BB

This is a response to questions I had for Ben this morning.
Keep in mind that this response was within the hour.
Don't you admire that? I most certainly do.
I hope this sets your minds at rest.
Kind regards< W

Good morning Warrick

Thanks for your questions.

We have received all the assays from the RC program, and these results were included in today’s announcement. The assays from the diamond core hole, however, are still pending and we expect to receive them within the fortnight.

Today’s announcement regarding the RC results would, in an ideal world, have been delayed until we have received the assays from the diamond hole as the assays from diamond hole DXDD001 would help put things into more perspective.  

For example, the diamond may indicate that the high-grade gold mineralisation is on a secondary structure located 50 metres east or west of where we drilled our RC holes. It should be remembered that we only drilled 5 holes as part of our recent program (that said, hole DXRC005 was testing a separate target away from the IP anomaly) and that these holes were ostensibly all in a line. Therefore this program would not have fully tested any zone outside of the single targeted horizon.

To illustrate this, please see the attached announcement from S2 resources (ex-Sirius). The S2R gold body is 10 metres wide and has a the low-grade gold halo of about 20 meters on either side (see their Figure 1).

(It should also be noted that S2R drilled 163 separate holes as part of the attached program but only 7 holes hit mineralisation greater than 1 g/t gold. And  S2R considered 4 metres @ 0.22 g/t Au to be significant -their hole SPBA2802. We hit 106 meters @ 0.22 g/t gold in DXRC003).

Our March 2016 drilling at Dixon may well have only tested the low-grade halo whereas our 2015 hole (MMRC016) hit the higher-grade core. To work out if this is the case, we need to wait on the results of the diamond hole before looking to undertake our next drill program.

We know there is gold in the system, we just need to pin-point the higher grade core.

We do assay for other elements in addition to gold – 34 elements in total. These non-gold elements such as copper, silver, arsenic, bismuth all help us to vector into the high-grade gold zone. Given that I only received the RC assays last on Friday night, I haven’ yet had a chance to review the multi-element assays to see what they are telling us. This work will happen over the coming week and I will incorporate the findings in a future announcement.

I am sorry if my announcement came across negative. It shouldn’t have because I am not discouraged by the results. Instead, this announcement is incomplete as I don’t have all the information I need at this time to make a comprehensive assessment of the prospect.

An IP survey and further drilling is proposed to commence in May. The exact location of these holes cannot be determined though until I have received the results from our diamond hole DXDD001.

I hope the above answers your questions? Naturally, please feel free to contact me if you would like me to expand on any aspect of Australian Mines’ exploration program/results.

Kind regards

Ben