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Spitfire Materials: Completion of Merger and Statement of 1.3Moz JORC Resource for Aphrodite Gold Project

25 January 2018 - Spitfire Materials Limited (ASX: SPI) is pleased to advise that,following its successful merger with Aphrodite Gold Ltd (ASX: AQQ) by way of a scheme arrangement, the Company has acquired the Aphrodite Gold Project and its 2012 JORC compliant 1.3Moz gold resource, located 65km north of Kalgoorlie (Figure 1).

Figure 1: Aphrodite Gold Project Location Map

The 1.3Moz 2012 JORC Mineral Resource was completed as part of Aphrodite Gold’s Pre-Feasibility Study in 2017 by independent resource consultants McDonald Speijers (MS). Accordingly, the information outlined below was announced to the market on 27 June 2017 by Aphrodite. 

Spitfire confirms that there has been no material change to the Mineral Resource estimate since that date and it is now being released by Spitfire for the first time. The 1.3Moz MineralResource will form the basis of the Company’s 2018 exploration program and potential future Definitive Feasibility studies.

Spitfire recently announced a $5.33 million capital raising to underpin is gold exploration and development strategy for 2018, including a major new 5,000m resource in-fill and extensional drill program scheduled to commence at the Aphrodite Project later this month (see ASX announcement, 18 January 2018).

Table 1: McDonald Speijers Aphrodite Project Resource Estimation

The resource estimate was classified in accordance with the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC Code 2012) and in accordance to ASX listing rule 5.8 the information below is in support of this revision.

Geology

Aphrodite is a typical shear-zone hosted lode gold mesothermal deposit hosted by greenstone belt rocks in the Bardoc Tectonic Zone (BTZ) which also hosts several other notable gold deposits. The Aphrodite prospect comprises a suite of intermediate to felsic porphyries that have intruded a sequence of basalts and dominantly volcanic-derived epiclastic rocks. The main zones of mineralisation defined so far (the near vertically dipping Alpha and Phi lodes) lie within a regional N-S sericite-pyrite-arsenopyrite alteration system that extends for about 3km along strike. 

Drilling techniques and spacing

Aphrodite Gold database contains 1,998 holes for an aggregated length of 236,050m. The resource estimate is based on 1,017 of these Reverse Circulation (RC) and Diamond Drill (DD) holes for a total length of 171,381m. The average drill spacing at Aphrodite is at most 40x40m with infill drilling down to 20x20m in some areas. Drill holes have been oriented orthogonally to the general trend of the mineralised bodies. Hole collars have been surveyed by means of Differential Global Positioning System (DGPS).

Sampling and Sub Sampling Techniques

Reverse circulation (RC) drilling was used by Aphrodite Gold to obtain 1m samples from which 3-5 kg was pulverized to produce a 50g charge for fire assay. All samples were collected off the cyclone of the RC rig(s) with a rotary cone splitter. Bulk samples were weighed to ensure adequate recoveries.   Where Diamond Core drilling was used then samples were collected to the nearest 1m interval based on geological boundaries. Field duplicates were collected at a rate of about 1 in 10, and certified standards and blanks were also inserted at regular intervals prior to samples being sent to the laboratory.

Sample Analysis Method

Samples weighing around 3-5 kg each were submitted to Genalysis laboratory where they were dried and pulverised using best industry practise. Grind checks were also done at regular intervals to ensure acceptable results. Quality control procedures involved the use by the laboratory of certified reference material, assay standards and blanks. All samples were assayed for gold via the fire assay/atomic absorption (FA/AA) technique using a 50gm charge.

Estimation and Modelling Techniques

The revised resource was calculated using the Recovered Fraction (RF) modelling method.  This is a proprietary method developed by McDonald Speijers. The RF method involves the outlining of an envelope containing all the intersections of interest for each recognised mineralised domain. Within each defined domain a process of intersection selection is then undertaken using a set cut-off value and other set parameters and tests. If the model is to be used for mine planning, then ore loss and dilution skins of specified length may be applied to the edges of the selected ore intersections. 

Fixed length composites are then formed for each drill hole wherein the proportion of (diluted) ore intersection is calculated along with the metal content of the intersection. The proportion is called the fraction and has a value between 0 and 1. The metal content is called the accumulation and is calculated as the product of the fraction and the length weighted average grade of that portion of the intersection that falls within the composite length. There may be more than one accumulation for each fraction if more than one metal is involved.

The calculation of the fraction and accumulation is typically carried out concurrently for a range of different cut-offs (or other parameters) with these values interpolated into the model blocks in a single pass.

Cut-Off Parameters

As per the previous resource estimate in 2013 it was considered practical to divide the mineralisation into near surface (above 155 metres depth below surface) and deeper resource (155-440 metres below surface) and to apply varying cut off grades to each depth domain to reflect potential open pit and underground mining scenarios.

It should be noted that the resources reported refer to separate volumes with no overlaps.

Mining Factors

Given the steep nature of the mineralised bodies it seems likely that part of the resource will be extracted by open pit methods with the remainder extractable by underground methods.  The already completed Scoping Study completed in 2011 showed that this was the most likely scenario (refer ASX Announcement 9th February 2011)

Metallurgical Factors

No metallurgical factors have been applied to the resource estimate.

The 2017 resource estimate (Table 1) incorporated results from AQQ’s 2016 Diamond Drill (DDH) program.  The mineral resource is open at depth with strong mineralisation evident below 440 metres to a depth of at least 600 metres however the drilling density below 440 metres is insufficient to allow a resource to be estimated without additional drilling.

DISCLAIMERS AND FORWARD-LOOKING STATEMENTS

This announcement contains forward looking statements. Forward looking statements are often, but not always, identified by the use of words such as "seek", “target”, "anticipate", “forecast”, "believe", "plan", "estimate", "expect" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions.

The forward-looking statements in this announcement are based on current expectations, estimates, forecasts and projections about Spitfire and the industry in which they operate. They do, however, relate to future matters and are subject to various inherent risks and uncertainties. Actual events or results may differ materially from the events or results expressed or implied by any forward-looking statements. The past performance of Spitfire is no guarantee of future performance.

None of Spitfire’s directors, officers, employees, agents or contractors makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward-looking statement, or any events or results expressed or implied in any forward-looking statement, except to the extent required by law.You are cautioned not to place undue reliance on any forward-looking statement. The forward-looking statements in this announcement reflect views held only as at the date of this announcement.

For further information contact:

INVESTORS:

John Young

Spitfire Materials Limited

Telephone:0419 954 020

Email:admin@spitfirematerials.com.au

MEDIA:

Nicholas Read

Read Corporate

Telephone:0419 929 046

Email:info@readcorporate.com.au

Competent Person’s Statement

The information in the report to which this statement is attached that relates to Resource estimates is based on information compiled by Mr Diederik Speijers, Director of McDonald Speijers Consultants, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy.  Mr Diederik Speijers has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  Mr Speijers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this announcement relating to Exploration Targets, Exploration Results and Mineral Resources is based on information compiled by the Company’s proposed Managing Director, Mr John Young, a competent person, who is a Member of the Australian Institute of Mining and Metallurgy. Mr Young has sufficient experience relevant to the style of mineralisation and to the type of activity described to qualify as a competent person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.” Mr Young has disclosed to the Company that he is a substantial shareholder in the Company. Mr Young consents to the inclusion in this announcement of the matters based on his information in the form and content in which it appears.

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http://www.spitfirematerials.com/sites/default/files/asx-announcements/6869284.pdf