Resource Estimate

A maiden resource estimate for Mallee Bull was made in May 2014 by MPR Geological Consultants Pty Ltd (MPR), reported in accordance with the guidelines of the JORC Code (2012 edition) to comprise 3.9 million tonnes at 2.3% copper, 32 g/t silver and 0.3 g/t gold for 90,000 tonnes of contained copper, 4 million ounces contained silver and 43,000 ounces contained gold (at a 1% copper equivalent cut-off). Approximately 16% of the Mallee Bull resource is in the Indicated Mineral Resource category. A breakdown of the Mineral Resources at 1% copper equivalent cut-off is shown below in Table 1. The figures in this table are rounded to reflect the precision of the estimates and include rounding errors.

 

Cut off Category Kt Grade Contained Metal
CuEq % CuEq Cu % Ag g/t Au g/t Cu Eq Kt Cu Kt Ag koz Au koz
1.0 Indicated 620 2.22 1.73 29.0 0.54 14 10.7 578 11
Inferred 3,300 2.8 2.4 32 0.3 93 79 3,395 32
Total 3,920 2.7 2.3 32 0.3 107 90 3,973 43

Table 1: Mallee Bull Mineral Resource estimate based on 1% copper equivalent (Cu Eq) cut-off grade.

 

Mineral Resource estimates include copper equivalent grades incorporating copper, silver and gold values. The copper equivalent grades are based on copper, silver and gold prices of $7000/t, $20.00/oz and $1300/oz with overall recoveries of 95%, 90%, 66% respectively. These estimates are based on Peel’s interpretation of potential commodity prices and the company’s interpretation of first pass metallurgical test work performed on Mallee Bull diamond core using the following formula: Cu equivalent (%) = Cu (%) + 0.009 x Ag (g/t) + 0.415 x Au (g/t). It is the company’s opinion that all elements included in the metal equivalent calculation have a reasonable potential to be recovered and sold. Additional test work is required to demonstrate potential metallurgical recoveries for cobalt, lead and zinc.

A range of lower cut-offs was used to report grades and tonnages, as shown in Table 2. The estimates at zero cut-off grade represent the entire mineralised domain volumes. Mineralisation appears robust and this is demonstrated by the fact that elevated cut-off grades have relatively minor effect on the contained metal – i.e., at a 1.8% copper equivalent* lower cut-off, the resource still contains approximately 79,000 tonnes of copper, 3.45 Moz of silver and 34 koz of gold (see Table 2). The Mineral Resource estimate will form the basis of an in-house scoping study.

 

Cut Off Category Kt Grade Contained Metal
CuEq % CuEq Cu % Ag g/t Au g/t CuEq Kt Cu kT Ag koz Au koz
0.0 Indicated 640 2.18 1.70 28.6 0.53 14 10.9 588 11
Inferred 3,300 2.7 2.3 32 0.3 90 76 3,395 32
Total 3,940 2.6 2.2 31 0.3 103 87 3,987 43
1.0 Indicated 620 2.22 1.73 29.0 0.54 14 10.7 578 11
Inferred 3,300 2.8 2.4 32 0.3 93 79 3,395 32
Total 3,920 2.7 2.3 32 0.3 107 90 3,973 43
1.4 Indicated 580 2.28 1.78 29.6 0.57 13 10.3 552 11
Inferred 3,100 2.8 2.4 33 0.3 87 74 3,289 30
Total 3,680 2.7 2.3 32 0.3 101 85 3,841 41
1.8 Indicated 450 2.46 1.92 30.5 0.65 11 8.6 441 9
Inferred 2,600 3.1 2.7 36 0.3 82 70 3,009 25
Total 3,050 3.0 2.6 35 0.4 93 79 3,451 34

Table 2: Mallee Bull Mineral Resource estimate outcomes based on a range of copper equivalent lower cut-off grades. The figures in this table are rounded to reflect the precision of the estimates and include rounding errors.

 

Resource Domains

The Mallee Bull Mineral Resource comprises two main mineralised domains (hanging-wall and footwall domains), and one smaller zone (central domain). The domains were generated from wire-framing geological data and the use of an 0.8% copper lower cut-off. The Mineral Resource area has dimensions of approximately 400m (north) by 400m (east) and 800m (elevation). Drilling of the deposit consists primarily of diamond drill holes providing 94% of resource composites (51 holes for 21,083m). The remainder comprises reverse circulation (RC) drillholes (19 holes for 4,422m). Drillhole spacing varies from 20m by 20m and tighter in the upper to central areas of the mineralisation to greater than 80m by 80m in peripheral areas and at depth. For the hanging-wall and footwall domains, estimates for mineralisation with consistently 40m by 30m or closer spaced sampling are classified as Indicated and estimates for more broadly sampled mineralisation are classified as Inferred. The central mineralised domain is comparatively broadly drilled and all estimates are classified as Inferred.