Deokon Gold-Silver Project

Introduction

The historic Deokon Au-Ag mines are located in the central-southwestern part of South Korea, in the Jeolla-buk Province. Post-war mines department records show production resumed between 1958 and 1980, when a Korean national company, registered as The Deokon Mining Company Ltd., re-developed the multilevel underground mining operations at both the Main Mine and the Shin Adit prospects (Figure 1), on a series of through-going highly silver-gold mineralised, dacite-hosted lode- and vein-zones.


Figure 1: Detailed Plan view of the Deokon Project, highlighting numerous bonanza gold-silver grades.

Recent Exploration

First-pass assessment of the Deokon Project was undertaken by Southern Gold Korea in April 2018. Work conducted included systematic traversing, extensive rock chip and grab sampling of the Shin Adit lode and vein system at surface and an initial sampling exercise throughout an accessible lower access drive. Reconnaissance and sampling along strike to the north of the Shin workings in excess of one kilometre was conducted with sampling of vein exposures in the entrance of a single open adit in the Main Vein Workings to the west.

Table 1: Rock Sample Assays (>1.0 g/t Au) from rock samples at Deokon mine.

Line ID

NAT Grid_ID

NAT_North

NAT_East

NAT_RL

Sample Type

Au (g/t)

Ag (g/t)

KRS205254

WGS84_52N

3949098

331844

224

Rock Mullock

13.3

2,130

KRS205231

WGS84_52N

3949099

331848

224

Rock Mullock

9.23

1,080

KRS205229

WGS84_52N

3949100

331846

224

Rock Mullock

7.65

558

KRS205409

WGS84_52N

3949452

330923

319

Rock Outcrop

4.00

681

KRS205288

WGS84_52N

3949057

331770

224

Rock Mullock

3.93

359

KRS205413

WGS84_52N

3949452

330923

319

Rock Outcrop

3.32

581

KRS205410

WGS84_52N

3949452

330923

319

Rock Outcrop

1.66

574

KRS205287

WGS84_52N

3949054

331771

224

Rock Mullock

1.65

124

KRS205412

WGS84_52N

3949452

330923

319

Rock Outcrop

1.39

333

KRS205302

WGS84_52N

3949042

331769

224

Rock Mullock

1.15

70

KRS205240

WGS84_52N

3949099

331851

224

Rock Mullock

1.05

191

KRS205253

WGS84_52N

3949098

331843

224

Rock Mullock

1.01

133

This was followed up with first phase of systematic underground channel sampling in August 2018, demonstrating the ability to commence work quickly on newly acquired tenure. The aim of the program was to safely and systematically test the historical Shin Adit Mine to verify historically reported high-grade gold-silver results, survey the workings to have location confidence and geologically map lithology and structural controls on mineralisation (Figure 2).

Table 2. Deokon Significant Channel Sample Results (>1.0 g/t Au)

Line ID

Sample Type


Interval (m)


Au (g/t)

Ag (g/t)

FS224S1_08

Channel


0.35

@

12.6

509

FS224S1_07

Channel


0.40

@

9.26

1,165

FS224S1_06

Channel


0.75

@

5.31

527



including

0.25

@

12.3

1,290


Figure 2. Plan View of Underground Sampling Results from the historical Shin Adit Mine, Deokon Project.

In March-2019, a geological consultant, expert at epithermal mineral systems, was deployed to advance technical assessments of several projects in preparation for drilling. This resulted in multiple veins being identified at district scale, including a new area to the east of the currently held tenure that has returned 78.6g/t Au and 13,000g/t Ag in a “float” sample KRS205352 (Figure 3).

Figure 3: Plan View of Deokon Gold-Silver Project.  Note additional vein system identified in the east returning high grade gold and silver from float samples.

Table 3: Rock Sample Assays (>0.1 g/t Au) from reconnaissance sampling at Deokon mine.

Line ID

NAT Grid_ID

NAT_North

NAT_East

NAT_RL

Sample Type

Au (g/t)

Ag (g/t)

KRS205352

WGS84_52N

3949481

332597

253

Rock Float

78.6

13,000

KRS205397

WGS84_52N

3949614

332714.3

280

Rock Outcrop

3.08

3.7

KRS205372

WGS84_52N

3949614

332713

279

Rock Outcrop

1.69

0.3

KRS205367

WGS84_52N

332658

3949554

269

Rock Float

0.38

0.5


Further field work completed in April - June 2019 located the outcrop representing the source of the bonanza grade gold-silver float sample found during reconnaissance. The area was been renamed the ‘Bonanza Zone’ (previously ‘East Vein Zone’). The outcrop has identical vein textures, alteration, and abundant visible silver sulfosalts, native silver and what is likely silver-rich electrum.

In addition, another new area of extensive outcrop, the ‘Thorn Zone’, has been located 500m to the north of the Bonanza Zone.  Combined, the two zones represent a mineralised vein corridor of more than 500m that remains open in both directions, and now collectively named the ‘Golden Surprise Trend’.


Figure 4: April - June 2019 sampling results and planned drilling at Bonanza.

Future Plans

A diamond drilling program will commence in November 2019 at the ‘Bonanza Zone’ now that the company has secured land access and regulatory approvals.  This will be a first pass scout program initially to test the Bonanza Zone outcrop and will involve close spaced drilling to test the currently unknown true width of the mineralized zone and determine representative gold and silver grade.

The initial program will involve four diamond drill holes from Pad 1 for approximately 500m, three of which are designed to intersect around 25 metres below the identified outcrop at around 40m apart, with a fourth planned to intersect the structure at depth, approximately 50m below surface. A second pad along strike is also planned to follow with stage 2 holes.

Depending on results of the current drilling program, further drilling is planned along strike and down dip of the currently identified mineralisation to define its potential extent.


Technical Description

Deokon Main Mine

The Main Mine is reportedly comprised of at least six sub-parallel quartz-sulfide veins, mined over a strike length of approximately three-hundred-and-fifty metres, on nine production levels between 320 mRL and 60 mRL (260 vertical metres). Mining apparently utilised shrinkage stoping, with all levels connected by an internal shaft and access decline (Figure 5). Vein widths ranged between 0.3 and 1.0 metre based on historic channel sample data.


Figure 5: Cross-section and long-section views of the Main Mine, highlighting the poorly tested nature of the high-grade mineralisation.

Mines Department records between 1958 and 1980 indicated minimum production totals of 37,706 oz of gold and 2,358,045 oz of silver; however, gold production figures between 1978 and 1980 were not declared by the operators. The Korean Mining Promotion Company (KMPC, a precursor of KORES), conducted several diamond drilling programmes and underground resource determination works from the late 1970’s through to 1981. Three diamond holes were drilled in 1977 (DDH 77-1 to 77-3), four holes in 1978 (DDH 78-1 to 78-4) and a further three holes in 1979 (DDH 79-1 to 79-3). These drilling programmes intersected silver-gold mineralisation, yet only a few selected intervals were sampled and assayed, with the remaining unsampled drill core discarded in dumps on site. An extension to existing underground workings were recommended, yet not undertaken. During 1981, the KMPC conducted a Self-Potential (SP) geophysical survey to test for along strike extensions to mined veining to the southwest of the mine. The results of this survey are unknown, however, four further drill holes were completed in 1982 (DDH 82-1 to 82-4).

Shin Adit Mine

Gold-silver mineralisation present within the Shin Adit Mine is epithermal Intermediate-Sulphidation type. Hydraulic quartz-sulphide vein to lode breccia (Figure 6) is within a strongly silica-illite/adularia-pyrite altered dacitic to rhyolitic volcanic host rock. Underground exposures of mineralised vein and lode dip at 72 degrees towards the east.  Mineralisation remains untested at depth and inadequately tested along strike.

Figure 6. Slab photo of KRD500525 (coarse duplicate of KRD500522), 16.45 g/t gold and 711 g/t silver. Hydraulic vein breccia, comprised of angular silica-illite/adularia altered rhyolite fragments, set in a mesocrystalline silica-sulphide flood matrix with later cross-cutting coarsely crystalline quartz veining.

Bonanza Vein Zone

It was noted by Mr. Craig Panther, who undertook the original April 2018 field work and reporting in this eastern area, that “several styles of mineralisation appear present, including known Intermediate to low sulphidation vein and lode hosted gold-silver mineralisation, potential dome flank and lode hosted stockwork and dome flank breccia-hosted mineralisation, diatreme margin-hosted mineralisation and replacement-type mineralisation associated with carbonaceous lacustrine sedimentary units”.

The Bonanza Vein appears to be in a zone of dilation, with wider veining observed and some samples consisting of pervasive and intense silica-illite clay-replaced rhyolite dyke margin up to one metre thick. The hydrothermal alteration and vein textures are indicative of a high paleo-hydrological level of exposure, that is potentially higher that that observed at the Shin Hill Adit.


Photo 2: Sample KRS205254. Hydraulic vein breccia, with angular rhyolite clasts, set in a flood mesocrystalline silica-sulfide matrix (pyrite, chalcopyrite, silver sulfosalts). 13.3 g/t Au and 2,130 g/t Ag.

Photo 3: Sample KRS205231. Hydraulic vein breccia, comprised of white silica-illite/adularia altered rhyolite fragments engulfed by mesocrystalline to crystalline quartz with coarse-grained sulfides (pyrite, tetrahedrite & silver sulfosalts). 9.23 g/t Au and 1,080 g/t Ag

Photo 4: Sample KRS205229. Hydraulic vein breccia, comprised of white silica-illite/adularia altered rhyolite fragments engulfed by mesocrystalline to crystalline quartz with coarse-grained sulfides (pyrite, tetrahedrite & silver sulfosalts). 7.65 g/t Au and 558 g/t Ag.

Photo 5: Sample KRS205409. Hydraulic vein breccia.   Brecciated dacite, pervasively silica-illite/adularia altered, with a flood crystalline interlocking to mesocrystalline quartz-sulfides event.  4 g/t Au and 681 g/t Ag.