Positive Pre-Feasibility Study Results For The Rozino Gold Project
VANCOUVER - Velocity Minerals Ltd. reported the results of an independent pre-feasibility Study (PFS) on its Rozino gold project located in southeast Bulgaria. The PFS establishes the Rozino deposit as supporting an economic open pit mine operation with gold recovery by a combination of on-site concentration in a flotation plant (“Flotation Plant”) and further processing to produce a gold-silver dora in the existing and operating processing plant located in Kardzhali, 85 km by road from Rozino, where dora would be produced. Rozino is located within the Tintyava prospecting and exploration license owned by Tintyava Exploration AD, in which Velocity has 70% ownership.
“We are pleased to report results of the Rozino pre-feasibility study, which further de-risks the project and provides opportunities for additional project enhancements as we advance the project towards production,” stated Keith Henderson, President and CEO, “The pre-feasibility study presents financial results for the Rozino gold deposit as currently defined. Exploration work is ongoing aiming to discover and define additional mineralization within the 145 km2 exploration license and at Velocity’s other option properties in the region, which could potentially fit into a Hub and Spoke development model. Over the coming 12 months, Velocity will continue to aggressively explore the exploration properties in the surrounding area, aiming to discover and define mineral resources as part of this strategy.”
The Company’s strategy is to develop a low cost “Hub and Spoke” operation in southeast Bulgaria whereby multiple gold projects produce gold concentrates for trucking to an existing, central processing plant for the production of dore. Other than Rozino, the projects referred to in the “Hub and Spoke” development model do not have defined resources nor is there is any guarantee that resources will be defined. These projects are not included in the PFS.
The PFS represents the best available estimates of operating and financial parameters of the Rozino Project. CSA Global recommend that the Company progress to complete a Feasibility Study for the Project, which will aim to resolve key project parameters with greater certainty. It is recommended that ongoing exploration drilling be completed prior to commencement of the Feasibility Study so that any additional discoveries can be integrated therein. The proposed open pit mining operation at Rozino is considered low to medium risk from a technical standpoint. CSA Global were able to determine that mineralization can be adequately modeled for its diluted, recoverable grade properties assuming a selective mining unit (SMU) of 4 x 6 x 2.5 m using the multiple indicator Kriging (MIK) methodology. No further dilution or mining loss was considered appropriate. Key to this recommendation is that the operational and technical mining team, mine management, and key operators to be well trained and attentive to dilution and ore loss controls and consistently apply best practices in mineral handling. The small pit size and requirement for there to be six to eight working locations may result in ore and waste scheduling constraints. Detailed short-term planning will identify the stress points and enable mitigation. Concentrate transport will require approximately 12 X 20 t trucks per day transporting concentrate to the existing Processing Plant located at Kardzhali (85 km by road). Although considered a low risk, public safety and concentrate supply continuity will be areas of focus during the mine life.
Potential Additional Resources at Rozino: Further exploration drilling may create additional opportunity at the Project. Mineralization is open on the southeastern boundary of the deposit and ongoing drilling by Velocity has recently intersected moderate grade, near-surface gold mineralization. The recent exploration results are considered not material to the outcomes of this PFS. The results of the recent and proposed exploration drilling will be considered in a future evaluation of the Mineral Resources and Mineral Reserves. Exploration is ongoing on various other prospects within the Tintyava Property, all of which are within trucking distance of the Rozino Flotation Plant. There is some additional unused tailings capacity in the pit.
Additional metallurgical test work is recommended in the FS to undertake additional variability test work to obtain more confidence in the grade-recovery function and the oxidation-recovery relationship. If gold recovery at lower grades is better than expected, there could be more value derived from lower grade ore. In addition, more accurate estimation of the oxidation rating will improve short-range recovery estimates. The metallurgical test work indicates the presence of silver in the bulk concentrate and dore that could potentially add value. Routine drill core analyses have been limited to gold through much of the drilling campaigns. Consequently, silver was not able to be incorporated into the Mineral Resource estimate and Mineral Reserve statement. Silver analysis of laboratory pulps is recommended and will be undertaken for the FS.
The estimates are based on 2 m down-hole composited gold assay grades from angled diamond drilling available on 23rd October 2019. Relative to the dataset available for the previous September 2018 Inferred Mineral Resource estimates, the estimation dataset contains assay results for an additional 114 holes for 12,733 m of drilling. This additional infill drilling, which reduced hole spacing for much of the deposit to around 50 m by 50 m, confirmed the general tenor and continuity of mineralization interpreted from the previously broad spaced drilling. This drilling, along with additional analytical information, supports the estimation of Indicated Mineral Resources.
The Rozino sampling database compiled for these estimates includes 311 diamond holes for 44,071 m of drilling, of which 86 drill holes (14,289 m) completed by Asenovgrad Geoengineering EAD during the 1980s are not included in the resource estimation dataset due to insufficient quality control data. The estimation dataset compiled for resource modeling and defining mineralization extent totals 204 diamond holes for 26,321 m and includes drill holes within the interpreted mineralized domain and rare holes up to approximately 100 m from the domain. This drilling includes 170 holes (21,787 m) drilled by Velocity, 28 drill holes (3,794 m) completed by Hereward Ventures Ltd., and 6 drill holes (740 m) completed by Asia Gold Inc.. The remaining angled drill holes from the database are located outside the modeling area and did not inform the resource estimation. Relative to the dataset available for the previous September 2018 Mineral Resource estimate, the estimation dataset contains data for an additional 114 diamond holes (12,733 m). The combined hole spacing varies from around 50 m by 50 m and locally closer in central portions of the deposit, to around 100 m by 100 m in peripheral areas. Samples from Velocity’s diamond drilling provide 82% of the estimation dataset, with diamond holes drilled by Hereward and Asia Gold contributing 16% and 3% respectively.