Lion Selection

Pani Gold Project

In April 2018, Lion acquired One Asia’s 33.3% joint venture interest in the Pani Gold Project in Sulawesi, Indonesia.

Lion has been involved with the Pani project since 2012, when Lion made its first investment into One Asia. One Asia published a Mineral Resource Estimate (MRE) of 90Mt at 0.82g/t for 2.4 million ounces of gold based on a 0.2g/t cut-off (3 December 2014).

ClassificationTonnes (Mt)Au Grade (g/t)Au (million Oz)
Total89.50.822.37
Measured10.81.130.39
Indicated62.40.811.63
Inferred16.20.670.35

Technical work on the project is accelerating again following settlement in December 2017 of a long running dispute with respect to ownership of the Pani project. In the opinion of the Lion team, Pani is shaping up as the best gold discovery that Lion has been involved with since its inception in 1997.

At this early stage, three key factors are apparent at Pani which point towards a large and low-cost new gold mine:

  • Exceptionally thick and continuous gold mineralisation.
  • Minimal overburden.
  • Early test work indicating very high heap leach recovery.

Direct Equity Ownership

In August 2018, regulatory approval was received by the Pani Joint Venture to allow for foreign investors to hold equity directly. Accordingly, Lion’s 33.3% economic interest in the Pani Joint Venture is now being converted into a direct ownership interest. The regulatory approval also allows Lion to appoint representation to the board of the Pani Joint Venture, consistent with its memorandum of understanding with Provident.

Location

The Pani Gold Project is located in the central section of the north arm of Sulawesi, Indonesia. It is situated within the township of Hulawa, district of Buntulia, regency of Pohowatu, Province of Gorontalo.

Access to the project area is via daily flights to the provincial city of Gorontalo. From Gorontalo, it is about 130 kilometres (3 to 4 hour drive) to Marisa via the Trans-Sulawesi Highway. From Marisa, the project site can be reached via a five-kilometre asphalt/gravel road up to the town of Hele, and from thereon via a 10-kilometre dirt/gravel road to Project camp site.

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Tenement Status

In 1994, the Government of Indonesia (GoI) issued a KP (Kuasa Pertambangan) mining licence, covering an area of one square kilometre (100 hectares), to a local cooperative KUD Dharma Tani Marisa (KUD).

In November 2009, the KP licence was reissued as an IUP operation and production licence (316/13/XI/TAHUN2009), under the new Mining Law of 2009. The IUP was transferred to PT Puncak Emas Tani Sejahtera, a company jointly owned by the Pani Joint Venture and the KUD.

The Pani Joint Venture is progressing permitting for the Pani gold project including the Pani IUP licence containing the Pani gold Resource, a processing and refining area, and an access corridor.

The Pani IUP licence was issued by the Government of Indonesia in November 2009 for a period of 13 years, and, subject to government approval, is extendable for two 10-year periods. The Pani IUP is subject to the Mining Law 4 of 2009, including applicable royalty rates and levels of local ownership and input. The Pani Joint Venture meets the required level of local ownership, and accordingly no divestment will be required.

Historical Exploration Work

Gold was first discovered at Pani by the Dutch during the turn of the 20th century as a consequence of these early explorers observing alluvial gold mining activities then being conducted by the locals. There are reports that the Dutch even attempted to mine the gold underground, albeit with little or no success.

From 1967 to 1969, Newmont Limited (Newmont) investigated the area and sampled the Old Dutch underground workings, and in the process obtained significant values ranging from 1.24 g/t Au to 13.40 g/t Au. Newmont, however, did not proceed further beyond this stage.

In 1970, PT. Tropic Endeavor Indonesia (Tropic Endeavor) began the systematic exploration of the area under a 12,000 square kilometre government concession. Regional exploration work delineated a northeast trending zone of anomalous gold in bedrock centred on Pani Ridge.

In 1973, Kennecott Exploration (Australia) Limited (Kennecott) entered into a joint venture agreement with Tropic Endeavor to manage the exploration activities. More detailed work was undertaken, which included geological mapping and channel sampling of the Dutch adits as well as surface exposures.

Bulk sampling for metallurgical test work and mineral studies was also undertaken. The tests indicated up to 98% gold recovery with low reagent consumption using direct cyanidation.

Utah International signed an agreement with Tropic Endeavor in 1980 after Kennecott withdrew in 1976. Exploration resumed at Pani Ridge in 1981 with geological mapping and re-sampling of contour trenches and adits. The results obtained confirmed the previous findings.

Diamond drilling began in 1982, and seven vertical HQ diamond drill holes (GPD-01 to GPD-07) totalling 1,739.40 metres were completed. Additional bulk samples were also taken from surface exposures and from three new adits aggregating 219.70 metres.

In 1986, Tropic Endeavor relinquished the property and the area was subsequently acquired by PT. Aneka Tambang under Kuasa Pertambangan 318 (KP 318). BHP then merged with Utah Pacific, who obtained an 80% interest in, and management of, the property in a joint venture agreement signed in 1987.

From 1990 to 1991, a second round of drilling located on Pani Ridge was completed, consisting of 22 inclined holes (GPD-08 to GPD-28 & GPD-28E) totalling 2,817.50 metres. Extensive 2.00 metre channel sampling of 2.80 kilometres of step trenches and one kilometre of drill access road cuts was also completed. Although the drilling yielded good results, no new resource estimate was made upon completion of the program.

In 1993, BHP–Utah Pacific relinquished its interest in the joint venture. In 1994, the area was granted to a local cooperative, the KUD Dharma Tani Marisa (KUD).

Starting in 1996 to 1998, a Canadian listed company, Paramount Ventures and Finance Inc. (Paramount) conducted a detailed mapping, trenching and drilling program consisting of 16 holes for 1,915 metres.

From 2012 to December 2013, One Asia Resources undertook geological mapping, surface sampling and a diamond drill program. A total of 2,514 surface samples were collected and 137 diamond drill holes were drilled for 26,017 metres. Drilling results yielded significant intercepts ranging a minimum of three metres to as much as 135 metres, with values ranging from 0.20 g/t Au to 15.49 g/t Au. Mineralisation remains open to the South and West within the IUP boundary.

On 19 August 2013, One Asia released Phase 1 metallurgical test undertaken by ALS-Ammtec in Sydney, Australia and initial scoping study results.

On 3 December 2014, One Asia released an updated JORC Resource of 89.5Mt @ 0.82g/t Au for 2.37 million ounces of gold using a cut-off grade of 0.2g/t Au.

Metallurgical

Test work was completed on three columns for three different ore types; oxidised, moderately oxidised and unoxidised, or primary ore. Test results on all three columns were excellent, with recoveries up to 94% with rapid recovery time and low reagent consumption.

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Technical Work

The Pani Joint Venture is currently undertaking key work streams towards a feasibility study for the Pani Gold Project. The Pani Joint Venture has been able to access technical personnel from Merdeka Copper and Gold, where Provident is a shareholder. Merdeka is a listed Indonesian company that has relevant recent experience in successfully developing the Tujuh Bukit Gold heap leach project.

Recent independent technical reviews have highlighted the presence of significant free gold associated with the mineralisation at Pani. It was therefore considered prudent to revisit certain elements of previous work programs underlying the 2014 Mineral Resource Estimate, including the sampling and assay procedures, definition of geological domains and metallurgical test work. This technical reassurance included re-logging of all diamond drill core and some re-assays of stored material from historical drilling.

Following these reviews, the next phase of work at Pani is now firming up, with more detailed works that contribute towards an economic assessment of the project. This is expected to include a comprehensive program of re-assaying stored material, drilling, metallurgical test work and technical studies. An updated Resource is expected as part of this process.