Malmsbury
Victoria has been a gold producing region since the first documented discovery of gold at Clunes, located 50km west southwest of Malmsbury, in July 1850. The announcement stimulated prospecting in the district and on 20 July 1851 gold was found at the foot of Mt Alexander, only 20km north-west of Malmsbury. This became the richest alluvial gold field the world had ever seen, with 3.5 million ounces of gold dispatched to Melbourne in a ten year period from a creek length less than 3km long.A few months after the Mt Alexander discovery, the Bendigo goldfield was found and produced over 22 million ounces of gold. Victoria has been a significant gold producing region for over 150 years.
Targeting Intrusion Related Gold Deposits
Generally, gold deposits in central Victoria are classified as orogenic gold style deposits which are typically characterised by gold collecting as irregular and unevenly dispersed small nuggets that are usually contained in veins of quartz within the host rock.
The target geological structures in the Company’s Victorian project areas are the economically important class of deposit commonly called intrusion related gold deposits. Such deposits are generally characterised by more evenly disseminated gold mineralisation at appreciable grades that may also display a high degree of continuity. These characteristics can assist in the economic extraction of ore.
Malmsbury Project – EL 4515
The Malmsbury project comprises one tenement, EL 4515 (which includes the recent amalgamation of EL 4503) and covers an area of 22.0 square kilometres.
The area includes numerous historic gold occurrences on which considerable work has been conducted using traditional Victorian reef gold models to direct the exploration. Initial prospecting in the licence area identified over 30 historic gold pits and underground mine workings.
The first gold in the Malmsbury district was also discovered in 1851 near Lauriston and was followed in 1852 by discoveries at Taradale. In 1856 there were discoveries of rich auriferous deep leads and quartz reefs.
The Drummond North goldfield located in the northern area of the Malmsbury project produced 98,000 tonnes of ore at an average grade of 29 g/t Au, or approximately 91,000 ounces of gold, in the late 19th century. There is no record of work done in the area from 1916 to 1964 and since then there has been little targeted exploration activity or drilling.
Within the Malmsbury project area the main prospects are disseminated shear related deposits in the vicinity of Belltopper Hill. The historic mines at Belltopper Hill were centred on three reef structures namely Leven Star, Missing Link and Panama reefs.
Two types of mineralisation have been investigated to date at Belltopper Hill, one comprising narrow, steeply dipping, north trending quartz reefs or strike reefs at Panama and Missing Link that were worked to shallow depths in the late 1800s, the other is the north east striking reef that was worked for a short time in the 1930s as Andrew’s lode but more recently as Leven Star reef.
High resolution imaging of airborne geophysical data from the Belltopper Hill area indicates two small circular features underneath and to the west of Belltopper Hill that could be subsurface igneous bodies. This is supported by the distinctive photo lineament pattern in the vicinity of Belltopper Hill.
The target deposit style within the Malmsbury project are intrusion related gold deposits. Deposits of this type elsewhere in the world include world class gold ore bodies such as:
- Cadia Ridgeway gold mine in New South Wales that has in excess of 20m ounces of contained gold in resource;
- Kidston gold mine in Queensland that operated between 1985 and 2001 and produced over 3.5 million ounces of gold;
- Fort Knox gold mine in Alaska that currently produces over 400,000 ounces of gold annually; and
- Pogo gold mine also in Alaska that holds an estimated resource of 5.6
million ounces of gold.
Leven Star Prospect
Unlike the nearby Panama and Missing Link strike reefs, the Leven Star reef has a distinctive gold-sulphide association and sulphide-carbonate alteration that are often indicative of hydrothermal systems that have an interpreted relationship to intrusive related gold deposits.
The Leven Star reef follows a narrow brittle mineralised fault zone with associated intense fracturing and subparrallel quartz veining in country rock up to 30m wide. Exploration drilling in the early 1990s defined a 450 metre long zone of gold mineralisation. Results from previous drilling included the following:
| Intercept Metres | Grade g/t AU |
| 1.0 | 33.2 |
| 4.1 | 13.1 |
| 6.6 | 8.2 |
| 8.6 | 5.66 |
| 5.0 | 5.39 |
| 6.3 | 5.02 |
| 11.0 | 4.6 |
| 16.0 | 3.78 |
| 10.0 | 3.63 |
| 7.7 | 3.25 |
| 14.0 | 2.80 |
| 14.0 | 2.59 |
| 30.0 | 2.16 |
In May 2007, the Company commissioned AMC Consultants Pty Ltd (AMC) to prepare a mineral resource estimate for the Leven Star gold prospect. AMC identified an inferred resource of 59,000 ounces from 305,000 tonnes at an average grade of 6.0 g/t Au.
The drill hole data used by AMC included 13 diamond drill holes that were drilled in 1990-1992 and 17 RC drill holes in 1994. The data show a high degree of continuity from both a grade and structural perspective.
AMC’s inferred resource at Leven Star is summarised in the following table:
| Volume cubic metres | Tonnes | Grams/Tonne gold | Ounces of gold |
| 122,134 | 305,333 | 6.02 | 59,000 |
The information set out above that relates to exploration results and mineral resources is based on information compiled by Mark Sweeney, who is a Member or Fellow of the Australian Institute of Mining and Metallurgy or the Australian Institute of Geoscientists included in the list promulgated by the ASX from time to time. Mark Sweeney has sufficient experience which is 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 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mark Sweeney consents to the inclusion in this Prospectus of the matters based on his information in the form and context in which it appears.
Long sections of the Leven Star gold mineralisation highlighting the gold grade continuity are shown below.
Geological interpretation based on the compilation of available geological, geochemical and geophysical information suggest that mineralisation in the Belltopper Hill region is associated with an intrusive stock at depth that may be related to the regionally significant Harcourt Granite. Hydrothermal fluids emanating from the regional intrusive are focussed adjacent to and within the intrusive stock. These fluids carrying metals such as gold, tungsten, arsenic, antimony and bismuth become unstable over time and distance from the main intrusive with the resultant minerals being deposited in favourable structures.
These systems are zoned from a geochemical and alteration perspective and may often extend to depths in excess of 1,500m below the surface.
Proposed Budget – Malmsbury Project
The budgets for the first and second years’ exploration, assuming full subscription of the Offer, are as follows
| Activity | Year 1 $ | Year 2 $ | Total $ |
| Sampling and assaying existing core | 30,000 | 0 | 30,000 |
| Geological data acquisition | 10,000 | 20,000 | 30,000 |
| Geochemical data acquisition | 16,000 | 10,000 | 26,000 |
| Geophysical data acquisition | 30,000 | 5,000 | 35,000 |
| Drilling | 1,250,000 | 665,000 | 1,915,000 |
| Subtotals | 1,336,000 | 700,000 | 2,036,000 |