150904 ASX Zoroastrian Underground Ore Reserve · PDF file• Total Zoroastrian open pit...

1 Excelsior Gold Limited ABN 38 123 629 863

Address: Unit 2, 124 Stirling Highway, North Fremantle WA 6159 Postal: PO Box 520, North Fremantle WA 6159 Telephone: 08 9335 7770 Facsimile: 08 9335 6231

4 September 2015 ASX Market Announcements ASX Limited Exchange Centre ASX Code: EXG 20 Bridge Street Sydney NSW 2000

ZOROASTRIAN UNDERGROUND ORE RESERVE UPDATE - Amended

Highlights:

• Underground mine re-design delivers additional Ore Reserve ounces and improves mine feasibility

o Improved Base Case NPV – A$54 million o Improved Base Case IRR – 123% o Reduced Base Case C3 Cost – A$1,165/oz Au

• Underground Ore Reserves increased by 10,300 ounces to

1.43 million tonnes @ 3.65g/t Au for 169,300ozs

• Total Zoroastrian open pit and underground Ore Reserves to date at A$1,380/oz gold price

2.75 million tonnes @ 2.82g/t Au for 250,200ozs

Excelsior Gold Limited (“Excelsior Gold” or the “Company”) is pleased to announce an updated Ore Reserve for the Zoroastrian deposit in the central part of the Kalgoorlie North Gold Project (“Project”).

Gold mineralisation which is associated with quartz veins and quartz stockworks extends for over 1.4 kilometres of strike within the Zoroastrian Dolerite. Indicated and Inferred Mineral Resources totalling 7.14 million tonnes grading 2.53g/t Au for 581,00 ounces of gold (ASX announcement 9 July 2015). The quartz vein and stock-work style gold mineralisation is localised by north-east cross cutting fault structures and is interpreted to be concentrated in two north plunging zones of gold mineralisation within granophyric units within the Dolerite (refer Figure 1).

Feasibility mine design works completed in July 2015 by independent consultants as part of the Mining Proposal for the development of the Zoroastrian deposit established Ore Reserves for



four open pits and two underground mines in the Zoroastrian area totalling 2.63 million tonnes @ 2.84g/t Au for 239,900 ounces of gold (ASX announcement 9 July 2015).

The Zoroastrian mine design studies were completed by Auralia Mining Consulting Pty Ltd (“Auralia”) for the large Zoroastrian Central open pit, and by Mining Plus Pty Ltd (“Mining Plus”) for the small Zoroastrian Extended open pit extension in the base of the historical Zoroastrian Pit, the two Zoroastrian South open pits and the Zoroastrian Central and Zoroastrian South underground designs. The open pits and underground mine designs are centred on the two north plunging mineralised zones within the Zoroastrian Dolerite and potential remains for additional plunging zones to the north and south of the existing mine designs.

Re-design work by Mining Plus on the Central Underground mine design was subsequently carried out to refine portal, crown pillar and rib pillar locations and incorporated updated underground mining costs submitted by mining contractors based on the initial designs. Re-design of the larger Southern Underground was no undertaken at this time although revised decline access from the base of the Zoroastrian Central open pit to the southern stope designs was incorporated in the study.

Figure 1: Zoroastrian Long Section showing Mineral Resource block model, Ore Reserves and proposed open pits and underground mine designs

The open pit designs and Probable Ore Reserves remain unchanged from those reported on 9 July 2015 (1.32 million tonnes @ 1.92g/t Au for 80,900 ounces) but underground Ore Reserves increased by 10,300 ounces to 1.43 million tonnes @ 3.65g/t Au for 169,300ozs as a result of the refinements to the Central Underground design. Total Zoroastrian Probable Ore Reserves at an Australian Dollar gold price of $1,380 per ounce increased to: -

2.75 million tonnes @ 2.82g/t Au for 250,200 ounces of gold



Source Proved Ore Reserve Probable Ore Reserve Total Ore Reserve

Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces

(,000t) (g/t Au) (,000oz) (,000t) (g/t Au) (,000oz) (,000t) (g/t Au) (,000oz)

Zoroastrian Central OP1 0 0.00 0 1,176 1.88 70.9 1,176 1.88 70.9

Zoroastrian Extension OP2 0 0.00 0 20 4.57 3.3 20 4.57 3.3

Zoroastrian South2 North Pit

0 0.00 0 60 1.56 2.8 60 1.56 2.8

Zoroastrian South2 South Pit 0 0.00 0 60 2.09 3.9 60 2.09 3.9

Total Open Pits 0 0.00 0 1,316 1.92 80.9 1,316 1.92 80.9

Central UG2 0 0.00 0 447 4.10 59.0 447 4.10 59.0

Southern UG2 0 0.00 0 988 3.44 110.3 988 3.44 110.3

Total Underground 0 0.00 0 1,435 3.65 169.3 1,435 3.65 169.3

TOTAL 0 0.00 0 2,751 2.82 250.2 2,751 2.82 250.2

Numbers may not sum due to rounding 1Auralia Mining Consulting Pty Ltd 2Mining Plus Pty Ltd

Table 1: Zoroastrian Ore Reserves – September 2015

The Zoroastrian Ore Reserves are derived from total Indicated Mineral Resources of 5.20 million tonnes @ 2.66g/t Au, containing 445,100ozs of gold. Due to the use of some historical drilling data in the resource estimates, Excelsior Gold does not quote Measured Mineral Resources or Proved Ore Reserves classifications although data quality, drill density, geological continuity and Mineral Resource confidence are high. Any material classified as an Inferred Mineral Resource was not included in the mining studies.

The underground mine design study utilised Minable Shape Optimiser® (MSO), a Datamine Studio3® tool, to determine the preliminary mining extents or stope shapes. The MSO data provides a means of assessing a mining envelope by considering the deposit in terms of tonnes, grade, mining width, level spacing and cut-off grade. A cut-off grade of 2.0g/t, a level spacing of 20 metres and a minimum mining width of 1.5 metres were selected to further analyse from the MSO results.

The planned treatment of Zoroastrian ore is at the Paddington processing facility located 20 kilometres to the south. The Paddington Mill is a conventional 3.5mtpa CIL plant originally designed for the treatment of Zoroastrian type ores. Ore treatment costs are derived from the cost structure associated with the long term cooperative Capital Contribution and Ore Treatment Agreement with Paddington Gold Pty Ltd (ASX announcements 18 June 2014 and 20 October 2014).

Ore Reserves are quoted on a ‘delivered to mill’ basis, which excludes metallurgical recovery factors.

Metallurgical test work has been completed on representative Zoroastrian diamond drill core samples, including detailed elemental head grade analysis, gravity and leach recovery test work which demonstrated low deleterious elements, rapid leach rate with high gold recovery. Process recoveries of 91.3% are applicable for the fresh Zoroastrian underground mineralisation.



The underground mine design is based on Sublevel Open Stoping as the single mining method as it provides higher production rates and generally lower operating costs, however further studies may show that more than one mining method may be used to extract additional ore from selected areas on the deposit.

The Zoroastrian underground mine plan incorporates two underground mines with decline design commencement points for the Zoroastrian Central and the South ore bodies from portal positions within the Zoroastrian Central open pit (refer Figure 2).

Stoping dilution was factored onto the stoping blocks at 15%. A minimum mining width of 1.5m was set for the stoping blocks.

Figure 2: Zoroastrian Central Open pit and Central and South Underground Mine Designs

showing geology, Ore Reserves, proposed open pit designs, portal locations and Central and South underground mine designs



Total Project Ore Reserves derived from the Prefeasibility Study completed in March 2014 (ASX announcements 4 March 2014) and the recent round of mining studies (ASX announcements 18 March, 10 April and 9 July 2015) applying the cost structures associated with the Paddington ore processing agreements are

7.55 million tonnes @ 1.98g/t Au for 481,200 ounces of gold.

Source Proved Ore Reserve Probable Ore Reserve Total Ore Reserve

Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces

(,000t) (g/t Au) (,000oz) (,000t) (g/t Au) (,000oz) (,000t) (g/t Au) (,000oz)

Excelsior (2014 PFS) 3,022.5 1.37 133.1 831.9 1.22 32.6 3,850.0 1.34 165.8 Lochinvar (2014 PFS) 135.8 1.85 8.1 135.8 1.9 8.1

Bulletin South1 0 0.00 0 458.0 2.14 31.6 458.0 2.14 31.6

Jackorite1 0 0.00 0 76.0 2.76 6.7 76.0 2.76 6.7

Castlereagh1 0 0.00 0 66.0 2.23 4.8 66.0 2.23 4.7

Big Blow South1 0 0.00 0 27.0 3.66 3.2 27.0 3.66 3.2

Nerrin Nerrin1 0 0.00 0 36.4 2.97 3.5 36.4 2.97 3.5 El Dorado (2014 PFS)

0 0.00 0 153.0 1.60 7.4 153.0 1.60 7.4 Zoroastrian Central1 0 0.00 0 1,176.0 1.88 70.9 1,176.0 1.88 70.9

Zoroastrian Extension2 0 0.00 0 20.0 4.57 3.3 20.0 4.57 3.3

Zoroastrian South2 North Pit

0 0.00 0 60.0 1.56 2.8 60.0 1.56 2.8

Zoroastrian South2 South Pit 0 0.00 0 60.0 2.09 3.9 60.0 2.09 3.9

Total Open Pits 3,022.5 1.37 133.1 3,100.1 1.80 178.7 6,118.2 1.59 311.9

Zoroastrian Underground2 0 0.00 0 1,435.0 3.65 169.3 1,435.0 3.65 169.3

TOTAL 3,022.5 1.37 133.1 4,535.1 2.38 348.0 7,553.2 1.98 481.2 Numbers may not sum due to rounding 1Auralia Mining Consulting Pty Ltd 2Mining Plus Pty Ltd

Table 2: Kalgoorlie North Gold Project Ore Reserve Summary – September 2015 (refer ASX announcements 4 March 2014, 18 March 2015, 10 April 2015 and 9 July 2015)

The initial mining program (shaded rows in Table 2 above) involves development of three small open pits in the Bardoc South section of the Project, three open pits, an extension of the original Zoroastrian open pit and two underground mines in the Zoroastrian area and an open pit at Bulletin South. The initial Base Case program Ore Reserves of 3.38 million tonnes @ 2.72g/t Au for 296,400 ounces of gold are derived from total Indicated Mineral Resources of 6.22 million tonnes @ 2.59g/t Au for 519,100 ounces on five of the current 22 resource areas.

These Ore Reserves form a basis for the initial development of the Project. The future inclusion of additional resources areas, conversion of Indicated and Inferred Mineral Resources to Ore Reserves and extension of existing resources will enable refinement of the mining schedule and expansion of the life and scope of the Project.



Key parameters of the initial mine development plan (Base Case) for the Kalgoorlie North Gold Project are summarised as follows.

Base Case Mine Sequence Bardoc South Pits – Jackorite, Big Blow South, Castlereagh Zoroastrian Pits Bulletin South Pit Zoroastrian Underground

Ore tonnes mined and milled 3,397,900 tonnes

Average mined ore grade 2.74g/t Au

Mill recovery 92.0%

Recovered ounces 275,200 ounces

Average annual production 30,000 – 40,000ozs

Capex $18 million

Mine life (based on minimum milling rate 500,000tpa)

7.3 years

Table 4 Base Case Project Mine Production Parameters

The Central Underground mine re-design has substantially increased the mining and milling rate of ore from the underground operations. Milling of higher grade ore from the underground operations from November 2019 now averages approximately 36,500 tonnes per month with average monthly gold production of approximately 4,000 ounces of gold. Further open pit ore sources will be brought online to supplement the underground feed to at least meet Excelsior Gold’s minimum allocation at the Paddington Mill of approximately 41,700 tonnes per month.

Figure 3: Base Case Production Profile

showing monthly mine production tonnages and gold production ounces.

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0

1,000

2,000

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4,000

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Nov 2

015

Feb 2

016

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016

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016

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016

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017

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017

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017

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017

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018

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018

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018

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018

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019

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019

Aug 2

019

Nov 2

019

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020

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020

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020

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020

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021

May 2

021

Aug 2

021

Nov 2

021

Feb 2

022

May 2

022

Aug 2

022

Nov 2

022

Tonnes

Oun

ces

Month

Ounces Tonnes



Gold Price A$1,500/oz A$1,500/oz plus Hedge Position

A$1,600/oz

Base Case Free Cash Flow

$148 million $152 million $175 million

Base Case Discounted Cash Flow (NPV) discount rate 8%

$51 million $54 million $65 million

Unlevered IRR 100% 123% 145%

Project C1 cash cost $916 cash operating costs, including mining, milling, transport and site administration

Project C2 cash cost $961 C1 plus royalties and less by-product credits

Project C3 cash cost

$1,165 C2 plus depreciation, amortization, corporate, cost of the Facility and inclusive of underground mine capital

Table 5: Base Case Project Cash Flow and Cost Parameters

The Central Underground mine re-design contributes to improved Project NPV which increased by 46% due to the reduction of overall capital development costs for Central Underground. Further savings are derived from reduction in fixed costs by improving average monthly production profile from an average 26,700 tonnes (ASX announcement 13 July 2015) to an average 36,500 tonnes per month thereby reducing the underground mine life by approximately 13 months.

The improved underground mining case also reduces C3 costs by A$66 per ounce from A$1,231 to A$1,165 per ounce.

Excelsior Gold will continue to work towards further reducing cash costs on an ongoing basis. For further information contact Excelsior Gold Limited David Hamlyn David Potter Managing Director Technical Director T: + 61 8 9335 7770 T: + 61 8 9335 7770 E: [email protected] E: [email protected]



Competent Person Statement – Exploration Results and Mineral Resources:

Information in this announcement that relates to Mineral Resource and exploration results is based on information compiled by Mr. David Potter who is the Technical Director of Excelsior Gold Limited. Mr. Potter is a Member of The Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking, to qualify as Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Potter consents to the inclusion in the document of the information in the form and context in which it appears.

Competent Persons Statements – Ore Reserves Zoroastrian Central Open Pit The information in this Release which relates to the Ore Reserve estimates accurately reflect information prepared by Competent Persons (as defined by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves). The information in this public statement that relates to the Zoroastrian Central Open Pit Ore Reserve at the Excelsior Gold Kalgoorlie North Gold Project is based on information resulting from Feasibility works carried out by Auralia Mining Consulting. Mr. Daniel Tuffin completed the Ore Reserve estimate for this Zoroastrian Central Open Pit. Mr Daniel Tuffin is a Member and Chartered Professional (Mining) of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify him as a Competent Person as defined in accordance with the 2012 Edition of the Australasian Joint Ore Reserves Committee (JORC). Mr Tuffin consents to the inclusion in the document of the information in the form and context in which it appears.

Competent Persons Statements – Ore Reserves Zoroastrian Extended and Zoroastrian South Open Pits The information in this Release which relates to the Ore Reserve estimates accurately reflect information prepared by Competent Persons (as defined by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves). The information in this public statement that relates to the Zoroastrian Extended and Zoroastrian South Ore Reserves at the Excelsior Gold Kalgoorlie North Gold Project is based on information resulting from Feasibility works carried out by Mining Plus. Mr. David Billington completed the Ore Reserve estimate for these pits. Mr Billington is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify him as a Competent Person as defined in accordance with the 2012 Edition of the Australasian Joint Ore Reserves Committee (JORC). Mr Billington consents to the inclusion in the document of the information in the form and context in which it appears.

Competent Persons Statements – Ore Reserves Zoroastrian Underground The information in this Release which relates to the Ore Reserve estimates accurately reflect information prepared by Competent Persons (as defined by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves). The information in this public statement that relates to the Zoroastrian Extended and Zoroastrian South Ore Reserves at the Excelsior Gold Kalgoorlie North Gold Project is based on information resulting from Feasibility works carried out by Mining Plus. Mr. Peter Lock completed the Ore Reserve estimate for these pits. Mr Lock is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify him as a Competent Person as defined in accordance with the 2012 Edition of the Australasian Joint Ore Reserves Committee (JORC). Mr Lock consents to the inclusion in the document of the information in the form and context in which it appears.

Qualifying Statement This release may include forward-looking statements. These forward-looking statements are based on a number of assumptions made by the Company and its consultants in light of experience, current conditions and expectations concerning future events which the Company believes are appropriate in the present circumstances. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Excelsior Gold, which could cause actual results to differ materially from such statements. The Company makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect the circumstances or events after the date of this release.

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JORC Code, 2012 Edition – Table 1 Section 1 Sampling Techniques and Data –

(Criteria in this section apply to all succeeding sections.) Information for historical (Pre Excelsior Gold from 1983 to 2008) drilling, sampling, mining and milling of the Zoroastrian deposit has been extensively viewed and validated where possible. Information pertaining to historical QAQC procedures and data is incomplete but of a sufficient quality and detail to allow drilling and assay data to be used for resource estimations. Further, Excelsior Gold has undertaken extensive infill and confirmation drilling which confirm historical drill results. Sections 1 and 2 describe the work undertaken by Excelsior and only refer to historical information where appropriate and/or available.

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 down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.

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

• 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.

• N/A. Reserve update due to recent desktop redesigning of underground operations without further sampling and exploration work, or changes to Mineral Resources of the Zoroastrian deposit. Refer to ASX announcement dated 9 July for Sections 1-3 information of the Zoroastrian deposit.



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.).


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Criteria JORC Code explanation Commentary Drill sample recovery

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

• Measures taken to maximise sample

recovery and ensure representative nature of the samples

• Whether a relationship exists between

sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.




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.

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

• The total length and percentage of the relevant intersections logged.




Sub-sampling techniques and sample preparation

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

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

• For all sample types, the nature, quality

and appropriateness of the sample preparation technique.

N/A. Reserve update due to recent desktop redesigning of underground operations without further sampling and exploration work, or changes to Mineral Resources of the Zoroastrian deposit. Refer to ASX announcement dated 9 July for Sections 1-3 information of the Zoroastrian deposit.


• N/A. Reserve update due to recent desktop

redesigning of underground operations without further sampling and exploration work, or changes to Mineral Resources of the Zoroastrian deposit. Refer to ASX announcement dated 9 July for Sections 1-3 information of the Zoroastrian deposit.

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Criteria JORC Code explanation Commentary • Quality control procedures adopted for all

sub-sampling stages to maximise representivity of samples.

• 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.

• Whether sample sizes are appropriate to

the grain size of the material being sampled.





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.

• 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.

• Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.





Verification of sampling and assaying

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

• The use of twinned holes.



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Criteria JORC Code explanation Commentary • Documentation of primary data, data

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

• Discuss any adjustment to assay data.




Location of data points

• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation

• Specification of the grid system used

• Quality and adequacy of topographic control.





Data spacing and distribution

• Data spacing for reporting of Exploration Results.

• 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.

• Whether sample compositing has been applied.




• 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.

• 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.



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Criteria JORC Code explanation Commentary Sample security • The measures taken to ensure sample

security. • N/A. Reserve update due to recent desktop



Audits or reviews

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


Section 2 Reporting of Exploration Results –

(Criteria listed in the preceding section also apply to this section.)

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.

• 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.



Exploration done by other parties

• Acknowledgment and appraisal of exploration by other parties.


Geology • Deposit type, geological setting and style of mineralisation.


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.

• 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.




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Criteria JORC Code explanation Commentary • The assumptions used for any reporting

of metal equivalent values should be clearly stated.


Relationship between mineralisation widths and intercept lengths

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

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

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






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 drill hole collar locations and appropriate sectional views.


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.


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.


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).

• Diagrams clearly highlighting the areas of

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



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Section 3 Estimation and Reporting of Mineral Resources –

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

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.

• Data validation procedures used.



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

• 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.

• Nature of the data used and of any assumptions made.

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

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

• The factors affecting continuity both of grade and geology.








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.


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Criteria JORC Code explanation Commentary 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.

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

• The assumptions made regarding recovery of by-products.

• Estimation of deleterious elements or

other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterization).






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

• Any assumptions behind modelling of selective mining units.

• Any assumptions about correlation

between variables.

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

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

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









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Criteria JORC Code explanation Commentary Moisture • Whether the tonnages are estimated on a

dry basis or with natural moisture, and the method of determination of the moisture content.


Cut-off parameters

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


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.


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.


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.


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Criteria JORC Code explanation Commentary 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

• 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.

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




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

• 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).

• Whether the result appropriately reflects

the Competent Person’s view of the deposit.





Audits or reviews

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


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Criteria JORC Code explanation Commentary 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 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.

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






Section 4 Estimation and Reporting of Ore Reserve – Zoroastrian Central Underground

Criteria listed in section 1, and where relevant in sections 2, 3 and 4 as reported in ASX announcement 9 July 2015 also apply to this section. Criteria JORC Code Explanation Commentary Mineral Resource estimate for conversion to Ore Reserves

• Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

• Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

• The Mineral Resources for the Kalgoorlie North Gold Project (KNGP) have been estimated by Mr. David Potter, competent person for Excelsior Gold Limited (EXG).

• Mineral Resources used were provided by Excelsior Gold for Zoroastrian Central.

• The resource model CSV imported was “1412_zoro_final for engineers.csv”

• The resource model was converted to a Datamine model and the tonnes and grades agreed with Excelsior on 0.6g/t and 3.0g/t cut off grades

• The Zoroastrian Central Underground Reserves are wholly within of the Resources reported for Zoroastrian Central

Site visits • Comment on any site visits undertaken

by the Competent Person and the outcome of those visits.

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

• David Billington completed a site visit, 15th May 2015.

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Criteria JORC Code Explanation Commentary Study status • The type and level of study undertaken

to enable Mineral Resources to be converted to Ore Reserves.

• The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

• Ore Reserves were estimated using a suite of specialised mine planning software packages and production scheduling program. The input parameters selected are based on the review of the mining studies completed by Mining Plus and discussions with Excelsior personnel.

• The estimation of JORC (2012) Ore Reserves were prepared at the Pre-Feasibility Study level

Cut-off parameters

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

• Stope shapes were generated, using specialised software to identify the mining areas.

• The nominal cut-off grade of 1.58g/t Au diluted was applied as the marginal economic cut off for stoping. The stope shapes were then individually checked against the geological block model.

• The nominal cut-off grade of 1.13g/t Au diluted was applied as the marginal economic cut off for development.

• Gold price of AUD1,380/oz has been utilised.

Mining factors or assumptions

• The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

• The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

• The assumptions made regarding

geotechnical parameters (e.g. pit slopes, stope sizes, etc.), grade control and pre-production drilling.

• The major assumptions made and

Mineral Resource model used for pit and stope optimisation (if appropriate).

• The mining dilution factors used.

• The mining recovery factors used.

• Any minimum mining widths used. • The manner in which Inferred Mineral

Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.

• The infrastructure requirements of the

selected mining methods.

• Underground extraction will be via long hole open stoping method with pillar support.

• Pre-feasibility level geotechnical studies have been completed by Excelsior, which have been used in the stope design parameters and support requirements.

• The minimum mining width is 1.5 m.; • The vertical level spacing is 20 m, floor to floor; • Mining recovery factor of 90% has been applied for stopes; • Mining recovery factor of 100% has been applied for

development • development 100% • A dilution factor of 15% was applied for each stope; • A dilution factor of 0% was applied for development; • Rib pillars and sill pillars were sized as recommended by the

geotechnical study entitled “Zoroastrian Deposit, Preliminary Geotechnical Assessment, Underground Mining”, Peter 0’Bryan & Associates, dated November 2013.

• There was no Inferred Mineral Resources extracted by stoping operations. Some Inferred Mineral Resource material was mined in the course of developing access to the Indicated Mineral Resources. This Inferred material, was treated as mineralised waste and hauled as waste;

• The mine design included all major infrastructure requirements to support the long hole open stoping mining method.

Metallurgical factors or assumptions

• The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

• Whether the metallurgical process is well-tested technology or novel in nature.

• • The nature, amount and

representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and

• A metallurgical recovery of 91.3% has been applied to the mined gold oz to calculate the recovered gold oz for the revenue and the cash flow purposes.

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Criteria JORC Code Explanation Commentary the corresponding metallurgical recovery factors applied.

• • Any assumptions or allowances made

for deleterious elements.

• The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.

• For minerals that are defined by a

specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

Environmental • The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

• Mining Plus is not, and has not been made, aware of any reports, data or restrictions that may exist in regards to potential environmental impacts;

Infrastructure • The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

• The access to mine site is via the existing road infrastructure in the area;

• The mine site will require an area for administration and technical support offices. The mine infrastructure requires an equipment repair shop and service facility with water and diesel storage tanks. All power for the mine and office facilities is assumed to be grid power;

• Processing will be conducted by a third party off site, so no metallurgical plant is required to be constructed;

• Personnel will be housed in Kalgoorlie Costs • The derivation of, or assumptions

made, regarding projected capital costs in the study.

• The methodology used to estimate

operating costs. • Derivation of transportation charges.

• The basis for forecasting or source of

treatment and refining charges, penalties for failure to meet specification, etc.

• The derivation of assumptions made of

metal or commodity price(s), for the principal minerals and co- products.

• The source of exchange rates used in the study.

• The allowances made for royalties payable, both Government and private.

• • Allowances made for the content of

deleterious elements.

• The operating costs for the study were provided by Excelsior and were based on a quotation from a mining contractor, which appear reasonable and to an acceptable level of accuracy;

• Operating costs were calculated using the mine production schedule and equipment productivities;

• Processing costs were from the announced Ore Treatment Agreement with Norton Goldfields at their Paddington Mill

• The transport costs to the processing plant was included and based on a quotation from the incumbent haulage contractor currently contracting to the process plant operator

• The processing costs were provided by Excelsior and based on information from the process plant operator;

• The Australian Dollar (AUD) is the base currency in the study; • A Government royalty of 2.5% of gold revenue was included.

Revenue factors

• The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

• The Ore Reserve was based on a gold price of AUD $1,380 per ounce.

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Criteria JORC Code Explanation Commentary • The derivation of assumptions made of

metal or commodity price(s), for the principal metals, minerals and co-products.

Market assessment

• The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

• A customer and competitor analysis along with the identification of likely market windows for the product.

• Price and volume forecasts and the basis for these forecasts.

• For industrial minerals the customer

specification, testing and acceptance requirements prior to a supply contract.

• Market assessment has not been conducted as the gold metal is planned to be sold on the open market.

• Payment will be made based on the value of the contained gold

in each ore parcel (Recovered Gold Credits) by Norton Goldfields based on the Gold Recovery Statement derived from the detailed Ore Stockpiling, Sampling and Grade Determination Procedure. Norton Goldfields will sell the Recovered Gold Credits at the AUD Spot Gold Price as quoted by the Refiner on the business day preceding the delivery of the Gold Recovery Statement

• The Gold price of A$1,380/oz provided by Excelsior Gold, was used.

Economic • The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

• NPV ranges and sensitivity to variations in the significant assumptions and inputs.

• The NPV discount rate, provided by Excelsior, is 8%; • Inflation and escalation was not considered in the cash flow

model

Social • The status of agreements with key stakeholders and matters leading to social licence to operate.

• Mining Plus is not, and has not been made, aware of any data or restrictions that may negate a social license to operate.

Other • To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

• Any identified material naturally occurring risks.

• The status of material legal agreements and marketing arrangements.

• The status of governmental

agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

• There is an agreement to supply the plant, located off-site and operated by a third party, mineralised material at the rate of 500,000 tonnes per annum for five years.

• While there are existing mining approvals for various surface workings, it is expected that Government approval of the Mining Proposal for underground operations will be received within the schedule anticipated in the pre-feasibility study

Classification • The basis for the classification of the Ore Reserves into varying confidence categories.

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

• Mining Plus has classified all the Indicated Mineral Resource as Probable Mining Reserve;

• The classification is consistent with the Competent Person’s view of the deposits;

• There were no Mineral Resources classified as Measured;

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Criteria JORC Code Explanation Commentary

• The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

Audits or reviews

• The results of any audits or reviews of Ore Reserve estimates.

• The Ore Reserve was peer reviewed, internally, and the Ore Reserve meets the requirements as set out by JORC 2012.

Discussion of relative accuracy/ confidence

• Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve 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 reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

• 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.

• Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.

• It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

• Confidence level for the reserves was tested performing sensitivity check based on a techno-economic model generated by Mining Plus;

• Sensitivity analysis was conducted on revenue (gold price), operating and capital costs. The analysis showed that the project economics is most sensitive to gold price, followed by operating cost.

• The Ore Reserve was found to be resilient to +/-15% variation in key parameters employed for sensitivity tests, except Revenue, which resulted in a small negative NPV at a variation of -15%;

• The accuracy and confidence level of the input parameters are in line with expected pre-feasibility study limits of accuracy;

150904 ASX Zoroastrian Underground Ore Reserve · PDF file• Total Zoroastrian open pit...

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