Independent Technical Report on the Geology, Mineralization, and Recommended Exploration of the Kainantu Project, Papua New Guinea
Prepared by GJF Geological Services for PLB Capital Corp.
Written by: Graeme J. Fleming, B. App. Sc., MAIG Jl. BBL No. 23, Batu Layar, Lombok Barat, NTB 83111, Indonesia
Effective Date: September 30, 2020
1 TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
1.0 SUMMARY ...... 1
2.0 INTRODUCTION ...... 6 2.1 Issuer… ...... 6 2.2 Terms of Reference… ...... 6 2.3 Information Used… ...... 6 2.4 Site Visit by Qualified Persons… ...... 7
3.0 RELIANCE ON OTHER EXPERTS…...... ……8
4.0 PROPERTY LOCATION AND DESCRIPTION………………………9 4.1 Area of Property…………………………………………………9 4.2 Property Location……………………………………………….9 4.3 Tenure… ...... 9 4.4 Property Ownership… ...... 11 4.5 Royalties and Other Agreements… ...... 12 4.6 Environmental Liabilities… ...... 12 4.7 Permits and Obligations… ...... 12 4.8 Other Significant Factors… ...... 12
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 14 5.1 Physiography… ...... 14 5.2 Climate… ...... 17 5.3 Access… ...... 17 5.4 Local Resources… ...... 19 5.5 Surface Rights, Power, Water, Personnel and Potential Infrastructure Sites… ...... 20
6.0 HISTORY ...... 21 6.1 Prior Ownership… ...... 22 6.2 Previous Exploration… ...... 25 6.3 Historical Resource and Reserve Estimates… ...... 29 6.4 Historical Production… ...... 29
7.0 GEOLOGICAL SETTING AND MINERALIZATION...... 30 7.1 Regional Geology… ...... 30 7.2 Local Geology… ...... 30 7.3 Property Geology… ...... 33 7.4 Mineralization… ...... 39
8.0 DEPOSIT TYPES ...... 46
9.0 EXPLORATION ...... 49 9.1 EL2558… ...... 49 P9. 1.1 9.2 EL2559………………………………………………………….49 9.2.1 Procedures/Parameters of Surveys and Investigations……49 Sampling Methods and Sample Quality……………………..54 Relevant Information…………………………………………..55 Results and Interpretation…………………………………….56
SECTION DESCRIPTION PAGE
10.0 DRILLING ...... 75
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 76
12.0 DATA VERIFICATION...... 80
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING .... 81
14.0 MINERAL RESOURCE ESTIMATES ...... 82
15.0 - 22.0 SECTIONS NOT RELEVANT TO THIS REPORT
23.0 ADJACENT PROPERTIES ...... 84
24.0 OTHER RELEVANT DATA AND INFORMATION ...... 85
25.0 INTERPRETION AND CONCLUSIONS ...... 86
26.0 RECOMMENDATIONS ...... 89
27.0 REFERENCES ...... 92
28.0 DATE AND SIGNATURE PAGE ...... 95
29.0 CERTIFICATE OF QUALIFIED PERSONS ...... 96
LIST OF FIGURES
FIGURE NO. DESCRIPTION PAGE
Figure 1 Location image of Kainantu & South Kainantu tenements...... 9 Figure 2 Kainantu & South Kainantu tenement location in relation to other ELs/ELAs in the Kainantu District …………………………………….10 Figure 3 Main physiographic regions in PNG ...... 13 Figure 4 Elevation map of PNG ...... 14 Figure 5 Drainage system map of EL 2559 ...... 16 Figure 6 Precipitation and average dry days per month, Kainantu ...... 18 Figure 7 Average temperatures and precipitation, Kainantu...... 18 Figure 8 EL 2558 local access and major & minor settlements……………...18 Figure 9 EL 2559 local access and major & minor settlements……………...19 Figure 10 Location of mineral occurrences in the Kainantu District ...... 22 Figure 11 Historical assays of stream sediment samples, EL 2559 ...... 26 Figure 12 Historical assays of panned concentrate samples, EL 2559...... 27 Figure 13 Historical assays of rock chip samples, EL 2559 ...... 27 Figure 14 TMI imagery of the Barrick 2008 aeromagnetic survey, Kainantu ...28 Figure 15 The main geological elements of PNG……………………………….30 Figure 16 Kainantu geology, structure, & min occs.…………………………….32 Figure 17 Main geology elements of EL 2558…..…………………………….....34 Figure 18 Major structs in Bilimoia re EL 2558……………………………...... 36 Figure 19 Geology and structural map of EL 2559……………………………...39 Figure 20 Loc of EL 2558 in rel to struct corridor in Bilimoia…………………...40 Figure 21 Conceptual model for porphyry and related low & high sulphidation mineralization ...... 46 Figure 22 Schematic displaying skarn development in a calcareous unit adjacent to the causative intrusion ...... 48 Figure 23 Map of target areas where 2020 field survey conducted……………50 Figure 24 EL 2559 SS sample locations, 2019, Tirokave area………………...51 Figure 25 EL 2559 PC sample locations, 2019, Tirokave area…...... 52 Figure 26 EL 2559 RC sample locations, 2019 Tirokave area…………………52 Figure 27 EL 2559 All sample locations, 2020,……………….…………………53 Figure 28 EL 2559 Sample locations, 2020, Tirokave area…………………….54 Figure 39 EL 2559 Sample locations, 2020, Irafo area…………………………54 Figure 30 EL 2559 geology fact map of the 2019 mapping program………….56 Figure 31 EL 2559 Au/Cu anomalous stream sediments, 2019 program…….57 Figure 32 EL 2559 Au anomalous panned concentrates, 2019 program……..57 Figure 33 EL 2559 Au/Cu anomalous rock chips, 2019 program……………...58 Figure 34 EL 2559 Au/Cu anomalous soils/CC, 2019 program………………..58 Figure 35 EL 2559 Tirokave area, geology & structure, 2020...……………….59 Figure 36 EL 2559 Tirokave area, rose diagram plot of main structures……..67 Figure 37 EL 2559 Interpreted ring features……………………………………..68 Figure 38 EL 2559 Oblique look at 2 prominent ring features..………………..68 Figure 39 EL 2559 Tirokave, distribution of 2019-20 PC samps & Au ranges.69 Figure 40 EL 2559 Tirokave geochem anomaly summary map……………….72 Figure 41 EL 2559 Irafo geology map……..……………………………………..73 Figure 42 EL 2559 Irafo geochem summary map……………..………………..74 Figure 43 Location of Kainantu District in relation to known mineral deposits of PNG……………………………………………………………………84 Figure 44 EL 2558 drainages targetted for initial mapping & sampling……….89 LIST OF TABLES
TABLE NO. DESCRIPTION PAGE Table 1 Tenement Details for the Kainantu Project ELs ...... 10 Table 2 Tenement Details for the Kainantu Project ELAs ...... 10 Table 3 Local Resources to the Property…………………………………….19 Table 4 Historical ownership of tenements which overlapped EL 2559 ..... 23 Table 5 Regional rock formations of the Kainantu District ...... 33 Table 6 EL 2559: Type and quantity of samples taken, 2019 ...... 51 Table 7 EL 2559: Type and quantity of samples taken, 2020 ...... 53 Table 8 EL 2559: Anomalous PC samples, 2019-20...... 70 Table 9 EL 2559: Anomalous SS samples, 2019-20 ...... 70 Table 10 EL 2559: Anomalous RC & SO samples, 2019-20 ...... 71 Table 11 EL 2559 – Assay Values returned from Blanks – Q4 2019-Q1 20………77 Table 12 EL 2559 – Assay Values returned from Standard 1 – Q4 2019-Q1 20….77 Table 13 EL 2559 – Assay Values returned from Standard 2 – Q4 2019-Q1 20….78 Table 14 EL 2559 – Assay Values returned from Standard 3 – Q4 2019-Q1 20….78 Table 15 EL 2559 – Assay Values returned from Duplicates – Q4 2019-Q1 20…..78 Table 16 Proposed 18 month work plan & budget for Kainantu Project…....91
LIST OF PLATES
PLATE NO. DESCRIPTION PAGE
Frontispiece General View of the Tirokave Area, Central EL 2559
Plate 1 The southwestern portion of the EL 2558 area, looking SSE across the Ramu River floodplain towards the Bismark Range, marking the northeastern edge of the New Guinea Highlands…..15 Plate 2 The Parufi Ck. rapids flowing E to W, Tirokave……………………16 Plate 3 Parufi Ck. waterfall E of Kokopi camp area…………………….…..16 Plate 4 Typical lower montane forest of the Kainantu District ...... 17 Plate 5 Typical grassland cover of the Kainantu District ...... 17 Plate 6 Outcrop of phyllite, Bena Bena Metamorphics…………………...... 34 Plate 7 Outcrop of Akuna Igneous Complex rock ...... 35 Plate 8 Propylitized porphyritic diorite, example of Elandora Porphyry…...38 Plate 9 Well-rounded quartz and magnetite pebbles, Tirokave perched placer prospect………………………………………………………...42 Plate 10 Calc-silicate hosting finely disseminated & veinlet pyrite, Koiyamu/Aikoho Ck. junction ...... 43 Plates 11 a & b Medium to coarse flaky gold in magnetite-rich panned concentrate, Koiyamu Ck……………………………………………..43 Plate 12 Type 1, massive magnetite skarn ...... 44 Plate 13 Type 2, vesicular magnetite skarn…...... 44 Plate 14 Type 3, magnetite skarn with hematite, quartz, and base metal sulphides ...... 44 Plate 15 Sheeted and stockwork quartz-clay±limonite veinlets in strongly weathered clay-sericite(?) altered porphyritic diorite, upper road cutting NNW of Tirokave……………………………………………..45 Plate 16 Phyllite, Tirokave…………………...... 60 Plate 17 Chloritized hornfelsed siltstone, Tirokave…………………...... 60 Plate 18 Greywacke, Tirokave…………………...... 61 Plate 19 Unconsolidated conglomerate, Tirokave…………………...... 62 Plate 20 Hornblende diorite porphyry, Tirokave…………………...... 62 Plate 21 Quartz diorite porphyry, Tirokave…………………...... 63 Plate 22 Microdiorite, Tirokave…………………...... 64 Plate 23 Andesite, Tirokave…………………...... 64 Plate 24 Welded lithic tuff, Tirokave…………………...... 65 Plate 25 Welded ash tuff, Tirokave…………………...... 66 Plate 26 Adularia-quartz altered fault breccia, Tirokave…………………….71 Plate 27 Colloform banded quartz as matrix to hornfels clasts, Irafo………73
LIST OF APPENDICES
APPENDIX NO. DESCRIPTION
Appendix I EL 2558, EL 2559, El 2650, & EL 2652 Kainantu Project Exploration License Coordinates
1.0 SUMMARY
Introduction At the request of PLB Capital Corp (“PLB”), GJF Geological Services (“GJF”) was commissioned to prepare a National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) technical report on Exploration Licenses (ELs) 2558, 2559, 2650, and 2652 for the Kainantu Gold- Copper Project (the “Kainantu Project” or the “Properties”) in Papua New Guinea (PNG). It is intended that this report be used as an Independent Technical Report as part of the regulatory process to seek a listing on the TSX Venture Exchange (“TSX-V”).
This Technical Report has been prepared to comply with disclosure and reporting requirements set forth in NI 43-101, Companion Policy 43-101CP and Form 43-101F1. The effective date of this report is September 30, 2020.
GJF has based this report on information provided by Pacific Energy Consulting Limited (“PEC” or “the Company” or “the Owner”) as the current owners of the tenements, third party technical reports and other general website information, along with a site visit.
Property Location The Properties comprise a single rectangular shaped block of 40.92 km² (EL 2558) and three irregularly shaped contiguous blocks (ELs 2559, 2650, & 2652 totalling 494.45 km²) over or near current and historical gold-copper exploration targets. They are located within the Kainantu Goldfields, partly occupying the Kainantu and Henganofi Districts of the Eastern Highlands Province of PNG.
Ownership The Properties are 100% held under Exploration Licenses held by PEC, a private PNG company. Kainantu Resources Limited (“KRL”) has entered into an exclusive option agreement to acquire control of such Exploration Licenses and contiguous License Applications.
Tenure Both ELs 2558 and 2559 were issued to PEC by the PNG Mining Minister on August 29, 2018 for an initial two (2) year period (and applications have been made to renew such tenements in accordance with applicable law; with both tenements remaining on foot pending determination). Subject to certain government obligations they can be extended for a further two years repeatedly. Both ELs 2650 and 2652 were granted to PEC on September 10, 2020. The licenses allows for the prospecting of metals including Au, Cu, Ag, Pb, Zn and Fe, along with other associated metals. Two EL applications (ELAs) totalling 190.96 km² contiguous with the granted ELs are expected to be granted within 2020 and are also included in the agreement.
Accessibility, Climate, Local Resources, Infrastructure & Physiography The Properties lie near the eastern margin of the New Guinea highlands in an area of mostly rugged topography, with transecting rivers forming lower lying areas. Elevations range from 390m in the Ramu-Markham Valley to 2,400m above sea level. All major streams draining the tenement areas are perennial and vigorous. The drainage system in the areas display mainly dendritic patterns with the landforms highly dissected by the tributaries of these major rivers. Two main types of vegetation growing in the Kainantu area are tropical rainforest and lower-lying grassland induced by shifting agricultural practices.
The climate across the Property is variable due to topography. Daytime temperatures reach 30°C dropping to night time lows of 20°C. A pronounced wet season occurs between November and April, although rainfall is common throughout the year. Annual rainfall averages approximately 2,000 mm.
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The closest commercial airports to the Property are at Goroka and Lae, both serviced by daily flights from Port Moresby. Access to the Property is via the Highlands Highway, a bitumen sealed road linking Lae with Kainantu (193km) and onto Goroka (270km).
EL 2558 is close to the Ramu Highway, near Gusap. The village of Tirokave, centrally located within EL 2559, is linked by a 26km long unsealed 4WD road from a turn-off about 8km west of Kainantu. Branch roads within the EL offer reasonable access to most parts.
Historical Mining and Exploration Gold was first recorded in the Kainantu District by Ned Rowlands in 1928. Subsequent geological investigation and mapping by government agencies and private entities started in the early 1940’s and continues to this day.
The bulk of the exploration effort within the Kainantu District has focussed on the Bilimoia field, immediately SW of EL 2558 and about 34km NE of EL 2559, where several distinct high grade gold±copper lodes were discovered by various entities from the mid 60’s up to the present day. Highlands Pacific Ltd conducted mining operations there from 2005-09. Through Barrick, K92 Mining Inc. has since acquired the mine and surrounding tenements and recommenced production in 2018.
Closer to EL 2559, early exploration around Kainantu Township led to the discovery and selective mining of a number of intrusion-related precious and base metal deposits and prospects. Throughout the 1980’s and 90’s, several multi-national companies conducted regional exploration surveys around the tenements but barely surveyed within the present boundaries.
Within EL 2559, the Tirokave skarn and Tirokave placer Au prospects were recognized and explored by Highlands Gold Development N.L. in 1970-71 while in the late 1980s, Indaba Ltd conducted a comprehensive drainage mapping and sampling survey around the Tirokave area that resulted in several gold and copper anomalies and a recommendation for extensive soil sampling programs. However the ground was relinquished in 1990. A district scale aeromagnetic/radiometric survey commissioned by Barrick in 2008 covers the eastern 2/3rds of the present EL 2559. Little exploration work was recorded over EL 2558.
Geology The Kainantu Properties are located within the Papuan Mobile Belt, relatively close to its northern contact with the Finisterre Terrane. The properties are underlain by the Mesozoic Bena Bena Metamorphics unconformably overlain by Miocene age sedimentary and intermediate volcanic rocks of the Omaura and Yaveufa Formations. These formations were intruded in the mid-Miocene by the Akuna Intrusive Complex, which comprises multiple phases of mafic to felsic magma, represented in the Properties by a very small exposure mapped on the eastern edge of EL 2558, and two small intrusive bodies NW of Tirovake in EL 2559. Late Miocene age Elandora Porphyry is represented on the government geology sheet as a roughly circular unroofed batholithic body of around 20km² immediately NW of Tirokave, but is thought to be somewhat more complex, displaying extensive zoned hydrothermal alteration, a multi-intrusive lithological suite, and occasional hornfelsed (+ calc- silicate) country rock throughout.
Major regional structures are recognized proximal to and within the tenement with the dominant directions being northwest, parallel to the Markham Fault and the structural grain of the Papuan Mobile Belt, and northeast to north-northeast, parallel to and a possible extension of the Kainantu transfer structure, recognized as a significant control on mineralization within the district.
Mineralization Mineralization in the Kainantu District includes gold, silver and copper occurring in quartz-Au telluride veins, sulphide Au-Cu-Ag veins, porphyry Cu-Au-Mo systems, Au-base metal skarns and alluvial Au.
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Potential mineralization on the properties is recognized as occurring in at least three distinct porphyry- related styles, and one placer style. The porphyry styles are:
• Skarn Cu-Au (ELs 2559 & 2652): boulders of massive magnetite skarn, some containing quartz and copper sulphides, drain from a stream along the SW edge of the Elandora Porphyry body described above. This is in addition to the skarn previously worked by Highland Gold Development during the early 1970s.
• Porphyry Cu-Au (both ELs): In EL 2559, all of the Elandora Porphyry exposures so far mapped and observed in the field appear hydrothermally altered to some degree, with zonation thought to be complex. Potassic altered float has been recorded and a melanocratic variety of porphyritic diorite noted hosting finely disseminated copper-stained pyrite and/or bornite. Strongly weathered road cut exposures of clay-sericite(?) altered intrusive and country rock, some transected by sheeted and stockwork quartz-clay±limonite veinlets, are common throughout the Tirokave area. In EL 2558, such mineralization is conceptual at this stage, but based on detailed studies of nearby Au-Cu resources.
• Epithermal Au-Ag: Crustiform, colloform banded, and sugary quartz float has been recognized from streams draining the ridges southwest of the main intrusive as well as along the Onamunga River, south of Tirokave. Such textures may indicate the presence of epithermal style quartz veins peripheral to Elandora Porphyry/Akuna Intrusive complexes.
The placer style is represented by a perched quartz and magnetite pebble-rich body thought to be around 5m thick, and occasionally worked for alluvial gold by the local people, just south of Tirokave. Other such occurrences have been recognized by previous workers in the area.
Exploration Apart from a brief inspection and engagement with the local people, no exploration work has yet been done over EL 2558.
Recent exploration over EL 2559 by the Owner’s geologists and support crew during the last quarter of 2019 involved initially engaging with the local people, followed by a preliminary mapping and sampling drainage survey. This entailed standard stream sediment, panned concentrate and outcrop and float sampling.
This initial phase proved successful in delineating weak to strongly anomalous gold and copper values from rocks and sediments draining from the southern and southwestern edge of the large Elandora Porphyry body, as well as from hydrothermally altered and veined exposures closer to its center. This supported the findings of the previous survey conducted by Indaba Ltd over the same area during the late 1980s and pointed to the need for follow-up work over the lease.
Subsequent exploration conducted during Q1 plus April, 2020 over EL 2559 expanded the previous survey in the Tirokave area and included an initial drainage survey in the Irafo area, centered about 8km south of Tirokave.
The exploration surveys proved successful in both areas, with mapping and sampling near Tirokave identifying several Au-anomalous hydrothermally altered fault breccia bodies, while anomalous Au and associated elements were recorded within the headwaters of a radially draining ring feature. At least 3 other ring features ranging in diameter from 1.6km to 5km, were also recognized forming an approximately 10km northerly trending belt of potentially shallow-buried intrusive complexes, supported by historic and current exploration observations and results, within and adjacent to EL 2559.
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A work plan and budget for the following 18 months exploration over EL 2559 has been proposed. This will largely involve substantial ridge-and-spur soil sampling followed up by trenching to delineate drill targets for 2021. Work over EL 2558 will also commence about that time. Work plans and budgets for the newly-granted ELs 2650 and 2652 have yet to be formulated.
Drilling Apart from one unsuccessful diamond hole drilled 20.4m into pyrrhotite-rich skarn mineralization near Tirokave by Highlands Gold Development N. L. during the early 1970s, no drilling has been done over the Property.
Sample Preparation, Analyses and Security No material issues have been identified with the Company’s mapping and sampling protocols, with the data collection and management protocols in place being to industry standard and therefore enabling confidence that the samples are representative of the mineralization in grade and location.
The sample preparation and analytical work has been undertaken at fully accredited laboratories owned and run by an industry-leading analytical company. The analytical techniques for gold and other elements are considered appropriate for the styles of mineralization identified within the Project.
QA/QC protocols established by the Owner’s staff are of a robust nature but require further refinement in regards to appropriate choice of certified reference material for Au checks in particular. Possible cross-contamination of free Au bearing PC samples was also found to be an issue, but can be rectified in the field by a more rigorous approach to sample packaging and storage. In the opinion of GJF, the analytical results delivered by the Intertek Minerals laboratory are sufficiently reliable for the purpose of the current level of exploration.
Data Verification The Properties were visited by GJF during early December 2019. With only limited surface prospecting completed to that date, no assay results available at that time, and with only a short time frame, no geochemical verification samples were taken over the limited number of exposures observed. The site inspection by GJF noted that industry standard procedures appear to have been used in the initial mapping and sampling of the Property. Unfortunately the current situation has curtailed further planned site inspections by GJF.
Subsequent exploration progress over the properties, particularly EL 2559, has been regularly monitored by GJF via company reports and engagement with management and technical staff, reviewing original assay results, and logging in to PNG government mining related websites,
Apart from the recent granting of ELs 2650 and 2652 to PEC, GJF knows of no material changes that have occurred over the property since the time of the site inspection, December 2019.
Adjacent Properties Since the 1960s, there have been many and varied types of exploration and mining tenure over the Kainantu District, the predominant and longest-lived (since 1982) covering the Bilimoia field where gold mining has undergone another revival and K92 Mining Inc have declared the Kora/Kora North mine operational since February 2018. This company’s tenement package totals about 725km² (including a contiguous application) with its NE corner adjoining EL 2558 and its SW corner closest, at about 11km east, to a northeasterly corner of EL 2559. The Owner’s ELAs, which are expected to be granted within 2020, close this gap and adjoin the SW portion of the K92 tenement package. Apart from this, other companies’ tenement details in the district are unknown to GJF.
Conclusions and Recommendations 4
GJF considers that the Kainantu Properties have potential for discovery of economic Au-Cu-Ag porphyry/epithermal/skarn mineralization. The exploration strategy proposed by the Owner to explore the Properties is sound and follows normal industry doctrine. The 18 month work plan outlined in this report assumes progressive results throughout, but will incorporate sufficient decision points to allow advancing to a subsequent phase contingent with positive results from the previous phase.
Details of the estimated budget of ~US$850K for the EL 2559 work plan is as follows:
OPEX May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Total Days 31 30 31 31 30 31 30 31 31 28 31 30 31 30 31 31 30 31 Employees 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Expat Salaries $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 90,000 Staff Salaries $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 334,854 Casual (Geos x3 + Local labour) $ 7,268 $ 11,468 $ 10,418 $ 11,468 $ 12,518 $ 10,418 $ 10,418 $ 9,893 $ 9,893 $ 9,368 $ 10,418 $ 10,418 $ 10,418 $ 6,218 $ 8,318 $ 8,318 $ 8,318 $ 4,118 $ 169,665 Food and Messing $ 5,580 $ 5,400 $ 5,580 $ 5,580 $ 5,400 $ 5,580 $ 5,400 $ 5,580 $ 5,580 $ 5,040 $ 5,580 $ 5,400 $ 5,580 $ 5,400 $ 5,580 $ 5,580 $ 5,400 $ 93,240 Fuel $ 1,628 $ 1,575 $ 1,628 $ 1,628 $ 1,575 $ 1,628 $ 1,575 $ 1,628 $ 1,628 $ 1,470 $ 1,628 $ 1,575 $ 1,628 $ 1,575 $ 1,628 $ 1,628 $ 1,575 $ 27,195 Assay $ - $ 2,880 $ 2,880 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 2,880 $ 2,880 $ 1,440 $ - $ 60,480 Other (Sample bags, phone charges, Stationary, medical, Safety etc) $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 18,000 Rostered Travel (Domestic) $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 40,500 Rostered Travel (International) $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ 13,500 Visa Work Permits $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ 1,800 Contractors (Geophysics, Petrology, etc) $ 5,000 $ 5,000 Total $ 45,153 $ 53,301 $ 47,808 $ 49,973 $ 54,491 $ 45,548 $ 52,391 $ 48,398 $ 48,723 $ 47,176 $ 52,623 $ 45,316 $ 52,623 $ 44,491 $ 45,708 $ 45,383 $ 44,036 $ 31,096 $ 854,234
This budget includes provision for logistical support for the programs, consumables, interpretation of data, expansion of the number of personnel and in-country administration.
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2.0 INTRODUCTION
2.1. Issuer and Receiver
This report is an independent technical review of historic and current exploration activities, district precious and base metal occurrences, and a recommended work program and budget for “Pacific Energy Consulting Limited” (“PEC” or ”the Company” or “the Owner”)’s Kainantu Project, an early stage exploration project over properties located in the Eastern Highlands Province of PNG.
The receiver of the report will be “PLB Capital Corp.” (“PLB”) a company incorporated pursuant to the laws of the Province of British Columbia of 2040-885 West Georgia Street, Vancouver, British Columbia, V6C 3E8.
PLB wishes to conclude a transaction involving KRL as soon as reasonably practicable, whereby PLB will acquire, indirectly, all of the equity interests in KRL in exchange for PLB issuing equity to the ultimate shareholders of KRL, which equity would be traded on the TSX Venture Exchange (with KRL holding an option and exclusive rights in the Tenements of the Owner).
2.2. Terms of Reference
At the request of Mr. Matthew Salthouse (Executive Director of PEC-Mining), on behalf of PLB, PEC and “Kainantu Resources Limited” (“KRL”), “GJF Geological Services” (“GJF”) was commissioned in January 2020 to prepare an Independent Technical Report on the properties’ geology, an assessment and review of the current exploration work over EL 2559, along with recommendations for future exploration work (including a suitable work program and budget). This report has since been modified to reflect recent updates to property ownership, the proposed work plan and budget, and field work conducted over EL 2559 from Q1 2019 up until the effective date, September 30 2020. It also includes a merger of pertinent aspects of a technical report describing EL 2558 into this report.
This Technical Report has been prepared to comply with disclosure and reporting requirements set forth in NI 43-101, Companion Policy 43-101CP and Form 43-101F1.
PLB intends that this report be used as an Independent Technical Report as required under Part 4 of NI 43-101, as part of the regulatory process to seek a listing on the TSX-V.
The scope of GJF’s inquiries and of the report included the following:
• Site visit • Review related Company technical reports and exploration databases, • Review available historic exploration reports • Review current exploration results and future exploration direction, and • Complete a NI 43-101 Independent Technical Report.
2.3. Information Used
The principal sources of information used to compile this report comprise:
• Technical reports and data variously compiled by the Owner and its partners or consultants; • Discussions with the Owner’s management and exploration personnel; • Publicly available information; and • Site visit undertaken by Mr. Graeme Fleming.
The Owner has warranted to GJF that full disclosure has been made of all material information in its
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possession or knowledge and that such information is complete, accurate and true to the best of its knowledge. None of the information provided by the Owner has been specified as being confidential and not to be disclosed in this report. Readers of this report must appreciate that there is an inherent risk of error in the acquisition, processing and interpretation of geological and geophysical data.
Additional relevant data was derived by GJF from a number of sources listed under “References” (Section 27) of this report.
The results and opinions outlined in this report are dependent on the aforementioned information being current, accurate and complete as of the effective date of this report or as of dates indicated within this report, and the assumption that no information has been withheld which could impact the conclusions or recommendations herein.
2.4. Site Visit by Qualified Persons
The review of prospect areas within the Kainantu Project was conducted by Mr. Graeme Fleming who visited the Properties on 7th December, 2019. This involved a chartered helicopter flight from the provincial capital, Goroka, to the Properties in the morning, a brief over-flight of the terrain, field inspection of a skarn occurrence and local people’s gold panning activities within an active stream, along with a brief inspection of local diggings within a perched placer deposit. Evidence of widespread hydrothermal alteration was observed in road cuttings during the remainder of the vehicular survey before returning to Goroka. The 8th December was spent on a review of the Owner’s exploration to date and likely future direction, involving most of the people mentioned below.
Mr. Fleming was accompanied on the site visit by Mr. Matthew Salthouse (Executive Director of PEC- Mining), Mr. Yilmaz Yasar (Project Director, PEC- Mining), and Mr. Ozgur Zor (consultant) as well as by a number of the Owner’s geological and field staff.
Mr. Fleming has sufficient experience relevant to the hydrothermal style of gold-copper mineralization and deposits under consideration and to the activity which he is undertaking 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‟ (Australia); and as a Qualified Person as defined in NI 43-101 (Canada).
Mr. Fleming is a member of the Australian Institute of Geoscientists (MAIG) and the principal of GJF Geological Services of Lombok Barat, NTB, Indonesia.
While further site inspections by GJF had been planned to occur regularly throughout H1 2020, the current global virus pandemic has restricted travel to the property from overseas. GJF has regularly tracked the progress and results of the continued exploration of EL 2559 by the Owner’s field teams throughout 2020. The methods employed by GJF to monitor such work on the property is detailed in Section 12.0 – Data Verification, and concludes with the statement that GJF knows of no material changes that have occurred over the property since the time of the site inspection during December 2019.
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3.0 RELIANCE ON OTHER EXPERTS
Technical data provided by PEC from December 2019 to July 2020 for use by GJF in compiling this report is the result of work conducted, supervised, and/or verified by PEC’s professional staff and/or their consultants. Data used in this report have been verified where possible and GJF has no reason to believe that the data were not collected in a professional manner and has drawn its own conclusions augmented by direct field examination.
GJF has relied on reports, opinions or statements of legal or other experts who are not Qualified Persons for information concerning non-technical issues and factors relevant to this report.
Specifically, with regard to status and legal titles of the Kainantu Project, PEC’s Community & Government Affairs Officer, Mr. James Topo, has kept GJF informed in a timely manner. Throughout 2020, GJF has also regularly referred to the PNG Mining Cadastre Portal website (portal.mra.gov.pg/Map/) to further confirm and track any changes to PEC’s leasehold status.
Mr. Topo has also been helpful in apprising GJF of the current community affairs status within the areas covered by the existing leases.
Mr. Matthew Salthouse, (Executive Director of PEC-Mining), has familiarized GJF as to the nature of the exclusive option agreement between PEC and KRL with regard to the latter’s right to acquire control of the relevant Properties.
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4.0 PROPERTY LOCATION AND DESCRIPTION
4.1 Area and Status of Properties
The Kainantu Project Properties, designated EL 2558 “Kainantu” and ELs 2559, 2650, & 2652 “South Kainantu”, comprise respectively a single rectangular shaped block of 40.92 Km² and three irregularly shaped contiguous blocks totalling 494.45 Km² proximal or covering historic and current gold-copper mineral occurrences. Two EL applications, totalling 190.96 Km² and more or less contiguous with the granted ELs are pending and considered likely to be granted within 2020 but are not covered in any technical detail in this report. These applications are also included in the agreement between PEC and KRL regarding the latter’s rights to acquire the properties.
Considering ELs 2650 & 2652 have only recently been granted, these tenements are also not covered in any technical detail, apart from relevant historical exploration references, in this report.
4.2 Location of Properties
EL 2558 – Kainantu is located on the border between the Eastern Highlands and Morobe Provinces of Papua New Guinea, centered on 6°05’00” S Latitude and 145°55’30” E Longitude, 138km west- northwest of Lae, PNG’s second largest city, and 60km east of the Eastern Highland’s provincial capital, Goroka (Figure 1).
EL 2559 – SW Kainantu is located within the Kainantu Goldfields in the Eastern Highlands Province of Papua New Guinea, centered on Tirokave Village, 6°22’19” S Latitude and 145°39’02” E Longitude, 154km west-northwest of Lae and 43km SE of Goroka. ELs 2650 and 2652 are contiguous with EL 2559 to the east and west respectively (Figure 1).
Figure 1: Location Image of Kainantu & South Kainantu Tenements; GJF, 2020
4.3. Tenure
Mining Tenure – General
Tenements are issued by the PNG Mining Minister on recommendation from the Mining Advisory Council (MAC) under the Mining Act 1992. The Head of State, acting on advice from the National
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Executive Council issues the special Mining Lease whilst the Minister for Mining issues the other types of licenses. The relevant tenement is:
Exploration License (EL)
An exploration license may be granted for a term not exceeding two years, which may be extended for periods not exceeding 2 years. The area of land in respect of which an exploration license may be granted shall be no more than 750 sub-blocks (one sub-block = 3.41 km² ) and one area comprising one sub-block or more than one sub-block, each of which shall share a common side with at least one other such sub-block.
Tenure – EL 2558 - Kainantu and EL 2559, 2650, & 2652 - South Kainantu
The property comprises four exploration licenses, EL2558 - Kainantu and EL 2559, 2650, & 2652 - South Kainantu, for gold and other minerals. A tenement map is shown below in Figure 2 and tenement details are summarized in Table 1. Corner coordinates can be found in Appendix 1.
Within the same district, The Owner has applied for two other leases: ELA 2655, contiguous to the southeast of EL 2558 and ELA 2660, contiguous to the east of EL 2650. Tenement details for these applications are summarized in Table 2. The Owner’s combined leases and applications are contiguous to the NE and SW with K92 Mining Inc’s tenement package, with both companies’ combined tenement packages covering the bulk of the Kainantu Goldfields District. The ELAs are awaiting Warden’s hearings and Mining Advisory Council deliberations and as such, apart from noting anticipated tenure, none of the ELAs are addressed in this report.
Figure 2: Kainantu & South Kainantu tenement location in relation to other ELs/ELAs in the Kainantu District; modified from Buku, S., PEC 2020
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GJF has not undertaken any title search or due diligence on the tenement titles or tenement conditions, apart from consulting the PNG Government’s Mining website, and the tenement’s status has not been independently verified by GJF.
Pacific Energy Consulting Ltd (PEC), a company incorporated in Papua New Guinea, is the registered holder of EL 2558, EL 2559, EL 2650, and EL 2652 in PNG (MRA, 2019 & 2020), as issued by the applicable government authorities in accordance with the PNG Mining Act 1992 (the "Mining Act"). KRL holds an exclusive option agreement over all of the ELs mentioned above and described in Table 1, along with the ELAs described in Table 2.
Table 1: Tenement Details for the Kainantu Project Exploration Licenses Expenditure Area Licence Licence No. Holder Grant Date Expiry Date Commitment/Yr km2 (PGK)
Aug 28, Pacific Energy Aug 29, Kainantu EL 2558 2020 225.06 26,400** Consulting Ltd 2018 (pending renewal)*
Aug 28, 2020 SW Pacific Energy Aug 29, EL 2559 (pending 40.92 4,800** Kainantu Consulting Ltd 2018 renewal)*
Pacific Energy Sept 10, Sept 9, Avaniofi EL 2650 143.22 16,800** Consulting Ltd 2020 2022
Pacific Energy Sept 10, Sept 9, Tapo EL 2652 126.17 14,800** Consulting Ltd 2020 2022
* Note: Tenement remains on foot under PNG law pending determination of renewal application **Note: Currency exchange mid-rate at time of writing was 1USD = 3.4865PGK
Table 2: Tenement Details for the Kainantu Project Exploration License Applications Licence Licence Application Area Application Applicant Application Date km2 No.
Pacific Energy Jan 23, Lae, Morobe ELA 2655 88.66 Consulting Ltd 2020
Pacific Energy Feb 24, Sonofi ELA 2660 102.30 Consulting Ltd 2020
4.4 Property Ownership
The EL and ELA tenement package described above is owned 100% by the Owner and subject to an exclusive option agreement to the benefit of KRL.
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To the extent known by GJF, there are no other option agreements or joint venture terms in place for the property.
To the extent known by GJF, there are no other significant factors and risks that may affect access, title, or the right or ability to perform work on the property.
4.5 Royalties and Other Agreements
There appear to be no royalties (other than the mandated government royalties under the Mining Act for any future production), back-in rights, payments, or other agreements or encumbrances on the Property.
Fees applied by the Ministry of Energy and Mining in the EL periods include an annual rent of PGK 26.39 (approximately US$7.75) per square kilometer. This translates to PGK 1,080 for EL 2558, PGK 5,940 for EL 2559, PGK 3,780 for EL 2650 and PGK 3,330 for EL 2652.
The minimum expenditure required to be spent annually in connection with an approved program shall be as prescribed. In the cases of the Owner’s ELs, they are detailed in Table 1.
4.6 Environmental Liabilities and Compensation
No environmental studies have been required nor undertaken on the Project to date.
PEC has adopted the rates from the Valuer General in terms of applying compensation for land use and vegetation clearance.
4.7 Permits and Obligations
Aside from the approved EL, no other permits are required to conduct exploration programs. There are no known environmental impediments either existing or foreseeable.
4.8 Other Significant Factors
Social and Community
Whilst the Mining Act grants wide ranging rights to the EL holder, engagement with the local community is essential in maintaining harmonious relations throughout the exploration area. As part of community relations building, the Owner partakes in customary obligations such as providing certain items for feasts and local community leaders meetings and gatherings.
The Owner’s Community & Government Affairs (CA) section is responsible for overseeing engagement with the local and host communities in all of the Owner’s tenements and areas of operation. Its goal is to ensure that all relevant stakeholders, especially the landowners and landowning community are fully aware and consent to the Owner’s operations.
The Owner’s CA’s engagements with the local and host communities include general community relations concerns such as information awareness and community assistance programs, as well as specific concerns regarding lands and compensation, social mapping, grievance registration and management, and sustainable development initiatives in terms of social and infrastructure development, business development opportunities and management assistance to aid the communities in managing the impact of the projects and the opportunities it provides, as the project moves from exploration to construction and operation. 12
The important part of this equation is that in PNG, land is customarily owned by the local people in each of their communities so maintaining community consent ensures the ‘social license to operate’ which directly translates to project security.
However, there is no guarantee that future surface rights agreements with landowners will be obtained under favourable terms or at all. Notwithstanding this, there is no reason to believe that future agreements will not be readily entered into under similar terms to those previously applicable.
In relation to EL 2558, the precedence set by numerous negotiations, successful or otherwise, between whatever companies variously held the adjacent K92 tenement package since the 1980s and those that claimed, rightly or wrongly, to be landowners, has finally resulted in a workable contract between the current legitimate stakeholders.
The main issue to date regarding the EL 2558 - Kainantu tenement currently being negotiated is the landholders’ desire for an all-embracing, pre-exploration Memorandum of Agreement (MOA) as opposed to the Owner’s requirement for appropriate incremental adjustments of the MOA to reflect the progressive stages of exploration and development of the tenement. It is believed by the Owner that, as many of the current stakeholders of the tenement are common to some of those of the K92 agreement, an understanding of the issues involved can be more readily grasped by those stakeholders, and subsequent negotiations will progress rapidly and efficiently.
The Tirokave-Kokopi locale within EL 2559 can be considered a high-risk working area because of decades-long sporadic tribal conflict. A method of monitoring such activities for swift detection will be initiated while appropriate channels of communication with police and/or other security forces need to be established.
The company will also review the standard of health care in this remote area to ensure an acceptable level is always maintained, particularly for its staff and local area employees.
The Owner intends to be involved in road & bridge maintenance to assist both the Owner’s work force and the local communities.
Climate
Exploration work may be delayed from time to time, due mainly to essential road maintenance during the months of high rainfall.
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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Physiography
5.1.1 EL 2558 – Kainantu
EL 2558 straddles part of the northeastern edge of the New Guinea highlands defined by the Ramu River valley (Figure 3). Elevations within the region range from 300m to 2,500m above sea level (asl) (Figure 4) while those within the Property range from 390m to 500m asl in the valley floor, northeast of the river to up to 1,000m asl in the northern foothills of the Bismark Range, southwest of the river.
Figure 3: Main physiographic regions in PNG showing the approximate location of Kainantu; modified from Dow & Plane, 1965.
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Figure 4: Elevation map of Papua New Guinea; National Geophysical Data Centre, National Oceanic & Atmospheric Administration, U.S. Dept of Commerce.
All the streams draining the southern part of tenement area flow northwards into the Ramu River which more or less diagonally bisects the EL from the southeast to the northwest. The southern streams are short and steep, displaying a dendritic pattern, while the Ramu River is somewhat more mature and meanders through its flat floodplain which makes a stark contrast with the rugged topography forming the northern foothills of the Bismark Range, New Guinea Highlands (Plate 1).
Plate 1: The southwestern portion of the EL 2558 area, looking SSE across the Ramu River floodplain towards the Bismark Range, marking the northeastern edge of the New Guinea Highlands. K92 Mining’s access road is in the foreground; Tate, 2004.
The two main types of vegetation growing in the Kainantu District are basically tropical rainforest and grassland. The rainforest is characterized by dense undergrowth and difficult to penetrate in areas where paths are not well defined. The larger valleys and basins, along with hills, are dominated by induced kunai grassland, due to de-forestation by continual burning and the practice of shifting agriculture.
The Ramu River valley has long been a commercial farming area for both livestock and a variety of
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crops, sugarcane being predominate. The remainder of the tenement covers foothills of the highlands and is largely grassland except where remnants of forest occupy the steeper drainages (Plate 1).
5.1.2 EL 2559 – Southwest Kainantu
The Southwest Kainantu Property, EL 2559, lies near the eastern limit of the New Guinea highlands (Figure 3) in an area of mostly rugged topography, with transecting rivers forming lower lying areas. Elevations range from 1,600m to 2,500m above sea level (Figure 4).
All the major streams draining the tenement area are perennial and vigorous (Plate 2). The main rivers are the Orlowat, Penimaka, Ramu and Gafutina. The drainage system in the area displays a dendritic pattern with the landforms highly dissected by the tributaries of these major rivers (Plate 3).
Plate 2: The Parufi River rapids flowing east to Plate 3: Parufi River, waterfall east of Kokopi west, Tirokave. camp area.
Within the southern portion of EL 2559, the Kratke Range forms a prominent watershed between tributaries draining north into Orlowat River and those draining south to Penimaka River (Figure 5).
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Figure 5: Drainage system map of EL2559; PEC, 2020
Mt Kasiviga, the highest peak in the tenement standing around 2400m above sea level, was observed during the mapping program.
The two main types of vegetation growing in the Kainantu area are basically tropical rainforest and grassland. The rainforest is characterized by dense undergrowth (Plate 4) and difficult to penetrate in areas where paths are not well defined. The larger valleys and basins are dominated by induced grassland, mainly kunai, (Plate 5) due to de-forestation by continual burning and the practice of shifting agriculture.
Plate 4: Typical lower montane forest Plate 5: Typical grassland cover of of the SW Kainantu area. the Kainantu District
5.2 Climate
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The climate of the Kainantu area is classified under the “tierra templada” zone of Koppen’s climatic classification (Koppen, 1931). It is a zone of temperate climate, especially tropical land of 600 to 1800m elevation in which the temperature is modified by the elevation.
The climate across the Property is variable due to topography. Hot temperatures and wet conditions characterize the climate at Kainantu. Daytime temperatures reach 30°C dropping to night time lows of 20°C. A pronounced wet season occurs between November and April, although rainfall is common throughout the year. Rainfall averages 235 mm/month during the November to April wet season, and 137 mm/month during the dry season. Annual rainfall averages approximately 2000 mm. Project operation/exploration is subject to the weather; reduced visibility when cloudy prevents operation of helicopters and heavy rainfall or earthquakes (low-moderate frequency – Makrup et al, 2018) can trigger landslides.
The precipitation diagram below (figure 6) for Kainantu displays a pattern of drier mid-years. The blue shades show the measurement of rainfall per month and the yellow shade shows the number of days without rainfall.
Figure 7 exhibits the varying temperatures and rainfall throughout the year within the Kainantu district. The mean daily maximum is represented by a solid red line while the mean daily minimum is denoted by a solid blue line. Hot days and cold nights (dashed red and blue lines) show the average of the hottest day and coldest night of each month.
Figure 6: Precipitation and average dry days Figure 7: Average temperatures & precipitation per month, Kainantu; Meteoblue Weather, 2019 of Kainantu; Meteoblue Weather, 2019.
5.3 Access
The closest commercial airports to the Properties are the Goroka airport in Goroka and Nazab airport near Lae. Both airports are serviced by daily flights from the Nation’s capital, Port Moresby. Lae is the capital city of the Morobe Province and the second largest city in PNG, hosting its largest cargo port. Goroka is the capital of the Eastern Highlands Province. Apart from some scattered private airstrips, including Gusap adjacent to EL 2558, there are no airports situated close to the exploration sites. Access to the Properties is via the Highlands Highway, a bitumen sealed national highway stretching from Lae WNW to beyond the Western Highlands. The estimated distance by road from Lae to Goroka is about 270km. The distance from Goroka to Kainantu is approximately 77km and about 193km from Kainantu to Lae.
Access to EL 2558 is via the Highlands and Ramu Highway, bitumen sealed national highways. The Highlands Highway stretches from Lae WNW to beyond the Western Highlands while the Ramu Highway branches off at Watarais junction and continues on to Madang, a further 175km away. About 13.5km northwest from Watarais, opposite the northwestern end of the Gusap airstrip and nearly coinciding with the northeast corner of the tenement block, a well-formed gravel road branches off to the southwest,
18 crosses the Ramu River, and leads to the base of the foothills within the tenement, about 5.5km from the highway. The road continues on to the K92 Mine operations (Figure 8). The estimated distance by road from Lae to the approximate center of the Property is 175km. The distance from Goroka to the Property, via Kainantu, is about 140km, and from Kainantu, 45km.
Figure 8: EL 2558 local access, settlements, & other features; modified from Google Earth base, 2020
Access to the village of Tirokave, centrally located within EL 2559, is via a 26km long unsealed road from a turn-off about 8km west of the administrative center of Kainantu (Figure 9). Four-wheel drive vehicles must be used from that point onward. This road can be adversely affected by high rainfall during the wet season. Branch roads within the EL offer reasonable access to most parts. The 2019-20 field team was stationed at Wanoka and Kokopi areas which is about 2km WSW of Tirokave for the duration of the initial mapping and sampling program.
Figure 9: EL 2559 local access and major & minor settlements; modified after PEC, 2020
5.4 Local Resources
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The current Tirokave camp site is located 227km from Lae, 34km from Kainantu and 95km from Goroka (Table 3). Goroka is the Capital of Eastern Highlands Province and contains Local and Provincial Level Government Offices. Table 3. Local Resources to the Properties; modified from Woodward et al, 2018 Local Resources Lae Goroka Kainantu
Population: ~100,700 ~18,500 ~6,700
Elevation: 10m 1600m 1570m
Road distance to Lae: - 270km 193km Road Distance to center of EL 2558 175km 140km 45km
Road Distance to Tirokave, EL 2559: 227km 95km 34km 1 x Runway Length: 2 x Runways Airport: 2440m Private use Max length 1646m
3 x flights daily.
1hr flight from Port Commercial air travel: + 11 x flights daily No Moresby. Schools, hospital, School, hospital, Facilities: Many police station, district police station, and provincial court, district court, fuel tertiary education, stations, banks. fuel stations, banks Local Level Gov Offs
Yonki Dam and Ramu Hydro Electric Power Station: Yonki Dam provides water for the Ramu Hydro Power Station and the Yonki Toe of Dam Power Station operated by PNG Power Ltd. The Dam commissioned in 1991 on the upper Ramu River, has a 335M m3 capacity, a 60m high earth fill dam wall with 680m long crest. Mining Projects including Hidden Valley created a need for additional power output. The Yonki Toe of Dam Project was commissioned in 2013 to help meet that requirement. Currently the Ramu 1 Hydro Power station is supplying 54 MW from three generators on to the Ramu Grid while the Yonki Toe of Dam supplies 14MW. They are supplemented by 4MW from the Pauanda Hydro Power station, 10MW from the Baiune Hydro Power station at Bulolo in Morobe Province and a combined thermal generation capacity of 20MW from the diesel power stations in Lae, Madang and the Highlands centres, giving a total generation capacity of 102MW into the Ramu Grid (PNG Power website, 2014). The grid serves Lae, Madang & Gusap in the Mamose Region, and Wabag, Mendi, Mt Hagen, Kundiawa, Goroka, Kainantu and Yonki in the Highlands. Local Airstrips Although privately operated, several scattered airstrips within and in reasonable proximity to ELs 2558 and 2559 could possibly be used in emergency situations. Probably the most useful would be the Aiyura strip near Kainantu. Another is the Gusap Airstrip, a fully licenced, international grass strip located in the Ramu Valley and maintained jointly by the K92 mining project and Ramu Agricultural Industries.
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5.5 Surface Rights, Power, Water, Personnel & Potential Infrastructure Sites
Surface Rights
With the issued Exploration License, the Owner has all the appropriate surface rights applicable to mineral exploration.
Power
Should prospects within the Property be progressed via exploration to a mining operation, power sources would be addressed in a feasibility study.
Water
The relatively high rainfall and presence of several perennial rivers within the Property suggests that water supplies would be sufficient for any future mine development.
Personnel
At the present exploration stage there is thought to be a sufficient number of un-to-semi skilled labour within the tenement area to effectively execute the planned programs.
Potential Infrastructure Sites
With large tracts of communal grassland and forestry land, it is thought that sufficient areas exist for potential infrastructure sites should any mining operation be established.
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6.0 HISTORY
Gold was first recorded in the district by Ned Rowlands in 1928 from a small creek draining into Abinakenu Creek in the Kainantu alluvial gold areas. Subsequent geological investigation and mapping of the Central Highlands including Kainantu District was conducted in the early 1940’s to late 1950’s by several petroleum and mineral exploration companies and government geologists. Investigations of mineralized areas had been made in the late 1950’s to early 1960’s by Resident Geological Staff, New Guinea Mines Division (Dow and Plane, Best, 1958; Davies, 1958; Dow, 1959, 1961, and 1963). However, modern exploration did not commence within the area until the early 1970’s.
The bulk of the exploration effort within the Kainantu District has focussed on the Bilimoia field, centered about 16km north of Kainantu township and about 34km northeast of Tirokave, where several distinct high grade gold±copper lodes were discovered by various entities from the mid 60’s up to the present day: The southern end of the Irumafimpa lodes was discovered some time prior to 1967, while the Kora lode was worked by private investors between 1967 and 1970, producing about 1,000 tonnes of gold and copper ore averaging three ounces recovered gold to the ton (Woodward et al, 2018). Between 1969 and 1972, most reconnaissance work concentrated on the Yonki copper-gold lode, south of Abinakenu Creek. After EL 470 was initially granted to Renison Goldfields Consoldated (RGC) on 7th May 1982, work continued intermittently within the Bilimoia field via several tenement renewals and grants and involved, at various times, an assortment of companies such as Highlands Gold Ltd, (HGL), Placer, Highlands Pacific Ltd (HPL), Greater Pacific Ltd, Nippon Metals and Mining Company, Barrick Gold, and currently K92 Mining Inc. via a series of joint ventures, take-overs, pull-outs, terminations, acquisitions, and other agreements. During this time, often quite detailed and focussed exploration work involving mapping, sampling, trenching, drilling, and geophysics (ground and airborne magnetics/radiometrics, CSAMT, IP) was undertaken and indicated a very high potential for a significant tonnage of high-grade gold mineralization within the Kora, Irumafimpa, Maniape and Arakompa vein systems, the latter two situated between 2 and 4.5km from the southwest corner of EL 2558. HPL commenced mining operations on the Irumafimpa deposit in 2005. However, the mine struggled to achieve planned mined grades through a combination of complexity of geology and unplanned dilution. The operation had been put on care and maintenance since January 2009. By this time, Barrick had acquired all the assets, conducted further exploration and resource evaluation of the Kora deposit and prioritized the discovery of economic porphyry copper-gold mineralization. K92 Mining Inc. has since acquired the tenement package and, after further infill drilling, including from underground, and a refurbishment of the mine and mill, announced the restart of commercial production from the Kora/Kora North mine effective February 1, 2018. While all this was happening, local people had started mining shallow oxidized zones of the Irumafimpa vein in 1992 after the discovery of the outcrop by Highlands Gold Ltd. Surface mining at all of the major mineralized structures continues today, and provides a significant source of income for the local people. Closer to EL 2559, early exploration around Kainantu Township led to the discovery and selective mining of a number of deposits & prospects (Figure 9) such as Aifunka Hill, supposed skarn-related mineralization where the Barola reefs mine produced 371.5 oz Au from 1953-61, Kathnell (shear-hosted Au, open cut and underground mined from 1965-67, 507oz Au produced from 3,500t), the Yonki and Aianora Cu±Au skarn prospects, the Yompossa porphyry Cu-Au prospect with one DDH intersecting 60m @ 0.3% Cu, 0.1g/t Au, and the Kunurunta porphyry Cu prospect. Further SW, the Tirokave* skarn and Tirokave placer Au prospects were recognized and explored by Highlands Gold Development N.L. in 1970-71 (Figure 10, Table 3).
*Spelt “Tirokavi” in some of the literature.
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Figure 10: Location of mineral occurrences in the Kainantu District relative to ELs 2558 & 2559; modified after Arumba et al 1994
6.1 Prior Ownership
Previous tenement holdings which partly overlapped the current EL 2558 area are detailed in Table 4, following page.
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Table 4: Historical Ownership of Tenements which Overlapped the EL 2558 Area
Previous tenement holdings which partly overlapped the current EL 2559 area are detailed in Table 4, following page.
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Table 4: Historical Ownership of Tenements which Overlapped the EL 2559 Area EL 2559 - SW KAINANTU - HISTORIC ELs Original Tenement Years Company Notes / Comments No. / Name Kennecott Explorations Extensive drainage survey for Cu/Au mineralization. Little reported over EL2559 area. Covered Bilimoia and surrounds 05/05/66-05/05/69 EL18 (Aust) PL including a very small slice of the NE corner of ELA 2650. "Part B" partly covered EL 2559. In the Tirokavi area a massive sulphide deposit in a contact zone between a "decomposed" porphyritic hanging wall and indurated dolomite was discovered…"The sulphides appear to be copper stained and are magnetic". Sampling of costeans & pits, and later 3 adits in the massive pyrrhotite lode dipping shallowly SW returned 5,000ppm Cu, Highlands Gold 28/01/70 - ?/10/71 PA117 300ppm Co, & 2ppm Ag, Au not reported. Minor zone of chrysacolla in serpentinite returned 9.8% Cu & 0.15% Ni (Forster, Development N.L. 70/100). One DDH was drilled to 62', intersecting the pyrrhotite-mnr pyrite lodes at 40'-45' and 47'9"-55'. The first interval assayed only trace to 0.01dwt Au, same for Ag, and from 520ppm to 840ppm Cu from 5 foot sampling intervals. No results available for the 2nd interval (Forster, 71/138). EOP. Comprehensive regional exploration program over an area of 3,376km² and involving 3 phases of helicopter supported recon 05/07/82-Present over the first 2 years. Work included airborne mag survey, geological mapping, stream sed., pan conc., rock chip and soil sampling plus more detailed work over individual prospects. That portion of the EL Renison Goldfields Covered a large portion of the eastern sector of present EL 2559, since relinquished. Mentions limited drainage sampling of EL470 covering present EL Consolidated southern flank of Mt. Yanguteia Area, ~6km south of Henganofi, shedding porphyry and hydrothermally altered rock, alluvial 2559 was Au in some drainages. No results available. relinquished pre-1987 After several relinquishments, EL was pared down to cover the Bilimoia area and currently forms part of the tenement package owned by K92 Mining.
Covered a 2,200km² area immediately west & north of the tenement including a very small slice of the NW corner of EL 2559 11/06/87-20/11/91 Lomino/Highlands Gold Ltd EL755 - Yaveufa & ELA 2652. Follow-up of 19 regional anoms discouraging. Relinquished. Poseidon Exploration / Covered a 2,100km² area immediately SE of the tenement including a portion of the SE corner of EL 2559. Target was Carlin 11/06/87-21/08/89 Freeport Australian EL762 - Lamaria River style disseminated Au. Follow-up of a small number of regional anoms generated in first-pass program was discouraging. Minerals Ltd Relinquished. Covered most of the eastern half of present EL 2559, since relinquished. A total of 126 panned concentrate, 217 stream sediment and 23 rock chip samples were derived from streams that drain the Elandora Porphyry, Akuna Intrusive Complex 26/07/88-27/04/90 Keyte/Tischler (Indaba PL) EL857 - Kainantu and Omaura Greywacke in the Tirokavi-Tebeo areas. Many low to moderate level Au anomalies in stream sediments, high level pan con anoms, and 2 x RCs returning 0.54ppm Au & 1,950ppm Cu and 0.1ppm Au & 2,110ppm Cu. Extensive follow-up work recommended, but no records of any such work available. Covered the area immediately SE as well as the SE quarter of present EL 2559, since relinquished. Some detailed drainage 29/08/94-15/05/96 Canada Pacific PL EL1114 - Kainantu sampling for Au-Ag-Cu described in the Moife-Osena area, south of Tirokave, but no record of follow-up available. Covered the area immediately west and north as well stretching east to surround the Bilimoia leases. Overlap occured in the 30/05/97-30/05/99 Canada Pacific PL EL1139 - Kainantu northern and most of the western sectors of present EL 2559, since relinquished. Little information available.
6.2 Previous Exploration
Prior to 1970, no mineral occurrences are known to have been reported from either the EL 2558 or EL 2559 tenement areas. This situation remained constant up until present day for EL 2558.
From 1970 to 1971, Highlands Gold Development N.L. (HGD) held a Prospecting Authority (PA117) over two parts: Part A covered the Mt. Ubank and Mt Victor/Clarks Ridge area, SSE of Kainantu (Figure 9), while Part B covered the Tirokave area. During reconnaissance exploration in early 1970, a massive sulphide lode was identified near Tirokave. No location data was available at time of writing.
The sulphides were dominated by pyrrhotite and minor pyrite and as described, occurred in lenses along a shallowly SW dipping contact zone between a hanging wall of “decomposed” (possibly weathered and hydrothermally altered) porphyry and an underlying fine grained indurated “greenstone” (possibly epidote-bearing calc-silicate). Minor chrysacolla-bearing serpentinite with one sample assaying 9.8% Cu and 0.15% Ni (Forster, 70/100) was also reported during reconnaissance prospecting in other areas of “Part B”.
The prospect was initially test pitted and costeaned with samples reported as returning 5,000ppm Cu, 300ppm Co and 2ppm Ag (Forster, 70/100) while three evenly spaced (“100 foot centers”, about 30.5m) adits were driven into the exposure. Due mainly to the friable nature of the hanging wall rocks, only one of these was successful in breaking through the contact zone. A later DDH was drilled to 67 feet (about 20.4m) before the machine broke down, forcing an end to the program in October 1971. Drill results for Au & Ag were disappointing, from trace to 0.01dwt, while 320ppm to 840ppm Cu was returned from 3 samples, all from 5 foot intervals (Forster, 71/138). The description of the drilling program is sketchy, and no other prospecting work was reported.
During the early 1980s to early 1990s, several companies, including RGC, Lomino/Highlands Gold Ltd, and Poseidon Exploration/Freeport Australian Minerals Ltd, all holding large scale tenements, skirted around the edges of the EL 2559 area while undertaking regional drainage reconnaissance surveys for mainly Au-Cu mineralization. No record of any geochemical anomalies attributable to these surveys can be found from the Tirokave area, apart from a brief RGC assessment of the Mt Yanguteia area.
In a 1986 annual report on exploration of PA 470, RGC describes reconnaissance prospecting over Mt. Yanguteia located 6km south of Henganofi. This would place it within the northwest portion of EL 2559, about 9km NW of Tirokave. Anomalous panned concentrates, including visible gold, in association with porphyritic rocks, possible hornfels, and hydrothermal alteration was reported from 3 streams draining the southern flanks of the mountain, however, no geochemistry was recorded. A large portion of PA 470 that included the Mt. Yanguteia area was, by government requirement, relinquished by RGC soon after.
In the late 1980’s most of the eastern portion of the current tenement around the Tirokave and nearby Tebeo areas was acquired by Indaba Pty Ltd for Au-Cu exploration. They commented favourably on the extent of hydrothermal alteration throughout the area. A total of 217 stream sediment, 126 panned concentrate, and 23 rock chip samples were taken along streams that drain the Elandora Porphyry, Akuna Intrusive Complex and Omaura Greywacke in the Tirokave-Tebeo areas. Comparative assay results of these samples were plotted on maps and included as part of the reports by Indaba on EL 857 (Figures 11 to 13).
Most of the stream sediments taken around Tirokave range from 0.01 to 1ppm Au, with the highest 4.64ppm (S#281214) from Tebeo (eastern area).
Generally, most pan concentrate samples from Tirokave contain 50% magnetite in the heavy mineral fraction and exhibit colours of gold. Nine samples returned highly anomalous gold (>500ppm) from the 26 Tebeo area.
Although many rock chip samples were taken, only 23 were assayed. According to results Sample #381490 in the Kokopi area (south) assayed 0.1ppm gold and 2,110ppm copper and S#381587 near Tigunta (north) returned results of 0.54ppm gold and 1,950ppm copper.
Several sites in the Tirokave-Tebeo-Tigunta areas were earmarked for soil sampling, but such programs were not reported on. The EL was later relinquished by Indaba in April 1990.
Figure 11: Historical assay ranges of stream sediment samples, Tirokave-Tebeo area; Kimala et al, 1988
27
Figure 12: Historical assay ranges of pan concentrate samples, Tirokave-Tebeo area; Kimala et al, 1988
Figure 13: Historical assay ranges of rock chip samples, Tirokave-Tebeo area; Kimala et al, 1988
Canada Pacific PL explored in the area from 1994 to 1999 with 2 ELs overlapping the NW corner and the SE corner of EL 2559. They concentrated mainly on the Mt. Victor area. In an annual report on the exploration of EL 1114 (Hembling, J. N., 1995), they describe a brief sampling and mapping reconnaissance program over the Moife-Irafo area which lies in the central southern portion of EL 2559,
28 about 8km south of Tirokave. Although a number of streams displayed visible gold in panned concentrates, and sulphide-rich rock chip samples (up to 20% py/cpy) were taken from 14 locations, only weakly anomalous gold was returned. Some encouragement was returned from stream sediment samples with the highest at 1.08ppm Au from a stream draining from the north of Moife. No other work was reported over the EL 2559 area.
After Barrick Gold acquired the Bilimoia tenement package in December 2007, they signaled their early intent to prioritize the exploration of economic porphyry Cu-Au mineralization within the district by commissioning a 25,510 line-Km aeromagnetic/radiometrics survey covering their newly purchased leases and a large portion of the surrounding countryside. The data were acquired between March and July 2008 by Perth-based UTS Geophysics using a helicopter-borne stinger system flown with a nominal terrain clearance of 50m and a line spacing of 200m. The extensive survey covered most of EL 2558 and two thirds to half of the EL 2559 and 2652 areas on their eastern side and all of EL 2650 along with substantial portions of the Owner’s ELAs (Figure 14).
Figure 14: TMI imagery of the Barrick 2008 aeromagnetic survey showing the Owner’s & K92’s tenement packages
No further exploration work is known to have been undertaken over the EL 2559 area before The Owner
29 acquired the lease in 2018.
6.3 Historical Resource and Reserve Estimates
Historical resource or reserve estimates have not been reported from any of the ELs 2558, 2559, 2650, and 2652.
6.4 Historical Production
Mining in the Kainantu Goldfields District dates back to the 1930s. However, within the Properties there are no official records of any mineral production, although some local diggings in small placer Au deposits is highly probable.
30
7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Kainantu region is located in the northeastern flank of the northwest trending Papuan Mobile Belt which is a major foreland thrust belt (Rogerson et al., 1987). The regional structural package of the Kainantu district is bounded in the northeast by the northwest trending Ramu-Markham Fault, a major suture zone that marks the northern margin of the Australian Craton, and in the southeast by the Aure Deformation Zone (Figure 15). Many of the major structures in the New Guinea Thrust Belt represent crustal-scale thrust faults and host fragments of obducted oceanic crust. The belt is characterized by Late Miocene, sub- horizontal to shallowly north-dipping, stacked thrust sheets of regionally metamorphosed and strongly cleaved Triassic to Eocene fine-grained sedimentary rocks and minor volcanic rocks. Following a middle Oligocene hiatus, siliciclastic sediments, carbonates and volcanic rocks were deposited until thrusting began in the middle Miocene (Rogerson et al, 1987; Dobmeier et al, 2012) accompanied by middle Miocene intrusions. A mild orogeny in Late Tertiary time folded and faulted Tertiary rocks and has continued to the present day (Dow and Plane, 1965). The belt is characterized by a number of north-northeast trending fault zones that commonly host major ore deposits (Figure 43).
. Kainantu
Figure 15: The main geological elements of PNG; modified from Williamson and Hancock, 2005
7.2 Local Geology
The Kainantu District is underlain by an uplifted metamorphic basement comprising the Early Mesozoic Bena Bena Metamorphics composed of pelite, psammite, conglomerate and marl beds intruded by gneissic granitoids and metamorphosed to greenschist to amphibolite grade. Mid Oligocene-Mid Miocene 31 sedimentary and volcaniclastic rocks of the Omaura and Yaveufa Formations deposited after a period of hiatus during Cretaceous and Paleocene-Eocene due to collision/accretion unconformably overly the basement. These successions were intruded by Miocene age stocks, dykes and diatreme breccia pipes of ultramafic to felsic composition of the Akuna Intrusive Complex and the Elandora porphyry.
A north-northeast trending transfer structure transects the area, with associated mineralization, alteration and porphyry complexes aligned along it (Figure 16).
32 Figure 16: Kainantu District geology, structure, significant mines & mineral occurrences, and K92 Mining Inc’s Tenements in relation to the Owners Tenements; modified after 1:100K Kainantu Geological Sheet and Downes et al, 1994
Table 5 below outlines the relationships of the rock units of the Kainantu District. A more detailed description of the major units follows under section 7.3.
33
Table 5: Regional rock formations of the Kainantu District; modified from Woodward et al, 2018
Age Rock Unit Names & Descriptions Recent Quaternary Kainantu Formation – basal fluvial conglomerate, sandstone and mudstone overlain by thin bedded tephra ~~~Unconformity~~~ Late Miocene Elandora Porphyry – intermediate dykes, sills and stocks Early-Mid Miocene Akuna Intrusive Complex – ranges in composition from olivine gabbros through to granodiorites. Early–Mid Miocene Yaveufa Formation – basaltic and andesitic agglomerates, lithic tuffs, volcaniclastic sandstone and limestone. Late Oligocene-Early Omaura Formation – thin bedded to laminated calcareous Miocene siltstone and mudstone. ~~~Unconformity~~~ Early Mesozoic Bena Bena Metamorphics – pelite, psammite, conglomerate and marl metamorphosed to schist and phyllite. Gneissic granite.
7.3 Property Geology
7.3.1 EL 2558 – Kainantu
Bena Bena Metamorphics/Goroka Formation (Early Mesozoic)
The Property is underlain by basement rocks of the Goroka Formation consisting of metamorphosed and sheared intermediate to felsic pyroclastic rocks and sedimentary units (Plate 6). The metamorphic grade of these units ranges from the biotite zone (greenschist facies) to amphibolite facies. These crop out mainly in elevated areas within the southwest portion of the tenement area (Figure 17).
Omaura Formation (Late Oligocene-Early Miocene)
The Omaura Formation (aka the Omaura Greywacke) is the predominant rock unit, underlying most of the southern half of the tenement (Figure 17). It is comprised of fine to medium-grained greywacke, commonly calcareous, with interbedded siltstone and minor fossiliferous limestone lenses, arkose, and pebble conglomerate. It is extensively folded, faulted and veined (Tingey and Grainger, 1976).
34
Plate 6: Outcrop of phyllite, Bena Bena Metamorphics
Figure 17: The main geological elements of EL 2558 and surrounds: Mb: Bena Bena Formation; Mg: Goroka Formation, Tou: Omaura Formation, Tmak: Akuna Intrusive Complex, Qphf: Quaternary piedmont-slope deposits; modified after Tingey & Grainger, 1976 35
Akuna Intrusive Complex (Early to Mid-Miocene)
The Akuna Intrusive Complex intrudes the Bena Bena Metamorphics west of the tenement as well as the Omaura Formation immediately east and further south of the tenement. It occurs in the district generally as large batholithic bodies, but closer to the tenement as small stocks and dykes. It is alternatively referred to as Akuna Dolerite (Dow and Plane, 1965), and is generally of mafic composition. Rock types include olivine gabbro, hornblende gabbro, porphyritic dolerite, diorite, granodiorite, minor peridotite and serpentinite (Tingey and Grainger, 1976, Plate 7).
Plate 7: Outcrop of Akuna Intrusive Complex rock
Recent Quaternary Sediments
This comprises a combination of both riverbed and terrace alluvium, primarily associated with the Ramu, Baupa, and Kumian stream systems, flanked by piedmont slope deposits derived from both the Highlands and the Finisterre Terrane infilling the Ramu River Valley.
Structure
The southern half of the EL2558-Kainantu tenement is located within the New Guinea Thrust Belt, close to its northern contact with the Finisterre Terrane. The contact is denoted by the northwest trending Ramu-Markham fault, a major suture zone that marks the northern margin of the Australian Craton. The New Guinea Thrust Belt displays evidence of an early Miocene or older ductile, tight folding event that was followed by middle Miocene intrusions. Late Miocene regional scale low-angle thrust faulting followed, associated with the collision of the Finisterre Terrane (Vigar et al, 2015). Prominent NW trending faults parallel the Markham Fault system and display a protracted history of activity.
The belt is characterised by a number of northeast to north-northeast trending fault zones that commonly host major ore deposits (Hill et al., 2003). Structures in this orientation might be expected to display a dilatant character during any NE-SW compression resulting from plate collision. The most prominent of these structures are inferred to represent arc-normal transfer structures which may localize porphyry intrusions (Corbett, 1994). Within the Kainantu District, the intersection of NW trending structures, formed 36 parallel to the Markham Fault, with NE to NNE trending transfer structures are associated with porphyry intrusions, and control vein distribution (Figures 18 & 20, Corbett et al, 1994).
Figure 18: Major structures in relation to mineralization, Bilimoia field, showing location of the southern half of EL 2558; modified after Espi et al, 2007. 37 7.3.2 EL 2559 – Southwest Kainantu
Omaura Formation (Late Oligocene-Early Miocene)
The Omaura Formation (aka the Omaura Greywacke) is the predominant rock unit, underlying more than 50% of the tenement (Figure 15). It is composed of fine to medium-grained greywacke, commonly calcareous, with interbedded siltstone and minor fossiliferous limestone lenses, arkose, and pebble conglomerate. It is extensively folded, faulted and veined (Tingey and Grainger, 1976).
Yaveufa Formation (Early to Mid-Miocene)
The Yaveufa Formation conformably overlies the Omaura Formation (Dow and Plane, 1965; Bain and Mackenzie, 1974; Tingey and Grainger, 1976; Rogerson et al., 1982). It occurs in the southeastern, part of the northern, as well as the southwestern corner of the tenement.
It consists of interfingering and interbedded volcanolithic sediments and volcanics. The volcanolithic sediments consist of waterlaid tuff, polymict pebble, cobble, and boulder volcanolithic conglomerate, greywacke, and calcarenite which commonly contains volcanic detritus. The volcanics consist predominantly of coarse red, purple, or multicoloured agglomerate interbedded with subordinate reddish or dark grey to black porphyritic basic lavas, volcanolithic rudite, and welded ash flow tuff. Zeolites are common, particularly in the agglomerate, both as infillings in vesicles and other cavities, and as veins. The agglomerate consists of angular to subrounded fragments of porphyritic amygdaloidal basic lavas set in a zeolite-bearing matrix of coarse crystal-lithic tuff.
The formation has been described by Dow and Plane (1965): The larger fragments are rounded to subangular pebbles and cobbles of basalt, gabbro, andesite, and silicified siltstone. The matrix is an unsorted crystal and lithic tuff made up of the following angular fragments in order of decreasing abundance: basalt and andesite, siltstone, plagioclase, augite, and quartz. The matrix is generally considerably altered to chlorite, epidote, and kaolinite; and the sedimentary rock fragments are commonly epidotized near their margins. The predominance of conglomerate and the presence of lenses of reef limestone indicate that beds were laid down in shallow water.
Intrusive rocks
The tenement encompasses some of the Neogene porphyritic mafic to intermediate intrusive rocks that crop out as batholiths, stocks and dyke swarms. Their radiometric ages range from 18 Ma to 7 Ma, which appears consistent with known more definitive stratigraphic relationships. It was also shown that within this time range, two distinct phases of plutonism occurred and that the second phase from 9 Ma to 7 Ma was often associated with magmatic hydrothermal Cu-Au-Ag mineralization. The earlier phase is named Akuna-type, and the later phase Elandora-type (Rogerson and Williamson, 1986).
Akuna-type intrusives tend to form large complexes (eg. Akuna Intrusive Complex, Bismarck Intrusive Complex) in outcrop area, displaying a wide variety of fractionated compositions from pyroxenite, gabbro, diorite to granodiorite. In contrast to Akuna-type, Elandora-type intrusives (Elandora Porphyry, Yandera porphyries) generally form microdioritic, often tabular stocks, dykes and dyke swarms, some of which intrude Akuna-type masses. Many bodies and parts of individual bodies display propylitic alteration assemblages, with argillic, phyllic and silicic alteration being locally dominant. Elandora-type intrusives are apparently associated with either areas of outcropping basement or areas underlain at shallow depth by basement (Rogerson and Williamson, 1986).
38 • Akuna Intrusive Complex (Early to Mid-Miocene)
The Akuna Intrusive Complex intrudes the Late Oligocene to Early Miocene Omaura Greywacke and occurs as small stocks and crops out approximately 5km northeast of Tirokave. It is alternatively referred to as Akuna Dolerite (Dow and Plane, 1965), and is generally of mafic composition. Rock types include olivine gabbro, hornblende gabbro, porphyritic dolerite, diorite, granodiorite, minor peridotite and serpentinite (Tingey and Grainger, 1976). The Akuna Intrusive that crops out northeast of Tirokave is serpentinite and believed to be a differentiate of the complex which was probably emplaced later than the main intrusions (Dow and Plane, 1965).
• Elandora Porphyry (Late Miocene)
The Late Miocene Elandora Porphyry is an intrusive body of intermediate composition that occurs as dykes and batholiths within the tenement. It intrudes the Omaura Greywacke and Yaveufa Formation. A massive body is exposed at the center of the tenement near Tirokave village, with a smaller body located on the eastern edge of the tenement, southeast of Tirokave. This intrusive body is composed mainly of hornblende andesite porphyry consisting of phenocrysts of andesite, hornblende, and minor pyroxene in a very fine-grained granular groundmass (Plate 8). The groundmass is composed of feldspar together with some quartz, hornblende and epidote. Accessory minerals are iron oxide, apatite and zircon. Propylitic alteration is common in this unit (Rogerson and Williamson, 1986).
Plate 8: Example of propylitized, phenocryst-crowded Elandora Porphyry from near Kokopi camp
39 Structure
Two major regional structures recognized proximal to and within the tenement are the northwest trending Puburamba Fault and the semi-parallel Orlowat Syncline (Figure 16). The Puburamaba Fault delimits the Omaura Greywacke in the southwestern corner of the tenement. The Orlowat Syncline is symmetrical and its limbs dip between 30° and 60°. Minor irregular folds and reversals of dip occur on the limbs of the syncline. These features have probably been caused by subaqueous slumping during deposition, and by drag-folding of the less competent beds on the limbs of the syncline.
A northeast trending normal fault southeast of Tirokave village truncates Orlowat Syncline and forms the contact between the Yaveufa Formation to the southeast and the Omaura Greywacke to the northwest. It is seen displacing the limestone beds of the Omaura Greywacke east of Tirokave village. Displacement on the fault is about 550m and downthrow is to the east.
Three major northwest trending faults, again parallel with the Orlowat Syncline, in the northern portion of the tenement transect the Yaveufa Formation. The more northeasterly fault forms the contact between Yaveufa Formation and Omaura Greywacke. The structural orientation and nature of the displacement are yet to be studied.
Figure 19: Geology and structural map of EL2559; Modified from PNG Geological Survey, 250K Markham sheet.
7.4 Mineralization
Mineralization in the Kainantu District includes gold, silver and copper occurring in quartz-Au telluride veins, sulphide Au-Cu-Ag veins, porphyry Cu-Au-Mo systems, Au-base metal skarns and alluvial Au.
7.4.1 EL 2558 Kainantu
Within EL 2558 itself, there are no known records of any mineral occurrence. Previous companies’ exploration efforts have largely concentrated on the Bilimoia field, immediately to the southwest.
40 Prominent NNE trending mineralization-controlling structures occur within 2.5km of the SW corner of EL 2558 (Figure 20). They comprise the large-scale Maniape Structure, localizing, through dextral rotation (Corbett, 1994) the Maniape gold prospect, as well as several smaller scale sub-parallel structures controlling veins of the Arakompa gold prospect. These structures fall within the northern portion of the Kathnell-Arakompa Corridor, a broad (~2.5km wide) linear NNE trending feature associated with several known precious-base metal prospects of the Kainantu District scattered within or adjacent to its ~20km length. This corridor projects into the southwest portion of EL 2558 (Figure 20).
Figure 20: The location of EL 2558 in relation to significant mineralized structural corridors in the Bilimoia field; modified after Vigar et al, 2015.
The Arakompa-Maniape vein systems, along with the north to northwesterly trending veins further southwest, such as Kora and Irumafimpa, display multistage vein and breccia development as well as complex mineralogy involving precious and base metals accompanied by W, Te, Bi, and Sn. This is further addressed in Sections 8 & 9, below.
All the above-named systems occur within a larger mineralized area, approximately 5 × 5 km, with complex multiphase intrusions, breccias, and diatremes and comprise multiple occurrences of Au-bearing veins and porphyry Cu-Au mineralization. Gold occurs over considerable vertical extents as shoots, either at the intersections of pre-existing major Markham Fault related structures with cross structures, or as en echelon features developed by movement on the major structures. Elandora style porphyries and porphyry fragment-bearing diatreme breccias occur in association with much of the structurally controlled vein mineralization.
Fluid inclusion, gold fineness, vein paragenesis and mineral distribution indicate that the Arakompa vein system is proximal to a porphyry source at depth, whereas the carbonate-base metal gold system at Maniape to the west is inferred to be distal to the same porphyry system. A fluid flow pattern is defined from the mineral zonation and it is suggested that the mineralizing porphyry has possibly been emplaced at the intersection of the Arakompa structures and the contact between the Akuna granodiorite and Bena-Bena 41 Metamorphics (Corbett et al, 1994) and/or pre-existing NW trending and steeply SW dipping structures representing uplifted elements of the Markham Fault System. Thus the inferred porphyry source of the Arakompa-Maniape vein systems is interpreted to lie within a few kilometers of the edge of EL 2558, along a significant NNE trending structural corridor.
While the Elandora Porphyry has been interpreted by most workers as the prime mineralizing agent within the Kainantu District, certain phases of the Akuna Intrusive Complex are also noted to be altered and mineralized, not completely ruling out the possibility of its having contributed to the mineral endowment of the district. At least one small body has been mapped on the eastern edge of the tenement (Figure 11), while a brief reconnaissance of the lease has identified Akuna Complex dykes of limited size intruding along the predominantly NW trending cleavage plane of the metamorphic host rocks. It may be interpreted that the presence of a shallowly buried mineralizing intrusive body(s) possibly underlies a portion of the southern half of EL 2558.
The presence of numerous high-sulphidation lithocaps and diatremes in the wider Bilimoia area are positive signs of potential for the further discovery of porphyry-style mineralization. Significantly, historical and current exploration activities both within and peripheral to this area have identified further signs of vein, porphyry-style, and alkali intrusion-related mineralization.
It must be stated herein that the information detailed in this section is not necessarily indicative of the mineralization in the EL 2558 property.
7.4.2 EL 2559 Southwest Kainantu
Previous exploration by various entities over the EL 2559 tenement area outlined at least two alluvial gold prospects and probable skarn style mineralization along with some encouraging gold and copper drainage anomalies (section 6). It is reported by local people/prospectors that visible colours of gold can be panned from several streams within the tenement.
Placer Style:
During the current exploration phase undertaken by PEC geologists since early October 2019, at least one placer style gold prospect, sporadically worked by the local people, has been partially delineated. It is perched on a ridge top and straddles the road immediately south of Tirokave Village. It is thought to be up to 5m thick and contains lenses of well-rounded quartz pebbles in association with surprisingly large well- rounded pebbles of magnetite set in a reddish brown silty clay matrix (Plate 9). The underlying basement appears to be a strongly weathered clay altered breccia of indeterminate origin and composition. While the roundness of the pebbles would normally indicate a distal source, the size of the magnetite pebbles suggests otherwise. A relatively nearby source derived from an agglomerate/conglomerate/breccia body has been suggested.
42
Plate 9: Well-rounded quartz and magnetite pebbles in the Tirokave perched placer prospect
Skarn Style:
While the prospect referred to as the “Tirokave Skarn” in the literature was not located during the current exploration phase, angular boulders of massive variably hematite-quartz-base metal (particularly copper) sulphide bearing magnetite skarn up to 4m in diameter were traced nearly 2km up Koiyamu Creek and into Aikoho Creek, the junction approximately 3km west of Tirokave Village. These streams drain the southern flank of Mt. Kasiviga, at around 2,400m the highest point within the tenement. Although no outcrop of the skarn was noted, the scree slopes adjacent to the streams, particularly to the west, include abundant cobble-sized magnetite-bearing rocks. Within the streams, sporadic outcrops of porphyritic microdiorite, thought to represent the Elandora Porphyry, were mapped together with a small exposure of a rock resembling a calc-silicate, likely a metosomatized calcareous unit of the Omaura Formation, bearing disseminated and veinlet pyrite (Plate 10), a possible host to, or at least associated with, the magnetite skarn. Gold is occasionally panned by the local people along Koiyamu Creek, downstream from the locations described above. The gold is often medium to coarse and flaky (Plates 11a & 11b).
43
Plate 10: Calc-silicate hosting finely disseminated and veinlet pyrite, Koiyamu Ck. / Aikoho Ck. Junction
Plates 11a & 11b: Medium to coarse flaky gold in magnetite-rich panned concentrate, Koiyamu Ck.
Although many of the above occurrences fall just outside of the tenement boundary, the source of the skarn boulders may well underlie the lease.
44 Three different types of skarn mineralization were identified here. All are interpreted to be exoskarns. The significance and spatial relationships of these skarn types and their theoretical interrelationships with a causative intrusion is diagrammatically exhibited in Section 8. Deposit Types.
1. A massive very fine grained magnetite-dominated skarn (Plate 12). This type has a very high rock strength.
2. A vesicular generally massive rock with fine to medium magnetite crystals and a higher hematite content (Plate 13). Bornite, chalcopyrite and chalcocite were also noted in this type which has a low to medium strength and can easily be broken down with a hammer.
3. A hematite-richer phase that is still dominated by massive magnetite with minor fine to medium magnetite crystals (Plate 14). This type also hosts crustiform quartz along with copper and other base metal sulphides.
Plate 12: Type 1, massive Plate 13: Type 2, vesicular Plate 14: Type 3, magnetite magnetite skarn magnetite skarn skarn with hematite, quartz, and base metal sulphides
Porphyry Style:
The known porphyry (along with higher level hydrothermal) copper-gold prospects of the Kainantu District, as well as elsewhere (e.g. Wafi, A. Williamson, pers. com) are largely linked by many authors to the Late Miocene Elandora porphyry although the Early-Mid Miocene Akuna Intrusive Complex is known to also exhibit weak to moderate hydrothermal alteration and mineralization in certain areas.
Both intrusive stages are represented in the Tirokave area (Figure 19). The older Akuna complex has been mapped in two small slightly elongate (NW) bodies situated between 2.5Km and 5km NE of Tirokave, while the Elandora Porphyry forms a largely unroofed, more or less circular body averaging about 4.5km in diameter with Tirokave on its southeastern edge. The former rock type has not been inspected during the current exploration stage, hence the following discussion on mineralization relates solely to observations of those exposures of the Elandora Porphyry and surrounding country rocks recently mapped and sampled.
A road traverse from the Kokopi Village camp site about 3.5km ENE to the Tirokave road junction, then 2.5km NNW to a road cutting, rising about 440m in total, reveals both broad alteration zonation and the multiphase nature of the porphyry body. The southern exposures near the low-lying Kokopi camp appear weakly chlorite-clay altered whereas the upper road cuttings, close to the center of the batholith, expose sheeted quartz-clay±limonite veinlets in strongly clay-sericite(?) altered porphyritic microdiorite masked by equally strong oxidation (Plate 15). The rocks along the road cuttings immediately east and out to at least 3.5km from Tirovake on the road to Kainantu also appear strongly clay-sericite(?) altered. Due to the 45 sporadic nature of the exposures, it must be stressed that this cannot be interpreted as simple zonation without more rigorous work, but the apparent scale of the alteration package must be considered encouraging.
Plate 15: Sheeted and stockwork quartz-clay±limonite veinlets in strongly weathered clay- sericite(?) altered porphyritic diorite, upper road cutting near the center of the Elandora Porphyry body, 2.2 km NNW of Tirokave.
In fact, such alteration zonation is more likely to be complex rather than simple as mapping has revealed a variety of interrelated intrusive lithologies underlying the porphyry area: feldspar diorite porphyry, hornblende diorite, microdiorite, granodiorite, hornblende andesite porphyry, and andesite were all mapped in various locations. In one outcrop in the Parufi River, which drains the center of the batholith, a more melanocratic variety of the hornblende diorite was noted hosting weak to moderate finely disseminated bornite or at least copper-stained pyrite. Both alteration and mineralization in the area are expected to be variably telescoped.
The porphyry body and its peripheries, along with the Akuna intrusives, clearly require some diligent mapping and sampling in the near future.
Epithermal Style:
Scattered float of crustiform, colloform banded, and sugary quartz was noted in streams draining the ridges west of the above skarn occurrences as well as along the Onamunga River, south of Tirokave. Such textures may indicate the presence of epithermal style quartz veins peripheral to Elandora Porphyry/Akuna Intrusive complexes, similar to those found in the Bilimoia field, and are targeted for follow-up mapping during future exploration stages.
46
8.0 Deposit Types
Gold mineralization in Papua New Guinea is associated with intermediate and acid intrusions into a variety of host rocks (Sheppard and Cranfield, 2012).The New Guinea Thrust Belt hosts intrusion-related gold and copper mineralization, which were developed in two periods: during the older Sepik Event (30– 22 Ma), and during the younger Maramuni Event (<17 Ma) (Sheppard and Cranfield, 2012). The Maramuni Event represents the main period of magmatism and related mineralization on mainland PNG.
Mineralization related to intrusions (schematically represented in Figure 21) of intermediate composition of the Maramuni Event occurs along the whole length of the belt from Indonesia-PNG border to the Wau district south of the Huon Gulf, and sporadically into the offshore Papuan Islands (e.g. Woodlark Island). Notable prospects in the New Guinea Thrust Belt associated with the Maramuni Event include Frieda, Yandera (porphyry Cu–Mo–Au), Nena (high-sulphidation epithermal Cu–Au) and Kainantu (low- sulphidation epithermal Au) (Page and McDougall, 1972; Rogerson and Williamson, 1986; Espi et al., 2002).
Figure 21. Conceptual model for porphyry and related low and high sulphidation mineralization; Corbett & Leach, 1997
In the central part of the New Guinea Orogen uplift and erosion has exposed granite batholiths of the Maramuni Event: for example, the Morobe Granodiorite (Wau–Bulolo), the Bismarck Intrusive Complex (Yandera), and the Akuna Intrusive Complex (Kainantu area), each of which host younger intrusions with associated Cu–Au mineralization.
Precious/base metal mineralization and alteration are generally associated with phases of Elandora-type intrusives. The common occurrence of the mineralizing phase of the Elandora-type as dykes and dyke swarms of limited extent often localized within mineralized Elandora- or Akuna-type intrusives suggests they generally constitute small targets (Rogerson and Williamson, 1986). 47
Metal values within the intrusives are generally lower than those in the adjacent country rocks, exoskarns or veins related to the intrusive. Intrusion invariably results in local fracturing of the host rocks, usually accompanied by weak, though pervasive propylitic alteration. These features are enhanced when intrusion takes place in areas of pre-existing faults. Minor, local argillic alteration assemblages characterised by the occurrence of clay pyrite may develop in areas of these pre-existing structures.
Close to EL 2558, evidence of porphyry related mineralization is widespread within the Bilimoia field. However, while early exploration models emphasized the epithermal and porphyry geological setting, these models were later refined by Espi et al (2007), who recognised that the high-grade quartz-Au- telluride veins overprinting per cent Cu grades in the sulphide-rich Au-Cu-Ag event were likely a significant separate event that was perhaps not directly connected to the porphyry Cu-Au mineralization seen nearby at the surface. The association with an earlier W-bearing phase within the same structures and with Sn and Bi tellurides suggested that they should be classed as ‘intrusion-related gold’, with both mesothermal (sulphide-dominant) and epithermal (quartz telluride) components active at different times and space. A direct magmatic input is suggested (Espi et al, 2007), and the consistent Au-Te association is interpreted to indicate an alkalic intrusion source at depth (Vigar et al, 2015).
Within the Arakompa vein system, the gold is of a high fineness (723-995 average 877), which is characteristic of quartz-sulphide systems transitional between porphyry Cu/Au and carbonate-base metal gold systems (Leach and Corbett, 1994). The higher salinity fluids and presence of Bi-Te phases indicates mineralization at Arakompa involved a significant influx of magmatic-derived fluids.
Various factors indicate that Maniape represents the transition from classical carbonate-base metal systems to the shallower level epithermal colloform banded quartz-adularia-clay style of vein systems such as Tolukuma (Corbett et al., 1994) and Cracow (Corbett and Leach, 1994). These factors include:
1. a low average gold fineness (average 690); 2. the relatively low fluid inclusion temperatures during gold mineralization (200-250°C); 3. the abundance of Ag-rich phases; 4. the association of gold with hematite, indicative of the presence of significantly oxidizing conditions; 5. the occurrence of low temperature clays within the mineralized veins.
Given the relative close proximity of the Arakompa-Maniape systems to EL 2558, along with their rather complex array of metalliferous minerals - an alkalic intrusion geochemical signature includes: Au, Ag, As, Sb, Pb, Zn, F, Ba, V, Te, Bi (Schroeter et al, 1996) – and interpreted multi-generic deposit type associations, it would appear that further exploration of the southern portion of EL 2558 will require a sampling & mapping program designed to identify any of the above described deposit types.
Within EL 2559, precious/base metal mineralization is thought to be best developed in the country rocks and ranges from locally developed, thin, randomly oriented networks of pyritic fractures, through small veins and stringers, to more pervasive, extensive stockwork veining. Skarn lenses hosting pyrite, pyrrhotite, gold, sphalerite, chalcopyrite, magnetite and minor galena with various combinations of pyroxene, epidote, garnet and quartz, may develop within calcareous strata adjacent to the intrusives (Figure 22).
48
Figure 22: Schematic displaying skarn development in a calcareous unit adjacent to the causative intrusion. Variations of skarn mineralogy due to fluid flow dynamics is thought to be exemplified in EL 2559 by recently sampled specimens (inserts); Source: Cadia Mine, NSW, Australia.
Field mapping and observations during late 2019 by the Owner’s geologists and the author over the central section of EL 2559 have led to the belief that potentially of 4 types of precious±base metal deposits could be targetted for future exploration here:
• Placer Au, particularly within perched terraces. The large size of magnetite pebbles within at least one of these occurrences also suggest a proximal source (agglomerate/conglomerate/breccia?)
• Skarn Cu-Au-Ag
• Epithermal Au-Ag, particularly low to intermediate sulphidation styles
• Porphyry Cu-Au
This is supported in part by previous work done over the property and also by the prevalence of such deposits in similar geological and structural settings throughout the remainder of the Kainantu District.
49
9.0 EXPLORATION
9.1. EL 2558
9.1.1 Procedures/Parameters of Surveys and Investigations
Apart from a brief inspection during the latter half of 2019, the Owner is yet to begin systematic exploration over EL 2558. Initial geological observations have confirmed the presence of dykes, likely derived from an underlying Akuna Intrusive Complex body within the Project area. This is considered encouraging enough to warrant the continuation of the exploration program.
The majority of the Owner’s Exploration & Mining Division activities to date have been focussed on preparation of the initial reconnaissance survey (Section 26 – Recommendations) and engagement with the local people (Section 4.8).
As part of its country-wide evaluation, relevant historical exploration and mining data together with topography and geology maps (1:250,000 and 1:100,000 scales) have been sourced from several entities including government agencies and published technical papers.
9.2 EL 2559
9.2.1 Procedures/Parameters of Surveys and Investigations
The Owner conducted exploration activities over EL 2559 Southwest Kainantu during the last quarter of 2019 to the end of April 2020. The majority of the Owner’s Exploration & Mining Division activities to date have been focussed on preparation and implementation of the initial reconnaissance survey during Q4 2019, follow-up surveys and expansion of the exploration area during early 2020, and continual engagement with the local people (Section 4.8).
Data Compilation
As part of its country-wide evaluation, historical exploration and mining data together with topography and geology maps (1:250,000 and 1:100,000 scales) have been sourced from several entities including government agencies and published technical papers.
Field Program
The 2019 field program over EL2559 consisted of geological mapping in conjunction with geochemical sampling of the Kokopi-Tirokave area, which was considered to be one of the more prospective and easily accessible areas of the Property.
Initial reconnaissance field work was carried out from 25th September to 12th December, 2019 by 7 staff from the Owner’s Exploration and Mining Division. This comprised 3 exploration geologists, 1 graduate geologist, and 2 geological/logistical technical officers, overseen by the Exploration Manager and supported by 1 to 2 hire 4WD vehicles. Local labour was hired when and where appropriate. A management/consultants’ inspection of various key sites was undertaken on the 7th December.
The field team was stationed at the Wanoka-Kokopi area which is about 2km south west of Tirokave for the duration of the initial program.
50
The 2020 field program was undertaken from early February to the end of April 2020 and expanded the initial mapping and sampling in the Tirokave area as well as extending the prospecting to the Irafo target, centered about 10km SSE of Tirokave (Figure 23). Approximately 20 km of creek traversing was accomplished with about 24 km² of geological mapping completed over both targets.
Figure 23: Map of target areas where the 2020 field work was conducted; E.Tau PEC 2020.
Geological Mapping
Geologic mapping was focussed on determining the distribution, character and controls to mineralization. As outcrop exposure in the prospect area is generally poor due to soil/scree cover and forest, work was mainly confined to creek traverses. All rock outcrops were recorded with measurements of structures, veins, bedding and foliation collected where applicable.
By necessity, it was common that portions of several streams falling just outside the tenement required traversing before the boundary of the lease was reached. Context mapping was carried out over these portions, as well as the collection, at appropriate sites, of drainage samples most likely derived from the tenement.
Surface Geochemical Sampling
Geochemical sampling was done in conjunction with the mapping program and involved taking stream sediment and panned concentrate samples, generally from adjacent sites just upstream of junctions, and float and outcrop rock samples where appropriate.
51 Reconnaissance soil samples were taken over soil/scree covered areas considered, by various reasons, prospective enough to warrant a larger coverage.
At this stage, all samples were analysed by Intertek Laboratories in Lae (FA) and Townsville (ICP) by 50g fire assay for gold and a 33 element ICP. More detailed descriptions of sampling methods and analytical techniques are described in Section 11.
The 2019 Sampling Program
Table 6 displays the types and quantity of samples taken during the 2019 fieldwork in the Tirokave area, while the following maps (Figures 24 to 26) exhibit the sample collection sites of each of the different types of samples taken.
Table 6: EL 2559 - Type and quantity of samples taken, 2019.
Sample Type Total Stream Sediment 57 Panned Concentrate 75 Rock: Outcrop/Float/Continuous Chip 98 TOTAL 230
Figure 24: EL 2559 Stream sediment sample locations, 2019; Miugle, B., PEC, 2019
52
Figure 25: EL 2559 Panned concentrate sample locations, 2019; Miugle, B., PEC, 2019
Figure 26: EL 2559 Rock chip (outcrop/float/channel) sample locations, 2019; Miugle, B., PEC, 2019
The 2020 Sampling Program
Table 7 describes the type and quantity while Figure 27 displays the locations of samples taken during the 2020 fieldwork. After considerable delays, all assay results have been returned.
53
Table 7: EL 2559 - Type and quantity of samples taken, 2020. Sample Type Tirokave Irafo Total Stream Sediment 36 31 67 Panned Concentrate 48 31 79 Rock: Outcrop/Float/Continuous Chip 162 41 203 Soil 20 0 20 TOTAL 266 103 369
Figure 27: EL 2559 - All sample locations, 2020; PEC, 2020
The following maps (Figures 28 & 29) exhibit the sample collection sites of each different type of sample taken in the Tirokave and the Irafo areas.
54
Figure 28: EL 2559 – Tirokave area - Sample location map, 2020; Miugle, B., PEC, 2020
Figure 29: EL 2559 – Irafo area - Sample location map, 2020; Tau, E., PEC, 2020
9.2.2 Sampling Methods and Sample Quality
Representative rock samples including both in-situ and float samples were collected to determine lithological, alteration style and intensity, structural, and other controls to mineralization. No factors
55 producing a result that could be considered biased were recognized during the sampling program.
Collected to determine mineralization within a discrete area or structure or lithologic break, representative chips are unbiased samples taken across a measured width (channels) or chips within a small area, usually less than 1.5 m in diameter. Trench samples are continuous chips collected as soil/oxides from road cuts or other disturbances sometimes in shallow channels over prescribed intervals to obtain a representative metal value of the rocks/soil. Float or transported samples have been detached from the source outcrop and have moved short or significant distances away from the original location.
For rock samples from potentially mineralized outcrop exposures, along with float from hill talus and streams, standard sampling procedures involved first removal of any obvious surface crustiform weathering and/or organic matter, followed by the collection of a representative sample of the inferred mineralized rock material. For continuous 0.5-2.0 meter outcrop samples, samples were oriented perpendicular to any obvious mineralized structure. Any obvious surface crustiform weathering and/or organic matter was first removed, followed by a continuous chip-channel of HQ/NQ core proportions using a rock chisel and hammer.
The precise sample location, (UTM, WGS84), sample type (rock outcrop, float, continuous/semi- continuous chip/channel, soil, stream sediment, panned concentrate, etc.) lithologic, mineralogic, alteration, structural and other features, were recorded along with the date, etc. in field books or in sample tag books. Rock cuttings or chips were sealed on-site in cloth or plastic sample bags and marked with sequential numbers.
Soil samples/trench samples were collected from road cuts on selected spots over intermittent intervals, nominally 15 – 20m to determine mineralization within a broad area of little or no outcrop. The location, character, and other observed features were recorded on site in field books or logs. Sample bags were stored and secured along with rock samples before delivery to the selected laboratory for analysis.
Stream sediment samples were collected at nominal 100 m and 200 m intervals and above every creek junction to determine possible upstream geochemical anomalies from broad catchment areas. Samples were collected from mainstream and discrete channels in similar fashion to soil samples.
Panned concentrate samples were usually collected from trap sites close to a stream sediment collection point. The sediment is panned down to a black sand concentrate (approximately 100-200g) and examined for visible gold and other relevant minerals, observations which are recorded in the field notes/sample book. The concentrate is securely bagged in plastic, labelled and carefully stored with the other samples.
Geologic mapping on the Property was conducted using both digital and hard copy bases. Sampling locations were verified with handheld Garmin GPS units. Field maps were compiled in MapInfo in a geodatabase on topographic bases. Representative photographs were taken to supplement field notes and help with consistency in selecting stratigraphic breaks, etc. Field geologic data were uploaded into MapInfo as .tab files for further review and presentation.
9.2.3 Relevant Information
The author knows of no other relevant information.
56
9.2.4 Results and Interpretation
9.2.4.1 The 2019 Exploration Campaign
Initial geological mapping, sampling, and observations confirmed hydrothermal alteration and mineralization exists within the Project area. The alteration distribution appears zoned and extensive and suspected to be complex due to the variety of lithologies noted in the field (Figure 30), indicating multi-intrusive cores likely leading to extensive telescoping of the alteration-mineralization systems.
Figure 30: EL 2559 geology fact map of the 2019 mapping program exhibiting a variety of lithologies; PEC, 2020
Although the approximately 20km² exposure of the Elandora Porphyry is largely unroofed, as indicated on the geological sheet, sufficient evidence in the field, such as exposures of hornfels and calc- silicates (metasomatized units of the Omaura Formation) at various topographic levels along the edges and partly within the intrusive mass suggests that such unroofing is relatively recent and shallow. At such levels, a variety of intrusion-related mineralization styles may be present, and at least such 3 styles, skarn, epithermal, and porphyry have been mapped and sampled in the field.
Geochemically, the limited number of samples taken thus far precludes any meaningful statistical treatment. Anomalism has therefore been arbitrarily selected at >0.1ppm for gold and >100ppm for copper in all sample types barring panned concentrates. With the latter, 2 levels of anomalism have been selected: from 1ppm to 10ppm Au, and >10ppm Au.
Stream sediment samples taken around Tirokave display significant gold and copper anomalism, occasionally coincident, in some areas (Figure 31). Highs of up to 0.364ppm Au and 430ppm Cu were returned. A cluster of 6 anomalous samples in mid Koiyamu Ck. highlights the prospectivity of the western edge of the Elandora Porphyry, while 2 more gold anomalies further southeast point to further potential along its southern edge, and the need for further sampling around and within the intrusive itself.
57 Figure 31: EL 2559 Au/Cu anomalous stream sediment locations, 2019 program; PEC 2020
Panned concentrate samples were taken in conjunction with the stream sediment samples and display strong and consistent anomalism within the Parufi River, on the southern edge of the Elandora Porphyry (Figure 33). However, this should be viewed with caution as the perched placer gold prospect just south of the Tirokave junction is situated upstream of these sample sites. Subsequent drainage sampling surveys will be undertaken upstream of this prospect, towards the center of the altered intrusive complex.
The other gold-anomalous streams potentially draining from mineralized areas within the EL are the magnetite boulder laden Koiyamu Ck and an unnamed creek draining elevated areas southeast of the midpoint between Kokopi and Tirokave (Figure 32).
Figure 32: EL 2559 Au anomalous panned concentrate locations, 2019 program; PEC 2020
Perhaps unsurprisingly, Koiyamu Ck. again displays anomalism, particularly copper, in some of the rock chip samples taken from both outcrop and float (Figure 33). Highs of 0.293ppm Au and 1,429ppm
58 Cu were returned. Encouragingly, the southern edge of the Elandora Porphyry again exhibits anomalous gold, in this instance from rocks.
Figure 33: EL 2559 Au/Cu anomalous rock chip locations, 2019 program; PEC 2020
Soil sample anomalism around Tirokave is displayed in Figure 34. In this case, soil mainly refers to channel, or continuous chip samples taken of exposures of weathered rock, either in road cuttings or stream banks. Highs of up to 0.138 ppm Au and 4,046ppm Cu were returned. Near its southwestern edge, the intrusive body is again highlighted by mainly copper anomalism, while close to the center of the body, a gold anomaly is accompanied by several copper anomalies from samples taken along the road cut exposures of altered and veined porphyritic diorite (Plate 15)
Figure 34: EL 2559 Au/Cu anomalous soil/continuous chip sample locations, 2019 program; PEC 2020
Overall, the results from the preliminary mapping and sampling program confirmed Indaba’s 1988 findings and pointed to the need for further exploration of the area.
59 9.2.4.2 The 2020 Exploration Campaign
9.2.4.2.1 Tirokave Area
Geology & Structure
Mapping and sampling of the remainder of the Tirokave area was mainly directed upstream within the headwaters of the Parufi River.
Prospect scale mapping has identified several different lithology types (Figure 35). The four main rock types identified, most in likely order of ascending age are: low grade metamorphic rocks, sedimentary rocks, intrusive rocks, and volcanic rocks.
The sedimentary rock units mapped belong to the Omaura, Yaveufa and the recent Kainantu Formations.
Further mapping has also confirmed the 2019 observation that that the actual exposure of Elandora Porphyry on the 1:250K sheet is somewhat less than depicted, implying minimal unroofing has occurred and higher level mineralization may still be intact.
Figure 35: EL 2559 Tirokave area geology & structure, 2020 program; PEC 2020
Low-Grade Metamorphic Rocks
Phyllites
The phyllite is a low–grade metamorphic rock and is fault bounded towards the south eastern part of Tirokave. It is greenish grey, comprising chlorite – epidote ± actinolite and clay. It is fissile and easily peels off the foliation fabric (Plate 16). A late stage chlorite - magnetite – sulphide alteration overprints this rock unit. Further work is required in this area to determine whether the metamorphism is a product of localized stresses on Miocene siltstone or represents emergent basement rocks, e.g. Bena 60 Bena Fm.
Plate 16: Phyllite rock specimen
Sedimentary Rocks
Siltstone
The siltstone is very fine grained and indurated and is commonly found in float. It is widespread throughout the tenement area and in places shows brittle deformation due to conjugate jointing sets which appear to be highly weathered and oxidized with predominant limonitic and hematitic clay.
The siltstone is often chloritized and hornfelsed proximal to intrusive contacts and moderately mineralized with observed sulphides such as pyrite + pyrrhotite ± chalcopyrite ± bornite (Plate17).
Plate 17: Chloritic hornfelsed siltstone with pyrite vein infills.
61
Greywacke
This rock unit is part of the older Omaura Greywacke. The distribution is sporadic and occurs generally as smaller units. It is greyish to dark green, likely locally chloritic, fine grained with a gritty feel and highly indurated. It is locally highly fractured, with quartz infill veins and mineralized with sulfides (pyrite + pyrrhotite + chlorite ± bornite), Plate 18.
Recent Conglomerate
The recent unconsolidated conglomerate deposit is predominantly clast supported and comprised of boulders to gravel size clasts embedded in a matrix of very fine to fine grained sand and clay. Much of it is likely derived from mass slumping. The clasts are subangular to well rounded, poorly sorted and randomly oriented (Plate 19). The conglomerate is polymictic and comprise siltstone, intrusive and volcanic clasts. It unconformably overlies all lithologies in and around major creeks and tributaries.
Plate 18: Greyish to dark green, gritty fine-grained Greywacke with 1.5cm quartz vein.
62
Plate 19: Unconsolidated conglomerate layer exposed along a creek in Tirokave.
Intrusive Rocks
The igneous intrusions mapped are thought to form different phases of the Elandora Porphyry. The intrusions have porphyritic textures while the sub-extrusive equivalent is mainly a finer grained andesite.
Hornblende Diorite Porphyry
A distinct sub-crowded hornblende porphyry with hornblende (1–10 mm) phenocrysts set in a felsic groundmass of plagioclase and minor quartz (Plate 20). They occur mostly as dykes towards the south-western end of Tirokave and appear to be moderately weathered and oxidised with limonitic and hematitic clays. In exposures towards the north of Tirokave, outcrops appear to be columnar jointed.
Plate 20: Hornblende diorite porphyry rock specimen
63
Quartz Diorite Porphyry
Sub-crowded quartz feldspar porphyry with quartz (1–6 mm) phenocrysts noted replacing plagioclase feldspars (Plate 21) occur mostly to the north and east of the Tirokave area.
This rock unit forms the felsic dykes throughout Tirokave and intrudes the surrounding siltstone country rock occurring as both chilled margin and fault contacts along pre-existing faults. The porphyry is very weakly mineralized (±py) to barren; however, it is observed to host inferred intermineral (evident by observation of fracture fill and vein infill mineralisation) phases at depth.
Plate 21: Quartz diorite porphyry rock specimen Microdiorite
The microdiorite is sub-crowded to crowded and fine to medium grained (1-5 mm) with an equigranular texture (Plate 22). It is finer grained than the hornblende and quartz diorite which occurs to the center and south of Tirokave.
64
Plate 22: Microdiorite rock specimen
Andesite
The andesite is fine to medium grained (1–4 mm) with a porphyrytic texture (Plate 23). The phenocrysts comprise acicular hornblende and the matrix is fine grained quartz, hornblende laths, and magnetite.
This rock unit occurs as mafic dykes intruding volcanics, pyroclastics, siltstones, and earlier phase intrusives. It appears to be weakly propyllitic altered with dissemination to fracture and/or vein fill sulphides (mainly pyrite + pyrrhotite).
Plate 23: Andesite porphyry rock specimen
65
Volcanic Rocks
Pyroclastics
This unit comprises welded lithic tuff (Plate 24) and welded ash tuff (Plate 25). They are intruded locally by narrow fresh to weakly propylitic (chl-epi-mt-hm±cb) altered mafic extrusive dykes of basaltic and andesitic compositions.
The welded lithic tuff is dark greyish-green and is composed of polymictic pebble to cobble size clasts that are dominantly angular to subangular with lesser subrounded polymitic (hornfels, andesite, basalt) clasts within a basaltic matrix of ash tuff. The matrix is generally altered to chlorite, epidote, and minor kaolinite and the sedimentary clasts have epidote around the margins.
Plate 24: Welded lithic tuff rock specimen
The welded ash tuff consists predominantly of ash-flow, multicolored (red to purple) agglomerate interbedded with subordinate reddish or basic (dark grey to black) porphyritic lavas and volcanolithic rudites. It is totally oxidised and weathered, and easily eroded because of their soft tuffaceous nature.
66
Plate 25: Welded ash tuff rock specimen
Structures
The structures mapped within the Tirokave area comprise NW trending (fault breccias and faults), NE trending (fault breccias, fault bounded dilational jogs) and N trending displacement faults (Figures 35 & 36). Possible arcuate structures and regional scale ring features have also been recognized.
NW trending Structures (Arc-parallel)
These structures comprise faults, fault breccias and fracture zones. In Tirokave, they appear to form a bounding structural corridor almost 1 km apart and are defined by fault breccias (2–5 m wide) in crackle to mosaic fabric and associated milled breccia textures.
NE trending Structures (Arc-transfer)
The NE trending structures comprise fault breccias and faults with conjugate joint sets at the intersection of the NW trending structures. Dilational structures with pinch and swell textures have been observed along this trend that were initiated in response to the sinistral strike-slip movement along the NW trending structural corridor described above. These NE trending structures appear to localize dilational jogs.
These structures also appear to form very late stage tight dextral displacement faults cross cutting all lithology, alteration and early structural domains.
N trending Structures
The N trending structures appear to be later stage displacement faults. These structures are tight (< 1 cm width) and appear to be strike-slip faults. In places where conjugate joint sets occur, calcite veins infill the fractures and heal the joints, or may form sheeted calcite vein sets. 67
Figure 36: EL 2559 Tirokave area rose diagram plot of main structural measurements recorded during the mapping program; Ila, A. & Miugle, B., PEC 2020
Annular and Radial Structures
The larger interpreted bodies of fault breccia mapped in the southeast quadrant of the Tirokave map appear to describe an arcuate shape, locally intersected by similar bodies perpendicular to the arc. This is also reflected in several of the associated faults and fractures as well as, to a certain extent, portions of the largely NE trending dyke swarm mapped in the same quadrant (Figure 35).
It could be interpreted that they represent both annular and radial fracturing around the edges of the emergent intrusive complex to the NE. This may also suggest that such structures may also be found around the remaining edges of the complex. Such enhancements of structural permeability may positively impact on the volume of mineralization introduced into the Tirokave area and have important implications for further exploration here, Section 25.
Topographic Ring Features
Recent digital enhancement of what topographic data was available allowed a more detailed study of the geomorphology of the EL 2559 area and surrounds.
At least 4 ring features, varying in size between 1.6km and 5km in diameter, were noted within the eastern sector and another 2 possible further NW (Figure 37). Those designated the Tirokave and Tebeo ring features are the most prominent (Figure 38) and abut each other within a possible enclosing outer ring. The Irafo ring appears somewhat subdued, though the largest, while the Mt. Yungateia ring falls outside of EL 2559, to the north, and completes a broad, appoximately 10km long, northerly trending zone of potentially shallow-buried intrusive complexes, with the Elandora Porphyry and the Akuna Complex Intrusives emergent at the center, near Tirokave.
A relationship between the Tirokave ring feature, and the possible annular/radial fracture set mapped in the SE quadrant of the Tirokave area may be established with future fieldwork.
68
Figure 37: Interpreted ring features within and adjacent to EL 2559; GJF, 2020
Figure 38: Oblique look at the prominent Tirokave and Tebeo ring features; Mt Yungateia ring feature seen further north
The connection between the ring features and shallow-buried to emergent intrusive complexes is further supported by both historic and current field observations within the areas encompassed or
69 adjacent to the rings, Section 25.
Geochemistry
The 2020 geochemical drainage sampling program further extended the 2019 program upstream of the perched placer deposits near Tirokave and was successful in recording several significant anomalies clearly deriving from the upper headwaters of Parufi River (Figure 39). This figure also illustrates the anomalies generated by the 2019 program in order to compare locations.
Abundant anomalous Au in panned concentrate samples were returned from the 2 programs: (49 samples ≥1ppm Au out of a total of 105 taken within EL 2559, highest of 105ppm, Table 8 – those taken outside the EL are not included).
From the distribution, the gold is believed to derive from 3 possible sources: • Perched placer deposits near Tirokave • Exposed hydrothermally altered fault breccias in the SW quadrant • Upstream, hydrothermally altered and mineralized areas within and peripheral to the rim of the Tirokave ring feature.
Figure 39: EL 2559 – Tirokave area - distribution of 2019-20 panned concentrate samples and associated Au value range; Tau, E., PEC 2020
70
Table 8: EL 2559 - Anomalous Panned Concentrate Samples from the 2019-20 Drainage Surveys
Of 82 stream sediment samples taken in the Tirokave drainages during the 2019-20 surveys, 13 samples returned ≥0.1ppm Au, highest 0.36ppm. Of 260 rock (RO, RF, CC) and soil samples taken, 3 rock samples returned > 0.1ppm Au, highest 0.944ppm.
Resultant anomaly clusters and multi-element relationships are considered significant (Tables 9 & 10) and will require follow-up in future surveys. Some of the relationships appear to be approaching a ‘Bilimoia’ geochemical signature (Section 7.4.1) with some samples coincident in Au-Ag-Cu- Mo±Sb±Te(in rocks)±W±Zn.
Table 9: EL 2559 - Anomalous Stream Sediment Samples from the 2019-20 Drainage Surveys
71
Table 10: EL 2559 – Anomalous Rock & Soil Samples from the 2019-20 Exploration Surveys EL 2559_Anomalous Rock & Soil Samples_2019-20 Sample No. E N Type Au1(ppm) Ag Bi Cu Mo S Sn Te W PEC401 350246 9295292 RF 0.123 PEC402 349795 9295575 RF 0.016 0.27 995 2.8 PEC412 349194 9296204 RF 0.011 21.3 PEC416 349304 9296344 RF <0.005 238 PEC417 348832 9296214 RF 0.056 0.37 15 895 4.6 27.1 PEC419 349559 9296169 RF 0.006 264 PEC420 349549 9296199 RF 0.018 0.33 575 0.7
PEC212 348521 9294147 RO 314 14 PEC227 348961 9293720 RO 481 PEC228 348961 9293720 RO 1429 46412 15 66 PEC229 348961 9293720 RO 7 16 PEC1126 350650 9297095 RO 0.944
PEC293 349086 9293436 CC 1 4046 64195 7 162 PEC300 349753 9297404 CC 0.138 PEC303 349930 9297393 CC 221 PEC422 349291 9296032 CC 0.029 0.24 275
Au1_ppb PEC777 349623 9295644 SO 5 PEC779 349443 9296073 SO 9 156 8.9 PEC780 349306 9296043 SO <1 0.23 6.2 PEC781 349218 9295966 SO 7 862 PEC785 350995 9294689 SO 6 PEC788 349722 9294715 SO 5 PEC789 349747 9294910 SO 7 PEC790 349692 9295018 SO 7 PEC791 349727 9295032 SO 5 5.1 PEC793 349729 9295034 SO 14 50.1 PEC796 350900 9295467 SO 5 PEC797 350902 9295469 SO 8
The anomalous drainage results can be summarized in Figure 40. A cluster of weak to moderately anomalous gold in stream sediments, panned concentrates, and rock chips at the lower end of the map can be associated with the hydrothermally altered (quartz-adularia, Plate 26) fault breccia bodies aligned along the SE rim of the Tirokave ring feature.
72
Plate 26: Adularia (white)-quartz altered fault breccia near Tirokave Silver-base metal anomalies appear to cluster towards the center of the drainage basin, whereas further gold anomalies appear to drain from both the northern and western rims of the ring feature. It is too early to suggest a metal zonation at this stage, but further work along those lines is required. The figure also displays planned ridge-and spur soil lines which will provide an abundance of valuable geochemical data as well as alteration assemblages from spectral data.
Figure 40: Geochemical anomaly summary map of the Tirokave area
9.2.4.2.2 Irafo Area 73
Geology & Structure
At Irafo, the dominant lithology appears to be intermediate pyroclastics ranging in grain size from agglomerate to siltstone.
Widespread sporadic occurrences of intrusive rocks have been mapped throughout the area and this, coupled with commonly observed hornfelsed rocks, suggests the bulk of the Irafo area to be underlain by several shallowly buried intrusive phases (Figure 41).
The hornfels sometimes exhibit small quartz veins of variable texture: colloform banded (some with fine sulphides, Plate 27), saccharoidal, comb to massive, which suggest a high level in the hydrothermal profile.
Figure 41: Irafo Geology, Q1 2020
74
Plate 27: Colloform banded quartz matrix to hornfels clasts, Irafo area
Geochemistry
Of 31 pannned concentrate samples taken, 1 sample returned ≥1ppm: (4.1ppm Au).
Of 31 stream sediment samples taken, 2 samples returned ≥0.1ppm Au (highest 0.58ppm Au).
Rock and soil samples taken were not found to be anomalous.
It is considered significant that both anomalous SSs and a coincident anomalous PC derive from the same drainage partly underlain by intrusive rocks (Figure 42). This will require follow-up work involving more detailed drainage sampling upstream and R&S soil lines along the ridges adjacent to the streams.
The western sector still requires first-pass drainage sampling & mapping.
75
Figure 42: Geochemical summary map of the Irafo area
76 10.0 DRILLING
Other than the one reported diamond drill hole of 67 feet (20.4m) completed in 1971 (Section 6.3), no other sub-surface investigations of the Property are known to have been undertaken.
77 11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY
Methods & Analyses
To support exploration conducted over EL 2559 during Q4 2019 and the first half of 2020, the following methods and analyses were employed:
Samples consisting of rock chips, soils, or sediment were collected at the site by the Owner’s geologists and placed in labelled, plastic or calico bags. Bagged samples were carried from the field and stored in a secure place/house for the duration of the work program. Periodically, samples were transported to Intertek Laboratory (ITS) in Lae by the Owner’s geologists and or technical staff in specially organized, approved cars or trucks. From the point of collection to subsequent delivery to the analytical laboratory, samples were securely locked or under the direct supervision of the Owner’s staff. ITS is a highly regarded, multi-national, ISO17025:2005 accredited analytical and testing laboratory completely independent of the Owner. Employees of the Owner do not participate in any part of the sample preparation and analytical procedures once samples are submitted to ITS.
On sample submittal at ITS, the Owner uses the laboratory’s standard codes for sample preparation and geochemical analysis. A variety of ITS sample preparation and analytical procedures were employed to determine Au, Ag, and multi-elements contained within rock, soils, and stream sediments.
Submitted samples at the Lae prep laboratory are first checked off against the sample submission sheet and the weight of the wet samples logged. They are then dried at 105 deg C. for a minimum of 8 hours or until dry, the oven temperature is monitored and logged routinely. Once the samples are dry they are then crushed in a jaw crusher to a nominal 6-10 mm. Barren material is run between samples to clean the jaws of the crusher. The unit is also cleaned with compressed air between samples. All sizing units at ITS are installed with a dust collection system to minimize airborne contamination dust.
The sample is pulverized to a nominal 95% passing 75μm. Depending on sample size, should multiple batches have to be pulverized they are combined by roll mixing. A sub-sample of approximately 250g is taken for analysis and the remaining pulp is stored. This sub-sample is further split to provide a charge for Fire Assay, done at the Lae laboratory, with the remainder of the material securely dispatched to the ITS laboratory in Townsville, Qld, (ITS lab, Jakarta is another option) for the ICP analyses.
The analytical processes employed for each sample include:
i. Gold using Fire Assay with an Atomic Absorption Spectrometry Finish on a 50 gm charge (FA50-AA); and
ii. 33-element package (Ag, Al, As, Ba, Bi, Ca, Cd, Ce, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Te, Ti, Tl, V, W and Zn) using 4 acid digest with ICPOES (Inductively Coupled Plasma Optical Emission Spectrometry) finish (4A/OE33).
QA/QC Procedures & Results
QA/QC procedures were employed during sample collection by the Owner’s geologists as well as standard steps taken by ITS during sample preparation and analysis, particularly to avoid cross- contamination.
To ensure required precision and accuracy for all geochemical sampling programs, the Owner’s geologists randomly inserted sample blanks (containing no or negligible Au), standards, and sample
78 duplicates into each batch submitted to ITS. All sample standards (Au, Ag, and Cu) including blanks used in the exploration campaigns were prepared and certified by OREAS Labs, Australia.
ITS employs extensive internal QA/Q methods including the use of systematically incorporated certified standards, blanks, and duplicates to assure precision and accuracy. In addition, selected samples are re-analysed to confirm anomalous results. This QC data forms a part of the final report.
A total of 583 samples (224 rock, 96 soil, 122 stream sediment and 141 panned concentrates) were taken over the exploration campaigns, with the addition of 29 QC samples (11 blank, 15 standard, and 3 field duplicates) representing an insertion rate of 1 QC per 20 field samples.
The tabulated results and brief analyses are presented below:
Table 11: EL 2559 – Assay Values returned from Blanks – Q4 2019-Q1 20 Exploration Surveys BLANK- OREAS C27c (ppm) Au1 Au2 Cu OREAS Certified Value <0.002 7.49 Sample ID Sample Type PEC000345 SS 0.011 41 PEC000366 SS <0.005 44 PEC000715 PC 0.117 6 PEC000746 PC 0.072 6 PEC000426 RC 0.029 5 PEC000466 SS 0.015 0.017 5 PEC000489 PC 0.043 PEC000770 PC 0.024 PEC000960 Soil 0.002 4 PEC001040 RC 0.007 4 PEC001120 RC 0.016 4
Regarding the Au values displayed in the above Table 11, only 1 sample in 11 ‘blanks’ reports below the detection limit. The 2 Cu values above 40ppm are likely a result of mislabeling in the field.
Table 12: EL 2559 – Assay Values returned from Standard 1 – Q4 2019-Q1 20 Exploration Surveys STANDARD- OREAS 20a (ppm) Au Ag Cu OREAS Certified Value <0.003 0.061 45.4 Sample ID Sample Type PEC000235 RC 0.009 <0.5 34 PEC000256 RC 0.007 <0.5 30 PEC000393 PC 0.101 <0.5 47 PEC000704 PC 0.108 <0.5 47 PEC000725 PC 0.445 <0.5 47 PEC000735 PC <0.5 49 PEC000757 PC 2.56 <0.5 47 PEC001020 RC <0.005 PEC001060 RC <0.005 PEC001100 RC <0.005
79 Table 12, above, displays a pronounced bias of overvaluing Au in PC samples. This is likely a contamination issue due to free gold present in proximal samples. It cannot be determined at this stage whether this occurred in the field or during a sample run in the laboratory. The reason the Au value from sample PEC000735 was not reported is also indeterminate. Values for Ag and Cu are within acceptable limits.
Table 13: EL 2559 – Assay Values returned from Standard 2 – Q4 2019-Q1 20 Exploration Surveys STANDARD- OREAS 25a (ppm) Au Cu OREAS Certified Value <0.002 33.9 Sample ID Sampe Type PEC000302 Soil 0.005 52 PEC000322 Soil <0.005 32 PEC000792 Soil <1 25 PEC000940 PC 0.018
Table 13 again displays what is likely contamination of Au values in the PC environment. The Cu values display a relatively broad spread.
Table 14: EL 2559 – Assay Values returned from Standard 3 – Q4 2019-Q1 20 Exploration Surveys STANDARD- OREAS 45h (ppm) Au Ag Cu OREAS Certified Value 0.0411 0.147 767 Sample ID Sample Type PEC000980 Soil 0.04 <0.5 785
There is no apparent issues with the values displayed in Table 14.
Table 15: EL 2559 – Assay Values returned from Duplicates – Q4 2019-Q1 20 Exploration Surveys DUPLICATE SAMPLES (ppm) Sample ID PEC000919 PEC000920 PEC000999 PEC001000 PEC001079 PEC001080 Sample Type PC SS RC Au1 4.1 5.89 0.58 0.886 <0.005 <0.005 Au2 5.88 Ag <0.5 <0.5 <0.5 <0.5 Cu 56 60 39 41
Comparative values for the duplicate samples displayed in Table 15 are generally well within acceptable limits.
Conclusions and Recommendations
The sample preparation, security, and analytical procedures employed by the Owner’s geologists are adequate and appropriate for the early stage of exploration of the property.
80 Sample collection and preparation completed by the Owner’s technical staff followed clearly established best practice procedures. QA/QC protocols are employed by all Company personnel concerned. The ITS sample preparation facilities at Lae and the analytical laboratories in Lae, Townsville, and Jakarta are ISO accredited and undergo routine internal group and independent audits which are considered sufficient to meet international standards. The chain of custody procedures for sample security are adequate.
The analytical techniques for gold and other elements described above were considered appropriate for the styles of mineralization sampled at the Project.
More rigorous, systematic, and comprehensive security and QA/QC measures will be required when advanced programs, such as drilling, are underway. Certified reference material of more appropriate Au values needs to be sourced. The issue of likely cross-contamination of PC samples at both the field and laboratory levels needs addressing.
To support future exploration over the Owner’s Kainantu Project Properties, alternative laboratories will be considered along with analyses of more heightened sensitivity for Au in soil (e.g. 1ppb Au detection limit).
The same procedures as described above will be implemented during the exploration of El 2558 and likely the adjoining ELAs once they become available for field investigations.
81 12.0 DATA VERIFICATION
Mr. Graeme Fleming of GJF Geological Services, Indonesia visited the Kainantu Project from December 7-8, 2019. The inspection involved a helicopter overflight of PEC’s leases, followed by a short foot traverse to a skarn boulder accumulation in a streambed. This was followed by vehicular- supported foot traverses up the Tirokave valley, observing outcrop at the more accessible locations before leaving for Goroka. The following day involved a review of the exploration program and findings with management and the field crew.
With only limited surface prospecting completed to that date, no assay results available at that time, and with only a short time frame, no geochemical verification samples were taken over the limited number of exposures observed. Industry standard procedures appear to have been used in the initial mapping and sampling of the Property.
Due to the onset of the global covid-19 virus pandemic, further planned field visits and inspections by GJF could not be undertaken.
During the first half of 2020 all aspects that could materially impact the integrity of the resources database (mapping, sampling and database management) were reviewed by GJF. Routine reviews of exploration reports from the field teams operating in EL2559 was done by GJF. The original assay results derived from such exploration along with associated QA/QC procedures and results were also reviewed by GJF.
Apart from the imposed limitations of a physical presence mentioned above, the data verification processes completed to date are in accordance with the relevant industry benchmarks and practices. Furthermore, the analyses completed to date have not identified any significant issues which would result in any inherent bias in the geological/geochemical results deriving from the property. Cross- contamination of free Au-bearing PC samples is considered a minor, easily identified and rectifiable issue.
Other than the granting of Els 2650 and 2652 to PEC by the PNG Department of Mines on the 10th September 2020 (detailed in Section 4), GJF knows of no material changes that have occurred over the property since the time of the site inspection December 2019.
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13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
The Owner has not carried out any mineral processing or metallurgical tests on samples from either of the Kainantu or the Southwest Kainantu Properties.
83
14.0 MINERAL RESOURCE ESTIMATES
There has been no Mineral Resource estimate prepared for the mineralization discovered to date from either of the Kainantu or the Southwest Kainantu Properties.
84
Sections 15.0-22.0 of the Form 43-101F1 Technical Report are not applicable to this report.
85
23.0 ADJACENT PROPERTIES
The Owner’s Kainantu Project Properties occur within a well-endowed belt of epithermal and porphyry style mineralization that reportedly contains several major deposits (Figure 43).
Figure 43: Location of Kainantu District in relation to known mineral deposits of PNG; PNG Chamber Mines and Petroleum 2011
The Kainantu District, often referred to as the “Kainantu Goldfields” has a relatively long history of exploration and periodic mining for mainly gold, silver, and copper and is well documented in the literature. Since the 1960s, there have been many and varied types of exploration and mining tenure over the District, the predominant and longest-lived (since 1982) covering the Bilimoia field where gold mining has undergone another revival and K92 Mining Ltd have declared the mine operational since February 2018. This company’s tenement package, including one lease application, totals about 725km² with its SW corner closest, at about 11km east, to a northeasterly corner of EL 2559. Apart from this, other companies’ tenement details in the district are unknown to GJF.
GJF has been unable to verify the above information and such information is not necessarily indicative of the mineralization on the property that is the subject of this technical report.
At the effective date, the Owner’s tenement holding in the district includes EL 2558, EL 2559, EL 2650, and EL 2652 along with two exploration lease applications, ELA 2655 and ELA 2660, all described in Section 4 of the report and diagrammatically located in Figure 2.
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24.0 OTHER RELEVANT DATA AND INFORMATION
There is no other data or information known which is relevant to the understanding and conclusions of this report.
87
25.0 INTERPRETATION AND CONCLUSIONS
No material issues have been identified with the Owner’s sampling protocols, with the data collection and management procedures in place being to industry standard and therefore enabling confidence that the samples are representative of the mineralization in grade and location. GJF considers the density of sample data covering the areas of the property that have so far been explored by the Owner’s field teams to be adequate.
The sample preparation and analytical work has been undertaken at fully accredited laboratories owned and run by an industry-leading analytical company. The analytical techniques for gold and other elements are considered appropriate for the style of mineralization at the Kainantu Project.
Apart from some easily identifiable and rectifiable issues regarding cross-contamination of PC samples, QA/QC protocols established at the Project are satisfactory. More suitable certified reference material needs to be sourced for future programs. In the opinion of GJF, the analytical results delivered by the ITS Minerals laboratories are sufficiently reliable for the purpose of surface exploration.
Based on the above assessment, to the best of GJF’s knowledge, at the time of this report compilation there are no known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues that could materially impact the continued viability of the Kainantu Project Properties.
The Owner’s tenement package is situated within the Papuan Mobile Belt where several world class Au-Cu deposits are well documented and often associated with NE-NNE trending transfer structures.
The Kainantu Property - EL 2558 is situated on the Kainantu NNE trending transfer structure and adjoins K92 Mining Inc’s tenement package to the NE, with its SW corner about 6km from the operating mine.
About midway between the mine and KRL’s lease, two historic gold prospects, Maniope and Arakompa, both part of the K92-owned Bilimoia Goldfield hosting the mine along with several other highly prospective vein lodes and porphyry targets, were drilled by Highlands Gold Ltd (HGL) during the early ‘90s. They are included in K92’s inventory of near-mine prospects to be further explored.
Detailed studies of hydrothermal fluid flow relative to both prospects (Corbett et al, 1994) led to the prediction of a mineralizing porphyry source to both lodes situated NNE of Arakompa at the intersection of elements of the transfer structure with a mafic intrusive-metamorphic rock contact. This location virtually puts it at the doorstep of EL 2558, possibly within 1km of its SW corner.
It is speculated that mineralizing hydrothermal fluids could also migrate from the porphyry source towards the NNE along the transfer structure and deposit Au-Ag-Cu rich lodes, particularly at or near the intersection with NW trending elements of the Ramu-Markham Fault Zone (RMFZ) closer to the centre of EL 2558.
Research of MRA’s historic database shows that while portions of the EL have been included in various exploration companies’ leaseholds from time to time, the tenement has been largely under- explored.
The relatively small size of the EL, at about 41km², precludes any relinquishment of area and another 2 years (from August 2020) remains for the lease to be comprehensively explored.
88 An EL application (ELA 2660) was lodged early in 2020 and covers an area to the east and south adjoining EL 2558. Also under-explored, this area is thought to be shallowly underlain by Akuna Intrusive Complex bodies in juxtaposition with intersecting elements of the NNE trending transfer structure and those of the NW trending RMFZ, leading to potential mineral deposition sites.
EL 2559 is situated within the Kainantu Goldfields District about 34km SW of K92 Mining Inc’s Bilimoia Gold Mine. The lease contains elements of a significant transfer structure along strike of a first tier Au mine.
Emergent Elandora Porphyry & Akuna Intrusive Complex bodies, thought to be prime sources and drivers of mineralization throughout the Kainantu Goldfields District, are mapped near Tirokave village in the centre of the EL.
Further evidence of shallowly buried intrusive bodies both south and north of Tirokave (Irafo & Mt Yungateia [EL 2650]), indicate a broad 10km long northerly trending belt thought prospective for porphyry and intrusive-related Au-Cu.
Such evidence includes at least 4 recently identified topographic ring features, historic reports of the presence of porphyritic intrusive rocks, hornfels, hydrothermal alteration, and past and present gold panning activities throughout much of the drainages.
Historic first-pass drainage sampling Au-Cu anomalies are described from 1980s-90s reports in the Tirokave and Irafo areas, with recommendations for further work by the authors (not followed-up by the respective companies). A Cu-anomalous skarn prospect near Tirokave was explored (including three adits and one inconclusive DDH) in the 1970s.
The evidence is supported by the current exploration programs undertaken by the Owner’s team during Q4 2019 and Q1-Q2 2020. Multiphase intrusive rocks and widespread hydrothermal alteration mapped in the Tirokave area suggest mineralizing magmas may have been intruded at different levels over a prolonged time span. Both porphyry (intensely oxidized stockworked phyllic zone(?) – 0.14ppm Au from a channel sample) and low sulphidation epithermal styles of mineralization are noted.
In addition, substantial zones of hydrothermally altered (clay-quartz-adularia) fault breccia were also identified here, with sampling indicating weak but consistently anomalous Au from the intensely weathered & leached breccia exposures. Structural permeability should be enhanced in these breccia zones, leading to better chances of mineralization. Such zones may be replicated, particularly at various orientations around the margins of the ring features, and, with further exploration, become prime drill targets.
The current survey returned numerous PC samples highly Au anomalous (up to 105ppm) along with sporadic low to moderately anomalous SS (up to 0.36ppm), RF (up to 0.12ppm), RO (up to 0.944ppm), and CC (up to 0.14ppm, 4,046ppm Cu), some spatially coincident, all associated with the Tirokave ring feature.
Certain rock and drainage samples returned coincident anomalous Au-Ag-Cu-Mo±Sb±Te±W±Zn which is similar to the geochemical signature often noted in the Bilimoia Field, host to K92’s Au mine. Detailed studies in this field indicate several different phases of mineralization occurred within structurally controlled zones of extraordinary vertical dimensions over prolonged periods of time. Such samples will require follow-up.
An aggressive program of ridge-and-spur soil sampling and trenching is planned to cover the bulk of the Tirokave ring feature over the following 2 quarters to rapidly delineate drill targets.
89 The Irafo program confirmed historic exploration reports and was successful in delineating one drainage system underlain by intrusive rocks and exhibiting coincident anomalous Au in two SS (maximum of 0.58ppm) and one PC (4.1ppm) samples. The ridges inter-fingering with and adjacent to the system will also require ridge-and-spur soil sampling while the western sector of the prospect requires first pass drainage sampling.
The Tebeo Prospect, adjacent to Tirokave, together with the Tigunta Prospect situated along the western to northern fall of the ring features, both exhibit historic significant anomalous Au-Ag-Cu drainage geochemistry with hydrothermal alteration and mineralization described in rock float and outcrop. Exploration over these prospects may be fast-tracked after some drainage sample verification, with a soil sampling/trenching program planned to commence Q3 2020.
Due to EL 2559’s size (225km²), no part of the tenement need be relinquished for at least another 2 years (from August 2020), allowing time to complete at least a first-pass drainage survey of the remainder of the EL.
Surrounding contiguous leases and a lease application are also noted to contain valid historical and recently identified prospects: EL 2650 – Mt Yungateia intrusive related Au; EL 2652 – Kokopi skarn Au-Cu; ELA 2660 – Onteru/Onteru Nth Au±Cu skarns (also possible porphyry Au-Cu potential as highlighted in a past K92 Mining Inc prospect map).
It is considered key that the portion of the aeromagnetic/radiometric data/imagery generated by Barrick in 2008 that covers the bulk of the Kainantu Project leases and lease applications should be interpreted by a specialist geophysicist and placed in context with the structure/alteration/mineralization characteristics of the Kainantu District.
Overall, the work done to date over the Kainantu Project has met the original objectives of the survey in that potentially economic mineralization had been confirmed and sampled.
GJF agrees with the Owner’s Exploration and Mining Division interpretations and conclusions and is of the opinion that the Properties have sufficient merit to warrant further exploration.
GJF is not aware of any significant risks and uncertainties that could affect the reliability or confidence in the exploration information detailed above.
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26.0 RECOMMENDATIONS
EL 2558
For the moment, exploration on EL 2558 is still undergoing planning and no budgeting has been attempted. An outline of the initial exploration plan is presented below.
Field Program
The 2020-21 field program over EL2558 will consist of geological mapping in conjunction with geochemical drainage sampling in the southern portion of the tenement. Targetted drainages are outlined in Figure 44. All tributaries within these drainages will also be traversed and mapped. Rock chips, stream sediments and panned concentrate samples will be collected while mapping the streams, along with petrological samples where appropriate.
Figure 44: EL 2558 drainages targetted (dashed lines) for initial mapping & sampling survey; PEC, 2019
Field work will likely be carried out during either the latter half of 2020 or early 2021, by at least 7 staff from the Owner’s Exploration and Mining Division. This would normally comprise 3 exploration geologists, 1 graduate geologist, and 2 geological/logistical technical officers, overseen by the Owner’s Team Leader and supported by at least 1 vehicle. Local labour will be hired when and where appropriate.
Geological Mapping
Geologic mapping will focus on determining the distribution, character and controls to any mineralization identified. As outcrop exposure in the prospect area was noted to be generally poor due 91 to soil/scree cover, work will be mainly confined to creek traverses. All rock outcrops will be recorded with measurements of structures, veins, bedding and foliation collected where applicable.
Surface Geochemical Sampling
Geochemical sampling done in conjunction with the mapping program will involve taking stream sediment and panned concentrate samples, generally from adjacent sites just upstream of junctions, and float and outcrop rock samples where appropriate (described in more detail in Section 9.2.2).
Reconnaissance soil samples will be taken over soil/scree covered areas considered, by various reasons, prospective enough to warrant a larger coverage.
At this stage, all samples will be prepared and analysed by an overseas internationally accredited laboratory. All rock, panned concentrate, and stream sediment samples will be analysed by 50g fire assay for gold, with soil samples to be assayed by 30g fire assay with a lower detection limit (1ppb Au) available. Considering the multi-element associations of targetted mineralization described in Section 8, a multi-element suite using ICP methods will be appropriate. These methods are further described in Section 11.
Geophysics
PEC is in the process of contacting geophysical contractors to determine a cost and time frame for interpreting the aeromagnetic/radiometrics survey commissioned by Barrick that was flown over the district during 2008. Such interpretation will be integrated with the results derived from the program described above.
EL 2559
For future exploration over EL 2559, GJF agrees with the Owner’s staff and management to an 18 month exploration program and budget of US$850K for a single-staged campaign over each of the 8 prospects so far identified within the lease.
It is envisaged that at the end of each sub-program, if not before, the respective data will be evaluated and a decision to continue exploring each prospect, likely including a drilling stage, be made. Details for the estimated time line and budget for the program are presented below in Table 16.
The budget does not include any overhead costs, but includes logistical support for the programs, consumables, interpretation of data, expansion of the number of personnel and in-country administration.
GJF considers the budget reasonable for the work planned over the time scale and sufficient to achieve the planned objectives.
Planning work has yet to begin on the newly granted ELs 2650 and 2652.
92
Table 16: 18 Month Work Plan & Budget for EL 2559
18 Month Work Plan & Budget for EL 2559
Prospect Name/ Mineralization Style Activity May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Total Central Area (Tirokave) Aganunofi; Bx-hosted & Placer Au Extension Mapping 3 R & S Soil Sampling 8 Trenching, Mapping & Sampling 8 8 8 Analysis of Results, Reporting Avananofi; Porph & IR Cu-Au Extension Mapping 3 R & S Soil Sampling 8 4 Trenching, Mapping & Sampling 8 8 8 8 Analysis of Results, Reporting Tebeo; Porph & IR Cu-Au, Skarn Cu Drainage Sampling (Verification) 3 Mapping 6 R & S Soil Sampling 4 8 Trenching, Mapping & Sampling 8 8 8 8 8 Analysis of Results, Reporting Tigunta; Porph & IR Cu-Au Drainage Sampling (Verification) 6 Mapping R & S Soil Sampling 8 8 Trenching, Mapping & Sampling 8 8 8 Analysis of Results, Reporting Kakopi; Skarn Au-Cu R & S Soil Sampling 8 Trenching, Mapping & Sampling 8 8 Analysis of Results, Reporting Southern Area Irafo/Moife; Epithermal Au, (+ deeper IR Au-Cu?) Extension Mapping 3 R & S Soil Sampling 8 4 Trenching, Mapping & Sampling 8 8 8 8 Analysis of Results, Reporting Southern intrusive; Porph & IR Cu-Au (?) Drainage Sampling 6 Mapping R & S Soil Sampling 8 Trenching, Mapping & Sampling 8 8 Analysis of Results, Reporting Northern Area Mahenave; Porphyry & Skarn Cu-Au Drainage Sampling 6 6 Mapping R & S Soil Sampling 8 8 Trenching, Mapping & Sampling 8 8 8 8 8 Analysis of Results, Reporting Regional / Other Studies Geological interp of aeromag Petrological Interp of prospect rx
No. of Assay Samples 0 100 100 150 150 150 150 150 150 150 150 150 150 150 100 100 50 0 2100 No. of Local Labour 12 28 24 28 32 24 24 22 22 20 24 24 24 8 16 16 16 0
OPEX May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Total Days 31 30 31 31 30 31 30 31 31 28 31 30 31 30 31 31 30 31 Employees 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Expat Salaries $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 90,000 Staff Salaries $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 18,603 $ 334,854 Casual (Geos x3 + Local labour) $ 7,268 $ 11,468 $ 10,418 $ 11,468 $ 12,518 $ 10,418 $ 10,418 $ 9,893 $ 9,893 $ 9,368 $ 10,418 $ 10,418 $ 10,418 $ 6,218 $ 8,318 $ 8,318 $ 8,318 $ 4,118 $ 169,665 Food and Messing $ 5,580 $ 5,400 $ 5,580 $ 5,580 $ 5,400 $ 5,580 $ 5,400 $ 5,580 $ 5,580 $ 5,040 $ 5,580 $ 5,400 $ 5,580 $ 5,400 $ 5,580 $ 5,580 $ 5,400 $ 93,240 Fuel $ 1,628 $ 1,575 $ 1,628 $ 1,628 $ 1,575 $ 1,628 $ 1,575 $ 1,628 $ 1,628 $ 1,470 $ 1,628 $ 1,575 $ 1,628 $ 1,575 $ 1,628 $ 1,628 $ 1,575 $ 27,195 Assay $ - $ 2,880 $ 2,880 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 4,320 $ 2,880 $ 2,880 $ 1,440 $ - $ 60,480 Other (Sample bags, phone charges, Stationary, medical, Safety etc) $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 18,000 Rostered Travel (Domestic) $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 3,375 $ 40,500 Rostered Travel (International) $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ - $ 1,500 $ 13,500 Visa Work Permits $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ - $ 200 $ 1,800 Contractors (Geophysics, Petrology, etc) $ 5,000 $ 5,000 Total $ 45,153 $ 53,301 $ 47,808 $ 49,973 $ 54,491 $ 45,548 $ 52,391 $ 48,398 $ 48,723 $ 47,176 $ 52,623 $ 45,316 $ 52,623 $ 44,491 $ 45,708 $ 45,383 $ 44,036 $ 31,096 $ 854,234
27.0 REFERENCES
Abiari, T. B., Bennell Baker, M. J., 1986. RGC (Papua New Guinea) Pty Ltd. Annual Report on PA 470 – Kainantu. Report 87/037 to PNG Mines Dept.
Arumba, J., Downes, P.M., Findlay, R.H., Kopi, G., and Nekitel, S., 1994. A review of the geology and mineralization of the Kainantu area, Papua New Guinea.
Bain, J.H.C., and MacKenzie, D.E., 1974. Karimui, Papua New Guinea- 1: 250 000 Geological Series. Bur. Miner. Resource. Aust. explanatory Notes SB/55-9.
Barrick, 2008. Project 9010 Kainantu Project EL693 Annual Report for the period 5 February 2008 – 4 February 2009, Technical Report No. TR1302. Barrick (PNG Exploration) Limited. Barrick report to PNG Mines Dept.
Buku S, Handu N, Ila A, Ipauki L, Joseph C, Miugle B, Saiwa T, Tau E, Tusais I, Wafiware M, March 2020, EL2559 Kainantu Exploration Gold – Copper Project of Eastern Highlands Province, Papua New Guinea, Project Report 2020/01, 47 p.
Corbett, G.J., 1994. Regional structural control of selected Cu/Au occurrences in Papua New Guinea, in Rogerson, R. (Ed.), Proceedings of the PNG Geology, Exploration and Mining Conference 1994, Lae. The Australasian Institute of Mining and Metallurgy, Melbourne.
Corbett, G.J., Leach, T.M., Thirnbeck, M., Sione, T., Koima, H., Digan, K., Petrie, P., 1994. The geology of porphyry related mesothermal vein gold mineralization north of Kainantu, PNG. Geology, Exploration, and Mining Conference, 1994, Lae. The Australasian Institute of Mining and Metallurgy, Melbourne.
Corbett, G.J., & Leach, T. M., 1997. Southwest Pacific rim gold-copper systems: Structure, alteration and mineralization, Short course manual.
Corbett, G. J., Semple, D. G., and Leach, T.M., 1994. The Tolukuma Au/Ag vein system, Papua New Guinea, in Rogerson, R. (Ed.), Proceedings of the PNG Geology, Exploration and Mining Conference 1994, Lae. The Australasian Institute of Mining and Metallurgy, Melbourne.
Dobmeier, C.J., Poke, B., and Wagner, B., 2012. 1:100 000 Geological map publication series of Papua New Guinea, Sheet 7886 Minj: Port Moresby, Mineral Resources Authority.
Dow, D.B., and Dekker, F.E., 1964. The geology of the Bismarck Mountains, New Guinea. Bur. Miner. Resource. Aust. Rep., 76.
Dow, D.B. & Plane, M.D, 1965. The geology of the Kainantu goldfields. Bur. Miner. Res. Aust. Rep., 79.
Espi, J.O., Kajiwara, Y., Hawkins, M.A., and Bainbridge T., 2002. Hydrothermal alteration and Cu-Au mineralization at the Nena high sulfidation-type deposit, Frieda River, Papua New Guinea. Resource Geology 52(4), 301–313.
Espi, J.O., Hayashi, K.I., Koomuro,K., Murakami, H., and Kajiwara, Y., 2007. Geology, Wall-Rock Alteration and Vein Paragenesis of the Bilimoia Gold Deposit, Kainantu Metallogenic Region, Papua New Guinea. Resource Geology, v.57 No.3: 249-268
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Forster, E. T., 1970-71. Highland Gold Development N.L., 3-monthly progress reports on PA 117 Parts A & B. Reports 70/100, 70/101, 71/136, 71/138 to PNG Mines Dept.
Hembling, J. N., 1995. Canada Pacific Pty Ltd Annual Report on EL 1114, Eastern Highlands Province, PNG. Report 95/058 to PNG Mines Dept.
Highlands Pacific Limited & Greater Pacific Gold, 1999. EL 1049 Yar Tree, Annual Report for the One Year Period Ending 08 Feb 1999. Report to the Dept. of Mining & Petroleum, PNG, 1999/007.
Hill, K. C. and Hall, R., 2003. Mesozoic-Cenozoic evolution of Australia’s New Guinea margin in a west Pacific context, GSA Special Papers, 372:259–283.
Homu, J., Buku, S., Miugle, B., Wafiware, M., & Tusais, I., 2020. Kainantu Exploration, Copper-Gold Project EL2559 – Eastern Highlands Province, Papua New Guinea. Internal report for Pacific Energy Consulting Ltd.
Kimala, P., Kiwo, J., Tischeler, S. M., & Keyte, G. M., 1988. Indaba Pty Ltd. Annual Report on PA 857 Tebeo and Tirokave area. Report 88/243 to PNG Mines Dept.
Koppen, W., 1931. Grundniss der Klimakunde. Walter de Greeter Co.
Leach, T.M., and Corbett, G.J., 1994. Porphyry-related carbonate-base metal gold systems in the southwest Pacific: characteristics, in Rogerson, R. (Ed.), Proceedings of the PNG Geology, Exploration and Mining Conference 1994, Lae. The Australasian Institute of Mining and Metallurgy, Melbourne.
Lowenstein, P.L., 1975. Geology and base metal mineralization in the Simbai area, Madang District. Geol. Sun.PNG Rep., 7511
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Miugle, B, 2019. Brief tenement review of EL 2558-Kainantu, Goroka Eastern Highlands Province, PNG. Internal report for Pacific Energy Consulting Ltd.
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Page, R.W., and McDougall, I., 1972. Ages of mineralization of gold and porphyry copper deposits in New Guinea Highlands: Economic Geology, 67, p. 1034–1048.
Page, R.W., 1976, Geochronology of igneous and metamorphic rocks in the New Guinea highlands: Bureau of Mineral Resources, Australia, Bulletin162, 117 pp
Rogerson, R., Williamson, A., Francis, G., and Sandy, M.J., 1982. Geology and mineralization of the Kainantu area. Papua New Guinea Geological Survey 82/23.
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Rogerson, R., Hilyard, D., Francis, G. and Finlayson, E., 1987. The foreland thrust belt of Papua New Guinea, in Proceedings of the Pacific Rim Congress 1987, Gold Coast, p. 579-583. The Australasian Institute of Mining and Metallurgy, Melbourne.
Schroeter, T.G. and Cameron, R. (1996): Alkalic Intrusion-associated Au-Ag, in Selected British Columbia Mineral Deposit Profiles, Volume 2 - Metallic Deposits, Lefebure, D.V. and Hõy, T, Editors, British Columbia Ministry of Employment and Investment, Open File 1996-13
Sheppard, S., and Cranfield, L.C., 2012. Geological framework and mineralization of Papua New Guinea — an update: Mineral Resources Authority, Papua New Guinea, 65p.
Sillitoe, R.H., 2010. Porphyry copper systems. Economic Geology v. 105, 3-41.
Tingey, R.J., and Grainger, D.J., 1976. 1:250,000 Geological Map and Explanatory Notes Sheet SB/55-10. Papua New Guinea Geological Survey Explanatory Notes.
Williamson, A., and Hancock, G., (editors), 2005. The geology and mineral potential of Papua New Guinea: Papua New Guinea Department of Mining, 152p.
Woodward, A.J, Tear, S. Desoe, C., and Park L.J., 2018. Independent Technical Report, Mineral Resource Estimate Update and Preliminary Economic Assessment of Kora North and Kora Gold Deposits, Kainantu Project, Papua New Guinea, 30 September 2018. https://www.meteoblue.com/en/weather/historyclimate/climatemodelled/kainantu_papua-new guinea_2095038
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28.0 DATE AND SIGNATURE PAGE
This report titled “Independent Technical Report on the Geology, Mineralization, and Recommended Exploration of the Kainantu Project, Papua New Guinea” and dated September 30, 2020 was prepared and signed by the following author.
Dated at Lombok, Indonesia September 30, 2020
“Graeme J. Fleming”
Graeme J. Fleming, B. App. Sc., MAIG Qualified Person
97
29.0 CERTIFICATE OF QUALIFIED PERSONS
CERTIFICATE GRAEME J. FLEMING
I, Graeme Jon Fleming, do hereby certify that:
1. I am an independent Consulting Geologist and Professional Geoscientist, business address Jl. Bukit Batu Layar No. 23, Batu Layar, Lombok Barat, NTB, 83111 Indonesia (Tel:+62-370-750 3694) and am the principal of GJF Geological Services based in Lombok, Indonesia.
2. I graduated with a Bachelor of Applied Science (B. App. Sc.) from the NSW Institute of Technology in 1980. I was a registered member of the AUSIMM from 1990 to 2020 and am now a registered member of the Australian Institute of Geoscientists (MAIG, No, 7609).
3. I have worked as a geologist for a total of 25 years since my graduation, primarily as a senior minerals explorationist involved in precious and base metals exploration within young volcanic terrains of the Australasian region. I have participated in and led several successful campaigns from greenfields exploration programs (discovery in 1990 of the Miwah high sulphidation Au-Cu prospect, Aceh), through initial diamond drill programs (1987, Co-O Au deposit, Mindanao) to more advanced and mine development programs (Toka Tindung Gold Project, North Sulawesi, where I recruited and managed from 2010-14 a largely national team instrumental in substantially increasing the published resources). Since 2000, I have, through my Indonesian consulting company, provided geological services for clients including design and implementation of exploration programs, and evaluation and assessment of prospects in Indonesia, Papua New Guinea, Australia, and Africa.
4. I am responsible for all Sections of this Technical Report entitled “Independent Technical Report on the Geology, Mineralization, and Recommended Exploration of the Kainantu Project, Papua New Guinea”, with an effective date of September 30, 2020 to which this certificate applies (the “Technical Report”). I have visited EL 2558 Kainantu and 2559 Southwest Kainantu, Papua New Guinea, from December 7 to 8, 2019 and reviewed the exploration program, together with interviewing the national geological team involved in the Project.
5. I am a Competent Person as defined under the Joint Ore Reserves Committee Code (2012).
6. I have read the definition of "qualified person" set out in National Instrument 43-101 ("NI 43-101") and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirement to be a "qualified person" for the purposes of NI 43-101.
7. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1.
8. To the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed in order to make the Technical Report not misleading.
9. I have not had prior involvement with the Properties that are the subject of this Technical Report.
10. I am independent of the issuer applying all of the tests in section 1.5 of NI 43-101.
98
Dated at Lombok on September 30, 2020
“Graeme J. Fleming”
Graeme J. Fleming B. App. Sc., MAIG Qualified Person
99
APPENDICES
100
APPENDIX I
ELs 2558, 2559, 2650, & 2652 KAINANTU PROJECT EXPLORATION LICENSE COORDINATES
EXPLORATION LICENSE 2558 COORDINATES
EXPLORATION LICENSE 2559 COORDINATES
EL2559 Latitude Longitude 1 06° 16' 00" S 145° 33' 00" E 2 06° 16' 00" S 145° 36' 00" E 3 06° 20' 00" S 145° 36' 00" E 4 06° 20' 00" S 145° 37' 00" E 5 06° 21' 00" S 145° 37' 00" E 6 06° 21' 00" S 145° 41' 00" E 7 06° 25' 00" S 145° 41' 00" E 8 06° 25' 00" S 145° 43' 00" E 9 06° 29' 00" S 145° 43' 00" E
10 06° 29' 00" S 145° 38' 00" E
11 06° 28' 00" S 145° 38' 00" E 12 06° 28' 00" S 145° 35' 00" E 13 06° 27' 00" S 145° 35' 00" E 14 06° 27' 00" S 145° 34' 00" E 15 06° 29' 00" S 145° 34' 00" E 16 06° 29' 00" S 145° 31' 00" E 17 06° 25' 00" S 145° 31' 00" E 18 06° 25' 00" S 145° 40' 00" E 19 06° 23' 00" S 145° 40' 00" E 20 06° 23' 00" S 145° 38' 00" E 21 06° 22' 00" S 145° 38' 00" E 22 06° 22' 00" S 145° 35' 00" E 23 06° 19' 00" S 145° 35' 00" E 24 06° 19' 00" S 145° 33' 00" E
EXPLORATION LICENSE 2650 COORDINATES
EL 2650 Latitude Longitude 1 06° 16' 00" S 145° 36' 00" E 2 06° 16' 00" S 145° 43' 00" E 3 06° 25' 00" S 145° 43' 00" E 4 06° 25' 00" S 145° 41' 00" E 5 06° 21' 00" S 145° 41' 00" E 6 06° 21' 00" S 145° 37' 00" E 7 06° 20' 00" S 145° 37' 00" E 8 06° 20' 00" S 145° 36' 00" E
EXPLORATION LICENSE 2652 COORDINATES
ELA2652 Latitude Longitude 1 06° 19' 00" S 145° 31' 00" E 2 06° 19' 00" S 145° 35' 00" E 3 06° 22' 00" S 145° 35' 00" E 4 06° 22' 00" S 145° 38' 00" E 5 06° 23' 00" S 145° 38' 00" E 6 06° 23' 00" S 145° 40' 00" E 7 06° 25' 00" S 145° 40' 00" E 8 06° 25' 00" S 145° 31' 00" E