MYSTIQUE GOLD JV

Location: 240km ESE of Kalgoorlie, Western Australia
Area: 433 sq km
Black Fire Interest: Earning 75%
Manager: Black Fire

Background

Black Fire entered into the Mystique JV with PacMag Metals Ltd in September 2009. The project is located in the Proterozoic Albany - Fraser Belt (also referred to as the Tropicana Belt) whose gold prospectivity has only become known in the last 10 years and as such has a very low exploration maturity. The discovery of the +5Moz Tropicana gold deposit by the Anglogold - Independence Group JV using simple calcrete soil geochemical techniques has resulted in much exploration interest in the belt with a number of other encouraging prospects such as Beachcomber (Anglogold – Independence JV), Plumridge (International Goldfields Ltd) and Hercules Trend (Beadall Resources) being reported.

The Mystique project is centred on a substantial historic gold soil anomaly, defined before the discovery of Tropicana and that has to date been ineffectively drill tested and thus represents a “walk-up target” for Black Fire.

Under the JV agreement with PacMag Metals, Black Fire may earn up to 75% equity in the project with the expenditure of A$2.5M over 5 years.

Geology

At the regional scale the project is located within the Albany - Fraser Belt which is a Proterozoic collision zone between the Achaean Yilgarn and Gawler Cratons. Rocks in the belt are generally high grade metamorphics including mafic and felsic granulites and garnetiferous metasediments which represent both reworked Archaean protoliths and Proterozoic sediments and intrusives. Outcrop is generally poor and covered by aeolian sands and pedogenic carbonate, and the eastern edge of the belt is covered by rapidly thickening sedimentary units of the Tertiary Eucla Basin, including gravels, sands, silts and lignites. Despite this extensive cover, geophysics and particularly aeromagnetics allow for detailed geological interpretations to be made.

Locally the project area has little to no outcrop, however historic aircore drilling has indicated the presence of interleaved felsic and mafic granulites overlain by 10-80m (thickening eastwards) of Eucla Basin sediments. Within the cover sequences, distinct bands of geochemically significant lignite (effectively very low grade coal) have been defined. Importantly, the project is located on the western edge of a distinct aeromagnetic low and straddles the projected “exit” of a number of NW-SE trending faults from the Yilgarn Craton to the west.

2010 Activities & Results

The Mystique JV tenements were granted by the DMP in February 2010. Data compilation of the historic exploration results was completed with reprocessing of aeromagnetic data resulting in a new interpretation being completed which identified a number of existing and new targets. A series of exploration programmes were planned and implemented to test these, including;

• Calcrete soil geochemical sampling of untested targets and infill sampling around a number of historic regional calcrete gold anomalies. This work identified the new Salubris and Booderoo geochemical targets which were subsequently tested by AC drilling during 2010.
• An Aboriginal heritage survey over the Torquata, Salubris and Boonderoo target areas where no significant archaeological or ethnographical sites were identified.
• A programme of aircore drilling to test the Salubris and Boonderoo targets. This programme identified Proterozoic bedrock with Tertiary cover to depths of +80m which was considered too deep to warrant further exploration.
• An RC drilling programme to test at depth beneath a number of the historically defined +1g/t Au aircore drilling intersections at Torquata. These efforts were thwarted by unconsolidated sands within the Tertiary cover sequences causing the abandonment of most drill holes. The programme was subsequently suspended pending review of the best techniques to drill test this exciting target.

2011 Planned Programmes

Based on results from the 2010 work programmes, the Torquata Prospect remains the priority target for the Company. A detailed re-evaluation of all of the historic data from the prospect has highlighted a number of areas of +0.1g/t Au bedrock anomalism which, when combined with new geophysical and palaeo-topographical interpretations, led to the definition of a priority drill target in the southern part of the soil anomaly. Part of the rationale of this target is that significant geochemical depletion of gold has been reported at the Tropicana gold deposit in the weathered rocks above the mineralised zones and it was not until deeper drilling was undertaken to test fresh rock that significant +1g/t Au gold intersections were reported.

Given the previous drilling difficulties, options to establish the most cost effective drilling technique to test this target were reviewed and subsequently a 4-5 hole mud rotary and diamond drilling programme is planned for Torquata during 2011.

Torquata Prospect - background

Historic broad spaced calcrete soil sampling of a large part of the central Albany - Fraser Belt by Geographe Resources in the mid to late 1990’s lead to the definition of numerous gold, copper and nickel anomalies. The most significant gold anomaly defined was named Torquata and was subsequently infill sampled with the resultant definition of a 4km long by 2.2km wide +10ppb gold anomaly with a peak result of 600ppb (0.6g/t Au). This anomaly is larger and stronger than that publically reported as defining Tropicana.

Subsequent vertical aircore drilling of parts of the anomaly on an average 200m x 200m pattern, initially by Geographe Resources and subsequently by the Homestake – Geographe joint venture and Sipa Resources, highlighted the presence of a cover sequence of Eucla Basin sediments overlaying interleaved felsic and mafic granulites. Numerous +0.1g/t gold results were returned both from within the lignite horizons in the cover stratigraphy and to a lesser extent in the targeted Proterozoic bedrock. Best aircore drill intersections reported include 3m @ 2.92g/t Au, 1m @ 0.62g/t Au, 6m @ 0.2g/t Au and 1m @ 0.84g/t Au. A total of three follow-up RC holes were drilled by Homestake, but these represent an ineffective test of such an extensive area of gold anomalism. Within the limited bedrock intersections to date the mineralisation comprises narrow, weakly sulphidic quartz veinlets hosted within both the felsic and mafic granulites.

The historic work undertaken at Torquata was all completed prior to the discovery of Tropicana (now +5Moz Au) in August 2005 and in that light the significance of the scale and tenor of the Torquata soil anomaly makes this prospect a priority for further exploration. The opportunity for Black Fire relates to the largely ineffective drill testing of this very substantial soil geochemical anomaly in that (a) the aircore drilling was vertical and penetrated less than a few metres into the Proterozoic bedrock, and (b) this drilling has indicated that a large proportion of the surface calcrete soil geochemical anomaly lies “above” highly gold anomalous lignite beds within the Tertiary cover sequences. The gold in these lignite beds, which have in places returned +1g/t Au assays, is discrete and is interpreted as representing remobilised gold from the bedrock. In summary, the majority of the historic drilling has targeted a “transported anomaly”, the source of which has yet to be adequately explained.