POTENTIAL OF THE DONGWE COPPER GOLD PROJECT By Nathan Sabao, P.Geo. September 2015 1
TABLE OF CONTENTS Page 1.0 EXECUTIVE SUMMARY 1 2.0 LOCATION 2 3.0 ACCESS 2 4.0 GEOLOGY 3 5.0 PREVIOUS DRILLING 5 6.0 LOCAL MINING OPERATIONS 6 7.0 CONCLUSIONS AND RECOMMENDATIONS 6 i
1.0 EXECUTIVE SUMMARY The Dongwe copper gold project consists of Licence number 17212HQLPL covering an area of about 557 km², located in Mufumbwe District of the North Western Province of Zambia, 60 km from the former producing Kalengwa copper mine that produced 1.6 million tonnes of copper grading 6.45% Cu. The property is near the Dongwe River, halfway between the towns of Kaoma and Kasempa. The project is a JointVenture between GN Mining LTD a Zambian registered Company and Virtus Minerals Corporation Ltd. a privately held Canadian registered Company. The general geology of the area is Neoproterozoic argillites and arenaceous sediments of the Kundelungu formation intruded by granite. The Northern part of the licence exhibits some Kalahari cover. Very high grade copper oxide and sulphide pods are exposed at surface in breccia zones. Associated with the copper is gold and cobalt. Exploration, carried out during the period of 1928 to 1946 identified numerous high grade copper gold occurrences which Roan Selection Trust ( RST ) followed up with soil sampling, auger drilling, and diamond drilling. Diamond drilling targeted the Karibarembi prospect with 13 holes, 4 holes were collared within licence 17212HQLPL and 9 holes in an exclusion and 3 holes were drilled in the Chimena prospect; all of the RST drilling intersected breccias, some contained oxide closer to surface and sulphide pods at depth. Western Mining Corporation carried out a soil sampling survey in 199798 over the entire licence and identified a large copper anomaly and associated gold and cobalt, 5 km in strike length and 500 m wide. Only 20% of the results of the soil sampling survey data is available. Indications from the regional samples were that further major anomalies would have been outlined in due course. 2.6 km strike length of the 5 km long delineated copperinsoil anomaly occurs on the current licence 17212HQLPL. Western Mining Corporation carried out RC drilling to evaluate the copperinsoil anomaly and 1,718.5 m targeted the Chimena prospect; intersections included: 6m @ 0.7% Cu, 7m @ 2.1g/t Au and 7m @ 0.14% Co (hole k22) at a depth of about 60 m. 13m @ 1.59% Cu, 3m @ 1.19g/t Au (hole k23) at a depth of about 100m. 10m @ 3.53% Cu and 5m @ 0.96g/t Au (hole k49), a depth of 115m. 7m @ 1.67% Cu, 2m @ 0.76g/t Au (hole k26) and 11m @ 0.62% Cu at a depth of about 35m to 50m. The drilled Zone remains open at depth. Drill hole k25 (4m @ 2.40% Cu, 0.50 g/t Au) terminated in mineralization. Lateral extension to the north is possible. Virtus Minerals Corporation concludes that the open mineralized horizons can be closed off and the lateral extension to the north can be traced with further drilling resulting in resource delineation on the Chimena Prospect; the estimated budget is USD 3,000,000. Other prospects delineated by copperinsoil anomalies and warrant further evaluation include KARIBAREMBI and SHIREMBWE. 1
2.0 LOCATION The Dongwe coppergold project in the Mufumbwe District of North Western province of Zambia and is registered under the licence code number 17212HQLPL and covers an area of 557 square kilometres as illustrated in Figure 1. The licence area is located 103 km north east of Kasempa and 125 km south of Kaoma. From Lusaka, a good network of paved and gravel roads lead to the property. Labour is locally available to carry out field work and water from the Dongwe river can be used, as required for exploration, development and mining purposes. The licence is free from game management areas, game parks or national forest reserves, no settlements are located within the tenement. Figure 1. 3.0 Location map of the Dongwe coppergold project in Zambia. ACCESS The licence can be accessed through 2 routes, Lusaka Mongu road via Kaoma Kasempa road, this is a paved road from Lusaka to Kaoma and from Kaoma to the tenement is a maintained gravel road. Lusaka Solwezi route via Kasempa Kaoma road is also paved to Kasempa. 2
4.0 GEOLOGY Located within the South Western limb of the Lufilian arc in the Katangan high region, a series of trenches and pits exposed a breccia and alteration zone of about 2.7 km and several metres wide within licence 17212HQLPL. The breccia appears to be roughly S shaped and has parasitic folding at the west and east ends crossed by large northwest dextral regional faults that dictated the route of the Dongwe River to the west. Soil geochemistry anomalies indicate the Centre portion of the breccia zone is enriched in copper; the eastern end has a copper gold association. Figure 2. Regional geological map. A significant portion of the breccia exhibits abundant copper oxide and some chalcocite in a coarse polymictic breccia with associated silicification, sericitic and secondary hematite alteration. The western end of the centre of the breccia is characterized by an abundance of albitisation. This albite forms the majority of the matrix between the mudstone breccia fragments. The breccia seems to be hosted in a silicified mudstone. On the flanks of the breccia zone, abundant andalusite development is present suggesting a thermal metamorphic origin of the breccia and the mineralization. The association of mineralization with a breccia situated between two large regional faults adjacent to a large granitic intrusion seems to suggest a genetic link and a logical conclusion the granite was 3
probably a heat source to drive the mineral rich fluids into the faults and openings in the surrounding country rock. A ground magnetic survey concluded the presence of an underlying granite body at the Chimena target but none of the drill holes intersected granite. This might suggest that some granite interpreted based on the magnetic survey might actually be alteration as opposed to lithology. Figure 3. Regional magnetic image. Mineralogically there is an association with albite, quartz, tourmaline, chlorite, dolomite, calcite, sericite and hematite. Extensive albitisation occurs at both Kalengwa mine and Kasanshi mine. The most extensively albitised rock at Karibarembi assayed 18.4g/t Au, this suggests a very strong correlation between gold and albite. Illustrated on Figure 4 is the soil copperinsoil anomaly and the granite intrusion, the orange contour is the whole 2.7 km soil anomaly and the red contour open to the north is the mineralized drilled zone open to the north. To the east, the milky white colour and black small triangles is the granite intrusion 4
Figure 4. Map illustrating the delineated copperinsoil anomaly and drill hole collars. Figure 4 illustrates the layout of the Chimena soil anomaly in relation to the granite and drilled mineralized zone that remains open to the north. The red contour on the map represents drill holes with intersections. The black dotted line cutting through the soil anomaly is an axial plain of the anticlinal structure mapped by RST. This structure extends for a length of about 26 km in the tenement 5.0 PREVIOUS DRILLING The writers of this report didn t have access to all the original files of Western Mining, but most of the available reports, all indicate further work is required on the property of Virtus, especially on the Chimena and Breccia Ridge prospects. Out of the RC drilling carried out by Western, 1,718 m were drilled at Chimena within the copper anomalous zone outlined by soil geochemistry. The drilling returned the following intersections: 10 m @ 3.53% Cu, 5m @ 0.96 g/t Au at a depth of 115 m (hole k49), 7 m @ 1.67% Cu, 2m @ 0.76 g/t Au, 11m @ 0.62% Cu at a depth of 35 m to 50 m (hole k26) 6 m @ 0.7% Cu, 7 m @ 2.1 g/t Au, 7m @ 0.14% Co at a depth of 60m (hole k22) 13 m @ 1,59% Cu, 3 m @ 1.19 g/t Au at a depth of 100m (hole k23) 5
Figure 5. 6.0 Map illustrating location of historical drilling LOCAL MINING OPERATIONS The Kalengwa Mine, 60 km north of the Chimena copper occurrence operated between 19691977 and produced 1.6 million tonnes of copper grading 6.45% Cu. The nearest producing mine is Kashanshi near Solwesi. The site of the mine has extensive ancient workings and has been worked since 1901. Kashanshi took off as a full fledge mining operation when the Zambian government offered it for privatization in 1996. 7.0 CONCLUSIONS AND RECOMMENDATIONS Significant copper and gold mineralization occurs on the ground held by Virtus Minerals. Exploration by various groups has outlined the main mineralized structure. The ore minerals appear to be linked to a breccia in the neighbourhood of a granitic intrusion. It is concluded that the intrusive is the major cause for the presence of the mineralized hydrothermal fluids, and therefore the observed mineralization. 6
The Chimena occurrence has never been drilled off completely. It is open at depth and along strike on the north side. Moreover, there is a 2.7 km long coppergold geochemical anomalous zone striking NE from Chimena to the Breccia Ridge occurrence. Core drilling should definitely be carried out at Chimena in order to delineate a resource. In addition along the geochemical anomalous zone, more detailed soil geochemical sampling, and possibly trenching, should be carried out to better assess the coppergoldcobalt potential and to pinpoint drilling targets to define additional resources. Other targets on the licence of Virtus like Karibarembi, Shirembwe and others which already have a soil geochemistry signature can be followed up by additional work at a later date. In order to delineate a resource on the Chimena target, detailed exploration should be undertaken on the soil anomaly identified by Western Mining Corporation, including the following: Historical data compilation Detailed soil sampling, 100 m by 25 m Trenching (if deemed warranted) to follow up the soil anomalies. Induced polarization 100m line spacing by 50 m sampling station Diamond Drilling (10,000 m) 7