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IONIC RARE EARTHS LIMITED Capital/Financing Update 2016

Sep 4, 2016

65151_rns_2016-09-04_bddb05d6-9e56-4d1a-afbc-30853fcb2508.pdf

Capital/Financing Update

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ASX Announcement 5 September 2016

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GEOPHYSICS HIGHLIGHTS NEW TARGET ZONES AT TOPACIO

HIGHLIGHTS

  • Geophysical anomalies from the recent airborne survey highlight new gold target zones

  • The Rebeca Zone includes a number of subparallel vein structures with potential concealed lateral continuity up to 3 kilometres in length, coincident with gold-in-soil anomalies

  • New epithermal vein targets inferred from linear zones of magnetic depletion

  • Radiometrics identify alteration zones located along the Mico vein and also associated with the Rebeca Zone veins

  • Detailed mapping and infill soil sampling is planned to refine the targets for drilling


Oro Verde Limited (ASX: OVL) (“Oro Verde” or “the Company”) is pleased to announce that the recent heliborne geophysical survey at the Topacio Gold Project, located in southeastern Nicaragua (Figure 1), has identified new target zones for possible drill testing.

The geophysical survey is part of the Stage 1 exploration program of the Farm-In Agreement between Newcrest International Pty Ltd, a wholly owned subsidiary of Newcrest Mining Limited (ASX: NCM) (“Newcrest”) and Oro Verde, executed at the end of November 2015[1] .

The high quality magnetic and radiometric data has provided valuable structural and alteration data across the full concession. Interpretation of the magnetic data indicates that the Rebeca Zone, southeast of the Topacio resource, could host NW-SE trending concealed veins with up to 3 kilometres of strike extent. This zone is broadly coincident with a gold-in-soil anomaly recently reported by the Company[2] .

A follow-up field program, including detailed mapping and infill soil sampling, is currently being implemented to refine this target area, with drill testing expected to follow.

Oro Verde’s Managing Director, Mr. Trevor Woolfe, commented “Our understanding of the geological characteristics of the Topacio Gold Project have improved significantly with the completion of the concession-wide geochemistry (soils) and geophysical surveys. We are now focused on refining the priority targets generated, with the objective of drill testing the best targets and, ultimately, expanding the gold resource.”

1 Refer to ASX announcement dated 30 November 2015 “Newcrest Signs A$11M Farm-in Agreement with Oro Verde”

2 Refer to ASX announcement dated 16 August 2016 “Strong Gold Anomalies in Soils at Topacio”

Oro Verde Limited (ASX code: OVL)

Level 1, 34 Colin St, West Perth, WA 6005 Phone: +61 8 9481 2555 Fax: +61 8 9485 1290 Email: [email protected]

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San Isidro
Topacio
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Figure 1 Major Nicaraguan gold deposits and the Topacio Gold Project

AIRBORNE GEOPHYSICAL PROGRAM

The Stage 1 airborne geophysical survey over the Topacio Gold Project, located in southeastern Nicaragua (Figure 1), was completed successfully in July, without safety or community incidents. With the survey being undertaken during the wet season, Oro Verde, Newcrest and New Sense Geophysics (NSG)(of Canada) worked tirelessly and closely, with assistance from the Nicaraguan Air Force (FAN), to ensure that a rigorous safety overlay was in place, not only for the operational aspects but also for the local communities and landholders.

A total of 1,021.3 line kilometres were flown during the helicopter-borne survey, which included magnetics and radiometrics over a survey area covering the entire 93km[2] of the concession.

HIGHLIGHTS OF THE GEOPHYSICAL DATA INTERPRETATION

Three first order target areas have been delineated (see Figure 2):

  1. Rebeca Zone - Linear NW-SE features (high amplitude anomalies) in magnetics highlight a number of veins, likely related to brittle failure, with potential lateral extent up to 3km. These features have not previously been drill tested.

  2. Myra-Lirina Veins – magnetic depletion along structures associated with mapped veins, similar to the nearby Rebeca Zone.

  3. La Palmita Structure – This is another NW-SE trending structural zone – in proximity to an interpreted intrusive contact zone - to the north of the Rebeca Zone that may be related to a concealed vein zone. It may be a continuation of the La Palmita vein, which has been mapped at the NW end of this trend.

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2

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----- Start of picture text -----

1,344,000mN
Topacio Gold Project
Heli-borne Magnetics
RTP
1,341,000mN
5
4
2
3
1
Topacio resource area
and historical drill holes
2 x remanently magnetised bodies – large intrusions
1,336,000mN
Mapped vein
Historical drill hole
1 [st] order target area
1
2 [nd] order target area
785,000mE 790,000mE
776,000mE 780,000mE
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Figure 2 Topacio Project – Magnetic data

Two second order target areas have been identified (see Figure 2):

  1. Two additional NW-SE trending features have been highlighted by the magnetics to the north and northeast of the Topacio-Rebeca vein areas. Their signatures suggesting possible concealed vein zones. Veins have not been mapped along these two features previously.

  2. The magnetic signature of an area to the NW of the Topacio resource indicates the possibility of a previously unidentified vein zone. No veins are currently mapped within this area. The area is along strike to the NW of the Rebeca vein.

Two large remanently magnetised bodies have been identified in the SW and SE of the concession (Figure 2), interpreted as representing large intrusive bodies.

The radiometric data (Figure 3) displays some significant zones of potassium-rich alteration present in the Topacio Project area:

  • Rebeca Zone (dashed area on Figure 3) – Strong pink shading in the area of the Rebeca Zone and also to the NE of the Topacio Vein, indicates prominent potassium-rich alteration zones.

  • Mico Vein – The pink zones along parts of the Mico Vein indicate potassium-rich alteration associated with the emplacement of the vein. A magnetic depletion zone on part of the Mico Vein (Figure 3) maybe intrusion related or a large alteration zone.

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3

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1,344,000mN
Topacio Gold Project
Heli-borne Radiometrics
Ternary map (K-U-Th)
1,341,000mN
Topacio resource area
and historical drill holes
1,336,000mN
Mapped vein
Historical drill hole
Rebeca Zone alteration
785,000mE 790,000mE
76,000mE 7 780,000mE
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Figure 3 Topacio Project – Radiometric data

Next Stage

The key objective of the Stage 1 exploration program, which commenced in January 2016, is to identify highly prospective vein, alteration, geochemical, geophysical and structural targets for drill testing, scheduled to commence in the second half of 2016. The Stage 1 program, which has successfully achieved its objectives, included:

  • Detailed geological mapping and sampling

  • Concession-wide 400m x 400m grid soil sampling program

  • Airborne geophysics – magnetics and radiometrics

A follow up program of detailed mapping around the Rebeca Zone, combined with closer spaced soil geochemical sampling (localised - down to a 200m x 50m grid), is currently being implemented with a view to refining and prioritising targets for drilling as soon as practicable.

Associated environmental studies required for drilling activities are also being initiated.

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TOPACIO PROJECT BACKGROUND

Oro Verde holds an Option to Purchase Agreement over the high grade Topacio Gold Project, located in southeastern Nicaragua (Figure 1). Details can be found in the announcement to the ASX dated 27 February 2015[3] . The project contains a historical NI 43-101 (Canadian standard, similar to JORC) compliant Inferred Resource of:

2,716,176 tonnes at 3.9 g/t gold, containing 340,345 ounces of gold, at a 1.5 g/t gold cut-off

National Instrument 43-101 (“NI 43-101”) is a national instrument for the Standards of Disclosure for Mineral Projects within Canada and as such this estimate is a foreign estimate and is not reported in accordance with the JORC code (Australia). A competent person has not done sufficient work to classify the foreign estimate as mineral resources in accordance with the JORC code and it is uncertain that following evaluation and/or further exploration work that the foreign estimate will be able to be reported as mineral resources in accordance with the JORC code.

For enquiries contact:
Mr Trevor Woolfe Mr Brett Dickson
Managing Director Company Secretary
+61 411 127 837 +61 8 9481 2555

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About Oro Verde Limited: Oro Verde Ltd is a mineral exploration company focused on identifying and developing significant gold projects in Central America, particularly Nicaragua. Oro Verde holds an Option to Purchase Agreement to acquire 100% of the Topacio Gold Project in Nicaragua that contains a NI43-101 compliant Inferred Mineral Resource of 340,000 ounces of gold. A US$7.9 million 5 year farm-in agreement was signed on November 25, 2015 with a subsidiary of global gold major - Newcrest Mining Limited (ASX: NCM) – to jointly explore for multi-million ounce gold deposits at Topacio. Oro Verde also holds 100% of the early stage San Isidro Gold Project, also in Nicaragua, located adjacent to the 2.3 million ounce La India gold project.

COMPETENT PERSON STATEMENTS

The information in this document that relates to Exploration Results is based on information compiled by Mr Trevor Woolfe BSc Hons (Geol), who is a Member of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Woolfe is the Managing Director and a shareholder of the Company, and is employed through consultancy Shordean Pty Ltd. Mr Woolfe has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Woolfe consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this document that relates to Historical Mineral Resources is extracted from the report entitled “Acquisition of High Grade Gold Project” created on 11 November 2014 and available to view on www.asx.com. The Company confirms that it is not in possession of any new information or data that materially impacts on the reliability of the estimates in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

JORC Code, 2012 Edition – Table 1 (Completed by Oro Verde Limited) Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary Commentary
Sampling
Nature and quality of sampling (eg cut channels, random
chips, or specific specialised industry standard measurement


The airborne geophysical survey was conducted by an
independent contractor with prior experience working in
techniques tools appropriate to the minerals under investigation, such as Nicaragua - New Sense Geophysics Ltd (Canada). The
down hole gamma sondes, or handheld XRF instruments, etc). helicopter-borne survey incorporated high resolution magnetics
These examples should not be taken as limiting the broad andgamma rayspectrometry (radiometrics),coveringthe entire

3 Refer to ASX announcement dated 27 February 2015 “Oro Verde Proceeds to Acquire Topacio Gold Project”

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Criteria JORC Code explanation JORC Code explanation Commentary Commentary
meaning of sampling. 93km2of the Presillitas concession, which contains the Topacio
Include reference to measures taken to ensure sample Gold Project.
representivity
and
the
appropriate
calibration
of
any

A total of 1,021.3 line kms were flown, incorporating N-S lines at
measurement tools or systems used. 100m spacing and E-W control lines at 1,000m spacing. The
Aspects of the determination of mineralisation that are Material nominal flight height was 40m. Equipment used was a Scintrex
to the Public Report. CS-3 (magnetometer), 16L RS-500 (spectrometer) and TRA
In cases where ‘industry standard’ work has been done this 3500 (radar altimeter), flown with a Bell 206 Jet Ranger (FA-233)
would be relatively simple (eg ‘reverse circulation drilling was (helicopter).
used to obtain 1 m samples from which 3 kg was pulverised to
No drilling was undertaken in the current program
produce a 30 g charge for fire assay’). In other cases more
explanation may be required, such as where there is coarse
gold
that
has
inherent
sampling
problems.
Unusual
commodities or mineralisation types (eg submarine nodules)
may warrant disclosure of detailed information.
Drilling Drill type (eg core, reverse circulation, open-hole hammer,
rotary air blast, auger, Bangka, sonic, etc) and details (eg core


No drilling was undertaken in the current program
techniques diameter, triple or standard tube, depth of diamond tails, face-
sampling bit or other type, whether core is oriented and if so,
_by what method, etc). _
Drill sample Method of recording and assessing core and chip sample
recoveries and results assessed.

No drilling was undertaken in the current program
recovery Measures taken to maximise sample recovery and ensure
representative nature of the samples.
Whether a relationship exists between sample recovery and
grade and whether sample bias may have occurred due to
preferential loss/gain of fine/coarse material.
Logging Whether core and chip samples have been geologically and
geotechnically logged to a level of detail to support appropriate


No drilling was undertaken in the current program
Mineral Resource estimation, mining and metallurgical studies.
Whether logging is qualitative or quantitative in nature. Core
(or costean, channel, etc) photography.
The total length and percentage of the relevant intersections
logged.
Sub-sampling If core, whether cut or sawn and whether quarter, half or all
core taken.

No drilling or sampling was undertaken in the current program.
techniques and If non-core, whether riffled, tube sampled, rotary split, etc and
sample
preparation
whether sampled wet or dry.
For all sample types, the nature, quality and appropriateness
of the sample preparation technique.
Quality control procedures adopted for all sub-sampling stages
to maximise representivity of samples.
Measures taken to ensure that the sampling is representative
of the in situ material collected, including for instance results
for field duplicate/second-half sampling.
Whether sample sizes are appropriate to the grain size of the
material being sampled.
Quality of assay
data and
The nature, quality and appropriateness of the assaying and
laboratory procedures used and whether the technique is
considered partial or total.



No drilling or sampling was undertaken in the current program.
The airborne geophysical survey was conducted by an
independent contractor with prior experience working in
laboratory tests For
geophysical
tools,
spectrometers,
handheld
XRF
instruments, etc, the parameters used in determining the

Nicaragua - New Sense Geophysics Ltd (Canada). The
helicopter-borne survey incorporated high resolution magnetics
analysis including instrument make and model, reading times,
calibrations factors applied and their derivation, etc.
and gamma ray spectrometry (radiometrics), covering the entire
93km2of the Presillitas concession, which contains the Topacio
Nature of quality control procedures adopted (eg standards, Gold Project. A total of 1,021.3 line kms were flown,
blanks, duplicates, external laboratory checks) and whether incorporating N-S lines at 100m spacing and E-W control lines at
acceptable levels of accuracy (ie lack of bias) and precision 1,000m spacing. The nominal flight height was 40m. Equipment
have been established. used was a Scintrex CS-3 (magnetometer), 16L RS-500
(spectrometer) and TRA 3500 (radar altimeter), flown with a Bell
206 Jet Ranger (FA-233) (helicopter).
The geophysical equipment comprised one high-sensitivity
Cesium-3 magnetometer mounted in a fixed stinger assembly,
and a 1024-channel spectrometer with four downward-looking
crystals (total 16L) and one upward-looking crystal (total 4L). The
airborne ancillary equipment included digital recorders, a fluxgate
magnetometer, a radar altimeter and a GPS receiver, which
provided accurate real-time navigation and subsequent flight
path recovery. Ground equipment included a magnetic base
station with GSP time synchronization and a PC-based field
workstation, which was used to check the data quality and
completeness on a daily basis. The fully corrected magnetic and
radiometric maps were prepared by New-Sense Geophysics
Limited in their Toronto office, after the completion of the survey
activities.
Sample Rates were as follows:

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Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Verification of The
verification
of
significant
intersections
by
either

No drilling or sampling was undertaken in the current program.
independent or alternative company personnel.
sampling and The use of twinned holes.
assaying Documentation of primary data, data entry procedures, data
verification, data storage (physical and electronic) protocols.
Discuss any adjustment to assay data.
Location of data Accuracy and quality of surveys used to locate drill holes
A NovAtel state of the art OEM628 GPS board was used for
(collar and down-hole surveys), trenches, mine workings and navigation and flight path recovery. None of the geophysical data
points other locations used in Mineral Resource estimation. recorded in the current survey is to be used in future Mineral
Specification of the grid system used. Resource estimation.
Quality and adequacy of topographic control. While the Grid system used for field activities to date has been
UTM Zone 16 with datum NAD27 Central, the geophysical
survey was undertaken using WGS84 (World) and transformed
to WGS84 UTM Z16N.
Combined with the state of the art GPS positioning system
described above, a radar altimeter was utilised to topographically
control the data captured. With a 100m flight line spacing, the
data had agrid cell size of 25m(1/4 of line spacing).
Data spacing and
distribution



Data spacing for reporting of Exploration Results.
Whether the data spacing and distribution is sufficient to
establish the degree of geological and grade continuity
appropriate for the Mineral Resource and Ore Reserve
estimation procedure(s) and classifications applied.
Whether sample compositing has been applied.





A total of 1,021.3 line kms were flown, incorporating N-S lines at
100m spacing and E-W control lines at 1,000m spacing. The
nominal flight height was 40m.
This geophysical survey method is not appropriate for resource
estimation
No drillingor samplingwas undertaken in the currentprogram.
Orientation of Whether the orientation of sampling achieves unbiased
No drilling or sampling was undertaken in the current program.
sampling of possible structures and the extent to which this is
data in relation to known, considering the deposit type.
geological
structure
If the relationship between the drilling orientation and the
orientation of key mineralised structures is considered to have
introduced a sampling bias, this should be assessed and


reported if material.
Sample security The measures taken to ensure sample security. No sampling was undertaken in the current program.
Audits or reviews
The results of any audits or reviews of sampling techniques
Digital data associated with this survey was subject to audit by
and data. New Sense Geophysics Limited. A second pass review of the
data was undertaken by Newcrest Mining Limited geophysicists
and consultants.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Mineral tenement and
Type, reference name/number, location and ownership
The Topacio Gold Project is a Nicaraguan mining concession,
including agreements or material issues with third parties known as Presillitas, held by Topacio S.A, and located
land tenure status such as joint ventures, partnerships, overriding royalties, approximately 200km east of Managua. Oro Verde Limited
native title interests, historical sites, wilderness or national (OVL) holds an Option to Purchase Agreement over the
park and environmental settings. concession through its 100% owned subsidiary Minera San
The security of the tenure held at the time of reporting along Cristobal SA (MSC).
with any known impediments to obtaining a licence to operate
In November 2015, OVL/MSC signed a farm-in agreement
in the area. with Newcrest International Pty Ltd (Newcrest) (a subsidiary
of Newcrest Mining Ltd of Australia) whereby Newcrest can
earn up to 75% in the Topacio Gold Project through staged
investments into the project. Newcrest and MSC will jointly
explore the project, however MSC will continue to manage
exploration activities on the project. Newcrest has the option
to take over management of the project once it has reached
51% equity in the project, subject to expenditure milestones
and other conditions.
The concession is in good standing and no known
impediments exist (see map elsewhere in this report for
locations).
Exploration done by Acknowledgment and appraisal of exploration by other
parties.

Previous exploration of the Topacio Gold Project has
consisted of mapping, stream sampling, rock chip sampling,
other parties soil sampling, trenching, diamond drilling and feasibility
studies in 3 main periods:
1980s – CPRM (Brasil)
1990s – Triton Mining (Canada)
2010-2013 – FDG Mining/Tango Gold (Canada)
The latter group has produced resource estimates that are
consistent with NI 43-101 (Canadian) standards.
CPRM activities were undertaken at a time when compliance
with standards such as JORC (Australian) and NI 43-101
(Canadian) did not exist. The quality of the data is thus
difficult to appraise. Core samples from that phase of drilling
are not known to be in existence.
Triton activities were undertaken duringthe mid 1990’s when

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7

Criteria JORC Code explanation JORC Code explanation Commentary Commentary
quality control and QA/QC procedures and reporting
standards were in the process of significant improvements.
Information and data provided in Triton reports appears to be
of reasonable quality, however OVL has not undertaken any
specific checks, as trenches have been rehabilitated and core
samples are not known to be in existence.
FDG /Tango activities were undertaken under NI 43-101
guidelines and standards and are considered to be of
reasonable quality. Core from FDG drilling is being stored in a
secure location near the project area and is in reasonable
condition.
Deposit type, geological setting and style of mineralisation. The Topacio Gold Project is a low sulphidation epithermal
gold-(silver) vein type system (along with stockworks and
brecciation) set in a sequence of tertiary volcanics –
essentially of andesitic and basaltic composition. The project
is located in the SE of Nicaragua in the province known as
RACCS (South Caribbean Coast Autonomous Region).
The main veins are NE striking and dipping steeply and
variably to the NW and SE. Other veins in the broader
concession strike NW and are also steeply dipping. Veins are
generally up to 3m wide but in places may blow out to widths
of more than 20m.
Drill hole Information A summary of all information material to the understanding of
No drilling was undertaken in the current program
the exploration results including a tabulation of the following
information for all Material drill holes:
o
easting and northing of the drill hole collar
o
elevation or RL (Reduced Level – elevation above sea
level in metres) of the drill hole collar
o
dip and azimuth of the hole
o
down hole length and interception depth
o
hole length.
If the exclusion of this information is justified on the basis that
the information is not Material and this exclusion does not
detract from the understanding of the report, the Competent
Person should clearly explain why this is the case.
Data aggregation In
reporting
Exploration
Results,
weighting
averaging
techniques, maximum and/or minimum grade truncations (eg


No data aggregation methods have been applied
methods cutting of high grades) and cut-off grades are usually Material
and should be stated.
Where aggregate intercepts incorporate short lengths of high
grade results and longer lengths of low grade results, the
procedure used for such aggregation should be stated and
some typical examples of such aggregations should be shown
in detail.
The assumptions used for any reporting of metal equivalent
values should be clearly stated.
Relationship between
These relationships are particularly important in the reporting
of Exploration Results.

No drilling or sampling was undertaken in the current
program.
mineralisation widths
If the geometry of the mineralisation with respect to the drill
and intercept lengths hole angle is known, its nature should be reported.
If it is not known and only the down hole lengths are reported,
there should be a clear statement to this effect (eg ‘down hole
_length, true width not known’). _
Diagrams Appropriate maps and sections (with scales) and tabulations
of intercepts should be included for any significant discovery


Refer to maps and diagrams in the body of the report.
being reported These should include, but not be limited to a
plan view of drill hole collar locations and appropriate
sectional views.
Balanced reporting Where comprehensive reporting of all Exploration Results is
not practicable, representative reporting of both low and high


The Company believes that reporting of results in this report is
balanced.
grades and/or widths should be practiced to avoid misleading
reporting of Exploration Results.
Other substantive Other exploration data, if meaningful and material, should be
In addition to the current geophysics program, other technical
reported including (but not limited to): geological observations; work completed by OVL on the Topacio project includes
exploration data geophysical survey results; geochemical survey results; bulk reconnaissance rock chip sampling, geological mapping and
samples – size and method of treatment; metallurgical test soil geochemistry. Where relevant in the context of the
results; bulk density, groundwater, geotechnical and rock geophysical program, these other programs are referred to in
characteristics;
potential
deleterious
or
contaminating
this report.
substances.
Further work The nature and scale of planned further work (eg tests for
The Company is currently reviewing all available data on the
lateral extensions, depth extensions or large-scale step-out project and formulating its ongoing work program in the
drilling). context of results received from recent geological mapping,
Diagrams
clearly
highlighting
the
areas
of
possible
soil geochemistry and the pending airborne geophysical
extensions, including the main geological interpretations and results. The activities are designed to provide sufficient
future drilling areas, provided this information is not information to define and prioritise targets for drill testing.
commercially sensitive. More detailed geological mapping/sampling and infill closer
spaced soil geochemistry sampling is to be implemented on
the highest priority target areas to better define some targets.
Preliminary indications of target areas being considered for
further follow upare shown elsewhere in this report.

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8