EX-99.1 2 d325580dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

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BARRICK GOLD CORPORATION

TECHNICAL REPORT ON THE

PORGERA JOINT VENTURE,

ENGA PROVINCE,

PAPUA NEW GUINEA

NI 43-101 Report

Qualified Persons:

David W. Rennie, P.Eng.

Stuart E. Collins, P.E.

Kathleen Ann Altman, Ph.D., P.E.

March 16, 2012

ROSCOE POSTLE ASSOCIATES INC.


 

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Report Control Form

 

Document Title

   Technical Report on Porgera Joint Venture, Enga Province, Papua New Guinea

Client Name & Address

  

Brookfield Place, TD Canada Trust Tower

Suite 3700, 161 Bay Street, P.O. Box 212

Toronto, Ontario M5J 2S1

Document Reference

   Project #1669    Status &

Issue No.

   Final

Version

   Rev 0

Issue Date

   March 16, 2012

Lead Author

  

Dave W. Rennie

Stuart E. Collins

Kathleen Ann Altman

   (Signed)

(Signed)

(Signed)

Peer Reviewer

  

Graham Clow

   (Signed)

Project Manager Approval

  

Dave Rennie

   (Signed)

Project Director Approval

  

Richard Lambert

   (Signed)

Report Distribution

  

Name

   No. of Copies
  

Client

  
  

RPA Filing

   1 (project box)

 

Roscoe Postle Associates Inc.

55 University Avenue, Suite 501

Toronto, Ontario M5J 2H7

Canada

Tel: +1 416 947 0907

Fax: +1 416 947 0395

mining@rpacan.com


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TABLE OF CONTENTS

 

     PAGE  

1 SUMMARY

     1-1   

Executive Summary

     1-1   

Technical Summary

     1-8   

2 INTRODUCTION

     2-1   

3 RELIANCE ON OTHER EXPERTS

     3-1   

4 PROPERTY DESCRIPTION AND LOCATION

     4-1   

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

     5-1   

6 HISTORY

     6-1   

7 GEOLOGICAL SETTING AND MINERALIZATION

     7-1   

Regional Geology

     7-1   

Local Geology

     7-4   

Property Geology

     7-4   

Mineralization

     7-11   

8 DEPOSIT TYPES

     8-1   

9 EXPLORATION

     9-1   

Exploration Potential

     9-6   

10 DRILLING

     10-1   

11 SAMPLE PREPARATION, ANALYSES AND SECURITY

     11-1   

12 DATA VERIFICATION

     12-1   

13 MINERAL PROCESSING AND METALLURGICAL TESTING

     13-1   

14 MINERAL RESOURCE ESTIMATE

     14-1   

Summary

     14-1   

Introduction

     14-4   

Open Pit Models

     14-6   

Underground Models

     14-27   

15 MINERAL RESERVE ESTIMATE

     15-1   

Summary

     15-1   

Model Reconciliation

     15-8   

16 MINING METHODS

     16-1   

Open Pit Operation Description

     16-1   

Underground Mine Description

     16-17   

17 RECOVERY METHODS

     17-1   

18 PROJECT INFRASTRUCTURE

     18-1   

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page i   


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19 MARKET STUDIES AND CONTRACTS

     19-1   

Markets

     19-1   

Contracts

     19-1   

20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

     20-1   

Introduction

     20-1   

Environmental Studies

     20-2   

Project Permitting

     20-2   

Monitoring

     20-4   

Social or Community Requirements

     20-5   

Mine Reclamation and Closure

     20-7   

21 CAPITAL AND OPERATING COSTS

     21-1   

Capital Costs

     21-1   

Operating Costs

     21-3   

22 ECONOMIC ANALYSIS

     22-1   

23 ADJACENT PROPERTIES

     23-1   

24 OTHER RELEVANT DATA AND INFORMATION

     24-1   

25 INTERPRETATION AND CONCLUSIONS

     25-1   

26 RECOMMENDATIONS

     26-1   

27 REFERENCES

     27-1   

28 DATE AND SIGNATURE PAGE

     28-1   

29 CERTIFICATE OF QUALIFIED PERSON

     29-1   

LIST OF TABLES

 

         PAGE  

Table 1-1

 

Mineral Resources (100%) – December 31, 2011

     1-2   

Table 1-2

 

Mineral Reserves (100%) – December 31, 2011

     1-3   

Table 1-3

 

Summary of Open Pit and Underground Sustaining Capital Costs (2011 Mid-Year)

     1-21   

Table 1-4

 

Summary of Open Pit Operating Costs (2011 Mid-Year)

     1-22   

Table 6-1

 

Porgera JV Historical Ounce Production

     6-5   

Table 7-1

 

Mineralization Types at Porgera JV

     7-12   

Table 7-2

 

Mineralized Zones at Porgera JV

     7-13   

Table 9-1

 

Peruk Significant Drill Intercepts

     9-5   

Table 9-2

 

Central Zone Significant Drill Intercepts

     9-6   

Table 13-1

 

Lithology Types

     13-2   

Table 13-2

 

Gold and Sulphur Recovery Constants by Lithology

     13-3   

Table 13-3

 

CIP and ADSS Constants by Lithology

     13-5   

Table 13-4

 

Actual Versus Budgeted Gold Recovery

     13-6   

Table 13-5

 

Actual versus Budgeted Gold Recovery

     13-6   

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page ii   


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Table 13-6

  2011 Mill Budget (2011 through 2039)      13-7   

Table 14-1

 

Mineral Resource Estimate (100%) – December 31, 2011

     14-1   

Table 14-2

 

Change in Mineral Resources

     14-3   

Table 14-3

 

Block Model Types

     14-5   

Table 14-4

 

Bulk Densities

     14-7   

Table 14-5

 

Gold Domains

     14-8   

Table 14-6

 

Sulphur Domains

     14-9   

Table 14-7

 

Gold Top Cuts

     14-11   

Table 14-8

 

Sulphur Top Cuts

     14-12   

Table 14-9

 

2 m Non-Declustered Composite Grades—Gold

     14-13   

Table 14-10

 

2 m Non-Declustered Composite Grades—Sulphur

     14-14   

Table 14-11

 

Block Model Geometry

     14-17   

Table 14-12

 

Comparison of Mean Composite and Block Grades

     14-21   

Table 14-13

 

Comparison of 2011 and 2010 Block Model Results (1.0 g/t Au Cut-Off)

     14-23   

Table 14-14

 

Resource Classification by Kriging Variance

     14-25   

Table 14-15

 

CNZ Raw Sample Statistics

     14-31   

Table 14-16

 

AHD Raw Sample Statistics

     14-32   

Table 14-17

 

EZ Raw Sample Statistics

     14-33   

Table 14-18

 

PX Raw Sample Statistics

     14-33   

Table 14-19

 

OZ Raw Sample Statistics

     14-34   

Table 14-20

 

EDX Sample Statistics

     14-34   

Table 14-21

 

Top Cuts-underground Models

     14-35   

Table 14-22

 

Capped Composite Statistics—Gold

     14-36   

Table 14-23

 

Capped Composite Statistics—Sulphur

     14-37   

Table 14-24

 

Block Model Geometries

     14-41   

Table 14-25

 

Comparison of Mean Composite and Block Gold Grades

     14-43   

Table 14-26

 

Comparison of EOY2011 and Previous Block Model Results (1.0 g/t Au Cut-Off)

     14-48   

Table 14-27

 

Indicated and Inferred Classification Search Distances

     14-49   

Table 15-1

 

Mineral Reserve Estimate (100%) – December 31, 2011

     15-1   

Table 15-2

 

Whittle pit optimization parameters

     15-3   

Table 15-3

 

Mine Design Parameters

     15-4   

Table 15-4

 

Summary of Development Heading dimensions

     15-6   

Table 15-5

 

Summary of Underground Cut-off Grade Inputs

     15-8   

Table 15-6

 

Mined Ore Reconciliation Results – December 31, 2011

     15-9   

Table 16-1

 

Summary of Open Pit Equipment Fleet (Estimated 2012)

     16-2   

Table 16-2

 

Summary of Open Pit and Underground Equipment Fleet Performance Assumptions

     16-3   
 

(Estimated 2012)

  

Table 16-3

 

Summary of Open Pit Mine Design Parameters

     16-4   

Table 16-4

 

Summary of Underground Equipment Fleet (Estimated 2012)

     16-23   

Table 16-5

 

Life Of Mine Open and Underground Production Schedule

     16-24   

Table 20-1

 

Summary of Major Permits

     20-3   

Table 21-1

 

Summary of Open Pit and Underground Sustaining Capital Costs (2011 Mid-Year)

     21-2   

Table 21-2

 

Summary of Open Pit Operating Costs (2011 Mid-Year)

     21-4   

Table 21-3

 

Porgera 2011 Cost Per Ounce Gold Produced

     21-5   

Table 21-4

 

2011 Cost per Milled Tonne

     21-6   

Table 21-5

 

Summary of Manpower as of March 2011

     21-6   

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page iii   


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LIST OF FIGURES

 

       PAGE   

Figure 4-1

 

Porgera JV Location Map

     4-4   

Figure 5-1

 

Porgera Mine Regional Infrastructure

     5-3   

Figure 5-2

 

Porgera Mine Local Infrastructure

     5-4   

Figure 7-1

 

Regional Geology

     7-2   

Figure 7-2

 

Property Geology

     7-5   

Figure 7-3

 

Geological Cross Section

     7-7   

Figure 9-1

 

Proposed Holes for the Tawasikale Veins Drill Hole Program

     9-2   

Figure 9-2

 

P-Zone Target

     9-4   

Figure 11-1

 

Primary Sample Preparation and Assaying Workflow for Diamond Drill Core

     11-7   

Figure 11-2

 

Primary Sample Preparation and Assaying Workflow for Grade Control Samples

     11-8   

Figure 13-1

 

Comparison of Actual Versus Budgeted Gold Recovery

     13-5   

Figure 13-2

 

Comparison of Actual Versus Budgeted Ounces Recovered

     13-6   

Figure 14-1

 

Example Block and Composite Grade Distributions (All Zones)

     14-20   

Figure 14-2

 

Tonnage And Grade Curves – ID3 vs Kriging

     14-22   

Figure 14-3

 

Drift Diagram (X-Direction)

     14-24   

Figure 14-4

 

Location of Underground Resource Domains

     14-29   

Figure 14-5

 

Example Histogram Comparison of Blocks vs Composites

     14-45   

Figure 14-6

 

Example Histogram Comparison of EOY2011 vs Mid-Year 2011

     14-46   

Figure 15-1

 

Open Pit Mine – Ultimate Pit (Stage 5E)

     15-5   

Figure 16-1

 

Ultimate Pit Section 11300N Viewed North

     16-5   

Figure 16-2

 

Ultimate Pit Section 22500E Viewed East

     16-6   

Figure 16-3

 

Open Pit Slope Sectors

     16-9   

Figure 16-4

 

Open Pit Mine – Stage 5A

     16-10   

Figure 16-5

 

Open Pit Mine – Stage 5B

     16-11   

Figure 16-6

 

Open Pit Mine – Stage 5C Intermediate

     16-12   

Figure 16-7

 

Open Pit Mine – Stage 5C

     16-13   

Figure 16-8

 

Open Pit Mine – Stage 5D Intermediate

     16-14   

Figure 16-9

 

Open Pit Mine – Stage 5D

     16-15   

Figure 16-10

 

Open Pit Mine – Stage 5E

     16-16   

Figure 16-11

 

Longitudinal Section of Underground Workings

     16-19   

Figure 16-12

 

Isometric View of Underground Workings and the Open Pit

     16-20   

Figure 17-1

 

Process Flow Sheet

     17-4   

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page iv   


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1 SUMMARY

EXECUTIVE SUMMARY

Roscoe Postle Associates Inc. (RPA) was retained by Barrick Gold Corporation (Barrick) to prepare an Independent Technical report on the Porgera Mine (the Project) located in Papua New Guinea (PNG). The purpose of this report is to support public disclosure of Mineral Resource and Mineral Reserve estimates at the Project as of December 31, 2011. This Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects. RPA visited the property from August 28 to September 2, 2011.

The Project is located in Enga Province of the Western Highlands of PNG. The mine is approximately 130 km west-northwest of Mount Hagen, PNG and 600 km northwest of the national capital, Port Moresby, PNG. The property is located at elevations between 2,200 MASL and 2,700 MASL in rugged mountainous terrain, which is largely covered with rain forest.

The Project is owned by Porgera Joint Venture (Porgera JV) whereby Barrick is the operator and has a 95% interest through a wholly owned subsidiary, and Mineral Resources Enga Limited has a 5% interest. The Project is a producing open pit and underground gold mine which has a planned operating rate of approximately 5.2 million tonnes per annum from the open pit and stockpiles and 0.8 million tonnes per annum from the underground. The mine produces gold in doré form from process plants utilizing gravity as well as flotation followed by autoclaves and cyanide leaching. Annual gold production was approximately 526,000 (100% interest) ounces in 2011.

Table 1-1 summarizes the Porgera JV Mineral Resources exclusive of Mineral Reserves as of December 31, 2011; this represents 100% of the Resource estimate and not the 95% attributable to Barrick.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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TABLE 1-1 MINERAL RESOURCES (100%) – DECEMBER 31, 2011

Barrick Gold Corporation – Porgera JV

 

Category

   Description    Tonnes
(000)
   Grade
(g/t Au)
   Contained
Gold

(000 oz)

Measured

           
   Open Pit    8,190    2.31    609
   Underground    463    10.33    154

Total Measured

      8,650    2.74    763

Indicated

           
   Open Pit    15,800    1.56    793
   Underground    1,630    9.15    480

Total Indicated

      17,400    2.27    1,270
     

 

  

 

  

 

Total Measured & Indicated

      26,100    2.41    2,030
     

 

  

 

  

 

Inferred

           
   Open Pit    13,500    1.77    771
   Underground    8,100    8.90    2,320

Total Inferred

      21,600    4.45    3,090

Notes:

  1. CIM definitions were followed for Mineral Resources.
  2. Mineral Resources are estimated at a cut-off grade of 1.0 g/t Au for the open pit and 3.0 g/t Au for the underground mine.
  3. Mineral Resources are estimated using an average gold price of US$1,400 per ounce, and a US$/C$ exchange rate of 1:1.
  4. A minimum mining width of 5 m was used.
  5. Bulk density is determined based on lithology
  6. Measured and Indicated Mineral Resources are exclusive of Mineral Reserves.

Table 1-2 summarizes the Porgera JV Mineral Reserve estimate as of December 31, 2011; this represents 100% of the Reserves and not the 95% attributable to Barrick. This includes open pit, underground and stockpile reserves.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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TABLE 1-2 MINERAL RESERVES (100%) – DECEMBER 31, 2011

Barrick Gold Corporation – Porgera JV

 

Category

   Tonnes
(000)
     Grade
(g/t Au)
     Contained
Gold

(000 oz)
 

Open Pit

        

Proven

     13,944         3.00         1,343   

Probable

     31,105         2.11         2,115   

Subtotal

     45,049         2.39         3,458   

Underground

        

Proven

     3,500         7.17         807   

Probable

     3,624         7.56         880   

Subtotal

     7,124         7.37         1,687   

Stockpiles

        

Proven

        

Probable

     19,802         2.29         1,455   

Subtotal

     19,802         2.29         1,455   

Process Inventory

     —           —           102   

Total Proven

     17,443         3.83         2,149   

Total Probable

     54,532         2.60         4,552   
  

 

 

    

 

 

    

 

 

 

Total Mineral Reserve

     71,975         2.90         6,701   
  

 

 

    

 

 

    

 

 

 

Notes:

  1. CIM definitions were followed for Mineral Reserves.
  2. Open Pit Mineral Reserves are estimated at a breakeven cut-off grades range from 0.95 g/t Au to 1.29 g/t Au (nominal).
  3. Underground Mineral Reserves are estimated at a cut-off grade of 3.5 g/t Au.
  4. Open Pit Mineral Reserves are estimated using an average long-term gold price of US$575 per ounce, a US$:C$ exchange rate of 1:1, and a US$:AUS$ exchange rate of 0.9:1.
  5. A minimum mining open pit width of 25 m was used.
  6.

Bulk densities range from 2.64 t/m3 to 2.79 t/m3, depending on lithology.

  7. Numbers may not add due to rounding.
  8. Mineral Reserves do not include Mineral Resources, i.e. Mineral Reserves are exclusive of Mineral Resources.

Mineral Reserves have been based on only Measured and Indicated Resources. The Mineral Reserves are exclusive of Mineral Resources, i.e. Mineral Reserves are not included in the Mineral Resources.

CONCLUSIONS

Based on the site visit and review, RPA draws the following conclusions:

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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GEOLOGY AND MINERAL RESOURCES

   

Sampling methods and protocols are consistent with common industry standards and appropriate for the style of mineralization.

 

   

The data capture is conducted in an appropriate fashion, with a reasonable level of safe-guards and validation.

 

   

The database is maintained using secure protocols and industry-standard software.

 

   

The assaying is done using methods commonly used in the industry and appropriate for the grades, deposit type and style of mineralization.

 

   

A minimum level of independent assay quality assurance/quality control (QA/QC) checking is applied. Assay repeatability is observed to be poor for gold, and the use of metallics screen assays is being contemplated.

 

   

RPA noted some minor errors in the database. However, in RPA’s opinion the sample database is reasonably free from error and adequate for use in estimation of Mineral Resources and Mineral Reserves.

 

   

Mineral Resource estimates are carried out using methods that are, for the most part, conventional and commonly used within the industry, using software that is commercially available. Certain geostatistical and statistical analyses are conducted using in-house software.

 

   

There is a good understanding of the geology, mineralogy and deposit model. The geological interpretations of the mineralized zones and the wireframe models derived from those interpretations are reasonable.

 

   

Parameters for grade estimation are derived using reasonable and appropriate interpretations of the geology, statistics, and geostatistics.

 

   

There are a number of mineralized zones that have been intersected by drill holes but have not yet been fully defined. Most often, these zones are located in the background domains. The block models for these domains are poorly constrained, which results in excessive dilution in some cases, and unrealistic extrapolation of grades in others. These zones require further drilling, interpretation, and wireframe modeling to fully evaluate their potential and bring them into the Mineral Reserves. As an interim solution, Porgera JV mine staff have implemented an estimation strategy which employs search ellipsoids with highly restricted cross-strike radii (the “Statistically Controlled” method).

 

   

The implementation of the Statistically Controlled (SC) interpolation method has resulted in the addition of significant volumes of Mineral Resources to the inventory. In RPA’s opinion, this method is acceptable for use in estimation of Inferred Mineral Resources. It will require some time to assess the performance of this estimation method through tracking of the Inferred material through upgrade to Indicated and Measured.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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Other recent modifications to the estimation methodology include the application of a two drill hole minimum per block, and a conversion of the classification scheme to one based on distance from samples. These changes are being implemented to bring the process more in line with the guidelines imposed by Barrick’s Tuscon Resource Group.

 

   

On a 100% basis, the Measured and Indicated Mineral Resources total 26.1 million tonnes at a grade of 2.41 g/t Au, containing 2.03 million ounces of gold.

 

   

On a 100% basis, the Inferred Mineral Resources total 21.6 million tonnes at a grade of 4.45 g/t Au, containing 3.09 million ounces of gold.

 

   

Resource classification is reasonable and consistent with the requirements of NI 43-101.

 

   

Block model validation techniques are reasonably rigorous and do not indicate that there are any major issues with the grade interpolations.

 

   

The mine staff apply an appropriate level of rigour in demonstrating that the Mineral Resources have a reasonable prospect of economic extraction.

 

   

The cut-off grades applied are reasonable.

 

   

The resource estimate procedures are not very well documented, primarily due to the scheduling of a new set of block models for year end. Reports for some zones (e.g. PX and EDX) in the underground mine are up to six years old and require updates.

 

   

There are exploration targets in and around the Porgera JV Mine that could provide additional Mineral Reserves in the future.

MINING AND MINERAL RESERVES

 

   

RPA finds the Mineral Reserve estimates to be conservative, reasonable, acceptable, and compliant with NI 43-101. The Mineral Reserves are generated based upon the mine designs applied to the Mineral Resources. The design methodology uses both the cut-off grade estimation and economic assessment to design and validate the mineable reserves. Schedules are generated using industry-accepted methods and programs.

 

   

Open pit, underground, stockpile and inventory Proven and Probable Mineral Reserves total, on a 100% basis, 72.0 million tonnes at a grade of 2.90 g/t, containing 6.7 million ounces of gold.

 

   

The total closing stockpile at as of December 31, 2010 was 22.0 million tonnes at 2.35 g/t Au and 2.62% S for 1.66 million ounces. The total closing stockpile as of December 31, 2011 was 19.8 million tonnes at 2.29 g/t Au for 1.46 million ounces.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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As of December 31, 2011 the mine has produced approximately 17.4 million ounces of gold. Current mine life based on the Mineral Reserves only is approximately eight years.

 

   

The location of the Project creates many challenges for the mine planning and mine operations departments. Listed below are some the challenges that Porgera JV faces:

 

   

Dewatering of the surface and meteoric (ground) waters is a major challenge, which can impact the open pit slope stability;

 

   

Given the impacts of surface and ground waters and lithologies found in the open pit and underground, the ground control conditions can be difficult, which can result in highwall failures;

 

   

The Project is in a very remote area of Papua New Guinea that lays in high relief terrain, and experiences yearly precipitation of greater than two metres;

 

   

Maintaining the equipment with an experienced staff and sustaining an adequate supply of spare parts is continually being addressed by the Porgera JV management team.

PROCESSING

 

   

Although the equations used to estimate gold recovery appear to be accurate, they are very complex. RPA observed that communication as to how the estimates are developed was deficient between the process department and the technical services department. As a result the equations are not used in the cut-off-grade calculations or the Resource and Reserve models.

 

   

Historical metal recovery has been approximately 86%.

ENVIRONMENTAL AND COMMUNITY CONSIDERATIONS

 

   

The practice of segregating potential metal leaching material was initially used in the operation but was subsequently abandoned and was not in use at the time of the RPA site visit.

 

   

Illegal mining is one of the principal challenges affecting the operations.

ECONOMIC ANALYSIS

 

   

Recovered gold ounces are estimated to be 5.68 million for the period between 2012 and 2025. Mining will be active until 2020, after which time, stockpiles will be reclaimed to provide mill feed.

 

   

RPA notes that the economic analysis confirms that the material classified as Mineral Reserves is supported by a positive economic analysis

 

   

The Porgera JV has suffered from lack of expenditures to maintain the facilities.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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RECOMMENDATIONS

RPA makes the following recommendations:

GEOLOGY AND MINERAL RESOURCES

 

   

Porgera JV mine staff are planning to amend the assay QA/QC protocols to include screen metallics analysis in order to try and improve repeatability. RPA concurs with this approach and recommends that it continue.

 

   

Exploration work should continue in order to continue to add new Mineral Resources.

 

   

The SC method should only be used to estimate Inferred Mineral Resources.

 

   

Efforts to simplify the estimation methodologies should continue. However, RPA recommends changes should be implemented gradually and only with complete understanding of the effects of each change.

 

   

The present documentation for the resource estimates is fragmented and out-of-date. A single report document should be prepared which describes the methodologies and parameters used in the estimation process.

MINING AND MINERAL RESERVES

 

   

RPA recommends that a single resource model be used for both the open pit and underground mine planning.

 

   

Another open pit evaluation should be completed at higher gold prices, which should enable the mine to produce a larger open pit beyond the current pit limits.

 

   

A concerted effort to eliminate and/or severely reduce surface waters from entering the open pit should be undertaken.

 

   

Dilution and ore recovery from the underground stopes needs to be improved.

 

   

Longhole drilling accuracy should be reviewed and a quality control program instituted. Modifications to stope drilling and blasting patterns, which would have less impact on the hanging wall should be investigated.

PROCESSING

 

   

RPA recommends that the process department and the technical services department work together to simplify the equations used to estimate gold recovery so they can be used in the cut-off grade calculations and in the Resource and Reserve estimates.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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ENVIRONMENTAL AND SOCIAL AND COMMUNITY CONSIDERATIONS

 

   

RPA recommends that the practice of segregating potential metal leaching (PML) material and impounding it within competent waste that is not PML should be re-instituted unless on-going, detailed waste characterization including assaying, acid-base accounting, and humidity cell tests prove that there is no possibility of PML material causing environmental concerns in the future.

 

   

Porgera JV should continue to focus on plans and systems that ensure relocations are handled in a timely manner.

ECONOMIC ANALYSIS

Under NI 43-101 rules, producing issuers may exclude the information required for Section 22—Economic Analysis, on properties currently in production, unless the technical report includes a material expansion of current production. RPA notes that Barrick is a producing issuer, the Porgera JV mine is currently in production, and an expansion of a material consequence is not being planned. RPA has performed an economic analysis of the Porgera JV mine using the estimates presented in this report and confirms that the outcome is a positive cash flow that supports the statement of Mineral Reserves.

TECHNICAL SUMMARY

PROPERTY DESCRIPTION AND LOCATION

The Porgera JV mine is located in Enga Province of the Western Highlands of PNG, at latitude 5°28’ south and longitude 143°05’ east. The mine is approximately 130 km west-northwest of Mount Hagen, PNG, and 600 km northwest of the national capital, Port Moresby, PNG. The property is located at elevations between 2,200 MASL and 2,700 MASL in rugged mountainous terrain, which is largely covered with rain forest.

LAND TENURE

The Porgera JV is an unincorporated joint venture whereby each party subscribes its portion of operating expenses and in return takes its appropriate portion of the gold production. The operation is managed by Barrick (Niugini) Ltd. (a wholly owned subsidiary of Barrick) on behalf of the joint venturers which are:

 

•    Barrick (Niugini) Limited

   95%

•    Mineral Resources Enga Limited

     5%

 

 

 

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Barrick increased its beneficial interest in the Porgera JV from 75% to 95% in 2007. Mineral Resources Enga Limited’s 5% is divided between the Enga Provincial government (2.5%) and local landowners (2.5%).

There is an area over which the Porgera JV has purchased the land rights from the locals who are the underlying land owners. The Porgera JV has paid compensation for the land and pays an ongoing lease payment but at the completion of operations the land will be returned to the underlying owners.

The Porgera JV operation is subject to a 2% royalty on revenue after the deduction of selling and refining costs.

EXISTING INFRASTRUCTURE

The major assets and facilities associated with the Porgera JV mine are:

 

   

The open pit mine and associated waste dumps and haul roads.

 

   

The underground mine and mine development.

 

   

Open pit and underground mining equipment and support equipment.

 

   

Six million tonnes per year capacity concentrator with crushers, grinding circuit, flotation circuit, autoclaves, cyanide leaching, cyanide destruction, for the recovery of gold, and paste tailings backfill plant.

 

   

Two camps for employees.

 

   

A hard surface air strip located approximately 11 km from the mine.

 

   

Abundant water from a reservoir containing greater than 7,000,000 m3, located seven kilometres away at the Waile Creek Dam.

 

   

Four water treatment plants for potable water and five sewage treatment plants.

 

   

Power supplied from the 62 MW gas-fired Hides Power Station via a 73-km transmission line and 13 MW of diesel-powered backup power from a generator located at the mine site.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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HISTORY

Alluvial gold showings were first officially reported in the area in 1938 by PNG Government officers and, in 1948, the first geological investigations traced the source to the Waruwari Hill area.

In 1964 and 1966 Bulolo Gold Dredging Ltd. (Bulolo) conducted mapping, channel sampling, and shallow diamond drilling programs followed, two years later, by Mount Isa Mines (MIM) which also carried out mapping, channel sampling, and diamond drilling. More drilling was done in the area in 1969 by Anaconda Australia Inc. which core drilled six holes at Waruwari and one at Rambari. A small-scale sluicing operation was set up in 1970 by MIM and Ada Explorations Pty. Ltd. to exploit the alluvial gold showings, and two adits were driven at Waruwari and one at Rambari.

In 1979, a three-way joint venture agreement was established between Placer PNG Pty. Ltd. (Place PNG), MIM, and New Guinea Goldfields Ltd. (NG Goldfields). A separate agreement was signed between the joint venture partners and the Independent State of Papua New Guinea (the State) that granted the State the right to acquire, at cost, up to 10% of the project if developed.

A preliminary technical and economic assessment conducted in 1981 based on a planned 15,000 tpd open pit mining operation was deemed uneconomic but later exploration success prompted a reevaluation. Another preliminary economic evaluation, conducted in 1984, returned positive results based on a mining rate of 4,000 tpd and development began in 1985 with the collaring of an exploration adit.

A Feasibility Study in 1989, based on a production rate of 8,000 tpd from combined underground and open pit operations, returned positive results. After regulatory approval was received, full construction began immediately and the State accepted its full 10% entitlement in the project. Through various acquisitions Placer Dome PNG, and later Barrick, was able to establish a 95% beneficial interest in the Porgera JV.

Commercial production was declared in 1990 and the open pit commenced operation in 1992 with a production rate of 8,000 tpd. In 1997, the underground mining operation was placed on care and maintenance but re-started in 2002 after exploration successfully identified additional resources.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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The Porgera JV mine has undergone numerous expansions over the life of the mine from the initial Stage 2 expansion in 1991 to the proposed Stage 5 expansions that are now planned. These expansions have resulted in the addition of major components to the processing circuits and pushbacks to the open pit mine. It should be noted again that Barrick increased its beneficial interest in the Porgera JV from 75% to 95% in 2007 following the acquisition of Placer in 2006.

GEOLOGY AND MINERALIZATION

The Porgera deposit is a world-class, largely refractory gold deposit that has already produced over 16.5 million ounces of gold. The high-grade core (Zone VII) is an epithermal-style deposit hosted within thermally metamorphosed sediments of the Cretaceous Chim Formation and the associated Porgera Diorite Intrusive Complex of Miocene age. The deposit is spatially associated with late Tertiary oxidized, hydrous, alkaline (shoshonitic) magmas of the Porgera Igneous Complex (PIC) located approximately 25 km south of the Lagaip fault zone in the northern portion of the Papuan Fold and Thrust Belt. The regional setting for Porgera is thought to be a back-arc region of a continental/island arc collision zone.

The tectonic units of Papua New Guinea result from collision and accretion of the Australian continental plate to the south with the Pacific oceanic plate to the north. The zone of interaction between the two plates forms the Central orogenic zone. The Papuan platform that hosts the Porgera JV mine is separated from the Central orogenic zone by the Lagaip fault zone, located some 25 km north of Porgera JV.

The Porgera intrusive complex is a calc-alkaline series of diorite plugs, stocks and dikes that form predominant relief within a seven kilometre wide basin rimmed to the south and east by limestone cliffs. The stocks and sills of the Porgera intrusive complex range from one metre wide dykes to bodies that are hundreds of metres in width. The stocks and dikes of the Porgera intrusive have experienced variable degrees of alteration.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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The Porgera JV mine area geology consists of a complex sequence of high level potassium-rich intrusives and variably altered sedimentary rocks which has characteristics of different deposit types. Despite its alkalic nature, Porgera shares many similarities with porphyry copper deposits. Rapid emplacement at shallow crustal levels distinguishes it from a typical gabbroic intrusion and the nature of the mineralization is more indicative of an epithermal gold deposit.

The primary sediments are pyritic, slightly calcareous, massive, incompetent bituminous shales and mudstones known as “brown mudstones”. These occur on the southwest and northwest margins of Waruwari (located in the southern part of the Porgera intrusive complex). The “black sediments” are the main variant on the “brown mudstones” and are the major host rock. Interpreted to be derived from the “brown mudstone”, the “black sediments” are more competent and less friable.

The major intrusive phases at Porgera are hornblende diorite, feldspar porphyry and hornblende diorite porphyry. These occur as stocks and sills and contacts generally dip steeper than 45°. Each of the intrusive rock types occur as more than one intrusive body, are inhomogeneous in texture and have chilled margins. By volume, hornblende diorite is the most prevalent rock type with two distinct bodies occurring. Feldspar porphyry forms small outcrops to the south of Waruwari and occur as small stocks to the northeast of Waruwari. The second most prevalent rock type by volume, it strikes north-northeast between two hornblende diorite bodies. Andesite and basalt are a fraction of the size of the three main intrusive bodies and occur mostly as dikes with accessory biotite and matrix plagioclase. Field observations have established the relationship between the intrusives. The hornblende diorite was emplaced first and followed by the feldspar porphyry and finally the hornblende diorite porphyry.

The principal structural features in the Porgera intrusive complex are the east trending faults, that control drainage in the area, and the Roamane Fault, which parallels and is subsidiary to the Lagaip Fault. The east trending Roamane Fault dips south at 70º to 80º and defines the northern extent of Waruwari and truncates the Yakatabari and Roamane intrusions. It appears to have moved many times creating a broad zone of deformation that has been invaded by numerous pulses of hydrothermal fluid which altered and mineralized the breccias that were formed by the movement

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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Three distinct and highly variable types of breccias have been recognized within the Porgera intrusive complex, namely, sedimentary, tectonic, and hydrothermal. They are important hosts to mineralization and can display strong alteration and open space filling gangue mineralization.

Mineralization occurs within the Porgera intrusive complex and is closely associated with three dominate structural trends, the Roamane Fault, the Hanging Wall Shear Zone and the Footwall Splay Zone. Mineralization occurs around the margins and within the intrusive bodies. The Footwall Diorite (north of the Roamane Fault) and the Eastern Deeps are also mineralized and have contributed significant tonnages at moderate grade.

Gold is suggested to have been transported as a chloride complex in early magmatically derived hypersaline fluids and deposited as disseminate auriferous pyrite during cooling as a result of sulphidation and sericitization reactions with mafic igneous wall rocks.

Precious metal mineralization comprises four types, corresponding to four distinct mineralizing events. From oldest to most recent, these are:

 

   

Auriferous pyrite, sphalerite and galena;

 

   

Coarse euhedral auriferous pyrite;

 

   

Fine-grained anhedral auriferous arsenical pyrite;

 

   

Gold and electrum associated with roscoelite.

The fourth mineralization style is typified by very high grades and the presence of roscoelite is a useful visual indicator of these high grade zones. The distribution of mineralization is associated with structural activity and, to a lesser extent, alteration.

Gold mineralization occurs as fracture-fillings and as disseminations in and around faults, breccias and dilatant zones. Gold is usually present as submicroscopic grains within the pyrite, with a relatively minor component occurring as free grains. Important accessory minerals include quartz and roscoelite. Cross cutting relationships indicate the mineralization occurred in several pulses. Evidence suggests that some remobilization of gold may have occurred. Later fluids favoured the deposition of metallic gold suggesting earlier mineralization types may have been affected by later mineralizing events. Gold grade is closely related to fracture intensity and mineralization type.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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EXPLORATION

Since RPA’s last Mineral Resource and Reserve audit report in 2009, exploration diamond drilling has taken place in the following areas: Tupegai, Tawasikale Veins, Tawasikale Intrusion, P-Zone, Peruk, Central Zone East, and Alipis.

RPA conducted a cursory review of the exploration work at Porgera JV. The exploration staff are of the opinion that there are significant targets remaining within the mine area as well as underexplored sections of the concessions that warrant further work. In RPA’s opinion, this is a reasonable assessment that exploration work should continue.

MINERAL RESOURCES

The Mineral Resource estimate for Porgera JV is shown in Table 1-1. These represent the in situ Mineral Resource estimate excluding Mineral Reserves. In RPA’s opinion the Mineral Resources are reasonable, acceptable and compliant with NI 43-101.

The estimate was carried out using block models constrained by wireframe models of the geological domains and mined out volumes. Grade interpolations were done using a variety of methods which included Multiple Indicator Kriging (MIK), Ordinary Kriging (OK), and Inverse Distance weighting (ID). Data used in the interpolations comprised diamond drill and face samples. Grades were estimated for gold and sulphur, and the block models contain data for domain codes, bulk density, and classification.

The global Mineral Resources increased substantially in terms both of tonnage and grade from YE2010 to YE2011. The changes to the Mineral Resources were due to the following:

 

   

increase due to addition of new resources in the O, North and East Zone (underground mine)

 

   

increase due to new pit shell with current gold price

 

   

decrease via depletion

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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increase due to changes to the classification scheme

 

   

decrease due to update of cut-off grade

OPEN PIT

The open pit block model encompasses the entire Porgera JV deposit, including material that will in all probability be mined from underground. The reported Mineral Resources are only those captured within a Lersch-Grossman open pit shell generated using Whittle to demonstrate the economic viability of mining by open pit. This pit shell was created using a gold price of $1,400/oz. Grades for gold and sulphur are interpolated MIK, OK and ID weighting. Kriging variance, which is used in the resource classification, is estimated into the model using OK. The interpolations are constrained by wireframe models of the principal estimation domains, as well as stoped volumes.

The cut-off grade used for the open pit resource estimate was 1.0 g/t Au, which is consistent with Barrick’s Reserve and Reporting Guidelines. This cut-off was derived using a gold price of $1,400/oz.

UNDERGROUND

The Mineral Resource estimates for the underground mine are generated from models created for six separate zones. These are the AHD, Central/North Zone (CNZ), East Zone (EZ), Project X (PX), Eastern Deeps (EDX), and O Zone (OZ). The models are constrained by 3D wireframes constructed using diamond drill and underground chip sampling results.

Grades for gold and sulphur are interpolated into the blocks using OK. The wireframe models are constructed using a nominal cut-off grade of 3 g/t Au and a three-metre minimum mining width. This cut-off was derived using a gold price of $1,400/oz. For some zones, a low-grade halo surrounding the 3 g/t wireframe is also constructed. These halos are based on a nominal 1.5 g/t Au cut-off.

MINERAL RESERVES

The Mineral Reserves for the Porgera JV mine are shown in Table 1-2. These Mineral Reserves are a combination of the open pit and underground operations and the stockpiles and inventory. Overall, RPA finds the Mineral Reserve estimates to be

 

 

 

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reasonable, acceptable, and compliant with NI 43-101. The Mineral Reserves are generated based upon the mine designs applied to the Mineral Resources. The design methodology uses both the cut-off grade estimation and economic assessment to design and validate the mineable reserves.

Block models, along with their associated wireframes, are constructed for both the open pit and underground mines. The open pit models are prepared by Senior Resource Geologists at Porgera JV mine with occasional assistance from external consultants. The models are constructed using Datamine software. Separate models are used for the open pit and underground mines.

Wireframes are also created for the mined volumes by the mine survey personnel. These models comprise stope and development void spaces in the underground mine as well as the volume depleted from the open pit.

Porgera JV maintains a system of both ore and low grade stockpiles, which have been growing since the 1990s.

The Probable Reserves located in 13 different stockpiles are estimated to be 54.5 million tons grading 2.60 g/t Au, containing 4.55 million ounces of gold, as of December 31, 2011. RPA agrees with the ore control rationale for creating the stockpiles, and the accounting methods used to track the stockpile quantities and grades. Consideration should be given to reclassifying these as Proven Reserves.

MINING METHODS

OPEN PIT

Barrick’s Porgera JV open pit is a large scale operation utilizing a traditional truck and shovel fleet. The open pit currently has five remaining phases, with the ultimate pit to measure approximately two kilometers east to west, 1.5 km north to south, and have an average depth of approximately 500 m. The waste rock dumps are located to the southeast and southwest of the open pit.

Ultimate pit limits were determined by generating Whittle® pit shells based on the net cash generated and the pit slopes recommended by Piteau Associates Engineering Ltd.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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Haul ramps were designed to be 35 m wide, including the safety berm for double lane traffic accommodating the 175 st class haul trucks, and have a maximum grade of 10%. Mining thickness is 10 m in waste and ore to help minimize dilution.

Barrick optimizes mining by using a multi-phased approach which maximizes stripping rates to keep an ore producing face always available. This multi-phase technique consists of a primary ore layback, a primary stripping layback, and a secondary stripping layback. Historically, this approach was put in place to maintain a consistent mill feed, and keep mine production in the range of 14 to 15 benches per layback per year. There are approximately 135 million tons per year mined.

The single, open pit operation is projected to mine approximately five million tonnes of ore per year at an average strip ratio of four waste tonnes to one ore tonne (4W:1O). The operation uses conventional open pit methods to mine the ore and waste; bench drilling, blasting, and loading with shovels and loaders into off-highway trucks. The primary loading units are supported by motor graders, track-dozers, small excavators, water trucks, and maintenance equipment.

The major risks associated with Porgera JV open pit are the following:

 

   

Dewatering and slope stability, the Southwest Dyke Failure in particular;

 

   

Equipment availabilities; and

 

   

Safety and security issues due to artisanal miners who trespass on the Porgera JV mine site.

UNDERGROUND

Porgera JV started in 1990 as an underground mining operation, which was completed in 1997. Underground mining was restarted in 2002, and it is currently planned to continue as long as the open pit is operating. It is RPA’s opinion that underground mining could continue after the planned completion of the open pit and during the milling of the stockpiles.

The underground mine is expected to produce approximately 1.2 million tonnes of ore per year and the goal is to increase this to 1.4 million tonnes per year. In 2011, the underground mine generated 935,000 tonnes grading 7.29 g/t Au.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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There are several underground deposits, but current production is coming from the North zone, and the recently accessed East zone. Underground exploration and development is underway and moving towards the AHD and Project X zones.

The average rock conditions are the key factor in the underground mine design and mining method selection. This has led to two mining methods both of which rely on cemented backfill for support. Where long hole stoping is used, the wall and back exposure is reduced by taking short long hole sections and filling before taking the next section. The underhand drift and fill stoping provides a backfill roof for subsequent lifts in the mining cycle.

Transverse long hole stoping is used where the mineralized zone has a significant width. Footwall drifts are driven parallel to the strike of the ore to provide access for stoping. Mining with transverse stopes requires a primary, secondary, and sometimes tertiary extraction to completely mine out the area. Longitudinal stopes are utilized in areas of the mine with adequate ground conditions to support a stope rib greater than 15 m in height, but do not have mineralized widths greater than 20 m. The stopes are accessed from a footwall drive and then driven parallel to the strike of ore. Each section is mined and filled before the next section is mined. If ground conditions are poor, the long hole stope section length can be reduced.

The underhand drift and fill method is utilized in areas of fair to poor ground conditions regardless of the width of the zone. The underhand drifts are nominally designed as 15 m wide by 15 m high. The minimum width is 15 m. The primary drift is driven with increased ground support to hold the ground open, then backfilled with a high strength cemented rock fill (CRF). Where the ore width exceeds the nominal drift width, subsequent drifts are developed (parallel or at oblique angles to the primary drift) and then backfilled. This process continues until the entire ore shape at a given elevation has been excavated and filled. Successive lifts are taken beneath the primary workings, utilizing the backfill as an engineered back.

MINERAL PROCESSING

The Porgera JV ore processing plant consists of crushing, grinding, flotation, pressure oxidation and leach/carbon-in-leach (CIL) operations. The crushing and grinding plant is

 

 

 

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at Tawisakale, which is physically separated from the concentrator at Anawe. Tawisakale is located immediately adjacent to the open pit and ground ore slurry is delivered by pipeline to the Anawe Concentrator.

ENVIRONMENTAL, PERMITTING AND SOCIAL CONSIDERATIONS

The Porgera JV site is located in an area that poses a number of unique challenges including:

 

   

High rainfall

 

   

High elevation

 

   

Remote location

 

   

Steep terrain

 

   

Seismic activity

 

   

Challenging social factors including illegal miners

For all of these reasons Porgera JV uses two operational practices that are uncommon for large mining operations. They are riverine tailings disposal and erodible dumps for disposal of mudstones. During initial permitting the PNG government and Porgera JV selected riverine tailings disposal as the method that poses the lowest risk to the environment.

Currently, Porgera JV is also developing and implementing an Environmental Management System (EMS) in preparation for certification by ISO 14001 and to meet Barrick corporate environmental standards.

PROJECT PERMITTING

The Porgera JV has approval to work the Porgera deposit within the agreed development plan under the terms of the Porgera Mining Development Contract (MDC) between the Government of PNG and the joint venture partners. The MDC specifies, in addition to other items, the annual rents that must be paid for the Special Mining Lease (SML). The MDC also specifies the classes of compensation that are payable to the landowners for the various land uses. The SML is issued by the Government of PNG. The SML, which expires in 2019, but is renewable, encompasses approximately 2,240 ha, including the mine and Project infrastructure areas. The Government of PNG has also awarded Leases for Mining Purposes (LMPs) for the waste dumps, campsites, and airstrip.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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WASTE ROCK STORAGE/DISPOSAL

Waste rock management is permitted under the waste discharge permit. It is generally split into three classifications:

 

   

Competent waste, comprising Porgera intrusive complex rocks and altered sediment

 

   

Semi-competent waste, comprising black and calcareous sediment;

 

   

Erodible waste, comprising Chim Formation mudstones (Yakatabari and Western Mudstone)

Waste is further divided into potential metal leaching (PML) material and non-PML material based on sulphur and zinc grades. PML material is generally competent or semi-competent, and was impounded within the stable dumps during earlier operations. RPA noted that this operating practice was subsequently abandoned and was not in use at the time of the site visit. RPA recommends that this practice should be re-instituted unless on-going, detailed waste characterization including assaying, acid-base accounting, and humidity cell tests prove that there is no possibility of PML material causing environmental concerns in the future.

SOCIAL OR COMMUNITY REQUIREMENTS

Community relations are a significant concern at Porgera JV due to the large influx of people, the local culture and customs, and the impact of the mine on the people of Papua New Guinea. The Porgera Environment Advisory Komiti (PEAK) was formed to provide advice, communication and review services to the mine.

Porgera JV has become a training centre for the mining industry in PNG. Porgera JV is committed to training programs and was developing a $24 million training program at the time of the site visit.

From time to time, civil disturbances and criminal activities such as trespass, illegal mining, sabotage, particularly with respect to power, theft and vandalism have occasionally caused disruptions to the operation and temporarily halted production at Porgera.

Illegal mining is one of the principal challenges affecting the operations at Porgera JV. RPA observed illegal miners in the open pit, at the waste dumps, and at the tailings discharge area. RPA recommends that continued pursuit of measures designed to mitigate the situations should be one of the highest priorities for Porgera JV.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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MINE RECLAMATION AND CLOSURE

SRK Consulting established the closure costs using the Barrick Reclamation Cost Estimator (BRCE) methodology and estimated the closure cost as $170 million.

CAPITAL AND OPERATING COST ESTIMATES

The sustaining capital costs for the Porgera JV for the period of 2012 to 2024 has been estimated to be $466 million (Table 1-3).

Operating costs for 2011 are estimated to be $841 per oz Au produced, or $81.78 per tonne milled (Table 1-4).

TABLE 1-3 SUMMARY OF OPEN PIT AND UNDERGROUND SUSTAINING

CAPITAL COSTS (2011 MID-YEAR)

Barrick Gold Corporation – Porgera JV

 

Capital Cost Category

   Totals for Years 2012  -2024
(US$ 000)

Open Pit Mining

   117,893

Underground Mining

   71,511

Processing

   53,230

G&A

   176,423

Other

   47,730

Total

   466,788

 

 

 

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TABLE 1-4 SUMMARY OF OPEN PIT OPERATING COSTS

(2011 MID-YEAR)

Barrick Gold Corporation – Porgera JV

 

Department Description

   Actual Cost
(US$/tonne  –milled)

Open Pit Total

   26.78

Underground Total

   8.30

Mill Total

   23.39

Maintenance Total

   6.04

Sustainable Development Total

   0.86

Exploration Total

   0.01

Strategic Total

   0.43

Accounting Total

   0.18

Supply Total

   1.20

Business Improvement Total

   1.04

Security Total

   2.46

Personnel Total

   0.96

Occupational Health & Safety Total

   0.46

Community Affairs Total

   1.50

Admin General Services Total

   5.63

Administration & Selling Total

   1.91

Indirect Costs Total

   0.62

Total

   81.78

 

 

 

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2 INTRODUCTION

Roscoe Postle Associates Inc. (RPA) was retained by Barrick Gold Corporation (Barrick) to prepare an Independent Technical report on the Porgera mine (the Project) located in Papua New Guinea (PNG). The purpose of this report is to support public disclosure of Mineral Resource and Mineral Reserve estimates at the Project as of December 31, 2011. This Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects. RPA visited the property from August 28 to September 2, 2011.

The Project is located in Enga Province of the Western Highlands of PNG, at latitude 5°28’ south and longitude 143°05’ east. The mine is approximately 130 km west-northwest of Mount Hagen, PNG and 600 km northwest of the national capital, Port Moresby, PNG. The property is located at elevations between 2,200 MASL and 2,700 MASL in rugged mountainous terrain, which is largely covered with rain forest.

The Project is a producing open pit and underground gold mine which has a planned operating rate of approximately 5.2 million tonnes per annum (Mtpa) from the open pit and stockpiles and 0.8 Mtpa from the underground. The mine produces gold in doré form from process plants utilizing gravity as well as flotation followed by autoclaves and cyanide leaching. Annual gold production was approximately 526,000 (100% interest) ounces in 2011. The Project is owned by Porgera Joint Venture (Porgera JV) whereby Barrick is the operator and has a 95% interest through a wholly owned subsidiary, and Mineral Resources Enga Limited has a 5% interest.

PERSONNEL

Site visits were carried out from August 28 to September 2, 2011 by the following RPA employees:

 

   

David Rennie, P. Eng, RPA Principal Geologist

 

   

Kathleen Altman, P. E., Ph.D., RPA Principal Metallurgist

 

   

Stuart Collins, P. E., RPA Principal Mining Engineer

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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SOURCES OF INFORMATION

During the visit, the auditors met with the following people:

 

   

Simon Jackson, General Manager

 

   

Ettienne Du Plessis, Technical Services Manager

 

   

Bruce Robertson, Resource Geologist

 

   

Mike Beatty, Senior Long-term Open Pit Planning

 

   

Ridge Nyashanu, Process Manager

 

   

John Mark, Senior Metallurgist

 

   

Simon, Senior Metallurgist, Crushing & Grinding

 

   

Reynold Giwar, Plant Metallurgist, Crushing & Grinding

 

   

Jacob, Chief Chemist

 

   

Charles Ross, Environmental Manager

 

   

Steve Mitzelberg, UG Production Foreman

 

   

Mark Mousek, UG Engineer

Mr. Rennie is responsible for the overall preparation of the Report and has contributed to Sections 3 through 12, inclusive, and to Sections 14, 23, 24, and parts of Sections 1, 2, 25 and 26. Dr. Altman is responsible for Sections 13, 17, 18, 19, 20 and contributed to Sections 1, 2, 25, and 26. Mr. Collins is responsible for Sections 15, 16, 19, 21, 22 and contributed to Sections 1, 2, 25, and 26.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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LIST OF ABBREVIATIONS

Units of measurement used in this report conform to the Imperial system. All currency in this report is US dollars (US$) unless otherwise noted.

 

µm

   micron   km2    square kilometre

°C

   degree Celsius   kPa    kilopascal

°F

   degree Fahrenheit   kVA    kilovolt-amperes

µg

   microgram   kW    kilowatt

A

   ampere   kWh    kilowatt-hour

a

   annum   L    litre

bbl

   barrels   L/s    litres per second

Btu

   British thermal units   m    metre

C$

   Canadian dollars   M    mega (million)

cal

   calorie   m2    square metre

cfm

   cubic feet per minute   m3    cubic metre

cm

   centimetre   min    minute

cm2

   square centimetre   MASL    metres above sea level

d

   day   mm    millimetre

dia.

   diameter   mph    miles per hour

dmt

   dry metric tonne   MVA    megavolt-amperes

dwt

   dead-weight ton   MW    megawatt

ft

   foot   MWh    megawatt-hour

ft/s

   foot per second   m3/h    cubic metres per hour

ft2

   square foot   opt, oz/st    ounce per short ton

ft3

   cubic foot   oz    Troy ounce (31.1035g)

g

   gram   ppm    part per million

G

   giga (billion)   psia    pound per square inch absolute

Gal

   Imperial gallon   psig    pound per square inch gauge

g/L

   gram per litre   RL    relative elevation

g/t

   gram per tonne   s    second

gpm

   Imperial gallons per minute   st    short ton

gr/ft3

   grain per cubic foot   stpa    short ton per year

gr/m3

   grain per cubic metre   stpd    short ton per day

hr

   hour   t    metric tonne

ha

   hectare   tpa    metric tonne per year

hp

   horsepower   tpd    metric tonne per day

in

   inch   US$    United States dollar

in2

   square inch   USg    United States gallon

J

   joule   USgpm    US gallon per minute

k

   kilo (thousand)   V    volt

kcal

   kilocalorie   W    watt

kg

   kilogram   wmt    wet metric tonne

km

   kilometre   yd3    cubic yard

km/h

   kilometre per hour   yr    year

 

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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3 RELIANCE ON OTHER EXPERTS

This report has been prepared by Roscoe Postle Associates Inc. (RPA) for Barrick Gold Corp. (Barrick). The information, conclusions, opinions, and estimates contained herein are based on:

 

   

Information available to RPA at the time of preparation of this report,

 

   

Assumptions, conditions, and qualifications as set forth in this report, and

 

   

Data, reports, and other information supplied by Barrick and other third party sources.

For the purpose of this report, RPA has relied on ownership information provided by Barrick. RPA has not researched property title or mineral rights for the Project and expresses no opinion as to the ownership status of the property.

RPA has relied on Barrick for guidance on applicable taxes, royalties, and other government levies or interests, applicable to revenue or income from the Project.

Except for the purposes legislated under provincial securities laws, any use of this report by any third party is at that party’s sole risk.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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4 PROPERTY DESCRIPTION AND LOCATION

The Porgera Mine property is located in Enga Province of the Western Highlands of PNG, at latitude 5° 28’ south and longitude 143° 05’ east. The mine is approximately 130 km west-northwest of Mount Hagen, PNG and 600 km northwest of the national capital, Port Moresby, PNG. The property is located at elevations between 2,200 MASL and 2,700 MASL in rugged mountainous terrain, which is largely covered with rain forest (Figure 4-1).

LAND TENURE

The Porgera JV is an unincorporated joint venture whereby each party subscribes its portion of operating expenses and in return takes its appropriate portion of the gold production. The operation is managed by Barrick (Niugini) Ltd. (a wholly owned subsidiary of Barrick) on behalf of the joint venture partners which are:

 

   

Barrick (Niugini) Limited                                     95%

 

   

Mineral Resources Enga Limited                           5%

Barrick increased its beneficial interest in the Porgerga JV from 75% to 95% in 2007. Mineral Resources Enga Limited’s 5% is divided between the Enga Provincial government (2.5%) and local landowners (2.5%).

The Porgera JV has approval to work the Porgera deposit within the agreed development plan under the terms of the Porgera Mining Development Contract (MDC) between the Government of PNG and the joint venture partner. The MDC specifies, inter alia, the annual rents that must be paid for the Special Mining Lease (SML) and the classes of compensation that are payable to the landowners for the various land uses. The SML is issued by the Government of PNG. The SML, which expires in 2019, but which is renewable, encompasses approximately 2,350 ha, including the mine and project infrastructure areas. The Government of PNG has also awarded Leases for Mining Purposes (LMPs) for the waste dumps, campsites, and airstrip.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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Any future open pit and waste dump expansions that extend the mine life beyond the expiry date of the Special Mining Lease (SML) will require an extension to the SML be approved by the PNG government. It has been postulated that the primary and only significant environmental impact from any potential, future open pit expansion should be the expansion of the existing waste dumps.

While initial overtures to the Government of PNG, related to the extension of the SML, have been received favourably there has been no formal application to extend the SML to include the operations and reclamation, which are now estimated to continue until after mine closure in 2020. Open pit and underground operations are expected to cease in 2020, with the mill continuing to process stockpiles through 2025. Agreements with the local populace concerning the Anawe North Waste Rock Facility (WRF) are deficient with respect to the required duty for this dump in any possible Stage 6 Plan. Negotiations, with the goal of reaching an agreement that is to the satisfaction of all stakeholders, are planned (Bassotti & Woodward, 2010). No Stage 6 expansion plan is being considered at this time. A substantial amount of exploration and development work needs to be completed before any further open pit and waste dump expansion is considered.

Any major change to the Approved Proposal for Development requires State approval under the MDC. The MDC defines a major change as either a material change in:

 

   

The design, capacity, location or availability of the Works and Facilities including the mine water supply, infrastructure directly associated with the mining or processing of ore and the administration building, and Suyan and Alipis camps.

 

   

The design, capacity or availability of facilities located within the Mining Area, or in the mine plan or mine production if the material change would materially reduce the States royalties or revenue or have an adverse impact on the environment (Bassotti & Woodward, 2010).

There is no expiration date for the MDC, but it is tied to the continuation of the SML. If the mine life is extended, it is required that current environmental permitting arrangements be renewed. Previous submissions regarding pushbacks have met with approval so precedents exist for positive outcomes.

There is an area over which the Porgera JV has purchased the land rights from the locals who are the underlying land owners. The Porgera JV has paid compensation for

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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the land and pays an ongoing lease payment but, at the completion of operations, the land will be returned to the underlying owners. Land ownership is a major issue for the operation and the extension of the mine area would involve lengthy negotiations with both current and proposed land owners. Land in PNG is owned by individuals and not the State and, as such, “social license” is a very important part of the operation of the Porgera Mine (Bassotti & Woodward, 2010).

The Porgera JV operation is subject to a 2% royalty on revenue after the deduction of selling and refining costs.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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FIGURE 4-1 PORGERA JV LOCATION MAP

 

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Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

ACCESSIBILITY

Access to Porgera JV is via the Enga Highway, a road distance of 211 km from Mount Hagen, PNG. There is a 470 km long road connection from Mt Hagen to the port of Lae, PNG. Almost all mine consumables and equipment are transported along this road on highway heavy-goods vehicles.

CLIMATE

The climate at the mine site is temperate year round, with daily temperatures ranging from 10ºC to 25ºC. The average annual rainfall is 3,650 mm spread throughout the year, although there are often drier periods from April through to October. There are high-intensity rainfall events of short duration, but there are no large rainfall events such as cyclones or monsoons. Climate, generally, does not impact on the Project’s operations.

LOCAL RESOURCES

The workforce consists of approximately 2,600 employees In addition, there are approximately 500 contractors. Of the total employee workforce, 94% are PNG citizens (64% local employees and 30% from other parts of PNG).The employees who are not local inhabitants commute to and from the mine by air, either by helicopter from Mt Hagen, PNG, landing directly at the minesite or by a DHC-6 (Twin Otter) light aircraft to the Kairik airstrip, located 11 km from the minesite. A joint venture between Airlines PNG and Heli Niugini operates this service under charter to the Porgera JV. This charter agreement also provides for feeder flights to and from Mt Hagen, PNG utilizing a DHC-8 (Dash 8) aircraft. Destinations are Port Moresby, Lae, Rabaul, Madang, and Wewak in PNG, and Cairns in Australia.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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LOCAL INFRASTRUCTURE

Local infrastructure and resources to support the mine have grown substantially since the mine started operations. Initially, the local population was estimated to be between 3,000 people and 5,000 people. Currently there are approximately 30,000 to 50,000 people. There is a hospital, schools, and other infrastructure that have improved the quality of life and reduced the mortality rates. The influx of people from outside the area has brought in “outsiders” and intermarriage between the various groups from PNG which has changed the dynamics of the local region. The influx of people provides a virtually unlimited supply of labor to work at the mine. Porgera JV provides a great deal of support in the local communities.

More detailed regional and local infrastructure plans are shown in Figures 5-1 and 5-2.

PHYSIOGRAPHY

The property is located at elevations between 2,200 MASL and 2,700 MASL in rugged mountainous terrain, which is largely covered with rain forest.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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FIGURE 5-1 PORGERA MINE REGIONAL INFRASTRUCTURE

 

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Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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FIGURE 5-2 PORGERA MINE LOCAL INFRASTRUCTURE

 

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Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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6 HISTORY

This section is derived from Bassotti & Woodward (2010) unless otherwise noted.

Alluvial gold was first officially reported in the area in 1938 by PNG Government officers and, in 1948, the first geological investigations traced the source to the Waruwari Hill area.

In 1964, J.J. Searson gained title to the area and solicited interest from various explorers. In 1964 and 1966 Bulolo Gold Dredging Ltd. (Bulolo) conducted mapping, channel sampling, and shallow diamond drilling programs.

Two years later, in 1968, Mount Isa Mines (MIM) carried out extensive geological mapping, trenching, and channel sampling programs.

The next year, in 1969, Anaconda Australia Inc. was active in the area with additional mapping, channel sampling, and drilling. Six holes were core drilled at Waruwari and one at Rambari but results indicated, for the prevailing gold price, sub-economic grades and tonnages.

In 1970, MIM and Ada Explorations Pty. Ltd. conducted extensive testing of the alluvial gold and established a small-scale sluicing operation. Also, two adits were driven at Waruwari and one north of Rambari.

Placer (PNG) Pty Ltd. (Placer PNG), which had amalgamated with Bulolo in 1966, entered into a joint venture agreement (JVA) with MIM and became the operator. In 1979, Placer PNG, MIM, and New Guinea Goldfields Ltd. (NG Goldfields) entered into a JVA that granted equal one-third interest to the three parties. An additional agreement, termed the Equity Agreement, was entered into with the Independent State of Papua New Guinea (the State). Under the terms of this agreement, the State had the right to acquire, at cost, up to ten percent interest in the project if it was developed.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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In 1981, a preliminary technical and economic evaluation was carried out by Fluor Mining and Metals Inc. on behalf of the joint venture partners and concluded, at the time, the project was uneconomic based on a 15,000 tpd production rate from an open pit. Subsequently, six zones of higher mineralization were discovered in the proposed mine area and another economic evaluation, based on the new information, was done in 1982. Subsequent to that evaluation, a seventh zone was discovered by surface exploration. Another preliminary economic evaluation was conducted in 1984 using a 4,000 tpd production rate and returned positive results.

Development on the mine began in 1985 with the collaring of an exploration adit. A full feasibility study was completed in 1989, based on an 8,000 tpd production rate from a combined open pit and underground operation. The joint venture partners’ application for an SML was approved in May, 1989, and full construction began immediately. The State accepted its full ten percent entitlement under the 1979 Equity Agreement and the three joint venturers were diluted to 30% interest each.

In 1990, commercial production was declared and MIM sold its 30% to Highland Gold Ltd (Highland). In 1993, Placer PNG, NG Goldfields, and Highland sold 15% (five percent each) interest in the property with the State purchasing ten percent and the remaining five percent going to Enga Province and the Porgera landowners.

In addition to the carried interest in the Porgera JV project, the State had been involved in the development of the Kutubu oil field and had direct equity involvement with the Lahir Gold Project. This lead to the formation and partial privatization of Orogen Minerals Ltd. (Orogen) to whom the State sold its 20% interest in the Project (Orogen, 2001).

Since startup the operation has expanded four times. The initial expansion in 1991, termed Stage 2, saw the addition of three autoclaves, an acid neutralization circuit, a 150 tpd lime plant, and a 310 tpd oxygen plant.

In 1992 the open pit commenced operation with an 8,000 tpd primary crusher, a semi-autogenous grinding (SAG) mill, ball mill, and additional capacity in the flotation concentrator that was part of Stage 3 expansion. The next expansion, Stage 4A in

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

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1993, added a ball mill and raised the grinding capacity of the operation to 10,500 tpd. A 75 tpd oxygen plant and a fourth autoclave was added and the mining rate for the underground operations was increased to 5,000 tpd.

Late in 1995, the Stage 4B expansion increased the mill capacity to 17,700 tpd with the addition of a SAG mill, a ball mill, flotation cells, a 340 tpd oxygen plant, an upgrade to the leach circuit, an expansion to the lime plant, and an increase in water storage capacity at Waile Creek Dame reservoir.

In 1997, the underground operation was placed on care and maintenance and an adit was collared. The adit was designed to serve dual purposes, exploration access and drainage for the open pit. It was successful in providing a means of identifying additional underground resources and a feasibility study recommended restarting underground operations. Underground operations re-commenced in 2002 and, as of 2009, produced 750,000 tpa of ore. Improvements were also made to the processing circuit with the expansion of the cleaner flotation circuit.

Also in 1997, Placer Dome Inc. (Placer Dome) acquired Highland for US$344 M and, along with its control of Placer PNG, increased its overall stake in the joint venture to 50%. Placer further increased its interest in the Project to 75% in 2003 with the acquisition of Aurion Gold Ltd. which was beneficial owner of the 25% controlled by NG Goldfields.

In 1998, additional oxygen plant capacity was installed that allowed for an increase in sulphur throughput. This was followed by other enhancements in 1999 that included the addition of a Knelson concentrator gravity separation circuit in the grinding section, an extension of the rougher/scavenger flotation circuit, and the addition of a cleaner circuit to the gravity circuit.

An Acacia reactor was installed in the gold room in 2001 to improve the gravity recovery of free gold. A contact secondary crusher was installed to improve mill capacity and bridge the gap between milling and oxidation capacity from 2004 to 2006.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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In 2002, Oil Search Ltd. (Oil Search) merged with Orogen and acquired the 20% interest that had formerly belonged to the State. In 2003, Oil Search sold its 20% interest to Durban Roodepoort Deep Ltd. (now named DRDGOLD Ltd.) for US$ 73.8 M.

In 2006, Barrick acquired 100% control of Placer Dome and took over operations at Porgera JV. In 2007, Barrick purchased an additional 20% interest in the Project, which resulted in an overall increase in their interest to 95%. In 2011, a twin decline and a paste backfill plant were completed.

Historical ounce production from the beginning of the mine life in 1990 to 2011 is shown in Table 6-1.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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TABLE 6-1 PORGERA JV HISTORICAL OUNCE PRODUCTION

Barrick Gold Corporation – Porgera JV

 

Year

   Recovery
(%)
   Gold Poured
(oz)
   Contained Ounces
Mined (oz)

1990

   69.7    265,645    381,126

1991

   85.9    1,216,101    1,415,717

1992

   94.7    1,485,077    1,568,191

1993

   90.3    1,156,669    1,280,918

1994

   86.8    1,032,767    1,189,824

1995

   83.0    848,868    1,022,733

1996

   77.2    854,822    1,107,426

1997

   73.5    712,693    969,650

1998

   75.3    726,806    965,086

1999

   77.9    754,754    968,875

2000

   78.9    910,434    1,153,909

2001

   81.6    760,622    932,135

2002

   84.8    641,811    756,853

2003

   87.6    851,920    972,511

2004

   88.4    1,019,700    1,153,507

2005

   90.9    847,130    932,039

2006

   88.3    523,358    592,704

2007

   85.0    533,913    628,133

2008

   85.5    637,572    745,698

2009

   87.8    572,595    652,158

2010

   86.8    524,572    604,346

2011

   86.7    519,944    463,470
  

 

  

 

  

 

Totals

      17,397,773    20,457,009

 

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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7 GEOLOGICAL SETTING AND MINERALIZATION

REGIONAL GEOLOGY

The tectonic units of Papua New Guinea result from collision and accretion of the Australian continental plate to the south with the Pacific oceanic plate to the north (Fleming et al., 1986). The zone of interaction between the two plates forms the Central orogenic zone. The Papuan platform that hosts the Project is separated from the Central orogenic zone by the Lagaip fault zone, located some 25 km north of Porgera JV.

The Late Jurassic to Cretaceous pelitic, terrigenous, shelf sediments of the Chim Formation were partially eroded during Paleocene emergence and unconformably overlain by Eocene to Miocene limestone (Figure 7-1). Limestone deposition ceased following commencement of Eocene uplift and tectonism due to continental collision and/or crustal thickening. On the Papuan platform, folding and southerly thrusting occurred. Later Miocene calc-alkaline igneous activity within the Central orogenic zone took place. Mineralized intrusive rocks occur within this zone and Porgera and OK Tedi intrusive systems may have been derived by the southward migration of tectonism (Fleming et al., 1986).

The Porgera intrusive complex is a calc-alkaline series of diorite plugs, stocks and dikes that form predominant relief within a seven kilometre wide basin rimmed to the south and east by limestone cliffs. Late Cretaceous shale and mudstone sediments of the Chim Formation outcrop within the basin and extend to the northwest along the margin of the Papuan platform. These sediments are interbedded with calcareous to dolomitic siltstone and calcareous to glauconitic arenites or sandstones and host characteristic syngenetic pyrite mineralization. Eocene limestone of the Mendi Group unconformably overlies the Chim Formation. No limestone outcrops in the vicinity of the Porgera intrusive complex and no skarn rocks have been observed (Fleming et al., 1986).

The stocks and sills of the Porgera intrusive complex range from one metre wide dikes to bodies that are hundreds of metres in width. No evidence of extrusion exists but textural observations and spatial relationship with the overlying limestone indicate intrusive emplacement close to surface (Fleming et al., 1986).

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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FIGURE 7-1 REGIONAL GEOLOGY

 

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Barrick Gold Corporation – Porgera Joint Venture, Project #1669

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LOCAL GEOLOGY

In the vicinity of the Porgera intrusive complex, sedimentary layering strikes to the northwest dipping steeply with several tight folds plunging to the southeast. Thrusts and steeply dipping faults intersect the shales. The overlying limestone is folded into broad open structures with low dip angles and has the appearance of having rafted over the shales. The limestone displays blocks of competent rock tens of kilometres in area (Fleming et al., 1986)

The principal structural features in the Porgera intrusive complex are the east trending faults, that control drainage in the area, and the Roamane Fault (RF), which parallels and is subsidiary to the Lagaip Fault (Fleming et al., 1986).

The intrusive complex is characterized by gabbroic and porphyritic rocks of alkalic basalt composition. The stocks and dikes of the Porgera intrusive have experienced variable degrees of alteration. Gold mineralization post dates alteration and occurs in three stages:

 

   

Magnetite-sulphide-carbonate±quartz veins with minor gold

 

   

Base metal-sulphide-carbonate±quartz±gold veins

 

   

Quartz-roscoelite-pyrite-gold veins and breccias

The third stage of mineralization is the most economically significant (Ronacher et al., 2004).

PROPERTY GEOLOGY

The Porgera area geology consists of a complex sequence of high level potassium-rich intrusives and variably altered sedimentary rocks (Figures 7-2 and 7-3). It has characteristics of different deposit types. Despite its alkalic nature, Porgera shares many similarities with porphyry copper deposits. Rapid emplacement at shallow crustal levels distinguishes it from a typical gabbroic intrusion and the nature of the mineralization is more indicative of an epithermal gold deposit (Richards and Kerrich, 1993).

 

 

 

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The primary sediments are pyritic, slightly calcareous, massive, incompetent bituminous shales and mudstones known as “brown mudstones”. These occur on the southwest and northwest margins of Waruwari (located in the southern part of the Porgera intrusive complex) (Handley and Bradshaw, 1986).

Several distinctive interbeds of calcareous, grey, massive, silt-size sediment occur on the flanks of Waruwari and dip eastward. These contain significant amounts of calcium carbonate. Thought to be products of hydrothermal alteration and remobilized sedimentary carbonate, these “calcareous sediments” are found adjacent to some intrusives (Handley, G.A. and Bradshaw, P.M.D., 1986).

The “black sediments” are the main variant on the “brown mudstones” and are the major host rock. These are dark grey to black, well-bedded, silt sized, shallow marine sediments. The bituminous material has been broken down by hydrothermal alteration to carbon. Interpreted to be derived from the “brown mudstone”, the “black sediments” are more competent and less friable (Fleming et al., 1986).

Altered sediments are easily recognizable as they are pale grey to cream-coloured and occur at the margins of the intrusives. They are sericite-dolomite altered “black” and “calcareous sediments”. At depth, the strongly altered sediments appear mottle, pale red, green or yellow (Fleming et al., 1986)

 

 

 

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FIGURE 7-2 PROPERTY GEOLOGY

 

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The major intrusive phases at Porgera are hornblende diorite, feldspar porphyry and hornblende diorite porphyry. These occur as stocks and sills and contacts generally dip steeper that 45°. Each of the intrusive rock types occur as more than one intrusive body, are inhomogeneous in texture and have chilled margins. The presence of an intrusive body indicates a location of structural disturbance and larger intrusions occur in areas of structural dislocation (Fleming et al., 1986).

By volume, hornblende diorite is the most prevalent rock type with two distinct bodies occurring. Hornblende phenocrysts are up to ten millimetres and plagioclase is the dominant igneous mineral with augite, minor biotite and apatite. Equigranular, moderately coarse grained augite hornblende diorite occurs at the northern margin of Waruwari and at Rambari, north of the Romaine Fault. Olivine replacement is observed. The presence of olivine indicates a basic composition of magma that has been altered. Hornblende diorite occurs at depth in Waruwari. The matrix is predominantly feldspar, apatite and quartz with subordinate hornblende phenocrysts and no augite (Fleming et al., 1986).

Feldspar porphyry forms small outcrops to the south of Waruwari and occur as small stocks to the northeast of Waruwari. The second most prevalent rock type by volume, it strikes north-northeast between two hornblende diorite bodies. Strongly altered at Waruwari, the matrix composition is plagioclase with minor mafic granules and quartz and commonly contains numerous sedimentary and intrusive xenoliths up to 50 mm in size in varying stages of absorption. This intrusive phase is characterized by autobrecciation and wall-rock stoping. Relatively unaltered and unmineralized in other areas of the Porgera intrusive complex, it commonly forms dikes that persist for tens to hundreds of metres (Fleming et al., 1986).

Andesite and basalt are a fraction of the size of the three main intrusive bodies and occur mostly as dikes with accessory biotite and matrix plagioclase. Carbonate amygdales define the unit and the presence of olivine indicates basic composition (Fleming et al., 1986).

 

 

 

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FIGURE 7-3 GEOLOGICAL CROSS SECTION

 

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Field observations have established the relationship between the intrusives. The hornblende diorite was emplaced first and followed by the feldspar porphyry and finally the hornblende diorite porphyry. Pervasive alteration has hampered efforts to age date the rocks. Analyses using K-Ar dating have put the age of the Porgera intrusive complex from 7.5 Ma to 14.4 Ma and confirm it as middle Miocene in origin. The large date range suggests that either several differentiation events have occurred or hydrothermal overprinting has affected the K/Ar ratios. The large disparity in ages, along with the observed field relationships, suggests that the igneous activity occurred in different phases and was not from one single differentiating magma chamber (Fleming et al., 1986).

Three distinct and highly variable types of breccias have been recognized within the Porgera intrusive complex. They are important hosts to mineralization and can display strong alteration and open space filling gangue mineralization.

Sedimentary breccia is a slump feature confined to one narrow horizon. It consists of angular to subangular fragments of Chim Formation shale or calcareous sediment cemented by rock flour and diagenetic calcite with pyrite in both fragments and matrix. Cretaceous in origin, it predates the other brecciation events and does not contain any higher grade mineralization (Fleming et al., 1986).

Tectonic breccias occur in fault zones and at intrusive contacts and generally host low grade gold mineralization. These are usually less than ten metres wide with angular to subrounded fragments in a rock flour matrix. Gold mineralization greater than 3 g/t Au is sometimes observed in contact breccias where fracturing during, and collapse after, intrusive emplacement occur. Associated with the intrusive igneous activity, tectonic breccia predates the hydrothermal breccia but postdates the sedimentary brecciation (Fleming et al., 1986).

Hydrothermal breccias usually occur where there are structural controls. There are three distinct types.

 

   

Poorly mineralized pebble breccias that occur as steeply dipping sheets. Less than one metre wide, they consist of rounded to subrounded fragments of altered sedimentary and intrusive rocks. The matrix is dark, silica-rich and contains disseminated pyrite locally.

 

 

 

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Crackle breccias occur in strongly fractured rock at Waruwari. One occurrence is in the northeast corner of the deposit (at Yakatabari) and the other is at depth in the feldspar porphyry. These exhibit high fragment content with the matrix composed of crystalline carbonate-quartz and quartz containing finely disseminated pyrite. The fragments are autochthonous and carbonate quartz veins are common.

 

   

Disruptive breccia is monomictic or polymictic within a quartz, carbonate and sulphide matrix. Free gold may occur in the presence of chlorite. The fragments can be rotated, angular to round (due to milling) and are often autochthonous. This type of breccia hosts the highest grades and is usually found in the south end of the deposit.

The crackle breccias appear to predate the disruptive breccias and are controlled by post-intrusive faulting. Disruptive breccias uniquely exhibit repeat brecciation and occur in sediments (Fleming et al., 1986).

The most intense fracturing in the Porgera intrusive complex occurs at Waruwari. Many trends have been identified but only a few faults display any significant displacement. The east trending RF dips south at 70º to 80º and defines the northern extent of Waruwari. It also truncates the Yakatabari and Roamane intrusions. It appears to have moved many times creating a broad zone of deformation that has been invaded by numerous pulses of hydrothermal fluid which altered and mineralized the breccias that were formed by the movement (Fleming et al., 1986).

The host shales and the altered margins of the intrusives are the most fractured. Major vein directions are north-northwest to northeast dipping to the west, and east dipping to the north. The eastern portion of the intrusive complex shows the strongest relationship between vein orientations and the more regional structural trends with sulphide quartz veins and quartz filled breccia zones running parallel to the RF (Fleming et al., 1986).

All intrusive rocks have undergone some hydrothermal alteration. The predominant alteration minerals are carbonate, sericite and chlorite. The most intense and pervasive alteration occurs within the feldspar porphyry and surrounding sediments at Waruwari.

Four phases of alteration have been identified and are summarized below (from Fleming et al., 1986).

 

 

 

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Phase 1 is characterized by the presence of chlorite, calcite and minor dolomite, alteration of the intrusive rocks is pervasive, with carbonate cementing of the host sediments adjacent to the intrusives. Intrusive rocks display greenish hues due to chlorite pseudomorphs of mafic minerals. Chlorite and calcite occur as interstitial patches within matrices and carbonates are prominent within vugs. Plagioclase can be altered to sericite or patchy carbonate.

 

   

Phase 2 is structurally controlled and best developed in permeable zones. The loci of alteration is intrusive contacts, veins, faults and within the breccia. The relationship with Phase 1 alteration is complex, with overprinting, sharp and gradational contacts observed. Phase 2 alteration is stronger and affects most intrusive and adjacent sedimentary rocks. The alteration exhibits a bleaching of the dark mafic minerals. These have been replaced by carbonate and plagioclase has been replaced by sericite. Olivine alters to serpentine, but siderite, epidote, apatite and clay minerals also occur. Textural modifications are common, and sericite and carbonate flooding of porphyry matrices have been observed. The bleached appearance in the sediments is a product of the removal of organic bituminous material and the formation of sericite, montmorillonite clays, and dolomite replacement of calcite.

 

   

Phase 3 is characterized by silicification and regularly occurs in conjunction with Phase 2 alteration. Phase 3 alteration commonly occurs in strongly brecciated rock with igneous, or sedimentary and igneous, fragments that are intensely carbonatized and sericitized, with minor silicification. The matrix is dominated by silica, with chlorite developing as acicular or colloform aggregates in both fragments and matrix. Fine gold has been observed in these chlorite aggregates and specular hematite may occur. In sediments, Phase 3 alteration can result in hornfelsing.

 

   

Phase 4 alteration is confined to late fracture and fault zones and destroys all mineralogy and texture. It is characterized by argillic mineral assemblages and has not been recognized at depth.

MINERALIZATION

Mineralization occurs within the Porgera intrusive complex and is closely associated with three dominate structural trends, the RF (Zone VII), the Hanging Wall Shear Zone (Zone VI) and the Footwall Splay Zone (Zone VIII). Mineralization occurs around the margins and within the intrusive bodies. The Footwall Diorite (north of Zone VII) and the Eastern Deeps have contributed significant tonnages at moderate grade (Agnew & Bassotti, 2008).

 

 

 

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Gold is suggested to have been transported as a chloride complex in early magmatically derived hypersaline fluids and deposited as disseminate auriferous pyrite during cooling as a result of sulphidation and sericitization reactions with mafic igneous wall rocks.

Precious metal mineralization comprises four types, corresponding to four distinct mineralizing events. From oldest to most recent, these are:

 

   

Auriferous pyrite, sphalerite and galena;

 

   

Coarse euhedral auriferous pyrite;

 

   

Fine-grained anhedral auriferous arsenical pyrite;

 

   

Gold and electrum associated with roscoelite.

The fourth mineralization style is typified by very high grades and the presence of roscoelite is a useful visual indicator of these high grade zones. The distribution of mineralization is associated with structural activity and, to a lesser extent, alteration. The deposit is a low-silica, high-sulphur system with most of the gold being refractory, likely in solid solution with pyrite grains. The relationship between higher gold grades and sulphide content, however, is not direct.

Gold mineralization occurs as fracture-fillings and as disseminations in and around faults, breccias and dilatant zones. Gold is usually present as submicroscopic grains within the pyrite, with a relatively minor component occurring as free grains. Important accessory minerals include quartz and roscoelite. Cross cutting relationships indicate the mineralization occurred in several pulses.

The four mineralization types that occur within the deposit are summarized in Table 7-1.

 

 

 

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TABLE 7-1 MINERALIZATION TYPES AT PORGERA JV

Barrick Gold Corporation – Porgera JV

 

Type

  

Abundance

  

Form

  

Principal
Minerals

  

Accessory
Minerals

   Median
Grade(g/t)
  Au(g/t)
:S(%)
A    Very widespread    Vein, veinlets, breccia    Auriferous pyrite, sphalerite, galena    Arsenical pyrite, freibergite, gold, electrum, pyrrhotite    3.0 (Au)
12.0 (Ag)
  1:3
B    Widespread    Disseminated, veinlet and stockwork    Coarse, euhedral auriferous pyrite    Sphalerite, galena    2.5 (Au)
5.0 (Ag)
  1:2
C    Restricted    Fine disseminated in crackle breccia    Fine, anhedral auriferous pyrite    Pyrite, marcasite    6.0 (Au)
4.0 (Ag)
  4:1
D    Localized    Veinlets and breccia matrix, vuggy    Gold, electrum    Pyrite, hematite, tellurides    10.0 (Au)
10.0 (Ag)
  10:1

From Handley and Bradshaw, 1986

Evidence suggests that Type-D was the last mineralization event and that some remobilization of gold may have occurred. Later fluids favoured the deposition of metallic gold suggesting earlier mineralization types may have been affected by later mineralizing events. Gold grade is closely related to fracture intensity and mineralization type (Handley &Bradshaw, 1986).

Mineralization Types-A and -B are dominant volumetrically, with Type-C being subordinate and Type-D being relatively minor. The mineralization types form recognizable zones within the deposit as summarized in Table 7-2.

 

 

 

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TABLE 7-2 MINERALIZED ZONES AT PORGERA JV

Barrick Gold Corporation – Porgera JV

 

Zone

  

Location

  

Control

  

Dominant Mineralization Type

I    Outcrops at south end of Waruwari, plunges to north    Pipe-like breccia    Type-A massive sulfides in breccia matrix (silica poor)
II    Outcrops adjacent to Zone I, plunges NNE, dips east    Brecciated contacts of andesite / basalt dykes    Type-D
III    Mid-depth at Waruwari    Brecciated feldspar porphyry contacts    Type-B
IV    Parallel to strike (NNW), dips east    Corridor zone between Yakatabari and Waruwari hornblende diorites, underlain by feldspar porphyry    Type-A and Type-B
V    Broad zone underlying Waruwari at depth, strikes east    Brecciation at feldspar porphyry contact and crackle brecciation within feldspar porphyry    Type-C (subordinate but significant Type-B)
VI    Strikes east through Yakatabari diorite    Associated with east striking faults and crackle brecciation    Type-C
VII    South of RF, north end of Waruwari, strikes east, dips south    RF controlled brecciation    Type-D (significant Type-C to east, Type-A and Type-B in central area). Silica rich, sulfide poor
VIII    Strikes east, dip south    Splay faults linking to RF, intersect NE trending “linking” faults   

From Handley & Bradshaw, 1986

The Porgera Zone VII deposit is an epithermal style mineralized body with a 930 m strike length and an average width of 20 m to 30 m and a maximum width of 100 m (Agnew & Bassotti, 2008).

The Footwall Splay Zone (Zone VIII) mineralized bodies are hosted within or associated with two east-west striking, south dipping faults named the Northern Footwall Splay faults (NFWS). These faults intersect the RF to the east and are cut by northeast trending “linking” faults. High grade mineralization occurs at the intersection of the NFWS splays and these “linking” faults. These deposits have been subdivided into North, Central, Eastern and Eastern Deeps mineralized bodies (Agnew & Bassotti, 2008).

 

 

 

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8 DEPOSIT TYPES

Porgera Mine is an epithermal vein-type gold-silver deposit but it shares many characteristics with porphyry copper deposits. Remnant heat from the intrusive rocks drove the boiling and upward migration of hydrothermal fluids and resulted in the emplacement of mineralization. The movement of these fluids was controlled by permeability of the rock mass, which developed in and around faults and tectonic zones of dilatancy. As such, the mineralization tends to occur in tabular bodies and breccia zones, the geometry of which is strongly influenced by the orientation of fault structures and subsidiary fractures. Deposition of ore minerals in epithermal systems is also dependent upon temperature and hydrostatic pressure. These conditions are generally closely related to elevation, with reduction of both temperature and pressure as the fluids migrate upwards.

 

 

 

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9 EXPLORATION

Since the last audit report in 2009, exploration work has taken place in the following areas: Tupegai, Tawasikale Veins, Tawasikale Intrusion, P-Zone, Peruk, Central Zone East, and Alipis. The most recent summary of exploration work was prepared in December 2010 (Bassotti & Woodward, 2010). At that time many of the programs for the targets described below were still underway or had yet to be carried out.

TUPEGAI

This program is designed to test the northern strike extension of the north-south trending, east dipping, Tupegai augite-hornblende-diorite (AHD). . Two ten metre drill hole intersections of 15 g/t Au and 9.6 g/t Au were encountered in two older holes. Targeting another AHD-style, sub-parallel, south-dipping lode complex characterized by Stage 2D (Type-D?) veining, as structural elements of the east-west trending RF zone, the drill program was completed in late 2010 and for a total depth of 2,647 m. The main mineralized intervals intersected were associated with reactivated Type-A vein structures and Stage 2D (Type-D?) vein breccia.

TAWASIKALE VEINS

The Tawasikale program targeted veins in the southern portion of the mine in the hanging wall of the RF. Drilling in this area was intended to follow up on high-grade intercepts and visible gold occurrences obtained in an earlier drill program. The drilling was also to test for extensions of a corridor of brecciation and altered sediments and intrusives. This breccia zone, termed the Damage Zone, strikes east-west, is near-vertical, and measures up to 123 m in width (see Figure 9-1).

 

 

 

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FIGURE 9-1 PROPOSED HOLES FOR THE TAWASIKALE VEINS DRILL HOLE PROGRAM

 

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TAWASIKALE INTRUSION

The Tawasikale Intrusion is a feldspar porphyry body also located in the southern portion of the mine along the hanging wall of the RF. Drilling on this target was designed for the following purposes:

 

   

Test for mineralization associated with the intrusion.

 

   

Test the intrusion depth extent, thickness and alteration halo.

 

   

Test the repetitive low angle reverse south east dipping fault structures (SERF).

 

   

To test the intersection of the Western Boundary Fault (WBF) and the RF for potential mineralisation.

P-ZONE

The P-Zone in located in the central portion of the mine, on the down dip extension of the East and Far North Zones (see Figure 9-2). Exploration work in this area is following up on an intercept of six metres grading 24.2 g/t Au obtained from hole U1984.

 

 

 

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FIGURE 9-2 P-ZONE TARGET

 

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PERUK

The Peruk target, located in the eastern part of the Porgera intrusive complex, consists of a steep south dipping west-northwest trending structure, hosting Type-D vein mineralization and transecting a hornblende to feldspar porphyritic intrusion (the Peruk porphyry). It is defined at surface by gold mineralization occurring in historical trenches. A previous hole, U3265, intersected 5.4 g/t Au over four metres (down hole width) within the feldspar porphyry. Five drill holes, collared underground, were planned to test targets down dip and along strike of drill hole U3265. Drilling was completed in January, 2011 with the resulting significant intersections shown in Table 9-1.

TABLE 9-1 PERUK SIGNIFICANT DRILL INTERCEPTS

Barrick Gold Corporation – Porgera JV

 

HOLE ID    Interval (m)      Intersection
(m)
     Au (g/t)      S (%)      True Thickness
(m)
 
   From      To              
U5960      375.0         377.9         2.9         23.2         4.84         1.8   
     465.0         466.0         1.0         5.01         1.33         0.6   
U5961      289.0         289.7         0.7         4.72            0.5   
U5962      250.6         252.4         1.8         6.18         4354         0.9   
U5962W1      249.6         251.1         1.5         4.12         4.88         0.6   

CENTRAL ZONE EAST

This program targeted the eastern extension of the east-west striking sub-vertical Central Zone mineralized structure, consisting of quartz-roscoelite veins and breccias hosted within augite diorite and altered sediments, which links the RF Zone and the North Zone. Drilling was done between September, 2010 and November, 2010 and comprised 12 holes. The first hole, drilled proximal to the Central Zone resource, intersected an east-west striking, sub-vertically dipping gold bearing quartz-roscoelite Type-D vein at approximately 180 m down hole. Additional holes, drilled to the east at a 40 m by 40 m spacing through the target zone, intersected mostly thin scattered zones of low to moderate grade gold mineralization. The AHD, which is a favourable host of gold mineralization in the Central Zone, shows less continuity to the east and, in its absence, mineralizing fluids appear to precipitate out into discontinuous fractures within sediments and along pre-existing carbonate-base metal Type-A vein type systems. This results in multiple poorly-defined zones of low- to moderate-grade gold mineralization. Significant intersections are summarized in Table 9-2.

 

 

 

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TABLE 9-2 CENTRAL ZONE SIGNIFICANT DRILL INTERCEPTS

Barrick Gold Corporation – Porgera JV

 

HOLE ID    Interval (m)      Intersection
(m)
     Au
(g/t)
     S
(%)
     True Thickness
(m)
 
   From      To              
U5997      154.0         155.0         1.0         5.25         0.78         0.5   
U5998      89.2         89.7         0.5         10.80         11.92         0.4   
U5998B      173.0         174.0         1.0         7.58         0.47         0.5   
     179.0         181.0         2.0         7.28         2.48         1.9   
U5999      107.0         111.0         4.0         9.75         0.88         1.4   
     128.0         128.7         0.7         8.93         15.17         0.7   
U6001      72.0         73.0         1.0         5.33         1.50         0.7   
U6002      55.9         56.4         0.6         6.83         5.87         0.5   
U6005      116.3         118.0         1.7         26.49            1.5   
U6006      68.0         69.0         1.0         11.32         1.14         0.9   

ALIPIS

The Alipis programme is designed to investigate the possible intersection of the RF zone within surface geochemical anomalies in an area between the north-south trending Tupegai and Kogai dykes, and the poorly tested eastern extension of the known mineralized zones in an effort to identify mineralization outside of the current resource.

Four holes were planned but only three were drilled, of which, none reached the target depth. Little encouragement was gained from the lithologies intersected. The first two abandoned holes found no encouraging alteration, mineralization, or intrusions. The last hole did not intersect the favourably oriented east-west structure of the north-south Kogai dyke.

EXPLORATION POTENTIAL

RPA conducted a cursory review of the exploration work at Porgera JV. The exploration staff are of the opinion that there are significant targets remaining within the mine area as well as underexplored sections of the concessions that warrant further work. In RPA’s opinion, this is a reasonable assessment that exploration work should continue.

 

 

 

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10 DRILLING

Surface drilling is carried out on a nominal 40 m by 40 m spacing. Underground definition drilling is done on a nominal 20 m by 20 m spacing but, where warranted, is reduced to 10 m by 10m intervals. A relatively minor amount of reverse circulation (RC) drilling has been done in the pit. Underground core size is NQ2 (5.06 cm diameter) and the work is conducted by Barrick-operated labour and equipment. Surface holes are collared as PQ (8.51 cm diameter) down to approximately 60 m to 70 m below the collar, where the core size is reduced to HQ (6.35 cm diameter). At a depth of 250 m, the holes are further reduced to NQ (4.76 cm diameter). All surface drilling is conducted by Quest Exploration Drilling (PNG) Ltd.

Drill core is delivered to the site logging facility on a daily basis. Technicians photograph the core and measure recovery and RQD. RPA notes that recovery is not routinely measured, and that there is reportedly a large volume of RQD data that has not been entered into the database. In RPA’s opinion, core recovery is a key measure of the quality of the drilling, and should be done routinely for every hole.

Bulk density measurements are taken on a campaign basis, generally only when new areas of the mine are accessed. Once a suitable number of samples have been taken from a new rock unit, a bulk density value is assigned to it and measurements are suspended.

Geologists log the core and mark it for sampling. Drilling data are captured and managed in an acQuire database. Mine geologists log the holes and capture the data on Toughbook computers, which are linked directly to the Acquire system. Exploration geologists log on conventional lap-tops, which then have to be connected to the network to upload to acQuire. Script routines are run by the database operators to validate the logging information, ensuring that things such as the codes, from and to distances, and the hole depths are consistent.

Planned holes are entered into Acquire prior to drilling. When the holes have been drilled and surveyed, the as-built coordinates and orientations are entered into the database where they are compared with the plan. If there is significant deviation, then follow-up confirmation is carried out.

 

 

 

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Required information in the log includes:

 

   

From/to depth of the interval being described

 

   

Description of the lithology

 

   

Structure, alteration, mineralization descriptions

 

   

Sample number

During the logging process the geologist identified and marked obvious geological boundaries and/or distinct changes in grade and/or style of mineralisation. Core is marked for sampling and turned over to the samplers.

Drill hole collars are surveyed by the mine survey staff. Down hole surveys are carried out using a Ranger single shot instrument. Data are collected starting at ten metres below the collar, continuing at 50 m intervals until the end of the hole is reached. The Ranger single shot camera is calibrated every month on surface to ensure accuracy. Historic survey data are collected using an Eastman Kodak single shot camera. Survey and header information is captured in the database, and the holes are plotted on sections for validation. The hole traces are checked by the drafting department and again by a Senior Geologist.

 

 

 

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11 SAMPLE PREPARATION, ANALYSES AND SECURITY

This section is derived from Bassotti & Woodward (2010) unless otherwise noted.

CORE SAMPLING

Core is marked by the logging geologist for sampling. The following sample intervals are then marked across the core:

 

   

Approximately one metre in even style/grade of mineralization.

 

   

At contacts of intra-mineral and late mineral dykes cutting mineralization.

 

   

Less than one metre in high-grade zones with sheeted vein, stockwork, replacement and/or breccia styles of mineralization—guided by geological breaks.

 

   

Sample intervals should start from, and stop at, major geological contacts.

 

   

Minimum sample width is 0.3 m.

 

   

Samples should be no more than one metre in length in PQ-, and 1.5 m in HQ-size core.

RPA notes that while the protocol is for samples to end at changes in lithology, it was reported during the site visit that underground diamond drill holes are still being sampled at a constant one-metre interval.

Drill samples are assigned numbers generated in acQuire according to Porgera JV site protocol. Sample numbers are written on the core at the start of each interval. A “Sample Advice Sheet” is printed from acQuire and checked with the pencil marks on the core. Quality assurance/quality control (QA/QC) samples, such as blanks, duplicates and certified reference materials (CRMs), are included in the sample stream and, while not appearing on the core itself, these control samples are listed on the Sample Advice Sheet. Numbers are clearly written on calico bags using black, permanent marker pen. Possible high gold and/or sulphide samples are noted and depths of sample intervals are recorded in acQuire.

 

 

 

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The sampler matches the sample number written on the bag against the one on the core and informs the logging geologist if any discrepancies are observed. Sampling does not proceed until sample numbers and intervals coincide on the bags, on the Sample Advice Sheet and on the core. Underground holes are sampled as whole-core and are not split. Core from exploration holes is split using a core saw. One half of the core is lifted from the box (leaving the half with the orientation line in the box) and placed inside the numbered calico bag. Faulted, clayey, or broken intervals that are not cut are sampled entirely as whole core, leaving no material in the box for that interval. This is only done when there are specific instructions from the logging geologist. Calico sample bags are tightly closed and lined up on the core shed floor in numerical order. The control standards and blanks are then added.

Sample number format is “drill hole number-consecutive sample number” starting at 0001. For example the 45th sample in drill hole U5876 will have the number “U58760045”.

All samples from Exploration, Resource Definition and underground grade control are submitted to the mine site laboratory. Batches can include up to a maximum of 45 samples (including QA/QC samples) and each dispatch must be accompanied by a Sample Dispatch Form. This form contains the following information:

 

   

Unique dispatch identifying number

 

   

Project geologist contact information

 

   

List of sample numbers

 

   

Analysis and sample preparation required

 

   

Any additional instructions

 

   

Where to send the results (on-site data administrator)

 

   

What to do with pulps and coarse rejects.

 

 

 

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OTHER SAMPLING

UNDERGROUND CHANNEL SAMPLING

Underground face samples are collected along a sample line that is perpendicular to the lode or vein structure with sample interval widths ranging from a minimum of 0.3 m to a maximum of two metres. Where the lithology changes the samples respect the lithological contacts. Focus is placed on sampling mineralized zones separately from waste sections (i.e. vein contacts, vein centres and waste on hanging and footwall sides). Samples across vein contacts pass at least fifteen centimetres into the adjacent wall rock.

Sampling is done along a corridor (horizontal in the case of a vertical vein) through the lower third of the face. Width of the corridor is set at approximately 50 cm. Sample intervals are marked by the mine geologist. The samples are chipped by the underground field assistant under the supervision of the mine geologist. Samples collected weigh approximately 2.5 kg to 3.0 kg.

BLAST HOLE SAMPLING

Rock chip samples are collected using a nine-inch pie tray (primary method) and scoops. The samples weight must be at least 25 kg per hole for an unbiased analysis of the ten metre hole. The sample collection process consists of the following steps:

 

   

Place pie tray underneath dust skirt with the open end next to the collar position prior to drilling.

 

   

Pie tray must be no more than ten centimetres from the hole.

 

   

Pie tray must point away from the hole so that it can take a radial slice of the blast hole cuttings.

 

   

When drill depth has reached ten metres, pie tray is removed from under dust skirt so sub-drill is not included in the sample.

 

   

The sample is collected by the drill offsider. The sample bag is left with the top folded over (to protect from rain) next to the hole.

 

   

The hole collar / sample location is picked up by Survey.

 

   

The blast hole sample tag number is stapled to the inside of the bag by the geological sampler.

 

 

 

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The geologist and geological sampler will then map or log the blast hole lithology and alteration and then remove the bag from the blast pattern.

 

   

The geologist is to maintain an accurate mud map or logged map of the pattern for cross checking if survey files are corrupted or lost.

 

   

No sample bag is to be moved by authorised / unauthorised personnel unless it has a sample number stapled to it.

 

   

Only geology personnel can move bags unless permission has been granted by geology.

The sample information is captured into a handheld Data Logger by the open pit geologist. The information is then transferred to the acQuire Data Capture Object and validated. The standard and blank controls are inserted into the sample run based on a regular ticket ID sequence. Field duplicates are collected (a second pie tray) at a percentage of approximately 5%.

SAMPLE PREPARATION AND ANALYSES

Assays for sulphur and gold are carried out on-site at the Porgera JV laboratory by Barrick employees. RPA inspected the laboratory facilities during the site visit and found it to be properly equipped, well organized, and competently managed. The Porgera JV laboratory is certified as a member of the National Institute of Standards and Industrial Technology (NISIT) which is part of the PNG National Laboratory accreditation scheme. It is also recognized by the National Association of Testing Authorities, Australia (NATA) and it participates in round robin third-party verification through NATA and GEOSTAT (independent suppliers of CRMs).

Diamond drill core and underground chip samples are delivered to the laboratory in calico bags. The samples are transferred onto a trolley and placed in the drying oven. Blast hole samples are transferred from the calico bag to an aluminum tray (50 cm by 40 cm) prior to being placed on a trolley and placed in the drying oven. The oven temperature is controlled between 110°C and 114°C.

After drying the diamond drill core and underground chip samples are crushed and split using a Rocklabs combination jaw crusher and rotating splitter. The split sample weight is approximately four kilograms. The remaining coarse reject from the drill core is transferred into labelled calico bags and further stored in larger plastic bags. The

 

 

 

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crushed sample size distribution must be to a minimum of 80% minus 2 mm or 90% minus 3.35 mm. All samples are pulverized using one of six LM5 pulverisers to 90% passing 106 µ.

A 300 g to 400 g pulp sub-sample is taken from the pulverized sample and put in a labelled brown pulp bag. Samples are sent to the fire assay (FA) section to be processed. Each batch of samples sent for FA is accompanied by a work sheet that includes a “batch” number and a “fusion” number. The pulverized reject from the diamond drill core is discarded. The pulverised reject from the blast hole samples is retained for one week before being discarded.

Samples are, generally, processed in batches of 50. A batch comprises 45 samples, which includes up to two external certified reference materials (CRMs), two pulp duplicates, two in-house reference standards, and one reagent blank.

Samples are weighed into a plastic bag until 50 g is achieved and the weight of the aliquot is transferred from the balance into the CCLAS database. For samples containing high concentrations of sulphur, a 25 g aliquot is used instead of 50 g. A 150 g fusion flux charge is then added to the plastic bag and the contents are thoroughly mixed. The sample and flux are then transferred to a 125 ml crucible. When a sufficient number of samples are prepared to make a batch, they are loaded into a furnace heated to 1050°C and allowed to fuse for 60 minutes. Once removed, the samples are simultaneously poured into fusion molds.

When cooled, the fused product is hammered to remove any slag from the lead button that contains the precious metals. Each of the lead buttons is transferred to a preheated cupel and the set of cupels is inserted into a cupellation furnace heated to 960°C. The cupellation process takes up to 60 minutes to complete. The resulting silver/gold prill is transferred to a test tube which is placed in a rack before being sent for digestion.

Each prill is digested by adding one milliliter of 50% nitric acid (HNO3) to the test tub and heating, on a hot plate, to 105°C for ten minutes. An additional two milliliters of concentrated hydrochloric acid (HCl) is added and test tubes are heated for an additional 15 minutes. The solution is allowed to cool after the digestion is complete and distilled

 

 

 

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water is added to the test tube to bring the volume of each sample up to ten milliliters. Each test tube is shaken and the rack of tubes is transferred to the Varian 240 Atomic Absorption Spectrometry (AAS) instrument for gold analysis. A Lab Fit CS-2000 Sulphur Analyzer is used to determine the sulphide sulphur content. Multi-element determinations for lead, zinc, silver, and copper are routinely performed using acid digestion and AAS techniques. Carbon analyses are performed using a titrimetric procedure.

Gold readings are transferred to the CCLAS system and, if CRMs analyses return values within acceptable limits, the results are published to the database for access by the Geology department.

Graphical representations of the sample preparation and assay workflows for drill hole and blast hole samples are shown in Figures 11-1 and 11-2, respectively.

RPA has reviewed the sample preparation, analyses, and security of the Porgera JV laboratory and found them to meet industry-standards. In RPA’s opinion, results generated from the Porgera JV laboratory are adequate and acceptable for use in the estimation of Mineral Resources. Security is a significant concern, however, throughout the mine. There is considerable evidence, for example, that drill core has been tampered with. Pieces have been noted to be missing from the boxes on delivery to the logging facility, before the sampling can be done. The mine geological staff are aware of this and have taken a number of steps to quantify the loss and try to prevent it. In practice, however, the problem has proven to be somewhat overwhelming, as was observed by RPA during the site visit. Many unauthorized people gain access to the mine despite fairly rigorous security protocols.

In RPA’s opinion, the loss of gold from samples is likely causing an understatement of the estimated Mineral Resources at Porgera JV. However, it is impossible to quantify what the magnitude of any discrepancy might be. Mine production reconciliations appear to confirm that the block models are predicting the grades reasonably well (see Section 15). Work conducted by the mine geology staff suggests that the result of losses of core could be resulting in mineralized zones being overlooked in the modeling process. So the actual understatement in this case may be just omission of resource material from the inventory altogether.

 

 

 

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FIGURE 11-1 PRIMARY SAMPLE PREPARATION AND ASSAYING WORKFLOW FOR DIAMOND DRILL CORE

 

LOGO

 

 

 

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FIGURE 11-2 PRIMARY SAMPLE PREPARATION AND ASSAYING WORKFLOW FOR GRADE CONTROL SAMPLES

 

LOGO

 

 

 

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12 DATA VERIFICATION

For drill core samples, QA/QC materials are placed in the sample stream at a rate of one in twenty. For open pit sampling, one blank and one standard are included with each batch. Reference materials consist of coarse blanks and commercially prepared standards. The blank material is locally-acquired river gravel. The standards are prepared by Rocklabs Inc. The QA/QC samples are entered into the acQuire system along with the regular samples.

The laboratory runs two standards, one blank and two duplicates with every batch of 50 assays. The results of these internal QA/QC analyses are reported to AcQuire and can be viewed by the geology staff. Assay results are posted to a Central Holding Database (CHD). AcQuire polls the CHD twice a day. Batches for which the QA/QC results are within specifications are eligible for download from the CHD. Failures in the QA/QC result in re-assay of the entire batch.

The AcQuire system has validation routines to produce reports of invalid drill hole data, such as overlapping intervals and incorrect hole lengths. The assay data is automatically imported from the laboratory and there are no “certificates” issued. Consequently, there is no way to validate the assay results.

RPA encountered a few errors in the database when attempting to import the drill holes into GEMS. Three drill collars had invalid data in the header table and could not be imported. As a result, three downhole survey records could not be imported because there were no corresponding header records. Several other collars had recorded hole lengths that were not consistent with downhole measurements in the assay, survey and litho tables. However, RPA notes that these errors were very easy to correct. Eight assay records were duplicated in the database and rejected on import. Three duplicate downhole survey records were found. A total of 1,344 duplicate litho records were encountered, as well.

RPA did a check of the assay database to look for invalid from-to intervals and obviously incorrect assay values. Several sulphur values were found that were greater than 100%,

 

 

 

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which is obviously incorrect. This was reported back to the geology staff, who in turn confirmed the errors. It is not known exactly how the erroneous assays came about, but it is suspected that they stem from keypunch errors at the laboratory. An additional validation routine will be added to check for errors of this type.

Routine field duplicates are not taken as part of the assay QA/QC protocol. Once per quarter, a suite of 250 pulps are sent to an outside commercial laboratory for checks. The results from these duplicates indicate that there is very poor repeatability for gold assays. RPA reviewed the paired duplicates results and concurs that the repeatability is quite poor, especially for pulps. In order to try to improve reproducibility the assay protocols are being amended to include metallics sieve analysis. In RPA’s opinion, this is reasonable and appropriate course of action.

In RPA’s opinion, the data management practices at Porgera JV meet or exceed standard industry practices. The database is resident on a central server that is managed by the site IT staff. The system is reasonably secure and is backed up daily. Assay QA/QC protocols are adequate for now, and will be improved by the addition of metallics assays. It is likely that there are some errors in the database but the number of assays is so large that relatively few errors will not have much of an impact on resource estimates.

 

 

 

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13 MINERAL PROCESSING AND METALLURGICAL TESTING

Metallurgical testing programs are completed as necessary to support new projects and project expansions. Typically, these test programs are completed by outside laboratories. For example, metallurgical testing was completed to support the Stage 6 Feasibility Study in 2007, which should be noted that this feasibility study has not been approved by Barrick, and another metallurgical study was conducted in 2010 to support the AHD feasibility study. Routine metallurgical tests are also conducted in the on-site metallurgical laboratory to check recovery and help define the source of recovery problems when they are experienced in the operating plants. Since the mine has been operating over 30 years, the metallurgical recovery models are based primarily on historical operating data. The ore must be differentiated between whether the source is the hanging wall or the footwall. The southwest hanging wall performs poorly in the processing plant. It has lower gravity recoverable gold, one percent to two percent lower flotation gold recovery, poorer carbon-in-leach (CIL) recovery, and higher oxygen demand.

RECOVERY

Due to the number of unit operations in the processing facilities, recovery must be estimated for all of the processes including:

 

   

Gravity gold recovery

 

   

Flotation

 

   

Pressure oxidation

 

   

Leaching and carbon adsorption

 

   

Carbon elution and refinery

Over the years, Porgera JV has developed a system of elaborate formulae to predict the gold recovery. Recovery is dependent upon the gold and sulphur head grades of the ore and the amount of material being processed. The ore is classified as one of 17 different lithologies including 12 from the footwall and five from the hanging wall. Data to support the recovery models is updated annually using operating data. The various lithologies are listed in Table 13-1.

 

 

 

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TABLE 13-1 LITHOLOGY TYPES

Barrick Gold Corporation—Porgera JV

 

Location

  

Designation

  

Lithology

Footwall    1    Black Seds
   2    Calc Seds
   3    Altered Seds
   4    Diorite
   5    Augite Horneblende Diorite
   6    High Sulphur Breccia
   7    Feldspar Porphyry
   8    Andesite
   9    Muds W
   10    Muds Y
   11    ROM Stockpile
   12    Longterm Stockpile and Blue Ore
Hanging Wall    13    Black Seds
   14    Calc Seds
   15    Altered Seds
   16    Diorite
   17    Feldspar Porphyry

The gravity gold recovery is estimated to be 22%. Of that 22%, it is estimated that 92% of the gold is recovered in the Acacia high intensity cyanide leaching reactor.

The gold recovery in the flotation concentrator is estimated using equations of the general format shown below.

Flotation Au Recovery

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Where:

 

 

dAuRec =

   Gold recovery constant d   
 

aAuRec=

   Gold recovery constant a   
 

SAG, t/hr =

   Estimated average plant feed in t/hr
 

SAG mill avail =

   Estimated SAG mill availability, %
 

bAuRec =

   Gold recovery constant b   
 

Au, g/t =

   Gold head grade, g/t Au   
 

Grav Rec =

   Gravity recovery, 22%   
 

cAuRec =

   Gold recovery constant c   
 

S, %

   Sulphur head grade, %S   

The sulphur recovery is estimated using a similar equation but there is no relationship to the gold head grade.

 

 

 

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Where:

 

 

CSRec =

   Sulphur recovery constant c   
 

aSRec=

   Sulphur recovery constant a   
 

SAG, t/hr =

   Estimated average plant feed in t/hr
 

SAG mill avail =

   Estimated SAG mill availability, %
 

bSRec =

   Sulphur recovery constant b   
 

S, %

   Sulphur head grade, %S   

Table 13-2 shows the constants for the various Porgera JV lithology types using the designations shown in Table 13-1 (from 1 to 17). Constants a, b, and c used to estimate gold recovery and constants a and b used to estimate sulphur recovery are the same for all ore types, as shown in the table.

TABLE 13-2 GOLD AND SULPHUR RECOVERY CONSTANTS BY

LITHOLOGY

Barrick Gold Corporation—Porgera JV

 

No.    Gold Recovery Constants     

Sulphur Recovery Constants

     a      b      c      d    a      b      c
1             88.05          83.1
2             96.55          90.1
3             100.55          94.1
4             103.55          96.6
5             103.55          96.6
6             101.55          96.1
7             101.55          95.6
8             101.55          95.1
9      -0.003         2.102         -6.281       100.05      0.012         -4.754       90.1
10             100.05          90.1
11             102.05          94.1
12             102.05          92.1
13             88.05          83.1
14             97.05          90.1
15             96.55          94.1
16             103.55          96.6
17             101.55          95.6

The sulphur grade of the flotation concentrate is estimated to be 14% since this is the optimum for the operation of the autoclaves. The mass of concentrate produced is estimated using the estimated sulphur recovery determined by using the equations shown above and the final sulphur grade using the following equation.

 

 

 

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The gold grade of the concentrate is calculated by estimating the quantity of gold recovered from the gravity plus flotation circuit and dividing by the tonnage of flotation concentrate produced. For the purpose of estimating the overall recovery, it is assumed that the mass of material being processed in the pressure oxidation circuit and the leach/carbon-in-leach circuit is equal to the mass of concentrate produced. Finally, the oxidation and cyanide leaching recovery is estimated by calculating the “CIP Tails” and subtracting the amount of gold lost to tailings from the amount of gold feeding the circuits, i.e. the amount of gold recovered in the gravity and flotation circuits.

The CIP Tails are dependent upon two sets of constants: one set of constant for the oxidation/autoclave circuit (ADSS) and another set of constants for the cyanide leach (CIP) circuit. The general form of the equation is:

 

LOGO

Where:

 

        aCIP =

   CIP constant a

        bCIP=

   CIP constant b

        cCIP =

   CIP constant c

        aADSS =

   Oxidation recovery constant a

        bADSS =

   Oxidation recovery constant b

        cADSS =

   Oxidation recovery constant c

        S (t/hr) =

   Tonnes of sulphur fed to the oxidation circuit per operating hour based on the sulphur recovered in the flotation circuit

The constants are the same for all ore types as shown in Table 13-3.

 

 

 

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TABLE 13-3 CIP AND ADSS CONSTANTS BY LITHOLOGY

Barrick Gold Corporation—Porgera JV

 

Constant

   Value  

aCIP

     0.990   

bCIP

     -0.012   

cCIP

     1.619   

aADSS

     0.295   

bADSS

     -2.123   

cADSS

     3.943   

In order to assess the accuracy of the calculations, RPA compared the actual versus budgeted production data for 2009, 2010, and by month through November 2011. The results are shown graphically in Figure 13-1.

FIGURE 13-1 COMPARISON OF ACTUAL VERSUS BUDGETED GOLD RECOVERY

 

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Since the recovery is dependent upon the gold feed grade to the plant, the actual and budgeted head grades are shown on the second axis of the figure. Overall recovery is only 0.1% lower than the budgeted overall recovery. The difference appears to be primarily due to the differences in head grade. A comparison of the numerical recoveries is provided in Table 13-4.

 

 

 

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TABLE 13-4 ACTUAL VERSUS BUDGETED GOLD RECOVERY

Barrick Gold Corporation—Porgera JV

 

Year

   Concentrator Recovery      Overall Recovery  
   Actual     Budget      Actual     Budget  

2009

     92.1        90.2         87.8        86.7   

2010

     92.2        92.6         86.8        87.0   

2011 (Jan-Nov)

     91.8        91.6         86.5        87.2   

Weighted Average

     92.0        91.5         86.9        87.0   

Difference

     0.5        -0.1  

RPA also evaluated the ounces produced for the same time period. The results are summarized in Table 13-5 and Figure 13-2.

TABLE 13-5 ACTUAL VERSUS BUDGETED GOLD RECOVERY

Barrick Gold Corporation—Porgera JV

 

Year

   Au Ounces Recovered      Au Ounces Fed  
   Actual     Budget      Actual     Budget  

2009

     580,292        619,434         512,116        557,064   

2010

     546,953        612,631         630,181        704,329   

2011 (Jan-Nov)

     496,858        613,266         573,721        703,539   

Total

     2,120,962        2,458,597         2,289,739        2,668,472   

Difference

     -15.9        -16.5  

FIGURE 13-2 COMPARISON OF ACTUAL VERSUS BUDGETED OUNCES RECOVERED

 

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Upon further evaluation, it was determined that the tonnage fed to the plant was 6.8% lower than budgeted and the average gold grade of the ore fed to the plant was 9.1% lower than the budgeted grade. Both of these differences contributed to the inability to meet the budgeted production targets.

CONCLUSIONS AND RECOMMENDATIONS

Although the equations used to estimate gold recovery appear to be accurate, they are very complex and RPA observed that communication about how the estimates are developed was deficient between the process department and the technical services department so the equations are not used in the cut-off-grade calculations or the Resource and Reserve models. Particularly since the life-of-mine (LOM) plan shows the number of material types to be greatly reduced and the majority of the material will come from the long term stockpiles, RPA recommends that an effort be made to simplify the equations and use them in the calculations and Resource and Reserve estimates that are completed by the Technical Services department. The 2011 Mill Budget estimates the quantities and material types that will be processed from 2011 through the end of the mine life. The data is summarized in Table 13-6.

TABLE 13-6 2011 MILL BUDGET (2011 THROUGH 2039)

Barrick Gold Corporation—Porgera JV

 

Location

   Lithology    Tonnage      Percentage  
   Black Seds      3,468,000         4.7
   Calc Seds      7,800         0.0
   Altered Seds      3,625,000         4.9
   Diorite      3,019,000         4.1
   Augite Horneblende Diorite      12,818,000         17.3

Footwall

   High Sulphur Breccia      —           —     
   Feldspar Porphyry      —           —     
   Andesite      —           —     
   Muds W      —           —     
   Muds Y      —           —     
   ROM Stockpile      —           —     
   Longterm Stockpile and Blue Ore      51,213,000         69.1 %% 
     

 

 

    

 

 

 

Hanging Wall

   Black Seds      —           —     
   Calc Seds      —           —     
   Altered Seds      —           —     
   Diorite      —           —     
   Feldspar Porphyry      —           —     

Total

        74,153,000         100.0

 

 

 

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14 MINERAL RESOURCE ESTIMATE

SUMMARY

The Mineral Resources estimated for Porgera JV are shown in Table 14-1. These represent 100% of the in situ Mineral Resources estimated after exclusion of material included in the Mineral Reserves.

TABLE 14-1 MINERAL RESOURCE ESTIMATE (100%) – DECEMBER 31, 2011

Barrick Gold Corporation – Porgera JV

 

Category

   Description    Tonnes
(000)
     Grade
(g/t Au)
     Contained
Gold

(000 oz)
 

Measured

           
   Open Pit      8,190         2.31         609   
   Underground      463         10.33         154   

Total Measured

     8,650         2.74         763   

Indicated

           
   Open Pit      15,800         1.56         793   
   Underground      1,630         9.15         480   

Total Indicated

        17,400         2.27         1,270   
     

 

 

    

 

 

    

 

 

 

Total Measured & Indicated

     26,100         2.41         2,030   
     

 

 

    

 

 

    

 

 

 

Inferred

           
   Open Pit      13,500         1.77         771   
   Underground      8,100         8.90         2,320   

Total Inferred

     21,600         4.45         3,090   

Notes:

  1. CIM definitions were followed for Mineral Resources.

 

  2. Mineral Resources are estimated at a cut-off grade of 1.0 g/t Au for the open pit and 3.0 g/t Au for the underground mine.

 

  3. Mineral Resources are estimated using an average gold price of US$1,400 per ounce, and a US$:C$ exchange rate of 1:1.

 

  4. A minimum mining width of 5 m was used.

 

  5. Bulk density is determined based on lithology.

 

  6. Measured and Indicated Mineral Resources are exclusive of Mineral Reserves.

The estimate was carried out using block models constrained by wireframe models of the geological domains and mined out volumes. Grade interpolations were done using a variety of methods which included Multiple Indicator Kriging (MIK), Ordinary Kriging

 

 

 

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(OK), and Inverse Distance weighting (ID). Data used in the interpolations comprised diamond drill and face samples. Grades were estimated for gold and sulphur, and the block models were configured to store values for domain codes, bulk density, and classification.

In keeping with Barrick policy, Porgera JV typically updates the block models for the mid-year Mineral Resource estimate. The protocol is for the models to be current up to the beginning of June, and the monthly production is depleted from the model to calculate the total resources. Depletion for the second half of the year is applied to the model for the year-end estimates. For 2011, due to staff turnover, there was no mid-year update of the models. The Mineral Resources and Mineral Reserves estimates were reported by depletion from the June 2010 models. The block models were updated for year-end, and form the basis of the year-end estimates of Mineral Resources and Mineral Reserves.

This audit and report covers the year-end reported Mineral Resources and Mineral Reserves.

SUMMARY OF CHANGES TO THE RESOURCE ESTIMATES

Table 14-2 summarizes the changes to the Mineral Resource estimate (exclusive of Mineral Reserves) from end-of-year (EOY) 2010 to EOY2011.

 

 

 

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TABLE 14-2 CHANGE IN MINERAL RESOURCES

Barrick Gold Corporation – Porgera JV

 

     Open Pit     Underground     Total  
Measured    Tonnes
(Mt)
    Au
(g/t)
    Au
(Koz)
    Tonnes
(Mt)
   

Au

(g/t)

    Au
(Koz)
    Tonnes
(Mt)
   

Au

(g/t)

    Au
(Koz)
 

2011

     8.19        2.31        609        0.463        10.33        154        8.66        2.74        763   

2010

     5.84        1.97        369        —          —          —          5.84        1.97        369   

Difference

     2.35        0.34        240        0.463        10.33        154        2.82        0.77        394   

% Difference

     40.2     17.3     65.0     n/a        n/a        n/a        48.3     39.4     106.8
Indicated    Tonnes
(Mt)
    Au
(g/t)
    Au
(Koz)
    Tonnes
(Mt)
   

Au

(g/t)

    Au
(Koz)
    Tonnes
(Mt)
   

Au

(g/t)

    Au
(Koz)
 

2011

     15.8        1.56        793        1.63        9.15        480        17.4        2.27        1,270   

2010

     10.3        1.40        465        2.51        8.57        690        12.8        2.80        1,160   

Difference

     5.5        0.16        328        -0.9        0.58        -210        4.6        -0.53        110   

% Difference

     53.4     11.4     70.5     -35.1     6.8     -30.4     35.9     -18.9     9.5
Inferred    Tonnes
(Mt)
    Au
(g/t)
    Au
(Koz)
    Tonnes
(Mt)
   

Au

(g/t)

    Au
(Koz)
    Tonnes
(Mt)
   

Au

(g/t)

    Au
(Koz)
 

2011

     13.5        1.77        771        8.10        8.90        2,320        21.6        4.45        3,090   

2010

     10.5        1.88        634        2.72        7.71        674        10.5        1.88        643   

Difference

     3.00        -0.11        137        5.38        1.19        1,646        11.1        2.57        2,447   

% Difference

     28.6     -5.9     21.6     197.8     15.4     244.2     105.7     136.8     380.6

Notes:

  1. Totals may not add due to rounding.

The global Mineral Resources increased substantially in terms both of tonnage and grade from EOY2010 to EOY2011. There were many influences on the resource estimates that caused both increases and decreases. The changes to the Mineral Resources were due to the following:

 

   

increase due to addition of new resources in the O, North and East Zone (underground mine).

 

   

increase due to new pit shell with current gold price.

 

   

decrease via depletion.

 

   

increase due to changes to the classification scheme.

 

   

decrease due to update of cut-off grade.

 

 

 

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The single largest change was due to resources added in the underground mine in the North and East Zones. These changes resulted from a change in the estimation parameters. This change involved the application of the statistically controlled method of interpolation (SC Method) which is described in more detail later in this section of the report. The resources that were added by making this change were in the Inferred category only and this is reflected in the significant change in Inferred resources in the underground mine (Table 14-2).

Additional Mineral Resources were also captured for the open pit by re-running the resource pit shell using up-to-date metal prices. This is reflected in Table 14-2 as an across-the-board increase in all categories.

Changes made to the classification methodology resulted in decreases to some zones and increases in others. These changes were only offsetting and resulted in a modest increase overall to the global resources. Measured Mineral Resources were added to the underground mine estimate, which is a significant increase from 2010, when there were no Measured resources. The Indicated category in the underground mine decreased, primarily due to changes in the classification methodology which resulted in upgrades to Measured in some cases and downgrades to Inferred in others.

INTRODUCTION

Block models, along with their associated wireframes, are constructed for both the open pit and underground mines. The open pit models are prepared by Mauro Bassotti and the underground models are the responsibility of Bruce Robertson. Both are Senior Resource Geologists for Porgera JV. From time to time Barrick has retained consultants to update parts of the models. The models are constructed using Datamine software, which is a commercially available package commonly used in the industry. Statistical and geostatistical analyses, declustering, and sundry support functions for derivation of the estimation parameters are carried out using a variety of commercial and in-house proprietary software.

Separate sets of models are used for the open pit and underground mines. At the end of the estimation process most of these models are combined into one single block model, which encompasses all of the Mineral Resources, both open pit and underground. The

 

 

 

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models all tend to occupy the same geographical area but have different characteristics depending on the variables that they store. For the gold and sulphur estimates in the principal mining areas, for example, the block models are double precision, in order to be configured to allow sub-blocking. The sub-blocking allows the model to better honour the boundaries of the wireframe models. For the background gold and sulphur values, located outside the principal resource domains, the block models are single precision.

Wireframes are also created for the mined volumes by the mine survey personnel. These models comprise stope and development void spaces in the underground mine as well as the volume depleted from the open pit.

A list of the general classes of the various block models and their purpose is provided in Table 14-3 below.

TABLE 14-3 BLOCK MODEL TYPES

Barrick Gold Corporation – Porgera JV

 

Area

  

Model

   Type    Purpose

Open Pit

   Kriging variance    OK, single precision    Estimate kriging variance
for classification purposes.

Open Pit

   Litho model    NN    Lithology codes stored for
application of bulk density.

Open Pit

   Au background    ID2, single prec.    Estimate background gold
values.

Open Pit

   S background    ID2, single prec.    Estimate background
sulphur values.

Open Pit

   Voids model    NN    Blocks tagged for mined out
volumes. Tagged as
cemented backfill,
uncemented backfill, ore
development.

Open Pit

   Dynamic Anisotropy Model    NN, single prec.    Used to apply individual
search anisotropy to each
block (sub-blocking used).

Open Pit

   Gold grade    MIK, double prec.    Gold estimates (sub-
blocking used).

U/G

   Gold grade    OK, double precision    Gold estimates (sub-
blocking used).

Open Pit & U/G

   Sulphur grade    OK, single precision    Sulphur estimates.

 

 

 

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OPEN PIT MODELS

The open pit block model encompasses the entire Porgera JV deposit, including material that will in all probability be mined from underground. The open pit resource is limited to material that falls within a Whittle pit shell configured expressly for delineation of Mineral Resources. The model comprises blocks measuring 10m by 5m by 10m, with grades for Au and S interpolated by MIK, OK and ID weighting. Kriging variance, which is used in the resource classification, is estimated into the model using OK. The interpolations are constrained by wireframe models of the principal estimation domains (24 for Au and 18 for S), as well as stoped volumes.

DATABASE

The database for the estimate consists of diamond drill and channel sampling data. In the most recent database supplied to RPA, there were records for 10,094 drill holes and channels. Of these, 331 were rejected on import to RPA’s database software (GEMS) due to missing or invalid information. The database contained 889,980 assay records (samples), of which seven were rejected on import due to invalid information.

The assay table contains data for Au and S. RPA notes that not all records contained a complete set of analyses. Of the 889,980 valid records in the assay table, 855,646 contained Au assays. The rest contained either -2000, -999, -0.01 or zero. The S assays consist of either total sulphur, which were done prior to 1999, and sulphide sulphur, which has been done since 1999. There were 317,710 total sulphur assays, and 512,640 sulphide sulphur assays.

Sample lengths ranged from a low of zero up to a high of 268 m. Seven samples were recorded as having equal from and to measurements (i.e. zero length), which are obvious errors. Apart from the zero-length intervals, were four samples with lengths of less than 10 cm. Twelve samples had lengths of greater than 10 m, and all of these sample records contained Au values. Five of these samples were recorded as being longer than 100 m. In RPA’s opinion, while there are clearly some spurious sample lengths, the relative number of obviously incorrect values is quite low considering the size of the database. This suggests that the data-entry QA/QC procedures are being observed reasonably well. Finding errors of this type is a very simple task, and RPA recommends that periodic inspections of the database be carried out to capture and correct or eliminate these errors.

 

 

 

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BULK DENSITY

Bulk density is applied according to rock type. The average bulk density for each rock type is shown in Table 14-4.

TABLE 14-4 BULK DENSITIES

Barrick Gold Corporation – Porgera JV

 

Lithology

   LITHJB
Code
   Bulk
Density

Black Sediments

   2    2.64

Calcareous Sediments

   3    2.64

Altered Sediments

   4    2.75

Diorite

   5    2.74

Augite Hornblende Diorite

   6    2.79

Feldspar Porphyry

   7    2.66

Brown Mudstone

   10    2.64

Yak Brown Mudstone

   11    2.64

Footwall Diorite

   12    2.74

Roamane Diorite

   13    2.74

Bulk density measurements are carried out on an ad hoc basis when new areas are developed in the mine. A campaign of density measurements is conducted within the new rock type until a reliable average density can be tabulated. The density determinations are performed by weighing a core specimen in air and again submerged in water. The density is the ratio of the dry weight to the difference between the dry and wet weights.

Density is applied to the blocks according to rock type codes. In some instances, where stoping of parts of blocks has occurred, the density is adjusted to account for the missing volume. The Datamine volumetrics routine calculates the tonnage based on the entire block volume, and the missing material is accounted for by pro-rating the density downwards.

 

 

 

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WIREFRAME MODELS

In all, 24 Au and 34 S domains were used in the estimation. The domains encompass regions within the deposit of like geological and/or mineralogical characteristics. Wireframe models are constructed by the mine staff for all of these domains. Often, no updates are required. New development or drilling in a particular domain will trigger an update to the wireframe model, which is then carried out by Porgera JV staff.

The Au and S domains are listed in Tables 14-5 and 14-6, respectively. Note that the wireframes are assigned priority numbers in case of overlaps. Where two or more domains overlap, the common volume is assigned to the domain with the higher priority.

TABLE 14-5 GOLD DOMAINS

Barrick Gold Corporation – Porgera JV

 

Name

   Code    AuCode

domau107

   1    107

domau_tt116

   2    116

domau158

   3    158

domau160

   4    160

domau161

   5    161

domau164

   6    164

domau165

   7    165

domau166

   8    166

domau167

   9    167

domau169

   10    169

domau123

   11    123

domau108

   12    108

domau110

   13    110

domau171_1210

   14    171

domau170

   15    170

domau172

   16    172

domau109

   17    109

domau_ahd_2_op

   21    181

domau_ahd_3_op

   22    182

domau_ahd_4_op

   23    183

domau_ahd_1_op

   24    180

domau_tt129

   18    129

domau_tt105

   19    105

domau_tt102

   20    102

 

 

 

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TABLE 14-6 SULPHUR DOMAINS

Barrick Gold Corporation – Porgera JV

 

Name

   Code   

Description

s7    7    Roamane Fault
s12    12    FW EW Rubble Zone
s8    8    FW Diorite
s3    3    HW Breccia Base
s9    9    FW Splay
s15    15    HW Breccia Top
s16    16    HW Diorite
s29    29    HW Roamane Zone West
s30    30    HW NE EXT Zone #1 Top
s13    13    HW NE EXT Zone #1
s31    31    NE HW Zone #2 Top
s4    4    NE HW Zone #2 Base
s32    32    NE HW Zone #3 Top
s5    5    NE HW Zone #3 Base
s33    33    NE HW Zone #4 Top
s6    6    NE HW Zone #4 Base
s24    24    HW Roamane Zone East
s28    28    FW Roamane Zone Top
s26    26    FW Roamane Zone #1 Base
s27    27    FW Roamane Zone #2 Base
s11    11    FW Augite Hornblende Diorite
s14    14    Adit Diorite
s17    17    HW Augite Hornblende Thrust
s34    34    Wagima Intrusives
s19    19    FW NW Zone #1
s20    20    FW NW Zone #2
s21    21    FW NW Zone #3
s22    22    FW NW Zone #4
s10    10    FW Waste
s25    25    NE HW Zone #5 Top
s23    23    NE HW Zone #5 Base
s2    2    SE HW Waste Dom

RPA inspected the wireframe models and found no concerns. In RPA’s opinion, they appear to represent reasonable interpretations of the mineralized zones.

COMPOSITES AND CAPPING

The samples are capped then composited to two-metre widths, using the wireframe models as boundary constraints. Compositing begins at the point where the drill hole

 

 

 

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enters a wireframe and progresses at two-metre increments to the exit point. The distance through a wireframed domain is seldom an exact multiple of two metres so the last composite in any domain is usually less than the proscribed length. Remnant composites less than one metre in length are discarded.

Composites are tagged with a code for the geology, as well as the gold and sulphur domains, and whether or not they reside within a stoped volume. The pit encompasses the portion of the deposit mined from underground in earlier years of production. These old stopes are accounted for in the block modeling to prevent overestimation of the tonnage. The treatment of composites from within these mined out areas is discussed in more detail below.

High grade samples are capped based on statistical analyses carried on each domain. Porgera JV staff generate means, cumulative frequency diagrams and coefficients of variation for each of the domained datasets at a range of top cuts. The caps are typically chosen at the value at which 10% of the metal content is removed, or in the case of the MIK domains, the median of the highest grade bin. Tables 14-7 and 14-8 list the top cuts applied to both Au and S, respectively.

Practice at Porgera JV used to be to cap the composites instead of the samples. For the EOY2011 models, the samples were capped prior to compositing in order to be consistent with Barrick standard practice. RPA concurs with this approach.

 

 

 

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TABLE 14-7 GOLD TOP CUTS

Barrick Gold Corporation - Porgera JV

 

AUCODE

   Estimation
Type
   Top Cut
(g/t Au)
  

Comment

102    id    30   
105    ik    31    Top class median
107    ik    249    Top class median
108    ik    312    Top class median
109    ik    100    Top class median
110    ik    65    Top class median
116    ik    43    Top class median
123    ik    365    Top class median
129    id    100   
158    ok    30   
160    ok    40   
161    ik    64    Top class median
164    ok    10   
165    ok    700   
166    ok    100   
167    ok    20   
169    ok    200   
170    ik    176    Top class median
171    ik    180    Top class median
172    ok    90   
180    ok    30   
181    ok    50   
182    ok    40   
183    ok    30   

 

 

 

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TABLE 14-8 SULPHUR TOP CUTS

Barrick Gold Corporation - Porgera JV

 

DOMAIN

   SCODE    Top Cut (% S)

s2

   2    2

s3

   3    15

s4

   4    10

s5

   5    15

s6

   6    15

s7

   7    12

s8

   8    10

s9

   9    12

s10

   10    12

s11

   11    12

s12

   12    20

s13

   13    15

s14

   14    5

s15

   15    17

s16

   16    8

s17

   17    3

s19

   19    10

s20

   20    8

s21

   21    7

s22

   22    3.5

s23

   23    15

s24

   24    5

s25

   25    9

s26

   26    10

s27

   27    4.5

s28

   28    10

s29

   29    10

s30

   30    9

s31

   31    15

s32

   32    15

s33

   33    10

s34

   34    9

s34

   34    9

The composites are declustered by means of a 3D polygonal method, using in-house software developed for that purpose. The declustered data are then subjected to statistical and geostatistical analyses to define the estimation parameters. Uncapped, non-declustered composite statistics for gold and silver are provided in Tables 14-9 and 14-10. RPA checked and confirmed the mean grades for each of the domains.

 

 

 

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TABLE 14-9 2 M NON-DECLUSTERED COMPOSITE GRADES - GOLD

Barrick Gold Corporation—Porgera JV

 

AUCODE

   Number Au Comps    Mean Au    Max Au g/t    Min Au g/t

0

   17,369    0.917    428.50    0.002

102

   15,309    0.195    150.35    0.002

105

   212,237    0.535    350.00    0.002

107

   11,522    15.748    11,100.00    0.005

108

   43,257    4.341    2,419.00    0.005

109

   54,968    1.565    3,500.00    0.005

110

   23,635    0.954    900.00    0.005

116

   1,098    3.004    1,600.00    0.005

123

   51,169    2.881    4,376.00    0.002

129

   52,310    0.835    1,665.00    0.002

158

   227    2.017    82.00    0.01

160

   2,407    3.868    220.00    0.01

161

   2,468    3.564    220.00    0.01

164

   172    2.326    64.14    0.01

165

   1,701    27.545    3,904.10    0.03

166

   2,350    3.665    239.00    0.01

167

   1,980    2.220    75.00    0.01

169

   16,135    6.461    8,400.00    0.005

170

   46,785    2.083    685.00    0.002

171

   38,824    3.321    1,520.05    0.002

172

   5,163    0.797    839.00    0.002

180

   1,808    0.336    53.88    0.005

181

   1,524    1.072    112.67    0.005

182

   4,700    1.422    155.82    0.002

183

   11,547    0.462    86.00    0.002

Total

   620,665    1.99      

 

 

 

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TABLE 14-10 2 M NON-DECLUSTERED COMPOSITE GRADES—SULPHUR

Barrick Gold Corporation—Porgera JV

 

SCODE

   Number S Comps    Mean S    Max S %    Min S %

0

   12,137    0.889    22.70    0.002

2

   10,662    0.560    15.40    0.002

3

   815    5.042    24.70    0.1

4

   8,566    2.221    35.50    0.01

5

   11,025    3.100    46.89    0.01

6

   8,336    2.214    25.00    0.01

7

   11,442    2.886    44.00    0.01

8

   113,832    0.814    40.60    0.002

9

   30,382    2.225    34.70    0.01

10

   36,143    1.169    33.00    0.002

11

   53,793    1.345    279.50    0.002

12

   1,318    4.894    24.30    0.05

13

   1,812    2.527    27.00    0.05

14

   12,404    0.664    16.60    0.002

15

   1,278    4.664    24.84    0.01

16

   5,783    1.745    26.60    0.01

17

   780    0.445    4.40    0.05

19

   100,086    1.869    918.79    0.002

20

   25,755    1.337    19.60    0.002

21

   6,263    0.926    17.20    0.002

22

   1,822    0.697    14.86    0.002

23

   41,294    1.638    39.60    0.01

24

   3,786    1.714    12.80    0.01

25

   8,319    1.062    115.59    0.01

26

   32,572    1.919    33.30    0.05

27

   1,218    0.866    11.32    0.05

28

   9,614    2.342    21.20    0.01

29

   11,830    2.505    27.20    0.01

30

   462    1.710    13.00    0.05

31

   5,930    2.973    36.00    0.05

32

   8,644    2.304    27.30    0.01

33

   2,771    1.835    24.10    0.01

34

   2,511    0.792    15.45    0.002

Total

   540,405    1.50      

STOPE COMPOSITES

The voids model contains tags for mined out volumes. Different tags are applied depending on the type of void space. Early stopes, that which were filled with uncemented backfill, are discriminated from later ones with cemented backfill. This is to allow for different dilution parameters in the treatment of composites within the mined volumes, and for the design and reserve estimation processes. Similarly, a separate category is applied to development in ore.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page 14-14   


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Production experience has shown that a better block model grade estimate is obtained when some of the samples from within stoped volumes are included in the database. For stopes mined prior to 1997, a procedure has been developed for treating composites within the voids. Composites located immediate inside of the mined volumes are termed “skin samples”. Generally only the skin samples are used in block modeling, and the samples in the interior of the stopes are ignored. An exception would be for narrow pillars between stopes. In this instance, the interior samples are included.

For grade interpolation purposes the skin samples are adjusted according to the following steps:

 

   

If the grade of an adjacent sample outboard of a skin sample is higher than the grade of the skin sample then the grade of the skin sample is used.

 

   

If the grade of the outboard sample is greater than 12 g/t Au, then the skin sample is given the grade of that outboard sample.

 

   

Skin samples with grades greater than 12 g/t Au are capped at 12 g/t.

GEOSTATISTICS AND SEARCH PARAMETERS

(Note that the term “variogram” may be used to refer to correlograms and semi-variograms in this report.)

Geostatistical analyses are carried out for both gold and sulphur in all domains. Omin-directional semi-variograms are generated to estimate nugget effects. Variogram maps and directional variograms are created in order to study anisotropy in grade continuity. This information is then used as a guide for development of search parameters for the OK and ID estimates and variograms models for the OK estimates. For the MIK domains, indicator variograms are generated for each class bin. The number of different variograms generated is quite large and they are too numerous to include in this report.

The geostatistics for gold are carried out using in-house software, and for sulphur using Sage. Variography is not routinely redone for every estimate. If there was no significant increase in the database for a particular domain, then the previous year’s variograms parameters are used.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page 14-15   


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SEARCH PARAMETERS

Search parameters are developed in part from the geostatistical analyses described above. The orientation of the search ellipsoids are determined by the Dynamic Anisotropy Modeling (DAM) system. Strings are drawn along the approximate centreline of the zones in plan and section views for each estimation domain. The strings are modified by adding additional points to them in order to ensure consistent coverage throughout each zone. Strikes and dips are then generated for each of the polyline points and stored as data for grade interpolation. The strikes and dips are then interpolated into a block model using ID2 and stored as inputs to the grade estimations. When the block grades are interpolated, the system queries each block for the orientation of the search ellipsoid.

The grade interpolations are run using a series of progressively larger search ellipsoids and more liberal composite selection criteria. There were a total of 168 individual search parameter variants included in the summary file reviewed by RPA. Most domains have in the order of one to ten different search passes. However, domain 108 had 58 different search patterns, due to the fact that this domain comprises five separate sub-domains. The searches tended to vary most in ranges and not in sample selection criteria. All parameter files used an octant search with a minimum of four and maximum of 20 composites per block, with composites from a minimum of at least two drill holes.

The introduction of the two drill hole constraint is a new modification to the overall methodology. Also, the maximum composite per block limit of 20 is a significant change from the previous limit of 200. These changes were invoked to bring the Porgera JV estimation methodology more in line with Barrick’s preferred protocols. Barrick’s guidelines for resource estimation typically incorporate inverse distance interpolations using a small number of composites per block (typically no more than six).

BLOCK MODELS

There are several block models generated in the course of preparing the Mineral Resource and Reserve estimates. Most comprise arrays of 10 m by 5 m by 10 m blocks,

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page 14-16   


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although these models can vary in block size depending on their ultimate use. Some models are sub-blocked, while others are reblocked to a larger size for use in pit optimization. All, however, are oriented parallel to the property survey grid and encompass the same volume. The geometry of the generic framework for the block model array is provided in Table 14-11.

TABLE 14-11 BLOCK MODEL GEOMETRY

Barrick Gold Corporation—Porgera JV

 

Block Size:

     X       10 m
     Y       5 m
     Z       10 m

Origin:

     X       21,200E
     Y       10,200N
     Z       1,600 m el

Extents:

     X       2,660 m
     Y       2,260 m
     Z       1,200 m

Block models are developed for grade interpolations for sulphur and gold using OK, ID3 and MIK. A model is also created to store individual search orientations for the DAM. Indicator kriging is used for domains with relatively high coefficients of variation. Inverse distance is used for background domains and those with relatively few data points. Each domain is estimated separately and is discriminated from neighbouring domains by means of the wireframe models. Sub-domains are defined for some zones to allow for variation in the estimation parameters within a domain.

The generalized process for constructing the block models is as follows:

 

  1) Collect and validate the sample data. De-survey the samples (i.e. determine the XYZ coordinates of the samples).

 

  2) Update wireframe domain models including DAM, if applicable.

 

  3) Create and tag the 2 m composites. Tags include estimation domains for gold and sulphur and stope types.

 

  4) Adjust composites for skin samples.

 

 

 

Barrick Gold Corporation – Porgera Joint Venture, Project #1669

Technical Report NI 43-101 – March 16, 2012

     Rev. 0 Page 14-17