AGORACOM Small-cap Investor Relations Blog

• Compared to the inferred mineral resources of 1.675 million ounces of gold (20.78 million tonnes grading 2.5 g/t Au) outlined in January 2014
• On three separate deposits, Adumbi, Kitenge and Manzako at Imbo, inferred mineral resources have now increased by 49% to 2.5 million ounces of gold (30.65 million tonnes grading 2.54 g/t Au)
• Total mineral resources at Loncor’s properties in the Ngayu belt now stand at 3.05 million ounces of inferred mineral resources

TORONTO, April 17, 2020 (GLOBE NEWSWIRE) — Loncor Resources Inc. (“Loncor” or the “Company“) (TSX: “LN”; OTCQB: “LONCF”) is pleased to announce a 49% increase in mineral resources at its Imbo Project (Loncor 76.29%) in the D.R. Congo.

Compared to the inferred mineral resources of 1.675 million ounces of gold (20.78 million tonnes grading 2.5 g/t Au) outlined in January 2014 by independent consultants Roscoe Postle Associates Inc. (“RPA”) on three separate deposits, Adumbi, Kitenge and Manzako at Imbo, inferred mineral resources have now increased by 49% to 2.5 million ounces of gold (30.65 million tonnes grading 2.54 g/t Au), this increase coming from the Adumbi deposit.  This assessment was undertaken by the Company’s independent geological consultants Minecon Resources and Services Limited (“Minecon”). The updated estimate for Adumbi was based on a review of the Adumbi deposit including remodelling, grade capping and considering the CIM requirement for mineral resources to have “reasonable prospects for economic extraction”. 76.29% of this updated gold resource is attributable to Loncor via its 76.29% interest in the Imbo Project.

Combined with the Company’s Makapela Project (100%) (see Figure 1), total mineral resources at Loncor’s properties in the Ngayu belt now stand at 3.05 million ounces of inferred mineral resources (33.87 million tonnes grading 2.80 g/t Au) plus 0.614 million ounces of indicated mineral resources (2.205 million tonnes grading 8.66 g/t Au ). 

Commenting on today’s inferred mineral resource increase on the Imbo Project, Loncor’s President Peter Cowley said: “We are very encouraged by the significant increase in mineral resources at the Adumbi deposit, which was developed from exploration conducted during the period 2014-17, following on from the recommendations from the independent RPA study in 2014.  We now have a clear strategy going forward to increase the mineral resources on the Imbo Project by undertaking additional drilling and advancing the project up the value curve by initiating a Preliminary Economic Assessment on the Adumbi deposit.  Significant potential still exists at Adumbi to increase and upgrade mineral resources within the open pit as well as underground potential since the mineralization remains open at depth.”

As outlined in the Company’s press release dated January 28, 2020, Loncor has been focussing on the Adumbi deposit (see Figures 2 and 3), where Minecon had identified significant resource upside potential from additional exploration evaluation, including drilling that was undertaken during 2017.  Much of this exploration work was undertaken following on from the recommendations made by RPA in their 2014 NI 43-101 technical report and included:

• Additional Drilling
  RPA recommended additional drilling at Adumbi to test the down dip/plunge extent of the mineralization. In 2017, four deeper core holes (see Figures 3 and 8) were drilled below the previously outlined RPA inferred resource over a strike length of 400 metres and to a maximum depth of 450 metres below surface. All four holes intersected significant gold mineralization in terms of widths and grade and are summarised below:

Due to funding constraints, no follow up drilling was undertaken at the Adumbi deposit after 2017.

• Survey and Georeferencing
  All the Adumbi drill hole collars, trenches and accessible adits and adit portals were accurately surveyed and the data appropriately georeferenced.  In addition, all accessible underground excavations and workings were accurately surveyed.
  
• Re-logging of All Drill Holes
  All boreholes (153 holes totalling 33,651 metres) from Adumbi were systematically relogged and all data was put on (Strata Logs software) including core orientations.  The re-logging of drill holes defined the presence of five distinct geological domains in the central part of the Adumbi deposit where the BIF (Banded Iron Formation) unit attains a thickness of up to 130 metres (see Figures 3 and 4).  From northeast to southwest these are:

1. Hanging wall schists: dominantly quartz carbonate schist, with interbedded carbonaceous schist.
2. Upper BIF Sequence: an interbedded sequence of BIF and chlorite schist, 45 to 130 metres in thickness.
3. Carbonaceous Marker: a distinctive 3 to 17 metre thick unit of black carbonaceous schist with pale argillaceous bands.
4. Lower BIF Sequence: BIF interbedded with quartz carbonate, carbonaceous and/or chlorite schist in a zone 4 to 30 metres in thickness.
5. Footwall Schists: similar to the hanging wall schist sequence.

In the central part of the Adumbi deposit, three main zones of gold mineralization are present (see Figures 5 and 6).  These include the following mineralization:

1. within the Lower BIF Sequence;
2. in the lower part of the Upper BIF Sequence.  Zones 1 and 2 are separated by the Carbonaceous Marker, which is essentially unmineralized; and
3. a weaker zone in the upper part of the Upper BIF Sequence.

There is a higher-grade zone of gold mineralization termed the Replaced Rock Zone (“RP Zone”) associated with alteration and structural deformation that has completely destroyed the primary host lithological fabric.  The RP Zone occurs in the lower part of the Upper BIF package and in the Lower BIF package, and transgresses the Carbonaceous Marker, located between the Upper and Lower BIF packages, both along strike and down dip (see Figures 3 and 4).

• Relative Density (“RD”) Measurements
  The increase in the sample population coupled with the application of a more rigid RD determination procedure based on recommendations from the RPA resource study, indicates that the new RD measurements from both mineralized and unmineralized material and from the various material types and lithologic units have improved the confidence in the relative RD determination to be applied to any resource estimates. Relative to the 6 oxide RD measurements used for tonnage estimation in the RPA model, 297 oxide RD measurements within the mineralized domain were undertaken during the review work. For the transition and fresh material, equal number of determinations relative to the previous RD sample volumes were undertaken with the review process employing more rigid RD determination procedures.  

Table 1 below indicates significate positive variance between the previous model RD and the reviewed work for the oxide and transition materials.

Table 1: Summary of Previous and Updated Mineralised Average RD Measurements for Adumbi Deposit

• Oxidation and Fresh Rock Surfaces
  The re-logging of the core as per the RPA recommendations identified major differences between the depths of Base of Complete Oxidation (BOCO) and Top of Fresh Rock (TOFR), and the depths used by RPA in the 2014 model.  In the RPA model, the BOCO was negligible and the TOFR corresponded approximately to the re-logged BOCO.  The deeper levels of oxidation that were observed during the re-logging exercise have had positive implications with respect to ore type classification and associated metallurgical recoveries, mining and processing cost estimates.
  
• Adit Sampling and Georeferencing
  Following the accurate surveying of the 10 historical adits and appropriately georeferencing, the 796 adit samples (1,121 metres in total) when applied have positive implications on the data spacing and classification of mineral resources at the Adumbi deposit.
  
• Quality Control and Quality Assurance
  Assessment of assay standards and blanks of the Adumbi deposit by RPA indicated that 1,014 samples within some batches failed QC and were identified for re-assay. A total of 616 pulps and 382 quarter core samples were retrieved for re-assay. The samples were submitted to the SGS Laboratory (which is independent) in Mwanza, Tanzania in November 2014, together with international reference material from Rocklabs (8 per 100 samples) and blanks (4 per 100 samples). This was undertaken to ensure the samples passed internal QA/QC analytical procedures.
  
  For the post 2014 drilling campaign, drill cores for assaying were taken at a maximum of one metre intervals and were cut with a diamond saw with one-half of the core placed in sealed bags by company geologists and sent to the SGS Laboratory in Mwanza.  The core samples were then crushed at the laboratory down to minus 2 mm and split with one half of the sample pulverized down to 90% passing 75 microns. Gold analyses were carried out on 50g aliquots by fire assay. In addition, checks assays were also carried out by the screen fire assay method to verify high grade sample assays obtained by fire assay. Internationally recognized standards and blanks were inserted as part of the internal QA/QC analytical procedures.
  
  Minecon has reviewed the quality of all the assay data used for the modelling and estimation of resources to ensure that they all passed the Company’s internal QA/QC criteria.
  
• Gold Price
  A gold price of US$1,200 per ounce was used in 2014 for the RPA study. To reflect more recent market conditions, a gold price of US$1,500 per ounce has been used in Minecon’s resource determinations.

In summary, this additional 2014 to 2017 information resulted in better quantification with improved confidence in updating the geological model for grade interpolation and pit optimisation studies to determine mineral resources for the Adumbi deposit.

Geological Modelling and Grade Estimation
The Adumbi 3-Dimensional model was constructed by Minecon in collaboration with on site geologists using cross sectional and horizontal flysch plans of the geology and mineralization (see Figures 3 and 4) and was used to assist in the constraining of the 3-D geological model.  The mineralization model was constrained within a wireframe at 0.5 g/t Au cut-off grade (see Figures 5 and 6).  Grade interpolation was undertaken using:

• 2 metre sample composites capped at 18 g/t Au to improve the reliability of the block grade estimates.
• Ordinary Kriging to interpolate grades into the block model.
• Relative densities of 2.45 for oxide, 2.82 for transitional and 3.05 for fresh rock were applied to the block model for tonnage estimation.

Pit Optimisation Parameters
To constrain the depth extent of the geological model and any mineral resources, an open pit for the Adumbi deposit was constructed based on the following pit optimisation parameters:

• A long-term gold price of US$1,500 per ounce.
• Block size: 8 metres x 8 metres x 8 metres.
• A two-metre minimum mining width and a maximum of four metres of internal waste was applied.
• Mining dilution of 100% of the tonnes at 95% of the grade.
• Ultimate slope angle of minus 45 degrees.
• Metallurgical recoveries of 95% for oxide and transitional material and 90% for fresh rock (in the RPA study a fresh rock metallurgical recovery of 95% was used while Minecon reduced this to a more conservative 90% even though no additional metallurgical testwork was undertaken after the RPA study).
• Average mining cost of US$2.5/t mined.
• Mineral resources were estimated at a block cut-off grade of 0.9 g/t Au constrained by a Whittle pit with processing and G&A costs of US$30/t.
• Transport of gold and refining costs equivalent to 4.5% of the gold price.
• No additional studies on depletion by artisanal activity was undertaken since the 2014 RPA study and the same total amount of material was used by Minecon.

The results of the Adumbi pit optimisation (see Figure 7) indicated an inferred mineral resource within the pit of 2.19 million ounces of gold (28.97 million tonnes at 2.35 g/t gold) (see Table II below).

Mineral Resources
Within the US$1,500 pit shell (Figure 7), the following is classified as inferred mineral resource at the Adumbi deposit: 

Table II: Inferred Mineral Resource for the Adumbi Deposit (with an effective date of April 17, 2020)

Note: Numbers may not add up due to rounding.

The additional drilling information, the higher RD determinations and the increased gold price, have contributed significantly to the increased mineral resources of the Adumbi deposit with improved confidence.

In summary for the Imbo Project, the inferred mineral resource for the Adumbi, Manzako and Kitenge deposits now totals 2,503,000 ounces of gold (30,650,000 tonnes grading 2.54 g/t Au) and is summarised in Table III below.  76.29% of this inferred mineral resource is attributable to Loncor via its 76.29% interest in the Imbo Project.

Table III: Inferred Mineral Resource for the Imbo Project (with an effective date of April 17, 2020)

Note: Numbers may not add up due to rounding.

Additional Resource Potential and Recommendations for Further Work
There is significant additional resource potential within the Imbo project permit:

• At the Adumbi deposit, the gold mineralization is still open at depth and, subject to securing the necessary financing, the drilling of an additional 12 core holes (7,000 metres) has the potential to add and upgrade mineral resources within the US$1,500 pit as well as outline potential underground resources below the pit (see Figure 8).  After this proposed drilling program has been completed, additional drilling may be undertaken (subject to securing the necessary financing) before a Preliminary Economic Assessment is initiated to include additional mineral resource determinations, metallurgical testwork, open pit and potential underground studies, metallurgical plant processing, infrastructural, environmental and economic studies.
• At the Kitenge and Manzako deposits, additional drilling may also be undertaken (subject to securing the necessary financing) to further define and increase the inferred mineral resources at these deposits. 
• Ongoing exploration including gridding, soil sampling, trenching and channel sampling is planned to be undertaken at the Imbo East prospect in order to generate potential drill targets.

An independent National Instrument 43-101 technical report relating to the mineral resource estimates on the Imbo Project reported in this press release will be filed on SEDAR and EDGAR within the period required by National Instrument 43-101.

Qualified Person
Mr. Daniel Bansah, Chairman and Managing Director of Minecon, is the “qualified person” (as such term is defined in National Instrument 43-101) who is responsible for the mineral resource estimates and other technical information disclosed in this press release.  Mr. Bansah has reviewed and approved the contents of this press release.

About Loncor Resources Inc.
Loncor is a Canadian gold exploration company focussed on the Ngayu Greenstone Belt in the Democratic Republic of the Congo (the “DRC”).  The Loncor team has over two decades of experience of operating in the DRC.  Ngayu has numerous positive indicators based on the geology, artisanal activity, encouraging drill results and an existing gold resource base.  The area is 200 kilometres southwest of the Kibali gold mine, which is operated by Barrick Gold (Congo) SARL (“Barrick”).  In 2019, Kibali produced record gold production of 814,000 ounces at “all-in sustaining costs” of US$693/oz.  Barrick has highlighted the Ngayu Greenstone Belt as an area of particular exploration interest and is moving towards earning 65% of any discovery in 1,894 km² of Loncor ground that they are exploring.  As per the joint venture agreement signed in January 2016, Barrick manages and funds exploration on the said ground at the Ngayu project until the completion of a pre-feasibility study on any gold discovery meeting the investment criteria of Barrick.  In a recent announcement Barrick highlighted six prospective drill targets and are moving towards confirmation drilling in 2020. Subject to the DRC’s free carried interest requirements, Barrick would earn 65% of any discovery with Loncor holding the balance of 35%.  Loncor will be required, from that point forward, to fund its pro-rata share in respect of the discovery in order to maintain its 35% interest or be diluted.

In addition to the Barrick JV, certain parcels of land within the Ngayu project surrounding and including the Makapela and Adumbi deposits have been retained by Loncor and do not form part of the joint venture with Barrick. Barrick has certain pre-emptive rights over the Makapela deposit.  Loncor’s Makapela deposit (which is 100%-owned by Loncor) has an indicated mineral resource of 614,200 ounces of gold (2.20 million tonnes grading 8.66 g/t Au) and an inferred mineral resource of 549,600 ounces of gold (3.22 million tonnes grading 5.30 g/t Au).  Adumbi and two neighbouring deposits hold an inferred mineral resource of 2.5 million ounces of gold (30.65 million tonnes grading 2.54 g/t Au), with 76.29% of this resource being attributable to Loncor via its 76.29% interest in the project.  

Resolute Mining Limited (ASX/LSE: “RSG”) owns 26% of the outstanding shares of Loncor and holds a pre-emptive right to maintain its pro rata equity ownership interest in Loncor following the completion by Loncor of any proposed equity offering. 

Additional information with respect to Loncor and its projects can be found on Loncor’s website at www.loncor.com.