Xantho Extension and Cervantes Mineral Resource Statement as at March 31, 2008

Transcription

1 Xantho Extension and Cervantes Mineral Resource Statement as at March 31, 2008 Summary The Xantho Extensions Inferred Mineral Resource is estimated to be: Product Tonnes (Mt) Cu % Pb % Zn % Ag g/t Au g/t Sg Zn Mineralisation Cu Mineralisation Total Mineral resources reported within the 4% Zn and 1% Cu triangulations. No further economic constraints have been for this resource estimate. The Cervantes Inferred Mineral Resource is estimated to be: Product Tonnes (Mt) Cu % Pb % Zn % Ag g/t Au g/t Sg Zn Mineralisation Cu Mineralisation Total Mineral resources reported within the 4% Zn and 1% Cu triangulations. No further economic constraints have been for this resource estimate. The Xantho Extension and Cervantes Inferred Resources are new additions to the Mineral Resources of Oxiana Limited at Golden Grove. Further drilling is required to upgrade this resource. Detail Xantho Extension The Xantho Extension Mineralisation has been estimated to be 1.3Mt of zinc mineralisation grading 1.5% Cu, 0.6% Pb, 11.5% Zn, 28g/t Ag and 0.8g/t Au and 3.8Mt of copper mineralisation grading 3.6% Cu, 1.1% Zn, 32g/t Au and 0.8g/t Au, which has been wholly classified as an Inferred Resource. The estimate is based on approximately 80m spaced sections and 50m RL based plan interpretations of high-grade mineralisation shapes. A zinc mineralisation triangulation defined above a 4% Zn and a copper mineralisation triangulation defined above a 1% Cu cut-off were used in the block model construction with inverse distance grade interpolation. Priorities were used to account for the intersection of triangulations representing mineralisation and barren rhyolite intrusive rocks. Upgrading of the mineral resource category requires further sectional drilling to more clearly define the mineralisation and the geology of the area, particularly the location of the Catalpa fault, which terminates the mineralisation to the south.

2 Setting The Golden Grove operations are located 375 km NNE of Perth and 225 km due east of the coastal port town of Geraldton (Figure 1). Access to site is via sealed roads from Perth to Paynes Find and from Geraldton to Yalgoo. Oxiana Golden Grove Pty Ltd (OGGPL) is a wholly owned subsidiary of Oxiana Limited. The Golden Grove mine comprises underground operations at Gossan Hill and Scuddles. VHMS mineralisation was discovered at Gossan Hill in 1971 and at Scuddles in Scuddles has been producing zinc and copper for over 14 years and Gossan Hill commenced production in The two deposits are within the same stratigraphic horizon but 4km apart. The Xantho Extensions mineralisation is located within the Gossan Hill Mine and is thought to be an extension of the Xantho mineralisation. The Xantho Extension copper and zinc-rich mineralisation is stratabound, being hosted within the Golden Grove 6 (GG6) member of the Golden Grove Formation. The stratigraphic position and style of the Xantho extension mineralisation is comparable with other mineralised lenses within the Gossan Hill mine. Figure 1: Golden Grove Location Plan. Assessment and Reporting Criteria The following table provides a summary of important criteria related to the assessment and reporting of the Xantho Extension mineralisation. Criteria Status Sampling Techniques and Data Drilling techniques Diamond (NQ2) standard tube drilling was used for geological interpretation. Drill sample recovery Core recovery was excellent with 98% recovered. Logging Core was logged on paper using codes matching those within the EXPLORER3 database. A graphic log was produced to aid geological

3 Sub-sampling techniques and sample preparation Quality of assay data and laboratory tests Verification of sampling and assaying Location of Data points Data spacing and distribution interpretation. Core was photographed after being logged by geologist. All core is stored at the Golden Grove core shed. Core is orientated along the apical trace of the reference plane ellipse (typically bedding) and then half-core samples are taken using a diamond core saw. Sample interval density was measured using the gravimetric method. Samples were dried, crushed and pulverised to a nominal 90% passing -75 microns. Sampling of the Xantho Extension followed the same procedures used throughout the Golden Grove mine and is deemed appropriate for the style of mineralisation. The methodology for Zn, Cu, Pb, Fe, S, and Ag assay involves digesting a 0.25g pulverised sample in an aqua-perchloric acid solution and then testing it using inductively coupled plasma (ICP) techniques. For gold, a nominal 50g sample of the pulverised sample is mixed with fluxing agents and fused at high temperatures. The gold is dissolved in aqua regia and the solution analysed by atomic absorption spectrometer. One standard was included every 25 samples sent to the laboratory. No duplicates or blanks were submitted for analysis. No umpire laboratory was used in the verification of these assays. No twinned holes were drilled. All diamond drillholes were surveyed and recorded in the EXPLORER3 database. Drill hole collar coordinates were surveyed in AMG using a DGPS method with a Leica GPS 900 instrument. This method gives an accuracy of 20mm. Surpac was used to convert AMG coordinates to local mine grid. All drillholes have magnetic down-hole surveys taken at 30m intervals using a multi-shot down-hole camera. An azimuth adjustment of o degrees was applied for the conversion to local mine grid. Some diamond holes were partially surveyed by Downhole Surveys Pty Ltd using a HSHA Rate Gyro. Comparison of gyro and magnetic data showed slight differences in dip readings and larger differences in the azimuth readings. In general, magnetic data tended to be biased towards the north; however the difference between the two has been determined to be negligible. Obtaining complete survey data for partially gyroed holes, involved adjusting multi shot magnetic data and adding this onto the last downhole gyro survey point. The adjustment value was calculated from the difference between gyro and magnetic values at downhole intervals of 30m. The difference in values is then averaged to obtain the adjustment. Adjustments to survey data other than conversion to mine grid was exclusive to holes surveyed with the gyro tool. Drill spacing ranges from 100m to 15m, but has approximately been drilled on 80m sections. Drilling density is concentrated along northing 19,200 and between the 8,800RL and 8,700RL.

4 Orientation of data in relation to geological structure Further drilling south of 19,200mN and north of 19,250mN is recommended to better constrain the Catalpa Fault position and northern margin of mineralisation respectively. All holes are drilled from east to west but no expected bias as similar structure to other deposits. The intersection angle is between 30 and 40 degrees through the tabular ore lenses. Audits or reviews No audits or reviews of sampling techniques and data have been undertaken for the Xantho Extended area. Estimating and Reporting of Mineral Resources Database integrity All data is stored in the Explorer3 database. All data is input manually into Microsoft excel spreadsheets set up with key field and data validation processes. Conditional formatting functions and macros reduce input error. Only data signed off as valid on a data upload request form are loaded to the data base. Manual checks performed by the supervising geologist before data is uploaded to the database include; survey depth is less than end of hole depth, S.G min/max is within reasonable limits, RQD values are 100 or less, recovery files are within reasonable limits, and 10% of assays are checked against final hardcopies. Two Holes have been removed from the estimate. RHDD083D1 due to incorrect assay results, this hole does not intersect the mineralisation. RHDD083D5 due to incorrect collar co-ordinates, again this hole does not intersect the mineralisation. Geological interpretation The mineralisation is hosted in Golden Grove Member 6 (GG6) of the Golden Grove Formation. GG6 is the known host of Zinc and Copper mineralisation at Golden Grove. The nature of mineralisation is considered to be stratabound. The style of mineralisation in the Xantho extension is similar to that observed within the other mineralisation and therefore the assumption has been made that mineralisation is continuous between drill holes. The mineralisation is constrained to the south by the Catalpa Fault which strikes NE/SW and dips 85 o towards the east. The fault position and orientation below the 8,900mRL is poorly understood and requires further investigation through drilling and re-logging of holes. Alternate interpretations of the fault position could potentially have implications on the lateral and vertical continuity of the model. The northern boundary of mineralisation coincides with an interpreted offset in the stratigraphy. This could indicate a northern structural control on the mineralisation and potentially have implications on the continuity of the model The mineralisation is cross cut by an NW striking steeply SW dipping rhyolite intrusion. Dimensions The Xantho Extension Copper and Zinc high-grade mineralisation follows the same orientation and are thought to be stratabound. The mineralisation has a strike of approximately 040 o at the top and swings to the north, approximately 010 o as you decrease in depth. The dip and plunge of the mineralisation are sub-vertical. The mineralisation extends from 19,090N to 19,260N, 5,150E to 5,260E and 8,925RL 8,575RL.

5 Estimation and Modelling Techniques Polygons and hence triangulations are based on a 4% Zn cut-off for the zinc shape and a 1% Cu cut-off for the copper shape. Grades below these cut-offs have been included in areas to honour the geology. The Copper mineralisation triangulation has been booleaned against the interpreted Catalpa fault triangulation. A priority system was set up to account for overlapping mineralisation and intrusive rock shapes. The highest priority given to barren intrusive rock shapes, follow by 4% Zn and then 1% Cu mineralisation shapes. Inverse Distance squared (ID2) interpolation was used to estimate Zn, Cu, Pb, Fe, Ag, Au grades and SG values. All variables were calculated as separate estimations An Octant based search was used for all variables. 4 estimation passes were run on all variables with varying search ellipse and octant search constraints. Parameter Run 1 Run 2 Run 3 Run 4 Sample and Octant Parameters Samples Min per Est. Samples Max per Est. Ocatants with samples Samples Min per Octant Samples per Octant Max Search Ellipse Parameters Major axis Semi-major axis Minor axis m assay composites were used, which is the equivalent to the average sample length. Estimation applied composite length weighting. No restriction on the number of samples used per drillhole was used. 9 drillholes were used in the estimation. Tonnes and grade estimates were based on the 4% Zn shape and the 1% Cu shape. No dilution or recovery factors were taken into account. Parent block sizes were set to 5X25X25m and sub-blocking to 1X2.5X2.5m with sub-blocks being assigned parent block grades was used. Moisture Tonnes have been calculated on a dry basis. Cut-off parameters The global in-situ mineralisation tonnes and grade have been estimated form within the >4% Zn mineralisation shape and the >1% Cu mineralisation shape. No other economic factors were taken into consideration. Mining factors or assumptions No mining assumptions have been made.

6 Metallurgical factors or assumptions The metallurgy of the mineralisation has been assumed to be similar to the known mineralisation within the GG6 formation. Bulk density All sampled core has been measured for density. The method used the entire non-dried core sample weighed in air and water. Sample interval density was measured using the gravimetric method and is used to calculate SG. SG is calculated as a variable within the interpolation estimates. Background waste and barren intrusive rocks have been assigned designated SG values in a post block model script. Classification All of the mineralisation has been classified as an Inferred Mineral Resource. Upgrading of the mineral resource category requires further sectional drilling to more clearly define the mineralisation and geology of the area, particularly the location of the catalpa fault which terminates the mineralisation to the south. Additional QA/QC is required to improve the confidence and resource category. Audits or Reviews No external audits or reviews have been carried out on the Xantho Extension Mineralisation. Competent Person Statement This Mineral Resource Statement has been compiled in the accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition). The information in this report that relates to Mineral Resources is based on information compiled by Marcel Van Eck, John De Little and Chevaun Gellie under the supervision of Jared Broome, a full time employee of Oxiana Limited in the position of, Senior Geologist Resource and Mining, Oxiana Limited (Member - Australian Institute Of Geoscientists). All information relating to the Geological interpretation and drilling data, including database validation has been carried out by John De Little under the supervision of Marcel Van Eck. The block model calculations and the Resource Estimation have been carried out by Chevaun Gellie and reviewed by of Jared Broome. Jared Broome named above has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken 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.

7 Cervantes The Cervantes mineralisation has been estimated to be 0.8Mt of zinc mineralisation grading 0.6% Cu, 0.9% Pb, 13.6% Zn, 71g/t Ag and 1.0g/t Au and 1.0Mt of copper mineralisation grading 2.2% Cu, 0.2% Zn, 16g/t Au and 0.3g/t Au, which has been wholly classified as an Inferred Resource. The estimate is based on 3 distinct sections of diamond drilling with accompanying geological interpretation at approximately 22320mN, 22400mN, and 22530mN with 80m RL hole spacing and plan interpretation of high-grade mineralisation contours. Triangulations of zinc ( 4% Zn contour) and copper ( 1% Cu contour) mineralisation were used in the block model construction with grade estimated by inverse distance interpolation. Priorities were used to account for the intersection of triangulations representing mineralised domains and barren dolerite and dacite intrusive rocks. Upgrading of the mineral resource category requires further sectional drilling to more clearly define the mineralisation and the geology of the area. Setting The Golden Grove operations are located 375 km NNE of Perth and 225 km due east of the coastal port town of Geraldton (Figure 1). Access to site is via sealed roads from Perth to Paynes Find and from Geraldton to Yalgoo. Oxiana Golden Grove Pty Ltd (OGGPL) is a wholly owned subsidiary of Oxiana Limited. The Golden Grove mine comprises underground operations at Gossan Hill and Scuddles. VHMS mineralisation was discovered at Gossan Hill in 1971 and at Scuddles in Scuddles has been producing zinc and copper for over 14 years and Gossan Hill started producing in The two deposits are within the same stratigraphic horizon but 4km apart. The Cervantes mineralisation is located beneath the current workings of the Scuddles mine and appears to be a continuation and local thickening of the mineralisation forming the Batavia resource. The Cervantes copper and zinc-rich mineralisation is stratabound, being hosted within the Golden Grove 6 (GG6) member of the Golden Grove Formation. The stratigraphic position and style of the Cervantes mineralisation is comparable with other mineralised lenses within the Gossan Hill and Scuddles mines. Assessment and Reporting Criteria The following table provides a summary of important criteria related to the assessment and reporting of the Cervantes mineralisation. Criteria Sampling Techniques and Data Status Drilling techniques Diamond (NQ2) standard tube drilling was used for geological interpretation. Drill sample recovery Core recovery was excellent with 99.9% recovered. All occurrences of core loss were recorded by Geotechnical personnel. Logging Core was logged on paper using codes matching those within the EXPLORER3 database. A graphic log was produced to aid geological interpretation. Core was photographed after being logged by geologist. All core is stored at the Golden Grove core shed.

8 Sub-sampling techniques and sample preparation Quality of assay data and laboratory tests Verification of sampling and assaying Location of Data points Data spacing and distribution Core is orientated along the apical trace of the reference plane ellipse (typically bedding) and then half cored are taken using a diamond core saw. Sample interval density was measured using the gravimetric method. Samples were dried, crushed and pulverised to a nominal 90% passing - 75 microns. Sampling of the Cervantes mineralisation followed the same procedures used throughout the Golden Grove mine and is deemed appropriate for the style of mineralisation. The methodology for Zn, Cu, Pb, Fe, S, and Ag assay involves digesting a 0.25g pulverised sample in an aqua-perchloric acid solution and then testing it using inductively coupled plasma (ICP) techniques. For gold, a nominal 50g sample of the pulverised sample is mixed with fluxing agents and fused at high temperatures. The gold is dissolved in aqua regia and the solution analysed by atomic absorption spectrometer. One standard was included every 25 samples sent to the laboratory. No duplicates were taken. No blanks were submitted No umpire laboratory was used in the verification of these assays. No twinned holes were drilled. All diamond drillholes were surveyed and recorded in the EXPLORER3 database. Drill hole collar coordinates were surveyed in AMG using a DGPS method with a Leica GPS 900 instrument. This method gives an accuracy of 20mm. Surpac TM was used to convert AMG coordinates to local mine grid. All drillholes have magnetic down-hole surveys taken at minimum intervals of 36m using a multi-shot down-hole camera. An azimuth adjustment of o degrees was applied for the conversion to local mine grid. Some diamond holes were partially surveyed by Downhole Surveys Pty Ltd using a HSHA Rate Gyro. Comparison of gyro and magnetic data showed slight differences in dip readings and larger (up to ~2 o ) differences in the azimuth readings. Partially Gyro surveyed holes were extrapolated to completion depth using magnetic survey increments after evaluating an overall azimuth difference using corresponding down hole trace depths between the Gyro and magnetic surveys, giving the most accurate hole trace possible with the available data. Extrapolation of Gyro survey data was exclusive to only holes surveyed with the gyro tool. Vertical drill spacing ranges from 35m to 140m, but has approximately been drilled on 3 sections situated at 22320mN, 22400mN, and 22530m respectively. The 22320mN drilling section has a reasonably complete vertical spread of target intersections from 8600mRL to 9120mRL. The 22400mN drilling section has intersections between 8650mRL to 8900mRL. The 22530mN drilling section has deeper holes ranging from 8650mRL to 8790mRL with shallower holes being offset 40m south. Drilling has been concentrated around a north plunging elongate zone of which the lower and northern

9 extent is untested. Further drilling between the 22400mN and 22530mN sections, beneath and to the north of the 22530mN section is recommended to better understand the extent of the mineralisation. And to constrain the position and trend of intrusive dacites which remove some of the mineralised zone. Audits or reviews No audits or reviews of sampling techniques and data have been undertaken for the Cervantes deposit. Estimating and Reporting of Mineral Resources Database integrity All data is stored in the Explorer3 database. All data is input manually into Microsoft Excel spreadsheets set up with key field and data validation processes. Conditional formatting functions and macros reduce input error. Only data signed off as valid on a data upload request form are loaded to the data base. Manual checks performed by the supervising geologist before data is uploaded to the database include; survey depth is less than end of hole depth, S.G min/max is within reasonable limits, RQD values are 100 or less, recovery files are within reasonable limits, and 10% of assays are checked against final hardcopies. Data is validated within Explorer 3 using local database rules and accepted codes before being signed off by a geologist as being correct. Geological interpretation The mineralisation is hosted in Golden Grove Member 6 (GG6) of the Golden Grove Formation. GG6 is the known primary host of Zinc and Copper mineralisation at Golden Grove. The nature of mineralisation is considered to be stratabound. The style of mineralisation at Cervantes is similar to that observed within other zones of mineralisation at the Scuddles and Gossan Hill mines and therefore the assumption has been made that mineralisation is continuous between drill holes. The Copper Mineralisation appears to split from a relatively solid high grade zone in the south to a series of stringers in the north. The resource model has included these stringers as separate lenses. The Cervantes mineralisation has been constrained to the south by the extensive (~80mRL spaced) drilling along the drilling section. The upper boundary for the current resource model is reasonably constrained by a barren intersection at each drilling section. Mineralisation is interpreted to plunge approximate 45 o north with the lower and northern extent of this zone remaining untested. The mineralisation is cross cut by (local mine grid) NE striking steeply SE dipping dacite intrusions, the geometry of which is poorly understood and may have significant implications on the size of the Cervantes resource. No major faults have been recognised in the Cervantes area that could truncate the mineral resource or offset geology. Dimensions The Cervantes Copper and Zinc high-grade mineralisation follow a similar trend. The copper is considered to be stratabound within the GG6 layering while the Zinc appears to have a strike of about a 2 o difference. The copper mineralisation trends at about 010 o (local mine grid) in the southern extent of the interpretation, and swings around to approximately 020 o in the north of the resource, the separate stringer zones are parallel with this northern orientation.

10 The main Cervantes copper body extends from 22375mN to 22530mN and from 8640mRL to 8960mRL. The maximum thickness of 23m at around 8850mRL reducing gradually towards the boundaries of the resource model. The northern Copper stringers extending from 22460mN to 22540mN and from 8800mRL to 8600mRL and 8560mRL respectively moving east, and are between 4 and 12m thick. Each has a bulge of approximately 11m at 8650mRL and 8730mRL respectively moving east. The high grade Zinc mineralisation trends approximately 008 o and is interpreted as cross cutting the copper to the north. This mineralisation has a consistent thickness of approximately 3.2m. The zinc mineralisation in the current resource model extends from 22350mN to 22530mN and from 8600mRL to 8960mRL with the upper northern extent retreating southwards with reducing depth to 22450mN at 8960mRL. Estimation and Modelling Techniques Polygons and hence triangulations are based on a 4% Zn cut-off for the zinc shape and a 1% Cu cut-off for the copper shapes. Grades below these cut-offs have been included in areas to honour the geology and as part of overall composites. A low grade copper envelope (>0.1% Cu) was also modelled to be used for internal dilution purposes. A priority system was used to account for overlapping mineralisation and intrusive rock shapes. The highest priority given to barren intrusive shapes, follow by 4% Zn and then 1% Cu shapes. Inverse Distance squared (ID2) interpolation was used to estimate Zn, Cu, Pb, Fe, Ag, Au grades and SG values. All variables were calculated as separate estimations An Octant based search was used for all variables. 4 estimation passes were run on all variables with varying search ellipse and octant search constraints. Parameter Run 1 Run 2 Run 3 Run 4 Sample and Octant Parameters Samples Min per Est. Samples Max per Est. Ocatants with samples Samples Min per Octant Samples per Octant Max Search Ellipse Parameters Major axis Semi-major axis Minor axis m assay composites were used, which is the equivalent to the average sample length. Estimation applied composite length weighting.

11 No restriction on the number of samples used per drillhole was used. 10 drill holes were used in the estimation. Tonnes and grade estimates were based on the 4% Zn shape and the 1% Cu shape. No dilution or recovery factors were taken into account. Parent block sizes were set to 10X25X25m and sub-blocking to 1X2.5X2.5m with sub-blocks being assigned parent block grades was used. Moisture Tonnes have been calculated on a dry basis. Cut-off parameters The global in-situ mineralisation tonnes and grade have been calculated on the >4% Zn mineralisation shape and the >1% Cu mineralisation shape. No other economic factors were taken into consideration. Mining factors or assumptions Metallurgical factors or assumptions No mining assumptions have been made. The metallurgy of the mineralisation has been assumed to be similar to the known mineralisation within the GG6 formation. Bulk density All sampled core has been measured for density. The method used the entire non-dried core sample weighed in air and water. Sample interval density was measured using the gravimetric method and is used to calculate SG. SG is calculated as a variable within the interpolation estimates. Background waste and barren intrusive rocks have been assigned designated SG values in a post block model script. Classification All of the mineralisation has been classified as an Inferred Mineral Resource. Upgrading of the mineral resource category requires further sectional drilling to more clearly define the mineralisation and the geology of the area, particularly the position of the intrusive dacites. Additional QA/QC is required to improve the confidence and resource category. Audits or Reviews No external audits or reviews have been carried out on the Cervantes Mineralisation. Competent Person Statement This Mineral Resource Statement has been compiled in the accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition). The information in this report that relates to Mineral Resources is based on information compiled by Marcel Van Eck, Anthony Reed and Chevaun Gellie under the supervision of Jared Broome, a full time employee of Oxiana Limited in the position of, Senior Geologist Resource and Mining, Oxiana Limited (Member - Australian Institute Of Geoscientists). All information relating to the Geological interpretation and drilling data, including database validation has been carried out by Anthony Reed under the supervision of Marcel Van Eck. The block model

12 calculations and the Resource Estimation have been carried out by Chevaun Gellie and reviewed by Jared Broome. Jared Broome named above has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken 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.