Terry Leach & Co Exploration Geologists, Petrologists and Consultants A FIELD EVALUATION OF THE BAROI PROSPECT, CENTRAL KALIMANTAN PREPARED FOR P. T. K ALIMANTAN SURYA KENCANA BY TERRY LEACH IN SEPTEMBER 2003 TLC REPORT NUMBER: 03020 (TLC REFERENCE NUMBER: 570436 ) Telephone: (64 7) 8667642 Facsimile: (64 7) 8667642 Email: leach@ihug.co.nz Street : 2713 Rings Road Address Coromandel New Zealand Mailing Address: PO Box 150 Coromandel New Zealand
CONTENTS Page 1. SUMMARY...3 2. INTRODUCTION...2 3. BAROI GEOLOGICAL SETTING...2 4. CENTRAL and EAST ZONES...4 5. FAR EAST ZONE...7 6. RECOMMENDATIONS...12 2
1. SUMMARY Exploration activity to date in the southern portions of the Baroi prospect has encountered a number of features that are very encouraging for the discovery of a significant porphyry copper-gold system, especially in the Far East Zone. These features include : a) Intersection of a pronounced circular feature that is intersected by both arc parallel and arc normal structures. b) Multiple intrusions emplaced at the margin of a large pluton c) Abundant and metal-rich, quartz-sulphide vein systems that are aligned NE, parallel to the arc normal structures, and that are zoned coppergold-silver to peripheral lead-zinc silver from a centre located in the Far East Zone (FEZ) d) A circular breccia feature in the FEZ that has many characteristics of a diatreme breccia. Diatremes are associated with many porphyry copper systems in the Philippines and Papua New Guinea, as well as at Batu Hijau on Sumbawa Is., Indonesia e) The recognition of a high level dacite porphyry intrusion in the FEZ that hosts porphyry copper systems elsewhere in Central Kalimantan, and in other countries in the southwest Pacific region. f) Intense advanced argillic alteration in the FEZ that characterises the upper margins of economic porphyry copper-gold systems such as Batu Hijau. g) A donut-shaped magnetic high-low that is centred on the diatreme dacite porphyry in the FEZ, and is common to most porphyry copper deposits. h) A vegetation anomaly on the FEZ ridge is similar to that encountered at Beruang and Wafi River porphyry system in PNG. 3
It is recommended that a number of shallow (50-80m) holes be drilled to develop an understanding of the continuity of veining and mineralisation in the sheeted veins peripheral to the FEZ, and to develop an understanding of the geology and geochemistry on the FEZ ridge where outcrop is poor to absent. 2. INTRODUCTION A period of six days in September 2003 were spent in an evaluation of P.T. Kalimantan Surya Kencana s (KSK s) Baroi prospect, Central Kalimantan, which included two days inspecting outcrop and drillcore on site. The guidance and assistance provided by Mansur Geiger, KSK s exploration manager during this evaluation is gratefully acknowledge. The mid-tertiary Kalimantan magmatic arc of Carlile and Mitchell (1994) is well know as a host to epithermal quartz-silver, and carbonate-base metal gold deposits such as Kelian, Indo Muro and Masupa Ria. Exploration to date in KSK s CoW in Central Kalimantan has demonstrated that this arc is also an ideal geological setting for the discovery of significant porphyry copper-gold systems. The Beruang Tengah and Beruang Kanan prospects in the southeast of the CoW and the Mansur prospect in the eastern part of the CoW indicate that a potential economic porphyry copper-gold deposit could be discovered in this region. 3. BAROI GEOLOGICAL SETTING The Baroi prospect area is situated in the southwestern portion of KSK s CoW. Alteration and mineralisation at Baroi are hosted within, and on the margins of, a distinct 8 km wide circular feature. This feature is very obvious on landsat imagery and is the most pronounced structural element within the entire CoW (Figure 1). The ring structure is indicative of the emplacement of a large intrusion at depth and subsequent collapse associated with extrusive volcanic activity. The alteration and mineralisation encountered to date at Baroi are located in the southern portion of the circular structure, where it is intersected by major regional structures. This is the optimum structural setting for development a porphyry copper system. Firstly, the Baroi circular structure is transected by a strong regional NE trending lineament that is aligned parallel to the Kalimantan Suture to the south. This suture hosts a number of gold deposits and prospects such as Kelian and Indo Muro. 2
Figure 1: Western CoW Landsat Image 3
In addition, these porphyry-related gold deposits are localised along the NE Kalimantan Suture where it is cut by NNW striking arc normal structure. At Baroi, the wide circular feature is similarly cut by a series of subparallel, NNW trending arc normal faults, along which are also aligned the Mansur prospect to the north and the Tumbang Huoi prospect to the south. The Ongkang gold deposit and other prospects in the Masupa Ria district to the south of KSK s CoW are aligned along these NNW arc normal structures. Many world class porphyry copper deposits, such as Batu Hijau and Panguna (PNG), are hosted within high level intrusions which have been emplaced at the intersection of large plutons and cross-cutting regional structures. The geological setting of southern Baroi is very similar to these deposits. The host lithologies at Baroi consist predominantly of andesite volcanic rocks into which have been emplaced monzonite and dacite porphyry intrusions at the margin of a large granodiorite pluton where it is cut by the regional NE and NNW structures (Figure 2). 4. CENTRAL and EAST ZONES Exploration activity in the southern potion of the Baroi prospect area has been carried out since November 2002, whereas a thick sequence of sediments is reported to have possibly masked any evidence of hydrothermal activity in the northern Baroi area. During this initial stage of exploration activity, the southern Baroi prospect area has been divided into four zones, the Central or Main, East, South and Far East Zones, based on magnetic signatures and styles of alteration and mineralisation. In the Central Zone, quartz-sulphide veins has been recognised over a NW trending area of 200 x 800m. Channel sampling of these veins has indicated that at the surface they are Cu-Ag ± Au-Pb rich; e.g. 9 meters @ 2.17%Cu, 2.01 g/t Au, 143 g/t Ag and1.42% Pb. Seven short (<70-80m) diamond holes have been drilled into the zone of quartz-sulphide veins, over a strike length of approximately 700m. This program intersected a series of sub-parallel vein sets that have an overall metal budget of Zn Pb Cu and As >> Sb > Ag > Au; e.g. 10m @ 0.45%Cu, 1.5%Pb, 3.0%Zn, 1.28 g/t Au, 49 g/t Au, 102 ppm Sb and 2.4% As (39.8-49.8m in BC-1). 4
While on site, a brief inspection was carried out on the core from the Central zone drillholes. In the drillholes BC-1, BC-2, BC-3 and BC-4, drilled at high elevations to the northwest, the quartz-sulphide veins are hosted in weak to moderately chlorite-pyrite altered andesite volcanic rocks, with intense chlorite-sericite/illite-pyrite alteration only occurring immediately adjacent to the veins. The veins in these drillholes exhibit a sequence of deposition, from wallrock to the centre of the vein, of quartz pyrite arsenopyrite sphalerite galena chalcopyrite. The quartz is a milky white color that is characteristic of veins formed in mesothermal levels within a porphyry-related hydrothermal system. At 150-200m lower elevation to the southwest, the alteration increases to more pervasive and intense chlorite sericite / illite pyrite. The vein development in these drillholes is also more pervasive than at higher elevations to the northwest. In addition, there is a marked increase in the deposition of carbonates (calcite ± Mn-Mg-Fe-carbonates) in the veins that is intimately associated with the base metal mineralisation. Localised zones (e.g. at 74-80m in BC-6) of intense phyllic (sericite/illite quartz pyrite) alteration is accompanied by the development of a stockwork of thin sulphide / pyrite veinlets. Drillholes BB-1 and BB-2 were drilled in the East Zone and targeted a set of more NNW trending zones of quartz veins. These drillholes intersected a series of quartz base metal sulphide veins that exhibit similar mineralogy but were much thinner and less abundant than those encountered in the Central Zone. The style and intensity of alteration and vein development in the Central and East Zones are characteristic of the Zn-Pb-Ag lode zones that are encountered around the margins of a large porphyry system such as Bingham Canyon in Utah, U.S.A. (Corbett and Leach, 1998). The intersection of very localised, intense sericite/illite quartz -pyrite alteration and sulphide stockwork veinlets at lower levels indicates that the drilling has touched on the outer perimeter of a potentially large phyllic alteration zone at deeper levels and to the east of the Central Zone. 5
Figure 2: Baroi geology 6
It is speculated that the NW striking zone of quartz veins in the Central Zone have formed in response to dilation along the regional NNW trending arc normal structures, whereas the much narrower vein sets in the East Zones have been deposited in fractures within the more compressional NNW direction. 5. FAR EAST ZONE Recent exploration activity has been concentrated on the Far East Zone and has encountered many features that are characteristic of an environment (Figure 3) that is considered to be more proximal to a porphyry-copper-gold system than in the Central and East Zones. A conceptual N- S cross-section through the Far East Zone is illustrated in Figure (4). The features that are indicative of a porphyry copper system focused on the FEZ can be summarised as: a) Structural Setting The Far East prospect area is localised at the intersection of both regional NE and NNW structures and the margin of the 8km wide circular feature. In addition, these structural intersections occur at the margin of the granodiorite pluton to the south. As outlined above, this structural environment is optimum for localising a porphyry copper system. b) Magnetic Anomaly A weak high in the air-borne magnetics in the southern portions of the FEZ is surrounded by a broad zone of weak low magnetics. This donut-shaped magnetic high-low anomaly fingerprints many porphyry copper deposits. In these deposits, the central magnetic-high zone is typically a potassic zone of early biotite / K-feldspar magnetite alteration that has undergone retrograde sericite-chlorite alteration. The surrounding zone of low magnetics is a peripheral zone of intense phyllic / intermediate-argillic alteration. 7
Figure 3: Far East Zone surface geological features 8
Figure 4: Conceptual North-South section through the Far East Zone 9
The very high magnetic anomaly in the northern-most region of the Far East prospect area has been mapped in the field as a late, typically post-mineral, Sintag intrusion. Although not significant in terms of potential mineralisation, the occurrence of this post mineral intrusion indicates an environment of multiple intrusions that is a feature of all porphyry copper deposits in the south and west Pacific region. c) Diatreme Breccia A 400m wide area of intense brecciation in the northern part of the zone has many features that are characteristic of a diatreme breccia. In the field, this breccia is heterolithic, consisting of clasts of altered andesite, quartzsulphide veins and a fine grained equigranular intrusion. These clasts exhibit varying intensities of rounding and are set in a fine grained clay-pyrite altered comminuted matrix. Marginal to these zone thin breccia zones have been identified by petrological analyses (Leach, August 2003) as fluidised breccias. The breccia zone coincides with a 200-300m wide zone of moderately intense low magnetics. Diatreme breccias are associated with many porphyry copper deposits in the Philippines (e.g. Dizon, Sillitoe and Gappe, 1985) as well as in Indonesia (e.g Batu Hijau; Clarke and Irianto, 1995) and Papua New Guinea (e.g. Wafi River, PNG). The identification of a probable diatreme breccia in the Far East Zone is significant in that it illustrates that intrusions have been emplaced at very shallow levels in the crust, that cool meteroric waters have migrated down to this depth, and that these intrusions are probably hydrous. All these features are necessary for the formation of an economic porphyry copper deposit. d) Dacite Porphyry A small outcrop of a silicified intrusion is exposed in the south and east of the prospect area. Petrological analyses (Leach, 2003) indicate that the rock is a dacite porphyry that has undergone very intense acid leaching to an assemblage of residual quartz + iron oxides. 10
The identification of a dacite porphyry indicates that, as for the diatreme, a hydrous intrusion has been emplaced at shallow levels in the region, into which copper-gold mineralisation can be focused from a much larger magmatic source at depth (possibly associated with the Baroi circular collapse feature). In addition, dacite porphyry intrusions are genetically related to porphyry copper mineralisation elsewhere in Central Kalimantan (Manto-Tebihi prospect, 150km to the north-east). e) Advanced Argillic Alteration The identification of intense acid leaching of the dacite porphyry indicates the probable presence of a high sulphidation style alteration system in the region of this sample. The extensive zone of silica sand in the Far East Zone may be associated with the partial erosion of this high sulphidation system. It is speculated that these features may be part of an advanced argillic alteration zone that is commonly encountered immediately adjacent to, and above, a porphyry copper system. These advanced argillic shoulders are a feature of many porphyry copper deposits in both the southwest Pacific (e.g. FSE, Philippines; Batu Hijau, Indonesia; Frieda River PNG) and in South America (Corbett and Leach, 1998). f) Quartz-Copper Veins North-east trending zones, up to >200m wide, of abundant sheeted to locally stockwork, metal-rich, quartz-sulphide veins extend for more than 1 kilometer from the main dome-like ridge in the Far East Zone. These veins are copper-silver ± gold rich in which chalcopyrite either overgrows early milky quartz-pyrite or fills the matrix of brecciated quartz veins. The veins are locally more than 10m wide and in some cases grade over 10% copper (e.g. sample 641-43 : 9m @ 14.03 % Cu, 0.11 g/t Au and 464 g/t Ag. In more marginal settings from the Far East Zone ridge, these veins progressively become more Zn-Pb-Ag rich. It is postulated that the East and Central zone veins are a distal extension of the vein deposits that are centred on the Far East Ridge. As outlined above, the zonation of copper-lode veins outward to lead-zinc-silver lode veins around a central porphyry copper deposit is well documented at Bingham Canyon, Utah. 11
However at Bingham Canyon, these zones form more uniform halos around the central deposit, whereas at Baroi it is speculated that the NW striking structures are so dilational that the mineralised fluids have preferentially been channelled along these structures. g) Gossanous Zone A thick (up to at least 3-4m) zone of abundant iron oxides and intense clay alteration underlies much of the upper regions of the FEZ ridge. This gossan indicates extensive oxidation of sulphides under a weathering environment, although similar gossanous material are not documented elsewhere in south and west Pacific porphyry copper system. The occurrence of the gossanous clay zone in the FEZ is indicative of the erosion of significant abundant of sulphides, and indicates a high potential for a substantial chalcocite enrichment zone beneath the gossan-clay zone. h) Vegetation Anomaly The FEZ ridge is characterised by a poorly developed forest of low, spindly trees, similar to that encountered in the Beruang prospect in the eastern portion of the CoW. The high sulphidation ridge that covered a high grade buried porphyry copper-gold deposit at Wafi River, PNG, was also characterised by a similar vegetation anomaly. 6. RECOMMENDATIONS 1. The features that are indicative of a porphyry system in the FEZ occur mainly on a flat lying ridge with very little exposure. It is recommended that a number of shallow (50-80 meter) holes be drilled into this ridge in order to get a better understanding of the underlying geology and geochemistry. It is recommended that these holes test : a. The extent and nature of the diatreme breccia b. The distribution of advanced argillic alteration c. The morphology and distribution of the dacite porphyry d. The occurrence of a potential chalcocite blanket beneath the gossanous material e. The causes of the donut shaped magnetic high-low anomaly 12
f. The possible presence of a potassic alteration zone and porphyry-style quartz sheeted / stockwork veins. g. The continuity of precious and base metal mineralisation in the quartz-sulphide veins peripheral to the FEZ ridge. 13