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17th January 2012
Open Pit Resource Inventory Grows
by 49% to 225,900 oz Au
Maiden Mineral Resource estimate for Cinnamon project:
Indicated: 0.96Mt at 2.3g/t Au
Inferred: 0.05Mt at 2.3g/t Au
Total: 1.01Mt at 2.3g/t Au for 74,100 oz 1
Plutonic Dome open pit Mineral Resource inventory grows
to:
2.8Mt at 2.5g/t Au for 225,900 oz
Total Project Mineral Resource inventory now stands at:
5.2Mt at 3.8g/t Au for 627,500 oz
1. Cinnamon Mineral Resource estimate reported at 0.5g/t lower cut-off grade
within a conceptual A$1,700/oz optimised pit shell
Dampier Gold is positioning itself to be among the next generation of Australian gold producers. The Company is evaluating and exploring ~700km² of the Plutonic – Marymia Greenstone Belt in central Western Australia with a view to near-term gold production. The project currently hosts defined Mineral Resources of 628,000 ounces of gold.
ASX CODE
DAU
CURRENT
Share Price
$0.26
Undiluted Market Capitalisation
$14.4M
ISSUED CAPITAL
Ordinary shares
55.3M
DIRECTORS
Dr Russell Skirrow
Chairman
Mr Richard Burden
Non-Executive Director
Mr Philip Retter
Non-Executive Director
Mr Rod Hanson
Non-Executive Director
MANAGEMENT
Mr Richard Hay
Chief Executive Officer
Mr Brendan Cocks
Chief Financial Officer
Mr Greg Rawlinson
General Manager – Geology
CONTACT
Dampier Gold Limited
ACN 141 703 399
Level 3, 8 Colin Street,
West Perth WA 6005
PO Box 1981,
West Perth WA 6872
P: (08) 6424 9700
F: (08) 6424 9799
E: info@dampiergold.com
www.dampiergold.com
2
Dampier Gold (“Dampier” or the “Company”) is pleased to announce results from the
recently completed Mineral Resource estimate for the Cinnamon deposit located within its
100% owned Plutonic Dome project in central WA (Figure 1).
Figure 1. Plutonic Dome Project simplified geology and deposit/prospect locations
Dampier’s IPO prospectus identified the Cinnamon deposit as a key open pit resource
target that required additional drilling to better define the bedrock gold mineralisation below
the shallow laterite deposit exploited by the former owners of the project. Since listing in
August 2010, Dampier completed a further 34 RC drill holes for 4,721m at Cinnamon which
were successful in identifying additional oxide and primary zone mineralisation, including
the discovery of a previously unknown footwall zone (Figures 2 & 3).
3
Figure 2. Simplified plan of Cinnamon deposit showing mineralised zones with selected drill results
Figure 3. Cinnamon cross section 26,260mE showing the footwall and main mineralised zones with
selected drill results
4
Dampier’s project team in conjunction with global consulting firm Runge Limited recently
completed a Mineral Resource estimate of the Cinnamon deposit. The estimate
incorporated drilling carried out by previous owners and new holes completed by Dampier.
The Mineral Resource, as summarised in Table 1, is reported at a lower cut-off grade of
0.5g/t Au within a conceptual open pit shell optimised at A$1,700/oz. Further details of the
resource estimate are presented in the Appendix to this announcement.
Table 1. Cinnamon January 2012 Mineral Resource Estimate (0.5g/t Au cut-off)1
Grade Grade Grade Grade Contained
ounces
(g/t Au) (g/t Au) (g/t Au) (g/t Au) (oz)
- - 961,000 2.3 2.3 1,015,000 2.3 74,10054,000
Measured Indicated Inferred Total
Tonnes Tonnes Tonnes Tonnes
1. Mineral Resource estimate reported within a conceptual A$1,700/oz optimised pit shell
The Cinnamon resource has been modelled within three key domains; a relatively flat-lying
supergene zone and the more steeply-dipping main and footwall zones. The resource
model extends over 400m in strike (Figure 4) and remains open at depth below 200m.
5
Figure 4. Plan of Cinnamon wireframes within conceptual A$1,700/oz optimised pit shell
The primary zone mineralisation at Cinnamon is predominantly associated with coarse-
grained conglomerate units near the contact of a volcaniclastic unit. Gold mineralisation
appears to intensify where the coarse-grained conglomerates intersect several interpreted
cross-cutting faults. This model is currently being used to target additional primary zone
mineralisation both at depth and along strike in advance of further drilling that is planned to
recommence in coming months.
The Company is pleased with the outcome of the Cinnamon resource estimate which
comfortably surpassed the magnitude of the exploration target disclosed in Dampier’s IPO
prospectus.
Dampier will continue to assess options for a potential open pit development at Cinnamon
complementing Dampier’s other key resource assets. The Cinnamon deposit remains open
6
at depth with potential for high grade lodes extending below the limits of the conceptual
open pit.
Contacts
Richard Hay – CEO
+61 417 188 984
richard.hay@dampiergold.com
Ben Jarvis – Six Degrees Media
+61 413 150 448
ben@sixdegreesmedia.com.au
About Dampier Gold
Dampier Gold has acquired 100% of the ~700km2 Plutonic Dome Project from Barrick Gold,
covering the majority of the Plutonic – Marymia Greenstone Belt, excluding Barrick’s
underground mining and processing operation. Dampier’s project area produced some
580,000oz Au from 40 open pits in a generally low gold price environment between 1990
and 2005. The project currently contains a Mineral Resource of approximately 628,000oz
Au (comprising a Measured Resource of some 0.5Mt at 2.1g/t Au, an Indicated Resource of
some 2.7Mt at 3.9g/t Au and an Inferred Resource of some 1.9Mt at 4.1g/t Au). The
Company is actively evaluating its priority resource targets with a view to future gold
production. Framework terms are in place for a proposed ore purchase agreement to
access Barrick’s Plutonic processing facility. If agreed, this will help fast-track Dampier to
producer status with modest capital outlay.
7
Appendix:
Cinnamon Mineral Resource Estimate Executive Summary
Runge Limited (Runge) was contracted by Dampier Gold Limited (DAU) to carry out a review and
Mineral Resource estimate for the Cinnamon Gold Deposit (Budgie prospect area). The Budgie
prospect is located in the central part of the Plutonic Well Greenstone Belt on tenement M52/228.
The Budgie corridor includes the Cinnamon prospect, which is centred on the existing Budgie
Laterite Pit, as well as the prospects Skyblue and Cobalt to the west and east respectively.
The geology at Budgie comprises, from north to south, an overturned greenstone package of basalt,
dolerite-gabbro intrusives, talc-chlorite±carbonate ultramafic schists, and quartz-sericite±chlorite
schists, which structurally overlies a younger package of mafic-derived volcaniclastics, arkosic
sandstones/felsic volcaniclastics and conglomerates. The conglomerates are matrix-supported and
are dominated by granitic clasts with minor mafic, chert, BIF and quartzite clasts. Mineralisation is
hosted almost exclusively within the conglomerate unit situated between a footwall mafic
volcaniclastic and felsic volcaniclastic in the hanging wall. Cinnamon lies along a pronounced east-
west trending lineament clearly visible in the aeromagnetic data. The Trident, Mongoose, Wedgetail,
Ibis and Skyhawk deposits are also aligned along this lineament.
Depth of weathering is extremely variable over the area with the base of complete oxidation (BoCO)
anywhere between 4-25 m over the mafics, 12-60 m over the ultramafics, and 5-120 m over the
metasediments. Likewise, the top of fresh (ToFr) surface varies extensively, and is anywhere
between 80 to >150 m over the sedimentary units, but much shallower to the north across the
mafics. Supergene enrichment has resulted in mineralisation thickening and grade enhancement at
the BoCO and ToFr. The supergene processes have also resulted in a depleted zone due to
leaching in the near-surface oxides.
Drilling extends to a maximum down hole depth of 330m and the majority of gold mineralisation was
modelled between a depth of approximately 50m to 190m below surface based on the down-dip
continuity of mineralisation and the drill spacing. The estimate is based on good quality surface RC
and minor diamond drilling data. The drillhole section spacing is approximately 20m along strike.
8
The Mineral Resource estimate complies with recommendations in the Australasian Code for
Reporting of Mineral Resources and Ore Reserves (2004) by the Joint Ore Reserves Committee
(JORC). Therefore it is suitable for public reporting. The Runge Mineral Resource estimate (reported
in relation to the Dampier supplied AUD$1,700 pit shell optimisation) is summarised in Table A.
Table A: - Cinnamon Deposit August 2011 Resource Estimate
(COG: 0.5g/t Au for all domains, constrained to within AUD$1,700 pit optimisation)
Indicated Inferred Total
Type Tonnes Au Tonnes Au Tonnes Au Au
t g/t t g/t t g/t Ounces
Oxide 221,000 2.3 23,000 2.0 244,000 2.2 17,500
Transition 234,000 2.2 8,000 1.9 242,000 2.2 16,700
Fresh 506,000 2.3 23,000 2.9 529,000 2.3 39,800
Total 961,000 2.3 54,000 2.3 1,015,000 2.3 74,000
Note minor rounding errors may occur in compiled totals.
The Cinnamon deposit was estimated in a standard Surpac block model using Ordinary Kriging (OK)
interpolation. The interpolation was constrained by gold mineralisation envelopes prepared using a
nominal 0.5g/t Au cut-off grade for three geological domain groups. The domains were separated on
the basis of geological orientation and ranged from a flat, supergene orientation to steeply dipping
shear zones at depth.
The block dimensions used in the model were 5m NS by 10m EW by 5m vertical with sub-cells to
1.25m by 2.5m by 1.25m. No rotation was applied to the block model as the strike orientation of
mineralisation is generally on an east-west direction to the local grid (BMA_M grid). A statistical
analysis of the assay data determined that a high grade cut was required to limit the influence of
several erratic high grade gold values. The high grade cuts ranged from 20 to 40g/t Au and were
applied at approximately the 99th percentile of each mineralisation domain after a review of
geostatistical characteristics.
Bulk density values ranging from 1.8t/m3 for near-surface oxide to 2.8t/m3 for fresh, primary material
mineralisation were assigned to the resource model by weathering domain. Density values were
based on neighbouring deposits with similar geology.
9
The Cinnamon Resource Estimate was largely classified as Indicated based on a review of drillhole
spacing and geostatistical errors of measurement. Isolated areas or extensions at depth defined on
relatively poorer sample spacing were classified as Inferred.
The resource tables are only reported where within an AUD$1,700 pit optimisation. This pit
optimisation was carried out as a part of desktop economic studies by mining consultants Optiro.
The Cinnamon deposit remains unmined below the laterite weathering profile but appears to have
reasonable potential for profitable exploitation by medium scale open pit mining. The deposit also
has the potential for extension of the defined resource with further exploration drilling.
The resource model is undiluted, so appropriate dilution needs to be incorporated in any evaluation
of the deposit.
Craig Allison Senior Consultant Geologist
Cinnamon Mineral Resource Statement and Parameters
Classification Tonnes Au g/t Au Ounces
Measured 0 0 0
Indicated 961,000 2.3 70,100
Inferred 54,000 2.3 3,900
Total 1,015,000 2.3 74,000
Note: Minor rounding errors may occur in compiled totals.
The resource estimate was completed using the following parameters:
The Cinnamon deposit area extends over a strike length of 730m (from 25,800mE to
26,530mE) and includes the 330m vertical interval from 540mRL to 210mRL. The main
portion of the deposit is located between 26,150mE to 26,530mE (BMA_M grid).
Runge has not undertaken a site visit, however is satisfied that current information is
sufficient to allow a technical assessment to be made without a project inspection.
The full database contained records for 5,443 drill holes. The database includes 83
shallow grade control drillholes for a small laterite pit. A total of 140 exploration holes were
10
included in the Mineral Resource estimate. Of those, 128 were RC drillholes and 12 were
RC drillholes with deeper diamond tails.
Grade control holes were drilled at 20m spacings on 10m spaced cross sections. However
the hole depth is generally 7 to 10m deep. Holes in the deeper resource area were
generally drilled at section spacings of approximately 20m and hole spacings of 20m to
30m down dip.
The majority of RC holes were sampled at 1 metre intervals. A review of the drilling,
sampling, assay and QAQC methodology has not identified any significant issues.
The drill core was sampled at generally 0.9m intervals on average with a sample length
ranging from 0.05m to 2.65m for BDRCD collar prefix drill core. Runge selected a 1m
interval for domain composites after a review of geological and statistical mineralisation
domain characteristics.
A review of the assay database suggests a combination of lead-collection fire assay and
aqua regia gold assay methods have been historically used. More recent gold assays from
Dampier drill programs were analysed using lead collection fire assay on a 25 gram charge
with an AAS finish.
The Cinnamon deposit was estimated in a standard Surpac block model using Ordinary
Kriging (OK) interpolation. The interpolation was constrained by gold mineralisation
envelopes prepared using a nominal 0.5g/t Au cut-off grade for flat-lying, supergene and
steeply dipping, structural domains at depth.
The block dimensions used in the model were 5m NS by 10m EW by 5m vertical with sub-
cells to 1.25m by 2.5m by 1.25m. No rotation was applied to the block model as the
mineralisation generally strikes in an east-west direction (BMA_M grid). A high grade cut of
20 g/t Au for the flat to moderate dipping domains was applied, while a 40g/t Au high grade
cut was applied to the steeply dipping shear zone.
OK grade interpolation used an oriented ‘ellipsoid’ search for each element. Two passes
were used to fill the model with the majority of the model being filled in the first pass.
The Budgie laterite pit was mined by Resolute in 1997. It produced 40,208t at 1.64g/t high
grade and 24,313t at 1.17 g/t low grade for 3,035oz. Higher grade mineralisation was
mined from the basal nodular / pisolitic laterite. The depth of the final pit was in the order of
5 to 10 metres. This Mineral Resource Estimate excludes the laterite pit.
Bulk density values ranging from 1.8t/m3 for near-surface oxide to 2.8t/m3 for fresh,
primary mineralisation were assigned to the block model by coded weathering domain.
11
Dampier requested that Runge carry out a Mineral Resource classification for reporting
purposes. The portions of the block estimate defined by closer spaced drilling were
classified as an Indicated Mineral Resource. This reflected the consistency of geometry of
the mineralised zones and the support provided by the well-spaced RC drilling. More
poorly defined extensions at depth and small zones with limited sample support were
classified as an Inferred Mineral Resource.
The effect of cross-cutting structures was not examined in detail; however it would appear
that cross-faulting has not caused significant broken offsets in mineralisation zones.
The main mineralised zones remain open down dip of current drilling. This provides good
potential to identify further gold mineralisation at the deposit with additional drilling.
12
Cinnamon Grade-Tonnage Distribution
The following table provides a breakdown of the grade-tonnage distribution for the
Cinnamon resource using a range of cut-offs within a conceptual optimised pit shell at
A$1,700/oz Au.
Grade Cut-off
Range Tonnes Au_ok Grade Tonnes Au_ok Au
Au g/t t g/t Au g/t t g/t Ounces
0.0 -> 0.2 0 0.00 0.0 1,017,219 2.26 74,067
0.2 -> 0.4 823 0.34 0.2 1,017,219 2.26 74,067
0.4 -> 0.6 2,081 0.48 0.4 1,016,396 2.27 74,058
0.6 -> 0.8 19,385 0.73 0.6 1,014,315 2.27 74,026
0.8 -> 1.0 68,838 0.91 0.8 994,930 2.30 73,571
1.0 -> 1.2 99,269 1.10 1.0 926,092 2.40 71,557
1.2 -> 1.4 96,468 1.29 1.2 826,823 2.56 68,047
1.4 -> 1.6 86,446 1.50 1.4 730,355 2.73 64,046
1.6 -> 1.8 89,097 1.69 1.6 643,909 2.89 59,877
1.8 -> 2.0 75,798 1.90 1.8 554,812 3.09 55,036
2.0 -> 2.2 63,357 2.10 2.0 479,014 3.27 50,405
2.2 -> 2.4 57,142 2.29 2.2 415,657 3.45 46,128
2.4 -> 2.6 51,705 2.50 2.4 358,515 3.64 41,921
2.6 -> 2.8 38,998 2.70 2.6 306,810 3.83 37,765
2.8 -> 3.0 37,018 2.90 2.8 267,812 3.99 34,379
3.0 -> 3.5 66,820 3.23 3.0 230,794 4.17 30,928
3.5 -> 4.0 51,174 3.73 3.5 163,974 4.55 23,989
4.0 -> 4.5 49,334 4.25 4.0 112,800 4.92 17,852
4.5 -> 5.0 23,603 4.75 4.5 63,466 5.45 11,111
5.0 -> 5.5 18,060 5.29 5.0 39,863 5.86 7,506
5.5 -> 6.0 10,820 5.69 5.5 21,803 6.33 4,435
6.0 -> 6.5 3,721 6.28 6.0 10,983 6.95 2,456
6.5 -> 7.0 2,781 6.70 6.5 7,262 7.30 1,704
7.0 -> 7.5 1,945 7.20 7.0 4,481 7.67 1,105
7.5 -> 8.0 1,843 7.79 7.5 2,536 8.03 655
8.0 -> 8.5 328 8.12 8.0 693 8.68 193
8.5 -> 9.0 238 8.81 8.5 365 9.18 108
9.0 -> 9.5 0 0.00 9.0 127 9.87 40
9.5 -> 10.0 127 9.87 9.5 127 9.87 40
>10 >10
Total 1,017,219 2.26
Incremental Resource Cumulative Resource
13
Plutonic Dome Mineral Resource Inventory
Plutonic Dome Project Mineral Resource – January 2012
OP/
UG Grade Grade Grade GradeContained
metal
(g/t Au) (g/t Au) (g/t Au) (g/t Au) (oz)
***K2, K3 OP 19,000 3.2 197,000 4.7 2.1 489,000 3.2 50,200
UG - - 158,000 6.5 5.2 245,000 6.1 47,600
19,000 3.2 355,000 5.5 2.8 734,000 4.1 97,800
*Trident OP - - - - - - - -
UG - - 787,000 6.2 4.9 1,859,000 5.5 326,100
- - 787,000 6.2 4.9 1,859,000 5.5 326,100
OP - - 194,000 1.8 2.8 297,000 2.2 20,800
UG - - - - - - - -
- - 194,000 1.8 2.8 297,000 2.2 20,800
***K1 OP 504,000 2.1 103,000 2.0 3.7 752,000 2.4 57,800
UG - - - - - - - -
504,000 2.1 103,000 2.0 3.7 752,000 2.4 57,800
***PPP OP - - 203,000 2.7 2.4 273,000 2.6 23,000
UG - - 129,000 3.9 3.9 221,000 3.9 27,900
- - 332,000 3.2 3.3 494,000 3.2 50,900
****Cinnamon OP - - 961,000 2.3 2.3 1,015,000 2.3 74,100
UG - - - - - - - - -
- - 961,000 2.3 2.3 1,015,000 2.3 74,100
523,000 2.1 1,658,000 2.0 1.9 2,826,000 2.5 225,900
- - 1,074,000 6.0 4.8 2,325,000 5.4 401,600
523,000 2.1 2,732,000 3.9 4.1 5,151,000 3.8 627,500
162,000
103,000
-
103,000
1,072,000
Indicated
1,895,000
1,251,000
644,000
54,000
54,000
Total UG
Grand Total
Sub-total
Sub-total
Total OP
145,000
-
Sub-total 145,000
70,000
92,000
Sub-total
**Albatross -
Flamingo
Sub-total
272,000
87,000
Sub-total 359,000
-
1,072,000
Deposit
Measured Inferred Total
Tonnes Tonnes Tonnes Tonnes
OP = open pit, UG = underground
*Trident resource based on parameters detailed in an ASX announcement on 29th November 2010
**Open pit resources are reported within an optimised pit shell at A$845/oz Au
*** Open pit resources are reported within an optimised pit shell at A$1,600/oz Au
****Cinnamon resource is reported within an optimised pit shell at A$1,700/oz Au
Due to rounding, tonnages and grades may not equate to exact contained ounces
100% equity basis
Competent Persons The information in this report that relates to Exploration Results is based on information compiled and reviewed by Mr Greg
Rawlinson, who is a Member of the Australian Institute of Mining and Metallurgy and General Manager Geology of Dampier Gold.
Mr Rawlinson has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the
activity which he has undertaken, to qualify as a Competent Person as defined in the 2004 JORC Code. Mr Rawlinson consents to
the inclusion in this report of the matters based on this information in the form and context in which it appears.
The information in this report that relates to the PPP, Trident, K1 and K2-K3 Mineral Resources is based on information compiled
and reviewed by Mr Aaron Green who is a Member of the Australian Institute of Geoscientists and full-time employee of Runge
Limited. Mr Green has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to
the activity which he has undertaken, to qualify as a Competent Person as defined in the 2004 JORC Code. Mr Green consents to
the inclusion in this report of the matters based on this information in the form and context in which it appears.
14
The information in this report that relates to the Cinnamon Mineral Resource is based on information compiled and reviewed by Mr
Craig Allison who is a Member of the Australian Institute of Mining and Metallurgy (AusIMM), and full-time employee of Runge
Limited. Mr Allison has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to
the activity which he has undertaken, to qualify as a Competent Person as defined in the 2004 JORC Code. Mr Allison consents to
the inclusion in this report of the matters based on this information in the form and context in which it appears.
The information in this report that relates to the Albatross-Flamingo resource is based on information reviewed by Mr Richard Hay,
who is a Member of the Australian Institute of Geoscientists and the Chief Operating Officer of Dampier Gold. Mr Hay has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he
has undertaken, to qualify as a Competent Person as defined in the 2004 JORC Code. Mr Hay consents to the inclusion in this
report of the matters based on this information in the form and context in which it appears.
Recommended