Mallee Bull

Mallee Bull

The Gilgunnia Project is located about 100km south of Cobar in central NSW and comprises 80km2 of granted leases (ML1361 & EL7461). It contains the historic May Day gold-base metal deposit along with the highly prospective Mallee Bull “Cobar-style” polymetallic discovery.

Gilgunnia

  

Historic info

The Mallee Bull prospect lies adjacent to the historic 4-Mile Goldfield, and was initially identified as a coincident EM and magnetic geophysical anomaly in March 2011. Preliminary RC and Diamond drilling to test this anomaly encountered significant silver-lead-zinc mineralisation, and in July/August 2011 intersected a massive and stringer/breccia sulphide zone with strong copper-silver-gold-lead-zinc-cobalt values characteristic of major Cobar-style deposits.

 

Geology

The Mallee Bull discovery sits favourably in a volcaniclastic turbidite sequence within the Silurian-Devonian Cobar Superbasin and is structurally located in the high strain environment of the “nose” of an anticline, with broad zones of deformation and alteration. Mineralisation at Mallee Bull features the Cobar-style attributes of short strike lengths, narrow widths and vertical continuity, with the current deepest drill hole intercept at more than 800m below surface. Mineralisation is interpreted as occurring as shoot-like structures dipping steeply to the west.

 

JV

In May 2012, Peel and CBH Resources Limited, a wholly owned subsidiary of Toho Zinc Co Ltd., signed a binding Heads of Agreement related to EL7461 and ML1361, which includes the Mallee Bull copper-polymetallic discovery near Cobar. Under the agreement, CBH has the right to earn an interest of up to 50% over a three-year period via staged $8.33 million expenditure on exploration and contribution to previous exploration costs incurred by Peel.

In March 2014, CBH Resources completed its final Farm-in payment in relation to the agreement, and consequently has earned an undivided 50% interest in the project; a 50:50 Joint Venture has now been formed.

CBH Resources is an Australian-based mineral resources company producing zinc, lead and silver from the Endeavour Mine north of Cobar. The company, which is 100%-owned by Tokyo Stock Exchange-listed Toho Zinc, is also commissioning the Rasp underground zinc, lead and silver mine at Broken Hill. CBH brings a wealth of technical expertise and resources to Mallee Bull, particularly with regards to exploration and development within the Cobar Superbasin.

 

Drilling to date

Initial drilling from March 2011 to Feb 2012 comprised multiple phases of diamond, RC and RAB drilling for a total 9,407m, and confirmed Mallee Bull as a Cobar-style discovery. Following CBH’s election to farm-in to Mallee Bull, seven drilling programs have been completed for a total 45,848m. The programs have continued to confirm significant grades of copper along strike, at depth and also near surface. Stage 3 of the farm-in, which was completed from August 2013 to March 2014 and saw mineralisation at Mallee Bull extended to more than 800m below surface, also included resource definition drilling that enabled the maiden resource estimate released in May 2014.

Gilgunnia_image 2

 

The Mineral Resource estimate formed the basis of a scoping study, completed at the end of September 2014, which highlighted the benefits of increasing the scale of Mallee Bull. Consequently, an Orion 3D DC-IP-MT survey was completed, identifying numerous anomalies including the T1 area. Defined by a very strong chargeable and low resistivity response, T1 is located about 150m below surface and up-dip to the east of Mallee Bull. Follow-up RC drilling encountered extremely high grade Zn-Pb-Ag-Au mineralisation, with better intercepts including:

  • 7m @ 21.39% Zn, 12.74% Pb, 203 g/t Ag, 0.58 g/t Au from 71m including 5m @ 29.54% Zn, 17.52% Pb, 280 g/t Ag, 0.80 g/t Au from 71m in MBRC028
  • 12m @ 20.30% Zn, 14.81% Pb, 308 g/t Ag, 1.59 g/t Au from 83m including 7m @ 31.44% Zn, 19.37% Pb, 440 g/t Ag, 2.53 g/t Au from 83m in MBRC024

Substantial zinc-lead and copper-rich mineralisation has previously been intercepted at Mallee Bull, most notably on the northern end of the current resource model where it has been defined to more than 500m below surface, remains open, and is yet to be formerly quantified.

Encouragingly, follow-up RC and diamond drilling intercepted multiple intervals of quartz-sulphide (chalcopyrite-pyrrhotite) stringer/breccia style mineralisation, indicating greater strike continuity of copper mineralisation than previously assumed at Mallee Bull. Significant intervals include:

  • 5m @ 1.01% Cu, 12 g/t Ag from 371m, 2m @ 1.91% Cu, 23 g/t Ag, 0.25 g/t Au from 392m and 3m @ 2.42% Cu, 74 g/t Ag, 0.29 g/t Au, 0.87% Pb, 0.22% Zn from 403m in MBRCDD049
  • 62m @ 3.15% Cu, 42 g/t Ag, 0.28 g/t Au from 465m (incl. 34m @ 4.6% Cu, 63 g/t Ag, 0.44 g/t Au from 475m) in MBRCDD050
  • 5m @ 2.1% Cu, 59 g/t Ag, 0.72 g/t Au from 385m, 4m @ 1.18% Cu, 23 g/t Ag, 0.12 g/t Au from 398m, 4m @ 1.87% Cu, 18 g/t Ag, 0.09 g/t Au from 463m and 4m @ 2.64% Cu, 34 g/t Ag, 0.77 g/t Au from 483m in MBRCDD051
  • 2m @ 2.33% Cu, 46 g/t Ag, 0.62 g/t Au from 422m in MBDD026/026W1
  • 4m @ 1.52% Cu, 111 g/t Ag, 0.21 g/t Au, 2.52% Pb, 4.2% Zn from 197m in MBRC052

The latest drilling program (CBH JV Program 7), which was completed in part to determine the cause of an off-hole DHEM anomaly centred ~300m north of the main Mallee Bull deposit, led to the discovery of new copper mineralisation in the area now termed ‘Mallee Bull North’. This mineralisation remains open along strike and down dip. Better intercepts include:

  • 7m @ 2.01% Cu, 38 g/t Ag, 0.15 g/t Au from 324m in MBRC054
  • 9m @ 2.24% Cu, 27 g/t Ag, 0.27 g/t Au from 455m in MBRC055
  • 5m @ 0.76% Cu, 0.54% Pb, 0.62% Zn, 16 g/t Ag from 458m in MBRCDD056
  • 10m @ 1.01% Cu, 0.37% Zn, 14 g/t Ag from 469m (incl. 4m @ 1.67% Cu, 0.61% Zn, 18.4 g/t Ag, 0.13 g/t Au from 474m) in MBRCDD059
  • 4m @ 1.18% Cu, 0.36% Pb, 0.23% Zn, 37.7 g/t Ag, 0.37 g/t Au from 369m (incl. 1m @ 3.15% Cu, 0.30% Pb, 0.31% Zn, 39.7 g/t Ag, 0.58 g/t Au from 369m)  in MBRCDD060
  • 1m @ 1.59% Cu, 0.47% Pb, 3.05% Zn, 28.9 g/t Ag from 266m, 1m @ 4.65% Cu, 48.3 g/t Ag, 2.96 g/t Au from 335m, 7m @ 1.28% Cu, 16 g/t Ag, 1.89 g/t Au from 371m and 5m @ 2.22% Cu, 31 g/t Ag, 0.09 g/t Au from 404m in MBDD027

 

Significant Results

Drilling at Mallee Bull has continued to encounter zones of strong mineralisation. Significant results include:

Hole ID Northing Easting Final Depth (m) From (m) To (m) Width (m) Cu (%) Ag (g/t) Au (g/t) Pb (%) Zn (%)
MBDD009W1 6413369 415162 567.8 470 523 53 4.08 42 0.22 0.3 0.05
Including 472 484 12 9.13 86 0.34 0.54 0.05
MBDD009W2 6413369 415162 852.7 484 487 3 0.08 18 0.85 0.35 0.31
494 518 24 0.39 33 1.39 0.32 0.22
706 727 21 2.22 40 0.11
MBDD009W2W1 6413369 415162 760.7 496 507 11 0.55 24 1.62 0.29 0.23
575 659 84 4.42 38 0.14 0.1
Including 626 652 26 11.39 80 0.2 0.11
669 675 6 0.7 15 0.13
MBDD009W3 6413369 415162 610.1 456 461 5 25 0.11 0.8 1.6
502 512 10 4.53 31 0.13
MBDD010 6413626 415115 735.8 512 515 3 0.11 24 2.21 5.42
634 666 32 3.62 46 0.21
MBDD009 6413370 415163 642.8 542 560 18 9.35 83 0.43 0.3 0.07
547 551 4 17.99 143 0.39 0.23 0.1
MBRCDD005 6413428 415048 492 450 470 20 1.81 26 0.74 0.04 0.05
MBRCDD010 6413270 415056 510.4 358 363 5 1.23 46 1.75 1.00 0.28
MBRCDD011 6413350 415048 552.4 444 460 16 1.40 11 0.07 0.10 0.08
MBDD017 6413360 415379 775.3 392 416 24 2.14 13 0.10 0.15 0.03
440 504 64 2.12 8 0.33 0.06 0.03
617 720 103 2.30 34 0.08 0.10 0.04
MBDD017W1 6413360 415379 892.6 810 827 17 1.78 16 0.14 0.15 0.03
MBDD017W2 6413360 415379 1047.8 751.4 756.8 5.1 3.36 74 0.31 0.20 0.06
MBDD021 6413367 415166 399.4 274 302 28 1.75 29 1.13 0.11 0.07
Including 293 301 8 3.00 42 1.64 0.11 0.09
MBDD022 6413410 415163 438.1 281 295 14 1.12 34 1.20 0.46 0.17
375 379 4 5.73 208 0.43 1.68 0.37
MBDD024 6413451 415174 289.2 318 322 4 0.34 66 0.48 10.6 10.5
Including 320 322 2 0.50 91 0.52 14.5 19.0
MBRC016 6413390 415340 291.8 131 138 7 0.05 76 0.25 3.42 6.08
MBRC018 6413430 415380 292.8 106 116 10 0.15 322 1.28 7.60 15.8
MBRC021 6413451 415400 293.5 95 101 6 0.03 159 0.76 4.98 10.3
MBRC023 6413451 415360 292.8 121 127 6 0.10 53 0.39 4.81 10.6
MBRC024 6413410 415400 292.6 83 95 12 0.54 308 1.59 14.8 20.3
MBRC028 6413410 415420 293.1 71 78 7 203 0.58 12.7 21.4
MBRCDD049 6413520 415135 288.4 403 406 3 2.42 74 0.29 0.87 0.22
MBRCDD050 6413481 415093 287.7 465 527 62 3.15 42 0.28 0.12 0.11
Including 475 509 34 4.60 63 0.44 0.14 0.17
MBRCDD051 6413481 415180 289.5 385 390 5 2.10 59 0.72 0.31 0.09
MBRC052 6413450 415300 295.0 197 201 4 1.52 111 0.21 2.52 4.20

May Day

May Day was discovered in 1898 and was initially developed as an underground copper-lead-silver mine. Exploration in the 1970s identified high grade gold-base metal mineralisation to a depth of about 250m below surface. Exploration in the late 1980s defined a shallow gold resource, which eventually lead to the development in 1996 of a small-scale mining operation comprising an open pit with a heap leach gold circuit.

In May 2010, Peel completed a programme of 10 RC drillholes for 1,877m of drilling at the May Day gold-base metal deposit, testing for down-dip extensions to known mineralisation. Better drill results include 16m at 1.78 g/t Au, 42 g/t Ag, 0.25% Cu, 0.95% Pb, 1.33% Zn from 159m in MDRC002; 24m at 0.96 g/t Au, 20 g/t Ag, 0.07% Cu, 0.70% Pb, 0.85% Zn from 120m in MDRC004; and 27m at 2.12 g/t Au, 27 g/t Ag, 0.11% Cu, 0.43% Pb, 0.75% Zn from 120m in MDRC005.
The results confirmed down-dip extensions and the shear-related sub-vertical shoot-like nature of the mineralisation.

Several geophysical surveys comprising gravity and IP were also undertaken over the immediate May Day mine environment and 2km along strike to the northeast; this data, along with remodelled regional airborne magnetic data shows that a moderate-to-strong chargeable IP anomaly and a deep (greater than 400m) magnetic anomaly is associated with the May Day deposit. Drill result-supported interpretation has been made that the source of this magnetic anomaly is a possible deeper mineralised system that has remobilised or “leaked” into the May Day deposit.
Further work at May Day will involve a deep drilling programme to target this anomaly.