This prefeasibility study describes a proposed Phase I open pit operation at the Granada Gold Project, with custom milling at the Iamgold-Doyon mill and a reported mineral resource estimate for the project.
Report context
The Prefeasibility Study (PFS) Phase I – Open Pit Granada Gold Project is effective as of May 6, 2014, and was prepared to support a press release of the same date regarding a positive prefeasibility study for the rolling start to gold production at Granada. The study was prepared in accordance with the guidelines set under Form 43-101F1 Technical Report of National Instrument 43-101 Standards and Disclosure for Mineral Projects. The initial mandate from Gold Bullion to SGS Geostat was to prepare an on-site mill scenario; the scope of work changed during preparation of the study to bring the project into a Phase I – Open Pit with custom milling.
Processing route
Proposed custom milling arrangement
The PFS proposes that 35,000 tonnes will be processed at a mill feed rate of 2,400 tonnes per day (tpd). This rate corresponds to approximately 15 days of continuous operation. The processing is planned to occur at the Iamgold-Doyon mill.
Recovery assumptions
SGS Geostat states that because the Iamgold-Doyon mill is proven to be very efficient, the gold recovery is expected to be at least what was obtained at the metallurgical testing level. No specific recovery percentage is stated as a design parameter in the processing sections.
Gold settlement procedures
Gold settlement between IMG and GBB will be determined by:
- Computation of daily tonnage
- Daily mill sampling
- Weighing and analysis of doré bars
- Mill surveys and gold inventory taken at beginning and end of each batch
Because ore mixing cannot be avoided at the beginning and end of each batch, GBB and IMG will have title to and ownership of the doré bars on a pro rata basis, based on the respective amounts of refined gold attributable to each party.
Mineral resources
Resource estimation approach
SGS conducted extensive validation and database construction to prepare the resource estimate for the Granada Gold project. SGS considers the estimate to conform to current CIM standards and definitions as required under NI 43-101.
For the Phase I open pit design, mineral resources were remodeled with mineral zones having a minimum horizontal width of 7 metres down to elevation 237.5 metres. This model was used for pit optimization and design for the "Rolling Start" project, starting from surface and extending to a pit bottom at elevation 237.5 metres.
Resource estimation parameters
- Cut-off grade: 1.69 g/t gold
- Composites capped at 30 g/t
- Density: 2.7 t/m³
- Block size: 2.5m × 1.25m × 1.25m, with a full block tonnage of 10.55 tonnes
In-pit resources
The in-pit resource using an optimal Whittle pit and a cut-off grade of 1.69 g/t Au is presented in the following table:
| Resource Class | Tonnes (t) | As (ppm) | Au (g/t) | Au (oz) |
|---|---|---|---|---|
| Inferred | 21,000 | 131 | 5.57 | 3,800 |
| Indicated | 369,700 | 576 | 5.52 | 65,600 |
| Measured | 152,500 | 850 | 4.64 | 22,700 |
| Indicated + Measured | 522,200 | 656 | 5.26 | 88,300 |
Project website: https://granadagoldmine.com/en/news/2014/
Resources beneath the Whittle pit
Resources beneath the Whittle pit to a maximum depth of 237.5 metres, also applying a cut-off grade of 1.69 g/t Au:
| Resource Class | Tonnes (t) | As (ppm) | Au (g/t) | Au (oz) |
|---|---|---|---|---|
| Inferred | 33,500 | 1,071 | 6.85 | 7,400 |
| Indicated | 462,000 | 840 | 3.72 | 55,000 |
| Measured | 371,500 | 1,035 | 3.10 | 37,000 |
| Indicated + Measured | 833,500 | 927 | 3.44 | 92,250 |
Mineral resources that are not mineral reserves do not have demonstrated economic viability. No dilution or mining loss is shown in these resource estimates.
Metallurgical testing
Metallurgical testing was performed on samples from the project. The following table summarizes selected composited intersections from the 2012 drilling program:
| Drillhole Name | From (m) | To (m) | Length (m) | Au (g/t) |
|---|---|---|---|---|
| GR-11-305 | 3.30 | 78.00 | 74.70 | 0.41 |
| Including | 3.30 | 20.00 | 16.70 | 0.67 |
| Including | 76.00 | 82.00 | 6.00 | 0.90 |
| Including | 114.00 | 126.50 | 12.50 | 0.76 |
| GR-11-337 | 4.50 | 55.00 | 50.50 | 2.25 |
| Including | 6.00 | 13.00 | 7.00 | 0.87 |
| GR-11-338 | 68.50 | 87.00 | 18.50 | 0.35 |
| Including | 74.50 | 82.50 | 8.00 | 0.67 |
| Including | 84.50 | 94.50 | 10.00 | 0.48 |
| GR-11-339 | 49.00 | 108.00 | 59.00 | 0.50 |
| Including | 53.00 | 62.00 | 9.00 | 1.84 |
| Including | 53.00 | 57.00 | 4.00 | 3.55 |
The following intercepts were also reported in the drilling tables:
| Drillhole Name | From (m) | To (m) | Length (m) | Au (g/t) |
|---|---|---|---|---|
| GR-11-326 including | 4.50 | 93.50 | 89.00 | 0.65 |
| Including | 4.50 | 22.00 | 17.50 | 2.78 |
| Including | 11.40 | 15.50 | 4.10 | 11.16 |
| GR-11-329 | 16.50 | 19.50 | 3.00 | 1.21 |
| GR-11-330 | 45.90 | 48.00 | 2.10 | 1.08 |
| Including | 60.96 | 68.80 | 7.84 | 7.93 |
| Including | 60.96 | 64.00 | 3.04 | 19.23 |
| Including | 99.00 | 112.00 | 13.00 | 5.63 |
| Including | 99.00 | 102.00 | 3.00 | 22.35 |
| Including | 109.00 | 112.00 | 3.00 | 1.88 |
| GR-11-331 | 71.08 | 82.50 | 11.42 | 0.50 |
| Including | 129.00 | 132.00 | 3.00 | 1.41 |
| GR-11-334 | 75.50 | 80.50 | 5.00 | 0.88 |
| Including | 105.50 | 121.50 | 16.00 | 0.50 |
| Including | 24.00 | 138.00 | 114.00 | 0.71 |
| Including | 39.50 | 42.00 | 2.50 | 2.95 |
| Including | 80.00 | 97.00 | 17.00 | 1.14 |
| Including | 89.00 | 97.00 | 8.00 | 1.95 |
| Including | 131.00 | 138.00 | 7.00 | 5.73 |
Verification of assay data
The verification program reported selected assay intervals from the 2011 and 2012 drilling campaigns. The following table summarizes drill intersections that were announced in the press release and verified:
| Drillhole Name | From (m) | To (m) | Length (m) | Au (g/t) |
|---|---|---|---|---|
| GR-11-305 including | 3.30 | 78.00 | 74.70 | 0.41 |
| Including | 3.30 | 13.00 | 9.70 | 0.88 |
| Including | 15.00 | 22.00 | 7.00 | 0.67 |
| Including | 48.50 | 50.00 | 1.50 | 2.04 |
| GR-11-313 | 3.30 | 8.00 | 4.70 | 9.99 |
| Including | 6.00 | 8.00 | 2.00 | 22.35 |
Drilling programs
2012 drilling campaign
The 2012 drilling program was initiated to test structures and gold mineralization on the north and west extension of the Granada property. A total of 8,339.25 metres in 23 holes was drilled. The drilling contractor was Landdrill International Ltd. of Notre-Dame-Du-Nord, Quebec, providing two surface diamond drill rigs.
Drilling commenced March 5, 2012 and concluded July 6, 2012. All drillholes were oriented south with different ranges of dip and length. Deep holes were spotted and surveyed by Mazac Geoservices Inc., while GR-12 holes were located by SGS Geologists using handheld GPS.
The initial drill plan on the northern deep drilling area comprised three deep holes (DUP-12-01, DUP-12-02 and DUP-12-03) with wedges. Due to excessive deviation, DUP-12-03 was abandoned at 378 metres depth. Hole DUP-12-03A was subsequently drilled 25 metres west of the abandoned hole to a final depth of 1,347 metres, with three wedges (W1, W2 and W3). Hole DUP-12-02, located 830 metres NNE of hole GR-11-390, was drilled to 1,593 metres with one wedge (W1).
Drilling results
Significant results from the drilling program include:
- GR-12-03A-W1: 3.00 metres grading 2.25 g/t Au
- GR-12-03A-W1: 3.00 metres grading 0.37 g/t Au
- GR-12-03A-W2: 3.00 metres grading 0.49 g/t Au
- GR-12-03A-W2: 3.00 metres grading 4.15 g/t Au
The deep drillholes expanded the mineralization by 650 metres to the north and an additional 600 metres in depth, with the mineralization envelope remaining open for further expansion.
Resource estimation methodology
Block model parameters
The resource estimate used:
- Block size: 2.5m × 1.25m × 1.25m
- Density: 2.7 t/m³
- Cut-off grade: 1.69 g/t Au
- Resource category: Indicated and Inferred (open pit)
The estimate was based on available sampling and assumptions available to the authors. The resource estimate parameters were derived from a three-year weighted average of metal prices obtained from Index Mundi.
Data quality and limitations
The previous consultant responsible for the execution and management of the Phase 1, 2 and 3 drilling campaigns misjudged the amount of work, drilled holes at incorrect orientations, and drilled holes outside the property boundary. The author is confident that most hole collars were drilled at the right place and that the core is representative of the ground at Granada.
Historical holes from the 1990s were not used for resource estimation because:
- Drill cores were not sampled in full
- It was not possible to carry out a QA/QC program at this stage
- Significant differences in hole elevations were observed
Only one historic hole (90-01) to the northwest was used to complete information between new deep drilling and the intensively drilled area.
Drillhole survey and orientation
Drillholes were surveyed by Mazac Geoservices Inc. for deep holes and by SGS Geologists using handheld GPS for GR-12 holes. Down-hole orientation surveys were carried out using both Gyro and Reflex EZ-trac for deep holes, and only Reflex EZ-trac for western extension holes.
Most drillholes were drilled at a roughly perpendicular angle to the veins. Core lengths are generally 85% to 90% of true width for drillholes drilled south-southwest. Holes drilled southeast have approximately 75% true width as per current modelling. Shallow holes are closer to true width; deep holes were drilled at a steeper angle.
Site infrastructure and condition
Site inspections were positive; work sites were clean and well maintained. The Gold Bullion core shack and core splitting facilities were in good condition. Drill cores are stored in covered core racks, and rejects and pulps are stored in containers. The site is constantly monitored.
Property location and ownership
The Granada Gold Mine property is located 5 kilometres south of Rouyn-Noranda in northwestern Québec and 1.5 kilometres southeast of the borough of Granada. The property covers a total area of 10,061.22 hectares (100.6 km²) and comprises 246 staked mining claims divided into 3 contiguous groups of 27, 98 and 121 claims, held 100% by Gold Bullion Development Corp.
Claims are all in good standing with renewals at variable due dates. A total of 101 claims were up for renewal in 2014, with the rest due between 2015 and 2023. The mining leases BM #813 (21.12 hectares) and BM #852 (22.47 hectares) have a 3% NSR payable to Mousseau Tremblay Inc. The detailed definition of the NSR could not be verified by the author. No additional royalties were identified.
Principal assumptions and limitations
The authors are not qualified to comment on legal agreements, royalties, permitting, taxation and environmental matters. The authors relied on representations and documentation supplied by Company management and third parties. Metal prices were derived from a three-year weighted average obtained from Index Mundi.
The author relied on:
- An independent surveyor (Mazac Geoservice Inc.) for accuracy of diamond drillhole positions and gyroscopic down-hole orientation surveys
- Commercial laboratories for assay results
- Mrs. Lucie Chouinard, M. Fisc., CPA, CA, from Deloitte Rouyn-Noranda for taxation matters
Cautionary statement
It should be understood that mineral resources which are not mineral reserves do not have demonstrated economic viability. The mineral resources presented in this technical report are estimates based on available sampling and on assumptions and parameters available to the authors. The comments in this PFS show the authors' and SGS Geostat's best judgment in light of the information available.
