Malachite Resources Limited ABN

Transcription

1 Malachite Resources Limited ABN Suite 1502, Tower B, 799 Pacific Highway, Chatswood NSW 2067 P O Box 5218, West Chatswood NSW 1515 Tel. (02) Fax (02) ASX Announcement Code: MAR 24 February 2010 NCOURAGING NW RSULTS AT JOS GULLY: TOOLOOM GOLD PROJCT SUMMARY Recent exploration drilling at the Joes Gully Prospect has produced some encouraging new results, with gold assays up to 28g/t Au. The elevated gold values occur within broad zones of anomalous gold in quartz vein stockwork systems that point to the upper part of Joes Gully as an exciting target for continuing exploration. An intensive and highly focussed field program is underway, aimed at better defining the Joes Gully target for follow up drilling. Malachite Resources Limited (ASX: MAR) advises that assay results from recent diamond drilling at the Joes Gully Prospect, part of the Company s wholly owned Tooloom Gold Project, have now been received. The results are encouraging, as several significant gold values were recorded, the highest being 28.4g/t Au over a 1m interval. Commenting on the new results, Managing Director, Garry Lowder observed: Joes Gully has tantalised gold prospectors for over a hundred years and Malachite no less so than any of our predecessors. We have long believed that a rich prize may lie hidden at Joes Gully and these new results indicate we are on to something quite exciting. Two holes were drilled at Joes Gully, both of them diamond core extensions to older reverse circulation percussion ( RC ) holes that were drilled from the same pad but in opposite directions. The first hole (JGRD01), oriented roughly west, extended an earlier 169m deep RC hole by a further 205m to a total depth of 374m. The second hole (JGRD02), oriented roughly east, extended another older RC hole from 201m to a total depth of 378m. Figure 1 is a geological map of the Tooloom district, showing the location of recently drilled prospects, including Joes Gully. Figure 2 is a geological map of the Joes Gully prospect area, showing the drill hole locations. Figure 3 summarises the results of drilling at Joes Gully in a cross section through both drill holes. RSULTS Hole JGRD01 targeted a prominent quartz vein stockwork system exposed at surface (Fig. 4) and thought to be a possible source of the numerous gold nuggets recovered from Joes Gully below this point. A quartz vein stockwork system was indeed intersected in the drill hole (Fig. 5), extending from about 148m to about 178m down hole, the first 21m of which was in the earlier RC section and the last 9m in the new diamond core extension. This intersection comprises both sedimentary rocks

2 XPLORATION AT JOS GULLY, TOOLOOM 2 of the mu Creek Formation and intrusive dolerite and diorite dykes. It is distinctly anomalous in gold (Fig. 3), with values in the 0.1 to 0.6g/t Au range. There is also an isolated value of 1.8g/t Au over 2m higher in the RC part of the hole ( m). Anomalous gold is accompanied by weak disseminated and veinlet pyrite, with subordinate pyrrhotite, arsenopyrite and traces of sphalerite. A second zone of mineralisation hosted by sandstone, siltstone and dolerite was encountered deeper in the diamond core part of the hole (Fig. 3), from about 307m to 341m down hole (the section from 326m to 333m was not assayed). Gold was generally at anomalous levels similar to those in the higher zone (up to 0.72g/t Au) except for two distinct highs at to 316.3m (2.20g/t Au) and at 336 to 337m (28.4g/t Au). Minor disseminated sulphide is present in this zone, mainly pyrite and pyrrhotite, with some arsenopyrite and traces of sphalerite, especially within quartz veins. This deeper anomalous zone appears to correlate with a zone of anomalous gold in soil at surface on the ridge above the hole. Weakly to moderately anomalous silver, copper, lead and especially zinc values are associated with the elevated gold results in JGRD01, with zinc reporting a maximum value of 0.2% Zn. Hole JGRD02 targeted a strongly altered and geochemically anomalous diorite intrusive body exposed at surface and thought to be a possible primary mineralising agent. The diorite was intersected in the drill hole from 164m to 210m and was anomalous in gold throughout this length and for a few metres into the adjoining dolerite and sandstone below, with highs of 1.11g/t Au from 190 to 191m and 2.23g/t Au from to m. Strong sericite alteration was reported for the diorite intersection, together with disseminated pyrite and pyrrhotite and traces of chalcopyrite; copper is anomalous in the range ppm Cu throughout the diorite intersection. Below this point there were several further intersections of diorite and dolerite as dykes but mineralisation is weak and only selected sections of the core were assayed, with no significant results. The JGRD02 results suggest that the main target for follow up in the short term lies to the west, or upstream in Joes Gully, in the direction that JGRD01 was drilled, rather than to the east. There are, however, some old mine workings to the east (Pioneer mine, Fig. 2) and reports in old records of a wide zone of anomalous gold in surface sampling in the lower part of Joes Gully. This will be followed up at a later date. INTRPRTATION The Joes Gully drilling results support the view that the diorite intersected in JGRD02 is, or is closely related to, a primary mineralising intrusive source of the gold that was introduced into the nearby passive sandstone and dolerite host rocks, favouring zones of fracturing or structural weakness that allowed quartz vein stockworks to be formed. In turn, it seems likely that the quartz vein stockwork systems seen at surface and in drill core are indeed sources of the coarse grained free gold and gold nuggets recovered in alluvial mining in Joes Gully below the site of drilling (Fig. 6). The spotty nature of the gold grades recorded so far is consistent with expectations, given that the gold from the Joes Gully alluvials is generally coarse to very coarse grained (Fig. 6). It should be understood that it would take only one or two of the larger nuggets illustrated in Figure 6 within a tonne of rock to raise its average grade to economic levels. Statistically the chances of hitting such a nugget in drill core that is only 47mm in diameter are low, but when it happens the gold grade is much enhanced. This is probably the case for the for the interval 307m to 341m in JGRD01, where the gold grades generally are in the range 0.02 to 0.72g/t Au, but jump suddenly to 2.20 g/t Au at m and to 28.4g/t Au at m. The presence of coarse free gold can be a real plus at the production stage, allowing low cost gravity methods of recovery to be employed. At the exploration stage, the presence of coarse gold can

3 XPLORATION AT JOS GULLY, TOOLOOM 3 present difficulties in measuring gold grades in mineralised drill core reliably. This is a well known problem in gold exploration. Detailed drilling, especially larger diameter drilling, can improve the statistics but in the end, some form of bulk sampling is usually required. Fortunately for Malachite, the zones of interest in the Joes Gully drill holes correlate fairly well with surface features, such as the outcropping quartz vein stockwork illustrated in Figure 4, that can be accessed for bulk sampling purposes. Previous sampling of the outcrop shown in Figure 4 is minimal, comprising just one or two conventional, 2kg rock chip samples; these were weakly anomalous in gold. A new sampling program, involving both larger rock chip samples and carefully targeted selective sampling of the quartz veins themselves (the likely direct gold host) is planned for the near future. Samples will be assayed by techniques aimed at more reliably measuring coarse gold, including application of the Bulk Leach xtractable Gold ( BLG ) and screen fire assay methods. This work will be part of some very focussed follow up at Joes Gully, investigating both the outcropping quartz veins in the Kenny s Creek branch of Joes Gully, where JGRD01 was drilled, and the next few hundred metres of Joes Gully above the junction with Kenny s Creek, where highly anomalous gold in previous stream sediment sampling has yet to be explained and there is a soil gold anomaly above the best intersection in JGRD01. The stream sediment results imply additional sources of gold upstream from where the drilling has taken place and very detailed sampling and mapping will be undertaken there in the next few weeks, aimed at identifying new gold ore targets at Joes Gully. HISTORICAL NCOURAGMNT Malachite draws considerable encouragement from the long history of mining at Joes Gully, including both hard rock and alluvial mining. The gold recovered from alluvial mining that was still going on in the late 1990s, as illustrated in Figure 6, is characteristically angular, implying a short distance of travel, and very commonly composite in nature, intergrown with vein quartz. The composite nuggets, like those shown in Figure 6, clearly indicate that gold occurs in coarse grained form at the primary source (or sources). Indeed, negative imprints of formerly intergrown hexagonal quartz crystals can be seen in the gold component of some of the nuggets illustrated in Figure 6. ven as far back as 1911 Joes Gully was seen as an attractive gold prospect, as demonstrated by the following extract from the Annual Report of the NSW Department of Mines for that year: The Three Jacks Gold Mining Company, Joe s Gully, parish of Clarence, near Tooloom, is held and worked by a small local syndicate. Some very rich patches of gold have been obtained from time to time in this locality. The work carried on at present is the driving of a tunnel from the south side of Joe s Gully to intersect a flat reef running through the hill, from which a good deal of gold was obtained by different parties of miners in years past. Joe s Gully was worked for alluvial in years past, and yielded a great quantity of gold, and it is supposed that this reef, which is being driven for, is one of the sources from which the gold in Joe s Gully was derived." 1 The Three Jacks Mine is located close to the outcropping quartz vein stockwork illustrated in Figures 3 and 4 and is just below the drill pad used by Malachite for its drilling at Joes Gully (Fig. 2). CONCLUSION Joes Gully has tantalised gold prospectors for a long time and Malachite no less so than any of its predecessors. Both the historical data and the results of recent drilling support the Company s view that a substantial deposit containing coarse free gold hosted by quartz vein stockworks may be 1 Annual Report of the Department of Mines, New South Wales, for the year 1911, p. 22.

4 XPLORATION AT JOS GULLY, TOOLOOM 4 present at Joes Gully. A highly focussed field program has commenced with the aims of more effective testing of outcropping quartz veins and the identification of possible additional sources of gold above Kenny s Creek in Joes Gully. A new round of carefully targeted drilling is expected to follow the current field work. For further information please telephone Garry Lowder on or the company at: info@malachite.com.au G. G. LOWDR Managing Director 24 February COMPTNT PRSON STATMNT The information in this report that relates to xploration Results is based on information compiled by Dr Garry Lowder and Mr Russell Meares, who are a Fellows of the Australasian Institute of Mining and Metallurgy. Dr Lowder and Mr Meares are full time employees of Malachite Resources and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 dition of the Australasian Code for Reporting of xploration Results, Mineral Resources and Ore Reserves. Dr Lowder and Mr Meares consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. ABOUT MALACHIT Malachite Resources is a Sydney-based resources company that listed on the ASX in November 2002 and is an active explorer for gold, silver, tin, copper and associated base metals in eastern Australia. The Company s key assets are: CONRAD: The Conrad Silver Project is located 25km south of Inverell in northern NSW. The Company is evaluating the scope to reopen the old Conrad mine, which has had two previous periods of production but has not operated for over 50 years. Drilling at Conrad by Malachite has intersected narrow high grade, massive sulphide, silver-rich base metal veins, like those mined in the past, and wide zones of lower grade, disseminated and stockwork veined, polymetallic mineralisation. At current prices, silver represents 50% of total recoverable metal value in the Conrad ore and tin, copper, lead and zinc make up the balance. The currently defined mineral resource at Conrad contains approximately 10Moz of silver, or 19Moz of silver equivalent. This resource remains open along strike and at depth. Malachite also has excellent exposure to tin, through its LSMOR Project, located 20km east of Inverell, where the Company is considering the possible development of a paleo-alluvial tin deposit, known as the Karaula Lead, at the Newstead Prospect. The Karaula Lead appears to have the potential to support a small surface mining operation, which could be developed with low capital and operating costs and generate useful cash flow for the Company. Work is now underway to better quantify the Karaula Lead deposit, determine an appropriate processing route and assess the economic viability of mining. The TOOLOOM GOLD PROJCT also in northeastern NSW, is based on a forgotten goldfield rediscovered by Malachite. Numerous prospects have been identified, including a significant greenfields discovery called Phoenix. The company is systematically exploring Phoenix and the other prospects at Tooloom, which are intrusion-related and have major ore potential. Current focus is on the Joes Gully prospect, where recent drilling has produced encouraging results, with gold assays up to 28g/t Au within quartz vein stockwork systems that are thought to contain coarse grained free gold.

5 ± ' ' 0 2km 28 35'S PHONIX L 5714 L 6263 K JOS GULLY K LGND Hardrock workings Alluvial workings Road River or creek L 6263 (Tooloom) L 5714 (Rivertree) GOLOGY Quaternary Undifferentiated fluvial deposits K K BACK CRK 28 40'S Tertiary Volcanics Late Triassic - Jurassic Clarence-Moreton Basin sequence arly Triassic Moonbi Supersuite: Cullens Ck & Rivertree Granite, Morgans Ck & Stanthorpe Monzogranite, undiff. diorite intrusions Late Permian - arly Triassic Tooloom Diorite Suite Paddys Flat PIN GULLY Clarence River Supersuite: Jenny Lind Granite, Koreelah Ck Granodiorite, Bruxner Adamellite Permian Wandsworth Volcanic Group: Gilgurry Mudstone, Drake Volcanics, Razorback Ck Mudstone Late Carboniferous - arly Permian mu Creek Formation kilometres Figure 1. Geological map of the Tooloom Gold Project, showing prospect locations, including Pine Gully, Back Creek and Joes Gully, which are targets for the current phase of drilling, and Phoenix, which has been drilled previously

6 JGRD mn mn creek m old mine working track interpreted boundary of rock unit (position approximate) drill hole showing hole number and downhole trace Dolerite Diorite LGND mu Creek Formation - sandstone/siltstone m m m Diorite Dam KNNY'S KNNY'S CK CK CK Rise and Shine - JGRC05 Three Jacks K JGRD01 - JGRD02 Wakey Wakey m - JGRC m Pioneer metres mn JGRC03 - JGRC04 MALACHIT RSOURCS LIMITD TOOLOOM PROJCT JOS GULLY PROSPCT Geological Interpretation Plan mn Scale: 12,500 Date: February 2010 Figure 2

7 W LGND JGRD02 JGRD01 Dolerite Diorite mu Creek Formation sandstone/siltstone Downhole Assay Au (g/t) Histogram 1.1g/t 1.8g/t 0.6g/t COR RC RC COR 2.2g/t <= 5% Qtz stockwork 374.5m 2.2g/t 378.2m MALACHIT RSOURCS LIMITD 28.4g/t TOOLOOM PROJCT JOS GULLY PROSPCT Drill Hole Cross Section JGRD01, JGRD02 Scale: 1:2385 Date: February 2010 Figure 3

8 XPLORATION AT JOS GULLY, TOOLOOM 8 Figure 4: Stockwork quartz veins at surface in Kenny s Creek, near its junction with Joes Gully Figure 5: Stockwork quartz veins and later, cross cutting quartz carbonate sulphide veins in drill hole JGRD01, from within the upper anomalous gold zone Figure 6: Composite gold/vein quartz nuggets and coarse grained free gold from alluvial mining in Joes Gully, ca $1 5c coin for scale $1 coin for scale