quarterly out

GREAT AUSTRALIAN
RESOURCES LTD
A
Quarterly Report
For the Quarter Ended 30th June 2006
HIGHLIGHTS
• Company entered into a Heads Of Agreement on a Platinum Project covering 15,000 hectares within the Bushveld Complex in South Africa.
• New gold results from Banlung (Cambodia) trenching program – preliminary results have delineated intercepts up to 26.4g/t gold associated with sulphidic quartz veins.
• New gold results from Oyadao (Cambodia) soil geochemical sampling – over 1,500ppb gold with associated rock chips up to 11.3g/t gold and 1.2% copper.
• During the quarter the Company announced promising anomalous soil values up to 2,100 ppb gold and up to 61.8g/t gold from rockchip sampling at Banlung.
• Further acquisitions in Cambodia – the Company joint ventured into a new project area and has also been granted a new licence area.
• The Company is well advanced in negotiating a Heads of Agreement on another Platinum Project within the prospective Bushveld Complex in South Africa.
• As at 10th July 2006, GAU entered into an Option Agreement with View Resources on the Company’s Corboys deposit. The deal is valued at approximately $700,000 to GAU - at current View Resources’ share and gold prices. View Resources have the Bronzewing plant and equipment located approximately 30km from Corboys and is anticipating to produce gold in 2007.
QUARTERLY REPORT
For the Quarter Ended 30 June 2006 Page 2
CORPORATE
Heads of Agreement on Platinum Project, South Africa
During the quarter, the Company announced that Impact Mining (Impact), in which GAU has a 50% shareholding, has entered into a Heads of Agreement (HOA) with a South African Black Economic Empowerment (BEE) company to acquire up to 64% of 3 Prospecting Rights, totaling approximately 15,000 hectares.
The Prospecting permits are located on the eastern limb of the Bushveld Complex in South Africa. The main target minerals on the properties are platinum and chrome. The project area covers approximately 50 kilometres of strike length along the Bushveld Complex and south of major platinum mines operated by Anglo American Platinum and Aquarius Platinum.
Under the terms of the agreement, Impact Mining will acquire 64% of the project in consideration for exploration expenditure of R10m (approx. US $4m).
The project is well located with tar roads to access the area. Rail, power supply and other infrastructure are also readily available in the area.
The Prospecting Permits have been secured by the BEE partners recently and have been granted under the “New Order” granting system. Previously, the ground had been locked away under the “Old Order” system and therefore no exploration has been carried out over the area.
The Bushveld Igneous Complex contains over half of the world’s current platinum production within two major horizons, the Merensky and the UG2 reefs. It is the intention of Impact Mining to commence exploration on these properties as soon as possible with an array of modern geophysical and geochemical tools prior to extensive drilling programmes.
The mining sector in South Africa is still robust and the South African Bushveld Complex ranks as the world’s primary source of platinum group metals. With the increase in platinum prices at record highs and increased possibilities for local downstream beneficiation of platinum group metals, GAU believes that there are still strong prospects for the growth of this sector in South Africa.
GAU believes that the project offers an attractive opportunity for potential future benefit and wealth for the Company, based on quality tenements and solid fundamentals for Platinum Group Elements.
Unit 13, 28 Belmont Avenue, Belmont, WA, 6104
Phone: +61 (08) 9479 5745 Fax: +61 (08) 9479 6362 E-mail: [email protected]
QUARTERLY REPORT
For the Quarter Ended 30 June 2006 Page 3
Further acquisitions in Cambodia
During the quarter, the Company announced that through its wholly owned subsidiary company, Liberty Mining International Cambodia (LMIC), it has been granted two exploration licences in the Kingdom of Cambodia, close to the southern border of Laos.
Previously, the Company held two Memorandum Of Understandings (MOU) over the project areas (Banlung and Oyadao). These new exploration permits allow the Company to carry out any form of exploration programmes, whereas the previous MOU’s had limitations on certain types of exploration techniques. The Company sees that this is a huge step forward and is continuing to build a good rapport with the Cambodian government.
The Company has also been granted a new MOU on ground contiguous to the north of the Banlung project area, totalling 127km2.
In addition, joint venture negotiations have also been finalised over a project area contiguous to the west of the Oyadao project area with a local Cambodian company. This area totals approximately 280km2. Under the terms of the joint venture GAU may acquire 70% in the project by taking the project to the Bankable Feasibility Stage. The Company has commenced its due diligence field reconnaissance work over the Oyadao West area. The project area contains many alluvial and hard rock workings.
The Company now has access to just under 1000km2 of highly prospective area for gold and base metals in the Ratanakiri region, an area that is on the same geological trend as Oxiana’s Sepon Project in Laos.
The Company is reviewing and carry out its due diligence on a number of other projects in the South-East Asian region as it continues to aggressively acquire new projects.
Corboys Gold Project – Option Agreement with View Resources
It was announced on 10th July 2006 that the Company had entered into an Option Agreement with View Resources Ltd (ASX code: VRE) on the Corboys Gold Project, located 30kms north of View’s Bronzewing Project within the Yandal Greenstone Belt. Corboys currently has a JORC compliant Inferred Resource of 152,000 ounces of gold (as previously published by GAU “Resource upgrade and drill results” 17 June 2005).
The deal, comprising of cash, View’s Script and royalties is potentially worth over $700,000 to Great Australian. This amount may increase substantially should either the gold price or View’s share price increase in future.
This deal further strengthens View’s position at Bronzewing as they finalise their feasibility study to recommission the Bronzewing Project. It also adds to View’s recently announced agreement with Audax on its Venus gold deposit, which is seen as a potentially high grade resource and feedstock for the Bronzewing plant.
Unit 13, 28 Belmont Avenue, Belmont, WA, 6104
Phone: +61 (08) 9479 5745 Fax: +61 (08) 9479 6362 E-mail: [email protected]
QUARTERLY REPORT
For the Quarter Ended 30 June 2006 Page 4
Under the terms of the option agreement View will also spend up to $500,000 on upgrading the resource status and completing all necessary test work, studies and approvals over the next 18 months. View will be able to exercise its option to purchase the tenement outright for a cash and script consideration with a royalty on future mining by December 2007. For full details see note (i) below.
View is currently on site exploring a number of other targets at Bronzewing, including Venus, Success and Cockburn North as well as completing a major regional structural review
The Bronzewing feasibility study is progressing well, with the major focus on tying down costs and securing ore to fully utilise the 2.3mtpa plant and infrastructure, all of which are in good working condition and ready to go.
Note (i):
The terms of the option agreement with View Resources are as follows;
1. View will pay GAU $50,000 cash, within 30 days of signing the agreement.
2. View to spend up to $500,000 on resource delineation, test work, feasibility study, approvals and other associated works by 31 December 2007.
3. View to spend a minimum of $300,000 on work as outlined in 2 above by 31 December 2007 prior to any withdrawal from the agreement.
4. View may exercise its option to purchase tenement M53/15 on or before 31 December 2007 by paying GAU $125,000 and transferring 625,000 fully paid ordinary View shares to GAU, with View owning the tenement outright.
5. View to pay GAU an option of fee of $25,000 per quarter starting 1 July 2007 to a maximum of $50,000.
6. Should View exercise its option to purchase tenement M53/15 then any outstanding obligations in 2, 3 & 5 above are waived.
7. View to pay GAU $125,000 cash on commencement of mining at Corboys.
8. A royalty of 5% of the gold price over $700 per ounce at the time of mint receipt. I.e. if the gold price at the time is $900 per ounce then GAU receives $10 per ounce ($900-$700x5%).
Unit 13, 28 Belmont Avenue, Belmont, WA, 6104
Phone: +61 (08) 9479 5745 Fax: +61 (08) 9479 6362 E-mail: [email protected]
QUARTERLY REPORT
For the Quarter Ended 30 June 2006 Page 5
EXPLORATION UPDATE
Banlung Gold Project, Cambodia (GAU 100%)
During the quarter the Company announced that it had received highly anomalous gold results from soil geochemical sampling at the Banlung Gold Project within the Kingdom Of Cambodia.
A soil gold anomaly grading up to 2,100ppb gold over an area of 900m x 200m has been delineated at Banlung. Rockchip sampling over this anomalous zone has returned grades up to 61.8g/t gold and also 30.8g/t gold with 73/gt silver and 9.12% copper.
During the quarter the Company completed a small trenching program to expose the geology of the mineralization over the anomalous soil area. Due to the conditions caused by the wet season, this work was very limited. The trenches were excavated by manual means to a maximum of 1.5m depth. In total, 5 trenches were completed for a total of 150 metres in length. Preliminary results are available for these trenches and include ore grade intercepts of up to 26.4 g/t gold over a metre.
Table 1. Preliminary Trench Assay Results at the Banlung Project
Trench No.
Easting
Northing
Intercept
TRBL001
7775
5000
2m @ 2.78g/t gold
TRBL001
7775
5000
6m @ 5.35g/t gold
Incl. 1m @ 26.4g/t gold
TRBL002
7750
4900
9m @ 2.3g/t gold
Incl. 1m @ 11.9g/t gold
TRBL003
7650
4800
1m @ 0.81g/t gold
Note: Intercepts using a lower cut-off 0.5g/t gold. No internal dilution of greater width than 2m.
The higher grades are associated with sulphidic quartz veining in broader low grade alteration zones. While the work was limited in its extent and did not cover all targets, results are considered significant. In particular, the extent of clay alteration and the complex vein arrays are considered to be encouraging signs.
Further trenching to adequately test the targets in their entirety will be completed before the end of the year. This will allow the refining of drill targets for future follow-up.
The Company believes that the early reconnaissance results indicate a great opportunity for significant discoveries within the project area.
Unit 13, 28 Belmont Avenue, Belmont, WA, 6104
Phone: +61 (08) 9479 5745 Fax: +61 (08) 9479 6362 E-mail: [email protected]
QUARTERLY REPORT
For the Quarter Ended 30 June 2006 Page 6
Oyadao Gold Project, Cambodia (GAU 100%)
During the quarter, the Company completed a first pass soil geochemical sampling at the Oyadao Project over a 2.2 x 2.5km grid area. A total of 641 soil samples and 35 rockchip samples were collected over this prospective target area.
Results show widespread gold and base metal mineralization associated with quartz veining and granite intrusive units. A peak soil value of 1.59 g/t gold was returned, which was associated with rockchip results of up to 11.3g/t gold and 1.2% copper.
New Project Generation
The Company is currently assessing numerous project opportunities in the South-East Asian region and South Africa on a number of different commodities. Due diligence on a number of the projects will be ongoing during the September 2006 quarter.
Joe Cornelius BSc, MAustIMM, MAIG, SIA
Managing Director
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves of the projects owned by Great Australian Resources Ltd is based on information compiled by Mr Joe Cornelius and Mr Don Horn, who are members of the Australasian Institute of Mining and Metallurgy and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Cornelius and Mr. Horn consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.
For further information please contact:
Great Australian Resources Limited Telephone: +61 8 9479 5745
13/28 Belmont Avenue Facsimile: +61 8 9479 6362
BELMONT WA 6104 Website: www.greataustralian.com.au
Email: [email protected]
Unit 13, 28 Belmont Avenue, Belmont, WA, 6104
Phone: +61 (08) 9479 5745 Fax: +61 (08) 9479 6362 E-mail: [email protected]
QUARTERLY REPORT
For the Quarter Ended 30 June 2006 Page 7
Figure 1: Location of Banlung and Oyadao Projects in Cambodia
Unit 13, 28 Belmont Avenue, Belmont, WA, 6104
Phone: +61 (08) 9479 5745 Fax: +61 (08) 9479 6362 E-mail: [email protected]