13 September 2013 Exploration Update: New Targets & Ideas Highlights: Bass received preliminary findings of a multidisciplinary technical review of its Que- Hellyer polymetallic project. Verification of Arsenic, Antimony and Thallium as excellent pathfinder elements to mineralisation; more consistent vectors to mineralisation than the ore elements. New structural geology modelling and interpretation suggest (somewhat controversially) that deformation (folding) may also be a key determinant on the location of ore. Nine targets identified for further detailed follow-up; including four new target areas based on a combination of geochemical, geological and structural inputs. Further surface sampling and structural analysis planned prior to further drill testing. Joint venture partner being sought with an Information Memorandum being prepared. Introduction Bass Metals Ltd (ASX:BSM) is pleased to report that despite corporate distractions, it is very much business as usual undertaking low cost but important geological work on prospective areas in Tasmania and in Turkey. This report is to provide an update on the independent review of the current geological model and exploration strategy for the Que-Hellyer project in NW Tasmania. The scope of the review was to assess the current geological model and aimed to identify new targets comprising alteration signatures that may be indicative of undiscovered mineralisation. The work was undertaken over the past four months in a four-way collaboration between Dr Scott Halley (Mineral Mapping Pty Ltd) and Dr Jun Cowan (Orefind) with consultants from JigSaw Geoscience; Dr Brian Krapez and Mr Carl Young together with Bass geologists. The results of a soon to be completed, Bass sponsored, PhD study on mineralisation within the Que Hellyer Volcanics (QHV) by CODES University of Tasmania PhD student Selina Wu, were also utilised. The Company plans for this review to catalyse interest to attract a joint venture partner to its Tasmanian projects. Work completed comprises: Selective field checking of geological mapping, drill hole logging and reconciling that to Bass existing 3-dimensional geological model; Collection of 105 samples from the hanging-wall sequence to the Fossey and Hellyer deposits for trace element geochemical analysis; Updating the overall geological model with new trace element data, including approximately 1,800 soil samples collected from seven target areas during 2010/2011; A review of the structural setting of the known ore deposits; and Utilising fingerprints to mineralisation defined by the above work, the global dataset was reviewed for new targets and gaps for further work. Despite 40 years of exploration in the QHV there are still significant zones of geochemical anomalism that remain undrilled or poorly tested. Data collected by Bass, combined with 3D modelling and visualisation, have greatly enhanced the definition of these targets. The new data has also revealed new insights into ore forming processes and raised questions about alternative stratigraphic and structural models that would bring new target zones into play. Page 1
The Company is evaluating the findings of the review presented in a preliminary report which includes: Identification of nine target areas, including several new targets; Recommendations for further work comprising further surface sampling, trace element and spectral analysis; Detailed structural analysis; and Further modification and update of the geological targeting model. Background New Technology Bass has always attempted to employ new technology and ideas to explore its Tasmanian tenements. The company had success in 2007 with the Fossey discovery. Fossey, together with Fossey East was a new 740,000 tonne high-grade massive sulphide deposit (Table 1) within a 2.8 million tonne massive barite body containing low grade gold mineralisation (Table 2), located about 150 metres from the large 16.5 million tonne Hellyer deposit (now mined out Table 3). Hellyer itself was discovered in 1984, through the use of new geophysical technology at the time. Technology currently being employed on the leases is designed to finger print deposits by multielement geochemistry and spectral analysis and to then find those finger print patterns in regional data sets, which can be followed-up with drill testing. The review identified Antimony (Sb), Arsenic (As) and Thallium (Tl) as the key pathfinder elements; they provide a more consistent and uniform vector towards mineralisation than the ore elements such as zinc, lead and copper. New Ideas For more than 40 years the QHV deposits have been regarded as Volcanogenic Massive Sulphide deposits (VMS), very similar to deposits that can be seen forming on the current sea floor. Figure 1 shows the long known relationship of mineralisation to a particular part of the stratigraphic sequence in the QHV; the host or Mixed Sequence, shown in brown on the figure below. This model has resulted in a very strong exploration focus on that part of the stratigraphy. However, the 2009 discovery of mineralisation at Fossey East, the McKay prospect in 2011 and the historic S Lens mineralisation at Que River mine, deeper within the stratigraphy, suggest that discoveries may be made in other parts of the sequence. Figure 1: Simplified regional long projection showing the relative stratigraphic position of mineralisation Page 2
As part of the current review, our structural geology consultant has examined the relationship of the known mineralisation and alteration zones to folding. He has questioned the long held VMS ore formation model and suggested that there may be a strong input from folding into the formation of the known orebodies. The concept is that although mineralisation may originally be related to exhalations on or near the sea floor (VMS), the current location of the deposits, within much later regional folds, is due to remobilisation of the primary mineralisation into fold hinges. This will be a controversial proposal amongst geologists but Bass considers this model has interesting implications that are worth investigating. Under this model anomalous geochemistry in parts of the sequence that could previously have seen a target downgraded, may in fact make it a highly ranked target, if the structural setting for remobilisation of mineralisation is favourable. Bass proposes to review all targets in the light of this potential and to conduct local detailed structural investigations on drill holes from the known deposits, to test the application of this model. Target Areas Untested or poorly tested geochemically anomalous target areas defined by the review are shown below on Figure 2. Targets shown are split into those that conform to the standard Mixed Sequence stratigraphic model and those that fit the potential new structural model. Figure 3 shows the same targets in plan-view as shells overlain by Sb soil values. Figure 2: Simplified geology map showing untested or poorly tested target areas as defined by this Technical Review. Page 3
Brief features of each target are: Hellyer North Alteration zone continues strongly at depth and has been drilled to 900 metres beyond the Hellyer orebody. With an interpreted NE plunge the target stratigraphic horizon would occur at great depth, which downgrades its priority. Switchback comprises coincident Ag-Pb-Zn-Sb-As-Tl anomalism. Some drilling in this area, but sufficient space to follow prospective stratigraphy down plunge to the NE. Switchback East defined by prospective stratigraphy close to the intersection with the Henty Fault coincident with anomalous Sb-As-Tl in soils with a target down plunge to the NE. Only sparse historic drilling in this area. Fossey West - at the northern end of the strongest As-Sb-Tl soil anomaly where the alteration system plunges under the hangingwall basalt. Sparse historic drilling. D Zone strongly anomalous As-Sb-Tl geochemistry but considered less prospective under the stratigraphic model as only footwall rocks are present. However, structural interpretation well supported by alteration and soil anomalies. Charter North is an extensive As-Sb-Tl soil anomaly to the north of the Mt Charter Au resource. Thick complex prospective Mixed Sequence stratigraphy obscured by alteration and little drilling. Charter South is a down-plunge continuation of the Mt Charter mineralisation. A structural conceptual target. Barite Creek comprises a strong soil anomaly near the Henty Fault, with significant bismuth anomalism, indicating a hotter part of the VMS system. There is no drilling in this area. Figure 3: Proposed targets in plan-view, overlain by antimony (Sb) values in soils and drill holes geology map underlay (north is to the top right). Grey envelope is intense sericite alteration as defined by spectral data. (Note historic ore element soil sampling is not shown) The Next Phase Figure 4 shows the extent of modern multi-element soil geochemistry collected by Bass. Given the effectiveness of this technique in vectoring toward and defining altered and mineralised rocks and also mapping bedrock geology, it is proposed to extend the current soil geochemistry coverage. Page 4
The soil sampling extensions would have two sampling aspects: The alteration zone from north of Que River through to Mt Charter and Hangingwall basalts above, west and south of Hellyer will be covered as it has been shown by this review that geochemically anomalous hangingwall alteration can detect underlying mineralisation at Hellyer and Fossey. A deeply buried system may be detected by this method. Figure 4: Current modern multi-element soil geochemistry coverage (coloured dots) and proposed soil sampling extensions along the corridor between Hellyer and Mt Charter and the hangingwall basalt south of Hellyer. (Note- historic ore element soil samples are not shown) Nine target areas Nine target areas have been identified by this review. Some are ready for immediate drill testing but others are associated with complex geology that will need to be resolved before drill holes can be designed. Nevertheless, it is expected that a program of around 12-15 drill holes for approximately 6,000 metres of drilling will be needed to test these targets that have now been proposed. As mentioned above, the review has raised interesting questions about the role of folding in the formation of the known deposits in the QHV and the possibility for new discoveries that may arise from using a new paradigm. It is planned for a structural geologist to undertake a program of targeted detailed structural mapping and drill core measurement which should assist to clarify the role of structure in the formation of the deposits. Given the scale of the follow-up work likely to be warranted the Company is seeking joint venture partners to advance this project. The Company looks forward to providing further updates on its Tasmanian exploration work and the new exploration initiative in Turkey. ---ENDS--- Page 5
Competent Persons Statement Exploration Results and Mineral Resources The information in this report that relates to Mineral Resource estimates is based on information compiled by Mr Michael Rosenstreich who is a fulltime employee of Bass Metals and a Member of the Australasian Institute of Mining and Metallurgy. Mr Rosenstreich has sufficient experience which is relevant to the style of mineralisation and type of deposit 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 (the JORC Code). Mr Rosenstreich consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. About Bass Bass Metals Ltd is an ASX listed gold and base metal exploration company. Since listing in October 2005 the Company has focused on exploring and mining polymetallic (copper, lead, zinc, silver and gold) deposits in the highly mineralised Mt Read VMS terrain in NW Tasmania, Australia. With mining and processing operations at its Hellyer site wound down after 5 years of production the Company is reassessing its Tasmanian exploration strategy and also diversifying its exploration interest to Turkey. Refer to: http://www.bassmetals.com.au/ Contact Media Mike Rosenstreich David Ikin/Colin Hay Managing Director - Bass Metals Limited Professional Public Relations T: +61 (0)8 6315 1333 T: +61 (0)8 9388 0944 Page 6
Appendix 1 Table 1 Fossey + Fossey East Pre-Mining Mineral Resources at >5%(Pb+Zn), estimated Nov. 2011 (see Table 4 for Resource Estimation Criteria). CATEGORY '000 TONNES Cu% Pb% Zn% Ag g/t Au g/t Ba% Densit y Measured 430 0.50 7.4 13.7 137 2.8 16.9 4.38 Indicated 260 0.49 6.2 11.2 101 1.8 13.8 4.03 Inferred 50 0.36 4.6 8.6 97 2.3 23.9 4.23 TOTAL 740 0.50 6.8 12.4 121 2.4 16.3 4.24 Note: small rounding errors may occur Table 2 Fossey + Fossey East Pre-Mining Mineral Resources (no cutoff applied), estimated Nov. 2011 (see Table 4 for Resource Estimation Criteria) CATEGORY 000 TONNES Cu% Pb% Zn% Ag g/t Au g/t Ba% Density Measured 430 0.5 7.4 13.7 137 2.8 16.9 4.38 Indicated 2000 0.1 1.1 2.2 48 1.3 37.4 4.13 Inferred 370 0.1 0.8 1.6 35 1.6 42.4 4.25 TOTAL 2800 0.2 2.0 3.8 60 1.6 35.0 4.18 Note: small rounding errors may occur Table 3 Hellyer Orebody Pre-Mining Mineral Resource, estimated in 2000 by Western Metals Ltd Tonnes (millions) Cu% Pb% Zn% Ag g/t Au g/t 16.5 0.4 7.2 13.9 169 2.6 Table 4 - Checklist of Assessment and Reporting Criteria- Fossey /Fossey East Resource Estimate. Criteria Comments Geological Fossey / Fossey East is a Volcanic Hosted Massive Sulphide deposit comprising dominantly Setting baritic mineralisation, associated with areas of high-grade Base Metal Sulphide (BMS) and underlain by minor stringer and disseminated mineralisation. The deposit is dominantly stratiform but Fossey East in part appears to cross-cut stratigraphy. Tenement and The deposit occurs within Hellyer Mining Lease CML103M/87. land status Drilling The current resource estimate is based on 122 intercepts on nominal 12.5m centres 33 Bass surface holes, 14 historic surface holes and 75 Bass underground holes. In addition 24 sets of continuous chip samples from underground cross-cuts through mineralisation were used. All Bass Metals Ltd holes were diamond-drilled and NTW, NQ or LTK60-sized core recovered (diameters of 56mm, 47.6mm or 45.2mm respectively). Historic holes were also diamond-drilled and are of NQ or BQ core size (47.6mm or 36.4mm diameter respectively). >90% core recovery, averaged over the entire hole, was achieved during Bass Metals drilling with close to 100% recovery in the ore zones. Similar high recoveries were achieved by historic drilling. Surface drilling is on E-W sections and underground holes are drilled as skewed fans from several underground sites. Logging All drill holes have been geologically logged using standard Que-Hellyer logging codes. Wet and dry digital photographs of all Bass Metals core were taken and RQD measurements were recorded at per drill-run intervals (average of 3.0m). For historic holes RQD was also measured and core photographs on slide film were taken. Sampling For both Bass and historic drilling half-core samples were collected at nominal 1.0m intervals or at lithological boundaries. Sampling extended into barren host rocks or sub-grade mineralisation in both the hangingwall and footwall. Assaying Half core samples were submitted for assay, with SG determination conducted by the laboratory on each assay sample. For Bass infill drilling, samples were submitted to ALS Laboratories in Burnie, Tasmania. Samples were analysed for Cu, Pb, Zn, Ag, As and Fe (AAS), Ba, S and Si (XRF) and Au (fire assay). For the original 2007-2009 surface drilling programs samples were assayed for Cu, Pb, Zn, Ag, As and Fe, using a modified aqua regia digest followed by ICP, at Amdel laboratories in Adelaide, South Australia. Au and Ba were assayed at Ammtec (now ALS) laboratories in Burnie, using fire assay and pressed powder Page 7
Surveying Database integrity Geological Interpretation Estimation and modelling techniques Cut-off parameters. Previous Mining Mining factors / assumptions. Metallurgical factors Bulk density Classification Audits or reviews XRF respectively. QA-QC involved standards, blanks and duplicates (one of each every 25 samples). Historic assays were carried out on half core at Aberfoyle s company laboratory (now the ALS Burnie lab) using pressed powder XRF for Cu, Pb, Zn; AAS for Ag and As and Au by fire assay. Internal laboratory blanks and standards were the only QA-QC for historic holes. Historic drill-hole collar locations were measured by the Hellyer Mine surveyor, Bass surface drill-holes by a contract surveyor and Fossey underground holes by the Fossey Mine surveyor. The drill-hole database used comprises Bass Metals drilling data recorded on Excel spreadsheet and historical data in ASCII format, both imported into Datamine software. New assay results together with standard and blank results were checked to ensure these were within acceptable limits. The Fossey orebody strikes grid NNW and has the broad cross sectional form of a folded downward tapering wedge. The deposit comprises three major zones: Massive Barite Zone - The bulk of the deposit comprises massive barite, which is dominant in the stratigraphically upper areas. BMS Zone - Underlying the massive barite zone is banded to massive BMS. The boundary of the footwall of the BMS is a sharp contact. The internal boundary between the BMS and Barite zones is usually a sharp mappable contact but occasionally is a gradational grade boundary. Footwall Zone - Commonly underlying the BMS is low to moderate grade base metal mineralisation as disseminations to stringer veins up to several 10 s of centimeters thick. Fossey East mineralisation occurs as a roughly tabular lens striking grid north and dipping steeply east. At its southern end massive barite joins and continues down-dip from the Fossey deposit but to the north it diverges and occurs east and below the main Fossey body. Fossey East mineralisation terminates to the north on the Easy St. Fault whilst to the south and at depth mineralisation lenses out. Elements were estimated using ordinary kriging, restricted to mineralisation domain boundaries. Variography of all elements was studied and grade continuity modelled. The outer boundary of the Fossey and Fossey East barite and BMS zones is based on sharp geological contacts. The internal boundary between the two zones can be gradational and a boundary of 5%(Pb+Zn) was chosen as the best grade which provided good continuity between holes and from section to section. Immediately underlying the BMS zone at Fossey holes usually contain stringer vein and / or disseminated to semi-massive mineralisation. This domain was wireframed at a cutoff of 5%(Pb+Zn). Mining of the Fossey deposit began in December 2010 with development ore being sourced from the 465 level. Longhole open stoping production commenced in March 2011. To mine closure on 4th May 2012 a total of 535KT of ore was hauled to the Hellyer Mill ROM grading 0.3% Cu, 4.2% Pb, 7.8% Zn, 1.7g/t Au and 101g/t Ag. No assumptions have been made about mining factors. No assumptions have been made about metallurgical treatment. Where no bulk density measurement was available (514 of 4112 assay samples in the mineralised zones, mostly continuous chip samples) regression equations were developed to estimate bulk density from assay values. Bulk density was interpolated for each block. Classification of resources and reserves was undertaken by taking into account data integrity, grade continuity, estimation variance, geological confidence and drill hole spacing. This resource estimate is an update of an earlier estimate (July 2011) that was reviewed by resource consultant specialists, Snowden Group. Page 8