Tererro Copper-Gold-Zinc VMS Project, New Mexico, USA

The Tererro VMS Project is located approximately 120km north-east of the city of Albuquerque in northern New Mexico (see Figure 1). An interstate highway and a national railway line both pass approximately 20km to the south of the Project. A sealed road provides access from the interstate highway to within approximately 5km of the Deposit, from which an extensive network of unsealed tracks provide excellent access to the Jones Hill Deposit and the greater Tererro VMS Project area.

The Company has entered into agreements providing it with the right to acquire a 100% interest in 20 Federal mining claims covering 400 acres in New Mexico, USA.

The Company has also staked new Federal mining claims covering 4,300 acres that encompass multiple under-explored VMS prospects immediately along strike from the Jones Hill Deposit (100% NWC; see Figure 2).

The Jones Hill Deposit is a middle-Proterozoic-aged volcanogenic massive sulphide (“VMS”) deposit. It is hosted by a metamorphosed volcano-sedimentary sequence whose exposure in the district is generally limited to the lower parts of drainages that have eroded through the younger, overlying Palaeozoic sediments to expose the older, underlying Proterozoic host rocks (see Figure 2).

The Jones Hill Deposit is located 8km south-west of the historical Pecos Mine, another VMS deposit (see Figure 2). Between 1927 and 1939 approximately 2 million tonnes of ore was mined from the Pecos Deposit at average grades of 13.1% Zn, 4.0% Pb, 0.78% Cu, 116 g/t Ag and 3.63 g/t Au.

Mining operations ceased in 1939 due to problems managing water coupled with bad ground conditions.

Mineralisation at the Jones Hill Deposit comes to surface and comprises:

The Jones Hill Deposit was worked from three adits and a shaft during the 1930s and 1940s. No historical production figures are available, but production appears to have been limited.

In 1970, two prospectors, Carlson and Rector, secured the claims over the deposit.

In 1974, Conoco Inc. secured the rights to Carlson and Rector’s claims as they assembled an extensive land package which extended from the Jones Hill Deposit to the Pecos Mine.

Between 1977 and 1981, Conoco drilled 39 diamond core holes that led to the discovery of the Jones Hill Deposit. This drilling program revealed that mineralisation had considerable depth extent, extending to greater than 800m below surface.

Thick sequences of high-grade mineralisation were intersected in multiple holes, with better results including:

In 1981/82, Conoco was subject to a takeover offer, and sold its interests to Santa Fe Pacific Mining Inc. (“SFPM”).

In 1983 and 1984, SFPM drilled 18 diamond core holes from surface and nine underground holes. Further very encouraging results were returned, including:

Since 1984 only one (effective) diamond core hole has been completed at the project, in 1993. Negligible work has been undertaken since then.

Cross sections illustrating the mineralisation that has been delineated at the Jones Hill Deposit to date are presented as Figures 4 and 5; with the location of previous diamond core drilling illustrated in Figure 6.

In 1981, Conoco calculated a Mineral Resource estimate based on the 39 diamond core holes (22,129 m) it had drilled to that time. The resource estimate comprised:

Table 1. Historic (1981) Mineral Resource estimate for the Jones Hill Deposit.

For further details on the historic mineral resource estimate, refer to the Company’s ASX announcement of 9 April 2019