Neungju Gold Project

Introduction

Southern Gold has been granted formal tenure over a large, gold-silver epithermal target, “Neungju” (Figure 1), which is characterised by large zones of hydrothermal alteration with multiple vein corridors up to 30 m wide and hundreds of metres of strike extent.

The Neungju project is located approximately 25 km south-east of Gwangju city (Figure 1) in the southern Jeolla Province, in the southwest of the country. The region hosts several known gold occurrences including the currently operating Eunsan-Moisan gold-silver mine just 70 km to the south-east.

The geology of the project area is characterised by a northeast-southwest trending, eleven kilometre-wide, pull-apart basin or graben, filled by a complex sequence of intermediate- to felsic-tuffs, tuff breccias and local conglomeratic basin fills. The current target area falls along the eastern flank of a large caldera-like volcano-plutonic complex and consists of a complex series of dacitic to rhyodacitic flow domes and late andesitic lavas that have all undergone varying degrees of hydrothermal alteration.


Recent Exploration

Neungju was originally identified by Ivanhoe Mines in 2001 with no other previously known mining or exploration activities. The project area was recognised by Ivanhoe to be highly prospective, with a number of rock samples returning grades up to 26 g/t Au and 139.6 g/t Ag (Table 1).

Detailed ground assessment work by Southern Gold late in 2017, identified Neungju as one of several very prospective epithermal gold-silver targets with no known drilling or mining to date. The area is difficult to explore due to the dense secondary forest and this leads to optimising field work during the post winter thaw when foliage is significantly reduced. Despite this, good field work has been undertaken to identify large zones of hydrothermal alteration and multiple vein corridors each of which show wide zones of veining over 100s of metres along strike length. Several new rock samples returned grades up to 20.30 g/t Au and 163 g/t Ag (Table 2).

The conversion of this tenement has taken almost nine months due to the strict process of meeting a satisfactory criteria level, combined with the Korean regulatory agency requirement to visit the site as part of the approval process.

LEAD Technologies Inc. V1.02

Figure 1: Location of Southern Gold’s current portfolio in South Korea. Project Generation activities, focusing in southern Korea, including the Jeolla District (left) and the Gyeongsang District (right) highlighted in green boxes.


Table 1: Significant historical Ivanhoe Mines rock samples at Neungju.

Sample ID

Sample Type

Grid ID

Easting

Northing

Au g/t

Ag g/t

TA-112

Rock chip - unknown

WGS84_Z52Nth

312006

3870587

26.15

19.6

TA-113

Rock chip – unknown

WGS84_Z52Nth

312007

3870588

13.96

5.3

TA-95

Rock chip – unknown

WGS84_Z52Nth

311620

3870827

10.73

3.0

TA-65

Rock chip – unknown

WGS84_Z52Nth

312112

3870101

4.24

139.6

TA-109

Rock chip – unknown

WGS84_Z52Nth

311824

3870898

2.06

1.0

TA-97

Rock chip – unknown

WGS84_Z52Nth

311622

3870829

1.00

5.5

TA-67

Rock chip – unknown

WGS84_Z52Nth

312114

3870103

0.66

8.2


Table 2: Significant recent results from SAU rock samples at Neungju.

Sample ID

Sample Type

Grid ID

Easting

Northing

Au g/t

Ag g/t

KRS203189

Rock chip - float

WGS84_Z52Nth

311977

3870577

20.30

13

KRS203170

Rock chip – float

WGS84_Z52Nth

312017

3870974

16.50

20

KRS203171

Rock chip - subcrop

WGS84_Z52Nth

312017

3870974

1.49

16

KRS203173

Rock chip - subcrop

WGS84_Z52Nth

312026

3870979

1.05

1

KRS203205

Rock chip - float

WGS84_Z52Nth

311913

3871087

0.33

143


Figure 2: Neungju 33 assay results from historic and recent SAU rock sampling (in situ and float).


An intensive sampling program was completed in June 2019 at Neungju with over 130 new samples being taken and submitted for analysis. Two outcrop rock chip and three float samples returned high grade (>5 g/t) gold results (Figure 3 and Table 3). The peak outcrop rock chip sample at Neungju was 31.8 g/t Au and 6.6 g/t Ag.

Work to date included systematic field traversing, extensive rock sampling and 1:2,000 geological mapping (Figure 3). This work has identified three new vein corridors (The Oesin, Jidong, and Lee vein zones), and has extended both the Naesin (southern) vein corridor and Yeppeuda (northern) vein corridors.

Figure 3: Neungju Project sampling results and geology.


Table 3: Significant reconnaissance surface mapping rock sample results from Neungju (>1.0g/t Au).

Sample ID

Au g/t

Ag g/t

Sample Type

Prospect

Grid ID

Easting

Northing

Elevation

KRS206458

31.80

6.6

Subcrop

Naesin

WGS84_Z52Nth

311619

3870827

75

KRS206455

13.40

13.1

Float

Naesin

WGS84_Z52Nth

311763

3870723

81

KRS206478

6.79

9.8

Float

Yeppeuda

WGS84_Z52Nth

312019

3870975

110

KRS206492

6.44

10.9

Float

Yeppeuda

WGS84_Z52Nth

311948

3870030

94

KRS206529

6.17

25.2

Outcrop

Lee

WGS84_Z52Nth

312261

3870863

95

KRS206496

4.58

7.3

Float

Yeppeuda

WGS84_Z52Nth

311977

3870972

97

KRS206486

3.95

1.9

Float

Yeppeuda

WGS84_Z52Nth

311956

3871008

97

KRS206413

3.28

2.9

Float

Oesin

WGS84_Z52Nth

312574

3870517

111

KRS206481

2.58

15.2

Float

Yeppeuda

WGS84_Z52Nth

311987

3870978

104

KRS206526

2.35

0.8

Outcrop

Lee

WGS84_Z52Nth

312258

3870866

94

KRS206527

2.17

1.9

Outcrop

Lee

WGS84_Z52Nth

312254

3870866

94

KRS206525

1.79

8.9

Outcrop

Lee

WGS84_Z52Nth

312258

3870874

95

KRS206484

1.44

1.1

Float

Yeppeuda

WGS84_Z52Nth

311964

3871001

98

KRS206485

1.32

0.8

Float

Yeppeuda

WGS84_Z52Nth

311962

3871002

98

KRS206538

1.15

5.0

Subcrop

Jidong

WGS84_Z52Nth

312631

3870761

128

KRS206477

1.08

1.6

Float

Yeppeuda

WGS84_Z52Nth

312021

3870975

110

KRS206506

1.05

0.4

Subcrop

Yeppeuda

WGS84_Z52Nth

312065

3870943

114


Future Plans

The area is readily accessible and land use is semi-dense secondary regrowth forest, which will be easier to access post winter thaw with minimal track making required. This will allow more detailed geological mapping of outcrop, which is seasonally obscured by vegetation, and continue to build upon the current information.

Follow-up work will initially be aimed at better delineating the mineralisation corridors and identifying additional targets prior to progressing to more advanced stages of works. Planned future activities may include first phase systematic soil geochemical sampling lines across the mineralised corridors, in addition to broader scale lithology, alteration and geo-structural mapping within Neungju 33 at a detailed level. Outcomes from the mapping and geochemical sampling programs will help determine the appropriate next stages of work, which may include reconnaissance drilling to determine the vein system grade and extent.

The Southern Gold Korean team will hold discussions with local landowners to enable drilling to commence as soon as practicable. The Company takes its Community and Social Responsibilities very seriously and is aiming to build relationships with local people for the long-term benefits of all stakeholders.


Neungju


Technical Description

The Neungju project is hosted within a multiphase intrusive and extrusive volcanic Cretaceous basin on the edge of a large caldera-like volcano-plutonic complex, localised proximal to the faulted contact between basement gneiss/schist and Cretaceous felsic volcanic rocks. The Neungju mineralised system itself is a very promising low-sulfidation adularia-sericite type epithermal vein and breccia hosted system, defined by wide outcropping to sub-cropping stringer and sheeted crystalline, mesocrystalline, and chalcedonic quartz veining within an extensive footprint of hydrothermal clay alteration. Dacites, rhyodacites and associate dome-margin breccias and pyroclastics predominate to the north, and andesitic flow units to the south.  The former display intense sheeted to blocky jointing and pervasive “argillic” illite/adularia-silica-kaolinite ± pyrite alteration.  They are also strongly limonite-haematite stained after oxidised pyrite.  In contrast, the southern andesitic sequence is relatively unaltered; however, to the north, it is variably propylitised, displaying silica-illite-chlorite-haematite alteration assemblages where in contact with dacite and rhyodacite dome facies rocks.

Neungju displays the typical geological and structural complexity seen in highly prospective back-arc extensional basin-hosted volcano-plutonic sequences (a similar setting to the Company’s Hampyeong, Weolyu, Deokon and Beopseongpo project areas in South Korea). The results of completed, semi-detailed geological mapping and surface sampling to date indicates that Neungju has potential for the discovery of a large, potentially highly gold-silver mineralised Low-Sulfidation epithermal deposit.  Five major vein zones have been recognised, with a minimum mapped, combined strike extent of 1,065 metres and open in both strike directions.

The Southern Vein Corridor has been identified as being at least 30 m in width. The Central and Northern Vein Corridors are also exposed and show strong strike continuity, from outcrop and abundant quartz vein float. The northwest trending mineralised vein corridors are hosted within pervasive hydrothermal clay altered dacitic to rhyodacite flow dome volcanic facies and these vein corridors are inferred to be up to 30 m in width from field mapping (Figure 3, Photos 1 and 2).


Photo 1: KRS203189: 20.3 g/t Au, 13 g/t Ag. Fractured & white chalcedonic to crystalline quartz healed, silica - illite ± adularia altered dacite with late limonitic fracture fills.


Photo 2: KRS203170: 16.5 g/t Au, 20 g/t Ag. Hydraulically brecciated and chalcedonic quartz flooded float.


Photo 3: Subcrop sample KRS206458, 31.8g/t Au and 6.6g/t Ag. Naesin Vein Zone (Western end). Quartz-feldspar-phyric dacite, intensely silica-illite (adularia) altered, with minor limonite staining & quartz vein development.


Photo 4: Float sample KRS206492, 6.44g/t Au and 10.9g/t Ag.   Yeppueda Vein Zone. 

Hydraulically brecciated, silica-illite-clay altered dacite, cut & flooded by mesocrystalline quartz.  Well-developed limonite-haematite staining.


Neungju