koongie copper zinc project

KOONGIE COPPER-ZINC PROJECT
UPDATE JUNE 2008

HIGHLIGHTS
• 28m @ 1.93% Cu, 30g/t Au intersected in hole pre-collar
• Northern extensions of Sandiego mineralisation confirmed with intersection of 8m@ 5.22% Zn
• 13m of massive sulphide intersected at Atlantis
• Pre- feasibility work continues






RESOURCE DEFINITION AND EXTENSION DRILLING PROGRAM

On 27 March 2008 Anglo Australian Resources NL announced it had commenced an extensive drilling program at its Koongie Copper-Zinc Project, located 25km south-west of Halls Creek in the Kimberley region of Western Australia,
consisting of approximately 7000m of RC and 4500m of diamond drilling. The drilling program is designed to enhance and advance the Pre-Feasibility work currently in progress by:
• targeting resource extensions at Sandiego
• definition drilling of Onedin sulphide extensions
• exploration drilling at Atlantis and Neptune
In addition development work will be progressed by:
• drilling for metallurgical purposes at Onedin and Sandiego
• water bore drilling
• geotechnical drilling
Phase one of the drilling program is now complete with forty nine RC holes completed for a total of 7214m. Most of these holes will act as precollars to the diamond drilling program which is expected to commence during the September quarter. These holes were collared outside the target zone within the footwall of the mineralisation and therefore the RC portion of the hole is not expected to be
mineralised. Four metre composite assays have now been received for the first fifteen drill holes with some encouraging results. A summary of results is shown
in Table 1. One metre samples have been collected from anomalous zones and submitted to for assay. Results quoted in this announcement should be regarded as preliminary only.
HIGHLIGHTS
• 28m @ 1.93% Cu, 30g/t Au intersected in hole pre-collar
• Northern extensions of Sandiego mineralisation confirmed with intersection of 8m@ 5.22% Zn
• 13m of massive sulphide intersected at Atlantis
• Pre- feasibility work continues Anglo Australian Resources NL ASX Announcement 6 June 2008
28m @ 1.93% Cu, 30g/t Ag intersected in hole pre-collar.
Significant supergene copper mineralisation was intersected earlier than expected within a metallurgical test hole. SRC029 intersected 28m @1.93% Cu and 30g/t
Ag from 112m (inc. 8m @ 4.98% Cu and 60g/t Ag from 116m). The hole ended in mineralisation and will be extended by diamond drilling. This intersection suggests that that the supergene copper zone at Sandiego is much larger than previously modelled.
Northern extensions of Sandiego mineralisation confirmed with an intersection of 8m@ 5.22% Zn Exploration hole SRC035 testing the northern extensions of Sandiego
mineralisation intersected 8m @ 5.22%Zn and 11g/t Ag from 104m within highly weathered clays (see Figure 1). This hole was drilled below SRC020 which
intersected 20m @ 1.6% Cu and which prior to this drilling program was the most northern effective hole at Sandiego. Weathering on this section was also much deeper than expected providing encouragement for sulphide intersections at depth.
Localised deep weathering occurs within the centre of the main Sandiego deposit.
13m of massive sulphide intersected at Atlantis (see Figure 2)
Drill hole ARC10 intersected a 13m wide zone of massive sulphide (including sphalerite and chalcopyrite) starting from 51m down hole. The drill hole was sited in the same area as previous intersections such as 12m @ 10.9% Zn from 26m (KPP36), 6m @ 20.1% Zn from 44m (KPP37) and 10m @ 12.06% Zn from 32m (KPP38). Outcrop in this area is poor and preliminary interpretation from drill cuttings suggests the geology at Atlantis to be structurally complex requiring careful geological interpretation to determine the potential plunge directions of the mineralisation.
Overview
Phase one drilling program has set a platform for the Phase two diamond drilling program, which is expected to commence during the September quarter.
It is anticipated that the drilling program will increase resources at Sandiego and Onedin, improving the viability of the project, and advance the project to feasibility
stage.
KOONGIE PRE-FEASIBILITY UPDATE
Work on the pre-feasibility study continues with an initial report expected early in the September quarter. Work in the last month has included:
• Ongoing metallurgical testwork for all ore types from Onedin and Sandiego.
• Completion of initial development, decline and stope design work.
• Completion of design of flotation, milling and crushing circuit.
• Completion of site layout design.
Anglo Australian Resources NL ASX Announcement 6 June 2008
Operating costs for treatment plant prepared
• Development of mining schedule in progress.
• Environmental studies, including a flora and fauna survey, commenced at both Sandiego and Onedin.
• Geotechnical analysis of Sandiego commenced
• Initial water bore drilling program commenced
• Whittle optimisation work on the Onedin Open pit targeting near surface resources continues.
The current pre-feasibility work has focused entirely on the Sandiego underground option which could see an operational life of 4-5 years. Project life could be further extended to 8 years with the inclusion of the Onedin mineralisation.