Joanna Gold Project, Quebec
The Joanna Gold Project is located along the Cadillac Break, in Joannes Township, two kilometres northeast of the Rouyn-Noranda airport and 20 kilometres east of Rouyn-Noranda. The property extends east-west for more than eight kilometres and, in places, is three kilometres in width.
The project is comprised of five sectors based on different ownership agreements. The Hosco sector currently represents the core of the mineral resources located on the property. The other sectors include Heva, Alexandria, Henriksen, and Aurizon. The project comprises 156 claims covering 4,294 hectares in 3 separate blocks.
Aurizon owns a 100% interest, subject to certain underlying royalties, in all of the sectors comprising the Joanna Project.
A $3.7 million surface exploration program is in progress and comprises 26,000 meters of drilling utilizing two to three drill rigs.
The objective of the 2011 drill campaign is to perform step-out drilling on 50 metre spacing along the 2.5 kilometre strike length of the Heva deposit and potential satellite zones, down to 150 metres, in order to extend the mineral resources contour and to increase the quality of the existing indicated and inferred mineral resources.
Outlook
Aurizon is currently working on a feasibility study on the Hosco deposit of the Joanna property, which will incorporate a reserve update based on the increased mineral resource estimate announced on June 13, 2011, together with results of metallurgical pilot tests, a geotechnical study, updated capital and operating cost estimates, and other relevant studies.
As reported on August 11, 2011, an initial review of the studies has indicated that the projected capital and operating costs appear to be significantly higher than previously anticipated. The increased scope of the project, as a result of the expanded mineral resource base, has increased capital costs, including those associated with an autoclave process. Ore and waste stockpiles, tailings costs, and costs of materials and equipment have also all been trending higher, along with the gold price. Consequently, several optimization studies are underway and include a revision of the mine plan to optimize the mining fleet and productivities; additional environmental characterisations (soil/streams/residues & waste material) to ensure minimal environmental impact of the mine; and revision of the metallurgical process and surface infrastructures. This additional work will delay the estimated completion of the feasibility study until the second quarter of 2012.
In the context of the current strong gold price environment, management is confident in the future development of the Joanna property given its measured and indicated in-pit resources of 54.1 million tonnes at an average grade of 1.29 grams of gold per tonne, or 2,245,000 ounces of contained gold in the Hosco deposit, its excellent exploration potential, its location in the heart of the Cadillac Break gold camp, and its close proximity to existing infrastructure.
Additional drill results from the drill campaign are being used to revise the block model for the western extension of the Hosco orebody. The resource update is currently being completed and the results will be included in the feasibility study.
Although the original objective of the 2011 drill campaign was to perform step-out drilling on 50 metre spacing along the 2.5 kilometre strike length of the Heva deposit and potential satellite zones, some drill rigs were diverted to the Hosco sector in order to increase and improve resources. Drilling is scheduled to restart on Heva in late November, 2011. Feasibility and exploration expenditures during the third quarter totalled $1.1 million and year to date totalled $8.8 million. Continued feasibility optimization studies and exploration activity in the fourth quarter of 2011 are expected to total approximately $2.0 million.
Mineral Resources
On June 13, 2011 Aurizon reported that an updated mineral resource estimate has been completed for the Hosco deposit at its 100% owned Joanna Property, located 20 kilometres east of Rouyn-Noranda, in north-western Québec. The updated mineral resource estimate was prepared by SGS Canada Inc. - Geostat (“SGS Geostat”) in collaboration with Aurizon’s personnel.
The updated mineral resource estimate integrates the results of the drilling program that took place during the last three quarters of 2010 and January 2011 in the lateral and depth extensions of the pit outline of the Hosco Deposit-Joanna Gold Project defined in the Pre-Feasibility Study of December 22, 2009, available under the Company’s profile at www.sedar.com. It includes 230 additional new holes.
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At a cut-off grade of 0.5 grams of gold per tonne, in-pit measured and indicated mineral resources have increased by 537,000 ounces, a 31% increase when compared to the last estimate released on July 5, 2010 and now total 2,245,000 ounces of gold for the Hosco deposit only.
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In-pit inferred mineral resources stand at 284,000 ounces, a reduction of 97,000 ounces when compared to July, 2010.
"For the fourth consecutive year, our drilling program has substantially increased the mineral resource base in the Hosco sector of Joanna. These resources will be incorporated into the upcoming Feasibility Study and should have a positive impact on the project," said Martin Bergeron, P. Eng., Vice-President of Operations.
Grade Cut-off
(Au g/t) |
Category |
May 31, 2011 |
July, 2010 |
Tonnes
(t) |
Grade
(g/t) |
Gold
(oz) |
Tonnes
(t) |
Grade
(g/t) |
Gold
(oz) |
0.33
(Base Case) |
Measured
Indicated |
29 490 000
25 840 000 |
1.35
1.18 |
1 283 000
977 000 |
27 710 000
13 460 000 |
1.34
1.22 |
1 198 000
528 000 |
M + l
Inferred |
55 330 000
7 730 000 |
1.27
1.15 |
2 260 000
285 000 |
41 170 000
9 300 000 |
1.30
1.28 |
1 725 000
383 000 |
| 0.5 |
Measured
Indicated |
28 840 000
25 300 000 |
1.37
1.19 |
1 275 000
970 000 |
26 750 000
13 050 000 |
1.38
1.25 |
1 186 000
523 000 |
M + l
Inferred |
54 140 000
7 670 000 |
1.29
1.15 |
2 245 000
284 000 |
39 810 000
9 200 000 |
1.33
1.29 |
1 708 000
381 000 |
| 1.5 |
Measured
Indicated |
20 460 000
14 710 000 |
1.60
1.47 |
1 054 000
697 000 |
19 640 000
7 990 000 |
1.58
1.53 |
995 000
392 000 |
M + l
Inferred |
35 170 000
210 000 |
1.55
1.33 |
1 750 000
210 000 |
27 630 000
6 560 000 |
1.56
1.47 |
1 387 000
310 000 |
The mineral resource estimate has been calculated using the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definitions Standards for mineral resources in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Mineral resource update effective date: May 31, 2011.
*Rounded to nearest 10 thousand
**Rounded to nearest 1 thousand. The July 2010 resources were released without In-Pit simulation
The in-pit mineral resource estimates were calculated based on the following geological and resource modeling parameters:
The mineral resources of the Hosco deposit have been estimated with two distinct mining scenarios: open-pit and underground mining perspectives. The open pit mineral resources are reported within a Whittle pit shell optimised with the parameters used in the project’s Pre-Feasibility Study.
Mineral resources were evaluated using recent and historical data which include 734 recent and 109 historical surface drill holes for a total 194,065 metres of surface drilling with an additional 3,243 historical underground drill holes and channel samples. A total of 122,601 assays are now available in the data bank.
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The mineral resources were modeled and estimated using the software SectCad v. 5.5.25.
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The interpolation was conducted on composite assays of 2 metres in length.
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Capping of 15 grams of gold per tonne was applied to the assay composites. Results are presented as undiluted and in-situ.
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The mineral resource model was interpreted from transverse sections ranging between 25 to 50 metres.
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The interpolation was done by Ordinary Kriging in two stages: One block model using mineralised envelopes for the high grade mineralisation (>0.5 grams of gold per tonne), and one block model for the lower grade mineralisation located outside the defined mineralised envelopes.
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The block model was defined by a block size of 8 metres long by 5 metres wide by 8 metres thick and covers a strike length of 3,000 metres to a maximum depth of 1,000 metres below surface.
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An average drill spacing of 25 metres x 25 metres is used in the measured and indicated categories resources.
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The average relative density used to calculate the tonnage for Hosco deposit from the volumetric estimate of the resource block model has been updated to 2.75t/m3, following an in-depth review of the specific gravity of the mineralised lithologies observed at Hosco. The relative density used for the previous resource estimates was 2.66t/m3.
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Historical Hosco production of 9,704 oz has not been removed from mineral resources.
Whittle
A Whittle pit optimisation was performed by SGS Geostat using the cost parameters from the Pre-Feasibility Study adjusted for a gold price of US$1,000 per ounce and an exchange rate of 1:1. The parameters are subject to revision upon completion of the detailed cost studies currently in progress. The base case pit simulation was performed with a minimum cut off grade of 0.33 grams of gold per tonne (base case). The results at a cut-off grade of 0.5 and 1.0 grams of gold per tonne are derived from the base case pit simulation.
Whittle pit optimisation July 2010 compared to global resources
|
Grade Cut-off
(Au g/t) |
Category
In-Pit |
July 10 (whittle simulation) |
July, 2010 (global without whittle) |
Tonnes
(t) |
Grade
(g/t) |
Gold
(oz) |
Tonnes
(t) |
Grade
(g/t) |
Gold
(oz) |
0.5
|
Measured
Indicated |
26 750 000
13 050 000 |
1.38
1.25 |
1 186 000
523 000 |
26 780 000
18 770 000 |
1.38
1.23 |
1 187 000
546 000 |
M + l
Inferred |
39 810 000
9 200 000 |
1.33
1.29 |
1 708 000
381 000 |
40 550 000
23 170 000 |
1.33
1.19 |
1 732 000
887 000 |
The mineral resources located below the Hosco optimised pit shell were evaluated using an underground (“U/G”) mining scenario. The base case cut-off grade for the U/G mineral resources at Hosco has been set at 2.0 grams of gold per tonne. The U/G mineral resources are reported in the Joanna Project mineral resources table below.
Geology
Mineralization at Joanna is closely related to the east-west Cadillac fault and forms a 200 metre wide corridor composed of different mineralized lenses parallel to the fault, dipping 55 degrees to the north. Mineralization takes the form of a few millimetres to a 15 centimetre-wide quartz vein network inside the altered sediment rock with finely-disseminated sulphides. Mineralization has been defined and correlated based on altered mineral assemblages (biotite, tremolite, carbonates, muscovite, tourmaline, chlorite), quartz textures, deformation features and sulphides types (pyrrhotite and arsenopyrite).
At Hosco, mineralization is located within three main lenses, one located north of the fault and two at the southern side of the fault. Each lens shows a thickness of between 15 and 60 metres and a variable lateral extension of between 300 and 700 metres.
Qualified Person and Quality Control
Information of a scientific or technical nature regarding Joanna has been prepared by or under the supervision of Ghislain Fournier P. Eng., Technical Services General Manager and Martin Demers, P.Geo., Exploration Manager of the Company. Mineral resource estimates were prepared by André Laferrière, M.Sc. P.Geo., Senior Geologist for SGS Geostat, a "qualified person" as defined by National Instrument 43-101.
Additional Information
Additional information required by part 3 of NI 43-101 can be found in the Pre-Feasibility Study and in the Mineral Resource Estimation -- Joanna Gold Deposit, August 2010 Update, dated August 17, 2010 both of which are available under the company's profile at www.sedar.com.