Atapa applies Western thinking to Indonesian property

Cikotok, Indonesia — For the natives living in this village on the southwestern coast of Java, local small-scale mining projects run by state-owned Aneka Tambang (Antam) provide jobs necessary to supplement meager incomes from traditional rice farming.

For Atapa Minerals (ATAP-C), those artisanal projects could point the way to economic deposits at its Cikotok and Cikidang properties. At the Cikidang epithermal gold-silver deposit, the company is attempting to prove up reserves sufficient to warrant a Western-style mining operation.

“Modern exploration is still finding viable projects in previously established mining camps,” Alan Hawke, Atapa’s vice-president of exploration, told The Northern Miner on a recent visit to the property. “For small companies like Atapa, such areas are ideal because we don’t have sufficient funds to go chasing after new finds.”

Atapa and its privately owned Indonesian joint-venture partner hold a 75% interest in the larger Cikotok exploration concession and a 70% interest in the Cikidang mining concession. Together, the properties cover 1,000 sq. km.

Atapa, which has a 95% interest in the partnership, is operating the exploration project, as well as providing the necessary funds. The remaining interests in the properties are held on a carried basis by Antam, which also retains back-in rights for the properties, subject to the outcome of feasibility studies by Atapa.

Reserves at Cikidang, which were calculated by Antam, stand at 473,000 tonnes grading 10 grams gold and 87.7 grams silver per tonne. Production from four levels covering a strike length of 710 metres and a vertical depth of 80 metres is 130 tonnes per day.

Ore is trucked 30 km to the Cikotok village, where it is ferried by gondola 4 km to the Cikotok mill. Recovery rates stand at 90% for gold and 60% for silver using the Merill-Crowe method.

The profitability of Antam’s methods are questionable, with cost figures unavailable. Atapa, however, is confident it can turn the mine into a money-maker.

“The viability of this deposit hinges on the grade, which we feel has been undervalued by Antam,” said Michael Kosowan, Atapa’s project analyst. “Mining it may require a little ingenuity on our part, but our increasing of the average gold grade by 50% is certainly helping our bottom line.” Based on 392 sets of channel samples from underground workings and results from drilling to date, Atapa estimates an average mineralized width of 2 metres at an average grade of 15.51 grams gold and 90.49 grams silver. The company envisages a 500-to-1,000-tonne-per-day operation using cut-and-fill mining methods. A concentrator or carbon-in-leach plant would be built on site to cut transportation costs.

“A plant is certainly the ideal situation, but the high grade of this deposit could justify a concentrator,” Kosowan mused.

Mineralization at the mine is non-refractory, with a brownish-orange hue distinguishing high-grade zones from lower-grade mineralization. Controlling dilution will be a important economic factor.

At the time of the Miner’s visit, Atapa was conducting preliminary definition drilling, which is expected to be completed by the end of November. A prefeasibility study will follow.

To date, the company has sunk 58 diamond drill holes in a program spanning more 5,605 metres. Holes are collared on 40-metre sections, with three to four holes at each location testing mineralization downdip at 20-metre intervals.

Results from holes CKD 67 to 70, which were drilled to test mineralization below workings in the northern portion of the mine, include: 2.3 metres (core length) grading 21.4 grams gold and 103 grams silver in hole 67; 3.6 metres of 22.79 grams gold and 39 grams silver in hole 68; 4.1 metres of 16.44 grams gold and 19 grams silver in hole 69; and 1.75 metres grading 14.55 grams gold and 19 grams silver in hole 70.

A second drill rig is testing a potential northern extension, which is separated from the Main zone by 175 metres of limited outcroppings and low topography. Antam previously drifted along the vein for 130 metres.

Atapa expects exploration of the zone will merit definition drilling, results from which could be incorporated into the prefeasibility study. Based on the outcome of the study, Atapa will decide whether or not to tighten the sections to 20-metre centres.

“Any reserve calculations will definitely require this spacing,” said Hawke.

“We know the grades will drop once we look at the mining aspects, but, subsequently, the widths and tonnage will increase dramatically.” Geologically, the Cikidang deposit lies in the Bayah Dome, a 40-km-long-by-80-km-wide Oligocene to Quaternary age volcanic complex of calc-alkaline rhyolitic-to-andesitic composition. Gold mineralization is structurally controlled by a north-northeast-trending fault zone, dubbed the Cikidang shear zone.

The zone, which varies in width from 2 to 15 metres and dips steeply to the east, has been intercepted to a depth of 200 metres. High-grade mineralization in the zone is associated with a series of en echelon chalcedonic quartz-clay breccia veins, which pinch and swell along strike and range in width from 0.3 to 2.5 metres.

The veins are bounded by silicified and argillic alteration halos, which are hosted in massive to flatly bedded andesitic lapilli-tuff and breccia units.

Mineralization in the veins and alteration halos varies in width from 4 to 7 metres and grades between 7 and 10 grams gold. Geophysical and mapping data taken north of the underground workings suggest the shear zone branches north-northwest, north- northeast and northeast. Artisanal workings along the northwestern limb have been mapped for 300 metres.

The zone is cut off to the south by faulting, but a similarly mineralized shear zone, Cibidos, was recently discovered a further 250 metres southwest of Cikidang. Those zones are separated by a dip in topography.

At the Cibidos zone, eight holes were drilled, at 40-metre centres, along a strike length of 200 metres. Six holes returned values similar to those encountered at Cikidang.

The near-surface intersections include: hole 4, which hit 5.2 metres of 22.3 grams gold and 16 grams silver; hole 6, which intersected 4.1 metres of 13.7 grams gold and 14 grams silver, excluding a 0.55-metre interval of lost core; and hole 3, which yielded 0.85 metre of 4.6 grams gold and 4 grams silver.

Mineralization at Cibidos remains open to the south. Other targets are keeping the company optimistic. Of priority is the Pasir Ela project, where Atapa attempted to define a deposit in a 5-by-3-km area of widespread hydrothermal alteration.

“We were plunging in holes to find our own Busang’ because the market demanded it,” said Hawke. “Although several hits were made, we knew we had to step back and do some hard science before going any further.” Eight prospects and two historical mines are known to exist on the property, the most advanced of which is Ginung Picung. That prospect was one of the several zones mined by Antam to maintain operations at the Cikotok mill.

Mining there extracted 11,599 tonnes grading 4.22 grams gold and 42.44 grams silver from four drives on two levels, as well as a small open pit. Trenching at the southern end of the zone returned 110 metres of 1.71 grams gold and 8 grams silver. The zone narrows in width to 50 metres some 200 metres to the north.

A related zone is offset by faulting 300 metres west of, and 200 metres below, Ginung Picung. That zone has a strike length of 200 metres and a horizontal width of 100 metres. Channel sampling across 30 metres of exposed true width returned an average grade of 2.14 grams gold. To date, 46 targets have been identified on the Cikotok and Cikidang properties.