QUARTERLY ACTIVITIES REPORT FOR PERIOD ENDED 31 DECEMBER 2011

Transcription

1 QUARTERLY ACTIVITIES REPORT FOR PERIOD ENDED 31 DECEMBER 2011 ASX Code: AUC Directors: Robert Pett Chairman and CEO Simon Trevisan Executive Director Richard Lockwood Non-Executive Director Christopher Kelsall Non-Executive Director Management: Mark Di Silvio CFO & Company Secretary Craig Hall Exploration Manager Share Registry: Security Transfer Registrars 770 Canning Highway, Applecross WA 6153 Issued Capital: Ordinary Shares: 118.5M Listed Options: 83.2M Unlisted Options: 7.0M Key Shareholders: CQS: 11% JP Morgan: 8% Capital Group: 4% Fidelity: 3% Investor Relations: Robert Pett, Chairman T: E: rpett@ausgoldlimited.com Victoria Thomas, Six Degrees Media T: E: victoria@sixdegreesmedia.com.au HIGHLIGHTS Exploration: Major drill program commenced and focussed on 4 kilometre Jinkas Corridor within Katanning Gold Project Corporate: Significant reverse circulation ( RC ) drill results within the Jinkas Corridor, extends known gold mineralisation along strike and at depth Drilling confirms potential for stacked ore bodies within the Jinkas Corridor with at least three stacked gold lodes identified A new 200 kilometre mineralised greenstone belt confirmed from advanced work on 7,500 square kilometres of regional tenure at Katanning Potential for new Archaean gold camp recognised with 54 new gold targets generated in addition to Katanning Gold Discovery 2012 targeted exploration campaign to test identified gold anomalies over 200 kilometre tenement area Significant Copper-Nickel mineralisation intersected at Yamarna Identification of significant gold and copper targets at Cracow $8.2M cash on hand as at 31 December Appointment of Mr Mark Di Silvio as CFO & Company Secretary. Commenting on the quarterly results, Mr Robert Pett, Chairman and CEO of Ausgold Limited said: In addition to significant progress at our Katanning Gold Project, advanced work within Ausgold s regional tenure has confirmed the presence of a major new mineralised greenstone belt which has attributes of the Giant Archaean gold camps with potential to host multi-million ounce deposits. This represents a major milestone for Ausgold. 80 Churchill Avenue, Subiaco, Western Australia 6008 T F E info@ausgoldlimited.com W

2 SUMMARY OF EXPLORATION ACTIVITIES Ausgold Limited ( Ausgold or the Company ) (ASX: AUC) is pleased to release its Quarterly Activities Report for the period ended 31 December Katanning Gold Project, Western Australia (AUC 100%) The Katanning Gold Project is located 275 kilometres southeast of Perth. Ausgold holds 7,500 square kilometres of tenure within the region (see Figure 1). Figure 1: Location map of Ausgold Katanning Gold Discovery relative to Perth and Newmont s Boddington Gold Mine Ausgold s exploration at Katanning has identified a continuous gold mineralised corridor with a strike length in excess of 20 kilometres which constitutes the Katanning Gold Project. This zone is currently being drill tested within the Jinkas Corridor (refer Figure 2).

3 RC AND DIAMOND DRILLING OF JINKAS CORRIDOR Drilling during the quarter focussed on the Jinkas Corridor, a 4 kilometre section of the Katanning Gold Project between Fraser in the south, and Olympia and Jackson prospect to the north (refer Figure 2). Drilling commenced in this corridor in November 2011 with up to five RC rigs and a diamond rig. The program consists of approximately 35,000 metres drilling and is targeting the continuity of high grade gold mineralisation within these zones along strike and at depth. The Jinkas Corridor is now recognised to consist of at least three stacked gold mineralised zones, namely the Jinkas, White Dam and Jackson lodes. These gold mineralised zones occur in close proximity to the foot and hanging wall of two adamellite sills. Distinct differences in gold mineralisation are now being recognised between these zones, in particular in respect of their chemical composition. During the quarter the Company announced significant gold assays returned from its RC drilling, including: 5.57 g/t Au from 62m in Hole BSRC g/t Au from 133m and 3.04 g/t Au from 43m in Hole BSRC g/t Au from 81m and g/t Au from 93m in Hole BSRC g/t Au from 121m in Hole BSRC g/t Au from 149m and 14.4 g/t Au from 82m in Hole BSRC g/t Au from 54m in Hole BSRC g/t Au from 221m in Hole BSRC g/t Au from 131m Hole BSRC g/t Au from 101m in Hole BSRC g/t Au from 85m in Hole BSRC0500 Drilling in the Jinkas lode now confirms the continuity of gold mineralisation at least 120 metres north of previous drilling. Importantly, this drilling continues to intersect high grade gold mineralisation along strike, down dip and down plunge at Jinkas. The deeper intersect in Hole BSRC0451 of 3.67 g/t Au from 221 metres is significant as it demonstrates coherent high grade gold mineralisation deeper in the system (refer Figure 5), and suggests the possibility of multiple high-grade shoot development within the corridor. Drilling advanced generally on 40 metre section lines with drill holes 40 metres apart with a number of deep holes to scope mineralisation at depth. During the quarter a number of holes were drilled in the White Dam lode targeting the hanging wall of the adamellite west of Jinkas. High grade gold mineralisation continued to be intersected including 5.88 g/t Au and 3.62 g/t Au from holes BSRC0436 and BSRC0434. These holes follow on from recently reported high grade intercepts in this location including 7.86 g/t Au in BSRC0435. This zone is now referred to as the White Dam lode. This discovery confirms the potential for stacked lodes and additional high grade shoots within the Jinkas Corridor.

4 20 KM Figure 2: Simplified geology map of the Katanning Gold Project, a 20km long corridor hosting Ausgold s Katanning Gold Discovery. Areas of known mineralisation or significant anomalism are indicated in red.

5 Figure 3: Katanning Gold Project location plan with simplified geology showing areas of current activity RC drilling in the southern portion of the Jinkas Corridor was conducted at Fraser to follow up on shallow gold mineralisation identified from aircore drilling. This drilling intersected coherent primary gold mineralisation in two positions on the western side of the Jinkas Corridor on the hanging wall of the Jinkas adamellite (analogous to the White Dam lode to the north) and on the footwall of the western adamellite analogous to the Jackson zone.

6 Figure 4: Jinkas Section 18960mN, highlighting results to date Figure 5: Jinkas Section 18900mN, testing deeper mineralisation within the system

7 Drilling currently completed does not test the southern strike extension of the Jinkas lode. Drilling to target this zone and test for high grade shoot development is intended during the first quarter of Large diameter diamond drilling of the northern strike of the Jinkas deposit commenced during November, primarily to provide metallurgical, geotechnical, geological and bulk density information to the project. Two PQ and one HQ size holes have been completed to date, and visually impressive mineralisation has been intersected in all holes. Strong sulfide mineralisation (major Pyrrhotite and Pyrite, minor Chalcopyrite) has been encountered in all holes, with visible coarse gold encountered over several metres in the last hole completed, BSDD004 (refer Figure 6). Figure 6: Section of White Dam Lode showing high grade mineralisation SOIL GEOCHEMISTRY Partial leach ionic soil geochemistry is proving to be an effective exploration tool in identifying gold mineralisation at Katanning and is being used both to identify gold mineralised zones and targets within the Katanning Project and to explore and extend of size of the gold system at a Katanning. It is also being used to identify different styles of gold mineralisation now recognised within the project area, define additional gold targets, identify prospective geology, map associated structures and identify potentially mineralised blind magmatic intrusions. A major soil sampling program is currently underway with the aim of covering the entire project area with soil geochemistry over a 20 kilometre strike length of the known gold mineralised corridor. During the quarter over 2,000 samples were collected with a further 1,500 due for collection early the next quarter. The full results of this program will be announced once sampling activities and analysis is complete.

8 BACK LOG OF DRILLING RESULTS With a slowdown in drilling during the Christmas period as drillers took leave there was also a corresponding reduction in assay completions leading to a back log of drilling results. These are expected to be available in early February and will be released as soon as practicable. Figure 7: Visible gold in BSDD004 at 86m. Diameter of 10c piece is 23.6mm. FORWARD EXPLORATION PROGRAM AT KATANNING The exploration program at Katanning Gold Project over the next quarter will consist of RC, diamond, and aircore drilling in addition to soil geochemistry and geophysics. The aim of the program is to establish an initial JORC resource and drill for gold ounces within existing targets and at the same time extend the overall size of the gold system at Katanning and generate new targets for RC drilling. RC and diamond drilling will continue to be focused on the Jinkas Corridor and consist of over 35,000 metres of drilling. Once this drill program is complete a JORC resource will be calculated. Aircore drilling will be conducted on new gold anomalies identified from soil geochemistry starting at Lukin Prospect (see Figure 8). Soil geochemistry will continue with the aim of covering the whole 20 kilometres of the project area and beyond. A gravity survey will be conducted to better define the potential magmatic intrusions to the east of the main corridors identified from multi element geochemistry.

9 Figure 8: Elements of the near-term Katanning Gold Project exploration program

10 KATANNING REGIONAL PROJECT, Western Australia (AUC 100% & Joint Venture) Ausgold has a tenement position of 7,500 square kilometres in south Western Australia covering a strike length of 250 kilometres east and south of the 30 million ounce Boddington Gold Deposit and surrounding the Katanning Gold Discovery. NEW MAJOR GREENSTONE BELT CONFIRMED During the quarter geological interpretation was conducted using new generation geophysical and geochemical data. Coupled with an exhaustive review of all previous exploration data, the collection by Ausgold of over 1,000 stream samples has confirmed the presence of a major new mineralised greenstone belt 200 kilometres in length similar to other greenstone belts within the Yilgarn Province and with attributes of the Giant Archaean gold camps (eg. Kalgoorlie, Timmins and Ashanti). Greenstone lithologies or derivatives thereof typical of the Yilgarn Craton have been geochemically mapped over 200 kilometre strike length, along with crustal scale structures, probable thermal centres capable of driving large alteration systems and a large endowment of gold targets with multiple styles of mineralisation have also been recognised. Recognition of this new belt now provides the Company with the opportunity to explore for various styles of gold and base metal mineralisation that typically occur in greenstone belts elsewhere in the Yilgarn block (eg. Kalgoorlie, Boddington). ADDITIONAL 54 GOLD TARGETS GENERATED An additional 54 gold and associated base metal targets have been generated following a regional survey collecting over 2,000 geochemical samples outside of the Katanning Gold Project and supported by fresh geophysical analyses that has also produced a new geological interpretation for the belt. These are now being ranked and prioritised together with other anomalies for RC drilling early in GEOLOGICAL INTERPRETATION Geological interpretation using new generation geophysical and geochemical data, coupled with an exhaustive review of all previous exploration data has allowed reinterpretation and production of a revised geological plan. The regional package exhibits a complex structural setting comprising crustal scale faults to tap mantle fluids, the recognition of probable thermal centres capable of driving deep fluid circulation cells resulting in large alteration systems, and distinct chemical variations within the rock sequences, combined with specific structural locations that provide a focus for mineral accumulation. Exploration confirmed that such areas are more prevalent than first thought within the tenement block, and are directly associated with significant and cohesive gold and base metal rock, soil and stream anomalies generated by Ausgold sampling.

11 Collectively these attributes suggest that Ausgold s tenements host a package of rocks derived directly from original greenstone hosts, with a structural setting similar to that of other major gold producing greenstone belts (see Figure 9). Regional ionic stream sampling identified 54 catchment positions (outside of the Katanning Gold Project) which are clearly anomalous in gold and base metals (Refer Figure 10). Importantly key signature elements diagnostic of two different gold mineralisation styles recognised at the Katanning gold project, were also identified coincident with, and in support of the catchment anomalies. Integration of regional stream and soil geochemistry with geophysical data continues and is expected to contribute to drill target ranking and the regional genesis study. FURTHER REGIONAL STUDIES Further interpretation of new regional data is underway via a study to place the Company s Katanning project in context with other greenstones hosting giant gold deposits. The study draws on findings delivered from the Predictive Mineral Discovery Cooperative Research Centre (pmd*crc) study completed in The seven year CRC project involved mining companies, universities and government, and researched the genesis and settings of giant gold deposits in the Eastern Goldfields (Kalgoorlie). A number of critical parameters identified from the pmd*crc study have been identified in Ausgold tenements, work is continuing. This greenstone belt is almost owned 100% by Ausgold and the Company believes there is demonstrable potential for multi-million ounce deposits within a major new Archaean gold camp. Quadrio JV (Ausgold earning 60%) The regional Aircore drilling program continued during the quarter within the Quadrio Joint Venture where Ausgold has now earned 60% of the joint venture interest. The planned drilling work is complete at the Bullock Pool and Nanicup Bridge Prospect, located south of and to the south east of the Katanning Gold Discovery respectively. Analytical data from this program continue to be received and are being evaluated; however initial data has defined several areas with anomalous gold values worthy of further work marking extensions to known mineralisation and new targets.

12 Figure 9: Setting of the Katanning Gold Project in relation to recognised greenstone belts and gold deposits

13 Figure 10: Katanning Regional Project tenement holding with greenstone derivative lithologies and gold targets highlighted

14 Cracow, Queensland (AUC 100%) Cracow style epithermal gold targets identified with coincident multi-element data including silver, copper and molybdenum. Mineralised porphyry intrusion targets characterized by copper, molybdenum, silver, lead, zinc and cadmium. Key alteration minerals characteristic of mineralized epithermal systems identified. The Cracow project covers 1,200 square kilometres enclosing highly prospective Camboon Volcanics, host to the greater than 1 million ounce Cracow gold mine 16km south of Ausgold s area of interest (Refer Figure 11). The project is located 375 kilometres northwest of Brisbane and is well serviced by major roads and the Theodore township. The ground is considered highly prospective for repetitions of the neighbouring Cracow epithermal gold ore body, along with polymetal (gold, copper, silver, lead, and zinc) intrusion related porphyry systems (e.g. Kidston deposit). During the quarter a helicopter-supported stream sediment sampling and reconnaissance soil and rock chip sampling was completed. 940 stream sediment samples have been collected over the project to date, along with 98 soil samples and 73 rock samples. Interpretation is continuing. Reconnaissance geological mapping investigating five anomalous gold and multi-element catchment targets located significant areas showing surface quartz/sericite/sulfide alteration, sulfide stockworks, quartz breccias and silica veining, all considered characteristic of epithermal systems capable of hosting substantial gold deposits. The mapping and initial geochemical results indicate that Ausgold s tenement have identical geological setting and chemical/alteration characteristics to that of other major epithermal gold systems including the Cracow gold field immediately south. The proposed 2012 program includes: 1. Finalisation of interpretation of the geochemical and geological data 2. Petrological study to determine position within the intrusive systems already identified 3. Ground and airborne magnetic and conductivity geophysical surveys 4. Detailed soil sampling within the anomalous catchments 5. Structural analysis 6. Targeted RC drilling

15 Figure 11: Cracow Project tenement holding underlain by magnetic imagery with new targets highlighted Yamarna, Western Australia (AUC 100%) The Yamarna Project is located approximately 125 kilometres north-east of Laverton in central Western Australia on Exploration Licence ( EL ) 38/2129. It comprises approximately 600 square kilometres of prospective ground over the eastern-most Archaean greenstone belt of the Yilgarn Craton the Yamarna belt. The Winchester Copper-Nickel Discovery was originally identified from Ausgold s 2010 drilling campaign which returned a significant copper, nickel and cobalt interval, reported as Copper Equivalent (Cu Eq*) values below: 1.55% Cu Eq from 27m (Hole YMRC003)

16 Eight holes were completed during the December 2011 quarter for 2,462 metres at three main areas of focus, namely Winchester and electromagnetic ( EM ) anomalies Yam09 and Yam19. All holes were cased for downhole EM testing and the Company is currently awaiting final results from the program. Significant assays received to date include: 0.63% Cu, 0.20% Ni, and 0.02% Co (1.24% Cu Eq) from 88m in Hole YMRC % Cu, 0.21% Ni, and 0.02% Co (1.16% Cu Eq) from 99m in Hole YMRC % Ni from 5m (Hole YMRC012) (*Cu Eq results based on respective values of Copper USD$6,500/t, Nickel USD$17,500/t and cobalt USD$30,000/t.) Mineralisation in the first two holes was characterised by disseminated chalcopyrite-pentlanditepyrite (up to 10%) within a metagabbro, sitting above a black shale unit (refer Figure 12). Figure 12: Winchester Prospect Discovery Section, Yamarna The eighth hole in the current program, YMRC017 intersected similar geology but no mineralisation of significance. Two holes (YMRC012 & 013) were drilled at two proximal EM targets at Yam09. Hole YMRC012 intersected a large anomalous zone of nickel mineralisation over 150 metres at just under 0.1% Ni from approximately 5 metre depth (refer Appendix 2). Hole YMRC013 was a short (100 metre) hole designed to test a relatively shallow conductor, which successfully intersected a small band of sulfide mineralisation with no economic metal concentrations. At target Yam 19, two holes (YMRC 015 & 016) were completed. Both completed holes intersected a significant alteration package thought to be indicative of a large alteration system, but no economic mineralisation was returned from Hole YMRC016.

17 It is the Company s intention to drill adjacent sections at Winchester during the 2012 field season to determine the extent of the mineralising system. In addition, Ausgold is planning drilling solutions for targets generated from the recently completed downhole EM surveys. The Company believes that the recent work at Yamarna has enhanced the prospectivity of the immediate area and region for Copper-Nickel-Cobalt and Nickel Sulfide mineralisation and that further exploration will demonstrate this more conclusively. Corporate Activities Ausgold announced the resignation of CEO Mr Benjamin Bell during the quarter. Whilst the Company is seeking to appoint a high calibre successor to lead Ausgold through its next phase of exploration and development, Ausgold s current Chairman, Mr Robert Pett, has assumed CEO responsibilities during this interim period. Also during the quarter, the Company appointed Mr Mark Di Silvio to the role of CFO and Company Secretary. Mr Di Silvio s extensive experience in gold mining and development compliments Ausgold s continued path of growth in exploration and development. As at 31 December 2011, the Company held a cash balance of $8.2M. The Company remains debt free and unhedged. CONTACT DETAILS Registered Office 80 Churchill Avenue Subiaco WA 6008 Tel: Fax: For further information, shareholders and media please contact: Robert Pett Chairman Ph: rpett@ausgoldlimited.com Victoria Thomas Six Degrees Investor Relations Ph: victoria@sixdegreesmedia.com.au or visit:

18 About Ausgold Limited Ausgold Limited was formed to utilise some of the latest innovations in geosciences to target areas in Australia prospective for the discovery of gold and copper-gold ore bodies. This work was initially carried out by the Centre for Exploration Targeting, an internationally renowned group affiliated with the University of Western Australia and Curtin University, using a team of highly qualified geoscientists with extensive experience in gold mineralised systems and exploration targeting. The result was Ausgold's acquisition of tenements covering 17,500 km² of ground prospective for gold and copper mineralisation. These tenements cover a range of mineralised systems in known and emerging mineral provinces throughout Australia, where potential exists for new gold and copper discoveries. Ausgold has identified a major new greenstone belt 200 km in length within south Western Australia similar to other greenstone belts in the Yilgarn and with attributes of other Giant Archaean gold camps. This successful targeting by Ausgold has led to the unearthing of the Katanning Gold Discovery, 275 km south west of Perth. The discovery sits within the greater Katanning Regional Project covering an impressive 7,500 km² in the Yilgarn to the southeast of Newmont's Boddington Gold Mine. The Katanning Gold Discovery demonstrates similar geological and structural characteristics to Newmont s sizeable 26 million ounce Boddington Gold Mine, and also shows the potential to host its own multi-million ounce deposit. A major reverse circulation drilling program undertaken by Ausgold has identified multiple gold mineralised horizons at Katanning within a corridor having a strike length in excess of 20 kilometres. To date, three main zones have been uncovered within the confines of the Katanning Gold Discovery, those being Jackson, Jinkas and Dingo with gold mineralisation at a fourth prospect, Fraser, also being discovered. In addition to the burgeoning Katanning Gold Discovery and Boddington South Exploration Project, highly prospective ground has also been identified and acquired at Doolgunna Station, Yamarna, Paterson and Cracow. Competent Persons Statement The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Craig Hall, who is a Member of the Australian Institute of Geoscientists. Mr Hall is the Exploration Manager and fulltime employee of Ausgold Limited, and has sufficient experience relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Hall consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Quoted co-ordinates are in MGA Zone 50 GDA94. All holes are drilled on an azimuth of 243 and dip at -60 degrees unless otherwise noted. Intercepts calculated using a 0.5 g/t Au lower cut, no upper cut, and a maximum 2 metre internal dilution. All assays determined by 1 metre split samples using fire assay by Ultra Traces and Quantum Analytical Services in Perth, Western Australia.

19 Appendix 1: Summary of New RC Drill results, all holes 60 degree inclined unless indicated PROSPECT SECTION HOLEID Easting Northing RL Hole Depth From To Interval Au g/t JINKAS BSRC NSI JINKAS BSRC JINKAS BSRC JINKAS BSRC JINKAS BSRC JINKAS BSRC JINKAS BSRC JINKAS BSRC inc JINKAS BSRC NSI vertical JINKAS-WD BSRC JINKAS-WD BSRC vertical JINKAS-WD BSRC

20 PROSPECT SECTION HOLEID Easting Northing RL Hole Depth From To Interval Au g/t JINKAS-WD BSRC JINKAS-WD BSRC inc JINKAS-WD BSRC JINKAS BSRC JINKAS BSRC NSI JINKAS BSRC inc JINKAS BSRC inc JINKAS BSRC

21 PROSPECT SECTION HOLEID Easting Northing RL Hole Depth From To Interval Au g/t JINKAS BSRC inc inc JINKAS BSRC JINKAS BSRC JINKAS BSRC JINKAS BSRC DINGO BSRC FRASER BSRC FRASER BSRC FRASER BSRC NSI FRASER BSRC FRASER BSRC

22 PROSPECT SECTION HOLEID Easting Northing RL Hole Depth From To Interval Au g/t FRASER BSRC inc FRASER BSRC FRASER BSRC FRASER BSRC FRASER BSRC FRASER BSRC FRASER BSRC

23 PROSPECT SECTION HOLEID Easting Northing RL Hole Depth From To Interval Au g/t FRASER BSRC FRASER BSRC FRASER BSRC Appendix 2: Summary of Yamarna RC Drill Results (assays are multi-acid digest with ICP finish) HOLE ID EAST NORTH RL Azi Dip Depth From To Cu Ni Co Width Cu Eq YMRC YMRC YMRC NSI YMRC YMRC NSI YMRC NSI YMRC NSI YMRC NSI YMRC NSI