Annual Technical Report GR449 MLN 582, MLN 1121, MLN 1122, MLN 1123, MLN 1124 and MLN 1125 5 January 2018 to 4 January 2019

Abstract

The McArthur River mine is one of the world's largest zinc, lead and silver mines, situated approximately 65km south-west of Borroloola, near the Gulf of Carpentaria in the Northern Territory. It is operated by McArthur River Mining (MRM), a subsidiary of the Swiss mining company Glencore. Although discovered in 1955, when it was originally named the HYC ('Here's Your Chance') deposit, mining operations did not commence until 1995. Initially an underground mining operation, the mine transitioned across to an open-cut operation in 2006. The sediment-hosted stratiform HYC deposit is approximately 1.5km long and 1km wide with an average thickness of 55m. The HYC deposit has similarities with orebodies at Mount Isa in Queensland. The mine site is contained within five contiguous leases (MLN 1121, MLN 1122, MLN 1123, MLN 1124 and MLN 1125), located on McArthur River Station Pastoral Lease, with MLN 582 located west of these contiguous leases by a distance of approximately 4.5km. During the reporting period a series of drilling programmes was completed across MLN 1121, MLN 1122, MLN 1123 and MLN 1124 for the purpose of resource development, waste characterisation and determine groundwater interaction within the South Extension and Lower Fold Zone (LFZ) areas; to identify the geometry and spatial location of suitable clay material for waste dump construction, and identification of coarse gravels and cobbles acting as conduits for groundwater inflows to the mine operations; to determine and quantify groundwater flow interaction with geological structures near waste rock dump stockpiles (WOEF and NOEF), and containment structures (ELS, SEPROD, SPROD and TSF); and, to confirm the groundwater relationship between the NOEF and Emu Creek alluvial system. The 2018 reporting period consisted of 38 diamond drillholes totalling 4,902m, 29 RC drillholes totalling 1,261m, and 290 AC drillholes totalling 4,557m. The findings from the drilling programmes are highlighted by; a reduction in orebody thickness within the LFZ, and discontinuity of mineralisation observed east of the LFZ; South Extension drilling confirmed lower quality (nodular) mineralisation in all orebodies with exception to orebodies 2 and 8; South Extension drilling showed a slight increase in orebody thickness with a significant change in the location of the orebody when compared to the current geology model; South Extension drilling shows no palaeochannel recharge of sediments east of the current J stage and that palaeochannel water reports to the southern wall adjacent to the Southern Ramp; Alluvium Definition drilling showed suitable clays can be sourced from within the first 2-3m of the cover sequence; identification of karstic features within the Barney Hill anticline - especially related to the western side/FWQ and along the McArthur Road. Hydraulic testing of the Barney Karstic zone indicates highly permeable ground, which is related to north-south, structures (Cooley contact, Whelan's and Myrtle Fault); mineralisation between the western side of WOEF and the Barney Diversion; identification of karstic areas near the ELS, and drillcore observations, coupled with assay results have identified significant natural mineralisation, which has the potential to influence groundwater quality; hydraulic tests identified a semi-regional geological structure, which strikes beneath Cell 2 and the proposed WMD facility; and, hydraulic tests indicated a very massive and hard siliceous boundary between the HYC basin and the Emu Fault. Hydraulically, there is little to no evidence of water transmitting through this structure, which indicates the KCB model assumption is valid. No drilling activities were conducted on MLN 582 or MLN 1125, as they are located outside the current operational area.