Walhalla

Gold Project

FIGURE 1: Project Locality Plan 

1.       Complete a technical review of all data relating to the highly prospective Walhalla Gold Project and determine priority
          targets to be drill tested.

2.       Progress a pre-feasibility study on the current gold resources within the Walhalla Gold Project.

FIGURE 2: Walhalla Gold Project Tenement Holdings 

1.    The Cohen’s area, being essentially the area covering the West 1, West 2 and Cohen’s mineralised trends in the
       country west of the Walhalla township.

FIGURE 4:  Cohen’s-Empress long section illustrating some potential exploration targets.  This figure illustrates the large number of possible exploration targets.  Areas shown in pink are regarded as potential blocks of remnant ore which require further drill testing to confirm.  The blue panels are zones considered to be prospective with the red circles denoting areas of specific interest.  The large red arrows indicate interpreted mineralised shoots.  The black dashed line is an interpreted fault within the plane of the diagram.

The Cohen’s reef system (mined late 1800s to early 1900s) is Victoria’s highest single producing reef system, with production of ~1.5 Million ounces at a head grade approaching 40 g/t Au.  After approximately 40 years of mining many basic features of the system remain unknown or poorly defined, providing much scope for successful exploration.  As the spatial limits and disposition of the Cohen’s Reef system and associated mineralisation remains open in all directions, much prospective ground remains untested.  The high probability of remnant resources, the likelihood of discovery of extensions to known lodes and wholly new lodes, and unexploited ‘stockwork’ style mineralisation means that the chances of a significant resource being delineated based upon the Cohen’s reef system is regarded as very good.

Given the historical production at Cohen’s, the other nearby lines of mineralisation (West 1 and West 2) have been subject to minimal exploration.  Importantly, previous mining has largely concentrated upon the Cohen’s Line, so the potential for near surface ore being delineated along the West 1 and 2 trends is considered high. This potential will be tested in the initial drill program which commenced in the December 2009 quarter.

The gold endowment of the West 1 and West 2 structures has the potential to be similar to that of the main Cohen’s structure, especially as cross-sections by the likes of Herman (1901) and Baragwanath (1918) interpret West 1 and West 2 as splays from the major reverse fault that constitutes Cohen’s reef.  Based on this interpretation, West 1, West 2 and Cohen’s appear to be part of the same mineralised system.  (See figure 5)

Geologically, the ore in the Cohen’s reef comprises continuous, roughly planar, laminated, auriferous quartz veining (colloquially referred to as a ‘reef)’.  This reef is situated within a reverse fault in a high-strain zone 10-50 metres wide hosted within sedimentary rocks.  Intermediate dykes are intimately associated with the reef and locally these may also bear auriferous veining.  Continuous reefs like Cohen’s are readily extracted by modern mining methods, and locating and defining continuous, high-grade primary reef mineralisation of this style is considered to be the main focus of exploration in the Cohen’s area.

Figure 5: Cohen’s Deeps Cross Section (modified after Herman, 1901)

2.    The Ross Creek Line (RCL) located in the proximal area of interest includes the string of prospects (north to south)
       Shamrock – Bonanza – Centennial - North Coronation -Tubal Cain - Strusses – Eureka  - Walhalla Proprietary.

Geologically, the mineralisation established to date along the RCL is different in style to that of the Cohen’s area, largely being examples of the region’s classic ‘ladder reefs’ formed within dyke bulges, with lesser mineralisation hosted as laminated, breccia or ‘stockwork’ reefs in strained sediments adjacent to the dyke contacts.  The dyke-hosted nature has a number of ramifications on metallogeny and endowment: 

• The individual ‘reefs’ or ‘floors’ are stacked vertically, and the spacing between them varies from 5 to 50 metres.
  
  
• The quartz reefs are constrained by the host dyke, and the areal extent of a given reef is thus largely controlled by the size of the dyke bulge and the dyke that hosts it.  Individual reefs may traverse across the entire dyke contact into the surrounding wall rock.  There does not appear to be a clear relationship between overall dyke volume and gold endowment – the biggest dyke (Morning Star) is the biggest producer (of this style of mineralisation), however, the second biggest producer (the A1) is situated in one of the smaller dyke bulges.
  
  
• Completion of the pre-feasibility study on the Tubal Cain and Eureka deposits will assist in determining the economics of such deposits and what future work should be undertaken by the Company.  

Given the potential for larger scale deposits being discovered along the Cohen’s Line, West 1 and West 2 Lines, the Company has elected to prioritise drill testing of targets in the Cohen’s area aimed at establishing a near surface resource base which will support the development of a mining operation in the short to medium term.