September 2010 Quarter Activities Report

Transcription

1 September 2010 Quarter Activities Report ABOUT ARC EXPLORATION LIMITED Formed in 1983, Arc Exploration Limited (ASX Code: ARX) is an Australian listed gold company focused on exploration in Indonesia. The Company has a 95% joint venture interest in two projects with PT Sumber Mineral Nusantara. These are the Trenggalek tenement located in East Java and the Bima tenement located in East Sumbawa. Both projects lie on the Sunda-Banda magmatic arc and are prospective for high-grade epithermal gold-silver vein deposits and porphyry copper-gold deposits. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. Arc Exploration Limited ABN Suite 1502, Level 15 Tower B 799 Pacific Highway Chatswood NSW 2067 AUSTRALIA Tel: info@arx.net.au Exploration - Indonesia Scout Diamond drilling continued on the Trenggalek Project in East Java. A total of 2,161 metres was drilled in 19 inclined holes during the quarter. Mineralised intercepts include: 1.9 m at g/t gold & 293 g/t silver within 6.6 m at 4.89 g/t Au & 149 g/t Ag intersected from m down-hole in TRDD-35 on Kenong vein at Kojan m at 9.49 g/t gold & 144 g/t silver within 1.85 m at 4.90 g/t Au & 87 g/t Ag intersected from 71.7 m down-hole in TRDD-42 on Kenong vein at Kojan. 1.0 m at 10.9 g/t gold & 304 g/t silver and 2.0 m at 8.73 g/t gold & 48 g/t silver within m at 3.19 g/t Au & 60 g/t Ag intersected from 13.4 m down-hole in TRDD-37 at Buluroto. 2.0 m at 6.75 g/t gold & 46 g/t silver within 6.3 m at 2.77 g/t Au & 23 g/t Ag intersected from 30.7 m down-hole in TRDD-39 at Buluroto. New gold prospect, Baku, identified at Bima in East Sumbawa. Up to 12m at 1.7 g/t gold including 1m at 10.2 g/t Au obtained in rock chip samples taken within an extensive gold soil anomaly centred on an altered porphyry intrusion. Potential for bulk tonnage gold and deeper porphyry copper-gold targets are indicated by these early results. ARX Anglo American Strategic Alliance to explore for copper and gold in Papua was extended to Nearly 1,000 km 2 of highly prospective exploration ground, forming the Aisasjur Project in West Papua, is secured under an Exploration IUP. Results of exploration completed to date support the potential for shallow bulk-tonnage gold and deeper porphyry copper-gold deposits. Corporate The Company successfully raised $1.195 million by way of a Placement of 59,750,000 shares at 2.0 cents during the quarter. The funds raised through the Placement will primarily be applied to advance the Company s Indonesian exploration strategy with detailed surface work at Trenggalek and Bima to identify targets for the drilling programs planned for 2011.

2 PROJECT ACTIVITY INDONESIA ARX is exploring for gold, silver and base metal deposits on Java and elsewhere along Indonesia s highly prospective magmatic arcs and associated terranes. The primary exploration targets are high-grade epithermal gold-silver veins and bulk tonnage porphyry-related copper-gold deposits. Java Trenggalek Project, East Java (ARX 95%) The Company operates a joint venture with P.T. Sumber Mineral Nusantara, which holds the Trenggalek Exploration IUP license covering an area of 30,044 ha (~300 km 2 ) in the Southern Mountains of East Java. The Southern Mountains lie within the Sunda-Banda magmatic arc, which is highly prospective for epithermal goldsilver and porphyry-related copper-gold deposits; highlighted by the results of our own work and by Intrepid s major emerging copper-gold project, Tujuh Bukit, located about 250 km east of Trenggalek. Diamond drilling continued at Trenggalek during the quarter. Nineteen holes (TRDD-28 to TRDD-45) were drilled for 2,161 metres testing epithermal gold targets at Sentul, Buluroto, and Kojan prospects (see prospect plan on next page). Drill hole details are presented at the back of this report. This work completes the Company s scout drilling program at Trenggalek for 2010, in which a total of 5,230 metres was drilled in 45 holes. The program has provided an initial test of five of at least 10 gold targets identified within the IUP. Results presented in previous reports, and in the accompanying sections, confirm the potential for high-grade gold mineralisation in the project area. High-grade gold intercepts within lower grade gold mineralisation haloes have been intersected on three (Sentul, Buluroto and Kojan) of the five prospects tested. This is an excellent strike-rate for a scout drilling program. The drilling has demonstrated that the mineralised hydrothermal systems found at Trenggalek are large, and by analogy with similar epithermal vein fields, the potential for discovering economic gold resources in such large hydrothermal systems is considered high. The Company will use the results of this drilling campaign to refine plans for further exploration drilling in 2011, with the aim of moving towards resource definition. 12 Page 2 of

3 TRENGGALEK EXPLORATION IUP ON SATELLITE PALSAR IMAGE KOJAN Thirteen scout holes totalling 1,202 metres were drilled at Kojan to test three of at least six known parallel veins located in the northwestern corner of the IUP. These veins are part of a north-northwest trending multiple vein system that lies on a large structural lineament extending for several kilometres. Each of the veins has been traced at surface for between 100 to 250 metres strike-length with widths ranging from less than 1 to over 5 metres. The occurrence of high-grade vein-float boulders located to the north and east of Kojan suggests that vein extensions and new vein sources occur in these surrounding areas. All holes returned gold-silver mineralised intercepts (see table below) in narrow (1-2 m wide) banded quartzadularia-clay veins hosted by propylitic-altered andesite and intrusive breccias. The strongest mineralised intercept, obtained in TRDD-35 on the Kenong Vein, returned 1.9 m at g/t Au & 293 g/t Ag within 6.6 m at 4.89 g/t Au & 149 g/t Ag from m down-hole. Hole TRDD-42, drilled about 50 m to the south of TRDD-35, returned 0.85 m at 9.49 g/t Au & 144 g/t Ag within 1.85 m at 4.9 g/t Au & 87 g/t Ag from 71.7 m down-hole. Page 3 of 12

4 The results demonstrate the presence of in-situ high-grade gold and silver mineralisation in the northern part of the tenement. Only part of the Kojan vein system has been tested to shallow depths of between 50 to 100 metres. The mineralised veins are open along strike and down dip. Hole ID KOJAN PROSPECT Mineralised Drill Hole Intercepts From To Interval Au g/t Ag g/t Recovery TRDD % % TRDD % TRDD % TRDD % Incl % TRDD % TRDD % TRDD % TRDD % Incl % TRDD % TRDD % Incl % TRDD % TRDD % TRDD % Notes: 1) Sample preparation/analyses by P.T. Intertek Utama Services, Jakarta 2) Gold assayed by 50g Fire Assay/AAS Finish. 3) Silver assayed by Mixed Acid Digest/AAS Finish Page 4 of 12

5 BULUROTO The Buluroto Prospect is defined at surface by a m long and m wide gossanous breccia zone developed near the confluence of two narrow quartz veins. Previous trenching on this breccia returned up to 10 m at 12.7 g/t Au and 96 g/t Ag in channel samples. In the last quarter TRDD-25, one of two holes drilled at Buluroto, returned a broad gold-copper intersection of 27.3 m at 0.49 g/t Au & 0.19% Cu from 135 m down-hole in sulphidic hydrothermal breccia and stockwork. Another three holes were completed in the current quarter and have tested extensions of this mineralised intercept. The two shallow holes, TRDD-37 and TRDD-39, returned narrow medium- to high-grade gold and silver intercepts within a halo of lower grade gold mineralisation. These included 1 m at 10.9 g/t Au & 304 g/t Ag and 2 m at 8.73 g/t Au & 48 g/t Ag within m at 3.19 g/t Au & 60 g/t Ag in TRDD-37, and 2 m at 6.75 g/t Au & 46 g/t Ag within 6.3 m at 2.77 g/t Au & 23 g/t Ag in TRDD039. Copper, arsenic, antimony and molybdenum are also locally elevated over narrow intervals within these two holes, including up to 0.73% Cu, 756 ppm As, 1750 ppm Sb and 58 ppm Mo. TRDD-40 was drilled to test about 75 metres below the copper-gold mineralisation intersected in TRDD-25. It intersected a broad zone of quartz stockwork surrounding a m wide core of hydrothermal breccia. The hole returned best intercepts of 4.6 m at 0.45 g/t Au in the stockwork and 14.8 m at 0.38 g/t Au in breccia. The copper grades are low (<0.05% Cu). The drilling results highlight potential for a near-surface gold resource at Buluroto. Mapping and soil sampling are in progress to better characterise the shape and distribution of the target at surface, prior to further drilling. Hole ID BULUROTO PROSPECT Mineralised Drill Hole Intercepts From To Interval Au g/t Ag g/t Recovery TRDD % Incl % % Incl % % TRDD % Incl % % TRDD % % % Incl % Notes: 1) Sample preparation/analyses by P.T. Intertek Utama Services, Jakarta 2) Gold assayed by 50g Fire Assay/AAS Finish. 3) Silver assayed by Mixed Acid Digest/AAS Finish Page 5 of 12

6 SENTUL Sentul is a large mineralised vein system comprising two main north-northeast-trending veins (West and East Sentul) and numerous intermediate tension veins. Three holes totalling 667 metres were drilled on the West Sentul Vein during the quarter. These holes tested beneath a previously reported high-grade intersection of 2 m at 17.2 g/t Au obtained in TRDD 4 (see long section below). TRDD-36a, a redrill of an earlier failed hole TRDD-36, returned a best intercept of 4 m at 1.17 g/t Au & 6 g/t Ag within a zone of m at 0.89 g/t Au & 6 g/t Ag from m down-hole. This occurs about 50 metres directly below the high-grade intersected in TRDD-4. TRDD 38 intersected the vein about 50 metres north of TRDD-4 and TRDD-36a. It returned a best intercept of 0.95 m at 2.18 g/t Au & 3 g/t Ag within a zone of 5.45 m at 0.51 g/t Au & 1.5 g/t Ag from m down-hole. Page 6 of 12

7 The drop in gold grade in all three holes is caused by dilution from late barren quartz that cross-cuts(?) this part of the vein. The higher gold grades intersected in holes TRDD-2,-3, -4 and -5 are interpreted be part of a steeply south plunging shoot that is still open at depth (see long section below). Multiple ore shoots are common in this style of large gold-vein system and the potential for more high-grade shoots along the m wide, 8 km collective length of the Sentul Vein System is still considered high. Less than 10% of the Sentul Vein System has been drill tested so far. Further prospecting and soil sampling are underway to define the extent of the vein system and to refine the hole targeting prior to more drilling in Hole ID SENTUL PROSPECT Mineralised Drill Hole Intercepts From To Interval Au g/t Ag g/t Recovery TRDD % TRDD036a % Incl % % TRDD % Incl % Notes: % 1) Sample preparation/analyses by P.T. Intertek Utama Services, Jakarta 2) Gold assayed by 50g Fire Assay/AAS Finish. 3) Silver assayed by Mixed Acid Digest/AAS Finish Note: This long section shows the pierce-points of the highest grade gold intercepts returned in each hole drilled along the West Sentul Vein; it does not represent all of the gold intercepts, including broader haloes of lower grade gold mineralisation intersected within the vein. Page 7 of 12

8 TRENGGALEK PROJECT, EAST JAVA Summary of Drill-hole Details Hole ID Prospect Coordinates Dip Azimuth Final Depth mn me mrl TRDD028 Kojan 9,102, , TRDD029 Kojan 9,103, , TRDD030 Kojan 9,103, , TRDD031 Kojan 9,102, , TRDD032 Kojan 9,103, , TRDD033 Kojan 9,103, , TRDD034 Kojan 9,102, , TRDD035 Kojan 9,102, , TRDD036 Sentul 9,088, , TRDD036a Sentul 9,088, , TRDD037 Buluroto 9.089, , TRDD038 Sentul 9,088, , TRDD039 Buluroto 9,089, , TRDD040 Buluroto 9,089, , TRDD041 Kojan 9,102, , TRDD042 Kojan 9,102, , TRDD043 Kojan 9,102, , TRDD044 Kojan 9,102, , TRDD045 Kojan 9,102, , Exploration expenditure at Trenggalek during the quarter totalled A$457,653. West Nusa Tenggara Bima Project East Sumbawa (ARX 95%) The company operates a joint-venture with P.T. Sumber Mineral Nusantara, which holds the Bima tenement in East Sumbawa, West Nusa Tenggara Province. The conversion of the KP to an Ijin Usaha Pertambangan (IUP) was completed in the previous quarter. The Exploration IUP covers an area of 24,980 hectares (nearly 300 km 2 ) and is valid for 5 years until April The Bima Project is located about 230 km east of Newmont s giant Batu Hijau and Elang porphyry copper-gold deposits and lies on the same segment of the Sunda-Banda magmatic arc. This highly prospective terrane is underlain by Early Miocene to Pliocene intermediate-felsic volcanic and volcaniclastic rocks, fossiliferous limestone and high-level intrusions. Targets identified at Bima are gold and base metal-rich intermediatesulphidation epithermal veins, high-level silicification in limestones, and gold-rich high-sulphidation lithocaps, all of which may be related to buried porphyry copper-gold targets. Activities undertaken during the quarter included a 1:50,000 scale litho-structural interpretation of the entire Bima IUP using satellite imagery, prospecting, detailed geological mapping and surface geochemical sampling. Page 8 of 12

9 BAKU Baku Prospect is represented by a +400m by 300m NW-SE elongated silica-clay/vughy silica alteration lithocap centred on quartz-feldspar porphyry intruding andesitic-dacitic volcanic rocks. This large alteration zone is highlighted as a spectral anomaly detected in processed ASTER satellite imagery. ARX undertook field verification of the source of the spectral anomaly at Baku early in the quarter. Initial rock chip samples taken from altered outcrops found in the anomalous area produced results of 0.29 to 2.75 g/t Au, 1 to 23 g/t silver and 22 to 48 ppm antimony in five grab samples. Follow-up work undertaken by ARX later in the quarter included 1:1,000 scale geological mapping, ridge-and-spur soil and rock chip geochemical sampling. This work has highlighted two areas of interest. The principal area is delineated by a +300m by 200m NW-SE elongated coincident Au-Ag-As-Sb-Mo soil anomaly that occurs over quartz-limonite-sulphide stockwork-veining in silica-clay altered quartz-feldspar porphyry. The soil anomaly is open to the southeast and southwest (see figure, next page). Continuous-chip samples taken from patchy outcrops within the area of soil anomalism returned elevated gold and multielement results. Thirty-six of 88 (~40%) rock samples taken within the principal area yielded >0.2 g/t gold assays with a mean of 0.83 g/t Au and averaging 6 g/t Ag, 53 ppm As, 30 ppm Sb and 5 ppm Mo. A best result of 12m at 1.7 g/t Au & 10 g/t Ag was returned from a sample composite taken across intense stockwork-veining. This includes a high-grade result of 1m at 10.2 g/t Au & 24 g/t Ag. Another continuous-chip sample, taken 80m northwest of this result, returned 3m at 6.75 g/t Au, including a high-grade result of 1m at 12.3 g/t Au & 24 g/t Ag. The second area of interest lies about 250m northeast of the principal area and is highlighted by a +200m by 100m gold soil anomaly. This anomaly is less well defined and remains to be followed up with infill sampling and rock chip sampling. The early results support the potential for a large near-surface bulk tonnage gold deposit that may be related to deeper porphyry-style copper-gold mineralisation. ARX will focus on defining drill targets over the next quarter by conducting further surface geochemical sampling and possibly geophysical surveys (electrical and ground magnetics). The aim is to advance the project to the scout drilling stage to be undertaken in 2011, subject to funding. Page 9 of 12

10 SORO Grid-based soil geochemical sampling and mapping were undertaken on Soro Prospect during the quarter. Soro is located about 6km south of the Kowo Prospect, where ARX has previously reported on extensive gold and base metal anomalism in soil and rock samples taken within a window of altered and mineralized volcanic rocks within younger cover (see previous quarterly reports). Soro is represented by a +1km 2 area of limestone hosting patchy silicification and low-sulphide quartz veining. The silicified limestone potentially caps an underlying mineralized vein system in volcanic rocks that are similar to or an extension from the neighbouring Kowo Prospect. The aim of the soil sampling at Soro is to highlight pathfinder (As, Sb, Hg) anomalies that could indicate the presence of mineralization beneath the limestone cover. The initial soil sampling was completed late in the quarter. Results are awaited. Exploration expenditure at Bima during the quarter totalled A$44,292. Page 10 of 12

11 Papua Aisasjur Project - Anglo Strategic Alliance (ARX 20%) During the quarter, ARX and Anglo American PLC (Anglo) extended the Strategic Alliance to explore for coppergold deposits in Papua and West Papua provinces. Key elements of the Alliance, which has been extended to 2014, are summarised as follows: Anglo holds an 80% interest by sole funding exploration expenditure through to the first decision to mine; ARX s 20% interest is carried (not free carried) through to a Decision to Mine at which time ARX becomes liable to repay 10% of exploration and predevelopment costs out of its share of project proceeds (non-recourse to ARX); If following completion of a Feasibility Study, Anglo makes a Decision to Mine then a Joint Venture shall be formed and each of Anglo and ARX shall participate (and fund capital expenditure) according to their 80/20 project interests. ARX dilutes if it does not contribute; In the event that a resource of less than one million tonnes of contained copper equivalent or 1 million ounces of gold is identified, then Anglo may not offer any interest in the resource to a third party without first making an offer to ARX either that such project revert to ARX on an 80/20 basis (with ARX holding 80%) or that 100% be transferred to ARX with Anglo retaining a 2% NSR. The Alliance has the potential to add very significant value to ARX and it looks forward to continuing to work with Anglo in this regard. About the Aisasjur Project Aisasjur, the first project in the Alliance, is located in remote, heavily forested and mountainous terrain at the centre of the Bird s Head peninsula in West Papua. The project area has no major road network and access is mainly by helicopter (about 1 hour) via the major provincial towns of Sorong and Manokwari.. The project originally comprised three KP tenements (KP s 1, 2 & 3). These were amalgamated into a single Ijin Usaha Pertambangan (IUP) in the previous quarter. The new Exploration IUP covers an area of 99,410 hectares (nearly 1,000 km 2 ) and is valid until April Although Aisasjur Prospect has been the main focus of past exploration activity, only a small portion of the IUP area has been thoroughly explored and we expect that more prospects will be identified in future work programs. Aisasjur was originally identified from gold/multi-element stream sediment anomalies detected in a regional reconnaissance survey by Normandy Anglo Asia Ltd in Trenching completed on +2 km 2 ridge-and-spur gold soil anomaly produced encouraging surface results that included 80 m at 1.2 g/t gold, and locally higher grades of 10 m at 12.7 g/t gold, with coincident arsenic, antimony and mercury anomalism. Scout drilling by Normandy returned strongly mineralised intercepts in extensive vein stockworks, including 28.4 m at 1.10 g/t gold from 16.6 m (ASD-2), 32 m at 4.2 g/t gold from m (ASD-5), 55 m at 2.1 g/t gold from m (ASD-7), and m at 0.3 g/t gold from 3 m (ASD-8). This work clearly demonstrated potential for a major bulk tonnage gold target but was not pursued for non-technical reasons. The original Strategic Alliance signed between ARX and Anglo in 2005 was based on a re-evaluation of the historic data, and on the recognition that porphyry intrusions intersected in the earlier drilling program have a similar age and strong geochemical affinities with intrusive rocks hosting the giant copper-gold deposits at Grasberg and Ertsberg, located about 600 km to the southeast. These world-class copper-gold deposits are associated with Pliocene porphyry systems emplaced into Cretaceous and Tertiary age clastic sedimentary rocks and limestone. A similar geological setting is demonstrated at Aisasjur, where a Pliocene-age intrusive complex is associated with an extensive intermediate-sulphidation epithermal gold system. Two phases (2006 and 2008) of scout diamond drilling have been completed under the ARX-Anglo Strategic Alliance. This drilling has targeted porphyry-style copper-gold mineralisation hosted at depth within the intrusive complex. Both programs confirmed the presence of porphyry-style alteration and mineralisation, preserved beneath the shallower epithermal gold system, and returned significant intercepts including 13 m at 0.21% copper and 0.51 g/t gold from 561 m (ASD-23) and m at 0.13% copper & 0.19 g/t gold from m (ASD-26). Page 11 of 12

12 They also confirmed the presence of widespread gold intercepts associated with the shallower overprinting epithermal gold mineralisation and included intercepts of 68.8 m at 0.49 g/t gold from 322 m (ASD-24), 9 m at 3.24 g/t gold from m, 18 m at 1.58 g/t gold from 415 m, and 39 m at 1.25 g/t gold (ASD-28), and 14 m at 3.23 g/t gold from 219 m (ASD-29). A total of 11,164 m has been drilled (including Normandy) in 30 holes at Aisasjur to date. Exploration work at Aisasjur has highlighted potential for a multimillion ounce, bulk-tonnage gold resource. Surface work and drilling have proved the occurrence of gold mineralisation over an area of greater than 1 km 2 and persisting to a depth of at least 700 m. Although the copper-gold grades obtained from the deeper drilling completed to date are low, the copper/gold ratios and the presence of bornite in the deeper porphyry-related quartz-pyrite-pyrrhotite-chalcopyrite veins provide strong evidence on the potential for high-grade copper-gold porphyry deposits in the project area. Further exploration in the Aisasjur project area is in the planning stage. The information in this report that relates to Exploration Results is based on information compiled by Mr John Carlile, who is a Fellow of the Australian Institute of Mining and Metallurgy, and Mr Brad Wake, who is a member of the Australian Institute of Geoscientists. Mr Carlile and Mr Wake 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 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Carlile and Mr. Wake are full time employees of Arc Exploration Limited and consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. This report is dated 26 October For further information please contact: Andrew J. Cooke Company Secretary Tel: andrewcooke@arx.net.au Page 12 of 12