Drilling extends mineralisation 250m below Resource

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ABOUT CALIDUS RESOURCES Calidus Resources is an ASX listed gold company that is developing the 1.5Moz Warrawoona Gold Project in the East Pilbara district of Western Australia. DIRECTORS AND MANAGEMENT Mr Mark Connelly NON-EXECUTIVE CHAIRMAN Mr David Reeves MANAGING DIRECTOR Mr John Ciganek NON-EXECUTIVE DIRECTOR Mr Keith Coughlan NON-EXECUTIVE DIRECTOR Mr Paul Brennan PROJECT DEVELOPMENT Mr Richard Hill CHIEF FINANCIAL OFFICER Ms Julia Beckett COMPANY SECRETARY calidus.com.au ASX : CAI [email protected] Suite 12, 11 Ventnor Ave West Perth WA 6005 AUSTRALIA 15 February 2021 Warrawoona Gold Project, WA Drilling extends mineralisation 250m below Resource Results highlight underground potential, further increasing the scope for growth in mine life and production HIGHLIGHTS Two drill holes intersected the main Klondyke shear 250m below the current Mineral Resource The drill holes demonstrate continuity of the mineralised shear zone and associated alteration zones at depth and highlight the longer-term underground potential at Warrawoona Main project construction set to start this quarter; Calidus is fully funded through to production Scoping Study on nearby Blue Spec gold deposit scheduled for completion this quarter Warrawoona will be a low-cost, ~90,000ozpa producer with potential for significant growth through development of nearby deposits such as Blue Spec and exploration Calidus Resources (ASX: CAI) is pleased to report that drilling has extended the known mineralisation at its Warrawoona Gold Project in the Pilbara by 250m below the existing Resource. Calidus believes the results are highly significant because they show the potential for additional underground mining at Warrawoona, which in turn adds to the overall scope to grow production and mine life utilising the central project infrastructure. Calidus Managing Director Dave Reeves said: “This drilling demonstrates that the main mineralised Klondyke shear zone continues at depths well below the designed open pit and underground and highlights the longer-term underground potential at Warrawoona.” “With main construction about to start, the scoping study on the nearby Blue Spec deposit almost completed and exploration ramping up, our strategy to develop the project while growing the gold inventory is progressing to plan”.

Transcript of Drilling extends mineralisation 250m below Resource

Page 1: Drilling extends mineralisation 250m below Resource

ABOUT CALIDUS RESOURCES

Calidus Resources is an ASX listed gold company that is developing the 1.5Moz Warrawoona Gold Project in the East Pilbara district of Western Australia.

DIRECTORS AND MANAGEMENT

Mr Mark Connelly NON-EXECUTIVE CHAIRMAN Mr David Reeves MANAGING DIRECTOR Mr John Ciganek NON-EXECUTIVE DIRECTOR Mr Keith Coughlan NON-EXECUTIVE DIRECTOR Mr Paul Brennan PROJECT DEVELOPMENT Mr Richard Hill CHIEF FINANCIAL OFFICER Ms Julia Beckett COMPANY SECRETARY

calidus.com.au

ASX : CAI

[email protected]

Suite 12, 11 Ventnor Ave West Perth WA 6005 AUSTRALIA

15 February 2021

Warrawoona Gold Project, WA

Drilling extends mineralisation 250m below Resource

Results highlight underground potential, further increasing the scope for growth in mine life and production

HIGHLIGHTS

• Two drill holes intersected the main Klondyke shear 250m below the current Mineral Resource

• The drill holes demonstrate continuity of the mineralised shear zone and associated alteration zones at depth and highlight the longer-term underground potential at Warrawoona

• Main project construction set to start this quarter; Calidus is fully funded through to production

• Scoping Study on nearby Blue Spec gold deposit scheduled for completion this quarter

• Warrawoona will be a low-cost, ~90,000ozpa producer with potential for significant growth through development of nearby deposits such as Blue Spec and exploration

Calidus Resources (ASX: CAI) is pleased to report that drilling has extended the known mineralisation at its Warrawoona Gold Project in the Pilbara by 250m below the existing Resource.

Calidus believes the results are highly significant because they show the potential for additional underground mining at Warrawoona, which in turn adds to the overall scope to grow production and mine life utilising the central project infrastructure.

Calidus Managing Director Dave Reeves said: “This drilling demonstrates that the main mineralised Klondyke shear zone continues at depths well below the designed open pit and underground and highlights the longer-term underground potential at Warrawoona.”

“With main construction about to start, the scoping study on the nearby Blue Spec deposit almost completed and exploration ramping up, our strategy to develop the project while growing the gold inventory is progressing to plan”.

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Results from the deep drilling include:

• 1m @ 5.12 g/t Au from 638m (20KLDD117A)

• 1.79 m @ 4.82 g/t Au from 627.79m (20KLDD116A)

• 1.92m @ 2.84 g/t Au from 589.08m (20KLDD116)

• 3m @ 1.84 g/t Au from 599m (20KLDD117)

Klondyke drilling

The Klondyke deposit lies within mining leases M45/669, M45/547 and M45/670 approximately 25km southeast of Marble Bar in Western Australia. It forms part of the Warrawoona Gold Project. Klondyke hosts a Mineral Resource of 42.3Mt @ 1.02g/t for 1.4Moz (Measured, Indicated and Inferred) and Ore Reserves (Open Pit and Underground) of 14Mt @ 1.2g/t for 521koz.

In June 2020 RC pre-collars were drilled for two diamond holes (20KLDD116 and 20KLDD117) designed to target the main ore zone at Klondyke roughly 300m below the present Mineral Resources (Refer Figure One). The aim of the drilling was to establish continuity of the mineralising system at depth and to define areas potentially amenable to underground mining. The drill holes were intended to follow up on intercepts about 400m below surface further to the west under the historic Klondyke Queen mine (Refer CAI:ASX Release 20 June 2018 Drilling confirms high-grade Coronation Results and Klondyke depth extension). The pre-collars were drilled in July 2020 to depths of 438m (20KLDD116) and 468m (20KLDD117), very close to the planned traces of the holes.

Figure One: Tenements at the Klondyke deposit with the pXRF derived geology, pit outline and location of deep diamond drill hole collars and surface projection of hole traces. The location of the cross section in Figure Three is also shown.

In September 2020 drilling commenced on the diamond tails to the two pre-collars. The two tails and a wedge off each tail were finished in November 2020. The details of the primary holes and wedges are shown in Table 1. Delays to the drilling were caused by problems in manning double shifts on the rig owing to Covid-19 travel restrictions. The drilling has confirmed the presence of the main Klondyke shear at depths >550m below surface and about 300m below the presently defined Mineral Resources (Refer Figures Two and Four). Encouragingly, the main sericite and fuchsite alteration zones and a chert marker known as Kopcke’s leader, have been shown to persist at depth (Refer Figure Three).

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All assays from these holes have now been received and the significant intercepts are presented in Table Two below. The best intercepts recorded were 1.79m @ 4.82 g/t Au from 626m in 20KLDD116A and 1m @ 5.12 g/t Au from 638m in 20KLDD117A. Mineralised zones show continuity between the primary holes and their respective wedges, albeit commonly with variable thicknesses (Refer Table Two). Neither of the two holes or their wedges intersected the narrow high-grade shoots within the main ore body that were the focus of historic mining and that have been identified in recent infill drilling at Klondyke (Refer CAI:ASX Releases 14 January 2021, Infill drilling results highlight strong production outlook and 4 November 2019, Drilling hits more shallow, high-grade gold at Klondyke).

Figure Two: Long section showing the current Klondyke Mineral Resource extents and significant intercepts from the recent

Klondyke Deeps diamond drill hole program.

Figure Three: Drill core from hole 20KLDD116A showing Kopcke’s leader and the sericite and fuchsite alteration zones.

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Figure Four: Stylised cross-section through the Klondyke deposit showing the trace of 20KLDD116A with significant intercepts,

alteration zones around the Klondyke shear and the current resource envelope and pit design.

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COMPETENT PERSON STATEMENT

The information in this announcement that relates to exploration results is based on and fairly represents information compiled by Steve Sheppard, a competent person who is a member of the AIG. Steve Sheppard is employed by Calidus Resources Limited and holds shares in the Company. Steve has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Steve Sheppard consents to the inclusion in this announcement of the matters based on his work in the form and context in which it appears. For the purpose of ASX Listing Rule 15.5, the Board has authorised for this announcement to be released.

For further information please contact: Dave Reeves Managing Director

[email protected]

Refer announcements:

ASX – 14 January 2021 – Infill drilling results highlight strong production outlook ASX – 4 June 2020 – Exploration update ASX – 18 December 2019 – High-grade gold intersected outside Klondyke Resource ASX – 25 November 2019 – Robust infill drilling results to underpin open-pit resource upgrade ASX – 4 November 2019 – Drilling hits more shallow, high-grade gold at Klondyke ASX – 22 October 2019 – More wide, shallow intercepts confirm robustness of open pit ASX – 20 June 2018 – Drilling confirms high-grade Coronation results and Klondyke depth extension Table One: Details of drill holes from the September–November 2020 diamond drilling at the Klondyke deposit

Hole ID Hole type

Pre-collar depth (m)

Depth (m) Easting Northing RL Dip Azimuth

Comment

20KLDD116 RC/DD 438.5 660.4 799890 7637368 274 -63 021 Primary hole 20KLDD116A DD 465.4 664.2 — — — -60 26 Wedge 20KLDD117 RC/DD 468 625.1 800290 7637209 278 -66 018 Primary hole

20KLDD117A DD 478.6 642.4 — — — -60 26 Wedge

Table Two: All significant intercepts from the September–November 2020 diamond drilling at the Klondyke deposit using a 1.5g/t cut off, a minimum interval width of 0.01m and a maximum internal waste interval of 2m.

Hole_ID From (m) To (m) Width Grade Intercept

20KLDD116 589.08 591 1.92 2.84 1.92m @ 2.84 g/t Au

20KLDD116 607 608 1 3.87 1m @ 3.87 g/t Au

20KLDD116A 593.31 594.12 0.81 3.06 0.81m @ 3.06 g/t Au

20KLDD116A 626 627.79 1.79 4.82 1.79m @ 4.82 g/t Au

20KLDD117 584.46 585.16 0.7 4.14 0.7m @ 4.14 g/t Au

20KLDD117 599 602 3 1.84 3m @ 1.84 g/t Au

20KLDD117A 577.29 578.26 0.97 2.05 0.97m @ 2.05 g/t Au

20KLDD117A 598 598.87 0.87 1.53 0.87m @ 1.53 g/t Au

20KLDD117A 638 639 1 5.12 1m @ 5.12 g/t Au

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JORC Code, 2012 Edition – Table 1 – Klondyke Deposit

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling techniques Nature and quality of sampling (e.g. 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.

RC pre-collars were sampled for their entire length as 3m composites, with 1/20 of each interval sampled for assay, and the remaining 19/20 of each interval stored on site. For any composites with assays >1g/t Au, samples from the individual meters were passed once through a riffle splitter to obtain 3-5kg of material. Representative chips from the drilling were also collected in chip trays for reference. The chip trays were photographed.

Diamond core samples had a minimum sample length of 0.5m, a maximum of 1.5m, and a 1m default length. Sample intervals were defined by geological boundaries, considering rock types, alteration, veining, and sulfide abundance. After logging and photographing, drill core was cut in half, with one half sent to the laboratory for assay and the other half retained in the core trays.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

The parent holes were drilled at -63° and -66° toward an azimuth of roughly 020°. All drill holes at Klondyke lifted with depth and the dip of the holes at the ore zone was roughly -50°. As the mineralised zone is subvertical, this is close to perpendicular to it as possible.

RC samples were collected at three-metre intervals by a cone splitter mounted to the drill rig cyclone. The cone is balanced vertically to ensure no bias. To ensure representative sampling of diamond holes, core was sampled to marked geological contacts and to nominal 1m intervals within geological domains. The same side of the core was sampled throughout the holes.

Aspects of the determination of mineralisation that are Material to the Public Report.

Samples from RC drilling were split at the rig to achieve a target sample weight of 2-5kg. Samples of half NQ core were taken throughout the holes according to geological boundaries selected by a geologist. Sample weights were typically between 2 and 4kg.

RC and drill core samples were dried and crushed by MinAnalytical Laboratories in Perth, before analysing a 500g split using their Photon Assay technique.

Drilling techniques Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. 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).

RC pre-collar samples were collected by PXD (Precision Exploration Drilling) using a Hydco 800 track-mounted RC rig with compressor size 1350/500psi. RC drillholes were 5.5” diameter holes with a face sampling hammer utilized for the program. Sufficient air was available to ensure that samples were kept dry. Diamond drill core was collected using a Hydco Multipurpose drill rig operated by Topdrive Drilling Australia.

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Criteria JORC Code explanation Commentary

Drill sample recovery Method of recording and assessing core and chip sample recoveries and results assessed.

RC sample recovery was generally very good as logged by the supervising geologist. Almost all the samples were dry.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Sufficient air was available to ensure that the pre-collars were kept dry and to maximise sample recovery. Recoveries were monitored by a geologist. Sample equipment on the RC rig was regularly cleaned.

Diamond drill samples were collected from competent, fresh rock and >95% of sample intervals had excellent recovery.

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.

A dust suppression system was used on the RC rig to reduce the loss of fine material. The dry nature of the samples also reduced the amount of fine material lost to water. Diamond drill recoveries were regularly monitored during drilling.

No correlation has been demonstrated between sample weights as measured by the laboratories and 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.

For the RC pre-collars each metre was logged for rock types, alteration mineralogy and intensity, and sulfide abundances. In the drill core, rock types, alteration mineralogy and intensity, vein types, and percentages of sulfides were recorded for each geological interval throughout the hole.

The detail of logging is sufficient to support any future Mineral Resource estimations.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

Logging of RC samples and drill core was predominately qualitative in nature, although vein and sulfide percentages were estimated visually. All chip trays and core trays were photographed after logging.

The total length and percentage of the relevant intersections logged. All recovered intervals were geologically logged.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken. All drill core was sawn in half and the same half throughout each hole was submitted to the laboratory for analysis.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

RC samples were collected each metre from the full recovered interval at the drill rig by a cone splitter. A split was collected every three meters into a pre-labelled calico bag. The vast majority of all the samples was dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Samples submitted for photon assay to MinAnalytical Laboratory Services Australia Pty Ltd (NATA accredited for compliance with ISO/IEC17025:2005) were oven dried and crushed to a nominal top size of 3mm, (samples >3kg were riffle split), and 500g linear split (PAP3512R) placed into a jar for photon assay (PAAU2). The larger sample size used for photon assay (compared with 50g for Fire Assay) ensures a more representative assay in systems

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Criteria JORC Code explanation Commentary

characterized by coarse gold, such as at Klondyke.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Field QAQC procedures include the insertion of blanks, standards and the collection of RC field duplicates. These were inserted at a rate of 1 in 40 or better for each to ensure an appropriate rate of QAQC.

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.

Field duplicates of the RC samples in the pre-collars in a second calico bag were collected at a rate of 1 in every 40 samples.

Whether sample sizes are appropriate to the grain size of the material being sampled.

Each primary RC sample was between 2 and 5kg, which is considered sufficient for the style of gold mineralisation.

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.

Photon assays were carried out by MinAnalytical (NATA accredited for compliance with ISO/IEC17025:2018 testing). Gold can be measured even if it has not been liberated from the sample material. Photon assay for a ~500g sample has a nominal lower detection limit of 0.03g/t Au which is considered to be appropriate for calculating a Mineral Resource.

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.

No such tools were used in the preparation of this release.

Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

Three different certified reference materials (CRMs) from OREAS of similar grade to the ore body were inserted into the batches of RC and drill core samples to monitor the accuracy of the results from MinAnalytical. Precision was monitored by several duplicate assays. The results of internal laboratory CRMs and blanks were also reported. Both accuracy and precision were satisfactory and passed all QC checks.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

On receipt of assay results from the laboratory the results are verified by the Geological Database Manager and by the Regional Exploration Manager who compare the results with geological logging. Significant intercepts have been reviewed in the available data by senior geological staff at Calidus.

The use of twinned holes. No twinned holes were drilled.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Geological data is logged into Excel spreadsheets on a Toughbook computer at the drill rig for transfer into the drill hole database. DataShed is used as the database storage and management software and incorporates numerous data validation and integrity checks using a series of predefined relationships. All original planned data is retained in DataShed for validation purposes.

Discuss any adjustment to assay data. Adjustments made to the assay data were limited to the replacement of below detection results with a negative value.

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Criteria JORC Code explanation Commentary

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.

Drill hole collar locations were captured by DGPS by Dean Smith Surveying. Readings have an estimated uncertainty of less than 0.02m for the Easting and Northing relative to the base station at Klondyke.

Downhole surveys for dip and azimuth of the hole were taken every 20-30m by the drillers using a north-seeking REFLEX EZ-GYRO™ in multi-shot mode during the drilling.

Specification of the grid system used. The grid system used is MGA94 Zone 50. All coordinates in this release refer to this grid system.

Quality and adequacy of topographic control. The height datum is AHD71. The expected accuracy of the RLs is less than 0.05m relative to the base stations.

Data spacing and distribution Data spacing for reporting of Exploration Results. See Table 1 for hole positions.

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.

The data spacing and distribution of holes is insufficient for Mineral Resource estimations.

Whether sample compositing has been applied.

For the RC pre-collars, 3m composite samples were collected. For assays that returned >1g/t Au, bulk samples from the individual metres were put through a riffle splitter and 1m samples collected and assayed.

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.

The gold mineralisation identified to date consists of numerous mineralised veins parallel to a zone of fuchsite and sericite alteration striking approximately 115° and dipping steeply (80°–90°) to the south. The holes were oriented approximately perpendicular to the strike of mineralisation and at a high angle to the dip of the main Klondyke shear.

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.

All mineralised structures are parallel or nearly so to the main mineralised structure. The holes were drilled nearly perpendicular to the orientation of the mineralised zone and as such is not expected to introduce a sampling bias.

Sample security

The measures taken to ensure sample security.

All samples in calico bags were placed into green plastic bags which were then sealed in bulker bags at the rig. Samples were then picked up from Klondyke and transported to MinAnalytical in Perth using a reputable freight company.

MinAnalytical check the samples received against the submission form and notify Calidus of any discrepancies. The samples at MinAnalytical in Perth are kept in a secured compound security with restricted entry. MinAnalytical operates an audit trail for every sample whilst in their custody.

Audits or reviews The results of any audits or reviews of sampling techniques and data. The program and data were reviewed by senior company personnel.

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Section 2 Reporting of Exploration Results

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 Klondyke deposit is situated in the East Pilbara District of the Pilbara Goldfield of Western Australia, approximately 25km SE of the town of Marble Bar. It forms part of the Warrawoona Gold Project. The Project comprises mining licences M45/670, M45/547, and M45/669 which are held 100% by Keras (Pilbara) Gold Pty Ltd a wholly owned subsidiary of Calidus Resources Limited.

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.

The tenements are in good standing and no known impediments exist.

Tenement ID Holder Size (ha) Renewal Ownership/Interest

M45/670 Keras (Pilbara) Gold Pty Ltd 113.10 29/12/2037 100%

M45/547 Keras (Pilbara) Gold Pty Ltd 17.72 2/05/2035 100%

M45/669 Keras (Pilbara) Gold Pty Ltd 101.95 28/12/2037 100%

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Modern exploration has been undertaken by several companies from the mid-1980s to the present day. During this period Magnet Minerals, Aztec Mining, BP Minerals, CRA, Lynas, Haoma and Jupiter all conducted exploration in the Klondyke area. Exploration included drilling, geological mapping, bulk sampling, underground sampling, soil sampling, aeromagnetic surveys, aerial photography, resource modelling/calculations and petrology.

Geology

Deposit type, geological setting and style of mineralisation.

The Warrawoona Gold Project area lies within the Warrawoona Group, one of the oldest greenstone belts within the Pilbara Craton. The Klondyke gold deposit (~1.15Moz Au) is a deformed orogenic vein system localised at an interflow contact between komatiite and high-Mg basalt. Host rocks are determined by composition from pXRF analyses, and the scattered preservation of spinifex textures in komatiite and variolitic textures in high-Mg basalt. The contact is defined by an interflow metasedimentary horizon (Kopcke’s Leader) with distinctive pale green siliceous, and locally black siliceous chemical sedimentary rocks. Kopcke’s Leader has remarkable strike and depth continuity over the resource area and well past to the east and west providing a strong marker unit to guide exploration and resource drilling.

Gold mineralisation is present in laminated quartz-carbonate-chlorite-pyrite-galena-sphalerite-Au ± scheelite veins at the komatiite/meta-basalt contact with dense wall rock sheeted vein arrays. The mineralized veins strike at approximately 115° and dip about 80-90° to the south-southwest. Intense post-mineral deformation in the form of asymmetric, chocolate-tablet boudinage and oblate flattening has produced a modified ore distribution with the controls on high-grade gold determined by the shape and size of laminated quartz vein boudins. The bulk of the moderate-grade gold ore is hosted in sericite-altered, high-Mg basalt to the south of Kopcke’s Leader. The remainder of the moderate-grade ore is hosted in fuchsite-altered komatiite to the norther of Kopcke’s leader.

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Criteria JORC Code explanation Commentary

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.

Refer to Tables One and Two.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

No data aggregation methods have been applied to these exploration results.

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.

High-grade gold intercepts within broader, lower grade intercepts are reported as included intervals.

The assumptions used for any reporting of metal equivalent values should be clearly stated. No metal equivalents values are used for reporting of exploration results.

Relationship between mineralisation widths and intercept lengths

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

The mineralisation at Klondyke appears to be associated with shearing and alteration and sub-vertical overall. The drill holes have dips of close to 50° when piercing Kopcke’s leader and should, therefore, intersect the mineralisation at a high angle. Reported downhole widths will be slightly longer than the true widths.

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.

Suitable summary plans have been included in the body of the report.

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

All intercepts using parameters described above are reported, together with locations of all drill holes reported in Table 2.

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Criteria JORC Code explanation Commentary

practiced to avoid misleading reporting of Exploration Results.

The report is considered balanced and provided in context.

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.

All meaningful and material data are included in the body of the announcement.

Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Further work will involve the testing of along strike extensions to the current mineralisation and the possible locations of higher-grade ore shoots.

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Diagrams are contained in this announcement.