Pasofino Gold Limited - Projects

Disclaimer | SEPTEMBER 2022

The content on this page is subject to updating as exploration and other activities progress. Please visit the Pasofino news page for the most recent announcements.

Overview

The Dugbe Gold Project (the “Project”) is in southern Liberia within one of the last remaining genuinely under-explored parts of the Birimian geological province which is host to the majority of West African gold deposits. This part of the Birimian is has a growing gold endowment and Pasofino is a first mover with very large ground holding: 2,559 km². The Project area is located 70 km by road from the Greenville deep-water port.

Following the completion of a Feasibility Study (FS) in June 2022, the Dugbe Gold Project is subject to a joint venture agreement between Pasofino's wholly-owned subsidiary ARX and Hummingbird Resources Plc (“Hummingbird”) (AIM:HUM) under which ARX holds a 49% economic interest*. On October 31, 2022 Pasofino provided notice to Hummingbird that Pasofino is exercising its right to cause Hummingbird to sell to Pasofino, Hummingbirds 51% interest in the shares of Hummingbird Resources (Liberia) Inc. and all shareholder loans made by Hummingbird to Hummingbird Resources (Liberia) Inc. in order for Pasofino to become owner of 100% of the Dugbe Gold Project (prior to giving effect to the 10% carried interest of the Government of Liberia).

A mineral development agreement issued by the Government of Liberia for the project secures mining rights and terms for 25 years.

The Tuzon and Dugbe F gold deposits are 4 km apart and were discovered by Hummingbird in 2009 and 2011 respectively. 82,000m of core drilling has been completed and fieldwork to support the Feasibility Study completed by DRA Global (South Africa) in June 2022.

The Feasibility Study defines an open pit Mineral Reserve Estimate of 2.76 Moz of gold, planned to be mined over 14 years, with an output of 200koz per annum for the first 5 years.

In addition, there are many gold prospects, two of which are within 10 km of the existing deposits and drill-ready with gold in bedrock in outcrop and pits - Pasofino sampling returned up to 31 g/t Au.

* Pasofino has the right to acquire 100% of the Dugbe Gold Project by converting Hummingbird's 51% ownership interest in Hummingbird Liberia for a 51% shareholding in Pasofino, such that Pasofino would own 100% of Hummingbird Liberia and the Project (prior to the government of Liberia's 10% carried interest), subject to the receipt of all required approvals including the approval of the TSX Venture Exchange.

Regional Geology.

View and download the Feasibility Study for the Dugbe Gold Project (PDF, 20.3 MB)

Feasibility Study Highlights

Financial Metrics

Pre-tax NPV5% of USD690M (USD524M post-tax),
26.4% IRR (23.6% post-tax) using a base gold price of 1,700 USD/oz.
Life of Mine (LOM) AISC 1,005 USD/oz

Initial Capital

29 USD/t of ore cash cost
Pre-production capital of USD397M excluding USD37M owners’ costs
3.3-year capital pay-back

Large Mineral Reserve

200koz per year Au production from open pit
2.76Moz gold in Mineral Reserves with an average grade of 1.30 g/t Au.
Reserves support 2.27Moz produced over a 14-year LOM
LOM metallurgical recovery of 83% from the FS test work
Average annual production of 200koz for the first 5 years
LOM strip ratio is low at 4.2:1 and lower for first 5 years
5Mtpa processing plant process plant midway between the two deposits

FS Plant

Large Mineral Resource, remains partially ‘open’

The combined Measured and Indicated Mineral Resource Estimate is 3.3Moz of Au with an average grade of 1.37 g/t. The Inferred Mineral Resource Estimate is 588 koz of Au with an average grade of 1.23 g/t. The Mineral Resource is partially open for further expansion.

The Mineral Resource Estimate for Dugbe F and Tuzon was prepared by SRK Consulting (UK) Limited (“SRK”) with an effective date of November 17. 2021, reported under NI 43-101 requirements and are presented in the table to the right.

Both deposits outcrop at surface for most of their length. Tuzon continues to over 380 m below surface. At their thickest Tuzon is ~100m thick and Dugbe F ~40 m thick.

Further details of the updated mineral resource estimates are provided in the Company’s press release on November 22, 2021 and the report “Dugbe Gold Project, Liberia NI 43-101 Technical Report, Effective Date 17 November 2021,” prepared by SRK Consulting (UK) Limited which can be found at www.sedar.com.

Typical cross-section through the Tuzon deposit showing drillhole intersections

Dugbe Gold Project | Mineral Resource Estimate
0.5 g/t Au cut-off grade	Tonnes (M)	Gold Grade (g/t)	Gold (000 oz)
Tuzon Deposit
Measured & Indicated	53.2	1.40	2,396
Inferred	7.5	1.13	270
Dugbe F Deposit
Measured & Indicated	22.1	1.29	916
Inferred	7.4	1.34	317
Total M&I	75,2	1.37	3,312
Total Inferred	14.9	1.23	588

Notes to Table

Rounding errors may be evident when combining totals in the table but are immaterial.
The effective date of the Mineral Resource Estimate is August 19, 2020 as reported in “Dugbe Gold Project, Liberia NI 43-101 Technical Report, Effective Date 19 August 2020,” a report prepared by SRK Consulting (UK) Limited.
The Qualified Person is Mr. Martin Pittuck (CEng, MIMMM) of SRK (UK) Limited..
The Mineral Resource has been classified under the guidelines of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council (2014), and procedures for classifying the reported Mineral Resources were undertaken within the context of the Canadian Securities Administrators National Instrument 43-101 (NI 43-101).
Mineral Resources are not Mineral Reserves and have no demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues.
Mineral Resource estimates are stated within conceptual pit shells that have been used to define Reasonable Prospects for Eventual Economic Extraction (RPEEE). The pit shells used the following main parameters: (i) Au price of US$1700/ounce; (ii) plant recovery of 90%; and (iii) mean specific gravity of 2.78 t/m3 for
fresh rock and 2.1 t/m3 for oxide material.

Examples of gold mineralization.

Geology & Mineralization

The host rock at both deposits is sulphide-bearing orthopyroxene gneiss layer within a thick sequence of quartz-feldspar biotite gneiss with or without garnet, or lesser barren orthopyroxene gneiss. Folding has caused repetition and thickening of the layer especially at Tuzon where it may be 100 m thick in the main fold hinge. The rocks are high grade metamorphic; gold mineralisation is interpreted to have taken place before peak metamorphism. Continuity of the mineralised layer is excellent except where cut by later pegmatite intrusions which were modelled and taken into account for the Mineral Resource Estimates.

Opportunities for further gains to the economics

Gains are expected during the Front-End Engineering and Design (FEED) phase, enhancing overall Project economics. These may include:

Increase to the Mineral Reserve

67koz of Inferred Mineral Resources (with average grade 1.25 g/t Au) within and immediately adjacent to the FS pit was considered as waste for the FS – this is an opportunity - with further drilling so that it may be included.
The surface oxide material is currently 2.9% of the M+I MRE. Further drilling may increase this to 4-5%. Given the higher recovery and that its at surface would benefit the project
Test the potential for moderate expansion of the Mineral Resource and Reserves on the SE limb further SW beyond TDC186 which intersected 17.3m @ 2.7 g/t Au

Project design optimisation and gains

Further optimisation of the metallurgical process: a 2% increase in overall recovery enhances the Project NPV by up to USD52M
Review the Tailings Storage Facility design to reduce capital
Assessment of hydropower potential to reduce energy supply costs to the project and to reduce greenhouse gas emissions. Option to use 3rd party to reduce capital.
Examine potential for ore-sorting to remove pegmatite and barren gneiss to potentially increase Mineral Reserve grade.
Review blast zones with objective of reducing the extent of the mine-managed land.
Additional work aimed at reducing the floating LNG (liquid natural gas) storage cost.
Reduce haul truck capital by potentially using smaller ‘on-highway’ trucks – may also support more selective mining to lower dilution.

Mineral Development Agreement

Hummingbird signed a 25-year Mineral Development Agreement ("MDA") with the Government of Liberia which provides the necessary long-term framework and stabilization of taxes and duties for development and operation of the Dugbe Gold Project. Under the terms of the MDA, the royalty rate on gold production is 3%, the income tax rate payable is 25% (with credit given for historic exploration expenditures), the fuel duty is reduced by 50% (75% for first five years of production if gold price is below $1,500) and the Government of Liberia is granted a free carried interest of 10% in the Project..

Exploration Opportunities

Project area showing gold deposits and targets

Less than 20% of the project explored and includes:

the Dugbe F and Tuzon 3.3 Moz Measured and Indicated Resource
Numerous drill-ready targets with abundant gold at surface
Bukon Jedeh an area that is thought to have produced 100’s koz gold over 80+ years of artisanal production, described in more detail below.Tuzon Sackor trend target -up to 3 g/t Au exposed at surface not yet drilled, described in more detail below.

- The other 80% is equally prospective

Bukon Jedeh Area

4 km long zone of artisanal pits, gold production for >80 years.
Recent mapping identified that 10 of the pits are well into fresh rock, rock-chip sampling by Pasofino returned up to 31 g/t Au.
Drilling of 80 RC holes in 2012/2013 by ASX listed Equator included some good intersections but did not test the current pits. Intersections included:
• 2 m @ 61.80 g/t Au from 74 m (BRC050)
• 10 m @ 6.20 g/t Au from 11 M (BRC037)
• 7 m @ 5.69 g/t Au from 10 m (BRC019)

- Next step is core drilling.

Images from Bukon Jedeh

Tuzon Sackor trend

6km trend of Au in soil, on strike from Tuzon, recognised by Pasofino in 2021
Within which there is a 600+ m long zone defined by two trenches: TZTR091 with 36m @ 0.6 g/t Au including zones of 2 g/t Au and TZTR099 with 10m @ 0.90 ppm Au.
These targets have not been drill-tested.

- Next step is core drilling.

Dugbe Camp core-shed

Dugbe Gold Project