GBM Resources has entered into a farm-out agreement with leading Japanese trading houses Mitsui Corporation and Pan Pacific Corporation’s covering a number of tenements in North West Queensland.

Under the farm-in agreement, which is now in its third year, Mitsui and Pan Pacific (PPC) can outlay up to A$55 million through their Australian registered JV company Cloncurry Exploration and Development Pty Ltd. Projects subject to this agreement include the Talawanta-Grassy Bore Project, Bungalien Project and the Mount Margaret Project. GBM remains as operator of this project.

Exploration activity in the project increased significantly during 2011 and delivered some promising results including the drilling an intersection of a previously unknown IOCG system below some 400 metres of cover at the Bronzewing Bore Prospect.

There are also multiple IOCG targets which remain to be tested in these project areas and the Bronzewing Bore discovery provides confidence that this approach will deliver significant new discoveries using innovative technologies.

A $3.8 million budget was approved for the current year, allowing GBM to maintain an active exploration program over the Farm-in areas.

Bungalien Project

The Bungalien Project refers to four tenements to the south-west of Cloncurry, namely: Bungalien, EPM 14355; Malbon 2, EPM 14120; Horse Creek, EPM 15150; and Limestone Creek, EPM 17849. As of the 24th May 2012, EPM 14355 has been conditionally relinquished in favour of the newly-granted tenement EPM 18207 (Bungalien 2).

Exploration has focussed on investigation of discrete magnetic features in the Proterozoic basement under a cover of younger sediments of the Cambrian Georgina Basin. These features are consistent with magnetite bearing hydrothermal alteration associated with IOCG Cu-Au deposits. Scout drilling in 2011 successfully encountered IOCG-style mineralisation at the Bronzewing Bore prospect, including a 219m intercept in drill-hole BNG001 that averaged 842ppm Cu between 361580m downhole. Two other holes were located some distance to the south (drill-holes BNG002, BNG003), also intersecting anomalous mineralisation beneath 360-407m of younger cover rocks.

In addition, one hole at the Malbon 2 tenement encountered minor sulphide mineralisation in a magnetitebearing granite.

Following this success, extensive geophysical surveys have been completed this year including further 2D and 3D IP, SQUITEM, downhole IP and downhole EM surveys.

That work included down-hole IP surveys in the three scout drill-holes at Bronzewing Bore. To complement the regional magnetic data, additional detailed ground gravity surveys were completed at Bronzewing Bore and Horse Creek. Based on targets identified from these geophysical surveys further drilling will test these targets in the coming year.

Drilling in the Bungalien tenements by previous explorers has been almost entirely restricted to shallow RC testing of phosphate-bearing strata in the overlying Georgina Basin sediments. Only three holes have been located which test magnetic anomalies in the basement rocks; one hole at Malbon 2, and two in the northern part of the Bungalien tenement, making this extensive tenement holding one of the most underexplored portions of the Eastern Succession in the Mount Isa Area.

                                        Bungalien IOCG target and drillhole Location Plan

Talawanta-Grassy Bore Projects

The Talawanta-Grassy Bore Project consists of two granted exploration permits: EPM15406 Talawanta, and EPM15681 Grassy Bore. The tenements include a north south trending zone of prominent magnetism. Limited drilling indicates that the Proterozoic basement lies beneath some 300m (Grassy Bore) to 650m (Talawanta) of younger cover rocks. Anomalous Cu-Au intersections associated with intense metasomatic alteration were recorded in the core from limited drilling in this area by previous explorers. A ground gravity survey carried out by GBM in 2010 and 2011 demonstrated that none of the previous holes were collared close to the peak of the gravity and magnetic anomalies.

An extensive hydrothermal alteration system was intersected in two scout drill holes at the Ibis and Ibis south prospects in 2010/2011, GBM is pursuing these and similar targets in the Grassy Bore area, and several untested targets in the Talawanta area.

The initial drill-hole at the Landing Ground prospect has intersected a magnetite-bearing alteration assemblage with the presence of minor copper sulphides within the Fe-rich alteration, which is encouraging with respect to the IOCG potential of the prospect.


Talawanta Grassy Bore Project tenement and drillhole location plan

Talawanta Cu Au Project

Talawanta is centred on a major magnetic anomaly which is the most intense anomaly in the district next to Ernest Henry. The magnetic anomaly is 15km x 7km in area. The anomaly has been drill tested by three drill holes which intersected alteration and zones of Cu-Au mineralisation.

The complex magnetic-gravity anomaly is clearly associated with alteration and the potential for discovering IOCG style mineralisation is considered high.

Grassy Bore Cu Au Project

Grassy Bore is centred on a series of bull’s eye magnetic and gravity features. Limited drilling has confirmed the presence of alteration and weak mineralisation. The depth of cover is reported as around 300 metres. Grassy bore also contains valid targets for IOCG style mineralisation.

The Landing Ground prospect is approximately 10km NNW of the Ibis Prospect in the Grassy Bore tenement, where an extensive magnetite-rich, hydrothermal alteration system had been intersected in a 2010 drill-hole (TGD001).

Mount Margaret West Project Mount Margaret West Project

The Mount Margaret West group of tenements are located in close proximity (to the north and northwest) of the Ernest Henry Cu-Au-magnetite mine and are situated in the same geophysical and geological domain. Ernest Henry is the largest IOCG deposit in the Cloncurry district. The Proterozoic rocks lie beneath shallow cover (typically <100m) over the majority of the Mount Margaret West project area.

The tenements are centred on a series of magnetic anomalies that surround prospective granites. The area also contains extensive geochemical targets (Cu, Au), though the relationship with basement magnetic features has not been established in our review to date. It is a highly mineralised district with Ernest Henry and Mt Margaret deposits located nearby.

2012 field-based exploration activities at Mount Margaret West commenced late in the June quarter with gravity and IP surveys and this work was continued in the September quarter, along with soil sampling and detailed analysis of existing geophysical and drilling data over the area.

Work completed  included the ongoing review and evaluation of existing geophysical, geological and drilling data over the tenements, particularly the large quantity of historical data at the FC4S prospect. Fieldwork consisted of the completion of ground gravity regional and infill grids at FC6, FC2 and FC4S. An MMI soil program was also completed over the FC2 area. Ground gravity programs were planned for FC12 and FC15, and further MMI soils planned at FC6, FC12 and FC15. A diamond drilling program was planned for FC4S and a scout drilling program outlined for FC2 West targets. Detailed analysis was commenced on the results of the MMI soil grid at the FC2 West area.

FC2 prospect

A program of MMI (Mobile Metal Ion) soils was completed over the large under-explored tenement area west of FC2 prospect (figure below). A total of 296 samples were collected from a nominal 400x400m grid. The sampling method consisted of down-hole composite sampling of a 15cm horizon consistently between 10cm and 25cm below surface within damp, clay/silt-rich quaternary sediments. The results of this survey have been received and are currently being analysed.

A large ground gravity survey initiated last month was completed and is designed to cover the area of sparse existing data coverage west of the FC2 prospect, following the identification of a strong residual gravity anomaly in the state dataset.

A program for three scout drill-holes to test two of the identified areas of interest has been completed and drilling is underway.


                       Mount Margaret West tenement and target plan

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The December Quarter represents a pivotal period for the Company withkey activities together marking a major step forward in realising nearterm gold production from the Mt Coolon Gold Project while at the sametime providing the opportunity for a longer mine life by incorporating significant additional gold resources from the Twin Hills Gold Project
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6 October 2017


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