In January 1994, Macraes Mining Company started a new phase
of exploration to find additional resources along strike and down dip of
identified resources for a mill that was being expanded from 2.1 Mtpa to 3.2
Mtpa. At 30th June 1997 a total of 456,784 m in 3,627 holes had been drilled at
the Macraes Gold Project with approximately 325,000 m in 2,100 holes drilled in
the latest phase of exploration. This necessitated the construction of resource
estimates on a more frequent basis and resulted in the formation of a resource
modelling team, assisted by Snowden of Perth. Since April 1995, 14 separate
resource estimates have been completed. At Macraes, resource estimates are built
using Medsystem/Minesight software. The geological interpretation is converted
into a set of three dimensional wireframed solid models which are used to code
drillhole composites and blocks in a block model. The interpolation method of
indicator kriging is used to interpolate grade into the blocks. Classification
into measured, indicated and inferred categories is on the basis of geological
confidence and drill spacing. The resource estimate is reconciled against grade
control polygonal estimates on a bench by bench basis and on a monthly basis.
Grade control estimates are reconciled monthly to mill production. For the
period 30 June 1995 to 30 June 1997, the resource estimates have under predicted
tonnes by 4% and grade by 1% to under predict ounces by 5% at a 0.5g/t cut off.
At ROM sulphide cutoff grade, the models have over predicted tonnes by 5%, under
predicted grade by 5% to over predict ounces by 1%.