Uley graphite43 10111july2012final

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Uley Graphite Mine NI43-101

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Uley graphite43 10111july2012final

  1. 1. Uley Main Road Graphite DepositEyre Peninsula, South AustraliaNI43-101 ReportPrepared by Coffey Mining Pty Ltd on behalf of:MEGA Graphite IncEffective Date: 11 July 2012Qualified Person: Trevor Bradley – MAIGMINEWPER01006AA
  2. 2. 11 July 2012MEGA Graphite IncLevel 1, Suite A192 Waymouth StreetADELAIDE SA 5000Attention: Mr Christopher DarbyDear ChrisRE: Uley Main Road Graphite Deposit – NI43-101Please find attached our report in support of the proposed submission of the Uley Project Main RoadGraphite Resource under NI43-101 reporting guidelines.If you have any queries relating to this report, please do not hesitate to contact Trevor Bradley orKaren Lloyd in our West Perth office on 9324 8800.For and on behalf of Coffey Mining Pty LtdThis is a scanned signature held on file by CoffeyMining. The person and signatory consents to itsuse only for the purpose of this document.Karen LloydPrincipal Consultant Audits MINEWPER01006AACoffey Mining Pty Ltd ABN 52 065 481 2091162 Hay Street, West Perth WA 6005 AustraliaPO Box 1671, West Perth WA 6872 AustraliaT (+61) (8) 9324 8800 F (+61) (8) 9324 8877 coffey.com
  3. 3. Coffey Mining Pty LtdDOCUMENT INFORMATIONAuthor(s): Karen Lloyd Principal Consultant/Primary Author MAusIMM Trevor Bradley Manager – Audits (Supervising MAIG Principal)Date: 11 July 2012Project Number: MINEWPER01006AAVersion / Status: Final F:MINEProjectsMEGA Graphite IncMINEWPER01006AA_Uley GraphitePath & File Name: ProjectReportCMWPr_1006AA_UleyGraphite_43-101_11July2012_TB Final.docxPrint Date: Thursday, 12 July 2012Copies: MEGA Graphite Inc (1 Electronic) Coffey Mining – Perth (1)Document Change ControlVersion Description (section(s) amended) Author(s) DateDraft ALL TB / KL 07/06/2012Final ALL TB / KL 12/07/2012Document Review and Sign OffThis is a scanned signature held on file by Coffey This is a scanned signature held on file by CoffeyMining. The person and signatory consents to its Mining. The person and signatory consents to itsuse only for the purpose of this document. use only for the purpose of this document.Principal Consultant/Primary Author Supervising Principal ConsultantKaren Lloyd Trevor BradleyUley Main Road Graphite Deposit – MINEWPER01006AANI43-101 Report – 11 July 2012
  4. 4. Coffey Mining Pty LtdTable of Contents1 Summary .......................................................................................................................................12 Introduction ..................................................................................................................................33 Reliance on Other Experts ..........................................................................................................44 Property Description and Location ............................................................................................55 Accessibility, Climate, Local Resources, Infrastructure and Physiography .........................76 History ...........................................................................................................................................87 Geological Setting and Mineralisation .......................................................................................9 7.1 Regional Setting ................................................................................................................9 7.1.1 Stratigraphy ............................................................................................................. 9 7.1.2 Project Geology ..................................................................................................... 12 7.1.3 Structural Geology ................................................................................................. 12 7.2 Mineralisation and Alteration .......................................................................................... 138 Deposit Types ............................................................................................................................ 149 Exploration ................................................................................................................................. 1510 Drilling ........................................................................................................................................ 16 10.1 CRAE Drilling .................................................................................................................. 16 10.2 2011 Drilling .................................................................................................................... 18 10.3 Surveying ........................................................................................................................ 18 10.4 Geological Logging ......................................................................................................... 18 10.5 Sampling ......................................................................................................................... 19 10.5.1 CRAE Sampling .................................................................................................... 19 10.6 2011 Sampling................................................................................................................ 19 10.7 Bulk Density Measurement ............................................................................................ 19 10.8 Drillhole Data .................................................................................................................. 19 10.8.1 CRAE Sample Preparation .................................................................................... 19 10.8.2 2011 Sample Preparation ...................................................................................... 20 10.8.3 Prior Analysis ........................................................................................................ 2011 Sample Preparation, Analyses and Security .......................................................................... 21 11.1 CRAE Analytical Quality Control Procedures and Data ................................................. 21 11.1.1 Certified Reference Material (Standards) and Blanks ........................................... 22 11.1.2 Umpire Laboratory Check Assaying ...................................................................... 22 11.1.3 Summary ............................................................................................................... 22 11.2 CRAE Database Validation ............................................................................................ 26 11.3 2011 Drilling Results....................................................................................................... 2612 Data Verification ........................................................................................................................ 28 12.1 Database Coding and Compositing................................................................................ 28 12.2 Summary Statistics ......................................................................................................... 28Uley Main Road Graphite Deposit – MINEWPER01006AANI43-101 Report – 11 July 2012
  5. 5. Coffey Mining Pty Ltd 12.3 Density ............................................................................................................................ 28 12.4 Block Model Construction ............................................................................................... 28 12.5 Estimation Approach ...................................................................................................... 30 12.6 Modifying Factors ........................................................................................................... 30 12.7 Resource Classification Criteria ..................................................................................... 30 12.8 Mineral Resource Reporting ........................................................................................... 3313 Mineral Processing and Metallurgical Testing ....................................................................... 34 13.1 1980 - 1987 Testwork ..................................................................................................... 34 13.2 LECO Analyser ............................................................................................................... 34 13.3 Minimum Additional Testwork Requirements ................................................................. 34 13.3.1 Head Assays ......................................................................................................... 34 13.3.2 Mineralogy ............................................................................................................. 35 13.3.3 Batch Flotation Testing.......................................................................................... 3514 Mineral Resource Estimates .................................................................................................... 36 14.1 Geological Interpretation and Modelling ......................................................................... 36 14.2 Mineralisation Interpretation ........................................................................................... 36 14.3 Weathering Interpretation ............................................................................................... 3615 Adjacent Properties .................................................................................................................. 3716 Other Relevant Data and Information ...................................................................................... 38 16.1 Geological Model ............................................................................................................ 38 16.2 Grade .............................................................................................................................. 38 16.3 Resource Tonnages ....................................................................................................... 3817 Interpretation and Conclusions ............................................................................................... 4018 Recommendations .................................................................................................................... 4119 References ................................................................................................................................. 42Date and Signature Page .................................................................................................................... 43Uley Main Road Graphite Deposit – MINEWPER01006AANI43-101 Report – 11 July 2012
  6. 6. Coffey Mining Pty LtdList of TablesTable 1_1 – June 2012 Resource 2Table 4_1 – Tenement Schedule Summary 5Table 10.1_1 – Estimate Summary Drilling and Sampling Statistics for 16Table 10.2_1 – 2011 Drillhole Locations 18Table 10.7_1 – Bulk Density Statistics 19Table 11.3_1 – 2011 Assay Results 27Table 12.2_1 – Summary 2m Composite Statistics –Graphitic Carbon (%) 29Table 12.4_1 – Block Model Parameters 30Table 12.7_1 – Confidence Levels of Key Categorisation Criteria 31Table 12.7_2 – Sampling Techniques and Data 31Table 12.7_3 – Estimation and Reporting of Minerals Resources – Fundamental Data 32Table 12.7_4 – Estimation and Reporting of Minerals Resources – Modifying Factors 32Table 16.3_1 – Classified Resource at 3.8% Graphitic Carbon Cutoff 39Table 18_1 – Exploration Potential – 41List of FiguresFigure 4_1 – Uley Graphite Project - Tenure 6Figure 5_1 – Uley Graphite Project - Accessibility 7Figure 7.1.1_1 – Stratigraphic Column 11Figure 7.1.3_1 – Graphitic Schist – Uley Main Road Deposit 12Figure 8_1 – Graphitic Schist Model – Uley Main Road Deposit 14Figure 9_1 – Regional Mineralisation Targets 15Figure 10.1_1 – Drillcore Storage and Sample Archive 17Figure 10.1_2 – Outcrop at the 17Figure 11.1.2_1 – Summary Statistics – Amdel versus Comlabs 24Figure 11.1.2_2 – Umpire Assaying 25Figure 17_1 –Other Adjacent Anomalies 40Uley Main Road Graphite Deposit – MINEWPER01006AANI43-101 Report – 11 July 2012
  7. 7. Coffey Mining Pty LtdList of AppendicesAppendix A – Lab Assay ProtocolsAppendix B – Extracts from Warries and Barnes October 1996 ReportAppendix C – 2012: ResourceUley Main Road Graphite Deposit – MINEWPER01006AANI43-101 Report – 11 July 2012
  8. 8. Coffey Mining Pty Ltd1 SUMMARY Coffey Mining Pty. Ltd. (Coffey Mining) has been retained by MEGA Graphite Inc (MEGA) via a letter of engagement dated 6 March 2012 to undertake reporting of the Uley Main Road graphite deposit under Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (2011). Coffey Mining has validated the existing drillhole data and database, re-constructed data from local mine grid to Australian Mine Grid (AMG) survey and developed a new density model for the resource, based on billet sampling with results produced to certified Australian Standards 1289.2.1.1 and 1289.3.5.1. This report documents the graphite resource, which has been estimated using Ordinary Kriging (OK) techniques and cross checked against an estimate calculated by using Inverse 3 Distance Cubed (ID ) methods. Both estimates utilised the re-validated drillhole and assay data as well as an additional (50 sample) assay set from a diamond core drilling programme undertaken in 2011. The Uley Project is located on the Eyre Peninsula, 15km west-southwest of Port Lincoln in the state of South Australia. A site visit was undertaken in May 2012. The Uley project consists of five contiguous tenements, of which two are retention licences, two are mining leases and one is an exploration licence. Uley has been mined intermittently from the 1920s with the most recent period of production coming to an end in early 1993. The mining and processing site has been on extended care and maintenance since that time. The 20 tonne per hour (tph) processing plant is substantially intact and operable, subject to refurbishment. A 33KV power supply to the plant site is in place and energised. Coffey Mining validated substantial parts of the Conzinc Rio Tinto Exploration (CRAE) database, containing sample, assay and drillhole data. Independent contractors have re- established collar and survey control and Coffey Mining has developed a density model using recent density data measured to applicable standards by Coffey Information (an associated company to Coffey Mining) has been developed. Based upon this work the insitu dry bulk density (DBD) of the wallrock material used is 2.6g/cm³. The DBD of graphite is 2.17g/cm³. The density model using 2.17g/cm³ and the estimated percentage of graphite was applied to the resource block model.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 1NI43-101 Report – 11 July 2012
  9. 9. Coffey Mining Pty Ltd Coffey verify that all the relevant core, as documented in the archive provided by MEGA, is intact; that the original and residual sampling was re- verified; that all collar positions have been updated from local mine grid to the Australian Height Datum AMG grid correctly and that a topographic survey has been completed. In addition to the classified Mineral Resource several less well explored prospects were identified and reported on. These are located on the exploration tenement and provide an additional total exploration potential, which is estimated to fall within a range of 25-150Mt with grade ranging from 5 to 20% graphitic carbon. This report has been prepared in accordance with and complies with Canadian National Instrument 43-101 for the ‘Standards of Disclosure for Mineral Projects’ of June 2011 (the Instrument) and the resource and reserve classifications adopted by the Canadian Institute of Mining (CIM) Council in November 2004. The report is also consistent with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ of December 2004 (JORC Code) as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy (AusIMM), Australian Institute of Geoscientists (AIG) and Mineral Industry Consultants Association (MICA). The Uley Graphite Mineral Resource Upgrade Report, of June 2011, was prepared by Coffey Mining and the Resource declared in accordance with the guidelines of the JORC Code 2004. Ms Karen Lloyd compiled this report under the direct supervision of Mr Trevor Bradley (MAIG), an employee of Coffey Mining and a Member of the Australian Institute of Geoscientists whom has sufficient experience relevant to the activity undertaken to qualify as a Qualified Person as defined in NI43-101 and whom takes responsibility for this report on behalf of Coffey Mining Pty Ltd. The Mineral Resource Statement as at 10 June 2011 is tabulated below (Table 1_1). Table 1_1 Uley Main Road Graphite Deposit - June 2011 Resource Update Classified Resource at 3.8% Graphitic Carbon Cutoff OK Estimate using a Parent Block of 10mY by 4mE and 4mRL Lower Cutoff Grade Tonnage Average Grade Classification (Graphitic Carbon %) (Mt) (Graphitic carbon %) Indicated 3.8 4.3 9.4 Inferred 3.8 2.3 7.5 Total 6.6 8.7 Notes:  There is drilling coverage for the whole rock grades on a 25m by 50m grid over the target areas. These host rocks, folded and thrust graphitic schists, were intersected by 30 drillholes. Of these all 30 are diamond drillholes.  Statistical analyses on samples and 2m composites were completed.  Grade estimates were calculated for 4m (east-west) by 10m (north-south) by 4m (vertical) blocks. The method used to obtain grade estimates was Ordinary Kridging. An ID3 check estimate was performed.  Average in situ dry bulk densities were applied. Density measurements are obtained from direct measurment to Austraslian standard. Mineral Resource classification was developed from the confidence levels of key criteria including drilling methods, geological understanding and interpretation, sampling, data density and location, grade estimation and quality. The requirements for infill drilling, together with uncertainties in geological interpretation and mineralisation envelopes in the more structurally complex zones have resulted parts of the resource being classified as an Inferred Mineral Resource.  Model does not include mining dilution nor metallurgical receovery. Metallurical recovery of flake graphite estimated at 60% of graphite grade.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 2NI43-101 Report – 11 July 2012
  10. 10. Coffey Mining Pty Ltd2 INTRODUCTION Coffey Mining Limited (Coffey Mining) has been commissioned by MEGA Graphite Inc (MEGA) to report on the Uley Graphite Project, located in the state of South Australia under Canadian National Instrument 43-101 Standards of disclosure for Mineral Projects (2011). This report complies with the requirements of NI-43101 for the purpose of listing on the Toronto Stock Exchange (TSX) and has been prepared in accordance with the NI-43101. A site visit was undertaken on 22 May 2012. The competent person in respect of this report is Mr Trevor Bradley (MAIG), an employee of Coffey Mining and a Member of the Australian Institute of Geoscientists whom has sufficient experience relevant to the activity undertaken to qualify as a Qualified Person as defined in NI43-101 (2011) and whom takes responsibility for this report on behalf of Coffey Mining Pty Ltd. Ms Karen Lloyd is the primary author and compiled the report under the direct supervision of Mr Bradley. A historical Mineral Resource estimate was previously undertaken by Coffey Mining in January 2010. Previous Mineral Resource estimates have not been reported under NI-43101 as historical ownership of the project was limited to Australian Securities Exchange listed companies and privately owned entities. Coffey Mining and its parent, Coffey International, has been providing consulting services for over 50 years. Coffey International Limited (Coffey) is an Australian-based international consulting firm specialising in the areas of mining and geotechnical engineering, hydrogeology, hydrology, tailings disposal, environmental science and social and physical infrastructure. Neither Coffey, nor the Experts responsible for compiling this report, have or have had previously any material interest in MEGA Graphite Inc or the mineral properties in which MEGA Graphite Inc has, or is earning, or acquiring, an interest. Coffey Minings relationship with the Uley Graphite Project is solely one of professional association between client and independent consultant. This report is prepared in return for professional fees based upon an agreed commercial schedule of rates and the payment of these fees is in no way contingent on the results of this report.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 3NI43-101 Report – 11 July 2012
  11. 11. Coffey Mining Pty Ltd3 RELIANCE ON OTHER EXPERTS The principal sources of information used to compile this report comprise technical reports and technical data variously compiled and supplied by MEGA Graphite Inc, and its consultants and discussions with its corporate management. A listing of the principal sources of information is included in Section 19 of this report. As part of this assessment a Principal Consultant and employee of Coffey Mining Ms Karen Lloyd has visited the project site in May 2012. Ms Lloyd is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has applied for fellowship status. Mr Trevor Bradley is reliant on Ms Lloyd for the purpose of the site visit and has liaised with Ms Lloyd throughout the generation, reporting and validation of the 2012 Mineral Resource model and this document. The data supplied as related to resource estimates and exploration includes:  Primarily, digital files, in MapInfo format of geology, geophysics and tenements.  A Vulcan/Maptek Map-file with drilling and assay completed by the tenement holders prior to MEGA, who were Conzinc Rio Tinto Exploration (CRAE).  A series of resource completion reports (Collins 2007; Read and Associates, 1987; Finch 1984; and Howard, 1982) that summarises the resource estimate methodology, the project geology, the project database to that time, drilling methods, QA/QC procedures, sampling methodologies, structural analysis, target generation and a tabulated and classified resource. The latter of these reports is a comprehensive and diligent summary of all work on the Project to that date and represents the major report at hand on the Uley Project.  Data previously held in archive by Coffey Mining of project work completed by RSG Global (subsequently merged with Coffey Mining in 2007).  Assays received from ALS-Chemex, Perth for samples submitted in the 2011 drilling programme. Coffey Mining declares that it has relied upon the information it has been provided by MEGA Graphite Inc and has taken all reasonable care to ensure that the information contained in this report is, to the best of its knowledge, in accordance with the facts. Furthermore Coffey Mining assumes that the information contains no omission likely to affect its import. Coffey Mining has not undertaken any independent enquiries or audits of MEGA Graphite Inc to verify that all material documentation has been provided and gives no representation that its assumption is correct. MEGA Graphite Inc has agreed to indemnify Coffey Mining from any liability arising from Coffey Mining’s reliance on data provided or not provided to it.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 4NI43-101 Report – 11 July 2012
  12. 12. Coffey Mining Pty Ltd4 PROPERTY DESCRIPTION AND LOCATION The Uley Graphite Project consists of five contiguous tenements (Table 4_1 and Figure 4_1), of which two are retention leases two are mining leases and one is an exploration licence. Development would be subject to the development, submission and approval of a Mining and Rehabilitation Plan (MARP) which is mandated under South Australian State legislation. MEGA has a 100% interest in these tenements and no royalty agreements are in place. Table 4_1 Uley Main Road Graphite Deposit - Resource Update Tenement Schedule Summary Type Lease/Title Number Area Expiry ML 5561 44ha 16 March 2017 Mining Lease ML 5562 22ha 16 March 2017 RL 66 225ha 10 October 2016 Retention Lease RL 67 187.5ha 10 October 2016 Exploration Lease EL 3414 75km² 12 October 2014 Allotment 1/Plan 28872 Freehold Title 117ha N/A Hundred of UleyUley Main Road Graphite Deposit – MINEWPER01006AA Page: 5NI43-101 Report – 11 July 2012
  13. 13. Coffey Mining Pty Ltd Figure 4_1 Uley Graphite Project – Tenure (Source: MEGA)Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 6NI43-101 Report – 11 July 2012
  14. 14. Coffey Mining Pty Ltd5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY The project site is situated approximately 23km west and southwest from the City of Port Lincoln (population 14,000), the regional centre for the Lower Eyre Peninsula (Figure 5_1). Port Lincoln offers a nearby workforce and substantial infrastructure. Port Lincoln has a modern deep water port and is serviced by air from Adelaide the capital city of the state of South Australia. A two lane highway connects Port Lincoln to other regional towns on the peninsula and through to Adelaide, a total road distance of just over 600 kilometres. With rolling topography and coastal cliffs, the areas average maximum temperatures range from 25 - 29°C in summer to a slightly cooler 15-18°C in winter. Rainfall is about 500mm or 20 inches which mainly falls during the winter months. Figure 5_1 Uley Graphite Project – Accessibility North 10kmUley Main Road Graphite Deposit – MINEWPER01006AA Page: 7NI43-101 Report – 11 July 2012
  15. 15. Coffey Mining Pty Ltd6 HISTORY The project was mined by open pit methods intermittently from the 1920s and the latest episode of production ceased in early 1993. The mining and processing site has been on extended care and maintenance since that time. The 20 tonne per hour (tph) processing plant is substantially intact and presumed operable, subject to refurbishment. A 33KV power supply to the plant site is in place and energised. A tailings storage facility (TSF) is present, as are the mine-offices and accommodation blocks. The depleted pit is flooded and the records of production from the old pit were abandoned in 1993 when the mine was closed.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 8NI43-101 Report – 11 July 2012
  16. 16. Coffey Mining Pty Ltd7 GEOLOGICAL SETTING AND MINERALISATION7.1 Regional Setting The graphite deposits around Port Lincoln are located within the Gawler Craton geological province. The Hutchison Group metasediments within which the deposits are hosted overlies the granitoid gneisses of the Sleaford Complex and is itself overlain elsewhere by marine shelf sediments of the Wallaroo Group. Regionally the project area is overlain by calc-arenites of the Tertiary age Bridgewater Formation, which locally, are immediately underlain by either the Pliocene age Uley Formation (well sorted, rounded orange-brown-clayey sand and quartzose sand) or the Eocene age Wanilla Formation (humic fluvial sands). Local laterally extensive ferricrete is developed over the Wanilla sediments. The Uley and Wanilla formations overlie the Archean age, Hutchinson Group which is split into a lower and upper Hutchinson Group and separated by the Cook Gap Schist. The graphite deposits which are the subject of this report are hosted within the Cook Gap schist. To the north east of the Uley tenements lies the Kalinjala mylonite, which represents a vertical tectonic terrane boundary and fault zone. To the north of the tenements lies an eastward verging thrust zone within the Donnington (1850 Ma) suite of charnockites, granite gneiss and gabbro-norites geographically proximal to Boston and Louth bays. The Uley Graphite Project tenements lie within the Lincoln SI53-11 1:250,000 Geology sheet (Schwarz, 2003). Drilling on the tenements has intersected the Katunga dolomite and the Warrow quartzite at the base of the Hutchinson Group. The Uley Main Road deposit and the now depleted Uley pit are both interpreted to be developed within a thrust zone of similar age to the one to the North within the Donnington suite. The geological basement is comprised of undifferentiated ortho- and para-gneiss of the Archean age Sleaford Complex.7.1.1 Stratigraphy The basement to the Hutchison Group is the Sleaford Gneiss and similar age gneisses in the Port Lincoln area, though little of this sequence has been recognised in the Middleback Ranges. Areas between the Hutchison Group exposures are most probably Dutton or Donnington Suite granites and gneisses, although exposure in these areas is poor. Figure 7.1.1_1 summarises the stratigraphy in the region. Parker & Lemon (1982) defined the stratigraphy of the Hutchison Group for the entire Eyre Peninsula. Facies variations were invoked to account for the significant iron formations of the Middleback Ranges around Whyalla. The Hutchison Group stratigraphy in the Middleback Range comprises from base: the Warrow Quartzite, Katunga Dolomite, Lower Middleback Jaspilite, Cook Gap Schist, and the Upper Middleback Jaspilite.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 9NI43-101 Report – 11 July 2012
  17. 17. Coffey Mining Pty Ltd The Lower Middleback Jaspilite was further subdivided into 4 members: the Duke, Duchess, Knight and Long Gulley members (Lemon, 1979). These members were originally limited to the South Middleback Ranges only, however RSG Global (now Coffey Mining) geophysical interpretations suggest that the lower 3 members can be identified throughout the entire Eyre Peninsula.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 10NI43-101 Report – 11 July 2012
  18. 18. Coffey Mining Pty Ltd Figure 7.1.1_1 Source Parker & Lemon (1982) Stratigraphic ColumnUley Main Road Graphite Deposit – MINEWPER01006AA Page: 11NI43-101 Report – 11 July 2012
  19. 19. Coffey Mining Pty Ltd7.1.2 Project Geology The Uley project target horizon within the Hutchison Group is the Cook Gap Schist, The Warrow Quartzite and Katunga Dolomite have been intersected and are horizons below the target. Thrusting, faulting and folding with subsequent metamorphism have resulted in graphite mineralisation being developed in thickened local synclinal rootless folds. Faulting and thrusting has further disrupted the graphite mineralisation resulting in brecciated and sheared textures. Three broad sub-horizontal broad graphitic horizons are recognised, two above and one below an interpreted flat lying fault, interpreted to be a thrust. This interpretation of the Uley Main Road deposit is in broad agreement with mapping and interpretations made during excavation of the now depleted Uley pit, some 600m to the north7.1.3 Structural Geology The Uley prospect is hosted within a suite of graphitic schists (Figure 7.1.3_1) and biotite- garnet gneisses. This has been historically interpreted as a basal sub-horizontal thrust, with folded and thrust schists and gneiss in the hanging wall of the thrust. Locally the stratigraphy has been metasomatised during high grade metamorphism and siliceous pegmatite veins invade the schists and gneiss. The timing of these events is unknown Figure 7.1.3_1 Graphitic Schist – Uley Main Road DepositUley Main Road Graphite Deposit – MINEWPER01006AA Page: 12NI43-101 Report – 11 July 2012
  20. 20. Coffey Mining Pty Ltd7.2 Mineralisation and Alteration Metasomatised pegmatites that are quartz rich, are developed during high grade prograde metamorphism and are encountered throughout the stratigraphy. Carbonate alteration occurs both as pervasive wall-rock alteration and as carbonate veins/veinlets. Pervasive carbonate alteration haloes have been observed in the rocks within and surrounding the Uley mineralisation on a scale of up to hundreds of metres. Carbonate alteration has been observed in nearly all types of rocks.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 13NI43-101 Report – 11 July 2012
  21. 21. Coffey Mining Pty Ltd8 DEPOSIT TYPES Graphite is developed as a constituent mineral in coarse prograde metamorphic assemblages as well as in the fabric and foliation of micaceaous schists. These are interpreted to be the folded, thrust and metamorphosed equivalents of the Cook Gap Schist. Folding on various local scales is obvious (Figure 8_1). Figure 8_1 Graphitic Schist Model – Uley Main Road Deposit View to N across N9500 Local Grid Light blue: un-mineralised < 3% Graphitic carbon, Blue/mauve 3-5%, Yellow 5-6%, Orange 6-10%, Red 10-20%; Purple > 20%Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 14NI43-101 Report – 11 July 2012
  22. 22. Coffey Mining Pty Ltd9 EXPLORATION Coffey Mining has reviewed the existing regional exploration data. The primary exploration targeting tool is a Sirotem geophysical survey completed by Solo Geophysics using a 50m x 50m loop size and MKIII instrument. These EM anomalies (Figure 9_1) have subsequently been followed up with diamond drilling and significant intersections are reported below (Table 10_1). Exploration is targeting graphitic schists within a sequence of garnet-biotite and cordierite gneisses and metasediments. These targets have an obvious and distinct EM signature which has not been affected by weathering. Figure 9_1 Regional Mineralisation Targets (Source: SER)Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 15NI43-101 Report – 11 July 2012
  23. 23. Coffey Mining Pty Ltd10 DRILLING The original RSG Global and Coffey Mining resource estimates were based on a subset of a global database consisting of 2,560m of diamond drilling dating from 1982 to 1983 completed by Conzinc Rio Australia Exploration (CRAE). The drilling database has been reformatted into a Vulcan ISIS database and Excel spreadsheet for use in Vulcan and comprises 71 drillholes for 5,212.7m of drilling. Of these 18 drillholes, for 1,153.6m of diamond drilling (HQ size) were actually used for the Uley Main Road resource estimate, with 987.4m of core sampled. The remainder represent scattered drilling on other geophysical anomalies on the surrounding exploration tenement. Coffey Mining has independently verified the drilling data through access to the HQ/HQ3 core stored in secured core-sheds on the Retention Leases. Eight of the CRAE drillhole collars used for the resource estimate were also preserved in the field and visited.10.1 CRAE Drilling All remaining CRAE drill core (Figure 10.1_1), post sampling are kept on-site in two secure sheds. All assay (Table 10.1_1), sampling results, procedures, manuals and remnant materials are kept on-site, either in a laboratory annex to the site-office, or a metallurgical laboratory next to the plant site. There are a number of scattered test pits (Figure 10.1_2). Table 10.1_1 Uley Main Road Graphite Deposit - December 2009 Resource Update Estimate Summary Drilling and Sampling Statistics Number Average Length Total Drilled Number of Method of Holes (m) Metres Assays Diamond 18 96 1,153.6 1,028Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 16NI43-101 Report – 11 July 2012
  24. 24. Coffey Mining Pty Ltd Figure 10.1_1 Drillcore Storage and Sample Archive Figure 10.1_2 Outcrop at the “Eastern Anomaly” to the East of Uley Main Road DepositUley Main Road Graphite Deposit – MINEWPER01006AA Page: 17NI43-101 Report – 11 July 2012
  25. 25. Coffey Mining Pty Ltd10.2 2011 Drilling Diamond drilling (Table 10.2_1) on infill spacing of 25 x 50m has been completed to complement the existing resource and assay database. The core is HQ (63.5mm) and all drilling is vertical. Table 10.2_1 Uley Main Road Graphite Deposit 2011 Drillhole Locations Drillhole Easting (m) Northing (m) Dip Final Depth (m) ULEY 500 564,347 6,148,618 -90 105.5 ULEY 501 564,297 6,148,618 -90 108.5 ULEY 502 564,247 6,148,618 -90 96.3 ULEY 503 564,372 6,148,568 -90 85.6 ULEY 504 564,347 6,148,568 -90 100 ULEY 505 564,272 6,148,568 -90 102.5 ULEY 506 564,247 6,148,568 -90 94.6 ULEY 507 564,197 6,148,568 -90 103.5 ULEY 508 564,197 6,148,518 -90 99.5 ULEY 509 564,197 6,148,468 -90 104 ULEY 510 564,247 6,148,468 -90 80.4 ULEY 511 564,347 6,148,518 -90 81.410.3 Surveying All plan collars and data was based on the Uley Mine Grid. In Howard (1982) a reference is provided to the local to AMG grid conversion factors. As was common in 1982, local mine grid was used and then truncated to deal with the 8 bit processors in calculators and computers at that time. The reported truncation was E -56,000m and N -6,140,000 metres. This has been applied to reformat the composite “Mapfiles” used in the estimation and the block model these data inform. Drillhole collars have been re-surveyed in the field and these transforms validated. Topography has been re-surveyed by a qualified local land surveyor and applied to the block models as a DTM. Drillhole data had heights specified to AHD (Australian Height Datum). All holes used in the resource database were recorded as vertical.10.4 Geological Logging The geological logging was completed and recorded by qualified CRAE geologists with logging details, assay sheets and drillhole core recoveries provided in Appendix 1. The drillhole logs were directly entered into Excel spreadsheets on-site. The drillhole database is currently stored in a Vulcan - ISIS format. The project database stores the geological logging data, assay analyses and collars which is considered sufficient for the current study.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 18NI43-101 Report – 11 July 2012
  26. 26. Coffey Mining Pty Ltd10.5 Sampling10.5.1 CRAE Sampling CRAE sampled the core as 1m lengths, typically as ½ sawn drillcore. Where geology remained constant, lengths where increased to a maximum of 1.5m, 2m or 3m intervals. Where geology varied at lengths less than 1m, intervals down to 0.3m were sampled. The most common sample length is 1m. For the resource estimate, 2m composites were used.10.6 2011 Sampling Whole core was selected on geological intervals that were dispatched to ALS-Chemex in Perth. Fifty percent by weight of crushed -6mm sample was retained as a reference sample.10.7 Bulk Density Measurement Selected core samples have undergone density determination by the Coffey Mining affiliate Coffey Information. Selected billets of core have been tested and certified to Australian Standards 1289.2.1.1 for core and AS1289.3.5.1 for looser material. Twenty four direct measurements were taken. Two different methods were used, both are direct measurement of selected billets and soil particle measurement was only used where material was no longer coherent core. The average of these is 2.6g/cm³. Table 10.7_1 summarises the results of the density measurements. Table 10.7_1 Uley Main Road Graphite Deposit Bulk Density Statistics Mean 2.6 Median 2.7 Kurtosis 2.2 Mode 2.6 Geomean 2.6 Number 24 Maximum 3.5 Minimum 1.7 Skew -0.4715210.8 Drillhole Data10.8.1 CRAE Sample Preparation The CRAE core samples were crushed and sieved on site and the +75µm fraction subjected to LECO analysis for graphite. This method in essence follows the “Proximate” analysis methodologies used in oil, gas, coal and carbon based mineral systems, where % volatiles, % ash and % fixed carbon are determined.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 19NI43-101 Report – 11 July 2012
  27. 27. Coffey Mining Pty Ltd10.8.2 2011 Sample Preparation The core samples were crushed and sieved by ALS-Chemex and the +75µm fraction subjected to LECO analysis for graphite using techniques C-IR07, C-IR17, C-IR-06 and carbonate % by calculation.10.8.3 Prior Analysis The determination of graphitic carbon in a specimen containing graphite cannot be determined by loss on ignition and moisture analysis alone, as a significant fraction of the non-graphitic mineral component may be present as volatile carbonates, bicarbonates, sulphides and nitrates. Organic compounds are expected to be present in samples, when mined. The total concentration of organic and inorganic decomposition gases is determined as the Volatile Matter by heating a weighed specimen in a covered crucible, at > 950°C for a specified time in an insert atmosphere. All CRAE samples were analysed on-site or at Amdel in 1980-1987, with analysis involving the following steps:  Determination of moisture content;  Loss on Ignition and residual ash content  Content of non-combustible volatiles, fixed carbon after combustion and volatilisation;  Sizing analysis;  Acid leach of minerals fractions;  LECO carbon analysis by Infrared spectrometry;  Wet-sieving analysis. Samples (20g) are sieved at +150µm, 106µm and 75µm, after crushing and froth flotation, acid leach and LECO analysis is performed on all size fractions. The LECO CR 412 Analyser is a non-dispersive, infrared, digitally controlled device and is designed to measure the carbon content in a wide variety of organic and inorganic materials, including soil, cement and limestone. Analysis begins by weighing out a sample into a combustion boat (crucible). On analysis, the sample is typically combusted at >1350°C, within a pure oxygen environment. All sample materials contained in the combustion boat go through an oxidative reduction process which causes carbon bearing compounds to break down freeing the carbon, which oxides to form CO2. From the combustion chamber, the gases flow through two Anhydrone (MgCl4) tubes to remove moisture, through a flow controller (3.5l/min) then through to an infrared (IR) detection cell. The IR cell measures the concentration of carbon dioxide gas present. The instrument, its theory of operation, and characteristics are presented in Appendix 1. The LECO CR 412 Analyser has an inherent manufacturer specified accuracy of +/- 1% carbon present.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 20NI43-101 Report – 11 July 2012
  28. 28. Coffey Mining Pty Ltd The method as developed and applied by Amdel (now part of the Bureau Veritas group) is reported in Howard, 1982. Samples are acid digested at 90°C and then filtered on fibreglass. Dried samples are then heated in an oven to 500°C before being heated in a “LECO” combustion chamber at 1500°C and the CO2 is determined by infrared spectrometry. Subsequent stoichiometric calculation results in percentage carbon as graphite or carbon in carbonate. These were the two variables estimated in the original resource estimate.11 SAMPLE PREPARATION, ANALYSES AND SECURITY The current round of sampling was subjected to:  Acid leach of mineral fractions;  LECO carbon analysis by Infrared spectrometry.11.1 CRAE Analytical Quality Control Procedures and Data As part of a previous study, Coffey Mining had completed a statistical review on the quality control data provided by MEGA. The objective of these analyses was to determine accuracy of the assaying and also to assess the relative precision and accuracy levels between various sets of assay pairs. It should be noted that no additional assay quality control data has been provided to Coffey Mining for any assaying completed since Howard (1982) reported these. The quality control data investigated by Coffey Mining for this assignment was only the umpire and duplicate assays undertaken by Howard (1980). The statistical measures used in these assessments are summarised as follows:  Thompson and Howarth Plot, showing the mean relative percentage error of grouped assay pairs across the entire grade range, used to visualise precision levels by comparing against given control lines.  Rank % HARD Plot, which ranks all assay pairs in terms of precision levels measured as half of the absolute relative difference from the mean of the assay pairs (% HARD), used to visualise relative precision levels and to determine the percentage of the assay pairs population occurring at a certain precision level.  Mean vs % HARD Plot, used as another way of illustrating relative precision levels by showing the range of % HARD over the grade range.  Mean vs %HRD Plot is similar to the above, but the sign is retained, thus allowing negative or positive differences to be computed. This plot gives an overall impression of precision and also shows whether or not there is significant bias between the assay pairs by illustrating the mean percent half relative difference between the assay pairs (mean % HRD).Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 21NI43-101 Report – 11 July 2012
  29. 29. Coffey Mining Pty Ltd  Correlation Plot is a simple plot of the value of assay 1 against assay 2. This plot allows an overall visualisation of precision and bias over selected grade ranges. Correlation coefficients are also used.  Quantile-Quantile (Q-Q) Plot is a means where the marginal distributions of two datasets can be compared. Similar distributions should be noted if the data is unbiased.  Standard Control Plot shows the assay results of a particular reference standard over time. The results can be compared to the expected value, and the ±10% precision lines are also plotted, providing a good indication of both precision and accuracy over time.11.1.1 Certified Reference Material (Standards) and Blanks Coffey Mining can find no records of standard certified reference materials and blanks being used. Laboratory procedures and manuals are however comprehensively documented on- site. The sampling methodology used is similar to that used in coal and the determination of organic content in sediments and these are broadly destructive techniques, with a limited ash residue not suited for replicate analysis.11.1.2 Umpire Laboratory Check Assaying Howard (1982) took seventeen samples from the remnant HQ core for the purposes of umpire and duplicate analysis. The Amdel laboratory is the original sample venue. Due to the nature of the HQ sampling, only limited material was reportedly available for this umpire analysis. Results of umpire and duplicate analysis as reported in Howard (1982) are presented in Figures 11.1.2_1 and 11.1.2_2. At a 15% precision level, >80% of the data are within precision limits. Given the flakey and thus nuggetty effect the graphite flakes and grains would have on sampling, these results are considered acceptable. The LECO instrument has stated manufacturers accuracy of 1% carbon under ideal operating conditions. The Amdel versus check laboratory (Comlabs) comparison displays overall acceptable precision (82% within a 15% Rank HARD limit) although the mean of the Comlabs analysis (15.3% C) is 2.1% higher than the Amdel assay (13%).11.1.3 Summary Although limited, the CRAE quality control protocols implemented at Uley are considered to represent good industry practice at the time and allow some assessment of analytical precision and accuracy. The assay data is considered to display acceptable precision. Further investigation is recommended into the sample preparation to ensure improved precision is achieved in future assay results.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 22NI43-101 Report – 11 July 2012
  30. 30. Coffey Mining Pty Ltd Additional duplicate assaying should be completed at a rate of 1:20 samples submitted. This additional quality control data allowed further investigation of the sample preparation and enabled the determination of the errors associated with the crushing and splitting of the crushed sub-sample relative to the pulverisation. Coffey Mining notes that the umpire repeats are ~20% higher in grade, however the graphs indicate this is due to nuggetty mineralisation at grades > 20% graphite carbon. No standards data was available for review at the time of this report, however the AMDEL laboratory was considered to be a reputable laboratory at the time for carbon analysis.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 23NI43-101 Report – 11 July 2012
  31. 31. Coffey Mining Pty Ltd Figure 11.1.2_1 Summary Statistics – Amdel versus Comlabs Summary (All Data) AMDEL COMLABS Units Result No. Pairs: 17 17 Pearson CC: 1.0 Minimum: 0.2 0.5 carbon % Spearman CC: 1.0 Maximum: 41.8 53.5 carbon % Mean HARD: 11.6 Mean: 13.0 15.8 carbon % Median HARD: 4.7 Median 10.8 10.8 carbon % Std. Deviation: 11.2 14.7 carbon % Mean HRD: -11.5 Coefficient of Variation: 0.9 0.9 Median HRD -4.7 Mean vs. HARD Plot Rank HARD Plot (All Data) (All Data) 60 100 HARD (%) 80 HARD (%) 40 60 82.4% of data are within Precision limits 20 40 20 0 0.1 1 10 100 0 0 10 20 30 40 50 60 70 80 90 100 Mean of Data Pair (carbon %) Rank (%) Mean HARD: 11.6 Median HARD: 4.7 Precision: 15% Precision: 15% HRD Histogram Mean vs. HRD Plot (All Data) (All Data) Frequency (%) 30 20 HRD (%) 0 20 -20 10 -40 0 -60 -1.0 0.0 1.0 0.1 1 10 100 HRD (/100) Mean of Data Pair (carbon %) Mean HRD: -11.5 Median HRD: -4.7 Mean HRD: -11.5 Median HRD: -4.7 Precision: +/-15.0% Precision: +/-15% Absolute Difference (carbon %) T & H Precision Plot (Assay Pairs) T & H Precision Plot (Grouped Pairs) (All Data) (All Data) Median AD (carbon %) 100 10 10 1 1 0.1 0.01 0.1 0.1 1 10 100 1 10 Mean of Data Pair (carbon %) Grouped Mean of Pair (carbon %) 10% 20% 30% 50% 10% 20% 30% 50% Correlation Plot QQ Plot (All Data) (All Data) COMLABS (carbon %) COMLABS (carbon %) 60 60 40 40 20 20 0 0 -20 0 10 20 30 40 50 60 -20 0 10 20 30 40 50 60 AMDEL (carbon %) AMDEL (carbon %) P.CC= 1.0 S.CC= 1.0 Ref. Line y = 1.3x -0.8 Ref. Line y = 1.3x -0.9 Printed: 17-Dec-2009 16:59:22 Data Refreshed: 17-Dec-2009 16:54:24 Page 1Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 24NI43-101 Report – 11 July 2012
  32. 32. Coffey Mining Pty Ltd Figure 11.1.2_2 Umpire Assaying Summary (All Data) AMDEL ANALABS Units Result No. Pairs: 17 17 Pearson CC: 1.0 Minimum: 0.2 0.3 carbon % Spearman CC: 1.0 Maximum: 41.8 50.9 carbon % Mean HARD: 8.1 Mean: 13.0 14.7 carbon % Median HARD: 5.6 Median 10.8 12.5 carbon % Std. Deviation: 11.2 13.7 carbon % Mean HRD: -4.8 Coefficient of Variation: 0.9 0.9 Median HRD -2.0 Mean vs. HARD Plot Rank HARD Plot (All Data) (All Data) 30 100 HARD (%) 80 HARD (%) 20 60 82.4% of data are within Precision limits 10 40 20 0 0.1 1 10 100 0 0 10 20 30 40 50 60 70 80 90 100 Mean of Data Pair (carbon %) Rank (%) Mean HARD: 8.1 Median HARD: 5.6 Precision: 15% Precision: 15% HRD Histogram Mean vs. HRD Plot (All Data) (All Data) Frequency (%) 40 20 HRD (%) 30 0 20 -20 10 0 -40 -1.0 0.0 1.0 0.1 1 10 100 HRD (/100) Mean of Data Pair (carbon %) Mean HRD: -4.8 Median HRD: -2.0 Mean HRD: -4.8 Median HRD: -2.0 Precision: +/-15.0% Precision: +/-15% Absolute Difference (carbon %) T & H Precision Plot (Assay Pairs) T & H Precision Plot (Grouped Pairs) (All Data) (All Data) Median AD (carbon %) 100 10 10 1 1 0.1 0.01 0.1 0.1 1 10 100 1 10 Mean of Data Pair (carbon %) Grouped Mean of Pair (carbon %) 10% 20% 30% 50% 10% 20% 30% 50% Correlation Plot QQ Plot (All Data) (All Data) ANALABS (carbon %) ANALABS (carbon %) 60 60 40 40 20 20 0 0 -20 0 10 20 30 40 50 60 -20 0 10 20 30 40 50 60 AMDEL (carbon %) AMDEL (carbon %) P.CC= 1.0 S.CC= 1.0 Ref. Line y = 1.2x -0.8 Ref. Line y = 1.2x -1.1 Printed: 17-Dec-2009 16:57:29 Data Refreshed: 17-Dec-2009 16:54:24 Page 1Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 25NI43-101 Report – 11 July 2012
  33. 33. Coffey Mining Pty Ltd11.2 CRAE Database Validation A total of 18 CRAE era and 12 diamond drillholes drilled in 2011 in the Uley area had been used in the resource modelling study. The database used for resource estimation consists solely of diamond drilling and has been reviewed and re-validated for obvious errors by Coffey Mining prior to commencing the resource estimation study. Checks to assay certificates have been provided by ALS Chemex. The following checks were completed prior to uploading the drilling data into a Vulcan database:  Check and correct overlapping intervals.  Ensure downhole surveys existed at a 0m depth.  Ensure consistency of depths between different data tables, for example survey, collar and assays.  Check gaps in the assay data which were replaced by -999.  Data was composited to 2m lengths.11.3 2011 Drilling Results The 2011 drilling results are tabulated below in Table 11.3_1.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 26NI43-101 Report – 11 July 2012
  34. 34. Coffey Mining Pty Ltd Table 11.3_1 Uley Main Road Graphite Deposit Assay Results Sampling Assay Total Graphite (%) Graphite (%) Carbon as From To Length Carbon (%) Weak Digest Strong Digest Carbonate (%) Drillhole Sample (m) (m) (m) Method Method Method Method C-IR06 C-IR07 C-IR17 CAL-15 ULEY 500 1 15.5 17.5 2.0 17.35 17.05 17.20 0.15 ULEY 501 1 22.0 24.3 2.3 13.05 7.69 8.08 4.97 ULEY 501 2 56.3 58.01 1.7 37.50 39.60 35.80 1.70 ULEY 501 3 59.1 60.8 1.7 17.40 17.65 17.30 0.10 ULEY 501 4 60.8 62.5 1.7 27.60 27.10 26.50 1.10 ULEY 502 1 60.6 62.0 1.4 34.50 34.80 32.10 2.40 ULEY 502 2 62.0 63.3 1.3 33.50 35.50 31.60 1.90 ULEY 502 3 63.3 64.3 1.0 18.70 17.40 18.50 0.20 ULEY 502 4 82.0 84.0 2.0 37.10 37.40 34.70 2.40 ULEY 502 5 85.0 87.5 2.5 46.10 42.20 39.30 6.80 ULEY 503 1 41.8 44.3 2.5 24.20 24.60 22.70 1.50 ULEY 503 2 53.4 54.7 1.3 32.20 31.90 29.50 2.70 ULEY 504 1 7.3 9.3 2.0 4.61 3.54 3.84 0.77 ULEY 504 2 28.3 29.3 1.0 12.45 8.74 10.20 2.25 ULEY 504 3 30.3 32.01 1.7 12.80 10.80 11.00 1.80 ULEY 504 4 39.3 41.1 1.8 8.10 7.78 7.51 0.59 ULEY 504 5 41.1 42.1 1.0 12.90 12.60 12.20 0.70 ULEY 505 1 11.2 13.1 1.9 28.30 23.90 23.50 4.80 ULEY 505 2 46.4 48.5 2.1 38.80 41.00 37.20 1.60 ULEY 506 1 12.9 15.3 2.4 22.50 19.00 19.25 3.25 ULEY 506 2 56.1 57.3 1.2 29.20 30.20 28.50 0.70 ULEY 506 3 57.3 60.3 3.0 >50.00 50.40 49.20 4.20 ULEY 506 4 80.7 82.01 1.3 28.30 28.30 26.70 1.60 ULEY 506 5 82.01 83.01 1.0 28.90 27.50 28.00 0.90 ULEY 506 6 83.5 87.01 3.5 28.70 27.40 28.00 0.70 ULEY 507 1 47.0 48.5 1.5 23.80 24.60 22.90 0.90 ULEY 507 2 48.5 52.01 3.5 30.00 31.10 28.20 1.80 ULEY 507 3 50.0 51.5 1.5 38.00 40.50 37.00 1.00 ULEY 507 4 51.5 53.9 2.4 36.20 36.10 35.00 1.20 ULEY 508 1 26.3 28.3 2.0 6.71 5.31 5.80 0.91 ULEY 508 3 34.9 36.1 1.2 28.90 27.20 27.50 1.40 ULEY 508 2 34.4 34.9 0.5 14.90 14.60 12.50 2.40 ULEY 508 4 38.4 42.3 3.9 18.10 19.75 17.30 0.80 ULEY 508 5 42.5 45.6 3.1 28.40 27.10 26.10 2.30 ULEY 508 6 54.5 58 3.5 19.90 20.60 18.80 1.10 ULEY 509 1 34.5 36.5 2.0 19.80 21.30 18.80 1.00 ULEY 509 2 36.5 39.5 3.0 32.80 34.30 31.30 1.50 ULEY 509 3 44.5 47.5 3.0 >50.00 52.00 48.90 1.80 ULEY 509 4 54.4 55.7 1.3 48.60 51.10 47.50 1.10 ULEY 509 5 66.5 68.5 2.0 29.60 28.30 28.20 1.40 ULEY 509 6 68.8 70.1 1.3 23.40 25.30 21.60 1.80 ULEY 509 7 70.1 72.7 2.6 25.70 29.50 25.70 <0.02 ULEY 510 1 9.1 10.2 1.1 21.80 21.50 21.20 0.60 ULEY 510 3 22.4 24.4 2.0 16.70 12.05 12.25 4.45 ULEY 510 2 30.5 33.6 3.1 18.60 18.95 15.00 3.60 ULEY 510 4 35.3 38.3 3.0 23.00 19.55 17.75 5.25 ULEY 511 1 6.4 9.4 3.0 8.71 6.34 7.28 1.43 ULEY 511 2 13.0 14.3 1.3 11.85 7.01 7.55 4.30 ULEY 511 3 36.0 38.4 2.4 18.70 17.40 18.50 0.20 ULEY 511 4 38.4 42.4 4.0 14.80 14.90 14.60 0.20Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 27NI43-101 Report – 11 July 2012
  35. 35. Coffey Mining Pty Ltd12 Data Verification12.1 Database Coding and Compositing The resource drillhole database was composited to a 2m downhole composite interval, which was then coded against the recording the interpreted mineralisation model. The 2m composites were used for all statistical, geostatistical and grade estimation studies. The decision to use 2m composites was based on the targeted mining approach which is to be by conventional open pit methods, using small to medium sized mining fleet.12.2 Summary Statistics Summary 2 metre composite statistics are presented in Table 12.2_1. The data distribution is positively skewed which is typical of many such deposits. The coefficient of variation (CV), which is calculated by dividing the standard deviation by the mean grade, of 1.11 is moderately high indicating that high grade composites are not materially influencing the mean.12.3 Density An average bulk density of 2.20 t/m³ has been applied to all modelled mineralised zones as a default value. Where relevant a scripted and calculated density value which considers the modelled graphite grade is substituted which is based on an average of 35 density measurements conducted on-site.12.4 Block Model Construction A three-dimensional block model was constructed for the Uley Rain Road graphite deposit, covering the interpreted mineralisation zone and including suitable additional waste material to allow later pit optimisation studies. The selected block size was based on the geometry of the domain interpretation and the data configuration (25m to 50m drill section spacing). A parent block size of 4mE x 10mN x 4mRL was selected with no sub-blocking. Block coding of the mineralisation domains, oxidation and lithology was completed on the basis of the block centroid, wherein a centroid falling within any wireframe was coded with the wireframe solid attribute. A visual review of the wireframe solids and the block model indicates robust flagging of the block model. Sufficient variables were included in the block model construction to enable grade estimation and reporting. Details are reported in Appendix B, as originally reported in Warries and Barnes, 1996. The block model construction parameters are displayed in Table 12.4_1. The mineralisation domains, lithology and modelled weathering were coded to the block model. The mean bulk density of 2.2g/cm³ was applied to the block model via block model script for tonnage reporting. A bulk density was also calculated based on Graphite Carbon % and surrounding bedrock reporting at 2.6g/cm³.Uley Main Road Graphite Deposit – MINEWPER01006AA Page: 28NI43-101 Report – 11 July 2012

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