Borroloola Project Group Annual Mineral Exploration Report GR121-13, 11 April 2012 to 10 April 2013

Abstract

Work done includes road and track works for heavy vehicle access and camp infrastructure, geological mapping and rock chip sampling, geophysical re-processing and interpretation, RC and Diamond Drilling, down hole sampling and analysis. The project area lies within the Batten Trough of Middle Proterozoic sediments of the Tawallah, McArthur and Roper Groups of the McArthur Basin, the Lower Proterozoic Scrutton Volcanics, and Cretaceous and Tertiary cover sediments. During 2012, Sandfire targeted three mineralisation styles on four prospect areas: at Hell's Gate Prospect on EL 26555 for enriched sediment hosted iron ore accumulations within the Sherwin Formation, at Alice Prospect on EL 26831 for replacement lead-zinc mineralisation in limestones and dolomites of the Karns Dolomite, and at Rosie Creek and Bing Bong Prospects for HYC-SEDEX-style lead-zinc mineralisation hosted within sulphide-rich black shales of the Barney Creek Formation, proximal to the Pine and Gulf Faults respectively. The Bing Bong Prospect is also prospective for manganese accumulations in shallow water marine Cretaceous sediments, analogous to the Groote Eylandt manganese deposits. Geological mapping and rock chip sampling at Hell's Gate confirmed the enrichment of the sedimentary iron ore horizons with analyses ranging from 48.4 percent Fe to 67.2 percent Fe, with an average of 58.8 percent Fe from 33 samples. A 23 drill hole RC drilling program was proposed, but has been held over until 2013 due to access difficulties. Six diamond drill holes and three shallow RC drill holes for water were completed at Rosie Creek Prospect. Assays of mineralised intersections from the six diamond holes indicate the presence of base-metal mineralisation of the black shales; metal content identified is below economic levels. The mineralisation reaches a high of 2.0m at 4310 ppm Zn in 12BLDD0017 from 254.0m to 256.0m and the interval 218.0m to 220.0m in 12BLDD0018 returned 2.0m at 1375 ppm Pb. Two diamond drill holes and one RC drill hole for water were completed at Alice Prospect. 12BLDD0022 and 12BLDD0023 intersected a mineralised horizon of sulphide bearing chloritic siltstone. Analysis results within the unit returned thick, moderately elevated base metal values. The best intersection was in 12BLDD0022, 70.0 - 78.0: 8.0m at 954ppm Pb and 298ppm Zn. Two diamond drill holes proposed for Bing Bong Prospect were held over to 2013 to allow for negotiations with Native Title custodians. During the reporting period, Exploration Licence EL 26908 was relinquished and EL 29022 was granted for six years tenure. Waivers of reduction were accepted for two Exploration Licences EL 26555 and EL 26587 at their fourth anniversaries.