Overview
On July 28, 2021, TVIRD signed an investment agreement to acquire 100% of the outstanding equity in Greenstone Resources Corporation (“GRC”), the owner and operator of the Siana Gold Project (“Siana”) and the Mapawa Project (“Mapawa”), both of which are located in the southern Philippine island of Mindanao. Prior to the acquisition by TVIRD, GRC was the Philippines affiliate of Red 5 Limited (“Red 5”) (ASX: RED), a Perth, Western Australian-based gold company, the shares of which are listed on the Australian Securities Exchange.
The assets of GRC include:
- The Siana Project, as covered by Philippines MPSA No. 184-2002-XIII covering 3,289 hectares, which includes the following project infrastructure:
- A modern 1.1mtpa Outotec mill, gravity and CIL mill facility commissioned in 2012 at a capital cost of U.S. $54 million that includes a single stage SAG mill and 6 CIL tanks;
- Grid power with backup 8MW diesel fired power station; and,
- Administration building, warehouse, mess hall, camp facilities and accommodation, engineering building and maintenance facilities.
- Mapawa Project, as covered by MPSA No. 280-2009-XIII covering 1,482 hectares.
- The Ferrer Claim, as covered by the Application for Mineral Production Sharing Agreement No. A000046 and comprising of one Block of 595 hectares.
- Established government approvals and relationships with key stakeholders.
Siana is located in Tubod, Surigao del Norte, approximately 35 kilometers from Surigao City and near to Lake Mainit, while Mapawa is located 20 kilometers north of Siana and has the potential to be developed as a satellite source of ore feed for the Siana processing plant.
Siana produced nearly one million ounces of gold prior to its acquisition in 2003 by Red 5's Philippine affiliated company, GRC. GRC commenced exploration work on Siana in 2004, completed a project feasibility study in 2009 and received all necessary permits to construct and operate by 2009. Construction at the mine site commenced in 2010 and the inaugural gold pour was achieved by GRC in February 2012. TVIRD understands that, to date, Siana has produced 149,203 ounces of gold and 199,669 ounces of silver, in addition to nearly one million ounces of gold prior to its acquisition in 2003 by GRC.
Uncertainty surrounding the mining policy in the Philippines and difficulty obtaining environmental permit approvals led Red 5 to suspend mining and processing activities at Siana and to place the site on temporary standby in April 2017. Ongoing activities through suspension have included dewatering of the open pit, infrastructure maintenance and monitoring of geotechnical issues.
Red 5 has advised TVIRD that GRC has spent over U.S. $200 million, to date, in its efforts to develop Siana. TVIRD has also been advised that all of the mining and processing facilities and required permits are in place for re-commencement of operations. Siana has the only modern gold plant in the region with the potential to establish Siana as a processing center for other nearby prospects/gold deposits.
RESOURCES
Red 5 has previously published underground and open pit mineral resource and mineral reserve estimates for Siana and mineral resource estimates for Mapawa. These estimates, detailed below, were prepared using the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code" or "JORC 2012"). No estimates for either Siana or Mapawa have been prepared using the 2014 definition standards published by the Canadian Institute of Mining Metallurgy and Petroleum ("CIM 2014 Standard") and no technical report supporting this estimate has been prepared in accordance with NI 43-101. A "qualified person" (as defined in NI 43-101) has not done sufficient work to classify any of these mineral resource or mineral reserve estimates as current. As a result, the Company is treating the following estimates as historical in nature and not current mineral resources or mineral reserves, and they should not be relied upon. There are certain differences between the JORC Code and the CIM 2014 Standard described further below.
Red 5 announced on February 23, 2016 that Mining One Pty Ltd had completed a JORC 2012 underground mineral resource and reserves estimate using a 2.4 g/t gold cut-off that has been subsequently reviewed annually by Red 5 and most recently confirmed in their Annual Report at June 30, 2020. Further to the ASX announcement released by Red 5 on January 11, 2016, the database for the Siana resource estimate included 109 holes and approximately 47,300 meters in addition to 79 historic holes drilled by Suricon between 1980 and 1990 for approximately 10,600 meters. The database also includes a further 10,417 grade control channel samples conducted by GRC prior to April 2013.
The Red 5 2020 Annual Report at June 30, 2020 reports the JORC 2012 underground mineral resource and reserves estimate to be:
In the Red 5 Annual Report at June 30, 2020, and due to what Red 5 has reported as pending construction of additional tailings storage capacity, no updated JORC 2012 reserve estimate is reported for the Siana open pit as at that date. As such, Red 5 has reported the open pit mineral resource and reserve estimate at June 30, 2020 to be:
In summary, and further to the above tables as included in the Red 5 2020 Annual Report, the Siana open pit and underground mine have at June 30, 2020, a combined Indicated JORC 2012 mineral resource estimate of 4.3Mt @ 4.6 g/t Au and 6.8 g/t Ag and combined Inferred JORC 2012 mineral resource estimate of 0.5Mt @ 8.9 g/t Au and 10.6 g/t Ag. TVI is not treating this as a current mineral resource under NI 43-101 as a qualified person has not done sufficient work to classify the historical estimate as current, and the estimates should not be relied upon.
Mining One Pty Ltd, with offices in Australia, China, Indonesia and Canada, has extensive experience in the Philippines, Papua New Guinea, Indonesia, Africa, South America and China and with underground and open pit mines across a broad range of commodities. They are involved in planning, supervision, project management, studies, geology, contracts, financing and corporate assistance and advice and their clients have included, among others, BHP, Rio Tinto, Glencore. Alcoa, Anglo American, Anglo Gold Ashanti, Barrick.
Siana Open Pit and Underground Feasibility Study Results
Red 5, together with GRC, has engaged various mining engineering firms since 2009 to complete numerous Feasibility Studies that have been publicly disclosed. These studies were prepared using the JORC Code. Qualified persons have not done sufficient work under NI 43-101 to verify the results of these studies or render them current and complete under NI 43-101, and therefore details of these reports are not included here.
TVIRD is presently assessing GRC's mine development and production plan for Siana in order to develop its own plan in furtherance of a potential recommencement of operations.
Mining History at the Mapawa Gold Project:
GRC also holds a 100% interest in Mapawa under MPSA No. 280-2009-XIII covering 1,482 hectares and located as well in Surigao del Norte, Philippines. Mapawa is located 20 kilometers north of Siana and has the potential to be developed as a satellite source of ore feed for the Siana processing plant. Red 5 reported in the 2016 Annual Report that Mapawa hosts a known gold porphyry system with a number of significant gold occurrences throughout the project area and thereby considered the area to have significant potential.
Red 5 announced on June 14, 2016 that an inaugural JORC 2012 mineral resource estimate had been completed for Mapawa by Optiro Pty. Ltd., an independent group of Australian geological consultants who reported the following on a dry tonne basis based on a 0.7g/t gold cut-off and taking into account historic mining depletion:
Red 5 reported that the Mapawa JORC 2012 mineral resource estimate was calculated based on a total of 78 diamond core drill-holes totaling 13,798 meters of drilling, comprising 5,628 meters of historical drilling completed by Suricon and 8,170 meters of additional diamond drilling completed by GRC.
Opitro Pty. Ltd. Is an advisory services firm with extensive geological, mining engineering, metallurgical and financial expertise that provides strategic, independent advice to mining and exploration companies, their advisors and investors. Their consultants are recognized competent persons under JORC and other international standards and have published numerous reports supporting listings on the ASX, TSX, LSE, NYSE and various other stock exchanges around the world.
As noted above, TVI is not treating the estimates reported for Siana and Mapawa as current mineral resources as a qualified person acting in compliance with NI 43-101 reporting requirements has not done sufficient work to classify these estimates as current resources, has not verified this information and these estimates should not be relied upon The historical estimates are believed to be based on reasonable assumptions, and neither the Company nor the qualified person responsible for the scientific and technical content of the summary provided here has any reason to contest their relevance and reliability.
TVIRD currently does not plan to conduct any work to verify the historical estimates other than using them to guide its exploration, resource modeling and possible development work.
TVIRD is presently assessing the GRC resource model, mine development and production plan for Siana in order to develop its own plan in furtherance of a potential recommencement of operations. TVIRD is evaluating steps that would be required to upgrade or verify the foregoing historical estimates as current under NI 43-101 standards, which would include a review of past drill results and Quality Assurance/Quality Control procedures applied as well as possibly resource modeling with the involvement of a qualified person.
Additional information related to Siana and Mapawa may be found on the TVIRD website at https://tvird.com.ph/.
HISTORICAL OPERATIONS
Siana is located in Tubod, Surigao del Norte, approximately 35 kilometers from Surigao City, and is covered by MPSA No. 184-2002-XIII that extends over 3,289 hectares of land near Lake Mainit. The MPSA was granted on December 11, 2002 and registered with the Philippine Mines and Geoscience Bureau ("MGB") on December 27, 2002 for a term of 25 years. Siana is located along the Surigao Valley Fault, a major mineral structure, which is a part of the major Philippine Fault or Rift Zone. The Rift Zone constitutes multiple epithermal gold and porphyry-type copper-gold mineral deposits.
Mining operations have been conducted at Siana since the early 1900's, with major commercial underground mining conducted by the Philippine company, Suricon Consolidated Mining Company ("Suricon"), from 1938 to 1960 followed by open pit mining from 1980 to 1991.
Siana had produced nearly one million ounces of gold prior to its acquisition in 2003 by Red 5's Philippine affiliated company, GRC. GRC acquired 100% of Siana in 2003, commenced exploration work on Siana in 2004, completed a project feasibility study in 2009 and received all necessary permits to construct and operate by 2009.
Construction at the mine site commenced in 2010 and the inaugural gold pour was achieved in February 2012.
Siana was subsequently placed voluntarily by GRC on care and maintenance in April 2013, when a superficial crack was noted in the external wall of one of the tailings dams ("TSF4"). There was, however, no tailings spill and the incident was therefore considered environmentally benign. In order to mitigate any potential environmental risk, the MGB imposed a cease-and-desist order ("CDO") in June 2013, which could not be rescinded until completion of structural repairs and improvements to tailings storage facilities. GRC completed the works in January 2015 and the MGB subsequently lifted the CDO in January 2015, thereby allowing commercial operations to resume in February 2015.
Uncertainty surrounding the mining policy in the Philippines and difficulty obtaining environmental permit approvals led Red 5 to again suspend mining and processing activities at Siana and to place the site on temporary standby in April 2017. Red 5 stated in an ASX announcement on April 18, 2017 that it believed the suspension to be the best way to preserve "the significant inherent value of the large in-situ gold inventory and high-quality infrastructure" at the site and that the decision was made because of the operational impact "which the current uncertainty regarding regulatory and government mining policy in the Philippines has had on the group's operations." Ongoing activities through suspension have included dewatering of the open pit, infrastructure maintenance and monitoring of geotechnical issues.
TVIRD understands that, to date, Siana has produced 149,203 ounces of gold and 199,669 ounces of silver, in addition to nearly one million ounces of gold prior to its acquisition in 2003 by GRC.
Source: Red 5 Limited ASX Report to
Shareholders dated June 24, 2015
Siana Gold Project – Operations Update
Source: Red 5 Limited ASX Activities Report
for the 3 months ended 31 March 2015
During its brief operating period, GRC has mined the Siana deposit by open pit methods with a plan that included a transition to underground mining following completion of open pit mining.
View of the Siana open pit Stage 4 West wall looking north.
Source: Red 5 Limited December 2015 Quarterly Activities Report, dated Jan.22.2016.
Mining west wall at Siana Gold Project.
Source: Red 5 Limited September 2015 Quarterly Activities Report.
Underground mine development has commenced with 445m of development completed, three portals developed and the establishment of several critical surface infrastructures for the mining operations.
Construction of main access portal at the Siana Underground Mine.
Source: Red 5 Limited March 2017 Quarterly Activities Report, dated April 28, 2017.
Concrete batch plant, constructed to support the underground mine development at Siana.
Source: Red 5 Limited December 2016 Quarterly Activities Report, dated Jan.30.2017.
Material mined from the Siana open pit has been processed onsite at the Siana CIL gold processing plant that has a design capacity of 1.1 mtpa. TVIRD understands that processing recoveries reported have been between 75 to 85% for gold and 40 to 45% for silver. The plant comprises single stage crushing, SAG milling, gravity concentration and high intensity cyanidation, leaching and adsorption (CIL), followed by carbon elution and electrowinning to produce combined gold and silver doré. Tailings from the cyanide leach area are treated in a detoxification circuit to minimize cyanide concentration prior to discharge to the TSF. Red 5 has advised TVIRD that GRC has spent over U.S. $200 million, to date, in its efforts to develop Siana.
Siana has the only modern gold plant in the region with the potential to establish Siana as a processing centre for other nearby prospects/gold deposits.
TVIRD intends to review historical processing operations with the objective of testing and optimizing future performance.
Siana Processing Plant with SAG mill.
Source: Red 5 Limited September 2015 Quarterly Activities Report.
Thickener at Siana Gold Plant, construction of which was completed by October 2014 with
pre-commissioning, dry-commissioning and wet commissioning completed in November 2014.
Source: Red 5 Limited ASX Activities Report for the 3 months ended 31 December 2014.
View of the Siana processing plant with thickener and CIL tank in foreground.
Source: Red 5 Limited June 2015 Quarterly Activities Report.