GR355 Part Annual and Surrender Report for the Brunchilly Phosphate Project, 15 October 2019 to surrender

Abstract

The Brunchilly Phosphate Project consists of three exploration licences, EL 30222, EL 30223 and EL 30224, approximately 100 km northeast of Tennant Creek. The project is targeting Cambrian sedimentary rock phosphate in the Georgina Basin. The three ELs have been progressively reduced from 250 blocks each at grant to 57, 13 and 30 blocks. This means that only 22.8%, 5.2% and 12% of the original grants; collectively less than one seventh of the project area; has been retained. In Year 1, previous work by Rio Tinto, Vale, CSIRO, Minemakers, two studies by NTGS, and a Water Resources branch report were assessed. An in-house waterbore study was undertaken. Forty-two waterbores had sufficient information available to warrant data compilation and interpretation. The main objectives of this study were to identify the depth to prospective stratigraphy relative to basement and relative to the standing water level. The previous NTGS and CSIRO studies had been purely geochemical and ignored the possibility that any phosphate present might be below the watertable, or even in the main aquifer, and therefore very difficult, if not impossible, to mine. None of the previous waterbore studies had taken much notice of the geology/lithologies described by the drillers or the stratigraphy assigned in other previous studies of waterbores. As a result of the in-house studies and an AAPA site search, two rounds of voluntary reductions were made in 2015. During 2016 and early 2017, a low environmental impact MMP for 50 drillholes was prepared and refined and then submitted to stakeholders in 2017. This was designed to definitively test the three ELs with a single pass of drilling. Unfortunately, all greenfields exploration funds had to be redirected to the company's flagship Ammaroo phosphate project. This was partly as a result of NT Government delays to, and extra work and expense required for, the Ammaroo EIS which took over four and a half years from the NOI. In the light of escalating rents at Brunchilly and no available exploration funds, it was necessary to reduce the Brunchilly project to less than one seventh of its original size. The 2017 MMP that was awaiting stakeholder approval as of September 2018 was withdrawn. After Verdant Minerals was taken over by CD Capital, the parent company allocated drilling funds for this project. An MMP for 13 holes was prepared for the much-reduced area. This was approved by all stakeholders. Twelve holes (BPRC001-12) of the proposed 13 holes were completed for 540 m, to a maximum of 61 m and a minimum of 23 m, averaging 45 m. This was in two campaigns, October and November 2019; the second used a slightly larger rig to drill in the north of the project area. One hole, BPRC002, intersected 1 m at 10.8% P2O5 from 42-43 m and 1 m at 17.3% P2O5 from 47-48 m. These roughly confirm the findings of a Rio waterbore study that had 12.6% P2O5 from 57-60 m in RN009449, 1.5 km away. Verdant hole BPRC012 was drilled 100 m from waterbore RN33967 in which the Rio study found 3 m at 10.5% P2O5 from 36-39 m, 3 m at 10.2% P2O5 from 51-54 m and 6.06% P2O5 from 63-66 m. BPRC012, drilled to 43 m, did not intersect phosphate as determined by handheld XRF, having tested only the upper interval reported by Rio. Hole BPRC006 was drilled approximately 2 km from Gum Bore (RN007674) in which Minemakers found >10% P2O5 by handheld XRF (but only assayed 1,050 ppm P) at an unknown depth in old surface cuttings. The bore went to 153 m and the standing water level is either 83.8 m or 67.75 m (different depths are presumably at the time of drilling and after equilibration). The gamma log of this bore shows a change in geology with a pronounced gamma spike below about 58 m and then presumably cleaner limestone below 70 m. BPRC006, drilled to 53 m, did not intersect the geological change visible on the gamma log and no phosphate (as determined by handheld XRF) was present to the depth drilled. It is not known if BPRC006 went deep enough. None of the other greenfields holes drilled in the Brunchilly Project intersected phosphate detectable by handheld XRF to the depths achieved. With the possible exception of the first hole, none of the Verdant holes reached basement and correlation with waterbores and Vale holes suggests that, in some cases, more than 50 m of Cambrian section might remain untested. However, this was considered prohibitively deep. In the opinion of Verdant Minerals management, the results were disappointing and overall there is nothing worth following-up. It is recommended that the three ELs be surrendered, dropping the Brunchilly Project entirely. MRT format data for 12 holes for 540 m and 16 P2O5 assays accompany this report.