EPM 16142 TOOLEBUC PROJECT

FINAL REPORT

th 30 April 2009

Author: A. Bowden

Tenure Holder: Mt Isa Metals Ltd

Date of Report: 30 April 2009

Contents 1. Summary ...... 3 2. Introduction ...... 4 3. Geology ...... 5 4. Summary of Historical Exploration ...... 7 5. Work Completed During the Reporting Period ...... 8 6. Bibliography ...... 9 7. Copyright Statement ...... 9

List of Figures

Figure 1: Tenement Location...... 4 Figure 2: Tenement Geology (GA 1:250k Province GIS series)...... 6

Digital Data

No digital data.

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1. Summary Application for EPM 16142 was lodged on 13 February 2007, together with five other applications and one granted mineral exploration permit within the broader Julia Creek – Hughenden region. Combined the tenements comprise Mt Isa Metals’ Toolebuc Project.

EPM 16142 was granted to Mt Isa Metals Ltd on 24 October 2007. The first annual report for EPM 16142 covered the period from 24 October 2007 to 23 October2008.

rd No further work has been carried out on this tenement between 23 October 2008 and the date of this final report.

The Toolebuc Project focused on the discovery of two principal deposit types:

1. Secondary uranium mineralisation–potentially developed by leaching of uranium from primary Polymetallic deposits with transport and precipitation in to proximal permeable Lithologies to the Toolebuc Formation.

2. Polymetallic mineralisation – believed to be evidenced by regional molybdenum ‐ lead ‐ zinc ‐ uranium anomalism in historical datasets.

Activities since granting of the tenement have focused on compilation of historical third party exploration reports and compilation of regional datasets. A regional desk ‐ study assessment of all the tenements within Mt Isa Metals’ Toolebuc project was undertaken in 2008 with the objective to prioritise field activities during 2008‐2009. The result of the review and analysis of available data downgraded the potential of the area for roll front type uranium mineralization. The potential for economic polymetallic mineralization was considered to be low with the consequent decision to relinquish the tenement.

No field work was carried out during Mt Isa Metals’ tenure.

2. Introduction EPM 16142 was granted to Mt Isa Metals Limited (MET) on 24 October 2007 and comprises 93 sub‐blocks.

Summary tenure details for EPM 16142 are provided below:

Tenement No. Grant Date Term No. of Sub‐Blocks

EPM 16142 24 October 2007 5 years 93

Table 1: Summary Tenure Details.

EPM 16142 is located 21km north‐northwest of the township of Hughenden. The tenement is one of seven tenements which comprise Mt Isa Metals’ Toolebuc Project.

Access can be gained via the Flinders Highway which runs parallel to and 9Km south of the southern boundary of the tenement and then via unsealed county roads and property tracks.

The tenement location is shown in Figure 1.

Figure 1: Tenement Location.

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3. Geology

Regional Geology

The Toolebuc Project tenements are located on and around the northern margin of the Eromanga Basin, a sub basin of the Great Artesian Basin, which consists of a number of thick sequences of non‐marine and marine sedimentary units. The basin was developed as a major down warp on a basement of Proterozoic to Palaeozoic metamorphic and igneous rocks during the Jurassic to Cretaceous.

Deposition within the Eromanga Basin of fluvial sandstones of the Hutton Formation as a consequence of down warping of the basement commenced in the early Jurassic period. These Jurassic sandstones are the main aquifers of the Great Artesian basin. Further fluviatile, lacustrine, and possibly deltaic sedimentation, continued at the end of the Jurassic. Marine transgression during the Cretaceous period resulted in deposition of the Rolling Downs Group sediments in a shallow marine to paralic setting. Formational units of the Rolling Downs Group include the basal Wallumbilla Formation; composed of mudstone and siltstone from the Doncaster Member, the Jones Valley Member and the Ranmoor Member; overlain by the calcareous bituminous shale, limestone and coquinite of the Toolebuc Formation; and the upper Allaru Mudstone. Following marine regression lithic sediments were deposited above the Rolling Downs Group.

Tertiary basalt and minor sandstone units unconformably overlie the Cretaceous sediments. Thin Quaternary alluvium covers much of the region.

Minor metalliferous mineralisation recorded in the region includes gold associated with quartz veins, has been exploited at small scale prospects 200 Km northeast of Hughenden and 90 Km northwest of EPM 16142 on the edge of the Etheridge Province. Alluvial deposit and deep lead conglomerate prospecting for gold has occurred at several locations proximal to the edge of the basalt outcrops.

Economic quantities of the target deposits styles (sedimentary uranium mineralisation) have not been identified in the Toolebuc Project region to date.

Local Geology

The oldest lithology within EPM 16142 is represented by the Cretaceous Ranmoor Member mudstone which occurs throughout the north –north eastern half of the tenement area. Discontinuous and younger Toolebuc Formation outcrop lies in an east ‐ west band in the central western portion of the tenement. The younger Cretaceous Allaru Mudstone overlies the Ranmoor Member and Toolebuc Formation to the south. This section of the Cretaceous sequence has formed in the northern rim region of a shallow southerly dipping basin.

Tertiary to Quaternary Woondoola Beds of unconsolidated sand, conglomerate and friable sandstone cover the area of the north western tenement boundary.

The geology of the tenement area sourced from GA 1:250k province series is presented in Figure 2.

Wallumbilla Formation ‐ Ranmoor Member

The Ranmoor Member forms a featureless soil plain to the north and is reportedly separated from the Allaru Mudstone and Toolebuc Formation by a low scarp. It is characterised by chocolate‐brown to black soil cover and lack of any resistant soil residuals. Occasional beds of gypsum, up to 1m thick, occur close to the contacts with the Toolebuc Formation and Allaru Mudstone.

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Cuttings of the Ranmoor Member from drill holes were described as a grey to chocolate‐brown mudstone with or without traces of gypsum. The distinctive colour change in the mudstone cuttings appears to be the main criterion available to tentatively divide the Ranmoor Member from the Allaru Mudstone.

Toolebuc Formation

Only a small area of Toolebuc Formation occurs in the tenement and differentiation from the topographic rises of the Allaru Mudstone on satellite image is difficult. Outcrop is reportedly very poor, consisting of coquinite and interbedded black carbonaceous and bituminous shale with minor siltstone. No interbedded crystalline limestone is reported though limestone concretions are recorded to occur around the margins of outcrops. No shaly limestone was recorded beneath the coquinite from drilling. North‐ south traverses across the direct contact between the Allaru Mudstone and the Ranmoor Member failed to locate Toolebuc Formation indications and it was concluded that the Toolebuc Formation has no eastwards extension along strike (Kennecott Explorations Pty Ltd, G. Williamson, 1967).

Allaru Mudstone

The Allaru Mudstone occurs over the southern part of the tenement and is typified by its greenish‐brown soil colour and numerous concretions of silty impure limestone. The concretions are reportedly fossiliferous with a variety of mollusc fauna occurring as casts and large platy pelecypol shells similar to those found in the Toolebuc Formation have also been noted. Where this lithology is non‐concretionary the outcrop is reportedly very poor.

Allaru Mudstone from drill hole cuttings has been described as a yellow‐brown to grey mudstone with traces of gypsum.

Figure 2: Tenement Geology (GA 1:250k Province GIS series).

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4. Summary of Historical Exploration A large number of companies have explored in the district within and around the MET’s Toolebuc Project tenements. The principal focus has been oil shale, vanadium and gypsum exploration. Minor exploration activity has also been directed towards copper and gold exploration with no activity reported on uranium exploration.

Prior exploration activity has not identified any prospective uranium, gold, copper or base metal anomalism in the tenement area. The oil shale located was considered to be uneconomic.

A summary of companies that have previously held tenure and completed field work within the current EPM 16142, Toolebuc Project, together with the principal exploration target/s are provided below (shaded cells indicate tenure which overlapped EPM 16142):

Tenement Company Period Principal Target/s No’s.

Kennecott Explorations (Australia) Pty 1967 Oil Shale, Phosphate 393 Ltd

Exoil NL 1969 ‐ 970 Oil shale 680

Mineral Commerce Ltd 1980‐1982 Oil shale 3032, 3003

Dampier Mining Company 1980 ‐1981 Oil shale 2422

BHP 1980‐1981 Oil shale 2422

Table 2: Summary of Historical Exploration EPM16142.

Kennecott Explorations (Australia) Pty Ltd conducted exploration for oil shale and phosphate within Authority to Prospect 393M (AtoP 393M) which largely covered the existing EPM 16142 area. Work conducted concentrated on two separate areas, ‘Dribbly’ located closer to Richmond and the ‘Mistake Creek’ area which overlaps EPM16142.

Exploration focused on phosphate over the Lower Cretaceous Toolebuc Formation and consisted of:

 Airborne radiometric and magnetic survey  Aerial photograph geological interpretation  ground geological traversing and preliminary follow‐up of radioactive anomalies  Open hole drilling of four holes were drilled on the Mistake Creek area

The best phosphate intersection is recorded as 6 feet at 1% from one drill hole. The Toolebuc Formation was divided into an upper outcropping coquinite unit (detrital limestone), and a lower non‐outcropping shaley limestone, based on drilling evidence. The coquinite unit was found to be a single horizon and

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contained sporadic phosphatic nodules up to 10 inches (25.4 cm) long and 1.5 inches (3.81 cm) thick. The shaly limestone was noted to be more phosphatic with the nodules giving a high gamma count which could account for airborne radiometric anomalies. Gypsum was noted to be common close to the contact of the Toolebuc Formation and the Allaru Mudstone with the underlying Ranmoor Member. No significant mineralisation or oil shale was located and the tenure was not continued. Exoil NL conducted exploration for oil shale within AtoP 680 which covered the area of the current EPM 16142.

 Exoil drilled a total of 71 open holes for 4,477 metres & 12 diamond holes for 419 metres, throughout the three tenure holdings.

Drilling found that the Toolebuc Formation is up to 25 metres thick and predominately mudstone. Oil shale was found in both the Toolebuc Formation and the underlying black grey mudstone (Ranmoor Member) and was up to 30.5 metres thick. On average the oil shale was 6 metres thick and had a contained 10 gallons per ton of oil. Two areas were highlighted as best potential with one on AtoP 680 but not within that now covered EPM16142. The area was considered to be uneconomic and tenure was relinquished. Dampier Mining Company conducted drilling over AtoP 2422M during 1980 and 1981. EPM2422 covers a large proportion of the western half of the current EPM 15965 and minor eastern portions of the adjacent EPM 16142. This area was acquired based on the oil shale of the Lower Cretaceous Toolebuc Formation, and to test the occurrence of oil shale in the overlying Allaru Mudstone and the underlying Ranmoor Member of the Wallumbilla Formation.

Nine holes were drilled from 12.5 to 120 metres for a total of 510 metres. All holes were collared in Allaru Mudstone and intersected the Toolebuc Formation. Maximum yields are reported as 54 litres per tonne. Oil shale occurs in all holes associated with the Toolebuc Formation, except for one hole where the maximum yield occurs within the Allaru Mudstone. BHP Pty Ltd in 1981 report on drilling within AtoP 2422M. The report contains summaries of holes 5, 6 and 10A which were drilled during the previous exploration campaign. Hole 6 is reported to have intersected the Toolebuc Formation as the dominant unit with up to 53 L/t oil yields. Low yields in the Allaru Mudstone were attributed to weathering. No further work was conducted and the overall oil yields were considered too low for economic extraction.

Mineral Commerce Pty Ltd conducted exploration over AtoP’s 3032M and 3033M during 1981. AtoP’s 3032 and 3033 share a boundary with the western edge of the current EPM16142. Exploration was focused on the oil shale bearing Toolebuc Formation and work consisted mostly of planning, mapping and reconnaissance. A study of the regional water bores was conducted with summary logs and gamma logs being compiled. No further work was conducted on these AtoP’s and they were relinquished.

5. Work Completed Work completed by MET comprised:

 compilation and analysis of historical third party exploration data, and  Compilation of regional data set including regional magnetic and regional radiometric data.  A regional desk‐study assessment of all the tenements within Mt Isa Metals’ Toolebuc project with the objective to prioritise field activities during 2008‐2009.

As a result of the desk study analysis of available data Mt Isa Metals has downgraded the potential of the area for roll front type uranium mineralisation.

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No field work was carried out during Mt Isa Metals’ period of tenure.

6. Bibliography A summary of DME open file reports reviewed in the preparation of this report is as follows:

Kennecott Explorations Pty Ltd: AtoP 393M ‐ CR02218

Exoil NL and Transoil NL: AtoP 679M, 680M ‐ CR03301

Dampier Mining Company: AtoP 2422M, 2423M 2425M ‐ CR08473

BHP Pty Ltd: AtoP 2422M, 2425M ‐ CR09063, CR09341, CR09938, CR09939

Mineral Commerce Ltd: AtoP 3032M, 3033M ‐ CR09687, CR09688, CR10776, CR10777

7. Copyright Statement

Acknowledgement and Warranty

1. Subject to 2, the tenure holder acknowledges that this Report, including the material, information and data incorporated in it, has been made under the direction or control of the State of Queensland (the State) within the meaning of section 176 of the Copyright Act 1968 (Cwth).

2. To the extent that copyright in any material included in this Report is not owned by the State, the tenure holder warrants that it has the full legal right and authority to grant, and does hereby grant, to the State, subject to any confidentiality obligation undertaken by the State, the right to do (including to authorise any other person to do) any act in the copyright, including to:

 Use;  Reproduce;  Publish; and  Communicate in electronic form to the public, such material, including any data and information included in the material.

3. Without limiting the scope of 1 and 2 above, the tenure holder warrants that all relevant authorisations and consents have been obtained for all acts referred to in 1 and 2 above, to ensure that the doing of any of the acts is not unauthorised within the meaning of section 29(6) of the Copyright Act (Cwth).

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