Ravensthorpe Gold Project (RGP)

The Goal

ACH’s goal is to build a high-grade, high-margin, long life gold business.

Timeline

ACH is advancing a Feasibility Study into the technical and commercial viability of the RGP concurrently with the development approval process. Subject to positive outcomes with respect to studies and approvals, ACH expects to be in a position to make a decision to develop in early 2019.

The Project

The Ravensthorpe Gold Project (RGP) is centred on the historic Kundip mining centre, located 550km south east of Perth and 185km west of Esperance in the Great Southern region of Western Australia. Project resources are contained within granted Mining Leases with Mining/Heritage Agreements in place with the local indigenous groups, Wagyl Kaip and Southern Noongar. RGP benefits from excellent infrastructure, accessed by sealed roads and a short drive to the regional centres of Ravensthorpe and Hopetoun. Regular commercial flights from Perth service the area from a sealed airstrip located 10km to the south of the Project.

ACH Minerals is completing a Feasibility Study into a planned high grade gold project centred on the resources at Kundip. The Project will be comprised of both open pit and underground mines with ore treated on-site in a gravity/flotation/CIL process plant. The plant will produce dore and a high value precious metal concentrate containing gold, silver and copper. Metal production is estimated to be approximately 45Koz pa AuEq over a 6.5 year mine life.

Geology

Kundip is hosted in andesitic / dacitic rocks of the Annabelle Volcanics group, part of the Archaean Ravensthorpe Greenstone Belt. To the east, the volcanic rocks are thrust onto steep dipping, NNW striking Archaean sedimentary rocks and BIFs that form a prominent ridge – line called the Mt Chester range. To the west is the central Archaean tonalite, known as the Manyuptup Tonalite Complex. The tonalite has been interpreted to have crystallised from a magma chamber that was geochemically equivalent to the calc-alkaline lavas and pyroclastic rocks of the Annabelle Volcanics that formed the volcanic edifice to the vent. The Annabelle Volcanics that host the majority of the copper, gold and silver mineralisation within the Ravensthorpe area are typical of rocks associated with mass weathering of this emerging volcanic cone/edifice.

To the south, the Archaean aged greenstones are unconformably overlain by sediments of the later Proterozoic Basin known as the Mt Barren Group.

Kundip comprises numerous ore structures in three main groupings (Kaolin, Harbour View & Flag Groups) that have been the focus of varying levels of exploration and mining activity for over a century. Mineralisation is structurally controlled with generally narrow, ~2-3m wide pyrite- pyrrhotite-chalcopyrite-quartz veins. Historical gold production totals 121,000t @ 18g/t Au for 68,000oz of gold from both underground and open pit sources.

Kaolin comprises a series of multiple, stacked gently dipping structures, with more significant lode structures, such as Western Gem, extending over 400m of strike. Harbour View is predominantly a steeply dipping structure which extends over 950m stretching between the Kaolin and Flag areas with a NE strike. Flag also has a single dominant structure which extends over 820m and dips steeply south.


Oxidation depth extends between 15m at Flag to over 50m at Kaolin. Mineralisation within the oxidised zone comprises readily leachable gold with generally low copper levels due to substantial leaching. Mineralogical investigations in fresh ore show that high grade gold occurs at the boundary of sulphide zones as sub-microscopic inclusions in sulphides and as gold or electrum in irregular lenses of quartz, sulphide-quartz within chlorite-carbonate shear zones and massive sulphide veins. Copper contents in the sulphide zone vary across the field, and can reach up to 7%.

Origin of the Gold-Copper Mineralisation

The intense chloritic alteration and Fe-Mg metasomatism at Kundip is characteristic of the stockwork feeder zones beneath volcanogenic massive sulphide (VMS) deposits. Together with the distinctive metal zonation (Cu-Au, +/-Ag) found at Ravensthorpe, these observations led Geological Survey of Western Australia’s Witt (1998) to interpret that the mineralised veins and shears were part of a discharge feeder zone beneath massive sulphide deposits that have been eroded or faulted away. Witt further surmised that the Mount Cattlin, Mount Macmahon, Elverdton and Kundip centres all represent individual feeder zones “clustering” within the Annabelle Volcanics, proximal and often immediately adjacent to the emerging volcanic edifice.

Kundip Resources

ACH engaged Mining Plus to update the Kundip resources in accordance with JORC 2012 guidelines. A summary of the open cut (OC) and underground (UG) resources reported at Kaolin, Harbour View and Flag is provided in the table below:

Kundip – December 2017 Indicated Inferred Total
COG Tonnes Au g/t Au oz Tonnes Au g/t Au oz Tonnes Au g/t Au oz
Sub-total OC 0.75 g/t 3,097,000 2.2 223,900 346,000 2.3 25,100 3,443,000 2.2 248,900
UG 3.00 g/t 612,000 6.7 132,400 465,000 6.5 97,100 1,077,000 6.6 229,500
TOTAL 3,709,000 3.0 356,300 811,000 4.7 122,200 4,520,000 3.3 478,400

Kaolin


Harbour View


Flag

Tenure

Kundip comprises 5 granted Mining Leases (M74/51, M74/53, M74/41, M74/135, M74/180) and 2 Miscellaneous Licences (L74/34, L74/45) located 20km to the south east of Ravensthorpe and accessed via the Hopetoun-Ravensthorpe Rd. The Kundip tenements overlay a mixture of vacant crown land and crown reserve. Mining Leases granted post Native Title have Mining Agreements in place with the Traditional Owners, the Southern Noongar and Wagyl Kaip peoples.

All tenements and associated mineral deposits within the RGP are subject to WA State Government royalties upon commencement of production. In addition, Royal Gold Inc. (Royal Gold) holds a royalty over certain portions of the Kundip area.

Royal Gold’s royalty is payable as 1% of gross receipts for the first 250,000 ounces of fine gold recovered from the royalty area and 1.5% of gross receipts of fine gold recovered thereafter. Select deposits are excluded from the royalty area including the main mineralised deposits of Kaolin, Two Boys, Flag, Western Flag, Harbour View, Mayday and Try Again. The Trilogy deposit at Myamba is not a subject of the Royal Gold royalty.

Permitting

The Project previously received Ministerial Approval in 2005. Due to the Project not being advanced at that time that approval has lapsed. ACH referred the Project to the Office of the Environmental Protection Authority of WA (OEPA) in December 2016, case number CMS 16331. The referral document can be viewed at the following link:
http://www.epa.wa.gov.au/proposals/ravensthorpe-gold-copper-project

In March 2017, OEPA determined the Project would be subject to a Public Environmental Review (PER) level of assessment. The Public Environmental Review duration will be 4 weeks. A proponent-prepared draft Environmental Scoping Document has been approved by the OEPA. Biological surveys and additional studies which will inform the Environmental Review Document (ERD) are complete and a draft of the ERD has been submitted to the OPEA for comment.

Mine Life Extension

When considering the historic drilling completed in the immediate vicinity of the known deposits, some 88% of holes were drilled to depths less than 100 m below surface and only 2.0%, or just 66 holes, penetrated deeper than 200 metres.



ACH believes that the Kundip lodes represent VMS feeder zones and therefore significant potential remains at depth below the already defined resources. Many of the known deposits at Kundip also remain open along strike and importantly, given the feeder zone model, the intersection of key high grade lodes, such as Hillsborough with Harbour View and Harbour View with Flag, remain untested and could represent significant additional zones of high value gold/copper.

The Kundip deposits are also open along strike where the Archean host rocks pass beneath the younger Proterozoic cover to east whilst Flag is known to continue into the tonalite to the immediate west of Kundip. It is clear that this host rock change does not limit the potential as shown at the Lone Star prospect, some 1.5km west of Kundip, where first pass RC drilling at depths less than 20 metres below surface returned 3 metres @ 5.7% Cu / 24.7 g/t Ag and 2 metres @ 3.9% Cu and 1.72 g/t Au.

To the immediate north of the Kundip area the Gem Restored prospect returned results of up to 8m @ 18.5g/t Au & 1.3% Cu from early drilling.

ACH is extremely confident that the mine life at RGP will be extended from extensions to the known deposits, the discovery of new lodes within the immediate mine area and through testing the significant regional discovery potential.