SEPTEMBER 2013 QUARTERLY REPORT 31 October 2013

Transcription

1 SEPTEMBER 2013 QUARTERLY REPORT 31 October 2013 Peel Mining Limited ASX code: PEX ACN: Unit 1, 34 Kings Park Rd West Perth, WA 6005 Ph: (08) Fax: (08) E: Web: Contact: Rob Tyson Managing Director About Peel Mining Limited: The Company s six projects cover >3,500 km 2 of highly prospective tenure in NSW, WA and NZ. Mallee Bull is an exciting, free-carried copper-polymetallic discovery. New 100%-owned Cobar tenure offers highly-prospective greenfields exploration potential. Apollo Hill hosts a major, protruding, shear-hosted, gold mineralised system that remains open down dip and along strike. Ruby Silver project contains several historic high-grade silver mines. Attunga Tungsten Deposit is a high grade tungsten deposit. Rise and Shine project exhibits strong similarities to the multi-million ounce Macraes gold mine. 132 million shares on issue for $34m Market Capitalisation at 31 October Highlights for September quarter 2013 CBH Resources Limited proceeds with Stage 3 of the Mallee Bull farm-in agreement, which will see CBH spend a further $3.33 million to increase its interest to a total of 50%. Butcher s Dog drillhole BDDD001 intercepts broad zone of pyrrhotite and chlorite alteration coincident with anomalous geochemistry; DHEM survey of BDDD001 identifies new very strong (170 milliseconds time constant) offhole conductor. Magnetotellurics (MT) geophysics survey identifies new anomaly ~500m north of Mallee Bull; diamond drillhole underway. Excellent preliminary metallurgical results for Mallee Bull stringer (footwall) mineralisation with ~25% copper-in-concentrate returned at 90-95% copper recovery. Wirchilleba Station purchase (covering Mallee Bull footprint) completed. Sandy Creek drillhole PSCDD001 targeting strong DHEM anomaly returns several broad zones of mineralisation/alteration with significant base metal intercepts returned including: 16 g/t Ag, 0.33% Cu, 2.64% Pb, 0.31% Zn from 493m including; o 48 g/t Ag, 0.50% Cu, 9.63% Pb, 1.1% Zn from 493m. Plans for December quarter 2013 Continuation of Stage 3 exploration at Mallee Bull comprising further diamond drilling and additional geophysical. Ongoing regional exploration and workup of priority targets. RC drilling programme at Apollo Hill. Peel Mining Limited Quarterly Report September

2 Exploration Mallee Bull Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 70%, CBH earning up to 50%). Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation. Drilling and exploration continued at the Mallee Bull copper-polymetallic discovery, 100km south of Cobar in NSW. As previously announced, Mallee Bull is subject to an $8.3m farm-in agreement with CBH Resources Ltd. Prior to the quarter s commencement, CBH Resources Limited proceeded with Stage 3 of the Mallee Bull farm-in agreement, which will see CBH spend a further $3.33 million on exploration at Mallee Bull to earn an additional 20%, taking CBH s interest in Mallee Bull to 50%. Peel remains operator throughout the farm-in process. Exploration efforts at the Mallee Bull/Gilgunnia Project during the quarter have been focused on identifying potential new sources of mineralisation, supplementary to that already recognised at Mallee Bull. Promising results have been received with drilling continuing at the time of reporting. Recent activities at the Mallee Bull/Gilgunnia Project have comprised diamond and RAB drilling, various surface and downhole geophysical surveys, mineralogical and metallurgical studies and the purchase of part of Wirchilleba Station. See below for further information. BDDD001 Drillhole (Butcher s Dog) Summary Drillhole BDDD001 was designed to test a strong DHEM offhole conductor recognised at the Butcher s Dog prospect north of Mallee Bull. Butcher s Dog is defined by coincident magnetic and electromagnetic anomalies and is located under the axis of a regional scale anticline; proximal to a northeasterly trending shear/structure mapped at Mallee Bull and intercepted in MBDD011. Drillhole BDDD001 (1223.4m) intercepted a broad zone of disseminated and veinlet pyrrhotite mineralisation coincident with variable chlorite alteration and minor/trace chalcopyrite/galena and sphalerite; commencing at ~800m downhole and continuing to the drillholes end. Sampling of the intervals m (56 samples) and m (56 samples) confirm anomalous precious and base metal values in these zones, consistent with observed alteration. Peak values for individual metres in these zones reached up to 0.54% Cu, 25 g/t Ag, 1.32 g/t Au, 0.51% Pb, and 1.92% Zn although most values are considerably lower than these results. Follow-up DHEM surveying of BDDD001 indicates that the original DHEM target was intersected and was associated with a zone of abundant pyrrhotite mineralisation and chlorite alteration. The DHEM survey also identified a new, very strong offhole anomaly (~170 millisecond time constant) beneath BDDD001 s drillhole position. This anomaly is the strongest identified to date at the Mallee Bull/Butcher s Dog project and is extremely high for the Cobar district and NSW in general. Peel is very encouraged by the broad pyrrhotite and chlorite alteration, and coincident anomalous geochemistry returned in the drillhole and the presence of a very strong offhole conductor, and notes that disseminated pyrrhotite alteration halos can be associated with Cobar-style deposits and is a characteristic of Mallee bull. Follow-up work is planned. Peel Mining Limited Quarterly Report September

3 New strong offhole conductor (170 ms) Figure 1 BDDD001 Oblique Section showing alteration and DHEM plates Peel Mining Limited Quarterly Report September

4 RFDD001 Drillhole Summary Drillhole RFDD001 (524.9m) was designed to test a coincident geochemical and stratigraphic target located on the eastern flank of the Mallee Bull anticline at the Rabbits Foot prospect, approximately 1km east of Mallee Bull. RFDD001 intercepted a thick zone of volcaniclastic material with variable pyrrhotite alteration and minor sphalerite and galena mineralisation. No significant assay results were returned. MBDD012 Drillhole Summary Drillhole MBDD012 (483.3m) was designed to test a moderate offhole DHEM anomaly identified at ~250m downhole in MBDD011. This anomaly is located in close proximity to significant lead-zinc-silver mineralisation observed over a 4m zone at ~390m in MBDD011. Galena, sphalerite and pyrite are known to be poor conductors and therefore any conductor in close proximity to this zone is potentially prospective. MBDD012 intercepted a broad zone of variable, but generally weak, sphalerite-galena-pyrrhotitepyrite mineralisation occurring as veinlets from ~350m downhole to end-of-hole. This mineralisation is coincident with an increase in chlorite alteration. Assay results remain pending. Follow-up DHEM surveying of MBDD012 indicates that the primary DHEM target remains untested and follow-up drilling targeting this anomaly is now underway. Figure 2 Mallee Bull/Butcher s Dog Geology and Drillhole Location Plan Peel Mining Limited Quarterly Report September

5 MBDD013 and MBDD014 Drillhole Summaries Drillholes MBDD013 (618.5m) and MBDD014 (799.9m) were recently completed targeting a newly identified geophysical anomaly generated from a magnetotelluric (MT) survey completed recently over the Mallee Bull and Butcher s Dog prospect areas. Preliminary 2D modelling of the data identified a new anomaly located approximately 500m north of Mallee Bull. Drillholes MBDD013 and MBDD014 targeted this anomaly. Both drillholes intercepted minor zones of variable, narrow, chalcopyrite-pyrrhotite-pyritearsenopyrite mineralisation similar in style to Mallee Bull stringer mineralisation with associated chlorite and silica-alteration. Peel is encouraged by the presence of this mineralisation. Assay results remain pending however are not expected to be economically significant. 3D modelling of the MT data also remains pending at the time of reporting. MT anomaly Geophysics Figure 3 Mallee Bull North MT 2D Section A substantial programme of high-powered DHEM surveying utilising the DigiAtlantis receiver sensor has been completed at Mallee Bull and Butchers Dog recently, with additional surveys now underway. At Mallee Bull, DHEM has confirmed the general geometry of mineralisation encountered to date and has identified a strong offhole anomaly off MBDD010 for follow-up drill testing. As previously mentioned, DHEM of BDDD001 identified a new, very strong offhole anomaly beneath BDDD001 s drillhole position. Peel Mining Limited Quarterly Report September

6 As previously mentioned, a magnetotelluric (MT) geophysical survey over the Mallee Bull and Butcher s Dog prospect areas was also completed during the quarter. MT is a deep penetrating geophysical technique and has proven successful in detecting mineralisation at other Cobar Basin deposits (CSA and Elura mines). Preliminary 2D modelling of the data indicates that it successfully identified the Mallee Bull deposit, and also identified a new anomaly located approximately 500m north of Mallee Bull. Drillholes MBDD013 and MBDD014 targeted this anomaly. 3D modelling of the MT data also remains pending at the time of reporting. A downhole magnetometric resistivity (MMR) geophysical survey was also completed in drillhole MBDD007 at Mallee Bull recently. Interpretation of the MMR data defined several conductive sources with data correlating well with DHEM modelling and the known Mallee Bull mineralisation as defined by drilling to date. RAB Drilling A programme of close-spaced angled rotary air blast (RAB) drilling was designed to cross the nose of the regional anticline near Mallee Bull targeting a magnetic anomaly located in this area and also to test near historic workings of the Four Mile gold field. The concept was to test for a shallow gold deposit using the nearby May Day gold mine as an analogue. May Day was originally worked as an underground copper-lead-zinc deposit before a shallow open cut gold operation was developed in the late 1990s. Generally low gold values were returned, however elevated base metals and pathfinder elements (as shown by portable XRF) were returned from several drillholes in close proximity to Mallee Bull. Followup work is planned. Mallee Bull Mineralogy and Metallurgy Two sets of core intervals from MBDD009W2W1 were sent to ALS Metallurgy in Burnie, Tasmania for initial flotation and particle mineralogy assessment. These sets represented the two dominant styles of mineralisation identified at Mallee Bull to date, i.e. Stringer Sulphide (or footwall lode) and the Massive Sulphide or (hangingwall lode). It is estimated that Stringer Sulphide mineralisation accounts for approximately 80% of all mineralisation intercepted to date whilst the Massive Sulphides account for the balance (20%). Mineralogical assessments show two very different sulphide textures: The Stringer Sulphide mineralisation contains only traces of pyrite or pyrrhotite and is some 85% volume non-sulphide gangue. Chalcopyrite shows excellent liberation from nonsulphides and the minor arsenopyrite present. At a grind p80=106um the 50% liberation size for chalcopyrite is 150um. The Massive Sulphide mineralisation contains some 60% volume of pyrite and pyrrhotite (9:1 ratio) with around 35% volume of non-sulphide gangue. Minor presence of sphalerite and galena with chalcopyrite at around 1% of volume. The chalcopyrite shows strong association with pyrite to fine size. At a grind of p80=106um the chalcopyrite has a 50% liberation size of some 38um. (Above 38um Cp is <50% liberated and below 38um is >50% liberated.) The Stringer Sulphide composite yielded excellent flotation results with concentrates of ~25% copper at a recovery between 90-95% returned from testwork. Further assessments to define an overall grade and recovery after cleaning are planned. Peel Mining Limited Quarterly Report September

7 The Massive Sulphide composite demonstrated reduced recovery and grade from roughing floats due largely to the strong association of pyrite and chalcopyrite. It is noted that Massive Sulphide mineralisation intercepted to date has shown considerable variability; from base-metal rich to basemetal poor; and the sample sent for testwork fits the latter category. Further assessments using stronger pyrite depression routines in roughing, and a variety of Massive Sulphide mineralisation are planned. Peel is highly encouraged by these results, as they indicate that the bulk of mineralisation at Mallee Bull as defined by drilling to date (i.e. Stringer Sulphide) is potentially recoverable via simple metallurgical processes. Wirchilleba Station Settlement Peel recently completed the purchase of part of Wirchilleba Station in accordance with an option agreement executed in April Consideration for Western Lands Lease 3456, comprising 7,974 hectares, was $800,000. Peel purchased the property to secure long-term access and to assist in fasttracking future development at Mallee Bull. Cobar Superbasin Project: Copper, Silver, Gold, Lead, Zinc; Western NSW (PEX 100%). Targets: Cobar-style polymetallic mineralisation; Volcanogenic Massive Sulphide mineralisation. Progress of Peel s 100%-owned Cobar Superbasin project (including Sandy Creek) continued during the quarter with recent activities comprising diamond drilling, surface and downhole geophysical surveys, surface geochemical surveys and geological mapping. See below for further information. PSCDD001 Drillhole (Sandy Creek) Summary Drillhole PSCDD001 (639.2m) was completed during the quarter at the newly acquired Sandy Creek project targeting the namesake Sandy Creek prospect. Drillhole PSCDD001 was designed to test a strong DHEM offhole conductor and intersected several broad zones of mineralisation/alteration including: a 25m zone of disseminated pyrrhotite-dominant sulphides from 237m; and a 19m zone of variable pyrrhotite-dominant sulphides from 493m including a 4m zone of strong galena-dominant mineralisation averaging 48 g/t Ag, 0.50% Cu, 9.63% Pb, 1.1% Zn from 493m. The true width of these intercepts is estimated to be close to the downhole intercept. Follow-up high-powered DHEM indicates that the anomaly remains open in multiple directions. PSCDD001 confirms the potential of Sandy Creek to host economic mineralisation and Peel notes that Sandy Creek bares many similarities to Mallee Bull at an early stage of exploration. Other Cobar Superbasin Activity An extensive review of historical data and preliminary field work has been undertaken on Peel s broader 100%-owned Cobar Superbasin Project. This work has resulted in the definition of many prospects that warrant closer scrutiny. More than 7,000 multi-element portable XRF samples have been collected since exploration commenced with sampling interrupted due to an extended period of wet ground conditions over winter. Eight prospects are now deemed as priority one ; they are Bedooba, Tara, Tara 4, Burthong S Grid, Mundoe, A5 (Peel-4), Wirlong and Red Shaft. A priority one target has multiple characteristics similar to the known economic deposits of the Cobar Superbasin. Exploration of Peel s Cobar Superbasin Project is continuing. Peel Mining Limited Quarterly Report September

8 Figure 4 Sandy Creek Section N Figure 5 Sandy Creek Geology and Drill Location Plan Peel Mining Limited Quarterly Report September

9 Apollo Hill Project: Gold; Northeastern Goldfields WA (PEX 100%). Targets: Archaean gold deposits. During the quarter, a programme of work was submitted for the Apollo Hill licences E39/1198 and M39/296 and subsequently approved by the WA Department of Mines and Petroleum. The programme of work is for up to 24 Aircore/RC holes and is designed to test for mineralised extensions to the main mineralised zone at Apollo Hill. Drilling is planned to commence in early November. Attunga Project: Gold, Tungsten, Molybdenum, Copper; Northeastern NSW (PEX 100%) Targets: Intrusive-Related Gold System and/or Orogenic gold mineralisation; skarn type tungstenmolybdenum mineralisation and skarn-type precious/base metals mineralisation During the quarter, a single diamond drill hole was completed at the Attunga Tungsten deposit. AWP001 was drilled for future metallurgical testwork purposes and continues to confirm the highgrade nature of the Attunga Tungsten Deposit. AWP001 returned 0.2% WO 3 from 5.9m; 3m@ 0.17% WO 3 from 14m; 0.32% WO 3 from 76m; and 0.31% WO 3 from 91m (including 0.42% WO 3 from 104m). Rise & Shine: Gold; Central Otago New Zealand (PEX 100%) Targets: Orogenic gold mineralisation. No fieldwork was undertaken during the quarter. Ruby Silver Project: Silver, Gold; Northeastern NSW (PEX 100%). Targets: Silver mineralisation associated with fracture-fill quartz-carbonate veining. No fieldwork was undertaken during the quarter. Morawa: Copper, Gold; Central West WA (PEX 100%) Targets: Volcanogenic Massive Sulphide mineralisation. No fieldwork was undertaken during the quarter. Corporate During the quarter, a General Meeting of Shareholders was held. This meeting successfully ratified the January and June placements of shares enabling the completion of the acquisition of Sandy Creek. For further information, please contact Rob Tyson on The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Tyson, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Tyson has sufficient experience which is relevant to the style of mineralisation and type of deposit 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 Tyson consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Peel Mining Limited Quarterly Report September

10 Hole ID Northing Easting Azi Dip Final Depth Table 1 - Sandy Creek Significant Drill Assay Results From To Width PSCDD Cu Ag (g/t) Au (g/t) Pb Zn including Table 2 Mallee Bull/Butcher s Dog/Rabbits Foot Diamond Drilling Collar Details Hole ID Northing Easting Azi Dip Final Depth From To Width BDDD MBDD Pending MBDD Pending MBDD Pending RFDD Pending Cu Ag (g/t) Au (g/t) Pb Zn Table 3 Mallee Bull RAB Collar Details Hole ID Northing Easting Azi Dip Final Depth MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB Peel Mining Limited Quarterly Report September

11 Hole ID Northing Easting Azi Dip Final Depth MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB MBRAB Information regarding drilling/assaying data 1. Drilling was completed as HQ or NQ diamond core, or RAB blade/percussion. 2. Sample recoveries were considered adequate for all samples. 3. Drillcore and drill chips have been logged in detail based on lithology, mineralisation, and alteration. 4. Samples for analysis were collected by sawing core in half, or by spear sampling RAB drill samples. 5. Samples were submitted as 1m or 4m composite half-core intervals, or as 5m composites for RAB drill samples. 6. Samples were analysed at ALS Chemex utilising methods: Au AA25 for Au (fire assay); ME ICP41, ME-ICP61 or ME MS61 for multielement including Ag, Cu, Pb, Zn; Ag-OG46 for >100 g/t Ag; Cu-OG46 for >1% Cu; Pb-OG46 for >1% Pb; and Zn-OG46 for >1% Zn. RAB multi-element analysis was completed using an Innovex portable XRF. 7. Diamond drillhole collars were surveyed by DGPS (GDA94) and downhole gyroscopic surveys were run continuously. RAB drillholes were surveyed using a Garmin 62 GPS. Peel Mining Limited Quarterly Report September