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The Geology, Alteration and Mineralisation at the Jelai Gold Project Kabupaten Bulungan, East Kalimantan

The Jelai Gold Project is located 1,550 kilometres northeast of Jakarta, the capital city of Indonesia, close to the east coast of the Province of East Kalimantan. The centre of the Jelai Gold Project is located at approximately E 117° 00’ 00” and N 03° 10’ 00”. The concession area is held by PT Jelai Cahaya Minerals. The licence is currently in the exploration stage of activity. The property was first intensely explored in 1996 by geologists working for Indochina Goldfields Limited (now Ivanhoe Mines), when anomalous gold contained in stream float samples were traced upstream to the Mewet area. Subsequent exploration programmes, such as stream sediment sampling, soil sampling, mapping and drilling outlined a series of areas containing anomalous gold and silver. Follow up exploration by PT Jelai Cahaya Minerals has concentrated on shallow drilling to define the extent of the veins, with selected deeper drilling where mineralisation and textures have shown a potential ore shoot may have developed. In total, there is more than 5 kilometres of aggregate vein within the Mewet area alone and a number of other peripheral prospects have yet to be sampled sufficiently to define drill targets.

The mineralisation in the area comprises a series of low sulphidation epithermal veins, vein breccias, sheeted vein systems and silicified zones with anomalous precious metal values hosted within andesitic volcanics, dacite and andesite intrusions and sediments. The alteration within, and adjacent to, the mineralised zones is typically propylitic on a regional scale, with narrower zones of argillic alteration adjacent to the veins and ubiquitous silicification associated with the precious metal mineralisation. Calcite can be rare to common within the quartz veins. The structural trend of the veins, normally north-south with steep dips to the west and occasionally to the east, and the regional structures defined can allow a structural model to be developed for the development of the mineralisation. Major faults in the area, with a number of conjugate fault sets being developed, have allowed a suitable fluid pathway for the epithermal fluids to permeate to a level where boiling has occurred, with the deposition of precious metals. Mineralogically, the gold mineralisation is extremely fine and free-milling in the Mewet area. Higher grades of gold are often associated with fine, black sulphide bands in colloform quartz, which may be gold-rich electrum or a gold sulphosalt. The silver:gold ratio is generally low, unlike some other Kalimantan epithermal systems such as Mount Muro.

The exploration of the Jelai Gold Project is an example of persistence and detail, often required to adequately explore epithermal systems, where the bonanza shoots and economic portions of the veins may not be apparent at surface. The drilling of these targets is also difficult, requiring targeting a shoot sometimes less than 50 metres in width along the vein. It is important when exploring these types of deposits that surface observations of vein texture, alteration and structural setting are interpreted correctly to target an essentially hidden bonanza zone at depth. Surface geochemistry and geophysics are useful tools for exploration but care is required to ensure what may be geochemically barren quartz at surface does not contain textural or structural signals of a bonanza ore zone at depth.

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