Gold Copper Project
The Wonogiri project covers a highly prospective 3,928 hectares in central Java, Indonesia. The project lies within the tectonically complex Sunda-Banda Magmatic Arc which is characterised by multiple phases of volcanic activity and extensive deformation. Significant gold and copper mineralisation is found along this arc including some of the world’s largest copper and gold deposits.
Alpha HPA Limited holds a 45% economic interest in the Wonogiri licence. Alpha HPA is currently seeking divestment terms for its interest in the Wonogiri Project.
The Wonogiri project has quality infrastructure supporting the project with it located approximately 30 kilometres to the south of the provincial city of Solo and is easily accessible by daily flights from the capital Jakarta and a short one hour drive by car on sealed roads. The surrounding area has grid power, a large dam and numerous river and stream systems. Altitude of the Randu Kuning deposit is approximately 200 metres above sea level.
In the north of the project area, a significant area of alteration has been identified as having potential for gold and copper porphyry mineralisation and epithermal gold and silver mineralisation. This alteration zone may be more extensive than indicated at surface, as the alteration zone appears to continue under the surrounding shallow sediments and soil. The Randu Kuning gold-copper porphyry deposit, which is detailed below, is located in this zone.
Randu Kuning Prospect
The Randu Kuning prospect is the most advanced of the prospects within the Wonogiri project. Alpha HPA has completed a total of 50 diamond holes for 15,114 metres since acquiring the project in 2011. Drilling has targeted sulphide gold-copper mineralisation associated with a multiphasal, highly altered wall rock porphyry system. Mineralisation is associated with copper and gold sulphide bearing quartz stockworking veins and as disseminated mineralisation within multiple microdiorite and diorite intrusives.
The gold and copper mineralisation exists from surface to over 400 metres true vertical depth. Mineralisation remains open at depth, to the west and to the south. Further drilling is warranted to test these prospective areas.
An intial resource estimate for the Randu Kuning prospect was completed in 2013. In 2016 a revised JORC 2012 compliant resource estimate for Randu Kuning, completed by Computer Aided Geoscience Pty Ltd, was as follows:
At 0.2 g/t AuEq1 cut-off grade the total contained resource is 81.56 million tonnes at 0.38 g/t Au and 0.11% copper. This represents 1.15 million ounces of AuEq consisting of 996.5 thousand ounces of gold and 190 million pounds of copper. At 0.5 g/t AuEq1 cut-off grade, the cut-off grade used in the Scoping Study, the total contained resource is 20.95 million tonnes at 0.85 g/t Au and 0.16% copper. This represents 573 thousand ounces of AuEq1 consisting of 533 thousand ounces of gold and 74 million pounds of copper. Details of the resource estimate for Randu Kuning are as follows:
On 30 August 2016 Alpha HPA announced that the original Scoping Study on Randu Kuning (ASX announcement dated 11 March 2014) had been updated to include the significantly enhanced project economics resulting from the aggregate potential of the project (ASX announcement dated 6 July 2015), metallurgical studies (ASX announcements dated 28 October 2015 and 29 April 2016) and current costings for fuel and equipment. The results of the internal Scoping Study confirmed the potential for the development of the deposit at Randu Kuning.
The Scoping Study was undertaken by Alpha HPA technical staff and based on comparable mining operations in Indonesia and Australia. Metallurgical data was provided by testwork completed by Pt. Geoservices in Jakarta under the guidance of qualified independent consultants MetChem Consultants of Perth, Australia and also PWA Limited of Kuala Lumpur, Malaysia.
As Alpha HPA does not currently have adequate capital and operational finance to develop the Wonogiri project and scoping studies are not at a stage to secure project financing, the Company is precluded by the recently released ASIC Information Sheet 214 concerning forward looking statements by mining and resource companies from announcing details of the Scoping Study and its related cautionary statements.
Operating costs were estimated at a preliminary level based on local benchmarked costs and comparable mining costs. Capital expenditure costs to develop the project were estimated based on comparable mining industry costs with allowances for second hand equipment and local costs. No contingency was used in the capital cost estimates.
Wonogiri Metallurgical Studies
The Company has previously reported on the metallurgical testing of the Randu Kuning Au-Cu mineralised rock completed by ALS-Ammtec in 2012. This work indicated recoveries of over 89.0% of gold and 95.0% of copper. Concentrates of up to 90.6 g/t gold and 21.2% copper were achieved during initial concentrate optimisation studies. Selected assays of concentrates have shown low arsenic and other deleterious elements.
The Scoping Study used a similar recovery model assuming 87% recovery for both gold and copper to produce a constant concentrate copper grade of 20% and a gold grade of between 60.0 g/t and 90.0 g/t.
Alpha HPA is currently completing additional metallurgical testing to evaluate optimising gold recovery via initial gravity concentration and increasing the Cu% in sulphide concentrate via suppression of pyrite during the flotation process. As reported previously approximately 54.3% recovery of gold by gravity and intensive leaching of concentrates; and 86.6% gold, 70.7% silver and 87.7% copper recovery by combined gravity + flotation of gravity tailings.
The completed testwork has also importantly confirmed that Randu Kuning tailings material will be non-acid forming and will be a net acid consumer. As such there will be no acid mine drainage concern for the process tailings.
Alpha HPA, along with Wonogiri JV partner Rajawali Corporation has submitted application for an aggregate production IUP licence over the area selected for potential quarry development.
The Company is currently evaluating several aggregate production scenarios with interested contractors who would provide quarry development and production management services. It is clear from the earlier market study and related discussions with industry consultants that there is strong demand for high quality aggregate throughout Java to supply ongoing and planned infrastructure projects as part of an extensive transportation upgrade initiative by the Indonesian Government.
Epithermal alteration and mineralisation has been identified in the immediate surrounds of the Randu Kuning porphyry. Drilling has identified a number of epithermal vein systems containing wide zones of anomalous gold mineralisation.
At the Bukit Piti prospect, a single hole was drilled to test a trench gold anomaly. This hole intersected an intensively propylitic altered quartz feldspar intrusive with a number of zones of gold mineralisation including 3.5 metres at 0.70 g/t gold from 29.0 metres, 4.5 metres at 1.05 g/t gold from 43.0 metres, which included a 0.5 metre interval of 7.93 g/t gold from 44.0 metres, 1.0 metre at 4.99 g/t gold from 66.0 metres and a further 1.0 metre at 4.16 g/t gold from 119.0 metres. Geological interpretation of the data and alteration concludes that further drilling is warranted at Bukit Piti to test for porphyry related copper and gold mineralisation at depth.
At the Gawe prospect, three holes (WDD035, WDD039 and WDD043) drilled by Collerina Cobalt Limited tested anomalous gold geochemical results and a coincident geophysical anomaly. The geochemical anomaly at Gawe has been identified over a length of 520.0 metres with drilling to date only undertaken at the western extent of the anomaly. Each hole drilled intersected anomalous zones of epithermal related gold mineralisation with WDD035 intersecting 1.0 metre at 0.45 g/t gold, 0.38% copper and 12.4 g/t silver from 85.0 metres and a further 1.0 metre at 1.01 g/t gold and 11.0 g/t silver from 213.0 metres. Hole WDD039 intersected three relatively shallow zones of gold mineralisation which included 0.5 metres at 3.35 g/t gold and 2.6 g/t silver from 27.0 metres, 4.0 metres at 0.67 g/t gold from 36.5 metres and a further 2.0 metres at 0.73 g/t gold and 11.6 g/t silver from 114.0 metres. Hole WDD043 returned 5.0 metres at 0.42 g/t gold and 2.2 g/t silver from 97.0 metres and a further 3.7 metres at 0.55 g/t gold and 1.3 g/t silver from 119.0 metres.
With only the western limits of the Gawe anomaly drill tested, further testing of the Gawe anomaly is warranted.
Drilling at the Geblak prospect tested a north-south trending geochemical anomaly approximately 970 metres south-southeast of the Randu Kuning deposit. Best results at Geblak were from holes WDD037, where 6.0 metres at 1.05 g/t was intersected from 261.0 metres, and hole WDD031, where a number of wide anomalous gold mineralised zones were intersected including 15.0 metres at 0.60 g/t gold from 38.0 metres and 22.0 metres at 0.33 g/t gold from 84.0 metres.