Catalyst Metals : Quarterly activities and cash flow report (5.25 Mb)

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Quarterly Activities Report

Quarter ended 31 December 2016

SUMMARY

• Programme and budget to June 2017 finalised for Four Eagles Gold Project
• >20,000 metres RC Blade/Hammer and Air Core drilling programme commenced in January 2017
• Mineralisation Report for Four Eagles Gold Project completed and Retention Licence Application lodged over area of EL4525
• Modelling of gold mineralisation continues at Tomorrow Zone of Tandarra Gold Project
• Four applications lodged for TARGET exploration funding from Victorian Department of Economic Development, Jobs, Transport and Resources INTRODUCTION

  Most of the activity during the December 2016 Quarter involved continued compilation and analysis of all drill and geophysical data in relation to the completion of the Mineralisation Report for the Four Eagles Gold Project and finalisation of planning for the 2017 drilling programme. The Mineralisation Report is a Victorian Government requirement to demonstrate the presence of a mineralised gold zone which then satisfies one of the conditions of an application for a Retention Licence. The Retention Licence application was lodged in December 2016.

  Further modelling of the shapes of the gold mineralisation was undertaken on the Tomorrow Zone at the Tandarra Gold Project to assess the viability of potential open pit development.

  The Four Eagles Gold Project and the Tandarra Gold Project are situated about 15 kilometres apart along the Whitelaw Fault Corridor which is considered to be a major structural control of gold mineralisation north of Bendigo in Victoria. Catalyst Metals Limited (Catalyst) manages the entire Whitelaw Gold Belt and has interests in eight Exploration Licences which extend for 75 kilometres along the Whitelaw and Tandarra Faults north of Bendigo (Figure 1).

  WHITELAW GOLD BELT

  There was no field activity during the December 2016 Quarter to minimise any impact on the grain crops that are usually harvested by December each year. Planning and preparations have commenced for another large field drilling season that will be conducted between January and June 2017. The results from the 2016 drilling programme have further confirmed the gold potential in the Whitelaw Fault corridor which is still largely untested because the favourable Ordovician rocks are concealed by younger sediments deposited in the Murray Basin.

  The Whitelaw-Tandarra Fault corridor is believed to be very important for gold deposition but is still largely untested north of Bendigo because the favourable gold-bearing rocks are hidden beneath barren Murray Basin cover sediments. Prospectors and miners who mined over 22 million ounces of high grade gold (15g/t Au) from the exposed areas of Bendigo in the 1800s were unable to find gold in the Catalyst areas because they had no method of locating the gold beneath these barren rocks.

  The objective of Catalyst is to use modern geophysical and drilling techniques to discover high grade gold deposits that can be mined by open cut or underground methods. The discoveries at Four Eagles and Tandarra have confirmed the high prospectivity of the Whitelaw Fault Corridor.

  FOUR EAGLES JOINT VENTURE (EL4525, EL5295, EL5508)

  The Four Eagles Gold Project is a joint venture between Catalyst, Providence Gold and Minerals Pty Ltd (Providence) and Gold Exploration Victoria Pty Ltd (GEV) (a wholly owned subsidiary of Hancock Prospecting Pty Ltd). Catalyst is retaining its 50% interest whilst GEV has earned a 25% interest in the project and has made the decision to spend a further $2.1 million to earn the remaining 25% from Providence. The project is managed by Catalyst within the Four Eagles Joint Venture.

  The Four Eagles Joint Venture covers an envelope of gold mineralisation about 6 kilometres long and 2.5 kilometres wide with gold occurring in at least three structural zones trending roughly north south (Eagle 2, Eagle 3 and Eagle 4 on Figures 2a and 2b). Three prospects have produced high grade gold intersections (Discovery, Hayanmi and Boyd's Dam). Only a small portion of the total area has been tested by drilling and the 2017 programme will aim to carry out drilling on many of the targets interpreted from the 2016 gravity survey.

  2017 PROPOSED PROGRAMME AND BUDGET

  The Four Eagles Joint Venture has approved a Programme and Budget for the period to the end of June 2017 which will involve the expenditure of about $1.8 million on RC Blade/Hammer and Air Core drilling. It will test both shallow gold zones on the known trends (Hayanmi, Boyd's Dam and Discovery) as well as regional targets (Boyd North and gravity targets). The location of the gold zone drilling is shown on Figures 2a and 2b.

  PROPOSED RC BLADE/HAMMER DRILLING

  This programme will involve the drilling of angled large diameter air core holes (RC Blade/Hammer) on the Hayanmi and Boyd's Dam gold structures to give a better understanding of the shapes of the gold mineralisation. Approximately 10,000 metres of drilling will test strike lengths of 1.2 kilometres on Hayanmi and about 900 metres on Boyd's Dam (Figures 2a and 2b). Drill holes will be sampled at one- metre intervals from surface with sample splitting prior to dispatch to the laboratory. Assays should be available progressively between February 2017 and June 2017.

  Hayanmi Prospect

  A programme of approximately 6,000 metres of RC Blade/Hammer will be carried out at Hayanmi to test the vertical interval of 120 metres depth over a strike length of 1.2 kilometres (Figure 3). Several deeper RC or perhaps diamond holes will be attempted later in the season to explore potential high grade shoots of gold mineralisation that lie beneath the shallow zones as shown on the longitudinal projection on Figure 4. Such zones formed the basis of underground mining at Bendigo and Fosterville.

  Some of the previous intersections recorded at Hayanmi are listed below:

  • 41.0m @ 3.87g/t Au from 76 metres including 6.0m @ 16.3g/t Au from 76 metres (FE696)
  • 13.0m @ 2.6g/t Au including 5.0m @ 5.76g/t Au from 135 metres Au (FE700)
  • 3.0m @ 5.96g/t Au from 75 metres (FE471)
  • 3.0m @ 14.7g/t Au from 87 metres (FE591)
  • 9.0m @ 7.9g/t Au from 87 metres (FE608)
  • 1.5m @ 12.9g/t Au from 53 metres (FE626)
  • 10.0m @ 3.7g/t Au including 2.0m @ 14.3g/t Au from 61 metres (FERC043)
  • 4.0m @ 4.0g/t Au including 1.0m @ 14.3g/t Au from 65 metres (FERC042)
  • 4.0m @ 3.8g/t Au including 1.0m @ 12.0g/t Au from 116 metres (FERC041)
  • 1.0m @ 9.4g/t Au from 111 metres and 2.0m @ 3.4g/t Au from 123 metres (FERC055)
  • 5.0m @ 2.6g/t Au from 73 metres including 1.0m @ 8.5g/t Au (FERC061)
  • 6.0m @2.8g/t Au from 106 metres including 1.0m @ 9.6g/t Au (FERC059)
  • 3.0 m @ 11.2g/t Au including 1.0 m @ 32.5g/t Au from 127 metres (FERC034)
  • 1.0m @ 103.0g/t Au from 149 metres (FERC088)
  • 16.0m @ 1.26g/t Au from 94 metres including 1.0m @ 9.54g/t Au from 109 metres(FE085)
  • 5.0m @ 2.71g/t Au from 100 metres (FERC027)
  • 2.0m @ 19.2g/t Au from 93 metres (FERC044)
  • 6.0m @ 2.7g/t Au from 97 metres (FERC050)
  • 9.0m @ 5.7g/t Au from 108 metres (FE717)
  • 3.0m @ 13.4g/t Au from 99 metres (FE718)
  • 18.0m @ 1.2g/t Au from 60 metres and 3.0m @ 9.2g/t Au from 147 metres (FE719)

    Boyd's Dam Prospect

    Limited drilling was possible at the Boyd's Dam prospect during 2016 due to early sowing of grain crops and the onset of wet weather. The RC Blade/Hammer programme of about 4,000 metres resumed in January 2017 to test a vertical panel down to 120 metres depth over a strike length of approximately 900 metres (Figure 5). Deeper structurally targeted holes are also planned. The objective is to confirm the mineralised shapes from previous drilling which produced the following intersections:

  • 6.0m @ 3.77g/t Au including 1.0m @ 7.82g/t Au from 44 metres (FERC010)
  • 3.0m @ 36.6g/t Au from 57 metres (FE415)
  • 9.0m @ 2.33g/t Au from 48 metres (FE579)
  • 2.0m @ 6.2g/t Au from 49 metres (FERC003)
  • 1.0m @ 18.3g/t Au from 127 metres (FERC002)
  • 2.0m @ 7.6g/t Au from 55 metres (FERC039)
  • 8.0m @ 3.7g/t Au including 1.0m @ 12.35g/t Au and 1.0m @ 10.05g/t au from 66 metres (FERC039)
  • 1.0m @ 11.0g/t Au from 66 metres (FERC037)
  • 16.0m @ 2.0g/t Au from 80 metres (FERC038) AIR CORE DRILLING

    This programme will involve the drilling of conventional 90mm diameter air core holes to test the Boyd North and Discovery prospects where high grade intersections in excess of 100g/t Au have previously been recorded although drill traverse spacing is still very wide. The programme will also test eight gravity targets that were highlighted in the geophysical survey undertaken early in 2016. Approximately 10,000 metres of air core drilling is planned for the January to June 2017 period.

    Boyd North Prospect

    This prospect lies to the north of Boyd's Dam (Figures 2a and 2b) and was discovered in early 2016 when two air-core holes 600 metres apart intersected high grade gold in an area where the basement depth is only 20 to 40 metres. Angled air core drilling will test the entire strike length between the following two holes with the objective of defining a new high grade gold prospect (Figure 5).

  • 1.0m @ 6.4g/t Au from 85 metres (FE728)
  • 3.0m @ 154.0g/t Au from 96 metres (FE732)

    Discovery Prospect

    The Discovery prospect was one of the first areas at Four Eagles to show high grade gold, however limited drilling has been undertaken there since 2012. The prospect, however, contains some of the highest- grade gold intersections seen at Four Eagles as shown in the following table:

  • 3.7m @ 4.7g/t Au including 0.8m @ 17.5g/t Au (FEDD001)

 0.4m @ 8.4g/t Au and 0.75m @ 15.3g/t Au (FEDD007)

 0.4m @ 152g/t Au (FEDD008)

 6.0m @ 82.7g/t Au (FE328)

 1.5m @ 1.81g/t Au (FE326)

 3.0m @ 9.71g/t Au (FE380)

 3.0m @ 0.9g/t Au (FE584)

 3.0m @59.0g/t Au and 3.0m @ 7.0g/t Au (FE663)

Gold is often associated with massive quartz lodes and may be hosted in saddle reefs similar to Bendigo. The structure extends over about two kilometres of strike length and air core drilling is proposed over two segments where previous drilling has shown high grades (Figures 2a and 2b).

Gravity Targets

Following the gravity survey in early 2016, geophysicists highlighted a number of structures that were very similar to those seen in the mineralised trends at Hayanmi, Boyd's Dam and Discovery but still lie within the favourable regional structure west of the Whitelaw Fault. Eight targets have been identified and air core drilling (approximately 3,500 metres) will be carried out over each one. The objective is to discover new gold deposits that enhance the prospectivity of the Four Eagles Gold Project. These gravity targets are shown on Figure 6.

MINERALISATION REPORT/RETENTION LICENCE APPLICATION

During the December 2016 Quarter, Catalyst finalised the preparation of a Mineralisation Report on the Hayanmi and Boyd's Dam gold zones. The main purpose of this report is to satisfy Victorian Department of Economic Development, Jobs, Transport and Resources (EcoDev) regulations to demonstrate that gold mineralisation has been discovered and to form the basis of an application for a Retention Licence to replace the current Exploration Licence 4525. The Report has attempted to apply shapes to the zones of gold mineralisation and outline a ten-year programme of further exploration, scoping studies and possible feasibility studies. The Retention Licence application was lodged on 22 December 2016. The new RL006422 will take some time to be granted but EL4525 will remain in force in the interim.

The Mineralisation Report has also provided information on the possible plunge of the gold zones which has been used to enable more detail for the planning of the 2017 drilling programme.