New Guinea Gold Corporation

New Guinea Gold Corporation

September 15, 2005 17:48 ET

New Guinea Gold Announces Resources Estimates at Sinivit Gold Project

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Sept. 15, 2005) - New Guinea Gold (TSX VENTURE:NGG) is pleased to announce mineral resource estimates for the Sinivit gold deposit in Papua New Guinea. These resources were defined, in part, by 122 diamond drill holes totalling 18,067 metres, and 75 reverse circulation percussion (RC) holes totaling 2,987 metres. The drilling emphasized a strike length of approximately 1,000 metres covering the Southern Oxide Zone (9810 N to 10000 N), the Central Oxide Zone (10000 N to 10180 N), the Northern Sulphide Zone (10180 N to 10400 N) and the Northern Oxide Zone (10400 N to 10550 N).

Mineral Resource Estimate:

The following tables shows the Indicated Mineral Resource and Inferred Mineral Resource estimates for the Sinivit deposit.

Category Tonnes Gold (g/t) Contained gold
Indicated - Oxide 413,000 4.4 58,000
Indicated - Sulphide 300,000 7.6 74,000
Indicated - TOTAL 713,000 5.7 132,000
Inferred - TOTAL 340,000 3.2 35,000

Mineral resources that are not reserves do not have demonstrated economic viability. Measured and indicated mineral resources are that part of a mineral resource for which quantity and grade can be estimated with a level of confidence sufficient to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. An inferred mineral resource is that part of a mineral resource for which quantity and grade can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified.

The resource estimate has been confirmed by Project Geoscience Pty Ltd, which is independent of New Guinea Gold and is classified to conform to the CIM definitions referred to in National Instrument 43-101. Ralph Stagg, B.Sc, M.Sc, F.AusIMM, CP, DIC, MIMMM, C.Eng, who has 35 years experience in the exploration, mining, engineering and investment fields served as the Independent Qualified Person responsible for this estimate and the preparation of the independent report in accordance with NI 43-101.

Project Geoscience Pty Ltd has reviewed this disclosure and consents to its release. Ralph Stagg, the independent Qualified Person has reviewed the data and the work by other independent and non-independent Qualified Persons, agrees with the mineral resource estimates and concurs with the estimated reported. The Independent Report will be filed on Sedar within 30 days.

Mr. Stagg visited the property on August 23, 2005 and inspected the mineralized outcrops, drill sites, drill core and other on-going activities such as preparation of haul roads, vat leach sites, etc. Mr. Stagg reviewed all aspects of the resource estimates including, but not limited to the following;

- Geology, deposit type and mineralisation

- Weathering

- Drilling, including compilation of all drill holes and trenches by cross-section, used in the estimate

- Sampling methods and details

- Factors effecting reliability of samples

- Sample preparation, analyses and security

- Assay procedures, quality and checking

- Quality control and verification procedures

- Mineral processing and metallurgical testing

- Methodologies of resource estimation

- Categorization of resources

- Permitting

- Capital and operating costs

- Economic analysis

These items are all dealt with in detail in the "Technical Report on the Sinivit Property, Papua New Guinea" by R.N. Stagg B Sc, MSc, DIC, FAusIMM, CP, MIMMM, CEng, which will be lodged on Sedar within 30 days.


The Sinivit Gold Project is located 50km south-southwest of Rabaul in the East New Britain Province, Papua New Guinea. It can be accessed by road from the town of Kokopo and port of Rabaul. A jet airport at Kokopo has several daily flights to Port Moresby and Lae. The Company announced on June 16, 2005 that all approvals had been received from the Papua New Guinea Government in respect to commencing development of the Sinivit Gold project.

Historic resources were included in an independent feasibility study on the Sinivit gold deposit by Ausenco Ltd, a Brisbane, Australia engineering company, dated 11 December 1995. These resources were estimated by independent and non-independent Qualified Persons under the supervision of Robert D. McNeil, B.Sc. Honours, MSc. Fellow of the Australian Institute of Mining and Metallurgy and Dr David Lindley, B.Sc. Honours, Ph.D. Member of the Australian Institute of Geoscientists, both of whom are Qualified Persons as defined by N.I. 43-101 and both persons consent to this public disclosure. Mr McNeil is now chairman/CEO and Dr Lindley is Exploration Vice President of New Guinea Gold Corporation. These resources have an effective date of September 12th 2005, are now considered current, and comply with the requirements of N.I. 43-101.

New Guinea Gold has an active exploration/development progam with the objective of defining additional gold mineralisation. The known mineralisation is open at depth and there are numerous other, as yet unexplored targets within the Sinivit properties. The potential to increase mineralisation at the project has been described in the independent Technical Reports by Peter Christopher, PHD, P. Eng, which is available at

The Company commenced development at Sinivit in July 2005 based on the historical estimates of reserves and resources in the 1995 independent Feasibility Study prepared by Ausenco Ltd of Brisbane, and an update of this historical feasibility study. Investors are cautioned that the development is proceeding in the absence of a feasibility study prepared by an independent Qualified Person that determines and supports the economic viability of the project, and, as such, the financial risk of the project may be higher.

Key Assumptions, Parameters and Methods Used to Prepare the Mineral Resource Estimate

Deposit Description

Both oxide and sulphide vein resources are present in the project area. Gold and silver bearing oxidised vein material forms, on average, a 30 m thick surficial zone overlying gold-copper-silver-telluride bearing veins. Supergene oxidation has typically resulted in the total removal of copper and tellurides and the partial leaching of gold and silver from primary mineralisation. Oxide resources have been identified in the Sinivit vein (Southern, Central, and Northern Oxide Zones), and the Kavursuki vein. Work to date has delineated a sulphide resource in the Sinivit vein (Northern Sulphide Zone).

Downhole Survey

All drill holes were surveyed for dip and azimuth at the collar, and six holes have been surveyed downhole. The dip and strike of these downhole surveyed holes differs very little from that measured at the collar. For example, hole WDD035 is 220 metres long. Its dip dropped from 60 degrees to 64 degrees, and its azimuth from 105 degrees to 108 degrees over the full hole length.


Since 1984, the Sinivit Prospect has been under intermittent, though often intensive investigation. As well as trenching, detailed mapping and sampling, a total of 122 diamond drill holes have been put down for 17,775 metres, and 62 reverse circulation percussion (RC) holes for 2,600 metres.

The drilling has been concentrated within a strike length of approximately 1,000 metres covering the Southern Oxide Zone (9810 N to 10000 N), the Central Oxide Zone (10000 N to 10180 N), the Northern Sulphide Zone (10180 N to 10400 N) and the Northern Oxide Zone (10400 N to 10550 N).

Trench Sampling

A series of trench samples were taken across the Central reef in the Southern and Northern Oxide Zones. Bulldozed cuts across the zones of massive resistant silicification were facilitated in areas where intense post-mineralisation cross-fracturing has imparted brittle fracturing. Trenches were along bulldozed cuts and allowed recovery of samples from surface to around 2 metres depth into the reef. Although designed to sample across the reef the trenches did include samples both along and across strike.

In many of the trenches, individual and average grades are significantly higher than the grades obtained from drill holes directly beneath them. Since the trenches were sampled in, along and across strike, and care was taken to collect the full sample interval, the trenches returned reliable "bulk" grades. One possible reason for the discrepancy between the drill and trench samples could be that the drill holes may have followed down along the weakened zones of cross fracturing rather than drilling through the un-fractured mineralisation. It is likely that the fractures would exhibit more intense leaching than the surrounding un-fractured ground.

Assaying and Sample Preparation

Conventional RC drilling sampling was carried out, with samples collected in a bag which allowed dewatering by overflow, and diffusion through the bag surface.

On site preparation included drying, weighing and riffle splitting into one quarter/three quarter splits. Consecutive one quarter splits were combined and dispatched until mid 1986 to Pilbara Laboratories in Lae, then after this date to PNG Analytical, also in Lae.

At the laboratory, the sample was first crushed to -40 mesh by a roll mill, then to -60 mesh by a Keegor mill.

Finally, the sample was pulverised to -150 mesh, and gold values derived by fire assay of a 50 gram charge, with atomic absorption spectrophotometer (AAS) finish.

If assays of +0.5g/t Au were obtained, a second quarter split on an individual metre basis was submitted for analysis.

Diamond drill half core samples submitted to the laboratory were prepared in the same way, except that a preliminary jaw crushing stage was introduced.

All gold determinations to March 1987 were completed on 50 gram charges. During March 1987, trial analyses of both 50 gram charge and 25 gram charge determinations were completed on 50 samples, ranging in gold content from below the assay detection limit to 12g/t Au.

The results showed close correlation, after which the laboratory routinely completed gold analyses on 25 gram charges on all Sinivit samples.

Check Assays

Interlaboratory checks were completed during September 1986 and July 1987. The July 1987 check included in excess of 300 samples, with determinations done on a 50 gram charge basis by the check laboratory versus 25 gram charges by the initial laboratory.

Standards have been used since October 1985 on a one in ten basis. Up to the end of 1986, three standards: less than 0.01g/t Au, 0.9g/t Au and 4.9g/t Au were rotated. Commencing 1987, six standards were used, at least two assaying 2.5g/t Au, two assaying 8g/t Au and one assaying less than 0.1g/t Au.

Basic Statistics for Oxide Indicated Resource

The drill hole gold assays were composited on 2 metre intervals to correspond to the probable mining bench height and preliminary statistical analyses were conducted. In order to eliminate potential along strike variations the data was grouped into two sets. The Southern and Central Oxide Zones formed one set while the Northern Oxide Zone formed the other. The geological structure is too complex to allow detailed definition of the economic grade zones at this stage so the "ore" zones were selected by a visual assessment of the grade separating mineralised zones from the background mineralisation. This was 0.30 g/t Au for the Southern and Central Oxide Zones and 0.40 g/t Au for the Northern Oxide Zone. Statistics for the two areas are summarised in Table 3.4.

Table 3.4 Oxide Zone Statistics
Southern and Central Northern Oxide Zone
Oxide Zones
No. of 2 m Composites 527 31
Minimum Assay 0.30 0.40
Maximum Assay 50.40 37.96
Mean 2.47 3.35
Variance 20.26 56.25
Standard Deviation 4.50 7.50
Coefficient of Variance 1.82 2.24

The spread of values for the Southern and Central Oxide Zones are typical of many gold deposits. A coefficient of variance below 2.00 for gold is not excessive. Results from the Northern Oxide Zone are much more scattered. This is probably due to the small number of composites which is too low to allow useful analysis of grade distribution.

Grade frequency histograms and cumulative frequency plots were prepared for both populations. Each showed a major skew to the lower grades, even using log transformed data. This is despite the fact that lower grade limits were applied in both cases. Much more detailed examination of the drilling data is required to determine the reasons for this skewed distribution. It may be, for example, that the holes have followed down leached fractured zones. However the data in its current form is not suitable for detailed geostatistical analysis.

In Situ Bulk Density

Specific gravity measurements were made on approximately 130 core and rock chip samples during September and October 1995. These samples were selected from surface to 30 metres depth from each of the Southern, Central and Northern Oxide Zones. Nearly all of the samples were closely clustered around an average of 2.61 t/m3. This agrees well with the average specific gravity of quartz at 2.65 t/m3.

Specific gravity used for the Sulphide Indicated/Inferred Resources and the Oxide Resource at Kavursuki was 2.5.

Computer Database and Modelling System

Orebody modelling, resource estimation and mine design were carried out using SURPAC 2000 software. A SURPAC database was compiled incorporating:

- Drill hole collar coordinates and levels in the local grid system.

- Drill hole types (reverse circulation or diamond core).

- Drill hole dips and azimuths.

- Gold primary and repeat assays and an average of the two used in the resource modelling.

- Copper assays.

- Silver assays.

A topographic model was prepared by digitising contours from the most recent aerial photography. It was later noted that this photography was impeded by the dense tree canopy and is not accurate in places. The surveyed drill hole collars were included in the model to improve its accuracy.

Geological In Situ Resource Estimation.

Geological interpretation and delineation of the quartz veins was undertaken by Dr David Lindley.

Definition of the grade zones within the geological boundaries and subsequent sectional modelling of the resource and reserve in SURPAC was undertaken by John Wyche of Australian Mine Design and Development Pty Ltd.

Resource Estimation Procedure The following steps were carried out in the resource estimation:

- East-west section lines were defined along the baseline to group the drill hole and trench data as closely as possible within the known fault blocks.

- Drill hole cross sections were extracted on the defined lines showing hole name, hole trace, average gold grade and copper grade in each uncomposited sample interval.

- Topography cross sections were taken through the topography model on each of the section lines.

- Cross section plots showing the drill hole data and topography were produced at 1:250 scale on each section line.

- The reef structures were drawn onto the sections using data from the original drill logs and outcrop mapping.

- A cut off grade of 0.5g/t gold was chosen as it appears to provide adequate definition of the mineralised zones while still being at the lower end of potentially economic grade.

- Resource polygons were marked out on each section by following the 0.5 g/t gold envelopes within the interpreted quartz reef structures. The shape of the polygons takes into account:

- The occurrence of cross faulting as logged in trenches, core, or as
interpreted from drilling difficulties.

- The occurrence of cross cutting dykes.

- Topography.

- Polygonal interpretations on adjacent sections.

- Where polygons were defined by more than one drill hole they were split half way between the drill holes to limit the grade interpolation distance.

- Polygons were not generally extended more than 10 metres up or down dip from the last hole on a section. This distance is probably less than the range of continuity in the mineralisation but the structural complexity of the deposit limits confidence in the extrapolation of the mineralised pods.

- Each section was assigned an along strike width of influence extending half way to the sections either side. The two end sections (9810 N and 10550 N) were extrapolated 20 metres beyond the section plane.

- Normally at this stage the polygon areas on each section would be multiplied by the along strike width of influence to calculate the ore volume. However the steep topography at Sinivit could give rise to major volume errors with ore being extrapolated into air. The following procedure was used to clip the orebody model against topography:

- Each section polygon was sliced at 2 metre vertical intervals. The slices were extended half way to each adjacent section to form rectangles in plan view with along strike lengths equal to the section widths of influence.

- The rectangles carry the grades of the polygon from which they were extended. The result is a sort of block model made up of rectangles defining the ore zones on each 2 metre bench.

- The topography model was contoured at the same 2 metre vertical interval and the contours were used to clip off the parts of the interpolated/extrapolated ore rectangles which had been extended beyond natural surface.

- Each bench was given a vertical width of influence of 2 metres. It was thus possible to multiply the areas of the slipped rectangles by 2 metres to calculate an ore volume. This was multiplied by the oxide ore bulk density of 2.61 t/m3 to calculate the ore tonnage.

- The gold and copper grades for each clipped rectangle were combined as tonnage weighted averages for each bench and each zone.

Resource Categories

Resource categories are designed to give interested parties a measure of the confidence with which the resource tonnes and grade have been estimated. Much of the Sinivit resource has been drilled at less than 25 metre centres. Such a close spacing combined with the procedures already noted, is used, this would normally assist in the classification of a measured resource but three main factors prevent this.

Steep topography makes drilling of regular section lines impossible. This makes interpretation of mineralisation and structures more uncertain.

- Frequent, irregular cross faulting decreases confidence in interpolation and extrapolation of structures.

- Discrepancies in grade between trench samples and adjacent drill holes remain unexplained.

However, on the one section of exposed reef which has been thoroughly mapped and sampled the structure and gold distribution is well understood and this model is consistent with the ore polygons delineated on each section. An adequate model exists for the structure of the host system and the distribution of gold within it but the small scale of the structures and the irregularity of the drilling make it impossible to fully define each intersected zone of mineralisation. For this reason the entire resource model is classed as indicated.

Diamond Twin Holes

Diamond twins were completed adjacent two reverse circulation holes during the 1986 program; viz: WDP010/WDP022 and WDP004/WDP021. These holes were collared within 2 to 4 m of each other and 100% core recovery was obtained from cored holes. Comparison of the Au results from these holes by J. Whyce and I.D. Lindley, indicate a "perfect" match in downhole reverse circulation geochemistry with respect to that of the corresponding drill hole.

Check Sampling by New Guinea Gold Corporation

A program of surface and drill core check sampling was completed in January 2004 on the Northern, Central and Southern Oxide and North Sulphide Zones of the Sinivit deposit. These results confirm the reliability of the original drill assays. In addition a 13.20m core assay (7.15 to 20.35m down-hole) was split into 10 splits to study the "nugget effect", if any, of the Sinivit oxide ore. The original assay was 12.4 g/t gold and the splits assayed as follows: 14.85, 18.4, 15.45, 15.4, 18.25, 7.47, 18.45, 6.8, 6.85, 7.53 (average -13.0 g/t gold). These results show there can be significant variation between splits, but the average grade is similar to the original grade.

Four large bulk samples (60-100kgs) were collected from surface trenches to check the tenor of gold at the surface. Each sample was crushed and split into 10 separate samples to check for the "nugget effect" and assay repeatability. The results confirm extensive gold at the surface and show there is relatively minor variation between splits and only minor "nugget effect".

Open Pit Design

The resource model was modified to account for mining dilution and a set of three pits was designed to maximise gold recovery in low copper oxide mineralisation. The goals of these designs were to extract as much gold mineralisation above the 0.5 g/t Au cut off as possible while minimising the volume of high copper mineralisation exposed and keeping the waste : ore ratio as low as possible.


The geotechnical design parameters were selected on the following premises:

- The mineralisation zones occur in two, and sometimes three, quartz reef structures which run the full strike length of the deposit. These reefs provide reinforcement to the rock mass.

- Although there is an extensive blanket of very weak oxidised clay material the majority of the rock mass outside the reefs comprises tuffs of moderate to competent strength.

- Most of the structures are near vertical.

- Bulldozer cuttings with near vertical walls of eight to ten metres height have stood for nearly ten years.

- Natural slopes of greater than 1 in 1 are not uncommon.

- The occurrence of high copper grades at shallow depths limits the pits to 30 metres depth.

- The pits will have short lives, generally less than one year each.

The overall pit wall slope selected is 62 degrees which is formed by a face slope of 70 degrees with a 4 metre berm every 16 metre vertically. This slope is flattened in places by the inclusion of ramps and widened ore benches.

Metallurgical Testwork

There are two distinct mineralisation types - oxide and sulphide.

Metallurgical testwork on the Sinivit oxide deposits has been undertaken by a number of groups including City Resources, Warman Laboratories, Ed Newman & Associates and the Julius Kruttschmitt Research Centre. Ed Newman & Associates prepared a review of testwork in July 1994. The gold mineralogy of the oxidised mineralisation is not clear, but cyanide leach liquor assays contain low levels of tellurium, arsenic and copper, suggesting extensive oxidation and remobilisation of gold into leachable forms.

Bond Work Index determinations were completed on oxide ore samples indicating an index of 11.2 KWh/tonne which is low for quartz type materials. The ore is indicated to be composed of many fracture planes.

Column leach testwork carried out in 2003 - 2004 by Macmin and AMMTEC have indicated that material crushed to minus 12.5 mm is leachable in cyanide. Recoveries up to 92 % were obtained with cyanide consumptions of 0.65 kg/t. Ammtec's figure of 88% has been adopted. This has indicated that vat or heap leaching is a viable option for recovery of gold from the oxide material.

Data suggests that gold in sulphide mineralisation is mainly present as gold telluride which is refractory to cyanide leaching. There is sufficient sulphide mineralisation testwork available, however, to show that a flowsheet involving a simple flotation scheme, in a low cost flotation cell such as the Jameson cell, followed by shipment to Mt Isa (or other smelter) for treatment in the copper Isasmelt vessel would be feasible. The presence of an existing infrastructure to mine the oxidized ore, should make this option feasible.

The technical data in this elease was prepared by or under the supervision of Robert D. McNeil, CEO of New Guinea Gold Corporation, and Dr. David Lindley, Vice President Exploration of New Guinea Gold Corporation. Mr McNeil has an MSc in Geology, 46 years mining industry experience, is a Fellow of the Australian Institute of Mining and Metallurgy, and meets the requirements of NI 43-101 for a qualified person. Mr McNeil was formerly General Manager for Esso Papua New Guinea Incorporated (Exxon Minerals) from 1980 to 1986. Dr Lindley has a PhD in Geology, 27 years exploration industry experience (mostly in Papua New Guinea), is a Member of the Australian Institute of Geoscientists, and meets the requirements of N1 43-101 for a qualified person.




The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the company.

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