STAVELY PROJECT

The Stavely Project is located in western Victoria on the Stavely tablelands approximately 250 km to the west of Melbourne. The Stavely Project, covering an area of 1,046 square kilometres over the highly prospective Stavely Volcanic Belt in western Victoria, includes a 100% owned retention licence RL2017, the Black Range Joint Venture licence EL5425 and exploration licence application EL6870. 

The Black Range Joint Venture is an earn-in and joint venture agreement with Navarre Minerals Limited. Stavely Minerals earned 51% equity in EL5425 in December 2019.

 

In October 2018, the Company was awarded the right to apply for Block 3 (EL6870) in the Victorian Government’s Stavely Ground Release Tender. EL6870 is still going through the application process.

 

The Stavely Project (RL2017) hosts the Thursday’s Gossan prospect, a near surface secondary chalcocite-enriched blanket, has an estimated Mineral Resource of (using a 0.2% Cu grade lower cut-off) –28Mt at 0.4% copper for 110kt of contained copper (gold and silver not estimated).

 

Since 2014, the Company has been targeting a Cadia-style gold-copper porphyry in the Stavely Project. 

In September 2019, Stavely Minerals discovered shallow, high-grade, structurally controlled copper-gold-silver mineralisation at the Thursday’s Gossan prospect on RL2017. The first diamond hole, SMD050, drilled targeting mineralisation on the Ultramafic Contact Fault returned stunning grades of up to 40% copper within a 32m wide high-grade zone. The Company is in the process of doing a resource drill out of the Cayley Lode mineralisation.

 

At Thursday’s Gossan there are at least two additional structures that host high-grade copper-gold-silver mineralisation, namely the Copper Lode Splay and the North-South Structure Lode. 

Only very limited drilling has been conducted to test these target, however intercepts including 6m at 6.73% Copper, 0.84g/t gold and 15g/t silver from 538m were returned from the Copper Lode Splay and 18m at 3.62% copper, 0.28g/t gold and 15g/t silver from 848m were returned from the North–South Structure Lode.

While drilling to-date targeting the copper-gold porphyry has returned extremely encouraging indications that the system is a very hydrous, strongly oxidised and well-endowed with metals, and has all the attributes that it is well-mineralised, the economical porphyry has yet to be discovered. The search for the mineralised porphyry is on-going, including undertaking a seismic survey, structural studies and deep diamond drilling.

 

Other exploration targets within the Stavely Project include the Junction, Mount Stavely and Patanga porphyry prospects, the Fairview Epithermal Gold prospect and the Wickliffe VMS prospect.

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REGIONAL GEOLOGY

The Stavely Project is hosted in Cambrian age fault-bounded belts of submarine calc-alkaline volcanics, namely the Mount Stavely Volcanics, structurally in contact with the older quartz-rich turbidite sequence of the Glenthompson Sandstone and the Williams Road Serpentinite. 


These sequences were deformed in the Late Cambrian Delamerian Orogeny. Seismic traverses and a recent study by the Victorian Department of Economic Development, Jobs, Transport and Resources in western Victoria have supported the interpretation of an Andean-style convergent margin environment for the development of the buried Stavely Arc beneath the Stavely Volcanic Complex and environs. This regional architecture is considered conducive to the formation of fertile copper / gold mineralised porphyry systems as is the case with the Macquarie Arc in New South Wales, which hosts the Cadia Valley and North Parkes copper-gold mineralised porphyry complexes.

The Lachlan Fold Belt and Delamerian sequences are in fault contact through large-scale thrusting along the east dipping Moyston Fault.

Largely unconformably overlying both these domains by low-angle décollement is a structural outlier of the younger Silurian fluvial to shallow marine sandstone to mudstone sequences of the Grampians Group.

THURSDAY'S GOSSAN CAYLEY LODE MINERALISATION

 

The shallow copper-gold discovery on the Ultramafic Contact Fault (UCF) has been named the Cayley Lode, after Geological Survey of Victoria senior geologist Ross Cayley.

 

An intensive resource drill-out is continuing with the focus on extending the deposit to the north-west within the (now) overall 1.5km-long discovery zone, with in-fill and step-out drilling continuing based on a roughly 40m x 40m drilling grid.

The Mineral Resource drill-out is well advanced, is progressing well, and continues to generate impressive results which have significantly extended the Cayley Lode mineralisation. 


Results reported to-date have extending the resource definition zone to a strike length of 900m.

 

A review of drill core, assay results and other technical data undertaken in conjunction with Stavely’s consultants, Drs. Greg Corbett, Scott Halley and Paul Ashley, highlighted the significant similarities between the large mineral system at Thursday’s Gossan with the Butte, Montana and Magma-Resolution, Arizona copper deposits. This prompted Stavely Minerals to test for similar high-grade lode-hosted copper-gold-silver mineralisation at shallower depth.

 
SMD050, the first hole testing the UCF target returned:

  • 32m at 5.88% copper, 1.00g/t gold and 58g/t silver from 62m including

    • 12m at 14.3% copper, 2.26g/t gold and 145g/t silver, including

      •  2m at 40% copper, 3.00g/t gold and 517g/t silver

Drill hole SMD050 also intersected:

  • 4.4m at 3.98% nickel, 0.23% cobalt and >1% chrome​

Pyrite – bornite veining at 85m in SMD050

It is now believed that the ‘chalcocite enriched blanket’ is derived from the weathering and redistribution and dispersion of metals from the high-grade lode-style copper-gold-silver mineralisation as it approaches surface.

Thursday’s Gossan Prospect – Cayley Lode Intercept Table

The drill collar locations for the Cayley Lode drilling and selected sections are presented below. 
 

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THURSDAY’S GOSSAN COPPER SPLAY LODE AND NORTH-SOUTH STRUCTURE LODE

 

At Thursday’s Gossan there are at least two additional structures that host high-grade copper-gold-silver mineralisation, namely the Copper Lode Splay and the North-South Structure Lode. 

Diamond drill hole SMD032 returned: 

  • 6m at 6.73% copper, 0.84g/t gold and 15 g/t silver from 538m, including:

    • 1m at 22.8% copper, 0.91 g/t gold and 48 g/t silver, and 

      • 2m at 2.43% copper, 0.28 g/t gold and 4.9 g/t silver from 551m from the Copper Lode Splay

Diamond drill hole SMD044 returned: 

  • 38.3m @ 1.59% copper, 0.27 g/t gold and 8g/t silver from 890m, including

    • 6m @ 2.75% copper, 0.25 g/t gold and 7 g/t silver and 

    • 12.3m @ 2.59% copper, 0.44 g/t gold and 18 g/t silver in the North-South Structure 

And

  • 10m at 2.43% copper and 0.30 g/t gold from the Copper Lode Splay 

Diamond drill hole wedge SMD044W1 returned:

  • 18m at 3.62% copper, 0.28g/t gold & 15g/t silver from 848m, including

    • 7m at 7.74% copper, 0.46g/t gold & 32g/t silver, including 

      • 2m at 15.7g/t copper, 1.07g/t gold & 65g/t silver in the North-South Structure

Diamond drill hole SMD045 returned: 

  • 16m at 1.30% copper and 0.15g/t gold from 1,077m, in the North South-Structure


Diamond drill hole wedge SMD045W2 returned: 

  • 12m @ 0.51% copper, 0.1g/t gold and 2g/t silver from 1,129m, including 

    • 4m @ 0.91% copper, 0.12g/t gold and 2g/t silver from 1,133m in the North-South Structure

These structurally-controlled zones of high-grade copper-gold-silver mineralisation are now recognised as copper lode-style mineralisation similar to that at the Magma Mine in Arizona, USA.

Diamond drilling is planned to test for mineralisation on the Copper Lode Splay and North-South Structure at shallower depths.
 

Pyrite-chalcopyrite-bornite-covellite-chalcocite veining at 542.5m in SMD032

Pyrite vein with bornite-covellite-chalcocite (+-digenite) veining at 859.0m in SMD044W1

THURSDAY'S GOSSAN COPPER-GOLD PORPHYRY PROSPECT

 

Stavely Minerals is making significant advances in its search for a well-mineralised copper-gold porphyry at Thursday’s Gossan. 
All the indications are that the system is a very hydrous, strongly oxidised and well-endowed with metals, and displays both multi-phase intrusion and mineralisation events as well as ‘telescoping’ of later mineralisation over earlier events – all attributes for a well-mineralised copper-gold porphyry system.  

On inspection of the Cayley Lode resource drill holes, it is clear that the broad intercept in SMD121 (73m @ 0.64% Cu, 0.70 g/t Au and 6.8g/t Ag from 104m), as well as the intercepts in SMD127 (74.8m @ 0.37% Cu, 0.23 g/t Au and 5.9 g/t Ag from 126m) and SMD134 (44.2m @ 0.61% Cu, 0.26 g/t Au and 6.2 g/t Ag from 101m) are all hosted in a hydrothermal breccia – referred to as the Alfa breccia – and displays the same character of a broad, moderate grade copper-gold-silver intercept with higher-grade lode-style intercepts both within and on the margins of the breccia.

The recognition of the Alfa breccia as a quite coherent body in the hanging-wall to the Cayley Lode in recent north-west extensional drilling has significant implications with respect to the location of the long-speculated deep porphyry thought to be driving the large hydrothermal system at the Thursday’s Gossan prospect.


The Alfa breccia contains clasts of several different rock types including a number of intrusive units, serpentinite, sedimentary units and brecciated fragments of quartz veins with sulphides, and sulphide-only fragments.


The sedimentary fragments are interpreted to be locally derived due to their general lack of competency and their common angular nature but many of the quartz altered, magnetite-chalcopyrite mineralised porphyry fragments were well rounded and are interpreted to have been derived from depth and entrained in the fluidised breccia at the time of explosive release and transported to the higher levels in the breccia column where they are now seen.


Hydrothermal breccias form when the constraining lithostatic pressure is overcome by the over-pressurised vapour phase trapped in the carapace at the top of a porphyry intrusion – likely catalysed by a seismic-related fault movement – and the vapour is explosively released, causing the breccia column to ascend.

 
The implication is that these hydrothermal breccias typically ascend vertically from the causative porphyry intrusion and the observation of mineralised porphyry clasts in the breccia clearly indicates the porphyry at depth is copper mineralised.


This constitutes the most emphatic direct geologic evidence to date that both the oft-mooted mineralised porphyry at Thursday’s Gossan is indeed at depth, and importantly, that further review of the distribution and character of the Alfa breccia will likely provide a direct vector to the mineralised porphyry under the breccia body.
 

​Chalcopyrite-bornite (brown) clast in the Alfa breccia with magnetite-epidote​ altered matrix cut by a quartz-hematite-chalcopyrite vein - SMD044, 670.5m.

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Magnetite-epidote-bornite mineralised clast in the Alfa breccia with potassic altered clasts of dacite porphyry with magnetite-chalcopyrite mineralisation – SMD031, 76.9m.

Oblique view of the Cayley Lode (red) and the Alfa breccia (grey).

Proposed stages in the development of mineralised breccia pipes (after Corbett).

Architecture of a hydrothermal breccia (after Corbett).

Evidence of copper-gold alkalic porphyry mineralisation includes:

  • Porphyry M Veins

M Vein with intergrown chalcopyrite in SMD024

M vein with intergrown chalcopyrite in SMD024 –

  • 70m at 0.22% Cu,  including

    • 3m at 1.01% Cu, 0.16 g/t Au and 8 g/t Ag

  • High-grade copper-gold mineralised late D veins

Bornite – chalcopyrite D vein in SMD015 –

  • 9m at 2.62% Cu & 0.28 g/t Au, including

    • 4m at 5.41% Cu & 0.35 g/t Au

  • 4m at 5.85% Cu & 0.27 g/t Au, including

    • 1m at 10.75% Cu & 0.60 g/t Au

  • Broad intervals of low-grade copper-gold wall rock mineralisation – equivalent in tenor to pre-discovery drill intercepts at Cadia-Ridgeway.

Recently completed diamond hole SMD044 intersected the largest intervals to date:

  • 952m at 0.23% Cu from 11m

        Other broad low-grade wall rock mineralisation intercepts include:

  • 314m at 0.11% Cu in SMD029W1

  • 124m at 0.31% Cu & 0.12 g/t Au in SMD012

  • 85m at 0.35% Cu & 0.18 g/t Au in STRC005D

  • Multi-phase intrusion and mineralisation events

Anhydrite stockwork veining with well-developed chalcopyrite in SMD044​

  • Copper -Lode Splay with high-grade copper-gold-silver

Late bornite-chalcocite cutting earlier pyrite dominant

porphyry D veins in SMD044

Pyrite-chalcopyrite-bornite-covellite-chalcocite vein in SMD032 –

  • 6m at 6.73% Cu, 0.84 g/t Au & 15 g/t Ag, including

    • 1m at 22.8% Cu, 0.91 g/t Au & 48 g/t Ag

  • 2m at 2.43% Cu, 0.28 g/t Au & 4.9 g/t Ag

 

Copper – Lode splay in SMD044 returned -

  • 70m at 0.51% Cu from 580m, including:

    • 41m at 0.78% Cu, including:

      • 10m at 2.43% Cu, 0.30g/t Au and 11g/t Ag, including:

        • 1m at 8.97% Cu, 1.13g/t Au and 36g/t Ag

  • Aplite dykes, A Veins, light isotopic values less than -33‰ ɗ34 sulphur

Recently completed diamond hole SMD044 intersected the largest intervals to date:

  • 952m at 0.23% Cu from 11m

 

Including from the Copper Lode Splay (CLS):

  • 70m at 0.51% Cu from 580m, including

    • ​10m at 2.43% Cu, 0.30g/t Au & 11 g/t Ag

  • ​  

Including from the North-South Structure (NSS)

  • 38.3m at 1.59% Cu, 0.27g/t Au & 8g/t Ag from 890m, including

    • ​12.3m at 2.59% Cu, 0.44g/t Au & 18g/t Ag

These structurally-controlled zones of high-grade copper-gold-silver mineralisation are now recognised as copper lode-style mineralisation similar to that at the Magma Mine in Arizona, USA which are closely associated with the Resolution porphyry copper deposit (Inferred Resource of 1.8Bt at 1.53% copper – RTZ, 2018). 

Hole SMD049 was designed to target the source porphyry believed to be responsible for high-grade structurally-controlled polymetallic epithermal copper-gold-silver mineralisation encountered in drill holes SMD044, SMD044W1, SMD045, SMD045W1 and SMD045W2. SMD049, which was drilled from north to south, parallel to the mineralisation-hosting NSS, was completed to a depth of 1,767.6m. The hole did not intersect the source porphyry, as the hole encountered appreciable molybdenite in porphyry A veins from 1,315m to approximately 1,440m down-hole. This is consistent with an outer molybdenite halo to a porphyry.  It is possible that the drill hole ended in the barren core to the QDP porphyry – interpreted to be porphyry #2 in a sequence of four porphyry phases – the later two phases have not yet been seen in drilling but are the likely drivers of the structurally-controlled copper-gold-silver mineralisation.

 

The causative porphyry intrusion has not yet been seen and remains a priority target. 
 

Thursday’s Gossan Resource – Conceptual Study

The Company’s conceptual study on the potential for copper concentrate production from the chalcocite-enriched supergene ‘blanket’ at the Thursday’s Gossan copper deposit demonstrated sufficient positive outcomes with respect to net revenue and Net Present Value, as well as an attractive Internal Rate of Return, to proceed to a scoping study.

There are as not yet reasonable grounds to support the discussion of these projected economic outcomes in detail.

The key elements of the conceptual study include:

  • An average feed grade of 0.5% copper;

  • A sulphide flotation recovery of 87% (based on metallurgical testwork); and

  • A sulphide concentrate grade of 27% copper (based on metallurgical testwork) producing a very ‘clean’ concentrate with low deleterious elements.

 

Financial assumptions included:

  • World Bank forecast copper prices;

  • A range of A$/ US$ exchange rates of A$1 = US$0.60 to US$0.75

World Bank Copper Price, US$/t (June 2016)

 

 

The conceptual study identified a number of opportunities to enhance project economics including:

  • Increasing the size of the resource –recent drilling has identified chalcocite copper mineralisation outside the current Mineral Resource. Stavely Minerals’ drill hole SMD004 intersected 52m at 0.23% copper from 39m downhole depth. This intercept is located approximately 400m to the west of the existing Mineral Resource and illustrates the potential for material increases;

  • Reducing the assumed mining and milling costs by investigating the suitability of using continuous surface mining equipment. The attraction of the mining method is that it is well suited to long and wide, flat-lying, mineralisation; the oxidised nature of the mineralisation is well suited to this mining method; the product is already partially comminuted and reduces the need for primary crushing; and this mining method can be very selective in the vertical dimension.

  • Reducing the processing costs through lowering reagent usage and by streamlining the processing flowsheet – the Scoping Study will investigate the potential to beneficiate the mineralised from un-mineralised clays prior to flotation of the sulphide concentrate amongst other processing enhancements.

 

Recent RC/ diamond drilling at Thursday’s Gossan has returned shallow copper-gold (and silver) intercepts which are very significant for the potential development of the near-surface chalcocite enriched ‘blanket’.   All previous Mineral Resource estimates for the Thursday’s Gossan chalcocite have only estimated the copper within the deposit, excluding gold and silver. This was mainly because previous explorers had not assayed for gold or silver in many drill holes within this zone. Recent results conclusively demonstrate that significant gold and silver grades are hosted within the Mineral Resource area.

Mount Stavely Copper-Gold Porphyry Prospect

 

The exploration target at Mount Stavely is porphyry related copper-gold mineralisation associated with the Mount Stavely Volcanic Complex (MSVC) in the Mount Stavely Belt.

The Mt Stavely porphyry target is reflected as a ‘low’ in gravity data and as a ‘low’ in the airborne magnetic data which is interpreted to reflect magnetite destructive hydrothermal fluid alteration. A porphyry is inferred to exist at depth and is in proximity to marginal gold mineralisation at the Fairview gold prospect, which itself is interpreted to be a low-sulphidation epithermal style mineralisation. An IP survey in the Mt Stavely area returned a chargeability feature which was slightly offset from the gravity low. Geochemical soil sampling over the Mount Stavely prospect returned anomalous arsenic, molybdenum and gold values.

While the diamond hole drilled in 2017 at Mount Stavely did not encounter any mineralisation or porphyry alteration signatures in the drill core, a pebble dyke characterised by rounded milled clasts in a pyrite altered rock flour matrix has been identified. Pebble dykes are commonly used to vector towards porphyry mineralisation and its’ presence is considered to be extremely encouraging that there is a copper-gold porphyry in the Mount Stavely area.

The two diamond holes drilled in 2018/2019 at the Mount Stavely porphyry prospect, intersected porphyry zones, minor copper mineralisation and low temperature epithermal quartz veins and sulphides in separate drill holes.
 

Fairview Gold Prospect

 

The 4.8 kilometre long Fairview North and Fairview South mesothermal to epithermal gold anomalies was originally identified in soil sampling and followed-up with shallow reconnaissance aircore, RC and limited diamond drilling. The previous drilling returned numerous anomalous gold intercepts, including:

  • 5 metres at 17.44 g/t gold from 28 metres drill depth to end of hole,

  • 2 metres at 16.06 g/t gold from 23 metres drill depth,

  • 4 metres at 6.69 g/t gold from 10 metres drill depth,

  • 17 metres at 1.70 g/t gold including 5 metres at 3.1 g/t gold from 12 metres drill depth,

  • 12 metres at 2.16 g/t gold from 18 metres drill depth to end of hole including 3 metres at 5.1 g/t gold from 27 metres drill depth to end of hole.

 

The Fairview gold anomaly is associated with sericite albite and K-spar (adularia) alteration and quartz sulphide veins with chalcopyrite, sphalerite, galena and gold. The sphalerite is of a pale yellow colour and in conjunction with the adularia suggest a low-temperature possibly low-sulphidation epithermal affinity. The target at Fairview is a Lake Cowal-style gold deposit. 

Previous drilling failed to provide a focus for further drilling and the IP programme conducted in late 2016 was also not successful in identifying any definitive drill targets.  

Following a new interpretation of the structural controls for gold mineralisation at the prospect by Stavely Minerals a single diamond hole was drilled at Fairview North in early 2017. The hole returned an encouraging intercept of:

  • 30 metres at 1.4 g/t gold including

    • 11 metres at 2.4 g/t gold 

 

Follow-up drilling in mid -2017, comprising four RC drill holes around this previous intercept, has returned good widths of moderate grade gold mineralisation within large widths of low-grade gold mineralisation including:

  • 17 metres at 1.23 g/t gold from 23 metres drill depth within a larger low-grade interval of

    • 57 metres at 0.57 g/t gold from surface

  • 16 metres at 1.04 g/t gold from 6 metres drill depth within a larger low-grade interval of

    • 68 metres at 0.42 g/t gold from surface.

 

Additional intercepts included:

  • 6 metres at 1.65 g/t gold from 53 metres drill depth;

  • 4 metres at 1.70 g/t gold from 5 metres drill depth; and

  • 1 metre at 6.70 g/t gold from 76 metres drill depth.

 

Independently, Geoscience Australia drilled a diamond hole (STAVELY-17) in the immediate vicinity of the Fairview South prospect in 2014 as part of a series of holes drilled in the Stavely region as pre-competitive stratigraphic drilling. 

A geochemical study of the pyrites recovered from STAVELY-17 was released in 2017 and concluded that there was two-stage pyrite growth – a high temperature early stage which was likely to be related to porphyry-style mineralisation at depth and a low-temperature later stage which is likely an epithermal overprint.

This was compared by Geoscience Australia to the pyrite in the Wafi-Golpu and Lihir porphyry / epithermal copper-gold and gold deposits.  Jeff Steadman and Ross Large (ARC Centre of Excellence in Ore Deposits, University of Tasmania) went on to conclude that the estimated distance to the target porphyry would be 0.5 - 1 km.

 
Black Range Joint Venture Project

 

Stavely Minerals entered into an Earn-in and Joint Venture Agreement with Black Range Metals Pty Ltd (Black Range) - a wholly-owned subsidiary of Navarre Minerals Limited (Navarre Minerals) - for Black Range’s Exploration Licence 5425 in January 2018. In December 2019, Stavely Minerals fulfilled the first earn-in period and earnt a 51% share in EL5425. 
 
The exploration target for EL5425 is porphyry related copper-gold mineralisation associated with a potential extension of the Mt Stavely Volcanic Complex beneath Quaternary alluvium. 

An age date from U/Pb ratios from a gabbro intercepted in drilling conducted by Stavely Minerals, returned a date of 478±21Ma. While the error is large it clearly shows the gabbro to be of Cambrian age and contemporaneous with the mineralisation at the Thursday’s Gossan porphyry prospect, and not a Devonian intrusion.   
  
A review of the exploration potential of the Black Range Joint Venture with Navarre Minerals Limited has identified the Lexington prospect in the Bucheran Diorite to be worthy of follow-up soil sampling and drilling. At Lexington the copper-gold mineralisation appears to be fracture controlled and possibly postdates the emplacement of the intrusion. Another area of interest includes several magnetic lows, interpreted by the Geological Survey of Victoria to be a Cambrian intrusion, in the northern part of EL5425, at the junction between the Elliott and Stavely belts. 

Another Outstanding High-Grade Copper-Gold Intercept at Cayley Lode

Exceptional high-grade zones grading up to 7.17% copper, 30.6g/t gold and 52g/t silver in deepest intercepts on the Cayley Lode to date; initial Mineral Resource due this quarter

High-Grade Gold Results at Toora West

Outstanding high-grade gold assays of 8.72g/t and 4.27g/t in diamond drilling

Stavely Minerals Strengthens Strategic Footprint After Executing Key Property Purchase Agreement

Purchase includes a 524-acre farm and residence adjacent to Thursday’s Gossan