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The Hengxian Gold Project - Guangxi Province
View A: E-W Striking Hengxian Hill: Over 3 km's of continuous mining, View B: Gold processing at Hengxian, View C: Heap leach operations
Summary
Caledon Resources Plc, through it�s wholly owned subsidiary Blackwatch Resources, has signed an agreement with Guangxi Taifu Gold and Minerals Development Ltd Co (Taifu) covering granted mining and exploration tenements at Hengxian, Guangxi Province, PRC. Taifu is a privately run mining company conducting mining activities across southern China.
Under the terms of the agreement, Caledon, through its wholly owned subsidiary Blackwatch Resources, has the right to earn a 70% equity stake in the combined mining and exploration project by conducting exploration over a three year period. Taifu will hold a 30% equity, of which one third will be free carried and the remainder carried by a loan, repayable from future gold production. The equity holdings will be structured through the formation of a Cooperative Joint Venture Company
The Hengxian project is a classic example of a sediment hosted disseminated gold system (�Carlin-type�), with considerable exploration potential. Caledon has targeted the area for some time having witnessed the impressive strike length and width of the near surface oxide focused mining that is currently being carried out.
Hengxian Mine. View A: View of the North-eastern open pit looking northwest. View B: Low-temperature replacement silica stockwork with characteristic dissolution texture, silica �sponge� texture. View C: Fault breccia with coarse euhedral stibnite needles (arrow).
At Hengxian, gold is being mined in a north-east trending zone measuring up to 3 kilometers long and up to 800 meters wide. Gold occurs in steeply dipping, high grade �feeder� structures (> 4.5 g/t gold avg.), feeding flat-lying moderate grade (1-4 g/t avg.) stratiform zones. To date, at least four sub parallel feeder structures have been defined. The gold mineralisation occurs on a major regional structure that can be traced for more than ten kilometers away from the existing workings. Access and infrastructure in the area is excellent � Hengxian is a two hours drive from Caledon�s office base situated in the Guangxi Provincial capital, Nanning.
The full potential of Hengxian has hitherto gone unrecognised and the mine, together with the surrounding area, has been subjected to only cursory exploration due to a lack of exploration funding. Previous exploration has been almost entirely focused on shallow oxide zones. Gold reserves at Hengxian are reported to be 310,000 ounces (Inferred category) grading approximately 4.6 g/t gold � with those reserves having been defined by only a limited amount of shallow focused drilling, concentrated on the surface oxide zones (0 � 60 m depth) . Exploration to date has only been focused on a small � 2.5 kilometer long � portion of the entire 10 kilometer long structure, initiated on obvious outcropping oxidized sulphides.
Caledon�s due diligence of the limited past drilling conducted at Hengxian shows that the system has provided intensely mineralized sections on selected portions of the various ore bodies.
Examples of diamond drill intersections from Hengxian are:
Section Hole Number Depth (m) Intercept (m) Grade g/t Au
44 ZK 14 13 50.6 2.02
435 ZK 4351 25 10.1 8.0
ZK 4351 49 14.5 5.03
43 ZK 432 45 41.4 6.44
ZK 5 49 31.0 8.8
ZK 19 102 27.0 4.0
425 ZK 251 50 42.5 3.91
ZK 4255 103 29.1 6.93
ZK 4252 72 12.8 6.16
ZK 4252 90 18.6 4.02
415 ZK 152 42 20.7 3.0
ZK153 65 13.9 4.68
41 ZK 16 10 11.1 3.79
ZK 411 33 24.6 4.0
The above results are a selection of mineable intervals reported by Taifu, according to relevant mining economics at the time of small scale mine development (over ten years ago). Intervals between the higher grade mineralisation carry significant disseminated gold mineralisation, typical of such gold deposits. For example, drill hole ZK19 reported a 27 meter wide interval grading 4.0 g/t gold, occurring within a much wider down-hole interval reporting a width of 133 meters grading 3.24 g/t Au.
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