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

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PT GMT Indonesia Mewet Vein : Jelai Gold Project 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
PT GMT Indonesia Mewet Vein : Jelai Gold Project 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
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