geologists report on brumbys gold projects

Executive Summary
Brumby Resources Limited has acquired the
rights to two gold exploration properties,
Frances Furness and Brilliant Well, in
Western Australia. The Brilliant Well project
also has potential for the discovery of base
metal deposits.
The Frances Furness project located
approximately 4 kilometres southeast of
Marvel Loch gold mine south of Southern
Cross, Western Australia consists of two
granted tenements covering an area of 64
hectares. The tenements contain deposits
of high grade gold mineralisation that
have been subjected to small underground
mining operations at various times during
the last century. Brumby has entered into
an option agreement to purchase a 100%
interest in the tenements.
Frances Furness is located within the
Marvel Loch – Yilgarn Star section of the
Archean Southern Cross greenstone belt
which has produced over 5 million ounces
of gold from open pit and underground
mining operations. Regional stratigraphy
consists of sedimentary and volcanic rocks
which have been subjected to a complex
history of structural deformation and
metamorphism. It has been suggested
that contrast in ductility between
metasedimentary rocks and maficultramafic
rocks has focused structural
deformation and formation of mineral
deposits in the region.
The tenements contain three old
underground gold mines, Salvation and
Frances Furness. Frances Furness, the
principal mine, produced over 15,000
ounces of gold. At the Frances Furness
mine, underground mining and exploration
focused on two sub parallel mineralised
reefs, East and West lodes. Gold
distribution is erratic in its location in both
lodes and confined to shoots. The quartz
lodes plunge south at about 45 degrees
and the overall outline of the mineralisation
shows a distinct similarity with that at the
Marvel Loch mine. A sub-vertical northwest
trending fault terminates the lodes south
of the main Frances Furness underground
working. Exploration over the past few
years has detected what may be the East
and West lode systems offset to the east
on the south side of the fault. However,
attempts to drill define mineralisation in
this area have so far been unsuccessful.
The underground operation mined a south
plunging quartz lode up to 1.2 metres in
width to a depth of 75 metres. High gold
values of up to 7 ounces per tonne were
reported in stope sampling during mining in
the 1930s. Significant intrusions of flat-lying
pegmatite are present in the upper levels
of the old workings. Little work has been
carried out since that time.
The Eric Lode, discovered immediately
northwest of the Frances Furness line of
workings in 1996, parallels the general
geological trend, dips at 60 degrees to
the northwest and has a strike length
of about 225 metres. It is hosted mainly
within weathered mafic and ultramafic
rocks positioned along the west side of
a pyrrhotitic metasedimentary unit that
has been traced north to the Salvation
workings. Significant assays in reverse
circulation percussion (“RC”) drill holes
include intersections of 2 metres at 14.8
g/t Au, 1 metre at 65.0 g/t Au, 1m at 135.0
g/t Au, 1 metre at 12.25 g/t Au, 2 metres
at 33.85 g/t Au and 1 metre at 11 4.99 g/t
Au. The Eric Lode is weathered to around
75 metres depth or deeper on some
sections and primary mineralisation has
yet to be found beneath the current drill
intersections. In spite of the high grade
intersections there is little correlation
between intersections and extreme
variation between gold values reported
by different analytical methods point to a
coarse gold component. Consequently, no
resource estimate has been made even
though there is sufficient indication that
some material could be possibly be mined
as a small satellite pit to other gold mining
operations in the region.
Recently, a significant intersection of 3
metres at 14.6g/t Au, within a 29 metre
interval of alteration and associated
anomalous gold at Salvation, highlights
the potential for blind parallel lodes within
the Salvation-Frances Furness corridor.
Although appearing to have limited strike
length this mineralisation may have
extensive plunge continuity.
Brumby intends to test a variety of targets
with RC and diamond drilling and develop
new drill targets through further surface
exploration of the project area. Drilling
on the Eric Lode to better define the
mineralisation, outline resources and test
depth extensions is a priority. Follow up
drilling of the recent high grade intersection
at Salvation could lead to the delineation
of a new high grade underground deposit.
Further drilling of the East and West Lode
extensions south of the Frances Furnace
mine fault could also lead to the delineation
of a high grade underground deposit.
Brilliant Well, located approximately 40
kilometres north of the village of Leonora,
consists of three exploration licence
applications covering an area of 208
square kilometres in the Eastern Goldfields
Province of Western Australia. All three
tenement applications are held by Brilliant
Gold Pty Ltd and subject to a joint venture
agreement whereby Brumby can earn up to
85% interest in the tenements.
The project area covers greenstone and
granite terrain of the Norseman-Wiluna
greenstone belt. The Teutonic Bore
and Jaguar copper – zinc deposits are
located about 10 kilometres to the west
of the project area and the Tarmoola
and Thunderbox gold camps are located
20 kilometres to the southwest and 40
kilometres to the northwest respectively. All
of these deposits are in close proximity to
the Keith Kilkenny Tectonic Zone, a transcratonic
structure associated with major
gold and base metal deposits.
The Brilliant Well tenements straddle the
contact between the extensive Bundarra
granite pluton and greenstone stratigraphy
to the west. The contact may in part be
related to structures associated with the
Keith Kilkenny Tectonic Zone. At least one
major north-northeast trending splay, the
Deep Well Shear Zone, comes off the Keith
Kilkenny Lineament and cuts through the
southern and central part of the project
area and gold anomalies occur at several
locations along the splay within the project
area. Most of the project area is covered
by a thin to moderately thick cover of
transported material and consequently,
Archean stratigraphy and lithologies are
interpreted from aeromagnetic data and
minimal exploration drilling data.
The Brilliant Well project provides Brumby
with the opportunity to explore a large area
of Archean granite – greenstone terrain
within a mineralised province well known
for its deposits of gold nickel and base
metals. The property holding contains both
major and minor structures with associated
gold and, to a lesser extent, base metal
anomalies which to date have only been
lightly explored. Exploration carried out so
far can be considered to be of a preliminary
nature and Brumby has identified several
areas where RAB and aircore drilling
programs are warranted to define targets
for RC drilling. These are mainly along
the Deep Well Shear Zone where drill
traverses are currently at a wide spacing,
previous anomalous results have not been
followed up and favourable areas identified
from aeromagnetic data have not been
previously tested.
In the vicinity of Charlie Chicks Well,
previous explorers have identified similar
stratigraphy to that hosting the Teutonic
bore copper- zinc deposit. Although EMsurveys were conducted in the area and
anomalies identified, no base metals were
detected in drilling. Since that period of
exploration the sensitivity of EM techniques
has improved considerably and new
surveys are warranted in this area.
Aeromagnetic highs in the vicinity of
Madman Well and in the northeastern
part of the tenement area may represent
ultramafic bodies with potential to
host nickel mineralisation. Brumby
considers this area to be prospective
for nickel sulphide deposits and intends
to investigate this potential with
reconnaissance aircore drilling to identify
bedrock lithologies.
2.
Frances Furness (100%) - Gold
The Frances Furness project comprises two
granted tenements, Mining Lease 77/25
and prospecting Licence 77/3464 located
approximately 4 kilometres southeast
of Marvel Loch gold mine, Western
Australia. The tenements, covering an
area of 64 hectares contain deposits of
high grade gold mineralisation that have
been subjected to underground mining
operations at various times during the
last century. Brumby has entered into
an option agreement with the tenement
holders Dusky Holdings Pty Ltd and Lithios
Exploration Services Pty Ltd to purchase
a 100% interest in the tenements for a
cash consideration and issue of shares
to the vendors. The vendors will retain a
2% net smelter royalty on any production
from the tenements. Details pertinent to
the tenements and the option to purchase
agreement are provided in the Solicitors’
Report on Tenements and the Summary of
Material Contracts in Section 10 of
this Prospectus.
The project area is easily accessible
from Marvel Loch by regional roads and
numerous tracks cross the tenements
providing adequate access within the
project area. In general the tenement area
has a flat topography and is moderately
to heavily vegetated with eucalyptus and
acacia forest. Open farmlands of the wheat
belt lie immediately to the west.
2.1
Geologi cal Setting
Frances Furness is located within the
Marvel Loch – Yilgarn Star section of the
Archean Southern Cross greenstone belt
between the Ghooli Dome and Parker Dome
granitoid batholiths. The Southern Cross
greenstone belt is highly endowed with
gold deposits and has produced over 5
million ounces of gold from open pit andunderground mining operations. Regional
stratigraphy consists of sedimentary
and volcanic rocks which have been
subjected to a complex history of structural
deformation and metamorphism.
Three structural domains have been
recognised in the area;
a Northern domain consisting of an
arcuate belt of rocks around the southern
end of the Ghooli Dome;
a Southern domain comprising a narrow
belt of rocks around the northern
perimeter of the Parker dome; and
a Central domain between the Northern
and Southern domains bounded to the
north by a prominent east-west trending
Proterozoic mafic dyke.
The project area is situated within the
western arm of the Northern domain. The
Archean sequence in the region from top
to bottom consists of pelitic sediments,
felsic volcanics, mafic and ultramfic
volcanics, ultramafic intrusives and
psammitic sediments. These rocks have
been metamophosed to upper greenschistamphibolite
facies, metamorphism most
likely related to the emplacement of the
granite domes. Regional upright folds
characterise a period of early deformation
which has been overprinted by steeply
dipping, strongly mylonitic, transcurrent
shear zones, principally dextral in movement
and traceable over 70 kilometres along strike.
It has been suggested that contrast in
ductility between metasedimentary rocks
and mafic-ultramafic rocks has focused
folding and faulting at this major rock unit
contact providing open spaces and traps for
mineral bearing hydrothermal fluids and the
formation of mineral deposits in the region.
The tenements contain three old
underground gold mines, Salvation and
Frances Furness which along with Mountain
King and Donovan’s Find outside of the
leases form the Donovan’s Find Group.
Frances Furness is the principal mine in the
group and produced over 15,000 ounces of
gold (Table 2).
The Donovan’s Find Group is located along a
regional northwest trending structural zone
controlled by a major strike conformable
shear zone along which sections of
metasedimentary rocks have been deformed
by faulting. Gold mineralisation along
this zone is mainly associated with subparallel
and tensional quartz veins in shear
zones hosted within mafic amphibolite,
ultramafic rocks and to a lesser extent pelitic
metasedimentary rocks. Mineralisation
has also been recorded as lode material
in banded amphibolite. Arsenopyrite is
the dominant sulphide and the alteration
assemblage is commonly pyroxene, biotite
and feldspar.
At the Frances Furness mine, underground
mining and exploration focused on two
sub parallel mineralised reefs, East and
West lodes which converge in places. The
reefs are located within a coarse grained
amphibolite which forms a distinctive unit
on the boundary between fine grained
siliceous amphibolite and ultramafic rock
with associated politic metasediment and
metachert. The quartz lodes plunge south at
about 45 degrees and the overall outline of
the mineralisation shows a distinct similarity
with that at the Marvel Loch mine.The West Lode is relatively sulphide rich
(arsenopyrite, pyrrhotite) compared to
the East Lode which is richer in gold. Gold
distribution is erratic in its location in
both lodes and confined to shoots within
of relatively barren quartz. A sub-vertical
northwest trending fault terminates the
lodes south of the main Frances Furness
underground working. Exploration work
over the past few years has detected what
appears to be the East and West lode
systems offset to the east on the south side
of the fault.
Previous explorers have interpreted the
lode to be the faulted extension of the
Frances Furness lodes. The lode, mined
in the 1930s, consists of a south plunging
quartz lode up to 1.2 metres thick, cut by
flat lying pegmatite in the upper levels
of the mine. Spectacular grades of up
to 7 ounces per tonne were reported in
stope sampling at that time. The two
recently discovered lodes appear to be
in an intermediate position between the
previously mined Frances Furness lodes
and the lode.
The Salvation workings, located in the
northeast corner of ML77/25, were
developed in the 1930s to the base of
weathered rock at depth of 82 metres via
an inclined shaft. High grade ore occurs
in a steep dipping zone averaging about 1
metre in width. Recorded production grades
from Salvation were higher than the other
Donovan Find mines and gold may have
been enriched in the weathered zone.
In 1996, a new zone of gold mineralisation
was discovered immediately northwest of
the Frances Furness line of workings. This
zone, called the Eric Lode, parallels the
general geological trend, dips at 60 degrees
to the northwest and has a strike length
of about 225 metres. It is hosted mainly
within weathered mafic and ultramafic
rocks positioned along the west side of a
pyrrhotitic metasedimentary unit that has
been traced north to the Salvation workings.
Table 2: Historical gold production of the Frances Furness mine area
Mine Period Ore treated Reco vered Grade
(tones ) (ounces Au) (g/t Au)
Frances Furness 1 907-1971 31,000 1 2,700 1 2.7
1 987 680 1 ,312 60
1 993 2,000 1 ,316 20.4
Bohemia 1 908-1936 9,940 6,672 21.2
Salvation 1 924-1936 1 ,920 2,362 38.3
Total 45,540 24,362 1 6.7
prospect of finding significant ore between
the two mines.
Much of Rygol’s later exploration effort
focused on the underground workings of
the Frances Furness mine and included
mapping, sampling and rehabilitation.
This work resulted in the confirmation of a
southerly plunge to the lodes and lead to
tribute mining of about 2000 tonnes of ore
at an average grade of 20 g/t Au by Richard
Read and Associates in 1993.
Dusky Holdings Pty Ltd purchased the
mining lease from Rygol in 1994 and,
with Lithos Exploration Services Pty
Ltd contributing geological expertise,
commenced re-evaluation of the tenement.
Since then, the Dusky-Lithos consortium
has delineated a small laterite deposit
in the northern part of the lease and
discovered a continuation of the high grade
Frances Furness East and West lodes south
of the mine fault and the potentially high
grade Eric Lode to the northwest of the
Frances Furness mine.
Diamond drill hole intersections on the East
and West Lodes include 2.8 metres at
20.07 g/t Au from 221.0 metres (hole FFD4;
East Lode), 0.9 metres at 15.92 g/t Au from
188.1 metres (hole FFD6; West Lode),
0.53 metres at 20.28 g/t Au from
244.47 metres (hole FFD6; East Lode and
0.11 metres at 13.33 g/t Au from
174.69 metres (hole FFD7; West Lode).
The Eric Lode is in a similar stratigraphic
position to the Salvation lode and lies to
the west of an important meta-sedimentary
marker horizon west of the Frances
Furness line. Significant assays in reverse
circulation percussion (“RC”) drill holes
on the Eric Lode include intersections of
2 metres at 14.8 g/t Au from 49 metres
down hole (hole FFP47), 1 metre at 65.0
g/t Au from 62 metres (hole FFP55), 1m at
135.0 g/t Au from 58 metres (hole FFP56),
1 metre at 12.25 g/t Au from 11 metres
(hole FFP61),4 metres at 4.20 g/t Au from
22 metres (hole FFP70), 2 metres at 33.85
g/t Au from 76 metres (hole FFP91) and 1
metre at 11 4.99 g/t Au from 34 metres (hole
FFP96). Primary mineralisation has yet to
be found beneath the deeply weathered
Eric Lode position which extends to around
75 metres depth or deeper on some
sections. There is no direct relationship
between gold grades and quartz, although
variable amounts of quartz were reported
in drill holes. There is also little correlation
between intersections in holes as close as 5
metres apart and sections as close as 12.5
metres apart. Extreme variations between
gold values reported by atomic absorption
spectrophotometry, fire assay and bulk
2.2
Exploration History
Modern exploration in the project area
commenced with geological mapping
carried out by Union Miniere as part of a
regional assessment of the Marvel Loch
district for nickel deposits in the 1970s.
Having no interest in gold, Union Miniere
sold what was at that time a small package
of six gold mining leases( “GMLs”) to Kia
Gold Corporation (“KGC”), who in the early
1980s commenced a re-examination of the
Frances Furness underground workings
and undertook surface exploration of
the property. KGC’s surface exploration
was orientated toward discovering new
mineralised areas and work included auger
sampling, costeaning, rotary air blast
(“RAB”) and RC drilling. Some underground
development was completed at Frances
Furness and about 1300 ounces of gold
at an average head grade of 2 ounces
per tonne was produced. A number of
underground drill holes were used to probe
for parallel lodes with limited success. KGC
later converted the GMLs to a single mining
lease, ML77/25, and farmed out the project
to Mawson Pacific (“Mawson”) in 1987.
As operator of the joint venture, Mawson
continued exploration of the tenement
without success and in 1987 became the
sole owner of the lease when the joint
venture terminated. Mawson drilled 5
shallow holes across the Frances Furness
workings intersecting mineralisation in
three holes. One hole, FFP4, intersected 7
metres at 4.98 g/t Au including 2 metres at
13 g/t au in the footwall of an old stope.
Mawson was subsequently taken over
by Reynolds and the area became part
of Reynolds Yilgarn Gold Operations
Limited (“Rygol”). Exploration of ML77/25
continued with a comprehensive
reinvestigation of the overall tenement and
soil geochemistry and ground magnetics
were undertaken. Limited shallow drilling
focused on locating a southern extension to
the Frances Furness mineralisation trending
toward the workings. Rygol concluded that
a fault had terminated the Frances Furness
lodes and an abundance of pegmatiticleach analytrical methods point to a coarse
gold component in the mineralisation.
Consequently, no resource estimate has
been made even though there is sufficient
indication that some material could be
possibly be mined as a small satellite pit to
other gold mining operations in the region.
In 2005 Independence Group NL
commissioned a study to integrate drill hole
data into geological plans and sections and
evaluate high grade intersections in drill
holes. A comprehensive report detailing
geology mineralisation, alteration and
structure of the mines and prospects in
the tenement area was produced. Several
targets were identified and subsequent to a
ground magnetometer survey over the entire
area of M77/25, nine RC drill holes and two
RC pre-collared NQ2 diamond drill holes
were completed. A significant intersection
of 3 metres at 14.6g/t Au, within a 29
metre interval of alteration and associated
anomalous gold, was made at Salvation,
highlighting the potential for blind parallel
lodes within the Salvation-Frances Furness
corridor. Two additional holes although
intersecting substantial widths of alteration
and anomalous gold, failed to intersect high
grade mineralisation. Drilling southeast of
the terminating fault at Frances Furness
was inconclusive, and possibly missed the
interpreted lodes.