Annual and final report for EL 23440 SunJade Project 17 October 2007 to 17 December 2008

Abstract

The following information is a summary of our activities on EL 23440 and the current report for 2007/2008 inclusive. EL 23440 is situated about 40 Kms south of the town of Kalkarindji. Access to the area is from the Buntine Highway, east of Kalkarindji, then left, heading south, towards Lajamanu on the Lajamanu Road. There is an unmarked track leading off to the right, heading south south west, about 6 Kms down the Lajamanu road. This track is not easy to see from the Lajamanu Road. The track is cut by a number of creeks which flow into Gordy Creek to the west of the road. The track to EL 23440 is virtually impassable in wet weather and a 4WD vehicle is advisable at other times. The area is vegetated with Mitchell and Flinders grasses which flourish on the gently undulating black soil plains. Small shrubs and trees are quite prolific close to the main watercourses. The black soil is underlain by basic volcanic rock of the Antrim Plateau Volcanics. The volcanics are considered to be of early Cambrian Era which date them at about 500 million years old. These volcanics consist of a brown to red brown coloured basalt with vesicles and amygdales containing nodules of prehnite, agate, quartz, amethyst and jasper. Nodules have been found up to a metre in diameter, but the main sizes range from a few centimetres to 25 cms across. Some of these have formed as geodes and are lined with quartz crystals, smoky quartz, amethyst and pseudomorphs of chalcedony after calcite. In places the topsoil is only a few inches deep and in some areas, basalt outcrops are exposing prehnite nodules in situ. The land is relatively flat plateau cut by small gullies created by the drain-off of summer rains. Rain water drains into Gordy Creek which usually has water all year round, fed by Gordy Springs 20 kms to the south. During 2007, we visited the area to complete a survey for our MLA 25205. No work was done on the EL at this time. In 2008 we took some potential Chinese investors to see the area but they did not go any further. Possibly due to the isolation of the area and lack of facilities. We have continued to send samples to carving factories in China for evaluation and have been training the cutters in techniques for carving this material especially for our clear material. Thousands of tonnes of rough gemstones are imported into China each year and the cutters become familiar with some raw materials very easily. These materials include common ornamental gemstones such as agate, jaspers, petrified wood, obsidian, aventurine, amethyst, quartz, citrine etc. Unlike prehnite, the cutter can take a piece, slab, it preform it and finish it with ease. Prehnite, on the other hand, is an unknown until it is slabbed or the surface has been cleaned to reveal the colour and clarity. In one area, we hand excavated a small hole by hand to the depth of about 60 cms to examine the material below the surface. From this small exploratory digging, we collected more than 60 kilos of prehnite. The material was darker colour and better quality than any of the surface material and when cleaned it was determined to have less flaws, which, on the surface material, are believed to be caused by thermal shock due to extreme range of temperature between day and night. Most surface material has been faded and affected in some way by the sun. All the material collected over the period of this EL was shipped back to Melbourne and washed with a high pressure hose. From the first exploratory work, 200 kilos of higher grade material was separated and placed in a metal drum and a further 3,800 kilos were taken as a random sample and shipped to a factory in China for processing. We then decided that the rest of the material needed to be cleaned prior to sending to our processors and so we built a commercial tumbler to tumble the raw material to remove the outer crust. We are able to clean about 800 kilos of material a week in this tumbler. The initial stage is to remove the soil and iron staining to reveal any facet grade material. To remove heavy crusts, we tumble for a longer period of time using garnet abrasives. 'A' Grade material contains mainly prehnite which will cut into gemstones with a moonstone or cat's eye effect. 'AA' material is more translucent, suitable for faceting and cutting larger cabochons. In December, 2005, Gerry Pauley met with owners of gem processing factories and determined the true value of high grade prehnite. According to one company our prehnite is the best in the world and they have indicated that they could purchase 80,000 kgs of raw material annually. Gerry also visited the factory where we sent the original samples and went through the batch with the owners. He showed them what to look for in the material, and sorted out a quantity of material for them to sample process for us. The quality of carvings were good but the cabochons were not correctly oriented to get the cats eye effect. Gerry then visited the other factory that was conducting test processing and was reasonably pleased with the progress they had made. However, again, the cutters were not familiar with the material and will need educating in the orientation of the raw material in order to get the best effect. This company employed skilled carvers and they had produced some very nice carvings depicting Australian Fauna. Once we can commence full scale mining we have ready markets for raw material to Chinese cutting factories and we have also identified international jewellery manufacturers keen to buy the finished cabochons and faceted stones. Obviously, value adding will be essential to maximise profits from the operation. Because prehnite is a unique gemstone, we believe that with clever marketing we will gain a significant market in Australia for a wide variety of products. We have registered the trade name SunJade for worldwide marketing of the material. Value adding will, therefore, be a high priority and it is still our aim to establish some form of value adding facility in the Northern Territory. The yields from the raw material remain a concern but we believe that the low yields from the sampling is due to the fact that the material was surface collected. Surface material is suncrazed and faded but the material excavated from a few centimetres below the surface was much better quality and darker colour. Apart from the usual prehnite we have found some nodules with white radial inclusions. The inclusions were tested by the Museum of Victoria and proved to be prehnite. They may well be a pseudomorph of prehnite after a zeolite but this is only speculation at this stage. We have named this gem 'Flower SunJade' and we believe that there will be a good market for this gemstone. Other minerals and crystals of interest are smoky quartz, quartz, amethyst, pseudomorphs of chalcedony after calcite, agates, jasper, calcite and zeolites of agate as being formed by the introduction of siliceous fluids deposited around the vesicles in basalt. The concentric bands of differing coloured chalcedony create the banding in agate. During Gerry's visit to the factory he told them to cease processing because the average quality of the material was not suitable for processing. Once we commence mining we will be in a position to ship selected materials to our cutters to better assess the viability of of the resource. We have also taken samples to the Tucson Gem Show, Denver Show and Tokyo to gauge response to our finished products. After showing the finished product to a number of dealers we ascertained the possible values of finished products. The general consensus was that high quality faceted stones and cabochons with a moonstone or cats eye effect would sell for between $US1.00 and $US5.00 per carat. The selling price for semi processed graded, raw material would range from $US12.00/Kg to $US100.00/Kg. No rehabilitation should be required on EL 23440 because there was no earth disturbance or removal of vegetation. Crystal Universe retain an earlier ML over the centre of the area.