Highlights - December 2006 Quarterly Report
Kingsgate Molybdenum-Bismuth (Mo-Bi) Project, New England NSW
- Trial mining was successfully completed in December 2006. Results indicate the program's objectives have been achieved, confirming the high grade nature of the mineralisation.
- Drilling of the main mineralised quartz pipe which was the subject of mining returned an average grade of 0.34% Mo and 0.64% Bi - combined grade equivalent* of 0.55% Mo or 14.8 g/t gold. Additional pipes were also found in the trial pit that were not anticipated.
- The average grade of the mineralisation from grade control drilling confirms the Company's target grade with the added benefit of higher than expected bismuth credits.
- Metallurgical testwork and mining studies have commenced with results forming the basis of a scoping study due for completion in April 2007.
(*Combined grade equivalent is based on metal prices as at 25 January 2007 viz Mo A$72,252 mt, Bi A$23,514 mt, Au A$833 oz.)
Seven Hills Gold (Au) Prospect, New England NSW
- Rock sampling from follow-up mapping returned numerous samples greater than 1 g/t Au up to a maximum value of 24.4 g/t Au. The high grade sample was collected from near a large area of historical sluicing.
- A combined regolith mapping and IP geophysical survey is planned to better define targets for RC drilling in the March quarter.
Galala Range Molybdenum-Tungsten-Gold (Mo-W-Au) Project, North Queensland
- Results from a second phase drill program to further test the extent of the mineralisation within the molybdenum core indicate the area has the potential to host a significant Mo resource if the continuity of mineralisation can be established. Sampling at 1.0m intervals included assays up to 0.54% Mo with a best intercept of 5m at 0.20% Mo.
Running Brook Copper-Gold (Cu-Au) Project, North Queensland
- Encouraging rock chip samples were returned during the quarter with results including a maximum 3.12g/t Au and 8.17% Cu. Soil sampling defined a 10 ppb gold in soil anomaly measuring 1,500m by 800m that is open to the west and south. The anomaly includes a 30 ppb gold in soil anomaly measuring 1,000m x 300m.
- Both the rock and soil sampling indicate that Running Brook has the potential to host significant gold or copper-gold mineralisation. Further geochemistry will be completed in the March quarter with a drill program planned for May.
Kirwans Tungsten (W) Project, New Zealand
- The Company has entered into a Joint Venture Agreement with New Zealand Minerals Ltd (NZML) over tenements held by its wholly-owned subsidiary Auzex Resources (NZ) Pty Ltd (Auzex NZ) on the west coast of the South Island of New Zealand, including the Kirwans Tungsten prospect.
- The key terms of the agreement include NZML to fund NZ$1.70 million expenditure to earn 50% interest in all Auzex NZ tenements with a minimum expenditure commitment of NZ$850,000 required before withdrawal.
- An application has been submitted to the Department of Conservation (DOC) to undertake an initial diamond drilling program.
Corporate & Other Important Developments
- The Company's cash position as at 31 December 2006 was $2.51 million. Exploration expenditure was higher than normal in the December quarter as a result of the trial mining program at Kingsgate.
- Drill rig availability remains a serious issue for the Australian exploration industry. Several of the Company's proposed drill programs have been significantly delayed due to the inability to secure an appropriate drill rig. Fortunately, this issue does not affect the progress of the Scoping Study at Kingsgate.
- It is anticipated that a suitable exploration drill rig will be available from early March with the Company's intention to drill the Seven Hills, Deepwater and Stanthorpe projects in the New England region before mobilising the same rig to North Queensland. This is expected to coincide with the end of the wet season in May with drilling to focus on West Tinaroo and Running Brook.
Auzex Resources Limited