Victoria

Tuesday, 19 August 2008 12:04

Victoria

Victoria is a world ranking mineral province, which has produced approximately 2% of the world’s gold output. The potential for discovery of primary gold deposits within the Company’s Victorian tenements situated at Ararat, Kingston, Summerfield and Foster is considered to be high as all of the Company’s tenements are located in historical gold fields with previous large production records.

We are pleased to have secured three excellent companies as joint venture partners in our Victorian exploration tenements. The farm outs reflect the Company’s continuous review of risk/reward against cash resources and the realisation that targets will require deep drilling.

Kingston and Ararat

In June 2004 the Company reached an agreement with Newcrest Operations Ltd and Newcrest Mining Ltd (“Newcrest”) to farm out a portion of the Company’s interest in the Ararat and Kingston projects in Western Victoria. Newcrest will carry out exploration to earn a 70% equity in the project by spending $3 million on exploration over a period of 5 years.

Map: Ararat & Kingston Projects: Aeromagnetic Image

Kingston Project

WMC previously discovered a significant supergene gold zone at Kingston but there was limited drilling to test below the oxide zone.

The Company has completed several programs of RC drilling which identified a number of steeply plunging high-grade gold shoots within a structural jog of the Landsborough Fault.
Review work is in progress for the Kingston tenement where exploration is expected to begin in the current quarter.

Ararat Project

The Ararat project is located approximately 210km west of Melbourne. Ararat is part of a major gold province in western Victoria where, a clearly defined structural corridor, up to 15km wide contains the world-class Stawell Goldmine.

Stawell high-grade gold mineralisation typically occurs associated with sulphides in structurally controlled sites related to intensely deformed metasediments and volcanogenic sediments adjacent to the Magdala basaltic dome. The Company believes this geological association provides a strong predictive model guideing exploration in the Ararat tenement for Stawell-style structurally controlled gold deposits.

The Ararat district has a recorded gold production estimated at 610,000 ounces. Virtually all of this gold was recovered from alluvial deposits within the Company tenements, and has not been related to a major primary source.

Newcrest recently completed an air-core drilling program exploring for quartz vein, sulphide rich “Stawell style” gold deposits. The final program consisted of 93 holes for 7053 metres.

Four air-core traverses covered the Denicull Creek, Sarsaparilla Hill, Langi Logan target areas and air-core traverses were also conducted across coincident magnetic/gravity anomalies at Garoopna and Cathcart.

At the Garoopna anomaly a low grade gold anomaly approximately 320m wide was defined in holes ACAR060-061 on thewestern contact of an ultramafic intrusive.

At the Cathcart anomaly, hole ACAR081 intersected 3m @ 4.1 g/t Au from 60 metres inquartz veined ferruginous saprolite postulated to bederived from weathered basalt in a similar geological setting to the Stawell Goldmine.

Drilling also intersected broad low grade anomalous gold at Langi Logan, Denicull Creek and Sarsaparilla Hill. At Denicull Creek on the Kangaroo Point Road anomalous gold in hole ACAR031 (incl. 3m @ 1.2g/t Au) is associated with quartz veins in epidote-pyrite altered mafic volcanic-volcaniclastic rock. This hole forms part of a 550 metre long gold anomaly in a similar geological setting to the Sarsaparilla Hill anomaly approximately 1km along strike to the north-west.

At Langi Logan, hole ACAR080 intersected 3m @ 0.43 g/t Au and 150ppm As from 78m. The hole was located on the north-eastern margin of the postulated Langi Logan basalt dome which is considered analogous to the Magdala basalt dome at Stawell. The anomalous gold occurs at the bottom of the hole where it appears to have terminated on a massive quartz-sulphide vein.

Summerfield Project

The Summerfield Project is located 30 kilometres NNE of the Bendigo mining center. Geophysical assessment has identified a number of specific targets in the project area that were considered worthy of further exploration. These include significant regional structures with potential to host gold mineralisation such as the Whitelaw Fault. This major crustal scale structure is mineralised elsewhere along its length and extends into the project area.

Map: Summerfield Project

In November 2003 the Company reached agreement with Gold Fields Australasia Pty Ltd (“Gold Fields”), a subsidiary of Gold Fields Limited, to farm out a portion of the Company’s interest in this property whereby Gold Fields can earn 75% equity in EL 4447 through the expenditure of A$2.0m on exploration over a period of 4 years.

Initial exploration by Gold Fields has included BCL (Bulk Cyanide Leach) geochemical sampling and air-core drilling. An infill soil sampling program was completed during December and an air-core drilling program was conducted during the March quarter.

Gold Fields have completed a review of results from the recent air-core drilling program which tested the basement below an extensive gold and silver soil geochemistry anomaly in the southern half of the Summerfield tenement in the vicinity of O’Donoghues Road.

No significant gold or silver results were obtained from the drilling although drill holes failed to penetrate to basement due to difficult drilling conditions adjacent to the previous reported intersection of 3 metres at 0.44 g/t gold. Drilling along traverse lines 800 metres north and 1600 metres south of O’Donoghues Road returned no significant gold or silver values in bedrock. At this stage, the elevated soil geochemistry in this region is unexplained, but it is possible that it is a product of regional alluvial dispersion, sourced from the large Bendigo Goldfield.