Pencari Mining Corporation - Pani Property

Madagascar

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Itea Property

Northern Morondava Basin Uranium Property

Ejeda Property

East Fiana Gold Property

P49 Gold Property

Tsididdy Gold Property

Ambatofosy Property

Pani Property

Introduction:

The Pani Property currently hosts a resource of 527,868 ounces of gold with excellent upside for +1,000,000 ounces. The current zones of mineralization are open at depth and along strike. The resource defined to date is on surface with a low strip ration making this property amenable to low cost open pit mining. It is our objective to establish an open pit mining operation upon receipt of a positive feasibility study.

View Technical Report (1.6 Mb)

Acquisition Details, Holding Costs and Property Encumbrances

The Pani Property is held pursuant to a KP, or local mining authorization, that covers a total of 100 hectares. We acquired the right to earn a 90% interest through the assignment of a Joint Venture in the Pani Property in 2000. We can earn the interest by funding financial requirements for commencement of a mining operation at the property and have an option to purchase the remaining 10% interest for US$1,000,000 before the start of commercial production on the property. We must pay 5% net profits royalty on production from the property, subject to maximums of US$50,000 per year and US$300,000 over the life of commercial production on the property. We have an option to purchase the royalty for US$150,000 before the start of commercial production on the property. In addtion the property is subject to a 1% NSR to the underlying property license holder

Location:

The Pani Property is located 130 kilometres west of the town of Gorontalo in North Sulawesi, Indonesia. The property is a large tonnage, low grade gold and silver resource. Access is from the town of Marisa, via a 16 kilometre rugged dirt road. Marisa can be reached via the Trans-Sulawesi highway in three hours from Gorontalo.

Geology:

The Gunung Pani property is located in the Marisa Gold-Copper District at the western portion of North Sulawesi. This Terrain consists mainly of Tertiary to recent volcano-plutonic magmatic arcs.

Gunung Pani is located within a Pliocene rhyodacitic dome complex in a resurgent caldera-like volcano-tectonic depression. The volcanic stratigraphy in the property area consists of a porphyritic rhyodacite lave dome and coeval interbedded pyroclastic breccias and tuffs.

Mineralization:

Gold mineralization is hosted by silica-sericite altered porphyritic rhyadacite and coeval pyroclastics as fracture and breccia fillings, quartz-adularia-limonite veins and as disseminations in permeable volcanic lithologies and at contacts. Gold occurs as electrum associated with pyrite as late rims or intergrowths. In the oxidized zone, pyrite is altered to iron oxides forming limonitic fractures and stains where free gold is sometimes observed. Gold deposition, in this case, is secondary and due to supergene process.

Previous work at Pani has defined the approximately areal extent of gold mineralization as a E-W to N-NW zone of about 400m wide by 1000m long (length is constrained by property boundary). The geometry of the mineralized zone follows the general outcrop pattern of the porphyritic rhyodacite and the dominant structural trends.

Resources:

The identification of higher grade cross cutting northwest trending mineralized structures and drilling to intersect these structures suggest the property has excellent upside grade potential to increase the known resource base.

A revised resources report was completed by Mr. Roger H. Pooley, BSc, FAusIMM, CP, MMICA in October 2005. This report indicated the resources identified at Pani using a 0.5 g/t Au cut off are defined as follows:

Indicated Mineral Resource: 9,860,688 Tons at 1.45 g/t Au = 459,743 ounces Au
Inferred Mineral Resource: 1,383,621 Tons at 1.52 g/t Au = 67,624 ounces Au

The revised study has also identified a number of locations where infill drilling is recommended to potentially define further resources at the Pani Ridge. At the northern end of the deposit two to three drill holes are recommended to fill in a number of "gaps" between the shallow dipping zones. To the south of the main Pani Ridge additional mineralization appears to be present at depth and could potentially represent a down dip extension of mineralization exposed from previous trenching.

Future Plans:

A portion of the Pani Property that is important to the mineral resource is currently located within a forestry reserve. The Indonesian Government has recently issued a decree with respect to the issue affecting such mineral properties in Indonesia and a Decree from the Forestry Ministry is awaited detailing the underlying regulations. As the original mining permit at Pani was issued prior to the most recent Forestry regulations though our local Indonesian partner we will be making applications to have the boundaries of the reserve re-classified to enable mining to commence. This would release the important portions of the property from the forestry reserve. The Company has received approval at local Government level including approval from the Provincial Parliament, Provincial Governor to develop the project as soon as the forestry issues are cleared. When the property is released, we plan to advance the project to a feasibility study.

Overview of G. Pani Looking North

Pani - 3D IDW Model Check Bench Plan 490 RL -- Pani Project
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