Porphyry Copper Gold Systems in Central Kalimantan

Kalimantan Gold Corporation

Technical Paper presentation: Open Session

Prospectors and Developers Association of Canada
March 2002 Annual Convention

Authors
Mansur Geiger
Didik Prasetyo
Terry Leach
 Porphyry Copper Gold Systems in Central Kalimantan

Kalimantan Gold Corporation Limited

INTRODUCTION

Kalimantan Gold Corporation’s (KGC) contract of work (CoW) is situated within a mid-Tertiary age
magmatic arc (Carlile and Mitchell, 1994) that hosts a number of epithermal gold deposits (e.g., Kelian,
Indo Muro) and significant prospects such as Muyup, Masupa Ria, Gunung Mas and Mirah (Figure 1).
It has been postulated by many workers (e.g. Corbett and Leach, 1998) that these deposits are near
surface manifestations of porphyry-copper systems, although these systems may not yet have been
exposed by erosion.

The only known porphyry copper systems that have been recognized in this magmatic until recently are
a cluster of deposits in the north-eastern limb of this magmatic arc in Sabah, of which Mamut (Kosaka
and Wahila, 1978) is the best documented. However recent exploration activity by KGC, as well as by
International Pursuit in the Manto-Tebihi area 150km to the north-east, indicate that significant
porphyry copper systems also crop out in the central part of this magmatic arc and that these are viable
exploration targets in Central Kalimantan.

REGIONAL GEOLOGICAL SETTING

Porphyry -related copper-gold mineralization in KGC’s CoW is associated with a number of intrusions
that have been emplaced at shallow crustal levels at the junction between Mesozoic metamorphic rocks
to the south and accreted Lower Tertiary sediments to the north (Figure 2). These intrusions are
interpreted to be part of the Oligocene Cental Kalimantan arc of Carlile and Mitchell (1994). Older
intrusions, and associated volcanic and volcaniclastic rocks, of probable Cretaceous age (Carlile and
Mitchell, 1994), also crop out along this contact.

Structures in the region are dominated by a NE-striking set of faults that are interpreted to be features
of the Kalimantan Suture (van Leeuwen et al., 1990) and are probably arc parallel, or accretionary,
faults. Subsidiary NW trending arc normal, or transfer faults cross-cut the NE structures. The mid-
Tertiary intrusions have commonly been emplaced within dilational settings at the intersection of these
major structural features. The major gold prospects and deposits in Kalimantan are also localised in a
similar structural setting (Corbett and Leach, 1998). The shallow level intrusions are apparent as major
anomalies on aero magnetic survey data.

Large circular features, that are evident on satellite, landsat radar and aerial photo images, commonly
coincide with the mid-Tertiary intrusions and associated magnetic high anomalies. These circular
structures are interpreted to be volcanic collapse features and they host many of the porphyry copper-
gold prospects within the CoW. To date, more than 30 porphyry and porphyry-related copper and/or
gold prospects have been defined in the CoW, and only a few of these have undergone any detailed
exploration.

MANSUR PORPHYRY COPPER-GOLD PROSPECT

Preliminary reconnaissance in the 1980’s identified abundant gold in streams in the eastern part of the
CoW. This was followed up in the early 1990’s with exploration activity that was focused on a
porphyry copper-gold system in the Mansur prospect and on epithermal style gold mineralisation
within the Lakapoi area.
In the Lakapoi propect area, sporadic, but locally high grade (up to 70 g/t Au), epithermal quartz-
carbonate-gold-base metal veins occur at the intersection between regional NW structures and a
diatreme-dacite dome complex. The style of mineralisation at Lakapoi is comparable to the carbonate-
base metal low sulhidation style of gold system defined by Corbett and Leach (1998), and these forms
at shallower levels than, and/or distal from, porphyry copper-gold systems in the Southwest Pacific
region.

The Mansur Prospect, 10 km To the north-northeast of Lakapoi, is located within a large circular
feature which has an associated strong magnetic anomaly; these also coincide with a number of mid-
Tertiary intrusions at the north-eastern corner of the CoW (Figure 2). Copper-gold mineralization is
hosted in a diorite intrusion and later feldspar porphyry dykes that have been emplaced into a sequence
of interbedded siltstone, arenite and chert sediments (Figure 3). The sediments have undergone biotite-
magnetite contact hornfels alteration. This contact alteration was defined by a ground magnetic survey
that outlined a NE trending 500m zone around the diorite intrusion.

The diorite has undergone prograde biotite-magnetite ± quartz (‘potassic’) alteration, with the
magnetite locally forming in massive bands. In places, the plagioclase has been altered to secondary K-
feldspar. Quartz ± K-feldspar veinlets cut the potassic altered diorite and hornfels sediment. Late stage
retrograde quartz-sericite-chlorite-carbonate-sulphide assemblages occur in crosscutting veinlets, as
infillings in early veins, and as disseminated alteration of the biotite-magnetite in wallrock selvages to
veins. The sulphides are dominated by pyrite and chalcopyrite, with lesser abundances of bornite and
trace amounts of sphalerite and galena. Anhydrite and fluorite veinlets have also been recorded in the
drillcore.

In the Mansur Prospect area, a ‘doughnut-shaped’ shaped 1km wide zone of highly anomalous copper
geochemistry (>500ppm) is centred on the western diorite-hornfels contact (Figure 4). The highly
anomalous copper zone is coincident with high chargeability / low resistivity anomaly (Figure 5). This
zone surrounds a high resistivity, low copper grade potassic altered core of a diorite intrusion which is
expressed as a zone of anomalous gold in soils (Figure 6). Chlorite-sericite alteration and associated
chalcopyrite-molybdenite veinlets occur around the margin of the intrusion and extend into hornfelsed
sediments. Subsequent drilling, in part carried out in a joint venture with Cyprus Minerals, in the core
zone gave inconclusive results, although intercepts up to 40m @ 0.24% Cu and 0.24 g/t Au were
intersected in early shallow (100m) drillholes at the margins of the copper anomaly (Figure 4)

The coincidence of a halo of high copper in soils with a zone of high IP chargeability around a barren
to low grade central core zone, with minor local retrograde (sericite-chlorite) alteration, is characteristic
of porphyry copper systems that has been well exposed by deep erosion (Sillitoe, 2000). Future
exploration in the Mansur Prospect area will focus on the high copper – high IP chargeability zones
that may be related to high -grade ore in fault contacts of a porphyry intrusion at depth.

BERUANG TENGAH PORPHYRY COPPER-GOLD PROSPECT

More recently (1996-present), regional mapping, followed up by prospect-wide geological, geophysical

and geochemical surveys and local drilling have identified a number of porphyry -copper prospects
within the south-eastern sector of the CoW area. This work has identified the Beruang area as currently
being the most prospective. The Beruang Tengah and Beruang Kanan (see below) porphyry copper
systems are both hosted in a 10-12km wide circular feature that lies at the intersection of the regional
NE and NNW trending structures.

Copper-gold mineralisation at Beruang Tengah is hosted in a number of andesite to dacite and quartz
diorite intrusions that have been emplaced at the contact between sediments and tuff to the west and
older granodiorite intrusions in the eastern prospect area (Figure 7). Structural features at Beruang
Tengah are dominated by NE to NNE-trending arc parallel and NW-striking arc normal fault systems.
At Beruang Tengah, a zone of intense quartz-sericite (phyllic) alteration and sheeted sulphide-quartz
veinlets surrounds a central zone of potassic (biotite-magnetite) alteration; classical porphyry -style
quartz stockwork veins crop out at low elevations (Figure 8a). Biotite, from samples of both drillcore
and outcrop in the potassic alteration zone, has been dated by K/A r at 31 and 32.6 Ma respectively. In
comparison, a Lower Miocene age (21 Ma) has been assigned to the gold mineralisation event at
Kelian (van Leeuwen et al., 1990). The phyllic alteration zone grades outwards to a quartz-sericite-
chlorite assemblage and peripheral propylitic (quartz-chlorite ± epidote ± actinolite) alteration zones.
500m northwest of Tengah, a 1km long zone of intense phyllic alteration coincides with a zone of
anomalous (>0.1 g/t Au) gold in soils in the Gold Zone, and this is aligned parallel to NE regional
structures.

A 600m wide ‘doughnut-shaped’ zone of highly anomalous copper (>500 ppm) in outcrop coincides
with the zone of intense phyllic alteration (Figure 8b). A small, lower copper grade core is associated
with potassic alteration that has a later quartz-sericite-chlorite overprint. Anomalous gold (>0.1 g/t Au)
in rock (Figure 8c) closely follows that of copper anomaly, whereas anomalous molybdenum (>50
ppm) is associated with the central potassic and sericite-chlorite alteration assemblages (Figure 8d).

A three-hole drill program intersected low-grade, porphyry copper-gold style mineralisation (e.g. BT-2
: 240m @ 0.19% Cu and 0.12 g/t Au, including 77m @ 0.23% Cu and 0.27 g/t Au) hosted in very
intense sericite-chlorite ± andalusite altered diorite to granodiorite intrusions. Early sheeted quartz ±
molybdenite veins contain abundant liquid- and vapour-rich fluid inclusions. Halite ± sulphide
daughter crystals locally occur in some of the liquid-rich inclusions, indicative of highly saline
conditions during the early stages of hydrothermal activity. The quartz veins are cut by later sericite-
pyrite veinlets which have associated chalcopyrite ± molybdenite ± tennantite-galena-sphalerite
mineralisation.

A 300m x 2000m, north-east trending zone of anomalous (>0.1ppm) gold in both outcrop and trenches
is located 1km to the west of the Beruang Tengah porphyry system. This grades in the south-west into
an area of sheeted quartz vein development and polymetallic (Cu-Pb-Z n-Ag-Au) mineralization
(South-East Zone). Drilling into the ‘gold zone’ intersected pervasive, low grade (e.g. 144m @ 0.38 g/t
Au; HBK #2) gold mineralization associated with mesothermal-style quartz-sulphide (pyrite ±
chalcopyrite ± galena) veins that are hosted in strongly phyllic altered fine grained sediments and tuffs.

At Beruang Tengah, the observations that intense phyllic alteration is associated with gold-copper
mineralisation, and that there is only very limited surface extent of potassic alteration within a small
low grade core zone, indicate that erosion has only exposed the upper parts of an underlying porphyry
system (Sillitoe, 2000). It is therefore interpreted that significant potential exists for more extensive and
higher gold-copper at depth. The Gold Zone to the west is characteristic of quartz-sulphide vein
systems that typically form at the margins of Southwest pacific porphyry systems (Corbett and Leach,
1998).

BERUANG KANAN PORPHYRY COPPER SYSTEM

At Beruang Kanan, 3km to the north-west of Beruang Tengah (Figure 2), alteration (propylitic, local
phyllic, rare advanced argillic) and anomalous copper in soils (>200ppm in soils) extend over an area
of more than 16 km2 and the alteration and geochemical anomalies are open in most directions. This
alteration and mineralisation are hosted in a sequence of dacite tuff of probable Oligocene age, that
overlie lower Tertiary volcaniclastic siltstone and sandstones in the eastern prospect area (Figure 9).
Pre-mineral Sintang dacite porphyry intrusions of probable Oligocene age, and post-mineral
(?Miocene) andesite, dacite to basalt-gabbro dykes are intruded into the tuffs and sediments. Silica
sand occurs as a veneer on tuffs and sediments immediately to the east of the drilled area, and is
interpreted to have been derived from erosion of an advanced argillic cap that extended over this part of
the prospect area (see also Figure 11). The regional NE and NW lineaments, as well as local E-W
features dominate structures in the Beruang Kanan area.
Geological, geochemical (soil, ridge and spur auger and rock chip) and geophysical (induced
polarisation {IP} and ground magnetics) surveys delineate three centres of porphyry-style alteration
and mineralisation; the Main, South and West Zones (Figure 9 and 10). The South Zone consists of a
1km NE-striking, central zone of locally intense sericite-quartz-pyrite alteration, stockwork quartz +
sulphide veins, weak anomalous Au-Mo in soils and deep IP anomaly. A broad outer halo of
anomalous copper-zinc-arsenic-antimony in soils is hosted in intensely chlorite-pyrite altered tuff.
Sporadic quartz-pyrite-chalcopyrite (with minute native gold inclusions) veins cut the chloritised tuff.
These veins have produced assays over 2 meter of 1% Cu and 15 ppm Au. In the West Zone, scattered
zones of phyllic alteration (Figure 10) and anomalous copper and base metal geochemistry suggest that
in the West zone the system is less well defined.

Exploration activity to date at Beruang Kanan has been focused on the Main zone, that is defined by a
north-south elongate, 1 x 1.5km area of anomalous copper (>0.1% in rock chips) ± gold-molybdenum
geochemistry, high chargeability, and by intense phyllic alteration. The phyllic alteration is capped at
high elevations on the western margin of the Main zone by advanced argillic alteration (Figure 10). The
alteration and mineralisation are hosted almost entirely in dacite tuff and are cut by post-mineral dacite
dykes. These dykes are defined by ground magnetics, are up to 100-200m wide, and radiate north-west
and west through the prospect area. Copper-gold-molybdenum in soils are aligned NE within the Main
Zone.

Zinc, and to lesser extent lead, form broad anomalous geochemical halos around the Main zone, and
massive NE-trending zone of poly-metallic mineralisation crop out to the north and south of the Main
zone. Limited drilling into the zones to the north (Figure 9) intersected intervals of up to 16m @
2.8%Pb, 5.8%Zn, 58 g/t Ag, 0.65 g/t Au and 0.17% Cu (BKZ-1) associated with quartz-chlorite-illite
alteration. Base metal sulphide (sphalerite, galena, tennantite, chalcopyrite-bornite) mineralisation
occurs as wallrock disseminated grains, in shear zones and as sheeted veins.

In the Main Zone, fourteen drillholes, to 280m measured depth, have intersected a NNW-trending zone
of intensely sheared and silicified, highly pyritic, zoned phyllic to advanced argillic altered wallrock.
This zone was found to host copper grades up to 167m @ 0.59% Cu (BK-2; Figure 9).

Early quartz veins, that are commonly recrystallised and strained, contain rare anhydrite and apatite
inclusions and are locally cut by thin anhydrite veinlets. Subsequent shearing of the quartz veins was
accompanied by wallrock alteration and vein deposition of a mineral assemblages that are zoned
temporally from early advanced argillic, through intermediate phyllic to late stage argillic and sub-
propylitic.

The alteration assemblages and associated mineralisation are also spatially zoned. From depth in
drillholes to the south-east to shallow levels in drillholes to the north-west the zoning is : chlorite +
pyrite + chalcopyrite ⇒ sericite + pyrite + chalcopyrite ± bornite ± sphalerite ± galena ⇒
dickite/kaolinite + pyrite + bornite + chalcopyrite + tennantite ⇒ alunite + pyrite ± barite ± enargite
(Figure 11). This zonation indicates progressive oxidation and decrease in fluid pH as the hydrothermal
fluids migrated to cooler and shallow levels north-eastward from a source inferred to lie at depth to the
south-east. Supergene chalcocite and covellite overgrow and replace many of the primary sulphides and
account for much of the copper mineralisation at shallow levels.

Drilling in the Main Zone has intersected a shallow supergene copper enrichment zone (Figure 12) that
grades near surface to a thin veneer of leached cap rock. Drillholes BK_@, BK-3 and Bk-10 intersected
relatively high grade (>0.5% Cu) primary chalcopyrite mineralisation that is open at depth.
The IP surveys clearly define the highly pyritic NNE-trending shear zone that hosts most of the copper
mineralisation in the Main Zone (Figure 13). A high chargeability anomaly at depth in the central-east
part of the Main zone is interpreted to be the source zone for the hydrothermal fluids that is indicated
by the zonations in alteration and mineralisation. Chargeability anomalies at progressively shallow
levels reflect the inferred upflow (Figure 11) as well as an outflow to the NNE and to the south-west. It
is postulated that the deep chargeability anomaly is the downward plunge of the pyritic milled-mat rix
breccia encountered at shallow levels in drillhole BK-8, and is a potential target for a high copper-
grade breccia pipe.

At Beruang, it is proposed that both the emplacement of high level intrusions and the passage of
associated mineralised fluids were focused along favourable structures emanating from a deep seated
magmatic source related to the 10-12km wide circular feature. At Beruang Tengah, the upper-most
levels of a porphyry copper-gold systems are exposed at the current erosion surface.

At Beruang Kanan, the zonation in alteration, geophysics and geochemistry indicate that there were at
least three discrete centres of hydrothermal activity, probably associated with separate high level
intrusions from the inferred deep magma chamber. Erosion at Beruang Kanan has not yet exposed a
porphyry copper system but one most probably lies beneath the Main Zone. The presence of a highly
conductive phyllic zone and the observed remnants of an advanced argillic cap and enargite-tennantite
mineralisation, suggests a scenario comparable to the ‘lithocap’ described by Sillitoe (2000) that
typically forms at shallow crystal levels above a porphyry system. The presence of well defined base
metal, arsenic and antimony geochemical halos around a central zone of copper-gold-molybdenum
mineralisation is also characteristic of poorly eroded porphyry copper systems.

An increase in hypogene chalcopyrite mineralisation with depth, the occurrence of sulphide breccias
and the presence of a deep highly conductive anomaly indicates that there is significant potential for a
high grade breccia pipe at depth under the Main Zone (Figure 11), comparable to the a the Ridgeway-
Cadia mine in NSW, Australia (Wood and Holliday, 1995).

SOCIAL INVESTMENT

KGC views that social investment in t heir project area is equally as important as the technical aspects.
A mineral prospect or mine, made inaccessible by a breakdown in community relations in neither a
prospect nor a mine. A well-developed and well-maintained sustainable community relationship is the
only key to ensuring unconditional and guaranteed access and thus contributing to project success. To-
day KGC enjoys the support of the local government and community. It is this asset, along with the
company’s perseverance and dedicated shareholder base, that makes it one of a small group of explores
still active in Indonesia today.

The founders of Kalimantan Gold Corporation have been exploring for minerals in the northern portion
of Central Kalimantan since 1980. Working in this extremely remote location, and restricted by
minimal budgets in the early years, the company found it essential to develop good relations and
rapport with the Dayak local people of the area. The company was also quick to recognize that these
people have an invaluable and enormous knowledge of the area. As a consequence, KGC has over the
years, trained a number of these Dayaks in various exploration techniques, including geological
mapping and sampling. Additionally, the company provided scholarships to more than 20 young
Dayak’s, enabling them to complete their higher educations. Today, this training is an important social
asset as well as being of enormous benefit to the company.

As a result of the rapid social and political change in Indonesia, KGC recognized the importance of this
social investment, and the corporate social responsibility of initiating it early in the exploration phase,
well before any development starts.
In 1998, the company and a representative of the local people, established the Yayasan Tambuhak
Sinta (YTS). The foundation’s purpose was to channel KGC’s social commitment as well as provide an
institution through which the local people can work towards their aspirations. The aim was to facilitate
their participation in any future mine development.

The key focus is on empowering the local people, to work and solve problems themselves, avoiding
potential dependency on the company’s support. The positive results of these efforts to date have been
well recognized by local government, the local community and more recently by several mining
companies and contractors who themselves face major social problems.

CONCLUSIONS

Exploration over the past 15 years by KGC has identified over 30 copper and/or gold prospects and has
shown that porphyry copper-gold systems are viable exploration targets in the central regions of
Kalimantan. Only a few of these prospects in the southern part of the CoW have to date been explored
in detail. In addition, the aero-magnetic anomalies in the northern portion of the Cow have yet t o be
ground tested.

The porphyry copper systems that have been identified by KGC represent varying levels of erosion. In
the Mansur Prospect, the porphyry copper-gold system is well exposed, however exploration activity to
date has focused on the low -grade core zone. Considerable potential exists in the peripheral zones of
high conductivity and highly anomalous copper in soils. At Beruang Tengah, erosion has only exposed
the upper-most portion of a porphyry copper-gold system and potential exists for high-grade at depth
beneath the intense phyllic alteration zones. At Beruang Kanan, a porphyry copper system has not yet
been exposed by erosion and lies at depth beneath a phyllic-argillic ‘lithocap’ in the Main Zone. It is
considered that there is good potential for a high-grade breccia pipe to lie at shallow levels immediately
above this inferred deep porphyry system.

Mansur Geiger1
Didik Prasetyo1
Terry Leach2

References
Carlile, J.C., and Mitchell, A.H.G., 1994, Mamgamtic arcs and associated gold and copper
mineralisation in Indonesia: Journal of Geochemical Exploration, v. 50, p. 91-142.

Corbett, G.J., and Leach, T.M., 1998, Southwest Pacific rim gold-copper systems: Structure, alteration
and mineralisation: SEG Special Publication No. 6., 236p.

Kosaka, H., and Wakita, K., 1978, Some geological features of the Mamut porphyry copper deposit,
Sabah, Malaysia : Economic Geology, v.73, p. 618-627

Sillitoe, R.H., 2000, Role of gold-rich porphyry models in exploration, in S.G. Hagerman and P.H.
Brown, eds. Gold in 2000, Reviews in Economic Geology, v. 13, p. 311-346.

Van Leeuwen, T.M., Leach, T.M., Hawke, M. M., and Hawke A.A., 1990, The Kelian disseminated
gold deposit, East Kalimantan, Indonesia: Journal of Geochemical Exploration, v. 35, p. 1-61.

Wood, D.G. and Holliday, J.R., 1995, Discovery of the Cadia gold/copper deposits, New South Wales:
New Generation Gold Mines: Case histories of discoveries. Australian Mineral Foundation, p. 11.1-
11.10

Keywords
Porphyry copper gold, Kalimantan
 1. P.T. Kalimantan Surya Kencana
Jl. Teuku Umar 32A
Kalimantan Tengah 73112
INDONESIA
Phone : (62-536) 24810
Fax : (62-536) 29187
e-mail : kgc@cbn.net.id
info@kalimantan.com

2. Department of Earth Sciences, University of Waikato

Hamilton, New Zealand
P.O.Box 4370, Hamilton East
NEW ZEALAND
Phone : (64-7) 856 7344
Fax : (64-7) 856 0115
e-mail : tmleach@attglobal or leach@ihug.co.nz

FIGURES :

1. KGC Cow in Kalimantan Magmatic Arc

2. Geology of KGC CoW

3. Mansur project geology

4. Mansur project copper in soil

5. Mansur project conductivity/resistivity

6. Mansur project gold in soils

7. Beruan Tengah geology

8. Beruang Tengah a) alteration b) copper in rock, c) gold in rock, d) molybdenum in rock

9. Beruang Kanan geology

10. Beruang Kanan alteration

11. Beruang Kanan Main zone E-W section – alteration

12. Beruang Kanan Main Zone E-W section – copper grades

13. Beruang Kanan Main Zone E-W section – conductivity / resistivity