annual exploration report – year 12 mineral lease ml1154 ... · merlin diamonds pty ltd, which is...

Annual Exploration Report – Year 12

Mineral Lease ML1154

“Merlin”

14th June 2009 to 13th June 2010

Holder: Merlin Diamonds Pty Ltd

Operator: North Australian Diamonds Limited

Reporting Period: 14th June 2009 to 13th June 2010

Sheet Reference: Bauhinia Downs 1:250,000 (SE53-03)

Due Date: 14th August 2010

Author: Tom Reddicliffe

Date: 10th September 2010 Report No: 10-030 Copies To: Dept. of Primary Industry, Fisheries and Mines

Merlin Diamond Mine NADL Office

The contents of this Report remain the property of North Australian Diamonds Ltd. and may not be published in whole or in part, nor used in a company report without the written consent of the company.

North Australian Diamonds Ltd Annual Exploration Report MLN1154

i

TABLE OF CONTENTS

LIST OF FIGURES......................................................................................................................................... ii

SUMMARY.......................................................................................................................................................1

1.0 INTRODUCTION..............................................................................................................................2

2.0 LICENCE DETAILS.........................................................................................................................2

3.0 GEOLOGY.........................................................................................................................................4

4.0 EXPLORATION COMPLETED DURING CURRENT REPORTING PERIOD......................4

4.1 Resource Drilling .......................................................................................................................4 4.2 Drill Core Sampling ...................................................................................................................4 4.3 Exploration Drilling ...................................................................................................................1 4.4 COMEX Test Work .....................................................................................................................1 4.5 Plant Spillage Samples ...............................................................................................................1

5.0 GEOPHYSICAL SURVEYS.....................................................................................................................1

5.1 Ground Electromagnetic Surveys .......................................................................................................1

6.0 EXPLORATION EXPENDITURE..................................................................................................5

7.0 PROPOSED PROGRAMME AND BUDGET FOR 2010-2011 ....................................................5

8.0 REFERENCES...................................................................................................................................5


ii

LIST OF TABLES

Table 1

Tenement Details

Table 2 Bedevere RC Down hole Spoil Geochemical Sample (10-005) Results Table 3 Plant Spillage Sample Results

LIST OF FIGURES

Figure 1 ML1154 Location Map Figure 2

ML1154 Current/ Historical Sample Map

Figure 3 Bedevere EM 34-3 Survey Map Figure 4

Excalibur South Ground EM Survey Map

Figure 5 Perceval Ground EM Survey Map

LIST OF APPENDICES

Appendix A Drill Logs Appendix B Bedevere EM 34-3 Survey Data Appendix C

Excalibur South Ground EM Survey Data

Appendic D Perceval Ground EM Survey Data


SUMMARY

This report details exploration and evaluation activities carried out by North Australian Diamonds

Limited (NADL) over Mineral Lease ML 1154 for the period 14th June 2009 to 13th June 2010..

NADL acquired 100% of ML1154 in November 2004 from Rio Tinto. The tenement is held under

Merlin Diamonds Pty Ltd, which is a 100% wholly owned subsidiary company of NADL.

Activities completed during the reporting period included a geotechnical drilling program at Palsac,

Bedevere and Launfal as well as an exploration drilling program at Tailing’s Dam and Bedevere.

Down-hole spoil geochemical samples were collected from Bedevere and indicator minerals from

Tailing’s Dam. Plant Spillage samples were collected at Merlin. A ground EM survey was conducted

over Excalibur South and Perceval. COMEX test work was also conducted over the Merlin Mine and

samples were sent to COMEX in Norway for pyrite/diamond testwork.

Total expenditure amounted to $7,712,390.79


1.0 INTRODUCTION

This report details exploration and evaluation activities carried out by North Australian Diamonds

Limited (NADL) over Mineral Lease ML1154 for the period 45th June 2009 to 13th June 2010.

NADL acquired 100% of mineral lease 1154 in November 2004 from Rio Tinto. The tenement is

held under Merlin Diamonds Pty Ltd (MDPL), which is a 100% wholly owned subsidiary company

of NADL.

The target for exploration within this lease is diamond bearing kimberlite intrusives. In addition,

NADL is undertaking evaluation to reestablish commercial scale mining operations within the lease.

2.0 LICENCE DETAILS

Mineral Lease 1154 was granted to Ashton Mining Limited on the 15th June 1998 replacing

Exploration Retention Licenses (ERL’s) 141 and 142. The area covered by the ERL’s was

previously held under Substitution Exploration License 8630, which replaced the original licenses

6424, 7267, 7581, 7859, 7860 and 7861 in July 1995. ERL 141 comprised 736 hectares, and ERL

142, located to the south of ERL 141, comprised 888 hectares. On the 17th December 1996,

application for a mineral lease was made over the ERL’s, covering an area of 2,350 hectares. On

granting of the mineral lease, the ERLs were automatically surrendered.

The licence is located on the Bauhinia Downs (SE53-03) 1:250,000 map sheet and the Glyde (6164)

1:100,000 sheets. Access to the lease is via a 64 kilometre formed gravel access track from the

Carpentaria Highway, the turn-off is approximately 6 kilometres south-west of the McArthur River

Mine turn-off. A tenement location map is shown as Figure 1.

Table 1: Licence Details

Project Name Tenement No Application Date Grant Date Sub-Blocks Area (ha) Merlin MLN 1154 17/12/1996 15/06/1998 Na 2350


3.0 GEOLOGY

The mineral lease is located on a plateau referred to as the Merlin Plateau that is part of the Bukalara

Ranges. The Merlin Plateau occurs at an elevation of approximately 200m above mean sea level and

is approximately 10km north-south by 5km east-west. The plateau itself is host to twelve kimberlite

pipes, a small breccia pipe and a further two kimberlite pipes dissected by Matheson Creek that

bounds the plateau to the north (Emu 1 and Emu 2 kimberlite pipes). The kimberlite pipes have been

age dated as Devonian and intrude the Neoproteozoic Bukalara Sandstone that attains a maximum

thickness over the plateau of approximately 100m. Kimberlite material is described as olivine rich

kimberlite and kimberlite breccia and is likely to represent the upper diatreme facies. The kimberlite

is highly weathered to approximately 100m below surface. Proterozoic sediments of the McArthur

Group form the basement to the area. The youngest rocks in the area are sediments of Cretaceous

age that outcrop in isolated areas. Various alluvial deposits occur and a lateritic profile is developed

over the plateau.

4.0 EXPLORATION COMPLETED DURING CURRENT REPORTING PERIOD

4.1 Resource Drilling

Three programs of Diamond and RC resource definition drilling were completed during the previous

reporting period. The first program comprised an ore reserve and geotechnical drill program

targeting the Palsac pipe and included a total of 6 diamond drill holes for a total of 2,523.1 metres

and total RC drilled metres are 473m. The second program targeted the Bedevere pipe and included a

total of 1 diamond drill holes for a total of 179.4 metres. The third program comprised of a drilling

program at Launfal consisting of 1 diamond drill hole for a total of 535.8 metres. Each of the Drill

holes from all three programs is discussed in Appendix A.

4.2 Drill Core Sampling

Down-Hole Sampling

Three programs involving the collection of various downhole samples were completed at Bedevere

during May, 2010. The first comprised the collection of a downhole grade sample from a vertical

diamond drill hole through centre of Bedevere pipe. A selection of core from the resource drill holes

was sent to the Perth laboratory for diamond recovery. This was undertaken to provide some

certainty to the predicted diamond content at depth by investigating the relationship between


microdiamonds and macrodiamonds at depth from drill core and microdiamonds and macrodiamonds

at surface from production data and from mini-bulk samples. The second program involved the

Collection of samples from RC Chip piles for geochem analysis. The chips were from holes drilled

into and around the Bedevere kimberlite pipe. Analysis was to determine if samples were kimberlitic

or associated with kimberlite. Results from the samples are discussed in table 2. A third and separate

program surrounding Bedevere involved the collection of exploration downhole indicator samples. A

total of 491 samples were collected (10-008-001 to 10-008-491). Samples were sent to the company’s

Lab and results are awaited. All three programs and the samples collected in each are shown in figure

2.


Table 2: Bedevere RC Down hole Spoil Geochemical Sample (10-005) Results

SAMPLE TYPE TENEMENT EASTING_AMG NORTHING_AMG

DATU

M ZONE

Ba

(ppm)

Ce

(ppm)

Cr

(ppm)

La

(ppm)

Nb

(ppm)

Ni

(ppm)

10-005-

001

RC

Geochem MLN 1154 642427 8142491 AGD66 53 315 23 x 10.6 10 x

10-005-

002

RC

Geochem MLN1154 642427 8142491 AGD66 53 372 38.9 65 17.1 10 x

10-005-

003

RC

Geochem MLN 1154 642452 8142491 AGD66 53 184 132.4 x 58.7 27 x

10-005-

004

RC

Geochem MLN 1154 642452 8142491 AGD66 53 232 101.7 x 46.4 18 27

10-005-

005

RC

Geochem MLN 1154 642478 8142491 AGD66 53 178 116.8 x 54.8 18 58

10-005-

006

RC

Geochem MLN 1154 642478 8142491 AGD66 53 316 55.8 81 28.1 17 63

10-005-

007

RC

Geochem MLN 1154 642478 8142491 AGD66 53 330 46 x 22.4 21 86


10-005-

008

RC

Geochem MLN 1154 642478 8142491 AGD66 53 235 40.2 x 17.8 15 203

10-005-

009

RC

Geochem MLN 1154 642554 8142490 AGD66 53 711 55.8 100 26.7 15 116

10-005-

010

RC

Geochem MLN 1154 642554 8142490 AGD66 53 217 41.5 x 20.7 12 x

10-005-

011

RC

Geochem MLN 1154 642554 8142490 AGD66 53 311 63.3 69 32.5 34 x

10-005-

012

RC

Geochem MLN 1154 642554 8142490 AGD66 53 223 36.9 410 18.7 14 x


4.3 Exploration Drilling

Two Exploration programs targeting follow up chromite and diamond positive as well as indicator

minerals were completed at Bedevere and Tailing’s Dam. The first program was an RC exploration

drilling program around Bedevere to follow up on positive chromite and microdiamond indicators.

Four E-W lines were originally planned. Another 5 lines were added due to access problems to other

areas. These lines were to target some EM-34 anomalies and to drill through an apparent corridor

trending 15° that had microdiamond positive results. The lines were extended to areas that were of

higher elevation to where the positive samples were found using the logic that the indicators may

have washed down slope. Another five holes were planned to target an EM-34 high reading and

another four holes were also planned to the south of the Bedevere pipe as follow up to previous

kimberlite drill intercepts from historic drill holes. A total of 146 holes were drilled with a total of

9966m. The second program comprised RC exploration drilling north of the tailings dam. Two east-

west lines were planned to target areas of positive indicator minerals. Only one of the lines were

drilled (the northern most line) as the other line was still too wet for a drill rig to enter. A total of 10

holes were drilled (10-MEXR- 147 to 10MEXR-156) for a total of 600m of drilling.

4.4 COMEX Test Work

Representative samples of the Sorthouse tailings were collected from the Merlin Mine and were sent

to COMEX AS in Norway for the air classifier test. Its main purpose is separation of the fine

diamonds from pyrite or other gangue grains. Results are awaited.

4.5 Plant Spillage Samples

Five plant spillage samples were collected from the Merlin Mine plant for analysis and diamond

recovery. The samples were sent to the company’s wholly owned Lab in Wangara. Results were

released and included four positive and one negative sample which are discussed in Table 3.


Table 3: Plant Spillage Sample 10-010 Results

SAMPLE TYPE TENEMENT PROJECT EASTING_AMG NORTHING_AMG

DATU

M ZONE Indicator Result

Total

Diamon

d Macro Micro

10-010-

001

Plant

Fine MLN 1154 Merlin Plant 643251 8136183 AGD66 53 Positive 10 10 0

10-010-

002

Plant

Fine MLN1154 Merlin Plant 643251 8136183 AGD66 53 Positive 2 2 0

10-010-

003

Plant

Fine MLN 1154 Merlin Plant 643251 8136183 AGD66 53 Negative 0 0 0

10-010-

004

Plant


10-010-

005

Plant



5.0 GEOPHYSICAL SURVEYS

5.1 Ground Electromagnetic Surveys

Three EM Surveys were conducted during 2009-2010 period and these included an EM-34-3 Survey

over Bedevere (21st-26th of April 2010), a Ground EM Survey over Excalibur South (May 2010) and

a Ground EM survey over Perceval (May 2010). The survey conducted over Bedevere was flown

over approximately 30.2km using 20m cable with 25m line spacing and 20m stations. The survey is

shown in figure 3 and the data is discussed in Appendix B. The Ground EM survey over Excalibur

South was flown over approximately 54.7 line kilometres 20m cable, 25m line spacing and mostly

20m station spacing. The survey is shown in figure 4 and the data is discussed in Appendix C. The

last Ground EM survey which was flown over Perceval was flown over approximately 5.65 line

kilometres with a 20m cable, 25m line spacing and mostly 20m station spacing. The survey is shown

in Figure 5 and Appendix D.


6.0 EXPLORATION EXPENDITURE

Expenditure for the reporting period amounted to $7,712,390.79 as per the breakdown in the attached

expenditure report.

7.0 PROPOSED PROGRAMME AND BUDGET FOR 2010-2011

Proposed exploration and evaluation program for 2010-2011 will focus on prefeasibility production

trials. This work will include an upgrade to the Merlin pilot processing plant to enable throughputs

of greater than 50tph. Large bulk samples are to be excavated from the pipes Palomides, Sacramore,

Gawain and Kaye. The information on grade and diamond value obtained from this work will be used

to complete prefeasibility studies. An estimation of proposed expenditure is included below.

Processing plant upgrade $800,000

Bulk sampling and processing $1,500,000

Pre-Feasibility Studies $300,000

Total $2,500,000

8.0 REFERENCES

Reddicliffe, T., 2009. Annual Report. Year 11. ML1154 ‘Merlin’. North Australian Diamonds

Limited Report 09-031.

Kammermann, M., 2007. Annual Report. Year 10. ML1154 ‘Merlin’. North Australian Diamonds

Limited Report 08-033.

Appendix A

Drill Logs

Appendix B

Bedevere EM 34-3 Survey Data

Appendix C

Excalibur South Ground EM Survey Data

Appendix D

Perceval Ground EM Survey Data

annual exploration report – year 12 mineral lease ml1154 ... · merlin diamonds pty ltd, which is...

Documents