Rizal Resources | T’Boli Gold Mine
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T’Boli Gold Mine

Rizal Resources’ Philippines affiliate TMC received approval in October 2012 of its declaration of mining project feasibility (DMPF) from the Mines and Geosciences Bureau (MGB) and lateral mine development was also approved for permitting allowing the Company to mine and processing of up to 380 metric tons per day.

Project Overview

The T’Boli Gold Project is Rizal Resources’ flagship project which is situated on the southern end of Mindanao Island, approximately 40km northwest of General Santos City, in the Province of South Cotabato, the Philippines.

The operating gold mine has an NI 43-101 inferred resource of 1 million ounces gold equivalent (8.7 g/t Au, 27 g/t Ag) and is founded on a typical epithermal, high-grade, narrow vein system in similar style to several multi-million ounce deposits in the region, such as Barrick Gold’s Porgera gold mine and Medusa Mining’s Co-O gold mine.

T’Boli has a trained local work force, extensive underground workings, a fully constructed and commissioned carbon-in-leach (CIL) gold-silver processing plant, gravity concentrator, electro-winning circuit, tailings storage facility, powerhouse, grid power connection and is close to a main highway.

The established infrastructure and near-surface, high-grade mineralization is expected to contribute to a low-cost, high-margin underground mining operation.

Project ownership is structured as a typical Philippines foreign mining investment model whereby Rizal’s local partner, Tribal Mining Corporation (TMC), is the legal owner of the licenses covering the T’Boli project. Rizal holds rights in the project pursuant to a mineral processing agreement with TMC, under which it has an exclusive right to process ore from the TMC mineral areas.

TMC poured its first gold in October 2012 and in the period until mid-2014, recovered approximately $3.4 million from metal sales from stockpiled mineralized rock predominantly derived from the development of drives along veins in preparation of stopping operations during 2011 and 2012. In 2013, financial constraints resulted in the 200 tonnes per day targeting mining rates not being consistently achieved and operations were suspended in mid-2014.

Following a detailed review of T’Boli’s geology and mine plan, Rizal secured the required financing and commenced the construction of a new portal and decline in early 2016. The mill was successfully recommissioned in February 2016 at a rate of more than 200 tonnes per day through the reprocessing of tailings material.

In September 2016 the new decline reached the first vein and stoping has commenced.

Operations

The T’Boli operation consists of a series of historical underground workings that have been upgraded for modern, mechanized mining methods. A new portal and 180 metre decline was developed by Rizal in 2016 to access the high-grade gold mineralization and support the new mine plan. Mining is being conducted by traditional long hole open stoping techniques using a predominantly local workforce.

Rizal’s 72,000 tonne per annum CIL mill was recently rebuilt and has been successfully running at design capacity of 200 tonnes per day since February 2016. The mill consists of a single stage crushing circuit which is followed by a CIL extraction circuit to produce a gold-silver dore. The mill is located 5 kilometres from the mining operations.

A workforce of 80 predominantly local staff are currently employed on site.

T’Boli has a stand-alone power station and is connected to the national grid power system. The operation has sealed roads within the site and the project is connected to a main highway which provides simple transportation routes. A fully equipped assay laboratory is also available on site.

Mineral Resource and NI 43-101 Report

The T’Boli property hosts a reported inferred mineral resource of 3.8Mt at 8.7g/t Au and 27g/t Ag for a contained 1.1Moz Au and 3.3Moz AG. (independent technical report, Technical Report on T’Boli Gold and Silver Project, South Cotabato, Mindanao, Philippines, dated October 1, 2012, and filed on SEDAR on March 11, 2013)

Geology and Deposit Type

In the Philippines, copper and gold mineralization occurs mainly in copper porphyry and epithermal gold systems. The deposit types are interrelated genetically but are usually spatially separate, with various deposit types and mineralogy that are in evidence at or near the surface being dependent on the depth of post mineralization erosion.

Major gold and copper deposits within Mindanao Island are related to Tertiary/Quaternary-age igneous and tectonic activity along the Philippine Fault Zone and the northwest-trending Southern Cotabato Cordillera Fault. These major structures crossing Mindanao Island are related to the convergence between the Philippine Sea and Eurasian Plates which controlled the emplacement of diorite and quartz diorite intrusive rocks and associated porphyries.

Regionally, the T’Boli gold-silver project lies with the Saranggani Peninsular stratigraphy (Figure 1) and is located near the northerly flanks of the dormant and eroded Mt Parker volcano, a Pliocene to Pleistocene-age andesitic eruptive centre on the Cotabato Magmatic Arc which trends northwesterly.

Intermediate volcanic rocks and associated volcaniclastic sediments of the Mt. Parker volcano, and dacite porphyry intrusives of the Malita Formation, are the main host rocks for gold and silver mineralization in the area (Figure 2).

Tectonically, the project lies on the Daguma Fault, parallel with the subduction Cotabato Trench to the west (Figure 3).

The T’Boli project area is underlain by volcanic rocks that are intruded by a dacite porphyry stock, a common setting for epithermal deposits.  The main focus of exploration interest is the structural corridor defined by the northwesterly trending Kematu and Desawo Faults. The immediate T’Boli area is underlain by dacitic to andesitic, locally basaltic agglomerates, flows and tuffs, intruded by high level dacite porphyry of the Malibato Intrusive (Malita Formation).

Rizal’s current exploration is focused on an east-west dilatational-jog between the Kematu and Desawo Faults with several east-west steeply dipping vein structures occurring with fault structures near the southern margin of the Malibato Intrusive. These faults appear to confine a system of steeply dipping east-west structures that transverse both the porphyry and volcanic rocks.  These structures may represent the main pathways for the upward movement of the hot fluids that deposited gold in veins to form the mineralization seen at T’Boli.

T’Boli is an epithermal vein and stockwork system carrying gold and silver and is thought to be of the “carbonate base metal hot spring” style. In this type of system, gold is associated with base metals and is silver rich. These systems are regarded as developing at intermediate levels between porphyry and shallow epithermal systems. Carbonate base metal hot spring style systems are known throughout the southwest Pacific and this class of mineralization includes Acupan, Porgera, Wau, Kelian, Mt Kare and Gold Ridge, which are all multi-million ounce deposits.

A major alteration zone runs through the main mine workings from east to west, centered on the high-grade epithermal vein system containing the resource. At least three main high-grade veins are located in two stockwork zones (South vein set and North vein set), each with their associated mineralized alteration envelope.

The South vein set is in an area of more intense alteration associated with disseminated pyrite. Veining is complex and gold is also disseminated in the host rocks. Artisanal mining activity has been concentrated in rich veins in this area. The vein set can be traced over a strike length of some 700 meters (m), with widths of up to 30m.

The North vein set bifurcates into North A and North B veins, and is less altered and pyrite-mineralized than the South Vein Set. Gold is commonly contained in discrete veins a few centimeters (cm) to 50cm thick, and the surrounding host rock is generally weakly mineralized.  The North A vein set is approximately 10m wide and has been traced over a strike length of 400m. The North B set has been traced for 800m at an average width of 30m.

Gold is associated with silver in varying ratios, and mineralization includes silver tellurides.

Four other vein sets have been identified in the T’Boli zone, namely North Veins C, D, E & F.

An additional zone of alteration exists in the Lam Asam area of the property. To date, detailed exploration has been confined to the T’Boli zone.

Local rocks consist of andesites, agglomerates, ash flows and basalt related to eruptions from Mt Parker. The tuffaceous suite has been intruded by dacite porphyry.

The main zones of alteration and gold mineralization presently known in the area are referred to as the T’Boli and Lam Asam Zones. Detailed exploration to date has been confined to part of the T’Boli zone, which is an epithermal vein and stockwork system carrying gold with significant silver credits in a broad alteration zone of faulting and fracturing. Veins and associated fault and fracture zones trend easterly with faults dipping steeply to the north and south. High grade veins within the project area generally occur in two zones of alteration and stockworks classified ‘North’ and ‘South’ (Figure 4).

The South vein set and associated alteration and auriferous pyritic envelope generally occurs in tuff proximal to the dacite porphyry contact (within 40m). Local miners have concentrated on richer portions of the South vein set along the contact of the tuff and dacite porphyry. The South vein and alteration zone has been traced for 700m at widths of at least 30m.

The North vein sets are hosted in altered dacite porphyry with weaker alteration and pyrite mineralization of the host rock. Gold is commonly contained in discrete veins up to 0.5m thick, often with values of hundreds of grams per tonne.

The North vein set and alteration zone has been traced for 800m at an average width of 30m. Mineralization to the east is of the silica-sulphide and carbonate-base metal type with the best gold grades associated with potassic feldspar, comb quartz and base metal sulphides. The gold/silver ratios vary from near 1:1 in some T’Boli veins increasing westerly and to well in excess of 1:20 in the Lam Asam area. A cross-sectional interpretation of the vein sets demonstrates the structural repetition and continuity of the veins (Figure 5).

The deposit is a classic low-sulphidation epithermal deposit with localized fault gouge and brecciation caused by physical grinding and milling of the veins along existing mineralization structures (Figure 6).

Permitting and Environment

The T’Boli Project consists of 84.98 hectares MPSA No. 090-97-X1 (mining area) and 2,908.24 hectares APSA No. 51-X1 (exploration area).

The Philippine Mining Act of 1995 allows 100% foreign ownership of mining assets, and the permitting process is well defined.  Foreign companies may only hold 40% of the land title however, and therefore companies such as Rizal form partnerships with local companies in order to secure the land tenure.

Rizal’s Philippine national partner Tribal Mining Corporation (TMC) holds 60% of the licences covering T’Boli (Rizal 40% through shareholding in TMC) and pursuant to a mineral processing agreement with TMC, Rizal has an exclusive right to process ore from the TMC mineral areas.

The Mining Act is progressive legislation that requires mining companies to adhere to modern global best-practice standards in environmental management, and ensure that mining projects are advanced in ways that are sustainable with the host communities.

Rizal and TMC prepared an Environmental Protection and Enhancement Program (“EPEP”) and Final Rehabilitation and/or Decommissioning Plan (“FRDP”) for T’Boli for the Philippine Central Mines and Geosciences Burea office that was accepted and approved in 2012. The program included progressive rehabilitation, re-vegetation, mine de-watering, site run-off, tailings storage facility, monitoring programs and final mine closure preparations.

Corner

Latitude

Longitude

1 6°11′30” 124°51′00”
2 6°12′00” 124°51′00”
3 6°12′00” 124°51′30”
4 6°11′30” 124°51′30”

Table 1. MPSA Technical Description (Datum PRS92)

Community Relationships

Rizal and its Phillipine national partner Tribal Mining Corporation (TMC) have strong working relationships in the local communities and government entities. This has been founded upon complying with all national government requirements and training and employing people from the local communities. The vast majority of workers at T’Boli are from the Philippines. These local relationships have been strengthened through the renegotiation and signing of agreements with local landowners and tribal groups which set out an agreed framework for working partnerships which are mutually beneficial.

Through TMC’s community relations unit, Rizal supports local infrastructure through a Micro Infrastructure Assistance Program.  The unit also supports a daily feeding program for more than 3,000 children in regional primary schools and child minding centers.

Project History

Discovery of gold in the T’Boli area in the 1980s led to the T’Boli gold rush. Mining was started in an artisanal style by small scale miners and peaked in the early 1990’s, records of gold buyers indicate that some 400,000oz of bullion (gold to silver ratio unknown) was extracted by the artisanal miners using basic hand mining methods. More organized mining groups later accessed deeper parts of the mineralization by excavating the 380m Beehive and 260m Cualing adits.

A number of groups, working with local partners Tribal Mining Corporation (TMC) and Holon Mining Corporation (HMC), controlled the T’Boli project area through the mid to late 1990s where early stage exploration work including sampling of artisanal working, regional mapping, ground magnetics, soil geochemistry, trenching and limited diamond drilling was completed.

In January 1998 TMC consolidated ownership of HMC’s share of T’Boli, leaving the project under the ownership of TMC and Australian-listed company Eastern Corporation Limited.

Eastern completed a 7,057m diamond drilling program (23 holes) and mapped, surveyed and sampled 184 adits resulting in an NI 43-101 inferred mineral resource of 2.4 million tonnes, grading 5.5 g/t gold and 21 g/t silver, for 420,000 contained ounces of gold and 1.6 million contained ounces of silver (technical report prepared by I.S. Cooper, 2002).  The resource estimate in the Cooper report does not conform to current CIM definitions and is provided for background information purposes only.  See above under “Mineral Resource and NI 43-101 Report” for information on the current resource estimate.

In December 2002, Sur American Gold Corporation (subsequently renamed Cadan Resources and now Rizal Resources) entered into an agreement with Eastern to earn an interest in Sabena Limited. Subsequently, Sur American Corporation (Rizal) acquired a 40% direct interest in TMC.

Since 2011, Rizal and TMC have continued to develop exploration adits, have drilled a further 27 diamond drill holes and undertook a development studies. A small-scale development of T’Boli using mechanized methods was undertaken in 2012.

TMC poured its first gold in October 2012 and in the period until mid-2014, recovered approximately $3.4 million from metal sales from stockpiled mineralized rock predominantly derived from the development of drives along veins in preparation of stopping operations during 2011 and 2012. In 2013, financial constraints resulted in the 200 tonnes per day targeting mining rates not being consistently achieved and operations were suspended in mid-2014.

Following a detailed review of T’Boli’s geology and mine plan, Rizal secured the required financing and commenced the construction of a new portal and decline in early 2016. The mill was successfully recommissioned in February 2016 at a rate of more than 200 tonnes per day through the reprocessing of tailings material.