Kalgoorlie is the premier gold producing region of Australia, with a long history of mining and discovery of substantial gold deposits. The region’s ‘golden mile’ has produced more than 50 million ounces of gold alone, and KCGM’s Super Pit continues to generate about 800,000oz of gold each year.
The Aphrodite gold project, 65km north of Kalgoorlie in the Eastern Goldfields region, consists of five granted mining leases as well as adjacent areas subject to a farm-in agreement. The project lies close to key infrastructure – including a major gas pipeline, road, rail and an airport – and is about 350km south of Esperance Port.
Aphrodite Gold acquired the project from Apex Minerals in November 2009 for $7.2 million in cash and scrip, following Apex’s decision to focus on its Wiluna gold mining operation.
Following its acquisition, Aphrodite Gold outlined plans to undertake an aggressive exploration and development program at the project, with a view to moving into production as soon as possible.
While the company began exploration of the project in mid-2010, more extensiveexploration drilling was conducted during the past 12 months which culminated in completion of a positive scoping study for the project’s development in February 2012. Aphrodite Gold reported that it had received outstanding drilling results from the study of up to 168.66 grams per tonne gold.
In its recently-released 2012 annual report, Aphrodite Gold stated that the study had shown that a combined open-pit and underground mining operation would be suitable for the project, with production estimated at 550,000oz of gold (based on current resources) across a nine-year mine life.
“The study concluded that the project has the potential to become a significant cost-competitive gold producer with an average cash cost of $756/oz of gold,” Aphrodite Gold reported.
“The scoping study provided estimates of the net present value of the project on a discounted cash flow basis, ranging from $51 million at a gold price of $1450/oz, $129 million at $1650/oz and $208 million at $1850/oz (pre-tax).”
Golden horizons
Gold mineralisation within the Aphrodite project area was first discovered in 1996 when Goldfields Limited drill-tested a 1200m-long supergene gold anomaly identified during the previous year’s calcrete sampling program. The first significant intersection returned from the 1996 drilling was 10m at 8.6g/t gold from within the area’s weathered bedrock (saprolite), above what was subsequently
labelled the Alpha zone.
Follow-up drilling campaigns were undertaken in 1998 and 1999 to test the primary gold mineralisation in the fresh bedrock within and around the Alpha zone. The drilling discovered two gold lodes, termed Alpha and Phi, whose initial intersections included 16m at 10.94g/t gold and 30m at 5.5g/t gold respectively.
Aphrodite Gold commissioned an independent geologist to estimate the resources contained within the project area, and reported that there was a “significant inventory of unclassified gold mineralisation” believed to exist within and adjacent to the Alpha and Phi deposits.
Alpha lode
The Alpha lode occurs along a sediment-porphyry contact and is controlled by a north-northwest trending fault zone that acts as the primary conduit for fluid flow and, therefore, mineralisation. The result is a zone of mineralisation with average width within the porphyry unit of 5m, increasing significantly to 20m within the sedimentary unit.
According to Aphrodite Gold’s website, drilling confirmed that the gold mineralisation at Alpha continued for at least 650m below the surface, opening potential for an underground operation at
Alpha following any open-pit mining. The company reported that previous work on Alpha, including historic drilling, assumed the strike length of the gold lode was limited to 430m, however an independent geologist has since speculated that the lode may have a total strike length of up to 1400m.
Phi lode
The Phi lode lies just 200m west of Alpha, and comprises three parallel zones of gold mineralisation within a sediment package. According to Aphrodite Gold, each mineralised zone within Phi has an average width of 6m and extends to a depth of at least 400m. The company reported that the zones remained open at depth following drilling.
“Primary mineralisation at Phi extends for at least 450 metres along strike and recent modelling indicates the strike length of the Phi zone may be approximately 1800 metres,” the company’s website stated.
Exploration Potential
Exploration within the Aphrodite project area to date has primarily focussed on Alpha and Phi, however the area hosts other known gold mineralisation lodes that have been identified through previous
drilling. These include mineralisation at the Epsilon, Gamma and Omega lodes, which have the potential to host new gold deposits, according to Aphrodite Gold. Epsilon lies between Alpha and Phi, and contains gold mineralisation that is similar in style to Alpha. According to Aphrodite Gold, Epsilon’s mineralisation is interpreted as a northeast-striking lode that joins Alpha and Phi, and is best considered as a component of the Alpha-Phi system. In its June quarterly report, Aphrodite Gold stated that it had undertaken reverse cycle drilling at Epsilon to determine its resource potential.
The Gamma lode has seen very little exploration despite being only 200m east of Alpha. Following a limit drilling effort at Gamma, Aphrodite Gold reported that it had returned encouraging assay results.
Omega is 40m west of Phi, hosted within a sedimentary unit. Aphrodite Gold reported that, according to independent geologist’s reports, the lode had a strike length of up to 1000m and continued at
depth for 200m. The company reported that part of Omega had been modelled by an independent geologist and incorporated in the Aphrodite project’s resource estimate.
Looking further afield
According to Aphrodite Gold, reconnaissance exploration programs have identified a number of exploration targets outside the Alpha-Phi gold system that could potentially become new gold deposits within the Aphrodite project. These targets include the North Menelaus and Hera prospects, 4km north and 2km northeast of the Alpha-Phi lodes respectively.
On its website, Aphrodite Gold stated that drilling at North Menelaus had returned intersections including 4m at 11.42g/t gold and 9m at 1.52g/t gold. “This mineralisation is controlled by a structure that runs sub-parallel to the structure hosting the Alpha-Phi lodes,” the company stated.
“Encouragingly, gold mineralisation at the North Menelaus prospect was intersected near the sediment-dolerite contact and appears to have similar alteration to that associated with ‘bonanza’…and ‘high grade’… mineralisation at the Alpha and Phi lodes.”
The Hera prospect sits along strike of the Chameleon prospect, which occurs just beyond the boundary of the Aphrodite project area.
“Recent drilling over the neighbouring Chameleon prospect returned intersections including 32m at 3.78g/t gold, 22m at 5.43g/t gold and 5m at 5.08g/t gold,” Aphrodite Gold stated.
“While no significant drill intersections have been recorded at the Hera prospect to date, soil sampling and RAB [rotary air blast] drilling have identified gold anomalism within this prospect that warrant further investigation.”
In 2011, about 217 square kilometres of prospective ground was added to the Aphrodite project area through a farm-in agreement with adjoining tenement holder Breakaway Resources – a deal titled the Scotia Joint Venture. Under the terms of the agreement with Breakaway, Aphrodite Gold may earn up to 80 per cent interest in the gold rights of the farm-in area; to date, the company has earned at 51 per cent interest by undertaking exploration work on the tenements.
“Initial drilling of the Chameleon prospect in the joint venture tenements produced excellent results, the best being 12m at 10.99g/t (66m to 78m),” Aphrodite stated in its recent annual report.
“Further exploration program is planned for the coming year with the company aiming at defining an initial JORC resource containing [between] 100,000 [and] 140,000ozs of gold.”
In May, Aphrodite Gold announced a revised resource estimate for the
Aphrodite project – with the majority of its resources upgraded to indicated – of 7.2 million tonnes at 1.77g/t for 409,000oz down to 150m, amenable to open-pit mining; and 2.98mt at 6.6g/t for 631,000oz down to 440m, planned for underground mining.
“The resource remains open at depth, with limited drilling producing grades increasing with depth below 440 metres down to 600 metres,” Aphrodite Gold reported.
In the company’s annual report’s executive directors’ review, chief executive officer Wayne Ryder and managing director Leon Reisgys outlined a number of “crucial milestones” that Aphrodite Gold had met and surpassed in its ‘drive to production’, including: exceeding the work program outlined in its prospectus; completing more than 40,000m of drilling; upgrading its JORC-compliant resources from largely inferred to largely indicated; completing a positive scoping study; and establishing a clear path to gold production, with a target of 2014 set for first production.
“The next steps to production are underway, with a pre-feasibility study in progress, to be followed by a definitive feasibility study in 2013,” the report stated.
“Assuming these studies are positive, then production will be set to commence in 2014.
“The plan is to bring the project into production initially by open pit mining, followed by a transition to underground mining of the higher grade gold zones.”
