Baal Gammon Polymetallic Project

The Baal Gammon Project is located 7 kilometres west of Herberton immediately adjacent to the main sealed road between Herberton and Watsonville. Baal Gammon is located on granted MLs located with the broader Herberton Tin project area.

The Baal Gammon deposit comprises an area of around 1km² in which there have been 17 historical small mines. Tin and base metals were mined discontinuously between 1967 and 1983.

 

Figure 1: Baal Gammon Surface Geology and Drilling. Hodgkinson sediments are shown in white.

 

Baal Gammon is hosted by an interpreted roof pendant of Hodgkinson formation sediments which is intruded by a porphyry sill (known as the UNA Sill) which is thought to be a late stage, highly fractionized offshoot of the Elizabeth Creek Granite. The UNA is a greisenised quartz-sericite-topaz-muscovite rock that has been traced for some 1,200m along strike and has been drilled to 700m down dip. Drilling has shown the sill to dip at 20° to 60° to the south west and flatten with depth. The combination of the flattening in dip and faulting on the southern side of the sealed road causes a reversal in apparent dip so that the UNA Sill comes within 50m of the surface in that area. Its average thickness is about 15m in a typical range of less than 10m to 40m.

Mineralisation of economic interest is located mainly within the UNA Sill but there are also zones of elevated tin and copper/silver content in hanging wall sediments. It is thought that this mineralisation may be associated with a replacement of a dolomitic horizon in the sediments.

There are two dominant forms of potentially economic mineralisation identified at Baal Gammon:

• Copper and silver with associated indium in a suite of sulphides minerals comprising pyrrhotite, chalcopyrite and arsenopyrite with lesser pyrite.
• Tin occurs in quartz-tourmaline-cassiterite lodes and in complex tin sulphides. It is typically located in faults, fractures and joints. Tin occurs as both cassiterite, a tin oxide, and as stannite, a copper-tin-iron sulphide. Cassiterite accounts for some 70% - 75% of the total tin content in the UNA Sill.

AMC Consultants Pty Ltd (AMC) was engaged in March 2006 by NQM, to prepare a mineral resource estimate for the Baal Gammon copper-tin-silver-indium deposit in North Queensland. The resource estimation provided by AMC was constructed using historical data acquired primarily from historical drilling, together with recent exploration conducted by NQM to verify the validity of the existing database. The dataset comprises 386 drill holes, approximately 50% percussion and 50% diamond core.

The total JORC-compliant Resources (98% of which are in the Indicated Category) for the Baal Gammon copper-tin-silver-indium deposit is 5.48Mt @ 0.8% Cu, 0.2% Sn, 29g/t Ag and 29g/t In - or 1.8% Cu equivalent*.

 

Table 1: Summary of Resources - Baal Gammon Deposit (0.2% Cu cut-off)

+ - Contained Cu metal represents the Cu component only - it does not include credits from the other metals.

 

Mine optimisations for Baal Gammon were completed by Snowden in 2006. At a copper price of $3/lb (current price ~$4.25/lb) the Whittle optimization produces an optimal pit based on the discounted cash-flow with a mining inventory of 3Mt at 0.82% Cu, 0.2% Sn, 32.7g/t Ag and 32.8g/t In.

 

Figure 2: Schematic Cross Section, Baal Gammon Deposit

 

Based on the resource model generated by AMC and the Whittle modeling completed by Snowden, NQM generated the following Probable Ore Reserves in 2007:

 

Table 2: Summary of Probable Ore Reserves

Ore as defined in the table comprises blocks above a cut-off grade of a metal value of 0.53% Cu according to a formula used by Snowden. Low grade ore is material which has a value higher than the incremental cost of treatment. The cut-off grade used is 0.40% Cu based on the same formula. Estimated mineral processing recovery factors used have been based on metallurgical test work performed by Newmont.

 

NQM have made considerable progress with respect to developing the deposit and have commenced, and in most instances completed, detailed studies relating to all aspects of pre-mine feasibility including environmental, heritage, tailings storage, power supply, water supply and plant location.

Old mining areas and mines exist within 1km to 1.5km north-east of Baal Gammon. The mineral occurrences are in a similar geological setting to Baal Gammon, though with variations to mineralogy. The identification of additional ore to supplement Baal Gammon has been prioritized in the past and some high quality targets exist in close proximity to Baal Gammon.

The Copper Firing Line, Consolation and Isabel prospects all represent potential sources of addition copper ore for any potential Baal Gammon operation. Considerable historical exploration has been undertaken at these prospects, including drilling, and in the case of Consolation and Isabel a target mineralisation range has been developed. Furthermore, NQM drilled six percussion holes at Consolation in late 2008, three of which contained significant mineralisation:

 

Table 3: Consolation Drilling Results

Monto are currently assessing the various development options for the Baal Gammon Project and surrounding advanced copper-based prospects.

 

* Copper Equivalent Calculation Explanation:

The copper equivalent calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance is made for recovery losses that may occur should mining eventually result nor metallurgical flowsheet considerations. The copper equivalent calculation is intended as an indicative value only. Copper equivalent conversion factors and long‐term price assumptions used follow:
Copper Equivalent Formula= Cu % + Sn(ppm) x 0.0002 + Ag(ppm)x0.0103 + In(ppm) x 0.0059
Price Assumptions‐ Cu (US$9,041/t), Sn (US$25,775/t), Ag (US$28/oz), In (US$540/kg)