NORTHERN TERRITORY GOLD MINES N.L. EXPLORATION LICENCE 8170 McKINLAY RIVER EAST FIRST ANNUAL REPORT - FOR YEAR ENDING 15/7/94 REPORT NUMBER: NTGM/8170/1 Prepared by: AJ Hosking AJ Hosking and Associates Pty Ltd Darwin November 1994 TABLE OF CONTENTS Page SUMMARY INTRODUCTION 1 LOCATION AND ACCESS 3 SURFACE TENURE 4 PHYSIOGRAPHY 4 REGIONAL GEOLOGY 5 LOCAL GEOLOGY 7 KNOWN MINERALISATION 8 PREVIOUS GEOLOGICAL STUDIES AND 10 EXPLORATION ACTIVITIES EXPLORATION CRITERIA 16 WORK COMPLETED IN YEAR 1 OF TENURE 17 EXPENDITURE STATEMENT FOR YEAR 1 18 PROPOSED EXPLORATION PROGRAM AND BUDGET FOR YEAR 2 18 REFERENCES 20 APPENDICES 1. NTGS MINE DATA SHEETS - Localities within EL 8170 2. NTGS MINE DATA SHEETS - Localities in close proximity to EL 8170 FIGURES Figure 1 Location Figure 2 Physiographic and Cultural Features from Division of National Mapping Figure 3 Aerial Photograph of Licence Area Figure 4 Soil Types from Hooper (1969) Figure 5 Vegetation Types from Story (1969) Figure 6 General Geology of the Central Part of the Pine Creek Inlier from Nicholson and others (1994) Figure 7 Stratigraphy of the Central Part of the Pine Creek Inlier from Nicholson and others (1994) Figure 8 Regional Geology of the McKinlay River Area from Stuart-Smith and others (1986) Figure 9 Aeromagnetic Contours (BMR) from Goodeve (1966) Figure 10 Highlights of Previous Exploration from various sources SUMMARY The licence was granted to Northern Territory Gold Mines N.L. on 16/7/93 for a period of six (6) years. The licence area contains low-grade metasediments and metavolcanics of Palaeoproterozoic age which have been folded strongly and intruded extensively by pro-orogenic dolerite. The area has potential for gold mineralisation, particularly of the large tonnage, low grade type in quartz stockworks or complex vein systems. While no specific gold occurrences or old workings are known, small tin, manganese (-iron) and lead (-zinc) vein-type deposits do occur and appear to be fault-controlled. Research and data compilation comprised the main exploration activities in the first year of tenure. All data were processed digitally per a Geographic Information System. Open-file records of Commonwealth and Territory government agencies were the main sources of data. A considerable amount of historical geological and exploration data was processed. The activities in the first year have demonstrated that subsequent exploration for gold should be focussed upon structural targets with particular emphasis given to soil-covered areas in the south and anticlines plus faults in the north where outcrop is good. INTRODUCTION Exploration Licence (EL) 8170 of 42 one minute by one minute graticular blocks was granted to Northern Territory Gold Mines N.L. (NTGM) by the Northern Territory Department of Mines and Energy (NTDME) on 16/7/93 for a period of 6 years. The first licence year expired on 15/7/94. The licence area is one of 11 comprising the McKinlay River project area of NTGM. The main administrative details of the licences are provided in Table 1 below. Table 1 Details of McKinlay River ELs EL No. of Date of Term Expenditure Title no, blocks grant (years) commitment year 7155 4 05/12/90 6 $ 8000 4 7674 17 31/03/92 6 $ 5000 3 8055 9 27/07/93 6 $20000 1 8056 14 15/09/93 6 $30000 1 8069 36 27/04/93 6 $35000 1 8161 1 20/09/93 6 $ 5000 1 8170 42 16/07/93 6 $35000 1 8184 62 10/12/93 6 $30000 1 8228 24 31/12/93 6 $23000 1 8424 34 24/12/93 6 $20000 1 8425 3 24/12/93 3 $10000 1 Transfers of the title for ELs 7155 and 7674 from the original holder, Robert Biddlecombe were approved by NTDME on 29/10/93. Statutory areal reductions also have occurred as follows: EL 7155 - 15 blocks originally ; first reduction 5/12/92 with 8 blocks retained ; second reduction 17/1/94 with 4 blocks retained EL 7674 - 34 blocks originally ; first reduction 15/7/94 with 17 blocks retained The total number of blocks in the project area is 246 of which EL 8170 comprises approximately 17 per cent. The initial expectation of the company was that a very substantial field program in the project area would have been completed in the 1994 dry season, including a substantial component for EL 8170. However, unforseen problems with the public float of NTGM's parent company, Australian Gold Mines No Liability (AGM) on the Australian Stock Exchange caused major delays and difficulties in funding the proposed exploration program. Consequently, only research, administration and data management activities have occurred in Year 1. Considerable time, effort and expenditure has been devoted to digitising relevant technical data and establishing a Geographic Information System (GIS) for ongoing storage, processing, interpretation and presentation of such data per Ekos Research (NT) Pty Limited of Darwin. Details of the GIS are contained in the First Annual Report for EL 8069. The main exploration target of the company is large-tonnage, low-grade, open-pittable gold mineralisation similar to that which occurs at major deposits at Union Reefs and Mount Todd. The potential for high grade gold deposits amenable to underground mining, and for base-metals deposits also will be assessed routinely during exploration. Small tin, manganese (-iron) and lead (-zinc) deposits occur in the area. This report contains details of the geology of the licence area, the results of previous exploration plus the research and data management activities which have occurred in Year 1 and part of Year 2 (to 30/9/94). Two small areas within the EL are excluded from tenure. These areas cover the old Rosemary Tin Mine and an unnamed lead-silver prospect to the near north of this mine. Details of the tenements which are held by other parties are as follow: Rosemary Tin Mine Mining Lease North (MLN) 37 Holder: Michael McNally Area: 16.19 ha Date of Grant: 13/06/67 Date of Renewal: 30/12/87 Date of Expiry: 30/12/97 MLN 50 Holder: Jimmy Ah Toy and Edward Ah Toy Area: 9 ha Date of Grant: 08/09/71 Date of Renewal: Pending (application lodged 20/12/90) Unnamed Lead-Silver Prospect MLN 43 - 46 Holder: As for MLN 50 Area: 9 ha each Date of Grant: 21/06/71 Date of Renewal: Pending (application lodged 20/12/90) No sacred/significant sites are registered or recorded with the Aboriginal Areas Protection Authority. LOCATION AND ACCESS The location of EL 8170 is shown in Figure 1. The area occupied by the other ELs which with EL 8170 comprise the company's McKinlay River project area also is shown. The licence area, which has an inverted "L" shape, occurs in the central part of the total area which is held. The approximate centrepoint of the licence area, the Rosemary Tin Mine locality, is situated approximately 50 km northnorthwest of the township of Pine Creek. Vehicle access to the area is gained most conveniently from the south via the Stuart Highway, thence via the good, unsealed road adjacent to the old railway line and thence via the good, unsealed Burrundie Siding - Mount Wells - Mount Harris road. Part of this road traverses the central portion of the licence area. The old Mount Wells Mining Centre lies approximately two kilometres to the west of the most southern portion of the area. Access can be gained also from the west via an approximately east-west track between Ban Ban Springs homestead and the McKinlay Gold Mine (within the contiguous EL 8069) and thence south to the licence area. However, access from the west is complicated by the fact that, for much of its route, this track passes over a black-soil plain which is difficult, if not impossible, to traverse by vehicle in the wet season (particularly over the central portion of the licence area between Compass Creek in the northwest and McKinlay River in the east). The central-northern part of the licence area can be reached by a track which leads north from Jessops Tin Mine. SURFACE TENURE The licence area lies wholly within Ban Ban Springs Perpetual Pastoral Lease 1111 (NT Portions 695 and 1344). This property supports beef raising. PHYSIOGRAPHY The principal physiographic and cultural features of the licence area are shown in Figure 2. An aerial photograph of the area constitutes Figure 3. The licence area occurs in the catchments of the McKinlay and Mary rivers as shown by McGowan (1989). Tributaries of these rivers mark the southern-central and northern parts respectively. In the southern part of the area, drainage is to the north via the McKinlay River and one of its major tributaries, Watts Creek. In the central part of the area, drainage is to the west via tributaries of the McKinlay River. In the northern part of the area, drainage is to the north via Douglas Creek and "Douglas Creek East" and to the east via tributaries of the Mary River in the vicinity of the old Mount Harris Battery. A major physiographic study of the region bordered by the Alligator and East Alligator rivers was undertaken by CSIRO in the period 1965 - 1969 This study covered the licence area. Several authors, notably Williams (1969), Story (1969) and Williams and others (1969), contributed papers to a major publication which is the principal source of physiographic data in this report. Additional data have been obtained from the Vegetation Map of the NT published by the Conservation Commission of the NT ((Wilson and others, (1991)). The distributions of soil and vegetation types are shown in Figures 4 and 5. Two major land units are recognised by Williams and others (1969). These are the dissected foothills and alluvial floodplains. The former unit occurs mainly in the northern part of the licence area and is characterised by, low hills and rubble-covered rises formed by metasedimentary rocks with intervening alluvial flats. Strike ridges also are present. Woodland and/or stunted woodland (Box and Bloodwood) occur on the hills and rises with a grassland under-story, with grassland on the flats. Soils vary from leached, skeletal types to yellow, loamy types on the elevated areas to alkaline types on the flats. The latter unit occurs in the southern-central part of the licence area and is marked by floodplains, deeply incised channels, levees and billabongs. Sands and silts occur on floodplains and in channels while areas of loamy to sandy alkaline and/or acid soils also are present. Paperbark (Melaleuca) woodland and open savannah grassland are distinctive features of this land unit. The licence area has a monsoonal climate with an average annual rainfall in the order of 1500 mm, with most rain falling in the summer months. No waterbores are known to exist within the licence area. REGIONAL GEOLOGY The licence area lies within the Pine Creek Inlier (or Geosyncline). This major tectono-sedimentary unit contains pelitic and psammitic sediments with minor volcanics of Palaeoproterozoic age which developed in a basinal setting on granitic basement of Late Archaean age. The sedimentary pile subsequently was deformed and metamorphosed (mostly to greenschist facies) by the Top End Orogeny which lasted for approximately 180 Ma (1870 - 1690 Ma). Pre-orogenic sills of mafic intrusives and syn- to post - orogenic granitoids intrude the metasedimentary and metavolvanic rocks. Most granitoids were emplaced in the waning stages of the tectonism. A voluminous literature has developed for the Inlier over more than 50 years commencing with studies by the Aerial, Geological and Geophysical Survey of Northern Australia (AGGSNA) of mine areas and their surrounds. A considerable boost to the geological studies and to exploration followed the discovery of uranium at Rum Jungle in 1948. However, it is beyond the scope of this report to review this literature and only key publications have been referenced, notably those of Walpole (1968), Ferguson (1980), Stuart-Smith and others (1986), Needham and others (1988), Stuart-Smith and others (1993) and Nicholson and others (1994) which are particularly relevant to the licence area and its near surrounds. Geological maps at 1:63,360, 1:100 000 and 1:250 000 scales with accompanying reports produced by Commonwealth and NT government agencies are major components of this extensive database. A vast amount of data has accumulated from base-metal, gold and uranium exploration programs. Studies dealing with specific features of sedimentation, tectonism, magmatism and metallogenesis also have been features of the developing literature. Key references dealing with the mineralisation and metallogenesis of the Inlier are those of Crohn (1968), Needham (1981), Nicholson and Eupene (1984), Nicholson & Eupene (1990), Needham and de Ross (1990), Ahmad and others (1994), Ormsby and others (1994) and Bajwah (1994). In this report, the regional geology and stratigraphic framework proposed by Nicholson and others (1994) are adopted (see Figures 6 and 7). These authors have advocated a three-fold lithostratigraphic subdivision rather than the four-fold subdivision advocated by earlier BMR authors and applied widely in recent years. The significance of rim faults around major granitic bodies also is highlighted by Nicholson and others (1994). Such faults also were postulated by authors reporting on airborne geophysical surveys of the McKinlay River area in the 1960s eg. Goodeve (1966). The region contains mainly metasediments and metavolcanics of the Frances Creek Group namely Mundogie Sandstone, Koolpin Formation, Gerowie Tuff and Mount Bonnie Formation is ascending stratigraphic order. Pelitic and psammitic units of the overlying Finniss River Group are confined to a very small area near the Rosemary Tin Mine which is immediately adjacent to the western boundary of the licence area. BMR authors place the Mundogie Sandstone with the overlying Wildman Siltstone in the Mount Partridge Group stratigraphically below the South Alligator Group, The latter group contains the Koolpin Formation, Gerowie Tuff and Mount Bonnie Formation in the earlier interpretation. The Frances Creek Group is dominated by carbonaceous and commonly sulphidic shale with interbedded turbidites and varying amounts of chert, iron formation, tuff, carbonate rocks and non-carbonaceous shale of apparent pelagic origin, according to Ormsby and others (1994). Stratigraphic boundaries between the units of the group are determined by the relative abundances of the very distinctive chemical and volcanogenic sediments. Both crystal and vitric tuffs are known. The overlying Finniss River Group is a flysch sequence of greywacke, siltstone and shale. The units have undergone low-grade metamorphism (greenschist facies). Hornfelsing due to contact metamorphism associated with the components of the Cullen Bathylith, notably the Minglo Granite and the Frances Creek Leucogranite, is a prominent feature of the regional geology up to several kilometres from the margins of intrusive granitoids. The metasediments and metavolcanics have undergone at least two phases of folding. The first phase produced tight to isoclinal, upright folds about NNW - SSE axes while a second, gentler phase produced broad, open folds about east-west axes. Both strike-slip and cross faulting have affected units of the Frances Creek Group to significant degrees. LOCAL GEOLOGY The geology of the licence area is shown in Figure 8. The area contains the full complement of units comprising the Frances Creek Group (predominantly the units of the South Alligator and Mount Partridge groups in the earlier interpretation of BMR). The units (Mundogie Sandstone, Koolpin Formation, Gerowie Tuff and Mount Bonnie Formation) are intruded extensively by the pre-tectonic sills of the Zamu Dolerite. However, for the most part, the sills are contained either within the Koolpin Formation or occur at the contact between the Koolpin Formation and the overlying Gerowie Tuff. The main lithologies present are pelite and psammitic rock types, chert, banded iron formation, vitric and lithic tuffaceous rock types. Carbonaceous and sulphidic pelites are common throughout the sequence but occur notably in the Mundogie Sandstone (Wildman Siltstone level of BMR) and in the Koolpin Formation. All units have undergone tight to isoclinal folding about NNW-SSE axes which are subhorizontal and plunge mainly to the north. Drag folds on the limbs near fold noses are common. The units also have undergone low-grade metamorphism and now display greenschist facies effects. Both strike-slip and cross-faulting have affected the units considerably. Extensive hornfelsing within the contact metamorphic aureole of the Cullen Bathylith also has occurred. The units are intruded extensively by quartz and brecciated, quartz-haematite (ex-sulphide) veins. In the latter category, both tectonic and collapse types are evident, with collapse brecciation due to the oxidation of sulphides (mainly pyrite and arsenopyrite) and consequent volume changes. To the immediate north and west of the northwest corner of the EL lies a prominent, fault-bounded outlier of near-horizontal arenites and rudites of Mesoproterozoic age (Kombolgie Formation of Katherine River Group) which overlie unconformably the Palaeoproterozoic metasediments and metavolcanics. Outcrop of Gerowie Tuff at grid reference 027263 was sampled by the BMR for the purpose of radiometric dating (sample number 79125004). However, a more suitable sample of a similar lithology collected elsewhere was used for the purpose ultimately and gave the date which allows a precise fix upon the crystallisation age of the volcanics which comprise the Gerowie Tuff, namely 1884 ( 3 Ma, according to Needham and others (1988). KNOWN MINERALISATION The former Mount Wells Policy Reserve occupied part of the licence area. This reserve, which was created in 1964 to encourage small-scale mining, was revoked in May, 1988. The workings of the Mount Wells Mining Centre lie to the near west of the southern portion of the licence area. The Mount Wells Tin Mine was discovered in 1879 and worked intermittently until 1929, with recorded production being approximately 100,000t grading 1% Sn. A few tonnes of hand-picked ore grading 37% Cu also were produced in 1917. The Mount Wells Battery was established in 1961 as an aid to prospecting and small-scale mining in the Pine creek district. Subsequently, the battery was upgraded and then sold eventually in 1981 to Jingellic Minerals N.L., a company which acquired title to the Mount Wells Tin Mine in 1970. Ownership of the mine and facilities then passed in 1983 to Territory Resources N.L. and a further upgrading of the plant occurred in 1985, followed by further production from three of the six lodes (approximately 5,000t of ore with grades in the range 0.3 - 0.8% Sn). Underground ore reserves in 1985 in probable and possible categories stood at some 360,000t and 375,000t of 1.5% Sn and 1.3% Sn respectively while an open-cut reserve of 400,000t of 0.4% Sn was indicated. The nature and genesis of tin deposits in the Mount Wells region are discussed at length by Ahmad (1993). The Rosemary Tin Mine occurs in the central part of the licence area and has been drill-tested. Six core holes were drilled by the Northern Territory Geological Survey which downgraded the potential, according to Newton and Shields (1977) and Newton (1979). The Northern Territory geological Survey also drilled one core hole at the Lewis Manganese Mine to the near south of the Rosemary Tin Mine, again without significant encouragement according to Newton (1977). A large claim block (68 titles) lies to the near southeast of the southern part of the licence area. The area covered by this block has been tested extensively in the recent past by costeaning and reverse circulation drilling by Kable Resources Pty. Ltd and Dominion Mining Limited. Gold production has occurred recently from Mineral Claims covering the Touhys North and Touhys South prospects to the near northeast and east respectively of the Rosemary Tin Mine. Sketchy information only exists for the unnamed lead prospect to the near north of the Rosemary Tin Mine. The deposit is small and of vein type (as are most of the known mineral occurrences within and/or near the licence area which invariably are localised within fault or shear zones). No information is available on the lead-zinc prospect shown at grid reference 071311 in Figure 8. The prospect may be of considerable significance in light of the information available for the George Creek and Mary River (Gubberah Gossan) lead-zinc prospects to the near east of the Mary River which are contained within altered basalt and sulphidic-carbonaceous pelites respectively. The significant zinc contents of these prospects distinguish them from the more common quartz-galena veins in the general region (of which the PJ prospect to the immediate north of the northeast portion of the licence area is one example). Recent drilling at the Jessops Tin Mine intersected low-grade gold mineralisation (approximately 0.5g/t) beneath tin-bearing gossans and quartz-haematite breccias ((Ahmad (1993), Orridge (1994)). The association of tin and gold, albeit an erratic one, had been shown earlier by sampling carried out by Northern Territory Geological Survey in the Mount Harris Tinfield, notably at the Big Julie Mine ((Newton, (1977)). Mine Data Sheets for the mineral deposits within and close to the licence area are provided in Appendices 1 and 2 respectively. PREVIOUS GEOLOGICAL STUDIES AND EXPLORATION ACTIVITIES The central part of the Pine Creek Inlier has been the focus of many geological studies by Commonwealth and Territory government agencies and of substantial mineral exploration in recent years. The latter activities have occurred mainly in the 1980s and early 1990s and have been concentrated upon geochemical sampling (stream sediment and soil principally), being directed towards the search for one or more of gold, base-metals and uranium. Gold exploration has been the most recent. Small-scale production of tin has occurred from small mines near the licence area in past years, notably from Mount Wells. Significant aspects of the past government work are: work by the Aerial, Geological and Geophysical Survey of the Northern Australia (ASSSNA) at the McKinlay Gold Mine : Hossfeld (1940) core drilling by by the Northern Territory Geological Survey at the McKinlay Gold Mine, Rosemary Tin Mine and Lewis Manganese Mine: Newton (1974); Newton and Shields (1977), Newton (1977) and Newton (1979) 1:63 360 scale geological and geophysical mapping by the BMR in the 1950s and 1960s: eg Goodeve (1966) detailed geophysical mapping as an aid to tin exploration and mining in the Mount Masson - Mount Harris region to the immediate south of the northern, east-west half of the present licence area: Tipper and Finney (1966) detailed assessment of the Mary River (Gubberah Gosan) lead-zinc deposit approximately 9 km east of the Mount Harris Tinfield: Darby (1985) 1:100 000 scale geological mapping by the BMR in the 1980s: Stuart-Smith and others (1986) detailed geological and metallogenic studies by the BMR of the Cullen Mineral Field: Stuart Smith and others (1993) metallogenic mapping by the NTGS of the Pine Creek 1:250 000 mapsheet area: Ahmad and others (1994) Geological and geophysical plans provided in this report are based on BMR publications as listed above eg Figures 8 and 9. Detailed mineral exploration has been undertaken by many title holders, both of Exploration Licences and of Mineral Claims and Mining Leases. Only exploration on past Exploration Licences has been summarised as available technical data for past claims and leases are very incomplete. Included in the past exploration activities have been large airborne magnetic-radiometric surveys, principally designed as aids to uranium exploration but with much relevance to base metal and gold exploration as well. However, the bulk of the airborne geophysical data relates to ground to the immediate north and west of the licence area where black-soil plains are extensive. The highlights of previous exploration activities are summarised below. In this work, the results of 1:100 000 - scale geological mapping by the BMR have been used as the starting point by most previous explorers for large amounts of stream-sediment, soil and rock geochemistry, followed by limited drilling in some cases. While low-order geochemical anomalies have been quite commonplace in the past, none has led to intensive drill testing. The multi-client, high resolution, airborne geophysical survey flown by Aerodata in 1988 (with additions in 1991 and 1992) unfortunately covers only the southern portion of the licence area. ATP 2226 "Mary River Joint Venture" - Australian Geophysical Pty. Limited, Kenneth McMahon and Partners Pty. Limited (1969) extensive radiometric surveying plus followup stream-sediment and soil geochemistry widespread, low-order Pb soil anomaly on MD grid narrow anomalous Pb zones associated with Adam Creek Fault EL 351 - Central Pacific Minerals N.L., Pietsch (1973) soil and rock geochemistry for Sn mostly to the south of Jessops Tin Mine EL 947 - Comalco Limited Chak (1975) stream-sediment sampling of McKinlay River and tributaries for Au (pan concentrates) no anomalous samples in streams draining present licence area EL 1296, 1592 - Occidental Minerals Corporation of Australia, Swingler (1979) high-resolution airborne magnetic and radiomagnetic survey for uranium at contact between Palaeoproterozoic and Mesoproterozoic rocks in Mount Douglas area followup stream-sediment geochemistry produced Pb and As anomalies associated with the Koolpin Formation, none of which was deemed significant most exploration to near north and west of present licence area EL 3121 - Aquitaine Minerals Pty. Ltd. and International Nickel Australasia Limited, D'Auvergne (1982) unsuccessful follow-up of stream-sediment geochemistry of Occidental Minerals Corporation of Australia over same areas EL 4759 - Kable Resources Pty. Ltd. and Dominion Mining Limited, Burn (1988) extensive costreaming to northnorthwest and southsoutheast of old Watts Creek alluvial diggings by Kable plus followup mapping, sampling and reverse circulation drilling by Dominion of low-grade, stockwork - type Au mineralisation Southern Stockwork Zone (SSZ), Watts Creek North and Watts Creek South prospects current tenure as large claim block (68 claims) EL 4944 - BP Australia Gold Pty Ltd, Walker (1989) followup to earlier BLEG sampling by Kennecott Explorations (Australia) Ltd BLEG values to 18.7 ppb four prospects, Hill 5, Hill 156, Central Anomaly and L82185 Anomaly delineated Hill 5 prospect received detailed mapping plus gridding, costeaning and induced polarisation survey followed by reverse circulation drilling (5 holes with best intercept being 6m of 0.6 ppm Au elevated As values associated with Hill 5 and Hill 156 prospects surface samples of quartz or quartz-haematite veins with values to 0.4 ppm Au EL 5139 (Douglas Creek East) Dominion Mining Limited, Curnow and Tyson (1990) BLEG, silt and pan-concentrate stream-sediment plus rock geochemistry no significantly anomalous values initially part of Golden Dyke Joint Venture with Peko Wallsend Operations Limited most emphasis on Middle Koolpin Formation EL 5140 (Douglas Creek West) - Dominion Mining Limited, Burn (1989) as for EL 5139 BLEG stream-sediment values to 6.5 ppb Au EL 5512 - Geopeko, Sowerby (1990) BLEG stream-sediment anomaly associated with faulted anticline of Koolpin Formation followup to earlier work by Electroytic Zinc Company of Australasia Ltd and Norgold Ltd BLEG values to 22.0 ppb, soil values to 106 ppb, rock values to 0.33 ppm EL 5534 - Union Reefs Gold N.L., Mulroney (1991) mapping and rock sampling for Au several weakly anomalous samples EL 5548 - Eastern Gold NL, Vakil (1989) anomalous As and Zn but no anomalous Au rock geochemistry two quartz-vein systems evaluated EL 6095 (Mount Douglas) - Geopeko, Sowerby (1990) BLEG stream-sediment geochemistry with background levels only EL 6143 - Trescabe Pty. Ltd; Geopeko, Jettner (1993) extensive soil sampling to south and east of Rosemary Tin Mine exploration led to the mining of the small Touhys North and South Au deposits in ironstones developed above fine-grained, sulphidic metasediments EL 6184 - Wyrala Pty Ltd, Mining Management Services Pty Ltd (1990) rock sampling in Mount Harris Tinfield moderate As anomalies associated with gossanous, quartz-veined siltstone EL 6185 (Watts), 6186 (Masson) - Riomin Australia Gold Limited, Penney (1990) earlier work by BP Australia Gold Pty Limited also relates BLEG and silt stream-sediment geochemistry plus follow-up rock-geochemistry several values greater than 3 ppb Au plus one rock value of 1.6 ppm (latter from fine-grained metasediment containing pyrite and arsenopyrite) in EL 6185 BLEG values less than 2 ppb Au in EL 6186; also one rock value of 0.12 ppm Au EL 6444 (Frances Creek) - Billiton Australia, Mackay (1991) BLEG stream-sediment geochemistry with values less than 5 ppb Au one rock sample with 0.17% Zn EL 6473 - Auridiam N.L. Romanoff (1990) research only re Au potential EL 7155 - self, Orridge (1993) summary of previous exploration by Dominion Mining Limited (EL 5139, 1987 - 89) and BP Australia Gold Limited (EL 4944, 1986 - 89) The principal findings of past mineral exploration programs within and/or close to the present licence area are: a close association of tin and gold has been demonstrated in quartz and quartz-haematite (ex-sulphide) veins which invariably are related to faulting or shearing the Koolpin Formation and to a lesser extent, the Zamu Dolerite, have received much exploration for syngenetic, stratiform-stratabound and epigenetic, discordant (structurally controlled) types of Au mineralisation respectively, mostly for bulk-tonnage, low-grade deposits numerous past explorers can claim technical success in that one or more of BLEG, silt and pan-concentrate types of stream-sediment and/or soil samples has/have detected subeconomic Au mineralisation (and economic success in the case of Touhys South) past experience suggests that the levels of 5 ppb Au for stream-sediment samples and 50 ppb Au for soil samples are appropriate thresholds; higher than average background levels of Au in stream-sediment, soil and rock samples were encountered frequently by past explorers tin mineralisation invariably is fine grained eg Mount Harris Tinfield (gold often was present in tin concentrates during earlier mining). Jessops Tin Mine, Rosemary Tin Mine tourmaline is a common accessory in the tin-gold mineralisation higher gold values in the ferruginous cappings of quartz-sulphide veins and sulphidic metasediments point to a considerable degree of surficial enrichment during oxidation and weathering lead and arsenic have been established as pathfinders (arsenopyrite occurs commonly with pyrite in the sulphidic metasediments) sulphidic-carbonaceous units are common throughout the Frances Creek group, with the greatest concentrations being in the Mundogie Sandstone and Koolpin Formation EXPLORATION CRITERIA The criteria being observed by NTGM in its exploration of the area are: particular attention to subareas of non-outcrop given that past exploration activities had a strong geochemical focus (stream-sediment, soil and rock sampling) upon subareas of good outcrop, with largely discouraging results re-evaluation of all known mineral deposits and occurrences, with a particular emphasis on zinc in some localities (as well as on gold) delineation of structurally complex subareas using available detailed aeromagnetic data, satellite imagery and aerial photography, with particular emphasis on faults, shears and anticlinal axial zones evaluation of the mineral prospectivity generally of the contact metamorphic aureole of the Cullen Bathylith (evidence possibly favours metal dispersion rather than concentration of metals?) detailed sampling of the ferruginous cappings of sulphidic and carbonaceous rock units in the Koolpin Formation specifically and in the Frances Creek Group generally detailed sampling of tourmalinised rocks of present specific assessment of the potential of the Zamu Dolerite to host quartz-stockwork gold mineralisation The principal aim of the Year 2 program will be to locate drilling targets in appropriate structural settings via a combination of the interpretation of airborne geophysical data, detailed soil and rock sampling, detailed geological mapping and ground magnetometry. WORK COMPLETED IN YEAR 1 OF TENURE The following activities were undertaken in Year 1: acquisition and digitising of colour aerial photography for the McKinlay River project area, which includes the licence area research of available geological and exploration-related data, mostly available in the open-file records of NTDME, in connection with compilation of the prospectus for Australian Gold Mines NL (AGM), the parent company of NTGM ; this work was carried out by Dr. G.R. Orridge of Geonorth Pty. Ltd., Darwin and submitted as the Independent Geologist's Report for the prospectus ((Orridge (1994)). The prospectus, which was issued in April 1994, subsequently was withdrawn in June 1994 title management by principals and agents of NTGM based in Perth, Melbourne and Darwin establishment of a Geographic Information System (GIS) with subsidiary databases to manage all data generated by NTGM for its NT titles; this work was carried out by Mr. R. Fernandez of Ekos Research (NT) Pty. Limited assessment of options to obtain existing geophysical data (principally the aeromagnetic type) and satellite imagery in digital format to allow image processing This work has extended into the early months of the second year of title and included an extension of the research activities with work by AJ Hosking of AJ Hosking and Associates Pty. Ltd. As a consequence of the failure of the public float of AGM, alternative sources of funding for NTGM's exploration program in the NT have been sought. EXPENDITURE STATEMENT FOR YEAR 1 $ Darwin Office - Consultants 8545 Tenement Costs 1003 Aerial Photography 2242 Data Acquisition and Compilation 446 Geological Consultants 10735 GIS Management 2562 Travel and Accommodation 2449 Administration Overheads 2895 $30,877 The expenditure incurred in Year 1 was less than the covenant. Accordingly an application for a Variation of Condition has been made. Three geological consultants were utilised for varying periods in connection with preparation of the Prospectus for AGM, title administration and advice re programs and budgets for the title. PROPOSED EXPLORATION PROGRAM AND BUDGET FOR YEAR 2 Given the generally disappointing nature of the results of past exploration activities within and/or immediately adjacent to the licence area, the exploration philosophy and program for Year 2 will be based upon the following key aspects: completion of a structural interpretation of the area using colour aerial photographs plus images prepared from digital Thematic Mapper and aeromagnetic data rock-chip, soil and ground magnetic traverses across prospects delineated by the structural interpretation with auger and/or RAB drilling as necessary to sample beneath black soil detailed geological mapping of the prospects (subject to outcrop limitations) Most emphasis will be placed upon: assessment of the prospectivity of soil-covered subareas in the southern and central parts of the licence area delineation of faults, shear zones and folds (particularly the surface traces of anticlinal hingelines) delineation of magnetic units within the Koolpin Formation and of any major discontinuities or aberrations associated with them assessments of sulphidic-carbonaceous and tourmalinised rocks as potential hosts to mineralisation Expenditure is envisaged as follows: $ Geology - detailed mapping, supervision, data interpretation 4000 Geophysics - computer imaging of TM and aeromagnetic data, ground magnetic traversing 7000 Geochemistry - soft and rock-chip sampling (traverses), assaying 5000 Gridding 2000 Information Management (per GIS) 3000 Title Management 2000 23000 Overheads (10%) - Darwin and Perth offices 2300 Say $25,500 REFERENCES - . 1971: Mary River Uranium Joint Venture Prospecting Authority No. 2226, Final report of the 1971 airborne and ground spectrometer surveys - for Australian Geophysical Pty. Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 71/79 (unpublished). Ahmad, M.,1993: The origin of tin deposits in the Mount Wells region, Pine Creek Geosyncline, Northern Territory. Australian Journal of Earth Sciences, 40, 427-443. Ahmad, M., Wygralak, A.S., Ferenczi, P.A. and Bajwah, Z.U., 1993: Explanatory Notes and Mine Data Sheets, Pine Creek. Northern Territory Geological Survey, Metallogenic Map Series, Sheet 52-8. Bajwah, Z.U., 1994: Mineralogy and magnetic susceptibility of the Proterozoic granites, related to gold mineralisation, Pine Creek Geosyncline, Northern Territory, Australia. In The AusIMM 1994 Annual Conference, Darwin, Proceedings, 57 - 66. Burn, N.R., 1989: EL 4759 - Watts Creek, Pine Creek district, Northern Territory, Report for activities 26th August 1987 to 19th September 1988 - for Kable Resources Pty. Ltd. and Dominion Mining Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 89/079 (unpublished). Burn, N.R., 1989: EL 5140 - Douglas Creek West, Pine Creek district, Northern Territory, Annual report for second year of tenure - for Dominion Mining Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 89/083 (unpublished). Chaku, S., 1975: Final Report on Exploration Licence No. 947, Pine Creek, Mount Douglas area, NT - for Comalco Limited. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 75/109 (unpublished). Crohn, P.W., 1968: The mines and mineral deposits of the Katherine - Darwin region. Bureau of Mineral Resources, Australia, Bulletin 82. Curnow, G.P., and Tyson, P.L., 1990: EL 5139, Douglas Creek East, Pine Creek district, Northern Territory, Final and relinguishment report after third year of tenure - for Dominion Mining Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 90/269 (unpublished). Darby, P.R., 1985: Results of government investigations in the Mary River Mining reserve (MR 275). Northern Territory Geological Survey, Technical Report, GS 85/10 (unpublished). D'Auvergne, P., 1982: EL 3121, McKinlay River, Annual report for year ending 11 September 1982 - for Aquitaine Australia Minerals Pty. Ltd. and International Nickel Australasia Limited. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 82/384 (unpublished). Ferenczi, P.A., 1993: Cu-Pb-Zn-Ag mineralisation within the McKinlay River 1:100 000 sheet, NT. Northern Territory Geological Survey, Technical Report, GS 90/015 (unpublished). Ferguson, J., 1980: Metamorphism in the Pine Creek Geosyncline and its bearing on stratigraphic correlations. In Ferguson, J. and Goleby, A.B., (Editors) Uranium in the Pine Creek Geosyncline. International Atomic Energy Agency, Vienna, 91-100. Friesen, R., 1972: Annual report on Authority To Prospect 2255, Mt. Wells Policy Reserve area, Northern Territory. - for Frances Creek Iron Mining Corporation Pty. Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 72/006 (unpublished). Goodeve, P.E., 1966: Darwin/Pine Creek contract aeromagnetic survey, Northern Territory 1963. Bureau of Mineral Resources, Australia, Record 1966/101 (unpublished). Hooper, A.D.L., 1969: Soils of the Adelaide - Alligator area. In Lands of the Adelaide - Alligator area, Northern Territory, CSIRO, Melbourne, Land Research Series, 25, 95 - 133. Hossfeld, P.S., 1940: The McKinlay Gold Mine, Pine Creek district. Aerial, Geological and Geophysical Survey of Northern Australia, Northern Territory, Report, 46. Jettner, W.A., 1993: Exploration Licence 6143, Final report - for Trescabe Pty. Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 93/112 (unpublished). Kenneth McMahon & Partners Pty. Limited, 1969: Phase 2 investigations of Mary River AP 2226, Area No 1 (1968 AP 1727).- for Australian Geophysical Pty. Limited Northern Territory Joint Venture. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 69/3 (unpublished). McGowan, R.J., 1989: The hydrogeology of the Pine Creek mining region. Power and Water Authority, Explanatory Notes for 1:250 000 scale map. Mackay, C.R., 1991: Exploration Licence 6444, Frances Creek, Final report for the period 22nd March 1989 to 5th March 1991 - for Billiton Australia. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 91/268 (unpublished). Mining Management Services Pty. Ltd., 1990: Annual report, EL 6184, Mt Harris - for Wyrala Pty. Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 90/097 (unpublished). Mulroney, M.G., 1991: Final report, Mount Masson, Exploration Licence 5534 - for Union Reefs Gold N.L. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 91/031 (unpublished). Needham, R.S., 1981: A tabulated presentation of metallic mine and prospect data for the Pine Creek Geosyncline. Bureau of Mineral Resources, Australia, Record, 1981/39 (unpublished). Needham, R.S., Stuart-Smith, P.G. and Page, R.W., 1988: Tectonic evolution of the Pine Creek Inlier, Northern Territory. Precambrian Research, 40/41, 543 - 564. Needham, R.S. and de Ross, G.J., 1990: Pine Creek Inlier - regional geology and mineralisation. In Hughes, F.E., (Editor), The AusIMM, Melbourne. Geology of the Mineral Deposits of Australia and Papua New Guinea, 727 - 737. Newton, A.W., 1974: The McKinlay Gold Mine NT, Results of diamond drilling. Northern Territory Geological Survey, Report, GS 74/17 (unpublished). Newton, A.W., 1977: Big Julie Tin Mine, Mount Masson area. Northern Territory Geological Survey, Technical Report, GS 77/05 (unpublished). Newton, A.W., 1977: Diamond drilling investigations, Lewis manganese prospect. Northern Territory Geological Survey, Technical Report, GS 77/08 (unpublished). Newton, A.W., 1979: Minor diamond drilling investigations, Pine Creek area, 1978 - 79. Northern Territory Geological Survey, Technical Report, GS 79/19 (unpublished) Newton, A.W., and Shields, J.W., 1977: Diamond drilling investigations, Rosemary Tin Mine, NT. Northern Territory Geological Survey, Technical Report, GS 77/07 (unpublished). Nicholson, P.M., and Eupene, G.S., 1984: Controls on gold mineralisation in the Pine Creek Inlier. In the AusIMM 1984 Annual Conference, Darwin, Proceedings, 377-396. Nicholson, P.M. and Eupene, G.S., 1990: Gold deposits of the Pine Creek Inlier. In Hughes, F.E. (Editor), Geology and Mineral Deposits of Australia and Papua New Guinea, The AusIMM, Melbourne, 739 - 742. Nicholson, P.M., Ormsby, W.R. and Farrar, L., 1994: A review of the structure and stratigraphy of the Pine Creek Geosyncline. In The AusIMM 1994 Annual Conference, Darwin, Proceedings, 1 - 9. Ormsby, W.R., Nicholson, P.M. and Butler, I.K., 1994: Gold and base metal mineralisation in the central Pine Creek Geosyncline. In The AusIMM 1994 Annual Conference, Darwin, Proceedings, 11-19. Orridge, G.R.,1944: Independent Geologist's Report for Australian Gold Mines N.L. Prospectus (withdrawn). Orridge, G.R., 1993: Exploration Licence 7155 near Mount Masson, Northern Territory, Report on the areas surrendered 4th December 1992. - for self. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 93/187 (unpublished). Penney, S.R., 1990: Exploration Licence 6185 (Watts) and 6186 (Masson), Final report incorporating annual report for the period 24 October 1989 to surrender date - for Riomin Australia Gold Pty. Limited. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 90/158 (unpublished). Pietsch, B.A., 1973: Final report on Exploration Licence 351, Mt. Masson, Northern Territory, Project No. NT 39. - for Central Pacific Minerals N.L. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 73/201 (unpublished). Romanoff, A., 1990: Exploration Licence 6473, Jessops West, McKinlay River area, Northern Territory - for Auridiam N.L., Northern Territory Department of Mines and Energy, Open-File Company Report, CR 90/643 (unpublished). Sharkey, L.J., 1987: Mount Douglas project, helicopter radiometric survey over 12 uranium anomalies in ELs 4500, 4751 and 4855 - for Central Electricity Generating Board Exploration (Australia) Pty. Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 87/59 (unpublished). Sowerby, R.D. 1990: Final report on Exploration Licence 6095, Mount Douglas - for Geopeko. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 90/606 (unpublished). Sowerby, R.D., 1990: Third and final report on Exploration Licence 5512 - for Geopeko. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 90/648 (unpublished). Story, R., 1969: Vegetation of the Adelaide - Alligator area. In Lands of the Adelaide - Alligator area, CSIRO, Melbourne, Land Research Series, 25, 114 - 130. Stuart-Smith, P.G., Needham, R.S., Page, R.W., and Wyborn, L.A.T., 1993: Geology and mineral deposits of the Cullen Mineral Field, Northern Territory. Australian Geological Survey Organisation, Bulletin 229. Stuart-Smith, P.G., Needham, R.S., Wallace, D.A., and Roarty, M.J., 1986: McKinlay River, Northern Territory, Bureau of Mineral Resources, Australia, 1:100 000 Map Commentary. Swingler, N., 1979: Final report, Ringwood - Mt Douglas area, Northern Territory - for Occidental Minerals Corporation of Australia, Northern Territory Department of Mines and Energy, Open-File Company Report, CR 79/180 (unpublished). Taylor, J., 1967: Sampling of Touhy's tin prospect - for United Uranium No Liability. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 67/38 (unpublished). Tipper, D.B., and Finney, W.A., 1966: Mount Masson detailed aeromagnetic survey, Northern Territory, 1965. Bureau of Mineral Resources, Australia, Record, 1966/91 (unpublished). Vakil, P., 1989: Surrender report for EL 5548, McKinlay River - for Eastern Gold N.L. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 89/136 (unpublished). Walker, M.D., 1989: EL 4944, "Mt. Wells" Final report and annual report for the period 23.7.88 to 22.7.89 - for BP Australia Gold Pty. Ltd. Northern Territory Department of Mines and Energy, Open-File Company Report, CR 89/690 (unpublished). Walpole, B.P., Crohn, P.W., Dunn, P.R. and Randal, M.A., 1968: Geology of the Katherine - Darwin region. Bureau of Mineral Resources, Australia, Bulletin 82. Williams, M.A.J., Hooper, A.D.L., and Story, R., 1969: Land systems of the Adelaide - Alligator area. In Lands of the Adelaide - Alligator Area, CSIRO, Melbourne, Land Research Series, 25, 24 - 48. Wilson, B.A., Brocklehurst, P.S., Clark, M.J., and Dickinson, K.J.M., 1991: Vegetation Survey of the Northern Territory, 1:100 000 map. Conservation Commission of the Northern Territory, Darwin. Wygralak, A.S., 1983: The economic geology and mining history of the McKinlay River 1:100 000 sheet area, NT. Northern Territory Geological Survey, Report, GS 83/3 (unpublished). APPENDIX 1 NTGS MINE DATA SHEETS Localities within EL 8170 APPENDIX 2. NTGS MINE DATA SHEETS Localities in close proximity to EL 8170 ?? A.J. Hosking & Associates Pty Ltd 20 A.J. Hosking & Associates Pty Ltd