Managem Tizert MRS Memo 3CM036 005 SBB GC VP 20180212 [PDF]

Zitiervorschau

SRK Consulting (Canada) Inc. 101 – 1984 Regent Street South Sudbury, Ontario, Canada P3E 5S1 T: +1.705.682.3270 [email protected] www.srk.com

Memo To:

Ahmed Smouh

Date:

February 8, 2018

Company:

Group Managem

From:

Sébastien Bernier

Project #:

3CM036.005

Copy to: Subject:

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Mineral Resource Statement - Tizert Copper Project, Morocco

Introduction

SRK Consulting (Canada) Inc. (“SRK”) was retained by Group Managem (“Managem”) to update the mineral resource estimate for the Tizert copper project. The Tizert copper project is an undeveloped sedimentary-hosted copper (silver) property located in the Anti-Atlas province of Morocco. The deposit is potentially amenable to bulk underground mining. The mineral resources reported herein consider drilling information available to December 13, 2017 and were evaluated using a geostatistical block modelling approach constrained by copper mineralization wireframes. The mineral resources have been estimated in conformity with the CIM “Mineral Resource and Mineral Reserves Estimation Best Practices” guidelines and are classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) guidelines. The Mineral Resource Statement is reported in accordance with Canadian Securities Administrators’ National Instrument 43-101. The construction of the mineral resource model for the Tizert copper project was a collaborative effort between Managem and SRK personnel. Managem provided the borehole database, preliminary copper mineralization wireframes, and economic parameters for the cut-off grade determination. The construction of three-dimensional resource domains was reviewed by Mr. Sébastien Bernier, PGeo (APGO#1847) during the site visit which occurred between December 11 and 18, 2017. Mr. Bernier also completed the resource evaluation work in close collaboration with Managem. Finally, this assignment benefited from the senior review of Mr. Glen Cole, PGeo (APGO#1416).

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Mineral Resource Estimation Methodology

The mineral resources reported herein have been estimated using a geostatistical block modelling approach informed from core borehole data all constrained within 0.2 % Cu grade shells. Geological models of the PIII, Série de Base and Dolomite units associated with the grade shells, were defined using a traditional wireframe interpretation constructed from sectional interpretation of the drilling data. The evaluation of the mineral resources involved the following procedures:

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Database compilation and verification; Construction of three-dimensional wireframe models for the boundaries of the lithology and 0.2% Cu grade shells containing the copper (and silver) mineralization; Definition of resource domains within the geological models; Data extraction and processing (compositing and capping), statistical analysis, and variography; Selection of estimation strategy and estimation parameters; Block modelling and grade estimation; Validation, classification, and tabulation; Assessment of “reasonable prospects for eventual economic extraction,” and selection of the reporting assumptions; and Preparation of the Mineral Resource Statement.

2.1 Resource Database As of December 1, 2017, the exploration data available to evaluate the mineral resources for the Tizert copper project includes surface 816 boreholes drilled (166,341 metres – 23,337 assays), all drilled by Managem with the exception of a few historical exploration holes. The collar position of each borehole was assessed using a hand-held GPS unit with accuracies generally within a few metres. When required, the elevation of the boreholes was adjusted using a highresolution topographic profile provided by Managem. SRK received the borehole sampling data in Datamine Studio format. SRK performed the following validation steps: • •

Checked minimum and maximum values for each quality value field and confirmed/edited those outside of expected ranges; and Checked for gaps, overlaps and out of sequence intervals in assays tables.

No errors were found and SRK is satisfied with the quality of the database received from Managem. 2.2 Geological Modelling The PIII, Série de Base and Dolomite units forming the Tizert copper project were modelled by Managem, with most of the mineralization and at a higher grade occurring in the Série de Base. During the site visit, SRK validated the interpretation and wireframing approach with Managem. In close collaboration with SRK, Managem generated 10 unique 0.2 % Cu grade shells to constrain the copper (and silver) mineralization of the deposit (Figure 1). The grade shells are essentially parallel to the lithological units. SRK carefully reviewed the wireframes provided by Managem and, after minor modifications, is satisfied with the quality of the wireframes generated by Managem. SRK is satisfied that the geological modelling honours the current geological information and knowledge of the Tizert copper (silver) project. 2.3 Compositing and Capping Borehole assay data was extracted from within all the 0.2% Cu grade shells (Figure 1) and examined for determining an appropriate composite length (Figure 2). Block model cell dimensions and anticipated largescale room and pillar underground mining methods were also considered in the selection of the composite length. A modal composite length of 1.0 metre was applied to all data (Figure 2).

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The impact of copper and silver outliers was examined on composite data using log probability plots and cumulative statistics. In collaboration with Managem, SRK determined that capping analysis should be performed based on the different lithologies (PIII, Série de Base and Dolomite) present within the 0.2% Cu grade shell. Basic statistics for each metal assays, composites, and capped composites are summarized in Table 1. Basic statistics, histograms, and cumulative probability plots for each metal were applied to determine appropriate capping grades. These are illustrated in, Figure 4 and Figure 5 using copper and silver in Série de Base as an example, respectively.

Figure 1: Modelled 0.2% Cu Grade Shells for the Tizert Copper Project, in Relation to the Drilling Information (Black)

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Figure 2: Sampling Length within the 0.2% Cu Grade Shells

2.4 Specific Gravity Specific gravity measurements were obtained by pycnometry at the assay laboratory as part of the routine assaying protocol. A total of 1,677 specific gravity measurements were taken within the mineralized units (Figure 3). A uniform specific gravity of 2.75 was applied to all the 0.2% Cu grade shells.

Figure 3: Summary of the Specific Gravity Database SBB / gc - vp

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Figure 4: Basic Statistics of the Copper Data for the Série de Base

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Figure 5: Basic Statistics of the Silver Data for the Série de Base

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Table 1: Basic Statistics Element

Lithology

Assays Copper (%) PIII Copper (%) Série de Base Copper (%) Dolomite Silver (g/t) PIII Silver (g/t) Série de Base Silver (g/t) Dolomite Composites Copper (%) PIII Copper (%) Série de Base Copper (%) Dolomite Silver (g/t) PIII Silver (g/t) Série de Base Silver (g/t) Dolomite Capped Composites Copper (%) PIII Copper (%) Série de Base Copper (%) Dolomite Silver (g/t) PIII Silver (g/t) Série de Base Silver (g/t) Dolomite

Sample Minimum Maximum Count

Mean

Standard Coefficient Capped Deviation of Variation Count

40 7,857 2,022 40 7,857 2,022

0.00 0.00 0.00 0.00 0.00 0.00

3.30 1.14 15.36 0.69 12.28 0.48 125 10.41 615.00 141.39 479.00 12.40

1.09 0.82 0.83 22.56 22.78 27.07

0.96 1.19 1.74 2.17 1.58 2.18

45 5,478 1,315 45 5,478 1,315

0.00 0.00 0.00 0.00 0.00 0.00

3.30 15.36 12.28 125.00 351.19 357.82

1.37 0.80 0.65 11.61 16.62 16.25

1.04 0.81 0.94 24.21 22.33 30.65

0.76 1.01 1.46 2.09 1.34 1.89

45 5,478 1,315 45 5,478 1,315

0.00 0.00 0.00 0.00 0.00 0.00

3.20 7.50 6.30 47.00 209.00 167.00

1.36 0.80 0.63 8.96 16.56 15.28

1.03 0.78 0.81 14.80 21.62 22.71

0.76 0.97 1.29 1.65 1.31 1.49

1 3 5 2 4 10

2.5 Block Model Definition The criteria used in the selection of block size included the borehole spacing, composite assay length, the geometry of the modelled grade shells, and the anticipated underground mining technique. In collaboration with Managem, SRK selected a block size of 10 by 10 by 2 metres on X, Y and Z respectively. Subcells at 1 metre resolution on X and Y, 0.5 metre on Z were used to honour the geometry of the modelled grade shells. Subcells were assigned the same grade as the parent cell. The block model is not rotated. The characteristics of the final block model are summarized in Table 2. Table 2: Tizert Project Block Model Specifications Domain Axis All

X Y Z

Block Size (m) Parent Subcell 10 1 10 1 2 0.5

Origin* 207,800 362,600 600

Number Rotation Rotation of Cells Angles Priority 340 500 450 -

*UTM grid (NAD 83 datum)

2.6 Variography Variography were used to assess the spatial continuity of the copper and silver data and to assist with the selection of estimation parameters. SRK evaluated the spatial distributions using variograms and correlograms on data from the Central area of the deposit where the drilling density is denser. Continuity directions were assessed based on the orientation of the mineralization relative to the lithological units and their spatial distribution. Further, variogram calculation considered sensitivities on orientation angles prior to finalizing the correlation orientation. All variogram analysis and modelling was performed using Datamine Studio RM and the Geostatistical Software Library (GSLib).

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The modelled variogram for the Central area is presented in Figure 6 and Table 3. The same variogram was applied to all other zones, however the orientation was adjusted to honour the individual slight dip change (Table 4). The variogram model developed for copper was also applied for the silver estimation.

Figure 6: Copper Variogram for the Central area that forms the Basis for Variogram Fitting Note: The solid lines correspond to the fitted model, while the dashed lines correspond to the experimental variogram in those same directions.

Table 3: Variogram Parameters for the Tizert Project R1x R1y R1z (m) (m) (m) 0.25 Nugget 0.60 Exponential 80 90 7 0.15 Spherical 275 120 7

Element

Source Structure Contribution Model

Cu

Central Area

C0 C1 C2

Table 4: Variogram Angle Orientations for the Tizert Project Zone Ouest Ouest Nord Nord Centre Centre Sud Sud Est Aferni

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Code 18 37 55 47 9 35 19 54 17 6

Angle1 Angle1 Angle1 1 2 3 120 -12 2 120 -12 6 120 -15 10 120 -15 10 120 12 6 120 6 3 120 -12 3 120 -15 4 120 8 10 120 12 15

Axis 1 Z Z Z Z Z Z Z Z Z Z

Axis 2 X X X X X X X X X X

Axis 3 Y Y Y Y Y Y Y Y Y Y

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2.7 Estimation Strategy Table 5 summarizes the general estimation parameters used for the copper and silver estimation. In all cases, grade estimation used ordinary kriging and four passes informed by capped composites (Table 6). The first pass was the most restrictive in terms of search radii and number of boreholes required. Successive passes usually populate areas with less dense drilling, using relaxed parameters with generally larger search radii and less data requirements. SRK assessed the sensitivity of the copper block estimates to changes in minimum and maximum number of data, use of octant search, and the number of informing boreholes. Results from these studies show that globally the model is relatively insensitive to the selection of the estimation parameters and data restrictions mainly due to the relative uniformity of the copper grade distribution. For the first estimation pass, composites from at least three boreholes informing at least seven of the search ellipsoid octants were necessary to estimate a block. The second pass also used restrictive octant search options, but only five octants were required. Because of their unique geological characteristics, the grade shell was estimated independently using a hard boundary. Table 5: Summary of Estimation Search Parameters for Copper and Silver Parameter 1st Pass 2nd Pass 3rd Pass 4th Pass Interpolation method OK OK OK OK Search range X (relative to Variogram range) 1x 1x 1x 2x Search range Y (relative to Variogram range) 1x 1x 1x 2x Search range Z 40m 40m 40m 40m Minimum number of composites 9 7 5 2 Maximum number of composites 12 16 16 16 Octant search Yes Yes No No Minimum number of octant 7 5 Minimum number of composites per octant 1 1 Maximum number of composites per octant 12 12 Maximum number of composites per borehole 4 4 4 0

Table 6: Volume Estimated per Pass Zones

All

Estimation Pass 1 2 3 4

Volume Estimation 8,269,073 13,571,378 14,997,699 1,897,108

Percent Estimated 21% 35% 39% 5%

2.8 Block Model Validation The block model estimates were validated through: • • •

Comparison of the basic statistics of ordinary kriging estimates with nearest neighbour estimates and with the original capped composite source data. (Figure 7). Comparison of kriged estimates against an inverse distance (power of two) estimates to assess potential impact of negative kriging weights. Visual comparison of block estimates to original borehole data on plans and sections.

Validation checks confirm that the block estimates are a reasonable representation of the informing data considering the current level of geological and geostatistical understanding of the deposit. SBB / gc - vp

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Figure 7: Validation of the Copper Block Estimates for the Tizert Project

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Mineral Resource Classification and Preparation of Mineral Resource Statement

CIM Definition Standards for Mineral Resources and Mineral Reserves defines a mineral resource as: “[A] concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.” The “reasonable prospects for economic extraction” requirement generally implies that the quantity and grade estimates meet certain economic thresholds and that the mineral resources are reported at an appropriate cut-off grade that considers extraction scenarios and processing recoveries. Block model quantities and grade estimates were classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) by Mr. Sébastien Bernier, PGeo (APGO#1847). The Mineral Resource Statement for the Tizert copper project is reported at an in-situ cut-off grade of 0.45 percent copper equivalent (CuEq) assuming a copper price of US$ 2.95 per pound, a silver price of US$ 16.00 per ounce and a recovery of 88 percent and 85 percent respectively (Table 7). Table 7: Assumptions Considered for Conceptual Underground Extraction Parameters Copper Price Silver Price Milling Recovery – Copper Milling Recovery – Silver General and Administrative Mining Costs Milling Costs Mining Dilution Mining Loss In Situ Cut-Off Grade

Value 6,500 16 86 85 2.08 18.80 10.64 5 10 0.45

Unit US$/tonne US$/oz percent percent US$/tonne of feed US$/tonne mined US$/tonne of feed percent percent percent CuEq

Mineral resource classification is typically a subjective concept, and industry best practices suggest that resource classification should consider the confidence in the geological continuity of the mineralized structures, the quality and quantity of exploration data supporting the estimates, the geostatistical confidence in the tonnage and grade estimates, and the continuity at the reporting cut-off grade. Appropriate classification criteria should aim at integrating these concepts to delineate regular areas at a similar classification. SRK is satisfied that the geological modelling honours the current geological information and knowledge. The location of the samples and the assay data are sufficiently reliable to support resource evaluation. SRK considers the deposit to be amenable to extraction by underground methods. The sampling information was acquired primarily by core drilling on pierce points spaced at 50 to 200 metres. Most areas have been sampled by a sufficient number of boreholes to model the spatial variability of copper grade. Accordingly, all block estimates with borehole spaced fifty metres or less can be classified as Measured resources. Areas informed by drilling between 50 to 100 metres can be classified as Indicated with the remaining of the geological model being classified as Inferred resources.

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The Mineral Resource Statement for the Tizert copper project is presented in Table 8. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted into mineral reserves. SRK is unaware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that may materially affect the mineral resources. Table 8: Mineral Resource Statement*, Tizert Copper Project, Morocco, SRK Consulting (Canada) Inc., January 23, 2018 Resource Category Measured Indicated Measured + Indicated Inferred

Quantity (‘000 t) 13,010 63,050 76,060 15,240

Grade Cu (%) Ag (g/t) 0.76 15 0.81 17 0.80 17 0.74 16

Contained Metal Cu (‘000 Lb) Ag (‘000 Oz) 218,000 6,300 1,125,900 34,500 1,343,900 40,800 248,600 7,800

* Reported at a cut-off grade of 0.45 percent copper equivalent assuming a bulk underground mining method, copper price of US$ 2.95 per pound, a silver price of US$ 16.00 per ounce and a recovery of 88 percent and 85 percent respectively. All figures rounded to reflect the relative accuracy of the estimates. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

The mineral resource model is relatively sensitive to the selection of the reporting copper equivalency reporting cut-off grade. To illustrate this sensitivity, the quantities and grade estimates are presented in Table 9 at various cut-off grades and grade tonnage curves are presented in Figure 8. The reader is cautioned that the figures presented in this table should not be misconstrued with a Mineral Resource Statement. The figures are only presented to show the sensitivity of the block model estimates to the selection of copper equivalent cut-off grade.

Table 9: Global Block Model Quantities and Grade Estimates* at Various Copper Equivalent Cut-Off Grades Cut-Off Measured and Indicated Blocks Grade Quantity Grade CuEq Tonnage Cu Ag (%) (Kt) (%) (g/t) 0.10 88,000 0.73 16 0.20 88,000 0.74 16 0.30 86,000 0.75 16 0.40 80,000 0.78 17 0.50 72,000 0.83 18 0.60 63,000 0.88 19 0.70 53,000 0.94 20 0.80 44,000 1.01 21 0.90 35,000 1.09 23 1.00 28,000 1.17 24 1.10 22,000 1.26 26 1.20 17,000 1.34 27 1.30 14,000 1.42 28 1.40 11,000 1.51 29 1.50 8,000 1.60 31

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Inferred Blocks Quantity Grade Tonnage Cu (Kt) (%) 18,000 0.66 18,000 0.66 18,000 0.67 16,000 0.71 14,000 0.77 12,000 0.82 10,000 0.88 8,000 0.95 7,000 1.00 5,000 1.05 4,000 1.12 3,000 1.19 2,000 1.25 1,000 1.35 1,000 1.48

Ag (g/t) 15 15 15 16 17 18 19 21 22 23 25 27 29 31 33

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Figure 8: Global Grade Tonnage Curves for the Tizert Project

Yours truly, SRK Consulting (Canada) Inc.

Sébastien Bernier, PGeo Principal Consultant (Resource Geology)

Reviewed by: Glen Cole, PGeo, Principal Consultant (Resource Geology)

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