nordic geological review of draig licences

Not sure if the 44 page Nordic Geological Solutions (NGS) document, which reviews Draig's tenements, has been summarised here on HC yet.

It makes for interesting and objective reading (for medium to longer term investors).

A couple of things are important though.

Firstly, only 11 holes were drilled during due diligence, but NGS were able to make some assumption on the other tenements based on previous work by Peabody Winsway, and from related information.

There are 4 licences in the Ongi River Basin (Lower Central Mongolia - Teeg, Khongor, Nariin, Ergen), and 4 in South Gobi (Gurvantes, Shavan, Olomgui, Zamt).

Interestingly, the Ergen licence is prospective for gold and copper, with one assay showing 2.5% Au and 4.3% Cu.

Below, I am mostly quoting from the NGS geological review of Draig's tenements, summarising 44 pages into a short piece on each licence area. It is as condensed as I could get.

Lower Central Mongolia

TEEG
Draig drilled 5 holes.
Hole BTE-001 intersected a massive coal seam from surface to 60m depth.
Depth terminated a 100m, suggestive of further seams down dip.
Hole BTE-002 was drilled 280 metres to the north-west of BTE-001.
Hole BTE-002 intersected a 40m thick black coal seam from a depth of 89m.
NGS believes the significant coal seams entered in holes 1 and 2 warrants a well planned exploration program.

KHONGOR
Draig drilled 1 hole, no coal was intersected.
Previous data from Logonek suggests only a thin quarternary cover.

NARIIN
Located immediately to the West of TEEG.
Licence area is small, only 5.4km square.
NGS is not aware of any historic drilling.
Draig did no drilling.
NGS believes sediments of the coal bearing Bakhar formation that outcrop in the northern sector warrants further exploration.

ERGIN
Small licence area, 8.8km square.
Bounded to the South West by a small gold field.
No recent or historic drilling has been conducted.
The area was mapped in 2010 however no coal bearing sediments were identified.
However, Draig operatives noticed gold bearing quartz veins, perhaps the result of illegal mining.
A sample was provided to the Stewart lab, which returned 2.5% Au and 4.3% Cu.
Unfortunately, NGS believes the geological fabric of this licence does not appear to be favorable for coal, however, they were interested in finding the source of the relatively high gold and copper values.
Perhaps Draig could on-sell this licence to a gold/copper miner.


South Gobi

GURVANTES
Historic work includes mapping, trenching and drilling, but only limited data is available
Any coal bearing sediments would appear to be confined within the northern edge of the licence area.
5 drill holes were completed along the northern border in 2010, however only 1 registered any coal.
Draig drilled 2 holes on the northern border, the first did not intersect coal, the second hit 2 narrow seams of coal, 2.1m thick and 1.4m thick, however the quality of the coal was not good.
NGS considers the economic potential remains unknown.

SHAVAN
Seismic survey conducted in 2010 by Logantek.
Draig drilled 1 hole, but no coal bearing strata was intercepted.
NGS considers the economic potential remains unknown.

OLOMGUI
6 holes were drilled in 2009 within the northern and central part of the licence area, but only 1 of the 6 intersected coal bearing strata, a small 1m seam.
A ground magnetic survey was conducted in 2010.
The results suggest the central and southern area could be further studied.
Draig drilled 2 holes, but only encountered unconsolidated sediments of sand and clay.
Open cut extraction of any discoveries would be prevented by thick cover sequences.
NGS considers the economic potential remains unknown.

ZAMT
No coal outcrops are within the licence area.
Internal documents by geologists suggest further mapping and drilling to the southern half which shows possible coal potential within the permian sequence.
Situated proximal to the east of South Gobi Resources (SGR) Soumber deposit.
Draig drilled 3 holes, but unfortunately all of them were not coal bearing.
The licence area is greater than 30km, and is proximal to a major coal deposit (by South Gobi), so NGS recommends further exploration.


Recommendations by NGS
Specifically focus the exploration drive in 2011 on licence are TEEG and NARIIN, and to a lesser extent ZAMT.
A 30 line kilometre geophysical survey is recommended for TEEG, and a 15 line kilometre geophysical survey is recommended for ZAMT.

Gw

Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.
(Norm Franz 2001)