2015 Broken Hill Resources Investment Symposium - Heathgate Resources - Brett Rava

Heathgate Resources Pty Ltd

Frome Basin – Beverley North Deposits

Discovery to Recovery

Brett Rava – Geology Manager

Resources Investment Symposium

Broken Hill

May 2015

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Affiliate of General Atomics (San Diego, California) –  World leader for high-technology research and production for

industry and government in the U.S. and overseas •  nuclear fuel cycle , electromagnetic systems, remotely operated

surveillance aircraft, airborne sensors, and advanced electric, electronic, wireless and laser technologies.

Heathgate Resources Pty Ltd –  Established in 1990; based in Adelaide –  Operator of the Beverley uranium mine, which commenced

production in 2000 –  Owner of the Beverley North uranium mines, commenced

production in late 2010 –  Heathgate Resources is a service provider to Quasar

Resources.

Quasar Resources Pty Ltd –  Subsidiary of GA; based in Adelaide –  75% ownership and manager of the Four Mile Uranium Project

General Atomics Torrey Pines Site

Beverley Uranium Mine

Regional Picture – Frome Embayment

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Gammon Ranges

National Park

EL5261

EL5118

EL5119

EL5177

EL5349

EL5328

EL5311

EL5329

EL5017

25km

Heathgate EL

Quasar-Alliance EL

Heathgate ML

Quasar-Alliance ML

Quasar EL

Heathgate Resources & Quasar Resources – Frome Basin tenements

FROME BASIN PROJECT – 100% Heathgate

Total Total Area (km2)

Exploration Licences (EL) ** 7 4,108

Retention Leases (RL) 3 7.5

Mining Leases (ML) 2 178

TOTAL 4,115.5 km2

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FROME BASIN PROJECT – Quasar-Alliance JV


Exploration Licences (EL) ** 1 780

Mining Leases (ML) 1 122.1

TOTAL 780 km2

FROME BASIN PROJECT – 100% Quasar


Exploration Licences (EL) 2 1,051

TOTAL 1,051 km2

TOTALS


Exploration Licences (EL) ** 10 5,816.9

Mining Leases (ML) 3 300.1

•  Active exploration since 2002.

•  Sedimentary uranium focussed exploration programs.

•  Exploration investment since 2002 approximately +$150M.

•  Total planned exploration budget 2015 (excluding JV) ~$3.47M.

•  CSIRO Collaborative Project

•  Approximately 36 Mlbs of in-place resources discovered in 100% HGR tenements (not all amenable to ISR)

** EL underlies ML

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•  Northern Flinders Ranges – rated one of the 5 most naturally radioactive places in the world

•  Surface could contain ~1Mlbs based on airborne radiometric data (within drainage area)

•  In the last 5.3Ma (time of last uplift and erosion – Skirrow, 2009) significant amount of uranium has been mobilised into the basin (Skirrow, 2009 & Quigley et al, 2006)

•  In-ground resources discovered to date (not all in-ground resource amenable to ISR)

ü  Pepegoona E & W 3.5 Mlbs ü  Pannikan 3.9 Mlbs ü  Beverley 25.9 Mlbs ü  Other ~3 Mlbs(?) ü  Four Mile East (FME) & Four Mile West (FMW) 71 Mlbs* (Indicated & Inferred) ü  FMNE (Four Mile North East) 70-80 Mlbs** (Exploration Target)

Total ~177-187 Mlbs

•  Is there more and where is it?

Skirrow, R.G., 2009 (editor) GA Record 2009/40, p110

* Alliance Resources Ltd, Annual Report 2014 ** Alliance Resources Ltd, ASX Announcement 24 February 2015

Airborne Radiometrics (U channel)

Why are we looking in the Frome Basin?

Roll-front in an open cut mine – South Texas Upper and Lower Limbs

•  generally narrow, weakly mineralised, dominated by daughter products

•  Strong –ve DEF

Roll •  strongly mineralised – roll-front ore zone

•  strong +ve DEF

Redox Front

•  precipitation uraninite or coffinite at redox front/boundary

•  moderately to strongly mineralised

•  weak –ve DEF

Protore •  weakly mineralised

•  +ve DEF

What are we exploring for ?

DEF = Disequilibrium Factor (ratio PFN grade vs. γ grade)

DEF > 1.0; +ve DEF = uranium enriched

DEF < 1.0; -ve DEF = uranium depleted

DEF = 1.0; equilibrium

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0.5

– +5

km

Bulldog Shale

Namba Formation

60m

5-6m

3-4m

250m 25-50m

A A’

•  Deposits occur at the redox – front and described as similar in occurrence to a string of pearls

•  Roll-fronts are typically thin and often complicated in nature

•  Are commonly stacked, with occurrence of multiple sub-rolls

Roll-Fronts in Reality – not that simple

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•  Regional exploration to initially define redox-front

•  Great start - extensive drillhole database •  approximately +15,000 holes •  majority within Beverley and Beverley North MLs •  historical drilling

•  Majority of historical holes limited to testing of Namba Formation – an issue when exploring the Eyre Formation

•  HGR-QSR exploration holes drilled to Bulldog Shale

•  Redox boundary defined by broad spaced (+1km) drilling over approximately 110km length within northern tenements.

•  Re-reduction a consideration– looking at geochemical finger-printing

•  Potential for Beverley style palaeochannel mineralisation still considered high

Where to start ?

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How hard is it !

PR1108

•  June 2009 - Regional drill program

•  PR1084 – no mineralisation intersected, reduced sediments

•  All drillholes on section intersected reduced sediments

•  July 2009 – weak mineralisation intersected at base of Namba Formation

•  PR1108 – 0.8m @ 0.07 eU3O8

PR1084 400m

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PR1126

•  August 2009 - first ore intercept within Eyre Formation

•  PR1126 – 2.8m @ 0.14 pU3O8

Pepegoona

How hard is it !





•  PR1108 – 0.8m @ 0.07 eU3O8

400m

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PR1132

Pepegoona

•  September 2009 - first major ore intercept

•  PR1132 – 4.6m @ 0.36 pU3O8


•  PR1126 – 2.8m @ 0.14 pU3O8

How hard is it !





•  PR1108 – 0.8m @ 0.07 eU3O8

400m

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Pepegoona

•  Further drilling defined Pepegoona Deposit

How hard is it !

•  September 2009 - first major ore intercept

•  PR1132 – 4.6m @ 0.36 pU3O8


•  PR1126 – 2.8m @ 0.14 pU3O8





•  PR1108 – 0.8m @ 0.07 eU3O8

400m

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•  February 2010 – restart regional drill program


PR1218

Pepegoona

400m

How hard is it...to miss!

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•  PR1218 – barren

PR1219

•  March 2010 – first intercept At Pannikan

•  PR1219 – 6.6m @ 0.24 pU3O8

400m


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•  PR1218 – barren

•  March 2010 – first intercept At Pannikan

•  PR1219 – 6.6m @ 0.24 pU3O8

•  Pannikan drill out completed by end March 2010

Pepegoona

MISSED by <200m

400m


Pannikan

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Pannikan •  Large “classic” roll front or wedge-shaped

“geochemical” cell encompassing nearly the entire Eyre succession

•  Highest grades hosted by carbonaceous sands

•  Multiple stacked rolls

Pepegoona West •  Series of relatively competent multiple stacks of roll-

fronts hosted within the Eyre Formation

Pepegoona •  Multiple stacked roll fronts (staggered)

•  Hard to predict behavior due to the interference of abundant reductants (pyrite)

•  Complex network of thinner, less competent roll fronts

Pepegoona

Beverley North Deposits

Pannikan Deposit

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Downhole geophysical logs from wellfield drilling are correlated to enable grade and resource determination

Roll

Protore Limbs Roll

Limb

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Statistical Analysis

•  Statistical analysis of drill data is undertaken on;

•  Grade

•  Thickness

•  GT

•  DEF

to determine distribution, trends and correlations

•  statistical analysis enables us to understand spatial relationships in order to properly use geostatistical methods

•  roll front grade is very positively skewed and requires log normal kriging or multi-indicator kriging

PFN reading error

Is this indicative of another grade population?

Is high grade data missing

or Is this another population?

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Geology Front Mapping – GT Contouring GT Contouring for Resource Estimation and Wellfield Planning

•  Map •  Redox-front •  DEF •  GT values •  Interpreted roll-front characteristic

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GT Contouring for Resource Estimation and Wellfield Planning

•  Map •  Redox-front •  DEF •  GT values •  Interpreted roll-front characteristic

•  Contour •  Contour GT values •  Each roll-front must be mapped separately

•  Why GT Contouring

•  Defines the geometry of the roll-front

•  Cumulative GT

•  doesn’t take into account the nature of the roll-fronts (e.g. stacked roll-fronts or sub-rolls)

•  represents a 2D grade distribution but no continuity between roll-fronts especially when roll-fronts are of varying depth

•  will over-estimate resource in early exploration stages of stacked fronts

Geology Front Mapping – GT Contouring

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Predictive Flow Modelling for Wellfield Design

Injector Well

Extractor Well

Balance Line

Grade Thickness Contour

Wellfield Design & Planning

•  Wellfields designed to maximise recovery and lower costs

•  Traditional 5 and 7 spot patterns may work for “blob” interpretation but not for complex sinuous roll-fronts

Custom Pattern

7-Spot Pattern

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Predictive Flow Modelling for Wellfield Design

Wellfield Design & Planning

•  Wellfields designed to maximise recovery and lower costs

•  Traditional 5 and 7 spot patterns may work for “blob” interpretation but not for complex sinuous roll-fronts

Injector Well

Extractor Well

Balance Line


Custom Pattern

7-Spot Pattern

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7-Spot Pattern

•  40 wells (7 extractors, 33 injectors)

•  30m well spacing

•  Installation cost ~$3.6M

•  Under leach ??

Injector Well

Extractor Well

Balance Line


Custom Pattern


•  28 – 34m well spacing

•  Installation cost ~$2.52M

•  Under leach ??

versus

Modelling Resource Under Leach

Custom Pattern

7-Spot Pattern

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Custom Pattern

7-Spot Pattern

Mineralisation not initially swept is swept by later role reversals

7-Spot Pattern


•  30m well spacing

•  Installation cost * - $3.6M

•  Under leach – 1,264,000 lbs

Custom Pattern


•  28 – 34m well spacing

•  Installation cost * - $2.52M

•  Under leach – 1,323,000 lbs

versus

Injector Well

Extractor Well

Balance Line


Modelling Resource Under Leach

Geophysics – Seismic Interpretation, Palaeochannels

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POO

NTA

NA

FA

ULT

PO

ON

TAN

A F

AU

LT

Stratigraphy picked from drilling WEST EAST

POO

NTA

NA

FA

ULT

NAMBA

Channels

EYRE

Thankyou

2015 Broken Hill Resources Investment Symposium - Heathgate Resources - Brett Rava

Education

alliance resources

exploration target total

quasar resources pty

heathgate resources

mlbs beverley

ground resources

km2 frome basin project

place resources