28 October 2010 - Gedabek resource increases

Following the issue of a new resource report, the gold resource at AIMC’s Gedabek gold/copper mine in Azerbaijan (‘Gedabek’) has increased to 704,000 ounces (‘oz’) of gold (‘Au’) in the Measured and Indicated classifications.

The JORC compliant block model estimate (‘the Report’) was produced by mining consultants SGS Canada Incorporated Geostat Group (‘SGS’) on behalf of AIMC and includes updated information available as of 7 June 2010.  The Report significantly increases the resource from the estimate prepared in 2006 by SRK (‘the SRK Estimate’).  Both the Report and the SRK Estimate employ a cut-off grade of 0.3g/t Au for all categories.  Newly available structural geologic information was incorporated into the geologic model on which the Report was based.  The resource estimate in the Report explicitly excludes mined materials, including ore mined in the period to 7 June 2010 and that which is currently in the leach pad process, or contained in ore stock piles.
AIMC with delight announced that this upgraded resource which, after taking account of ore already mined, gives total gold uplift across the Measured and Indicated resource categories of 31.2%.  This resource increase reaffirms the inherent value of the Gedabek mine and, combined with the increasing gold production figures of the mine and the favourable gold price environment will further strengthen AIMC’s position as a profitable and cash generative gold production company.


Comparison of SGS 2010 Report and SRK 2006 resource estimate


SGS Canada 2010 Gedabek Resource (production era)

 

 

Tonnes

Au

Ag

Cu

Au

Ag

Cu

Classification

million

g/t

g/t

%

oz ’000

oz ’000

Tonnes

Measured

6.4

1.70

16.1

0.28

351

3,328

17,900

Indicated

9.8

1.12

11.1

0.27

353

3,487

26,200

Meas + Ind

16.2

1.35

13.1

0.27

704

6,814

44,100

Inferred

2.5

1.09

9.7

0.21

87

783

5,200

 

 

 

 

 

 

 

 

SRK 2006 Gedabek Resource (pre production)

 

 

 

 

 

 

 

 

Tonnes

Au

Ag

Cu

Au

Ag

Cu

Classification

millions

g/t

g/t

%

oz ’000

oz ’000

Tonnes

Indicated

12.4

1.5

13.0

0.26

598

5,183

32,200

Inferred

3.2

1.0

9.1

0.16

103

936

5,100

Numbers in tables above were calculated with greater precision than displayed, then rounded.
A total of 3,252 holes have been drilled and the results incorporated into the Report: 3,076 air-rotary production holes; 59 diamond drill holes (‘DDH’); 36 reverse circulation holes (‘RC’); and 81 combination holes which started with RC, drilled proximal to the expected mineralised zone, and finished with DDH.  A total of 13,895 assays were utilised.

Further Information

The updated resource estimate was prepared by SGS using inverse-distance squared estimation on 2.5x10x10 metre blocks.  A geologic grade-shell constructed at 0.2g/t Au was used to constrain the estimation of the grades; the grade shell was designed on 20 sections paralleling the drill-hole fences and 10 longitudinal orthogonal sections.  Structural geology and continuity of gold grades were primary design factors in the grade shell design.  Subsequently, four mineralised zones were identified, two of which were subdivided into two sub-zones each (in total six sub-zones).  Search ellipsoids were constructed for grade estimation for each of the sub-zones.  A nearest-neighbour estimate was also completed for validation purpose, using the same grade shell and search ellipsoids.
Gold grades were capped at 30g/t to limit the influence of sporadic high-grade assays, and thirty assays were thus capped.
The Block Model Estimate was classified to the standard three JORC classes: Measured/Indicated/Inferred on the following criteria:

  • Measured - within a radius of 15 metres from a composite value.
  • Indicated - between radii of 15 and 35 metres from a composite value.
  • Inferred - beyond the radius of 35 metres from a composite value, and up to the limits of the grade-shell envelope.

A value of 2.65 was used for specific gravity, derived from cumulative histogram analysis of 228 samples, with a mathematical average at 2.68.
The information within this resource update has been reviewed and signed off by D. Cukor, P.Geo, Senior Geologist of SGS, and Competent Person under JORC guidelines.

This updated resource estimate follows the press release of 13 April 2010 in which the initial results of ‘Phase 1 - Realistic Mineral Resources Model’ (the ‘Phase 1 Executive Summary’) produced by SGS on behalf of the Company were announced.  This earlier estimate was based on a total of 544 drill holes and the results were incorporated into the Phase 1  Executive Summary: 262 air-rotary production holes; 29 DDH; 34 RC holes; and 78 combination holes, started with RC, drilled proximal to the expected mineralised zone, and finished with DDH.  The Phase 1 Executive Summary (not a JORC-compliant report) also indicated significant increases in the overall quantities of gold, silver and copper.  However, like the SRK Estimate, the Phase 1 Executive Summary, produced by SGS, did not include structural geologic information, or the additional drill hole data (2,708 drill holes), which became available from 7 June 2010.  The inclusion of this information has significantly improved the interpretation of the geologic model.