The project is owned 65% by Madison and 25% by Matu Mining, a wholly owned subsidiary of Australian-listed Carpenter Pacific Resources. Kare-Puga Development, a company representing the Mt. Kare landowners, holds a 10% interest, which will be carried until a production decision is made.
Watts Griffis & McOuat (WGM) estimates that the total uncut, indicated and inferred resource is 20.4 million tonnes averaging 5.6 grams gold and 28.7 grams silver per tonne. This is equivalent to 4 million contained ounces gold and 18.8 million contained ounces silver.
The indicated portion of the estimate is 9.8 million tonnes averaging 5.6 grams gold and 33 grams silver, whereas the inferred resource is 10.6 million tonnes averaging 5.6 grams gold and 24.8 grams silver. A cutoff of 1 gram gold was used for these calculations.
If all bonanza-grade gold values in excess of 30 grams gold are reduced to 30 grams gold, the resource falls to 1.9 million oz. gold and 18.6 million oz. silver contained in 20.1 million tonnes grading 2.4 grams gold and 28.8 grams silver.
Madison is looking to the Porgera mine, 15 km to the southwest, as a model for Mt. Kare. Bonanza-grade gold associated with quartz roscoelite is present in that mine’s Roamane fault, and Madison believes a similar situation may exist at Mt. Kare, since high-grade intersections occur in a similar style of quartz roscoelite mineralization.
If a 1.5-gram-per-tonne cutoff is used and all high-grade mineralization is incorporated in the calculation, the estimate is 3.8 million oz. gold and 16.3 million oz. silver contained in 14.4 million tonnes grading 7.5 grams gold and 35.2 grams silver.
When the gold grade is cut to 30 grams gold using a 1.5-gram cutoff, the resource drops to 1.6 million oz. gold and 16.1 million oz. silver contained in 14.2 million tonnes grading 3 grams gold and 35.4 grams silver.
In its report, WGM says it sees no reason to limit the potential for additional economically interesting mineralization at Mt. Kare. “This is clearly one of the better gold projects we’ve seen in some time; we would not be surprised if Madison, through continued drilling, achieved a major increase in its resource base.”
WGM goes on to state that its check sampling and assaying program leaves no reason to doubt the veracity of previously reported gold and silver contents of drill core and other samples from Mt. Kare.
The property comprises 220 sq. km in the central highlands of mainland Papua New Guinea. Two distinct types of mineralization are recognized. The first is early mesothermal carbonate base metal-gold mineralization occurring in broad zones of northeasterly trending brecciation running parallel to the Porgera Transfer structure. This type of mineralization, defined in the Central and Black zones, is analogous to that being mined at Porgera. The second type, described as a late-stage, epithermal, high-grade quartz-roscoelite, is found in the Western Roscoelite zone. This mineralization resembles the bonanza-grade reserves previously mined underground at Porgera.
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