Annual Report ML 22934 Groundrush from 14 September 2011 to 13 September 2012

Abstract

Exploration in the eleventh year of tenure included; a computer modelling study of the lode structures within the Groundrush open pit in order to compare the characteristics of these vein sets; a report of the geology and mineralisation of the Groundrush gold deposit in the light of the 2011 drilling; an in-house Groundrush geological model report; petrographical investigation; surface sampling; and RC and diamond core drilling within and in the vicinity of the Groundrush open pit and at the Ripcord Prospect. The three studies of the Groundrush geology and structure using different approaches led to greatly enhanced understanding of the resource which in turn translated directly into the design of the 2012 drilling programs. Drilling at Ripcord Prospect extended the existence of significant mineralisation 100m to the north and 400m to the south of the historically defined limits and led to a maiden resource of 89,000 ounces statement plus the commencement of a 25m x 25m resource RC infill program. From the surface sampling program at the Ripcord Prospect it was concluded that partial leach analysis of the cover soil sampling was better than aqua regia analysis; however not significantly different enough to justify the greater cost. At the dormant Groundrush Pit, resource drilling added 39% or 208,000 ounces to the 535,000 ounce estimate of the 25 October 2011. The step-out drilling confirmed the extension of the mineralisation in the Groundrush Dolerite to the south of the pit. In the Groundrush Pit the best rock chip samples, with 470ppb and 220ppb gold assays, were collected from ENE and E striking, steep dipping veins.