The Browns Reef Project

REGION Cobar Basin, New South Wales
OWNERSHIP 100% of EL 6321 – The focus tenement. JV for surrounding tenements:
51% KDR / 49 % Variscan Mines Ltd & Thomson Resources Ltd
51% KDR / 49% Thomson Resources Ltd & Lassiters Resources Pty Ltd
LOCATION 5km west of the town Lake Cargelligo
PRODUCT Gold & Base Metals
PROJECT STATUS Exploration
HOLDING 441km2

OVERVIEW

The Browns Reef Project is located close to the township of Lake Cargelligo in central NSW. The project contains the Browns  Reef base metal (Lead-Zinc-Copper-Silver-Gold) deposit and  several other surrounding exploration licenses covering >80kms of strike length of the under-explored Browns Reef trend.

EXPLORATION

Browns Reef

In December 2014, the Company delivered a JORC compliant exploration target consisting of:

27 to 37Mt grading at 1.3-1.4% Zn, 0.6 – 0.7% Pb, 9-10g/t Ag and 0.2-0.3% Cu*

* “The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.”

The Brown’s Reef Main deposit extends 2.5 kms and remains open in all directions. The last drill hole completed by Kidman, BRD013 in the most recent drilling campaign was collared 550m north of the resource and confirmed both the geological model and the continuity of mineralisation along strike. The next stage of exploration will aim to infill the gap between BRD012 and BRD013 and confirm grade continuity, as well as test for high grade mineralisation further north.

Further mineralised lodes have been delineated from a soil sampling programme completed in 2014 which correlated strongly with a structural model interpreted earlier in the year.

Further targets

The Browns Reef trend contains multiple targets that remain to be tested including Mt Boorithumble, where a single drillhole intersected 3m @ 2% Pb, 2% Zn, 1.2% Cu, 150g/t Ag and 0.5g/t Au from 117m; other prospects include Achilles 1 and Achilles 3 and the Mt Tooroonga Gossans each with their own potential to host similar styles of mineralisation observed at Browns Reef.

GEOLOGY

Regional Geology

The Project is situated within the eastern margin of the Siluro-Devonian Rast Trough and Wagga- Omeo Zone of the central-western Lachlan Fold Belt. The Rast Trough is a narrow, meridional rift, which together with the Cobar, Mt Hope and Melrose Troughs, forms part of a larger Siluro- Devonian rift event. The Rast Trough contains a transgressive-regressive basin fill sequence, comprising basal syn-rift, coarse basement-derived alluvial fan clastics, overlain by quartz-rich turbidites, which are in turn conformably overlain by mud dominated basinal clastics of the Preston Formation and the silicic Ural Volcanics. Mineralisation occurs within a sequence of fossiliferous coarse-medium grained clastics with occasional volcanoclastic and siltstone-shale of the Preston Formation. Sediments within the Rast Trough are correlated as lateral equivalents of the Lower Amphitheatre Group from the Cobar Trough to the north (Stewart, 2014), which is the focal sequence of base metal and polymetallic deposits.

Local Geology

Brown’s Reef is a westerly-dipping stratabound mineralised structurally controlled system that does not outcrop extensively at surface. The local geology is comprised of a sequence of west dipping and younging marine sedimentary and volcanic stratigraphy which displays an overall fining upwards trend from basal conglomerates through sandstone and siltstone to black shale with intercalated volcanics.

Structures

Outcrops of the Preston Formation parallel the regional-scale Woorara Fault, a ~N-S trending regional structure that defines the eastern edge of the Rast Trough. Preserved structural relationships in the Brown’s Reef area are considered consistent with a restraining bend along the Woorara Fault (Stewart, 2014). The structural study suggests that sub-basin formation and localised stratigraphic thickening took place as a releasing bend developed along the Woorara Fault during deposition of the lower Preston Formation. Later inversion and dextral shearing have modified and partially offset these structural elements.

Mineralisation

The Brown’s Reef primary sulphide mineralisation occupies an area of approximately 0.4 km2 in the south of tenement EL6321. Mineralisation over the majority of the deposit averages ~10m thickness; a substantially thickened zone exist in the main mineralisation at Brown’s Reef deposit where thicknesses of 40m have been intersected. The reason for this pronounced localised thickening is currently interpreted to be formation syn-deformation. Mineralisation is predominantly hosted by medium to coarse grained sandstone units and is dominated by pyrite, with lesser sphalerite, galena and chalcopyrite and traces of arsenopyrite, covellite and bornite; as disseminations, blebs and stringers within silicified metasediments and in associated quartz- muscovite-Fe chlorite-carbonate vein stockworks.

The timing of mineralisation is not fully understood. Mineralising fluids deposited zinc, silver and lead together with minor copper, and trace gold into structurally prepared sites within rheological favourable units post sedimentary deposition. The Brown’s Reef deposit is believed to be similar in type to mineralisation within feeder zones of Cobar-type or Selwyn-type (SEDEX) deposits.

SIGNIFICANT RESULTS

Recent diamond drilling results by Kidman Resources include;

BRD01

10.10m @ 6.92% Zn, 2.82% Pb, 0.34% Cu, 24 g/t Ag from 258m
within a 41.1m intersection @ 2.81% Zn, 1.36 % Pb, 0.17 % Cu, 10.06 g/t Ag from 243m

BRD002

19m @ 3.54% Zn, 1.79% Pb, 0.21% Cu, 16.75 g/t Ag from 268m
within a 136m intersection @ 1.67% Zn, 0.87 % Pb, 0.14 % Cu, 7.52 g/t Ag from 224m

BR0018

6m @ 11.36% Zn, 4.8% Pb, 1.23% Cu, 74.17 g/t Ag from 368m
within a 58m @ 2.0% Zn, 0.93% Pb, 0.42% Cu, 18.9 g/t Ag from 316m

Please see the September 2014 Activities Report in this website at Investors / ASX Announcements for full list of drill results.

Other significant historical drill intercepts at Browns Reef include;

45.3m @ 1.71% Pb, 3% Zn, 0.1% Cu, 8g/t Ag from 291m (BR002)
including 20m @ 2.77% Pb, 4.95% Zn, 0.16% Cu, 14g/t Ag from 302m.

HISTORY

The prospects were explored in the late 1970’s to mid-1980 by surface sampling and mapping, shallow drilling and diamond drilling and geophysical techniques. Historical exploration at Brown’s Reef is dominated by the search for base-metal mineralisation by the Jennings/EZ/ESSO JV between 1973 and 1984.