The Bayan Airag Volcanogenic Massive Sulfide Deposit, Western Mongolia

CIM Vancouver 2006
Paul Zweng, Jim Franklin,
Abstract QGX Ltd.’s 80%-owned Golden Hills Cu-Au-Ag massive sulphide project is located in the Savkhan province of western Mongolia. The principle deposit at Golden Hills is the Central Valley Zone (CVZ) consisting of three ore types: (1) Cu-Au-Ag contained in volcanogenic massive sulphide (VMS), (2) Au-Ag contained in oxide (gossan), and (3) Au-Ag contained in high-grade quartz-telluride veins (HGQT) cutting (1) and (2). An independent NI 43-101 resource estimate for these mineralization types indicated: Measured and Indicated: 10.16 million tonnes massive sulphide grading 1.72 % copper, 0.39 g/t gold and 5.4 g/t silver, 3.1 million tonnes of oxide grading 2.83 g/t gold and 18.9 g/t silver, and Inferred: 696,000 tonnes in the CVZ high-grade quartz-telluride grading 19.63 g/t gold and 35.0 g/t silver.

QGX during late 2002 to early 2005 drilled 131 diamond drill holes (33,640 m) in the CVZ guided by electromagnetic and induced polarization geophysical surveys as well as geological mapping to outline these potentially significant deposits..

The massive sulphide at the CVZ is hosted in the Proterozoic Shuvuun formation consisting of greenschist metavolcanic and metavolcaniclastic rocks of intermediate to felsic composition. Multiple massive pyritic sulphide horizons occur over a strike length of 1200 m and range up to 130 m thick. The deposit forms a monoclinal sequence dipping from 0 to -70 degrees to the north (avg. dip is 55 degrees).

There are two principle massive sulphide deposits: the North Zone and the South Zone. The North Zone consists of two pyritic massive sulphide horizons denoted as Upper and Lower. The Upper Zone lies 80-90 m below a thick basalt horizon in a dominantly chlorite altered assemblage of quartz phyric felsic to intermediate metavolcanic rocks. The Upper North Zone averages 90m thick, is composed of +90% pyrite with accessory quartz, carbonate, clay and gypsum or barite. Copper mineralisation in the form of chalcopyrite is restricted almost entirely to this zone, concentrated within the upper third of the horizon. Gold values within the copper zone locally average 1 g/t but generally are from 0.2-0.5 g/t. Immediately below the base of oxidation is a supergene copper blanket up to 15m thick grading up to 8% Cu. The Lower North Zone is separated by 40-80m of intensely altered schist. The Lower Zone contains mostly pyrite with only sporadic chalcopyrite and trace gold values. Both Upper and Lower North zones are partially enveloped by HGQT mineralisation.

The South Zone occurs about 200 m below the North Zone. South Zone consists of massive and semi-massive pyritic lenses and horizons commonly with abundant chlorite. Occasional +90% pyrite lenses contain up to 6% Cu as chalcopyrite. Up to 12 metres of supergene copper occurs above the South Zone with up to 27% Cu locally. The North Zone MS remains open at depth over much of its strike length.

The oxide (gossan) deposits represent the weathered and oxidized portion of massive sulfide at depth. The oxide deposits extend from surface to the base of oxidation (typically 50-70 m depth) and range up to 30 m in thickness. Most massive sulphide bodies at depth are represented by a corresponding oxide body at surface containing variable amounts of gold and silver with no copper. The oxide deposits consist of a variety of black, brown and yellow goethite rich breccia, goethite and limonitic sandstone and siliceous limonitic cherty rock resembling toffee. The oxide material is typically very porous and permeable and commonly unconsolidated.

The HGQT veins occur principally around the margins of the upper and lower main North Zone massive sulfide horizons, almost entirely envelope the MS horizons. The HGQT zones average 3 m wide and consist of native tellurium and auriferous tellurium sulphides within brecciated and quartz-carbonate altered schist immediately adjacent to, or a few metres from, massive sulphide-schist contacts.

Alteration encompassing the CVZ deposits shows similarities with many other world-class VMS districts. Geochemical studies indicate sodium depleted footwall rocks with ancillary addition of potassium proximal to the North Zone (and the South Zone?) massive sulphide bodies. As with many large VMS districts, a large, locally epidotized mafic sill complex occurs within 1 km of the CVZ massive sulphide bodies within foot-wall strata and may represent the heat engine that “drove” the ore-forming hydrothermal system.

Preliminary metallurgical testing indicates that 75% of the gold contained in oxide (gossan) can be recovered from the coarse fraction, suggesting the possibility for a run-of-mine heap leach operation.. More than 94% recovery of copper is achievable from supergene massive sulphide resulting in a high-grade saleable concentrate of 31.1% copper and 90.1% recovery of copper is achievable from hypogene massive sulphide with a high grade saleable concentrate of 25.3% copper. Gold and silver recoveries of 94% and 97%, respectively, have been achieved from the HGQT veins with a concentrate grading 330 g/t gold.

Although the bulk of exploration has been conducted at the CVZ of Golden Hills, there remains within the surrounding 24 licenses held 100% by QGX an entire belt of Proterozoic rocks prospective for VMS totaling some 6400 square kilometers that have yet to receive systematic evaluation. QGX is organizing an airborne electromagnetic survey as well as geochemical surveys for 2006 to identify other potential massive sulphide bodies within the prospective Shuvuun formation in the Golden Hills area.
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