Western Tanami Exploration

WESTERN TANAMI UNDERGROUND DIAMOND DRILLING

 Major diamond drilling campaigns are continuing within the Western Tanami Operations targeting additions to known Mineral Resources and testing advanced exploration targets.

At the completion of the initial diamond drill program at Coyote, a total of 5,936 metres had been completed in 42 holes which provided definition to the high grade quartz vein mineralisation of South Zone, North Zone and Bommie.

The Company recently completed the deepest hole that has been drilled to date within the Coyote system to test for additional mineralisation at depth and deeper into the mine sequence beneath the Coyote deposit. Sampling from CYDD178 returned an interval of 6.1 metres grading 2.8g/t Au from 487.9 metres including 0.3 metres @ 21g/t from 489.9 metres that contained several occurrences of visible gold within quartz veins. Sampling of this new zone has returned a further intersection of 4.4 metres grading 3.6g/t Au from 497.6 metres including 0.7 metres grading 19.4g/t Au from 501.3 metres. The combined interval of 14.1 metres grading 2.4g/t Au from 487.9 metres represents a significant new discovery located some 170 metres to the north and 150 metres below the lowermost development level in the Coyote mine.

Given the numerous drill targets at Coyote, a second underground diamond drill is expected to be deployed in the September 2011 Quarter to fast track Resource and infill drilling at the Coyote underground operations.

South Zone, which is located within 50 metres of the main Gonzales Lode and primary mine development, has been defined over approximately 200 metres strike and 60 metres dip extent.  South Zone is comprised of up to three narrow high grade quartz veins that commonly show substantial visible gold in drill core and mine exposures. Exceptionally high grade intervals were returned from the diamond drilling including 0.3 metres grading 2,379g/t Au from CYUG1, 0.9 metres grading 1,517g/t Au from CYUG23, 0.4 metres grading 243g/t Au from CYUG13, 1.3 metres grading 209g/t Au from CYUG69 and 0.3 metres grading 87.9g/t Au from CYUG80.

The Bommie Zone vein system has been defined over 250 metres strike and 100 metres dip extent and remains open both up and down plunge. This zone is located approximately 80 metres north of the lowest level of the Gonzales Lode. High grade intersections from the Bommie Zone include 0.8 metres grading 109g/t Au from CYUG22, 0.3 metres grading 141g/t Au from CYUG33, 0.4 metres grading 465g/t Au from CYUG36 and 0.3 metres grading 31.5g/t Au from CYUG38. A number of exceptional down hole intersections were reported from recent Resource and infill drilling programs. These intersections include 0.3m @ 1,386g/t Au from 31.5m in CYUG206 and 0.3m @ 81.3g/t Au from 3.3m and 0.3m @ 15g/t Au from 42.8m in CYUG203.

The North Zone mineralisation located between Gonzales and Bommie, also returned high grade intersections including 0.3 metres grading 186g/t Au from CYUG39, 0.4 metres grading 50.8g/t Au from CYUG22, 0.4 metres grading 34.9g/t Au from CYUG24 and 0.4 metres grading 38.0g/t Au from CYUG33. North Zone remains open along strike and has been exposed in mine development headings off the Bommie access decline.

As a result of the underground diamond drilling program, an overall Measured, Indicated and Inferred Resource increase of 66,000 ounces at Coyote was achieved after allowing for underground mining depletion during the year of 39,000 ounces.

SURFACE EXPLORATION

The Company recommenced Reverse Cycle (RC), diamond core and aircore drill programs designed to identify new deposits and better define existing open cut and underground gold Resources. Drilling to date has focussed on the Kookaburra, Sandpiper, Cuckoo and Osprey deposits, the Road Runner, Hutch's Find and Camel prospects south and west of Coyote and on conceptual and grass roots targets distributed throughout the tenement portfolio.

  • Sandpiper

At Sandpiper, initial drilling was planned to test the deposit at depth with a view to establishing a Resource suitable for an underground mining operation. The surface diamond core (DC) drilling of 14 holes for 5,463 metres has identified four parallel mineralised lodes and delineated a further 65,000 ounces of Indicated and Inferred Resources through intersecting mineralisation over 400 metres down-plunge from the base of the open pit. All four lodes remain open at depth and along strike.

Two DC holes targeting down plunge extensions of the Sandpiper mineralisation have now been completed. SPDD 15 and SPDD16 were drilled beneath SPDD14 that intersected four strongly mineralised lodes. SPDD16, the deepest intersection within the Sandpiper system, intersected 2.7 metres grading 5.7g/t Au from 355.8 metres demonstrating the mineralisation remains open at depth.

  • Kookaburra

Two diamond holes were completed at Kookaburra for metallurgical sampling and mine planning purposes as part of the Kookaburra pit expansion feasibility study. These holes targeted fresh mineralisation within the northern limb and hinge zone of the Kookaburra syncline and returned a best intersection of 39.9 metres @ 5.0 g/t Au from KBDD1. Although drilled in part sub parallel to the dip of the mineralisation, the tenor of the intersections confirms the Kookaburra mineralisation has a number of discrete high grade zones within the system. Composite metallurgical samples have been submitted for analysis with results pending.

  • Hutch's Find

RC and DC drilling at Hutch's Find produced two significant intersections from the initial program designed to better define and extend mineralisation evident from previous exploration work. Five holes totalling 833 metres were completed in this campaign. HFDD4 returned 19 metres @ 2.3 g/t Au from 98 metres and 10 metres @ 5.4g/t Au from 123 metres. Extending the hole produced a further intersection of 0.5 metres @ 17.2g/t Au from 164.3 metres. Follow-up drilling is planned for this prospect.

  • Camel

RC and DC drilling at Camel was conducted as follow up to previous drilling that had identified mineralisation within a northwest trending sequence of folded dolerite and minor sediments. Two holes were completed for 373 metres to obtain further data on the structural controls of the mineralisation.  CMDD2 returned a significant intersection of 7.2 metres @ 3.1g/t Au from 94.8 metres related to quartz veining within fresh dolerite. Further drilling will be conducted to test for extensions to this mineralisation. 

  • Road Runner

Road Runner is located approximately 7 kilometres south of the Western Tanami treatment facility. RC drilling and one diamond hole has been completed at the Road Runner prospect.  In total,106 holes for 3,032 metres were completed to increase confidence in the supergene mineralisation previously defined by aircore and limited RC drilling and to further test the interpreted primary lode structures beneath the supergene enrichment zone. A Resource estimate and mine planning work will be completed for Road Runner where a shallow open pit operation is being assessed. Highlight grades returned from this program include:

  • 2.0 metres @ 17.2g/t Au in RRC110
  • 2.0 metres @ 12.2g/t Au in RRC140
  • 3.0 metres @ 8.7g/t Au in RRC130
  • 3.0 metres @ 8.3g/t Au in RRC133
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  • Cuckoo

RC drilling at Cuckoo was designed to bring the near surface mineralisation defined by previous RAB and limited RC drilling up to Indicated Resource status. In total, 32 holes were completed for 1,538 metres which confirmed several plunging zones of gold mineralisation within the folded metasediment-dolerite sequence. Further work is required to define extensions of the mineralisation down-plunge.

  • Osprey

The Osprey mineralisation is also potentially exploitable by open pit mining and required RC drilling to better define the flat surface zone and test a primary shoot at depth.  A total of 21 holes were drilled for 699 metres which returned a signfiicant result of 4 metres grading 15.8g/t Au from 55 metres in hole OSRC20. Further drilling is required to test the down-plunge extent of the high grade hinge zone mineralisation.