Batu
Hijau is a porphyry copper-gold deposit located onSumbawa Island in the western Banda Arc of Indonesia. The
deposit has been
evaluated from 54 000 m of drilling in 105 diamond drill holes over
a surface area of 1.2 km2 and to a depth of
1000 m below surface (412 m below sea level). A provisional plan is being
evaluated to mine 642 million tonnes at an average grade of 0.61% Cu and 0.55
g/t Au (variable cut-off) from an open pit in the higher grade portion of the
resource.

The
deposit is associated with a calc-alkaline intrusive complex that was emplaced
in a thick sequence of andesitic pyroclastic rocks. The oldest and most
widespread intrusion is porphyritic to medium-grained, equigranular, quartz
hornblende diorite. At Batu Hijau the western diorite contact zone was intruded
by two phases of tonalite. The older tonalite is a stock increasing from 200 m
diameter at surface to 500 m at sea level. It consists of quartz, plagioclase
and hornblende phenocrysts set in a groundmass of similar composition. A younger
tonalite intrudes the tonalite stock, quartz and plagioclase phenocrysts are
more abundant and it has a finer groundmass than the older tonalite. Brecciation
occurs near the older tonalite contacts but there are no breccia pipes or
late-stage features such as pebbledykes or postmineralisation intrusive
rocks.

Hydrothermal alteration of Old Tonalite and adjacent rocks
is centred on the Old Tonalite and is zoned from a core of pervasive potassic
alteration grading to an outer propylitic halo. At depth a propylitic assemblage
is developed in the low grade core in the Old Tonalite. Phyllic alteration, late
stage and mainly fracture controlled, overprints both potassic and inner
propylytic zones. Intermediate argillic alteration overprinting is widespread,
particularly on the eastern side of the hydrothermal system, where advanced
argillic alteration overlies argillic alteration.

Ore grade mineralisation is
cylindrical in shape, up to 800 m in diameter, and is centred on the Old
Tonalite. A high grade shell (>0.75% Cu) forms an upward tapering cone in and
around the Old Tonalite and reaches the surface in the centre of the deposit.
Lower in the shell >l g/t Au and >2 g/t Ag accompany >1% Cu. Below 75 m
above sea level mineralisation in the Old Tonalite rapidly decreases as a weakly
mineralised core develops, but the limb continues to contain mineralisation to
at least 412 m below sea level. Fracture and vein-controlled chalcopyrite and
bornite are the dominant hypogene copper minerals and are the hosts for most of
the gold mineralisation. Gold occurs free and in the lattice of the copper
sulphides, and has been observed in quartz.

Weathering, especially where argillic alteration is developed,
has produced a strongly leached cap, up to 147 m thick, below which is
an irregular copper enriched supergene zone. Where leaching is not developed,
such as over the centre of the deposit, an irregular oxide zone and a weakly
developed supergene zone may be present.