Gold Mining, Metal Company, Gold Producers Australia

In addition to the focus on drilling and the establishment of a solid resource base, the Company has also made significant progress on developing an in-depth understanding of the regolith and bedrock geology of the Mosquito Creek Belt, which is the main host of the mineralisation within Nullagine goldfield.

To underpin this work, the entire landholding was subject to high-precision, airborne magnetic and radiometric surveys, and almost a third of the landholding has been mapped, including all of the key areas around the main gold resources.

The knowledge gained from these work programs has allowed the Company to develop a reliable and cost-effective exploration methodology that is based on a logical progression from geological targeting, to meaningful surface sampling and various phases of well-directed drilling. This approach will serve the Company well in the future, and should allow mineable reserves to be replaced and the mine life extended beyond the scope of this feasibility study.

The Mosquito Creek belt is a typical Archaean turbidite-dominated, metasedimentary thrust belt in which gold mineralisation is structurally controlled. The mineralisation is controlled by faults and quartz vein arrays that appear to have channelled gold-bearing fluids away from broader shear zones, which are located nearby and are recognised as the major conduits for regional-scale fluid flow.

In most deposits, including those comprise the Bartons, All Nations and Golden Gate resources, gold is sited within or near the margins of steeply inclined quartz veins. The exception to this style of mineralisation is the large Golden Eagle deposit, which is characterised by gold disseminated through fractured wall rock that surrounds a series of gently inclined faults.

In outcrop, the Golden Eagle mineralisation is not accompanied by obvious wall rock alteration and, significantly, there are no historic workings developed on the zones of disseminated mineralisation, despite grades as high as 50 g/t Au. These features suggest that there is the potential for locating other, large-tonnage, Golden Eagle-style resources outside of the known mining centres within the Nullagine goldfield.

Independent geological and resource consultants Hellman & Schofield Pty Ltd undertook estimation on the majority of resources within the project area. The multiple-indicator kriging (MIK) block-modelling technique employed for estimation has been applied to the Golden Eagle, Bartons, All Nations, Shearers and Golden Gate ABCD deposits. CSA Global undertook estimation for the five small Golden Gate area satellite deposits, namely Falcon, Condor, Crow, G Reef and Harrier.

The JORC-compliant resource inventory for the Nullagine Gold Project at a 0.5 g/t Au cut-off grade is summarised in the table 1.

Apart from the current known resource base, there is clear exploration upside attached to the project area by virtue of the significant strike length of mineralised structures that are encompassed by the project, and the fact that much of the area has not been tested by modern, high-quality exploration of the type that Millennium can apply.