EL 10316 Reward Annual progress report for the period ending 21 July 2010

Abstract

The Reward exploration licence, EL 10316 contains several prospects for SEDEX (sediment-hosted) style zinc-lead mineralisation. Among these is the Myrtle prospect where a significant SEDEX style zinc-lead deposit has been discovered. The current mineral resource is; 43.6 million tonnes grading 4.09% Zn, 0.95% Pb at a lower cut-off of 3% Zn + Pb. RC drilling carried out during the year totalled 2,632 metres in 25 holes and successfully extended near-surface Zn-Pb mineralisation for a strike length of 700 metres. The drilling also discovered a new zone of Zn-Pb mineralisation at the Eastern Zone (Myrtle B soil anomaly), which is still open at depth and along strike. Re-logging of diamond drill core at Myrtle has enabled a stratigraphic framework to be established. A number of lithological features and marker units were identified which can be correlated across the width of the Myrtle Basin - a distance of up to 3km. Significantly, these marker units now enable mineralised lenses to be correlated across this distance also. To date the majority of the mineralisation at Myrtle has a strong nodular dolomite association, with only minor intercepts of laminated sphaleritic siltstone reported. However, recent studies by researchers on the nearby HYC Zn-Pb-Ag deposit report that the nodular dolomite forms a low-grade 200-700m wide halo peripheral to the high grade laminated ore facies. Further comparison of the broad stratigraphic, sedimentalogical, mineralogical, and geochemical characteristics of the Myrtle Prospect with those of the nearby HYC Zn-Pb-Ag deposit reveal many similarities and it is proposed that the mineralisation at Myrtle is analogous to that at HYC. The acceptance of a syn-sedimentary origin for the Myrtle mineralisation has significant implications for future exploration targeting. Studies at HYC have indicated that the best accumulations of high-grade zinc and lead are located proximal to; The deepest part of the basin; Areas where nodular dolomite is weakly developed or absent; and Areas where the sulphide textures are dominated by laminar sphaleritic siltstone. Physical property tests on mineralised core from Myrtle indicated that the best geophysical responses are likely from IP (induced polarisation) and gravity. Metallurgical testwork produced encouraging results from froth flotation tests conducted at 53 microns and 38 microns. No ultra-fine grind testwork was undertaken. QEMSCAN analysis showed that the mineralogy of the ore at Myrtle was 36% dolomite, 23% feldspar, 14% pyrite, 13% sphalerite, 6% quartz, 1% galena, and 7% other gangue minerals. Initial selective flotation tests achieved recovery into rougher concentrates of 72-74% for Pb and 90-93% for Zn from 24-25% of the mass of the sample. Recoveries into cleaner concentrates were lower, and more work and optimisation is needed on this step (including fine grinding and reagent selection). Other test work, e.g. bond ball mill work index, particle size analysis, flash flotation for Pb, and heavy liquid separation all produced encouraging initial results. An evaluation of the Berjaya prospect shows that a large (1.5 - 3.5km strike length) low-grade stratabound zinc-pyrite deposit is present. This system is similar in size to Myrtle, and further exploration is warranted at Berjaya.