Quarterly Report ending 31st March, 2010 · 2010. 7. 29. · Quarterly Report ending 30 th June,...

______________________________________________________________________________ Quarterly Report ending 30th June, 2010 29thJuly, 2010 _____________________________________________________________

ROCKLANDS COPPER PROJECT (CDU 100%)

-HIGHLIGHTS FOR THE QUARTER- • Las Minerale drilling continues to deliver high grade copper results LMRC201 intersects 146m @ 6.99% Cu Eq fm 3 – 149m LMRC206 intersects 137m @ 5.46% Cu Eq fm 0 – 137m LMRC220 intersects 118m @ 5.76% Cu Eq fm 3 – 121m LMRC241 intersects 116m @ 2.79% Cu Eq fm 0 – 116m LMRC223 intersects 92m @ 4.58% Cu Eq fm 2 - 94m LMRC208 intersects 153m @ 2.72% Cu Eq fm 3 – 156m • Wilgar Bedrock drilling intersects high grade gold up to 39g/t gold with aggregate

results of 257 m @ 3.58g/t gold (0.5gt cutoff and 301 m @ 67.80 g/t silver (31g/t cutoff)

• Rocklands Final Draft EIS released by Queensland Government for public

comment. • Definitive Feasibility Study by Lycopodium Minerals Qld Pty Ltd well underway and

expected to be completed Nov-Dec 2010 • Rocklands Technical Office Complex and Accommodation completed during

quarter. The complex is located within the Township of Cloncurry completed on time and under budget.

• Port of Townsville Copper Concentrate loading facility areas secured with Townsville Port Authority leased for 30 years. • New updated resource estimation underway • Pilot Plant test work completed by Ammtec Metallurgical Laboratory in Perth. • Sinosteel and Associated Metallurgical and Construction Group Nerin Metallurgical

and MCC site visit to Rocklands. • CuDeco Technical Team visit Sinosteel and Nerins Metallurgical facilities in China. • Vertical Diamond Core Drilling confirm mineralisation commences at surface on Las

Minerale.

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• The Company is currently upgrading its category of the current Joint Ore Reporting

Committee (JORC) compliant resource from inferred to measured. Current JORC Compliant Resource for Rocklands (July 2006 Las Minerale, Southern Rocklands and Central Rocklands Prospects only) 30.2 million tonnes @ 1.78% Cu Eq* in Inferred category. The company priority has been drilling to upgrade the current JORC compliant resource from inferred to measured category. The resource upgrade will allow the company to finalise the DFS for a 30 million tonne feasibility study based on a throughput of ore at the rate of 3 million tonne per annum for a 10 year period. What makes Rocklands Different from other Copper discoveries?

Depth of ore: The Rocklands mineralization commences at surface. Mining costs: The strip ratio of "waste to ore" in early inhouse studies appears to be very low (indications are around 2.5 tonne of waste to 1 tonne of ore). Transport: Rocklands will have a bitumen road to the site by the end of 2010, in a deal struck with the Cloncurry Shire Council. Location: The Rocklands site is located only 15klms from the rail spur to load the concentrates. Power Access: The main power line is 7 klms from Rocklands. Smelter Facilities: Mt Isa Copper smelter is only 90 klms to the west of Rocklands. Metallurgy: Metallurgical studies including Pilot Plant studies indicate metal recoveries are clean and very high. Pit Optimisation: The multiple orebodies at Rocklands all strike parallel which will enable one super pit as the deeper ore is extracted in years to come. Infrastructure: The township of Cloncurry has its own airport and runway with the airport fully staffed with lounge facilities serviced by QANTAS. The first years of production will be mining the high grade native copper and supergene zones. The normal cost of developing housing and accommodation for labour is to be located in the Township of Cloncurry on 15 klms away. CuDeco has its own area for unloading, storage and loading at Townsville Port and an agreement for storage and loading facilities and rail spur at Cloncurry. The normal high costs usually associated with mineral mining infrastructure in remote locations, including, road constructions, water costs for process treatments, labour in remote areas, access to power, construction of airport and runways for fly-in fly- out for remote operations are not required with the Rocklands Copper Project. The DFS is being designed for a 30mt resource to be processed at an on site process facility at the rate of 10,000 tonnes per day (approx 3mtpa). Mining Lease Application (MLA): The Mining Lease Applications (MLA’s) were lodged with the Queensland Dept of Mines in August 2006. The MLA’s blanket the entire EPM’s that makes up the Rocklands Group Copper Project near Cloncurry in NW Queensland. The MLA is for a lease period of 40 years.

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Workstation in the Completed 26 Project Personnel Office complex in Cloncurry (July 2010) Environmental Impact Statement (EIS): The Company lodged its Terms of Reference to the Qld Government in mid 2006. After a period of 4 years to completion CuDeco lodged the final draft EIS for approval during the quarter. The Qld Government requested some additional information and minor changes during the last 6 months, including a requirement for European Heritage Survey and detailed studies not normally required prior to design. We are now happy to advise that we have received from the Department of Environment and Resource Management the “Notice of Decision to Proceed” with the EIS being publically advertised for Public Comment during the quarter. Definitive Feasibility Study (DFS): The Company engaged metallurgical and process design consultants, Lycopodium Minerals QLD Pty Ltd, one of Australia’s largest and respected consultants in its field, to complete the DFS (Definitive Feasibility Study) for the Rocklands Project based on a 3mtpa processing plant. Water Studies: The Company engaged Knight Peisold Pty Ltd to complete a study on the water requirements for the Rocklands Project. The preliminary results from testwork show that on a throughput of up to 3mtpa, sustainable management can be achieved. A detailed water test programme will be carried out during the detailed design stage of the project.

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Technical Office Facility and Accommodation Township of Cloncurry: The Technical and Accommodation facility in Cloncurry Township was completed in the quarter. In addition to this facility the company is constructing an additional 200 man village to accommodate the construction crews during the construction phase of the Rocklands Processing facility and infrastructure requirements. The village is to be located within the township of Cloncurry rather than on site.

Construction of the 26 Project Personnel Office Complex in Cloncurry (June 2010)

Earthworks & Infrastructure underway for the Project Personnel Office & Housing Complex in Cloncurry (June 2010)

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Exterior of Completed 26 Project Personnel Office complex in Cloncurry (July 2010)

Interior of Completed 26 Project Personnel Office complex in Cloncurry (July 2010)

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One of the Executive Offices in the 26 Project Personnel Office Complex in Cloncurry (July 2010)

Boardroom in the 26 Project Personnel Office Complex in Cloncurry (July 2010)

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Exterior of Project Personnel Housing Complex in Cloncurry (July 2010)

Interior of one of the Project Personnel Accommodation Complex Cabins (July 2010)

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Transport and Rail Spur and Storage Facility in Cloncurry The Company has engaged with Queensland Rail, ARG and Road transport operators to transport the concentrates from the Rocklands Project to the Port of Townsville. An agreement has been completed on a rail spur, loading and storage facility for the loading of mineral copper and cobalt concentrates from the Rocklands Process facility. Townsville Port Facilities: The Company has successfully negotiated an area within the Townsville Port Authority. The facility is to be used for ship loading for the export of the Rocklands mineral concentrates at the Townsville Port. The design of the offloading facility, the storage, handling and loading facilities are in the hands of the engineers who are designing the facility for CuDeco. We have allowed a budget of approx $15m for this Port Storage, Handling and Ship Loading facility.

CuDeco’s Logistical Manager, John Green and Port of Townsville’s CEO, Barry Holden Metallurgy: The final testwork and metallurgical studies were completed at Ammtec Ltd in Western Australia. The aim of the final phase of the testwork was for providing maximum recoveries and processing efficiencies for the process plant at Rocklands. Any additional testwork will be for “fine-tuning” and will be undertaken during the final design phase. The results from the testwork have shown the recoveries to be in line with, or better than industry average. Recent work has confirmed the ability to produce a clean native copper concentrate (see photo – the black particles are magnetite which will be removed magnetically). Following completion of this work the preliminary process design will be finalised.

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Crushing and Native copper Separation process flow sheet (post Jaw Crusher), for metallurgical test-work recently completed at Ammtec Laboratories in Western Australia

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Our metallurgical team was in Perth during the pilot plant testwork and visited Sinosteel’s South China facility during the quarter. The team travelled directly from Perth to China with the results and samples from the testwork to discuss and implement the ongoing arrangements we have with Sinosteel as part of our MOU. The MOU with Sinosteel was non -binding at the request of CuDeco not, Sinosteel. Sinosteel ‘s technical team have now visited the Rockland site.

Above CuDeco’s metallurgical team; Peter Hutchison (Director - front row 4th from left), Arthur Hunt (Technical Manager - front row 5th from left), and Gary Zou (Chinese representative - front row 6th from left), surrounded by the Sinosteel/Nerin engineering and design team. Below: Wayne McCrae signing MOU with Sinosteel in Beijing.

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Earthmoving and Mining Equipment: The Company has now acquired approx 95% of all of the Earthmoving Equipment for the mining operation at Rocklands. The company will call for mining industry earthmoving contractors to tender for the mining and delivery of ore to the process plant using only CuDeco plant and machinery. The contractors will be responsible for the upkeep and the maintenance of all of the Equipment. Native Title and Heritage Agreement: All of these agreements have been completed and signed off by all relevant parties including the State and Federal Regulatory Authorities and compliant with all aspects required for the granting of the Mining Lease over Rocklands. Time Table and Timeframes: Assuming everything falls into place and assuming we are granted our Mining Lease by the end of 2010 or early 2011, we believe that with the forward planning in progress for the transport, port loading facilities, agreements for the construction of the plant, and timelines for construction of the processing facility and infrastructure we believe we can commence commissioning and commence production in mid 2012, subject to timelines of the granting of the Mining Lease. We expect to commence construction in early 2011 with strip back and mining in mid 2011. These dates are purely based on timeframes achievable by CuDeco, however, the timeframe is our timeframe, but at the end of the day we are at the mercy of the relevant approvals and speed of the Queensland State Government. Shareholders are advised: any hold ups on this project will not be caused by CuDeco. We have accelerated all aspects of the requirements for this project to ensure our timeframes are met. Las Minerale Vertical Drill Holes Confirm Mineralisation commences at surface at Las Minerale: DODH 067 intersects 189m @ 2.16% Cu Eq fm 4m DODH 099 intersects 123m @ 2.57% Cu Eq fm 2m DODH 080 intersects 84m @ 2.20% Cu Eq fm 1m DODH 086 intersects 169m @ 1.75% Cu Eq fm 8m DODH 071 intersects 128m @ 1.22% Cu Eq fm 3m DODH 090 intersects 141m @ 2.08% Cu Eq fm 3m DODH 083 intersects 100.7m @ 4.74% Cu Eq fm 4m

Metallurgical examples of massive native copper from central Las Minerale Bonanza Zone. Recoveries from metallurgical test-work recently conducted at Ammtec Laboratories in Western Australia, are exceeding expectations and demonstrating high recovery of clean native copper through only the first gravity circuit.

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Drilling and exploration has continued to intersect high grade mineralisation in a number of areas. None of the current drill hole results will be included in the upcoming resource statement, but will assist in the upgrade after the upcoming resource statement. On-going drilling at Las Minerale and Southern Rocklands is supplying sample for metallurgical test-work, grade control for mining and for information assisting in the geotechnical data required for the open cut mining operations. It is anticipated that mining will commence simultaneously with two open cut operations at Las Minerale and Southern Rocklands. The Processing Plant is being designed to ensure that the native copper (which we anticipate will account for approximately 25% of the overall resource at Las Minerale and Southern Rocklands) is processed using our upfront crushing and gravity circuits. The first 10 years of operation will focus on the high grade native copper and supergene zones to accelerate cash flows from day-one of operations. The processing plant will be able to accept native copper and sulphides simultaneously. Drill Holes DODH 80, 83, 86, 90 and 99 were grade control holes drilled vertically into Las Minerale. DODH 80 and 83 were drilled at the request of the metallurgical team to test the expected layer grade to be mined vertically to ensure that the process plant could be designed to handle the very high grade Native Copper zones which can vary from 5% Cu to 58%Cu. The Las Minerale and Southern Rocklands bonanza zones contain thick zones of high grade native copper and PQ (wide diameter) Diamond Drill Core was required to simulate actual ore size prior to the HPGR and Gravity Circuits at the front end of the plant to ensure that these circuits can handle the large copper nuggets. Approx 30 tonnes of product has now been drilled and used for this test-work. The vertical holes have also indicated that the ore commences from the surface. The results from the holes drilled vertically also provide geological and geotechnical data required for the planning of the open cut and provide vital information for ground support requirements. These vertical holes confirmed the high grade layers within the orebody in the supergene zones and grade above the holes drilled by the angle holes. Although the drilling of these holes is expensive it ensures that we are not in the position of having to adjust or make alterations to the processing plant when commissioning commences. It is more cost effective to ensure that there are no surprises due to lack of information when designing the process plant. In addition to the vertical holes, Drill Hole No's DODH 67 and 71 were drilled along strike as angle holes at 145'E and 310'W respectively to intersect the structure at the east end of Las Minerale and structure 2 (announced to market on 9th December 2009) which strikes parallel to current drilling lines. Las Minerale bonanza zone vertical delineation drilling now completed All assay results from grade distribution infill drilling of the central Las Minerale Bonanza Zone, have now been received and quantified into a comprehensive data set which will underpin the various mining and process studies currently underway. The vertical holes are useful in determining likely grade control expectations for the process design and to confirm data from angle drilling. Commencing in late 2008, the focus of this separate vertical infill drilling program was to target flat-lying, high grade mineralised zones within Las Minerale, typical of water table induced supergene enrichment. This program targeted the undrilled areas between the close-spaced angle infill drilling program at Las Minerale (25m x 25m grid), effectively creating a 12.5m grid. The result of the combination of these two highly successful programs is a relatively high density infill drill spacing within the 800m long Las Minerale Bonanza Zone, providing significant evidence for both geological and mineralised continuity.

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From a total of more than 290,000m of drilling at Rocklands to date, the programs have included close spaced drilling within the main Las Minerale Central, Las Minerale East and Las Minerale West mineralised zones, predominately to depths of 250m and at spacings based on a 25m grid. In the central 800m Bonanza Zone, due to the high grade native copper, supergene and primary ore zones, drill spacings are based on a 12.5m grid. Angle holes were drilled at 25m spacings and 25m step-backs. A vertical metallurgical drilling program that targeted important mineralisation styles throughout the length of Las Minerale, was also conducted in conjunction with infill programs ,and supplied solid drill core which was used in metallurgical test-work. The balance of drilling at Rocklands has focused on the remaining mineralised zones that make up the global Rocklands Project, including Rocklands South, Rocklands South Extension, Le Meridian, Rocklands Central, Southern Siltstone, Northern Siltstone, Rainden and Solsbury Hill. Apart from Solsbury Hill and Rainden, the mineralised zones that will initially be mined at Rocklands, occur in a mineralised corridor approximately 800m width, over 2km in length and strikes parallel at +/- 310°N This significantly mineralised area will potentially increase further with additional drilling. Exploration drilling on newly defined targets outside the discovered zones over the last two years has been relatively limited, making up only a small fraction of the total metres drilled to date at Rocklands. The only two specifically targeted exploration programs conducted over this time resulted in the discovery of mineralisation at both the Rainden and Solsbury Hill Prospects. A third and more recent exploration program is focusing on the Wilgar Iron Oxide, Copper, Gold (IOCG) Prospect, which is potentially shaping up as another significant discovery at Rocklands, effectively giving the exploration team 3 out of 3 in terms of specifically targeted exploration success. Vertical drilling increases confidence and complimented angle hole drilling at Las Minerale. Good geological practice dictates drilling should intersect the orebody as close as possible to perpendicular, and for sub vertical orebodies this typically means angle holes are required. For the most part, this has been the case at Rocklands.

Massive chalcopyrite (high grade, primary copper mineral) intersected in LMRC208 (diamond tail)....this interval of primary mineralisation at 180m, occurs immediately below a high grade chalcocite blanket which has formed in the overlying supergene

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In determining the orientation and distribution of flat lying high grade zones within an orebody however, angle holes do not necessarily provide optimum results in which case vertical drilling provides more valuable information. The supergene enrichment process at Las Minerale has resulted in numerous zones of flat lying “blankets” of high grade bonanza mineralisation, predominately consisting of native copper (native copper contains 99.8% copper) and chalcocite (chalcocite contains 79.85% copper), within a generally high grade supergene zone that extends to depths of 150-180m before moving into a transition zone, below which primary mineralisation in the form of chalcopyrite (34.63% copper), becomes the dominant copper mineral. The typically flat lying, or shallow dipping orientation and distribution of many of these high grade bonanza zones, means they cannot be accurately drill tested with angle drilling alone, unless the spacing between the drill holes is reduced considerably. Due to the typically flat lying nature of these supergene enriched blankets, it was determined that a separate vertical infill drilling program was required to compliment the angle infill drilling program, both of which were designed to increase confidence levels in the distribution and orientation of mineralisation within the main Las Minerale orebody. The ultimate aim being to lift confidence in our understanding of the mineralised envelope as much as possible, from surface down to a vertical depth of 250m, to support a Measured category according to the Joint Ore Reserves Committee (JORC) guidelines. Significant intersections of native copper and chalcocite have been observed along the entire 800m long bonanza zone, which forms the centre-piece of more than 1900m of confirmed mineralised strike length at Las Minerale. The bonanza zone will form an important aspect of the initial years of mining planned at Rocklands. Late in 2009, native copper was also encountered along strike and at the extreme NW end of Las Minerale. This zone falls well beyond the extents of the current bonanza zone outline, and will be the subject of further studies during the coming months. In addition to the infill drilling at Las Minerale, deeper drilling has also been conducted at 100m intervals along strike, confirming mineralisation continues to depths of at least 450m down dip over a continuous strike length of at least 700m. Of these deep holes, the deepest to target Las Minerale mineralisation are DODH044 which intersected mineralisation to 540m down dip, and DODH042 which intersected sulphide mineralisation over a 200m interval from 600-800m. Down-hole geophysics, including EM and IP surveys, are planned for the coming weeks, the results from which will help the exploration team in assessing the potential for possible IOCG style targets at depth and in planning a future deep drilling program scheduled for the months ahead. Highlights from the RC Drill vertical drilling program include: Drill hole ID intersection (m) Copper Grade Eq* Depth(m) LMRC200 intersects 166m @ 1.32% Cu Eq (4-170m) LMRC201 intersects 146m @ 6.99% Cu Eq (3-149m) LMRC202 intersects 103m @ 2.21% Cu Eq (3-106m) LMRC203 intersects 152m @ 1.35% Cu Eq (4-156m) LMRC205 intersects 137m @ 2.90% Cu Eq (4-141m) LMRC206 intersects 137m @ 5.46% Cu Eq (0-137m)

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LMRC207 intersects 164m @ 3.96% Cu Eq (3-167m) LMRC208 intersects 153m @ 2.72% Cu Eq (3-156m) LMRC209 intersects 134m @ 1.60% Cu Eq (4-138m) LMRC215 intersects 140m @ 2.02% Cu Eq (11-151m) LMRC218 intersects 181m @ 1.97% Cu Eq (3-184m) LMRC220 intersects 118m @ 5.76% Cu Eq (3-121m) LMRC221 intersects 166m @ 1.33% Cu Eq (4-170m) LMRC223 intersects 92m @ 4.58% Cu Eq (2-94m) LMRC224 intersects 172m @ 1.90% Cu Eq (1-173m) LMRC226 intersects 144m @ 1.48% Cu Eq (11-155m) LMRC227 intersects 136m @ 1.47% Cu Eq (3-139m) LMRC228 intersects 115m @ 3.27% Cu Eq (3-118m) LMRC229 intersects 147m @ 1.58% Cu Eq (3-150m) LMRC231 intersects 186m @ 1.56% Cu Eq (1-187m) LMRC235 Intersects 100m @ 2.01% Cu Eq (1-101m) LMRC241 intersects 116m @ 2.79% Cu Eq (0-116m) LMRC245 intersects 115m @ 1.81% Cu Eq (0-115m) LMRC261 intersects 121m @ 2.16% Cu Eq (12-133m) LMRC267 intersects 168m @ 2.06% Cu Eq (41-209m) LMRC270 intersects 124m @ 1.63% Cu Eq (3-127m) LMRC271 intersects 198m @ 1.59% Cu Eq (0-198m) LMRC272 intersects 166m @ 1.93% Cu Eq (6-172m) LMRC273 intersects 124m @ 1.71% Cu Eq (4-128m) LMRC278 intersects 105m @ 2.39% Cu Eq (55-160m) Wilgar Prospect (within Rocklands EPM) Wilgar High Resolution Shallow Bedrock Exploration Program Historical soil samples, bedrock samples, geophysical gravity and magnetic survey results, and RC and Diamond drilling, all point to IOCG style mineralisation at Wilgar. As part of the wider investigation of the Wilgar IOCG prospect, a high resolution Bedrock Drill program commenced in April 2010, with the view to identifying the areal extent, strike, dip and

Wide diameter PQ (85mm) metallurgical diamond core DODH073 - massive solid copper metal and chalcocite throughout. Intersection shown from approx. 22-23m. (Native copper contains 99.8% copper metal, chalcocite contains 79.85% copper metal)

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morphology of near surface high grade gold (Au), silver (Ag) and tellurium (Te), mineralisation encountered at Wilgar. Holes were sampled every metre down-hole from surface to aid in the identification of strike and dip of the Au-Ag-Te mineralisation. An aggregate result of 257m @ 3.58g/t Au (0.5g/t cutoff) and 301m @ 67.80g/t Ag (2.18 oz/t) (31 g/t (1 oz) cutoff ) has been drilled to date. Highlights from the Shallow Bedrock program include: WUBR003 intersected 14m @ 5.03 g/t Au Eq fm 0m – 14m WUBR071 intersected 3m @ 15.56 g/t Au Eq fm 0m – 03m WUBR072 intersected 9m @ 6.79 g/t Au Eq fm 0m – 9m WUBR099 intersected 8m @ 11.74 g/t Au Eq fm 0m – 8m WUBR100 intersected 6m @ 4.91 g/t Au Eq fm 0m – 6m WUBR116 intersected 8m @ 5.16 g/t Au Eq fm 0m – 8m Mineralisation in the soil cover and bedrock at Wilgar, as sampled in this program, predominately recorded high-grade gold, silver and tellurium, with grade increasing in relationship to each other suggesting telluride-style mineralisation similar to that observed in the Kalgoorlie goldfields (e.g. Golden Mile), in the case of Wilgar, has formed from a distinctly different mineralising system, playing host to a greater variety of deposited metals such as Mo, Cu and U. Due to recent results, an upgraded 2,000 hole bedrock drilling program is being designed for Wilgar, based on the current results which have proven that extraordinary high grade mineralisation exist in the soil cover and well into the bedrock profile. Results suggest mineralisation may be widespread and follow up drill programs will be required before any detailed determinations are made. Early interpretation, however, could possibly suggest a shallow dip to the local grid north, correlating with the dip direction interpreted from the Terrain Corrected Wilgar Gravity Survey. High grade shoots with a general parallel dip have also been identified within the mineralised zone, that grade up to 39.1g/t Au, 350g/t Ag and 730g/t Te. A phase 2 bedrock drilling program has now been completed. A third phase program will encompass a 2,000 hole bedrock drilling campaign, planned to add further data to an increasing appreciation of the possibility of a major IOCG prospect at Wilgar. To date, drilling has been confined to the twin hills of Wilgar, which is the most westerly of a group of 4 small hills which outcrop and strike in an East/West direction over a distance of approx 1.5km. Exploration and Drilling on Geophysics To date more than 290,000 metres of drilling has been carried out at Rocklands, the vast majority of which has been confined to the 11 mineralised structures that make up the Rocklands Project, namely Las Minerale Central, Las Minerale East, Las Minerale West, Rocklands South, Rocklands South Extension, Le Meridian, Rocklands Central, Southern Siltstone, Northern Siltstone, Rainden and Solsbury Hill. As things currently stand, estimates of more than a further 500,000 metres of drilling may be required just to test and delineate the many new targets which have been identified. In addition to testing these significant exploration targets, we still need to conduct ongoing drilling within already discovered zones of mineralisation throughout the Rocklands Project area...to increase strike, depth and where appropriate, increase confidence via infill drilling.

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One of our most successful geophysical survey tools at Rocklands is Sub Audio Magnetics (SAM), which measures sub-surface Conductivity, Magnetics and Resistivity in a single pass. This survey method has been extraordinarily successful at Rocklands, and has been largely responsible for identifying an aggregate length of approx 8km of mineralisation to date. Many more targets identified by SAM are yet to be tested, many of which are extensions to known zones of mineralisation. In addition to the SAM survey, Radiometrics and Induced Polarisation (IP) Geophysical Surveys have identified numerous sub-surface targets, including two large areas coincident in the south-west of the EPM. A similar target was identified at Wilgar, which is rapidly displaying all the signs of being a significant IOCG structure. The targets to the south west of the EPM however are multiples of the size of Wilgar, with an area extent approaching 1.4km x 1km. This target remains undrilled and unexplored. Importantly, every type of geophysical survey completed at Rocklands has identified some form of anomaly worthy of investigation at Wilgar. The Wilgar Prospect is located in the central area of the top half of the EPM, and whilst not yet confirmed, appears to be part of a separate mineralising event. Until recently the Wilgar prospect was put on the backburner, with only occasional and sporadic exploration whilst we continued to drill out the known copper/cobalt/gold areas of the EPM. At Wilgar, we recently commenced a shallow bedrock drilling program to test yet another target generated by our exploration team, but in an area also highlighted by the recently completed gravity survey. Gravity surveys, which effectively measure the density of sub-surface bedrock, are widely used in exploration for highlighting potential areas of mineralisation, which are often more dense than the surrounding rock due to their metal content. The bedrock drilling at Wilgar is carried out by drilling vertical holes until hard bedrock is reached, at which point the drill continues for another metre before stopping. Samples are taken down hole in 1 metre intervals, including the last metre into the bedrock. A six metre hole would typically provide 5m of softer, decomposed top-soil material (colluvium, alluvium, regolith or just plain soil), and one metre of fresh bedrock. The depth of the top-soil cover generally varies from 2 to 11 metres at Rocklands. The Company brought forward the previously planned bedrock drilling program at Wilgar due to the recent discovery of high grade mineralisation from RC Drill Hole LMRC754, which intersected high grade gold (up to 12.6g/t Au), Silver (up to 4.03kg/t Ag), Molybdenum (up to 3.18% Mo), Uranium (up to 2.30kg/t U), and rare elements Tellurium (up to 2640ppm Te) and Selenium (up to 0.98% Se)...see announcement 22nd March 2010. Over 500 bedrock holes were initially planned for this particular program at Wilgar, which has now been increased to 2,000 holes. Results from the first 142 holes have been received, for a total of 545m drilled. The extremely high grade and consistent nature of the results from hole to hole, when compared to previous soil and bedrock drilling in the surrounding area, provides evidence of a potentially large and widespread mineralised zone. Whilst insufficient data exists to quantify just how big, it is none the less extremely encouraging.

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At this stage we do not have enough information to confidently determine the likely extent of mineralisation at Wilgar, but given the proximity to a large gravity signature, and nature and style of exotic minerals found to date, we believe Wilgar is likely to be part of a large IOCG system and as such, have not ruled out the possibility that Wilgar sits on the outer rim of a much larger Porphyry and/or mineralised breccia pipe. Co-Operation agreement with Sinosteel Engineering and Equipment ltd Sinosteel is one of China’s largest and most influential companies with assets exceeding $US50 billion and an annual turnover of $US20b per annum . A state-owned enterprise, Sinosteel is subject to the Chinese State-Owned Asset Supervision and Administration Commission (SASAC) and had been authorised to enter negotiations with CuDeco. Nanchang Engineering and Research Institute of Nonferrous Metals (NERIN), an associated entity to Sinosteel, specialises in engineering design, consultation, survey, general contracting, construction supervision, Equipment manufacturing and assembly, and is integral to the Sinosteel arrangements. CuDeco has an ongoing relationship with Sinosteel via our representatives at our Hong Kong Office. A Memorandum of Understanding (MOU), was signed between the two Companies, which was agreed to be non-binding at the request of CuDeco. Immediately after the completion of the metallurgical test-work, including large scale continuous Pilot Plant testwork by Ammtec Ltd and at the request of China’s Sinosteel, our metallurgical team visited their South China facility to discuss the results. Discussions covered a range of topics relating to the equipment selection and process design requirements for the Rocklands processing flow-sheet, and focused particularly on the ease of liberation of the Native copper and designing to harness the high recoveries achieved in test-work Sinosteel has since visited the Rocklands Project to inspect the “lay of the land” with respect to Rocklands infrastructure requirements and to conduct discussions with various government agencies engineering and construction and contracting groups and regulatory officials. Sinosteel also had meaningful discussions with Lycopodium in Brisbane. With the completion of the metallurgical studies and test-work, apart from fine tuning, the Company is in the final stage of completing the Definitive Feasibility Study (DFS), being undertaken by Lycopodium Minerals (Qld) Pty Ltd, CuDeco post end of quarter signed an agreement for Basic Engineering Design services with Sinosteel/Nerin. The Quotation for the next stage, the Detailed Design and Equipment Supply is expected to be completed by November 2010 and quotation for Civil Works, Erection, and Steel Structure Supply is anticipated by December 2010. The quotations will be completed and being overseen by CuDeco’s Australian metallurgical and process design consultants, Lycopodium Minerals (Qld) Pty Ltd.

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CuDeco Directors Wayne McCrae and Peter Hutchison signing the Basic Engineering Design Contract with representative of Sinosteel’s, Mr Jiang Gongyang and Nerin’s. Mr Liu Tong Yours faithfully Wayne McCrae Chairman The information in this announcement that relates to Exploration Results is based on information compiled by Mr. Andrew Day. Mr Day is employed by GeoDay Pty Ltd, an entity engaged by CuDeco Limited to provide independent consulting services. Mr. Day has a BAppSc (Hons) in geology and he is a Member of the Australasian Institute of Mining and Metallurgy (Member #303598). Mr. Day 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 Ores Reserves”. Mr Day and GeoDay Pty Ltd consent to the inclusion in this announcement of the matters based on their information in the form and context in which it appears. The information in this announcement insofar as it relates to metal grades and likely recoveries, is based on information compiled by Mr Peter Hutchison, ARACI Ch Chem, MAusIMM, a full-time executive director of CuDeco Ltd. Mr Hutchison has sufficient experience in hydrometallurgical and metallurgical techniques which is relevant to the results under consideration and to the activity which he is undertaking to qualify as a competent person for the purposes of this report. Mr Hutchison consented to the inclusion in the report of the information, in the form and context in which it appears.

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Rocklands style mineralisation; is dominated by dilational brecciated shear zones, throughout varying rock types, hosting coarse splashy to massive primary mineralisation with high-grade supergene chalcocite enrichment and bonanza-grade coarse native copper. Polymetallic coppercobalt-gold mineralisation persists throughout the oxidation profile and remains open at depth. In order to be consistent with previous reporting at Rocklands, the drill intersections reported above have been calculated on the basis of a copper cut-off grade of 0.2% with an allowance of up to 4m of internal waste. Notes on Assay Results Calculated Co and Au grades are reported in the original release for relevant Cu Equivalent intersections. All analyses were carried out at internationally recognised, independent, assay laboratories. Quality assurance for the analyses is provided by continual analysis of known standards, blanks and duplicate samples. Reported intersections are down-hole widths. Combined Copper Equivalent results reported over multiple intersections are calculated on a weighted average. Au = Gold Co = Cobalt Cu = Copper CuEq = Copper Equivalent Calculated Te and Ag grades are reported in the original release for relevant Au Equivalent intersections. A gold cut-off grade of 0.5 g/t was applied with an allowance of up to 4m of internal waste. All analyses were carried out at internationally recognised, independent assay laboratories. Quality assurance for the analyses is provided by continual analysis of known standards, blanks and duplicate samples. Au = Gold Te = Tellerium Ag = Silver AuEq = Gold Equivalent *COPPER (Cu) EQUIVALENT CALCULATION The formula is based on the metal prices of: Copper $2.00 US$/lb Recovery: 95.00% Cobalt $26.00 US$/lb Recovery: 90.00% Gold $700.00 US$/troy ounce Recovery: 75.00% The recoveries used in the calculations are the average achieved to date in the metallurgical test-work on primary sulphide, supergene, oxide and native copper zones. Higher recoveries have been achieved during test-work. *GOLD (Au) EQUIVALENT CALCULATION The formula is based on the metal prices of: Gold $1000.00 US$/troy ounce Recovery: 80.00% Silver $15.00 US$/troy ounce Recovery: 80.00% Tellurium $200 US$/kg Recovery: 80.00% In the absence of metallurgical work on this new style of mineralisation, a conservative nominal recovery of 80% was used.

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HOLE LOCATIONS

Hole Id Easting Northing Dip Azimuth Hole Depth (m)

(°) (°)

DODH007 433388 7713760 -75 030 456

DODH030 433435 7713110 -85 030 171.55

DODH043 433339 7713992 -65 210 435.1

DODH044 433114 7713854 -70 030 506.3

DODH049 433274 7714057 -70 210 393.4

DODH052 433809 7713537 -60 210 323.25

DODH067 433515 7713883 -70 137 413.7

DODH071 433721 7713536 -55 320 361.4

DODH080 433339 7714103 -90 000 88.2

DODH081 433566 7713750 -55 142 281.2

DODH082 433529 7713916 -76 210 142.6

DODH083 433528 7713878 -90 000 104.7

DODH085 433598 7712866 -76 210 139.7

DODH086 433631 7713725 -90 000 236.89

DODH090 433627 7713760 -90 000 169.7

DODH099 433673 7713682 -90 000 142.8

DORC095 433633 7713802 -55 210 398.5

DORC495 433270 7714238 -55 210 506.6

DORC664 433604 7713591 -55 030 215.3

DORC675 433484 7713643 -55 030 268

DORC690 433913 7713427 -55 210 480.2

DORC725 434254 7714391 -55 210 81

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DORC785 434195 7714396 -55 030 64

DORC928 433571 7713123 -60 210 300

DORC942 433571 7713373 -60 210 424.8

DORC945 433530 7713244 -60 210 246

DORC981 433014 7716256 -55 030 114

LMRC200 433516 7713873 -90 000 257.6

LMRC201 433522 7713879 -90 000 188.1

LMRC202 433491 7713922 -90 000 112

LMRC203 433483 7713912 -90 000 185.2

LMRC205 433501 7713897 -90 000 142

LMRC206 433527 7713886 -90 000 148

LMRC207 433542 7713865 -90 000 172

LMRC208 433536 7713859 -90 000 212

LMRC209 433467 7713933 -90 000 200

LMRC215 433451 7713949 -90 000 152

LMRC218 433533 7713855 -90 000 248.8

LMRC220 433508 7713904 -90 000 121

LMRC221 433552 7713839 -90 000 181.6

LMRC223 433512 7713907 -90 000 112

LMRC224 433559 7713845 -90 000 226.6

LMRC226 433608 7713756 -90 000 190

LMRC227 433614 7713762 -90 000 208

LMRC228 433622 7713773 -90 000 166

LMRC229 433599 7713778 -90 000 202

LMRC231 433569 7713823 -90 000 202

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LMRC235 433390 7714043 -90 000 118

LMRC241 433373 7714060 -90 000 118

LMRC245 433354 7714076 -90 000 136

LMRC266 433635 7713742 -90 000 226

LMRC267 433620 7713734 -90 000 252.8

LMRC270 433656 7713714 -90 000 160

LMRC271 433650 7713700 -90 000 234.1

LMRC272 433675 7713662 -90 000 192.1

LMRC273 433670 7713657 -90 000 200.1

LMRC278 433691 7713647 -90 000 168.3

LMRC302 433531 7713408 -55 210 321.2

LMRC354 433355 7713463 -55 210 142

LMRC359 433724 7713842 -55 230 260.8

MDH004 433752 7713208 -55 210 263.25

WUBR003 432261 7715676 -90 000 14

WUBR071 432271 7715673 -90 000 3

WUBR072 432270 7715671 -90 000 9

WUBR099 432274 7715671 -90 000 7

WUBR100 432272 7715670 -90 000 6

WUBR116 432274 7715668 -90 000 8

Datum: AGD66 Projection: UTM54

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Exploration Results Reported During 1st April to 30th June 2010

Below is a list of all Drill Hole results in numerical order that were released during the quarter. Detailed explanations for each result can be found in the following release dates.

• 11th May 2010 • 25th May 2010 • 10th June 2010 • 23rd June 2010

DODH007 intersected 25m @ 1.32% Cu eq fm 319m – 344m

DODH030 intersected 49m @ 1.91% Cu eq in 4 mineralised zones

intersection 1 11m @ 0.71% Cu eq fm 48m – 59m



















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DODH082 intersected 140 metres @ 5.40% Cu eq fm 3m – 143m

DODH083 intersected 100.7 metres @ 4.74% Cu eq fm 4m – 104.7m












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DORC095 intersected 130m @ 1.59% Cu eq in 3 mineralised zones




DORC495 intersected 88m @ 0.97% Cu eq fm 41m – 129m














DORC942** intersected 71m @ 0.82% Cu eq in 5 mineralised zones









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LMRC200 intersected 166m @ 1.32% Cu eq fm 4m – 170m







LMRC208 intersected 175m @ 2.72% Cu eq in 2 mineralised zones

















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intersection 2 121m @ 2.16 % Cu eq fm 12m – 133m




















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MDH004 intersected 25m @ 1.21% Cu eq in 3 mineralised zones




WUBR003 intersected 14m @ 5.03 g/t Au eq fm 0m – 14m





WUBR116 intersected 8m @ 5.16g/t Au eq fm 0m – 8m

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Quarterly Report ending 31st March, 2010 · 2010. 7. 29. · Quarterly Report ending 30 th June,...

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Transcript of Quarterly Report ending 31st March, 2010 · 2010. 7. 29. · Quarterly Report ending 30 th June,...