Geology and mineralisation of the Mewet Vein, Jelai Gold Project ...

GMT 

I N D O N E S I A 

PT GMT Indonesia 

Jl. TB Simatupang Kav. 1S, 2 nd Floor 

Cilandak Timur, Jakarta, 12560 

Phone : +62 21 782 4677 (Hunting), Fax: +62 21 782 4679 

PT JELAI CAHAYA MINERALS 

GEOLOGY AND MINERALISATION OF THE MEWET VEIN, JELAI 

GOLD PROJECT 

KABUPATEN BULUNGAN 

EAST KALIMANTAN, INDONESIA 

APRIL 2009 

REPORT NUMBER : 0065 JCM/GEO/2009.04 

Author: 

Brett Dennis Gunter (mAusIMM) 

Contributors: 

Submitted to: 

PT Jelai Cahaya Minerals/Kalimantan Gold Corporation 

Date Submitted: 13 th April 2009 

Distribution List: PT Jelai Cahaya Minerals 2 copies 

PT GMT Indonesia library 1 copy plus digital archive 

One Stop Success Building 2 nd Floor 

Jl.TB.Simatupang Kav.1.S Cilandak Timur Jakarta – Indonesia 12560 

Phone: +62 21 782 4677 Fax: +62 21 782 4679


Mewet Vein : Jelai Gold Project 

TABLE OF CONTENTS 

1 SUMMARY ......................................................................................................................... 7 

2 INTRODUCTION ................................................................................................................ 8 

3 PROPERTY DESCRIPTION ............................................................................................ 10 

3.1 Location .....................................................................................................................10 

3.2 Tenure .......................................................................................................................10 

4 PROJECT ENVIRONMENT ............................................................................................. 12 

4.1 Access .......................................................................................................................12 

4.2 Climate ......................................................................................................................12 

4.3 Existing Infrastructure ................................................................................................12 

4.4 Physiography .............................................................................................................14 

5 HISTORY ......................................................................................................................... 15 

5.1 Pre-Indochina Exploration..........................................................................................15 

5.2 Indochina Goldfields Exploration................................................................................15 

6 GEOLOGICAL SETTING ................................................................................................. 17 

6.1 Regional Geology ......................................................................................................17 

6.1.1 Tectonic History .....................................................................................................17 

6.2 Stratigraphy ...............................................................................................................17 

6.2.1 Late Cretaceous - Early Eocene ............................................................................17 

6.2.2 Late Oligocene-Early Miocene ...............................................................................18 

6.3 Regional Structure .....................................................................................................18 

6.4 Description of Lithologies in the Project Area .............................................................18 

6.4.1 Andesitic Lava .......................................................................................................18 

6.4.2 Andesite Intrusives ................................................................................................19 

6.4.3 Andesitic Basalt .....................................................................................................19 

6.4.4 Lithic Tuffs .............................................................................................................19 

6.4.5 Dacite Porphyry .....................................................................................................19 

6.4.6 Rhyolite .................................................................................................................19 

6.4.7 Menterang Formation Sediments ...........................................................................21 

7 MINERALIZATION ........................................................................................................... 22 

7.1 Deposit Types............................................................................................................22 

7.2 Mewet Vein Geology..................................................................................................22 

7.2.1 General Geology ....................................................................................................22 

7.2.2 Mineralisation ........................................................................................................22 

7.2.3 Alteration ...............................................................................................................23 

7.3 Interpreted Genesis of the Epithermal Veins ..............................................................23 

8 EXPLORATION ................................................................................................................ 25 

8.1 PT Jelai Cahaya Minerals Exploration .......................................................................25 

0065 JCM/GEO/2009.04 Page ii



9 DRILLING PROGRAMME ................................................................................................ 27 

9.1 Available Data ...........................................................................................................27 

9.1.1 Drill Hole Logs .......................................................................................................27 

9.1.2 Core Photographs ..................................................................................................27 

10 SAMPLE PREPARATION, ANALYSES AND SECURITY ................................................ 30 

10.1 Sampling and Analysis ..............................................................................................30 

10.1.1 Ivanhoe Mines Sampling and Analysis ...............................................................30 

10.1.2 Jelai Cahaya Mineral Sampling and Analysis .....................................................30 

10.2 Frequency Distribution ...............................................................................................31 

11 DATA VERIFICATION AND INTERPRETATION.............................................................. 34 

11.2 Sampling Data ...........................................................................................................34 

11.3 Database Compilation ...............................................................................................35 

11.4.1 Topography........................................................................................................35 

11.4.2 Base of Weathering ...........................................................................................36 

11.4.3 Hangingwall and Footwall ..................................................................................36 

11.4.4 Limits of Mineralisation.......................................................................................36 

12 INTERPRETATION AND CONCLUSIONS ....................................................................... 38 

13 RECOMMENDATIONS .................................................................................................... 39 

13.1 Future Work Programmes..........................................................................................39 

14 REFERENCES ................................................................................................................. 41 

14.1 Text References ........................................................................................................41 

14.2 Project Reports Available ..........................................................................................42 

0065 JCM/GEO/2009.04 Page iii



FIGURES 

Figure 1. General location of the Jelai Gold Project, East Kalimantan, Republic of Indonesia. ...8 

Figure 2. Location map of the Jelai Gold Project concession area............................................11 

Figure 3. Forestry zone map of the project area. ......................................................................13 

Figure 4. Geology of the main project area. ..............................................................................20 

Figure 5. Location of the drill holes for the Mewet Vein area being considered.........................26 

Figure 6. Cross section 356,450N showing the general lithology, according to Table 6 (below) 

and Au histograms, and the grade histograms for Au. ...............................................................29 

Figure 7. Repeat analysis performance for the Jelai drill core sampling completed by Ivanhoe. 

.................................................................................................................................................31 

Figure 8. Repeat analysis correlation for Au from the JCM analyses, total data set for the Jelai 

Gold Project, including the Mewet Vein area. ............................................................................32 

Figure 9. Histogram of average Au values at greater than 0.5 g/t. A number of outliers 

appearing in the data set representing high grade shoot samples. These outliers are normally 

over narrow intervals, representing massive colloform banded sections of vein. .......................33 

0065 JCM/GEO/2009.04 Page iv



TABLES 

Table 1. Block coordinates of the JCM concession. ..................................................................10 

Table 2. Exploration summary by Ivanhoe Mines Ltd at the Jelai-Mewet Project area. .............16 

Table 3. Drill holes included in the assessment from the JM series of diamond drill holes 

(Ivanhoe drilling). ......................................................................................................................27 

Table 4. Drill holes included in the assessment from the JCM series of diamond drill holes (JCM 

drilling). .....................................................................................................................................28 

Table 5. Significant intercepts from the Mewet Vein drilling in the area assessed. ....................29 

Table 6. Descriptive statistics for Au from the Jelai Gold Project based on total project drilling 

and Mewet Vein specific drilling. ...............................................................................................32 

Table 7. Lithocodes for the Jelai Gold Project database. ..........................................................34 

Table 8. Considerations in assessing the exploration data, showing the confidence in the data 

set and the areas requiring further management. ......................................................................35 

Table 9. Work programme and budget required to advance the project ....................................40 

0065 JCM/GEO/2009.04 Page v



TERMINOLOGY 

All units of measure used in this report are metric, including tonne (metric tonne), hectares (unit 

of area) and kilometres (unit of distance). 

mtpa : Million tonnes per annum (used for production figures) 

ha : Hectare 

km : Kilometre 

Province : equivalent to a state area, a province is the Level 1 government area below the 

central government, head of government is the “Governor” 

Kabupaten : Level 2 government, equivalent to a shire or county, the most powerful level of 

government under regional autonomy, several Kabupaten are grouped under a province, head 

of government in a Kabupaten is the “Bupati” 

Kecamatan : Level 3 government, several Kecamatans are grouped into a Kabupaten, head of 

government is a “Camat” 

Desa : village area, Level 4 government, several Desa make up a Kecamatan, head of 

government is the “Kepala Desa” (village head), several individual villages may be included in a 

Desa 

DL : detection limit of the analytical method used 

Dusun : smaller than a Desa and headed by a “Kadus” (Kepala Dusun or dusun head) 

g/t : grammes per tonne, or ppm of an element, nominally used for precious metals, 

SKIP : surat keterangan izin peninjauan, licence issued by the Department of Mines for 

temporary access to an area for initial mineral evaluation purposes, usually for a period of one 

to two (1-2) months and forms part of the normal process for acquiring a KP (see below) 

KP : kuasa pertambangan, licence issued by the Department of Mines for exploration and 

exploitation of mineral resources, must be wholly owned through 100% Indonesian national 

shareholding 

PKP2B : coal contract of work, can be wholly foreign owned through a PMA company, 

becoming less popular with local governments recently due to large areas of concessions being 

held and not exploited 

KUD : very small village cooperative mining area, usually formed as a “village enterprise” and 

on concession areas of a maximum 100 hectares 

Sungai : river in Indonesian 

Kampung : village in Indonesian 

0065 JCM/GEO/2009.04 Page vi



1 

SUMMARY 

The purpose of this report is to review the geology and existing data from exploration of the 

Jelai Gold Project, specifically the Mewet Vein area and to analyse the controls on 

mineralisation contained within a segment of the vein where sufficient data exists to allow a 

detailed study. The Jelai Gold Project is located 1,550 kilometres northeast of Jakarta, the 

capital city of Indonesia, close to the east coast of the Province of East Kalimantan. The centre 

of the Jelai Gold Project is located at approximately E 117° 00’ 00” and N 03° 10’ 00”. 

The concession area is held by PT Jelai Cahaya Minerals, which is beneficially controlled by 

Kalimantan Gold Corporation through a system of agreements with the Indonesian-owned 

company JCM, as a kuasa pertambangan (or KP, literally translated as a “mining licence”). The 

licence was issued on the 4 th June 2007 for a period of 2 years, which is extendable. 

The Jelai Gold Project covers a series of low sulphidation epithermal veins with anomalous 

precious metal values hosted within andesitic volcanics. The mineralisation is characterised by 

quartz veins and vein breccias, generally with an argillic alteration halo. The exploration 

programme conducted by JCM has specifically targeted this style of mineralisation in the area 

and follows up previous work, including drilling, completed in the late 1990’s. 

The current database for the Jelai Gold Project contains 115 drill holes in different areas of the 

vein system. From these holes, 26 drill holes were completed by previous explorers for an 

advance of 3,901.52 metres with a further 89 drill holes completed in the second phase of 

drilling by JCM for an advance of 8,273.03 metres. The drilling in the Mewet Vein itself was all 

oriented to the east, with the original drilling on 50 metre sections. Hole inclinations ranged 

between 55-70° but were mostly inclined at 60°. 

The Mewet Vein crops out on the side of a small, north-south trending, ridge. The vein consists 

of small discontinuous outcrops of colloform banded chalcedony with adularia in the drilled area. 

The mineralisation in the Mewet Vein comprises a discrete lode structure containing mixed 

hydrothermal vein breccia, massive quartz veins and colloform-crustiform quartz veins in a zone 

trending generally north-south and dipping at approximately 60° to the west 

Over the strike length of the vein a pinch and swell effect is observed with the width being 

variable at a similar RL along the strike of the vein. High gold values from the drilling were 

returned from finely banded, colloform-crustiform, quartz-adularia veins with the highest gold 

values occuring in zones of multiphase brecciation of the colloform banded quartz which are 

healed by chalcedonic quartz and adularia. Silver grades are sporadic with the most elevated 

values occurring with the high grade gold in finely banded, sulphidic, quartz veins. 

The assessment of data has outlined an exploration target of between 900,000-950,000 tonnes 

of mineralisation with a gold grade of approximately 3 g/t and an accompanying silver grade of 

approximately 3 g/t. The Mewet vein target remains open along strike in both directions. 

The programme of exploration conducted by JCM has successfully outlined a number of areas 

of coherent mineralisation in the Jelai Gold Project area, of which one example is the Mewet 

Vein. The initial aims of the programme have been met, that is, to define the vein structures in 

the near surface environment and prepare targets for deeper drilling. Further work is 

recommended, with a budget of approximately USD 3.45 million to advance the project to a 

scoping study completion. 

0065 JCM/GEO/2009.04 Page 7



2 

INTRODUCTION 

2.1 

General Introduction and Scope 

PT GMT Indonesia (GMT) was appointed by PT Jelai Cahaya Minerals (JCM) and Kalimantan 

Gold Corporation (KGC) to act as Technical Advisors to the Jelai Gold Project in the Kabupaten 

Bulungan, Province of East Kalimantan since the inception of the exploration programme by 

JCM (Figure 1). In addition to these works, in September 2008 GMT was also requested to 

complete an initial geological appraisal of the most advanced of the prospects being 

investigated, being the Mewet Vein. Mr. Mansur Geiger, the Vice President- Exploration, of 

Kalimantan Gold Corporation outlined the general scope of the works for the geological model 

and exploration target estimate as follows: 

• Validate the data and describe in detail the previous works at the prospect location, 

• Update the validated database with the JCM exploration data, 

• Determine the geological and structural constraints on the mineralisation based on the 

available data, 

• Undertake analysis to determine the quality of data in the Mewet Vein area and make 

detailed assessments of the controls on the mineralisation defined, 

• Make recommendations on the most appropriate methods for continued drilling, 

• Complete a report on the results, including background information on the property and 

recommendations for further work. 

Figure 1. General location of the Jelai Gold Project, East Kalimantan, Republic of Indonesia. 

0065 JCM/GEO/2009.04 Page 8



2.2 

Scope and Conduct 

The purpose of this report is to review the geology and existing data from exploration of the 

Jelai Gold Project, specifically the Mewet Vein area and to analyse the controls on 

mineralisation contained within a segment of the vein where sufficient data exists to allow a 

detailed study. In the discussion of the geology, areas and prospects adjacent to the Mewet 

Vein are included but this may not specifically impact on the geology of the Mewet Vein. 

Mr. Brett D. Gunter (B.App.Sc (Geology), mAusIMM), Principal Consultant, PT GMT Indonesia 

prepared this technical report. 

JCM/KGC has accepted that the qualifications, expertise, experience, competence and 

professional reputation of GMT and Mr. Gunter are appropriate and relevant for the preparation 

of this Report. JCM/KGC has also accepted that the author who has signed this report is a 

member of a professional body that is appropriate and relevant for the preparation of this report. 

2.3 

Data Sources and Author Visits 

The author of this report previously worked with Indochina Goldfields Limited (Indochina, now 

Ivanhoe Mines Ltd, Ivanhoe) under the banner of PT Borneo Exploration and Mining, which held 

a 6 th Generation Contract of Work (CoW) over the project between 1995 and 2001. The author 

visited the prospect on numerous occasions during the period 1996 until late 2000. Indochina 

Goldfields had, during that time, an extremely active regional exploration programme being 

conducted over the CoW area. Part of these works were conducted over the general Mewet 

area, the subject of this report, and included mapping, geochemical sampling (soil, rock and 

stream sediments), trenching and drilling. The data on the project collected by Indochina is 

intact and extensive, as discussed later in this report. 

A number of subsequent site visits have been made to the property by the author since the 

recommencement of activities by JCM and GMT personnel remain active at the project in a 

technical role assisting JCM with the ongoing exploration and drilling works. The most recent 

visit to the property was in August 2008. 

The data in this report is derived from previous exploration results by Ivanhoe Mines Ltd 

(acquired by JCM from the originator) and data derived from the current exploration. 

2.4 

Units and Currency 

All units of measurement used in this report are metric unless otherwise stated. Currency is 

expressed in United States dollars unless stated otherwise. 

2.5 Disclaimer 

The Report is based on information known to the author as of the 13 th April 2009. The author 

has had a number of site discussions with JCM regarding the ongoing exploration of the 

property and, due to an intimate knowledge of the area, the author is confident that the material 

items that may affect the compilation of this report and the results reported therein have been 

sufficiently assessed during these discussions and visits. 

This report includes technical information, which requires subsequent calculations to derive subtotals, 

totals and weighted averages. Such calculations inherently involve a degree of rounding 

and consequently introduce a margin of error. Where these occur, the author does not consider 

them material. 

0065 JCM/GEO/2009.04 Page 9



3 

3.1 

PROPERTY DESCRIPTION 

Location 

The Jelai Gold Project is located 1,550 kilometres northeast of Jakarta, the capital city of 

Indonesia, close to the east coast of the Province of East Kalimantan (refer to Figure 1). The 

major towns in the area include Balikpapan, approximately 500 kilometres south of the project 

area and Tarakan 45 kilometres east of the project. 

The centre of the Jelai Gold Project is located at approximately E 117° 00’ 00” and N 03° 10’ 00” 

and the centre of the project lies approximately 410 kilometres north of Samarinda, the 

provincial capital of East Kalimantan. 

3.2 

Tenure 

The concession area is held by JCM, which is beneficially controlled by KGC through a system 

of agreements with the Indonesian-owned company JCM, as a kuasa pertambangan (or KP, 

literally translated as a “mining licence”). The KP system in Indonesia is a mining rights system 

issued by the Kabupaten (Regency) and is a smaller, wholly locally owned mining concession 

system that is valid through several periods of activities from general surveys till production. 

The concession covers an area of 4,929 hectares. The concession coordinates are outlined in 

Table 1 and the detailed concession area is shown in Figure 2. 

The author has sighted the concession documents and they appear valid with the following 

details: 

• Date issued : 4 th June 2007, 

• Type : KP, Exploration Period, 

• Period : 2 years, valid from the 1 st June 2007 until the 1 st June 2009 

• Block Code : 64 PP 22 023 

• Letter Number : 350/K-VI/540/2007 

Under Indonesian law, the KP can be extended for a further 3 years, to a maximum of 5 years, 

before progressing to the next stage of construction/production. 

Point Number Longitude Latitude 

1 E 116° 58' 15" N 03° 14' 30" 

2 E 117° 01' 00" N 03° 14' 30" 

3 E 117° 01' 00" N 03° 13' 45" 

4 E 117° 02' 00" N 03° 13' 45" 

5 E 117° 02' 00" N 03° 11' 30" 

6 E 117° 00' 00" N 03° 11' 30" 

7 E 117° 00' 00" N 03° 11' 00" 

8 E 116° 59' 15" N 03° 11' 00" 

9 E 116° 59' 15" N 03° 09' 45" 

10 E 116° 57' 45" N 03° 09' 45" 

11 E 116° 57' 45" N 03° 13' 15" 

12 E 116° 58' 15" N 03° 13' 15" 

Table 1. Block coordinates of the JCM concession. 

0065 JCM/GEO/2009.04 Page 10



All permits required for the exploration of the concession area are in place. At this point in time, 

the 100% beneficial interest in the property by KGC is unencumbered by other liabilities such as 

royalty payments to third parties, any future production from the property will be attributed 100% 

to JCM and, through agreement, KGC. 

Figure 2. Location map of the Jelai Gold Project concession area. 

0065 JCM/GEO/2009.04 Page 11



4 

4.1 

PROJECT ENVIRONMENT 

Access 

Access to the region is by daily domestic airline services with flights between Balikpapan and 

Tarakan (less than 1 hour flight time). Regular domestic flights service Balikpapan with Jakarta 

(2 hour flight). Tarakan can be an ideal base for operations within northeast Kalimantan, with 

supermarket shopping, hotel and port facilities. However, JCM has chosen Tanjung Selor, with 

less comprehensive facilities, to be the operating base for the operations for several reasons: 

• Since regional autonomy, the administration of mining licences has returned to the 

Kabupaten level and the present capital of the Kabupaten of Bulungan is Tanjung Selor, 

• Road access is now available between Tanjung Selor and the project site, 

• Administrative requirements that a branch office needs to be opened in the Kabupaten in 

which the operation is conducted. 

Speedboats allow rapid access from various major towns to the numerous large inland 

waterways present in the area. Longboats with 40 hp outboard engines provide further access 

upstream. From the major riverine townships and logging camps, local ketingting (large 

motorised canoe) craft can be hired to provide access to the interior. LCT (landing craft) vessels 

are also available to transport heavy equipment along these river systems. A large network of 

logging tracks and camps is situated in the interior, radiating from riverine logging camps. These 

provide further valuable access to the interior using motorbikes. 

Specifically, the Jelai-Mewet project area is located on the eastern side of the main Intraca 

logging road, which extends west from the main riverine logging camp on the S. Sekatak, at 

approximately Kilometre 16 road marker. The Intraca Camp can be reached by road from 

Tanjung Selor (4-5 hours) or by speedboat from Tarakan (1.5 hours). 

Presently access into the concession area is excellent from the Intraca Camp, with JCM resweeping 

the logging road with a bulldozer, albeit rain can affect the logging road causing 

slippery conditions and several bridges are in need of refurbishment as they have been 

abandoned for several years by the logging company, PT Intracawood Timber Products. 

4.2 

Climate 

The climate is wet tropical-monsoonal, with a rainfall of 3,500 mm/per annum, and a drier 

season between May and September. Daily temperatures range from 25°-35°C, relative 

humidity is always above 60%. Winds are generally light. Rainforest is ubiquitous in the area 

with a wide range of trees, shrubs, tubers and succulents. 

4.3 

Existing Infrastructure 

There is little infrastructure in the area apart from a number of disused or renovated logging 

roads. The nearest asphalt road is 16 kilometres north of the concession area. There are limited 

public power transmission facilities in the area but, as is often the case in many parts of 

Indonesia, these infrastructure issues can be managed. 

For the actual mine infrastructure, there is sufficient area within the concession to establish 

mining and processing infrastructure. The area is suitable for tailings storage facilities and the 

area is not in a seismically active zone. There is an abundance of skilled mining personnel in 

Indonesia and a large population of unskilled labour is available within the immediate area of the 

project. 

It is suggested that the project development, should it proceed, would not be dissimilar to other 

mining projects successfully developed in Indonesia. 

0065 JCM/GEO/2009.04 Page 12



The forestry concession holder in the area is PT Intracawood Timber Products and the forestry 

zone map shows the concession lies within production forest and limited production forest. No 

protected forest (hutan lindung) exists within the concession area (Figure 3). Under Indonesian 

law, there are no restrictions for the development of a mining operation within production and 

limited production forests, so long as the relevant permits are processed. 

Figure 3. Forestry zone map of the project area. 

0065 JCM/GEO/2009.04 Page 13



4.4 

Physiography 

Northeast Kalimantan is characterized by jungle covered mountainous terrain. To the north of 

the project area, near the Malaysian border, the topography is extremely rugged, with elevations 

up to 2,000 metres and difficult access. The coastline consists of an extensive, well developed 

estuarine-delta system, with dense palm grove vegetation and swamp development. 

In the Jelai-Mewet area, the terrain is undulating to rugged, with elevations of up to 1,000 

metres on some volcanic peaks. Waterfalls and rapids are developed in the upper reaches of 

the drainage systems, posing access problems in some areas. 

However, in the prospect area itself, elevations range up to 200-300 metres with a vertical relief 

of only 150 metres. 

0065 JCM/GEO/2009.04 Page 14



5 

5.1 

HISTORY 

Pre-Indochina Exploration 

Before 1994, there was little sustained systematic exploration of the region by mining 

companies. Much of Northeast Kalimantan was designated a Reserved Area (CTA 39A) and 

was not available for mineral exploration. 

CTA 39A was the reserve for a joint exploration and mapping programme at 1:250,000 scale 

and a stream sediment geochemical survey conducted by a joint French-Indonesia research 

team (Bureau de Recherché Geologiques et Mineres and Direktorat Jenderal Pertambang 

Umum (BRGM/DSDM) during 1979-1986 (reports by Lefevre et al., 1982, Le Bel et al., 1985 & 

1986 and Nagel et al., 1987). The BRGM/DSDM regional stream sediment geochemical survey 

resulted in the discovery of an intrusive-skarn metallogenic province in the Long Laai area 

(south of Jelai-Mewet). The skarns contain base metal-silver mineralisation associated with tinbearing 

intrusives. No systematic sampling was undertaken for gold, apart from pan concentrate 

analysis. 

Follow up stream sediment sampling in 1:50,000 scale geological mapping were undertaken by 

the BRGM/DSDM over the Long Laai region (Le Bel et al., 1986) and the Long Bia region (Nael 

et al., 1987). Drilling was conducted at the Mamak prospect, but the results were disappointing. 

The epithermal gold potential of north east Kalimantan was first discussed by Mr. D. Kirwin and 

Mr. A. Beaudoin in 1985 (Kirwin, 1993). 

RTZ (Rio Tinto) conducted a three month prospecting survey in 1990. The investigation 

included stream sediment, panned concentrate, stream float, channel sampling and some tape 

and compass mapping. Drainages investigated included the Sungai Turau, Mewet and Jelei. 

The results were not considered encouraging at that time for RTZ 

In 1993, PT Macan Mas Minerindo (Fleming, 1993) conducted a selective reconnaissance 

survey over areas considered prospective based on the BRGM/DSDM survey results. The 

reconnaissance survey located epithermal vein quartz in the Sungai Jelei area, silica-pyrite 

breccias in the Sungai Makjun and Sungai Pangean drainages, presumably base-metal gossan 

at Gunung Kelapis and confirmed the presence of base metal-silver mineralized skarns at Long 

Laai. 

Fleming (1993) indicated that some small scale hard rock gold mining activities were occurring 

in the Bukit Pondok area associated with previously worked (1902) lead-silver veins. Episodic 

local alluvial god panning was occurring in the Sungai Makjum, Saling, Betal, Geh, Malinau, 

Pangean, Segah, Yin and Ptong. 

5.2 

Indochina Goldfields Exploration 

A technical recommendation to systematically prospect the region for epithermal gold by Kirwin 

(1993) was the basis for Indochina committing to exploration in Indonesia. 

A geological assessment (Sennitt & Kirwin, 1994) and an aerial reconnaissance survey (Kirwin 

& Sennitt, 1994) were undertaken over parts of the region, in order to confirm the prospectivity 

for significant precious metal mineralisation. In July, 1994, Indochina Goldfields Ltd. entered into 

a joint venture agreement, covering three CoW blocks totaling 3 million hectares, in order to 

explore the region for precious metal mineralization. 

Work commenced in Sungai Jelai as early as 1995 but it was not until 1995/1996 that the focus 

shifted to the Sungai Mewet area, where epithermal quartz vein float was found in many 

streams in the area and precipitated a full detailed geological survey of the area including 

0065 JCM/GEO/2009.04 Page 15



mapping, rock chip sampling, stream sediment sampling, ridge and spur soil sampling, grid 

based soil sampling, geophysics (limited), trenching and drilling. 

The program utilised a dual-engined man-portable Drill Technics DT450P contracted from P.T. 

Radial Drilling Indonesia, which was capable of drilling 250 metres HQ diameter diamond core, 

with a maximum capability of 450 metres of NQ core. Holes were precollared by the dry 

plugging method and diamond coring was undertaken once competent rock was encountered. 

Diamond core was nominally HQ, however, reduction to NQ was sometimes necessary due to 

poor ground conditions or machinery problems. Down hole surveys were undertaken at 50 

metre intervals using an Austmine single shot camera. Orientating of the drill core was 

undertaken using the ‘spear and pencil’ method. Orientations were attempted on regular 

intervals, before the inferred vein interception depth and after intercepting the vein. Orientation 

readings were generally unsuccessful within the high grade epithermal veins due to their 

fractured or brecciated nature. Drilling was carried out on a 2x12 hour shift per day basis. 

The general project sampling statistics are shown in Table 2. 

Programme 

Quantity 

Mapping Total detailed mapping at 1:50,000 to 1:2,000 scale, approximately 100 

km² 

Stream sediment sampling 

251 samples of -80#, 6 BLEG samples 

Rock chip sampling 

1,680 rock chip outcrop and 871 float samples from the main project area 

plus surrounding samples from other projects 

Soil sampling 

9,393 samples, ridge and spur plus grid based, some deep augering 

Geophysics 

Magnetometer survey, grid based 

Trenching 

Approximately 40 hand-dug trenches, interesting zones channel sampled 

Drilling 

Twenty-six fully cored drill holes for 3,901.52 metres. 

Interpretations 

Various, geological, geochemistry, geophysics 

Survey control 

Various differential GPS surveys to fix base stations and grid survey for 

soil sampling and drilling, Entopos 

Table 2. Exploration summary by Ivanhoe Mines Ltd at the Jelai-Mewet Project area. 

The project was closed in December 2000, along with all other Ivanhoe Mines Ltd operations in 

Indonesia. 

0065 JCM/GEO/2009.04 Page 16



6 

6.1 

GEOLOGICAL SETTING 

Regional Geology 

6.1.1 

Tectonic History 

Recent geological mapping by AGSO and GRDC (Pieters, 1993) indicates that a suture formed 

in Borneo, by the collision of two continents. The collision occurred during the Cretaceous to the 

Late Tertiary, with possible after effects continuing until the Quaternary. 

Gold deposits are widespread in Borneo, forming a 100 kilometre wide belt trending eastwest in 

West Kalimantan and north-northeast in east Kalimantan. The deposits conform to an uplifted, 

faulted basement high, that arose during post-collisional uplift and extensional tectonism. 

Recently recognized epithermal gold-silver mineralization was most likely deposited as a result 

of hydrothermal activity associated with this volcanism, coeval with the uplift of the basement 

high (e.g. Kutai Basin-Kelian, Barito Basin-Mt. Muro, Mt. Wullersdorf in Sabah). 

The principle tectonic features of northeast Kalimantan are the Tarakan Basin and the Kuching 

High (a pre-Tertiary core complex). During the Miocene, the region was a zone of major 

extension, resulting in the formation of the Tarakan Basin and uplift of the Kuching High core 

complex. Dacitic volcanic activity commenced in the Pliocene, during the waning stages of 

extension, related to tectonic movement marginal to the Tarakan Basin. 

A suite of alkali ‘hot granites’ containing high concentration of U and Th, were emplaced in Late 

Cretaceous time, associated with a transitional tectonic environment from subduction to 

extension (Pieters, 1993). 

The BRGM (Le Bel et al., 1985 & 1986) postulate that the ‘hot granites’ resulted from arc 

accretion phenomena. The ‘double convection model’ proposed by Katili (1973) explains the 

formation of volcanic arcs and related basins up to the Early Eocene, the north west subduction 

zone being located at Sarawak, the southeast zone at the Mangkalihat Peninsula (Mangkalihat 

Ridge). The transition from this regime to a collisional regime took place when the southeast 

subduction gently stopped, while the northwest was still active. Partial melting of arc-derived 

material at depth, generated the ‘hot granites’. 

6.2 

Stratigraphy 

The geology of northeast Kalimantan is still poorly understood due to the lack of detailed 

mapping programmes and published data. Several petroleum companies have compiled their 

own stratigraphic subdivisions, including Pertamina-Beicip and Total Indonesia. However, the 

most useful work remains that of the various BRGM/DSDM surveys undertaken between 1979- 

1986. 

6.2.1 

Late Cretaceous - Early Eocene 

Mapping by the BRGM/DSDM (reports by Lefevre et al., 1982, Le Bel et al., 1985 & 1986 and 

Nagel et al., 1987) has indicated the widespread distribution of a thick sequence of laminated 

siltstone, carbonaceous siltstone, shale and micaceous feldspathic sandstone. A minor dacitic 

tuff component is evident in some areas and a thin intra-formational breccia grit/quartz pebble 

conglomerate unit is also observed. These rocks are well laminated, generally steeply dipping 

and tightly folded and display varying degrees of metamorphism, ranging from unaltered 

through contact hornfels to lower greenschist facies. The metamorphic grade and degree of 

deformation are probably a function of proximity to granitoid intrusions and major structures. 

The BRGM/DSDM team has named the Mentarang, Paking, Lurah, Malinau, Long Bawan and 

Long Geh formations as what is an essentially synchronous sedimentary cycle, but in different 

0065 JCM/GEO/2009.04 Page 17



palaeogeographic domains. The characteristics of these domains are conditioned by the 

relationships between a continent, situated to the west and a fluvial drainage system draining 

into an ocean, located to the east (Lefevre et al., 1982). The lithologies observed are flysch type 

sequences, with a marine environment found to the north and east. Lefevre et al. (1982) 

estimate a combined thickness of 7,000 metres for the various units. For simplicity, the 

Mentarang Formation is preferred, with the dacitic tuff/lava component represented by the Geh 

sub-Formation. 

6.2.2 

Late Oligocene-Early Miocene 

Several corridors of north-northeast trending granitoid intrusive complexes occur within the 

project areas. One belt occurs at Long Laai, the other southwest of Long Bia. The Long Laai 

complex has been studied in some detail by the BRGM/DSDM (Le Bel et al., 1985 & 1986) and 

found to consist of leuco adamellite, with the development of exo and endo skarn facies, at the 

contact of the intrusives with the older sediments. 

The complex situated southwest of Long Bia has been termed the Yamuk Intrusive Complex by 

Sennitt et al. (1995). It consists of biotite and hornblende granodiorite, granodiorite porphyry, 

quartz diorite porphyry, andesite porphyry and a “dry” quartz-feldspar porphyry. On the margins 

of the Yamuk Intrusive Complex, the older sediments are highly fractured and deformed, with 

hornfels and collapse breccias occasionally developed. Within the intrusive complex, intrusion 

breccias, autobreccias and xenolith rich zones are found. 

Age dating by the BRGM (Le Bel et al., 1985) obtained a 22.6 Ma age for the Long Laai 

leucoadamellite, indicating a Late Oligocene-Early Miocene age. A similar age is preferred for 

the Yamuk Intrusive Complex. 

6.3 

Regional Structure 

The regional structure of the project area is dominated by the north-northeast trending Jelai 

Fault System, which can be traced for at least 200 kilometres south-southwest from the project 

area and defines the main trend of volcanics and intrusives in the area. This fault system is 

interpreted to represent an arc-parallel structure, reactivated on numerous occasions and 

initially formed during the Cretaceous subduction event below Borneo from the northwest. The 

northern extension of the fault system is hidden beneath younger sediments of the Tarakan 

Basin. 

The Jelai Fault System contains a number of jogs to the south of the project area and the major 

rivers in the area, such as the Kayan River, follow the main fault line as a series of kinked 

drainages extending to the south from the project area. 

Subsidiary faults lie parallel to the main fault system and a number of splays can be see 

extending from the fault line on the north-western side, one of which hosts the epithermal vein 

system at the Jelai Gold Project. These splays may actually be conjugate fault sets developed 

from the main Jelai Fault System. 

Other structures noted on a regional basis around the project include west-northwest trending 

arc-normal structures, again assumed to have developed during the Cretaceous subduction 

event beneath Borneo. 

6.4 

6.4.1 

Description of Lithologies in the Project Area 

Andesitic Lava 

The predominant host rocks are fine to coarse andesitic lava (Figure 4). The rocks have a 

distinctive lava texture and comprise clasts containing crowded fine to coarse grained 

0065 JCM/GEO/2009.04 Page 18



plagioclase laths, rare fine grained subhedral granular quartz and scattered fine to medium 

grained opaques. These are hosted within a groundmass of broken feldspar, mafic minerals, 

minor quartz phenocrysts and glass. Irregular compressed cavities are common. Mafic 

phenocrysts are pervasively altered to chlorite and/or smectite. Plagioclase is commonly 

replaced with calcite and more rarely by chlorite or smectite. 

In close proximity to the veins the plagioclase displays weak to moderate sericitic alteration and 

occasional replacement by adularia. Vesicles within the groundmass are commonly infilled with 

calcite and in zones of strong propylitic alteration also with chlorite and epidote. Haematite 

staining is a common feature of the fine grained glassy groundmass. 

6.4.2 

Andesite Intrusives 

Andesite is characterised by a porphyritic texture of euhedral or partly resorbed phenocrysts set 

in a fine grained, glassy groundmass. The andesite generally displays pervasive alteration with 

a strongly bleached, pale green colouration. It commonly contains vesicles infilled with quartz 

and in zones of strong propylitic alteration, chlorite, haematite and calcite. Irregular patchy 

alteration gives rise to a pseudobreccia texture. 

6.4.3 

Andesitic Basalt 

The andesitic basalt is characterised by fine to medium grained mafic and felsic phenocrysts set 

in a fine grained, glassy groundmass. It is essentially unaltered but fine to medium grained 

hornblende phenocrysts often display weak chloritic alteration and trace haematite is often 

observed along microfractures. 

6.4.4 

Lithic Tuffs 

Lithic tuffs occur as rare thin units within the andesitic volcanic sequence. These units are 

typically poorly sorted and fine to coarse grained with subangular to well rounded clasts. Clasts 

are predominately silty mudstone of the Menterang Formation and mesothermal quartz. 

Approximately 30% of the larger clasts are composed of andesitic pyroclastics with 90% of the 

matrix being composed of very fine andesitic tuff clasts. Devitrified glass shards are also often 

observed within the matrix. The lithic tuffs are pervasively sericite altered. Part of this unit may 

represent thin intrusive breccias. 

6.4.5 

Dacite Porphyry 

The dacite porphyry occurs as irregular stocks, dykes and plugs in the area and comprises a 

grey to green-grey fine grained rock with prominent quartz eyes to 10 mm in diameter. The fine 

grained mafic component is occasionally chloritised and sericite is also common in some areas. 

In some areas, the epithermal vein structures are associated with the contact of the dacite 

porphyry, such as the Sembawang Vein but in other areas the drilling has intersected significant 

mineralisation without the presence of the dacite porphyry in close proximity and, therefore, 

there appears to be no consistent relationship between dacite porphyry intrusives and 

mineralisation, other than as a host. 

6.4.6 

Rhyolite 

The rhyolite is restricted to the east of the concession area, where the rock has intruded into the 

main fault line of the Jelai Fault System as a single stock. The rock is pink-brown, strongly flowbanded 

and is variably, albeit weakly, altered. Little is known about the genetic relationship 

between the rhyolite and the other intrusive and it is no known if there is a genetic relationship 

to any mineralization style in the area. 

0065 JCM/GEO/2009.04 Page 19



Figure 4. Geology of the main project area. 

0065 JCM/GEO/2009.04 Page 20



6.4.7 

Menterang Formation Sediments 

The Menterang Formation in the project area is composed of shales and argillite, being light to 

dark grey in colour when fresh, in 2-15 centimetre thick beds. Sometimes grey sandstones to 

75cm thick underlie shale bands. The thin shale sequence with occasional sandstone couplets 

is typical of distal turbidites. In some areas, thick sedimentary breccia, composed of randomly 

distributed angular fragments of shale approximately 10 centimetres in size in a light grey clay 

matrix possibly represent slump zones in the distal turbidite sequence. This argillite sequence is 

characterised by strong presence of the S1 cleavage which in places turns the rock into a slate. 

0065 JCM/GEO/2009.04 Page 21



7 

7.1 

MINERALIZATION 

Deposit Types 

The Jelai Gold Project covers a series of low sulphidation epithermal veins with anomalous 

precious metal values hosted within andesitic volcanics. These types of deposits are common 

throughout Indonesia and examples include Mount Muro, Gosowong, Pongkor, Muyup and 

Toka Tindung. The deposits are characterised by quartz veins and vein breccias, generally with 

an argillic alteration halo containing evidence of near-surface hydrothermal deposition of various 

silica phases, with or without the synchronous deposition of metallic minerals. 

The exploration programme conducted has specifically targeted this style of mineralisation. 

7.2 

7.2.1 

Mewet Vein Geology 

General Geology 



Sections of the vein structures predominately consist of volcanic clasts and are commonly set 

within a calcite matrix which breaks down easily resulting in a subdued topographic expression. 

The veins or breccias do not form prominent topographic features in any part of the system. 

Weathered breccia outcrops may have a box-work appearance due to the leaching of the 

volcanic clasts. From drilling, alluvium generally occurs in the first 4 metres of each hole with a 

cobble layer commonly encountered. Each hole intersected a manifestation of the multiphase 

breccia and vein which crops out on the western side of the north-south trending ridge. 

Unaltered andesitic basalt dykes were intersected in the drilling but these are un-mineralised 

and appear to postdate the main mineralising event. Silicified volcanic clasts and, occasionally, 

clasts of mesocrystalline to chalcedonic quartz may be present. Clasts are generally angular. 

However, sub-rounded clasts are also observed indicating that the hydrothermal system has 

transported the clasts from a deeper level. Basement sediment clasts have not been recognised 

within the breccias. 

The vein is hosted by andesitic lava, with clasts of silica-pyrite altered wallrock are cemented by 

opaline quartz in places. The vein strikes generally north-south, dips steeply to the west at 

approximately 60° and is traceable on surface for at least 2.5 kilometres. 

SPOT imagery interpretation indicates that the Mewet Vein forms part of the prominent oblique 

subsidiary set of the major north-northeast Jelai Fault System. This could explain the 

considerable strike length. A northwest to west-northwest fracture pattern is also strongly 

developed in its footwall. 

7.2.2 

Mineralisation 

The mineralisation in the Mewet vein comprises a discrete lode structure containing mixed 




variable at a similar RL along the strike of the vein. The lode dips at approximately 60° with a 

late cross-cutting quartz-carbonate vein and fracture fill phase at 65-70°. Late phase veins are 

typified by glassy to milky, fine grained drusy quartz + carbonate which are generally barren 

with assays rarely exceeding 0.02 ppm Au. The late phase quartz is rarely weakly amethystine 

in nature and crosscuts all phases of brecciation and veining. 

0065 JCM/GEO/2009.04 Page 22



High gold values were obtained from finely banded, colloform-crustiform, quartz-adularia veins. 

The highest gold values occur in zones of multiphase brecciation of the colloform banded quartz 

which are healed by chalcedonic quartz and adularia. No gold mineralisation occurs in the 

footwall to the vein but low grade gold values occur within the breccia on the hanging wall to the 

quartz vein. Silver grades are sporadic with the most elevated values occurring with the high 

grade gold in finely banded, sulphidic, quartz veins (Photograph 1). 

Drilling to date has only been carried out over a 325 metre strike length of the Mewet Vein. Most 

of the drill holes targeted at the vein intersected mineralised sections of vein and vein breccia 

material with variable mineralisation reported from the analysis of the core samples. 

7.2.3 

Alteration 

Pervasive propylitic alteration represents the predominant alteration throughout the andesitic 

volcanic sequence. The fine grained mafics always show a certain degree of chloritic alteration. 

Haematite is often present in the fine grained matrix of volcanic flow breccias, fracture coatings 

and in vesicles as coatings to chlorite and calcite. Up to 1% fine disseminated pyrite occurs with 

the chloritic alteration. Sporadic epidote occurs in zones of intense propylitic alteration and 

preferentially replaces feldspar phenocrysts and also occurs rarely as fracture coatings. In 

zones of intense propylitic alteration epidote occurs in vesicles with calcite and chlorite. Epidote 

alteration was not observed in the vicinity of the Mewet vein. 

Sericite alteration occurs as an halo to the hydraulic brecciation and to the epithermal 

mineralisation. The intensity of sericite is a function of the proximity to the mineralisation. 

Sericite is in all cases observed overprinting proplytic alteration. Sericite alteration is not 

specifically restricted to any one single phase of quartz veining/silicification. The intensity of the 

sericite – silica alteration is also a function of the intensity of brecciation. The strongly brecciated 

hanging wall acted as a more permeable medium for the alteration fluids than did the relatively 

unfractured footwall; thus sericite alteration is moderate to strong in the hanging wall while it 

quickly dissipates to strong chloritic alteration in the footwall. 

An advanced argillic zone is not present at Mewet. This is due to the system being eroded down 

to the top of the precious metal zone, at the boiling zone. Adularia is found as fine 

disseminations within the colloform-crustiform banded quartz veins in this zone. 

7.3 

Interpreted Genesis of the Epithermal Veins 

Multiple phases of brecciation and vein formation are evident at the Mewet Vein. Similar 

systems in other parts of Indonesia, and indeed the world, follow similar patterns of 

development and, although no specific studies have been undertaken to collaborate the 

observations, the following section describes the development of a typical low-sulphidation 

quartz vein, within the context of the Mewet Vein. 

North-south structures, originating from the major Jelai Fault System to the south, provided a 

conduit for ascending near-neutral chloride fluids which led to rapid silicification. The silica 

solution, with the silica originating from the leaching of the wall rocks at high temperatures, 

remained saturated and was deposited slowly, resulting in the formation of 

mesothermal/crystalline quartz observed in the early phase of silicification in the Mewet Vein. 

Sealing of the system with silica resulted in an over-pressuring effect, which was relieved 

through explosive brecciation of the system. Brecciation of the earlier phase of quartz veining 

resulted with sub-rounding of some clasts indicating that there has been some transportation 

from depth. No clasts of the underlying sedimentary basement were encountered in the drilling. 

Mixing of CO 2, with meteoric water, lead to the deposition of rhombic and bladed carbonate as 

breccia matrix flood and cavity infill. Subsequent mixing of the supersaturated acidic fluids with 

meteoric water resulted in the rapid deposition of fine grained microcrystalline to chalcedonic 

0065 JCM/GEO/2009.04 Page 23



quartz. Overprinting acidic/silica enriched fluids partially replaced the carbonate with amorphous 

silica, leading to massive chalcedonic silica with patches of bladed calcite pseudomorphs, lattice 

infilled textures and crustiform-colloform banded quartz veining. 

Photograph 1. Sample of 

Mewet Vein material showing 

the distinct banded nature of the 

higher grade vein material. 

Massive carbonate cavity fill in JM018 has been partially 

replaced by chalcedonic silica with the zone proximal to the 

colloform-crustiform banded quartz + adularia vein being 

completely replaced to massive chalcedonic silica. The 

elevated pH conditions from the draw down of acid 

sulphate rich water lead to the deposition of adularia 

disseminations and as banding in the colloform-crustiform 

banded quartz. No zone of advanced argillic alteration has 

been noted in the Mewet Vein system or surrounds, 

indicating that the upper section (mixing zone) has been 

eroded down to the relative level of the boiling zone. 

Continued boiling of the epithermal system lead to several 

telescoping phases of overprinting events, representing 

varying degrees of pH and concentrations of silica + CO 2 . 

The system represents several phases of sealing and rebrecciation 

with several phases of clasts of colloformcrustiform 

quartz clasts observed in the chalcedonic 

quartz. Colloform banded quartz clasts formed as a 

product of an acidic fluid are observed within a matrix of 

carbonate. Drusy quartz is in places overprinted with 

rhombic calcite with the calcite rarely displaying a late 

drusy quartz coating. Clasts of earlier chalcedonic quartz 

are often observed within the massive appearing carbonate 

veining and the quartz veining is also often represented by 

several phases of sealing and cracking. The collapse of the 

hydrothermal system led to the draw-down of meteoric 

waters leading to the deposition of glassy crystalline quartz 

+ calcite. Rarely amethystine quartz veining is noted as a late overprinting event associated with 

the late draw down event. 

High grade gold values were restricted to the finely laminated chalcedonic quartz-adulariasulphide 

veins. Variable high gold values were encountered in brecciated chalcedonic quartz 

vein with the grade being dependant on the frequency of chalcedonic-colloform banded quartz 

vein clasts within the breccia. 

Significant gold mineralisation is hosted in typical high grade, low sulphidation veins. Maximum 

gold values were obtained from finely laminated colloform-crustiform banded quartz-adularia 

veins with zones of multiphase brecciation of the colloform banded quartz and healing by 

chalcedonic quartz returning the highest values. Brecciation of the colloform banded quartz and 

subsequent additional deposition of chalcedonic quartz + adularia lead an upgrade of the gold 

grade. The mineralisation was tightly structurally controlled with there being no gold 

mineralisation disseminated in the footwall to the vein. Low grade gold values were obtained 

within the breccia column on the hanging wall to the quartz vein. Silver grades are sporadic with 

the most elevated value occurring with the high grade gold in the finely laminated, sulphidic 

quartz veins. 

Unaltered andesitic basalt dykes were intersected; these were un-mineralised and appear to 

predate mineralisation. Weak to moderate propylitic alteration occurs within the andesitic dykes, 

predominately as fracture coatings. 

0065 JCM/GEO/2009.04 Page 24



8 

8.1 

EXPLORATION 

PT Jelai Cahaya Minerals Exploration 

The project remained inactive for a number of years after it was abandoned by Ivanhoe Mines 

Limited. It is believed that a local miner attempted to develop a shaft on the Mewet Vein and 

evidence of this remains with a number of decaying sacks of quartz vein material dumped at the 

collar of a shaft a few metres in depth on the vein outcrop. It is though that the extremely fine 

nature of the mineralisation did not allow the recovery of any gold from the samples and the 

development was abandoned. 

In 2006, JCM Minerals placed an application over the known gold occurrences and this was 

granted on the 1 st June 2007. The management of the company, under the advice of a number 

of consultants, embarked on an aggressive scout drilling programme aimed at outlining the near 

surface extent of the vein systems. This programme was aimed at persistence, rather than the 

desire to obtain high-grade results, as it was determined that the soil cover in the project area 

could hide the mineralised lodes and shallow drilling was the most effective method for 

delineation of deeper targets. The exploration work was conducted by JCM personnel with 

technical assistance from PT GMT Indonesia (exploration consultants). 

Four drill rigs operated at the Jelai Gold Project, two scout rigs of Jakro 175 class, capable of 

drilling to depths of 75 metres in BQ diameter core (45 metres NQ diameter) and two larger 

coring rigs, a Jakro 240 and a RB34. These latter rigs can drill deeper, with the RB34 capable of 

drilling 200 metres BQ diameter and the Jakro 240 can drill to 200 metres NQ. 

The drill hole location map for the Mewet vein area considered is shown in Figure 5. 

0065 JCM/GEO/2009.04 Page 25



Figure 5. Location of the drill holes for the Mewet Vein area being considered. 

0065 JCM/GEO/2009.04 Page 26



9 

9.1 

DRILLING PROGRAMME 

Available Data 

9.1.1 

Drill Hole Logs 

The drill hole logs were coded and validated to remove inconsistent lithological abbreviations to 

endure the database was consistent for plotting. The present lithology abbreviations used by 

JCM are very similar to the old lithology coding used by Ivanhoe, therefore, the correlation was 

made easily and no major coding discrepancies were noted. 

The lithology logs were imported into an Access database for archiving and analysis. 

9.1.2 

Core Photographs 

All core photographs have been collected from both phases of drilling and the JCM core 

photography is complete and archived in a digital format. The old Ivanhoe core photography is 

available as scanned digital photos and original 35mm film-based photographs with negatives. 

9.1.3 Drill Hole Data 

The current database for the Jelai Gold Project contains 115 drill holes in different areas of the 

vein system. From these holes, 26 drill holes for an advance of 3,901.52 metres (JM001 to 

JM026) with a further 89 drill holes, prefixed JCM###, completed in the second phase of drilling 

by JCM for an advance of 8,273.03 metres. The drilling in the Mewet Vein was all oriented to 

the east, with the original drilling on 50 metre sections. Hole inclinations ranged between 55-70° 

but were mostly inclined at 60°. 

Of these, the drill holes considered in the data assessment are outlined in Table 3 and 4. 

Hole Easting (m) Northing (m) Elev. (m) Depth (m) Azimuth Inclin 

JM011 497961.0 356449.0 56.0 186.00 090 -55 

JM012 497931.0 356449.0 59.0 115.70 090 -60 

JM013 497972.0 356386.0 59.0 117.00 093 -60 

JM014 497956.0 356495.0 56.0 77.50 093 -60 

JM015 497927.0 356333.0 55.0 102.00 090 -60 

JM016 497927.0 356391.0 56.0 93.60 090 -60 

JM017 497915.0 356496.0 55.0 102.00 090 -60 

JM018 497879.0 356457.0 56.0 209.95 090 -60 

JM019 497829.0 356457.0 56.0 224.00 090 -60 

JM020 497801.0 356457.0 56.0 255.00 090 -62 

JM021 497902.0 356347.0 55.0 153.00 090 -70 

JM022 497888.0 356391.0 56.0 190.05 090 -65 

Total (m) 1,825.80 

Table 3. Drill holes included in the assessment from the JM series of diamond drill holes (Ivanhoe 

drilling). 

The early drill holes by Ivanhoe were generally surveyed down hole using a Eastman Single 

Shot down hole camera. The original discs are still available from this programme and are 

archived in Jakarta. The second round of drill holes were not surveyed down hole, as most of 

the drill holes were short (approximately 70 metres for scout holes). However, the deeper drilling 

on the Mewet Vein, particularly for smaller diameter drilling, it would be expected that the drift of 

0065 JCM/GEO/2009.04 Page 27



the drill holes would be significant over depths of 100 metres and future drilling will require the 

inclusion of down hole surveying to ensure the pierce points are accurately located within the 

vein structures. 

Hole Easting (m) Northing (m) Elev. (m) Depth (m) Azimuth Inclin 

JCM67 497885.0 356496.0 49.7 158.3 090 -60 

JCM68 497957.0 356333.0 56.7 76.00 090 -60 

JCM69 497957.0 356293.0 55.0 75.45 090 -60 

JCM71 497952.1 356239.2 49.8 76.55 090 -60 

JCM73 497847.0 356372.0 56.0 200.00 090 -60 

JCM74 497915.0 356536.0 55.0 75.40 090 -60 

JCM76 497959.1 356472.7 56.0 75.70 090 -60 

JCM78 497972.0 356417.0 59.0 75.65 090 -60 

JCM81 497980.0 356356.1 59.0 75.60 090 -60 

JCM83 497978.6 356293.0 57.0 75.75 090 -60 

Total (m) 964.40 

Table 4. Drill holes included in the assessment from the JCM series of diamond drill holes (JCM drilling). 

The drill hole locations for the first round of drilling by Ivanhoe were surveyed by tape and 

compass from fixed benchmarks established by Differential GPS during the Ivanhoe exploration. 

Some of these benchmarks still exist in the project area. The second round of drilling, 

conducted by JCM, used tape and compass traverses in conjunction with hand-held GPS 

surveys. Neither method is sufficiently accurate for surveying drill hole collar locations, with the 

lack of precise positioning affecting the confidence of the geological model for the Mewet Vein 

area. 

The drill hole database was supplied to GMT in a number of formats and the entire dataset was 

migrated into a new Access database for convenience and correlation. The final database 

contained the following tables: 

• Collar : Easting, northing and elevation of the collar in WGS84 Zone 50North projection, 

drill hole depth, collar azimuth and inclination of the bore hole and comments, 

• Assay : Detailed intervals of sampling from the project, including sample number, from 

and to intervals, detailed analysis data including check samples and repeat samples and 

average gold (taken across the results of the primary and check samples), 

• Survey : Recording of all down hole survey data, using collar data at the end of hole if no 

down hole surveys were completed, 

• Lithology : Detailed core logging data such as lithology, alteration, oxidation and 

mineralisation. 

A typical cross section of the Mewet Vein drilling, with lithology and assays, is shown in Figure 

6. 

0065 JCM/GEO/2009.04 Page 28



Figure 6. Cross section 356,450N showing the general lithology, according to Table 6 (below) and Au 

histograms, and the grade histograms for Au. 

Hole From To Intercept True Width Au Ag Reported by: 

(metres) (metres) (metres) (metres) (g/t) (g/t) 

JCM 

JCM-68 36.65 39.10 2.45 2.12 4.45 11 JCM 

and 59.70 60.15 0.45 0.39 2.83 33 JCM 

JCM-69 22.75 28.75 6.00 5.20 15.84 81 JCM 


JCM-73 153.95 156.40 2.45 2.12 1.02 2 JCM 

JCM-74 60.25 63.45 3.20 2.77 0.94 1 JCM 

JCM-76 18.70 21.55 2.85 2.47 9.39 27 JCM 

JCM-78 23.50 26.20 2.70 2.34 5.02 18 JCM 

JCM-81 34.30 41.20 6.90 5.98 24.70 22 JCM 



JCM-83 2.45 7.05 4.60 3.98 8.41 52 JCM 

JM011 26.31 28.43 2.12 1.84 6.90 16 Ivanhoe Mines 




and 69.27 70.77 1.50 1.30 7.40 20 Ivanhoe Mines 



Table 5. Significant intercepts from the Mewet Vein drilling in the area assessed. 

0065 JCM/GEO/2009.04 Page 29



10 

10.1 

SAMPLE PREPARATION, ANALYSES AND SECURITY 

Sampling and Analysis 

10.1.1 

Ivanhoe Mines Sampling and Analysis 

During the Ivanhoe programme, all core handling and sampling was conducted by geologists 

employed by that company. 

The Ivanhoe sampling and analysis programme followed the following methodology: 

• Core was geotechnically and geologically logged, photographed, cut and sampled at a 

central core processing facility, near to the Mewet village. 

• Original core photographs were catalogued and stored at the P.T. Indonesia Exploration 

Sejati office in Tarakan. the core from the programme was originally stored in a 

warehouse facility in Tarakan but has now been discarded by the locals, who sold the 

core trays for scrap metal. 

• Geologically interesting and mineralised core was sampled as half core with a minimum 

sample interval of 10 centimetres and a maximum interval of 1 metre. Samples through 

geologically monotonous rock were quarter cut and sampled on a 2 metre basis. 

• Samples were assayed for gold by fire assay (50g charge, DL 0.01 ppm Au) and silver 

by AAS (aqua regia digest, DL 1 ppm Ag) at PT Indoassay, Balikpapan. In the early drill 

holes, a number of holes were also analysed by Cu, Pb and Zn by AAS and As by 

hydride-AAS. 

• Limited samples were re-submitted to PT Indoassay and PT Inchcape Utama in Jakarta 

for check assaying. According to records, no significant discrepancies were found in 

sample repeats and re-assaying. 

• The repeatability of Au assays was reported as excellent with correlation coefficients 

varying from 0.9786 for values of 0.00-1.00 ppm Au and 0.9983 for values of >5.00 ppm 

Au. 

No routine blank or standard samples were submitted during the original Ivanhoe programme 

but the laboratory produced a number of QA/QC reports on the sampling and analysis 

programme, including the internal round robin analyses conducted by the laboratory itself and 

no major discrepancies have been outlined in reports written at the time. However, the actual 

QA/QC reports are not available for review. 

Correlation of the Ivanhoe primary analyses and repeats are shown in Figure 7. 

10.1.2 

Jelai Cahaya Mineral Sampling and Analysis 

During the drilling conducted by JCM, the routine was very similar to the Ivanhoe procedures 

and this has allowed a good correlation in the quality of the data between the two companies. 

The procedures outlined by JCM for core administration is as follows: 

• The core trays are marked in the field and the core placed in the trays, the driller 

measures the core run, recovered length and calculates the recovery at the rig site for 

tracking performance, 

• The trays are transported to the core shed at the main base camp and the geologists 

check the core recoveries, log RQD and lithology and determine the sections for 

analysis, 

• The core is marked up by the geologist and the sample markers placed at intervals, the 

core is split by a diamond saw and the runs sampled according to the sampling sheet 

prepared, 

0065 JCM/GEO/2009.04 Page 30



60 

Repeat Analysis Performance : Ivanhoe, Au 

Au : original analyse (ppm) 

50 

40 

30 

20 

10 

y = 0.9738x + 0.0211 

R² = 0.9985 

0 

-10 0 10 20 30 40 50 60 

-10 

Au : repeat analyses (ppm) 

Figure 7. Repeat analysis performance for the Jelai drill core sampling completed by Ivanhoe. 

• Sampling is based on mineralised intervals as the first parameter, followed by alteration, 

• A sample of relatively unaltered core is sampled at the base and top of the mineralised 

section to ensure the contacts in mineralisation are defined, 

• The samples are weighed on site, a sample submission form completed and the sample 

sheet re-checked against the submission, 

• All data is entered into an Excel database on site for merging with analytical results later. 

Sample analysis is conducted by PT Indoassay in Balikpapan, with gold analysed by fire assay 

and silver by AAS. Sample duplicates and splits are retained for future reference. The general 

statistics of the entire Jelai Gold Project assay database and the specific statistics for the Mewet 

Vein are shown in Table 6. 

The repeat analysis performance for the JCM samples is shown in Figure 8, with the results 

indicating very little variance in the analyses returned and confirming the consistent assay 

returns and low nugget affect in the deposit. 

10.2 

Frequency Distribution 

The frequency distribution of the average gold grades at the Jelai Gold Project is shown in 

Figure 9. 

In the case of the JCM exploration, all core handling and sample administration was conducted 

by company and contract geologists. The half core splits have been stored for future reference. 

The systems employed by JCM during the exploration are in line with industry standards but 

further attention to blank and standard submissions in the sample string would have been useful 

to check laboratory accuracy. A suitable chain of custody system for the samples would also be 

worthwhile for future sampling and dispatch. 

0065 JCM/GEO/2009.04 Page 31



The choice of laboratory is adequate and Indoassay is an internationally accredited laboratory 

with sufficient quality control procedures in place to add confidence to the results of the 

analysis. 

Jelai Gold Project 

All Project Data 

Au (Ave +0.50 g/t 

Au (Ave All) 

Au) 

Mewet Vein 

Au (Ave +0.50 g/t 

Au (Ave All) 

Au) 

Count 4555 308 1455 193 

Mean 0.356 4.587 0.742 5.312 

Stdev 2.579 8.907 4.048 9.993 

Range 65.065 64.570 65.065 64.57 

Minimum 0.005 0.500 0.005 0.5 

25th Percentile (Q1) 0.005 0.820 0.005 0.873 

50th Percentile (Median) 0.02 1.424 0.01 1.85 

75th Percentile (Q3) 0.08 3.637 0.09 4.445 

Maximum 65.070 65.070 65.07 65.07 

95.0% CI Mean 0.281 to 0.431 3.588 to 5.585 0.534 to 0.950 3.893 to 6.731 

95.0% CI Sigma 2.527 to 2.633 8.255 to 9.672 3.906 to 4.201 9.086 to 11.103 

Skewness 15.873 4.21 10.524 3.865 

Kurtosis 307.8 20.447 131.66 16.614 

Table 6. Descriptive statistics for Au from the Jelai Gold Project based on total project drilling and Mewet 

Vein specific drilling. 

70 

Repeat Analysis Performance : JCM, Au 

Au : original analysis (ppm) 

60 

50 

40 

30 

20 

10 

y = 1.0621x - 0.0467 

R² = 0.9985 

0 

-10 0 10 20 30 40 50 60 70 

-10 

Au (R) : repeat analysis (ppm) 

Figure 8. Repeat analysis correlation for Au from the JCM analyses, total data set for the Jelai Gold 

Project, including the Mewet Vein area. 

0065 JCM/GEO/2009.04 Page 32



Frequency 

100 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

Count = 247 

Mean = 4.744 

Stdev = 8.807 

Minimum = 0.5 

25th Percentile (Q1) = 

0.870000 

50th Percentile 

(Median) = 1.660 

75th Percentile (Q3) = 

4.030 

Maximum = 61.2 

0.5 

2.5 

4.5 

6.5 

8.5 

10.5 

12.5 

14.5 

16.5 

18.5 

20.5 

22.5 

24.5 

26.5 

28.5 

30.5 

32.5 

34.5 

36.5 

38.5 

40.5 

42.5 

44.5 

46.5 

48.5 

50.5 

52.5 

54.5 

56.5 

58.5 

60.5 

62.5 

Au (Ave +0.5 g/t) 

Figure 9. Histogram of average Au values at greater than 0.5 g/t. A number of outliers appearing in the 

data set representing high grade shoot samples. These outliers are normally over narrow intervals, 

representing massive colloform banded sections of vein. 

0065 JCM/GEO/2009.04 Page 33



11 

11.1 

DATA VERIFICATION AND INTERPRETATION 

Validation 

To update the database and ensure the data integrity was acceptable for future use, we applied 

a three stage validation process. 

Data validation routines were conducted were: 

• Verification of the files supplied by JCM and historical files from Ivanhoe, 

• Upload and compilation of the files in Access, ensuring samples and assays matched 

and the drill hole collars plotted were consistent with location data and historical plans, 

• Validation of the database through internal Surpac routines. 

Discrepancies in each stage were verified and checked, then corrected. Most of the errors were 

resolved in the compilation of the Access database and only minor errors were reported from 

further detailed validation. 

The lithological database was filtered and litho-codes standardised for easy manipulation at a 

later stage if required. The list of rock codes used in the geological validation is outlined in Table 

7. 

Code 

FLT 

HBX 

QV 

SED 

SOL 

VA 

VAL 

VBL 

VBX 

VDP 

VRD 

Description 

Fault gouge, breccia, post mineralisation 

Hydrothermal breccia, vein breccia, clast or matrix support, exotic matrix fill 

Quartz vein, massive or colloform-crustiform 

Sedimentary rocks, undifferentiated 

Soil, alluvium, colluvium 

Andesite, undifferentiated 

Andesite lava, undifferentiated 

Basalt 

Volcanic breccia, dominantly andesitic 

Dacite porphyry, stock or dyke 

Rhyolite, intrusive stock or dyke, flow-banded 

Table 7. Lithocodes for the Jelai Gold Project database. 

11.2 

Sampling Data 

The original sampling data from the Ivanhoe exploration was databased in an Access database 

with original digital files from the assay laboratory imported through a set routine. The matching 

of assay results to assay intervals was made using SQL queries and no manual matching of the 

assay data was undertaken by Ivanhoe. At the time, a number of checks were conducted on the 

analytical data matching and, in the latest data review, the same matching routine was used 

from the original datasets. The original analytical sheets are archived with JCM. 

The JCM assay data was matched by copying from the original analysis files into the Excel 

spreadsheet. Although there is some chance of mis-matching samples, the sample runs were 

generally short and the various checks by JCM and GMT staff throughout the programme 

corrected errors when they became apparent. 

A series of 10 individual analytical run results were checked during the course of this study and 

no errors were located in the transformation of the data. 

0065 JCM/GEO/2009.04 Page 34



11.3 

Database Compilation 

The validation has resulted in a complete data set that would be suitable for further follow-up 

modelling if desired, particularly for the Mewet Vein area. It is also believed there is sufficient 

data from the Sembawang Vein, in some sections, that also could be modelled and this requires 

further assessment. 

The resulting confidence level of the present data set is outlined in Table 8. 

Technical Condition Comments Confidence 

Geological model 

The geological model is well known for epithermal deposits and, 

although there are numerous variants, the chemistry and dynamics of High 

the systems are well documented 

Prospect geology 

The broad prospect geology is known but detailed structural data is 

limited for both surface and sub-surface areas, the real control on the Moderate 

development of ore shoots is not yet clear 

Alteration and 

Drilling has provided a broad understanding of the alteration and the 

mineralisation styles mineralisation position with respect to the precious metal values 

Moderate 

Drill collar positions 

No drill collars have been surveyed fully, in cases tied by tape and 

compass to control benchmarks, prone to have some errors 

Low 

Downhole geology 

Individual interpretations of the geology can lead to some mis-coding of 

Moderate to 

rock and mineralised intervals, simple geology has offset this weighting 

high 

with clear mineralised zones seen in the core 

Downhole survey 

Incomplete, Ivanhoe holes were generally surveyed, the JCM holes 

Moderate 

Core recovery 

Sample density 

Historical data 

have no surveys 

Some drill sections have poor core recovery, requiring weighting during 

compositing and lowering the confidence in the composite interval 

accuracy regarding precious metal grade 

The drilling interval on some sections remains at 25-50 metres, 

particularly in critical areas, more infill drilling is required 

The authors knowledge of the previous data allows the historical data to 

be viewed with higher reliability 

Low to 

moderate 

Moderate 

Present data The authors knowledge of the recent exploration allows a high reliability High 

Sample administration 

The systems in place and procedures used are generally acceptable 

and industry standard 

High 

QA/QC 

The analytical repeats are good and there is not major discrepancy 

between principal and check assays, external lab control is required in Moderate 

the future, as are blanks and standards in the main sample stream. 

Chain of custody Sample chain of custody is an area that could be reviewed Moderate 

Data administration 

The data sets are well-archived and are generally accurate, the storage 

system is adequate for the quantity of data being processed 

High 

Density factors Requires measurements in both waste and ore material Low 

Database integrity No major issues identified High 

Table 8. Considerations in assessing the exploration data, showing the confidence in the data set and the 

areas requiring further management. 

High 

11.4 

Analysis of Data 

11.4.1 Topography 

The topographic surface was generated using surveyed topographic data still available from the 

original exploration data of Ivanhoe Mines Limited for the vein outcrop area and, for areas to the 

west where no data is available, the drill hole collars were triangulated to form the topography. 

The area immediately west of the ridgeline is a flat alluvial terrace adjacent to the Sungai Mewet 

0065 JCM/GEO/2009.04 Page 35



(Mewet Creek) and the collar heights on most of the drill holes were within a few metres of each 

other in vertical collar position. 

There is a further requirement to accurately measure the topography in the Mewet vein area 

and the previously established benchmarks could be utilised for this purpose. 

11.4.2 

Base of Weathering 

The base of weathering can be established from the oxidation data from the drill holes in the 

area. The nature of the mineralisation does not appear to be affected by the base of oxidation, 

with high grade areas close to the surface on the south end of the vein structure, similar in 

magnitude to the higher grade intercepts on the north end of the area reviewed at depth, below 

the surface of oxidation. 

11.4.3 

Hangingwall and Footwall 

The hangingwall and footwall of the Mewet Vein was modelled on a section by section basis 

using the geological logging as a guide to the mineralised envelope defined. It was found that 

the mineralised segments anastomose within the logged vein structure, occurring near the 

hangingwall of the vein in some areas or near the footwall in others. Occasionally, 

mineralisation can occur both in the footwall and the hangingwall, separated by several metres 

of interburden. In areas, the mineralised intercepts, defined at the 0.50 g/t Au composite 

boundary, the two coalesce to form a single mineralised vein. 

A number of small mineralised sections can be found in the hangingwall of the Mewet Lode but 

the geological correlations were not possible at this time. It is considered that closer spaced 

drilling will define these hangingwall lodes more clearly and could be included in future models. 

Mineralised sections in the footwall of the main lode are rare and, in the few examples where 

they occur, can be explained by reviewing the core logs. For example, in JM022, a series of low 

–grade mineralised intercepts in the footwall can be attributed to a single narrow (



11.5 

• section 356,500N, below JCM-067 to test the plunging shoot to the north on the vein 

structure and extending at the same level one section north again to 356,575N below 

hole number JCM-074. 

Exploration Target 



approximately 3 g/t. This target is limited between 356,270 mN to 356,520 mN, approximately 

250 metres of strike length of the Mewet Vein and between the surface and the extent of drilling 

at depth. There remains potential to increase the size of the target by drilling along the strike of 

the Mewet Vein, both to the north and south. 

0065 JCM/GEO/2009.04 Page 37



12 

INTERPRETATION AND CONCLUSIONS 

The Jelai Gold Project contains known precious metal mineralisation in a number of north-south 

trending low-sulphidation epithermal vein structures. Drill testing of these veins by two 

companies has resulted in a certain confidence that parts of the mineralisation can be 

geologically modelled, as the data density is sufficient to undertake such an exercise. The first 

area chosen for the geological modelling of the mineralisation is in the Mewet Vein area, 

concentrated on a section of the vein that has been drilled in some detail. 



Sections of the vein structures predominately consist of volcanic clasts and are commonly set 

within a calcite matrix which breaks down easily resulting in a subdued topographic expression. 

The veins or breccias do not form prominent topographic features in any part of the system. 

Weathered breccia outcrops may have a box-work appearance due to the leaching of the 

volcanic clasts. 

The mineralisation in the Mewet vein comprises a discrete lode structure containing mixed 




variable at a similar RL along the strike of the vein. The lode dips at approximately 60° with a 

late cross-cutting quartz-carbonate vein and fracture fill phase at 65-70°. Late phase veins are 

typified by glassy to milky, fine grained drusy quartz + carbonate which are generally barren 

with assays rarely exceeding 0.02 ppm Au. The late phase quartz is rarely weakly amethystine 

in nature and crosscuts all phases of brecciation and veining. 

High gold values were obtained from finely banded, colloform-crustiform, quartz-adularia veins. 

The highest gold values occur in zones of multiphase brecciation of the colloform banded quartz 

which are healed by chalcedonic quartz and adularia. No gold mineralisation occurs in the 

footwall to the vein but low grade gold values occur within the breccia on the hanging wall to the 

quartz vein. Silver grades are sporadic with the most elevated values occurring with the high 

grade gold in finely banded, sulphidic, quartz veins. 



approximately 3 g/t. 

This calculation cannot be defined as a resource at this stage and should be considered as an 

exploration target only. 

The programme of exploration conducted by JCM has successfully outlined a number of areas 

of coherent mineralisation in the Jelai Gold Project area, of which one example is the Mewet 

Vein. The initial aims of the programme have been met, that is, to define the vein structures in 

the near surface environment and prepare targets for deeper drilling. 

0065 JCM/GEO/2009.04 Page 38



13 

RECOMMENDATIONS 

The following recommendations are made for the ongoing work programme at the Jelai Gold 

Project: 

1. The area has demonstrated sufficient data to attempt a resource modelling study on 

certain segments of some of the better defined veins. 

2. The addition of data in the Mewet Vein area would raise the confidence of the geological 

model and the management of some issues, such as poor core recovery in some drill 

holes, will give greater confidence to the grade model generated. 

3. Other areas where consistent mineralisation has been outlined should also be assessed 

for continuity and a geological model updated to include the other areas, such as the 

Sembawang Vein area and the Lipan Vein. The modelling of the geology should not only 

outline areas of mineralisation but also quantify areas of the geological model and data 

set that requires further input and clarification. 

4. A more concerted drilling effort is required in outlining areas around the main project, 

which have structural and alteration characteristics similar to the Mewet Vein and 

Sembawang Vein areas, and, 

5. Re-categorise the exploration target to comply with the reporting standards as required 

by the 43-101 guidelines. 

The following specific recommendations are made: 

1. The drill hole spacing should be closed to 25 metre pierce points along the main Mewet 

Vein area modelled, this includes drilling on sections 356,475N, 356,425N and 356,350N 

where drill holes are required below the shallow scout drill holes, 

2. Deep drilling on section 356,500N, below JCM-067 to test the plunging shoot to the 

north on the vein structure and extending at the same level one section north again to 

356,575N below hole number JCM-074, 

3. Manage the core recovery position on all drilling by using larger diameter core where 

possible (requiring a larger drill rig), with HQ core size recommended as the recovery 

was good in the previous Ivanhoe drilling using this core size, 

4. Future drilling should include routine standards and blanks (5% of total samples) in the 

dispatch stream and check analyses should be conducted at an alternate laboratory, 

5. A complete and comprehensive survey of drill collars is required and downhole surveys 

at 30 metre intervals is recommended for future drilling. 

13.1 

Future Work Programmes 

To advance the knowledge of the Jelai Gold Project, it will be necessary to conduct further 

drilling in the known vein areas and regional exploration in peripheral targets. The mineralisation 

in the project area is extensive and a number of targets are yet to be tested by drilling and a 

number of other targets have only had preliminary reconnaissance mapping completed over 

them. The recommended work programme budget is shown in Table 9. 

Work Programme Duration Units Estimated Budget 

(USD) 

Regional geological mapping and sampling 6 months $ 75,000.00 

Scout drilling peripheral targets and new vein 

areas 

9 months 4,000 metres $ 500,000.00 

Resource drilling Mewet / Sembawang Vein 6 months 5,000 metres $ 1,000,000.00 

Analytical work 9 months 2,500 samples $ 70,000.00 

0065 JCM/GEO/2009.04 Page 39



Metallurgical testwork 3 months $ 100,000.00 

Geotechnical studies 3 months $ 150,000.00 

Environmental studies 9 months $ 150,000.00 

Resource estimation 3 months $ 100,000.00 

Scoping Study 3 months $ 500,000.00 

Logistical Support and Administration 12 months $ 750,000.00 

Tenement management $ 50,000.00 

Total $ 3,445,000.00 

Table 9. Work programme and budget required to advance the project 

Additional control on future drilling, surveying of collar locations and completing down hole 

surveys will assist in increasing the confidence levels of the geological model but additional 

drilling will be required down dip and between sections that currently remain at 50 metre centres 

to close to at least 25 metre pierce-points. At this stage, a re-evalaution of the drilling data and 

modelling is recommended to be completed. 

0065 JCM/GEO/2009.04 Page 40



14 

14.1 

REFERENCES 

Text References 

BRGM 1982. Geological mapping and mineral exploration in North-east Kalimantan 1979-1982. 

Final Report. Report Bureau de Recherches Geologiques et Minieres, Orleans, France No. 82 

RDM 007 A), October 1982. (BRGM authors: Lefevre, J C, Collart, J, Joubert, M, Nagel, J L, & 

Paupy A.) 

Buchanan, L.S., 1981. Precious metal deposits associated with volcanic environments in the 

Southwest. Arizona Geol. Soc. Digest, v 14, p 237-261. 

Fleming, G., 1993. Borneo Project, selective reconnaissance survey, Unpubl. Co. Rept. (PT 

Macan Mas Minerindo). 

Hall, R 1996. Reconstructing Cainozoic SE Asia. In: Hall, R and Blundell, D J (eds) Tectonic 

evolution of SE Asia. Geological Society Special Publication No. 106, 153-184. 

Katili, J.A., 1973. On Fitting Certain Geological and Geophysical Features of the Indonesian 

Island Arc to the New Global Tectonics. In: P.J. Coleman (ed), The Western Pacific Island Arcs, 

Marginal Seas, Geochemistry, Univ. Western Australia Press, 287-305. 

Kirwin, D.J.., 1993. Technical notes concerning the epithermal gold-silver potential of Northeast 

Kalimantan, Indonesia. (Unpub internal company report). 

Kirwin, D.J., & Sennitt, C.M., 1994. Aerial reconnaissance conducted in northeast Kalimantan, 

Indonesia. (Unpub internal company report). 

Le Bel, L, Nagel, J.L, Lecomte, P, Machali Muchsin A. 1985. CTA39A, Follow-up work in the 

Longlaai area, NE Kalimantan (The Longlaai Project), Phase 1 (1984-1985), BRGM Report 86 

IDN 001, 107pp. 

Morrison, G., Dong, G., and Jaireth, S., 1991. Textural zoning in epithermal quartz veins. 

Klondike Exploration Services, Townsville, Australia. 

Nagel, J L 1987. Drilling in the northern part of the Long Laai skarns. BRGM-Anekatambang, 

J.V.- 1987, BRGM Report 87 IDN 224, 25p. 

Nagel, J L 1990. CTA 39A. Exploration of the Long Laai Zn-Pb-Ag skarn mineralisation in the 

Tahling Basin, Kalimantan - Timur (Indonesia). BRGM Report, R-30433, DEX-DAM-90. 

Pieters, P E, Trail, D S and Supriatna, S 1987. Correlation of early Tertiary rocks across 

Kalimantan.Proceedings Indonesia Petroleum Association Association 16th Annual Convention, 

October 1987, 291- 306. 

Pieters, P E and Supriatna, S 1990. Geological map of the West, Central and East Kalimantan 

Area, Scale 1 : 1,000,000. Geological Research and Development Centre, Bandung, Indonesia. 

Pieters, P E, Surono and Noya, Y 1993a. Geology of the Puttissibau sheet area, Kalimantan, 1 

: 250,000. Geological Research and Development Centre, Bandung, Indonesia. 

Pieters, P E, Abidin, H Z and Sudana, D 1993b. Geology of the Long Pahangai sheet area, 

Kalimantan, 1 : 250,000, Geological Research and Development Centre, Bandung, Indonesia. 

Sennitt, C.M. and Kirwin D.J. (1994). Geological Assessment and Evaluation of The Jelai 

River Kelapis and Long Laai Areas, Northeast Kalimantan, Indonesia (Internal Company 

Report). 

Setiawan, B. 1993. Les lignees granitiques et les skarns mineralises en Zn de Longlaai, Estalimantan 

(Borneo, Indonesie). Document du BRGM No 227. 

0065 JCM/GEO/2009.04 Page 41



van Bemmelen, R W., 1949. The Geology of Indonesia. Government Printing Office, The 

Hague. 

14.2 

Project Reports Available 

A.B. Ketaren & D. Crane : 1999. Ground magnetometer survey, Jelai-Mewet area. 

Unpublished internal technical report PT Borneo Exploration and Mining Indonesia. 

C. Gaughan : 1998. Jelai-Mewet reconnaissance follow up. Unpublished internal technical 

report PT Borneo Exploration and Mining Indonesia. 

C. Panther AND T.F. Santosa : 1998. Mewet vein auger soil sampling orientation programme. 


D. Crane : 1999. Mewet Vein : Deeper drilling programme drilling results, Mewet Lode system. 


G. Lo Grasso : 1998. Mewet Vein : Phase 1 drilling programme (2 volumes). Unpublished 

internal technical report PT Borneo Exploration and Mining Indonesia. 

G. Lo Grasso: 1998. Interim drilling report, Jelai-Mewet Project. Unpublished internal technical 

report PT Borneo Exploration and Mining Indonesia. 

G. Lo Grasso AND G. Estolano : 1999. Nyabi Vein Phase I drilling programme. Unpublished 


J. Corpus : 1997. Mewet-Balangan drilling proposal, Jelai-Mewet Prospect. Unpublished 


J.C. Corpus et al. : 1997. Progress report, Jelai-Mewet Project (5 volumes). Unpublished 

internal technical report Indochina Goldfields Limited. 

M. Barr, O.P. Consulta & T.F. Santosa : 1997. Regional and Mewet grid soil sampling (4 

volumes). Unpublished internal technical report PT Borneo Exploration and Mining Indonesia. 

M.J. Barr, O.P. Consulta, T.F. Santosa & W.A. Siddik : 1997. Mewet trenching programme (3 

volumes). Unpublished internal technical report PT Borneo Exploration and Mining Indonesia. 

M.R. Worsley : 1999. Sembawang and Lipan Veins, drilling results, Mewet Vein system. 


M.R. Worsley : 1999. Mewet Lode system Phase 2 drill proposal. Unpublished internal 

technical report PT Borneo Exploration and Mining Indonesia. 

M.R. Worsley : 1999. The Mewet Vein : A comparison to other quartz-adularia deposits. 


R. Lee, A.B. Ketaren, B. Widjanarko, S. Popang, David AND Andriansyah : 1998. Sungai 

Jelai Project. Unpublished internal technical report PT Borneo Exploration and Mining 

Indonesia. 

0065 JCM/GEO/2009.04 Page 42



I, Brett D. Gunter, of Jakarta Indonesia hereby certify that:- 

1. I am a geologist residing at Jl H. Mandor No 32, Cilandak Permai, Cilandak Barat, 

Jakarta Selatan, Indonesia and am the Principal Consultant of PT GMT Indonesia of Jl. 

TB Simatupang Kav 1S, Lt 2, Cilandak Timur, Jakarta Selatan, Indonesia. 

2. I am a graduate of the University of Technology, Sydney, Australia, with a Bachelor of 

Applied Science in Geology in 1988 and have practiced my profession continuously 

since 1988, I am a member of the AusIMM, 

3. I have been involved in mineral property appraisals, exploration programmes, resource 

evaluations and feasibility studies on mineral properties including, gold, silver, copper, 

lead, laterite nickel, iron ore, aluminium, mineral sands and coal. I have worked 

predominantly in Indonesia but also Australia, 

4. I am presently an independent self-employed consulting geologist and have been 

regularly conducting consulting since January 2005, 

5. As a result of my experience in the minerals industry related to the assessment of 

various deposits and my qualifications, I am a Qualified Person as defined in National 

Instrument 43-101. 

6. I am the author of the report titled “GEOLOGY AND MINERALISATION OF THE 

MEWET VEIN, JELAI GOLD PROJECT” dated April 13, 2009, and my compensation for 

this report is strictly on a commercial basis. 

7. I have visited the Jelai Gold Project on numerous occasions since 1997 with the most 

recent visit being on the 11 th August 2008. 

8. I have no personal direct interest in the Jelai Gold Project property itself but I openly 

declare that I own 130,000 unexercised options in Kalimantan Gold Corporation. In 

accordance with this, I am not an Independent Qualified Person. 

9. I have read National Instrument 43-101, Form 43-101F1 and this report has been 

prepared in compliance with NI 43-101 and Form 43-101F1. 

10. I am not aware of any material fact or material change with respect to the subject matter 

of the report that is not reflected in the report and where such omission to disclose would 

makes the report misleading. 

11. I hereby grant Kalimantan Gold Corporation permission to use this report in support of 

documents submitted to Canadian Securities Authorities or for other corporate purposes 

in accordance with applicable government regulations. 

12. Written excerpts may be quoted from this report provided no statements are taken out 

of context and are approved by the author in writing, as required by securities 

regulations. 

Dated this 13 th day of April 2009 


Brett Dennis Gunter BAppSc (Geol), mAusIMM 

0065 JCM/GEO/2009.04 Page 43



EXPERIENCE AND QUALIFICATIONS 

Brett Dennis Gunter 

Personal Profile 

Mr. Gunter is a geologist, graduating from the University of Technology, Sydney in 1989 with a 

Bachelor of Applied Science (Geology) and has nearly twenty years of experience in the mining 

industry. He has worked professionally in Australia and for the last 13 years in Indonesia. He 

has been involved in project management and exploration management roles for most of his 

career and has a broad experience in exploration and mining practices, particularly in relation to 

operations in Indonesia. He has held the position of statutory Mine Manager at a the Warroo 

Gold Mine in Queensland, Project Manager at a sand mining operation in South Sumatera and 

as Project Manager/Kepala Teknik Tambang at the Mount Muro Gold Mine in Kalimantan. In 

addition, Mr. Gunter has spent a large portion of his career exploring for and evaluating a wide 

range of deposits in tropical environments, including staff and consulting assignments in gold, 

silver, copper, lead, zinc, laterite nickel, iron ore, bauxite and heavy mineral sands. 

Mr. Gunter opened PT GMT Indonesia, a Jakarta based consulting group, in 2001 to focus on 

the Indonesian minerals sector and now employs more than 80 professional and support staff 

working in a number of areas in the Indonesian mining sector. PT GMT Indonesia consults to a 

number of multi-national clients in coal, gold, laterite nickel, iron, ore, base metals, tin, mineral 

sands and industrial minerals and also consults to a number of Indonesian national mining 

groups. 

Mr. Gunter speaks, reads, and writes in the Indonesian language and has had good exposure to 

non-technical aspects of working within Indonesia such as Mining Law, community development 

and liaison, Company Law, Labour Law, operational agreements, contract administration, mine 

closure, metallurgy and environmental studies. 

Principle assignments completed on evaluating precious metal properties during Mr Gunter’s 

career are: 

1994 Feasibility Study Warroo Gold Mine for Budmead Pty Ltd. 

1997 Geological evaluation of the Marsupa Ria CoW for Indochina Goldfields Ltd. 

1997 Geological evaluation of the Rawas Gold Mine for Indochina Goldfields Ltd. 

2005 Geological compilation and data validation for the Seruyung Gold Prospect for PT 

Simapertama Minindo. 

2005 Geological appraisal of a number of alluvial gold/zircon prospects for an investment group. 

2005-2006 Feasibility Study Phase II production, Mount Muro Gold Mine for Straits Resources 

Ltd. 

2006 Geological appraisal of an alluvial gold deposit in Central Kalimantan for a private investor. 

2007 Assessment of a series of vein gold properties in Sumatera for a private investor. 

2007 Exploration management of the Sudah Miskin gold prospect, Banten for Strike Resources 

Ltd. 

2007 Geological assessment of gold properties in Aceh, Strike Resources Ltd. 

2007-2008 Geological supervision Mewet Gold prospect for PT Jelai Cahaya Mineral. 

2008 Technical report : Kapur Gold Project for an investment group. 

0065 JCM/GEO/2009.04 Page 44

Geology and mineralisation of the Mewet Vein, Jelai Gold Project ...

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