© MLI Ltd 2012

Hesdaba, Aseylata, Gaggade and Garabbayis Gold Projects

Exploration Licenses

The Exploration Licenses were granted to a local company incorporated under the laws of Djibouti, being JB Djibouti Mining Limited (“JBDML”). As per the terms of Joint Venture Agreement executed with the Government of Djibouti for the exploration and mining of gold deposits at Djibouti, it has been agreed to have shareholding structure of 80 : 20% in favour of the Group and Government of
Djibouti, respectively. The Government of Djibouti shall not make any direct investment in the development and operation of the project although it would always provide all the assistance in kind as much as possible within the national policy considering the fact that the Gold Project under referenceGovt. of Djibouti has granted the following exploration permits to JBDMCL.  The locations of three permits of 100 sq km area each.


a.  Hesdaba Block granted on 20th July 2009 –Tenure 3 years with- 2 renewals of 2 years each
b.  Asaleyta Block granted on 20th July 2009 –Tenure – same as above
c.  Garabbayis Block granted on 20th July 2009 –Tenure – same as above


The granting of Exploration permit (Mining permit) is automatic and is for a period of three years.  The Exploration permits are owned 80% by JBMDCL and 20% by the Govt. of Djibouti.









































Mining Licenses

One 20 year Mining Exploration Permit for the mining of gold, covering an area of 10km2 in the Hesdeba area in the region of Dikhil, granted on 1 January 2012, mining license number 001/2012.

 

Geology of Hesdaba


Physiography

 

The Hesdaba block is characterized by low to high ridges cut by few broad valleys and innumerable narrow gorges both along and across the ridges. Prominent among the valleys is the ‘Hesdaba pass’ which ‘divides the mineralized zones into northern’ and ‘southern’. The ridges are conspicuous by their brownish colour in the backdrop of black basaltic lava flows that are sub-horizontally disposed.  All the hill slopes are covered by loose black and brownish boulders and rubble of vesicular and altered basalt or off white felsic rocks.  The hilly terrain is devoid of any vegetation.  The valleys support clusters of trees - some varieties of Palm and others thorny bush-types could be seen in the broad gravel-filled valleys.  

Vegetation

 

Hesdaba is a Saline Spring – known as Allouli, which is located along a southerly flowing stream course.  This relatively less-saline water remains as an important water source. The major Gaggade Rift Valley, located about 2 km westward of Hesdaba block has several shallow open wells, yielding brackish to nearly sweet water. The underground water can be accessed at a shallow depth of 4-6 m in most places in this 2-3 km wide and over 25 km long flat valley, dotted with clusters of palms and bushes.

Geological Setting

 

Hesdaba block is conspicuous by a series of parallel, northwesterly trending brownish ridges amidst dark coloured, sub-horizontal sheets of basaltic lava. The thick gravel-covered broad E-W valley known as Hesdaba Pass cuts cross the ridges, in the central part.  The ridges are made-up of numerous thin whitish chalcedonic quartz veins surrounded by leached reddish brown and off-white zones of hydrothermal alteration and weathering of the vesicular and amygdular basalts and rhyolitic flows. The entire litho-package predominated by shallow-dipping stratiform basaltic flows belongs to Stratoide Basalt Series (with a stratigraphic age range of 3.4 to 1.0 Ma). 


The basalt is classified into older basalt (Tertiary) and younger basalt (Quaternary). The older tertiary basalt is mostly weathered and altered by geothermal action which is surrounded by quaternary basalt. Rhyolite is intruded at later stage which cause for major week zones in tertiary basalt for faulting. Quaternary basalt is bouldery due to columnar joints. Quarternary to recent sedimentary formations are found on the eastern side which includes fire clay, conglomerates and sand. 
Major faulting after rhyolite extrusion cause to divide the older tertiary basalt in to various week zones, into which the siliceous solution with more iron and gold moves up ward and occupies major fractures\shear planes and cracks near and along the fault zones.  All the three quartz reefs are aligned parallel to this fault zone.


Volcanic flow of various rock compositions is related to Rift zones by sequence alternative flow of basic to acidic volcanic mass. Continuous widening of rift zone causes for development of week zones in younger formations and faulted during mountain building era and plate movement.
The structural control of gold localization is described as a “rift low sulphidic deposit (RLS) of volcanic arc controlled regional faulting”



The most important feature is the widespread alteration – manifested in silicification, pyritization and ferruginisation of the highly porous vesicular basalt.  Chalcedony veins exhibit characteristic epithermal textures like banded, colloform, crustiform, moss, drusy and cockade, or lattice-bladed and a combination of these textures with rare mold or radiating comb textures. Banded crustiform texture is diagnostic of most chalcedony veins, wherein the bands of different composition, colour or texture reflect fluctuating concentrations of elements in solution during precipitation. 


The fluctuating conditions are interpreted in literature to be the result of periodic boiling of hydrothermal fluids.  The rounded or convex external surfaces of colloform textures are inherited from strong surface tension of the silica gels.  Moss texture is formed either by rhythmic deposition of silica gel around a nucleus (a foreign particle or an earlier grown quartz particle) or by secondary diffusion during drying of viscous gelatinous material under higher temperatures. 


Drusy and comb textures develop in open space from a quartz supersaturated hydrothermal solution and grows from multiple nuclei along a vein wall.  Cockade texture is developed around the fragments of host rock, whereas the bladed texture is more often the result of replacement of bladed calcite by chalcedony or quartz, either in cavities, partings or contact zones.


Gold Mineralisation


The gold mineralization is controlled by ferruginous chalcedony quartz veins occupying the fault planes, fractures and cracks sub parallel to this fault trending NE-SW direction and dipping 70° due SE.  Electron micro thin section  studies indicates that gold is associated with goethite (iron) with quartz. It is also evident from analysis that pure quartz does have little gold content when compare to ferruginous chalcedony quartz. Coarse calcite veins are good indicator of fault contact.
Gold is also found in contact zones adjacent to chalcedony quartz due to chemical dispersion of iron by solution and therefore the system of veins and its silicified ferruginous basaltic wall rocks contacts are demarcated as “Mineralized zones”  while doing geological mapping.




































































Goethite and limonite appears to be the products of alteration.  Chalcedony veins and intensely silicified wall rocks show fine specks and aggregates of pyrite.


In Hesadaba, gold is more significant than Ag in all analysis. No much base metal. It is a typical Rift Low sulphidic deposit (RLS) of volcanic Arc. 


Rock Chip and Channel Samples:


1064 samples by Rock chip and Channel Samples were collected from various part of the mineralized zone in the licensed area and were chemically analyzed at an Internationally renowned Shiva Analytical Lab (India) Ltd, Bangalore for obtaining assay value of gold per parts in million.


Pitting and Trenching


JBDML excavated 25 test pits in total, covering dimensions of 3m length x 3m width x 3m depth per pit, and also excavated 3 trenches, covering dimensions of 1m width x 1m depth x 10m of length running on either sides in the licensed area of Hesdaba. The bulk representative samples collected from the said pits and trenches were sent for chemical analysis at Shiva Analytical Lab (India) Ltd, an internationally renowned laboratory.








































Diamond Core Drilling


In total, six bore holes were drilled at different angles & depth and a total of 602.60 meters of drilling was undertaken over the said 6 bore holes.



































Ore Beneficiation Studies:


Comprehensive gold recovery tests by various methods in various fractions were carried out on two composite samples of the mineralized chalcedony veins and the host altered wall rock from Hesdaba Prospect at Ammtec Laboratories, Western Australia. The detailed ore-microscopic, mineralogical and Electron Microprobe analyses were carried out at the QEMSCAN Lab and Roger Townsend and Associates


The head grades initially analyzed for the two bulk samples were 3.85 g/t and 0.875 g/t. However, the calculated Head grades obtained after Cyanide leaching are higher being 4.14 g/t and 1.18 g/t respectively for the Chalcedony and the Altered Wall-rock respectively. The results show that the percentage of gold extracted in solution increases with the increase in leach time. The overall leach percentage for the bulk mineralized material in a 24 hr. cycle is 83.20 %. This means, if the average mined ore grade fed into a processing plant is say 2g/t, the minimum percentage of gold recovery would be 1.66g/t (24 hrs) or 1.76 g/t ( in 48 hrs leaching).


Conclusions


1. The exploration program in Hesdaba Block included geological mapping and systematic sampling of chalcedony and associated wall rocks. The work was successful in defining twelve vein zones of mineralization with varying length and width with system of quartz veins.


2. Gold occurrence appear to be Hydrothermal in origin, controlled by deep seated fault of late tertiary\quaternary period, associated with hot springs and fumaroles.


3. Faults are trending in NW-SE direction and dipping 70° due NE which host major auriferous (gold bearing) quart reefs and small quartz veins are occupying the fractures and cracks that were developed by back breaks of such faults in tertiary basalts.


4. Gold is more significant than Ag in all analysis with limited base metals. It is interpreted as a typical rift low sulphidic deposit (RLS) of volcanic Arc.


5. There are limited gangue minerals (Geothite) associated with the epithermal quartz.


6. Ferruginous Quartz reefs associated with fault and its contact zones hosting ultrafine native gold as much as 20gms/tonne. The weighted average of mineable wide zones indicates in the order of 2gms per tonne. However selective mining is also possible along quartz reefs and its wall rocks with gold recovery + 4gms per tonne.


7. Additional exploration by pitting and trenching along quartz reef is necessary to establish gold potentials in quartz reefs and its contact zone.


8. Gold resource and reserves is estimated as per UNFC and JORC standards for 1000 hectares of ML area as,
a proven reserve up to 10m depth  of 7.6 Metric tonnes gold at an average grade of 2.0g/t Au  for visible quartz reefs.

                                   Proven  Reserves up to 20m =  7.6 Metric tonnes Au @ grade 2g/t

                                   Probable  Reserves up to 20m =  18.9 Metric tonnes Au @ grade 2g/t

                                   Inferred Resources below 20m  = 27.99  Metric tonnes Au @ grade 1.45g/t 

                                

9.The comprehensive ore-beneficiation studies carried out at the internationally recognized Ammtec Ltd in Perth, W.A. have shown that the representative sample of chalcedony from Hesdaba block has yielded a high head grade of 3.90 g/t whereas the brownish altered wall rocks assayed 0.90 g/t gold.



Studies by Ammtec Labs indicate that much of the gold occurs as free grains. Gold also occurs composited with tellurides and often found associated with sulphides like pyrite and chalcopyrite (+chalcocite + covellite). Both gold and silver are extractable by direct Cyanidation under normal grind to an extent of 83%. Presence of significant free gold (detected in gravity fractions and EPMA) and larger size of gold grains (ranging from 10-25 microns) is also confirmed by the studies.

10. The Prefeasibility report is prepared based on intensive field work by systematic mapping, surface sampling, pitting, trenching and diamond core drilling. Open cast mechanized mining by conventional system is proposed to develop this deposit to produce 500 kgs of gold per year initially and it will be increased to 1000 Kgs of gold per year when the mine is fully developed. The life of mine shall be 30 years as per the production schedule for the mineable reserves up to 20m depth. Tentative cost of mining per gram of gold bearing materials shall be $ 12.62  and production cost of gold ( 24 carat) shall be $37.86 per gm @  1.45gms/tonne grade of gold in the excavated materials. It varies in accordance with grade and production.

 

11. Based on the detailed Exploration Work carried out over a period of about 3 years and resulting conclusions there from following the International Standards laid down under the UNFC / JORC codes, it is concluded to start a Pilot Scale Mining & Mineral Processing Unit for extracting the Proven Reserve of 7.904 Metric Tonnes of Gold and then once with the help of additional exploration work, another 10 to 50 Metric Tonnes of Gold classified in the category of Proven Reserve, the scale of operations would then gradually be scaled up to the higher capacities in times to come.