Burra Projects- South Australia

Burra Projects- South Australia

South Australia

The Company holds a beneficial interest in 15 Exploration Licences in South Australian in the Burra region, approx. 160 kms northeast of Adelaide.

Ausmex entered into an initial partnership with University of Adelaide’s (UoA’s) Institute of Mineral & Energy Resources (IMER) to review the geological setting, mineralisation styles and exploration history of the Burra region and that report has been received.

As a result of that report it was evident that all future discoveries around Burra will involve deposits that are non-outcropping or under “cover”.

Ausmex’s further investigation of the area identified a deep conductive structure that had been detected by the AusLAMP Survey as further outlined below, and then developed in concert with UoA’s  a world’s first exploration methodology for the Ausmex controlled tenements via a Magnetotelluric  (MT) grid survey over the large conductive structure “hot spot” below Burra, SA.

The company has made great progress with our Burra initiatives during the period of this report.

We floated with EL5881 in Burra, being approx. 990 sq. kms (4/112016) which was independently valued in the float at $2.6 million.

During this period, we have added approx. 6,100 sq. kms of ground that is either Farm-In Joint Venture ground with PNX Metals, additional ELs of our own and an ELA that is expected to be granted soon.

We have not attempted to value this 7.8-fold increase in our Burra holdings, however given that this area is all contiguous and tailored to fit with our planned detailed MT Survey, we believe that this has achieved a substantial increase in value of our Burra ground and of the Company as a whole.

The company received the Report which we commissioned on the History and Geology of the Burra Region from our partners at the University of Adelaide (UoA) Institute of Mineral and Energy Resources (IMER) which confirmed the prospectivity of the area and the potential to locate repeats of the Monster Orebody, not only along the Kingston Fault, but also in areas to the west of Burra’s Monster Mine. In preparing this Report, AMG and the UoA worked closely together to examine many historic bore cores from around the Burra Region as are held at the SA Core Library, a fantastic World Class facility in Adelaide, and we thank all staff at the Core Library for their assistance with this work.

On the 25th of July 2017 AMG entered into an Option Agreement with PNX Metals Ltd to Farm-in to 60%, alternatively 90%, of PNX’s Exploration Licences around Burra which are contiguous with AMG’s EL5881. This Farm-In involves PNX’s ELs 5382, 5411, 5473, 5557, 5874, 6150, 5910 and 5918.

The Option with PNX was exercised on 30th March 2018 and the Farm-In Agreement was subsequently altered in duration via a Deed of Amendment executed on 20th June 2018 to reflect the time needed to complete and model the MT Survey as described below.

Working separately with the Geophysics Department at UoA, we identified and investigated the potential to apply the Magnetotelluric technique (MT) to explore for Mineral Pathways and non-outcropping orebodies throughout the Burra Region using a grid survey technique with MT detectors set at 10 km x 10 km spacings, optimally over an area approx. 80 kms wide (east to west) and 110 kms long (north to south) in order to fully cover the deep conductive structure that was identified below Burra by the AusLAMP program conducted by Geoscience Australia, The Geological Survey of South Australia and UoA.

To facilitate the MT Survey over the 80 X 110 km area mentioned above, the company applied for and was successful in being granted the following Exploration Licences EL 6101, 6102, 6116, 6103 and EL 6158 together with ELA 2018/00052 which is expected to be granted in the 3rd quarter of 2018 (22/7/18).

As part of our Risk Management of the MT Survey due to the number of Windfarms, HT Power Transmission Lines and pipelines through our EL areas, an MT Trial of 11 sites has been undertaken by UoA and the results proved to be very satisfactory. These Trial sites comprised part of the overall grid for the main MT Survey and the trial results will therefore form part of that Survey and not need to be redone.

During this period, we have appointed Nicole Galloway Warland to the position of Project Manager – Burra Region and Nicole will report to our MD and the Board through our Director Geoff Kidd.

The company, through both Geoff and Nicole, has made a substantial effort to ensure that sound working relationships are in place with all relevant SA Government Departments, The Regional Council of Goyder, all key landowners around Burra and the community within the Burra township. Our Director has been living within that community for lengthy period, also with considerable periods in Adelaide working with UoA and the SA Government, and we believe that this provides a sound basis to continue with our exploration next year.

Figure 1. The AusLAMP* program conducted by Geoscience Australia, University of Adelaide & the Geological Survey of South Australia previously identified a large conductive structure (red) below Ausmex’s tenement suite at Burra. The current MT stage 1 survey is targeting the conductive structure “Hot Spot”.

Figure 2. Ausmex South Australia tenement holdings as of 30th June 2018. ELA2018/00052 was subsequently granted on 20TH July 2018 as EL6201

On the 4th of October Independent Expert Emeritus Professor Kenneth D Collerson presented findings validating the significance of the AusLAMP Magnetotelluric (MT) anomaly identified by Geoscience Australia at Burra, SA. Key findings include:

  • Hydrothermal fluid compositions at Burra are similar to those for Olympic Dam and the Idaho Cobalt Belt in the USA.
  • The AusLAMP conductivity domain identified below Burra is similar in scale and character to the large MT conductive anomaly below BHP’s Olympic Dam.
  • As with Olympic Dam, the Burra Conductivity anomaly is interpreted to image the metal migration region involved in formation of the mineral system.
  • Significant potential for economic concentrations of Cobalt and Platinum Group Elements.
  • Potential for the Ausmex held Burra tenement suite to host another giant Jinchuan style ore deposit (>500 Mt @ 1.2% Ni, 0.7% Cu, 0.4g/t PGE) which is the largest single magmatic sulphide deposit in the World.

Figure 3. East looking X-Section through the Geoscience Australia AusLAMP conductive anomaly below Ausmex tenements in Burra SA. Note that the independent expert identified that Burra and Olympic Dam both share similar geophysical and geochemical features and sources of origin. (The base X-section of the above figure was kindly provided by the Geological Survey of South Australia)

Figure 4. North looking X-Section through the Geoscience Australia AusLAMP conductive anomaly below Ausmex tenements in Burra SA. Note how the Willalo, Burra, Princess Royal and Peter Pan historic mines are all located on a secondary near surface conductor. (The base X-section of the above figure was kindly provided by the Geological Survey of South Australia)

  • On the 16th of October 2018 Ausmex & the University of Adelaide (UoA) announced the completion of all sites of the 7,010 Sq. Km Magnetotellurics (MT) survey on schedule and on budget.
  • Initial modelling by the UoA has already identified a 30 km long conductive drilling target located to the northeast of Burra.
  • With only 14% of modelling completed to date, there is the potential to identify multiple Tier 1 IOCG targets within the remaining 86% of the Ausmex tenement suite.
  • This result indicates that Ausmex can:
  • Target and locate one or more potential Tier 1 IOCG orebodies that may potentially underly the Burra region, as recently described by Independent Expert Prof Ken Collerson, (Refer ASX announcement 4th October 2018).
  • Define & locate the “other half” of the Monster Orebody, which has been interpreted as missing since the mid-1850s. The Burra Mine produced 2.7 million tonnes of copper ore (up to 7% Cu), in two major mining phases — 1845–1877 and 1970–81 (Drexel, 2008).
  • Discover repeats of The Monster Mine Orebody that were previously identified by the UoA

Figure 5– Shows the initial modelling over a small section in the NE area of the Ausmex Exploration Licences and is a small component of what will be Ausmex’s final MT Model for Burra. This 3D Model has been prepared by the University of Adelaide (UoA) and shows a substantial conductive structure, the upper section of which appears to present a shallow drilling target. This conductive structure is an iso-surface wire-frame image at 5 ohm.m (the inner wire-frame in red is @ 1 ohm.m). This figure is projected facing north, with the conductive structure approximately 10 kms wide and 30 kms long.

Figure 6 – Shows the location of this first conductive structure shown in Figure 29, which is the initial area modelled to date (red polygon) within the Ausmex Exploration Licences.