Stavely Project – Retention Licence

Notice of Retention Licence Application 2017

 The Victorian Department of State Development, Business and Innovation (DSDBI) notified Stavely Minerals Limited on the 20th May 2014 that it has been granted priority over the Retention Licence Application RL2017 covering the Stavely Project.

What is a Retention Licence?

 The Victorian Department of Energy and Earth Resources states that:-

“A retention license is an intermediate license between an exploration licence and a mining licence. It allows activities such as intensive exploration, research and other development activities required to demonstrate the economic viability of mining.

 The primary purpose of a retention licence is to undertake further evaluation work on a mineral resource, which is not currently economically viable to mine, in order to establish its economic viability and lead to mining of the mineral resource.”

Retention Licence Application

A retention licence, RL2017 covering the entire extent of EL4556 has been applied for to include:

–       the Thursday’s Gossan Copper Deposit,

–       Fairview Gold Prospect and projected extensions, as well as,

–       the Patanga, Wickcliffe and Toora Road Prospects, and,

–       over an area required for mining infrastructure and waste-rock disposal landforms.

The Stavely Project, comprising exploration licence EL4556 contains an unmined copper deposit – the Thursday’s Gossan Copper Deposit.

The retention licence will allow Stavely Mineral’s to assess the project area for its economic merit over a 10 year time period.

The application area for RL2017 is set out in the plan below.

RL2017 Location Plan

Environment and Community Impact Mitigation

 All operations undertaken by Stavely Minerals will be conducted to ensure minimal impact on the existing land use, environment and community.

Site Risk Assessment

Drill collar locations will be selected and sites designed to ensure maximum protection of environment, social and land-use factors.

All drill sites will be fenced or flagged to prevent access by unauthorised personnel. Any person entering the drill area will be inducted by the on-site driller. All relevant personal protective equipment will be worn.

During the drilling phase a Stavely Mineral employee or Stavely Minerals contract representative will be present on site at all times.

Pre-existing tracks and roads will be used to access drill sites where possible. Where additional access is required it will be done in consultation with the landholder and will be rehabilitated upon completion of the program.

Noise Management

Proximity to housing will determine drill site selection. Noise attenuation devices (including the use of shipping containers) will be used where necessary to ensure minimal public disturbance and compliance with EPA limitations. RC drilling hours will be from 7am to 6pm.  Diamond drilling will be conducted in two 12hr shifts per day. This will reduce to one 12hr shift when drilling close to residences. It is anticipated that drilling will not be sited any closer than 100m from an occupied residence.

Water Management

Sites will be selected so as not to disturb any natural drainage lines. There will be no discharge of water or drilling fluids. It is anticipated minimal groundwater will be intercepted. If groundwater is intercepted, all water will be contained in cascading water tanks.  Biodegradable drilling fluids will be used to ensure minimal impact on groundwater.

Dust Management

A small amount of dust is expected to be emitted from the drill rig on occasions while RC drilling is in progress. All dust mitigation devices and techniques will be employed to minimise this emission.

Fire Prevention

All machinery and equipment will be checked to ensure adequate fire suppression equipment is available at all times. Equipment will be checked for potential fire hazards prior to beginning work.

Flora Management

Sites will be selected to ensure minimal vegetation disturbance. Sites with previous disturbance will be selected in preference to removing vegetation and no native vegetation removal is required.

Preparation of the site for diamond drilling will be done in consultation with the landholder. The preparation will may involve removal and setting aside of the top soil and subsequent laying of thick plastic sheets beneath the entire site, or the use of coconut matting to protect the soil ecosystem from mechanical disturbance or chemical additions. Following the completion of drilling, shallow scarification will be undertaken to remediate compaction, and if the topsoil was stockpiled, the top soil will be replaced.

All care will be taken to prevent the introduction of weeds or exotic species to the drill location. All equipment is thoroughly washed down taking particular care around the vehicle belly, wheels and wheel wells to ensure all dirt and organic material that may transfer seeds or pathogens are removed.

Fauna Management

When selecting drill collar locations, consideration will be given to possible fauna roosts, nests or general habitat. Operators will ensure there is no disruption to native fauna such as birds, reptiles or marsupials that may enter the drill site after drilling has commenced.

Waste, in particular food scraps, will be appropriately stored and disposed.

Rehabilitation

Upon completion, all drill sites will be fully rehabilitated to their natural state in accordance with the Mineral Resources Development Act 1990 (“the Act”).

Environmental Monitoring and Auditing

Safety and Environmental monitoring will be conducted by qualified/ experienced site personnel prior to and after completion of each drill hole. Site audits are then conducted on a quarterly basis for the first 12 months after completion of the programme thence on an annual basis for the duration of the Retention Licence.

Health and Safety

Stavely Minerals has an Occupational Health and Safety (OHS) Policy (attached below) .The plan aims to provide a safe and healthy working environment.

Community Engagement

A copy of all work programs detailing high impact exploration activities will be provided to the Ararat Shire by Stavely Minerals to ensure they are fully aware of the proposal and to give them an opportunity to comment.

The company will notify the landowners and occupiers in writing of any exploration to be undertaken, whether it be low impact or high impact in nature.  Landholder Compensation Agreements will be put in place for all landholders to be affected by high impact exploration, including drilling.

Stavely Minerals is committed to regular, open and honest communication with the community. The community will be kept informed of exploration programs on the project. Communication methods used include the company’s website, updates to the local council, interviews with the local newspapers and direct liaison with the affected landholders. Stakeholders with an interest in the project should join the mailing list on the website to receive email alerts for updates and news. Stavely Minerals has a local landholder liaison consultant, Greg Walcott with whom community members are encouraged to communicate with should they have any queries or concerns.

Greg Walcott’s contact details are (03) 5570 1244 or 0488 379 077.

Proposed Work Program for RL2017

Overview

Retention licence application 2017 contains an existing Inferred Mineral Resource at the Thursday’s Gossan prospect, a near surface secondary chalcocite enriched blanket of (using a 0.2% Cu grade lower cut-off) 28.0Mt at 0.4% copper for 107kt of contained copper. The estimate classified and reported in compliance with The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition).

The 4.8 kilometre long Fairview North and Fairview South low-sulphidation epithermal gold prospects, are also considered to be associated with the broader Thursday’s Gossan Porphyry hydrothermal mineralisation system.  Despite limited drilling at the Wickcliffe Volcanic Massive Sulphide (VMS) prospect, the Toora Road prospect and the Patanga porphyry prospect each have returned significant base metal ± gold mineralised drill intercepts and have excellent potential to provide a supplementary source of ore to any mining operations in the area.

The estimated Mineral Resource is not currently economically viable to mine but with further exploration and an increase in the Minerals Resources in the vicinity which could impact on the potential scale of an operation, and / or an increase in the copper and gold prices in the future, it is likely that the deposit could be economically viable to mine in the future.

Further details of the project and resource can be found at www.stavely.com.au\projects\stavely-project and www.stavely.com.au\resources\thursdays-gossan-resource respectively.

Short Term Work Program (1-2 Years)

The initial work program on the retention licence will focus on diamond drilling, to a depth of between 500m and 700m to test the company’s contention that potentially well mineralised copper-gold porphyries exists at depth beneath the Thursday’s Gossan – Junction chalcocite supergene blanket. Four, 700m deep drill holes have been planned at Thursday’s Gossan and three, 500m deep holes at Junction.

Other exploration to be conducted will include soil sampling at the Mt Stavely porphyry, as well as geophysical surveys at the Mt Stavely and Fairview prospects.

Medium Term Work Program (3-6 Years) 

Depending on the results from the initial phase of diamond drilling at Thursday’s Gossan and Junction further deep drilling will be conducted at these targets to progress the prospects.

The proposed work program during this period will include aircore drilling at the Mt Stavely, Toora Road, Wickcliffe, Fairview and Patanga Prospects and subsequent follow-up reverse circulation drilling to be designed based on the previous drill results.

Subject to exploration success, an updated resource estimate at the Thursday’s Gossan deposit and a maiden resource estimate for Fairview has been planned for the medium term.

Long Term Work Program (7 – 10 Years)

Assuming that prior stages of the work program have been successful metallurgical and geotechnical drilling and test work will be conducted at the Thursday’s Gossan and Junction Porphyries.

Depending on the results achieved during the medium term work program,  resource reverse circulation drilling will be undertaken at the Fairview, Patanga, Wickliffe and Toora Road as required.

Assuming that previous stages of exploration returned favourable results, activities during this period would include an assessment of the project economics and development potential, initially in the form of a scoping study and later as a pre-feasibility study.

Occupational Health and Safety (OHS) Policy