ASX ANNOUNCEMENT PROJECT UPDATE

Transcription

1 WEDGETAIL MINING LIMITED ABN Gound Floo, 24 Outam St West Peth WA 6005 Postal: PO Box 117, West Peth WA 6872 Phone: Fax: Website: ASX ANNOUNCEMENT PROJECT UPDATE 29 th Mach 2007 NULLAGINE PROJECT DEVELOPMENT The Company is pleased to advise that significant pogess has been achieved in advancing the development poposal fo the Nullagine Poject. Afte assessment of a numbe of altenatives fo caying out the mining of the vaious deposits compising the poject, the Company has elected to utilise owne mining as its pefeed mining option. This has esulted in a significant cost saving ove contact ates povided by a numbe of mining contactos late last yea. The new mining costs have been used as the basis fo pepaing a evised Financial Model which shows impoved etuns. Subject to final auditing by Westpac and thei independent consultant, RSG Global, this model will fom the Base Case Model fo the establishment of the level of poject debt available fom Westpac. It is expected that this pocess will be completed by mid-apil. The Depatment of Envionment and Consevation has advised that it has appoved the Woks Appoval fo the constuction of the pocessing plant. Appoval of the Mining Poposal which is now the only outstanding egulatoy appoval equied fo the poject to poceed is now expected fom the Depatment of Industy and Resouces in ealy Apil. Detailed planning fo the constuction of the pocessing plant has been ongoing and it is now anticipated that constuction will commence in May with fist gold poduction at the commencement of the second quate 2008.

2 EXPLORATION OUTLINES LARGE-SCALE GOLD TARGET An extensive zone of nea-suface (<20 m depth) gold minealisation has been defined by ecent exploation of the Achaean conglomeate located at the Beatons Ceek pospect at Nullagine. The lage aeal extent (>3 km 2 ) and flat-lying chaacte of the minealisation within this taget suggests thee is the potential to develop a low-stip atio, bulk-tonnage gold esouce. Moeove, the coase natue of the gold and it s occuence within the oxidised matix of the conglomeate suggests that the minealisation may be amenable to cost-effective pocessing involving a combination of mechanical beneficiation and gavity o heap-leach teatment to poduce gold. The esults fom the Beatons Ceek pospect ae a clea demonstation of the potential that exists within the Company s landholding. Highlights fom the ecent exploation pogams at Beatons Ceek include: Soil sampling Gold-in-soil anomaly at Beatons Ceek is ten times lage and moe metal ich than any othe soil anomaly delineated by Wedgetail s sampling at Nullagine; The anomaly extends along stike fo ove 2.6 kilometes and coves an aea of almost 3 squae kilometes at the >150 ppb Au theshold; At the >500 ppb Au theshold, seveal anomalies up to 1 kilomete long ae defined. RC dilling Check dilling designed to eplicate RC dilling undetaken in the 1980 s intesected boad zones of minealisation in oxidised bedock, within 20 m of the suface; Results fo the ecent dilling ae makedly bette than those etuned by the pevious dilling, and intecepts include g/t, g/t and g/t. Page 2 of 8

3 Backgound Histoy and Setting of the Beatons Ceek Pospect The Beatons Ceek mining cente is located 1 km noth of the town of Nullagine, and was the site of the fist gold discovey in the distict in Up until 1904 almost 3,600 ounces of gold at a ecoveed gade of 18.6 g/t was won fom had-ock mining. Mining esumed in 1983, but was focussed on the eluvial and alluvial mateial down slope fom the histoic had-ock wokings. Gold minealisation at Beatons Ceek is hosted by an intelayeed sequence of conglomeate, coase git and mino sandstone beds that locally fom the basal membe of the Hadey Sandstone, which is an impotant component of the lowe pat of the Achaean Hamesley Basin. In detail, gold is associated with pyite in the coasest beds (cobble and boulde conglomeate) and in many minealised beds the pyite exhibits a buck-shot o ounded fom. It is this featue, along with the geneal natue of the host ock sequence, that has dawn compaisons between the Beatons Ceek minealisation and the giant golduanium deposits of the Witwatesand Basin in South Afica, which have yielded ove half of the wold s total gold poduction. In the 1970s, the Beatons Ceek conglomeate was the focus of a numbe of significant gold and uanium exploation initiatives by majo companies seaching fo Witwatesand-style minealisation, and diamond coe holes wee dilled to depths in excess of 1 kilomete in some cases. Impotantly, gold minealisation was intesected at depths of as much as 500 m in these dill holes. Recent wok pogams by Wedgetail epesent a peliminay step towads the objective of delineating a lage, nea-suface oxide gold esouce at Beatons Ceek. These pogams wee designed to give an indication of the potential volume and gade of minealisation, and to check the effectiveness of past exploation pogams dating back 25 yeas. Soil Sampling Thee ae no ecods of soil sampling in the Beatons Ceek aea in the past and much of the pevious exploation dilling activity appeas to have been limited to aeas aound the histoic had-ock wokings. Theefoe, in ode to detemine the potential scale of the minealisation system at Beatons Ceek, the entie tenement holding was subject to systematic sampling along 200 m-spaced lines. The esults of this wok ae summaised in the figue below, whee it can be seen that coincident gold and asenic-in-soil anomalies extend along stike fo ove 2.6 km, and cove an aea in excess of 3 km 2 at the >150 ppb Au theshold. At the >500 ppb Au theshold, fou distinct gold-in-soil anomalies ae defined, and two of these exceed 1 km in length. As expected, these highe level anomalies diectly ovelie outcops of pyitic cobble and boulde conglomeate. Page 3 of 8

4 Compaed with othe significant soil geochemical anomalies defined by Wedgetail sampling in the Nullagine distict, the anomalies at Beatons Ceek ae an ode of magnitude (10 x) lage and moe metal ich (gold values exceed 5 g/t in two of the anomalies, and peak at 6.28 g/t). Rock units Beaton Ceek Conglomeate Mosquito Ceek Fomation Histoic Gold Wokings Shaft o adit Gold-in-soil contous As >50 ppm Metana (1984) >150 ppb >500 ppb >2000 ppb >5000 ppb Asenic-in-soil contous >50 ppm >100 ppm RC dillhole collas Wedgetail ± Beaton 1 kilomete As >100 ppm Ceek Nullagine Beatons Ceek mining cente showing ock units, histoic had-ock wokings, soil geochemisty, and dill hole collas Beatons Ceek RC Dilling A 20-hole pogam of RC dilling was ecently completed at Beatons Ceek by Wedgetail to check the esults of pevious shallow RC dilling undetaken in the ealy 1980 s. The pevious dilling was mainly limited to the aea aound the histoic had-ock wokings and penetated to the base of oxidation, at aound 20 to 45 m. Numeous low-gade intecepts wee etuned by the ealy RC holes, but peliminay modelling of these esults suggested that the minealisation was sub-economic. In contast, the esults of the Wedgetail check RC dilling ae fa moe encouaging. (see the dill hole plan, coss section and table of intecepts that follow). Fo example, dill hole BCRC0001 intesected 7 m gading 2.88 g/t fom 6 m depth, and dill hole BCRC intesected 15 m gading 1.45 g/t fom 7 m depth. Page 4 of 8

5 Pai compaison of the esults whee Wedgetail dill holes twinned the ealy dill holes (i.e. <2 m sepaation) suggests that the main diffeence between the esults is the poo epesentation of highe gades (1 to 10 g/t) in the assays fom the ealy dilling. The most likely cause of this discepancy is poo sample ecovey duing the ealy RC dilling, which would not have employed a face-sampling RC hamme, unlike the ecent Wedgetail dilling which achieved a high oveall level of sample ecovey. Gold-in-soil contous >150 ppb >500 ppb >2000 ppb >5000 ppb Coss Section Metana (1984) Wedgetail RC Colla ± 250 metes RC Intecept Cumulative metal facto (gmm = g/t x metes) 10 gmm 20 gmm 30 gmm Cental pat of Beatons Ceek mining cente showing soil geochemisty and dill hole intecepts Page 5 of 8

6 g/t g/t g/t g/t g/t mrl 425 mrl BCRC0001 BCRC0003 BCRC g/t BCRC0004 BCRC0005 BCRC0006 BCRC0007 BCRC g/t 400 mrl 375 mrl Coss Section showing intecepts fom ecent Wedgetail RC dilling (black tace & hatch), and intecepts in RC holes dilled in 1984 by Metana Mineals (gey tace & hatch; 0.5 g/t lowe cut-off used to geneate both sets of intecepts) HOLE ID Table of intecepts fo Beatons Ceek RC dilling NORTHING EASTING RL INCLINATION FROM TO WIDTH GRADE (MGA) (MGA) (AHD) /AZIMUTH (m) (m) (m) (g/t Au) BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC BCRC Note: Fie Assay analysis - Ultatace laboatoies. Intesections calculated as weighted aveages. Intesections calculated using a 0.5 g/t Au lowe cut, no uppe cut and 2m intenal dilution allowable. Page 6 of 8

7 Discussion and futue initiatives The ecent exploation pogams at Beatons Ceek have significantly alteed the Company s view of the minealisation potential of this aea. Fistly, the soil sampling indicates that bedock minealisation extends well beyond the aea tageted by ealy undegound mines and pevious campaigns of RC dilling, and, secondly, the ecent check RC dilling suggests that the pevious dilling significantly undestated the gade of bedock minealisation. The soil anomalies that have been delineated at the Beatons Ceek pospect epesent immediate dill tagets, and the company intends to stat a compehensive campaign of dilling in this aea in the June quate. High expectations ae held fo the aea along stike to noth of the ecent check RC dilling patten, whee a >500 ppb gold-in-soil anomaly extends fo in excess of 1 kilomete. Only a single dill hole has eve tested this anomaly (which etuned an intecept of 3 m gading 2.69 g/t at 12 m depth), and thee is evey chance that minealisation that is simila to, o bette than that intesected by the check RC dilling will be encounteed along the length of this anomaly. Futhe south of the ecent RC dilling patten, thee a two stong gold anomalies that ae almost 1 kilomete long that have neve been tested by dilling. Although exploation of the Beatons Ceek pospect emains at a vey ealy stage, thee is enough infomation fom suface outcops, gold distibution in the soil hoizon, and dill hole intecepts to speculate that the tonnage potential of the oxide minealisation taget, ove an aea of 3 km 2 and to a depth of 20 m, is in the ode of 15 to 20 million tonnes. In addition to committing to a compehensive campaign of high-quality RC dilling, the Company also intends to begin metallugical test wok on the Beatons Ceek minealisation to detemine the most economical method of extacting gold fom the nea-suface oxide mateial. The weatheing state of this mateial is highly vaiable, with much of the oxidation focussed in the fine gained matix between lagely unweatheed cobbles and bouldes of quatz, chet and ganite. As most of the minealisation is also constained to the oxidised matix mateial, thee is the potential to mechanically beneficiate ROM feed by beaking and selectively sceening this fine-gained matix mateial fom the cobbles and bouldes of waste ock, pio to the teatment of the sceen unde-feed in a gavity and/o heap-leach cicuit. Such an appoach to the teatment of the Beatons Ceek minealisation may significantly lowe pocessing unit costs and effectively educe mining cut-off gades to the point whee waste emoval is negligible. Both of these potential cost savings would be eflected in a favouable cash cost fo gold poduction. In addition to potentially educing opeating costs, it is also likely that a pocessing cicuit involving mechanical beneficiation would equie a much lowe capital commitment. Page 7 of 8

8 ONGOING EXPLORATION ACTIVITIES Resouce definition RC dilling is cuently undeway at the Angela pospect, which is located a shot distance fom the main Golden Eagle esouce. This pospect was discoveed last yea and was quickly advanced fom an intense soil geochemical anomaly to the point whee boad zones of gold minealisation in bedock wee delineated by RAB dilling ove a 600 m stike length. The cuent RC dilling is being undetaken on 50 m- spaced lines and selectively tagets the bette zones of bedock minealisation. The esults fo this wok should be eceived within 4 weeks, and, given the close location of the Angela pospect to the poposed Golden Eagle mining and pocessing infastuctue, this pospect is seen as the best oppotunity to quickly add to the existing eseve base fo the Nullagine gold poject. Inquiies: Mike Gigson Exploation Manage Tey Stak Managing Diecto Tel: The infomation in this epot that elates to Exploation Results is based on infomation compiled by D. Michael Gigson, who is a Membe of the Austalasian Institute of Mining and Metallugy. D. Gigson is a full time employee of Wedgetail Mining Limited. D. Gigson has sufficient expeience which is elevant to the style of minealisation and type of deposit unde consideation and to the activity which he is undetaking to be qualified as a Competent Peson as defined by the 2004 Edition of the Austalasian Code fo Repoting of Exploation Results, Mineal Resouces and Oe Reseves. D. Gigson consents to the inclusion in the epot of the mattes based on his infomation in the fom and context in which it appeas. Page 8 of 8