YERECOIN PROJECT

The Yerecoin Project

Yerecoin Project Overview

The Yerecoin Project covers some 105.5 km2 and centred 120km NNE of Perth, near the towns of Yerecoin and Calingiri, in the Shire of Victoria Plains. The Project area has only been explored in recent times, more particularly since 2007, by various parties and largely focused on the delineation and development options of the magnetite iron resources.  More recently, the discovery by Chalice Mining Ltd of its Julimar Project’s Gonneville PGE-Ni-Cu-Co mineralisation (~60km SSW) and recent exploration results by Caspin Resources Ltd at its Yarawindah Brook Ni-Cu-PGE project (~15km WSW), has significantly enhanced exploration interest in this region.

In summary, the Yerecoin magnetite ‘iron ore’ resources:

  • JORC 2012 compliant Indicated and Inferred Mineral Resources totalling ~247Mt high grade coarse grained magnetite at an average grade of 30% Fe
  • Metallurgical studies indicate magnetite concentrate, at 68% Fe concentrate grade, a premium coarse-grained magnetite product with low level impurities, suitable for direct sinter plant feed
  • Located in the Wheatbelt region of Western Australia
    •  rail infrastructure with excess capacity, linking to export ports such as Kwinana Bulk Terminal, Bunbury, Geraldton and Esperance
    • close to High Voltage 132kV (~40km West) and 330kV (~60km West) power transmission lines, and
    • close to Dampier to Bunbury Natural Gas Pipeline (60km West)
    • access from Great Northern Highway (15km West)
  • High quality, high ‘Spec’ Scoping Study1 completed by Cliffs Natural Resources plus Logistics & Value Engineering Studies completed by Radar Iron Ltd
  • Several development options studied including large tonnage and smaller tonnage scenarios
1. Cautionary Statement – The Scoping Study referred to is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Historical Exploration and Studies

The Yerecoin Project area has been subjected to limited exploration for various commodities and has only in recent years, since 2007, experienced a significant increase in exploration interest, particularly for Ni-Cu-PGE mineralisation.  Exploration for ‘iron ore’ resources commenced in earnest with Giralia Resources NL in 2007.

Giralia Resources NL (2007-2012)

In early 2009, Giralia completed its maiden drilling program, intersecting magnetite BIF in the majority of holes. Better intersections included 56m @ 35.7% Fe (RCY001 from 24m), 52.44m @ 31.55% Fe (RDY002 from 188.64m), 50.6m @ 30.2% Fe (RDY017 from 60m), 36.48m @ 30.5% Fe (RDY004 from 100m), and 36m @ 29.6% Fe (RCY016 from 24m)

56m @ 35.7% Fe (RCY001 from 24m),

52.44m @ 31.55% Fe (RDY002 from 188.64m),

50.6m @ 30.2% Fe (RDY017 from 60m),

36.48m @ 30.5% Fe (RDY004 from 100m), and

36m @ 29.6% Fe (RCY016 from 24m).

In 2010 Giralia engaged CSA Global to complete a maiden JORC 2004 compliant resource estimate for the Yerecoin Main and Yerecoin South deposits. Pre-Feasibility metallurgical testwork, along with preliminary open pit optimisation work, and groundwater and environmental studies were commenced late in 2010, however in early 2011, Giralia was taken over by Atlas Iron Ltd, and the Yerecoin Project sold to Cliffs Natural Resources in 2012.

Cliffs Natural Resources (2012-2014)

As Operator of the Gunnel JV with Nippon Steel & Sumitomo Metals and Sojitz Corporation as partners, Cliffs Natural Resources (“Cliffs”) carried out further diamond drilling, and during 2013, the Gunnel JV completed broad-scale analysis of potential mining scenarios, based on the defined resources and those deemed implied to exist on the basis of magnetic signatures. This work was not completed and required further work. The Gunnel JV also completed an extensive Scoping Study1 on a large scale 5Mtpa operation.  Cliffs divested the Yerecoin project to Radar Iron Ltd in 2014.

1. Cautionary Statement – The Scoping Study referred to is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Radar Iron Ltd (2014-1017)

Radar Iron Ltd (“Radar”) purchased the project from Cliffs in 2014 and later in that year reported an updated mineral resource estimate to comply with the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “2012 JORC Code, 2012 Edition”, or “JORC 2012”), using all historical RC and diamond drilling carried out by Giralia and Cliffs. Radar reported a total Magnetite Resource estimate of 246.7Mt @ 29.9% Fe head grade and 68.1% Fe DTR Concentrate grade comprising:

  • Indicated Resources of 31.0Mt @ 37.4% Fe head grade and 67.7% Fe DTR Concentrate grade
  • Inferred Resources of 215.7Mt @ 31.3% Fe head grade and 68.1% Fe DTR Concentrate grade

Radar carried out further scoping studies1 on a more modest scale operation targeting 250,000t of concentrate from 728,000t of mineralisation from the Yerecoin Main deposit. Radar also conducted engineering and transport logistics studies assessing the potential for economic mining, however due to market conditions at that time, the project was placed on care and maintenance. In mid-2016, Radar divesting of the Yerecoin project in 2017 to Novarange Pty Ltd.

1. Cautionary Statement – The Scoping Study referred to is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Location & Infrastructure

The Yerecoin Project is centered approximately 115 to the north-northeast of Perth, in Western Australia.  Located between and around the towns of Yerecoin and Calingiri, the Project is readily accessible from Perth via the Great Northern Highway.

The Yerecoin Project is very well located with significant infrastructure already established in the region, including:

  • close proximity to existing open-access, multi-user rail network that connects to the Eastern Goldfields Rainway (EGR), a duel gauge/dual track from Northam to Kwinana, enabling direct rail access to export markets via the Kwinana Bulk Terminal
  • approximately 10km from a high voltage (33KV) transmission line connecting to the 132KV transmission line at Moora
  • approximately 60km from the Dampier to Bunbury Natural Gas Pipeline

'Julimar Style' Ni-Cu-Co-PGE Potential

Aeromagnetics image overlain with locations of Yerecoin Main and Yerecoin South magnetite iron resources and exploration targets for additional magnetite iron resources, and an ‘eye-shaped” magnetics anomaly

Focus on the potential of the Project to host significant Ni-Cu-PGE_mineralisation followed the recent discovery by Chalice Gold Mines Ltd (ASX:CHN) of the increasingly large Julimar deposit which lies only ~60km to the south of the Yerecoin project. Investigation of the Yerecoin database has revealed the presence of an extensive (>3km), thick (>150m) ultramafic intrusive(s) in the footwall position to the Yerecoin South magnetite deposit.

Whilst the region has had very little exploration for this style of mineralisation, historically there are several known occurrences of platinum-nickel-copper-PGE mineralisation in the region. These occurrences, which aside from Chalice Mining Ltd’s (ASX:CHN) recent discovery of the Gonneville deposit at Julimar, (~60km South) and the recent exploration results of Caspin Resources Ltd’s (ASX:CPN) Yarawindah Brook project, located ~60km South and ~15km South West of the Yerecoin Project respectively, highlights the potential for further discoveries in this increasingly  significant  mineralised and under-explored province.

Investigation of the Yerecoin database has revealed the presence of an. Diamond drilling of the Yerecoin South magnetite resource by Cliffs intercepted abundant serpentinised ultramafic rocks in several holes over the entire ~3km extent of the deposit. The ultramafic intrusive(s) unit appears to be extensive (up to 3km) and thick (up to 150m) and is mostly located in the footwall position to the Yerecoin South magnetite deposit. The ultramafic unit extends to the bottom of the hole in several of the drillholes and in parts attains a thickness of at least 150 metres.

Petrographic study of diamond drill core samples identified ultramafic rocks which are variably serpentinised Harzburgite and Lherzolite pyroxenites, indicative of a large layered intrusion, with the potential to host Ni-Cu-Co-PGE mineralisation. Traces of copper sulphide (chalcopyrite) and cobalt-bearing nickel sulphides (pentlandite and millerite) were also observed further vindicating the mineral potential of the intrusion.

In addition to this ultramafic target at Yerecoin South, a large unexplained “eye-shaped” aeromagnetic anomaly measuring ~5km x ~3km lies to the immediate northeast of the Yerecoin South deposit and known ultramafic intrusive. This may represent un-mapped Banded Iron Formation (BIF) or potentially a large, ultramafic intrusion. The recently completed VTEMTM survey is anticipated to provide additional information as to the cause of the unusual shaped anomaly, and possibly drill targets.

The Ni-Cu-Co-PGE potential at Yerecoin has not been fully evaluated. Positive factors include the close association of ultramafics and BIF, evidence for crustal contamination and the presence of Co-bearing nickel sulphides observed in the ultramafics.

Regional aeromagnetic image showing location of Yerecoin Project tenements in relation to the Julimar-Gonneville discovery and exploration successes of neighbouring companies

Future Activities

Yerecoin Magnetite Deposits

It is Burley’s opinion that the two more recent case studies targeted the low– and high– end members of production scenarios and that somewhere in between, an optimal development schedule at more favourable capital costs can be established in today’s better price environment.

Burley aims to revisit and update these studies and conduct further work to determine the viability of developing the project.  In the short term, work envisaged includes;

  • Upgrading and expanding existing magnetite resources
  • Review and conduct additional Metallurgical test-work
  • Determine the optimum throughput using a single train of equipment
  • Develop a suitable process plant flow sheet
  • Review transport logistics including road, rail and port options
  • Revisit the ancillary infrastructure requirements, including power and water
  • Ascertain the approvals process and pathway forward to production
  • Refresh the capital and operating cost estimates
  • Identify potential end-user partners to optimise product quality
  • Complete financial modelling

Ni-Cu-Co-PGE Potential

Given the recent exploration successes of neighbouring explorers and the presence of potential Ni-Cu-Co-bearing ultramafic units identified to date, particularly in the Yerecoin South magnetite resource area, the Company has already engaged the geophysics consultant to process and interpret the recently flown airborne EM survey data.  This is anticipated to identify one or more EM targets for drill testing.

In addition, the Company will be carrying out mapping and surface geochemistry surveys to compliment the limited historical mapping in order to try and identify the presence of additional ultramafic units within the tenements.

Mineral Resources & Exploration Target

Resource Resource Category Tonnes Mt   DTR 4

        %

Fe %    In-situ
Fe% Conc  AI2O3 % Conc
SiO2% Conc P %  Conc S %  Conc
MAIN 1,4 Indicated 31.0 37.4 31.4 67.7 0.15 6.01 0.010 0.025
Inferred 99.8 35.1 29.6 68.4 0.20 5.40 0.010 0.038
Sub-Total 130.8 35.7 29.7 68.0 0.18 5.95 0.009 0.034
SOUTH 2,4 Inferred 115.9 28.1 29.8 67.9 0.41 4.20 0.010 0.750
TOTAL4 Indicated 31.0 37.4 31.4 67.7 0.15 6.01 0.010 0.025
Inferred 215.7 31.3 29.7 68.1 0.31 4.76 0.010 0.421
Total 246.7 32.1 29.9 68.1 0.29 4.91 0.010 0.371
1 The Yerecoin Main Mineral Resource Estimate was reported in 2014 under the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. The Mineral Resource Estimate was detailed in ASX:RAD announcement dated 8th September 2014 “Resource Upgrade for Yerecoin Project”
2 The Yerecoin South Mineral Resource Estimate was reported in 2014 under the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. The Mineral Resource Estimate was detailed in ASX;RAD announcement dated 24 April 2014 “Major Project Acquisition”

3 DTR is the acronym for Davis Tube Recovery (weight %). A Davis Tube is a laboratory instrument   designed to separate small samples of strongly magnetic ores into strongly magnetic and weakly magnetic fractions.
4 The Company is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the data in the relevant market announcements continue to apply and have not materially change.

Grosskopf Exploration Target

Significant exploration upside for further expansion of the magnetite resources lies within the Grosskopf property located immediately to the south of the western limb of the Yerecoin Main deposit. The contiguous ∼6km long magnetic anomaly ‘linking’ the Yerecoin Main and South deposits, including the Grosskopf target, have yet to be drilled and represents, an immediate exploration target for expansion of the magnetite resources.

Yerecoin Ni-Cu-PGE

Burley has recently completed an airborne Electro-Magnetic (“EM”) survey the data and interpretations have now been completed. The survey was completed over the entire northern portion of the tenements portfolio, encompassing the Yerecoin magnetite deposits, the known ultramafic intrusives and the magnetic ‘eye’ anomaly.  Further land based EM survey is currently being planned over a number of targets prior to the EM anomalies being tested by drilling.