Mining 2010 Conference - Black Oak Minerals Limited

SOUTHERN CROSS GOLDFIELDS LTD
ASX: SXG
www.scross.com.au
Mining 2010 Conference
28 October 2010
DISCLAIMER & IMPORTANT NOTICE
This presentation has been prepared by Southern Cross Goldfields Limited (“SXG” or the “Company”). It should not be considered as an offer or invitation
to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No
agreement to subscribe for securities in the Company will be entered into on the basis of this presentation.
You should consider all the Company’s announcements and reports lodged with the ASX before making any investment decisions.
This presentation contains forecasts and forward looking information. These are not a guarantee of future performance and involve unknown risks and
uncertainties. Actual results and developments will almost certainly differ materially from those expressed or implied. SXG has not audited nor
investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent
permitted by applicable laws, SXG makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and take no
responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any
information, statement or opinion contained in this presentation.
You should not act or refrain from acting based on this presentation . This presentation does not purport to be all inclusive or to contain all information
which its recipients may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation and
perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this
presentation before making any investment decision.
DISCLAIMER & IMPORTANT NOTICE
JORC Code Compliance Statement
•
The information in the report to which this statement is attached that relates to Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled by Richard Simmons who is a Member of The Australasian Institute of Mining and Metallurgy and the Australian Institute of
Geoscientists. Richard Simmons is a full time employee of Southern Cross Goldfields Limited. Richard Simmons has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Richard Simmons consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
•
The Battler resource estimate described in this report was completed by independent consultant Mr Dean Fredericksen of Fredericksen Geological
Solutions based on resource drilling data sets provided by SXG. Mr Fredericksen is a Member of The Australasian Institute of Mining and
Metallurgy and qualifies as a Competent Person in respect of the 2004 JORC code by virtue of having sufficient experience which is relevant to the
style of mineralisation and deposit types being estimated. Both Messrs. Simmons and Fredericksen have consented to the inclusion of this
information in the form and context in which it appears in this report.
•
The geological information in this report relating to Exploration Results and Mineral Resources other than the Battler Resource has been compiled
by Mr. Antony Truelove who is a director of Southern Cross Goldfields and a Member of the Australasian Institute of Mining and Metallurgy. He has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person in
respect of the 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mr Truelove
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 report that relates mineral resource estimation of the Dulcie deposit is based on work completed by Mr Jonathon Abbott who
is a full time employee of Hellman and Schofield Pty Ltd and a member of the Australasian Institute of Mining and Metallurgy. Mr Abbott 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Mr Abbott 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 report that relates to mineral resource estimation of the King Brown, Golden Orb, British Hill, Python, Dolly Pot, Dugite,
Goldstream and Mount King deposits is based on work completed by Mr Nic Johnson who is a full time employee of Hellman and Schofield Pty Ltd
and a member of the Australian Institute of Geoscientists. Mr Johnson 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 2004 Edition of
the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Johnson consents to the inclusion in the
report of the matters based on his information in the form and context in which it appears.
SXG Capital Structure
Listed
20 March 2008
Issued Capital
135.1M Shares
Market Cap
$15 M @ $0.11 (undiluted)
Cash
$3.0M at 30 September 2010
Options
29.5M @ $0.15 expire November 30, 2010
16.0M @ $0.20 – various expiry dates
6.5M @ $0.25 – various expiry dates
6.5M @ $0.30 – various expiry dates
Corporate Shareholders
Mineral Resources Limited* (9.82%)
Western Areas (6.09%)
Heron Resources (4.64%)
* Mineral Resource and Polaris
Company Strategy
Evaluate near surface gold deposits
Toll Treatment
Vat/Heap/Dump Leach
Joint venture or other arrangements
Explore
Gold targets complimentary to potential producing assets
Stand alone gold targets
Iron ore targets in strategic Johnson and Jackson ranges
Nickel sulphides on extension of the Forrestania/Southern Cross greenstone belt
Business Development
Regional and/or commodity based opportunities
Gold Deposits
Parker Range
Battler
Dulcie
British Hill
Marda
Python
Dolly Pot
Dugite
Goldstream
Jackson Trend
King Brown
Golden Orb
Battler Gold Deposit
New Resource 504,000t @ 2.32.g/t Au
37,500 oz Contained
Ikonos Backdrop
Battler Gold Deposit
New Resource
Based on additional drilling
504,000t @ 2.32 g/t Au
37,500 ounces contained
Recent Intersection
17m @ 9.9 g/t Au, inc 9.4m @ 14.4 g/t Au
Production Scenarios
Open Pit
Toll treatment and
Incremental dump/heap leach
Underground
Requires assessment
Battler Gold Deposit
Battler Project Development
New resource model completed based on additional drilling
Pit shell optimisations being run on several production scenarios
Toll Treatment
Joint Venture or other arrangement
Deposit is located on a granted mining leases
Miscellaneous licenses have been applied for to support a possible mining operation
Additional resource potential
Untested zone 700m to north (6m @ 2.39g/t Au)
Additional drilling to assess underground potential to be considered
Dulcie Laterite Gold
Resource 1.120MT @ 0.68 g/t Au
24,000 ounces contained
Continuity at higher cut- off grades
Presents staged production options
Recent Metallurgical Testwork
90% in 60 days – heap leach
Underway – vat (pond) leach
Production Scenarios
Heap or Vat (pond) Leach
Combination of vat (pond)/heap using
cut-off grade optionality
Dulcie Project Development
Resource 1.120Mt @ 0.68 g/t Au for 24,000 ounces contained
Optimisations being run on several production scenarios
Heap Leach; higher recovery, higher operating costs
Vat (pond) Leach; recovery being tested, lower operating costs
Trade off on each scenario between overall recovery, speed of recovery, operating costs
Deposit is located on a granted mining lease
Miscellaneous licenses have been applied for to support a possible mining operation
Additional resource potential could add to the value of the base case
Gold Project Pipeline
Battler and Dulcie are 2 of 9 SXG deposits in the Southern Cross area being evaluated
Each deposit is at varying stages of:
Leasing, environmental studies and permitting
Drill density and resource confidence
Resource model updating
Metallurgical, Hydrological, Geotechnical Testwork
Pit shell optimisations
Scheduling of project development, potential production is underway for each deposit
Exploration
Gold
Bullfinch North
Marda
Parker Dome
Nickel
Bullfinch North
Trough Well
Iron Ore (DSO +/- Magnetite)
Johnston Range
Jackson Range
Bullfinch North Gold Targets
Bullfinch North Gold
Targets - Mt Correll
Northern continuation of Copperhead
Shear Zone (host of plus 1Moz
Copperhead Deposit)
Previous RAB Drilling - 200m line
spacing
Plus 1g/t over 600-1000m strike
Drilling generally too shallow - stopped
at beginning of BIF host unit
Andromeda Prospect
Significant length and width
Open to the north
Nickel Sulphides
SXG re-evaluation of northern Southern Cross
Belt for nickel sulphides: first since 2002 WSA
Flying Fox discovery
66km strike with known favourable nickel
sulphide host rocks (olivine cumulates) inc:
Trough Well:14m @ 2.7% Ni, 5m@ 3.1% Ni (RC)
Trough Well Ext.: 20m @ 0.6% Ni incl. 4m @ 1.4% Ni (RC)
Lady Agnes: 3.6% Ni, 0.1% Cu in gossan (Rocks)
Lady Agnes East: 0.47% Ni, 0.05% Cu in gossan (Rocks)
EUR56: 12m @ 0.57%Ni, 0.05% Cu (RAB)
NED1: 0.7% Ni, 0.02% Cu on 500m RAB lines
NED2: 0.6% Ni, 0.03% Cu on two adjacent 500m RAB lines
NED3: 0.7% Ni, 0.02% Cu on 500m RAB lines
NED4: 0.7% Ni, 0.01% Cu on 1000m RAB lines
Scorpio: 0.6% Ni, 0.03% Cu
Sirius: 0.3% Ni, 0.07% Cu
Additional Early Stage Potential at Marda &
Parker Range Projects (e.g. Toomey Hills)
Trough Well Drilling & EM
Trough Well
RC drilling: 20M @ 0.62% Ni
including 4m @ 1.41% Ni
Best intercept in over
30 years exploration
Multiple zones of nickel sulphide
within classic Kambalda style
setting
Obvious thickening of channel
Sirius - Recent RAB Drilling
Marda Iron Ore
DSO District
Operating DSO Mines
Koolyanobbing (Cliffs)
Windarling (Cliffs)
Jackson (Cliffs)
Other Major Projects
J1/J6 (Cliffs)
Deception (Cliffs)
Carina/Bungalbin (MRL)
Johnston Range (MRL)
Lake Giles Magnetite (Macarthur)
SXG Projects
Jackson (SXG)
Johnston Range (SXG)
Iron Ore Exploration
Johnston Range
Magnetite
Formation
and
Haematite
Iron
Plus 30km Combined Strike
Selective Rock Chips to 67% Fe
Six Distinct Areas in 30% Strike
Low Deleterious Elements
Same BIF Mineralised Along Strike
Prospects Along Strike to the South
Deception (Cliffs)
Johnston Range (Mineral Resources)
Contorted BIF - Potential
Structural Thickening
for
Johnston Range Target 1
Iron Ore Exploration
Jackson
Magnetite BIF
Plus 20km Strike
Av 36% Fe in Rock Chips (Magn.)
Visible magnetite crystals - coarse?
Up to 59% Fe to South (DSO)
Goethite Rather Than Magnetite
Magnetics Lower Amplitude
Drilling has Identified a Broad, Low
Grade Goethitic Zone
Copper +/- Zinc-Lead-Silver
Recent discoveries at Austin, Doolgunna etc - renewed interest in western and central
Yilgarn Craton
Copper Bore - Plus 10km strike of black shale in basalt/gabbro with up to 8m @
8.3%Cu, 4.3g/t Au; 5m @ 1.5% Zn, 4.2% Cu
Marda Dome - WMC vacuum drilling (1970s) bottomed in 500 to 1100ppm Cu over plus
100m widths, not drill tested
Sandplain/Boomerang Dam - RAB drilling with plus 1000ppm Cu
Bullfinch North - Plus 11km strike with anomalous Cu in RAB drilling - up to 1850ppm
Cu
Exploration Target Pipeline
Gold exploration
Bullfinch North Gold Targets
Andromeda
Evanston Mine and Shear
Parker Range Regional
Iron Ore
Johnston Range
Jackson
Nickel Sulphide
Trough Well
NED Targets
Lady Agnes
Base Metals
Marda Copper-Gold
Excellent Exploration Track Record
Increased gold resource base to 436,000 ounces:
Discovered new gold zone at Andromeda
(21m @ 1.5g/t Au, 10m @ 4.4g/t Au)
Discovered additional zones beneath Battler
(14m @ 7.24g/t Au, 21m @ 4.15g/t Au, 5m @ 11.5g/t Au, 2m @ 24.4g/t Au, 17m @ 9.9 g/t Au)
Discovered nickel sulphide mineralisation at:
Trough Well Extended (SXG RC Drilling)
(20m @ 0.6% Ni, incl. 4m @ 1.4% Ni)
North Ennuin Dome (Previous explorer 500m x 100m RAB drilling)
(16m @ 0.6% Ni, 0.05% Cu)
Discovered the Dulcie gold laterite project - currently under feasibility study
Reviewed regional prospectivity and identified:
109 gold, 26 nickel sulphide, 12 copper-lead-zinc, 4 iron ore & 2 uranium targets
Discovered potential for DSO & Magnetite iron ore in strategic Johnston and
Jackson Ranges
Summary
Near term cashflow opportunities from existing gold deposits
Exploration
Gold; Near Deposit and stand alone targets for “Company Maker”
Iron Ore; Assess DSO and Magnetite potential and value
Nickel Sulphide; Strategy review to identify best opportunity to re-commence drilling
Copper - lead - zinc - uranium – phosphate; being evaluated
Business Development on regional and/or commodity basis
Gold Resources Total – 436,000 oz
Project
Deposit
Measured
Tonnes
Jackson Trend
Grade g/t
Indicated
Ounces
King Brown
Tonnes
Grade g/t
Inferred
Ounces
176,000
3.0
17,000
1,166,000
1.9
71,000
Golden Orb
Parker Range
British Hill
Die Hardy
TOTAL CP
Total
Grade g/t
Total
Ounces
Tonnes
Grade g/t
Ounces
25,000
2.2
2,000
201,000
2.9
19,000
1,023,000
2.2
71,000
1,023,000
2.2
71,000
557,000
1.9
35,000
1,724,000
1.9
106,000
Battler
432,000
2.4
33,400
72,000
1.8
4,100
504,000
2.3
37,500
Dulcie
1,020,000
0.7
22,300
100,000
0.7
2,300
1,120,000
0.7
24,600
2,794,000
1.6
143,700
1,777,000
2.0
114,400
4,572,000
1.8
258,100
TOTAL SXG
Marda
Tonnes
Python
502,000
2.0
32,000
241,000
1.8
14,000
117,000
1.7
6,000
859,000
1.9
52,000
Dolly Pot
488,000
1.9
29,000
178,000
1.6
9,000
85,000
1.5
4,000
751,000
1.8
43,000
Dugite
196,000
2.1
13,000
82,000
1.7
5,000
20,000
1.6
1,000
298,000
2.0
19,000
Goldstream
200,000
1.9
12,000
26,000
1.6
1,000
7,000
1.6
1,000
233,000
1.9
14,000
3.0
50,000
523,000
3.0
50,000
1,386,000
2.0
87,000
527,000
1.7
29,000
752,000
2.6
62,000
2,664,000
2.1
178,000
1,386,000
2.0
87,000
3,321,000
1.6
172,700
2,529,000
2.2
176,400
7,236,000
1.9
436,100
Mt King
523,000
Notes to Accompany Mineral Resource Estimate table:
•Numbers may not add due to rounding
•Resource models except for Battler, were constructed within the GS3 software, a proprietary resource modelling software developed by Hellman and Schofield.
•The resource model for Battler was constructed within the Minesite software.
•The Dulcie resource was estimated using Ordinary Kriging within a wireframe of laterite using 20m by 20m by 1m blocks. The resources for all other deposits are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction into model blocks customised to the average drill hole
spacing for each deposit and assuming smallest mining unit for ore selection in mine grade control of 3 metres (across the general strike of mineralisation) by 5 metres (along strike) by 2.5 metres (elevation).
•Gold estimation and model blocks were constrained within either geologically derived or grade based wireframes.
•Resource assaying data sets derived from all available reverse circulation and diamond drill sampling. No RAB drilling or trenching assays have been used in the estimates.
•Geology has been used to constrain mineralisation as appropriate.
•Weathering domains have been used to constrain mineralisation where appropriate.
•Data density varies and is reflected in the resource category which has been applied. All measured resources have a drill-hole density of approximately12.5m x 12.5m. All indicated resources except Dulcie and Battler have a drill-hole density of approximately 25m x 25m. Dulcie has a drill density of 40m x 40m. Battler has
a drill density of 20m x 12.5m. Inferred resources have variable density but always less than 50m x 50m except for Mt King which has variable drill-hole spacing between 25m and 100m.
•Assays are generally fire assay, with limited atomic absorption spectroscopy (AAS) assays in the weathered zone.
•All drill-hole collars are surveyed by GPS. Down hole surveys are limited, except at British Hill, where most drill-holes are surveyed.
•A lower cut-off of 0.5g/t Au has been used except at Dulcie where a lower cut-off of 0.4g/t Au has been used.
•CP resources are subject to a purchase agreement which is subject to shareholder approval and has not yet been completed.