Exploration for Base Metals in the Harz Mountains, central Germany. The Gosetal anomaly in the Harz Mountainsa Rammelsberg twin?

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Exploration for Base Metals in the Harz Mountains, central Germany The Gosetal anomaly in the Harz Mountainsa Rammelsberg twin?

Executive summary Harz Minerals GmbH, a fully owned subsidiary of Scandinavian Highlands Holding A/S in Denmark, holds an exploration license for a large part of the Harz Mountains in central northern Germany, covering app. 1250 km 2 A sizable, but previously unknown airborne TEM anomaly was found in the Gosetal, two kilometres west of the historic Rammelsberg mine. The anomaly has the potential of representing a World Class Deposit The TEM anomaly is located in the same middle Devonian stratigraphic sequence as the mineralisation in the Rammelsberg mine Soil Gas Hydrocarbon geochemistry analyses from the Gosetal area give a strong indication of a SEDEX deposit Geophysical and geological modelling suggested two alternative solutions for the TEM anomaly: a shallow conductor (100-400 m) or a deep conductor (500-800 m) with interference of surface infrastructure Two phases of exploration drilling have been carried out.

The Harz Mountains in central northern Germany Harz License The Harz license is about 70 km southeast of Hannover in northern Germany

Introduction The Harz is a very prospective region and mining for SEDEX and vein type mineralisations has been mined for more than 1000 years The Harz Minerals licence includes the now exhausted World Class Rammelsberg mine Airborne and ground EM surveys indicate the presence of a conductor in the same stratigraphic level as the Rammelsberg mineralisation, two kilometres west of the mine The footprint of the Gosetal anomaly is of a similar size as the combined Rammelsberg ore bodies The Gosetal anomaly lies in the same sub-basin on the margin of the Devonian Goslar Trough The TEM anomaly (the Gosetal anomaly) coincides with a pronounced soil gas hydrocarbon (SGH) geochemistry anomaly that suggests the presence of a SEDEX mineralisation The Gosetal anomaly has the potential of a World Class Deposit

The Harz license The 1250 km 2 license covers much of the historic Harz mining disctrict Goslar Basin West Harz Rise Lautenthal Rammelsberg Bad Grund Clausthal Zellerfeld Einheit St-Andreasberg Several hundreds smaller historic mines in the area are not indicated

Framework and setting of the exploration area Very stable political and judicial environment in Germany Positive local political attitude towards the project The target area is located two kilometres south of the historic mining town of Goslar Good infrastructure industrial area and railway system within few kilometres Some of the industries are remnants from the mining era

Rammelsberg mine A classic SEDEX deposit, situated at a shelf edge on the transition between the Goslar Trough (Middle Devonian shales) and the West Harz Rise (lower Devonian sandstones and shales) Source: Large and Walcher, 1999

Rammelsberg mine More than 1000 years of mining history Closed in 1988 after exhaustion of the resources Last operated by Preussag Metal AG since the 1920 s Now a UNESCO World Heritage site

Rammelsberg mine Total production: 27-30 M tonnes ore Average grade: 2% Cu, 6% Pb, 14% Zn, 1 g/t Au, 140 g/t Ag and 20% barite (Large and Walcher, 1999)

In-situ Value (US$/tons) Classification of mineral deposits Based on determined resources of 230 deposits (gold and base metals) 10000 Small Medium Large World class Rammelsberg 1000 100 Increasing Value Sub-economic 10 Break even interval 1 0.01 0.1 1 10 100 1000 10000 100000 Tonnage (Mt)

The Rammelsberg ore deposit The Rammelsberg ore (purple color) occurs in an overturned, isoclinal syncline. In the fold hinge, the ore body increases in thickness to ca. 40 m, from ca. 8 m on the limbs. (source: Preussag archives) 100 m Section through the Rammelsberg mine (Preussag, 1984)

Recent exploration activities in the Harz Data mining - 2008-2009 - acquisition of Preussag data - collection, digitising and evaluation of data - entering in GIS and database systems - geological 3D modelling Airborne TEM survey in the Goslar Trough and West Harz Rise May 2008 - outlining of the Gosetal anomaly - Ground inspection of the area mapping and sampling - Maxwell modelling of the TEM data Soil Gas Hydrocarbon geochemistry spring 2009 3D modelling of a shallow conductor in the Gosetal area combining geological and geophysical data spring 2009 Two phases of exploration drilling - three holes (245-372m) in the fall of 2009, two holes (677 and 750 m) in the winter of 2010/2011 Down hole TEM surveys during the drilling campaigns. Between hole IP survey in February 2011

Gosetal Anomaly in the Wissenbacher Shales Goslar Upper Devonian Calcareous shales Grane Lake Middle Devonian Volcanic rocks Upper Wissenbacher Shales Lower and middle Wissenbacher Shales Rammelsberg ore Ore-equivalent horizon Sand-banded shales Rammelsberg Calceola shales Lower Devonian Kahleberg sandstones Contoured TEM anomaly The Gosetal anomaly lies within the Wissenbacher shales, similar to the Rammelsberg ore deposit. Geological map from Preussag archives, 1:5000

New geological model Observations: The Rammelsberg ore bodies are bound to the north and south by two large faults, named the Eastern and Western Main Faults. Much of the Gosetal anomaly is constrained between the same two faults. The northern limit of the Gosetal anomaly coincides precisely with the Eastern Main Fault. The thickness of the middle Devonian sediments increases rapidly from north to south of the Eastern Main fault. Model: The new geological model assumes that the two main bounding faults are reactivated faults that formed the boundaries of a subbasin within the Devonian Goslar Trough during deposition of the Rammelsberg ore. The Gosetal anomaly (assumed mineralisation) and the Rammelsberg ore lie within the same sub-basin, at the eastern margin of the Goslar Trough. Grane Lake Goslar EM, WM = respectively Eastern and Western Main Fault EM WM

Airborne TEM survey 140 km 2 survey of the Goslar Trough and West Harz rise, May 2008 = Rammelsberg

The Gosetal anomaly The Gosetal Anomaly Almost 2 km long footprint 1-2 km west of Rammelsberg Strong conductor Unique in the surveyed area = Rammelsberg 1D inversion - Resistivity slice 200-220 masl.

The Gosetal Anomaly Approximately two kilometres west of the World class Rammelsberg mine Lies within the Wissenbacher shales, similar to the Rammelsberg deposit Almost two kilometre long footprint Strike-parallel with the geological layering Strong conductor, unique in the surveyed area Same depositional sub-basin as the Rammelsberg ore One of the previously drilled holes intersected 20 cm with 4% base metals Down-hole TEM surveys result in high signal strengths and decay curves not consistent with an empty half space = approx. 2 km Rammelsberg Harz 2008 SkyTEM resistivity slice 200-220 masl (ca. 200 m depth)

The ore equivalent horizon The ore-equivalent horizon can be recognised over a large area, many kilometres away from the mine, in outcrop and in drill holes, and contains commonly up to 1500 ppm Zn+Pb 4% base metal over 20 cm was found in the ore equivalent horizon in a Preussag drillhole in the Gosetal area in the 1980 s Restored depositional basin in the Lower Devonian.

Two conductor models Two alternative solutions consists for the collective data: a model with a shallow folded conductor, and a model with a deeper conductor of uncertain geometry 1) The model with the folded shallow conductor, focusses on the high frequency part of the data using Maxwell modelling. Peaks in the data are modelled as anticlinal fold hinges. The conductor needs to lie very shallow, in order to give the overall high TEM signal strength. 2) The model with the deeper conductor is mainly based on the low frequency (long wavelength) TEM anomaly. This is difficult to model exactly. The presented model connects this anomaly with the oreequivalent horizon, of which the position at depth was approximately known prior to the drilling, based on Preussag drilling data. Because of the similarity with the Rammelsberg deposit, the core of the syncline in the Gosetal area was chosen as the most likely target.

Modeled conductors Geological profile along one of the TEM flight lines. The two potential targets, an upper modelled conductor (blue dashed line) that forms a synform-antiform pair at 100-400m depth, and a deeper target formed by the ore equivalent layer (same stratigraphic level as the Rammelsberg ore) at greater depth in red. A deep synform with the ore-equivalent layer was intersected in a near-by Preussag drill hole from the 1980 s.

3D Geological models Folded mineralised layers form overturned anti- and synclines, plunging shallowly to the southwest and south. The upper target lies between ca. 100 m and 400 m depth. The lower target lies between ca. 500 m and 700 m and coincides with the regionallyrecognised ore-equivalent layer. Two alternative solutions in which geological/geophysical profiles of the each conductor were combined in a 3D model of the folded conductor. Model seen viewing towards the northeast.

Soil Gas Hydrocarbon geochemistry survey The concentric ellipses indicate a nested halo anomaly, and mark a redox cell above a SEDEX mineralisation. The white lines are the contoured TEM anomaly, of which the western part coincides with the SGH anomaly. The SGH anomaly is rated 6 out of 6, i.e. it strongly suggests a SEDEX mineralisation.

SGH nested halo in 3D geological model The core of the SGH anomaly is projected down as an elliptical cylinder. It coincides with the steep limb of the syn-/antiform pair of the upper target.

Exploration drilling Phase 1 - October to December 2009: three holes were drilled to 245-372 m depth to test the model of an upper folded conductor. Two holes intersected the steep to overturned limb of the modelled fold. The third hole intersected the synform. Phase 2 November 2010 to January 2011: Re-entry of one of the existing holes, drilled to 677 m. One new hole drilled to 750 m. These holes intersected the ore-equivalent layer of the Rammelsberg ore, but without mineralisation Down hole EM surveys in the drill holes Ground EM surveys along lines crossing the TEM anomaly

Exploration drilling, phases 1 and 2: testing the targets Drill holes of the first phase (red) testing the shallow target with a depth of 245-372 m, and the second phase (green) testing the deep target, 677 and 700 m deep.

Drill hole hits fault before the modelled conductor The drill hole targeting the synform core hits a fault, which truncates the synform

Ground geophysics Drilling phase 1 fall 2009: down-hole and ground TEM geophysical surveys revealed no conductors in the vicinity of the holes. May 2010: renewed down-hole TEM confirmed previous results. Down-hole IP and resistivity measurements indicate that the airborne measured anomaly is not a result of conductive shales. A 2 km long CSAMT survey was unsuccessfull as a result of high noise levels Drilling phase 2 winter 2010/2011: Down-hole TEM survey shows no nearby conductor. Down-hole IP and resistivity. February 2011: Between-holes IP survey to test for non-conductive ore bodies (e.g., dessiminated ore, sphalerite-rich ore). An IP anomaly exists between the two deep holes, final results are pending

Results of the first two drilling phases The folded structures were confirmed Two significant thrust faults were discovered The folded conductor at 100-400m depth was not found EM surveys found no conductors close to the drill holes or in the upper 200 m in the vicinity of the holes The high frequency part of the airborne TEM signals, on which the shallow model was based, are now assumed to be an interference of a buried conductor and surface infrastructure A strong EM signal in the area and EM soundings in the drill holes suggest the presence of a buried conductor

Section through the Gosetal area Lithological layering Fault Axial plane of synform Amphibolite Upper Wissenbach shale Ore-equivalent horizon Lower Wissenbach shale Sand-banded shale Drill hole (thick parts drilled in 2010) Several solutions for ore-equivalent horizon (magenta) in the central synform. The ones on the left are the most likely.

Section through the Gosetal area Lithological layering Fault Axial plane of synform Amphibolite Upper Wissenbach shale Ore-equivalent horizon Lower Wissenbach shale Sand-banded shale Drill hole (thick parts drilled in 2010) At 580 m the drillhole intersects a major fault which displaces the core of the syncline

Present status of the project The shallow folded conductor model has been tested and rejected. A first attempt to intersect a deep conductor was not successful. Down-hole TEM surveys show no sign of a near-by large conductor, but measured EM levels are high and decay curves are not consistent with an empty half-space. Preliminary results of between-holes IP survey show an anomaly between the two drill sites of 2010. Modelling of the results is ongoing. A third drilling phase will depend on the final outcome of the IP survey.

Contact Scandinavian Highlands Skovlytoften 23, 1. DK-2840 Holte Denmark Tel. +45 30 67 30 30 Jesper M. Larsen Tel. +45 30 67 30 42 jml@shas.dk www.scandinavian-highlands.com