Harvest Project

BACKGROUND


Tigray's Harvest Project is located 600 kilometres north of Ethiopia's capital city of Addis Ababa. It is located in the highly prospective Asmara Mineral Belt in the southern part of the Arabian Nubian Shield (ANS), 90 to 140 kilometres southwest of the Debarwa and Emba Derho volcanogenic massive sulphide (VMS) discoveries in Eritrea and SE of the Bisha deposit. Bisha is now a producing gold-copper-zinc-silver mine with over 25 million tonnes at 1% copper and 0.7 grams per tonne gold of ore in reserves. Vein-related gold deposits are also typical of the ANS, including the giant >13 million ounce Sukari deposit in Egypt, the one million ounce gold discovery at Koka-Zara in central Eritrea and the 140,000 ounce per year gold producer at Lega Dembi in southern Ethiopia.

Tigray acquired a 70% interest in the Harvest Project in 2011 through a joint venture with Ezana Mining Development, a private Ethiopian company. Harvest comprises five contiguous exploration concessions covering approximately 155 square kilometres, including Terakimti, Nefasit, Igub, Hamlo and Adi Nebried.

The Harvest Project contains multiple trends of copper-gold-silver-zinc rich VMS systems and numerous artisanal bedrock gold workings on its five exploration licences. Until recently, the ground has not been subject to modern exploration. Exploration by Tigray in 2011-2013 has included drilling 84 diamond drill holes testing four prospects for a total of 17,765 metres, a heli-borne VTEM, magnetic and radiometric survey, ground gravity and electromagnetic (EM) surveys, over 90,000 surface soil, stream and rock chip samples, and regional to detailed geological mapping. State of the art technologies, such as a Niton handheld XRF unit used for real-time base metal assay of drill core and surface geochemical samples, has allowed exploration to advance at a rapid rate.

The most advanced prospect on the Harvest Project is Terakimti, where over 70 diamond drill holes have been completed, with peak results of 73.80 metres of 3.80% copper, 1.30 grams per tonne gold and 14 grams per tonne silver, including 36.45 metres of 6.01% copper, 1.69 grams per tonne gold, 19 grams per tonne silver and 1.31% zinc in hole TD004. Significant base and precious metal mineralization has been intersected in the majority of drill holes completed. An initial 43-101 compliant mineral resource estimate was announced in January 2014 (details are provided below).

Drilling at Mayshehagne, approximately 3.3 kilometres south of Terakimti, has intersected 20.70 metres of 4.97% copper, 1.10 grams per tonne gold, 31 grams per tonne silver and 8.20% zinc from 24.00 metres, including 12.80 metres of 7.72% copper, 1.70 grams per tonne gold, 50 grams per tonne silver and 12.70% zinc (hole HD002).

A single drill hole at VTEM09, approximately 5 kilometres ENE and along strike of Terakimti, has intersected 10.69 metres of 3.47% copper, 4.20 grams per tonne gold, 91 grams per tonne silver, and 3.69% zinc from 19.81 metres, including 3.06 metres of 5.75% copper, 8.00 grams per tonne gold, 107 grams per tonne silver, and 0.70% zinc (hole TVD001).

Tigray is developing a number of grass roots to advanced prospects across the Harvest Project, including VTEM anomalies defined during a 1,500 line kilometre heliborne VTEM survey in April 2012 and a number of stream sediment and soil geochemical anomalies. Numerous bedrock artisanal gold workings along the Ruwa Ruwa trend have been located, mapped and sampled in preparation for ranking and potential drilling.

TERAKIMTI TREND


TERAKIMTI


Terakimti was the first prospect discovered on the Harvest Project in 2009 and is also the most advanced. Drilling at Terakimti has defined a substantial VMS system with four stacked lenses of massive sulphide. The masssive sulphide has significant oxide gold near surface and the system remains open down plunge.

The Terakimti prospect has been drill tested at 40 by 40 metre to 40 by 80 metre drill spacings, and drilling has defined multiple copper-gold-silver-zinc-rich stacked lenses over an 800 metre strike length. The VMS lenses are hosted within a sequence of intermediate volcanic rocks and basalt in the hanging wall. Exhalative siliceous iron formation occurs at the periphery of the mineralized zone, with jasperoidal alteration of basalts present in the hanging wall. Numerous quartz-eye porphyry dykes intrude the centre of the mineralized system and may be responsible for partial upgrading of mineralization through recrystallization. Mineralized lenses and associated alteration have a moderate east-northeast plunge and remain open down plunge.

TERAKIMTI INITIAL MINERAL RESOURCE ESTIMATE

In January 2014, an initial National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") compliant gold, copper, silver and zinc mineral resource estimate for the Terakimti volcanogenic massive sulfide (VMS) deposit was announced (please see Tigray's press release from January 27, 2014, available at www.tigray.ca or at SEDAR, www.sedar.com). This mineral resource estimate incorporates 16,495 metres of drilling in 79 diamond drill holes.

Tigray also received positive results from on-going metallurgical testing at Terakimti. A selected suite of representative supergene and primary sulfide mineralization has yielded encouraging initial results for potential base metal concentrates produced from conventional floatation work. Results from preliminary bottle roll testing on oxide composites have yielded recoveries that indicate oxides are amenable to conventional cyanide leaching.

Highlights
  • Indicated Mineral Resources of 2.131 million tonnes containing 89,477,000 lbs copper, 86,000 ounces gold, 1,130,000 ounces silver, and 66,871,000 lbs zinc.
  • Inferred Mineral Resources of 3.920 million tonnes containing 76,385,000 lbs copper, 166,000 ounces gold, 2,264,000 ounces silver, and 137,459,000 lbs zinc.
  • The Mineral Resource has potential to continue at depth.
  • Near surface oxide gold mineralization shows potential for heap leach amenability.
  • Supergene and primary mineralization produce copper concentrates (25% copper grade) through conventional floatation processes, with further optimization possible. Attractive zinc concentrates are also produced on selected mineralization.
Terakimti is defined at surface by an 800 metre surface NE-SW gossan expression, with the mineralized deposit dipping steeply to the southeast, plunging moderately northeast, and remaining open to extension down plunge at depth. The deposit is located within 7 kilometres of both a paved highway, and a high-voltage power grid line.

Terakimti Mineral Resource Estimate David Thomas, P. Geo., Effective Date: January 17, 2014
Mineralization Class
Ore Type
NSR
Cut-Off
($/t)
Contained Metals
Tonnes
('000s)
Cu %
Au g/t
Ag g/t
Zn %
Cu
('000 lb)
Au
('000 oz)
Ag
('000 oz)
Zn
('000 lb)
Indicated
Oxide
25.9
290
0.06
2.55
10.5
0.02
-
24
98
-
Sulphide
23.9
1,841
2.20
1.06
17.5
1.65
89,477
63
1,033
66,871
Sub-Total Indicated
 
2,131
 
 
 
 
89,477
86
1,130
66,871
Inferred
Oxide
25.9
398
0.13
4.77
7.2
0.07
-
61
92
-
Sulphide
23.9
2,583
1.09
0.96
20.6
1.42
62,187
80
1,712
77,101
Underground
Primary
63.9
939
0.69
0.84
15.2
2.92
14,198
25
459
60,358
Sub-Total Inferred
 
3,920
 
 
 
 
76,385
166
2,264
137,459
Footnotes to mineral resource statement

Fladgate undertook data verification, and reviewed Tigray's quality assurance and quality control programs on the mineral resources data. Fladgate concluded that the collar, survey, assay, and lithology data were adequate to support mineral resources estimation.
Domains were modelled in 3D to separate oxide, supergene and primary sulphide rock types from surrounding waste rock. The domains conformed to lithological contacts logged in diamond drill core. Sub-domaining was further warranted to separate different grade populations and zones with differing strike and dip orientation within domains. Raw drill hole assays were composited to 5 metre lengths broken at domain boundaries. High grade assays were capped prior to compositing. Capping thresholds were assessed within each domain independently. Block grades for copper, zinc, gold, and silver were estimated from the composites using a combination of ordinary kriging ("OK") and inverse distance weighted to the third power ("ID3") into 5 x 5 x 5 m blocks coded by domain. Dry bulk density of the oxide, supergene and primary sulphide was estimated by ID3 interpolation of SG measurements. Blocks were classified as indicated and inferred in accordance with CIM Definition Standards.
NSR was estimated using undiluted grades, metal prices, recoveries, smelter treatment and refining costs. Metal prices used for copper, zinc, gold and silver were US$3.50/lb, US$0.90/lb, US$1,400/oz, and US$25/oz respectively.
Metallurgical recoveries, supported by metallurgical test work were applied as follows:
Oxide zone: a recovery of 78.4% was applied for gold and 64.5% for silver. Copper and zinc are not recovered during the oxide phase and therefore are not considered a part of the oxide mineral resources.
Supergene zone: recoveries to copper concentrate of 87%, 36%, and 78% were applied for copper, gold and silver. Zero recovery of zinc from the
supergene zone has been assumed. The supergene zinc metal content has not been included in the mineral resource calculation.
Primary zone: recoveries to copper concentrate of 89%, 45%, and 39%, were applied for copper, gold, and silver respectively. Recoveries to zinc concentrate of 85% and 10% were applied for zinc and silver.
A Lerchs-Grossman pit shell was generated from the NSR and using open pit mining costs of US$1.75/t. The total ore based costs (process and G&A) are US$25.9/t for oxide, and US$23.9/t for the supergene and primary rock types. A constant pit slope of 45° was used in the pit optimization. Open Pit Mineral Resources were reported within the Lerchs-Grossman pit shell above an NSR cut off equivalent to the total ore based costs stated above. Underground Mineral Resources were reported within a grade shell generated at an NSR cut-off of US$63.9/t, assuming a US$40/t underground mining cost in addition to the ore based costs stated above. Isolated blocks were removed prior to tabulation.
The contained metal figures shown are in situ. No assurance can be given that the estimated quantities will be produced. All figures have been rounded to reflect accuracy and to comply with securities regulatory requirements. Summations within the tables may not agree due to rounding. The sulphide summation for contained zinc does not agree due to exclusion from the mineral resource of the contained zinc metal within the supergene zone.




A low sensitivity and a three year average price comparison on open pit economics was also conducted, to assess project potential and risk due to commodity price fluctuation. From the scenarios outlined below, the project illustrates consistency in metal content as prices decrease, and show upside potential in pit expansion to depth, as prices increase.

Open Pit Total
Tonnage and Metal
Sensitivity
%Tonnes
Cu Metal
Au Metal
Ag Metal
Zn Metal
Low Case
-2.9%
-0.7%
-0.9%
-0.8%
-1.4%
Base Case
0.0%
0.0%
0.0%
0.0%
0.0%
3year average
16.4%
7.1%
9.5%
11.3%
21.6%
Low Case - Cu $3.20/lb, Au $1250/oz, Ag $20/oz, Zn $0.80/lb
Base Case - Cu $3.50/lb, Au $1400/oz, Ag $25/oz, Zn $0.90/lb
3 year average - Cu $3.60/lb, Au $1548/oz, Ag $29.90/oz, Zn $0.90/lb


Metallurgy

Metallurgical work is considered preliminary in nature and is on-going. A total of 16 composite samples were designed for testing at the Blue Coast Research metallurgical facility in Parksville, BC. These composites were formed from ¼" diamond core from 28 separate drill holes, profiling representation from gold enriched oxide mineralization, copper enriched supergene mineralization, and copper-zinc primary mineralization. Oxide mineralization has been shown to be amenable to conventional leaching, with initial South and North Oxide zone composites illustrating 100 micron grind gold recoveries of 75-80%, and coarser size heap leach type material would be slightly lower at 71-75%. Additional test work, engineering, and trade-off studies would be required to establish the most attractive economic option.

Copper enriched supergene mineralization, derived from the combination of several composite samples, provided provisional Locked Cycle Test results with high copper recoveries of 90% and a concentrate grade of 25%. Locked Cycle Testing on a single composite sample of primary sulfide mineralization resulted in 89% copper recovery being achieved at a 25% concentrate grade, with 86% zinc recovery to a separate concentrate grading 60% zinc. Both concentrates contain gold and silver credits with the potential to prove attractive in a marketing context. One composite test conducted on transition mineralization did not respond favourably to initial conventional floatation, and will require additional review.

The metallurgical work conducted to date is considered very preliminary and more comprehensive work will follow more detailed drill testing and sampling.

VTEM09


The VTEM09 airborne EM anomaly is located on the Terakimti concession approximately 5.3 kilometres east-northeast of Terakimti, and comprises a strong bedrock EM conductor over 200 metres strike associated with several malachite-rich gossan outcrops. Four trenches (up to 1.5 metres deep and 103 metres long) were completed over 160 metres of strike length at 40m spacing in late 2012 yielded the following intercepts, from northeast to southwest:
  • 10 metres at 3.85 grams per tonne gold, 26 grams per tonne silver, 0.84% copper and 0.67% lead, including 5 metres at 7.27 grams per tonne gold, 45 grams per tonne silver, 0.65% copper and 1.14% lead. This intercept is within a broad copper-rich zone averaging 74.85 metres at 0.43% copper.
  • Trench 031 - 2 metres at 9.58 grams per tonne gold, 161 grams per tonne silver, 0.21% copper and 0.78% lead
In 2013, a single drill hole at VTEM09 intersected 10.21 metres of 3.16% copper, 3.97 grams per tonne gold, 87 grams per tonne silver, and 3.82% zinc from 20.29 metres, including 2.82 metres of 5.61% copper, 7.48 grams per tonne gold, 102 grams per tonne silver, and 0.72% zinc (hole TVD001).

The high-grade copper and precious metal enriched VMS mineralization intersected by TVD001 compares favourably with the metal tenor encountered at the Terakimti and Mayshehagne discoveries, and marks the third significant VMS discovery made at Harvest. This drill intersection discovery at VTEM09 continues to highlight the base and precious metal endowment of this region of the Arabian Nubian Shield.

MAYSHEHAGNE TREND


Drilling at Mayshehagne, approximately three kilometres south of Terakimti, has defined a high grade VMS lense over 120 metres strike/plunge, remaining open down down plunge, hosted in a sequence of mafic volcanic rocks with abundant jasperiodal cherts. The discovery adds potential to the project as it proves the presence of a significant new VMS trend.

The Mayshehagne target was identified as a strong bedrock EM conductor from an airborne survey conducted in 2006. Mapping and surface geochemical sampling by Tigray has defined a mineralized zone over a strike of 170 metres that includes several gossans, magnetic ironstone chert, chert breccia, barite and malachite, hosted in carbonate-altered mafic volcanic rocks.. Results from rock-chip sampling returned high-grade assay values ranging from 0.07% to 14% copper, 0.11 to 13.2 grams per tonne gold, up to 56 grams per tonne silver, 0.03% to 1.9% zinc and up to 1.7% lead.

The Mayshehagne prospect has been drilled on four sections over 160 metres of strike. Best results include:
  • 20.7 metres of 5.00% copper, 1.03 grams per tonne gold, 31 grams per tonne silver and 8.2% zinc from 24.0 metres, including 12.8 metres of 7.77% copper, 1.62 grams per tonne gold, 50 grams per tonne silver and 12.66% zinc (HD002); and
  • 18.0m of 3.23 % copper, 0.95 grams per tonne gold, 22 grams per tonne silver and 3.86% zinc from 60.0m (approximately 35 m below surface), including 5.45m of 7.05% Cu, 1.24 grams per tonne Gold, 46grams per tonne Ag and 6.53% Zn from 62.0 m. The high-grade massive sulfide body remains open down plunge and down dip to the northeast, with the alteration and volume of disseminated and stringer-style sulfide is continuing to the northeast.

RUWA RUWA GOLD TREND


The Ruwa Ruwa gold trend is located on the Terakimti Concession 1.5 kilometres west of the Terakimti VMS trend. Ruwa Ruwa is defined by a high-order soil gold anomaly and numerous artisanal bedrock gold workings over a seven kilometre strike length. The largest bedrock workings and most advanced targets are Lihamat and Adi Goshu. At Lihamat, extensive artisanal bedrock workings occur over a strike length of 225 metres and the mineralized zone is up to 50 metres wide with shafts up to 15 metres deep. Visible gold is mined in numerous quartz veins in a coarse-grained quartz sericite altered quartz porphyry. The porphyry has intruded into a sequence of mafic and felsic volcanic rocks and banded iron formation.

At Adi Goshu, deep mine workings (>20 metres) are present on quartz veins over a 100 metre strike length on two trends up to 20 metres wide. Soil geochemical sampling has defined a 500 metre long >100 parts per billion gold soil anomaly with five samples assaying > 1.0 grams per tonne gold.  

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Terakimti Long Section Terakimti Cross Sections Mayshehagne Long Section Harvest Drill Hole Intercepts Harvest Trench Results
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