Sulphur Springs Project

The Sulphur Springs Project is located 144 km to the south east of Port Hedland which includes the Sulphur Springs and Kangaroo Caves deposits together with tenements covering 27 km of the Panorama trend that contain six advanced targets that have returned intersections of ore grade copper and zinc mineralisation from wide spaced drilling.

The Company finalised the Value Engineering Study in February 2017 (see ASX Release - 16 February 2017) for the Project based primarily upon its previous 2012 Feasibility Study and 2016 Optimisation Study on the greenfields Sulphur Springs copper‐zinc project, resulting in a compelling and robust greenfields copper‐zinc project with appropriate up front capital costs and reduced operating costs (see ASX releases – 4 November 2015 and 1 July 2016).

The Company has embarked on a work program that includes confirmatory drilling and metallurgical test work on the high grade, near-surface inferred supergene copper Resource identified in the 2016 Sulphur Springs Resource update, updating the existing environmental permits, and identifying funding options for the Project.

Venturex plans to make a decision to commit to the Sulphur Springs development and have funding in place during the first half of 2018, which will see the project in production from the middle of 2019.

The new Resource model has also identified a near‐surface high grade Inferred Resource of supergene copper mineralisation (see ASX release – 11 May 2016). This has opened up the potential for a low capital cost stage 1 development of Sulphur Springs which, subject to further drilling and evaluation, could be economic at spot metal prices and is only likely to require an investment that is within the Company’s current capabilities to procure.

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The Sulphur Springs Project proposal generated by the 2012 Feasibility Study is fully permitted on approved Mining Leases with a Native Title Agreement in place.

Part of the funds raised in August 2016 will be used to begin the process of incorporating the recently identified enhancements to the project in the overall permitting, ensuring that it is ready to develop, as well as drilling to prove up the near‐surface high grade supergene copper oxide Resource and complete metallurgical test work and other studies necessary to consider the project potential.

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Sulphur Springs Deposit

The Sulphur Springs Deposit shows typical VMS morphology with a stratabound copper-zinc rich massive sulphide lens that is underlain by a copper rich stringer zone. The deposit strikes roughly east west and dips approximately 500m to the north.  Mineralisation has been drilled over a strike of approximately 500m, and to a depth of approximately 400m below surface.  Drilling below 400m vertical is sparse.  The lower stringer copper zone varies in thickness from 2m to 50m thick, and the overlying massive sulphide zone is between 2m to 20m thick with the maximum thickness of 50 metres. The deposit is offset along a north-west / south-east striking fault that separates the orebody into an east and west lens.

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Approximately 300m east of the deposit on the same stratigraphic horizon, drilling has identified the Bledisloe prospect where massive and disseminated copper and zinc mineralisation has been identified in drilling and further testing of this zone is warranted.

In April 2016 Hardrock Mining completed a re-run of the resource model for Sulphur Springs.  This differed from historic estimations in that it took into account the intention to mine by both open pit and underground methods, and greater emphasis was placed on geologically constraining the ore zones.  The new Mineral Resource estimate is 13.4Mt grading 1.5% copper and 4.0% zinc for 194,000t of contained copper.  A highlight from this revised model is the recognition of a supergene zone of copper enhancement of 800,000t at 4.2% copper.

Kangaroo Caves Deposit

The deposit is located 7km south-east of the Sulphur Springs Deposit. Geologically the deposit sits at the same stratigraphic horizon as Sulphur Springs but has a shallower dip of approximately 300m to the northwest.

The deposit has been drilled along a strike length of 300m and has been traced by drilling to 1,000m down dip.  Stringer copper-pyrite mineralisation has been defined in the lower part of the orebody grading upwards into massive copper–zinc, and zinc dominant massive sulphide.

The Kangaroo Caves Resource estimate released in September 2015 and prepared by Hardrock has a total of 3.55Mt grading 6.0% Zinc with 0.8% copper. Mineralisation remains open along strike and at depth.

Other advanced prospects occur to the south of Kangaroo Caves and include Breakers, Man O’ War, Anomaly 45 and Jamesons which are all located on the same stratigraphic horizon. At each of these prospects drilling has returned ore grade copper and zinc intersections. Further drilling is required to determine their economic significance.

Potential and Further Work

The Company considers the potential to discover additional copper zinc resources along and across the Panorama Trend to be excellent. Historic down hole EM has been reviewed and anomalies previously considered as spurious graphite bearing sedimentary rocks may be related to the mineralised system and therefore warrant further drill testing.

The Company has recently embarked on a program of reprocessing historical down-hole electromagnetic (DHEM) surveys from the Sulphur Springs deposit.  This review in conjunction with petrophysics has indicated that the concept of anomalies previously explained as spurious conductors, may be erroneous.  The conductors may well be associated with mineralisation and it would be prudent to resurvey selected holes drilled into the deposit with modern EM system.  This will identify further targets for drill testing.

Regional exploration is focusing on identifying prospective zones along and within the Panorama Trend stratigraphy.  This work involves identifying ancient volcanic centres that may have been the focus for sulphide fluid migration and subsequent deposition. The Company is using an earlier CSIRO study on the spectral signature along the Panorama Trend to identify targets.  Drilling on the first target identified at Midway returned a narrow zone of zinc mineralisation with follow up spectral analysis of drill core suggesting it could be proximal to the main source.  The Company continues to refine this model to define targets for future exploration