Bridging report to cover exploration activities over MLC 328 to MLC 337, 01 January 2001 to 18 June 2007 Queen of Sheba

Abstract

Mineral Leases 328 - 337, Queen of Sheba, were acquired by Santexco Pty Ltd (Santexco) to search for Tennant Creek style iron oxide copper-gold deposits. This bridging report records the exploration work done on these group of tenure during the term 01 January 2001 to 18th June 2007. The Queen of Sheba Group covers a prospective area of Warramunga Formation and coincident gravity ridge running from North Star mine south westerly to the Queen of Sheba and Gecko mines. In 1953, North Enterprise Gold Mines NL (North Enterprise) acquired an option to purchase the Queen of Sheba Mine. After drilling two scout diamond holes (results not available) it was announced that gold values occurred to a vertical depth of 27.4m, that the lode was 13.7m wide and from 10.7 - 13.7m the lode averaged 25.5g/t Au. Between 1953 and 1956 North Enterprise carried out a development program on Queen of Sheba, sinking a shaft and cross cuts on the 21, 30 and 46m levels. North Enterprise's activities on Queen of Sheba ceased in January 1956 when a 120 ton parcel of ore returned an average of 14.6g/t Au when an average of 27g/t had been expected. No data on the Evening Star workings are available. In 1960 Consolidated Gold Mining Areas NL drilled at least two diamond holes on the Queen of Sheba. One hole (QSGD01) was drilled under the old Queen of Sheba Mine. Poor core recoveries were experienced (<50%). No assay results are available, except for the comment that the best grade was 0.6g/t Au between 12.2 and 15.2m. The second hole's location is uncertain (QSGD02). It may have been drilled into the Southern Queen magnetic anomaly south of Queen of Sheba Mine and East of Evening Star. No assays are available and only trace sulphides are recorded. Exploration by Normandy over the Queen of Sheba for the Period 1978 to August 1996 has been detailed in Hatcher (1996). Exploration completed during the period 1/8/96 to 31/7/97 included a MMI geochemical sampling programme and a Moving Loop Time Domain Electro Magnetic (TDEM) survey. In February 1998, 212 line-km of helimag were completed over Queen of Sheba in as part of the Gecko-Warrego survey. The survey utilized Normandy's in-house geophysical equipment and was flown on NS lines, 50m apart, at a sensor height of 30m. Modelling indicated a very large magnetic body at 500-800m depth and two shallower bodies (the northern and southern 'ears') within the Southern Queen Shear. A diamond hole (QSDD-005) was completed in July 1998 at Queen of Sheba with a total depth of 399.5m. The modelled target, the southern 'ear' ironstone within the Southern Queen Shear, was not intersected. Two unsuccessful pre-collars were also drilled and have been designated as QSRC-029 (126m RC) and QSDD-004 (198m RC, 7m NQ2 - total 205m). These were abandoned due to excessive swing of up to 12 in 100m. A total of 70 3m-composite samples covering 0-126m in QSRC-029 and 126-198m in QSDD-004 returned a maximum of 3m at 0.04g/t Au from 54m in feldspar porphyry. Drill core results from QSDD-005 received include the intervals from 0-198m, 279-346m, and 399-450.5m. Results were disappointing with most Au values below detection (<0.01g/t Au) and a peak Au value of 0.04g/t. Magprobe results indicated that QSDD-005 narrowly missed a small ironstone to the north. A deep hole to test for the modelled main magnetic body, QSDD-006, was completed at 791m instead of the planned 1000m. Three Navi Drill cuts resulted in the hole maintaining a profile very near that planned. Unfortunately, upon reaching a depth of 791m, the rods became bogged at a point located below 740m downhole, almost certainly the talcose shear zone located at 745-755m (the Southern Queen Shear). The lower portion of the hole has been plugged and a wedge has been set to create a new hole, angled upward off the parent hole. Further drilling was cancelled until all data has been analysed. QSDD-006 intersected a 30m true thickness quartz-chlorite-hematitemagnetite zone with minor chalcopyrite from 359-467m, within sheared chloritic sediments. This body is a steeply dipping pipe extending from surface and is the major causative magnetic body. A total of 280 NQ2 drillcore samples were submitted from Queen of Sheba for assay. Assay results from QSDD-006 cover the intervals 0-468m and 500-750m and indicate patchy anomalous gold values within the 30m true thickness quartz-chlorite-hematitemagnetite zone, mostly in the 0.01-0.15g/t Au range. Bismuth values in the range 10-1700ppm Bi are common within this zone. The best intersections are as follows: 6m at 0.2% Cu from 346m and 0.6m at 2.16 g/t Au, 0.7% Cu from 365.2m within a broad shear zone composed of massive and multigenerational quartz veining, sedimentary clasts, and minor hematite and chalcopyrite veining; 1m at 1.71g/t Au from 413m in magnetite quartz ironstone; 0.4m at 6.45g/t Au from 414.6m in massive/multigenerational quartz veining with network hematite veining and chlorite blebs. The diamond hole, QSDD-008, was targeted on the northern 'ear' ironstone within the Southern Queen Shear. The hole intersected talc-dolomite-chlorite in the Southern Queen Shear from 357-378m, with minor magnetite and pyrite. Magprobing of QSDD-008 indicates the presence of a strongly magnetic but relatively small ironstone body 20-50m north of the shear zone intersection. The only significant intersection was 8m at 0.53% Cu from 244m in sheared sediment. QSRC-009 and QSRC-010 were targeted on the large quartz-hematite-magnetite-chlorite body intersected in QSDD-006. QSRC-009 was drilled to 230m and intersected siltstone with minor quartz veining and magnetite. This hole effectively closes off the target body to the south. QSRC-010 intersected quartz-hematite-magnetite rock and strongly chloritised sediments from 111m to the end of the hole at 219m. The hole was stopped due to the hammer being jammed in the hole. Queen of Sheba RC hole QSRC-010 returned a best intersection of 3m at 2.49g/t from 126m. The database for Queen of Sheba was updated and validated in 1999. Queen of Sheba is a large mineralised system but the major quartz-hematite-magnetite-chlorite body causing the very strong magnetic anomaly has only low grade patchy Au-Cu grades and appears to lack a structural/geochemical focus. It extends below 700m depth but there is no evidence that grades will improve with depth. During the report period no exploration was conducted over the Queen of Sheba tenure area. The Queen of Sheba Tenure area was included in large scale regional reviews of tenure, and exploration occurred to the north of the tenure area. The Queen of Sheba tenure area is located within EL 22583. Giants Reef did not consider this area as a high exploration priority, however Emmerson considers the proximity to many past producing mines and many smaller historical mines in the area still make it an attractive area to explore. The tenements are ranked as prospective due to being underlain by Warramunga Formation units and the presence of the Queen of Sheba, Evening Star and the Desert Queen mine workings.