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Projects

PropertyThe Kwanika claim group is 11,194 hectares in size and is held entirely by  Kwanika Copper Corporation (KCC).
LocationKwanika is located in the northern Quesnel Trough, which hosts numerous porphyry copper-gold deposits. It is acessible by road from the city of Fort St. James, British Columbia
Target SummaryAn advanced stage copper-gold project located near infrastructure in a politically stable jurisdiction. Kwanika's resource estimate includes a high-grade, well defined domain within the Central Zone on the property, which is currently undergoing a Pre-Feasibility Study fully-funded by strategic partner POSCO DAEWOO Corp. with scheduled completion Q2/2019.
OwnershipKwanika Copper Corporation is jointly held by Serengeti Resources Inc. (SIR; 65%) and POSCO DAEWOO Corporation (PDC; 35%).
StatusRevised resource estimate due for completion February, 2019. Metallurgical testwork, early Q2 2019. Prefeasibility Study scheduled for completion mid-2019.

Pre-Feasibility Study – Currently Ongoing

Kwanika Copper (KCC) is working on a Pre-Feasibility Study (“PFS”) on the Kwanika CU-Au porphyry, fully funded by partner POSCO DAEWOO Corp. The work will culminate in the publishing of an independent NI 43-101 compliant Technical Report, scheduled for mid-2019. The PFS is being managed by a consortium of industry-leading engineering consultants including Merit Consultants International, Cementation USA, Klohn Crippen Berger and Tetra-Tech.

A key input into the PFS will be the updated resource estimate, due for completion in February 2019, which will feed into the engineering study. KCC completed a 7,400-metre drilling program in September 2018 designed to upgrade the resource and to expand and investigate the known high-grade zones. The drilling also provided detailed geotechnical and hydrogeological data for the on-going engineering design.

The PFS will look at a new strategic mine plan to improve upon the project economics presented in the 2017 PEA. Notable areas of interest include exploring alternative mining options, staged development capital and focusing on higher-grades/margins.

Kwanika PFS Pathway and Status

7,400 metre Geotechnical Drill Program

Complete

Detailed in-hole hydrogeological testing

Complete

Revised resource estimate

Pending

Metallurgical Testing & Waste Characterization

Ongoing

Engineering Design & Optimization

Ongoing

Baseline Environmental Studies

Ongoing

First Nations/Community Engagement

Ongoing

Socioeconomic Studies

Ongoing

Serengeti remains as project operator and will be entitled to charge a 10% operator’s fee on expenditures, so long as it maintains a majority interest.

NI 43-101 Technical Report for the Kwanika Project Preliminary Economic Assessment Update (April 2017)
 

Kwanika Copper Corporation (KCC) Joint Venture*

  • SIR - operator plus 10% management fee (> 50% ownership)
  • SIR retains  METC(30%) credits on qualifying expenditures on first $8.2M
  • SIR maintains rights to enter into streaming transactions on all precious metals subject to DMC having certain off-take rights 

* see NR17-13, October 26th, 2017 for full details

Preliminary Economic Assessment Presentation - August 2017

2019 Kwanika Mineral Resource Estimate

Expands Kwanika Central Zone Mineral Resource – Project Confidence Substantially Increased

NI 43-101 Technical Report for the Kwanika Project Resource Estimate Update 2019

A new resource estimate was published for the Central Zone in March 2019. The Measured and Indicated (M&I) Mineral Resource is estimated to contain 1.32 billion pounds of Cu and 1.83 million ounces of Au in addition to a significant Inferred Resource (see table below). Importantly, the new resource estimate has identified coherent higher-grade domains within the open pit and underground M&I resources that will be the target for the PFS-stage mine planning currently underway. Highlights of the resource include:

  • A substantial increase in resource tonnes in all categories compared to the 2016 PEA resource;
  • Combined Measured and Indicated (M+I) Resource of 223.6 million tonnes grading 0.27% copper, 0.25 g/t gold and 0.87 g/t silver containing 1.32 billion pounds of Cu, 1.83 million ounces of Au and 6.27 million ounces of Ag as summarized in the table below;
  • An overall increase in contained metal from the 2016 resource estimate, including increases of 44% for Cu, 32% for Au, and 52% for Ag in the M+I categories;
  • Conversion of 42.9 million tonnes of Indicated Resources to Measured category, representing approximately 20% of the combined open pit and underground M+I Resource;
  • Identification of higher-grade domains within both the open pit and underground resource (as shown in Figure 1) which will form the basis for PFS mine planning, as outlined in the Sensitivity Table below. At higher cut-off grades for the open pit, and at a higher-grade confining shell for underground mineral resources, the higher-grade domains remain coherent, which suggests that mining should be able to target these areas as the Kwanika mine plan is developed. These will be incorporated into the on-going PFS engineering work and suggest potential for an expanded Central Zone open pit and underground mine life.
  • The new model is now based on more realistic open-pit and underground mining shapes that improve our overall confidence in the project. 

Table 1:  Summary of Total Pit and Underground Resource -  Kwanika Central (effective date: December 14, 2018)

Pit-Constrained

Classification

Quantity  (Mt)

Cut-off (CuEq%)

Grade

Contained metal

CuEq (%)

Cu (%)

Au (g/t)

Ag (g/t)

Cu (Mlbs)

Au (koz)

Ag (koz)

Measured

24.2

0.13

0.51

0.34

0.33

1.07

179

254

833

Indicated

80.4

0.30

0.20

0.18

0.69

360

454

1,784

Total M+I

104.6

0.35

0.23

0.21

0.78

540

708

2,617

Inferred

5.7

0.23

0.16

0.13

0.65

20

25

119

Underground

Classification

Quantity  (Mt)

Confining

Shape Basis (CuEq%)

Grade

Contained metal

CuEq (%)

Cu (%)

Au (g/t)

Ag (g/t)

Cu (Mlbs)

Au (koz)

Ag (koz)

Measured

18.7

0.27 confining shape -

0.58

0.36

0.40

1.15

151

239

692

Indicated

100.2

0.44

0.29

0.27

0.92

634

884

2,964

Total M+I

118.9

0.46

0.30

0.29

0.96

784

1,123

3,656

Inferred

84.7

0.27

0.17

0.18

0.60

319

480

1,634

Combined Pit and Underground

Classification

Quantity  (Mt)

Cut-off (CuEq%)

Grade

Contained metal

CuEq (%)

Cu (%)

Au (g/t)

Ag (g/t)

Cu (Mlbs)

Au (koz)

Ag (koz)

Measured

42.9

As applicable for pit and ug from above

0.54

0.35

0.36

1.10

330

493

1,525

Indicated

180.6

0.38

0.25

0.23

0.82

994

1,338

4,748

Total M+I

223.6

0.41

0.27

0.25

0.87

1,324

1,831

6,273

Inferred

90.4

0.26

0.17

0.17

0.60

339

504

1,753

Reasonable Prospects of Eventual Economic Extraction and Reporting Methods

  • Total Resources are reported within combined open pit and underground shapes to define “reasonable prospects of eventual economic extraction”.
  • Open-pit constrained mineral resources are confined to a Lerchs-Grossman shell above the potential block cave and created using Net Smelter Prices (NSPs) and an NSR cut-off grade of CAD$11.30.
  • Open pit planning for the PFS will consider mining a higher grade starter pit while underground development is in progress and will use a selective cut-off grade strategy to increase mill feed grades at the start of the project and stockpile lower grades to supplement underground production to ensure processing rates at mill capacity. Grade bin distribution for the open pit resource is provided in Table 2 below.
  • Underground resources reported in Table 1 contain all material confined within a potentially minable shape defined by a 0.27% CuEq, or above and NSR of CAD$20.12. This total underground resource contains the material for the PFS study plus additional areas which are the exploration targets at depth, to the north and northwest of the current shape.
  • Underground resources reported in Table 2 contain all material confined within a potentially mineable shape defined by the 0.40% CuEq (or NSR=CAD$29.80), which will be considered for the ongoing PFS study.
  • The CuEq block grades and potentially mineable confining shapes described above are illustrated in the section below at 351500E (Figure 1).

Table 2:  Measured+Indicated Pit Resource Sensitivity and Underground Material within PFS Confining shapes

Pit-Constrained Sensitivity Analysis at Various Cut-Off Grades

Classification

Quantity

(Mt)

Cut-off

(CuEq%)

Grade

Contained Metal

CuEq%

Cu

%

Au

(g/t)

Ag

(g/t)

Cu

(Mlbs)

Au

(koz)

Ag

(koz)

Total M+I

104.6

0.13

0.35

0.23

0.21

0.78

540

708

2,617

63.2

0.25

0.45

0.30

0.27

0.89

424

546

1808

24.4

0.40

0.67

0.45

0.41

1.26

244

318

991

Underground Sensitivity Analysis within 0.40% CuEq Confining Shape

Total M+I

64.0

**0.4 confining shape

0.62

0.39

0.43

1.23

550

884

2,520

Central Zone Resource Notes

The updated resource estimate was completed by Moose Mountain Technical Services (MMTS) of Victoria, British Columbia under the direction of Sue Bird, P. Eng., an independent Qualified Person as defined by NI 43-101. Sue Bird, P. Eng. completed a site visit to the Kwanika property from July 13 – 16, 2018 and reviewed and advised the geological modeling input to the current study.

*Resources are reported within a combined open pit and underground shape to define “reasonable prospects of eventual economic extraction”. Open-pit constrained mineral resources are confined to an open pit shell above the potential block cave and created using an NSR cut-off grade of CAD$11.30. Underground resources contain all material confined within a shape defined by the 0.27% CuEq cut-off. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate.

** Open pit constrained mineral resources are reported at a copper equivalent cut-off of 0.13% and underground resources report all material within shapes defined by the 0.27% CuEq grade shell. The cut-offs are based on prices of US$3.25/lb of copper, US$1,350/oz of gold, US$17/oz of silver and assumed recoveries of 91% for copper, 75% for gold, 75% for silver.

*** Copper equivalents are calculated using the formula below based on metal prices of US$3.25/lb of copper, US$1,350/oz of gold and US$17/oz of silver. Metal recoveries of 91% for copper, 75% for gold and 75% for silver have been applied to the copper equivalent calculations. 

CuEq = Cu% + ((Augpt/31.1034*AuPrice*AuRecovery) + (Aggpt/31.1034*AgPrice*AgRecovery)) / (CuPrice*CuRecovery*22.0462)

The 2019 Central Zone resource was based on 143 holes totaling 65,695 metres drilled at the Central Zone by Serengeti Resources since 2006 and incorporated drilling results from the 2018 program at Kwanika. Revised grade trends for copper and gold were modelled separately reflecting the presence of multiple mineralizing events and enrichment in gold and copper, resulting in a wider mineralized envelope extending deeper within the Central Zone compared with the 2016 resource estimate. A revised 3D geological model created in 2018 provided a key input for the new resource model. Furthermore, the 2019 resource was based on more reasonable confining shapes drawing on the 2017 PEA mining shapes for guidance. A total of six (6) resource domains were developed which were based on the geological model and included revised copper mineral speciation modelling as well as trend modelling for gold and copper. Copper and gold were modelled using independent variographic parameters within domains to accurately reflect the grade trends for each metal. Kriging interpolation was used to develop the resource for both gold and copper and was checked against nearest-neighbour (NN) and inverse-distance-cubed (ID3) for each metal to ensure consistency, precision and accuracy.   

 

The 2016 South Zone resource reported 33.3 million tonnes grading 0.26% copper and 0.08 g/t gold at 0.13% copper equivalent cut-off (Serengeti press release dated November 14th, 2016). The 2016 South Zone resource was based on 58 holes, totaling 17,958 meters drilled at the South Zone by Serengeti, between 2008-2010.

Table 3: Restated 2016 Kwanika South Zone Mineral Resource Statement (SRK Consulting, October 14, 2016)

Pit-Constrained

Classification

Quantity  (Mt)

Grade

Contained metal

CuEq (%)

Cu (%)

Au (g/t)

Ag (g/t)

Mo (%)

Cu (Mlbs)

Au (koz)

Ag (koz)

Mo (Mlbs)

Inferred

33.3

0.31

0.26

0.08

1.64

0.01

191

80

1760

8

South Zone Resource Notes

The South Zone resource estimate was completed in 2016 by SRK Consulting (Canada) Inc., of Vancouver, British Columbia under the direction of Marek Nowak P. Eng., an independent Qualified Person as defined by NI 43-101. Chad Yuhaz, P. Geo., also of SRK and also a QP, completed the site visit to the Kwanika property in 2016 and was involved with the geological modeling input for this re-stated 2016 South Zone resource estimate.

*Open-pit constrained mineral resources are reported in relation to a conceptual Whittle pit shell. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. All composites have been capped where appropriate.

** Open-pit constrained mineral resources are reported at a copper equivalent cut-off of 0.13%. The cut-offs are based on prices of US$3.00/lb of copper, US$1,300/oz of gold, US$20/oz of silver, US$9.00/lb of molybdenum and assumed recoveries of 89% for copper, 70% for gold, 75% for silver, and 60% for molybdenum.

*** Copper equivalents are calculated using the formula below based on metal prices of US$3.00/lb of copper, US$1,300/oz of gold, US$20/oz of silver and US$9.00/lb of molybdenum. Metal recoveries of 89% for copper, 70% for gold, 75% for silver and 60% for molybdenum have been applied to the copper equivalent calculations.

CuEq = Cu% + ((Augpt/31.1034*AuPrice*AuRecovery) + (Aggpt/31.1034*AgPrice*AgRecovery) + (Mo%*MoPrice*CuRecovery*22.0462)) / (CuPrice*CuRecovery*22.0462

2017 Preliminary Economic Assessment Highlights

An independent NI 43-101  Preliminary Economic Assessment (“PEA”) for the Kwanika copper-gold porphyry project located in the Quesnel Trough of North-Central British Columbia, Canada was completed in April 2017.  The results of the PEA demonstrated the potential technical and economic viability of establishing a new copper-gold mine and mill complex on the property. The independent PEA was prepared by Moose Mountain Technical Services (see NR 2017-04, April 3rd, 2017 for full details).

  • Pre-tax NPV7% of CDN $324 million, 21.1% IRR, 15 year mine life.
  • Life of mine (LOM) metal production of 601 million pounds copper, 676,300 ounces gold, and 2.66 million ounces silver in concentrates.
  • Annual metal production of 50.4 million pounds of copper, 70,100 ounces of gold, and 181,100 ounces of silver in concentrates for the first eight years.
  • Initial capital cost of CDN $476 million plus LOM sustaining capital and  closure cost of $83 million for a 15,000 tpd (5.4 million tpa) mill and combined open pit, underground mining operation.

  • Projected C1 (Direct cash cost of productionper pound of copper net of gold, silver credits) of US$0.70/lb/Cu for first eight years or US$1.20/lb LOM  

Plans moving forward

With the 2018 drilling complete and the assay results received, an updated Mineral Resource Estimate is underway, due for completion in February 2019. The revised resource, along with results of metallurgical testing, will enable detailed engineering design work for the PFS which is due for completion in late Q2 or early Q3, 2019.

Location and Infrastructure

Kwanika represents an advanced stage copper-gold project located near infrastructure in a politically stable jurisdiction. Kwanika is located in the northern Quesnel Trough, which hosts numerous porphyry copper-gold deposits. The Kwanika claims are 11,194 hectares in size and accessible by road from the city of Fort St. James, British Columbia.

A landmark access agreement was signed in August 2010 with the Takla Lake First Nation, and renewed in May 2018, which has facilitated First Nations' support for the project through the completion of the PFS.

History

David Moore and Myron Osatenko in 2010 H.H. "Spud" Huestis Awards

David Moore and Myron Osatenko in 2010 H.H. "Spud" Huestis Awards

Copper mineralization was first recognized along Kwanika Creek in 1964.

Since 2006, Serengeti has drilled 82,650 meters at the Kwanika project. In 2010, Serengeti principals David Moore, President and CEO, and Myron Osatenko, former Chief Geologist, were awarded the Association of Mineral Exploration, British Columbia (AMEBC) H.H. "Spud" Huestis Award for Excellence in Prospecting and Mineral Exploration in recognition for their discovery of the Kwanika deposit. 

Property Geology

The property is situated in the northern Quesnel Trough, which hosts numerous porphyry copper-gold deposits. The regional geology consists of Jurassic age andesitic volcanic rocks intruded by monzodiorites and monzonites with the Pinchi and Manson Creek faults on the west and east sides respectively. Kwanika is located between Northgate's former Kemess Mine, and the Mt. Milligan deposit, reported to contain mineable reserves of 6.0 million ounces of gold and 2.1 billion pounds of copper, currently being developed by Thompson Creek Metals.

The Kwanika project consists of two porphyry deposits, the Central copper-gold Zone and the South Zone, a copper-molybdenum-gold-silver zone located two kilometers to the South. 

The Central Zone (copper-gold) deposit is characterized by the presence of two major and several minor intrusive bodies of the multi-phase Hogem Batholith intruding a succession of andesitic rocks of the Takla Volcanic Group. Hypogene mineralization consists of disseminated chalcopyrite, bornite, and pyrite in and around a potassically altered monzonite stock. Where strongly mineralized, the unit commonly displays quartz stock work and hydrothermal brecciation. The highest grades occur within zones of strong to intense, texture destructive albite-hematite alteration, commonly occurring at the top of the hypogene mineralized zone. A supergene enrichment blanket has been superimposed on the Central Zone and extends to depth beneath unconformably overlying post-mineral sedimentary rocks which have preserved the supergene zone. Thickness of the supergene profile ranges from 5 to 70 meters in thickness and extends laterally for up to 500 meters. Two distinct assemblages of supergene mineralization are observed in the Central Zone; minor, supergene oxide (native copper) and prevalent, supergene sulphide (chalcocite, covellite).

The South Zone (copper-molybdenum-gold-silver) deposit occurs within a fault bounded sequence of strongly altered intrusive rocks of alkalic to intermediate composition. This structural corridor is bounded by the 'West Fault' to the west and possibly by a similar fault interpreted to lie along the east boundary of the corridor. Coincident chargeability and resistivity anomalies form a geophysical domain that represents the fault bounded South Zone corridor. This variably mineralized domain is 2,900 meters long and up to 500 meters wide.

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