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SEPTEMBER 2011 QUARTERLY REPORT Highlights
MAGNUS COPPER PROJECT
Comprehensive AMT survey commences at East Magnus with
acquisition of Stage 1 of survey completed
Interpolation of AMT data and the subsequent generation of conductor
sources is expected to be completed in the December 2011 quarter,
followed by planned drill testing
Lithogeochemistry confirms prospectivity of Narracoota sequence
GASCOYNE GOLD PROJECT
Indicated Resource at Hermes increases to 2.79 Mt at 2.19g/t gold
(equivalent to 196,650 oz of gold), representing an increase of
approximately 50%
High-grade gold intersected in diamond drill holes at Hermes deposit,
including 8m at 24.75 g/t gold from 126m, 4m at 16.47 g/t from 90m
and 4m at 8.57 g/t gold from 136m
Extensional RC drilling program targeting down-plunge positions to
commence in December 2011 quarter
MURCHISON PROJECTS
Encouraging gold mineralisation intersected in aircore drilling at Jeffery
Well, including 8m at 2.62g/t gold from 60m, 8m at 1.48 g/t gold from
80m and 20m at 0.87g/t from 72m
Gold anomalism delineated over one kilometre corridor
CORPORATE
$3.5 million cash at hand at 30 September 2011
BOARD OF DIRECTORS Mr Warwick Davies Non-Executive Chairman
Mr Robert Brierley Managing Director’
Mr John Arbuckle Non-Executive Director
Mr Jeffrey Moore Non-Executive Director
ISSUED CAPITAL
SHARES 97,447,408
OPTIONS 2,800,000 (Unlisted)
PROJECTS
MAGNUS COPPER (100%)
GASCOYNE GOLD (100%)
MURCHISON (80-100%)
18 Emerald Terrace WEST PERTH WA 6005 Phone: +61 8 9481 4400 Facsimile: +61 8 9481 4404
www.alchemyresources.com.au
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Magnus Copper Project (Alchemy 100%)
The Magnus Copper Project covers over 20 kilometres of strike length of volcanic and sedimentary rocks of the
highly-prospective Bryah Group, located 130km north-east of Meekatharra, Western Australia (Figure 1). Alchemy
is undertaking systematic exploration for VMS-type (base and precious metals) mineralisation at Magnus, which is
along strike and to the west of Sandfire Resources’ DeGrussa deposit, which contains Measured, Indicated and
Inferred Resources of 14.33Mt at 4.6% copper and 1.6g/t gold, and is undergoing mine development.
Alchemy remains focussed on unlocking the copper-gold potential of its 100% owned Magnus Copper Project
through employing innovative geophysical and geochemical methods in conjunction with drill testing of priority
targets.
Figure 1: Location of Magnus Copper Project and Gascoyne Gold Project.
Audio-Magnetotellurics Survey
A comprehensive audio-magnetotelluric (AMT) survey over the East Magnus project area has commenced to
detect discrete anomalies that may represent massive sulphide targets not detected or resolved in the previous
geophysical surveys (Figure 2). The survey is also seeking to define deeper structures that may represent fluid
pathways. It is the first time this advanced technique has been applied to the search for base metal mineralisation
in the Bryah Basin.
The AMT survey is acquiring data along 300 metre-spaced lines over the Narracoota volcanic sequence and upper
750 metres of the underlying Karalundi sedimentary sequence for both geological mapping purposes and to
directly detect potential massive sulphide conductors (Figure 2). Acquisition of Stage 1 of the survey was
completed in mid October 2011, some two weeks behind the original schedule.
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The AMT method has the capability of ‘seeing’ deeper into the prospective rock package than the previous
helicopter-borne versatile-time EM (VTEM) and ground moving-loop EM (MLEM) surveys. Of the geophysical
methods applied to date at Magnus, AMT appears to be the only one that has provided good correlation to
mapped geology, imaged conductive responses within the resistive Narracoota volcanic sequence and has the
deepest depth of penetration to over 600m.
An orientation AMT study completed in May 2011 established the applicability of the method to exploration of
base metals at Magnus. In particular, depth conductivity sections for the orientation AMT profiles successfully
delineated major geological packages and their boundaries, defined conductors that correlate well with the
VTEM, gravity and known geology, and resolved new features that were not detected in the VTEM survey.
Specifically, the AMT conductivity depth sections image a number of conductive anomalies including significant
conductors at depths over 300 metres within the Narracoota volcanic sequence.
Figure 2: Magnus Copper Project – Location of AMT survey showing Stage 1 completed, over interpreted geology.
Results from Stage 1 of the AMT survey are currently being processed with 2D inversions with the aim of
providing more reliability as to the true location of conductor sources, with the strongest portions identified being
justification for future targeted drill testing.
In parallel with the AMT survey, Alchemy has re-evaluated all of the geophysical targets identified in the VTEM,
MLEM and down-hole EM (DHEM) surveys and has identified untested targets.
Follow-up RC and diamond drilling and associated DHEM surveys will be planned as a priority based on the results
of the AMT survey and the re-ranking of the untested geophysical targets. The delay in acquiring the AMT data
will probably result in the commencement of drilling being deferred from late 2011 to early 2012.
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Geological Interpretation and Prospectivity
Recent geology interpretation of the Magnus Copper Project area has identified prospective stratigraphic
positions for VMS base metal mineralisation. The Narracoota volcanic sequence, comprising thick sequences of
basaltic and high-Mg volcanic rocks, intrusive dolerites and interflow sedimentary and volcaniclastic rocks, shares
similarities to sequences that host mafic-sediment association VMS deposits in Japan (e.g., Besshi) and Canada
(Windy Craggy, Lynn Lake).
Lithogeochemistry on selected mafic volcanic and intrusive rocks indicates that the Narracoota sequence is
chemically similar to mafic volcanic sequences hosting VMS base metal mineralisation at Fox Mine in the Lynn
Lake belt in northwest Manitoba, Canada.
Surface geochemistry and mapping delineated significant alteration along the contact zone of the Narracoota and
Karalundi sequences as well as within the Narracoota volcanic sequence. Mapping also indicates that the
Narracoota volcanic sequence is itself strongly deformed with evidence for steeply plunging folds within the
sequence. Interpretation of structures suggests syn-depositional faults controlled deposition of the sequences
and may have acted as ‘feeder zones’ for hydrothermal fluids.
Alchemy drilled a total of 42 RC holes at the Magnus Copper Project in 2010. The majority of these holes drill
tested VTEM conductors delineated from an interpretation of the VTEM survey and/or areas of multi-element
anomalism identified from soil sampling over the Magnus region.
Although no massive sulfide accumulations were encountered by the RC drilling, exploration has confirmed that
the Magnus project area is highly prospective for the discovery of copper-gold mineralised systems and has
provided a strong platform for continued systematic exploration.
Alchemy is committed to thoroughly and systematically exploring the Magnus area for both VMS-type copper
mineralisation and for ‘gold only’ mineralised systems as the potential reward is considered significant.
Gascoyne Gold Project (Alchemy 100%)
The Gascoyne Gold Project covers over 270km2 within the highly-prospective Marymia Inlier and Bryah Basin,
located 130km north-east of Meekatharra, Western Australia (Figure 1). The project comprises the Hermes and
Wilgeena Gold Deposits, and the Central Bore Prospect.
Indicated Mineral Resources at the Gascoyne Gold Project now total 246,000oz of gold, contained at the Hermes
and Wilgeena deposits. Alchemy has a goal of increasing its gold resources whilst also continually evaluating
commercialisation opportunities.
Achievements to date include the grant of Miscellaneous Licenses overlapping a proposed route to a nearby
gold processing plant, completion of metallurgical testwork on diamond core samples that confirmed that the
ore is amenable to conventional crush, grind and CIL treatment with a gravity recovery rate of 40-60%, and
commencement of preliminary economic analysis of the deposit to determine the viability of a gold mining
operation at current gold prices.
Hermes Gold Deposit
A revised Indicated Resource of 2.79 Mt at 2.19g/t gold (equivalent to 196,650 oz of gold) has been estimated for
the Hermes Gold Deposit (reported in an ASX Announcement dated 13 September 2011).
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This revised resource estimate, which was performed by Mr Simon Coxhell of Coxsrocks Pty Ltd using a 0.5g/t
gold lower cut-off grade, has enhanced the value of the Hermes Gold Deposit. The revised Indicated Mineral
Resource represents an approximate 50% increase from the previous estimate quoted (1.68Mt @ 2.39g/t gold
for 130,000oz of gold) by Snowden & Associates based on drilling up to 1998.
The resource consists of five areas of gold mineralisation – Trapper, Trapper West, Hawkeye, Winchester and
Blake (Figure 3). Gold mineralisation is associated with stacked zones of quartz veining and/or sulphides within
metasedimentary units and amphibolites.
Since Alchemy acquired the project from Troy Resources in 2008, significant work programs including systematic
data validation and review, geological mapping, aircore and RC drilling, diamond drilling and metallurgical
testwork have greatly improved the understanding of the Hermes deposit to a vertical depth of 150 metres.
Assay results from recent diamond drilling into four areas of gold mineralisation (see ASX announcement of 22
August 2011) confirmed the grade and width of mineralisation at Hermes and highlighted the presence of
robust high-grade zones (Figure 3).
Results include best intersections (applying 1.0 g/t lower cut-off and maximum 2 metres of internal dilution) of:
8 metres at 24.75 g/t gold from 126 metres in hole HRD002
4 metres at 16.47 g/t from 90 metres and 4 metres at 8.57 g/t gold from 136 metres in hole HRD003
1 metre at 7.17 g/t gold from 86 metres in hole HRD004
1 metre at 5.74 g/t gold from 97 metres in hole HRD005
The mineralisation is open at depth and further drilling has good potential to add to the known resource and
expand the area of gold mineralisation outside of the Indicated Resource.
Planning of follow-up extensional RC and resource definition drilling programs at Hermes is well advanced and
scheduled to commence in the December 2011 quarter.
Central Bore Gold Prospect
Two phases of RC drilling and targeted diamond drilling over a strike length of 300 metres in the central part of
the Central Bore area have resulted in the discovery of high-grade gold mineralisation related to quartz veining in
granite (reported in ASX announcements dated 10 December 2010 and 15 July 2011). The majority of the high-
grade intervals of up to an ounce-per-tonne appear to have some continuity within broader zones of low-grade
(<1g/t Au) mineralisation.
Results from the diamond drilling undertaken in 2011 includes best intersections (applying a 1.0g/t lower cut-off
and maximum 2 metres of internal dilution) of:
4 metres at 25.8 g/t gold from 125 metres, including 1 metre at 99.3 g/t gold from 125 metres, and 1 metre at 12.1 g/t gold from 222 metres in hole CBDD002
1 metre at 6.51 g/t gold from 119 metres in hole CBDD001
The targeted diamond drilling program obtained technical information on the nature, orientation and continuity
of the high-grade intervals and the broad mineralised envelopes. Structural studies indicate that gold
mineralisation plunges gentle-moderate towards the south-east.
These results are very encouraging and, combined with detailed structural orientation and logging of the core,
have enhanced the Company’s understanding of the gold mineralisation at Central Bore.
Planning of resource definition drilling programs at Central Bore is well advanced and scheduled for early 2012.
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Figure 3: Hermes Gold Deposit – Plan showing location of areas of gold mineralisation and results from diamond drill holes (previously reported).
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Murchison Projects
Assessment of the Company’s Murchison tenements continued with completion of aircore drilling programs at
Jeffery Well and Gidgee South, and continuation of surface geochemistry programs at Wydgee and Pollele
projects (Figure 4).
Jindalee Resources Limited (“Jindalee”) is a 20% JV partner in a number of Alchemy’s Murchison Projects.
Jindalee’s interest is noted where relevant.
Figure 4: Murchison Projects – Location of completed aircore drilling and surface geochemistry programs.
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Jeffery Well Project (Alchemy 80%, Jindalee 20%)
An in-fill aircore drilling program comprising 44 holes for 4,362 metres was completed in September 2011 at
Jeffery Well to test for high-grade, vein-style gold mineralisation within a regional gold corridor (Figure 5). The
gold corridor may represent an extension of the Sarus gold prospect previously drilled by MPI Ltd in the 1990s.
Assay results have been received for all 4m-composite samples from the aircore drilling program, with gold
anomalism recorded in a number of drill holes (Table 1). Significant intervals (using a lower cut-off of 0.20g/t gold)
include:
8m at 2.62g/t gold from 60m, including 4m at 4.59g/t gold from 60m, in JWAC058
8m at 1.48g/t gold from 80m in JWAC071
20m at 0.87g/t gold from 72m, including 4m at 2.56g/t gold from 80m, in JWAC082, and
1m at 2.95g/t gold from 94m at end of hole in JWAC089.
One-metre samples from mineralised intervals have been collected and results are expected in November 2011.
Previously released results from aircore drilling in late 2010 (reported in an ASX Announcement dated 24 January
2011), from 1m assays using a lower cut-off of 0.20g/t gold, include:
2m at 15.27g/t gold from 62m, including 1m at 30.2g/t gold from 63m, in JWAC023
5m at 1.53g/t gold from 78m, including 1m at 6.35g/t gold from 78m, in JWAC025
7m at 0.54g/t gold from 81m in JWAC008, and
1m at 2.89g/t gold from 54m in JWAC028.
In combination, these results are encouraging and extend the zone of gold anomalism localised in a structural
corridor at the contact between mafic and ultramafic rocks to over one kilometre.
Figure 5: Jeffery Well Project – Results from aircore drilling and previous drilling (see legend) over geology.
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The exploration effort at Jeffery Well highlights the potential in the Murchison District for not only large lode gold
systems but also for narrow high grade gold systems, similar to the gold mineralisation identified north of
Meekatharra at Andy Well by Doray Minerals Limited.
Table 1: Jeffery Well Project – Significant intervals from 4m-composite samples from Aircore Drilling, >0.20g/t gold
Hole ID Easting (m)
Northing (m)
Hole Depth (m)
Max Au (g/t)
From (m)
To (m)
Interval (m)
Au (g/t)
Comment
JWAC057 603115 7012401 85 0.36 83 85 EOH 2 0.36
JWAC058 603010 7012407 113 4.59 60 68 8 2.62 incl. 4m @ 4.59g/t (60m)
JWAC059 602911 7012403 116 0.74 76 88 8 0.50
JWAC060 602810 7012399 104 0.91 76 80 4 0.91
92 96 4 0.21
JWAC070 603022 7012194 102 0.26 84 88 4 0.26
JWAC071 602817 7012208 93 1.71 80 88 8 1.48
JWAC072 602614 7012197 118 0.37 92 96 4 0.37
JWAC074 602409 7012188 92 0.36 56 60 4 0.36
JWAC080 602612 7011999 119 0.55 108 112 4 0.55
JWAC082 602410 7011993 95 2.56 72 92 20 0.87 incl. 4m @ 2.56g/t (80m)
JWAC086 602813 7011799 102 0.22 48 52 4 0.22
JWAC087 602611 7011800 95 0.55 84 88 4 0.55
JWAC088 602409 7011799 89 1.14 84 89 EOH 5 0.64
JWAC089 602220 7011799 95 2.95 88 95 7 0.74 excl. 1m EOH @ 2.95g/t (94m)
JWAC091 602715 7011600 98 0.21 76 80 4 0.21
JWAC093 602520 7011596 101 0.71 60 72 12 0.58
92 101 EOH 9 0.48
JWAC095 602312 7011596 96 0.27 95 96 EOH 1 0.27
JWAC096 602215 7011599 92 0.32 64 68 4 0.32
Calculation of Assay Results:
Quoted drill intersections are based on a lower cut-off of 0.20g/t gold with a maximum of 4 metres of internal dilution (i.e., samples with
less than 0.20g/t gold). Assay results were obtained from geochemical analysis of 4 metre composite spear samples. Sampling was
undertaken following logging of geological boundaries within the drill hole. All samples were analysed at ALS Global Laboratories in Perth.
Samples are prepared using single stage pulverization of the entire sample. Gold assays are obtained using a 25g aqua regia digest and
either ICP or atomic absorption spectrometry analysis techniques. Full analytical quality assurance - quality control is achieved using a suite
of certified standards, laboratory standards, field duplicates, laboratory duplicates, repeats, blanks and grind size analysis.
The location of drill holes is determined using a handheld GPS achieving less than 10m accuracy and using the MGA datum (Zone 50). All
drill holes at were drilled at -60 degrees to 090 degrees MGA azimuth.
Gidgee South Project (Alchemy 100%)
An initial aircore drilling program comprising 78 holes for 6,539 metres was completed in September 2011 at
Gidgee South (Figure 5) to drill test for gold mineralisation in the north-eastern part of the project area. Drilling
spacing was reconnaissance in nature with 100 metre-spaced holes along drill lines spaced 400-800 metres apart.
This priority structural target was identified during regional targeting following development of Alchemy’s
proprietary three-dimensional geologic model of the Murchison Projects area and was a key reason for acquiring
this project in 2010. The gold target may represent the northern continuation of the highly-mineralised Big Bell –
Meekatharra shear zone, which hosts the Big Bell gold deposit (3.9 Moz).
Assay results have been received for all 4m-composite samples from the aircore drilling program, with weak gold
anomalism recorded in a number of drill holes (Table 2). Significant intervals (using a lower cut-off of 0.10g/t gold)
include 4m at 0.21 g/t gold from 88 metres in GGAC118, 4m at 0.14 g/t gold from 80 metres in GGAC098 and 1m
at 0.35 g/t gold in a bottom-of-hole sample at 84 metres in GGAC085.
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One-metre samples from the mineralised intervals have been collected and the results are expected in November
2011.
The weak gold anomalism forms a zone extending over four kilometres in length that is localised in a bend along a
major structural corridor at the contact between mafic and sedimentary rocks. Interpretation of the bottom-of-
hole multi-element assays in conjunction with interpretation of the aeromagnetic and geological data is required
prior to further exploration.
Table 2: Gidgee South Project – Significant intervals from 4m-composite samples from Aircore Drilling, >0.10g/t gold
Hole ID Easting (m)
Northing (m)
Hole Depth (m)
From (m)
To (m)
Interval (m)
Au (g/t)
Comment
GGAC047 614206 7029502 111 88 92 4 0.10 GGAC063 613799 7028291 106 100 104 4 0.14 GGAC085 615205 7027098 84 83 84 EOH 1 0.35 Bottom-of-hole sample
GGAC098 612606 7027094 119 80 84 4 0.14 GGAC118 611800 7026303 104 88 92 4 0.21
Calculation of Assay Results:
Quoted drill intersections are based on a lower cut-off of 0.10g/t gold with a maximum of 4 metres of internal dilution (i.e., samples with
less than 0.10g/t gold). Assay results were obtained from geochemical analysis of 4 metre composite spear samples. Sampling was
undertaken following logging of geological boundaries within the drill hole. All samples were analysed at ALS Global Laboratories in Perth.
Samples are prepared using single stage pulverization of the entire sample. Gold assays are obtained using a 25g aqua regia digest and
either ICP or atomic absorption spectrometry analysis techniques. Full analytical quality assurance - quality control is achieved using a suite
of certified standards, laboratory standards, field duplicates, laboratory duplicates, repeats, blanks and grind size analysis.
The location of drill holes is determined using a handheld GPS achieving less than 10m accuracy and using the MGA datum (Zone 50). All
drill holes at were drilled at -60 degrees to 090 degrees MGA azimuth.
Wydgee and Ninden Hill Projects (Alchemy 80%, Jindalee 20%)
Re-assessment of the Wydgee and Ninden Hill projects (Figure 4) during the June 2011 quarter has highlighted
the base metal prospectivity of these project areas. Mapping by the Geological Survey of Western Australia, in
combination with discovery of base metal mineralisation by Silver Swan Group at Austin, Reed Resources at
Chunderloo and Silver Lake Resources at Eelya, indicates that the northern Murchison district hosts volcanic
sequences with significant base metal potential.
A surface geochemistry program over the central part of the Wydgee Project was completed in August 2011. The
program delineated several areas of gold and/or base metal anomalism that will be the subject of further
exploration and drill testing. Maximum values of the surface geochemistry include 423ppb gold, 220ppm copper,
185ppm zinc and 411ppm nickel.
At Ninden Hill, field mapping and rock chip sampling of a sequence of graphitic metasedimentary and felsic
volcanic rocks in the north-central part of the project area indicate that the sequence is characterized by elevated
base (>800 ppm Zn; >75ppm Pb) and precious (>1.0g/t Ag; 0.44g/t Au) metals. A surface geochemistry program is
planned for the December 2011 quarter.
Big Bell North Project (E20/667: Alchemy 100%; E20/594: Alchemy 80%, Jindalee 20%)
An initial 1,500 metre aircore drilling program has been re-scheduled to early 2012 at Big Bell North to drill test
for gold mineralisation in the western part of E20/667 (Alchemy 100%). This target was generated as part of
regional targeting and development of the three-dimensional model for the northern Murchison region. The
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planned program tests an along-strike position of the northeast-trending Big Bell Fault in an area undercover and
with a subdued magnetic character.
Polelle Project (E51/1326: Alchemy 100%; E51/1042, E51/1225 & E51/1226: Alchemy 80%, Jindalee
20%)
A field assessment and surface geochemistry program was completed over the southern part of the Pollele
Project (Figure 4) in July 2011. In an area north of Burnakura Bore on E51/1326 (Alchemy 100%), an interpreted
north-south corridor of quartz-carbonate alteration associated with a folded sequence of mafic rocks and
corresponding with a de-magnetised zone in magnetic images, represents a favourable target for further
exploration. Results of surface geochemistry program over the south-eastern part of E51/1326 have delineated
several small zones of gold anomalism that will be the subject of further exploration in early 2012.
Corporate
Alchemy continues to control costs while actively exploring its project areas with $3.5 million cash at hand at 30
September 2011.
During this quarter, Alchemy spent approximately $0.8 million on drilling and evaluation of its tenements.
The Western Australian Warden’s Court action by Alchemy against Grosvenor Gold Pty Ltd seeking forfeiture over
fourteen tenements adjacent to Alchemy’s tenure in the Gascoyne District has been delayed. A new hearing date
is yet to be scheduled by the Warden.
Contact Details: Mr Robert Brierley
Telephone: +61 8 9481 4400
The information in this report that relates to Exploration Results is based on information compiled by Dr Kevin Cassidy, who is a Fellow of the Australian Institute of Geoscientists and is a fulltime employee of Alchemy Resources Limited. Dr Cassidy has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Dr Cassidy consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at the Hermes Gold Deposit and Wilgeena Gold Deposit is based on information compiled by Mr Simon Coxhell of Coxsrocks Pty Ltd, who is a Member of the Australian Institute of Geoscientists and a Member of the Australasian Institute of Mining and Metallurgy and is a consultant to Alchemy Resources Limited. Mr Coxhell has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Mr Coxhell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
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