Operations - Serbia

SERBIAN EXPLORATION
Serbia

DPM has been actively exploring in Serbia since 2004 and is the largest holder of mineral exploration licenses in the country.  The Corporation currently holds multiple exploration licenses amounting to a 1,925 square kilometer area, and three concession licenses, representing 143 km2. In addition, a number of additional license applications are pending with the Serbian Ministry of Mines and Energy.  DPM holds exploration and mining concession contracts for the Coka Kuruga, Coka Kupjatra and Tilva Njagra exploration and exploitation concessions (collectively known as the Crni Vrh concessions). These concessions are contiguous and are located approximately 10 km west and northwest of the town of Bor.

The exploration concessions are granted for a three year period, renewable for an additional two years, and include mining rights with a duration of 25 years.

Exploration targets within the licenses include porphyry copper-gold and molybdenum deposits, skarn-hosted base metal and gold, sediment-hosted epithermal gold, low sulphidation epithermal gold-silver, high sulphidation epithermal gold-silver-copper and limestone hosted gold mineralization. 

The DPM exploration licenses are located within several significant mining districts in Serbia including the Timok Magmatic Complex (hosting the Bor and Majdanpek deposits), the Lece Magmatic Complex (hosting the Lece mine) and the Besna Kobila-Osgovo Metallogenic Belt (hosting the historic Mackatica molybdenum mine).  

Environmental baseline studies continue under the auspices of AMEC within the Timok project area and were initiated on the Surdulica Molybdenum Project.

An independent NI 43-101 resource estimate for the Surdulica porphyry Mo–Re project in Serbia, was completed in the second quarter of 2008 by Coffey Mining using the exploration data collected during 2007.  The resource estimate, based on the 26,400 metres of diamond drilling, reverse circulation drilling and trench sampling carried out in 2007, returned an Inferred Resource of 106 million tonnes grading 518 parts per million Mo (0.052%) and 0.16 ppm Re, based on a 300 ppm Mo cut-off grade.

Exploration activities in 2008 focused on the completion of the nominal 160 metre by 160 metre spaced drilling program, which targeted soil molybdenum anomalies identified from soil sampling work carried out in 2007.  Drilling covered a surface area of approximately 2 km by 3 km.  The total amount of drilling completed during 2008 comprises 10,886 metres of diamond and 3,846 metres of reverse circulation drilling. The extent of mineralization has been demonstrated to have a vertical extent of at least 600 metres.  This brings the total drilling on the project by DPM to over 37km.  In addition, a total of 15,071 metres of trench and channel sampling has been carried out on the project.

Results received from all drill and trench samples have confirmed widespread Mo mineralization, expanding the known size of the porphyry system from the resource estimate completed in the second quarter of 2008.  An update to the database has been submitted to Coffey Mining for an updated resource calculation, results of which are expected during the second quarter of 2009.

During 2008, drilling was completed on the Valja Strz porphyry Cu-Au-Mo prospect over a 700 metre strike length within a 350 metre corridor on a nominal 80 metre by 80 metre drill spacing to an approximate vertical depth of 400 metres. In addition, a shallow RC drilling program was completed on a nominal 40 metre by 40 metre spacing to an approximate vertical depth of 60 metres over the same corresponding area. The database, which comprises 36,616 metres of drilling in 172 drill holes (54 diamond and 118 RC drill holes), together with 9,606 metres of surface trenching in 74 trenches, was validated and sent to Coffey Mining for the preparation of an NI 43-101 compliant resource estimate which will be completed during the first quarter of 2009.

Additional exploration on the concession licenses included first pass trenching, reverse circulation and limited diamond drilling on a number of porphyry Au and porphyry Cu-Au-Mo targets, confirming the potential along the porphyry belt for similar style mineralization to Valja Strz.  Exploration on the Kuruga high sulphidation prospect also continued with 2 diamond drill holes for 448 metres, 10 reverse circulation holes for 891 metres and 7 trenches for 701 metres.  Exploration provided encouragement for further exploration along the 1.4km strike length of the high sulphidation lithocap.

Exploration results continued to be returned during 2008 from work carried out on the ‘limestone-hosted gold’ project which is located along the western edge of the Timok Magmatic Complex.  Significant gold intersections in surface trenching have now been traced for over 25 kilometres along strike. Stream sediment sampling has significantly extended the anomalous area to the west and appears to have identified a major, previously unknown, province of anomalous gold to the west of the Timok magmatic complex.

Additional exploration activity including geological mapping, soil sampling, trenching and scout drilling on the surrounding Timok and regional licence areas continued during 2008 in an effort to further refine the target prospects with the greatest potential for economic mineralization. 

Exploration continued on the ‘limestone-hosted gold’ project, located along the western edge of the Timok Magmatic Complex, with 121 trenches and channels completed for approximately 22,000 metres in 2008.  Significant gold intersections in surface trenching have now been traced for over 25 km along strike. Stream sediment sampling has significantly extended the anomalous area to the west and appears to have identified a major, previously unknown, province of anomalous gold to the west of the Timok Magmatic Complex.

Drilling on the Bozuluj prospect, the most southern “limestone hosted gold’ prospect along the 25km anomalous trend, intersected economic grades providing encouragement for the remaining prospects within the province.

The 2008 exploration programme in Timok continued the process of defining the most significant and potentially economic targets in the Timok Magmatic Complex (a 60km x 20km mineralized district) as determined by regular in-house collaborative target ranking sessions.

During 2008, a total of 31,341 metres of diamond drilling and 18,557 metres of RC drilling were completed in Serbia.  Drilling on the Surdulica Molybdenum Project consisted of 10,886 metres of diamond drilling and 3,846 metres of RC drilling to expand the footprint of the historic molybdenum deposits at Mackatica and Borovik. The majority of the remaining 20,455 metres of diamond drilling and 14,711 metres of RC drilling were carried out on the Crni Vrh concessions and surrounding Timok exploration licenses with minor drill testing of targets on regional licenses.

The table below contains a summary of the activity across Serbia:

In response to the economic slowdown and the significant decrease in metal prices in the second half of 2008, DPM ceased all exploration and drilling activities on its Serbian properties in October 2008. The Corporation is taking steps to ensure that its titles and licenses are preserved.  The Corporation is seeking to identify partners to advance these properties.