to the incorporation of the joint
venture company, Fujian Fusheng Mining Co. In accordance with the joint
venture agreement, Zen was entitled to nominate four of the seven
directors. The nominees of Zen duly appointed as directors were Kit Lee,
chairman, Geoff Loudon, Catherine McLeod-Seltzer and Jim Stephenson. In
addition, Jim Stephenson was appointed the general manager. The board also
approved the budget for the initial exploration phase of approximately
US$2,000,000. This is part of the bankable feasibility program, estimated
to cost approximately US$12,000,000.
SURROUNDING EXPLORATION POTENTIAL
The joint venture lands of 4.37 sq km consist of a core area over the
Zijinshan prospect. This is surrounded by a 60 sq km exploration licence in
which eleven additional prospects have been identified as well as a
priority to apply for and expand the exploration licence to include other
immediately adjacent prospects. A description of the four highest priority
prospects included in this land package is as follows.
DAJIGANG - 1,400m of coring was completed in five vertical drill holes, in
an 800m wide by at least 1,400m long anomaly. One hundred per cent of the
core is available, but was only partly assayed. There are a few scattered
gold assays to 5 g/t and a single assay of 34.6 g/t gold, at or near
surface indicating the possible presence of a gold cap. Only narrow zones
of underlying copper mineralization consisting of chalcopyrite and
chalcocite have been identified in the drilling to date. There are
partially abundant vertical structures identified and the breccia zones, as
mapped, cut straight across topography. These zones are unlikely to have
been tested adequately by the vertical drill holes. This property requires
fracture pattern mapping, additional IP, collation and reinterpretation of
data, and inclined drilling.
XIAOJINSHAN: Immediately adjacent to Zijinshan itself, there are two
separate targets within a 1.5km by 2.0km area, one of which has been tested
by four vertical drillholes, and the other remaining untested by drilling.
One target exists at the contact between the Zijinshan (or ZJS) andesite
with granodiorite and consists of a surface geochemical gold anomaly, and
flanking copper anomaly. Two holes reported by the Chinese hit zones of 60m
of between 0.1% and 0.6% copper from 400m, and 170m of between 0.1% and
0.6% Cu from 300m, respectively. Both these holes are some distance east of
the surface contact, within the surface copper anomaly. Mineralization
consists of bornite and azurite, reportedly associated with magnetite and
molybdenum. The two holes within the gold anomaly originally were not
recognized as being mineralized and were not assayed. Subsequently the
presence of abundant very fine grained pyrite was recognized and a gold
zone of greater than 200 ppb gold and a 20m wide copper zone with values
ranging between 0.5% and 1.0% copper were identified.
The second main anomalous zone occurs over an irregular 1.5km mapped
section of contact between granite and granodiorite, and is open at both
ends. There are coincident gold, copper, silver, lead and molybdenum
geochemical anomalies along the contact. No geophysics (IP) have been
carried out here. The anomaly is linked at its northern end to the
above-mentioned drill tested anomaly by a fault that has a large associated
copper geochemical anomaly.
ERMIAGOU: This prospect occurs west-southwest of Zijinshan. Breccia zones
have been identified within a body of mixed coarse and fine granite,
adjacent to its contact with Proterozoic schists. Three thousand metres of
coring has been completed in 10 widely spaced scout drill holes within an
area 1000m in a north-south direction, and over 600m in an east-west
direction. Mineralization estimates by Zen's Chinese partners are 2.6
tonnes of contained gold grading 0.57 g/t, 46,000 tonnes of contained
copper metal grading 0.97%, and approximately 366 contained tonnes of
silver grading 80 g/t. Mineralization occurs as chalcopyrite plus bornite,
with minor covellite and chalcocite, and traces of galena and sphalerite.
LUOBOLING: This prospect occurs at the largely buried contact of the
youngest Mesozoic granodiorite porphyry phase at its northwest contact with
an older granodiorite. Five thousand seven hundred metres of coring were
completed in 12 vertical drill holes, including three drill sections over
the main target and some more scout-type holes. One drill hole reported by
the Chinese averaged 58m at 0.65% copper. Only 100 samples were assayed for
gold, and these were taken only within oxidized limonite zones. The
mineralized zone dips at an intermediate angle and would have been better
tested by angle drilling. Most of the porphyry contact remains essentially
untested.
A drill hole currently in progress has intersected chalcocite
mineralization with values of over 0.5% copper in a plus 20m zone with an
additional 25m containing copper assays ranging between 0.1% and 0.5%
copper.
Zen is currently evaluating these prospects as well as the potential of the
seven other explored prospects.
Management feels China's mining industry is increasing its commitment to
market reform and foreign joint ventures as a method to develop its
extensive mineral resources. Further reforms are anticipated during 1997
which will continue to enhance the mineral investment climate in China. The
Zijinshan copper-gold porphyry deposit with its over three million ounce
gold resource and 1.75 million tonnes of refined copper metal as well as
significant upside potential and eleven other prospects puts Zen
shareholders on the forefront of this exciting emerging market.
(c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com |
