The Mt Chalmers Tenement (EPM 25935) is located 15km northeast of the city of Rockhampton, situated 600km north of the State capital Brisbane.

Traprock Mining Limited is pleased to announce that it has now completed a resource estimation, and has a JORC 2012 category Inferred Resource of 3.6 million tonnes grading 0.8 grams per tonne gold, 1.2% copper and 8 grams per tonne silver, this transposes to inground metal estimates of 96,000 ounces gold, 44,000 tonnes copper and 924,000 ounces of silver.”

The resource is within the environs and base of the open pit, and mineralisation has not been closed off to the north, south and base of pit. The style of mineralisation  is a Volcanogenic Hosted Massive Sulphide (VHMS)  deposit, which come in clusters of deposits up to 40 deposits in some cases, Mount Chalmers has 23 known VHMS prospects, some extensively drilled within a five kilometre radius of the main open pit resource

 

The tenement covers the former Mt Chalmers gold-copper historical mine and comprises of approximately 66km2. The Mt Chalmers tenement also covers the Woods Shaft Gold prospect, and numerous other volcanogenic massive sulphide (VMS) anomalous targets, the historical New Zealand Gold field and other gold prospects both with hard rock and alluvial occurrences.

Feasibility studies are being completed and restart plans are being finalized. A highly experienced mining engineer has been appointed to oversee the restart operations.

 

 MC map

 

MOUNT CHALMERS GOLD PROJECT

 The main prospect is the historical Mount Chalmers mine which still hosts substantial mineralization.

 

 

 

 In addition, there are a number of partially drilled prospects whose geological and mineral characteristics are similar to those of the nearby Mount Chalmers mine.

 These prospects, including the known resource at Woods Shaft, require further drilling. The Company proposes to drill-out these prospects rapidly to obtain samples for geochemistry and metallurgical test-work so as to enable the Company to move quickly and seamlessly from exploration to feasibility studies with a view to initiating mining.

 The Mount Chalmers deposit was discovered in 1860 and was initially worked for gold. In 1898 copper was located deeper in the lode system. The mine was in production until 1914, when copper prices fell. Wartime production resumed the operations in 1941 until 1943.

 Mining resumed again in 1979 with Mount Morgan Limited mining the newly discovered West Lode.

 Production ceased in 1982, due to closure of the Mount Morgan mine and low commodity prices.

 

 The current tenement area held by Traprock has been tenured by multiple different explorers at any one time and this is the first time in 50 years that the whole field has been held by a single explorer.

 

 This resource had significant drilling with some of the better drill intersections had encouraging grades as follows:

 

The past exploration has left an open ended series of targets, requiring further exploration drilling, with the potential to increase the resource.

 The targets that the Company will explore are:

  • Massive sulphide lenses or deeper stockworks below the Main Lode and West Lode,
  • Direct down dip extensions to the plunging Main and West Lodes,
  • Potential mineralisation along strike within the mine geology.

Mount Chalmers is a Volcanic Hosted Massive Sulphide (VHMS) deposit, which type of deposit generally form in clusters of between five and 40 individual events and also may form as stacked lenses on top of each other.

 The Mount Chalmers VHMS deposit is situated in volcanic rocks (the Berserker Beds) of Permian age and are fault bounded in a graben rift 120km long and 15km wide.

 Further targets have been identified in the larger project area, including the Woods Shaft (1km SW of Mount Chalmers and drilled by a previous explorer). Previous drilling results from Woods Shaft have been very encouraging. Drilling was from surface to 90 metres depth and the mineralisation encountered has not been closed off, remaining open below the drilled zone and to the north and east.

 A resource was originally estimated for Woods Shaft in 1986 by Newmont. This resource predates JORC and therefore will not be disclosed within this prospectus. It is the Companies intentions that Woods Shaft will be redrilled and bring the resource to JORC Code, 2012 compliance.

 Some of the better drill intersections from Woods Shaft with encouraging grades are as follows

 

The mineralisation has a strike length of 250 metres and is hosted in similar rocks to the Mount Chalmers deposit. Further drilling is warranted to extend the known mineralisation.

 One kilometre to the north-east of the Mount Chalmers Mine, and in the same stratigraphic position, exists the Botos Prospect characterised by extensive alteration.

 Drilling by GeoPeko Ltd in percussion hole PDH13 intersected 21m@0.9 g/t gold, 0.2% copper, 63 g/t Silver, 1.4% lead and 2.8% zinc. Another percussion hole, PDH18 returned 33m @0.6g/t gold. Traprock considers this area to be highly prospective and will follow up with further exploration.

 

botos

 Previous explorers have identified a further twelve VHMS targets where scout drilling was conducted within the Mount Chalmers locality. The exploration drilling recovered significant grades of gold and base metals (see Independent Geologist’s Report) at the Tungamull Prospect. For example, a 220m drill hole intersected 5m @ 0.9 g/t gold, 0.2% copper and 0.5% zinc. Another drill hole intersected disseminated zinc and lead and the best drilled grades were 205 g/t silver, 0.34% copper, 3.0% lead and 3.5% zinc which were not followed up.

 Traprock intends to follow up with more intense exploration programs including extensive geophysical surveys (as VHMS mineralisation is very conductive) and drill testing of the existing and new targets generated.

 Five kilometres to the south of Mount Chalmers, within the Berserker Beds, is the New Zealand Gully Goldfield, which hosted some of the richest alluvial gold deposits mined in Queensland. The source for the alluvials was a series of quartz reefs in the Berserker Range where a cluster of historic gold mines resulted in small, but high grade, gold production. Traprock has identified three gold soil anomalies and geophysical targets on a northsouth fault structure, which also hosts some of the larger mines on the field. This will be followed up with detailed mapping, sampling and drilling.

 PLAN OF OPERATION

Feasibility studies are being completed and restart plans are being finalized. A highly experienced mining engineer has been appointed to oversee the restart operations.

Conduct a drilling program to upgrade the current resource estimates planned to be finalized in a four month timeline.

The drilling will reconfirm previous resource drilled gold & copper and extensions to the resources.

Delineate a resource at Woods Shaft Gold Prospect.

The Program will consist of 2000m RC & 2000m Diamond holes budgeted at $1.58 million. Commence baseline environment survey, metallurgical & geotechnical studies.

 

 

 

JORC Code, 2012 Edition – Table 1 Mt Chalmers Mineral Resources

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary
Sampling techniques
  • Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.
  • Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.
  • Aspects of the determination of mineralisation that are Material to the Public Report.
  • In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.
 
  • The Mt Chalmers deposit has been drilled with a combination of percussion drilling (“PDH”) and diamond core holes amounting to 382 drill holes for 15,818 metres.
  • Percussion drill hole metres exclude diamond drill hole precollars.
  • Federation drilling included 5 abandoned precollars totalling 98.0m
  • Federation used RC precollars
    • Sampling consists of either 1m intervals of chip material sub-sampled to 2kg for RC samples or 1m sawn or split half core samples yielding approximately a 3-5kg sample.
    • Samples are then crushed and pulverized to give a 200g sample from which a sub-sample of 1-5g is taken for analysis.
    • There is no documentation concerning the analytical method used by Peko, but the work was completed at the Mt Morgan minesite laboratory and presumably the analysis was to industry standard at the time. The Federation analysis was completed by a commercial laboratory using a mixture of ICP and 50g charge fire assay with atomic absorption spectroscopy (“AAS”) for base metals and gold respectively.
    • The mineralisation is considered a classic example of a Kuroko-style volcanogenic massive sulphide deposit. The stratabound Cu and Au (Pb, Zn, Ag) mineralisation is strongly related to a combination of pyrite-rich host lithologies and spatial positioning relative to a central rhyolite dome.
    • The deposit was mined in three phases: 1890 – 1912; during World War 2 and 1979-1981 by Mount Morgan Limited (“MML”)
Drilling techniques
  • Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).
    • A total of 104 diamond drill holes (7,288 metres) and 278 percussion holes (15,818 metres) were completed in the area of the deposit.
    • Percussion drilling was with a Mayhew 1000 or a Mayhew 1500 rig with 4.5 inch down hole hammer bit.
    • For the Peko drilling core sizes ranged from NQ to BQ whereas for Federation diamond drilling was mostly HQ size with some NQ where needed.
    • Many holes were initially drilled using a percussion or RC drilling method and tailed with diamond core.
    • The vast majority of drillholes were vertical
    • No core orientation data is available
 
Drill sample recovery
  • Method of recording and assessing core and chip sample recoveries and results assessed.
  • Measures taken to maximise sample recovery and ensure representative nature of the samples.
  • Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.
    • No recovery data is available for either diamond drilling or the RC drilling. Technical reports indicate 90% recovery from the Peko drilling except for weathered and oxide zones (these zones have been mined out).
    • No documentation of RC sampling procedures is available
    • Peko investigated the risk of sample bias due to loss of fines. Only a small number of samples were collected, too few for anything conclusive, but there was indications of a small preferential concentration of sulphides in the samples of retained drill cuttings with an associated increase in Cu, Ag and possibly Au grade (results for Au were erratic).
    • The drilling methods are considered industry standard at the time of drilling and would normally be expected to give reliable results suitable for resource estimation.
    • With a lack of recovery data it is not possible to establish if there is a relationship between sample recovery and metal grade.
 
Logging
  • Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.
  • Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.
  • The total length and percentage of the relevant intersections logged.
    • All drilling was competently logged with the production of hardcopy logs and cross sections. All hardcopies had appropriate levels of information for a resource estimate to be completed.
    • McDonald Speijers Pty Ltd (“MS”), consultant resource geologists, built the current digital database from sighting the original drill logs and kept records. John Macdonald, Principal Geologist with MS, transcribed and compiled the hardcopy data including visual verification.
    • Logging consisted of a series of codes that were a mixture of quantitative and qualitative data
    • Geological information consisted of lithology descriptions, alteration, mineralisation and oxidation levels.
 
Sub-sampling techniques and sample preparation
  • If core, whether cut or sawn and whether quarter, half or all core taken.
  • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.
  • For all sample types, the nature, quality and appropriateness of the sample preparation technique.
  • Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.
  • Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.
  • Whether sample sizes are appropriate to the grain size of the material being sampled.
    • Peko diamond core was sampled over variable intervals related to geological units, but generally averaging about 1m. Most of it was sampled using a mechanical core splitter with 50% taken for sample prep and assay. Some core through mineralised intervals was cut with a diamond saw with 50% of the interval sent to the MML laboratory at the Mt Morgan mine site for preparation and assay. No information is available about procedures used for this work.
    • Peko percussion drilling involved dry cuttings being collected via cyclones and riffled to give a sample of about 2 kg for submission to the laboratory. The RC samples were submitted to the MML laboratory at the Mt Morgan mine site for preparation and assay. No information is available about procedures used for this work.
    • Wet samples were collected in 2 ways. In the West Lode area samples were collected in a fine gauze catcher and mixed on a groundsheet before being coned and quartered. Sample intervals ranged from 1-2m. This sample collection method would have led to large losses of fines. In the Main Lode area wet samples were collected in half 44 gallon drums and transferred to hessian bags. When dry they were riffle split. This was a better method, but fines would still have been lost when water flows were high and the collecting drum overflowed.
    • The larger core from the 1995 Federation diamond holes was logged and mineralised intervals were selected on the basis of visual assessment These were sawn to give a 50% split and one half was then sawn again to give 25% splits. The 25% split was sent for sample prep and assay.
    • The Federation core samples were submitted to Australian Laboratory Services P/L for preparation at their Rockhampton facility and assay at their Townsville laboratory. The sample preparation scheme was jaw crushing to an unknown size followed by pulverisation of the total sample in a Labtechnics LM5 mill to a nominal 90% passing -75um.
    • A barren quartz flush was used after each sulphide-rich samples at an unknown insertion ratio
 
Quality of assay data and laboratory tests
  • The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.
  • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.
  • Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.
    • Peko samples were submitted to the MML laboratory at the Mt Morgan mine site for analysis. No technical details have been located regarding sample preparation procedures or assaying methods. The Mt Morgan operation has since shut down and the laboratory no longer operates.
    • Federation initially used an ICP method (1C587) for Cu, Pb, Zn, S, Ag, As, Ba, Fe and Mn. Fire assaying of a 50 gm charge with an AAS finish (PM209) was used for Au. After about the first 3-4 batches of samples the laboratory introduced an AAS method (A101) to check Cu, Pb, Zn and Ag assays for higher grade samples.
    • Peko submitted 352 samples for check assaying to Australian Laboratory Services (ALS) in Brisbane on a regular basis during their drilling programmes, although results for Au, Ag and Pb in particular were not always available. The drill logs recorded the results for these "duplicates" and MS were able to compile and analyze. They concluded there was no significant bias for Cu, Au, Ag and Zn. However there was a significant positive bias with the check laboratory for Pb but this was not significant for the resource as Pb is
    • Federation undertook check assaying at an independent laboratory but the results are not available.
    • There are no reports from any of the drilling campaigns of any standards being used to assess the accuracy of the analysis.
    • Despite the lack of documentation describing the analytical methods and the lack of QAQC it is reasonable to assume that the analysis was to industry standard and that the results would be reasonable especially for the level of classification of the resource estimate.
 
Verification of sampling and assaying
  • The verification of significant intersections by either independent or alternative company personnel.
  • The use of twinned holes.
  • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.
  • Discuss any adjustment to assay data.
    • No drillhole intersections have been viewed by Traprock
    • Traprock Mining has cross checked selected data, while building a new geological database, based on scanned open files held by the Queensland Dept of Mines, all drillhole collars were checked and random drill logs checked. No issues were noted.
    • No twin holes were drilled
    • Traprock state that all available data was compiled and verified by John Macdonald, Principal Geologist with McDonald Speijers Pty Ltd and documented in “MOUNT CHALMERS DEPOSIT UPDATED MINERAL RESOURCE ESTIMATE & REVIEW OF ASSOCIATED DATA COLLECTION PROCEDURES”
    • John Macdonald used a complete set of original drill logs, plus mine records which at the time were available at the Mt Morgan mine site offices.
    • There is no documentation of any adjustment to the data that has included inserting half lower detection limit values into the database, insertions of blank values where no sample recorded etc
 
Location of data points
  • Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.
  • Specification of the grid system used.
  • Quality and adequacy of topographic control.
    • The earliest grid shown on plans was an exploration grid established by CEC which originated at North Shaft, which was assigned coordinates of zero for both easting and northing.
    • Peko subsequently established a mine grid, again using North Shaft as the origin, which was assigned coordinates of 5000mE & 5000mN. A network of local control stations was set out by MML staff surveyors.
    • All previous data (such as drill collar locations) were converted by Peko to mine grid which appears to have been used consistently for both exploration and production work.
    • Control points for the Peko mine grid survive and this grid was also used for all Federation and MS work. A Rockhampton based surveyor (R E Harris) who previously worked as a mine surveyor on the project with MML conducted all surface surveys for Federation.
    • Local mine control survey point are still in existence, and these have been re-surveyed by Traprock Mining using a Differential Global Positioning System.
    • Traprock Mining has converted the Local Grid to GDA94 zone 56 grid using ArcGIS software, using a combination of local mine control survey points and landmarks.
    • The current topography was defined using a photogrammetric survey conducted by Capricorn Survey Consultants Pty Ltd on behalf of Federation in May-June 1995. This was based on photography flown in November 1992 and used ground controls established by MML in the 1970's to provide a tie in between AMG and mine grid coordinates.
    • Pre-open pit topography was available as photogrammetric contour plans dated November 1978, generated by Geo-Spectrum (Aust) for MML. These were presented at 1:500 and 1:1000 scale over the mine area with contour intervals of 1m and 2m respectively. They were apparently based on photography flown in 1973.
    • MS digitised the 1:1000 scale plan over the area of the resource model to allow volumes to be estimated for the Peko pit and for subsequent excavations at the south end of the pit, pit backfill and surface dumps
    • Percussion holes, which make up 73% of the total number of holes available, were not surveyed downhole. However it should be noted that virtually all of them were vertical and are considered by Traprock to have had very limited deviation.
    • For pre-Federation diamond drill holes, logs and sections only showed evidence of down hole surveying for 1 hole but the survey details are not recorded in the log. The remainder of the diamond drill holes are assumed not to have been surveyed downhole.
    • Federation drill holes were surveyed at intervals of approximately 50m using an Eastman single shot borehole survey camera supplied by the drilling contractors.
    • Traprock have assumed that all pre-1995 holes were straight, simply using the recorded collar bearings and dips. This will no doubt result in some errors in the 3- dimensional location of samples, but since hole depths are typically about 50-150m and most holes are vertical into flat-dipping rocks, serious hole deviations are expected to not have been common.
 
Data spacing and distribution
  • Data spacing for reporting of Exploration Results.
  • Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.
  • Whether sample compositing has been applied.
    • The Peko drilling was initially on a nominal pattern of 40m x 40m which was subsequently infilled to a nominal 20m x 20m over most of the deposit, but with considerable local variation in hole spacings.
    • Federation locally infilled or extended the 40m x 40m pattern, but on an irregular basis because of the access difficulties presented by the water-filled open pit.
    • At the northern end of the stringer zone where the mineralisation becomes deeper the pattern ranges from about 40m x 40m to 40m x 80m
    • Downhole sampling was at 1m intervals.
    • The data point spacing is appropriate for the use in generating Mineral Resources at the appropriate levels of confidence.
    • No sample compositing has been undertaken.
 
Orientation of data in relation to geological structure
  • Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.
  • If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
    • The deposit is generally flat-lying and virtually all drillholes are vertical thus giving a good intersection angle with the mineralisation.
    • There is no obvious sampling bias with the drilling orientation.
 
Sample security
  • The measures taken to ensure sample security.
    • There is no documentation describing the process of securing samples at site and their transportation to the laboratory.
 
Audits or reviews
  • The results of any audits or reviews of sampling techniques and data.
    • MS essentially completed an audit of the sampling techniques with the 2005 Mineral Resources. The audit concluded that “After extensive validation and editing MS are satisfied that the drill hole database files used for resource estimation are reasonably complete and free of serious errors, within the practical limitations imposed by the age of some of the data”.
 


Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation Commentary
Mineral tenement and land tenure status
  • Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.
  • The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.
    • Traprock Mining Limited (Traprock) has a 100% owned subsidiary, Dynasty Gold Pty Ltd which has a 100% beneficial interest in the Mt Chalmers Project. The Mt Chalmers Project is held in EPM 25935 located 25 kilometres east of the City of Rockhampton in coastal central Queensland, Australia. The project covers an area of historic gold and copper mining within EPM 25935, which comprises 69,200 hectares. Within the EPM, Traprock has a Mining Lease Application (Application number 100150) of 520 hectares covering the main gold, copper and silver mineralisation of Mt Chalmers open pit, Botos Prospect and Woods Shaft mineralisation.
    • The Project is free and unencumbered by either joint ventures or any other equity participation of the tenement.
    • Traprock has yet to negotiate any landowner provisions or Government royalties or yet to commence environmental studies within the project area. Currently the Queensland Department of Natural Resources & Mines is conducting remediation works on minor acid mine waste draining from a mineralised mullock dump.
    • All the tenements are for “all minerals” excepting coal.
    • Note that the granted tenements allow Traprock to carry out many of their planned drilling programs under relevant access procedures applying to each tenement.
    • All the EPMs are subject to the Native Title Protection Conditions with respect to Native Title.
    • Declared Irrigation Areas, Declared Catchment Areas, Declared Drainage Areas, Fossicking areas and State Forest, are all land classifications that restrict exploration activity. These are not affecting Traprock’s main prospects but may have impact on regional programs in places.
    • All annual rents and expenditure conditions have been paid and fully compliant
 
Exploration done by other parties
  • Acknowledgment and appraisal of exploration by other parties.
  • MIM and Peko are generally recognised as competent companies using appropriate techniques for the time. Written logs and hardcopy sections are considered good.
  • Federation was a small explorer that was entirely focussed on defining the Mt Chalmers resource. They used a very competent geologist, Alex Taube, for the drilling programme. Alex Taube is widely respected for his knowledge about VHMS deposits in North Queensland.
 
Geology
  • Deposit type, geological setting and style of mineralisation.
    • The Mount Chalmers mineralisation is situated in the early Permian Berserker Beds, which occur in the fault-bounded Berserker Graben, a structure 120km long and up to 15km wide. The graben is juxtaposed along its eastern margin against the Tungamull Fault and in the west, against the Parkhurst Fault.
    • The Berserker Beds lithology consists mainly of acid to intermediate volcanics, tuffaceous sandstone and mudstone, (Kirkegaard and Murray 1970). The strata are generally flat lying, but locally folded. Most common are rhyolitic and andesitic lavas, ignimbrites or ash flow tuffs with numerous breccia zones. Rocks of the Berserker Beds are weakly metamorphosed and, for the most part, have not been subjected to major tectonic disturbance, except for normal faults that are interpreted to have developed during and after basin formation.
    • Late Permian to early Triassic gabbroic and dioritic intrusions occur parallel to the Parkhurst Fault. Smaller dolerite sills and dykes are common throughout the region and the Berserker Beds.
    • Researchers have shown that the Mount Chalmers mineralisation is a well-preserved, volcanic-hosted massive-sulphide (“VHMS – Kuroko style”)) mineralised system containing zinc, copper, lead, gold and silver. Mineral deposits of this type are syngenetic and formed contemporaneously on, or in close proximity to, the sea floor during the deposition of the host-rock units deposited from hydrothermal fumaroles, direct chemical sediments or replacements (massive sulphides), together with disseminated and stringer zones within these host rocks.
    • The oldest rocks in the area, the 'footwall sequence' of pyritic tuffs, are seen only in the Mount Chalmers open pit and in drill holes away from the mine. The rock is usually a light coloured eutaxitic tuff with coarse fragments, mainly of chert, porphyritic volcanics and chloritic fiamme (fiamme are aligned, “flame-like” lenses found in welded ignimbrite and other pyroclastic rocks and indicate subaerial deposition. Eutaxitic texture, the layered or banded texture in this unit, is commonly caused by the compaction and flattening of glass shards and pumice fragments around undeformed crystals). The alteration (silicification, sericitisation and pyritisation)
    • The 'mineralised sequence' overlying the 'footwall sequence' consists mainly of tuffs, siltstones and shales and contains stratiform massive sulphide mineralisation and associated exhalites: thin barite beds, chert and occasionally jasper, hematitic shale and thin layers of bedded disseminated sulphides. Dolomite has been recorded in the mineralised sequence close to massive sulphides. This sequence represents a hiatus in volcanic activity and a period of water-lain deposition.
    • The 'hanging wall sequence' is a complex bedded series of unaltered crystal and lithic rhyolitic tuffs and sediments with breccia zones and occasional chert and jasper.
    • A mainly conformable body of andesite, ranging from 10m to 250m thick, intrudes the sequence; it usually occurs just above the ‘mineralised sequence’. A quartz-feldspar porphyry body intrudes the volcanic sequence and in places intrudes the andesite.
    • The rocks in the mine area are gently dipping, about 20o to the north in the Main Lode mine area and similarly dipping south at the West Lode: the predominant structure is a broad syncline trending north-north-west. Slaty cleavage is strongly developed in some of the rocks, notably in sediments and along fold axes. Such cleavage is prominent in areas close to the mineralisation.
    • Doming of the rocks close to the mineralisation has been interpreted by detailed work in the open cut to be largely due to localised horst block-faulting (Taube 1990), but the doming might also be a primary feature in part. Steep dips are localised and usually the result of block faulting. The Main Lode outcrop and West Lode outcrop are variably silicified rocks which, by one interpretation, may have been pushed up through overlying rocks in the manner of a Mont Pelée spine (Taube 1990), but in any case form a dome of rhyolite / high level intrusions of the Ellrott Rhyolite. The surrounding mineralised horizon is draped upon the flanks of domal structures.
 
Drill hole Information
  • A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:
    • easting and northing of the drill hole collar
    • elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar
    • dip and azimuth of the hole
    • down hole length and interception depth
    • hole length.
  • If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.
    • Exploration Results are not being reported
 
Data aggregation methods
  • In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.
  • Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.
  • The assumptions used for any reporting of metal equivalent values should be clearly stated.
  • Exploration Results are not being reported.
 
Relationship between mineralisation widths and intercept lengths
  • These relationships are particularly important in the reporting of Exploration Results.
  • If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.
  • If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).
    • Exploration Results are not being reported.
    • At Mt Chalmers the drilling has generally intersected the mineralisation at high angles.
 
Diagrams
  • Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.
    • Exploration are results not being reported.
 
Balanced reporting
  • Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.
    • Exploration results are not being reported.
 
Other substantive exploration data
  • Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.
  • MIM and Peko completed some brownfields exploration to assist with defining the resource including Induced Polarisation surveys and Sirotem (electromagnetic method) surveys.
  • Federation concentrated on defining the resource estimates.
  • No other exploration data is considered meaningful at this stage.
 
Further work
  • The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).
  • Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.
    • Infill and resource expansion drilling is planned to upgrade and potentially expand the resource estimates.
 

 


Section 3 Estimation and Reporting of Mineral Resources

(Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary
Database integrity
  • Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.
  • Data validation procedures used.
    • Data collated from hardcopy logs and assay sheets by John McDonald of McDonald Spiejers and converted to digital data (1995-2005). There is substantial documentation on the validation of the database complete by MS, including many fix ups.
    • Responsibility for the data resides with Traprock
    • Data validation by Traprock includes checking of randomly selected hardcopy logs.  
    • Data for resource estimates supplied to H&SC as CSV files
    • No downhole geological data was supplied to H&SC
    • Checks for internal consistency completed by H&SC include:
      • Data was imported into an Access database with indexed fields, including checks for duplicate entries, unusual assay values and missing data.
      • Additional error checking using the Surpac database audit option for incorrect hole depth, sample overlaps and missing downhole surveys.
      • Manual checking for plausibility of drill hole trajectories and assay grades.
      • H&SC’s assessment of the data confirms that it is suitable for resource estimation.
 
Site visits
  • Comment on any site visits undertaken by the Competent Person and the outcome of those visits.
  • If no site visits have been undertaken indicate why this is the case.
    • No site visit was completed by H&SC
    • Traprock has conducted numerous site visits, for exploration, surveying (including drone based photogrammetry of the site) sampling, environmental studies and stake holder meetings.
 
Geological interpretation
  • Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.
  • Nature of the data used and of any assumptions made.
  • The effect, if any, of alternative interpretations on Mineral Resource estimation.
  • The use of geology in guiding and controlling Mineral Resource estimation.
  • The factors affecting continuity both of grade and geology.
    • Geological interpretation was completed by McDonald Spiejers in 1995 and 2005.
    • The interpretation was checked by H&SC in 3D against drillhole assays grades and no significant issues were noted. Geology could not be checked as no drillhole geology data was supplied.
    • Interpretation of the drillhole database by MS allowed for the generation of 3D mineral constraining solids and geological surfaces for a combination of 20 and 40m spaced sections.
    • Four massive sulphide mineral zones within an encompassing exhalite horizon were defined using logged geology with reference to copper, gold and sulphur assay grades.
      • A geological surface was created for the base of complete oxidation from limited information in the Peko logs. In about 10- 20% of cases a specific reference was made in old logs, but in most cases the boundary was inferred from comments about gossan, iron oxides, iron staining or the first appearance of sulphides. In many cases no useful comments were recorded. The recent Federation holes provided more specific comments. The base of oxidation is consequently only an approximation. As interpreted it generally extends to a depth of about 10-30m below surface.
      • It is very likely that a transition zone of partial oxidation and/or supergene mineralogy exists below the base of oxidation. However the logs did not contain enough information to allow even a crude interpretation to be attempted.
      • Oxidation due to weathering has been defined by logged codes and low value sulphur assays.   There is no evidence of gold enrichment or depletion in the oxide zone. There is some evidence of copper depletion in the oxide zone and possibly some minor supergene copper enrichment locally.
      • Geological understanding appears to be good and appropriate for resource estimation
      • Alternative interpretations are possible for the mineral zone definition but are unlikely to significantly affect the estimates.
      • The style of mineralisation and the orebody type means there is a strong lithological control to the grade and geological continuity.
 
Dimensions
  • The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.
    • The resource is divided into 3 lithology zones, Massive, Exhalite & Stringer with an overall strike length of 600m; an east-west extent ranging between 100 and 330m and up to 90m of thickness for the stringer zone and 4 to 20m for the massive sulphide domains, beginning at surface and extending to a vertical depth of around 200m below surface.
    • The massive sulphide bodies are relatively flat-lying flanking a rhyolite dome with a variable dip from 10 to 40o. These zones are part of an encompassing exhalite horizon that immediately overlies a stringer mineralised zone.
 
Estimation and modelling techniques
  • The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.
  • The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.
  • The assumptions made regarding recovery of by-products.
  • Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation).
  • In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.
  • Any assumptions behind modelling of selective mining units.
  • Any assumptions about correlation between variables.
  • Description of how the geological interpretation was used to control the resource estimates.
  • Discussion of basis for using or not using grade cutting or capping.
  • The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.
    • Resource estimation was completed by McDonald Speijers in 1995 and 2005.
    • The block grades were estimated using an Inverse Distance Cubed method with Whittle 4~D software with the block model loaded into the Surpac mining software for validation, resource reporting and subsequent mine planning studies.
    • H&SC considers ID3 to be a sub-optimal estimation technique for this type of base metal and gold mineralisation.
    • There is no correlation between gold and any other elements eg Cu, Ag, Pb & Zn
    • The 6 mineral zones were treated as hard boundaries during estimation. There is no mention as to whether the base of oxidation was treated as a soft or hard boundary.
    • In MS's experience even subtle supergene effects can sometimes have a significant impact on metallurgical response during flotation, particularly for complex polymetallic sulphides such as those in the Exhalite/Massive zones.
    • One metre composites were used to estimate the mineralised bedrock. Coefficients of variation for elements from the different mineral zones were modest, generally <=2
    • Top cutting was applied to the composite data for each mineral domain: Cu 2 to 7%, Au 6 to 15g/t, Ag 30 to 150g/t.
    • Domaining was limited to the individual mineral zones, and to spatial orientations of search ellipses based on the geological dip and strike.
    • No assumptions were made regarding the recovery of by-products.
    • Variography was performed for the composite data but a lack of structure to the data prompted MS to use a less sophisticated modelling method.
    • Drill holes are on relatively regular but variably spaced grids with a nominal spacing of 20 by 20m increasing to 40 by 40m Block dimensions are 5m x 5m x 2.5m (E, N, RL respectively). The X and Y-axis dimensions were chosen as a compromise that is nominally one third the drill hole spacing and the variable width of the deposit. The vertical dimension reflects downhole data spacing in conjunction with possible bench heights.  
    • Modelling used an expanding search pass strategy with the initial search radii based on the detailed drill spacing increasing to take in the geometry of the mineralisation and the variography. Modelling consisted of two estimation runs, both with 2 passes. The minimum search used was 4m by 15m by 15m (X, Y & Z) and expanding by 15m increments in the Y and Z directions to a maximum of 60m (and to 12m in the across strike, X, direction). The minimum number of data was 12 samples and 4 octants. An additional Pass 5 estimation run used the 12m by 60m by 60m search radii with a minimum of 6 data and 2 octants. A further estimation run of 3 passes was used to generate an Exploration Target with the maximum search of 16m by 100m by 100m and a minimum number of 3 data and 1 octant.
    • The maximum extrapolation of the estimates is 60m.
    • The estimation procedure was reviewed by H&SC and considered reasonable for the time.
    • No deleterious elements or acid mine drainage has been factored in.
    • The block model was reviewed visually by H&SC and it was concluded that the block model fairly represents the grades observed in the drill holes.
    • The modelling strategy is acceptable with no significant issues.
    • Production figures comprise both initial underground and subsequent open pit operations. The mining was in the previous century and production records are rather vague. MS concluded that reconciliation between their block model and production was good and that the block model results were reliable within the constraints of the interpreted geology, drillhole distribution, historic assay results and the recorded position and extent of historic mine workings. H&SC concurs with this conclusion.
 
Moisture
  • Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.
  • Tonnages are estimated on a dry weight basis; moisture not determined.
 
Cut-off parameters
  • The basis of the adopted cut-off grade(s) or quality parameters applied.
  • A net dollar value (“NDV”) cut off grade was used to report resource estimates of $15/tonne to a maximum depth of 200m below surface. The figure was based on metal prices, mining and ore treatment costs and metallurgical recovery assumptions from 1996.
  • For the stringer mineralisation NDV = (Cu%*29.11) +(Aug/t*14.45) + (Ag g/t*0.13)
  • For the massive sulphide and exhalite mineralisation NDV = Cu%*21.51) +Aug/t*14.45) + (Ag g/t*0.13)
  • Metal price assumptions for 2005 were gold = US$430/oz, copper = US$1.50/lb and silver US$7/oz with an Australian exchange rate of US$0.79/AU$1.00
  • The cut-off grade at which the resource is quoted reflects an intended bulk-mining approach.
 
Mining factors or assumptions
  • Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.
  • H&SC’s understanding of a bulk mining scenario is based on information supplied by Traprock.
  • Mining will begin on the open pit remnants before proceeding to a bulk underground operation. This likely to take the form of room & pillar mining retreating up dip to the surface portal.
  • The model block size (5x5x2.5m) is the effective minimum mining dimension for this estimate.
  • Any internal dilution has been factored in with the modelling and as such is appropriate to the block size.
 
Metallurgical factors or assumptions
  • The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.
  • A two stage crushing process is envisaged for initial treatment of the ore.
  • A fine grind is most likely required to allow for a standard industry floatation circuit.
  • Previous processing by Peko involved direct smelting at the Mt Morgan facility.
  • Initial metallurgical testwork has indicated the possibility of 26% copper concentrate representing 85% copper recoveries.
  • It is likely zinc will be a penalty element.
 
Environmental factors or assumptions
  • Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.
    • The heavily disturbed area, from previous mining, lies within rolling terrain with broad watercourses
    • The area is covered with moderate vegetation typical of that part of North Central Queensland.   The land is used for cattle farming.
    • Two water filled open pits occur in the general area, the Mt Chalmers Main Lode pit and the connected West Lode Pit.
    • Acid mine drainage will be a potential issue.
    • There are no obvious immediate sources of carbonate rock for waste rock neutralisation.
    • No environmental studies have been completed by Traprock
 
Bulk density
  • Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.
  • The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vughs, porosity, etc.), moisture and differences between rock and alteration zones within the deposit.
  • Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.
    • Default density values were derived for the mineral domains.
      • Allocation of derived default density grades and oxidation levels to the block model was achieved by using the mineral wireframes and oxidation surfaces in relation to the block centroid.
      • More density test work is required in order to raise the confidence of the resource estimate to Indicated category.
 
Classification
  • The basis for the classification of the Mineral Resources into varying confidence categories.
  • Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).
  • Whether the result appropriately reflects the Competent Person’s view of the deposit.
  • Mineral resources were classified on sample spacing, grade continuity, QAQC and geological understanding.
  • All other relevant factors were taken into consideration eg topographic data, drilling methods, density data, etc.
  • The original MS classification was based on a defined shape derived from the drillhole spacing
  • The current estimates are classed as Inferred due to the historic nature of the estimates, the simplistic grade interpolation method, the age of the drilling results with some lack of QAQC, the possible contamination effect of some of the earlier drilling, uncertainty of the amounts of both the underground and open pit extraction, a lack of density data and the sensitivity to assumptions about estimates to metal prices, metallurgical recoveries and concentrate charges, all of which will have an impact on gut off grades.
  • The classification appropriately reflects the Competent Person’s view of the deposit.
 
Audits or reviews
  • The results of any audits or reviews of Mineral Resource estimates.
  • H&SC has completed a high level audit on the MS 2005 resource estimation. Several significant issues were noted. These have been reflected into the revised classification of the estimates
  • The MS work of the 1996 resource estimate included substantial validation of the digital database, with several issues picked up and subsequently dealt with.
 
Discussion of relative accuracy/ confidence
  • Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.
  • The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.
  • These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.
  • The relative accuracy and confidence level in the Mineral Resource estimates are considered to be in line with the generally accepted accuracy and confidence of the nominated Mineral Resource categories. This has been determined on a qualitative, rather than quantitative, basis, and is based on the Competent Person’s experience with similar deposits
  • The geological understanding of the deposit, the modest coefficients of variation and the reconciliation lend themselves to a reasonable level of confidence in the resource estimates. This has been offset by a lack of information on the sampling and assaying (plus a lack of QAQC), no drillhole geological or recovery data.
  • The Mineral Resource estimates are considered to be reasonably accurate globally, but there is some uncertainty in the local estimates due to the current drillhole spacing,
  • The deposit has had historical production data for both open pit and underground extraction. However there is some uncertainty as to the extent of these workings. Reconciliation of the MS resource model with the open pit pattern of extraction indicated a minor over-reporting of tonnage by 0.3%, with an understatement of copper grade by 6.4%, and gold by 5%. These outcomes suggest that the resource model was reasonably reliable within the constraints of the interpreted geology, drill hole distribution, historic assay results and the recorded position and extent of the historic open mine workings.
 

 

Competent Person Statements for Mt Chalmers Project
The information in this report that relates to Exploration Results for the Mt Chalmers Deposit is based on information compiled Mr David Jelley who is a Fellow of the Australian Institute of Geoscientists and who has sufficient experience relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr David Jelley
is a director of Traprock Mining Limited and consents to the inclusion in the presentation of the Exploration Results in the form and context in which they appear.
The data in this report that relates to Mineral Resource Estimates for the Mt Chalmers Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC
Code”). Mr Tear is a Director of H&amp;S Consultants Pty Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear.