Wonawinta Project
In December 2007, CCR entered a Joint Venture agreement with CBH Resources, who hold the Wonawinta Ag-Pb-Zn deposit under EL6155, some 20km to the south of Gundaroo. The agreement provided for CCR to earn 51% in EL6155 through an expenditure of $500,000 over 3 years, and 70% for an aggregate expenditure of $700,000 over 4 years. In November 2008 CCR notified CBH that it had reached the 51% earn in point.
Previous explorers located Ag-Pb-Zn mineralisation in three areas over a strike length of 4km (Figure 1). Isolated drill intercepts suggested the zone could extend a further 4km to the south.
The mineralisation is spatially controlled by a thick sequence of Winduck Group Booth Limestone that is unconformably draped over a NNW-trending basement ridge of Thule Granite. The Booth Limestone is overlain by the Gundaroo sandstone unit.
Flatly-dipping zones of secondary Pb-Zn and Ag mineralisation occur in iron and manganese-rich clays developed above the limestone and to a lesser extent above the Thule Granite (Figure 2). Primary MVT-style Pb-Zn-Ag mineralisation (intersected in several drill-holes) is the likely source of the metals.
Based on the limited drilling by previous explorers, CCR calculated target mineralisation figures for the three areas identified in Figure 1 below, as listed in Table 1.
Table 1: Wonawinta target mineralisation estimate
The approximate in-situ value for this mineralisation is $164/t - equivalent to 4.8 g/t Au.
Alternatively it may be expressed as having metal equivalence to;
- 47Moz at 233 g/t
- 360,000 tonnes of Zn metal at a grade of 5.8% Zn, or
- 300,000 tonnes Pb metal at 4.8% Pb
Figure 1: Geological plan of Wonawinta project showing identified target mineralisation areas.
Figure 2: Area 2 drill cross section showing distribution of Ag-Pb-Zn mineralisation
July 2008
CCR announced that it had upgraded its target mineralisation estimate to inferred resource status and achieved positive results from preliminary metallurgical testwork and economic modelling.
As part of a number of studies to determine the viability of the Wonawinta project, AMC Consultants Pty Ltd was engaged to carry out resource estimation. This work identified an inferred mineral resource1 of 6.5M tonnes at 97g/t Ag and 1.3% Pb for 20M ounces of silver at a high cut-off, within a global inferred resource estimate of 18.1M tonnes at 54g/t Ag and 0.9% Pb for 31M ounces of silver at a low cut-off. Oxide mineralisation exceeds 86% of the total in both cases.
The resource estimate was obtained by modelling mineralisation above either 15g/t Ag or 1% Pb and is summarised in the table below above various cut-offs.
The cut-off factor is the dollar value sum of recovered silver (85%, based on metallurgical testwork) and payable lead (39%, based on metallurgical testwork and assumed realisation costs). Metal prices of A$18.70/oz for silver and A$1,800/t for lead were used. The Factor has been calculated by the following formula Factor = 7* Pb% + 0.4*Ag g/t.
The inferred resource incorporates the results of the company’s recent 36 hole aircore drilling program. This program was designed to infill mineralised zones and test for potential strike extensions. The drilling successfully extended the mineralised zone 2km to the south, and also indicated likely continuity around the granite outcrop in the north (Figure 1).
Encouragingly, the best silver intercept (6m @ 363 g/t from 15m) was recorded in the southern-most line of aircore holes (Figure 2). CCR284 is 80m east of a strong intercept in a previous RC hole PWRC4, suggesting high-grade mineralisation is open to the south. The Company announced in January 2008 that it had reached agreement to acquire EL6651 which covers the area immediately north west and south east of EL6155.
Together with the inferred resource estimate the company has completed some preliminary studies into mining and metallurgy.
Mineralisation is generally shallow and clay hosted and could be mined as a series of open pits. Overburden is free digging and should not require drilling and blasting.
The metallurgical testwork indicates that crushing and grinding may not be required and a washing and scrubbing circuit may be sufficient to prepare the ore for processing. The majority of silver can be recovered as bullion by cyanidation treatment of the ore. Lead and residual silver can be recovered as by product credits by producing a gravity concentrate.
Preliminary financial modelling has been based on nominal output of 3M ounces of silver per annum. Revenues have been based on current metal prices for the first 2 years and lower metal prices thereafter. As a result of relatively low capital and operating costs, the project modelling indicates a positive return on investment.
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