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PRODIGY GOLD NL Capital/Financing Update 2017

Dec 13, 2017

65615_rns_2017-12-13_ea06c9a0-d89e-4b5a-9367-dc57a001a112.pdf

Capital/Financing Update

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ASX ANNOUNCEMENT / MEDIA RELEASE ASX:ABU

14 December 2017

Bluebush Reconnaisance Drilling Aircore Results

HIGHLIGHTS

  • 64 holes of first pass reconnaissance aircore drilling completed on 3 targets at Bluebush
    • Hornblower 24 holes
    • Indefatigable 12 holes
    • Wild Turkey 28 holes
  • Anomalous gold results intersected in 3 holes
    • 3m @ 71ppb Au from 6m (BL0144) Indefatigable
    • 3m @ 99ppb Au from 21m (BL0122) Wild Turkey
    • 2m @ 47ppb Au from 57m (BL0072) Hornblower
  • Follow up aircore drilling planned for March/April as part of the Capstan drilling campaign

ABM Resources ('ABM' or the 'Company') is pleased to announce additional aircore results from the Bluebush Gold Project located in the Tanami Goldfields of the Northern Territory. The Bluebush Project, covering Capstan, Wild Turkey, Indefatigable and Hornblower, is located 50km to the northwest of the world class Callie deposit.

The 64 hole aircore drilling program was designed to test anomalous geochemical and structural targets and collect reconnaissance data to screen for new large scale anomalies. The first results from within this campaign of drilling have already outlined 8 kilometres of gold anomalism at Capstan (ASX 21 November 2017).

Assay results from drilling at Wild Turkey, Indefatigable and Hornblower are now reported. Shallow gold intersections from the wide spaced reconnaissance aircore include:

  • 3m @ 71ppb Au from 6m (BL0144) Indefatigable
  • 3m @ 99ppb Au from 21m (BL0122) Wild Turkey
  • 2m @ 47ppb Au from 57m (BL0072) Hornblower

The results confirm the presence of quartz veining and alteration, with gold mineralisation in oxide and bedrock beneath large scale soil arsenic anomalies. In this style of mineralisation intersections of >100 ppb arsenic or >50 ppb gold typically define the extents of the systems. Intersections of >200 ppb gold often indicate a mineralised structure has been intersected or is nearby.

Managing Director Matt Briggs said "The current program aimed to collect reconnaissance data. In spite of the broad spacing of the drilling, the program completed has confirmed anomalous gold with several holes warranting follow-up drilling."

"The current strategy of systematic bedrock testing continues to demonstrate that arsenic anomalies identified in historic soil sampling have not been effectively screened for gold mineralisation."

"These high priority targets will be drilled, along with the 8km long gold anomaly recently identified at Capstan, in the first aircore campaign of 2018."

Figure 1. Indefatigable, Hornblower, and Wild Turkey Targets showing anomalism in drill holes

Background

Indefatigable, Hornblower and Wild Turkey are three projects within the Bluebush Project, north of Trans-Tanami Fault Zone, and located 50km northwest of the world class Callie Gold Mine (Figure 2). The Dead Bullock Formation (host rock of Callie), folding and faulting complexity, and geochemical anomalism highlight the prospectivity of the area. Numerous structures have been interpreted with associated soil and shallow drilling anomalism. Large soil arsenic anomalies at Indefatigable and Hornblower have not previously been bedrock tested. Previous drilling is commonly vacuum drilling which is often as shallow as 3 metres deep. These historic holes failed to penetrate transported cover or the leached weathering profile. Assuming a similar leaching depth to the Capstan Target, the majority of historical drilling is interpreted to be ineffective.

Targets

The Indefatigable Target is a 3.5km long soil arsenic anomaly. The arsenic anomaly, with values of 50- 380ppm, trends northwest along an antiformal fold hinge. The target was further prioritised due to the presence of a coincident low level gold anomaly. The area is interpreted to be Killi Killi Formation however no geochemical work is known to have confirmed this.

Hornblower is a coincident arsenic and gold soil anomaly. The underlying rock is interpreted to be the faulted Dead Bullock Formation. A number of shallow holes have been drilled to an average depth of 7.8m confirm the soil arsenic anomalism. The 7 RAB holes drilled in the area are the only historic holes 30m or deeper. Anomalous gold over 20ppb is only intersected at depths greater than 15m, suggesting the presence of a leached zone and potentially rendering the majority of the shallow historic drilling ineffective.

The Wild Turkey Target represents the intersection of the Central Tanami Pits structural trend with folded magnetic Dead Bullock Formation concealed under cover. It has a large gold in soil anomaly of >10ppb, where there is no cover, and extends over a strike length of 1.6 km along the fold axis.

The majority of historic sampling has been concentrated over subcropping east-west quartz veins. The area has been subject to historical prospecting with several trenches, and a small shaft sunk into the hinge of the anticline. Historic reporting describes "sporadic high values ranging from 2 to 30g/t Au were received over a zone approximately 500m in strike length and 150m width." (Koerber et al 1993).

Drilling Results

A drilling program of 64 holes for 2,986m was completed in late October (Figure 1). This reconnaissance program was aiming to confirm the presence of rocks in the area are the same as those hosting Callie, to complete an initial bedrock test under large arsenic anomalies, and to commence screening undercover for large scale geochemical anomalies as indicators of concealed deposits.

The drilling was optimised to test interpreted structural trends and targeted stratigraphy. The drill spacing for each project was; Indefatigable - 2km x 0.5km, Hornblower 1km x 0.5km, Wild Turkey 3km x 0.5km.

Anomalous gold has been identified in three holes. The zones of anomalism intersected (Figure 1) include:

  • 3m @ 71ppb Au from 6m (BL0144) Indefatigable
  • 3m @ 99ppb Au from 21m (BL0122) Wild Turkey
  • 2m @ 47ppb Au from 57m (BL0072) Hornblower

Drilling at Hornblower intersected Dead Bullock Formation, including within hole BL0072.

Geochemical assaying is continuing.

Figure 2. Indefatigable, Hornblower and Wild Turkey Target location map

Future Work

Geochemical data will be assessed with the gold results to finalise future drill plans and confirm the source of the large soil arsenic anomalies. Approximately 40 aircore holes are proposed to further define the gold anomaly and these will be included as part of a larger campaign with Capstan. Drilling is planned to commence at the break of the wet season in 2018.

Figure 3. 2018 Infill aircore drilling target areas (red outlines)

Referenced Reports

Koerber, D., Capp, S., Harley, B., 1993, Annual Report For Exploration Licenses 1271, 1276, and 1277. December 1992. Unpublished Company Report CR1993-0329A (http://www.geoscience.nt.gov.au/gemis/ntgsjspui/handle/1/78682)

Matt Briggs Managing Director

About ABM Resources

ABM is an established gold exploration company with a successful track record of discovery in one of Australia's premier gold mining districts. The Company owns gold resources and extensive prospective land holdings in the Central Desert region of the Northern Territory. The Company leadership has implemented a strategy of aggressive cost management initiatives and is developing a disciplined, tightly focused exploration strategy. Activities are currently focused on the Company's under-explored 21,000km2 Tanami Project area1 and includes:

  • Systematic evaluation of high potential early stage targets
  • Drilling of advanced prospects on the Suplejack Project
  • Assessment of existing resources and
  • Exploring opportunities for joint ventures and divestment of early stage targets

Competent Person's Statement

The information in this announcement relating to exploration targets and exploration results are based on information reviewed and checked by Mr Matt Briggs who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Briggs is a full time employee of ABM Resources NL and 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 Exploration Results, Mineral Resources and Ore Reserves". Mr Briggs consents to the inclusion in the documents of the matters based on this information in the form and context in which it appears.

Appendix 1 Significant intercepts at the Indefatigable, Hornblower and Wild Turkey Targets

Hole ID TotalDepth(m) East1 North1 RL(m) Dip Azimuth1 FromDepth(m) Interval(m) Result2(ppbGold)
BL0144 57 538670 7767551 406 -90 0 6 3 71
BL0122 54 557253 7770070 416 -90 0 21 3 99
BL0072 60 543529 7767553 417 -90 0 57 2 47

1 GDA 94 Zone 52

2 Collar information for mineralised AC drill holes >50 ppb Au or geological significance

1 Area managed by ABM excluding the Lake Mackay JV and North Arunta Projects

Appendix 2 JORC TABLES FOR BLUEBUSH DRILLING

SECTION 1: SAMPLING TECHNIQUES AND DATA

Criteria JORC Code explanation Commentary
Sampling techniques Nature and quality of sampling (e.g. cut channels,random chips, or specific specialised industrystandard measurement tools appropriate to theminerals under investigation, such as down holegamma sondes, or handheld XRF instruments, etc).These examples should not be taken as limiting thebroad meaning of sampling. The sampling has been carried out by Aircore (AC) drilling. 64 ACholes for 2,986 metres were drilled in this reported programme.AC samples are logged geologically and 3m composite samplessubmitted for assay.
Include reference to measures taken to ensuresample representivity and the appropriatecalibration of any measurement tools or systemsused The full length of each hole was sampled. Sampling was carriedout under ABM's protocols and QAQC procedures as per industrybest practice. Bag sequence is checked regularly by field staff andsupervising geologist against a dedicated sample register. Seefurther details below.
Aspects of the determination of mineralisation thatare Material to the Public Report. In cases where'industry standard' work has been done this wouldbe relatively simple (e.g. 'reverse circulation drillingwas used to obtain 1 m samples from which 3 kgwas pulverised to produce a 30 g charge for fireassay'). In other cases more explanation may berequired, such as where there is coarse gold that hasinherent sampling problems. Unusual commoditiesor mineralisation types (e.g. submarine nodules)may warrant disclosure of detailed information AC drilling was sampled as 3 m composites by spear sampling thetotal reject to produce a 2-3 kg composite sample. At the end ofhole (EOH) a 1 m 2-3 kg spear sample was collected.ABM samples were submitted to a contract laboratory forcrushing and pulverising to produce a 40 g charge for Fire Assaywith AAS finish.
Drilling techniques Drill type (e.g. core, reverse circulation, open-holehammer, rotary air blast, auger, Bangka, sonic, etc)and details (e.g. core diameter, triple or standardtube, depth of diamond tails, face-sampling bit orother type, whether core is oriented and if so, bywhat method, etc). AC drilling was undertaken with a Mantis 80 mounted on a 6 x 6Toyota Landcruiser AC drill rig. This rig has a depth capacity ofapproximately 120m with an on-board Sullair compressorproducing 185 cfm @ 200 psi.A 3 ½" aircore bit was used.
Drill sample recovery Method of recording and assessing core and chipsample recoveries and results assessed Recoveries from drilling were generally 90%-100%, thoughoccasional near surface samples have recoveries of 50%. Sampleswere typically dry with minor wet samples.
Measures taken to maximise sample recovery andensure representative nature of the samples Drillers used appropriate measures to minimise down-hole and/orcross hole contamination in AC drilling.The cyclone and buckets were cleaned every 30 m or after wetsamples to minimise potential for contamination.
Whether a relationship exists between samplerecovery and grade and whether sample bias mayhave occurred due to preferential loss/gain offine/coarse material. Aircore drilling is designed as a reconnaissance tool to defineanomalism in the regolith. Sample recovery does not impactidentification of anomalism and consequently no detailed analysishas been undertaken to determine a relationship between gradeand recovery for this programme. With sample recovery >90%bias is unlikely due to preferential loss/gain of fine/coarsematerial.
Logging Whether core and chip samples have beengeologically and geotechnically logged to a level ofdetail to support appropriate Mineral Resourceestimation, mining studies and metallurgical studies. ABM AC samples were geologically logged at the drill rig by ageologist. Data on lithology, weathering, alteration, ore mineralcontent and style of mineralisation, quartz content and style ofquartz were collected.
Whether logging is qualitative or quantitative innature. Core (or costean, channel, etc) photography. Logging is qualitative in nature and records interpreted lithology,mineralogy, mineralisation, weathering, colour and other featuresof the samples. EOH samples are wet‐sieved and stored in a chiptray.
The total length and percentage of the relevantintersections logged All holes were logged in full by ABM geologists.
Sub-samplingtechniques andsample preparation If core, whether cut or sawn and whether quarter,half or all core taken. No core was collected
Criteria JORC Code explanation Commentary
If non-core, whether riffled, tube sampled, rotarysplit, etc and whether sampled wet or dry. One metre samples were collected from a cyclone into a plasticbucket and then laid out on the ground in rows of 10 or 20.AC drilling was sampled as 3 m composites by spear sampling thetotal reject to produce a 2-3 kg composite sample. At the end ofhole (EOH) a 1 m 2-3 kg spear sample was collected.Recoveries from drilling were generally 90%-100%, thoughoccasional near surface samples have recoveries of 50%. Sampleswere typically dry with minor wet samples. Wet and dry sampleswere not mixed in the composites.
For all sample types, the nature, quality andappropriateness of the sample preparationtechnique. All samples have been analysed for gold by Bureau Veritas inAdelaide. Samples were dried and the whole sample pulverised to85% passing 75 µm, and a sub sample of approximately 200g isretained for Fire Assay which is considered appropriate for thematerial and mineralisation and is industry standard for this typeof sample.
Quality control procedures adopted for all subsampling stages to maximise representivity ofsamples. Field duplicates for AC were taken every 20 samples. At thelaboratory, regular repeat and Lab Check samples are assayed.
Measures taken to ensure that the sampling isrepresentative of the in situ material collected,including for instance results for fieldduplicate/second-half sampling. Three metre composites are taken from the 1 metre sample pilesusing a spear which penetrates across the full sample. The pile issampled in multiple slices from different angles ensuring arepresentative sample is taken. Samples are collected to weighless than 3 kg to ensure total preparation in the pulverisationstage.
Whether sample sizes are appropriate to the grainsize of the material being sampled. Sample sizes are considered appropriate to give an indication ofmineralisation given the particle size and preference to keep thesample weight below 3 kg to ensure the requisite grind size in aLM5 sample mill.
Quality of assay dataand laboratory tests The nature, quality and appropriateness of theassaying and laboratory procedures used andwhether the technique is considered partial or total. ABM use a lead collection fire assay using a 40g sample charge.For low detection, this is read by ICP-AES, which is an inductivelycoupled plasma atomic emission spectroscopy technique, with alower detection limit of 0.001 ppm Au and an upper limit of 1,000ppm Au which is considered appropriate for the material andmineralisation and is industry standard for this type of sample.
For geophysical tools, spectrometers, handheld XRFinstruments, etc, the parameters used indetermining the analysis including instrument makeand model, reading times, calibrations factorsapplied and their derivation, etc. Olympus DELTA handheld XRF was used on all the 64 drill holes.Calibration of the hand‐held XRF tools is applied at start up. XRFresults are only used for indicative analysis of litho-geochemistryand alteration and to aid logging and subsequent interpretation. 4acid digest data is also used to assist in litho-geochemicaldetermination.
Nature of quality control procedures adopted (e.g.standards, blanks, duplicates, external laboratorychecks) and whether acceptable levels of accuracy(i.e. lack of bias) and precision have beenestablished. A blank or standard was inserted approximately every 25-30samples. For drill samples, blank material was supplied by theassaying laboratory. Two certified standards, acquired fromGeoStats Pty. Ltd., with different gold grade and lithology werealso used. QAQC results are reviewed on a batch by batch basisand at the completion of the programme.
Verification ofsampling andassaying The verification of significant intersections by eitherindependent or alternative company personnel. Significant intersections were calculated independently by boththe Project Geologist and database administrator.
The use of twinned holes. No dedicated twin holes have been drilled as this is not consideredappropriate for early stage reconnaissance drilling.
Criteria JORC Code explanation Commentary
Documentation of primary data, data entryprocedures, data verification, data storage (physicaland electronic) protocols. Primary data was collected into an Excel spreadsheet and thedrilling data was imported in the Maxwell Data Schema (MDS)version 4.5.1. The interface to the MDS used is DataShed version4.5 and SQL 2008 R2 (the MDS is compatible with SQL 2008-2012– most recent industry versions used). This interface integrateswith LogChief and QAQCReporter 2.2, as the primary choice ofdata capture and assay quality control software. DataShed is asystem that captures data and metadata from various sources,storing the information to preserve the value of the data andincreasing the value through integration with GIS systems.Security is set through both SQL and the DataShed configurationsoftware. ABM has one sole Database Administrator and anexternal contractor with expertise in programming and SQLdatabase administration. Access to the database by thegeoscience staff is controlled through security groups where theycan export and import data with the interface providing full audittrails. Assay data is provided in MaxGEO format from thelaboratories and imported by the Database Administrator. Thedatabase assay management system records all metadata withinthe MDS and this interface provides full audit trails to meetindustry best practice
Discuss any adjustment to assay data. No transformations or alterations are made to assay data storedin the database. The lab's primary Au field is the one used forplotting and Resource purposes. No averaging is employed. Assaydata below the detection limit were adjusted to equal half of thedetection limit value.
Location of datapoints Accuracy and quality of surveys used to locatedrillholes (collar and down-hole surveys), trenches,mine workings and other locations used in MineralResource estimation. The AC hole collars were surveyed with a handheld GPS pre- andpost- drilling. Handheld GPS reading accuracy is improved by thedevice 'waypoint averaging' mode, which takes continuousreadings of up to 5 minutes and improves accuracy.No DH Surveys were collected due to the early stage nature of thedrilling style and the shallow drill depths.
Specification of the grid system used. The grid system used is MGA_GDA94, Zone 52.
Quality and adequacy of topographic control. For holes surveyed by handheld GPS the elevation has beenupdated based off the 30m SRTM data and recorded in thedatabase.
Data spacing anddistribution Data spacing for reporting of Exploration Results. The drilling was optimised to test interpreted structural trendsand targeted stratigraphy. The drill spacing for each project was;Indefatigable - 2km x 0.5km, Hornblower 1km x 0.5km, WildTurkey 3km x 0.5km
Whether the data spacing and distribution issufficient to establish the degree of geological andgrade continuity appropriate for the MineralResource and Ore Reserve estimation procedure(s)and classifications applied. The drilling subject to this announcement has not been used toprepare Mineral Resource Estimates.
Whether sample compositing has been applied. AC drill samples from this programme were composited from 1metre piles to 3 metre composites samples.
Orientation of data inrelation to geologicalstructure Whether the orientation of sampling achievesunbiased sampling of possible structures and theextent to which this is known, considering thedeposit type. The orientation of the drill lines was designed to intersect thestratigraphy as orthogonally as possible. The drill holes were alldrilled vertically as the dip of stratigraphy is unknown. As this isearly stage drilling the orientation of the drilling to mineralisationis not known.
If the relationship between the drilling orientationand the orientation of key mineralised structures isconsidered to have introduced a sampling bias, thisshould be assessed and reported if material. No orientation based sampling bias has been identified in thisdata.
Sample security The measures taken to ensure sample security. Samples were transported from the rig to the field camp by ABMpersonnel, where they were loaded onto a Toll Express truck andtaken to Bureau Veritas Laboratories secure preparation facility inAdelaide. ABM personnel have no contact with the samples oncethey have been picked up for transport. Tracking sheets have beenset up to track the progress of the samples. The preparationfacilities use the laboratory's standard chain of custodyprocedure. Details regarding sample security of drilling prior to2010 are not readily available.
Criteria JORC Code explanation Commentary
Audits or reviews The results of any audits or reviews of samplingtechniques and data. ABM conducted a Lab Visit to Bureau Veritas laboratory facilitiesin Adelaide in August 2017 and found no faults. QA/QC review oflaboratory results shows that ABM Resources sampling protocolsand procedures were generally effective.

SECTION 2: REPORTING OF EXPLORATION RESULTS

Criteria JORC Code explanation Commentary
Mineral tenementand land tenurestatus Type, reference name/number, location andownership including agreements or material issueswith third parties such as joint ventures,partnerships, overriding royalties, native titleinterests, historical sites, wilderness or national parkand environmental settings. The Indefatigable and Hornblower prospects are located on EL31291 and the Wild Turkey prospect is located on EL 27119 inthe Northern Territory. The tenement is wholly owned by ABM,and subject to the 'Tanami A' agreement between ABM andthe Traditional Owners via Central Land Council (CLC).
The security of the tenure held at the time ofreporting along with any known impediments toobtaining a licence to operate in the area. The tenement is in good standing with the NT DPIR
Exploration done byother parties Acknowledgment and appraisal of exploration byother parties. The target areas were first recognised in this district by surfacegeochemistry and shallow lines of VAC drilling in the late 1990sby Otter Gold NL. North Flinders, Normandy NFM andNewmont Asia Pacific subsequently all conducted exploratorywork on the Bluebush project area with the last recordeddrilling (prior to ABM) completed in 2006. Previous explorationwork provided the foundation on which ABM based itsexploration strategy. A reference to historic reports on historicsurface sampling is provided for the target area and has beenconsidered to prioritise targeting but is not considered suitablefor inclusion for Resource reporting.
Geology Deposit type, geological setting and style ofmineralisation. Geology at Bluebush consists of sedimentary packagesinterpreted to the prospective Dead Bullock Formation and theKilli Killi sediments. The stratigraphic package consists ofinterbedded steeply dipping sedimentary rocks (siltstones andshales) and turbiditic sandstones of the Killi Killi. Mineralisationis interpreted to be controlled NS and WNW striking faults andthe hinge zones of anticlinal and synclinal folds.
Drill hole Information A summary of all information material to theunderstanding of the exploration results including atabulation of the following information for allMaterial drill holes:easting and northing of the drill holecollarelevation or RL (Reduced Level –elevation above sea level in metres) ofthe drill hole collardip and azimuth of the holedown hole length and interception depthhole length. Summaries of all material drill holes are available within theCompany's ASX releases.
If the exclusion of this information is justified on thebasis that the information is not Material and thisexclusion does not detract from the understandingof the report, the Competent Person should clearlyexplain why this is the case The detail of reporting is appropriate for reconnaissanceexploration.
Data aggregationmethods In reporting Exploration Results, weightingaveraging techniques, maximum and/or minimumgrade truncations (e.g. cutting of high grades) andcut-off grades are usually Material and should bestated. ABM does not use weighted averaging techniques or gradetruncations for reporting of exploration results.All reported assays have been length weighted with a nominal25 ppb gold lower cut-off and 3 m of internal waste. No uppercut-offs have been applied.
Criteria JORC Code explanation Commentary
Where aggregate intercepts incorporate shortlengths of high grade results and longer lengths oflow grade results, the procedure used for suchaggregation should be stated and some typicalexamples of such aggregations should be shown indetail. Summaries of all material drill holes and approach tointersection generation are available within the Company's ASXreleases.
The assumptions used for any reporting of metalequivalent values should be clearly stated. No metal equivalent values are used.
Relationshipbetweenmineralisation widthsand intercept lengths These relationships are particularly important in thereporting of Exploration Results.If the geometry of the mineralisation with respect tothe drill hole angle is known, its nature should bereported.If it is not known and only the down hole lengths arereported, there should be a clear statement to thiseffect (e.g. 'down hole length, true width notknown'). From surface mapping and previous drilling in the district, hostlithologies and mineralisation are most commonly steeplydipping. Where sufficient outcrop exists to inform planning,drill holes are angled so as to drill as close to perpendicular tomineralisation as possible.
Diagrams Appropriate maps and sections (with scales) andtabulations of intercepts should be included for anysignificant discovery being reported These shouldinclude, but not be limited to a plan view of drillhole collar locations and appropriate sectionalviews. Refer to Figures and Tables in the body of the text.
Balanced reporting Where comprehensive reporting of all ExplorationResults is not practicable, representative reportingof both low and high grades and/or widths shouldbe practiced to avoid misleading reporting ofExploration Results. All exploration results have been reported.
Other substantiveexploration data Other exploration data, if meaningful and material,should be reported including (but not limited to):geological observations; geophysical survey results;geochemical survey results; bulk samples – size andmethod of treatment; metallurgical test results;bulk density, groundwater, geotechnical and rockcharacteristics; potential deleterious orcontaminating substances. Multi-element geochemistry and spectral logging studies havebeen completed on the deposit. These are used to influence theinterpretation of the regolith profile and host rock lithology.
Further work The nature and scale of planned further work (e.g.tests for lateral extensions or depth extensions orlarge-scale step-out drilling).Diagrams clearly highlighting the areas of possibleextensions, including the main geologicalinterpretations and future drilling areas, providedthis information is not commercially sensitive Further work would include additional framework RAB/ACdrilling to improve geological understanding and to confirmcontinuityofanomalism/mineralisation.Groundgeophysics/magnetics could be completedtomap outsubsurface structures.