PO Bo 1227, West Perth WA 6872 Phone: +61 8 9324 1053 ...2016/02/24 · o SS17 area, 1.4 Mt at 5.5%...

6 Outram Street, West Perth WA 6005

PO Box 1227, West Perth WA 6872

Phone: +61 8 9324 1053

Fax: +61 8 9324 3366

1

ASX Code: MCT

24 February 2016

Admiral Bay Zinc Project Resource Upgrade by 15%

• Admiral Bay confirmed as Australia’s largest zinc deposit at 111.3 Mt at 5.7% ZnEq

• Admiral Bay confirmed as one of the largest undeveloped zinc projects in the world

• Geological work on newly modelled zones supports Mineral Resource upgrade by 15%

• Additional Inferred Resources:

o SS6 area, 4.6 Mt at 7.6% ZnEq (4.6% Zn, 2.0% Pb, 27 g/t Ag)

o SS17 area, 1.4 Mt at 5.5% ZnEq (4.1% Zn, 0.8% Pb, 20 g/t Ag)

• Comprehensive lithostratigraphic and structural interpretation, re-logging all drill core, re-

processing 2D seismic data and compilation of a new geological model

• New geological model and Scoping Study on track for completion in March 2016.

Metalicity Limited (ASX:MCT) (“MCT” or “the Company”) is pleased to report the completion of a

Mineral Resource Estimate for the two extra zones announced on 17 December 2015 (“Significant new

mineralised zones identified at Admiral Bay”). The new estimates are for two zones of significant zinc

and lead mineralisation within the project area that have not previously had resources estimated. This

work was completed as part of the development of a new geological model being undertaken for the

100% owned Admiral Bay Zinc Project, located in the northwest of Western Australia (Figure 1).

The extra resource zones increase the total project resource by 15%. Both of these new zones remain

open along strike, and there is good potential to increase these resources with step out drilling.

Furthermore, the new geological work suggests that a number of the sub-economic intersections away

from the known resources along the Admiral Bay Fault zone may be “near misses” close to higher-grade

mineralised zones rather than indicating low potential.

Past reporting of Admiral Bay resources has focused on zinc-rich zones. Although a lead-dominated

zone, ‘Zone 3’, was reported, it was not emphasised in the general discussion of the total tonnes in the

deposit. Recent geological work has confirmed the presence of Zone 3 lead-dominated mineralisation

in the main deposit as well as in these two new areas. The proximity of Zone 3 to the other mineralised

zones at Admiral Bay is such that it would be potentially economically extractable as part of a large

integrated project. To enable the PFS mining work to address a full range of resource permutations at

Admiral Bay, it is considered appropriate to include Zone 3 in the Admiral Bay Mineral Resources,

classified as Inferred.

The Inferred Mineral Resource at Admiral Bay is now 111.3 Mt at 5.7% ZnEq1 (2.3% Zn, 2.7% Pb, 15 g/t

Ag). The strike lengths of the resources and new zones are limited to 2.1 km for the main zone, 200 m

for the SS6 zone and 200m for the SS17 zone, out of an 18 km drill-tested mineralised corridor within a

55 km prospective corridor along the Admiral Bay Fault Zone (as announced by PLD on 25/11/2014).

Details of the resource estimation are provided below.

1 Zinc Equivalent calculated as ZnEq=Zn+1.06*Pb+0.03*Ag; full details are presented below

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The Company is working through a program of comprehensive structural interpretation, re-logging of

all drill core and re-processing of 2D seismic data, with teams recently on site at Admiral Bay re-logging

both the mineralised and non-mineralised drill core. Integration of the geological and geophysical work

will result in the creation of a new 3D geological model.

This model will enhance the understanding of the mineralisation, its continuity and controls, and will be

used to identify discrete drill targets with the potential to further upgrade the MRE in both size and

classification. This work is being undertaken by industry leading consultants and is due for completion

as part of the Scoping Study in March 2016.

Admiral Bay is a carbonate-hosted zinc-lead-silver deposit and classified as a Mississippi Valley-type

(MVT) deposit. The deposit, however, does not demonstrate all the characteristics of a typical MVT,

notably having greater continuity of stratabound mineralisation, providing further support for the

potential of additional resources extending and linking the existing resources in the project area.

Commenting on the MRE Upgrade Managing Director Matt Gauci said:

“The MRE upgrade confirms Admiral Bay as Australia’s largest undeveloped zinc deposit and the world’s

5th largest undeveloped zinc deposit. The new geological model in particular is a critical step in

understanding the high-grade zones that occur within the system so they may be targeted for future

drilling and resource upgrades. The scale of already 5.25 Mt contained zinc from only 2.1 km of an 18 km

mineralised corridor, and location in the world class jurisdiction of West Australia, ensures Admiral Bay

is of significant interest to the base metals industry, and discussions are ongoing with potential

partners.”

New Geological Model

The geological model being compiled is an innovative and modern approach to assessing the Admiral

Bay deposit, and consists of the acquisition, compilation and interpretation of data previously

unavailable and evaluated for the first time by experts with substantial experience in MVT systems. The

process involves:

• Structural, lithofacies and mineralisation interpretation based on re-logging drill core and

integration of all data dating back to 1981

• Re-processing historical 2D seismic data to optimises 3D modelling of the horizons that host

mineralisation and confirm continuity from drill hole to drill hole

• Re-assess the current resource estimate using all available data including seismic data

• Assess potential for 3D seismic to image structures and mineralisation and provide discrete drill

targets

This will result in the compilation of a maiden 3D Geological Model to enhance the understanding of the

mineralisation, its continuity and generate discrete drill targets. This work has also identified significant

thick higher-grade zones of zinc and lead mineralisation within the existing Mineral Resource Estimate

(MRE). For

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Figure 1. Drill core logging

Figure 2. Example of seismic interpretation (not Admiral Bay)

Mineral Resource Additions

Following re-logging and interpretation of the main Admiral Bay deposit, the mineralisation in the SS6 zone

and in SS17 was re-interpreted using the same criteria as used in the main area. This re-interpretation was

then used to create wireframes for these two zones, and resource estimation was undertaken using the same

approach as in the main deposit.

A summary of the information and methodology of the resource estimation is as follows:

Drilling techniques

The deposit was sampled using diamond core drilling (DD) over several drilling campaigns undertaken by CRA

Exploration Pty Ltd (CRAE) and Kagara Ltd. Five CRAE surface diamond drill holes were used for the resource

estimation of these additional zones; four in the SS6 zone and the single intersection of SS17. All drill holes

were vertical. Mud rotary pre-collars were used to drill the cover sequence and manage zones of artesian

water and gas kicks. CRAE holes were predominantly NQ is size, with limited HQ core.

Sampling and Sub-sampling techniques

The entire length of the drill core was sampled; for CRAE core half core was sampled. The core was routinely

sampled on 1 m intervals, with a minimum interval of 0.25 m. Sample sizes are considered appropriate to

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accurately represent the mineralisation at Admiral Bay based on the thickness and consistency of the

intersections, the sampling methodology, and the percent value assay ranges for the primary elements.

The mud rotary pre-collars were collected as 10 m composite samples by the contract mud loggers. These

samples were not analysed.

Geological Interpretation

Drill-hole data spacing is variable. The SS6 section comprises four holes averaging 200 m apart. SS17 is a

single drill-hole intersection.

The zones are currently interpreted to be coincident with a bioherm associated with the Admiral Bay Fault

Zone (ABFZ). Mineralisation appears to be relatively continuous along the axis of the bioherm, but lower

grade and less well developed on its flanks. However, the flank areas are poorly defined or tested by drilling.

While mineralisation trend continuity appears to be predictable, grade continuity within the mineralised

zones remains relatively uncertain for some of the defined zones and is not adequately defined or constrained

by the current drill hole spacing.

Drill-hole intercept logging, wireline interpretation, and assay results have formed the basis for the geological

interpretation. The precise limits and geometry cannot be absolutely defined due to the limitations of the

current drill coverage. Further work is required to better define the geometry and limits of the mineralised

zones. The grade and lithological interpretation forms the basis for the modelling.

Sample Analysis Methods

CRAE samples were processed by Analabs and a four acid digest with AAS finish for Cu, Fe, Pb, Zn, Ag, Ca, Mg;

pressed powder XRF for Ba, Sr; and Fusion/Specific ion electrode) for F. A total of 224 samples for SS17 zone

and 1,078 samples for SS6 zone were analysed for Zn and Pb.

Wireline logging data including gamma, calliper, density, neutron, resistivity, SP, temperature, sonic and

magnetic deviation was collected from all drill holes.

Estimation Methodology

Four individual mineralised envelopes for each zone were interpreted based on the drill-hole sample data

using approximate 1.5-2% Zn and/or Pb cut-offs to define coherent zones of sulphide mineralisation.

SS6 and SS17 zones were interpreted using one cross-section for each zone. Each section was displayed in

Micromine’s Vizex display environment together with drill-hole traces colour-coded according to the sample

grades and sample grade values.

The following techniques were employed while interpreting the mineralisation:

• All interpreted strings were snapped to the corresponding drill-hole intervals, i.e. the interpretation

was constrained in the 3rd dimension

• The mineralised zones were extended approximately 100m from the drill-hole section to both sides

resulting in 200m length along strike

• The interpretation along dip direction was extended 50m from the peripheral drill holes on a section

and 100m from the internal drill holes.

The thickness of the mineralised envelopes varies from 3m to 14m for the SS6 zone and from 3m to 29m for

the SS17 zone. The mineralised zones extend from a depth of 1,315 m to a depth of 1,570m below the surface.

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All Zn, Pb, Cu, Ag, and Ba variables estimated in the Admiral Bay resource model mineralised zones were

generated using Inverse Distance (ID) using a power of 2. The ID estimates have been completed using

Micromine software. Block discretisation of 2x2x2 points (for X x Y x Z respectively) was used for block

estimation. Composite length and bulk density weighting was used in the estimation process.

The block model was constructed using a 25mE x 25mN x 5mRL parent block size, with subcelling to 6.25mE

x 6.25mN x 1.25mRL for domain volume resolution. The parent cell size was chosen on the basis of the general

morphology of mineralised bodies and in order to avoid the generation of too-large block models. The

subcelling size was chosen to maintain the resolution of the mineralised bodies.

A two-pass estimation strategy was applied for all variables estimated (Zn, Pu, Cu, Ag, Sr, and Ba), with

progressively expanded sample searches applied to successive estimation passes only considering blocks not

previously assigned. First pass searches used an anisotropic range of 600m x 300m x 300m with major axis

oriented horizontally along strike. If a block was not estimated in the first pass, a second pass search utilised

a maximum range of 1200m x 600m x 600m.

The use of similar search radii for the semi-major and minor axis orientations considered the narrow zones

being modelled, the variable orientations and curvature of the zones, and erratic distribution of data within

the mineralised zones.

The maximum number of composites used for any estimate was restricted to 20 composites for all estimated

variables. The minimum number of composites used for any first pass estimate was 10 composites for all

estimated variables. The minimum number of composites used for any second pass estimate was two

composites for all estimated variables.

All mineralised zone divisions were treated as hard boundaries for data and parameters used in the

estimation process.

The block model size was selected largely as a compromise for adequate volume definition of the narrow

mineralised zones in an underground mining scenario.

Classification Criteria

The Inferred Mineral Resource classification is based on the evidence from the available drill sampling and

seismic interpretation. This evidence is sufficient to imply but not verify geological and grade continuity.

Cut-off Grades

Four individual mineralised zones were interpreted based on the drill-hole sample data using approximate

1.5–2% Zn and/or Pb cut-offs to define coherent zones of sulphide mineralisation. The resource was reported

using a Zinc Equivalent lower cut-off grade of 2%.

Metal Equivalence

Zinc equivalent (ZnEq) calculation parameters are presented in Table 1. The metallurgical recoveries are

derived from metallurgical testwork completed by CRAE and Kagara. It is Metalicity’s opinion that all elements

included in the metal equivalent calculation have a reasonable potential to be recovered and sold. The

calculation formula is ZnEq=Zn+1.06Pb+0.03Ag

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Table 1 Zinc Equivalence Parameters

Metal Metal

Price

US$

Price in Assay

units

US$

Concentrate

Recovery

%

Recovered Unit

Pricing

US$

ZnEq

Factor1

Zinc 1.00/lb 22.04 per % 90 19.84 1.0

Lead 1.00/lb 22.04 per % 95 20.94 1.06

Silver 19/oz 0.61 per ppm 95 0.58 0.03 1 Approximating to head grade

Metal equivalents are highly dependent on the metal prices used to derive the equivalence formula. Metalicity notes that

the metal equivalence method taken above is a simplified approach. Only preliminary metallurgical recoveries are

available. The metal prices are assumed indicative LME prices and do not reflect the metal prices that a smelter would

pay for concentrate nor are any smelter penalties or charges included in the calculation.

Table 2 Admiral Bay Project Inferred Mineral Resources

AREA Tonnage

Mt

Zn

%

Pb

%

Ag

ppm

Ba

%

ZnEq

%

SS06 Zone 1 2.1 3.3 0.5 15 3 4.2

SS06 Zone 2 2.5 5.8 3.4 38 10 10.5

SS06 Zone 3 0.6 0.2 3.7 8 9 4.3

SS06 Total 5.3 4.1 2.2 25 7 7.2

SS17 Zone 1 1.2 4.4 0.7 21 3 5.7

SS17 Zone 2 0.3 2.6 1.1 18 23 4.3

SS17 Zone 3 0.2 0.2 4.9 29 14 6.2

SS17 Total 1.7 3.5 1.4 22 7 5.6

Central Zone 1 21.9 3.8 0.9 14 7 5.2

Central Zone 2 35.1 4.0 2.1 20 13 6.9

Central Zone 3 32.2 0.1 2.6 7 28 3.1

Central Zone 6 15.2 0.1 7.5 21 15 8.7

Coffey Total 104.4 2.2 2.8 15 17 5.6

Global Zone 1 25.2 3.8 0.9 14 6 5.1

Global Zone 2 37.9 4.2 2.2 21 13 7.1

Global Zone 3 33.1 0.1 2.6 8 28 3.1

Global Zone 6 15.2 0.1 7.5 21 15 8.7

Global Total 111.3 2.3 2.7 15 16 5.7

NOTES:

• ZONE 1 (CFM/NFM contact zone – high Zn/low Pb)

• ZONE 2 (NFM-hosted zone – high Zn/high Pb)

• ZONE 3 (NFM-hosted zone – high Pb/low Zn

• ZONE 6 (NFM/GFM contact zone – low Zn/high Pb)

CFM = Cudalgarra Formation, NFM=Nita Formation, GFM=Goldwyer Formation

• Inverse Distance (Power=2) Whole Block Estimates using 25mE x 25mN x 5mRL Parent Block Dimensions

• Reported using a Zinc Equivalent lower cut-off grade of 2% where ZNEQ=ZN+(1.06*PB)+(0.03*AG)

• Unconstrained and using ROUNDED figures

• Past reporting of the Admiral Bay Mineral Resources (e.g. PLD ASX release of 25/11/2014, Kagara release of

22/8/2008) included all the zones of the Central resource reported in this release, but chose to emphasise

resources that excluded Zone 3. As discussed above, the proximity of Zone 3 to the other mineralised zones in

most areas justifies their classification as Inferred Resources and consideration in the mining studies as part of

the current Admiral Bay Scoping Study.

• The 2008 and 2014 Mineral Resource reports used a slightly different formula to calculate ZnEq compared with

this report.

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Figure 3. Plan view of tenements and drill-hole locations over the 18 km Admiral Bay mineralised corridor

Main Zone 104.4 Mt SS17 Zone 1.44 Mt

SS6 Zone 4.62 Mt

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Competent Person Statement

The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’)

sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration

Results, Mineral Resources and Ore Reserves. The Information contained in this announcement has been

presented in accordance with the JORC Code and references to “Measured, Indicated and Inferred Resources” are

to those terms as defined in the JORC Code.

The information in this report that relates to Geology and Exploration Results is based, and fairly reflects,

information compiled by Dr Neal Reynolds, who is a Member of the Australian Institute of Geoscientists. Dr

Reynolds is employed by CSA Global Pty Ltd, independent resource industry consultants. Dr Reynolds 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 2012 Edition of

the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Reynolds

consents to the inclusion in the report of the matters based on his information in the form and context in

which it appears.

The information in this report that relates to the Admiral Bay Mineral Resources is based on information compiled

by Serikjan Urbisinov, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr

Urbisinov is a full time employee of independent, resource industry consultancy CSA Global Pty Ltd. Mr Urbisinov

has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration

and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the

‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Urbisinov

consents to the inclusion in the report of the matters based on his information in the form and context in which it

appears.

All parties have consented to the inclusion of their work for the purposes of this announcement. The

interpretations and conclusions reached in this report are based on current geological theory and the best

evidence available to the authors at the time of writing. It is the nature of all scientific conclusions that they are

founded on an assessment of probabilities and, however high these probabilities might be, they make no claim

for absolute certainty. Any economic decisions that might be taken on the basis of interpretations or conclusions

contained in this report will therefore carry an element of risk.

About Metalicity Limited

Metalicity Limited is an Australian mining exploration company with a primary focus on base metals sector

and the development of the world class Admiral Bay Zinc Project, located in the north west of Australia. The

company is currently undertaking a scoping study on Admiral Bay due to be completed by March 2016. The

Company’s secondary focus is the rare metals sector with the recent addition of the Pilgangoora South

Lithium Project and the Munglinup Graphite Project where early stage exploration has commenced. The

Company is supported by a management team with collective experience of over 200 years in the resources

sector and a cornerstone investor in Resource Capital Funds, who manage over $2B in resource related funds.

For More Information:

Matt Gauci

Managing Director

T: +61 9324 1053

David Tasker

Professional Public Relations

T: +61 8 9388 0944

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JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling

techniques

• Nature and quality of sampling (eg cut channels, random chips, or specific

specialised industry standard measurement tools appropriate to the

minerals under investigation, such as down hole gamma sondes, or

handheld XRF instruments, etc). These examples should not be taken as

limiting the broad meaning of sampling.

• Include reference to measures taken to ensure sample representivity and the

appropriate calibration of any measurement tools or systems used.

• Aspects of the determination of mineralisation that are Material to the

Public Report.

• In cases where ‘industry standard’ work has been done this would be

relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m

samples from which 3 kg was pulverised to produce a 30 g charge for fire

assay’). In other cases more explanation may be required, such as where

there is coarse gold that has inherent sampling problems. Unusual

commodities or mineralisation types (eg submarine nodules) may warrant

disclosure of detailed information.

• The deposit was sampled using diamond core drilling (DD) over several

drilling campaigns undertaken by CRA Exploration Pty Ltd (CRAE) and by

Kagara Ltd (11 holes) and one oil-well, Cudalgarra-1. A total of 21 surface

diamond drill holes were used for the resource estimation, of which 18 are

within the wireframe, together with oil well Cudalgarra-1. All drill holes were

vertical.

Drilling

techniques

• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast,

auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard

tube, depth of diamond tails, face-sampling bit or other type, whether core

is oriented and if so, by what method, etc).

• The deposit was sampled using diamond core drilling (DD) over several

drilling campaigns by CRAE and Kagara Limited using a UDR5000.

• Mud-rotary pre-collars were completed to depths of up to 1300m with HQ

and NQ diamond core tails through the mineralised zones.

• All drill holes were vertical and core was not oriented.

• Cudalgarra 1 is a mud rotary petroleum well that intersected the deposit

Drill sample

recovery

• Method of recording and assessing core and chip sample recoveries and

results assessed.

• Measures taken to maximise sample recovery and ensure representative

• Logged core recovery is only available for the Kagara drill holes. The data

indicates excellent average recoveries of 99% of cored portions of the drill

holes.

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nature of the samples.

• Whether a relationship exists between sample recovery and grade and

whether sample bias may have occurred due to preferential loss/gain of

fine/coarse material.

• Sample recovery is generally very high (99%) within the mineralised zones.

No significant bias is expected, and any potential bias is not considered

material at this stage of resource development.

Logging • Whether core and chip samples have been geologically and geotechnically

logged to a level of detail to support appropriate Mineral Resource

estimation, mining studies and metallurgical studies.

• Whether logging is qualitative or quantitative in nature. Core (or costean,

channel, etc) photography.

• The total length and percentage of the relevant intersections logged.

• All drill core was geologically logged by CRAE and Kagara, and has most

holes have been re-logged my Metallicity; the drill hole database contains

adequate geological detail to construct a basic resource model.

• A wireline suite comprising gamma, calliper, density, neutron, resistivity, SP,

temperature, sonic and magnetic deviation was collected from all drill holes

• Diamond core was geotechnically logged for recovery and RQD for drill

holes. Information on structure type and orientation are recorded in the

database.

• All drill core was logged in full; summary chip logs of the rotary mud

sections of the holes are also available.

Sub-sampling

techniques

and sample

preparation

• If core, whether cut or sawn and whether quarter, half or all core taken.

• If non-core, whether riffled, tube sampled, rotary split, etc and whether

sampled wet or dry.

• For all sample types, the nature, quality and appropriateness of the sample

preparation technique.

• Quality control procedures adopted for all sub-sampling stages to maximise

representivity of samples.

• Measures taken to ensure that the sampling is representative of the in situ

material collected, including for instance results for field duplicate/second-

half sampling.

• Whether sample sizes are appropriate to the grain size of the material being

sampled.

• CRAE HQ core was sampled as half core using a diamond core saw.

• Kagara HQ core sampled as quarter core, NQ as half core, using a diamond

core saw.

• 10m composites of rotary mud chips were also collected.

• The Kagara samples sample preparation process used was PRP88 whereby

up to 3.5kg of sample is dried, crushed, then pulverised to 90% passing

75µm

• Sample preparation procedures for CRAE samples are not documented.

• No sampling QA/QC data by CRAE is documented

• Most QA/QC data pertains to Kagara’s samples; there is no documentation

of sample duplicates.

• Considering the style of mineralisation, sampling of HQ core as quarter core

and NQ core as half core is adequate

• Although half-core sampling would be preferred for HQ, sample sizes are

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considered to be appropriate to accurately represent the mineralisation at

Admiral Bay based on the thickness and consistency of the intersections,

the sampling methodology and the percent value assay ranges for the

primary elements

• For Kagara core, the entire core section was sampled; for CRAE core most of

the core was sampled and adequately defines the mineralised intervals

Quality of

assay data

and

laboratory

tests

• The nature, quality and appropriateness of the assaying and laboratory

procedures used and whether the technique is considered partial or total.

• For geophysical tools, spectrometers, handheld XRF instruments, etc, the

parameters used in determining the analysis including instrument make and

model, reading times, calibrations factors applied and their derivation, etc.

• Nature of quality control procedures adopted (eg standards, blanks,

duplicates, external laboratory checks) and whether acceptable levels of

accuracy (ie lack of bias) and precision have been established.

• CRAE samples were analysed by Analabs using methods: 103-AAS

(perchloric, nitric, hydrochloric and hydrofluoric acid digest with AAS finish)

for Cu, Fe, Pb, Zn, Ag; 104-AAS (perchloric, nitric, hydrochloric and

hydrofluoric acid digest with AAS finish) for Ca, Mg; XRF (pressed powder)

for Ba, Sr; Fusion (Fusion/Specific ion electrode) for F

• Kagara samples were analysed by SGS Mineral Services using methods:

AAS43B (4 acid digestion with AAS finish) for Cu, Fe, Pb, Zn; ICP40Q (4 acid

digest with ICPOES finish) for Ag, Ca, Mg, As, Bi, Co Cd, Sb; CSA06V (Leco

analyser) for S; DP/OES specific fusion with OES finish for Ba and Sr

• QAQC procedures included the insertion of commercial standards (one

standard for every 25 samples) by Kagara

• CRAE included a limited number of field duplicates of ¼ core but there is no

record that standards or blanks were submitted.

• Subsequent re-analysis by Kagara concluded that Overall the data quality is

good but some standard values exceeded the three standard deviation

control limit. This is attributed to carry over from the very high grade

samples found in the jobs

• Subsequent check analysis in 2000 concluded that the data showed that

there is very close agreement between the routine and check analyses for

Zn, Pb and Ag

• Most QA/QC data pertains to Kagara samples submitted to Genalysis.

• Blanks

• Kagara – no blank samples submitted

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• Laboratory – Genalysis assayed 34 control blanks. Genalysis review of

Ba and Sr assays of blank material at the approximate detection limits

of the assays. No details of Pb, Zn, Cu and Ag results are given.

• Standards

• Kagara – One standard was included for every 25 samples in the

sample run. Kagara used Gannet standards.

• Laboratory – Genalysis analysed approximately 47 standard samples

comprising 3 different reference materials. Only Ba and Sr assay are

referenced, with no details on any analyses for Pb, Zn, Cu and Ag

elements.

• Coarse reject duplicates - none

• Pulp Duplicates - none

• Repeat Assays (same pulp)

• Laboratory – Genalysis documented that 30 pulp repeats were

analysed – re-assayed at a later time than the original samples

• Repeat Assays (AAS Respray)

• Laboratory- Genalysis documented that 44 pulp repeats were analysed

– re-assayed at the same time as the original samples.

• Genalysis QA/QC documentation (Genalysis, 2008) covers only Ba and Sr

assays. Apparent lack of review of Pb, Zn, Cu, and Ag results is a major

omission

• Available QA/QC results suggest the data quality is suitable for supporting

an Inferred Resource

Verification of

sampling and

assaying

• The verification of significant intersections by either independent or

alternative company personnel.

• The use of twinned holes.

• Documentation of primary data, data entry procedures, data verification,

data storage (physical and electronic) protocols.

• Discuss any adjustment to assay data.

• All mineralised drill intersections in the Central resource area have been

reclogged; visual examination supports reported assay results

• The drill core from the SS16 Zone has not been examined, but core

photographs have been reviewed and support the reported assay results

• One hole has been twinned, by wedging, Repeatability between ABRD011

and ABRD011D2 was reasonable

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• Kagara logging and analytical data were validated and stored in a relational

database. Kagara completed data capture and validation of previous CRAE

drill data and integrated these data into the same relational database

• Comparison of database results with original CRAE paper logs was

completed during re-logging and supported the validity of the data capture

• No adjustments have been made to original assay data

Location of

data points

• Accuracy and quality of surveys used to locate drill holes (collar and down-

hole surveys), trenches, mine workings and other locations used in Mineral

Resource estimation.

• Specification of the grid system used.

• Quality and adequacy of topographic control.

• CRAE drill-hole collar locations were recorded from the CRAE exploration

reports and checked by Survey North. Although only one collar could be

located, the rehabilitated drill-hole pads were easily located. This survey

confirmed the approximate locations of the drill holes (±10m) and also the

surface RL values (±1m).

• The CRAE drill holes were down-hole surveyed every 50-100m using a single

shot survey tool which recorded the deviation from vertical only with no

assigned azimuth. Because of the lack of azimuth data, the CRAE drill holes

were assumed to be vertical.

• Kagara drill holes were downhole surveyed in 3 phases.

• As part of a larger geophysical logging exercise, downhole surveys

were completed by Weatherford using a magnetic deviation tool.

• The diamond tail of hole ABRD009 was also surveyed using a Keeper

Gyro System. A comparison of both surveys reveals only minimal

variation in the northing coordinate and confirms the validity of the

magnetic deviation surveys.

• A third phase of directional surveying was completed by Downhole

Surveys of Kalgoorlie using a SPT north–seeking gyro tool

• The grid system is GDA94 Zone 51. Earlier CRAE work used AGD84 Zone 51,

but Kagara converted all data to GDA94

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• All Kagara collar locations have been picked up by means of DGPS, with

vertical and horizontal accuracy of around 10cm. Apart from drill hole collar

surveys, survey definition of surface topography was not essential as a

constraint for the top of the resource model given the depth of the

mineralisation

Data spacing

and

distribution

• Data spacing for reporting of Exploration Results.

• Whether the data spacing and distribution is sufficient to establish the

degree of geological and grade continuity appropriate for the Mineral

Resource and Ore Reserve estimation procedure(s) and classifications

applied.

• Whether sample compositing has been applied.

• Along the mineralised Admiral Bay Fault Zone trend, drill spacing is variable

from less than 100 m to more than 4 km.

• In the Central 2.7km mineralised zone within M4/249, Kagara drill holes

were drilled on nominally 400m spaced sections, 150m apart, infilling

previous CRAE drilling.

• Although the data spacing and distribution is very limited, geological

evidence is sufficient to imply but not verify continuity of mineralisation

• Lithological packages hosting the mineralisation are discernible on seismic

imagery and provide further support for evidence of geological continuity

• Grade continuity is less well established and given the nature of MVT-style

mineralisation is expected to be complex

• It is considered that available data is sufficient to demonstrate spatial and

grade continuity of the mineralised horizon to support the classification of

Inferred Mineral Resources under the 2012 JORC code

Orientation of

data in

relation to

geological

structure

• Whether the orientation of sampling achieves unbiased sampling of possible

structures and the extent to which this is known, considering the deposit

type.

• If the relationship between the drilling orientation and the orientation of key

mineralised structures is considered to have introduced a sampling bias, this

should be assessed and reported if material.

• The mineralised zones are broadly stratabound and generally appropriate

for sampling by vertical drill holes, especially for Zones1 & 2.

• A significant proportion of mineralisation in Zones 3 & 6 occurs within veins

which are often steeply dipping and where drilling may have introduced a

degree of sampling bias, although correlation between drill holes indicates

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Sample

security

• The measures taken to ensure sample security. • No information is available regarding sample security, but it is assumed that

normal industry-standard practice was followed

Audits or

reviews

• The results of any audits or reviews of sampling techniques and data. • No audit has been completed and there has been no detailed validation of

assay data against laboratory certificates

Section 2 Reporting of Exploration Results


Mineral

tenement and

land tenure

status

• Type, reference name/number, location and ownership including

agreements or material issues with third parties such as joint ventures,

partnerships, overriding royalties, native title interests, historical sites,

wilderness or national park and environmental settings.

• The security of the tenure held at the time of reporting along with any

known impediments to obtaining a licence to operate in the area.

• The Admiral Bay deposit is located within two granted Mining Leases

(ML04/244 and ML04/249), which are valid until 20/3/2033 and one

granted Exploration Licence (EL04/1610), which is valid until 3/9/2017.

• The Company acquired the project on 15/9/2015

• The tenement is located wholly within Vacant Crown Land and is covered by

the Native Title Determined Area of the Karajarri People (Area A)

• The tenements are in good standing with the WA Department of Mines and

Petroleum (DMP) subject to a minimum annual expenditure commitment of

$248,100 and annual rents are $46,910.

Exploration

done by other

parties

• Acknowledgment and appraisal of exploration by other parties. • The Admiral Bay deposit was discovered in 1981 by Meridian Oil NL during

petroleum exploration, and was subsequently acquired by CRA Exploration

(the exploration arm of CRA Limited, now Rio Tinto Ltd), who undertook

substantial exploration from 1986 to 1992.

• Kagara Ltd acquired the deposit from CRA Exploration in 2004 and

completed an exploration programme that lead to an initial Inferred

Resource, as well as a pre-feasibility study to test the viability of the project.

Kagara Ltd entered into Administration in 2012 and subsequently

Liquidation in 2013.

• Past work has been of a high standard and is considered suitable for

resource estimation

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Geology • Deposit type, geological setting and style of mineralisation. • Admiral Bay lies within the Admiral Bay Fault Zone, which separates the

Broome Platform and Willara Sub-basin of the Canning Basin.

• Admiral Bay is carbonate-hosted zinc-lead-silver-barium deposit, with

mineralisation hosted in Ordovician carbonate sediments over a

mineralised strike extent of at least 18km.

• Nominally the deposit is classified as a Mississippi Valley Type deposit

(MVT), however Admiral Bay is not a typical MVT, being strongly

stratabound, dominated by replacement and veining over open-space fill,

and characterised by very continuous mineralisation over long strike

lengths.

• Within the project area, the surface geology is dominated by Quaternary

Aeolian sand. Sand sheets in the northwest grade into 2–10m high dunes

towards the southeast.

• The Ordovician stratigraphy is overlain by a thick sequence of Cretaceous-

Jurassic-Permian sandstones/siltstones (up to 1,200m thick)

• The mineralised zones occur at depths of around 1,250m to 1,700m. The

upper higher-grade Zn-rich zone is up to 20m thick, whilst the lower higher-

grade Pb zone is up to 15m thick. These high-grade zones described above

are hosted within a broad, moderately Zn-Pb mineralised, zone up to 110-

120m thick.

• The Nita Formation hosts the main Zn-rich Zone 2 in a clean limestone unit,

while Zn-rich Zone 1 occurs on the contact with the overlying Carribuddy

Formation.

• The Pb-barite rich mineralisation encompassing Zones 3 and 6 occurs in

dolomitised limestones in the lower Nita Formation and underlying

Goldwyer Formations.

• Zn-rich sulphide mineralisation is characterised by replacement, small-scale

cavity fill, and minor veining and dissolution. Pb-rich mineralisation

includes replacive and vein styles. For

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Drill hole

Information

• A summary of all information material to the understanding of the

exploration results including a tabulation of the following information for all

Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level – elevation above sea level in metres) of

the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

• If the exclusion of this information is justified on the basis that the

information is not Material and this exclusion does not detract from the

understanding of the report, the Competent Person should clearly explain

why this is the case.

• Drilling data is addressed in the Resource estimation Section of this table

Data

aggregation

methods

• In reporting Exploration Results, weighting averaging techniques, maximum

and/or minimum grade truncations (eg cutting of high grades) and cut-off

grades are usually Material and should be stated.

• Where aggregate intercepts incorporate short lengths of high grade results

and longer lengths of low grade results, the procedure used for such

aggregation should be stated and some typical examples of such

aggregations should be shown in detail.

• The assumptions used for any reporting of metal equivalent values should

be clearly stated.

• Results were weighted by sample intervals, no top or bottom cuts were

applied.

• Intersections are length-weighted average grades for zones wider than or

equal to 2m and greater than 2% Zn or Pb, including up to 2m of internal

waste

Zinc equivalent (ZnEq) calculation parameters are presented in below. The

metallurgical recoveries are derived from metallurgical testwork completed by

CRAE and Kagara. It is Metalicity’s opinion that all elements included in the metal

equivalent calculation have a reasonable potential to be recovered and sold. The

calculation formula is ZnEq=Zn+1.06Pb+0.03Ag

Metal Metal

Price

US$

Price in

Assay units

US$

Concentrat

e Recovery

%

Recovered

Unit

Pricing

US$

ZnEq

Factor1

Zinc 1.00/lb 22.04 per

%

90 19.84 1.0 For

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Lead 1.00/lb 22.04 per

%

95 20.94 1.06

Silver 19/oz 0.61 per

ppm

95 0.58 0.03

1 Approximating to head grade Metal equivalents are highly dependent on the metal prices used to derive the equivalence

formula. Metalicity notes that the metal equivalence method taken above is a simplified

approach. Only preliminary metallurgical recoveries are available. The metal prices are

assumed indicative LME prices and do not reflect the metal prices that a smelter would

pay for concentrate nor are any smelter penalties or charges included in the calculation.

• Metallurgical testwork has predicted recoveries in excess of 95% for

Pb, 90% for Zn and from 46–54% for Ag; consequently a Ag recovery of

50% was selected (however it should be noted that the highly variable

grades Ag and unknown smelter thresholds mean the significance of

silver is minor).

• After review of the historical metallurgical testwork it is the

Company’s opinion that there is a reasonable potential for both zinc,

lead and silver to be recovered and sold.

Relationship

between

mineralisatio

n widths and

intercept

lengths

• These relationships are particularly important in the reporting of Exploration

Results.

• If the geometry of the mineralisation with respect to the drill hole angle is

known, its nature should be reported.

• If it is not known and only the down hole lengths are reported, there should

be a clear statement to this effect (eg ‘down hole length, true width not

known’).

• The mineralised zones at Admiral Bay are approximately tabular and flat

lying to shallowly dipping.

• Mineralisation is generally intersected with near true width down-hole

lengths.

Diagrams • Appropriate maps and sections (with scales) and tabulations of intercepts

should be included for any significant discovery being reported These should

include, but not be limited to a plan view of drill hole collar locations and

• Refer to Figures in the body of the report

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appropriate sectional views.

Balanced

reporting

• Where comprehensive reporting of all Exploration Results is not practicable,

representative reporting of both low and high grades and/or widths should

be practiced to avoid misleading reporting of Exploration Results.

• All data was used in the resource estimation

Other

substantive

exploration

data

• Other exploration data, if meaningful and material, should be reported

including (but not limited to): geological observations; geophysical survey

results; geochemical survey results; bulk samples – size and method of

treatment; metallurgical test results; bulk density, groundwater,

geotechnical and rock characteristics; potential deleterious or

contaminating substances.

• Wireline logging data comprising gamma, calliper, density, neutron,

resistivity, self-potential, temperature, compensated sonic and magnetic

deviation are available for all drill holes.

• Extensive 2D seismic data both from dedicated surveys at Admiral Bay and

from regional petroleum exploration work are available for the project area.

• Metallurgical, geotechnical, hydrogeological and mining studies have been

completed on the project.

Further work • The nature and scale of planned further work (eg tests for lateral extensions

or depth extensions or large-scale step-out drilling).

• Diagrams clearly highlighting the areas of possible extensions, including the

main geological interpretations and future drilling areas, provided this

information is not commercially sensitive.

• PLD aims to design exploration and resource evaluation programmes to test

the controls on and continuity of mineralisation at Admiral Bay. Work to

increase the understanding of the continuity of geology and mineralisation

are fundamental to advancing the project. Planned work includes additional

drilling as well as application of suitable geophysical techniques.

• Work is not yet sufficiently advanced to enable delineation of new target

areas and zones of potential extensions to mineralisation.

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Section 3 Estimation and Reporting of Mineral Resources


Database

integrity

Measures taken to ensure that data has not been corrupted by, for example,

transcription or keying errors, between its initial collection and its use for Mineral

Resource estimation purposes.

• Data used in the Mineral Resource estimate of SS6 and SS17 zones was

provided in the CSV format and imported into Micromine software.

Data validation procedures used. • Database information was validated against previous data supplied for

Admiral Bay, imported and desurveyed. Validation of the data import

include checks for overlapping intervals, missing survey data, missing

and incorrectly recorded assay data, missing lithological data, and

missing collars.

Site visits Comment on any site visits undertaken by the Competent Person and the

outcome of those visits.

• The Competent Person Neal Reynols has visited the site to investigate

the core material from previous drilling campaigns.

• Also a CSA geologist was present in 1988 during drilling and seismic

acquisition activities by CRAE

If no site visits have been undertaken indicate why this is the case. • CSA Global conducted a desktop review on the basis of the reports

prepared by Digirock, Coffey, Kagara, RSV Australia. Currently, no

exploration and drilling activities are being carried out at the deposit to

be observed.

Geological

interpretation

Confidence in (or conversely, the uncertainty of) the geological interpretation of

the mineral deposit.

• The zones are currently interpreted to be coincident with an antiformal

structure associated with the Admiral Bay Fault Zone (ABFZ).

Mineralisation appears to be relatively continuous along the strike of

the anticline, but lower grade / less well developed on the limbs.

However, the limbs areas are poorly defined or tested by drilling.

• While structural continuity appears to be predictable, grade continuity

within the mineralised zones remains relatively uncertain for some of

the defined zones and is not adequately defined / constrained by the

current drillhole spacing.

• 224 samples for SS17 zone and 1,078 samples for SS6 zone were

analysed for Zn, Pb, Ag and Ba.

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Nature of the data used and of any assumptions made. • Drillhole intercept logging and assay results have formed basis for the

geological interpretation.

The effect, if any, of alternative interpretations on Mineral Resource estimation. • The precise limits and geometry cannot be absolutely defined due to

the limitations of the current drill coverage. Further work is required to

better define the geometry and limits of the mineralised zones.

The use of geology in guiding and controlling Mineral Resource estimation. • Drill hole intercept logging, wireline interpretation and assay results

form the basis for the modelling. Coffey Mining developed a geological

and mineralisation framework suitable for grade estimation based on a

review of the available geological and geochemical data.

The factors affecting continuity both of grade and geology. • The Mississippi Valley Type Lead-Zinc mineralisation is interpreted to

be coincident with an antiformal structure associated with the Admiral

Bay Fault Zone. Mineralisation appears to be broadly continuous along

the strike of the anticline, but lower grade / less well developed on the

limbs, however the local distribution of grade is potentially less

continuous.

Dimensions The extent and variability of the Mineral Resource expressed as length (along

strike or otherwise), plan width, and depth below surface to the upper and lower

limits of the Mineral Resource.

• Four individual mineralised envelopes in each zone were interpreted

based on the drillhole sample data using approximate 1.5-2% Zn and/or

Pub cut-offs to define coherent zones of sulphide mineralisation.

• The mineralised zones were extended approximately 100 m from the

drill hole section to both sides resulting in 200 m length along strike.

• The interpretation along dip direction was extended 50m from the

peripheral drill holes on a section and 100m from the internal drill

holes.

• The thickness of the mineralised envelopes varies from 3m to 14m for

SS6 zone and from 3m to 29m for SS17 zone. The mineralised zones

extend from the depth of 1,315 m to the depth of 1,570m below the

surface.

The nature and appropriateness of the estimation technique(s) applied and key

assumptions, including treatment of extreme grade values, domaining,

• All Zn, Pb, Ag, and Ba variables estimated in the Admiral Bay resource

model mineralised zones SS6 and SS17 were generated using Inverse

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Estimation and

modelling

techniques

interpolation parameters and maximum distance of extrapolation from data

points. If a computer assisted estimation method was chosen include a

description of computer software and parameters used.

Distance (ID) using a power of 2. The ID estimates have been completed

using Datamine software. Block discretisation of 2x2x2 points (for X x Y

x Z respectively) was used for block estimation. Composite length and

bulk density weighting was used in the estimation process.

The availability of check estimates, previous estimates and/or mine production

records and whether the Mineral Resource estimate takes appropriate account

of such data.

• No previous estimates have been completed for these zones, and no

mining has taken place. The grade estimates were validated against the

data used to create them, both visually and statistically.

The assumptions made regarding recovery of by-products. • No assumption have been made

Estimation of deleterious elements or other non-grade variables of economic

significance (e.g. sulphur for acid mine drainage characterisation).

• Ag, Ba

In the case of block model interpolation, the block size in relation to the average

sample spacing and the search employed.

• The block model was constructed using a 25mE x 25mN x 5mRL parent

block size, with subcelling to 6.25mE x 6.25mN x 1.25mRL for domain

volume resolution. The parent cell size was chosen on the basis of the

general morphology of mineralised bodies and in order to avoid the

generation of too large block models. The subcelling size was chosen to

maintain the resolution of the mineralised bodies.

• For all variables estimated (Zn, Pb, Ag, and Ba), a two-pass estimation

strategy has been applied, with progressively expanded sample

searches applied to successive estimation passes only considering

blocks not previously assigned.

o First pass searches used an anisotropic range of 600x300x300

metres with major axis oriented horizontally along strike

o If a block was not estimated in the first pass, a second pass

search utilised a maximum range of 1200x600x600 metres.

• The use of similar search radii for the semi-major and minor axis

orientations considered the narrow structures being modelled, the

variable orientations and curvature of the structures, and erratic

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• The maximum number of composites used for any estimate was

restricted to 20 composites for all estimated variables.

• The minimum number of composites used for any first pass estimate

was 10 composites for all estimated variables.

• The minimum number of composites used for any second pass estimate

was 2 composites for all estimated variables.

• All mineralised zone divisions were treated as hard boundaries for data

and parameters used in the estimation process.

Any assumptions behind modelling of selective mining units. • The block model size was selected largely as a compromise for

adequate volume definition of the narrow mineralised zones in an

underground mining scenario.

Any assumptions about correlation between variables. • Metal zonation occurs vertically through the mineralised zones and has

the following characteristics:

o Higher Zn grades in upper zones

o Higher Pb grades in lower zones

o Ag grades are anomalous throughout all mineralised zones,

but increase with depth.

o Ba grades tend to be higher in the lower mineralised zones.

Description of how the geological interpretation was used to control the resource

estimates.

• Four individual mineralised envelopes were interpreted based on the

drillhole sample data using approximate 1.5-2% Zn and/or Pb cut-offs

to define coherent zones of sulphide mineralisation. The zones are

currently interpreted to be coincident with an antiformal structure

associated with the Admiral Bay Fault Zone

Discussion of basis for using or not using grade cutting or capping. • Assessment of the composite data was completed to determine the

requirement for high grade cutting. No topcuts were applied.

The process of validation, the checking process used, the comparison of model

data to drill hole data, and use of reconciliation data if available.

• Validation of the block model consisted of comparison of the block

model volume to the wireframe volume. Grade estimates were

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comparison of grade trends in the model with the drill data trends. No

reconciliation data is available at this early stage of the project.

Moisture Whether the tonnages are estimated on a dry basis or with natural moisture,

and the method of determination of the moisture content.

• The tonnages are estimated on a dry basis

Cut-off

parameters

The basis of the adopted cut-off grade(s) or quality parameters applied. • Reported using a Zinc Equivalent lower cut-off grade of 2%

• The Mineral Resource is quoted from estimated blocks above this cut-

off grade.

Mining factors

or assumptions

Assumptions made regarding possible mining methods, minimum mining

dimensions and internal (or, if applicable, external) mining dilution. It is always

necessary as part of the process of determining reasonable prospects for

eventual economic extraction to consider potential mining methods, but the

assumptions made regarding mining methods and parameters when estimating

Mineral Resources may not always be rigorous. Where this is the case, this

should be reported with an explanation of the basis of the mining assumptions

made.

• Initial study work by Mining Plus indicated that a modified sub-level

cave (SLC) would be the most appropriate method to mine the deposit.

However, additional work by Kevin Rosengren concluded that whilst an

uphole retreat sub-level cave mining method may be practical it was

not optimal or ideal. It suggested that some form of modified room-

and-pillar method may be appropriate.

• A subsequent study was carried out by Snowden to test the viability of

the project based on the known resource. Snowden’s geotechnical

work, coupled with a cursory literature survey, indicates that an

adaptation of a room-and-pillar mining method with paste fill is most

appropriate from both a geotechnical and a risk perspective.

Metallurgical

factors or

assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It

is always necessary as part of the process of determining reasonable prospects

for eventual economic extraction to consider potential metallurgical methods,

but the assumptions regarding metallurgical treatment processes and

parameters made when reporting Mineral Resources may not always be

rigorous. Where this is the case, this should be reported with an explanation of

the basis of the metallurgical assumptions made.

• The test work was carried out in the first half of 2009 at Optimet

laboratories. The test work was conducted on various composite

samples obtained from Kagara.

• The Pb and Zn grades are quite variable. The orebody is not

homogenous. The better understanding of the grade variability will

emerge as the variography testing results become available. Four

mineralised zones are identified.

• Four composites: Zn+Pb+Ba (with and without hydrocarbons) and

Pb+Ba (with and without hydrocarbons), were examined. For

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• The findings of the Optimet work were that recoveries in excess of up

to 95% lead and 90% Zn were possible. Silver recoveries were were 56%

in Zn concentrate and 46% in Pb concentrate.

Metallurgical test work has shown that coarse grained very high quality

lead and zinc concentrates could be produced at recoveries in excess

of 90% into very high quality concentrates:

Zinc concentrate grade of +55% Lead concentrate grade of +70%

Environmental

factors or

assumptions

Assumptions made regarding possible waste and process residue disposal

options. It is always necessary as part of the process of determining reasonable

prospects for eventual economic extraction to consider the potential

environmental impacts of the mining and processing operation. While at this

stage the determination of potential environmental impacts, particularly for a

greenfields project, may not always be well advanced, the status of early

consideration of these potential environmental impacts should be reported.

Where these aspects have not been considered this should be reported with an

explanation of the environmental assumptions made.

• The establishment of a mine and processing facility at the Admiral Bay

site will have significant impact on a large area.

• However, only limited environmental monitoring and studies have as

yet been completed.

Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If

determined, the method used, whether wet or dry, the frequency of the

measurements, the nature, size and representativeness of the samples.

• No documentation was provided regarding collection of bulk density

data. Data in the drillhole database suggest that the data was collected

on-site using the Archimedean method on either half core or whole

core samples. The database contains 906 bulk density determinations.

The bulk density for bulk material must have been measured by methods that

adequately account for void spaces (vughs, porosity, etc.), moisture and

differences between rock and alteration zones within the deposit.

• No documentation was provided regarding collection of bulk density

data.

Discuss assumptions for bulk density estimates used in the evaluation process of

the different materials.

• Bulk density data was allocated to the corresponding raw sample

intervals containing assay data. It should be noted that the bulk density

intervals tended to be smaller and selective relative to the assay

intervals.

• For bulk density weighting during compositing and estimation, assay

intervals not having bulk densities were assigned bulk densities based

on linear regression of the Ba% data

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• For bulk density weighting during compositing and estimation, assay

intervals not having bulk densities were assigned bulk densities based

on linear regression of the Ba% data

Classification The basis for the classification of the Mineral Resources into varying confidence

categories.

• The Inferred Mineral Resource classification is based on the evidence

from the available drill sampling and seismic interpretation. This

evidence is sufficient to imply but not verify geological and grade

continuity.

Whether appropriate account has been taken of all relevant factors (i.e. relative

confidence in tonnage/grade estimations, reliability of input data, confidence in

continuity of geology and metal values, quality, quantity and distribution of the

data).

• The Inferred classification has taken into account all available

geological and sampling information, and the classification level is

considered appropriate for the current stage of this project.

Whether the result appropriately reflects the Competent Person’s view of the

deposit.

• The Mineral Resource estimate appropriately reflects the view of the

Competent Person

Audits or

reviews

The results of any audits or reviews of Mineral Resource estimates. • CSA completed an internal audit of the Resource model.

Discussion of

relative

accuracy/

confidence

Where appropriate a statement of the relative accuracy and confidence level in

the Mineral Resource estimate using an approach or procedure deemed

appropriate by the Competent Person. For example, the application of statistical

or geostatistical procedures to quantify the relative accuracy of the resource

within stated confidence limits, or, if such an approach is not deemed

appropriate, a qualitative discussion of the factors that could affect the relative

accuracy and confidence of the estimate.

• The relative accuracy of the Mineral Resource estimate is reflected in

the reporting of the Mineral Resource to an Inferred classification as

per the guidelines of the 2012 JORC Code

The statement should specify whether it relates to global or local estimates, and,

if local, state the relevant tonnages, which should be relevant to technical and

economic evaluation. Documentation should include assumptions made and the

procedures used.

• The statement refers to global estimation of tonnes and grade

These statements of relative accuracy and confidence of the estimate should be

compared with production data, where available.

• No production data is available; this is an advanced exploration project

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Transcript of PO Bo 1227, West Perth WA 6872 Phone: +61 8 9324 1053 ...2016/02/24 · o SS17 area, 1.4 Mt at 5.5%...