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Technical MINERAL RESOURCES & RESERVES A
Technical Report in the form prescribed under National Instrument 43-101 (“NI 43-101”) was released for the company’s Soledad Mountain Project (the “Project”) on March 6, 2006. Peter Clarke of SRK Consulting (U.S.) Inc. (“SRK”), of Lakewood, Colorado, prepared the
Technical
Report. Click here for a full copy of the Technical Report. The Soledad Mountain deposit is hosted in a volcanic sequence of rhyolite porphyries, quartz latites and bedded pyroclastics that occur on a large dome-shaped feature, called Soledad Mountain, along the margins of a collapsed caldera. High-grade precious metal mineralization is associated with steeply dipping epithermal fissure veins occupying faults and fracture zones that cross cut the rock units and generally trend in a northwest direction. The veins are contained within siliceous envelopes of lower grade material that forms the bulk of the mineral resource. Extensive programs of mapping, diamond drilling, reverse-circulation drilling and underground diamond drilling and channel sampling were carried out on the property between 1985 and 1999. Company geologists and engineers managed these programs. The geological database today includes the results of exploration done on the property by Rosario Exploration and Shell/Billiton and the crosscut assay data recorded on linens by a mining syndicate managed by Gold Fields America Development Co. between 1933 and 1942. The database contains 71,325 samples, generated from over 113,593 m (372,649 ft) of drilling and sampling of underground crosscuts. Ore zones were shaped manually by company geologists to define continuity with a low-grade cutoff grade of 0.274 g/t AuEq (0.008 oz/ton AuEq). Prices for gold and silver of $325.00/oz and $6.00/oz and recoveries for gold and silver of 78.0 % and 60.0 % respectively were used to calculate the gold-equivalent cutoff grade for this purpose. Mineral Resources Development, Inc. (“MRDI”), of San Mateo, California, completed a detailed due diligence review of the procedures used by the company between 1998 and 2000. This work involved statistical analyses, the evaluation of grade capping, the design of appropriate kriging techniques and setting criteria for the classification of resources. MRDI submitted a final report with recommendations in May 2000. SRK and AMEC E&C Services, Inc. (“AMEC”) (AMEC acquired MRDI in 2000) did an exhaustive review of the database information and this included the MRDI recommendations from 2000 and audited the geological model over a period of five months in late 2005 and early 2006. Linear kriging was used to estimate gold and silver grades for all blocks in the model. Mineral resources were classified as follows: Measured – first drill hole or crosscut within 21 m (70 ft) and a second drill hole or crosscut within 30 m (100 ft); Indicated - first drill hole or crosscut within 43 m (140 ft) and a second drill hole or crosscut within 61 m (200 ft) and Inferred – everything beyond Measured and Indicated, but with two drill holes or cross-cuts within 91 m (300 ft) and this is more restrictive than the MRDI recommendation. Note that mineral resources are not mineral reserves and do not have demonstrated economic viability. Soledad Mountain Project - Measured &
Soledad Mountain Project -
The above resource estimates confirm past resource estimates prepared by the company. The company has prepared a drilling program with 40 drill holes and 7,200 m (23,500 ft) of drilling, designed to test a portion of the material classified as Inferred within open pit shells constructed in 2000. SRK concurred that strategically targeted drilling could upgrade a significant portion of the Inferred to the Measured or Indicated categories. We advise US investors that while the terms “measured resources”, “indicated resources” and “inferred resources” are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize these terms. US investors are cautioned not to assume that any part or all of the material in these categories will be converted into reserves. The company had disclosed mineral reserve estimates in the past based upon technical information and reports that preceded the implementation of NI 43-101. The British Columbia Securities Commission noted that the company’s technical disclosure did not comply with NI 43-101 in late 2005. The company therefore withdrew the mineral reserve estimates for the Project on the basis that they were not supported by an independent technical report. The Company has now engaged Norwest Corporation to prepare a NI 43-101 Technical Report to assess mineral reserves as part of an independent feasibility study based upon the technical work that has been completed to date. This Technical Report is to be completed in the first quarter of 2007. Why look at a pipe conveyor for the Project? A detailed mine design was included in the feasibility study prepared by M3 Engineering & Technology Corp. (“M3”), Tucson for the Project in 1998 and updated in-house by company engineers in 2000 and this assumed a loaded downhill ore haul to the crushing-screening plant for the mine life. The intent is now to replace the trucks that would haul the ore with a pipe conveyor with a possible significant reduction in both capital and operating costs for the Project. Pipe conveyor technology is well proven in practice with upwards of 200 installations in Europe. Regenerative braking is typically used in all loaded downhill applications and the power generated would provide a portion of the power required elsewhere in the Project. H.L. Klingmann visited the operations of Voestalpine Stahl GmbH in Steyrling, Austria to see a pipe conveyor installation on November 27, 2003. The visitors drove to the top of the mountain and walked down the length of the conveyor. The operation of the pipe conveyor was very smooth and had run for thirteen years with minimum maintenance. Koch Transporttechnik Ges.m.b.H., Austria has submitted a proposal for a pipe conveyor for the Project based upon a site layout prepared in-house. Why look at a mineral sizer for the Project? It may be a challenge to prepare the coarse ore feed for the pipe conveyor and use of a mineral sizer is being investigated for the Project. A mineral sizer would be used rather than a jaw crusher for sizing the run-of-mine ore. A sizer would give better control of the top size and thus a more reliable feed to a pipe conveyor although wear remains an issue in hard rock applications. Gold is present as native gold and electrum ranging in size from <10 micron to > 150 microns with the silver content of the electrum as high as 25 %. Silver is also present as acanthite (Ag2S) as the primary silver mineral with some native silver, pyrargyrite (3Ag2S.Sb2S3) and polybasite (9Ag2S.Sb2S3). Pyrite, galena and chalcopyrite are present in minor amounts and there is no acid-generating potential. Click here for a summary of the historic work done with recommendations. Programs Completed From 2003 To 2005 Amtel Ltd. (“Amtel”), Ontario did six studies from 2003 to 2006. These studies were done on both the rhyolite and quartz latite test samples and on leached residues from column leach tests. McClelland Laboratories, Inc. (“MLI”), Sparks, Nevada shipped a 1 kg sample of rhyolite ore Amtel. Click here for the complete report by Amtel, which was dated October 31, 2003. MLI shipped a 10 kg sample of leached residues from one of the confirmation column leach tests on rhyolite ore to Amtel. Click here for the report by Amtel, which was dated June 7, 2004. MLI shipped a 1 kg sample of quartz latite ore to Amtel. Click here for the complete report by Amtel, which was dated December 15, 2004. Results for a further study are expected shortly. THE HIGH PRESSURE GRINDING ROLL OR HPGR Extensive process development done on Soledad Mountain ores from 1988 to 1999 shows that these ores are readily amenable to heap leaching if the ore is crushed to relatively small sizes. The test work is well documented and test results have been used in a number of historic feasibility studies for the Project. Parameters such as agglomerate strength and binder addition rates, percolation rates, cyanide consumption and reagents required for pH control were also determined in standard tests. Extensive additional test work, which included tests with a high pressure grinding roll (“HPGR”) and bottle roll and column leach tests, was done on the two primary rock/ore types from mid-2003 to end-2006. The following is a brief summary of the process development that has been completed: Polysius Corporation (“Polysius”), Atlanta, GA ground Soledad Mountain ore samples in a laboratory-scale HPGR in 1989. MLI did the column leach tests on the ground material and these tests were completed in July 1990. Comparative tests were done on rhyolite and pyroclastic ores using a vertical shaft impact crusher, referred to as conventional crushing, and these tests were completed in February 1991. Detailed comparisons of these test results were done in-house in 2002 with a focus on particle size distributions vs gold and silver recoveries for the two ore types. Typical particle size distributions and time-recovery curves for rhyolite ore are shown in Figure 1 and Figure 2. Note that both the recovery rate and the total gold recovery were higher when the sample was prepared using the HPGR although the proportion of fine particles was higher when the sample was prepared using the vertical shaft impact crusher. A flow sheet that uses the HPGR for final particle sizing and preparation for heap leaching was developed jointly with Signet Engineering Pty. Ltd. (now Fluor Australia Pty. Ltd.), Perth. See INFO – Photo Gallery for pictures of an HPGR in use in iron ore mines in Chile and Brazil. A confirmation HPGR test was required to provide the following: • The design parameters required to size and to determine the power for the HPGR; The primary ore types that will be mined are rhyolite (68.1 %) and quartz latite (21.3 %). A sample of rhyolite ore was collected for the HPGR test in July 2003. A total of eight drums of rock was collected from four different locations. In addition, hand specimens were collected for a secondary crusher test and for unconfined compressive strength and point load tests. See INFO – Photo Gallery for a picture of the sampling in progress. The HPGR test sample was delivered to MLI where the sample was crushed to 100 % passing 32 mm. The sample was shipped by airfreight to two independent laboratories in Germany where the actual HPGR tests were completed in September. See INFO – Photo Gallery for a picture of the HPGR test in progress. A 4th and a 5th HPGR test were completed by one of the companies in Germany and this sample was returned to MLI for a further column leach test. Both bottle roll tests and column leach tests were completed. Three column leach tests were completed after 104 days of leaching and the final results were received and analyzed. One further column leach test was completed after only 70 days of leaching. Percolation Rates & Design Of The Heap Advanced Terra Testing, Inc., Lakewood, CO completed a test to determine the permeability under load of a sample of leached residues from the column leach tests. Golder Associates Inc. (“Golder”), Denver also did two tests on leached residues from the column leach tests to assess permeabilities under load. The results of all tests done vary widely and permeabilities range from 3x10-5 cm/s to 17,000x10-5 cm/sec. Golder has completed the design of the heap to an ultimate height of 60 m. Gold & Silver Recoveries – Rhyolite Test Sample The gold and silver recoveries obtained in bottle roll tests were higher by and absolute 6.3 % and 5.6 % respectively than the historic recoveries obtained on rhyolite ore. The following gold recoveries were obtained in four confirmation column leach tests:
These gold recoveries can be compared to the gold recovery obtained in a column leach test on a sample of rhyolite ore, prepared by conventional crushing and screening, of 71.8 % in 211 days of leaching in 1997 and 1998. The rate of gold extraction in the confirmation column leach tests was relatively high and approximately 90 % of gold was extracted after 15 days of leaching. The final test was terminated after only 70 days of leaching. A sample of quartz latite ore was taken for HPGR and confirmation bottle roll and column leach tests in April 2004. The HPGR tests were done with a range of specific press forces in the laboratory of Polysius in Germany in September and November 2004. The samples were returned to MLI in Nevada where confirmation column leach tests were completed. Gold & Silver Recoveries – Quartz Latite Test Sample The gold and silver recoveries obtained in bottle roll tests were higher by an absolute 11.6 % and 7.4 % respectively than the historic recoveries obtained on quartz latite ore. The following gold recoveries were obtained in two confirmation column leach tests:
These gold recoveries can be compared to the gold recovery obtained in a column leach test on a sample of quartz latite ore, prepared by conventional crushing and screening, of 79.7 % in 211 days of leaching in 1997 and 1998. The rate of gold extraction in the column leach tests was high and approximately 95 % of gold was extracted after 10 days of leaching. The tests were terminated after only 65 days. The detailed tails analysis indicated that tests should be done on a high-grade and a low-grade sample to obtain data for the complete range of expected head grades. Two rhyolite samples were taken for this test work from April 10 to 13, 2006. The total weight of the two samples was approximately 2,100 kg. The samples were shipped by truck to MLI for first-stage crushing and then by airfreight to the Polysius laboratory in Germany were the HPGR tests were done. The samples were returned to MLI and bottle roll tests and column leach tests were started in July and completed in December. Final results were received and analyzed in detail. The following recoveries are now projected for the commercial operation based upon the tails analysis:
The test results and a technical assessment of the HPGR shows that this will be a viable and cost-effective approach to preparing ores for heap leaching. The indicated benefits of using the HPGR will be: • Higher recoveries in the heap leach operation due to micro-cracks in the ore particles; The HPGR consists basically of two counter-rotating rolls – one a fixed roll and the other a ‘floating’ roll. The ‘floating’ roll is mounted on and can move freely on two slides and the grinding forces are applied to the ‘floating’ roll by four hydraulic rams. Ore is choke-fed to the gap between the rolls and comminution takes place by inter-particle crushing in the bed of particles. The gap between the rolls is determined by the nip-in characteristics of the feed and the total grinding force applied, which in turn depends upon the pressures in the hydraulic system. Each roll is driven by an electric motor via a planetary gear reducer. The total grinding force can range from 750 kN to 20,000 kN and pressures in the gap can range from 50 MPa to 250 MPa. The unconfined compressive strength of Soledad Mountain ores ranges from 2.2 MPa to 118.9 MPa by comparison. Comminution in the HPGR is achieved without impact and essentially without attrition of the wear protection on the surface of the rolls. Every element of the Project has been reengineered in the past three years in an effort to find sound technical and cost-effective solutions that will permit the Project to proceed and this phase of the technical work was completed towards the end of 2006. A detailed site layout with the required infrastructure has been completed. Click here for the current flow sheet. AMEC Americas Limited, Vancouver, British Columbia has done a design of the crushing-screening plant and this includes the HPGR. Polysius has also completed the detailed design of the commercial HPGR, which will have the ability to operate with a maximum specific press force of 4.5 N/mm2. Click here for a 3-dimensional rendering of the crushing-screening plant. A technical paper – “Flow Sheet Development And Benefits Of The HPGR” - was presented at the RANDOL conference held in Perth in late-August 2005. Click here for a copy of the paper. Summit Valley Engineering & Equipment, Inc., Salt Lake City, Utah did the design and capital and operating cost estimates for the Merrill-Crowe plant and refinery. Mr. Jack E Stanley, Analytical Laboratory Consulting Ltd., Princeton, British Columbia did the design and capital and operating cost estimates for the laboratory. Intermountain Consumer Protection Engineers, Salt Lake City, Utah did the design with a capital cost estimate for the workshop & warehouse and the water supply and the process water and firewater distribution systems. Golder did the design of the heap and the heap leach pad and this includes detailed estimates for construction quantities. Site investigations were done by Golder in 2004 and again in 2006. Click here for a picture of the work on site in progress. Terra Nova Technologies, Inc., San Diego did the heap leach stacking study and prepared capital and operating cost estimates for the conveying and stacking system. AMEC Americas Limited prepared a detailed motor list and estimated the power consumption for a commercial heap leach operation and did a capital cost estimate for power supply and distribution. Additional detailed work such as the manpower complement required for a commercial heap leach operation has been completed in-house. The following are a number of recent references that focus on the use of the HPGR in the mining industry:
The following is an indication of work done on site in 2006: • DeWalt Corporation, Bakersfield set out one bench mark for mining phases 1and 2 and one bench mark for mining phase 3 of the open pits as required by the Conditional Use Permits. • Two rhyolite samples were taken for HPGR-based column leach test work from April 10 to 13. The total weight of the two samples was approximately 2,100 kg. The samples were shipped by truck to McClelland Laboratories, Inc. for sample preparation and then by air freight to Germany. • A soil survey was done during the week of August 7 in an area west of Silver Queen Road to determine the possible presence and quality of clay. Clay is required for the construction of one of two liners under the heap leach pads and the current design is based upon a bentonite admixture. The use of bentonite would be expensive and a local source of clay would be preferred if a local source can in fact be located and quality confirmed. A dozen shallow test pits were excavated and a set of samples was taken and logged. Laboratory test work has been completed and a final evaluation will be completed in 2007. • T.J. Cross Engineers, Inc., Bakersfield is doing the detailed design for the turnoff from Silver Queen Road to the mine. The design has been discussed with and will be submitted to the Kern County Roads Department for approval. Kern County Roads Department completed a traffic survey along Silver Queen Road and provided T.J. Cross Engineers, Inc. with design parameters in November. • T.J. Cross Engineers, Inc. is doing the design of the septic systems and leach fields and these will be submitted to the County Environmental Health Services Department for a permit to construct. • The
PM10 monitoring and meteorological station was erected during the week of August 28 and commissioned during the week of September 4 and data is now being recorded on a continuous basis. • A study to assess and document the baseline soil conditions for mercury in the vicinity of the future Merrill-Crowe plant is underway. This is needed to be able to effectively monitor any potential future effects on soils from the operation of the Merrill-Crowe plant and the refinery. The sample locations were set out by a surveyor and samples were taken during the week of November 6. A total of 44 samples with 3 duplicates was taken and samples have been analyzed for a range of elements by BSK Analytical Laboratories, Fresno. A final report with an analysis of the results is being prepared and this will be submitted to the Kern County Planning Department. • Dr. Sam Bamberg designed a revegetation test plot around production well PW-2 in May. This is the first of a number of revegetation test plots that will ultimately be constructed and is in a location that will not be disturbed when mine development starts. The area around production well PW-2 had been used for waste disposal at some time in the past and the area was strewn with broken bottles, rusty tin cans and general garbage. The first task was therefore a thorough cleanup of the site and this was done mid-year. The test plot was prepared on November 6 and 7 with three types of surface preparation: • Ripped and graded with formed micro-basins; Seed was sown by hand on November 8. Growth will be monitored to see what effect surface preparation has on growth and to demonstrate that seed collected and prepared locally can be an effective source of seed. No fertilizer will be used and the area will not be watered. The test plot was fenced. A team of part-time workers collected seed on site from July 24 to 29 and on November 8 and a significant quantity of seed has been collected and is being stored on site. Click here for a number of pictures showing seed collection underway and the test plot. • An extensive bat survey was completed during the week of November 27 and a final report is being prepared. • Cleanup on site is being done by a small contractor from Rosamond. A number of important safety items such as gates and fences are being addressed. • Consulting engineers did a first statistical analysis of the available water quality data from three monitoring wells and a study of the groundwater regime in the area north of the Project. This work was included in the Report Of Waste Discharge that was submitted to the Regional Water Quality Control Board on March 1, 2007. The following is an indication of work that is being done on site in 2007: • The first bat gate was installed in an adit located on property controlled by the company south of Soledad Mountain. The site is readily accessible from Backus Road. This is a demonstration project that addresses a safety concern at the same time. A second reclamation test plot will be prepared on this site later in 2007. Click here for a picture of the bat gate being constructed. Cyanide will be used in the process to extract gold and silver. Very extensive procedures will be put in place to protect the workers and the environment. The cyanide will be received in a dissolved form by truck directly from the manufacturer. The liquid will be pumped to a storage tank on site and from there to the process. The cyanide will no longer be stored on site in a solid form and mixed on site and this was always a concern in other operations. The company expects to sign the International Cyanide Management Code. The Code was developed under the auspices of the United Nations Environment Program and the International Council on Metals and the Environment. The International Cyanide Management Institute, a non-profit organization, administers the Code. Signatories to the Code commit to follow the Principles set out in Code and to follow the Standards of Practice. Companies are expected to design, construct, operate and decommission their facilities consistent with the requirements of the Code and must have their operations audited by an independent third party. Audit results are made public. A large number of wind turbines are located in an area between Mojave and Bakersfield. Oak Creek Energy Systems, Inc., a company based in Tehachapi in California with experience in this area, has looked at the feasibility of using Soledad Mountain as a base for a commercial installation of wind turbines and has had discussions with the Company. Oak Creek Energy Systems, Inc. has had a wind monitoring station on Soledad Mountain for a year and has identified a potentially usable site for 8 to 12 wind turbines. The company is now actively pursuing this as an alternative source of power for the Project although it would still be necessary for Southern California Edison, the local utility, to provide a parallel power source for periods when there is little or no wind. Oak Creek Energy Systems, Inc. indicates that Soledad Mountain would be a very good site. Qualified Person & Caution With Respect To Forward-looking Statements Company President H. Lutz Klingmann, P.Eng, is a Qualified Person under National Instrument 43-101 and has reviewed and approved the technical content of this website. This section of the web site contains certain forward-looking statements, which relate to the intent, belief and current expectations of the company and its management. Investors are cautioned that any such forward-looking statements do not guarantee future performance as mineral exploration and development involves risks and uncertainties, including economic risks, regulatory risks and other risks including those disclosed in the company’s public filings. Actual results could therefore differ materially from those indicated by such forward-looking statements. Updated: May 30, 2007
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2002 - 2007 Golden Queen Mining Corp. & Digisys
Imaging Systems & Consulting. |
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