updated-internal-scoping-study-delivers-positive-results

Level 2, 66 Hunter Street Sydney NSW 2000
Phone: +61 2 9300 3310 Facsimile: +61 2 9221 6333 Web: www.augur.com.au
ABN 79 106 879 690
30 August 2016
The Manager Companies
ASX Limited
20 Bridge Street
Sydney NSW 2000 (11 pages by email)
Updated Internal Scoping Study Delivers Positive Results
(ASX: AUK)
The Directors of Augur Resources Ltd (‘Augur’ or ‘the Company’) are pleased to advise that
the original Scoping Study on its Randu Kuning deposit located within the Wonogiri project
(ASX announcement dated 11 March 2014) has been updated to include the significantly
enhanced project economics resulting from the aggregate potential of the project (ASX
announcement dated 6 July 2015), metallurgical studies (ASX announcements dated 28
October 2015 and 29 April 2016) and current costings for fuel and equipment. The results
of the internal Scoping Study confirm the potential for the development of the deposit at
Randu Kuning.
As part of the update a JORC compliant resource estimate of the Randu Kuning deposit was
completed by Trevor Leahey of Computer Aided Geoscience Pty Ltd, Australia, a Competent
Person as defined under JORC 2012, the results of which are detailed below.
2
Internal 2016 Scoping Study Summary
The Scoping Study was undertaken by Augur technical staff and based on comparable
mining operations in Indonesia and Australia. Metallurgical data was provided by testwork
completed by Pt. Geoservices in Jakarta under the guidance of qualified independent
consultants MetChem Consultants of Perth, Australia and also PWA Limited of Kuala Lumpur,
Malaysia.
Consultant Study input
Computer Aided Geoscience Pty Ltd JORC 2012 Mineral Resource
MetChem Consulting / PWA Ltd Metallurgical testwork & Process costs
ALS Ammtec Flotation processing testwork (2012)
National Land Development Pty Ltd Operating & Mining Costs
Pt Archi Indonesia
/ Sumatra Copper & Gold plc
Operating & Mining Costs
Pt. Intertek Assays
Pt. Geoservices Ltd Metallurgical testwork and aggregate
ASTM
testwork
Various Aggregate Market Study
The project is supported by a low strip‐ratio, good metallurgical recoveries, excellent access
to infrastructure and national grid power. The study focused on an open pit mining
operation with material treated by gravity concentration and flotation to produce a gold (+
silver)‐rich gravity concentrate and a copper (+ gold, silver bearing) concentrate. The
Scoping Study assumed 50% of in‐pit waste rock would be sold as aggregate.
As Augur does not currently have adequate capital and operational finance to develop the
Wonogiri project and scoping studies are not at a stage to secure project financing, the
Company is precluded by the recently released ASIC Information Sheet 214 concerning
forward looking statements by mining and resource companies from announcing details of
the Scoping Study and its related cautionary statements.
Operating costs were estimated at a preliminary level based on local benchmarked costs and
comparable mining costs. Capital expenditure costs to develop the project were estimated
based on comparable mining industry costs with allowances for second hand equipment and
local costs. No contingency was used in the capital cost estimates.
3
Mineral Resource and Mining Inventory
Despite the fact that, as outlined above, the Company is precluded from providing details
about its Scoping Study, the enhanced economics result in a revised JORC 2012 compliant
resource estimate for Randu Kuning, completed by Computer Aided Geoscience Pty Ltd, as
follows:
At 0.2 g/t AuEq1 cut‐off grade the total contained resource is 81.56 million tonnes at 0.38 g/t
Au and 0.11% copper. This represents 1.15 million ounces of AuEq consisting of 996.5
thousand ounces of gold and 190 million pounds of copper. At 0.5 g/t AuEq1 cut‐off grade,
the cut‐off grade used in the Scoping Study, the total contained resource is 20.95 million
tonnes at 0.85 g/t Au and 0.16% copper. This represents 573 thousand ounces of AuEq1
consisting of 533 thousand ounces of gold and 74 million pounds of copper. Details of the
resource estimate for Randu Kuning are as follows:
JORC 2012 compliant Resource Estimate of the Randu Kuning deposit within the
Wonogiri project. Refer to AuEq1 formulation in Statement of Compliance
4
Table: Resource using 0.5 g/t AuEq1 cut‐off grade
Metallurgy
Augur has previously reported on the metallurgical testing of the Randu Kuning Au‐Cu
mineralised rock completed by ALS‐Ammtec in 2012. This work indicated recoveries of
over 89.0% of gold and 95.0% of copper. Concentrates of up to 90.6 g/t gold and 21.2%
copper were achieved during initial concentrate optimisation studies. Selected assays of
concentrates have shown low arsenic and other deleterious elements.
The Scoping Study used a similar recovery model assuming 87% recovery for both gold and
copper to produce a constant concentrate copper grade of 20% and a gold grade of between
60.0 g/t and 90.0 g/t.
5
Augur is currently completing additional metallurgical testing to evaluate optimising gold
recovery via initial gravity concentration and increasing the Cu% in sulphide concentrate via
suppression of pyrite during the flotation process. As reported previously approximately
54.3% recovery of gold by gravity and intensive leaching of concentrates; and 86.6% gold,
70.7% silver and 87.7% copper recovery by combined gravity + flotation of gravity tailings.
The completed testwork has also importantly confirmed that Randu Kuning tailings material
will be non‐acid forming and will be a net acid consumer. As such there will be no acid mine
drainage concern for the process tailings.
Aggregate from In‐pit Waste Rock Evaluation
General ASTM standard rock quality tests were completed at PT Geoservices laboratory in
Bekasi, West Java, and are compiled in Table 1 below. Test work was completed on four
bulk rock samples (and three sub samples) made from two waste rock composite samples
collected from drill core from 3 drillholes within the Randu Kuning conceptual starter open
pit. The results indicate that the Randu Kuning waste rock has the properties required to be
highly suitable for a variety of stone aggregate uses including concrete. Specific concrete
design testwork has not been completed.
Table: ASTM test results for Randu Kuning waste rock composite samples
6
The Company completed a regional market study in 2015 to assess current aggregate supply
and demand within a 100 kilometre radius of the Wonogiri property. A total of 60 users and
suppliers were visited, the results of which suggest that aggregate production from a 250
tonnes per hour crusher to produce approximately 600,000‐700,000 tonnes of crushed
stone per year could be absorbed into the regional market for a variety of uses without price
disruption. It is also clear from the market study and discussions with industry consultants
that there is a strong demand for high quality aggregate throughout Java to supply ongoing
and planned Government infrastructure projects as part of an extensive transportation
upgrade initiative.
The Company is in discussions with third parties as part of evaluating several aggregate
production scenarios. This includes offtake agreements and also initial production from
stand‐alone quarries adjacent to the conceptual Randu Kuning open pits. The latter could
provide a low capital cost opportunity to get early cash flow with which to advance
development of the Randu Kuning mine and develop an aggregate market presence prior to
expanded production upon Randu Kuning start‐up. Production of manufactured sand
product from crushed rock dust may also be feasible.
2016 Work Program
Based on the results of the internal Scoping Study Augur plans to continue with completing
advanced metallurgical testwork in regards to production of a Cu (+Au) concentrate via
flotation processing. The potential to recover a significant portion of the contained gold
(and silver) via gravity concentration will also be further evaluated as will further
processing of a gold‐rich gravity concentrate at an offsite location using intensive leach
processing thereby removing the requirement to obtain a permit for cyanide use at mine site.
Commencement of initial geotechnical and hydrogeological studies will also proceed to
confirm pit slope stability and a water use plan. Further inquiries into potential sale of
Randu Kuning waste rock as high quality aggregate and development of a stand‐alone
aggregate quarry adjacent to the conceptual pit will also be completed.
7
For further information, please contact Peter Nightingale on +61 2 9300 3310.
Yours sincerely
Peter J. Nightingale
Director
pjn8563
Statement of Compliance
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled
by Augur staff and contractors and approved by Michael C Corey, geoscientist, who is a Member of the Association of
Professional Geoscientists of Ontario, Canada. Michael Corey is employed by the Company and has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Michael Corey has consented to the inclusion in this report of the
matters based on his information in the form and context in which they appear. Mr Trevor Leahey, of Computer Aided
Geoscience Pty Ltd, whom is a consultant to the Company, prepared the updated JORC 2012 Randu Kuning Resource
Estimation. Mr Leahey has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Leahey consents to
the inclusion in the report of the matters based on his information in the form and context in which it appears.
Mineralisation cut‐off used for the Wonogiri project is 0.2 Gold Equivalent with a maximum contiguous dilution interval
of 4.0 metres. Sample intervals are generally either 1.0 metre or 2.0 metres. Assaying has been completed by PT Intertek
Utama Services, a subsidiary of Intertek Group Inc and Pt. Geoservices. Blanks and/or independent standards are used in
each sample batch at approximately each 10 sample interval.
1Gold Equivalent Calculation for the Randu Kuning JORC 2012 CompliantResource
Where reported in relation to the Wonogiri mineral resource estimate, Gold Equivalent results are calculated using a gold
price of US$1,250/oz and a copper price of US$5,500/t. Silver is excluded from the gold equivalent calculation. In
calculating Gold Equivalents for the JORC 2012 resource estimate, gold and copper recoveries are assumed to be 85%. As
previously reported, metallurgical testing has resulted in mean recoveries from sulphide material of over 90% for gold and
94% for copper. It is the Company’s opinion that all metals used in the equivalent calculation have a reasonable potential to
be recovered in the event that material from the Wonogiri project was to undergo processing.
The gold equivalent calculation used is AuEq = (Au_g/t *$40.20 *85% + Cu_ppm *$0.0055 *85%) / ($40.20)
(i.e.: 1.0% Cu = 1.36 g/t Au)
8
9
10
11