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Technical Report 3760

Exploration Permit for Minerals No. 12561 ‘Fountain Range’, Queensland Partial Relinquishment Report

For The Period Ended 9 August 2009

XSTRATA COPPER EXPLORATION PTY LTD

TECHNICAL REPORT No.

3760

TITLE: EXPLORATION PERMIT FOR MINERALS No. 12561 ‘FOUNTAIN RANGE’, QUEENSLANDPARTIAL RELINQUISHMENT REPORTFOR THE PERIOD ENDED 9 AUGUST 2009

HOLDERS: MOUNT ISA MINES LIMITED SOVEREIGN METALS LIMITED

OPERATORS: XSTRATA COPPER EXPLORATION PTY LTDSOVEREIGN METALS LIMITED

1:250,000 SHEET: SF54-2 ‘CLONCURRY’

1:100,000 SHEETS: 6956 ‘MARRABA’

INVESTIGATIONSCONDUCTED BY: XSTRATA COPPER EXPLORATION PTY LTD

AUTHORS: A BROWN, TV HARVEY

SUBMITTED BY: TG SHAW

DATE: APRIL 2010

COPY: 2

DISTRIBUTION

1. Xstrata Copper Exploration Pty Ltd, Mount Isa Library

2. Department of Mines and Energy, Brisbane

3. Xstrata Copper Exploration Pty Ltd, Exploration Library

4. Sovereign Metals Limited, Perth (Hard & Digital)

i

LIST OF CONTENTS

1 INTRODUCTION................................................................................................1

2 LOCATION AND ACCESS............................................................................1

3 TENURE.....................................................................................................1

4 REGIONAL GEOLOGY.................................................................................2

5 PREVIOUS EXPLORATION ACTIVITY..................................................................3

6 EXPLORATION COMPLETED DURING THE TERM OF TENURE......................36.1 RECONNAISSANCE AND ROCK CHIP SAMPLING.............................................................36.2 GEOPHYSICS.............................................................................................................3

7 CONCLUSIONS AND RECOMMENDATIONS.................................................4

8 REFERENCES.............................................................................................5

ii

LIST OF TABLES

Table No TitleTable 1 Main Phases of Previous Exploration in

the Current EPM Area

LIST OF DRAWINGS

Drawing No Title Scale58494 EPM 12561 Fountain Range

Location and Sub-block Details 1:250,00058900 Fountain Range EPM 12561 Ged’s Reward

Area2009 IP-Resistivity Survey 1:10,000

LIST OF APPENDICES

Appendix No Title

Appendix 1 Rock Chip SamplesAppendix 2 IP-Resistivity Ged’s Reward

ii

SUMMARYAim of ProjectThe exploration program undertaken on Exploration Permit for Minerals (EPM) 12561 ‘Fountain Range’ was aimed at the discovery of economic copper-gold mineralisation.

Object of ReportThis report provides details of exploration carried out by Xstrata Copper Exploration over 7 relinquished sub-blocks of EPM 12561 ‘Fountain Range’ during the period of tenure ending 9 August 2009.

LocationEPM 12561 ‘Fountain Range’ covers approximately 216 km² in four separate blocks. The tenement is approximately 32 km west of Cloncurry, between latitudes 20 30’ south and 20 50’ south, and longitudes 140 06’ east and 140 17’ east.

TenureEPM 12561 ‘Fountain Range’, was granted over 67 sub-blocks for a period of five years on 10 August 2005.

The ‘Fountain Range’ EPM was operated by Xstrata Copper Exploration Pty Ltd on behalf of Mount Isa Mines Limited (51%), as part of the Carpentaria Joint Venture with Sovereign Metals Limited (49%), previously Echelon Resources Limited. On 18 March 2008, Sovereign Metals elected to sole fund and manage exploration on the tenement as part of the Excluded Tenements Joint Venture. On 21 October 2009, Xstrata Copper Exploration Pty Ltd again assumed management over the tenement.

Following the relinquishment of 7 sub-blocks reported here, the current tenement now totals 30 sub-blocks.

Summary of WorkExploration conducted by Xstrata Copper Exploration over the 7 relinquished sub-blocks to 9 August 2009 comprised compilation of open file data as part of regional target generation, reconnaissance traverses, rock chipping and a single line of IP-resistivity surveying.

Conclusions and RecommendationsTarget generation work failed to identify targets of significant size or interest to Xstrata Copper Exploration over the relinquished sub-blocks. The IP-resistivity surveying failed to indicate any sulphide mineralisation that may have been associated with surface geochemistry.

August 1 EPM: 12561 ‘Fountain

1 INTRODUCTIONExploration Permit for Minerals (EPM) 12561 ‘Fountain Range’, was granted on 10 August 2005 comprising 67 sub-blocks in four groups, approximately 32km to the west of the township of Cloncurry in north-western Queensland.

The tenement is one of several included in the Carpentaria Joint Venture between Mount Isa Mines Limited (51%) and Sovereign Metals Limited (49%), previously Echelon Resources Limited. The Joint Venture is operated by Xstrata Copper Exploration Pty Ltd on behalf of Mount Isa Mines. In 2008, Xstrata Copper Exploration ceased exploration activities on EPM 12561. Sovereign Metals elected to sole fund and manage exploration over the tenement on 18 March 2008 as part of the Excluded Tenements Joint Venture. On 21 October 2009, Xstrata Copper Exploration Pty Ltd again assumed management over the tenement.

The primary conceptual exploration target is economic iron-associated copper-gold mineralisation, recognised in a number of mineral deposits in the Eastern Succession of the Mount Isa Inlier. In the Cloncurry district the prominent example is the Ernest Henry copper- gold deposit (Ryan, 1998) where the ore is hosted in a magnetite-rich breccia body. Mineralisation is considered to have occurred post-peak metamorphism in an actively dilating breccia body within a north east-striking shear zone. Other significant deposits in the Cloncurry district are less magnetic and include Osborne (Adshead et al., 1998), where copper- gold ore is hosted in silica - magnetite pyrrhotite bodies, and Eloise where copper-gold ore is pyrrhotite-hosted (Baker, 1998). The common theme to all these styles of mineralisation is a strong structural control, an association with iron-rich alteration assemblages (sulphide or oxide), usually magnetic to some degree, and a probable granitoid genetic association.

This report documents work conducted by Xstrata Copper Exploration on the 7 sub-blocks relinquished during the tenure period ending on 9 August 2009.

2 LOCATION AND ACCESS‘Fountain Range’ EPM now covers approximately 80 km². The tenement is approximately 32 km west of Cloncurry, between latitudes 20 35’ south and 20 45’ south, and longitudes 140 10’ east and 140 15’ east.

The Exploration Permit is accessed using the Corella Park Road and subsequent station tracks. This tenement is located within the northern portion of the Marraba (6956) 1:100,000 sheet, and within the Cloncurry (SF54-2) 1:250,000 sheet.

The tenement area is variably rugged, with areas of good exposure interspersed with flat valleys containing alluvial to colluvial material.

3 TENUREEPM 12561 ‘Fountain Range’ comprising 67 sub-blocks, was granted to Echelon Resources on 10 August 2005 for an initial five year term as part of the Carpentaria Heads of Agreement. The Carpentaria Heads of Agreement was a Joint Venture between Mount Isa Mines Limited as the manager, and Echelon Resources.

During 2006, Mount Isa Mines earned 51% equity in the Joint Venture with Echelon Resources electing to contribute to their share of Joint Venture (JV) expenditure in order to maintain their 49% equity in the Carpentaria Joint Venture.


On 24 October 2006, Echelon Resources de-merged some of its Australian exploration assets into Sovereign Metals Limited (Sovereign). As a consequence, Echelon Resources assigned its interest in the Carpentaria Joint Venture to its wholly owned subsidiary, Sovereign.

Xstrata Copper Exploration Pty Ltd was appointed project manager of the Carpentaria Joint Venture on behalf of Mount Isa Mines Limited. On 18 March 2008, EPM 12561 ‘Fountain Range’ was transferred to an Excluded Tenements JV with Sovereign Metals electing to sole fund and manage exploration over the tenement. On 21 October 2009, Xstrata Copper Exploration Pty Ltd again assumed management over the tenement.

Twenty-one sub-blocks of EPM 12561 were relinquished on 9 August 2008. On June 25, a further 9 sub blocks was relinquished, accompanied by a relinquishment variation request. A letter dated 4 March 2010 from the Principal Tenure Officer denied the variation, and requested a minimum of a further 7 sub blocks to be relinquished. The 7 sub blocks, which are reported on here, were submitted for relinquishment on 31 March 2010. The location of the residual tenement and relinquished sub-blocks are presented in Drawing No. 58494.

Retained Sub-Blocks

BIM Block Sub-BlocksCLON 531 c, d, g, h, j, m, n, o, p, r, s, t, x, yCLON 603 a, b, c, d, f, g, h, j, l, m, n, o, q,

r, s, tTotal

Relinquished

Sub-Blocks

30 Sub-Blocks

BIM Block Sub-Blocks

CLON 459 f, l, q, s, t, x, y

Total 7 Sub-Blocks

4 REGIONAL GEOLOGYThe geology of the tenement can be divided into two broad areas, separated by a major northeast trending fault that is broadly coincident with the Barkly Highway. The northern area is dominated by Corella Formation calc-silicates, sandstones, and siltstones intruded by the Tommy Creek Microgranite and various dolerites. A thin sequence of Quamby Conglomerate is found in the northern sub-blocks. Structurally, the block is dominated by the Fountain Range Fault and the Corella River Fault Zone. The Fountain Range Fault runs along the western boundary of the tenement before crossing the northern sub-blocks; the Corella River Fault Zone is a broad northeast trending zone of brecciation that hosts a significant number of small copper-gold shows.

The southern area is dominated by the Bulonga and Duck Creek Anticlines, and the Wakeful Syncline, all of which plunge to the northeast. Three main lithological packages are present as follows:

The Overhang Jasperlite consisting of jaspilite, limestone, shale and marl; The Mitakoodi Quartzite comprising roughly 1750Ma deformed sedimentary and

intrusive rocks;


The Marraba Volcanics consisting mainly of metabasalts.

E mE mE mE mE

400000 410000 420000 430000 440000

7730000 mN 7730000 mN

7720000 mN 7720000 mN

7710000 mN 7710000 mN

7700000 mN 7700000 mN

4

5

66

6

6

bc

fg

lm

h459

460

qrstuqr

xyzvw531cdeghjk

mnop

rst

xy

abcd

fghj

lmno

qrst603

de

jk kfg675

674 o p no 676

st

wx x

140º05' 140º10' 140º15' 140º20' 140º25'

140º05'

1:1 Million Block ID Sheet : Cloncurry SF54

140º10' 140º15' 140º20'

Relinquished area - 2008



140º25'

0 5 10 15

Kilometers

XSTRATA COPPER EXPLORATION

FOUNTAIN RANGE EPM 12561

Location and Subblock DetailsRegion: NW QLD Projection: AGD 84 Author: P.Gow, A.Brown Scale: 1:250,000

1:100,000 : Marraba 6956 Drawn: G. O'C, S. J Date: 14/10/2004

1:250,000 : SF54-02 Revision Date: 19/03/2010 Drawing No: 58494 Sheet Size: A4

500 Km

Fountain Range EPM Mount Isa

--

--

--

--

--

m


5 PREVIOUS EXPLORATION ACTIVITYThe ‘Fountain Range’ area was the subject of significant exploration during the 1970’s to 1990’s. Surface geochemical sampling was the common exploration method, although airborne electro magnetics (EM) was also employed. The main phases of work completed over the current EPM area are documented in Table 1 below.

Year Company Activities

EPM DNRMReport

1975 Jododex Soil sampling, stream sedimentsampling, drilling

EPM1323 CR 5350,5608, 5939

1976 CarpentariaExploration Co Pty Ltd

Soil sampling EPM1269 CR 5572

1984 CRA Stream sediment sampling,RAB drilling

EPM3368,3967

CR 14123,15558

1989 WMC Stream sediment sampling EPM5544,6896

CR 21661,22166

1992 Dominion & NorthLimited

Stream sediment and soilsampling, drilling, airborne EM

EPM5754,7438, 7934

CR 24316

1997 Eagle Mining Stream sediment sampling EPM9601 CR 301832002 Selwyn Mines Soil sampling EPM10553 CR 33672

Table 1: Main Phases of Previous Exploration in the Current EPM Area

6 EXPLORATION COMPLETED DURING THE TERM OF TENUREExploration work conducted by Xstrata Copper Exploration over the sub-blocks relinquished during the period of tenure ending 9 August 2009 comprised a review of open file data as part of regional target generation activities, reconnaissance traversing including rock chip sampling, and a single line of IP-Resistivity surveying.

6.1Reconnaissance and Rock Chip Sampling

Subsequent to review of historical datasets, a number of traverses along a ~5km trend of elevated copper in soil were conducted. The trend was found to be hosted in calc silicate pyroxene-amphibole-feldspar±garnet metasedimentary rocks. 8 Rock chip samples were taken with maximum values of 4068ppm Cu and 34ppb Au. Details of the samples are in Appendix1. The low level copper was attributed to metamorphic remobilisation of metal.

6.2Geophysics

A single 1.4km line (AGD84 7730600N) of IP-resistivity surveying was completed over “Ged’s Reward”. Survey parameters comprised a 100m dipole-dipole array, with eight levels of transmitter dipole – receiver dipole separation (50m, 150m, 250m, 350m, 450m, 550m, 650m & 750m). This area forms part of the linear copper in soil trend and IP-resistivity surveying was carried out to test for the possibility of sulphides at depth. The results of the survey show a zone of weakly anomalous IP (peak values 10mV/V) coincident with anomalous copper geochemistry (413800mE-414000mE). The low tenor of IP anomalism suggests that significant sulphide accumulation is unlikely to be associated with the geochemistry.

The position and extent of IP-resistivity survey line 7730600N are shown on


Geophysical Coverage Map Drawing 58900; geophysical data and results can be found in Appendix 2.


7 CONCLUSIONS AND RECOMMENDATIONSTarget generation work failed to identify targets of significant size or interest to Xstrata Copper Exploration over the relinquished sub-blocks. The follow up ground work resulted in no recommendations for further work over the relinquished sub blocks.


8 REFERENCESAdshead ND, Voulgaris P and Muscio VN, 1998; Osborne copper-gold deposit, in Geology of Australian and Papua New Guinean Mineral Deposits (Eds. Berkman DA and MacKenzie DH), pp 793-800, AUSIMM Monograph 22.

Baker T, 1998; Alteration, mineralisation, and fluid evolution at the Eloise copper-gold deposit, Cloncurry District, Northwest Queensland, Australia, Economic Geology, v 93, pp 1213-1236.

Ryan AJ, 1998; Ernest Henry copper-gold deposit, in Geology of Australian and Papua New Guinean Mineral Deposits (Eds. Berkman DA and MacKenzie DH), pp 759-768, AUSIMM Monograph 22.

DRAWINGS

APPENDIX 1-21. Rock Chip Samples

2. Geophysical Data (Digital)

140°10' 140°11'

412000E 413000E 414000E 415000E 416000E

Ged's Reward IP Line 7730600mN (100m)

412000E 413000E 414000E 415000E 416000E140°10' 140°11'

-20°31'7732

77317730

7725

- 20°3

1'

7731

0077

2577

3077

32

10000,6,6,2,2,1;P,525x825,c

-20°32'7729

7728

- 20°3

2'77

2877

29

Scale 1:10000200 0 200 400 600

metresAGD84 / Australian Map Grid zone 54

77287728

XSTRATA COPPER EXPLORATION Pty LtdFOUNTAIN RANGE EPM 12561 GED'S REWARD AREA

2009 IP-RESISTIVITY SURVEY

100m dipole-dipole IP-resistivity ; n = 0.5-7.5 IP lines - pegs and Tx electrodes as shown

TVH - Mount Isa - 28-04-10 Drawing 58900

9

6

0m

-100m

-200m

-300m

-400m

APPARENT RESISTIVITY

103

128

154

152

249

255

118

287

397

230

253

463

355

284

97

477

428

436

280

474

513

439

147

320

600

496

263

407

625

182

123

419

422

223

329

486

150

287

106

479

176

166

216

196

193

202

137

97

223

232

65

119

284

387

56

81

155

488

73

108

286

395

46

103

202

239

63

205

173

135

72

131

179

99

197

114

102

261

235

188

64

273

337

110

168

168

227

291

144

661

77

445

96324 1000

6313982511581006340251610

RESISTIVITY(ohm-m)

0m

-100m

-200m

-300m

-400m

0m

-100m 10.111.1

4.8

4.4

5.5

3.4

5.7

3.5

2.8

3.9

3.1

3.3

4.1

3.9

3.7

3.9

3.6

2.8

3.8

3.3

2.0 2.7

4.2

2.3

2.9

2.3

4.4

1.5

3.0

3.8

3.8

4.6

3.1

4.6

2.8

2.0

3.4

2.6

1.60m

-100m15

-200m

-300m

-400m

APPARENT IP (820-1050msec)

12.3-0.8

3.5

0.7

3.1

2.9

3.7

3.2

3.1

3.5

4.0

6.4

4.0

2.7

7.3

5.1

4.8

7.1

4.7

4.7

5.7

4.3

4.1

7.3

4.2

4.6

4.0

5.5

3.8

5.1

5.1

5.1

4.9

3.8

5.0

3.6

4.3

3.3

4.1

3.3

3.8

2.5

3.9

4.6

3.6

4.5

2.5

3.8

4.9

2.6

4.3

3.9

3.2

4.4

5.2 1413 -200m121110 -300m87 -400m543210

IP(mV/V)

XSTRATA COPPER EXPLORATION Pty Ltd

Rx

TxGED'S

FOUNTAIN RANGE EPM 12561 REWARD AREA - 2009 SURVEY - LINE

7730600

4120

00m

E41

2000

mE

4122

00m

E41

2200

mE

4124

00m

E41

2400

mE

4126

00m

E41

2600

mE

4128

00m

E41

2800

mE

4130

00m

E41

3000

mE

4132

00m

E41

3200

mE

4134

00m

E41

3400

mE

4136

00m

E41

3600

mE

4138

00m

E41

3800

mE

4140

00m

E41

4000

mE

4142

00m

E41

4200

mE

4144

00m

E41

4400

mE

4146

00m

E41

4600

mE

4148

00m

E41

4800

mE

4150

00m

E41

5000

mE

4152

00m

E41

5200

mE

4154

00m

E41

5400

mE

mN

Fugro 100m dipole-dipole array10000,3,2,3,2,0,L,A3,10,10

Scale 1:10000100 0 100 200 300 400 500 600

metres

RESISTIVITY AND IP PSEUDOSECTIONSContour Intervals - Resistivity : logarithmic ; IP : 2mV/V linear

Dipole-dipole array ; 100m dipole size ; n = 0.5 to 7.5 ; repeat readings averaged IP Chargeability window : 820-1050 milliseconds

Time domain ; 50% duty cycle ; 0.125 hzTVH - Mt Isa - 12-11-09

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Microsoft Word - Fountain Range Relinquishment Report ... · Web viewiii iii August 20081EPM: 12561 ‘Fountain Range’ August 2008 1 EPM: 12561 ‘Fountain Range’ August 20083EPM: