Walhalla

 

Gold Project

Orion Gold NL (‘Orion Gold’) is an Australian exploration company focused on delivering value to shareholders through the successful exploration of the Company’s highly prospective tenement holdings shown in figure 1.   

FIGURE 1: Project Locality Plan 

 

Walhalla / Woods Point Goldfield is Victoria's sixth largest historical gold producing region with over 400 known reef and alluvial gold deposits.  The Company has a large tenement package in the Goldfield which it considers to be prospective due to the numerous workings and historic production in the area of approximately 4 million ounces.  The Cohen’s reef system (mined late 1800s to early 1900s) is Victoria’s highest producing single reef system, with production of approximately 1.5 million ounces at a head grade approaching 40 Au g/t.      

During 2010, the Company completed an initial 6,500 metre diamond drill program focusing on the Cohen’s, West 1, West 2 and Happy Go Lucky mineralised structures, given their proximity to a large number of old workings and historical production centres (see figure 2). The drilling program has identified a number of new target zones in these areas.   

 In April 2011, the Company announced that a comprehensive review of historic mining data and the logging and interpretation of drill core from the drill program was very successful.  The review resulted in a breakthrough understanding of the structural controls on mineralisation at Cohen’s and regionally throughout the Walhalla Gold Project area.   

 

 


FIGURE 2: Orion Gold Tenements

 

Building on the historic mining data and exploration programs undertaken to date on Orion Gold's Walhalla tenements, recent studies have provided a strong framework for ongoing exploration and regional target selection.  Detailed structural analysis of the previously mined, high grade Cohen’s Reef, has identified several key factors which appear to control mineralisation.  The review has resulted in a new geological/structural model which has opened up a highly prospective structural trend located within the Walhalla – Woods Point Goldfield, the majority of which is held by Orion Gold.   

The new structural/geological model highlights the importance of southeast-northwest trending cross cutting structures, which constrain and concentrate mineralisation along the well recognised north-south trends of historical workings.  In addition, the extension of the north-south trending Cohen’s Line to the north of Cohen’s Reef, has been reinterpreted.  The new interpretation opens up a major new focus for exploration along the interpreted northern extension of the Cohen’s structural trend.  

The new interpretation significantly increases the potential of the Cohen’s trend for over 35 kilometres to the north of Walhalla, where a number of historic workings have similar geology to Cohen’s.  The new geological model also highlights that the majority of the Walhalla-Woods Point goldfield’s production has been derived from gold mines associated with the reinterpreted Cohen’s trend.  In addition, through this work, reassessment has identified a number of highly ranked targets, which are located at the interpreted intersection of cross-cutting structures and the main north-south structural trends.

Given the significant findings of the recent studies, the Company is planning an intensive exploration program, commencing in the surrounds to Cohen’s Reef, on a series of targets defined by the new structural/geological model.  The priority targets in the central area include Longfellow’s and the near surface Lomond Zone, both of which have the potential to add to the Company’s near surface resource inventory.

From a more regional perspective, the recognition that the geologically equivalent position of the Cohen’s Reef and structural zone extends over 35 kilometres to the north, has important ramifications for the potential of the Toombon-New Dawn area (see figure 2).  The new structural model indicates that the Cohen’s trend hosts the major historical mines in the Walhalla-Woods Point goldfield, with a total recorded production of approximately 4 million ounces of gold from mines within this trend.  The Toombon-New Dawn deposits, also located on the Cohen’s trend, are under investigation and have recognisable similarities to the Cohen’s Reef.   This similarity is demonstrated by the unusual shape of previously mined mineralisation, which shows a shallow upper zone, rapidly changing to a steep zone at depth.  This suggests that intersecting faults constrain mineralisation at Toombon in a similar manner to Cohen’s.

The new geological model also upgrades the prospectivity of other locations along the Cohen’s trend.  One of these, the historic Victor’s Quartz workings, has been identified as an area of interest and will be subject to detailed assessment.

The drill testing of further regional targets is aimed at delineating additional near surface resources, which collectively, would support the development of mining operations with an increasing gold production profile.  

Tubal Cain 

Orion Gold continues to evaluate development options based on a review of the resources and mining economics at Tubal Cain (see figure 3). The review of the Tubal Cain 273,000 ounce gold resource (see table 1) is being undertaken in conjunction with a scoping study aimed at determining the economics of the resource and possible development scenarios.   

Table 1: Mineral Resources  

The in situ Mineral Resource for the Walhalla Gold Project total 1,688,000 tonnes at 8.1g/t Au above cut-offs of 3 and 4 g/t Au. The following table highlights the Mineral Resources by deposit.

Deposit	Cut-off Au g/t	Measured		Indicated		Inferred		Total
		Tonnes	Au g/t	Tonnes	Au g/t	Tonnes	Au g/t	Tonnes	Au g/t	Ounces Au
Tubal Cain	4	-	-	177,000	7.7	680,000	10.5	857,000	9.9	273,400
Eureka	4	-	-	36,000	13.9	117,000	8.8	153,000	10.0	49,200
Cohen's	3	80,000	5.4	388,000	5.1	210,000	6.1	678,000	5.5	119,100

Notes:  

1.     Tonnes are rounded to the nearest 000, grade is rounded to the nearest 0.1, the ounces Au rounded to the nearest 100 

2.     The cut-off grades for Tubal Cain and Eureka are set at values required to report only that part of the total in situ Mineral Resource which it is believed has potential to be mined economically by underground methods suitable for narrow vein deposits  

3.     The cut-off grade for the Cohen’s Deposit (previously referred to as the Cohen’s  Stockwork Deposit) is  set so as to report only that part of the Mineral Resource which it is believed has potential to be mined economically by underground bulk mining methods  

4.     These Mineral Resources are exclusive of areas of these deposits which are known to have been previously mined.  

The Mineral Resources have been classified into Measured, Indicated and Inferred categories in accordance with JORC guidelines based on the assessment of geological continuity, grade continuity, drill data density and grade estimation error. 

Competent Persons Statement
The information relating to the Mineral Resource is based on and accurately reflects grade estimation and modelling undertaken by Mr P. Ball B Sc MAusIMM for Orion Gold NL in his capacity as Consultant Geologist to Orion Gold NL.  The Mineral Resource information has undergone audit by external consultants.  Mr Ball has sufficient experience in relation to the style of mineralisation under consideration to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – The JORC Code”.  Mr Ball consents to the inclusion of the mineral resource information in the form and context in which it appears.  
Exploration information contained in the information above has been compiled and assessed under the supervision of Dr James Anderson, Orion Gold NL’s General Manager – Exploration, from historical records and field investigation.  Dr Anderson is a member of the AusIMM (CP) and has extensive experience in the identification of gold mineralisation of this style.  Dr Anderson consents to the public release of the information in the context contained within this release.   

Disclaimer  
The information above may include forward-looking statements.  These forward-looking statements are based on management’s expectations and beliefs concerning future events.  Forward-looking statements inherently involve subjective judgment and analysis and are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Orion Gold NL.  Actual results and developments may vary materially from those expressed in this release.  Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.  Orion Gold NL makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release.