Exploration Activities

Tuesday, 19 August 2008 12:01

Exploration philosophy

Exploration success is the Company’s main pathway to creating shareholder value. This can be achieved through discovery of additional ore to extend the life of an operation, or through discovery that provides the basis for a new operation. The Company recognises that successful exploration is a medium to long term activity, and many of Australia’s great discoveries come after persistent and thorough campaigns. Strong geological input to exploration helps determine better areas for exploration, provides a basis for making decisions to leave less prosperous areas behind, and enables the development of improved exploration methods. The heart of successful exploration is the technically strong team that is well-motivated and highly trained, and such a group cannot be assembled overnight.

Victorian gold province

Victoria is a proven gold province containing more than a dozen million-ounce gold producers in a relatively small area of 300km by 100km. Some deposits like Bendigo (22 million ounces) and Ballarat (10 million ounces) rank amongst the largest historical gold producers in Australia. The total gold production from Victoria is approximately 80 Moz, or 2600 tonnes of gold.

Early prospectors were very successful in Victoria during the 1850s, and in fact, discovered all of Clunes (1Moz), Castlemaine (5Moz), Ballarat, Bendigo and more in 1851 alone. Their methods were to pan creeks and then follow any traces of gold upstream to locate the quartz veins that had been eroded to produce the alluvial gold.

Today, the Company sees a real opportunity to discover one or more major gold deposits in the Victorian gold province by using new methods not available to the early prospectors. It is estimated that one third of the highly prospective ground in the Victorian gold province outcrops at the surface, and thus any gold mineralization lent itself very well to the methods used by the prospectors: limited opportunity only is seen in these areas today. However, the two thirds of the Province that lies under the cover of younger rocks was essentially invisible to the prospectors and remains to be tested by today’s exploration methods. Some of the younger rocks covering the highly prospective gold host rocks are basalt flows from young volcanoes, and much of the cover is sediments of the Murray basin on the north side of the Great Dividing Range. Different methods will be required for these different situations.

Different types of gold deposits can be found in Victoria including those dominated by quartz veins with irregularly distributed gold nuggets (Bendigo) to others where the gold is more evenly disseminated and not necessarily in quartz veins (Fosterville, Nagambie). Virtually all the deposits are gold-only and have little potential for associated economic elements. The gold-only deposit type has little in the way of any geophysical signature so cannot be directly detected by standard geophysical methods. However, geophysics can assist the early stages of exploration is showing where faults and rock units might trend under the cover (e.g. aeromagnetic surveys), and indicate where there are palaeochannels beneath the surface (e.g. electromagnetic methods including Tempest surveys, and airborne gravity surveys).

Understanding the regolith (literally everything between the atmosphere and fresh rock, and including the soils, Murray basin sediments, and weathered auriferous bedrock) will be critical to the Company’s exploration approach. The nature of the younger cover will dictate how well geophysical methods can see through the cover to the auriferous rocks at depth. Weathering of any gold deposits will alter their nature and how they respond to search methods. Weathering might also cause gold depletion and/or dispersion to give a larger exploration target.

Drilling remains an essential part of exploring for these gold-only deposits to collect information about the rock types, detect any alteration halo surrounding possible deposits, and for geochemical samples to analyse for gold and the elements that typically accompany gold in the Victorian gold province.

Ararat EL3019 & 4758: The Ararat district was of interest of mineral explorers in the 1970s based on a copper occurrence near Mt Ararat. Later, with the recompilation of gold production records, it became clear that Ararat was a significant alluvial gold producer for which there was no primary source for the gold yet known. The Company’s ELs 3019 & 4758 cover much of the upstream catchments of the historic alluvial gold mining areas at Ararat. 2008 – The Ararat tenements have been joint ventured to Newcrest Mining Corp who have been drilling in the north and south ends of this tenement.

Summerfield EL4447: Summerfield is 30km to the north of Bendigo and under a thin cover of sand and silt of the Murray basin. Both Myers creek and Bendigo creek flow across the Summerfield tenement and have brought substantial contamination from their headwaters in the Bendigo goldfield. This means that samples collected today at the surface have to be treated with extreme caution, and a preferred method of sampling is from drilling. 2008 – RNG has a program of drilling planned of 40 aircore drill holes to follow up gold anomalies found during earlier drilling.

Kingston EL4630: Kingston is a tenement around the old Kingston gold mine and south as far as the Landsborough goldfield. Mapping during 2007 has greatly extended the zone of interest around the Kingston mine to an area of 6km by 2km of quartz veining, old workings, carbonate alteration and pyrite. 2008 – a program is ready to define drilling targets with further mapping, and then to extend the exercise across the rest of the tenement.

South Australia

The exploration community globally regards South Australia as the most favourable of Australian states for exploration based on the progressive policies and support from the state government and its collaboration with research providers such as universities. The Company’s tenements are on the Gawler craton, a large stable part of the Australian continent containing rocks of great age (Archaean rocks older than 2500 million years).

The Gawler craton has been a difficult area to explore in the past as much of it is covered by wind-blown sands and other younger rocks obscuring the potentially mineralised rocks beneath from prospectors and some of today’s exploration methods. The main targets on the central Gawler craton are gold and nickel based on analogy with other Archaean sequences around the world. The Company’s experience in the similarly Archaean-ages Pilbara craton of Western Australia suggests some other commodities might be present also. To date, exploration of the Archaean part of the Gawler craton has yielded the 2-million ounce Challenger gold deposit being mined today by Dominion Mining, but so far, no nickel mines.

The Company has three tenements in the Archaean section of the Gawler craton, and these are joint ventured out to Minotaur Exploration for base and precious metals, and to Toro Energy for uranium.

The tenements are:
Lyons EL3994
Glenloth EL3040
Lake Labyrinth EL 3698.