Drilling Update, First Assay Results and Forward Programme – Stavely Porphyry Copper Project, Victoria

August 28, 2014

 First assays combined with observed alteration, veining and mineralisation shows drilling is closing in on at least two porphyry systems and providing additional vectors to the target zones

HIGHLIGHTS

SMD001 (Thursday’s Gossan Prospect) – Assay Results

  • Broad intervals of low-grade copper mineralisationin the first deep diamond drill-hole support geological observations from the well-developed phyllic alteration that SMD001 has intersected the edge of, or drilled over the top of, a large porphyry copper system. Assay results from this hole include:
    • 82.3m at 0.12% copper; 45.9m at 0.19% copper; and 28m at 0.15% copper.

Biotite (potassic) altered xenolith (rock fragment ripped up from depth by an intrusive dyke) indicates the presence of the target zone of better developed copper-gold mineralisation at depth.

 SMD003 (Thursday’s Gossan Prospect) – Geological Observations

  • SMD003, drilled 200m south-west of SMD001, demonstrates increased intensity of alteration with strong silica-sericite-pyrite (phyllic) alteration, an increased abundance of classical porphyry ‘B’ and ‘D’ veins and, importantly, material increases in the abundance of sulphide species including bornite and molybdenite, indicating a more proximal location to the target potassic alteration/quartz-sulphide stockwork zone compared to SMD001.
  • This drill hole is a significant incremental step towards the target mineralisation in what is clearly a large porphyry system at depth. It has also provided an oriented D-vein measurement, indicating that the target zone may be to the south of and at depth below SMD003.
  • SMD004 is currently in progress to test beneath SMD001 and SMD003 with additional holes planned as part of an accelerated deep drilling program.

SMD002 (Junction Prospect) – Partial Assay Results

  • First drill hole completed into the Junction porphyry target demonstrates alteration increasing from phyllic (overprinting propylitic alteration) to distal potassic alteration indicating proximity to the target inner potassic alteration/quartz-sulphide stockwork veining target zone.
  • Broad zones of low-grade copper mineralisationintersected are consistent with this peripheral interpretation:
    • 62m at 0.17% copper; 15m at 0.1% copper; and 44.8m at 0.15% copper.
    • Assays for the bottom third of the drill hole are pending.