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GG - Interim Technical Review Report

GG - Interim Technical Review Report. W. Mugomo, G.S Chagondah October 2013 Caledonia Mining Corporation Blanket Mine Division Gwanda, Zimbabwe. Preamble.

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GG - Interim Technical Review Report

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  1. GG - Interim Technical Review Report W. Mugomo, G.S Chagondah October 2013 Caledonia Mining Corporation Blanket Mine Division Gwanda, Zimbabwe

  2. Preamble • Within Blanket Mine’s minerals claim portfolio are several satellite gold claims within the Gwanda Greenstone Belt that have been explored and developed to different stages . These blocks of claims are all within 50km radius of Blanket Mine. • GG gold prospect is located 12km from Blanket Mine. It has a historical gold output of 2 500oz at a grade of 9.2g/t. • Gold in-soil sampling and IP exploration techniques were employed prior to extensive surface diamond drilling campaigns on the identified anomalies. A total of 4704.41 metres drilled on 18 holes at GG. • Significant broad intersections were encountered at GG. • On the basis of the encouraging exploration results, past production records and infra-structure availability, GG is an attractive prospect and production has since been planned in view of the relatively low capital cost input and short-term duration to production.

  3. 2.0) Project objective To upgrade GG resources to the mineable category in order to meet planned production schedules.

  4. 3.0) GG PROSPECT • 3.1) Location & Access • GG Prospect is located within the Gwanda Greenstone Belt approximately 8km west-northwest of Gwanda town, ( Matebeleland South Province -Zimbabwe). • Claims are in gently rolling relief. • Access to the Prospect is via an 9 km tarred road from Blanket Mine to the Kezi turn off from where a road seemingly heading towards Kezi immediately turns right into an all-weather dust road into the old Hotel Farm reaching the Prospect after approximately 3km (Figure 1 and Appendix 1).

  5. Figure 1. Location map of GG Mine

  6. 3.2) Ground Tenure Status • GG is one of the 21 satellite projects proximal to and held by Blanket Mine. • The ground is held in the form of gold claims. The claim holding covers an area of 162.9ha and is registered in the Bulawayo Mining District.

  7. Work done previously includes: • Traditional geological mapping • Rock chip geochem – on surface outcrops • Gold in-soil geochem • Geophysical work- Induced Polarisation (IP) • Surface drill-testing of selected targets • Resource estimation

  8. Figure 2: GG: Surface drilling plan and cross-section lines.

  9. Figure 3. Cross section through holes GGD- 5, 9 &10 (looking 060).

  10. Figure 4. Cross section along holes GGD- 8, 1B &13 (looking 060)

  11. Figure 5. Cross section along holes GG- 2,3 6 & 11 (looking 060).

  12. Figure 6. Cross section through holes GGD 12,7 & 7b (looking 060).

  13. 4.0) Current Work • 4.1) Shaft and Underground Development • Shaft sinking commenced in July 2012 & is still in progress with a twofold objective: • Provision of exploration drilling platforms to locate & confirm the previous findings on the nature of mineralisation, the gold tenor and distribution of values. • Facilitate the blocking out of mineable ore reserves. The main target ore zones are: • North Main (underneath mined out pit) • South Main. • 4.2) 60mL & 120mL diamond drilling objective • The 60mL and 120mL diamond drilling programs are designed to: • Define a preliminary GG Prospect geology model so that useful information e.g. ore body attitudes could be drawn and used to explore and develop subsequent levels. • Exploratory drilling platforms have been established on 60mL and 120mL. • Further drill platforms are also pencilled on 150mL, 180mL and 210mL.

  14. 4.3) 60mL and 120mL diamond drilling to date • Drilling at 60mL commenced in December 2012. • On 60mL, horizontal strike perpendicular and fanned drill holes were completed on 15 holes. Only one follow-up site was drilled at 20 degrees negative inclination. Total drill metreage for 60mL is 1 453.11 metres. • To date a total of 764.62 metres have been completed on 120mL over 9 holes. • All holes on 60mL and 120mL were survey marked on each cubby prior to drilling to enable correct drill hole azimuths.

  15. 5.0) Findings 5.1) Drilling Outcome Outlined below is a summary of the 60mL and 120mL drilling outcome (Figs. 7 to 8, 14 to 18 and Tables 1 to 3).

  16. Figure 7.GG 60mL and 120mL Shaft ore body, South & North Main reef projections.

  17. Figure 8. 60mL & 120mL SOB, FW1 to FW5 drillhole & assay plan

  18. Table 1: 60mL drilling - Summary of drill holes and intersections

  19. Table 2: 120mL drilling - Summary of drill holes and intersections

  20. 5.2) Structure • Gold mineralization at GG prospect like in the entire Gwanda Greenstone Belt is restricted to selected shear zones and/or fault zones within a largely meta-basalt country rock (Fig. 9). • The shear zones hosting mineralization at GG prospect are sub-parallel to the east-west regional foliation. • Two fault trends (NE-SW and E-W) have been identified to be displacing and truncating mineralization (Fig. 9). • Both fault trends appear to be intruded by post mineralization mafic dykes.

  21. Figure 9. GG Geology Map

  22. 5.3) GG Shaft ore body……A bonanza!!! • Underground development on 60mL, 90mL(partly) and 120mL has exposed a bonanza Shaft ore body (SOB), refer to Figures 10 and 11. • For the shaft ore body, it has been established that while the hosting banded argillaceous phyllite (magnesium basalt?) trends 272/83, mineralization trends 256/87. • The easterly plunging Shaft ore body is terminated on the west by a north-east trending and easterly dipping mafic dyke (Figure 11).

  23. Figure 10. The plan view of the Shaft ore body (SOB) with its projection at various levels.

  24. 5.4) Alteration and mineralization • Chloritization, silicification and carbonation appear to be the dominant alteration types associated with shear zones and mineralization. • The gold mineralization is confined to a predominantly sheared and bleached grey-khakish phyllitic unit (magnesium basalt?) and chlorite schist with the foliation following the regional shear, refer to Figure 9above. • Mineralization is hydrothermal in origin and is associated with smokey grey to blackish quartz-carbonate veins which are also foliation parallel in places. • The major sulphide mineral is acicular arsenopyrite with pyrite and pyrrhotite being subsidiary. • In places, contact metamorphism and associated metasomatism allow margins of mafic dykes to be mineralized. Generally, the mafic dykes are not pay.

  25. 5.5) Geology Footprint • The drilling program on 60mL and 120mL is largely successful as it is intercepting favourable structures (quartz and carbonate veins in sheared portions of banded argillaceous phyllite) for the North Main and South Main reefs which host significant intersections north-east of GG shaft and at depth. • There is a strong spatial association of anomalies outlined by a coincident high chargeability IP and Au in-soil techniques and actual reef positions as exposed by underground development (Fig. 20). • Surface, 60mL and 120mL drill intercepts have been collated and this has allowed projection of reefs at any level (Figure 7). This exercise has significantly improved our knowledge and understanding of the morphology of GG parallel reef package. • To the south of Shaft ore body (SOB), SOB FW1, FW2, FW3, FW4 and FW5 have been outlined from 60mL and 120mL drilling (Figure 8). • The SOB FW1-5 ore zones both on 60mL and 120mL appear to be lenticular, of limited strike, pinching and swelling on dip e.g. as depicted on SOB FW1 drill polygons (Figure 14).

  26. 6.0) GG Mineral inventory • GG mineral inventories are tabulated in Table 3 below. • Resource polygons for North Main, South Main, Shaft ore body and SOB FW1, FW2, FW3, FW4 and FW5 are presented in Figures 12 to 18. • The 2007 surface drilling campaign returned an inferred resource of 382 858 tonnes at 2.89g/t over an average true width of 5.20m for North Main and 1 092 357 tonnes at 2.04 g/t over an average true width of 13.12m for South Main. • The recently discovered bonanza shaft ore body has to date been estimated to contain a probable reserve of 42 042 tonnes at 4.02g/t over 4.40m. • South of the Shaft ore body, drilling in progress has delineated SOB FW1, FW2, FW3, FW4 and FW5 ore bodies which have a combined inferred resource of 191 413 tonnes at 2.88g/t over 2.20m.

  27. Table 3. GG mineral inventories - CIM summary

  28. Figure 11. GG Shaft ore body (SOB) longitudinal section looking NW (060).

  29. Figure 12. North Main resource longitudinal section looking (NW)

  30. Figure 13. South Main resource longitudinal section looking (NW)

  31. Figure 14. SOB FW1 longitudinal section looking NW (060).

  32. Figure 15. SOB FW2 longitudinal section looking NW (060).

  33. Figure 16. SOB FW3 longitudinal section looking NW (060).

  34. Figure 17. SOB FW4 longitudinal section looking NW (060).

  35. Figure 18. SOB FW5 longitudinal section looking NW (060).

  36. 7.0) Proposed work 7.1) GG underground diamond drilling Underground drilling off the GG Shaft levels will continue on levels to be established i.e. on 150mL, 180mL and 210mL with the object of locating inferred resources outlined by the 2007 surface drilling campaign. 7.2) GG underground on-reef development 7.2.1) 2007 surface drilling data has been collated and used to project reef positions on level plans e.g. as depicted on Figure 7, for 60mL and 120mL. This will speed up on-reef development while making diamond drilling cost effective. 7.2.2) Current 120mL drive east will be extended for 75m from site A to site D (Fig. 7). Fanned up and down dip holes will be drilled (on sites A, B, C & D) to test for the depth and grade continuity for the South and North Main reefs as depicted in Figure 20. This exercise will give confidence and better planning over the 100m of strike length to be probed. 7.3) Surface diamond drilling Surface drilling which targets a coincident chargeability IP and Au in-soil geochemical anomalies (Fig. 20) has been planned for 2014 with the following objectives: • to test the north-east extension after the anticipated merger of South and North Main reefs. • To test the strike and depth extensions of the quartz reefs (SOB FW1, FW2, FW3, FW4 and FW5) south of the Shaft ore body (SOB), refer to Figure 8.

  37. Figure 19. Proposed site D: Cross section looking NE along drill hole GGD-16 & 18.

  38. Figure 20. GG Prospect coincident high IP chargeability & geochemical Au in-soil anomalies.

  39. 8.0) Conclusions • The 2007 surface drilling campaign highlighted the existence of two consistent major reefs: North Main and South Main, which both extend beyond 270mL at variable grades with depth. • The recent discovery of the Shaft ore body is indicative of the growing potential of the GG Prospect. • The combined un-diluted GG mineral inventories are estimated at 1 708 670 tonnes at 2.33g/t representing 57 months of production (when the resources are successfully converted to reserves) at 30 000 tonnes per month. • The 60mL and 120mL drilling outcomes corroborate with the findings of the 2007 drilling campaign. • Surface, 60mL and 120mL drill intercepts have been collated and this has allowed projection of reefs at any level. This exercise has significantly improved our knowledge and understanding of the morphology of GG parallel reef package. • To date, both drilling and on-reef underground development have confirmed a positive spatial correlation of economic mineralization with coincident IP chargeability and Au in-soil geochemical anomalies. The anomalies defined in the prospect will continue to guide further work.

  40. 9.0) Recommendations 9.1 There is merit in extending the current GG shaft depth to beyond current 120mLpremised on the following: 9.1.1 The easterly plunging shaft ore body (SOB), with a tenor of 4.02g/t, appears to be opening-up down dip based on its almost doubled strike length between 60mL and 120mL. Furthermore, ore grades are getting elevated with depth e.g. from 3.36g/t on 60mL to 4.47g/t on 120mL. 9.1.1 Current underground evaluation drilling for North and South Main reefs has shown that the reefs are poorly developed above 120mL. From 2007 surface drilling campaign, significant intercepts representing 1 220 200 tonnes or 73% of for the two reefs’s resource are below 120mL. 9.1.2 In view of the need for a shaft safety margin (15m radius), a significant amount of the shaft ore body will remain unmined in the event that the shaft is not deepened beyond the 120mL. 9.1.3 The shaft, when deepened, will provide further evaluation drilling platforms to improve on the understanding and interpretations of the reefs which will go a long way in guiding and speeding-up ore reserves blocking.

  41. 10.0) References cited Mikhailov, A., (1998), Geological map of GG Prospect, Boss Resources (Pvt) Ltd, (Unpublished internal company report). Mpofu, P., (2006). Induced Polarization Surveys, Blanket Mine (1983) Pvt Limited Gwanda, Zimbabwe, Geophysics GPR (Zimbabwe) (Pvt) Ltd, (Unpublished internal company report). Nyagumbo, J., Thomson, B., (2005). Request for Authority to Fund Expenditure (AFE) for GG claims - Drilling, AFE No. BN-05-54, (Unpublished internal company report). Tyndale-Biscoe, R., (1940). The geology of the country around Gwanda, Southern Rhodesia Geological Survey, Bulletin No. 36, 204p. Zizhou, A. P., Sakala, A. E. (2007), GG drill hole sections and resource polygons.

  42. Appendix 1. Gwanda Greenstone Belt showing location of Blanket Mine claims including GG.

  43. Appendix 2. GG Prospect gradient array IP survey chargeability map.

  44. Appendix 3. GG Prospect Au in-soil geochemical map.

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