SAPPES GOLD PROJECT

Company Facts

Mineral Securities ownership interest:  100% ownership

Project Facts

• High grade gold deposit at permitting stage
• Country of operation - Greece

More Information

Sappes is located 30 kilometres northwest of Alexandroupolis in the Thrace region of north-eastern Greece, near that country’s borders with Bulgaria and Turkey.  Minsec owns 100% of Sappes.  The Project comprises Mining Lease ML850 (approximately 20 square kilometres in area).  The mining lease is held by Minsec’s wholly-owned Greek subsidiary Thrace minerals SA.

The project is based on the proposed development of a shallow underground gold mine on the high-grade Viper vein orebody and a small open pit on the near-surface St Demetrios orebody, together with a process plant producing gold dore and a gold-rich copper concentrate.  Planned production at the mine, subject to the completion of the permitting process, is at the rate of approximately 100,000 ounces of gold per annum for an initial four-to-five year life.  The project is expected to have highly competitive operating costs.  The most recent estimates (reported in the prospectus issued by Scarborough in February 2006) suggest life-of-mine capital costs of US$68 million and operating costs of approximately US$170 per ounce.

The project has been designed to have minimal environmental impact.  It has an extremely small footprint with a large part of process plant tailings returned to the mine as fill and uses a flotation process for gold recovery.

Mineral Resources and Ore Reserves

Measured and Indicated Resources are reported inclusive of those Mineral Resources modified to produce Ore Reserves.

The Resource and Reserve classification above is in accordance with the JORC Code, which sets out minimum standards, recommendations and guidelines for public reporting of exploration results, mineral resources and ore reserves in Australasia.

Geology and Mineralisation

The Sappes district is within the 800 kilometre long Drina-Rhodope arc, one of serveral subduction-related volcanic arcs which developed in the Late Mexozoic to Early Tertiary period in the Tethys Ocean which separated the continental land masses of Africa and Eurasia.  Continental collision led to the development of the Alping Mountains fold belt, and continues today.  Within the fold belt, the rocks are typically intensely faulted and hydrothermally altered.

The Sappes epithermal alteration system contains two gold orebodies (St Demetrios and Viper) that are being considered for development.  These are hosted by volcanic rocks of intermediate composition accompanied by subvolcanic intrusives (dacite – andesites) and plutonic rocks (quartz – monzodiorites).

The St Demetrios deposit outcrops. It consists of a 300 metre long, 100 metre wide and 45 metre thick zone of highly leached, hydrothermal, vuggy silica breccia that have potential for shallow open-pit mining.  It is underlain by a higher grade zone of quartz-vein stockwork mineralisation, hosted by volcanic lava flows. Gold occurs in native form and is associated with tellurides, sulphides and sulphosalts.

The Viper orebody is approximately 200 metres below surface and has an interpreted strike length of 500 metres and a width of around 100 metres and is relatively flat-lying.  It is located in a zone of late stage shearing between two andesitic flow breccias.  Gold is most commonly associated with sulphide minerals locally as gold telluride and rarely as coarse-grained gold in the silica.

The easterly limit of the Viper mineralisation is marked by an interpreted normal fault dipping to the west and with a downthrow of some 250 metres.  This fault separates the Viper deposit from the St Demetrios deposit about 120 metres to the east. The westerly limit of the mineralisation has not yet been identified and the northerly and southerly limits are not distinct.

For more information on Sappes Gold Project please phone +61 (0) 8 9221 7466.