Opening up – new mine opportunities

Materials World magazine
1 Jan 2009

It is often said that the best place to look for a new mine is next to an operating one. Canadian exploration company Lydian International Ltd has disproved this notion, Michael Forrest finds out more

The most important mining exploration decision is to determine the region in which to carry it out. While searching close to existing deposits has proved efficient in maximising the mineral bounty in known mining provinces, it does not expand the global reach. Also the rate of discovery of new large deposits has been falling, reflecting the scarcity of such resources with a surface expression. This implies that looking for surface deposits will not be effective in modern exploration.

One country that has attracted interest is Armenia, lying in the mountain belt that extends from the Carpathians into the Caucasus, and onward into Iran. This belt results from the collision of the Arabian plate into the Eurasian continent, an event that began some 150m years ago with the formation of the Tethyan sea, which was closed 50m years later as the continents converged.

The process has continued into geologically-recent times and has made the region prospective. These events include the subduction, obduction and accretion of sediments, and synchronous and later emplacement of igneous rock. Each can provide the heat, source rocks and fluid movements to promote mineralisation.

According to Andor Lips, Technical Director at Lydian International Ltd, a Toronto-listed Canadian company with interests in Kosovo and Armenia, the tectonics of the area can be correlated with those of the Andean region of South America. The scale is similar (over four million square kilometres) and both had long-lasting subduction with the Andean province, boasting a dozen world class gold and copper deposits, over 300t and 10Mt, respectively.

The Tethyan province of Armenia has 10-15% of Andean identified copper, although it contains similar amounts of gold (6.5Kt versus six thousand tonnes). The rate of subduction, says Lips, never exceeded 10-20% of that recognised in the Pacific. ‘The most fertile periods were the late Cretaceous volcanic island arc stretching from Romania to Iran, Palaogene calc-alkaline magmatism from central Europe to Iran, and Neogene plate-related epithermal gold and porphyry style copper-gold mineralisation,’ he says.

Local knowledge

‘Regional understanding defines the exploration area but doesn’t find the deposits,’ notes Lydian Managing Director Dr Timothy Coughlin. ‘Following our success at identifying new resources in the Tethyan belt, the company entered a joint venture with Newmont Overseas Exploration Ltd, a wholly owned subsidiary of US-based Newmont Mining Corporation that covers the Caucasus region of Armenia and Georgia. The joint venture is funded on a 50:50 basis with a clause that allows Newmont to earn an additional 30% by funding to commercial production’.

Initially, the area under review focused on the north of the country where the majority of Soviet-era mines and the large Alaverdi copper smelter were located. A visit to the other main mining area in the south of the country gave Coughlin an overview of its potential. ‘To visit this area one must take the ancient silk road towards Iran that passes by the copper-molydenum Karajan mine (at one time producing 30% of the Soviet Union’s molybdenum). The area is well serviced with roads, gas and electricity, mines and even a fibre optic link. On travelling down the road we noticed a rusty-coloured hill that, to a geologist’s eye, is indicative of mineralising processes’.

‘We immediately took out an exploration licence over the area. Further investigation revealed that although the area had been surveyed by Soviet geologists, their objective had been high-grade silica associated with epithermal systems for use in glass manufacture. They had mapped the area beautifully without recognising high-sulphidation mineralisation. This was one of our major objectives, as this type of mineralisation is prevalent in a number of major gold deposits in the Andean region, including the 1.6Moz/y Yanacocha mine in Peru’.

The surface expression of high-sulphidation systems is intense alteration reflecting the circulation of acidic magma-derived fluids. The ‘rusty hill’ is now Lydian’s Armulsar project, a mineralised system that is over three kilometres long.

Initial exploration included mapping and soil and channel sampling, which revealed gold values in 20% of rock chip samples that were greater than one gramme per tonne (g/t), and three centres of massive silica with silica-alunite and late silicification. The largest of these zones is to be found in the centre of Amulsar where drilling is underway. Results from last autumn showed 125m at 1.6g/t, including 31m at 4.4g/t, 122m at one gramme per tonne, 38m at 2.6g/t, and 83m at one gramme per tonne.

Mineralisation patterns

In terms of structure, mineralisation is controlled by a combination of stratabound ‘flats’ and steep dipping ‘feeders’. The feeders often exhibit high gold grades within oxidised fractures and breccias, while the flats are subject to subhorizontal lithological control in fragmental rocks.

All of the mineralisation discovered to a depth of 200m is oxide with no indication of sulphide minerals at depth. This suggests a far deeper system. Within this completely altered envelope there are areas converted to fine argillitic zones that are unfavourable for mineralising fluids.

Induced polarisation geophysics has identified favourable electrically-resistive bodies corresponding to bulk low-grade silicified breccia bodies at three locations within the Amulsar prospect. As already determined, significant gold mineralisation occurs where these lower-grade breccias are cut by later higher grade fractures. Samples from the drill programme showed that, in heap-leach simulation tests, recoveries of 94-97% of the contained gold are achievable.

So far, evidence supports a mineralised high sulphidation system hosted in a thick volcanic pile of andesitic tuffs and ignimbrites cut by domed andestic flows that occurred in two stages linked to the mineralisation. Remnants of massive silica from the pre-mineralised phase of alteration are heavily brecciated and have formed a good host for low-grade infill gold. Higher grade gold values are found in close proximity to the to the second-event domes and breccias.

Results of the drilling campaign suggest that the silicified material contains relatively low gold grades (0.5-0.8g/t) while the fractured iron-rich zones have values in the range of one to 10g/t. No evidence of a shallower part of a high sulphidation system is apparent at Amulsar. The highest (nearest surface) silicified bodies are judged to have been formed at 400-500m below the palaeosurface. This is supported by the local occurrence of the mineral pyrophyllite, which is indicative of formation temperatures of at least 240ºC.

Lips says Amulsar is progressing rapidly, ‘The first sample running over one part per million of gold was found only in June 2006. About 500m of mineralised diamond core was drilled in 2007. The 2008 combined reverse circulation and diamond drilling will provide data for a first indicated resource that could be easily doubled by the end of 2009 drilling’.