HORSESHOE METALS PROVIDES EXPLORATION UPDATE ...2012/06/22 · Page 2 of 18 ABN 20 123 133 166 Unit...

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Unit 6/11 Colin Grove, West Perth PO Box 256 West Perth WA 6872 Ph (08) 9481 5866 Fax: (08) 9481 5966

www.horseshoemetals.com.au

ASX/Media Announcement 22 June 2012

HORSESHOE METALS PROVIDES EXPLORATION UPDATE

HORSESHOE LIGHTS

• Diamond drilling programme of 9 holes for 1,782 metres in 3 different zones completed.

• Assay results received for 4 diamond holes to date.

• Best diamond drilling result received to date:

HDD1037: 11m (226 -237m) @ 1.4% Cu including 2 metres (233m) @ 3.1% Cu.

• Low angle RCP drilling programme commenced in May 2012 with 6 drill holes successfully completed to date. Assay results not yet received.

• 2 RCP rigs on site drilling multiple target areas.

KUMARINA

• DMP approval for next drilling programme due in July 2012. Programme includes a major drilling campaign at the Rinaldi Prospect.

• Additional airborne magnetics and radiometics survey to be flown in late July 2012 to assist in regional exploration.

• Horseshoe Metals Limited selected to receive $101,754 Western Australian Government co-funded drilling grant to drill test Kumarina Deeps Prospect.

• Kumarina Deeps Prospect to be drilled once all approvals and permits obtained.

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Horseshoe Metals Limited (ASX:HOR) (“Horseshoe” or “the Company”) is pleased to provide the following update on its 100% owned Horseshoe Lights Copper/Gold Project (“Horseshoe Lights Project”) and Kumarina Copper Project (“Kumarina Project”) located in the Peak Hill Mineral Field of Western Australia (see Figure 1).

Horseshoe Lights Project

Diamond Drilling Programme

The company has completed drilling a total of 9 diamond holes for 1,782 metres in three different areas at the Horseshoe Lights Project (see Figure 2). Table 1 on page 18 sets out the laboratory analysis results received to date.

Line 2 DDIP Anomaly

Four holes (HDD001, HDD002, HDD005 & HDD006) were drilled to test a large anomaly identified from the 2011 Dipole-Dipole Induced Polarisation (“DDIP”) survey. Holes ranged in depth from 259.1 metres to 459.8 metres depth with HDD001 & HDD006 drilled to intersect a dolerite sill which is interpreted to underlie sericite/chlorite altered tuffs and schists of the Narracoota Formation.

The four holes intersected sericite and chlorite altered tuffs with zones of jasperoid alteration (see Figure 3). In holes HDD001 and HDD002 only limited copper mineralisation was intersected as detailed below:

Hole Number Interval Depth (metres)

Interval (metres)

Cu % (0.25% Cu cutoff)

HDD001 317.1 – 318m 0.9m 0.3% 322 – 322.34m 0.34m 0.6%

HDD002 No Significant Results

Similarly no significant zones of copper mineralisation have been observed in the core of HDD005 and HDD006, however selected sections of core will be cut and submitted for analysis in the coming weeks.

The diamond drill holes all intersected an interpreted shear zone within a broad zone of alteration. Intervals of pyrite up to 2.3 metres thick were observed within the zone of alteration and these potentially may be the source of the DDIP anomaly. Whilst the zone of alteration was not significantly mineralised it remains prospective for copper and gold elsewhere within the sequence.

The information obtained from these holes will assist in planning future drilling to test adjacent DDIP survey target areas and other down dip targets.

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North West Stringer Zone

Three holes (HDD1013, HDD1016 & HDD1037) have been drilled in the North West Stringer Zone to the north of the open pit (see Figure 2) to extend Reverse Circulation Percussion (“RCP”) drill holes that were observed to have ended in copper mineralisation.

RCP hole RC1037 (original depth 222m) was extended with a diamond tail (HDD1037) 28.8 metres long for a total hole depth of 250.8 metres. HDD1037 was drilled down dip of RC1025 which recorded 16 metres @ 4.8% Cu from 161-177 metres (see Figure 4). HDD1037 passed through 16.1 metres of felsic tuff to intersect carbonaceous shale at 238.1 metres depth. Chalcopyrite mineralisation was observed throughout the felsic tuff to near the shale contact. 16.1 metres of cut core was sent for laboratory analysis. The best assay results of HDD1037 were:


Interval (metres)


HDD1037 224 – 225m 1m 0.4% 226 – 237m 11m 1.4% incl. 233 – 235m 2m 3.1%

RCP hole RC1013 (163m) was extended with a diamond tail (HDD1013) 107.8 metres long for a total hole depth of 270.8 metres. HDD1013 passed through felsic tuff to intersect dolerite at 258.4 metres depth (see Figure 5). Stringers of chalcopyrite mineralisation were observed intermittently in the core. 107.8 metres of core has been assayed with the best results being:


Interval (metres)


HDD1013 172.0 - 176.0m 4.0m 0.9% 181.0 - 184.0m 3.0m 1.1% 191.0 - 192.4m 1.4m 2.7% incl. 191.0 - 191.4m 0.4m 11.7% 229.1 - 233.6m 4.5m 0.7%

RCP hole RC1016 (201m) was extended with a diamond tail (HDD1016) 65.7 metres long for a total hole depth of 266.7 metres. HDD1016 passed through felsic tuff to intersect dolerite at 252.0 metres depth (see Figure 6). Stringers of weak chalcopyrite mineralisation were observed intermittently in the core. 4.1 metres (201 – 205.1m) of cut core has been assayed, recording 3m @ 0.9% Cu from 201 metres. 61.6m of additional core remains to be cut and will be submitted for laboratory analysis later in June.

The three diamond tails have provided valuable new geological information about the North West Stringer Zone mineralisation and the underlying dolerite and shale contacts.

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As the potential for discovering additional high grade copper in the North West Stringer Zone is considered to be high, additional holes will be drilled using the large conventional RC rig presently on site. This drilling may also include extending a number of existing RCP drill holes to test for deeper zones of copper mineralisation.

Motters Zone

Two holes (HDD003 & HDD004) were drilled at the Motters Zone (see Figure 2) to obtain core samples of this shallow copper zone ahead of additional RCP drilling.

HDD003 was drilled down to 99.8 metres depth to twin historical RCP hole RC863 which had previously recorded 23 metres @ 1.1 % Cu from 36 metres depth (see Figure 7). HDD003 intersected weathered felsic tuffs and pyroclastic rocks from surface, with dolerite intersected at 91.6 metres depth. Intermittent zones of copper mineralisation were observed from 16 to 55 metres. 99.8 metres of core has been sent for laboratory analysis, the results of which have not yet been received.

HDD004 was drilled down to 60.7 metres depth to test the down dip extent of copper mineralisation which outcrops close to the foot of the North Waste Dump (see Figure 8). HDD004 intersected highly weathered felsic pyroclastic rocks above sandstone and dolerite which was intersected at 45.6 metres depth. Copper mineralisation was observed from surface to 34 metres. 60.7 metres of core has been sent for laboratory analysis, the results of which have not yet been received.

Further RCP drill holes are planned to test for extensions of the Motters Zone in the current drilling programme.

RCP Drilling Programme

Drilling at the Horseshoe Lights Project has already commenced with two Reverse Circulation Percussion rigs (“RCP”) presently on site.

One specialist Aardvark RCP rig has been on site since May 2012 drilling low angle holes to test for shallow copper mineralisation under the North Waste Dump (see plate 1).

To date the Aardvark rig has completed 6 holes (RC1042 – RC1047) for 929 metres, with holes ranging from 145m to 160m in depth (see Figures 4, 5 and 6). Holes have been successfully drilled at 20o and 40o dip.

Holes were sampled at one-metre intervals and tested for copper on site using a field portable X-Ray Fluorescence (fpXRF) analyser. One metre samples have been submitted for laboratory analysis, the results of which have not yet been received.

The Aardvark RCP drilling has identified multiple zones of copper anomalism (i.e. fpXRF readings >1000ppm Cu) at shallow depths under the North Waste Dump.

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An additional 11 low angle RCP holes under the North Waste Dump are planned to be drilled in the coming weeks.

A second large conventional RCP rig arrived on site this week to commence drilling targets at a number of locations within mining lease M52/743.

Down Hole Electromagnetic (DHEM) Survey

A Down Hole Electromagnetic (DHEM) survey was completed in 4 holes during May 2012. The survey tested recently drilled HDD001 as well as 3 old holes which had been previously cased.

The survey results were not conclusive in identifying any additional drilling targets.

Exploration Strategy

The Company’s exploration strategy at Horseshoe Lights continues to evolve as fresh information is obtained through new drilling, as a detailed review of historical information takes place and by the use of computer modelling tools.

The principal focus of efforts throughout the remainder of 2012 will be to:

1. drill gaps in the existing resource model to prove up additional near surface resources to the north of the existing open pit and at the Motters Zone;

2. drill deeper and step-out holes in areas where copper/gold mineralisation has previously been intersected in the North West Stringer Zone and the Main Zone;

3. drill test for deep high grade copper/gold zones, potentially located down dip and down plunge of the Main Zone, which will be of sufficient grade to support underground mining; and

4. drill test shallow exploration targets outside of the immediate pit area which have not been adequately tested by previous exploration efforts.

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Kumarina Project

Drilling Programme

A Programme of Works for the next phase of RCP drilling at the Kumarina Project has been lodged with the Department of Mines and Petroleum (“DMP”). The planned works will include significant extension and in-fill drilling at the Rinaldi Prospect, as well as additional holes at the Kumarina Copper mine, Review East and North Show Prospects to follow-up copper mineralisation intersected by 2011 drilling.

It is expected that DMP approval for the drilling will be received in late July 2012.

Airborne Geophysics

In March 2011 the company completed a low level aeromagnetic and radiometric survey at 100 metre line intervals across the entire tenement holding of 217 km2. This survey has been a valuable tool in identifying structures not previously mapped.

An infill survey over the entire tenement area is to be completed in late July 2012, giving the Company combined aeromagnetic and radiometric survey data that will be at 50 metre line intervals. Information from the combined higher resolution aeromagnetic survey, together with ground mapping and soil geochemistry information gathered this year, will be used to plan regional drilling scheduled for H2 2012.

Kumarina Deeps Drilling

As announced to the ASX on 1 June 2012, the Company will receive $101,754 in co-funding from the State Government of Western Australia as part of its Exploration Incentive Scheme (EIS).

The co-funding will be utilised to investigate, through deep drilling, an untested magnetic anomaly (“Kumarina Deeps Prospect”) within the Backdoor Formation of the Collier Group that is thought to be prospective for a deep intrusive-related base metal system (see Figure 9).

The Company is planning to conduct this drilling programme later this year, subject to all necessary clearances and access permits.

ENDS For further information please contact:

Neil Marston Colin Hay Managing Director Professional Public Relations Pty Ltd Horseshoe Metals Limited Ph: +61 8 9388 0944 Ph: +61 8 9481 5866 E: [email protected] M: 0427 188 768 E: [email protected] Website: www.horseshoemetals.com.au

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Plate 1 –Aardvark Drill Rig at Horseshoe Lights Project.

Competent Persons Statement

The information in the report to which this statement is attached that relates to Exploration Results is based on information compiled by Mr Geoff Willetts, BSc. (Hons) MSc. who is a Member of the Australian Institute of Geoscientists. Geoff Willetts is employed full-time by Horseshoe Metals Limited. Geoff Willetts has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Geoff Willetts consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Horseshoe Metals Limited

Horseshoe Metals Limited (ASX: HOR) is a copper and gold focused company with a package of tenements covering approximately 300km2 in the highly prospective Peak Hill Mineral Field, located north of Meekatharra in Western Australia. The Company’s projects are the Horseshoe Lights Project and the Kumarina Project.

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About the Horseshoe Lights Project

The Horseshoe Lights Project includes the old open pit of the Horseshoe Lights copper-gold mine which operated intermittently between 1946 and 1994, producing over 300,000 ounces of gold and 54,000 tonnes of copper. The Horseshoe Lights ore body is interpreted as a deformed volcanic-hosted massive sulphide (VHMS) deposit that has undergone supergene alteration to generate the gold-enriched and copper-depleted cap that was the target of initial mining. The deposit is hosted by quartz-sericite and quartz-chlorite schists of the Lower Proterozoic Narracoota Volcanics, which also host Sandfire Resources’ recent DeGrussa Cu-Au discovery.

Past mining was focused on the Main Zone, a series of lensoid ore zones which passed with depth from a gold-rich oxide zone through zones of high-grade chalcocite mineralisation into massive pyrite-chalcopyrite. To the west and east of the Main Zone, copper mineralisation in the Northwest Stringer Zone and Motters Zone consists of veins and disseminations of chalcopyrite and pyrite and their upper oxide copper extensions. Previous operators of the mine drilled 829 RC and approximately 70 diamond drill-holes, many of which do not exceed 100m in depth and, in the case of some of the sterilisation holes drilled in the 1980’s, did not assay for copper.

Prior to the commencement of drilling by Horseshoe in 2010, the project had no exploration since the 1990’s and Horseshoe believes that systematic drilling, combined with the application of modern geophysical methods, can upgrade the known resources and may lead to new discoveries in the mine area.

About the Kumarina Project

The copper deposits at the Kumarina Project were discovered in 1913 and worked intermittently until 1973. The workings extend over nearly 3km as a series of pits, shafts and shallow open cuts. At the main Kumarina Copper Mine, the workings are entirely underground with drives from the main shaft extending for some 200m in the upper levels and for about 100m in the lower levels at a depth of 49m below surface.

Incomplete records post-1960s make it difficult to estimate the total copper production from the workings. However, indications are that the Kumarina Copper mine was the second largest producer in the Bangemall Basin group of copper mines. Recorded production to the late 1960s is 481t of copper ore at a high-grade of 37.0% Cu and 2,340t at a grade of 17.51% Cu. Exploration activities completed over the Kumarina area between 1992 and 1998 by St Barbara Limited focused on the Kumarina and Rinaldi workings and included geological mapping, gridding, rock sampling and 51 air core holes for 2,062m. Six metre composite drill samples were assayed for Cu, Au, Ag, Co, As, Pb and Mg. Four holes intersected multiple lodes that returned assays between 1.15% Cu to 3.5% Cu.

Two reverse circulation percussion drilling programmes were completed during the December 2011 quarter. Results of the drilling programmes identified significant shallow copper mineralisation at the Rinaldi Prospect along a north – south oriented intrusive. A March 2012 diamond drilling programme of seven holes intersected visible copper with some high grade zones returning one metre assays of up to 15.2% copper.

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Figure 1 – Projects Location Plan

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Figure 2 –Horseshoe Lights Project Drill Hole Location Plan

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Figure 3 –Oblique Drill Section through HDD001-HDD006

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Figure 4 – Drill Section 7194369mN

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Figure 9 –Kumarina Deeps Prospect Location Plan

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Table 1 Horseshoe Lights Project

Diamond Drilling Programme - Copper Intersections (0.25% Cu cut-off)

Hole Northing (m)

Easting (m)

Planned Azimuth (degrees)

Planned Dip

(degrees)

Hole Depth

(m)

From (m)

To (m)

Interval (m) Cu% Prospect/

Zone

HDD001 7,193,726 663,308 60 -60 459.8 317.1 318.0 0.9 0.3% SE Shear 322.0 322.3 0.3 0.6%

HDD002 7,193,761 663,357 60 -60 327.9 No Significant Results SE Shear HDD003 7,194,380 663,262 60 -60 99.8 Laboratory Assays Pending Motters HDD004 7,194,469 663,258 240 -65 60.7 Laboratory Assays Pending Motters HDD005 7,193,798 663,472 60 -60 259.1 Laboratory Assays Pending SE Shear HDD006 7,193,824 663,566 60 -60 372.6 Laboratory Assays Pending SE Shear

HDD1037 7,194,370 662,815 90 -65 28.8 224.0 225.0 1.0 0.4% NW Stringer 226.0 237.0 11.0 1.4%

including 233.0 235.0 2.0 3.1% HDD1016 7,194,309 662,855 90 -60o 65.7 201.0 204.0 3.0 0.9% NW Stringer HDD1013 7,194,358 662,842 90 -65 107.8 163.6 164.6 1.0 0.7% NW Stringer

172.0 176.0 4.0 0.9% 181.0 184.0 3.0 1.1% 185.0 186.0 1.0 0.4% 191.0 192.4 1.4 2.7%

including 191.0 191.4 0.4 11.7% 194.1 195.5 1.4 0.5% 196.8 198.6 1.8 0.4% 205.4 208.4 3.0 0.4% 229.1 233.6 4.5 0.7% 210.8 215.0 4.8 0.3% 242.7 243.7 1.0 0.4% 244.7 247.0 2.3 0.8% 252.5 253.5 1.0 0.3% 255.5 258.4 2.9 0.6%

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HORSESHOE METALS PROVIDES EXPLORATION UPDATE ...2012/06/22 · Page 2 of 18 ABN 20 123 133 166 Unit...

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