assays for historical tailings storage ...tom’s gully mine initially operated as an open pit mine...

ASX ANNOUNCEMENT ASX: PGO

4 December 2017

Primary Gold Limited Suite 23, 513 Hay Street

Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

ASSAYS FOR HISTORICAL TAILINGS STORAGE FACILITIES

RETURN GRADES UP TO 3.85 G/T GOLD AT TOMS GULLY SITE

HIGHLIGHTS

Two existing tailings storage facilities (TSF) return assays results of high gold grades:

- TSF1 grades vary from 0.05 to 3.85 g/t Au (average 2.18 g/t Au) - TSF2 grades vary from 0.28 to 1.18 g/t Au (average 0.72 g/t Au)

Up to 56% recoveries from initial metallurgical testing on TSF1

Primary Gold Limited (ASX: PGO) (“Primary” or “the Company”) is pleased to announce a sampling program across two tailings storage facilities at its Toms Gully site within the Mount Bundy Project in the Northern Territory (Fig. 1) have returned assays identifying significant gold values.

The average grade determined from the 23 sample program is 2.18 g/t Au for TSF1 with grades exceeding 3 g/t Au, and 0.72 g/t Au for TSF2 (Fig. 2).

Figure 1: Location of Tom’s Gully mine in the Northern Territory

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

Figure 2: Location of Tails storage facility at Tom’s Gully site.

Managing Director, Garry Mills, said: “While its early days, the results highlight significant concentrations of gold in the Tailings Storage Facilities at good grades which may potentially lead to an economically viable, low cost retreatment operation that can generate cash flow as a supplement to primary feed once operations are recommissioned at Mt Bundy.

There are of course many steps to get to this decision, however, we are encouraged by these initial results. Our next steps are to carry out additional metallurgical testing to provide clarity around recoverable grade especially in relation to TSF1. Dependent on positive results, we will then work towards resource estimation.”

Tailings Storage Facilities and Tailings Characteristics

The surface areas of the tailings facilities are approximately 280m x 220m (TSF1) and 280m x 300m (TSF2). The depth, estimated by the costeans varies up to 3m.

The sampling program indicates grades for TSF1 is in the range of 0.05 – 3.85 g/t Au (average 2.18 g/t) and the grade for TSF2 is in the range of 0.28 – 1.17 g/t Au (average 0.72 g/t).

Tom’s Gully mine initially operated as an open pit mine from 1988 – 1991 and as an underground operation from 2005 – 2007. The two tailings storage facilities were built in the natural topographic lows near the mine and infilled by residue products from the local ore processing plant. Tailings materials are distributed as sub-horizontal layers across the dams forming stratiform structure of the gold mineralisation.

280m

300m

220m

280m

Tailings 1

Tailings 2

Tailings 1 Tailings 2

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

Next steps

Following sampling results, Primary will undertake detailed metallurgical tests of the tailings. Based on positive results from the metallurgical tests, Primary Gold will then seek to undertake resource definition drilling.

For more information, please contact:

Garry Mills +61 8 6143 6700

Or download our Primary Gold App

Competent Persons Statement

The information in this announcement that relates to Exploration Results is based on information compiled by Dr Marat Abzalov, who is a Competent Person according to JORC 2012 Code. Dr Abzalov is a Fellow of the Australasian Institute of Mining and Metallurgy. He has sufficient experience in exploration, interpretation and evaluation of gold mineralisation, and has a strong expertise in the all aspects of data collection, interpretation and geostatistical analysis to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’. Dr Abzalov is employed as a director of Primary Gold Ltd. Dr Abzalov consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

APPENDIX 1: Sampling results

Table 1: Location and gold grade of the samples collected from the Tom’s Gully Tailings Storage Facilities

Tailing Pit ID Sample ID EAST NORTH Depth

of Samp. (m)

Au, g/t

tgtsf101 tgtsf101 0.1 777359.7 8579527.2 0.1 0.05 tgtsf101 tgtsf101 2.0 777359.7 8579527.2 2 1.83 tgtsf102 tgtsf102 0.1 777353.4 8579575.9 0.1 1.83 tgtsf104 tgtsf104 0.25 777230.9 8579576.8 0.25 1.46 tgtsf105 tgtsf105 2.5 777344.2 8579476.1 2.5 1.78 tgtsf106 tgtsf106 0.5 777342.1 8579449.3 0.5 3.11 tgtsf106 tgtsf106 2.5 777342.1 8579449.3 2.5 2.18 tgtsf106 TWIN-tgtsf106 0.5 777345.0 8579449.3 0.5 3.78* 3.85 3.7 tgtsf106 TWIN-tgtsf106 2.2 777345.0 8579449.3 2.2 2.86* 2.85 2.86 tgtsf107 tgtsf107 2.0 777262.8 8579344.1 2 1.50 tgtsf108 tgtsf108 0.5 777269.7 8579386.0 0.5 3.01 tgtsf109 tgtsf109 3.0 777200.7 8579377.7 3 2.29 tgtsf110 tgtsf110 0.5 777162.6 8579421.5 0.5 2.18 tgtsf110 tgtsf110 1.5 777162.6 8579421.5 1.5 2.63

2.18

tgtsf201 0.25 tgtsf201 0.25 778371.72 8580132.6 0.25 0.938 tgtsf201 1.5 tgtsf201 1.5 778371.72 8580132.6 1.5 1.1 tgtsf204 0.25 tgtsf204 0.25 778530.16 8580123.4 0.25 0.841 tgtsf205 1.5 tgtsf205 1.5 778485.07 8580184.7 1.5 0.621 tgtsf206 0.25 tgtsf206 0.25 778464.41 8580142 0.25 1.175 tgtsf206 1.5 tgtsf206 1.5 778464.41 8580142 1.5 0.909 tgtsf208 0.5 tgtsf208 0.5 778433 8580250.1 0.5 0.351 tgtsf208 1.0 tgtsf208 1.0 778433 8580250.1 1 0.301 tgtsf209 1.0 tgtsf209 1.0 778515.35 8580269.2 1 0.28

0.72 * average of two duplicate samples

Duplicate Samples (Au,

g/t)

Average

TSF

1

Average

TSF

2

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

APPENDIX 2: JORC (2012) COMPLIANCE CHECK LIST

Reporting criteria presented in the Section 1 of the JORC Table 1 (Sampling techniques and data)

Criteria of JORC Code

2012

Explanation given in the JORC Code

2012

Details of the Reported Project

(1.1.) Sampling techniques

• Nature and quality of sampling (eg cut channels, random chips, or specific specialized industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

23 samples have been collected from the tailing dams of the Toms Gully mine.

The samples, approximately 3 kg each, were collected from the exploration costeans (small pits) dug into tailings using small excavator.

• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Samples were collected from the different places around the tailings (Fig.) assuring their spatial distribution is representative for characterisation of the tailings.

Fig. Map of the Toms Gully mine area showing distribution of the samples (red dots) collected for characterisation of the tailings

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

• Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Samples were collected from the oxidised (upper o.5 m), and non-oxidised (below 0.5m depth) of the tailings.

A standard procedure, that commonly used for gold prospecting and colloquially referred as grab-sampling, was used for sampling the tailings

Each sample was approximately 3 kg and was delivered to ALS (Brisbane).

Drilling techniques (1.2.)

• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or

Not applicable as drilling was not undertaken.

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ABN: 42 122 726 283

other type, whether core is oriented and if so, by what method, etc).

Drill sample recovery (1.3.)

• Method of recording and assessing core and chip sample recoveries and results assessed.


• Measures taken to maximise sample recovery and ensure representative nature of the samples.


• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.


Logging (1.4.)

• Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Tailings material was classified by the degree of oxidation into oxide, and non-oxidised (sulphide) types. This was logged into the sampling spreadsheet, which also contains the depth of sampling. Level of details is sufficient for reporting the findings as Exploration results

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

Logging was qualitative.

Prospecting pits (costeans) were photographed

• The total length and percentage of the relevant intersections logged.

100% of costeans were logged to the level of details sufficient for reporting Exploration Results

Sub-sampling techniques and sample preparation (1.5.)

• If core, whether cut or sawn and wether quarter, half or all core taken

Not applicable as no core taken.

• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

3kg samples were collected from the costeans and sent to ALS laboratory for further processing.

No splitting /sub-sampling was made in the field.

• For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Standard same preparation techniques developed by ALS laboratories were used for all samples

• Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Laboratory QAQC procedures include regular checks of the sieved material assuring that these are compliant with the sample preparation protocols

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

• Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Twin verification samples at a distance of approximately 3m from the TGTSF106 exploration pit were taken.

• Whether sample sizes are appropriate to the grain size of the material being sampled.

Tailings at the Toms Gully are filled with fine grained material, residue of the past milling and processing of the Toms Gully ore. 3kg sample is used for bed rock gold therefore this sample size is appropriate for sampling the tailings, which are characterised by a finer grained textures and more uniform spatial distribution of gold mineralisation.

Quality of assay data and laboratory tests (1.6.)

• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

Gold was assayed by Fire Assay method with ICP-AES finish at the ALS laboratory. 30g aliquot was used

The laboratory code is Au-ICP21.

• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Not applicable. Geophysical tools were not used.

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

Internal QAQC procedures of the ALS were used at the programme

Verification of sampling and assaying (1.7.)

• The verification of significant intersections by either independent or alternative company personnel.

Twin verification samples at a distance of approximately 3m from the TGTSF106 exploration pit were taken.

• The use of twinned holes.

• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Assay results were obtained from the lab in an electronic form and saved on the company’s server.

• Discuss any adjustment to assay data.

No adjustments were made to the data

Location of data points (1.8.)

• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral

X -Y coordinates of the samples were collected using

Handheld GPS.

Depth was measured by a measuring tape along the side of the costean F

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

Resource estimation.

• Specification of the grid system used.

Grid MGA (GDA94) zone 52.

• Quality and adequacy of topographic control.

The detail topographic survey of the area was made using LiDAR technology.

Data spacing and distribution (1.9.)

• Data spacing for reporting of Exploration Results.

Samples were collected along the perimeter of the tailings dams. Distance between samples lie in the range of 60 – 120 m

• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Samples were collected for preliminary characterisation of the gold mineralisation at the tailings and can be used for reporting as Exploration Results. Data spacing and distribution are insufficient for estimation Resources

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

• Whether sample compositing has been applied.

Samples compositing was not used

Orientation of data in relation to geological structure (1.10.)

• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

Distribution of the samples along the perimeter of the tailings gives a good understanding of the spatial variations of the tailings gold grade.

The grab samples are not representative for understanding the vertical gold profile of the tailings.

• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

Not applicable.

Sample security (1.11.)

• The measures taken to ensure sample security

Samples were delivered to laboratory immediately after they have been collected from the dams.

Unauthorised people did not have access to the samples.

Audits or reviews (1.12.)

• The results of any audits or reviews of sampling techniques and data.

The reported sampling results was an initial study of the gold mineralisation hosted in Toms Gully tailings.

The validation and review of these results will be made by collecting the additional samples twinning some of the reported here results.

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

Reporting criteria presented in the Section 2 of the JORC Table 1 (Reporting of Exploration Results)

Criteria of JORC Code

2012

Explanation given in the JORC Code

2012

Details of the Reported Project

Mineral tenement and land tenure status (2.1)

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The sampled and reported here tailings dams are located in the mining lease ML1058.

• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

Mining lease (ML1058) is securely held and maintained in an orderly manner by Primary Gold Limited.

Exploration done by other parties (2.2)

• Acknowledgment and appraisal of exploration by other parties.

Study of the gold distribution in the Tom’s Gully tailings is undertaken with technical support of GR Engineering

Geology (2.3)

• Deposit type, geological setting and style of mineralisation.

The tailings were built in the natural topographic lows in the vicinity of the Tom’ Gully mine. They are formed by the residue products of the Tom’s Gully ore processed at the local plant. Material infilling the tailing dams are laying as sub-horizontal layers extending across the tailings dams and forming the stratiform structure of the gold mineralisation. F

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

Drill hole Information (2.4)

• A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:


• Easting and Northing of the drill hole collar.

• Elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar.

• dip and azimuth of the hole.

• down hole length and interception depth

• hole length.

• If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

All samples information is included into this report and considered Material

Data aggregation methods (2.5)

• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and

Sample grades change from 0.05 g/t to 3.11 g/t, average 1.45 g/t

Because all samples have the similar size the average was estimated without weighing.

No top cut was applied because of a uniform style of the grade distribution without high grade tails on the histograms and lack of the outliers

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

cut-off grades should be stated.

• Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

Not applicable because intercepts were not estimated from the sampling data

• The assumptions used for any reporting of metal equivalent values should be clearly stated.

Not applicable. Only gold is reported.

Relationship between mineralisation widths and intercept lengths (2.6)

• These relationships are particularly important in the reporting of Exploration Results.

Sampling of the tailings did not address the thickness of the gold layers at the tailings and therefore not reported here

• If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

Mineralisation occurs as sub-horizontal layers extending across the tailing dams.

The tailings have been studied by the vertical pits (costeans) which suites for this structure of mineralisation.

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

• If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

True width not known. The sampling results are reported as the point samples

Diagrams (2.7)

• Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Balanced reporting (2.8)

• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Results are reported as the point samples. Full range of the obtained results is presented in the tables in the Section 2.4 and on the histogram in the Section 2.5. The data was not used for estimation tonnages of mineralisation which are not reported.

Other substantive exploration data (2.9)

• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical

Metallurgical tests are currently underway and results will be reported in a different announcement after their completion.

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Subiaco WA 6008 T: 08 6143 6700

ABN: 42 122 726 283

survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Further work (2.10)

• The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Primary Gold has collected several samples for metallurgical testing of the tailings.

In the event gold recovery is positive the Resource definition drilling will be undertaken.

Future drilling will be made within the tailings boundaries using vertically drilled RAB holes that will be sampled at 0.5m intervals.

• Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Not applicable. Mineralisation is confined to the tailings dams and cannot be extended outside of tailings.

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assays for historical tailings storage ...tom’s gully mine initially operated as an open pit mine...

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