Exploration
Gold occurrences like this are extremely rare and this area will be thoroughly explored for a hardrock gold deposit as a source for the alluvials. Although the gold nuggets and the mineralized clasts originate in Derewo remnant terraces and may come from further upstream on the Derewo, the coarse nature of the gold and the mineralization in the clasts suggests that the source is fairly local. Nuggets of the sizes described, of several kilos, would not normally move far from source.
This placer deposit is found among graphitic slates and phyllites with abundant mineralized vein quartz seen both in place and as float in the colluvium/alluvium. Quartz-pyrite veins, massive pyrite and vein quartz with disseminated chalcopyrite, sphalerite and galena are noted in float. Silicification, oxidation and propylitic alteration are seen in the country rocks and in float. This indicates that the hardrock source is in mesothermal veins or stockwork within the graphitic slates and phyllites.
The granted exploration permits cover the most likely source areas for the gold in the metamorphic terrain to the north of the Derewo Fault. On 31 August 2011, West Wits announced to the ASX it had secured the results of a significant sampling program completed over the Company's Derewo exploration permits in the early 1990's by PT Freeport Indonesia ("Freeport"). This data has provided West Wits with three significant exploration targets – Wopogi, Sena and Biapigu. Wopogi is a gold/copper target, Sena is a gold target and Biapigu on the eastern edge of the tenement area is a copper target. Wopogi and Sena will primarily receive most of the Company's exploration efforts as West Wits focuses on locating the source of the coarse gold placer which sits within the Company's mining permit.
The sample data referred to is a geochemical multi-element database of 2486 samples (27,440 assays) over the three exploration permits covering 128,000ha in Papua. Significant results within the data include a panned concentrate sample of 6,864 g/t Au and rockchip samples of 125 g/t Au, 19.1 g/t Au and 1.8% Cu.
The data was collected by Freeport during a number of programs between May 1990 and December 1994 on its historic Contract of Work formally covering 2.6 million ha. Freeport completed first pass exploration over the area and then focused its efforts on identifying copper gold porphyry systems similar to Grasberg.
Analysis of this multi-element geochemical sampling database indicates three separate anomalous zones including the potential source of the rich alluvial gold within the Derewo River. Each zone shows a separate geochemical signature. The identification of these anomalies fast tracks the exploration program aimed at identifying the source of the Derewo alluvial gold as well as indicating an additional gold and an additional copper target.
The data was collected during several phases of exploration which followed a conventional helicopter reconnaissance and follow up program for this type of terrain. Sampling techniques included: stream sediment samples of the active sand in the river or creek; panned concentrate samples through using a prospectors dish to produce a concentrate of heavy minerals from the active sand in the stream; bulk sediment sampling; soil samples; outcrop samples; and outcrop channel samples. The sample density of about 1/220ha for stream samples and panned concentrates provides adequate coverage to define the target areas for future exploration focus, however many streams have not been sampled and their remains significant potential to identify additional areas.
The panned concentrate sampling shows the main Derewo River is highly anomalous in gold for over 30km with samples along the river ranging up to the 6864 g/t Au as mentioned above. The uppermost Derewo River panned concentrate sample of 31.44 g/t Au is located at the upstream boundary of West Wits' granted 40ha mining license which is where a coarse gold placer deposit is located. More significantly the data from the tributaries of the Derewo River which collectively contribute the anomalous gold values in the main river and contain the potential hardrock source of the gold shows two distinct areas of anomalous gold feeding the Derewo River along the section containing rich alluvial terraces and a separate area further upstream which is anomalous in copper.
Figure 1. Three Anomalous Areas of focus identified as Wopogi, Sena and Biapigu.
Wopogi gold/copper target: is an area of 157km2 on the northern side of the Derewo River, running parallel to the river in the metamorphic terrain to the north of the Derewo Fault. In Papua New Guinea similar metamorphic terrain host several multi-million ounce gold deposits. The area is defined by gold geochemistry with coincident copper and inconsistent arsenic geochemistry in multiple drainages along a strike length of 20km. Limited channel sampling of weakly altered volcanics show values up to 19g/t Au and 15g/t Pt. Float samples assay up to 1.8% Cu. The geological data indicates the existence of dioritic intrusions which elsewhere in Papua are a very strong indication for significant mineralised systems. This area presents as the likely source of the alluvial gold within the Derewo River including the coarse gold placer in the company's mining lease. This data suggests multiple hardrock sources of the alluvial gold in the gravels. The Wopogi Au-Cu target lies within the Paniai Structural Corridor which further to the south contains some of Freeport's main Cu-Au prospects outside the Grasberg mineral district.
Sena gold target: is an area of 57 km2 covering a complex section of the Derewo Fault where it flexes sharply south. The Derewo Fault is a major structural boundary which separates the Australian Craton to the south from the Pacific Plate to the north. This area is characterised by anomalous gold stream sediment and panned concentrate geochemistry. The copper geochemistry is peripheral to the main gold target but the arsenic geochemistry is coincident.
Biapigu copper target: is an area of 200km2 near the eastern boundary of the exploration permits and adjoining Contract of Work permit held by Freeport. This target is defined by stream sediment and panned concentrate copper geochemistry in two broad drainages. This area is associated with the Derewo Fault and lies 15km along strike to the west of the Freeport owned 8 million oz Au Wabu skarn deposit which is hosted in the hanging wall of the Derewo Fault.
In addition, a single outcrop sample of 125g/t Au near the Derewo River provides an additional target area outside the regional ones defined above. This site will also be a focus of follow up exploration.
Next Steps
The initial field exploration program will be undertaken in two phases. The first phase will consist of geological mapping including structural, lithology and alteration mapping together with detailed geochemical sampling of streams and outcrop. The second phase of the program will consist of trenching and soil sampling in prospective areas which will be followed by drilling.
In addition to the above exploration which will be focused on the areas identified from the Freeport data, a reconnaissance program to evaluate areas not sampled by Freeport will be undertaken. Targets defined by this reconnaissance work will be explored in more detail using similar methods to those described in the two phases above to define drilling targets.
Details of the geochemical data are shown in the following table.
The information in this report that relates to Exploration Results is based on information compiled by Mr Trevor Neale of West Wits Mining Limited who is a Member of the Australian Institute of Geoscientists. Mr Neale has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves’. Mr Neale consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.