Damang gold mine - Mineral Resources and Mineral Reserves

The Mineral Resources and Mineral Reserves were updated as at December 2017 and use gold prices of US$1,400 and US$1,200 respectively. The December 2017 Mineral Resources have been stated inclusive of Mineral Reserves. All relevant geological models and evaluation models have been updated during the year to reflect the latest available datasets.

Mineral Resources

Mineral Resources are classified as Measured, Indicated and Inferred as described in the SAMREC Code and are constrained within an optimised pit shell. Mineral Resource categories are assigned with consideration given to geological complexity, grade variance, and drill hole intersection spacing. The Mineral Resources are quoted at an appropriate in situ cut-off grade. They also include estimates of any material below cut-off grade that needs to be mined to extract the complete pay portion of the Mineral Resource.

Mineral Resource classification

  Tonnes (kt) Grade (g/t)   Gold (koz)  
Classification Dec
2017		   Dec
2016		   Dec
2015		 Dec
2017		   Dec
2016		   Dec
2015		   Dec
2017		   Dec
2016		   Dec
2015		  
Open pit
Measured 10,735   9,772   8,753 1.78   1.84   1.94   616   579   545  
Indicated 58,044   57,115   58,076 2.30   2.31   2.33   4,299   4,239   4,357  
Inferred 14,983   13,523   7,665 2.38   2.44   2.40   1,147   1,063   591  
Total open pit and underground 83,762   80,410   74,494 2.25   2.27   2.29   6,062   5,881   5,493  
Surface stockpiles
Total surface stockpiles 2,459   4,337   5,112 0.72   0.70   0.80   57   97   132  
Grand total 86,221   84,747   79,606 2.21   2.19   2.20   6,119   5,978   5,625  

Mineral Resource classification per mining area

  Measured Indicated Inferred Total  
Deposit Tonnes (kt)   Grade
(g/t)		   Gold
(koz)		 Tonnes
(kt)		   Grade
(g/t)		   Gold
(koz)		 Tonnes
(kt)		   Grade
(g/t)		   Gold
(koz)		 Tonnes
(kt)		   Grade
(g/t)		   Gold
(koz)		  
Damang (incl Saddle) 6,486   1.86   388 41,665   2.46   3,291 12,775   2.51   1,030 60,927   2.40   4,709  
Huni 1,147   1.47   54 3,899   1.57   197 256   1.48   12 5,302   1.55   264  
Juno 2,357   1.84   139 4,609   2.30   341 13   2.38   1 6,979   2.14   481  
Amoanda 65   1.74   4 5,133   2.05   338 233   1.39   10 5,431   2.02   352  
Rex 680   1.40   31 1,882   1.67   101 1,318   1.81   77 3,880   1.68   209  
Other –   – 855   1.12   31 389   1.31   16 1,244   1.18   47  
Total open pit 10,735   1.78   616 58,044   2.30   4,299 14,983   2.38   1,147 83,763   2.25   6,062  
Stockpiles 2,459   0.72   57 –   –   – –   –   – 2,459   0.72   57  
Grand total 13,194   1.59   673 58,044   2.30   4,299 14,983   2.38   1,147 86,221   2.21   6,119  

Modifying factors

  • The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce Mineral Reserves
  • Unless otherwise stated, all Mineral Resources and Mineral Reserves are quoted as 100% managed and are not attributable with respect to ownership
  • All Mineral Reserves are quoted in terms of RoM grades and tonnages as delivered to the metallurgical processing facilities, and are therefore fully diluted
  • Mineral Reserve Statements include only Measured and Indicated Mineral Resources, modified to produce Mineral Reserves and contained in the LoM plan
  • Mineral Resources and Mineral Reserves have undergone extensive internal and external audits during the Damang reinvestment study
        December      
Units   2017   2016   2015  
Mineral Resource parameters
Mineral Resource gold price US$/oz   1,400   1,400   1,500  
Cut-off for fresh ore g/t   0.69 – 0.90   0.69 – 1.01   0.63 – 0.85  
Cut-off for oxide ore g/t   0.51 – 0.70   0.51 – 0.78   0.46 – 0.62  
Mineral Reserve parameters
Mineral Reserve gold price US$/oz   1,200   1,200   1,300  
Cut-off for fresh ore g/t   0.72 – 0.77   0.71 – 0.81   0.67 – 0.75  
Cut-off for oxide ore g/t   0.55 – 0.59   0.56 – 0.62   0.46 – 0.55  
Strip ratio waste:ore   4.3   4.6   6.2  
Dilution (hydrothermal) %   17 - 25   17 - 30   15 - 20  
Dilution (palaeoplacer) cm   50   50   40  
Mining recovery factor %   95   91   90  
MCF %   95   95   95 – 96  
Plant recovery factor – fresh ore %   91   90   92  
Plant recovery factor – oxide ore %   91   90   93.5  
Processing capacity Mtpa   4.2   4.2   4.2  

  Grade tonnage curve -Surface  
   

Mineral Reserves

The Mineral Reserve estimate for Damang gold mine is based on development of appropriately detailed and engineered LoM plans. All design and scheduling work is undertaken to an appropriate level of detail by experienced engineers using appropriate mine-planning software. The planning process incorporates realistic modifying factors and the use of appropriate cut-off grades, geotechnical criteria, mining fleet productivities and other techno-economic investigations.

In general, Proved Mineral Reserves are derived from Measured Mineral Resources, and the Probable Mineral Reserves are derived from Indicated Mineral Resources. The stockpiles included in the Mineral Reserve comprise mostly lower-grade mineralisation that has been accumulated since the start of mining the Damang pit.

Mineral Reserve classification

  Tonnes (kt) Grade (g/t)   Gold (koz)  
Classification Dec
2017		   Dec
2016		   Dec
2015		 Dec
2017		   Dec
2016		   Dec
2015		   Dec
2017		   Dec
2016		   Dec
2015		  
Open pit
Proved 6,314   5,648   3,126 1.40   1.46   1.29   284   265   130  
Probable 24,162   23,069   14,531 1.81   1.80   1.58   1,406   1,336   739  
Total open pit 30,476   28,717   17,656 1.72   1.73   1.53   1,690   1,601   869  
Surface                
Surface stockpiles 1,453 3,033 3,564 0.82 0.75 0.91 38 73 104
Grand total 31,928   31,750   21,220 1.68   1.64   1.43   1,728   1,674   973  

Mineral Reserve classification per mining area

  Proved Probable   Total Mineral Reserve  
Mining area Tonnes
(kt)		   Grade
(g/t)		   Gold
(koz)		 Tonnes
(kt)		   Grade
(g/t)		   Gold
(koz)		   Tonnes
(kt)		   Grade
(g/t)		   Gold
(koz)		  
Open pit                                  
Huni 1,235   1.18   47 3,054   1.25   123   4,289   1.23   170  
Damang (incl Saddle) 5,051   1.45   236 17,246   1.95   1,080   22,297   1.84   1,316  
Amoanda 28   1.22   1 3,700   1.66   198   3,728   1.66   199  
Other –   –   – 162   0.96   5   162   0.96   5  
Total open pit 6,314   1.40   284 24,161   1.81   1,406   30,476   1.72   1,690  
Surface                
Surface stockpiles 1,453   0.82   38 –   –   –   1,453   0.82   38  
Grand total 7,767   1.29   322 24,161   1.81   1,406   31,928   1.68   1,728  

Mineral Resource and Mineral Reserve reconciliation year-on-year

Factors that affected Mineral Resource changes year-on-year Factors that affected Mineral Reserve changes year-on-year
Mined depletions Mined depletions
Change in optimised pit shells due to updated modifying factors Exclusion of Rex pit pending assessment of further drilling and updated resource models
Resource model update for Damang Complex Inclusion of Huni (+170koz)
Low-grade ore included is NPV accretive

Mineral Resource reconciliation (Gold – koz)   Mineral Reserve reconciliation (Gold – koz)
 

Mineral Reserve sensitivity

The Mineral Reserve sensitivity has been derived from the application of the relevant cut-off grades to individual grade tonnage curves of the optimised pit shells for the open pits.

The Mineral Reserve sensitivities are not based on detailed depletion schedules and should be considered on a relative and indicative basis only. The sensitivity chart indicates the Managed Mineral Reserve sensitivity at -15%, -10%, -5%, Base (US$1,200/oz), +5%, +10%, and +15% to the gold price.

  Mineral Reserve sensitivity (Gold – Moz)