PROJECTS

Crater Mountain

Crater Mountain is shaping up as PNG’s next large scale, gold and copper discovery.

Prime Location

PNG: +$20bn multinational investment transforming nation.
Hosts mineral province that is home to several of the world’s largest gold/copper deposits.
Province characterised by large mineralised hydrothermal systems related to intrusions underlying variably eroded volcanic complexes.

The project is located approximately 50 km southwest of Goroka, the regional centre for the Eastern Highlands Province, PNG. It comprises 3 contiguous exploration licences, straddling the border between the Chimbu and Eastern Highland Provinces.

This region is in the centre of the New Guinea Orogen, an extensive geological zone that makes up the mountainous spine of Papua New Guinea. The western portion of this zone encompasses the world class mining operations of Porgera, OK Tedi, Wafi-Golpu and Grasberg.

Crater Mountian Tenements

4 prospects: Nevera, Nimi, Masi, Awaunita. The most advanced is Nevera which is a former BHP tier-1 (best prospectivity) asset.
Nevera previously diamond drilled by BHP/Macmin/TPJ similar geological setting to many PNG deposits including Porgera's Waruwari, Wafi/Golpu & Hidden Valley.
Nevera location and topography expected to enable lower development and mining costs: amenable to open pit or bulk underground mining.

Ownership
The Company owns 100% of the Crater Mountain Project.

Geology
The Crater Mountain geology is structurally complex with all the hallmarks of a large mineralised system. It is highly prospective for the discovery of a world class multi million ounce gold deposit. Local geology is dominated by the Crater Mountain Volcanic Complex, one of a series of strato-volcanoes situated in the PNG thrust belt along the leading edge of the Australian Continental Plate. The volcanic complex includes two large craters over one kilometre in diameter, and approximately thirty small vents along with hot springs and associated sub-volcanic intrusives spread over more than 200 square kilometres formed after two separate phases of volcanism which are underlain by marine sediments of the Chim Formation. Mineralization and alteration is widespread in the volcanic sequences and the Chim Formation.

Exploration History
Crater Mountain has been actively explored for over 30 years, initially by Kennecott and CRA for copper porphyry mineralisation and in the 1980’s by Esso, City Resources and Highlands Gold for epithermal gold mineralisation. These efforts identified four prospect areas – Nevera, Nimi, Awanita and Masi.

Although anomalous base and precious metals values have been discovered at all of the mentioned Crater Mountain prospects, Nevera is by far the most advanced prospect. In the 1990’s, Macmin Ltd completed a soil sampling program over the Nevera prospect and outlined an area of anomalous gold mineralisation which is up to 1,500m long and 600m wide. Macmin signed a Joint Venture with BHP who drilled 3 holes at Nevera (Nev001 to Nev003) with one hole Nev002 intersecting a 115m at 1.83 g/t Au and leading BHP to declare the prospect as having their highest prospectively rating (Tier 1). For corporate reasons, BHP exited Papua New Guinea in 1997. Macmin drilled an additional 4 holes at Nevera with their best intercept being 24m @ 6.55 g/t Au. Macmin later joint ventured the Project out to Celtic Minerals and later TPJ who drilled an additional 10 holes at Nevera. The 17 holes drilled prior to the Company’s joint venture into the project totalled approximately 5,000 metres.

Mineralisation Model

Structurally controlled, sub-volcanic intrusion related mineralisation widespread low sulphidation epithermal gold mineralisation, with small centres of younger high sulphidation epithermal gold mineralisation, overlying possible porphyry copper - gold source.

A JORC compliant inferred resource of 24Mt at 1.0 g/t Au using a 0.5 g/t Au cut-off for 790,000 ounces has been defined in the Main Zone; this includes 9.4Mt at 1.46 g/t using a 1.0 g/t Au cut-off for 440,000 ozs (this inferred resource is open laterally and perhaps to depth, following down a possible steep plunge to the northeast).

Main Zone relatively shallow lying 150m to 300m below the northern end of the Prospect ridge, which comprises low-sulphidation epithermal carbonate-base metal sulphide-gold mixing zone mineralisation in excess of 600m long by 250m wide by 150m thick (with similarities to the Hidden Valley deposit in the nearby Morobe Goldfield).

High Grade Zone (“HGZ”) high grade high-sulphidation epithermal quartz-pyrite-gold mineralisation, extending from surface to several hundred metres depth (possibly in excess of 500m); local artisanal miners produced an estimated 15,000 ounces from a small area of shallow workings (maximum 50m depth) in the base of a steep mineralised spur from 2005 to 2012.

Potential porphyry copper A large porphyry copper-gold system identified by drilling at +800m depth below the northern end of the ridge (“Golpu“ type from Wafi-Golpu in the Morobe Goldfield).

A possible lead-zinc related quartz-carbonate-base metal sulphide-gold stockwork vein and breccia feeder zone (for the Mixing Zone mineralisation) at the margin of the deep intrusion (+600m) which is causing intense baking and fracturing of the sub-volcanic basement shales underlying the Mixing Zone (Porgera “Waruwari” type).

High Grade Zone

The Company is set to become a gold producer following the grant to its PNG subsidiary Anomaly Limited of a Mining Lease for the High Grade Zone gold project.

Following a rigorous environmental and social impact assessment process involving the PNG Department of Environment and Conservation and the Mining Advisory Council, the Minister for Mining, the Hon Byron Chan, issued the Mining Lease for the HGZ project. The granting of the Mining Lease is a watershed milestone for the Company as it transitions from developer to gold producer. A mill and gravity concentration circuit are already commissioned on site. The Company will commence gold mining shortly.

The High Grade Zone (HGZ) is an area of recent artisanal gold mining in which an estimated 15,000 ounces of gold was produced by local miners largely from shallow underground workings and simple gravity processing between 2005 and early 2013.

A decision was made by the Company early in 2013 to assess the potential of the HGZ for fast-tracking small to medium-scale gold production, with the strategy of reinvesting profit into the on-going exploration of the Nevera Prospect’s larger-scale potential.

The Company has been developing the HGZ since August 2013 through the development of an underground adit and cross cuts and an ongoing drilling program. This development has passed through a wide zone of intense brecciation containing numerous narrow gold bearing mineralised structures correlating well with surface artisanal gold workings. It is estimated that gold in the fractures and ore shoots which are known to extend down at least 100m from surface and potentially could extend many hundreds of metres deeper to the underlying magmatic source identified during the nearby drilling of the Mixing and Porphyry Zones.

The veins of relevant interest are those recording significant grades and which can be extracted using small scale, highly selective, narrow vein mining techniques.

With financial markets still displaying volatility for the junior end the Company will focus on generating cash flow from the High Grade Zone.

The Company believes that in the first year, production of 10,000 gold ounces is achievable.

Regional Prospects
Three other areas of anomalous gold mineralisation have been identified at Crater Mountain, these are the Nimi, Masi Creek and Awaunita prospects, these are summarised in brief below.

The Nimi Prospect
The Nimi prospect is located 12 km SSE of Nevera, it is the highest priority target after Nevera. It has a similar geological setting to Nevera and similar styles of mineralisation have been observed there. The prospect was identified by anomalous gold in stream sediment samples with follow up rock chip sampling returning values to 7.10 g/t Au, 1,060 g/t Ag, 1.35 Cu, 6.4% Pb and 15.65% Zn.

The Masi Creek Propect
The Masi Creek prospect is located 4km east of Nevera, it also has a similar geological setting to Nevera with basement Chim Formation sediments underlying a volcanic pile which have subsequently been intruded by several felsic bodies resulting in alteration and mineralisation.

The prospect is centered on two apparent NW – SE structures which have possible controlled the emplacement of the felsic intrusives. The prospect was first identified by anomalous stream geochemistry with follow up rock chip sampling returning values to 2.81 g/t Au, 3.25% Zn and 11.2 g/T Ag.

Awaunita
The Awaunita prospect is located 8 km due east of the Nevera prospect. The geology of the prospect is defined by an extensively argillised diorite stock consisting of three individual bodies intruding overlying volcanics and sediments. The area was initially defined by three panned concentrate samples from the headwaters of a single drainage which assayed 430 ppm, 255 ppm and 180 ppm respectively. Gold assay results from follow up programs returned low level gold with occasional elevated base metal and pathfinder geochemistry. There has been little exploration in the area and the prospect has never been drilled.

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