high grade results from snowbird project

ASX Announcement
29 July 2008

HIGH-GRADE RESULTS FROM SNOWBIRD PROJECT
LAND HOLDING EXPANDED

Western Metals Limited is pleased to announce that it has progressed its option to purchase 100% of the Snowbird polymetallic project in Canada from BHP Billiton. The decision follows a due diligence field investigation completed on the highly prospective region in the Northwest Territories. Additional work on the Wendy prospect adjacent to Snowbird also identified it as prospective for high grade gold mineralisation. This led to the staking of the five additional Wendy claims held 100% by Western Metals.
Rock chip sampling conducted during the field investigation confirmed tenor of mineralisation and delivered highly encouraging results including:
KB-1 Magmatic Copper-Nickel Target
•
2.57% Cu, 0.12% Ni
•
1.88% Cu, 0.12% Ni
KB-2 Gold-Silver / Base Metals Target
•
31.2 g/t Au, 806 g/t Ag, 3.16% Cu, 10.55% Zn
•
25.4 g/t Au, 769 g/t Ag, 2.23% Cu, 7.44% Zn, 4.22% Pb
Wendy Gold Target
•
273 g/t (9.6 oz/t) Au, 28.5 g/t Ag
•
9.97 g/t Au
The new Snowbird project area now consists of 21 claims within the Snowbird Tectonic Zone, located 625 km NW of the city of Thompson. The Snowbird Tectonic Zone is on the margin of an ancient continent that hosts the Thompson, Raglan and Voisey’s Bay nickel deposits as well as various gold and base metals mines. Several EM bedrock anomalies and the presence of elevated Cu, Ni, Ag, Zn and Au in exposed sulphide mineralisation have resulted in the definition of a number of drill-ready targets.
Western Metals’ Managing Director George Bauk expressed satisfaction with the high-grade sampling results from the project, noting that the progression of the BHP Billiton option along with the additional staking represents an opportunity to add successful polymetallic exploration to Western Metals’ portfolio in the near term.
Western Metals has the guaranteed right to purchase 100% interest in the Snowbird tenements by making a $US250,000 cash payment following the recently completed due diligence period. To complete the transaction Western Metals must now drill one hole to test anomaly KB-1, and choose to make a further cash payment of $US1,250,000 by 31 December 2009.
For further information contact:
George Bauk
Managing Director
Western Metals
(08) 6380 3600
Paul Downie
Porter Novelli (Perth)
(08) 9386 1233
0414 948 127
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
Background Information
The Snowbird project area is located in the southeast corner of the Northwest Territories in Canada (Figure 1). The area was originally explored for base metals by the Phelps Dodge Corporation in the late 1950s. Phelps Dodge returned to the area in 1973 and located and sampled an anorthositic gabbro boulder train containing chalcopyrite and pyrrhotite.
A composite grab sample returned significant nickel and copper assays including a peak of 2.92% Cu and 2.29% Ni 1. Encouraged by these results, Phelps Dodge then conducted electromagnetic (EM) and magnetic geophysical surveys but failed to delineate any conductor. Work done prior to 1999 was summarised by Phelps Dodge in a 2000 report submitted to the Provincial Mines Department.
In 1999 and 2000 the area was re-visited by Phelps Dodge, re-sampling and enlarging the area of exploration. Results of this work were considered encouraging and a time domain electromagnetic survey was proposed but never conducted. No drilling has ever been carried out on the property.
Figure 1 – Regional location map of Snowbird Project in the Northwest Territories, Canada
Between 1965 and the late 1980’s Rio Tinto Canada, Golden Rule Resources, Comaplex Minerals, Kilgour Gold Mines Ltd. and Courageous Exploration Inc. worked on the Wendy prospect at the southern end of the newly acquired Western Metals claims. Anomalous gold results (up to 195 g/t) associated with sulphides led to some further geophysical and geological work, but no extensive follow-up and no drilling was undertaken.
In 2005 BHP Billiton conducted helicopter supported reconnaissance geological mapping, geochemical sampling and a VTEM airborne electromagnetic survey of the Snowbird area. Interpretation of the VTEM data resulted in the identification of a number of EM bedrock anomalies and confirmed the presence of elevated Cu-Ni sulphides in boulders. Further geochemical sampling in the area identified high grade Zn-Cu-Pb-Ag-Au sulphide mineralisation in a shallow trench in the vicinity of the VTEM anomaly.
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
Western Metals completed a helicopter supported due diligence field campaign in June 2008 comprising geological reconnaissance and re-sampling of outcrop, trenches, and boulder trains. Selected results from the due diligence sampling are tabulated below:
Notes on Table: A total of 37 rock chip samples were collected during this field reconnaissance. Not all sample results were significant and have been reported in the table above. All samples represent grab samples. Sample were analysed by ALS CHEMEX Vancouver Canada. Au was determined by Fire Assay with AAS - method Au-AA26 (detection limit 0.01g/t, upper limit 100g/t) and overrange values by fire assay gravimetric analysis - Au-GRA26 (detection limit 0.05g/t). All other elements were determined by 4 acid digest, HCl leach and ICP – AES finish,- method ME-ICP61 (detection limits and upper ranges as follows: Cu 1ppm, 10000ppm; Pb 2ppm, 10000ppm; Zn 2ppm; 10000ppm). Overrange values were subsequently determined by four acid digest and conventional ICP-AES - method ME-OG62. The “-“ represents values below detection limit.
Opportunity
The project presents an opportunity to explore for two target styles; magmatic copper-nickel sulphide deposits, and high grade hydrothermal gold and base metals deposits in a poorly explored portion of the highly endowed Superior Craton margin. The BHP Billiton option claims have a number of untested walk-up drill targets defined by a combination of permissive regional geological setting, late-time EM anomalies, and highly encouraging geochemical data.
The recent recognition of a gold-rich system just to the north of the existing BHP Billiton claims imbue the project with a full polymetallic suite of targets, all of which are amenable to geophysical targeting and shallow drill testing.
The combination of exciting geophysical results supporting surface geochemistry and the lack of any drilling make this an exciting greenfields exploration opportunity.
Geology
The mineral claims lie within a NE-trending ~200 by 100 km crustal-scale lozenge of amphibolite to granulite-facies folded gneiss, granitoids, amphibolite, gabbroic and rare ultramafic bodies within the
Sample
Description
Au g/t
Ag g/t
Cu %
Zn %
Ni %
GR02590
Float – gabbro w/ chalcopyrite (KB-1 boulder train)
-
3.2
1.51
0.02
0.08
GR02593
Float – mineralised gabbro (KB-1 boulder train)
-
6.7
2.57
0.02
0.12
GR02594
Float – gabbro w/ chalcopyrite (KB-1 boulder train)
-
4.5
1.88
0.02
0.12
GR02581
Trench – amphibolite, qtz-rich w/ sulphides (KB-2)
1.99
135
0.34
1.63
-
GR02583
Trench (KB-2)
31.2
806
3.16
10.55
-
GR02584
Trench (KB-2)
25.4
769
2.23
7.44
-
GR02585
Trench (KB-2)
0.84
126
1.97
3.03
-
GR02508
Trench – vein quartz w/ pyrite (Wendy prospect)
2.16
0.8
-
0.01
-
GR02509
Trench – siliceous breccia w/ pyrite (Wendy)
3.69
1.7
-
-
-
GR02510
Float – quartz-pyrite rich (Wendy)
273
28.5
0.05
-
-
GR02511
Float – quartz-pyrite rich (Wendy)
3.26
0.5
-
-
-
GR02512
Float – quartz-pyrite rich (Wendy)
9.97
1.9
-
-
-
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
NE-trending Snowbird Tectonic Zone (Figure 2). This zone forms the terrane boundary between the Archaean Hearne and Rae Subprovinces along a rifted continental margin. The majority of the claim block is underlain by Archaean Rae Subprovince metamorphics The Archaean-Proterozoic Chipman Panel forms a micro-terrane within the Snowbird Tectonic Zone, and a terrane boundary between the Chipman Panel and the Rae Subprovince passes though the centre of the claim block.
The Archaean metamorphics are prospective for Archaean-style hydrothermal gold systems and base metals deposits, and magmatic Cu-Ni-PGE sulphide systems. The latter could be derived from Archaean or later Proterozoic intrusive bodies.
The 2005 VTEM and aeromagnetic survey covered only the northernmost 100 km2 of the BHP Billiton option area. Figure 3 shows an image of the late time secondary EM response, and the location of four anomalies considered worthy of follow-up.
Figure 2 – Geology of the Snowbird region area showing the claim block and targets for follow-up
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
Magmatic Copper-Nickel Sulphide Exploration Targets
KB-1
The target is represented by a late-time VTEM anomaly under glacial esker cover next to a small lake. The combination of outcrop mapping and airborne magnetic data indicate the anomaly sits within an interpreted doubly-plunging antiform, comprised of Rae Subprovince metamorphics (amphibolites and granite gneisses) close to the terrane-boundary with the Chipman Panel. Down-ice of the anomaly is a 400m long boulder train from which gabbro samples (GR02590, GR02593, GR02594) containing abundant chalcopyrite-pyrrhotite-pentlandite sulphide mineralization in disseminated to blebby magmatic textures were collected (Figure 4). PGE assays of all collected samples are pending.
Small gabbro dykes containing similar magmatic Cu-Fe-Ni sulphides are exposed in a series of trenches SW of the lake hosting the KB-1 anomaly. The copper sulphide-rich nature of the dyke and boulder train material suggests the gabbros may represent a highly fractionated component of a magmatic Cu-Ni-PGE sulphide system at depth. The VTEM anomaly is permissively a body of more primitive Ni-rich massive sulphide which does not outcrop but is indicated by the presence of high Ni (e.g. 2.29% Ni 1) in samples from the boulder train collected by Phelps-Dodge. This body is the main KB-1 drill target.
Figure 3 – Mid time VTEM response draped on satellite photo indicating all targets for follow-up on the BHP Billiton option claims.
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
KB-4
The target is represented by a mid-time VTEM anomaly persisting for over 1 km in strike length. The anomaly is interpreted as sitting on the western limb of the same doubly-plunging antiform that hosts KB-1 on the eastern limb. Gossan zones were identified near the anomaly centre, seen over at least 100m and containing anomalous Cu and Zn assays.
Figure 4 – Rich disseminated chalcopyrite in gabbro boulders down-ice (235°) from EM anomaly KB-1
Hydrothermal Gold-Silver / Base Metals Targets
KB-2
This target consists of a 1 km long VTEM anomaly within amphibolites. Approximately 300m SE of the centre of the VTEM anomaly is a trench, shown in Figure 5, containing veins and segregations of Au- and Ag-rich base metal sulphides (Samples GR02581, GR02583, GR02584, GR02585 – see table below) which are interpreted to be structurally/hydrothermally remobilised and are associated with a large-scale NW-trending structure which cross-cuts the EM anomaly in the magnetic image. The exposed sulphide mineralization has geochemical affinities with Au-rich VHMS systems (high Bi and As). Drill targets here are high-grade, structurally-reworked Au-rich VHMS or other hydrothermal systems associated with the trench exposure and the nearby VTEM-anomalies.
Figure 5 – Trench containing Au-rich Cu-Zn-Pb-Ag sulphides on anomaly KB-2, looking south KB-3
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
This target area is associated with a broad VTEM anomaly over Archaean greenstone rocks with Fe-sulphide laminations and quartz veins and is considered a prospective Archaean-style hydrothermal gold target. The KB-3 anomaly is hypothesised to be extensional to the Wendy prospect described below and shown in Figure 3. Follow-up will consist of detailed mapping and rock-chip sampling.
Wendy (WMT 100%)
The Wendy prospect, sitting less than 1 km from the northern boundary of the BHP Billiton option claims (Figure 2), comprises gold-mineralised quartz veins, siliceous breccia and pyrite-bearing wall-rock alteration, along an inferred granite gneiss/amphibolite contact. Pyrite is abundant in all three settings and pyrite abundance appears to correlate with gold mineralization. Gold-bearing, pyrite-rich boulders, some of which contain visible free gold, are strewn near a historical exploration trench at Wendy as seen in Figure 6.
Based on ground examination and open file report data there is no evidence of any previous drilling at the Wendy prospect. Wendy represents a structurally-controlled, Archaean-style hydrothermal gold target. The abundance of pyrite and the apparent gold-pyrite abundance correlation would lend itself to follow up by an induced polarisation survey followed by targeted drilling.
Figure 6 – Gold mineralised quartz breccia containing abundant pyrite in boulders in the vicinity of the Wendy prospect
Resources and Work Programme
Surface mapping and geophysical surveys will be completed on the Wendy claims prior to drilling. The KB-1 (see Figure 7) and KB-2 targets on BHP Billiton option tenements are considered drill ready based on existing BHP Billiton detailed geophysics and Western Metals field validation. Field work is scheduled for this calendar year, followed by diamond drilling to commence in early 2009, with all results received and interpreted by July 2009.
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO
Commercial Terms
Western Metals has made a $US250,000 cash payment following a due diligence period. This ensures the right to complete the purchase of 100% interest in the Snowbird tenements by drilling one hole to test anomaly KB-1, and paying a further cash payment of $US1,250,000 by 31 December 2009.
Within 45 days of the receipt of assay analysis from the hole testing KB-1, BHP Billiton may exercise a back-in right wherein WMT will hold a 40% interest in the property and BHP Billiton will hold a 60% interest.
Should BHP Billiton exercise its back-in right, a JV will be formed and standard dilution provisions will apply. Should BHP Billiton decline to exercise its back-in right, WMT will hold a 100% interest in the property, and BHP Billiton will retain a 2% net smelter royalty and the first right of refusal for marketing agency and off-take rights.
Figure 7 – Location of Cu-Ni EM target KB-1 to be drilled as part of the BHP Billiton option process
BACKGROUND TO WESTERN METALS
An emerging resource company developing a portfolio of world class Uranium and Base Metals Projects. The company has immediate plans, and the capability, to underpin value and accelerate growth through acquisition and exploration success.
COMPANY PROJECTS
URANIUM
A joint venture with Uranium Resources plc to explore in Tanzania. Western Metals has a 60% interest in the Mtonya Project, a 42.5% interest in an additional 10,413 km2 of tenements and a further 211 km2 under a 45% joint venture. The total licence area under Western Metals’ management is 14,062 km2.
A joint venture with Lynx1 LLC of the United States. The JV holds exploration and mining rights over prospective land in Colorado. Western Metals currently holds a 68% interest, with an ability to earn up to 85% by spending US$1.65 million.
BASE METALS
An option to acquire 100% of the advanced Parys Mountain copper-zinc project on the island of Anglesey in North Wales from Anglesey Mining plc (LSE:AYM), a UK based mining company listed on the London Stock Exchange (http://www.angleseymining.co.uk ). The project is currently in a final due diligence stage.
An agreement with BHP Billiton to explore for base metals in the West Georgetown region of northern Queensland. Western Metals has 100% ownership with BHPB retaining a claw back provision over one of the tenements (EL14722).
An option to purchase 100% interest in the Snowbird Nickel Project in the Northwest Territories of Canada by drilling one exploration drill hole and making a US$1,250,000 cash payment before 31 December 2009. BHP Billiton retains a 60% back-in right.
WMT has purchased from BHP Billiton a 100% interest in all exploration data relating to the Mid-Continent Nickel Project in Minnesota including all regional geophysical data, drill hole and analytical data.
A joint venture in Peru with a private Peruvian entity, to target a large tonnage Cu-Mo-Au porphyry deposit similar to other giant deposits in the region. Western Metals can earn up to 100% through payments of US$2.5 million over a four year period.
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled and/or assessed by Glen Edwards who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Edwards is employed by Western Metals Ltd. Mr. Edwards 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’. Mr. Edwards consents to the inclusion in the report of the matters based on his assessment of the available information in the form and context in which it appears.
Notes on reported sampling and assay techniques
1 Data has been taken from Phelps Dodge company reports submitted to the provincial government. Original data has not been available and details regarding sampling and assay techniques are not known.
2 Assays are from grab samples analysed by ALS Chemex, Vancouver by method PGM-ICP23, Au-GRA21, PB-AA46, ZN-AA46, and ME-ICP41.
Western Metals Limited
ABN 69 009 150 618
Unit 7, 100 Railway Road, Subiaco WA 6008 – PO Box 1674 Subiaco WA 6904
Tel: +61 8 6380 3600 Fax: +61 8 9382 8022 Em: [email protected] Web: www.westernmetals.com.au
ASX: WMT/WMTO