| |
Touquoy Gold Project
|
Environmental Approval |
| Atlantic Gold’s wholly-owned subsidiary DDV Gold Limited
has received Environmental Approval for its Touquoy Gold Project in Nova Scotia Canada.
The decision was handed down on Friday 1 February 2008 in Halifax by the Minister of Environment.
In particular the Minister states that: |
| The project has been considered with respect to potential adverse effects and environmental effects,
including effects on socio-economic conditions. I am satisfied following a review of the information
provided by DDV Gold Limited, and through the government and public consultation as part of the
environmental assessment, that any adverse effects or significant environmental effects of the
undertaking can be adequately mitigated through compliance with the attached terms and conditions.
|
| Atlantic Gold believes that the conditions of the Environmental Approval
received are both appropriate
and achievable and set a standard for commercial development that will promote an environmentally
sustainable and socially responsible operation. The Company looks forward to working with all
stakeholders to bring the project into production to realise these goals. |
| In July 2008, formal application for Industrial Approval was submitted
to the Nova Scotia Department of Environment. The additional investments and documentation for this second level of
environmental review address further detail relating to surface and groundwater quality, management of air quality,
protection and compensation for disturbance of terrestrial and aquatic habitat, site operations and reclamation,
emergency management and community liaison. In addition, an application for a Mining Lease was submitted to the
Nova Scotia Department of Natural Resources. |
| Receipt of Industrial Approval and grant of the Mining Lease
will complete regulatory permitting necessary to commence site development.
Acquisition of surface lands is also required and necessary fundraising is presently in progress.
|
Background
Under an Agreement established in May 2003 with a private local company Atlantic Gold NL (ATV), through its
wholly-owned local subsidiary DDV Gold Limited (DDV), now holds
60% interest in the Touquoy Gold Deposit and satellite deposits, located in Nova Scotia on Canada's Atlantic coast.
A further 15% interest in the surrounding property can be earned on securing project financing. DDV is the Operator.
Under the Agreement DDV receives 100% of all project cashflow until all exploration, pre-development and development
expenses, charges and overheads – capital or otherwise – plus interest are recouped, following which it retains
60% share of profits.
ATV has now advanced the Project to the Feasibility Study stage for an open pit mining and processing operation,
having now obtained Environmental Approval and completed comprehensive resource delineation and trial grade
control drilling along with metallurgical, geotechnical,
geohydrological, environmental and other technical investigations. In addition to in-house expertise, ATV has
engaged specialist consultants, where appropriate, to assist with these studies.
|
The target at Touquoy is a production scenario incorporating
an on-site gold treatment plant with a minimum 1.5 million tonne per annum throughput and a 6 year minimum mine
life to produce approximately 90,000 ounces gold per year. |
Location
The Project is located in central Nova Scotia approximately an hour and a quarter by sealed road from Halifax.
The region is mostly forested.
Skilled labour services and housing are available in the nearby Musquodoboit Valley, where several
long-standing gypsum and limestone open pits are operating. Grid power will be available with connection
requiring 5 km of new line and upgrade of 5 km of existing line.
|
|
Resources
As a result of ATV's resource delineation drilling – 129 diamond holes for 10,480 m – and trial
grade control drilling, the resource
inventory has now been confidently expanded to 656,000 ounces gold (13.2 million tonnes @ 1.5 g/t),
a 60% increase over the 405,000 ounces which had been identified prior to ATV's involvement. The single-pit
Touquoy Gold Deposit itself presently contains 11.7 million tonnes @ 1.5 g/t gold for 557,000 ounces to a
depth of 140 m with the remainder (1.5 million tonnes @ 2.0 g/t gold for 99,000 ounces) developed in
two satellite deposits 2 km away at Touquoy West.
Current resource estimates (April 2008) are as follows:
|
Tonnes (millions) |
Grade (g/t gold) |
Ounces gold |
|
TOUQUOY 1 |
Measured Resources |
2.8 |
1.5 |
130,000 |
Indicated Resources |
7.3 |
1.5 |
350,000 |
Inferred Resources |
1.6 |
1.5 |
77,000 |
Total Touquoy |
11.7 |
1.5 |
557,000 |
TOUQUOY WEST 2 |
Indicated Resources |
0.9 |
1.9 |
54,000 |
Inferred Resources |
0.6 |
2.2 |
45,000 |
Total Touquoy West |
1.5 |
2.0 |
99,000 |
|
Total Touquoy Project |
13.2 |
1.5 |
656,000 |
Note 1: Estimation technique: Multiple Indicator Kriging with block variance adjustment
applied. Ore selectivity is assumed to be 5 metres (north) by 5 metres (east) by 2.5 metres (elevation)
via an open pit mining scenario.
Assay methodology (all based on ½ NQ core):
-
ATV: Fire assay of pulverised whole-sample (32% of database), with all samples ≥ 0.5g/t or within ore-grade intervals screen fire assayed (1825 samples or 6% of database).
- Historic: Whole-sample fire assay of +100# gravity concentrate weight-averaged with fire assay of -100# fraction (28% of database) adjusted in accordance with trial grade control study, fire assay of pulverised split from crushed parent (28% of database) and screen fire assay (6% of database).
Bulk density: 2.80g/cm3 based on 183 determinations.
Lower cut-off grade: 0.5 g/t.
Drillholes: 298 NQ diamond holes for 27,200 m with variable spacing, averaging 30m x 20m. 80 grade control holes for 2990 m on 5 m x 10 m centres.
|
Note 2: Estimation technique: Multiple Indicator Kriging with block variance adjustment
applied. Ore selectivity is assumed to be 5 metres (north) by 2 metres (east) by 2.5 metres (elevation)
via an open pit mining scenario.
Assay methodology (all based on ½ NQ core):
-
Fire assay of pulverised split from crushed parent from 116 diamond drill holes.
Bulk density: 2.80g/cm3.
Lower cut-off grade: 1.0 g/t.
Hole spacing: Variable, averages 30m x 25m.
|
Underpinned by this resource inventory, the Touquoy Gold Deposit represents an attractive
open pit mine development given these further favourable attributes:
- Low waste:ore ratio of 2:1
- Excellent metallurgical recoveries 93%
- High gravity gold recoveries with about 65% expected
- coarse grind permitted (150μm), hence reduced power consumption
- low reagent consumption (0.4 kg/t CN-)
- grid power available
- short residence time (16-24 hours)
- Soft host rocks – Bond work index less than 10
- Excellent cyanide detoxification characteristics
- No acid rock drainage by virtue of calcite in the ore, and low sulphide content
- Favourable location with respect to excellent infrastructure
- On on-site accommodation required
- Keen local and homecoming workforce
- No sovereign risk
- Satellite deposits further west
- Excellent near-mine and regional exploration potential
|
|
|
|
|
Feasibility Study
AAusenco Canada Ltd has been engaged to undertake the process engineering for construction of
the treatment plant once appropriate used plant has been secured. This will enable completion of
the Touquoy Feasibility Study. Used plant has been identified, acquisition of which is subject
to suitable financing.Used plant is preferred to avoid expected long lead time for delivery of a
new mill, and to reduce capital costs.
|
Metallurgy
Final comprehensive metallurgical testwork has been undertaken under the guidance of Peter Lewis and
Associates. The ore has excellent metallurgical characteristics:
- Very high total recoveries (93%)
- Very high gravity recoveries (65%)
- Permissible coarse grind (150 microns)
- Low reagent consumption
- Very short residence time (16-24 hours)
|
Grindability
Grindability testwork on large diameter (PQ) diamond core samples drilled by ATV in August 2005 has been
conducted by SGS Lakefield Research Limited with direction from Perth-based, Orway Mineral Consultants (WA)
Pty Ltd. Results confirm the extremely low Bond ball mill work index (average 8.3 kWh/t) for the argillite
host rock, which will comprise 85-90% of the mill feed. This result implies low power consumption for the
grinding circuit. The preferred comminution circuit option arising from this testwork is a 3-stage
crush/Ball mill configuration.
|
Geotechnical testwork
A review of detailed and specific geotechnical investigations undertaken by ATV on selected resource
delineation drillholes under the guidance of Perth-based consultant, Peter O'Bryan and Associates has defined the
pit slope parameters used in the Engineering and Cost Study.
|
Geohydrological testwork
Results of airlift tests on selected resource delineation drillholes and eight monitoring water bores
drilled in and around the proposed pit, indicate minimal potential impact on surface water flow
characteristics and simple pit dewatering requirements.
|
Geology
The Touquoy gold deposit is located in the Meguma Group, a sequence of Cambro-Ordovician sandstones
and mudstones which underlies about half of the province of Nova Scotia. Since the mid-1800s about
sixty underground gold deposits within the Meguma Group have been mined, for an aggregate documented production of
about 1.2 million ounces. These deposits evidence the substantial gold potential of the Meguma Group.
The Touquoy deposit however is different from most of these deposits in that the gold is
disseminated throughout the host sediments and is essentially unrelated to quartz veining.
The very wide drill intersections of gold mineralisation at Touquoy, some in excess of 100 m, therefore
set this deposit apart from the typical Meguma Group gold deposits as a substantial, open-pit, bulk mining
proposition.
|
|
Property ownership
Under the 2003 farm-in Agreement, Atlantic Gold:
- has earned a 60% interest in the entire Property by having spent C$2.2 million before 31 December 2005
on exploration, evaluation and development of the Property, and by having made cash payments totalling $200,000
to the property vendors, Moose River Resources Inc (MRRI).
- may earn an additional 15% interest in the Exploration Block, which comprises the major part of the property
outside the currently defined resource area, upon securing project financing for the Project.
- is the operator and manager of the Project and will arrange project financing in respect
of MRRI's minority interest, and
- receives 100% of all project cashflow until all exploration, pre-development and development expenses,
charges and overheads – capital or otherwise – plus interest are recouped, following which it retains 60% share of profits.
A significant proportion of surface property rights are held by a number of permanent and part-time residents
of the hamlet of Moose River Gold Mines. Access agreements with these residents have been obtained to enable
the deposit to be drilled. It is anticipated that property sale and purchase agreements can be negotiated as required.
|
History
Gold mining began in the area in 1877, and continued intermittently until 1936, with numerous small
underground operations and open pits developed around the central part of the project area. About 26,000 ounces
of gold are reported to have been recovered from 150,000 tonnes of slate, quartz and glacial overburden material.
The deposit has undergone several exploration campaigns since 1986. These include:
- Seabright Exploration Inc, 1986-87: 143 diamond drill holes for 19,523 metres drilled around the Higgins
and Lawlor prospect and eastwards towards Touquoy. Seabright was taken over by Western Mining Corporation in
late 1987.
- Westminer Canada Limited (a subsidiary of Western Mining Corporation), 1988-89: 129 diamond
drill holes for 12,722 metres drilled on the Touquoy zone and surrounds. Mining and processing of a 57,000-tonne
bulk sample taken from near-surface mineralisation at the western end of the deposit.
- Moose River Resources Inc, 1996: 38 diamond drill holes for 2,669 metres and 37 percussion holes for
1,110 metres.
- Aurogin Resources Ltd, 2002: five percussion and one diamond drill holes for 381 metres.
Ongoing Investigations
Completion of the Feasibility Study and final regulatory permitting remains the focus of present
activities. However additional drilling to extend and detail the Higgins & Lawlor and Stillwater resources
at Touquoy West, and to test new positions flagged by previous reconnaissance percussion drilling in this
vicinity, and in the eastern sector of the Touquoy property, is yet to be fully undertaken.
At this stage, providing funds are available, no significant non-technical impediments to project
development are foreseen.
|
Exploration potential
In addition to developing the Touquoy Gold Project ATV is undertaking extensive exploration, both regional
and near-mine, to build its resource base. ATV believes the area is highly prospective for additional Touquoy
style deposits (a) elsewhere within the Touquoy property close to the proposed plant site, (b) on the well-located Cochrane
Hill property and (c) outside
the Touquoy property elsewhere within the Meguma Terrain.
(a) Step-out diamond and percussion drilling indicates the Touquoy host stratigraphy is gold- and
arsenic-anomalous for a kilometre eastwards of the Touquoy deposit. This favourable stratigraphy and
structure also extends westwards into the area of the historic Higgins & Lawlor and Stillwater deposits
of the Touquoy West locale. Both these deposits are open along strike.
(b) Indicated and Inferred Resources of 4.7 million tonnes at 2.5 g/t Au for 373,000 contained ounces
have been identified at Cochrane Hill, an advanced gold exploration property located 80 km east of the Touquoy Gold Project
and the subject of an option agreement with Scorpio Mining Corporation. Impressive assay results have been returned
from recent reconnaissance RC drilling. The nature of the Cochrane Hill mineralisation confirms Atlantic Gold’s belief
that this district is highly prospective for bulk-mineable gold reserves similar to
that at Touquoy.
(c) Considerable potential along adjacent parallel gold-mineralised belts - the anticlinal axes of pioneer
government geologist ER Faribault mapped over a century ago - is recognised beneath the widespread cover of
masking glacial till, and a strong local land position has been secured. A customised reconnaissance drilling
technique has been employed by ATV to effectively penetrate the cover and explore this terrain and to date
over 10,000 m have been drilled to test regional targets. This work is ongoing.
LAST UPDATED: 5 August 2008
|
|
|
 |