Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to
announce the initial resource estimate for the Bigar Hill project area, part of
its Timok Gold Project, a new gold discovery in an emerging sediment-hosted gold
belt located in Eastern Serbia.
The Bigar Hill mineral resource, prepared by AMC Consultants Limited (UK)
("AMC"), an independent mining consulting firm, has been estimated at 38,000,000
tonnes grading an average of 1.3 g/t gold in the inferred resource category for
1,500,000 ounces of gold, using a 0.4 g/t gold cut-off.
A summary of the mineral resource estimate using various cut-offs is tabulated
below:
--------------------------------------------------------------
BIGAR HILL
INFERRED RESOURCE ESTIMATE(1,2,3,4)
Combined Mineralized Zones
In Situ Resources
Local Multiple Indicator Kriging
5m x 5m x 5m Selective Mining Unit
--------------------------------------------------------------
Cut Off Grade Million Million
(Au g/t) Tonnes Au (g/t) Ounces (Au)
--------------------------------------------------------------
0.2 63.9 0.9 1.8
0.4 38.0 1.3 1.5
0.6 26.4 1.6 1.4
0.8 20.4 1.9 1.3
1.0 16.5 2.1 1.1
1.2 13.0 2.4 1.0
1.4 10.8 2.6 0.9
1.6 9.2 2.8 0.8
1.8 7.5 3.0 0.7
2.0 6.3 3.2 0.6
--------------------------------------------------------------
1. The effective date of the mineral resource estimate is 30th June 2012.
2. The gold price used in this estimate was the mean gold price for 2010
and 2011 of US$1350/oz. First phase, extensive metallurgical test work
is nearing completion and, based on information to date, along with
possible projected throughput rates for the entire Timok Gold Project,
typical mining costs and a range of processing costs and indicative
ranges of processing recoveries it is, at this stage, believed that
possible cut off grades lie in the range of 0.4g/t to 0.8g/t.
3. Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title,
taxation, sociopolitical, marketing, or other relevant issues.
4. The quantity and grade of reported inferred resources in this estimation
are uncertain in nature and there has been insufficient exploration to
define these inferred resources as an indicated or measured mineral
resources.
The Timok Gold Project comprises several targets including Bigar Hill, Korkan
and Kraku Pestar. The Bigar Hill resource estimate is the first of three
scheduled resource estimates, with Korkan and Kraku Pestar to follow. The
initial Korkan resource definition drilling program was recently completed and
the database is expected to be closed off presently, following which the data
will be forwarded to AMC. The Kraku Pestar drilling database is due to follow as
soon as selected 40 meter by 40 meter drilling is completed. Infill drilling at
40 meter by 40 meter spacing has re-started at Bigar Hill. Avala controls 100%
of this newly identified sediment-hosted gold belt which totals approximately
250 square kilometres.
1. HIGHLIGHTS
-- Independent resource estimation has been completed by AMC on the Bigar
Hill deposit.
-- The resource estimate is based on 199 drill holes (74 diamond drill
holes and 125 reverse circulation drill holes). Details of the drilling
and sampling program are summarised in the table below.
------------------------------------------------------------------------
Item DD RC Total
------------------------------------------------------------------------
HOLES 74 125 199
METERS DRILLED 19,410 26,658 46,068
SAMPLES 18,022 26,658 44,680
AVERAGE RECOVERY 97% 88% 92%
ASSAYS (Au) 43,738
BULK DENSITIES 2,598
TWIN DRILL PAIRS 24
TWIN DRILL METERS 10,652
40m x 40m (%) 22
80m x 80m (%) 78
------------------------------------------------------------------------
-- A very large amount of check sampling and assaying has been completed,
as part of Avala's standard QAQC procedures, which is summarised below.
------------------------------------------------------------------------
Item DD RC Total
------------------------------------------------------------------------
FIELD DUPLICATES 3,188 3,188
LAB DUPLICATES 1,870 3,537 5,407
LAB REPEATS 8,831 15,242 24,073
LAB SPLITS 2,259 4,398 6,657
REFEREE GENALYSIS (Au) 443
REFEREE ALS VANCOUVER (Au) 698
BLANKS 1,778
INTERNATIONAL STANDARDS 10,712
------------------------------------------------------------------------
-- Block model preparation and resource estimation has been completed using
Datamine and Isatis. One-meter composites (the standard Avala sampling
unit) were used to define geological boundaries and mineralized
wireframes, whilst three-meter down hole composites were used for
statistical analysis, variography and resource estimation.
------------------------------------------------------------------------
Item EAST NORTH RL
------------------------------------------------------------------------
LENGTH (METERS) 1,200 880 500
PARENT CELL (METERS) 20 20 10
SUB-CELL (METERS) 5 5 2.5
SELECTIVE MINING UNIT 5 5 5
------------------------------------------------------------------------
-- Resource estimation has been completed using the geostatistical
technique, Local Multiple Indicator Kriging ("Local MIK"). Local MIK is
a form of Multiple Indicator Kriging ("MIK") where the grades are
'mapped' directly into selective mining unit ("SMU") sized blocks from a
MIK estimate. Bulk density has been estimated into the block model using
inverse distance weighting. Three main mineralized zones were defined;
within the overlying andesite ("Andesite"), surrounding the boundary of
the S1/S2 sedimentary units ("MSSS") and surrounding the S1/underlying
limestone boundary ("MSSL"). A total of 11 indicator cut offs were used
to define the metal distribution within the model cells. Upper limits
were used in the top 'bin' of the indicator cut offs whilst an upper cut
of 8.0g/t was used for the Andesite-hosted mineralization.
-- The mineral resource was estimated using the Canadian Institute of
Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral
Resources and Reserves, Definitions and Guidelines prepared by the CIM
Standing Committee on Reserve Definitions and adopted by CIM Council.The
in-situ resource estimate is within the defined mineralized wireframes
and is reported at a wide range of lower cut off grades. The initial,
comprehensive, phase of metallurgical test work is being completed and
will be used, along with the Preliminary Economic Analysis, which has
recently been initiated and is being managed by G-Mining Services Inc.
of Montreal, to define the appropriate cut off grade for the complete
Timok Gold Project (Bigar Hill, Korkan and Kraku Pestar). The Bigar Hill
grade-tonnage report is summarised in the table below (reported to the
appropriate level of precision).
------------------------------------------------------------------------
BIGAR HILL
INFERRED RESOURCE ESTIMATE(1)
Combined Mineralized Zones
Local Multiple Indicator Kriging
5m x 5m x 5m Selective Mining Unit
------------------------------------------------------------------------
Cut Off Grade (Au g/t) Million Million
Tonnes Au (g/t) Ounces (Au)
------------------------------------------------------------------------
0.2 63.9 0.9 1.8
0.4 38.0 1.3 1.5
0.6 26.4 1.6 1.4
0.8 20.4 1.9 1.3
1.0 16.5 2.1 1.1
1.2 13.0 2.4 1.0
1.4 10.8 2.6 0.9
1.6 9.2 2.8 0.8
1.8 7.5 3.0 0.7
2.0 6.3 3.2 0.6
------------------------------------------------------------------------
1. See notes on page 1.
2. ADDITIONAL INFORMATION
Drilling and Sampling
-- Figure 1 shows the location of the Bigar Hill deposit within the Timok
Gold Project, whilst Figure 2 displays the drilling carried out to date
at Bigar Hill along with a gram-meter map of mineralization. Figure 3
shows a typical cross section through the Bigar Hill deposit
illustrating the shallow dipping nature of gold mineralization.
-- Diamond drilling has been carried out such that drill holes are always
started using PQ core and then reduced to HQ triple tube (HQ3) once
competent rock has been intersected. The diamond drill core size is kept
as HQ or HQ3 for as long as possible. Drill core is carefully packed for
transport to the sample preparation facility in Bor.
-- Reverse circulation (RC") drilling is carried out with specialised
custom drill rigs, which include separate, very high capacity compressed
air boosters in order to ensure sampling is under dry conditions. 'Blow
backs' are routinely used for every meter of advance (all the material
within the drill stem for the relevant meter of advance is displaced
into the sample bag prior to advancing to the next meter). The cyclone
is cleaned thoroughly at every rod change and the hole is thoroughly
conditioned (completely dried if any moisture has entered the drill
hole) before drilling is re-initiated. If sampling cannot be carried out
under dry conditions, the drill hole is abandoned and is then re-entered
as a diamond core 'tail'. Each meter sample is weighed using electric
scales and the data is recorded using data loggers in order to compare
with the theoretical sample mass for the particular drill bit diameter
and the lithology being drilled.
-- The average core recovery is 97% and the average RC sample recovery is
88%, with an average one-meter RC sample bag weight of 36.5kg.
-- All but 6 diamond holes (BHDD002, 003, 011, 021, 024 and BHDD053) and
one RC hole (BHRC025) have had their drill hole collars surveyed by DGPS
by Avala surveyors (registered independent surveyors regularly audit
Avala's survey control and procedures). The 7 holes had to be surveyed
using a traditional total station theodolite due to dense forest cover
and a poor DGPS signal.
-- The diamond drill holes were down hole surveyed every 30 meters using
electronic survey equipment, whilst an average 48 metre spacing was used
for the down hole surveying of RC holes.
-- Bigar Hill has been drilled on a nominal 80 meter by 80 meter grid
spacing with a portion of the resource area having been drilled at a
collar spacing of 40 meters by 40 meters. Approximately 22% of the
surface area of the Bigar Hill deposit has been drilled at 40 meters by
40 meters, with further infill drilling at Bigar Hill having been re-
started now that the Korkan first-pass resource drilling program is
complete. Diamond 'twin' drilling of the RC drill holes will continue
across the target area at a nominal rate of 15% of total RC drilling.
-- RC and diamond core sampling has been carried out using Avala's detailed
protocols throughout the entire drilling program.
Density Measurements
-- Density measurements are routinely taken every three meters down hole
from diamond drill core. The bulk density of the core billets is
measured at the SGS managed laboratory at Bor using the industry
standard wax-seal immersion method. The table below summarises the
numbers of density measurements for each rock type in the Bigar Hill
drill hole data set, relative to the mineralized wireframes for the
resource model.
-----------------------------------------------------------------
Lithology Total
-----------------------------------------------------------------
Andesite 540
Marl 113
S1 sediment 673
S2 sediment 313
Limestone 765
Outside resource model 194
Total 2,598
-----------------------------------------------------------------
Twin Drilling
-- Twin drilling has been routinely performed with a target of at least 15%
of all RC holes being twinned with diamond drilling.
-- At Bigar Hill there have been 22 DD/RC twins and one DD/DD twin and one
RC/RC twin. Based on total meterage drilled at Bigar Hill, some 23% of
the drilling relates to twin drilling (10,652 meters out of the current
deposit total of 44,680 drilled meters). The routine reverse
circulation-diamond 'twin' drilling program continues to confirm that
the majority of mineralized intercepts and hence the deposit style, is
dominated by layer-parallel, lithology-controlled gold mineralization
and that there can be close spaced variation in gold grade, as is
typical for gold deposits.
Assaying
-- All Bigar Hill, drilling has been routinely assayed for gold (Au),
silver (Ag) and sulphur (S). The number of samples in the Bigar Hill
resource estimation database is summarized below. In a future resource
update, including the 40 meter by 40 meter drilling that has been re-
started; the resource model will be updated for these additional
elements.
-- The table below summarizes the primary and referee assaying that
comprises the Bigar Hill resource estimation database along with the
assay methods that have been used.
----------------------------------------------------------------------------
Item Au Ag S
----------------------------------------------------------------------------
ASSAY METHOD 50g Fire
assay/AAS Aqua regia/AAS Eltra furnace
PRIMARY ASSAYS 43,738 43,750 33,822
REFEREE GENALYSIS 443 403 427
REFEREE ALS VANCOUVER 698 673 675
----------------------------------------------------------------------------
Variography
-- Detailed variography has been carried out for the 11 indicator cut offs
that have been used in the Local MIK grade estimation.
-- The table below summarises the modelled gold variography.
----------------------------------------------------------------------------
Structure 1 Structure 2 Structure 1 Range
Item Nugget Value Sill Value Sill Value (m)
X Y Z
----------------------------------------------------------------------------
Andesite 0.91 0.136 0.075 30 30 30
MSSS (S1/S2) 0.43 0.870 0.320 85 70 25
MSSL (S1/LMST) 0.39 0.072 0.203 25 25 25
----------------------------------------------------------------------------
---------------------------------------------------------
Structure 2
Item Range (m) Dip Dip Direction
X Y Z
---------------------------------------------------------
Andesite 65 65 65 -20 N090E
MSSS (S1/S2) 145235 50 -20 N090E
MSSL (S1/LMST) 60 60 60 -20 N090E
---------------------------------------------------------
Resource and Grade Modelling
-- Detailed interpretation of the geological and grade data has resulted in
the modelling of 3 main zones of gold mineralization, which have been
termed Andesite, MSSS (straddling the boundary and including the S1 and
S2 sedimentary units) and MSSL (straddling the boundary and including
the S1 and limestone units). The interpreted mineralized zones are in
contact for much of the deposit.
-- One-meter composites were used to define lithological boundaries,
geological boundaries and the mineralized zone outlines. Three-meter
down hole composites were used for statistical analysis, variography and
grade estimation. The table below summarizes the number of 3 meter
composites within the various domains.
-----------------------------------------------------------------
Item Number
-----------------------------------------------------------------
Andesite Wireframe (MMVO) 398
MSSS Wireframe (S1/S2) 2,956
MSSL Wireframe (S1/LMST) 2,296
Background 9,678
-----------------------------------------------------------------
-- The block model closely matches the volumes of the mineralized zone
wireframes as shown in the table below.
--------------------------------------------------------------
Item Wireframe Volume Block Model
(million cubic Volume (million
meters) cubic meters)
--------------------------------------------------------------
Andesite Wireframe (MMVO) 3.48 3.50
MSSS Wireframe (S1/S2) 20.3 19.9
MSSL Wireframe (S1/LMST) 18.1 18.1
--------------------------------------------------------------
Grade-Tonnage Reporting
-- The resource model has been categorized as Inferred Resources using the
CIM Standards on Mineral Resources and Reserves, Definitions and
Guidelines. While the grade estimate has been classified as Inferred
Resource, Avala believes that higher confidence resources should be
defined once all the 40m x 40m infill drilling is incorporated into the
future resource estimate. The current resource estimate has significant
regions defined by 40m x 40m spaced drilling that confirms the
mineralization zone continuity noted in the 80m x 80m spaced drilling.
The table below summarizes the grade-tonnage data, subdivided by the
three interpreted mineralized zones.
-- In the table below the reported tonnes, grade and contained gold have
been rounded to the appropriate level of precision for the reporting of
an Inferred Resource, and the numbers may not correlate exactly due to
rounding errors.
-------------------------------------------------------------------------
BIGAR HILLINFERRED RESOURCE ESTIMATE
Subdivided By Mineralized Zone Domain
Local Multiple Indicator Kriging
5m x 5m x 5m Selective Mining Unit
-------------------------------------------------------------------------
Andesite S1/LMST
MMVO MSSL
Au Au
Cut Off Grade (Au g/t) Mt (g/t) Moz Mt (g/t) Moz
-------------------------------------------------------------------------
0.2 4.1 0.6 0.08 25.2 0.6 0.5
0.4 2.2 1.0 0.07 13.2 1.0 0.4
0.6 1.4 1.2 0.06 8.0 1.3 0.3
0.8 1.0 1.4 0.05 5.4 1.6 0.3
1.0 0.7 1.7 0.04 4.0 1.8 0.2
1.2 0.5 1.9 0.03 2.7 2.2 0.2
1.4 0.4 2.1 0.02 2.0 2.5 0.2
1.6 0.3 2.3 0.02 1.6 2.7 0.1
1.8 0.2 2.5 0.02 1.3 3.0 0.1
2.0 0.2 2.6 0.01 1.0 3.2 0.1
-------------------------------------------------------------------------
------------------------------------------------
BIGAR HILLINFERRED RESOURCE ESTIMATE
Subdivided By Mineralized Zone Domain
Local Multiple Indicator Kriging
5m x 5m x 5m Selective Mining Unit
------------------------------------------------
S1/S2
MSSS TOTAL
Au Au
Mt (g/t) Moz Mt (g/t) Moz
------------------------------------------------
34.6 1.0 1.2 63.9 0.9 1.8
22.7 1.4 1.1 38.0 1.3 1.5
17.0 1.8 1.0 26.4 1.6 1.4
14.0 2.0 0.9 20.4 1.9 1.3
11.9 2.2 0.8 16.5 2.1 1.1
9.8 2.4 0.8 13.0 2.4 1.0
8.4 2.6 0.7 10.8 2.6 0.9
7.3 2.8 0.6 9.2 2.8 0.8
6.0 3.0 0.6 7.5 3.0 0.7
5.0 3.2 0.5 6.3 3.2 0.6
------------------------------------------------
Please see the following link to view all Korkan-Bigar and Kraku Pestar drill
holes located spatially in three dimensions:
http://www.corebox.net/properties/timok-gold-project
3. SAMPLING AND ANALYSIS
The majority of soil samples have been assayed at the ALS Chemex laboratory,
Perth, Australia. More recent programs have been assayed at the SGS managed
laboratory at Chelopech in Bulgaria using a combination of ICP-OES and ICP-MS;
whereas gold has been assayed by low level detection fire assay method with an
AAS finish. The Company has established a laboratory facility at Bor, Eastern
Serbia which is independently managed by SGS. Trench samples were prepared at
the laboratory facility at Bor and the samples have been assayed at the SGS
managed laboratory at Chelopech in Bulgaria or the laboratory facility at Bor.
Diamond drill core has been prepared at the laboratory facility at Bor and
assayed at either the SGS managed laboratory at Chelopech in Bulgaria or the
assay laboratory at Bor. A one meter sampling interval has been used where
possible for the Timok Gold Project diamond drilling program. Half core is
routinely submitted to the laboratory for analysis. Reverse circulation drill
samples have been prepared at the laboratory facility at Bor and assayed at the
laboratory at Bor. A one meter sampling interval has been used for the Timok
Gold Project reverse circulation drilling program. Following Avala standard
quality assurance procedures, a full suite of field and laboratory duplicates
and replicates along with internationally accredited standards and blanks, have
been submitted with each batch of samples.
Trench sampling was carried out as channels in the wall just above the trench
floor on 2m intervals. Except where extensive soil cover is encountered,
trenches are sampled in their entirety. The samples were routinely weighed prior
to final bagging to maintain an even sample size and to avoid sampling bias in
harder rock types. An average channel sample weight was maintained at 3kg/m,
which produces a consistent sample weight approximating half HQ core samples.
Field duplicate samples were taken every 20 samples and known standards were
inserted into the sample stream after every 20th sample. A geological and
structural log was completed as for diamond drilling. All data collected in the
field is routinely entered into geology and structural geology spread sheets
using Field Marshal software for subsequent inclusion in an acQuire database and
validation.
4. QUALIFIED PERSONS
The Bigar Hill resource estimate was undertaken by independent qualified person
Chris Arnold MAusIMM CP(Geo) of AMC. Mr. Arnold of AMC has reviewed and approved
the contents of this press release insofar as the Bigar Hill mineral resource
estimate is concerned.
AMC is completing a technical report for the mineral resource estimate in
compliance with NI 43-101 to be filed on SEDAR within 45 days of this press
release.
The other technical information contained in this press release was prepared and
approved by Dr Julian F. H. Barnes, FAusIMM, MAIG, a director of the Company and
special consultant. Dr. Barnes is a 'qualified person' within the meaning of
that term under NI 43-101.
About Avala Resources Ltd.: Avala Resources is a mineral exploration company
focused on the exploration and development of the Timok Gold Project in Eastern
Serbia. The Timok Gold Project comprises several targets, including Bigar Hill,
Korkan, and Kraku Pestar. Avala controls 100% of this newly identified
sediment-hosted gold belt which totals approximately 250 square kilometers. The
common shares of Avala trade on the TSX Venture Exchange under the symbol AVZ.
Avala is well-capitalized, with approximately $20 million in its treasury at May
31, 2012, which it plans to use for the exploration and development of its
mineral projects in Serbia. Avala's issued and outstanding share capital totals
214,492,223 common shares, of which approximately 51.4% is held by Dundee
Precious Metals Inc. (TSX:DPM).
Cautionary Statement Regarding Forward-Looking Information
This press release contains 'forward-looking information' within the meaning of
applicable Canadian securities legislation. Generally, forward-looking
information can be identified by the use of forward-looking terminology such as
"anticipate", "believe", "plan", "expect", "intend", "estimate", "forecast",
"project", "budget", "schedule", "may", "will", "could", "might", "should" or
variations of such words or similar words or expressions. Forward-looking
information is based on reasonable assumptions that have been made by the
Company as at the date of the information and is subject to known and unknown
risks, uncertainties, and other factors that may cause actual results or events
to differ materially from those anticipated in the forward-looking information.
Forward looking information in this news release includes information with
respect to the Bigar Hill mineral resource estimate and its potential expansion
and upgrade to a higher level of confidence, the Company's plans to complete
resource estimates on the Korkan and Kraku Pestar project areas and to complete
a preliminary economic assessment, the timing and location of future work
programs, the results and interpretation of studies and exploration activities,
the nature of the mineralization of the project, the potential size of the
sediment-hosted gold system, and the possibility that the Timok Gold Project
will prove to be economic.
Although the Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be factors that cause results to be other
than as anticipated, estimated or intended. There can be no assurance that the
forward looking information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance on
forward-looking information contained herein, except in accordance with
applicable securities laws.
Figures 1, 2 and 3 are available at the following link:
http://media3.marketwire.com/docs/Fig1%2c2%2c3_AVZ0706.pdf.