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Kili Teke Project

Kili Teke Project

Kili Teke is a significant advanced exploration porphyry gold-copper project with an existing mineral resource, and potential for further re-optimization and discoveries to increase overall value.

SPMC entered a definitive agreement with Harmony Gold (PNG) Exploration Limited (“HGEL”) to acquire 100% of the Kili Teke project on April 6, 2022. Updates on the status of the acquisition will be provided on SEDAR and KRL’s news releases.

The Kili Teke project has an existing defined Inferred Mineral Resource of 237Mt @ 0.34% Cu (=0.8Mt Cu), 0.24g/t Au (=1.8Moz Au) and 168ppm Mo (=0.04Mt Mo), with an effective date of 30 June 2021.

SAMREC Inferred Mineral Resource
Tonnes (Mt) g/t (000’ kg) (000’ oz)
237 0.25 56 1,810
Tonnes (Mt) % Cu (M kg) Cu (M lb)
237 0.34 802 1,767
Tonnes (Mt) ppm (M kg)  (M lb)
237 168 40 88

To date over 36,000m of drilling has been completed and has indicated significant exploration resource upside, with near surface, high-grade Au skarn mineralisation not yet included in the defined Mineral Resource.

SPMC has identified potential for re-optimisation, bringing Kili Teke significantly closer to production as an open-pit mine to increase potential economic returns;

The Project comprises of EL 2310 and is located approximately 40km west-northwest of the Porgera Gold Mine, in the Koroba-Kopiago District of Hela Province, PNG. EL 2310 was granted to HGEL in May 2014 and has been renewed three times. The EL remains in good standing and is currently subject to a further renewal application at the end of the current term in May 2022. Pending renewal, the EL remains on foot with SPMC entitled to continue to explore the project as is customary under PNG mining law.

Regional and Local Geology

The Project lies within the Papuan Fold Belt, a mixed terrane of limestone and clastic sediments which have been strongly folded and thrusted during the evolution of the New Guinea magmatic island arc, on the northern margin of the Australian tectonic plate.

Numerous felsic and intermediate plutons, generated from the subducting Australian plate, are intruded into these sediments, and several are host to, or are associated with, large porphyry Au-Cu and epithermal Au deposits, respectively, including Ok Tedi (3.4Mt Cu, 12.5Moz Au*), Frieda River (12.9Mt Cu, 21.1Moz Au), Porgera (10.4Moz Au), and Mt Kare (2.1Moz Au). *Pre-production figures.

These world-class ore deposits are all located close to major deep-seated transfer faults which accommodate lateral slip between adjacent segments of the Australian plate, as it moves northwards. Kili Teke is located on the strike extension of a transfer fault and is highly prospective, as shown in Figure 1.

Figure 1: Kili Teke Regional Project Location
Kili Teke Regional Project Location

Kili Teke is hosted by a late Miocene (3.59±0.5Ma to 3.50±0.04Ma) multi-phase, intermediate-composition, intrusive complex (including diorite, microdiorite and hornblende porphyry lithologies), and associated breccias and skarns, as indicated in Figure 2. The latter occur both within (along structures), and on the margins of the intrusive complex, in limestone host rock.

Figure 2: Kili Teke Geology
Kili Teke Geology

Mineralisation is exposed at surface and indicates that the upper part of the deposit could be mined via open pit.

Studies indicate the strongest mineralisation is developed as disseminated and vein infill chalcopyrite, with lesser bornite, pyrite, gold and molybdenum, in two classic, porphyry-style stockworks: the Northern and Southern Stockwork Zones (NSZ and SSZ). Both of these high-grade zones are offset at depth by post-mineralisation faulting.

Several zones of high-grade skarn mineralisation are also recognised, but the drill density is insufficient to confirm continuity at this stage and they have been excluded from the current Mineral Resource estimate. In due course, a priority for SPMC will be further investigation of this skarn mineralisation.

The dominant alteration is an early potassic assemblage, composed of pervasive fine-grained biotite±K-feldspar±magnetite±sulphide (py+cp+mo). This is overprinted in turn by a secondary potassic event, restricted to breccia zones, pervasive phyllic alteration (sericite±quartz±sulphide), and late-stage argillic to intermediate argillic alteration (kaolinite±smectite clays), also restricted to major fault zones.

Importantly, the controls on high-grade mineralisation have not been defined. There remains residual upside potential to expand high-grade zones.

Potential Upside to the Mineral Resource Estimate

Figure 3 indicates high-grade skarn areas which remain a viable exploration target, and an opportunity to increase the metal inventory significantly. The inclusion of skarn mineralisation in a previously reported Mineral Resource have the potential to add 11% and 10% additional Cu and Au, respectively, to the mineral resource estimate.

Figure 3: Kili Teke Project: High Grade Skarn Area
Kili Teke Project: High Grade Skarn Area

Additional Exploration Targets

The Ridge Gold Anomaly (RGA) target, is the primary exploration focus, located within 1km of the main resource. This target was defined by surface geochemistry in stream sediments, and has subsequently been confirmed in soils and bedrock, via trench sampling (5m@0.37g/t Au & 0.77% Cu) and anomalous rock chips (up to 3.5g/t Au). The bedrock anomaly potentially extends beneath a limestone cap cover sequence, which means that RGA may be a much larger target than has been considered before.

Two additional exploration targets have also been identified in close proximity to the Kili Teke deposit.

Conceptual Mining Study

To date, desk top studies by SPMC suggest that an open pit operation is potentially viable (with a robust economic return) on the definition of more high-grade ore. In due course, this would require further infill drilling, focused initially on the two high-grade stockwork zones (NSZ and SSZ) and the marginal skarns; and any other features that can be targeted if the controls of mineralisation can be determined. SPMC expects further investigation on the viability of these options are part of the intended work towards a PEA and Feasibility Study.

Infrastructure, Logistics and Community Relations

Local infrastructure to support a new mine at Kili Teke is favourable. The Hides gas power station, which supplies power to the Porgera Gold Mine, is 50km south of Kili Teke; and the largest sealed airstrip in PNG, at Komo, is 80km to the south (and there are dirt strips much closer, at Auwi and Tari). The government has announced funding to build sealed roads between the local towns of Komo, Tari, Korobo and Mendi, all of which would serve a future mine at Kili Teke.

SPMC stakeholders have significant experience operating in the Hela District where the Project is located. Based on initial discussions with relevant community groups, SPMC is confident it can develop a viable community programme at Kili Teke.

Next Steps

SPMC will continue to work co-operatively with the management of HGEL to obtain all necessary regulatory approvals to close the acquisition and consolidate the Project into SPMC.

Closing of the Transaction is subject to SPMC raising financing of up to US$1 million (or waiving this condition) and other conditions detailed in the announcement on April 6, 2022.

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