+++++++++++++++++++++++++ Preliminary assay results from the first diamond drillhole NMD 107 (W1) into the EM conductor announced on 6 March have produced a wide intersection of strong nickel sulphide mineralisation with 19.2m @ 2.05% nickel from 531m downhole depth, 150m below the Daybreak deposit.
The intersection consists of highgrade massive sulphides (2.4m @ 5.2% nickel), overlain by moderate grade disseminated and matrix sulphides (13.8m @ 1.8% nickel, including 4.9m @ 2.4% nickel), overlain by low grade sulphides (5.3m @ 1.0% nickel). Further assaying of adjacent disseminated sulphides in NMD 107 (W1) is expected to increase the total width of the intersection.
Based on an interpretation of the EM data and geology, the top of the new nickel zone appears to extend from below a horizontal granite dyke at about 420m depth to at least 600m vertical depth. The host of the nickel mineralisation is a strongly altered sequence of sediments and ultramafics. It is uncertain whether the new zone is an extension of the Daybreak deposit, offset by a fault 150m to the east.
Significance of results:
1. The new zone has the potential to develop into the largest nickel deposit discovered to date in the New Morning - Daybreak area. The intersection points to a trend of increasing width of nickel mineralisation with increasing depth (as shown on the attached cross section).
2. Drillhole samples making up the high grade interval in NMD 107 (W1) are very consistent in grade, with assays of 5.05%, 5.46% and 5.07% nickel. The overlying disseminated and matrix sulphides appear to be high tenor nickel sulphides with assays up to 2.9% nickel.
3. The current feasibility study at New Morning and Daybreak has been evaluating high grade massive sulphides only. The wide zone of mineralisation intersected in NMD 107 (W1) is now expected to have a significant impact on the economic development of the project.
4. NMD 107 (W1) demonstrates the potential for further discoveries in this area. Re-interpretation of data from a 1995 surface EM survey has identified another possible EM anomaly 200m north of New Morning. A follow up EM survey is planned as soon as contractors are available.
The Forrestania joint venture partners Western Areas (75%) and Outokumpu Australia (25%) are planning an immediate follow up program with a second diamond drillhole designed to intersect the new zone 50m north of NMD 107 (W1), commencing on 26th March.
The combination of using high quality EM data, applying a structural approach to interpreting the geology and a having an experienced team of geologists, geophysicists and drillers on site are major factors in the ongoing success of the exploration program at Forrestania.
A separate update of recent developments at Cosmic Boy will be released later this week.
J Hanna MANAGING DIRECTOR
The information within this report as it relates to geology and mineralisation was compiled by Mr Julian Hanna who is a member of the Australian Institute of Mining and Metallurgy and is competent in the field of activity being reported on and who consents to the inclusion of this information in the form and context in which it appears.
A copy of the full announcement, which includes the Cross Section, is available in PDF format on www.asx.com.au. Alternatively it is available for purchase from ASX Customer Service on 1 300 300 279.
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