Ann: Drilling Intersects Sulphides and Magnetite at Sortekap, page-4

7
Sortekap Discussion

The IP survey is regarded as having successfully identified sulphide mineralisation, with
drill-hole SODD001 intersecting sulphides within 10m of the interpreted chargeable
anomaly (Fig.8). The IP anomaly will now be re-tested down-dip by at least two
additional drill-holes, the first of which is currently underway (SODD002).

The consequent drill-holes are collared in Archaean greenstone amphibolite that is
known to host gold in quartz veins at surface. Prior surface sampling yielded grade up
to 2.7g/t, with the gold associated with trace sulphides. Each drill-hole will therefore
be penetrating two zones of interest, the amphibolite for gold and then the deeper IP
anomaly.

The magnetite encountered in SODD001 is massive in form, fine-grained and persists
for a combined total of 89.4m downhole. It differs from known deposits in Australia
where iron is present mostly in banded iron formation (BIF), instead the magnetite at
Sortekap is the result of hydrothermal alteration of serpentinite and is more akin to the
long-lived Cogne deposits in Italy, that produced magnetite from the Middle Ages to
1979. In addition to the magnetite, disseminated sulphide mineralisation is present and
analysis is awaited to determine what other metals aside from iron may be present.

The preliminary findings at Sortekap are strongly encouraging and the presence of
magnetite is something that the IP survey did not identify. The recently competed heli-
borne magnetic survey has however identified Sortekap, and a location
approximately 13km to the southeast, referred to as Pyramiden, as the most strongly
magnetic locations within the entire Ryberg Project area. The combined area of
interest covers ~75km2 and is regarded as being highly prospective for additional
sulphide and magnetite mineralisation.

Initial reconnaissance of Pyramiden has occurred, with iron oxide readily observed.
The geology is known to consist of Archaean metamorphic rocks (such as those seen
at Sortekap in SODD001), overlain by ~100 million-year old marine shales that have
been intruded by mafic sills. Further reconnaissance of this locality is planned, with the
intention of locating sites for drilling this field season.


9

Regional Magnetic-Radiometric Survey

The regional heli-borne magnetic-radiometric survey has been successfully completed
by New Resolution Geophysics (NRG) of South Africa (Fig.9). They utilised their ‘Xcite’
system, flying at 200m line spacing, and at 100m spacing over the Sortekap and Miki
Prospects, as well at the Togeda Dyke. The data is of high quality, having undergone
daily quality control checks by NRG technicians, and weekly checks by consulting
geophysicist Kim Frankcombe in Perth.

The regional data represents the first geophysical survey to ever be conducted over
the majority of the licence area. It is currently undergoing final processing and
interpretation, however preliminary findings have already highlighted areas of
significant interest, including magnetism at Sortekap and Pyramiden.