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NORTH FLINDERS MINES LIMITED

ANNUAL REPORT FOR THE TANAMI PROJECT

AREA FOR THE PERIOD MARCH 1993 TO FEBRUARY 1994

VOLUME 1- REGIONAL EXPLORATION, EL 6859 AND 7122

EXPLORATION LICENCES COVERED BY THIS REPORT:-

EL 1060 EL 2290 EL 23661 EL 2367'1

EL 23690 EL 23701 EL 2371 EL 2372 EL 4529 EL 6759 EL 6859 / EL 6938"' EL 7121 EL 7122 J

· (De Bavay) (Billabong) (Hordern Hills) (Schist Hills) (Mt. Ptilotus) (Rabbit Flat) (Kim's Bore) (MacFarlane's Peak) (Window) (Thompsons) (Wilson Range) (Officer Hill) (Mt. Davidson) (Mac Farlanes)

The Granites Mount Solitaire

1 :250,000 Sheet SF 52-3 1 :250,000 Sheet SF 52-4

D. A. C. ARCHIBALD MARCH 1994

I I I TABLE OF CONTENTS

I 1. INTRODUCTION 1

I 2. LOCATION, ACCESS, INFRASTRUCTURE AND SURVEY CONTROL 2 I 3. PREVIOUS EXPLORATION 3

I 4. EXPLORATION OBJECTIVES AND METHODS 4

5. REGIONAL EXPLORATION 5

I 6. REGIONAL AIRBORNE MAGNETIC SURVEY- REINTERPRETATION OF EL 2372, 6859 AND 7122 6

II 7. REGIONAL GEOCHEMISTRY SURVEY- STATISTICAL STUDY AND PRESENTATION OF SURFACE LAG SAMPLING ASSAYS (EL 6859 AND 7122) 7

:I 8. REGIONAL GEOCHEMISTRY SURVEY- SURFACE LAG SAMPLING PROGRAM (EL 6859) 8

I 9. REGIONAL GEOCHEMISTRY SURVEY- VACUUM DRILL SAMPLING PROGRAM 9

,I 10. REGIONAL GEOCHEMISTRY SURVEY- RAB DRILL SAMPLING PROGRAMS (EL 6859) 11

II 11. . TWIN BONANZA (EL 6859) 13 .I 12. OLD PIRATE (EL 6859) 16

13. HORDERN HILLS 22

I 14. APPROACH HILL - PETERS PROSPECT (EL 2366) 33

I 15. HOF (EL 2366) 37 I 16. QUARTZ RIDGE (EL 2366 AND 2367) 43

17. ANOMALY ONE (EL 2366 AND 2367) 46

I 18. ANOMALY TWO (EL 2367) 51

I 19. ANOMALY FIVE (EL 2367) 61 I I I I II 20. ANOMALY SEVEN (EL 2367) 64

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I II

I I 21. ANOMALY NINE

67

22. MAGELLAN ONE (EL 2367) 69

I 23. MAGELLAN TWO (EL 2367) 72 I 24. NESTOR (EL 2367) 80

I 25. GRIMWADE RIDGE (EL 2367) · 83

26. MADAM MARGI (EL 2367) 86

I 27. . MADAM PELE (EL 2367) 94 I 28. SYMINGTON (EL 2367) 100

I 29. ZEN (EL 2367 106

30. INSPIRATION RIDGE (EL 2367) 110

I 31. PTILOTUS 114 I 32. EAST PTILOTUS 119

I 33. ANOMALY 1o (EL 2369) 135

34. VENDETTA ONE (EL 2369) 139

I 35. VENDETTA TWO (EL 2369) 144 I 36. FARRANDS HILLS SOUTH (EL 2369 AND EL 2370) 147

37. ANOMALY SIXTEEN (EL 2369) 150

I 38. CHALLENGER (EL 2370) 152

I 39. LENNARD'S RIDGE (EL 2370) 162

I 40. RABBIT FLAT- RED EYE (EL 2370) 168 41. CAVE HILLS (EL 2370) 173

I 42. SMOKE HILLS (EL 2370) 176 I 43. TITANIA (EL 2370) 185

I 44. TYRED FLATS (EL 2370) 191 45. GRANITES ALLUVIALS (EL 4529 AND EL 2366) 198

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46

47.

OFFICER HILL (EL 6938)

NEWLY GRANTED EASTERN AND WESTERN EXPLORATION LICENCES (EL1060,2290,2371,2372,6759, 7121)

202

204

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1. INTRODUCTION

This report summarises the work carried out on Exploration Licences 1060, 2290, 2366,2367, 2369, 2370, 2371, 2372, 4529, 6759, 6859, 6938, 7121, and 7122 by North Flinders Mines (NFM) during the period 1/3/93 to 28/2/94.

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The core exploration licences initially granted ~to North Flinders were combined into a single Project Area by agreement with officers of the Department of Mines and Energy, confirmed by the Director of Mines in a letter dated 9th October, 1990. Licences subsequently granted in the Tanami have also been incorporated into the Project Area.

The grant of EL's 1060, 2290, 2371, 2372, 6759 and 7121 occurred recently on September 13, 1993. Traditional owners have allowed only limited track development, survey work and initial reconnaissance mapping until sacred site clearance work has been completed. This work is currently progressing, and it is anticipated that substantial reconnaissance programs will be completed during calendar year 1994. As little exploration work of a technical nature has been possible on these exploration licences, only a brief collective report is provided wi.th this document.

Gold is the principal commodity sought by NFM in its Tanami exploration. The aim of the Company is to replace and expand the current resource base on which its present mining operation is based.

Work undertaken includes the following:

• Mapping and rock chip sampling • Regional laterite sampling • Vacuum and rotary airblast (RAB) drilling • Reverse circulation (RC) and diamond drilling • Costeaning • Ground geophysical surveys • Maintenance of infrastructural support for field operation

Positive exploration results for the year to February 1994 are summarised below:-

• There has been substantial increase to the measured and indicated gold resource at Callie, to 3.6mt @ 8.0g/t Au. A new indicated resource at Gahn has an estimated 70,00ot@ 6.3g/t Au. These deposits lie within MLS 154 (entirely surrounded by EL 2367) so are not subject to this report.

• Reconnaissance RAB drilling at Titania (EL 2370) has intersected prospective lithologies with gold values in excess of 1 g/t Au and arsenic assays greater than 1 OOOppm.

• Rock chip sampling, reconnaissance RAB drilling and costeaning at Hordern Hills (EL 2366) have all yielded gold values in excess of 1 g/t Au and elevated arsenic assays.

• Reconnaissance vacuum and RAB drilling at Wilson's Range (EL 6859) has outlined a 20km long arsenic geochemical anomaly with sporadic elevated gold values.

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2. LOCATION, ACCESS, INFRASTRUCTURE AND SURVEY CONTROL

2.1 Location

The tenements are located approximately 600km north-west of Alice Springs in the Granites-Tanami region of the Northern Territory (see accompanying plan). The licences are situated on ground covered by 1:250,000 map sheets SF52-3, The Granites, and SF52-4, Mount Solitaire.

2.2 Infrastructure

Prior to the presence of NFM in this part of the Tanami region, infrastructural support was almost completely lacking. Currently supplies are trucked or flown to The Granites camps and Dead Bullock Soak from Alice Springs. Both camps are serviced by telephone and fax using microwave links. Water is provided by two remote borefields. One borefield lies 35km east of The Granites and the other 1 Okm north-east of Dead Bullock Soak. Power is locally generated by both

. exploration bases. The nearest settlements are the Rabbit Flat roadhouse 50km to the north-west on the Tanami Highway and Tanami Downs homestead 60km to the west. The nearest town is Yuendumu some 250km south-east of The Granites on the Tanami Highway.

2.3 Access

Access to the area is by air or via the Tanami Highway. A basic network of pre-existing and newly formed tracks links individual prospect areas to the two major NFM camps at The Granites and Dead Bullock Soak. A bitumen ore haul!:!ge road connects the Dead Bullock Soak mining/exploration camp with The Granites/Ivy camp facilities.

2.4 Survey Control

Initial survey control has been established over the current exploration licences by Company and contract surveyors. During the reporting period an array of survey stations was established throughout the exploration area using high precision GPS techniques to provide greater control in the positioning of local grids.

Local surveys fall into two categories:

1. Initial survey control - for photo/mapping control and early reconnaissance work.

2. Grid establishment - for sampling, drilling and mapping programs.

All survey marks have been tied to the Australian Map Grid with trigonometrical survey station control. Extensive use is made of Global Positioning System equipment by staff engaged in regional exploration.

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3. PREVIOUS EXPLORATION

Gold mineralisation was discovered by Davidson in 1900 at a number of sites within the Tanami region. In subsequent years, The Granites prospect was worked intermittently up to about the 1960's. The only reported exploration during this time involved limited programs of diamond drilling around The Granites deposits carried out by Anglo Queensland Mining Pty. Ltd. during the 1940's and by Northern Mining Development NL in the early 1950's. During the late 1960's and early 1970's Geopeko Ltd. carried out preliminary exploration including several diamond drill holes apparently targeted on major aeromagnatic anomalies throughout the region. At least three of the holes were located at The Granites, and while mineralisation was encountered it was not considered sufficient to warrant further work.

Following negotiations with traditionallandowrners North Flinders Mines Ltd. was granted access to the area now covered by MLS8 in 1983 and commenced a detailed exploration program that ultimately led to the development and commissioning of the currently producing Granites Gold Mine.

Within a .year of granting the first four exploration licences in 1988, comprehensive regional airborne geophysical, reconnaissance mapping, geochemical sampling and vacuum drilling programs commenced.

This initial exploration le.d to the identification :of two mineralised areas (Dead Bullock Soak and Lennards Ridge) where work was concentrated for the remainder of that year. No encouraging mineralisation was located at Lennards Ridge, however, at DBS potentially economic grades of gold were intersected in several reverse circulation drill holes in October/November, 1988. Ensuing exploration delineated a 7.9 million tonnes resource of ore grade material within this area. All open pit production is currently sourced from DBS (covered by ML 5154) though underground ore is still derived from The Granites (ML 58).

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4. EXPLORATION OBJECTIVES AND METHODS

Interpretation of geological and geophysical data accumulated by exploration throughout the Company's tenements has enabled NFM's geologists to assemble a regional picture of the various stratigraphic and structural features of the geology of the Tanami.

4.1 Gold Occurrence (Model)

Exploration and mine studies have indicated that gold mineralisation in the region has an association with a range of geological environments. Models of gold occurrence for which the Tanami is believed to be most prospective include:

• Disseminated, stratabound deposits hosted by banded iron formations, (e.g. Granites, Dead Bullock Soak)

• Discordant stockwork deposits of gold in relatively late stage quartz veins, (e.g. Callie);

• Gold mineralisation in veins hosted 'by shear zones with strong alteration characteristics, (e.g. East Ptilotus, Challenger 2);

• Deposits in regolith containing gold concentrated by alluval, eluvial or alteritic processes, (e.g. Granites, Quartz Ridge, Dead Bullock Soak);

Only the first of these is by definition specific to a particular host rocktype. The others could be deposited in any of a range of lithological hosts.

4.2 Exploration Methods

With these models in mind, the Company's geologists have selected prospective target exploration areas based on regional geological, structural; geophysical and geochemical data.

The detailed assessment of these targets has been undertaken by a range of exploration techniques, designed to reveal the geology of the target area, and the presence of indicator elements, particularly gold itself, in anomalous quantities.

The task has been made difficult by the very extensive cover of windblown sand and other transported material, which conceals the rock and associated soil, typically to a thickness of several metres. This blanket covers as much as 98% of the region. Consequently the exploration process has relied heavily on point samples obtained by drilling and trenching to expose bedrock.

The characteristics of underlying rock units have been mapped by geophysical surveys (magnetic, electromagnetic, gravimetric and radiometric).

The collation of this information has been used to evaluate the prospectivity of each target with regard to its geology and geochemical anomalism. A prospect may warrant additional sampling or re-examination at a later date, in the light of a different or subsequently developed model of mineralisation.

Even those areas North Flinders has previously explored remain prospective. The recent encouraging result at Hordern Hills provides an excellent example of mineralisation revealed only during the third phase of systematic exploration of a particular prospect.

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5. REGIONAL EXPLORATION

5.1 Published Information

The Granites - Tanami Block has been mapped by the BMR as part of a regional project with the results of this work presented in BMR Bulletin 197 (Blake et al 1979). A subsequent description of the geology of The Granites Gold Field my Mayer was published by the Australian Institute of Mining and Metallurgy in the Geology ofthe Mineral Deposits of Australia and Papua New Guinea (1990). .

The Granites-Tanami Block comprises Early Proterozoic metamorphosed sediments, volcanics and . basic intrusives together with unmetamorphosed sedimentary and volcanic lithologies. These have

been intruded by Early Proterozoic and Carpentarian granites.

Unconformably overlying these units are Mid to Late Proterozoic sandstones, Early Cambrian flood basalts, Palaeozoic sandstones and mixed Cainozoic sediments.

The most economically prospective lithological unit is comprised by The Mount Charles Beds (and possibly its equivalents) of the Early Proterozoic Tanami Complex. This formation, consisting of complexly interbedded siltstones, shales, cherts with Jesser graywacke, quartzite, Fe-rich chemical sediments and basic volcanics has been subjected to at least mid-greenschist facies grade metamorphism. It is complexly folded with typically 2-3 structural events being apparent. The formation normally has a high iron content, often in the form of magnetite. The Mount Charles Beds and the immediately underlying sediments hosts most ofthe known gold occurrences in the region.

5.2 Regional Reconnaissance Mapping by NFM

Reconnaissance mapping of the Tanami EL's at 1 :25,000 scale has been in progress since the beginning of 1989. It is effectively complete for all exploration licences other than those granted in September 1993 which still await sacred site clearance.. The primary objective of this work is to · systematically build up an understanding of the geology (including lithotypes, stratigraphy and structure) of the Tanami exploration licences that will assist in the regional exploration effort. The program encompasses:

1. Mapping all rock outcrops on the ELs using available airborne colour or infra-red photography. 2. Compiling fact (outcrop) geological maps at 1 :25,000 scale by transferring mapping on air

photographs directly onto suitable basemaps. · 3. Combining and integrating the information with remote sensing data and new drilling results in

areas of no outcrop to produce interpretive 1 :25,000 geological maps. 4. Supplementing 1:25,000 scale regional mapping with additional information gleaned from

prospect mapping. 5. Producing both fact and interpretive geological maps at 1:100,000 scale based on the 1 :25,000

mapping, for regional overview purposes.

5.3 Plans

Drawing No.

60-729 60-730 60-731-40-736 40-737· 40-738 ,

Title

Fact Geology, Sheet 1 Fact Geology, Sheet 2 Fact Geology, Sheet 3 Exploration Coverage, Sheet 1 Exploration Coverage, Sheet 2 Exploration Coverage, Sheet 3

Scale

1:100,000 1:100,000 1:100,000 1:100,000 1:100,000 1:100,000