Magnus Copper Project exploration update

Transcription

1 ASX ANNOUNCEMENT 30 SEPTEMBER 2011 CODE: ALY BOARD OF DIRECTORS Mr Warwick Davies Non-Executive Chairman Mr Robert Brierley Managing Director Mr John Arbuckle Non-Executive Director Mr Jeffrey Moore Non-Executive Director ISSUED CAPITAL SHARES 97,447,408 OPTIONS PROJECTS 2,800,000 (Unlisted) MAGNUS COPPER (100%) GASCOYNE GOLD (100%) MURCHISON (80-100%) Level 2, 72 Kings Park Road WEST PERTH WA 6005 Phone: Facsimile: Magnus Copper Project exploration update Close spaced AMT survey commences at East Magnus Lithogeochemistry confirms Narracoota prospectivity Systematic exploration ongoing and drill testing of geophysical targets to recommence December 2011 quarter Alchemy Resources Limited (ASX: ALY) is pleased to provide an update of on-going systematic exploration for VMS-type base and precious metals at its Magnus Copper Project in Western Australia (Figure 1). The Magnus Copper Project covers over 20 kilometres of strike length of volcanic and sedimentary rocks of the highly-prospective Bryah Group to the west of Sandfire Resources high-grade DeGrussa copper deposit, which contains measured, indicated and inferred resources of 5.6% copper and 1.9g/t gold. Alchemy remains focussed on unlocking the copper-gold potential of its 100% owned Magnus Copper Project through employing innovative geophysical and geochemical methods in conjunction with drill testing of priority targets. Audio-Magnetotelluric (AMT) survey A comprehensive audio-magnetotelluric (AMT) survey over the East Magnus project area has commenced to detect discrete anomalies that may represent massive sulphide targets not detected or resolved in the previous geophysical surveys. Additionally, the survey is seeking to define deeper structures that may represent fluid pathways. It is the first time this advanced technique has been applied to the search for base metal mineralisation in the Bryah Basin. The AMT method has the capability of seeing deeper into the prospective rock package than previous helicopter-borne versatile-time EM (VTEM) and ground moving-loop EM (MLEM) surveys. An orientation AMT study undertaken in May 2011 established the applicability of the AMT method to exploration of base metals at Magnus. The profiles surveyed in the study coincided with previous VTEM, MLEM and gravity surveys so that direct comparisons were able to be made. Depth conductivity sections for the orientation AMT profiles successfully delineated

2 Figure 1: Location of Magnus Copper Project major geological packages and their boundaries, defined conductors that correlate well with the VTEM, gravity and known geology, and resolved new features that were not detected in the VTEM survey. In particular, the AMT conductivity depth sections image a number of conductive anomalies including significant conductors at depths over 300 metres within the Narracoota volcanic sequence (Figure 2). The comprehensive AMT survey is acquiring data along 300 metre spaced lines over the Narracoota volcanic sequence and upper 750 metres of the underlying Karalundi sedimentary sequence for both geological mapping purposes and to directly detect potential massive sulfide conductors (Figure 3). The line-spacing of the survey has been determined using forward modeling of a conductor of dimensions approximating size of Conductors 4 and 5 at DeGrussa. Results from the AMT survey will allow 2D inversions to be completed and provide more reliability as to the true location of conductor sources, and the strongest portions identified will justify targeted drill testing. In parallel with the AMT survey, Alchemy has re-evaluated all of the geophysical targets identified in the VTEM, MLEM and down-hole EM (DHEM) surveys and has identified numerous untested targets. Follow-up RC and diamond drilling and associated DHEM surveys will be planned as a priority based on the results from the AMT survey and the re-ranking of the untested geophysical targets.

3 Figure 2: Magnus Copper Project Three-dimensional view looking upwards and north-east (towards DeGrussa) showing orientation AMT conductivity depth sections, new AMT targets (pink ellipses), initial VTEM targets (yellow) and RC drill holes (white lines) under VTEM image. Note the strong conductor at depth on the right hand side of the closest AMT depth section. Geological interpretation and prospectivity Recent geological interpretation of the Magnus project area has potentially identified prospective stratigraphic positions for VMS mineralisation. The Narracoota volcanic sequence comprising thick sequences of basaltic and high-mg volcanic rocks, intrusive dolerites and interflow sedimentary rocks shares similarities to sequences that host mafic-sediment-association VMS deposits in Japan (e.g., Besshi) and Canada (e.g., Windy Craggy). Lithogeochemistry on selected mafic volcanic and intrusive rocks indicates that the Narracoota sequence is chemically similar to mafic volcanic sequences hosting VMS mineralisation at Fox Mine in the Lynn Lake belt in northwest Manitoba, Canada. Minor occurrences of felsic rocks in the Narracoota sequence will be analysed to further test possible analogies with the Lynn Lake massive sulfides. Surface geochemistry and mapping delineated significant alteration along the contact zone of the Narracoota and Karalundi sequences. Mapping also indicates that the Narracoota volcanic sequence is itself strongly deformed with evidence for steeply plunging folds within the sequence. Interpretation of structures suggests syn-depositional faults controlled deposition of the sequences and may have acted as feeder zones for hydrothermal fluids. Alchemy drilled a total of 42 RC holes at the Magnus Copper Project in The majority of these holes drill tested VTEM conductors delineated from an interpretation of the VTEM survey and/or areas of multi-element anomalism identified from soil sampling over the Magnus Copper Project.

4 Figure 3: Magnus Copper Project Geological interpretation and location of AMT survey. Exploration has confirmed that the Magnus project is highly prospective for the discovery of copper-gold mineralized systems, although no massive sulfide accumulations were encountered in RC drilling to date, on the basis that: district-scale hydrothermal alteration of mafic volcanic rocks, characterised by multi-element anomalism, in particular, along the contact zone between the Karalundi and Narracoota formations, and anomalous copper and/or gold anomalism has been returned in both surface and drill hole samples. Best values include 807ppm Cu (including 0.17% Cu) in MGRC025, 0.15% Cu in MGRC015, 838ppm Cu in MGRC039 and 838ppm Cu in MGRC038. Several other RC holes returned anomalous copper and/or zinc over multiple metre intervals. Alchemy s drilling program at Magnus has highlighted the requirement to focus on the accurate definition of potential repeats of the DeGrussa copper-gold discovery. Alchemy is committed to thoroughly and systematically exploring the Magnus Copper Project area for both copper-gold mineralization and for gold only mineralized systems. Alchemy remains committed to on-going systematic exploration of its projects in the highly prospective Bryah Basin Alchemy Managing Director Robert Brierley said. These geophysical programs in conjunction with targeted drilling will provide the information needed to unlock the copper-gold potential of the Magnus Copper Project.

5 Alchemy plans to undertake a high-impact reconnaissance drilling campaign over the Magnus Copper Project area during 2011 to follow up on, as yet, untested gold and copper soil anomalies. This campaign may well dovetail with follow-up resource definition drilling programmes at the Hermes Gold Deposit and at the Central Bore Prospect. For further information, please contact: Mr Robert Brierley Managing Director Ph: ENDS ABOUT ALCHEMY RESOURCES Alchemy is actively exploring three key areas; the Magnus Copper Project, the Gascoyne Gold Project, and the Murchison Project. The Magnus Copper Project contains more than 20 kilometres of strike extent of the Narracoota Volcanic Sequence, host to Sandfire s DeGrussa copper deposit. Significant geophysical and geochemical data has been acquired over the project. Alchemy is part way through its evaluation and it believes Magnus is prospective for the discovery of VMS-style copper deposits. The Gascoyne Gold Project includes the Hermes and Wilgeena gold deposits and the Central Bore gold prospect. Hermes has an Indicated Resource of 2.19g/t gold (equivalent to 196,650 ounces of gold) and Wilgeena, located 15 kilometres south of Hermes, hosts an Indicated Resource of 2.34g/t (equivalent to 49,500 ounces of gold). The Murchison Project consists of more than 700 square kilometres of tenements located in the vicinity of several large (>1Moz) gold deposits. The project is being explored for gold and base metals. Competent Persons Statement The information in this report that relates to Exploration Results is based on information compiled by Dr Kevin Cassidy, who is a Fellow of the Australian Institute of Geoscientists and is a full-time employee of Alchemy Resources Limited. Dr Cassidy has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that 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 Resource and Ore Reserves. Dr Cassidy consents to the inclusion in this 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 Mineral Resources at the Hermes Gold Deposit and Wilgeena Gold Deposit is based on information compiled by Mr Simon Coxhell of Coxsrocks Pty Ltd, who is a Member of the Australian Institute of Geoscientists and a Member of the Australasian Institute of Mining and Metallurgy and is a consultant to Alchemy Resources Limited. Mr Coxhell has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that 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 Resource and Ore Reserves. Mr Coxhell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.