Perilya Limited

Rockhampton Project

EPM 15810

Partial Relinquishment Report

For sub-blocks relinquished on 28/04/2018

Author: Alex Taube Date: June 2018

Distribution: Department of Employment, Economic Development and Innovation Perilya Limited, Perth A. Taube,

Perilya Limited

Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

CONTENTS

SUMMARY ...... 3

1. INTRODUCTION ...... 4

2. TENURE, NATIVE TITLE, AND ABORIGINAL HERITAGE ...... 5

3. HISTORY OF EXPLORATION ...... 9

4. GEOLOGY ...... 9

4.1 Stratigraphy ...... 10

4.2 Structure ...... 11

4.3 Geology of the areas relinquished ...... 11

5. PHILOSOPHY AND OBJECTIVES OF EXPLORATION ...... 12

5.1 Exploration model ...... 12

5.2 Geophysics ...... 13

5.3 Geochemistry ...... 15

5.4 Objectives ...... 15

6. WORK COMPLETED IN RELINQUISHED PARTS OF EPM 15810 ...... 16

6.1 Work proposed: ...... 16

6.2 Work completed: review of drilling and target appraisal ...... 16

6.3 Discussion: ...... 16

6.4 Reason the holder has relinquished the area ...... 16

6.5 Significant mineralization identified ...... 16

7. REFERENCES ...... 17

8. KEYWORDS ...... 19

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

LIST OF FIGURES

Figure 1: Project Location

Figure 2: Relinquished Sub-blocks

Figure 3: Retained Sub-blocks

Figure 4: Native Title Claim Boundaries

Figure 5: Regional Geology of EPM 15810

Figure 6: Mt Morgan Geology

Figure 7: Regional Geology with VTEM survey and retained areas

LIST OF TABLES

Table 1: EPM 15810 - Sub-blocks relinquished and retained

Table 2: Stratigraphy

APPENDICES

Appendix 1: Report on a helicopter-borne versatile time domain electromagnetic (VTEM) and aeromagnetic geophysical survey, Golden Peaks project, for Hammer Metals Limited, by Geotech Limited

Appendix 2: Report on Mt Morgan VTEM results, prepared by K Hine, Mitre Geophysics

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Summary

Twenty eight sub-blocks were relinquished from EPM 15810 as a routine relinquishment. The EPM now consists of 41 sub-blocks essentially along the Dee-Ulam Range, some 30 km from Rockhampton, .

No field work was carried out in the areas relinquished in the past 12 months. The only work done was interpretation of the previously flown VTEM survey. No significant anomalies were found in the relinquished areas and these relinquished sub-blocks have very low prospectivity.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

1. Introduction

EPM 15810 of 192 sub-blocks was granted on 28 May 2008. The area was reduced to 96 sub-blocks on 27 May 2010. A reduction of 7 sub-blocks on 6/10/2010 was at the request of the Department of Employment, Economic Development, and Innovation and was designed to conform with Restricted Area (RA) 384. A further reduction of 20 sub-blocks was made on 26/06/2015. The present reduction of 28 sub-blocks brings the retained area to 41 sub-blocks. The area has been farmed out to other companies, the most recent being Hammer Metals, who recently withdrew from the Joint Venture

The tenement is held by Perilya Limited (90%) and a local syndicate consisting of mssrs A.Taube, R. Kitching, and W. Bridges (10%).

The Rockhampton Project is situated in hilly terrain approximately 25 kilometres southeast of Rockhampton and 500 kilometres north of Brisbane. Refer to Figure 1. Access to the area from Rockhampton is via the Razorback road to Moonmera, or along the Dawson Highway to Mt Morgan, thence by unsealed 4WD-only tracks.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

2. Tenure, Native Title, and Aboriginal Heritage

The location of EPM 15810 is shown in Figure 1.

Figure 1: Project Location

Twenty eight sub-blocks were relinquished bringing the retained area to 41 sub-blocks. Figure 2 shows a map of the relinquished sub-blocks and Figure 3 shows retained sub blocks.

Table 1 shows the sub-blocks relinquished and retained.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Table 1 – EPM 15810 - Sub-blocks relinquished and retained

SUB-BLOCKS RELINQUISHED

Block 3102 sub-blocks t, u, y, z.

Block 3103 sub-blocks v, w.

Block 3174 sub-blocks h, n, o, s, t, u, y, z.

Block 3175 sub-blocks c, h, q, t, v, w.

Block 3247 sub-blocks b, c, p.

Block3248 sub-blocks a, m.

Block 3393 sub-blocks g, s, t.

SUB-BLOCKS RETAINED

Block 3102 sub-blocks r, s, w, x.

Block 3174 sub-blocks c, d, e, j, k, p.

Block 3175 sub-blocks a, b, f, g, l, m, n, r, s, x, y, z

Block 3247 sub-blocks d, e, j, k,

Block 3248 sub-blocks f, g, l, q, r, v, w.

Block 3320 sub-blocks a, b.

Block 3392 sub-block k,

Block 3393 sub-blocks f, l. m, q, r.

28 sub-blocks relinquished, 41 sub-blocks retained

The relinquished sub-blocks are covered by applications for two Native Title claims – Gangulu (QC97/021) and Darumbul (QC97/036). The Darumbal claim application was determined in June 2016. The Gangulu claim has not yet been determined. The boundary between the two claims follows the top of the Dee Range. Figure 4 shows the Native Title Claim Boundaries, alteration zones and retained sub-blocks.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Figure 2: Relinquished Sub-blocks

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Figure 3: Retained Sub-blocks

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Figure 4: Native Title Claim Boundaries

In order to ensure compliance with the provisions of current Queensland aboriginal heritage legislation, Perilya (through Minocqua Metals P/L) had previously engaged consultants from Spinifex Pty Ltd and Australian Ethnography Institute Pty Ltd to provide advice on native title and aboriginal heritage matters.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

3. History of exploration

CRAE carried out in 1965-68 a regional mapping and geochemical sampling programme under ATP’s 161/162M, covering the northern part of the area relinquished. Geopeko in 1968-80 carried out a regional mapping and geochemical sampling programme and also flew the area with INPUT, an aerial EM survey which included aeromagnetics, under AP508M.

Pasminco Limited carried out a major programme of geochemistry and geophysics (UTEM) in 1991- 93 under EPMs 7725M and 8553M. Pasminco flew the area with detailed aeromagnetics and radiometrics.

EPM 13491 was consolidated with several other EPMS into the present EPM 15810, held by Perilya (90%) and the syndicate of Taube, Kitching, and Bridges (10%).

Newcrest carried out regional geochemical sampling and mapping, and drilled one RC hole in the Ironstone area under EPM 6010.

No field work was undertaken by Perilya within the areas relinquished from EPM 15810 in the last 12 months.

4. Geology

The project tenements cover the same sequence of Palaeozoic volcanics and sediments that host the Mount Morgan copper-gold mine which produced 50 million tonnes at 0.7% copper and 5gpt Au.

Figure 5 shows the regional geology of the area on a scale of 1:250,000 with the retained and relinquished areas.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Figure 5: Regional Geology of EPM 15810

4.1 Stratigraphy

The Geological Survey of Queensland has recently re-mapped the Yarrol Basin and has revised the stratigraphy (Barker et al, 1997). Table 2 shows the relevant stratigraphy of the area.

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Table 2 - Stratigraphy

Jurassic Precipice Sandstone (Razorback Sandstone, Siltstone Beds) Permian Complex Granodiorite to Gabbro Late Devonian Mt Morgan Trondhjemite Biotite – Hornblende Trondhjemite Mt Hoopbound Formation Andesitic lavas and volcaniclastics Middle Ginger Creek Member Acid lavas and volcaniclastics Devonian Raspberry creek Beds Andesite lavas and sediments Mt Warner Volcanics Hanging-wall Sequence Acid volcaniclastics Banded Mine Sequence Jaspers and siliceous sediments Silicified Rhyolite Sequence Acid lavas and siliceous sediments Footwall Sequence Andesitic volcaniclastics Mt Dick Beds Sedimentary Sequence Siltstone and sandstone Lava units Andesitic, dacitic and rhyolitic lava Early Devonian Mt Holly Beds Acid lavas and sediments, limestones

4.2 Structure

The stratigraphic sequence is gently to moderately folded along north-west trending axes. The axis of the regional Gracemere Anticline occurs just east of Moonmera. Dips on the flanks of the anticline are moderate and are relatively consistent, while the core of the anticline is somewhat more complex. There is abundant vertical block-faulting.

4.3 Geology of the areas relinquished

4.3.1 Struck Oil area (northern part of area relinquished)

Rocks in this part of the area relinquished include mainly andesitic rocks and derived sediments of the Raspberry Creek Beds, essentially the equivalent to the Upper Mine Sequence at Mt Morgan, i.e. hanging-wall sequence to the Mt Morgan mine. These are nearly flat-lying near the core of the regional anticline. A sliver of the acid sequence occurs on the east. These rocks are intruded by the Permian Station Creek Granodiorite.

The sequence carries weakly anomalous amounts of disseminated pyrite, a distal-peripheral manifestation of the Struck Oil porphyry copper.

4.3.2 Raspberry Creek area (western part of area relinquished)

These rocks are almost all andesitic rocks and derived sediments of the Raspberry Creek Beds, equivalent to the UMS at Mt Morgan. These are essentially unmineralized and mostly dipping shallowly SW, on the southwest side of the regional anticline.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

4.3.3 Station Creek Granodiorite (eastern part of area relinquished)

The acid volcanic rocks of the Mt Warner Volcanics, equivalent to the host sequence at Mt Morgan, are intruded by the Permian Station Creek Granodiorite. Rocks dip northeast, forming the opposite side of the regional anticline.

4.3.4 Upper Don Area (southeast end of the area relinquished)

An acid volcanic sequence containing anomalous zinc is thought to be the equivalent to the Mount Warner Volcanics. The sequence dips SE and is truncated by the Permian Station Creek Granodiorite.

5. Philosophy and objectives of exploration

5.1 Exploration model

Several exploration models may apply in the areas relinquished.

The Mt Morgan mine yielded 50 million tonnes of 0.7 % Cu and 5 g/t Au: it was a world class mine. The discovery in 1995 of significant, but sub-ore grade strata-bound volcanic-hosted massive sulphide mineralization (VHMS) 600m SE of the Mt Morgan mine showed that the mine is a VHMS deposit. Such deposits always occur in clusters, with further mines occurring along the equivalent stratigraphy. Figure 6 shows the Mt Morgan geology.

The Struck Oil porphyry copper deposit is a small classically-zoned porphyry copper system, comprising a complex but low grade central intrusive core surrounded by an annulus of higher- grade (but still low) fracture-style (crackle breccia) copper and molybdenum mineralization. This in turn is surrounded by a larger annulus of fracture-style pyrite mineralization, which decreases in intensity going outwards. The prospect has significant size and complexity but is relatively low grade and does not show any possible enrichment such as breccia zones. This does not preclude the occurrence of such enrichments at greater depth, however, and there may be a case for deep drilling (>2 km) to test for such a possibility. The low total sulphide of the system precludes the possibility of surface enrichment.

Another exploration model for the area is the possibility of skarn formation where a limestone horizon comes into contact with the mineralised system. Such a limestone can act as a “blotting paper” forming a high grade skarn from a low grade porphyry intrusive.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

Figure 6: Mt Morgan Geology

In the Mt Morgan-Struck Oil area the favourable horizon for the occurrence of a VHMS deposit occurs but does not show the characteristic favourable lithologies such as jaspers etc.

A possible exploration model for the area is the formation of a skarn deposit either associated with the Trondhjemite contact or with the Struck Oil porphyry copper prospect which is just outside the northeast corner of the area relinquished. Major limestones occur along a structural corridor outside of the relinquished area, referred to as the Mt Warner shear, but as yet these have not been found in any drilling on the Struck Oil area. Newcrest drilled one RC hole (RCIS002) on a small ironstone skarn adjacent to the Trondhjemite, but only low gold values were returned.

There is as yet no positive geochemical or geophysical support for such a skarn deposit in either of the areas relinquished, but the possibility of such an occurrence remains untested.

5.2 Geophysics

Earlier aerial geophysical techniques (INPUT and aeromagnetics) revealed conductivity related to water tables and faults but no mineral conductivity. Magnetics were of little use except for broad regional coverage. Ground geophysical work (UTEM) showed similar conductivity anomalies related mainly to faults but no mineral conductivity. IP chargeability was the only technique to show the known mineralization at the Ajax mine, in the central part of the belt. IP also defined the alteration zone at Mt Alexander.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

EM methods would detect the high grade central core of the Mt Morgan deposit if such a deposit occurred at shallow depth. IP chargeability would detect the alteration halo around the deposit, effectively a much larger target. The main drawback to IP is the relative slowness and high cost of the procedure.

No skarn or conductive material was intersected in the areas relinquished. It is conceivable that the source of any EM anomalies is greater than the depth of the drill holes, but this remains contentious.

A VTEM survey (helicopter-borne EM) was carried out in 2015 over the most prospective part of the belt. Figure 7 shows the area of the VTEM survey, anomalies from this survey and outlines of the retained sub-blocks on the regional map. Results of this survey are included in the Appendices of this report. The most pronounced anomalous features were related to shear zones, often clay- filled, along the Mt Warner and Ajax linears. Strong negative anomalies (IP effect) were recorded over known disseminated sulphide-alteration zones. Interpretation of the VTEM results was initially done by Southern Geoscience Consultants (SGC) who defined some 21 anomalies some of which were dismissed by K. Hines (Mitre Geophysics). The Mt Dick North anomaly was selected by K Hines as being the best conductor from the survey, and was surveyed using FLEM (Fixed Loop ground Electro-Magnetic) survey.

Figure 7: Regional geology with VTEM survey with retained areas

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

5.3 Geochemistry

Early stream sediment and soil sampling in the area using mainly Cu, Pb, Zn and Mo revealed most of the known alteration zones. Later work by Asarco using a suite of discriminator or signature elements produced strong anomalies in other elements including Ba, Tl, and Te. The discriminator elements can give an indication of the position in the stratigraphy, i.e., whether any sample is in the hanging-wall or footwall of a mineralized sequence.

As no significant geochemical anomalies were outlined these area were considered to have very low prospectivity and thus these areas were relinquished.

5.4 Objectives

The main objective of the forward work was to discover one or more large high grade VHMS deposits such as the Mt Morgan mine or a variant of the model. Porphyry copper and skarn deposits were also considered.

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Rockhampton Project: EPM 15810, Report on Areas Relinquished on 27 April, 2018

6. Work Completed in relinquished parts of EPM 15810

6.1 Work proposed:

The programme of works for EPM 15810 included the following: • Drilling review and target appraisal • Aerial geophysical survey • Prospect geology mapping and sampling • Gridding and soil geochemical surveys • Ground geophysics • Drilling of anomalies • Review and reporting

6.2 Work completed: review of drilling and target appraisal

Only the first two objectives have been accomplished in the areas relinquished. There has been no drilling or targets generated in the areas relinquished.

The report on the VTEM survey is included in this report as Appendix 1. The Consultant’s report is included as Appendix 2.

6.3 Discussion:

The work done to date in the relinquished areas of EPM 15810 illustrates the difficulty of any such survey in the geological environment. It is important to recognize that the depth of penetration of the electronic signal in this hilly country may not be as great as would be expected in flatter ground.

6.4 Reason the holder has relinquished the area

The area is being relinquished because of low potential in the ground compared with other areas in the district.

6.5 Significant mineralization identified

No new mineralization has been discovered in the relinquished sub-blocks during the tenure of EPM 15810.

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7. References

Barker, R.M., Blake, P.R., Burrows, P.E., Crouch, S.B.S., Fordham, B.G. Hayward, M.A., Livingstone, M.D., Morwood, D.A., Murray, C.G., Parfrey, S.M., Robertson, A.D.C., Simpson, G.A., Taube, A., Domagala, T., and Randall, R.E., 1997. New insights into the geology of the Northern New England orogen in the Rockhampton-Monto region, Central Coastal Queensland: progress report on the Yarrol project. Mining Journal, May 1997.

Brewster, D.C., 1995. EPM’s 7725 Ulam Range, 7940 Dee, 8553 Mt Dovecot, 8883 Mt Morgan, and MDL13, Mt Morgan, Queensland, Exploration report for 12 months ending 9 January 1995. CRAE Report No 20675.

Brewster, D.C., 1996. Moonmera MDL 86, Annual Report for the period of tenure 1/1/95 to 31/12/95. CRAE report No. 20671 (unpubl.).

Brewster, D.C., and Magner, P.M., 1996. EPM’s 7725, 7940, 8553, 8885 and MDL 13. Exploration report for 12 months to 9 January 1996. CRAE report No 20677.

Davis, R., 2006. Rockhampton Project: Combined Annual Report for the period December 22nd 2004 to December 21st 2005, EPM’s 7725, 7940, 10097, 10677, 11126, 12218, 12219, 14917, and MDL13. Minocqua Metals P/L, unpublished Company report.

Davis, R., 2007. Rockhampton Project: Combined Annual Report for the period December 22nd 2005 to December 21st 2006. EPM’s 7725, 7940, 10097, 10677, 11126, 12218, 12219, 14915, 14917, and MDL13. Minocqua Metals P/L, unpublished Company report.

Dummett, Hugo T., 1978. The geology of the Moonmera porphyry deposit, Queensland, Australia. Econ. Geol. 73, pp. 922-944.

Dunstan, B. 1904. Moonmera: its minerals and copper mines, and a study of its rock formations. Geol. Surv. Qld, Pub no 195.

Hawkins, B.W., and Whitcher, I.G., 1962. Moonmera copper mineralization, Mt Morgan, Queensland. Consolidated Zinc Pty Ltd Expl. Div. (unpub. Company report) 26p.

Kelso, I.J., and Taube, A., 1992a. EPM7725 Ulam Range, Central Queensland, First Annual Report to 9 January 1992. Pasminco Exploration, unpublished Company report.

Kelso, I.J., and Taube, A., 1992b. EPM 7940 Dee Range, Central Queensland, First Annual Report to 20 May 1992. Pasminco Exploration, unpublished Company report.

Kelso, I.J., and Taube, A., 1993. EPM 7725, 7940, 8553 and 8883, Mt Morgan, Queensland, Report for the 12 months ending 9 January,1993. Pasminco Exploration, unpublished Company report.

Mason, D.O., Muggeridge, G.D., and Barlow, M.G., 1994. EPM’s 7725 Ulam Range, 7940 Dee, 8553 Mt Dovecot, 8883 Mt Morgan, and MDL 13, Mt Morgan, Queensland exploration report for 12 months ending 9 January 1994. CRAE Report No 19551.

Taube, A., 1993. Exploration Permit for Minerals 7940, Dee Range, Mt Morgan, Report on areas relinquished on 21 May 1993. Pasminco Exploration, unpublished Company report.

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Taube, A., 1998. Report on exploration, Mt Morgan, Dee Range, Ulam Range, Struck Oil, Mt Morgan mining leases, EPM’s 7725, 7940, 10097, 10677, and 11126, 1997-1998. Perilya Mines NL, unpublished Company report.

Taube, A., 2000. Report on exploration, Mt Morgan, Dee Range, Ulam Range, Struck Oil, Mt Morgan mining leases, EPM’s 7725, 7940, 10097, 10677, and 11126, 1998-1999. Perilya Mines NL, unpublished Company report.

Taube, A., 2001. Report on exploration, Mount Morgan, Dee Range, Ulam Range 1999-2000: EPM’s 7725, 7940, 10097, 10677, 11126, 12218, 12219, and MDL13. Asarco Exploration Company Inc. unpublished report.

Taube, A., 2002. Report on exploration, Mount Morgan, Dee Range, Ulam Range 2000-2001: EPM’s 7725, 7940, 10097, 10677, 11126, 12218, 12219, and MDL13. Asarco Exploration Company Inc. unpublished report.

Taube, A., 2003. Report on exploration, Mount Morgan, Dee Range, Ulam Range 2001-2002: EPM’s 7725, 7940, 10097, 10677, 11126, 11730, 12218, 12219, 13491and MDL13. Asarco Exploration Company Inc. unpublished report.

Taube, A., 2004a. Report on exploration, Mount Morgan, Dee Range, Ulam Range 2002-2003: EPM’s 7725, 7940, 10097, 10677, 11126, 12219, 13491, and MDL13. Asarco Exploration Company Inc. unpublished report.

Taube, A., 2004b. Report on exploration, Mount Morgan, Dee Range, Ulam Range 2003-2004: EPM’s 7725, 7940, 10097, 10677, 11126, 12219, 13491, and MDL13. Asarco Exploration Company Inc. unpublished report.

Taube, A., Mawson, R, and Talent, J.A., 2005. Repetition of the Mount Morgan stratigraphy and mineralization in the Dee Range, north-eastern Australia: implications for exploration. Econ. Geol. V. 100, pp 375-384.

Taube, A., 2008. Rockhampton Project: Combined Annual Report for the period December 22nd 2006 to December 21st 2007. EPM’s 7725, 7940, 10097, 10677, 11126, 12219, 13491, 14915, 14917, and MDL13, Minocqua Metals P/L, unpublished Company report.

Taube, A., 2009. Rockhampton Project, Annual Report for the period 28 May 2008 to 27 May 2009, MDL 13. Perilya Limited, unpublished Company report.

Taube, A., 2011. Rockhampton Project, Annual Report for the period 1 November 2009 to 31 October 2010, MDL 13. Perilya Limited, unpublished Company report.

Taube, A.,, and Hewlett, G,, 2015. Rockhampton Project, Annual Report for the period 28 May 2014 to 27 May 2015, EPM 15810, Perilya Limited, unpublished company report.

Taube, A. and Hewlett, G., 2016. Golden Peaks Project. EPM 15810, Annual Report for the period 28 May 2015 to 27May 2016. Hammer Metals Limited, unpublished company report.

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8. KEYWORDS

Gold, copper, zinc, molybdenum, Mount Morgan, Razorback Range, Dee Range, Ulam Range, Precipice Sandstone, Mt Morgan Mine, geology, geochemistry, soil sampling, rock sampling, geophysics, IP, EM, UTEM, VHMS, satellite imagery, massive sulphides, porphyry copper, Permian, Devonian, acid volcanics, drilling.

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