CST Minerals Lady Annie Pty Ltd: Anthill Project No. …acquired the Lady Annie Project from Cape Lambert Lady Annie Exploration Pty Limited in 2010. The previous estimate for Anthill

CST Minerals Lady Annie Pty Ltd: Anthill Project No. 2328

Resource Estimation May 2011

Prepared by L Olssen

BSc, MAusIMM (CP) Principal Consultant .............................................................................................

Reviewed by J Graindorge

BSc(Hons), MAusIMM (CP) Senior Consultant .................................................................................................

nmcgrath

lolsen

nmcgrath

John G

Office Locations Perth 87 Colin Street West Perth WA 6005 PO Box 77 West Perth WA 6872 AUSTRALIA Tel: +61 8 9213 9213 Fax: +61 8 9322 2576 ABN 99 085 319 562 [email protected]

Brisbane Level 15, 300 Adelaide Street Brisbane QLD 4000 PO Box 2207 Brisbane QLD 4001 AUSTRALIA Tel: +61 7 3231 3800 Fax: +61 7 3211 9815 ABN 99 085 319 562 [email protected]

Vancouver Suite 550 1090 West Pender Street Vancouver BC V6E 2N7 CANADA Tel: +1 604 683 7645 Fax: +1 604 683 7929 Reg No. 557150 [email protected]

Johannesburg Technology House Greenacres Office Park Cnr. Victory and Rustenburg Roads Victory Park Johannesburg 2195 SOUTH AFRICA PO Box 2613 Parklands 2121 SOUTH AFRICA Tel: + 27 11 782 2379 Fax: + 27 11 782 2396 Reg No. 1998/023556/07 [email protected]

London Abbey House Wellington Way Weybridge Surrey KT13 0TT, UK Tel: + 44 (0) 1932 268 701 Fax: + 44 (0) 1932 268 702 [email protected]

Belo Horizonte Av. Afonso Pena 4121 / 302 Mangabeiras, 30130-009 Belo Horizonte MG Brazil Tel: +55 (31) 3222-6286 Fax: +55 (31) 3222-6286 [email protected] Website www.snowdengroup.com

This report has been prepared by Snowden Mining Industry Consultants (‘Snowden’) on behalf of CST Minerals Lady Annie Pty Ltd.

2011

All rights are reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Snowden.

Issued by: Perth Office Doc Ref: 110523_Final_2328_CSTMIN_RE Report_D.docx

Print Date: 23 May 2011

Number of copies Snowden: 2 CST Minerals Lady Annie Pty Ltd: 2

CST Minerals Lady Annie Pty Ltd: Anthill

Resource Estimation

Final May 2011 3 of 47

1 Executive summary .................................................................................................... 6

2 Introduction................................................................................................................. 8 2.1 Competent Persons statement ........................................................................ 9

3 Geology .................................................................................................................... 10

3.1 Project geology ............................................................................................. 10 3.2 Deposit geology ............................................................................................ 10

4 Information sources .................................................................................................. 11 4.1 Input data ...................................................................................................... 11 4.2 Data validation .............................................................................................. 12

4.3 Quality Control and Quality Assurance .......................................................... 13 4.3.1 Standards and blanks .................................................................... 13 4.3.2 Duplicates ..................................................................................... 16

4.4 Bulk density ................................................................................................... 17

5 Geological interpretation ........................................................................................... 19

6 Coding and compositing ........................................................................................... 21

7 Statistical analysis .................................................................................................... 22

7.1 Basic statistics............................................................................................... 22 7.2 Boundary analysis ......................................................................................... 26 7.3 Top cuts ........................................................................................................ 27

8 Variography .............................................................................................................. 28

9 Block modelling ........................................................................................................ 31

9.1 Block model .................................................................................................. 31 9.2 Grade estimation ........................................................................................... 31 9.3 Model validation ............................................................................................ 32

9.3.1 Global comparisons....................................................................... 32 9.3.2 Visual validation ............................................................................ 33

9.3.3 Grade trend plots .......................................................................... 33

10 Classification ............................................................................................................ 36

11 Mineral Resource reporting ...................................................................................... 37

12 Recommendations.................................................................................................... 40

13 References ............................................................................................................... 41

Tables Table 1.1 Anthill Mineral Resource, as at April 2011, reported above a

0.3% Cu cut-off grade ........................................................................ 6

Table 4.1 Standard and blank samples ........................................................... 13


Resource Estimation


Table 4.2 Duplicate samples ........................................................................... 16

Table 4.3 Bulk density results by rock type...................................................... 18

Table 4.4 Bulk density results by copper grade ............................................... 18

Table 4.5 Anthill resource estimate bulk density values................................... 18

Table 6.1 Anthill data coding fields .................................................................. 21

Table 7.1 Anthill summary statistics by weathering domain for copper ............ 22

Table 7.2 Anthill summary statistics by weathering domain for cobalt ............. 23

Table 7.3 Anthill summary top cut statistics ..................................................... 27

Table 8.1 Anthill back-transformed variogram parameters .............................. 28

Table 9.1 Anthill block model parameters ........................................................ 31

Table 9.2 Anthill final model fields ................................................................... 32

Table 9.3 Comparison of the mean composite grade with the mean block model grade ........................................................................... 32

Table 10.1 JORC assessment and reporting criteria for estimation and reporting of Anthill deposit ............................................................... 36

Table 11.1 Anthill Mineral Resource, as at April 2011, reported above a 0.3% Cu cut-off grade ...................................................................... 37

Table 11.2 Anthill grade tonnage reporting, as at April 2011 ............................. 38

Figures Figure 2.1 Lady Annie Project location map ....................................................... 8

Figure 2.2 Project area location map .................................................................. 9

Figure 4.1 Anthill drillhole location plan ............................................................ 11

Figure 4.2 Control chart – field blank ................................................................ 14

Figure 4.3 Standard control chart – G3 ............................................................. 15

Figure 4.4 Standard control chart – G4 ............................................................. 15

Figure 4.5 Standard control chart – laboratory standards ................................. 16

Figure 5.1 Plan view of 2011 Anthill mineralised interpretation (top) compared to previous October 2010 interpretation (bottom) ............ 20

Figure 5.2 Sectional view of 2011 Anthill weathering (red) and mineralised interpretation (blue) compared to previous October 2010 interpretation (green) ................................................. 20

Figure 7.1 Histograms and log probability plots by weathering domain for copper ........................................................................................ 24

Figure 7.2 Histograms and log probability plots by weathering domain for cobalt ......................................................................................... 25

Figure 7.3 QQ plot of oxide versus transitional within the mineralised domain ............................................................................................ 26

Figure 7.4 QQ plot of transitional versus sulphide within the mineralised domain ............................................................................................ 27

Figure 8.1 Anthill variogram models for copper ................................................ 29

Figure 8.2 Anthill variogram models for cobalt .................................................. 30


Resource Estimation


Figure 9.1 Example section showing estimated copper grades compared to input composites ......................................................... 33

Figure 9.2 Example section showing estimated cobalt grades compared to input composites.......................................................................... 33

Figure 9.3 Anthill grade trend plots for copper .................................................. 34

Figure 9.4 Anthill grade trend plots for cobalt ................................................... 35

Appendices Appendix A Duplicate analysis


Resource Estimation


1 Executive summary At the request of CST Minerals Lady Annie Pty Ltd (CST), Snowden Mining Industry Consultants (Snowden) has updated the Mineral Resource estimate for the Anthill deposit, which forms part of the Lady Annie Project. The Lady Annie Project is located in northwestern Queensland, Australia, approximately 120 km north of the town of Mt Isa.

The deposit is hosted within sedimentary sequences of siltstones and sandstones, along with dolomitic sandstone and some quartzite. Copper mineralisation is structurally controlled and occurs predominately in the form of malachite within the oxidised zone, with minor amounts of azurite, chrysocolla, cuprite and rare native copper.

CST provided Snowden with wireframe interpretations of the mineralisation and oxidation boundaries, along with the drillhole data. The wireframes were used to code the drillhole composites with the relevant domains and to construct the block models using a block size of 10 mE by 10 mN by 5 mRL. Copper and cobalt grades were estimated using ordinary block kriging. Due to the geometry of the mineralisation, dynamic anisotropy was used to locally adjust the dip and dip direction of the search ellipse and variograms to better represent the geological features.

The copper resource estimate was classified and reported in accordance with the guidelines of the 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2004). The Mineral Resource for the Anthill deposit is reported in Table 1.1 above a 0.3% Cu cut off grade. All copper grades are total copper unless stated otherwise.

Table 1.1 Anthill Mineral Resource, as at April 2011, reported above a 0.3% Cu cut-off grade

Weathering domain Mt %Cu

Indicated Resource

Oxide 5.2 0.87

Transitional 0.69 0.98

Sulphide - -

Total Indicated 5.8 0.88

Inferred Resource

Oxide 0.24 0.68


Sulphide 0.27 0.67

Total Inferred 0.66 0.65

Indicated + Inferred Resource

Oxide 5.4 0.86


Sulphide 0.27 0.67

Total Indicated + Inferred 6.5 0.86

Note all figures reported to two significant figures. Small discrepancies may occur due to rounding


Resource Estimation


The April 2011 Mineral Resource comprises a 260% increase in tonnes and 15% increase in copper grade for the total Indicated Resource since October 2010. The total Indicated and Inferred Mineral Resource has increased by 16% tonnes and 13% copper grade

The increase is due to infill drilling and an improved geological model allowing upgrade of the resource classification, together with an increase in the oxide density due to additional density testwork completed by CST. The updated oxide density is now more in line with that seen in the other Lady Annie deposits.

While exercising all reasonable due diligence in checking and confirming the data validity, Snowden has relied largely on the data as supplied by CST to estimate and classify the Mineral Resource. As such, Snowden accepts responsibility for the resource modelling and classification while CST has assumed responsibility for the geological interpretation and the accuracy and quality of the underlying drilling data.


Resource Estimation


2 Introduction CST Minerals Lady Annie Pty Ltd (CST) requested that Snowden Mining Industry Consultants (Snowden) update the Mineral Resource for the Anthill deposit which is part of the Lady Annie Project, located approximately 120 km north of the township of Mt Isa in northwestern Queensland, Australia (Figure 2.1). CST acquired the Lady Annie Project from Cape Lambert Lady Annie Exploration Pty Limited in 2010.

The previous estimate for Anthill was carried out by Snowden in October 2010 (Snowden, 2010b).

Figure 2.1 Lady Annie Project location map

The Lady Annie Project is composed of a number of copper deposits, including Lady Annie/Lady Brenda, Mount Clarke, Flying Horse, Mt Kelly Workings, Anthill, McLeod Hill and Swagman. The Mount Clarke, Flying Horse and Mt Kelly Workings deposits are collectively known as the Mt Kelly Mining Area (MKMA). The location of the deposits within the Lady Annie Project is shown in Figure 2.2.

Mining at Mount Clarke commenced with pre-stripping in April 2007 and mining at Lady Annie commenced in October 2008. The Mount Kelly processing plant was commissioned in October 2007. Mining stopped in November 2008 and copper production from the treatment plant finished in December 2009. Mining was recommenced at Mount Clarke and Flying Horse in August 2010.

No mining has been undertaken at the Anthill deposit to date.


Resource Estimation


Figure 2.2 Project area location map

2.1 Competent Persons statement Information in this report to which this statement is attached is based on information compiled by Ms Lynn Olssen who is a member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Lynn Olssen is a full time employee of Snowden Mining Industry Consultants and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken 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. Ms Olssen consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.


Resource Estimation


3 Geology For a detailed description of the regional geology of the Lady Annie Project area, the reader is referred to Snowden’s report entitled “Independent Technical Report on the Lady Annie Project” and dated 7 May 2010 (Snowden, 2010a).

3.1 Project geology The Lady Annie Project is located within the Middle Proterozoic of the Lower McNamara Group of the Western Fold Belt. The geology of the area can be broadly summarised as:

A basal sequence of mafic meta-volcanics belonging to either the Fiery Creek Group or the Eastern Creek Volcanics.

An unconformably overlying quartz sandstone sequence assigned to the Surprise Creek Formation.

Sedimentary units of the McNamara Group, comprising from the lowermost to uppermost: The Torpedo Creek Quartzite. The Gunpowder Creek Formation - laminated dolomitic and

carbonaceous siltstones, fine grained sandstones and green to red coloured micaceous siltstones.

The Mount Oxide Chert - laminated, fine grained siliceous material up to 5 m thick.

The Paradise Creek Formation - interbedded dolomitic and carbonaceous siltstones, shales and fine-grained sandstones.

The Esperanza Formation - dolomitic siltstones and sandstones with siliceous stromatolitic beds.

The Lady Loretta Formation - dolomitic siltstones and sandstones with occasional primary carbonate lithologies.

The copper deposits lie within an area of multiple faulting with numerous faults showing a wide range of orientations and ages. Most of the faults appear to be normal faults, some with a wrench component.

3.2 Deposit geology The Anthill deposit occurs within an area known as the Buckley River Area. The principal rock types within the Buckley River Area are Proterozoic age siltstones, dolomitic siltstones, cherts and sandstones of the Lower McNamara Group, which are folded around north-trending axes and cut by numerous northwest and northeast-trending faults. The main structure traversing the tenement (EPM9916) is the north-northwest trending Kennedy Fault. In the south of the project area, the Kennedy Fault juxtaposes the Eastern Creek Volcanics against strata of the McNamara Group. In the southeast corner of the project area, the Johnson Creek Fault forms the northern contact of the Eastern Creek Volcanics and Myally Subgroup with the Lower McNamara Group. The rocks are deeply weathered, generally down to depths of 50 m to 60 m and in places much deeper. These rocks are partly obscured by laterite and unconsolidated Tertiary-Quaternary sediments.

The copper mineralisation within the Buckley River Area is associated with complex structural positions along regional fault structures, in particular the Kennedy Fault (Anthill deposit) and the Johnson Creek Fault.


Resource Estimation


4 Information sources 4.1 Input data

The Anthill database was supplied as Excel spreadsheets of the collar, survey and assay data. Snowden loaded these files into Datamine and desurveyed them to create a drillhole file (ahdat.dm). AMG coordinates were used for the data.

The October 2010 Anthill estimate was based on a dataset comprising 6 diamond, 122 reverse circulation and 4 water bore drillholes. Of the water bores, three did not have any assay data and were excluded from the final dataset.

An additional 7 diamond and 74 reverse circulation drillholes were drilled between September and December 2010. 5 of the diamond drillholes are metallurgical test holes.

In addition, 7 drillholes have been included which were drilled prior to 2010 but were not in the October 2010 database (“MISSED”). These holes include BR07001, BR07002, BR07003, BR07005, BR041RC, BR021RC and BR007D). Of these drillholes, BR021RC lies outside of the deposit area and hence is not used in the estimate.

The Anthill area is drilled out on a grid of between 25 m by 25 m and 100 m by 50 m. The infill drilling program conducted by CST in 2010 has reduced drill spacing in the main deposit area to 25 m by 25 m. The drilling gridlines are orientated towards the north-northeast, perpendicular to the strike of the mineralisation (Figure 4.1).

Figure 4.1 Anthill drillhole location plan

The final dataset comprises 25,858.1 m for 24,137 samples. Of these, 98 intervals are missing copper assays and 11,244 intervals are missing cobalt assays. Copper assays were provided as parts per million (ppm) and percent (%). Percent assays have been used for estimation. Cobalt values were provided as parts per million and have been estimated in these units.

North


Resource Estimation


The assay data includes 1,891 samples with a copper value of “-0.01” and one of “-0.0005”, which are below the detection limit. These intervals have all been reset to 0.0001% Cu in the final dataset.

1,622 samples have a cobalt values of “-5”, “-3”, “-2” or “-1”. These intervals have all been reset to 0.1 ppm Co in the final dataset.

4.2 Data validation CST has followed up on data validation issues raised during the previous resource estimate as follows: It was noted in the October 2010 estimate that some drill collars did not

conform to the topographic survey. The collar database was queried for holes not previously surveyed by DGPS. These collars were resurveyed along with the new drilling on 24th February 2011 and the database was updated. It was noted that one of the previously established datum stations was incorrect. The locations were rectified to account for this error and it was established that this error had not affected the collar surveys of previous drillholes. All collars are now surveyed by DGPS and are considered more accurate than the topographic survey. The topographic survey at Anthill requires updating, however it is not considered a high risk to the project at this stage. A LIDAR survey has been recently acquired; however the data is not yet available.

It was previously noted that there were missing downhole surveys. These have still not been recovered and the original collars have been used and straight holes assumed. The 2010 drilling, which forms the basis to additions to this resource, has had the 0 m azimuth adjusted to the 12 m survey whilst retaining the setup inclination. This was performed as there were some significant variation between setup and downhole measured azimuth that likely related to geologist error during setup. It was determined to be due to a combination of magnetic versus true bearing and the limits of setup instrument precision. Some significant inclination deviation also occurs between the collar and 12 m survey which may also reflect error in setup, i.e. 60º setup and 55º degree 12 m measured inclination. These were retained as it was felt that they would not significantly affect the location of the final drillhole. Some spurious magnetic affected azimuths were noted including BURC031, 70 m azimuth set to 28.4 and BURD002 113 m azimuth set to 203. BURC047 and BURC049 showed strong deviations, however repeated surveying confirmed the results, exhibited normal magnetic values and were thus retained.

Some missing assays were noted as were sample loss in some ore grade intervals. These numeric exceptions were treated as continuous intervals for the purpose of mineralisation interpretation and it is anticipated that the estimation statistics will address this further during the estimate.

Snowden validated the 2011 Anthill dataset visually and statistically. No major issues were encountered. The following list summarises Snowden’s findings from the validation process: BURMET005 has no survey at 0 m. The survey at 12 m has been used for the

collar survey. BUR07022 has downhole azimuths in the original database which appear

erroneous. CST has replaced these azimuths with the collar azimuth. BR0718 has a collar dip of -60º in the original database. CST has adjusted this

to -55º as the collar setup was dubious.


Resource Estimation


BR0728 has a downhole dip of -50º in the original database. CST has adjusted this to -59º in line with the surrounding dips, as the original dip appears erroneous.

BURMET004 downhole azimuth at 213 m has not been adjusted from magnetic to AMG grid. This error has not been fixed, however it is near the base of the drillhole and will have a very minor impact.

BURD002 has an erroneous appearing azimuth at 113 m in the original database. CST has adjusted this azimuth to match the azimuth above at 83 m.

BR07014 has an erroneous appearing azimuth at 120 m in the original database. CST has adjusted this azimuth to match the azimuth above at 90 m.

4.3 Quality Control and Quality Assurance CST has carried out a detailed review of the historical and 2010 Quality Control and Quality Assurance (QAQC) results and has found no major issues with the data, although there appears to be an issue with assay precision in the 2010 duplicate data. CST is following up on this issue as discussed below.

Snowden has generated the QAQC graphs and confirmed CST’s analysis for the 2010 results.

The following is a summary of the results based on Snowden’s analysis and CST’s QAQC findings (as provided by CST).

4.3.1 Standards and blanks Table 4.1 details the standard and blank samples inserted in the sample batches for the historical and 2010 drilling programs.

Table 4.1 Standard and blank samples

Drilling program

Historical 2010

Laboratory standards 608 373

Field standards 174 220

Laboratory blanks 310 992

Field blanks 203 429

Historical standards and blanks A review of the historical standards in the database indicates that whilst internal laboratory standards performed well, there were significant validation issues with the field standards reflecting poor data collection. The standards were incorrectly labelled, with only 50% being correctly assigned. Populations in sample weight along with large variations in assay values has allowed high confidence reconstitution of the data into their correct standard populations and this data has been the subject of the QAQC analysis.

Seven field standards ranging from 2.9% Cu to 0.07% Cu and two blanks were used. The accuracy for the standards appears high, but certificate values are only available for three of the standards, which performed well within their certificated ranges. Both the pulp blank (laboratory) and internal coarse blank (field) have performed acceptably. There is no cause to question the validity of the historical assay data.


Resource Estimation


2010 standards and blanks An intensive review of the 2010 QAQC standards and blanks was performed. Two field standards (G3 and G4) and one coarse blank were used during the program. In addition the results for eight laboratory standards and one laboratory blank were provided by the laboratory (note, this number excludes standards with no copper results).

The accuracy of the multi-element ICP-OES on all the field standards was excellent except for the coarse blank, which appeared noisy in elements including iron, calcium and magnesium. This was determined to be a function of the quality of the blank along with its high sensitivity to small amounts of contamination in preparation. The accuracy for the copper analyses is excellent across all the standards and blanks.

One blank sample showed significant contamination, with the sample grading 4000 ppm (0.4%) Cu. This blank sample was preceded by a sample which assayed 8.5% Cu. Excluding the above, blanks show only modest contamination of up to 500 ppm. 83.9% assayed less than 20 ppm and 97.5% assayed less than 200 ppm. Figure 4.2 shows a control chart for the field blank results. The one outlier (4000 ppm) has been excluded to allow a better view of the results.

Figure 4.2 Control chart – field blank

Excluding one G3 standard sample, B4627, the standard results indicate that the accuracy of copper analysis was adequate. B4627 appears to be a faulty or contaminated standard prior to delivery at the laboratory. Multi-element variation of this sample from multiple laboratories and methods indicates it cannot be compared to the normal population of G3 standards. This sample has been excluded from the standard control charts.

Accuracy of the n=100 G3 standard (reference value 7529 ppm ± 50 ppm Cu) compared to its certificate indicated that the standard performed as well as it had during the certification round robin. G3 by aqua-regia ICP-OES reported a median and mean within error of the reference value and only one sample marginally outside 3σ (Figure 4.3). The standard deviation returned was within 1σ of the CRM value. The three acid ore grade method triggered by routine for this standard showed much higher precision than the standard’s certified reference values and was well within standard error; however the median value was 200 ppm higher than the certified reference value. This is not a sufficient bias for concern.

0

100

200

300

400

500

B10

001

B10

226

B10

451

B10

676

B10

901

B11

126

B11

351

B11

576

B11

801

B12

026

B12

251

B12

476

B12

701

B12

926

B13

151

B13

376

B13

601

B13

826

B14

051

B14

276

B14

501

B14

726

B14

951

B15

176

B15

401

B15

626

B18

51B

2005

1B

2026

B20

476

B20

76B

2301

B25

26B

2751

B29

76B

3201

B34

26B

3651

B38

76B

4101

B43

26B

4551

B47

76B

7676

B81

51B

8376

D13

226

D13

758

Cu (p

pm)

Sample Number

Anthill April 2011 QAQC

BLANK 10x Detection Limit Assay Mean

Standard BLANK


Resource Estimation


Figure 4.3 Standard control chart – G3

Accuracy of the n=120 G4 standard (reference value 29424 ppm ± 325 ppm Cu) returned a median of 29100 ppm by the three acid ore grade ICP-OES method utilised. The population precision well exceeded the certificated standard deviations (Figure 4.4).

Figure 4.4 Standard control chart – G4

Snowden also assessed the laboratory standards and blanks for copper. All of the blanks returned around or below detection limit. The repeatability of the standard results appears reasonable; however, the accuracy can not be quantified as there are no standard certificates available. Figure 4.5 provides a combined control chart for all of the laboratory standards with copper results. Snowden cautions that laboratory QAQC data is not considered independent as typically only the data from sample batches which passed the laboratory’s internal QAQC protocols are provided.

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

B10

077

B10

377

B10

677

B11

027

B11

527

B11

827

B12

077

B12

327

B12

627

B12

877

B13

227

B13

527

B13

827

B14

127

B14

377

B14

677

B14

977

B15

277

B15

577

B18

27B

2012

7B

2047

7B

2077

B23

77B

2627

B28

77B

3177

B34

77B

3827

B41

27B

4427

B47

27B

7677

B82

77B

8527

Cu (p

pm)

Sample Number


G3 Certified Value +3 Std Dev -3 Std Dev Assay Mean

Standard G3

Certif ied Value = 7529Sample Assay Mean = 7533

Dif ference = 0.1%

0

5000

10000

15000

20000

25000

30000

35000

40000

B10

027

B10

327

B10

627

B10

877

B11

177

B11

327

B11

577

B11

927

B12

277

B12

577

B12

977

B13

177

B13

477

B13

777

B14

077

B14

427

B14

727

B15

027

B15

327

B15

627

B19

77B

2022

7B

2042

7B

2177

B25

77B

2927

B32

27B

3527

B37

77B

4077

B44

77B

4827

B80

27B

8327

D13

327

D13

451

D13

586

D13

759

D13

877

Cu (p

pm)

Sample Number


G4 Certified Value +3 Std Dev -3 Std Dev Assay Mean

Standard G4

Certif ied Value = 29424Sample Assay Mean = 29199

Dif ference = -0.8%


Resource Estimation


Figure 4.5 Standard control chart – laboratory standards

4.3.2 Duplicates Duplicates from the total Buckley river database were analysed, not restricted to holes within the resource area. There was no distinction between resource and the other drilling programs, and their inclusion thus allows the examination of the data for batch and time domain errors.

Table 4.2 details the duplicate samples taken for the historical and 2010 drilling programs.

Table 4.2 Duplicate samples Drilling program

Historical 2010

Laboratory checks 690 573

Field duplicates 200 112

Re-splits 841 0

Copper duplicate results were reviewed for all duplicate pairs where one of the values exceeds 1000 ppm Cu (10 x detection limit). This removes detection limit effects from the comparisons and provides a better indication of the true sampling precision.

Summary plots for copper, including a scatterplot, QQ-plot, precision pairs plot and ranked HARD (half absolute relative difference) plot are provided in Appendix A for historical and 2010 results. The following section summarises the results.

Historical duplicates Good repeatability is achieved by the historical laboratory checks, with 90% of sample pairs having less than 5% variability (HARD). High variability appears almost solely limited to detection limit effects.

The repeatability of historical field duplicates is good with 90% of the sample pairs having less than 13% variability.

The historical re-splits show reasonable precision with 90% of the pairs showing with less than 22% variability.

0

2000

4000

6000

8000

10000

12000

14000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Cu (p

pm)

Sample sequence

Anthill April 2011 QAQCCombined standard control chart - laboratory standards

CopperCo-1 CopperCo-2 GBM306-13

GBM306-8 GBM398-4c GBM908-5

MRGeo08 OGGeo08


Resource Estimation


2010 duplicates Good repeatability is achieved by the 2010 laboratory checks, with 90% of sample pairs having less than 4% variability (HARD).

The repeatability of 2010 field duplicates is poor with 90% of the sample pairs having less than 32% variability. This is poor repeatability for this area. It does not show clustering in time or value once the bias to field duplication of high grade samples is considered.

Examination of individual cases shows that the errors likely relate to both field data collection and sampling procedure as well as an inherent nugget. This is currently being addressed by re-splitting the 112 field duplicates and submitting them as paired duplicates to compare both within the pair and against the original sample and duplicate in order to separate nugget and sample repeatability from human error. The samples will be both speared or split depending on the quality of the media encountered. The corollary of this may be that poor sampling technique (spearing of wet reverse circulation samples) is to blame and this would have affected a significant proportion of the samples utilised within the resource. Topography and depletion surfaces

A topographical survey was supplied as a dxf file (ahtopo_agd shifted_Jan08.dxf) and converted to Datamine (ahtopotr.dm/ahtopopt.dm). As discussed in the data validation section, collar surveys are not all coincident with the topographical survey. CST has indicated that all collar positions are now surveyed by DGPS and are considered to be more accurate than the topographical survey. A LIDAR survey has been recently acquired; however the data is not yet available. This is not considered a high risk to the project at this stage but an updated topographic survey should be incorporated into future estimates.

There has been no mining to date in the Anthill area.

4.4 Bulk density The following information has been provided by CST.

For the October 2010 estimate a bulk density of 1.8 t/m3 was applied to the oxide resource and 2.6 t/m3 to the sulphide resource. These values were derived by conservative assumption for the oxides based on the performance of the Lady Annie deposit and the sulphides based on one historical diamond drillhole from Anthill, BR069D, which was the only Anthill hole where specific gravities had been determined. Unfortunately no bulk densities were previously determined for rocks within the weathered domains at Anthill

Bulk density quantification for the April 2011 estimation of the Anthill resource is conservatively based on 41 pycnometer samples from the 2010 drilling program. Ordinarily pycnometer determinations are performed on pulps and provide a specific gravity which does not take into account the porosity within coherent rock and thus commonly overcalls bulk density.

The pycnometer method used for the 2010 drilling program at Anthill utilised unpulped reverse circulation chips passing minus 5 mm screening and determined in an acetone filled pycnometer. It was thought that this would minimise the overcall, as a significant portion of the sample remains in largely coherent rock fragments and thus preserves the original rock density. Furthermore, the use of acetone greatly improves both the wetting of the sample and the measurements of displaced volume owing to its low surface tension. The results are still considered conservatively as high determinations of the bulk density.


Resource Estimation


Results obtained from this method appear reasonable, ranging from 2.52 t/m3 to 3.53 t/m3 for an un-mineralised siltstone and a mineralised ironstone respectively (Table 4.3). The results show consistency with logged lithology and show continuous proportional variation with both increased iron and copper mineralisation (Table 4.4). Furthermore the bulk densities derived for the deeper samples with low iron are comparable to those from BR069D, albeit they demonstrate slightly lower bulk density for the same given iron concentration, which is as expected for slightly weathered rocks.

Table 4.3 Bulk density results by rock type

Lithology No of

samples Low (t/m3)

High (t/m3)

Mean (t/m3)

Median (t/m3)

Siltstone 16 2.52 3.01 2.68 2.62

Dolomite 3 2.79 2.86 2.82 2.82

Ironstone 7 3.08 3.53 3.28 3.21

Siltstone / ironstone 14 2.59 3.43 3.00 3.03

Table 4.4 Bulk density results by copper grade

Grade No of

samples Mean grade

(Cu%) Mean (t/m3)

Median (t/m3)

Mineralised >0.3% Cu 22 0.74% 3.04 3.09

Waste <0.3% Cu 19 0.11% 2.75 2.66

Lithology at Anthill is largely after one rock unit; a dolomitic siltstone. This is variably logged as siltstone where oxidised, dolomitic siltstone midway through the transitional zone and variably as ironstone where the combination of structurally hosted iron rich mineralisation and weathering result in an iron oxide rich lithology. The lithology is analogous to that of the transitional and sulphide rock domains of the Mt Clarke deposit where specific gravity is well understood. The specific gravity results obtained by pycnometer at Anthill are comparable to those for the transitional and sulphide rock domains at the analogous Mount Clarke deposit, which is dominated by a dolomitic siltstone lithology.

The bulk density values applied to this resource were conservatively based on the specific gravity results obtained from the pycnometer data. Table 4.5 details the bulk density values applied to the Anthill resource estimate.

Much of the copper mineralisation at Anthill shows a correlation with increased iron and thus increased bulk density. If the correlation between mineralisation and high iron is consistent throughout the deposit, then the specific gravity applied in this estimate is likely to be an overly conservative estimate of the bulk density of the deposit. This is being addressed in the current drilling program which includes infill and twin diamond holes which will have specific gravity determined by the wax immersion method.

Table 4.5 Anthill resource estimate bulk density values

Weathering domain Bulk density t/m3

Mineralised domain Waste

Oxide 2.4 2.4


Sulphide 2.8 2.8


Resource Estimation


5 Geological interpretation CST supplied Snowden with interpretations of the weathering and mineralisation domains for the Anthill deposit.

The weathering interpretation comprises of a base of oxidation surface (Boco final cut.dxf) and a top of sulphide (tofre final cut.dxf) which Snowden imported into Datamine as bocotr.dm/bocopt.dm and tofrtr.dm/tofrpt.dm.

Weathering surfaces were interpreted based on a combination of logged weathering, colour, mineralisation mineralogy, geochemistry and minor re-logging. The oxide to fresh boundary is in places abrupt however commonly a transition zone occurs. The shape of the weathering surfaces commonly follow the mineralisation and are depressed along similar structures.

Approximately 12% of the resource occurs in a transitional domain below the base of complete oxidation, whereas previous estimates did not include this mineralisation. Metallurgical samples have been collected from both the oxide and transitional domains and are being currently tested for amenability to heap leach.

The geological interpretation includes an updated mineralisation envelope based on a nominal 0.2% Cu cut-off grade (ore.dxf). This file was imported into Datamine as oretr.dm/orept.dm.

The updated mineralisation envelope has changed since the previous estimate to incorporate the additional data and increased geological understanding. The new envelope excludes the conceptual areas at depth and the lower grade northwestern area which were present in the October 2010 interpretation. The interpretation includes a series of shoots off a main mineralised lode as illustrated in Figure 5.2.

CST has indicated that the following procedure was used for the interpretation of the mineralised envelope. Mineralisation envelopes were built around a nominal 0.2% Cu cut-off grade over 10 m downhole width composited intervals, with allowances for high grade short intervals. Some 5 m true widths were included to improve continuity of inferred structures. Some intervals were partly excluded owing to an interpretation of smearing of wet reverse circulation samples. This is particularly evident where a twin diamond hole BURD001 encountered a 4 m void adjacent to the high grade wet reverse circulation intercept in BURC064. The section that includes BURC057, BURC065, BR036D and BR010RC demonstrates poor correlation between holes, with significantly less volume of mineralisation in the single diamond hole. It appears possible that a very high grade zone has been smeared downhole. Alternatively there is a sub-parallel steep structure in this location. In this model, CST have erred conservatively and maintained a thin shallow dipping mineralisation zone.

CST indicated that the current drilling program plans to twin at least 20% of the higher grades and widths in the Anthill deposit with diamond core to improve the confidence in the geological interpretation. Snowden agrees with this methodology of validating the RC drilling results and intersection widths with diamond drilling and further suggests that CST investigate alternative drilling methods (e.g. sonic drilling) to improve the reliability of samples from the wet, clay-rich oxide zones.

Figure 5.1 and Figure 5.2 illustrate the 2011 mineralisation envelope compared to the previous October 2010 envelope in plan and sectional view.


Resource Estimation


Figure 5.1 Plan view of 2011 Anthill mineralised interpretation (top) compared to previous October 2010 interpretation (bottom)

Figure 5.2 Sectional view of 2011 Anthill weathering (red) and mineralised interpretation (blue) compared to previous October 2010 interpretation (green)

North

North

Northeast


Resource Estimation


6 Coding and compositing The validated dataset was coded by weathering and mineralisation domain using the breakdown in Table 6.1. These codes were then combined into a MINFLAG field to allow statistical analysis of each sub-domain.

Table 6.1 Anthill data coding fields Field Values Description

MINZONE 0 Not mineralised

1000 Mineralised domain

OXIDE

10 Oxide

20 Transitional

30 Sulphide

ROCK 0 Rocktype (not used at Anthill)

MINFLAG MINZONE + OXIDE Combined code for analysis

The coded dataset was composited to 1 m intervals downhole using the weathering and mineralised domains as hard boundaries to control the compositing. The composite lengths were adjusted to include all intervals and avoid the loss of residual samples (MODE=1 option in Datamine). The majority of the sampling at Anthill is on 1 m intervals.


Resource Estimation


7 Statistical analysis 7.1 Basic statistics

Statistical analysis was carried out on all combinations of the weathering and mineralisation domains to determine the grade characteristics and ensure the domains were appropriate for estimation.

A cell weighting declustering analysis was undertaken for copper within the oxide mineralised domain to determine whether clustering of the data results in a bias in the mean grade. Based on these results, a declustering cell size of 25 mE by 25 mN by 1 mRL was applied to all domains.

Basic statistics of the composited sample data were calculated for each domain using the declustered data. These statistics are presented in Table 7.1 and Table 7.2 for copper (%) and cobalt (ppm) respectively. Histograms and log probability plots for each domain are illustrated in Figure 7.1.

As was seen in the 2010 statistical analysis, the log probability plot for the oxide indicates that there is a second statistical population above around 0.6% Cu. Review of the interpretation shows that the shoots tend to be lower grade than the main mineralisation which would account for some of this population change. Variography may be improved by separating the shoots out; particularly as the shoots are also orientated differently to the main mineralisation. However, as the grade change into the shoots appears to be gradational, there is no need to separate them out for estimation.

Table 7.1 Anthill summary statistics by weathering domain for copper Statistic Oxide Transitional Sulphide Samples 3,225 302 77 Minimum 0.01 0.00 0.04 Maximum 25.70 11.80 3.99

Mean 0.80 0.79 0.63 Std deviation 1.67 1.40 0.72

CV 2.10 1.78 1.16 Variance 2.80 1.96 0.52

10% 0.13 0.06 0.10 20% 0.19 0.13 0.20 30% 0.23 0.22 0.23 40% 0.28 0.29 0.26 50% 0.34 0.37 0.34 60% 0.41 0.51 0.45 70% 0.53 0.68 0.69 80% 0.80 0.88 0.85 90% 1.59 1.75 1.48 95% 3.17 2.77 2.22

97.50% 5.06 5.03 2.42 99% 8.14 7.42 2.93


Resource Estimation


Table 7.2 Anthill summary statistics by weathering domain for cobalt Statistic Oxide Transitional Sulphide Samples 1,474 182 69 Minimum 0.10 5.00 2.00 Maximum 826 600 172

Mean 69 59 33 Std deviation 94 81 36

CV 1.36 1.37 1.10 Variance 8,747 6,487 1,290

10% 6 9 3 20% 10 13 5 30% 16 18 8 40% 24 24 10 50% 36 36 14 60% 53 42 27 70% 73 56 44 80% 103 83 56 90% 155 131 82 95% 249 210 100

97.50% 348 231 104 99% 490 312 139


Resource Estimation


Figure 7.1 Histograms and log probability plots by weathering domain for copper

0.01 0.05 0.1 0.5 1 5 10

CU

0

2

4

6

8

10

12

14

16

1010.0

Log Histogram for CU

Points: 3225 (25584)Weights: 3225 (CU_1010.0_DeclWght)

Mean: 0.80Std Dev: 1.67

Variance: 2.799CV: 2.098

Skewness: 6.639Kurtosis: 61.31

Geom Mean: 0.39Log-Est Mean: 0.68

Maximum: 25.7075%: 0.63

50% (median): 0.3425%: 0.21

Minimum: 0.01

MG L25 50 75

0.001 0.01 0.1 1 10

CU

0

2

4

6

8

10

12

14

16

18

20

1020.0







Maximum: 11.8075%: 0.73

50% (median): 0.3725%: 0.18

Minimum: 0.00

MG L25 50 75

0.05 0.1 0.2 0.5 1 2

CU

0

2

4

6

8

10

12

14

16

18

1030.0







Maximum: 3.9975%: 0.72

50% (median): 0.3425%: 0.22

Minimum: 0.04

MG L25 50 75


Resource Estimation


Figure 7.2 Histograms and log probability plots by weathering domain for cobalt

Based on the statistical analysis, the cobalt domaining looks reasonable, however it should be noted that the mineralisation envelope is based on copper grades only. The cobalt distribution is not related to the copper distribution and hence these domains are not necessarily relevant for cobalt estimation. If cobalt grades are to be used as anything other than indicative grades, the domaining for cobalt should be reviewed independent of copper.

0.1 0.5 1 5 10 50 100 500

CO

0

1

2

3

4

5

6

7

8

9

10

11

1010.0

Log Histogram for CO

Points: 1474 (14302)Weights: 1474 (CO_1010.0_DeclWght)

Mean: 68.649Std Dev: 93.526

Variance: 8747CV: 1.362



Maximum: 826.00075%: 89.000

50% (median): 36.00025%: 14.000

Minimum: 0.100

MG L25 50 75

0.1 1 10 100

CO

0.010.020.050.10.2

0.512

5

10

20

3040506070

80

90

95

9899

99.899.9

99.991010.0

Log Probability Plot for CO

M

5 10 50 100 500

CO

0

2

4

6

8

10

12

1020.0



Mean: 58.999Std Dev: 80.545




Maximum: 600.00075%: 71.000

50% (median): 36.00025%: 15.000

Minimum: 5.000

MG L25 50 75

5 10 50 100 500

CO

0.010.020.050.10.2

0.512

5

10

20

3040506070

80

90

95

9899

99.899.9

99.991020.0


M

5 10 50 100

CO

0

2

4

6

8

10

12

14

1030.0



Mean: 32.587Std Dev: 35.913




Maximum: 172.00075%: 44.000

50% (median): 14.00025%: 7.000

Minimum: 2.000

MG L25 50 75

5 10 50 100

CO

0.010.020.050.10.2

0.512

5

10

20

3040506070

80

90

95

9899

99.899.9

99.991030.0


M


Resource Estimation


7.2 Boundary analysis Given the mainly gradational nature of the weathering boundaries, QQ plots were generated for copper to compare the weathering domains to determine whether they could be combined for estimation.

The QQ plots indicate that the grade distributions are similar above around 0.2% copper (Figure 7.3 and Figure 7.4). As a result all further analysis and estimation has been undertaken on the combined weathering domains.

Figure 7.3 QQ plot of oxide versus transitional within the mineralised domain

0.001 0.01 0.1 1 10

1010.0 CU {3225 values}

0.001

0.01

0.1

1

10

1020

.0 C

U {3

02 v

alue

s}

Data Set 1: CU 1010.0Data Set 2: CU 1020.0

QQ Plot 1010.0/1020.0 (log-log)

M

M

G

G

L

L


Resource Estimation


Figure 7.4 QQ plot of transitional versus sulphide within the mineralised domain

7.3 Top cuts Top cuts were applied to limit the influence of extreme outliers on the estimate. The top cuts were determined by looking at the point of disintegration of the grade population on the histograms and log probability plots. The top cuts applied, together with the uncut and top cut statistics, are shown in Table 7.3.

Note while top cuts have been applied globally within the mineralised domain, only the oxide portion contains grades above the top cut values for copper and cobalt.

Table 7.3 Anthill summary top cut statistics Statistic Cu% Co ppm

Mean 0.79 66 Std Deviation 1.64 91

CV 2.07 1.38

Top cut 17.00 700 Number of samples cut 7 3

Top cut mean 0.78 66 Top cut Std Deviation 1.55 90

Top cut CV 1.98 1.37

0.01 0.1 1 10

1020.0 CU {302 values}

0.01

0.1

1

10

1030

.0 C

U {7

7 va

lues

}

Data Set 1: CU 1020.0Data Set 2: CU 1030.0

QQ Plot 1020.0/1030.0 (log-log)

M

M

G

G

L

L


Resource Estimation


8 Variography Due to the positively skewed nature of the grade distributions, normal scores variograms were modelled for copper and cobalt within the mineralised domain. All weathering domains were combined for variography as they show similar statistical characteristics.

Downhole variograms were calculated and modelled to determine the nugget effect. Subsequently, directional variograms were calculated and modelled using a nugget and two nested spherical structures.

Due to the curved nature of the mineralisation, the data was limited to the central area where the most data lies in a similar orientation in order to select the directions of continuity and check the anisotropy.

The final variogram models are shown with all data included. As the continuity is reasonably isotropic in the plane of the mineralisation, the mixed orientations do not have a large impact. The variogram orientations were locally reorientated based on geology during estimation.

The resultant variogram models for copper are similar to the October 2010 models, with a shorter long range continuity.

All normal scores variogram models were back-transformed prior to estimation. The back-transformed models are provided in Table 8.1 and variogram models are illustrated in Figure 8.1 and Figure 8.2 for copper and cobalt respectively.

Table 8.1 Anthill back-transformed variogram parameters

Orientation Nugget Structure 1 Structure 2

Sill Range Sill Range 00290 30 65

Cu 00200 0.09 0.70 20 0.21 45 90000 6 20

00290 60 70 Co 00200 0.06 0.50 20 0.44 70

90000 3 30


Resource Estimation


Figure 8.1 Anthill variogram models for copper

0 5 10 15 20 25

Sample Separation (m)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Downhole - 1010_1020_1030

NormalScores Variogram for CU

3348

3122

2905

2692 2489

23052137

1989

18601750

163615441456

13711296

1220

1156

10931030

979926

869814

766 717

671

624 579

N( 0.05 )

Sph( 0.38, 3.5 )

Sph( 0.57, 25 )

Lag1

0 20 40 60 80 100


0.0

0.2

0.4

0.6

0.8

1.0

1.2

Direction 1: 00-->290 - 1010_1020_1030


69

1816 6522

871512684

15902

N( 0.05 )

Sph( 0.5, 30 )

Sph( 0.45, 65 )

Lag20

0 20 40 60 80 100


0.0

0.2

0.4

0.6

0.8

1.0

1.2

Direction 2: 00-->200 - 1010_1020_1030


115

256

1291

1411

1360

19652509

N( 0.05 )

Sph( 0.5, 20 )

Sph( 0.45, 45 )

Lag15

0 5 10 15 20 25 30


0.0

0.2

0.4

0.6

0.8

1.0

1.2

Direction 3: 90-->000 - 1010_1020_1030


172

322

201

195

194221

163

N( 0.05 )

Sph( 0.5, 6 )

Sph( 0.45, 20 )

Lag5


Resource Estimation


Figure 8.2 Anthill variogram models for cobalt

Gam

ma

(1.0

00)

Gam

ma

(1.0

00)

Gam

ma

(1.0

00)

Gam

ma

(1.0

00)


Resource Estimation


9 Block modelling 9.1 Block model

Table 9.1 summarises the block model prototype used for Anthill. The block model was coded for weathering and mineralisation domains as described in Table 6.1. These codes were combined for the estimation as per the data coding.

The parent cell size was selected based on that used previously and is, in Snowden’s opinion, reasonable given the drillhole spacing at the Anthill deposit.

A waste model was created outside of the mineralisation to provide sufficient area for optimisation. Sub-celling was used to more accurately define the volumes within the orebody interpretations.

Table 9.1 Anthill block model parameters Easting (X) Northing (Y) Elevation (Z) Origin 302900 7758600 40 Limit 304000 7759350 400 Parent block size (m) 10 10 5 Number of blocks 110 75 72 Minimum sub-cell size (m) 2.5 2.5 2.5

9.2 Grade estimation Copper and cobalt grades were estimated into parent cells using ordinary kriging within the mineralised domain. Block discretisation points were set at 5 east by 5 north by 2 elevation. All weathering contacts were treated as soft boundaries for the grade estimation based on the statistical analysis discussed in Section 7.

Dynamic anisotropy in Datamine was used to locally adjust the variogram and search orientations for both copper and cobalt. The mineralisation wireframes were used to create a point file where each point relates to a triangle centroid and contains the true dip and true dip direction of the wireframe triangle. All points related to the ends of the wireframes were manually removed to avoid anomalies in these areas. This point file was then used to estimate true dip and true dip direction into the block model. The estimates of true dip and true dip direction were subsequently used to locally adjust the variogram and search orientations during estimation.

The initial search pass dimensions were 60 m along strike by 40 m down dip by 20 m across strike. Blocks were estimated using a minimum of 16 and a maximum of 40 samples. If the initial search failed to find the minimum number of samples required, then a second search was conducted using double the search radii. A third search using four times the search radii with the minimum number of samples reduce to 4 was used to estimate any blocks still uninformed.

Default density values were assigned to the estimate as detailed in Section 4.4. Kriging efficiency and slope of regression were calculated for each block in the mineralised domain. 22 negative copper grades were estimated due to negative kriging weights. These blocks were manually reset to 0.0001% Cu.

Table 9.2 describes all of the fields in the final model, ah0411v1.dm.


Resource Estimation


Table 9.2 Anthill final model fields Field Values Description

MINZONE 0 Background

1000 Mineralised domain

OXIDE

10 Oxide

20 Transitional

30 Sulphide

ROCK 0 Rock type (not used at Anthill)

MINFLAG MINZONE + OXIDE Combined code for analysis

TRDIP 0-90 True dip

TRDIPDIR 0-360 True dip direction

TRPLUNGE 0 True plunge

NDIP Number of informing samples (dip)

NDIPDIR Number of informing samples (dip direction)

CU Estimated copper grade

NUMSAMCU/CO 4-40 Number of informing samples

VARCU/CO 0-1 Kriging variance

SVOLCU/CO 1, 2, 3 Search pass

AVARCU Within block variance for copper estimate

LAGRCU Lagrange multiplier for copper estimate

BVAR Block variance for copper estimate

KE Kriging efficiency for copper estimate

SLOPE Slope of regression for copper estimate

DENSITY 2.4, 2.6, 2.7. 2.8 Assigned density values

CLASS

2 Indicated

3 Inferred

4 Unclassified

9.3 Model validation 9.3.1 Global comparisons The final grade estimates were validated both visually and statistically against the input composite data within the mineralised domain. Table 9.3 provides a global comparison of the estimated grades compared to the input grades. The estimate was limited to blocks estimated within the first search pass for copper.

Table 9.3 Comparison of the mean composite grade with the mean block model grade

Assay Mineralised domain

Number samples Estimate Composites Top cut

composites

% Cu 3,604 0.79 0.79 0.78

Co ppm 1,725 60 66 66

This statistical comparison shows that the estimate of copper and cobalt validates well globally.


Resource Estimation


9.3.2 Visual validation The Anthill grade estimate shows a good visual comparison with the drillhole data. The estimates, although smoothed, follow the trends of the input sample data reasonably well. Example sections for copper and cobalt are illustrated in Figure 9.1 and Figure 9.2 respectively.

Figure 9.1 Example section showing estimated copper grades compared to input composites

Figure 9.2 Example section showing estimated cobalt grades compared to input composites

9.3.3 Grade trend plots Sectional validation graphs were generated to assess the reproduction of local means and to validate the grade trends in the model. The graphs compare the mean of the estimated grades to the mean of the input composite grades (uncut) within model slices (bins) for the portion of the deposit estimated within the first search pass for copper (Figure 9.3 and Figure 9.4). The graphs also show the number of input samples on the secondary Y-axis to assess the level of support for each bin.

Northeast

Northeast


Resource Estimation


The grade trend plots indicate that there is a good local reproduction of the input grades in both the horizontal and vertical directions for copper and cobalt.

Figure 9.3 Anthill grade trend plots for copper

20 mE bins

20 mN bins

5 mRL bins

0

50

100

150

200

250

300

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

303283.75 303383.75 303483.75 303583.75 303683.75 303783.75 303883.75

Num

ber o

f Sam

ples

CU

X Mid Point

Anthill: 20.00 Increments

Block Grade

Point Grade

No Samples

0

50

100

150

200

250

300

350

400

0

0.5

1

1.5

2

2.5

3

3.5

7758703.8 7758803.8 7758903.8 7759003.8 7759103.8 7759203.8

Num

ber o

f Sam

ples

CU

Y Mid Point


Block Grade

Point Grade

No Samples

0

50

100

150

200

250

300

350

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

120 170 220 270 320

Num

ber o

f Sam

ples

CU

Z Mid Point


Block Grade

Point Grade

No Samples


Resource Estimation


Figure 9.4 Anthill grade trend plots for cobalt

20 mE bins

20 mN bins

5 mRL bins

0

50

100

150

200

250

0

20

40

60

80

100

120

140

160

180

200

303283.75 303383.75 303483.75 303583.75 303683.75 303783.75 303883.75

Num

ber o

f Sam

ples

CO

X Mid Point


Block Grade

Point Grade

No Samples

0

20

40

60

80

100

120

140

160

180

200

0

50

100

150

200

250

300

350

7758703.8 7758803.8 7758903.8 7759003.8 7759103.8 7759203.8

Num

ber o

f Sam

ples

CO

Y Mid Point


Block Grade

Point Grade

No Samples

0

20

40

60

80

100

120

140

160

0

50

100

150

200

250

120 170 220 270 320

Num

ber o

f Sam

ples

CO

Z Mid Point


Block Grade

Point Grade

No Samples


Resource Estimation


10 Classification The Anthill resource estimate has been classified as Indicated and Inferred in accordance with the guidelines of the JORC Code. Table 10.1 lists the criteria pertinent to Table 1 of the JORC Code that have been used to derive the resource classification for the Anthill deposit. Snowden has based the resource classification upon a number of criteria, including the geological confidence, the integrity of the data, the spatial continuity of the mineralisation as demonstrated by variography, and the quality of the estimation. The oxide and transitional areas estimated within the first search pass for copper, with drilling coverage of 25 m by 25 m or better has been classified as Indicated, except the northeastern most shoot where higher grades appear to have smeared into the shoot from the main lode. The remainder of the mineralised domain is classified as Inferred. Note the classification is based on the copper estimate. Cobalt has less than half the amount of informing data and should be considered indicative.

Table 10.1 JORC assessment and reporting criteria for estimation and reporting of Anthill deposit

Item Comment Database integrity Snowden carried out the following basic validation checks on the data supplied by CST

prior to resource estimation: Unsurveyed drillhole collars Drillholes with overlapping sample intervals Sample intervals with no assay data Duplicate records Assay grade ranges Collar coordinate ranges Valid drillhole orientation data

No significant errors were identified by the validation. Geological interpretation The mineralisation interpretations have been completed by CST using a nominal

0.2% Cu cut-off grade in conjunction with the geological logging and mapping. Dimensions The main mineralisation extends over a strike length of 550 m by 500 m wide. The

interpretation is extended to a depth of around 200 m below surface. The thickness of the main oxide mineralisation ranges from less than 1 m up to around 25 m.

Estimation and modelling techniques

Grades for copper and cobalt were estimated using ordinary block kriging with dynamic anisotropy into 10 mE by 10 mN by 5 mRL parent cells.

Moisture Not applicable to this estimate – only dry mass considered. Cut-off parameters Resource estimate reported at a 0.3% Cu block cut-off grades within the mineralised

domain. Mining factors and assumptions

No assumptions have been applied.

Metallurgical factors and assumptions

No assumptions have been applied.

In situ density In situ bulk density set to between 2.4 t/m3 and 2.8 t/m3 dependant on weathering domain. These figures are based on density measurement test work carried out by CST.

Classification The estimate has been classified as an Indicated and Inferred Mineral Resource based on geological confidence, the integrity of the data, the spatial continuity of the mineralisation as demonstrated by variography, and the quality of the estimation.

Audits and reviews Snowden has completed an internal peer review of the estimate. Relative confidence and accuracy

No studies of relative confidence have been carried out.


Resource Estimation


11 Mineral Resource reporting The Anthill Mineral Resource has been reported above a 0.3% Cu cut-off grade and is summarised in Table 11.1.

Table 11.1 Anthill Mineral Resource, as at April 2011, reported above a 0.3% Cu cut-off grade

Weathering domain Mt % Cu

Indicated Resource

Oxide 5.2 0.87


Sulphide - -

Total Indicated 5.8 0.88

Inferred Resource

Oxide 0.24 0.68


Sulphide 0.27 0.67

Total Inferred 0.66 0.65

Indicated + Inferred Resource

Oxide 5.4 0.86


Sulphide 0.27 0.67

Total Indicated + Inferred 6.5 0.86

Note all figures reported to two significant figures. Small discrepancies may occur due to rounding

The previous October 2010 Mineral Resource comprised a total Indicated Resource of 1.62 Mt at 0.77% Cu and a total Inferred Resource of 4.00 Mt at 0.76% Cu at a 0.3% Cu cut-off grade. The total Indicated and Inferred Mineral Resource for October 2010 was 5.62 Mt at 0.76% Cu.

This is a 260% increase in tonnes and 15% increase in copper grade for the total Indicated Resource. The total Indicated and Inferred Mineral Resource has increased by 16% tonnes and 13% copper grade

The increase is due to infill drilling and an improved geological model allowing upgrade of the resource classification, together with an increase in oxide density due to additional density work. The updated oxide density is now more in line with that seen in the other Lady Annie deposits.

The resource model has been reported above block cut-off grades from 0% to 1% Cu at 0.1% Cu intervals (Table 11.2).


Resource Estimation


Table 11.2 Anthill grade tonnage reporting, as at April 2011

Cut-off Cu%

Indicated Inferred Total Indicated + Inferred

Mt Cu% Co ppm1 Mt Cu% Co

ppm Mt Cu% Co ppm

Oxide

0.0 6.09 0.77 58 0.36 0.54 69 6.45 0.76 59

0.1 6.07 0.78 58 0.36 0.54 69 6.43 0.76 59

0.2 5.92 0.79 58 0.34 0.56 70 6.26 0.78 59

0.3 5.15 0.87 59 0.24 0.68 72 5.40 0.86 59

0.4 4.23 0.98 58 0.16 0.85 75 4.40 0.98 59

0.5 3.44 1.11 58 0.12 1.01 77 3.56 1.10 58

0.6 2.80 1.24 57 0.08 1.20 82 2.88 1.24 58

0.7 2.34 1.35 58 0.06 1.43 95 2.40 1.35 59

0.8 1.95 1.47 58 0.05 1.58 101 2.00 1.48 59

0.9 1.64 1.59 58 0.04 1.69 107 1.69 1.59 60

1.0 1.39 1.70 59 0.04 1.75 106 1.43 1.70 60

Transitional

0.0 0.76 0.91 65 0.15 0.55 71 0.91 0.85 66

0.1 0.76 0.92 65 0.15 0.55 71 0.91 0.86 66

0.2 0.75 0.93 65 0.15 0.55 71 0.90 0.86 66

0.3 0.69 0.98 66 0.14 0.56 72 0.83 0.91 67

0.4 0.64 1.04 66 0.13 0.59 69 0.76 0.96 66

0.5 0.57 1.11 65 0.08 0.66 65 0.65 1.06 65

0.6 0.49 1.20 65 0.04 0.79 80 0.53 1.17 66

0.7 0.42 1.29 66 0.02 0.89 90 0.44 1.27 67

0.8 0.34 1.42 65 0.01 1.04 111 0.35 1.40 66

0.9 0.29 1.52 64 0.01 1.10 109 0.30 1.51 65

1.0 0.24 1.63 63 0.00 1.20 98 0.25 1.62 63

Sulphide

0.0 - - - 0.30 0.63 59 0.30 0.63 59

0.1 - - - 0.30 0.63 59 0.30 0.63 59

0.2 - - - 0.29 0.64 59 0.29 0.64 59

0.3 - - - 0.27 0.67 60 0.27 0.67 60

0.4 - - - 0.25 0.70 59 0.25 0.70 59

0.5 - - - 0.21 0.75 58 0.21 0.75 58

0.6 - - - 0.16 0.80 55 0.16 0.80 55

0.7 - - - 0.11 0.88 59 0.11 0.88 59

0.8 - - - 0.06 0.98 62 0.06 0.98 62

0.9 - - - 0.03 1.12 72 0.03 1.12 72

1.0 - - - 0.02 1.28 77 0.02 1.28 77

1 Note cobalt grades are not classified and should be considered as indicative grades only


Resource Estimation


Cut-off Cu%

Indicated Inferred Total Indicated + Inferred

Mt Cu% Co ppm1 Mt Cu% Co

ppm Mt Cu% Co ppm

Total oxide + transitional + sulphide

0.0 6.86 0.79 59 0.81 0.58 65 7.66 0.77 60

0.1 6.83 0.79 59 0.81 0.58 65 7.63 0.77 60

0.2 6.67 0.81 59 0.79 0.59 66 7.46 0.78 60

0.3 5.85 0.88 59 0.66 0.65 67 6.50 0.86 60

0.4 4.87 0.99 59 0.54 0.72 66 5.41 0.96 60

0.5 4.01 1.11 59 0.40 0.81 65 4.41 1.08 59

0.6 3.29 1.23 58 0.28 0.92 66 3.57 1.21 59

0.7 2.76 1.34 59 0.19 1.05 74 2.95 1.32 60

0.8 2.29 1.46 59 0.12 1.22 82 2.41 1.45 60

0.9 1.93 1.58 59 0.08 1.42 94 2.01 1.57 61

1.0 1.63 1.69 60 0.06 1.58 98 1.69 1.69 61


Resource Estimation


12 Recommendations The following recommendations are made in reference to ongoing work at the Anthill deposit: Snowden previously noted that the RC drilling at Anthill displays trends

indicative of downhole smearing and as such, recommended that some RC drillholes be twinned by diamond core drilling to validate this. Snowden understands that this work is underway. Moreover, Snowden recommends that CST investigate alternative drilling techniques, such as sonic drilling, for the wet, clay-rich material encountered in the Anthill oxide zone.

There are discrepancies between the collar surveys and topographical survey at Anthill. CST has indicated that the collar surveys are more accurate and that there are accuracy issues with the topographical survey. A LIDAR survey has been recently acquired; however the data is not yet available. This is not considered a high risk to the project at this stage but an updated topographic survey should be incorporated into future estimates.

There appears to be an issue with assay precision in the QAQC results for the 2010 drilling program. Snowden understand that CST is undertaking resampling of the duplicates to analyse this issue. Snowden notes, however, that some of the precision issues are likely caused by sampling errors related to the reverse circulation drilling in the oxide zone, which is typically wet and composed of clay-rich material at the Anthill deposit.

Analysis of the grade statistics within the mineralised domain suggests mixed populations with a high grade population above approximately 0.6% Cu. It appears that the shoots off the main mineralised lode are lower grade than the main lode which may account for some of this population mixing. While the grade change between the main lode and the shoots appears gradational and hence a soft boundary is appropriate for estimation, Snowden recommends that future interpretations wireframe the shoots separately to allow separate statistical analysis and variography.


Resource Estimation


13 References JORC, 2004. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code). Prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, December 2004.

Snowden, 2010a. Independent Technical Report on the Lady Annie Project. Unpublished internal report prepared for China Sci-Tech Holdings Limited, 7 May 2010.

Snowden, 2010b. Lady Annie Project, Mineral Resource Estimate, October 2010. Unpublished internal report prepared for China Sci-Tech Holdings Limited, October 2010.

Appendix A Duplicate analysis

Historical – laboratory check duplicates

0.001

0.01

0.1

1

10

100

0.001 0.01 0.1 1 10 100

Dup

licat

e C

u (%

)

Cu (%)

Logscale ScatterplotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu

Correlation Coefficient = 0.998

+/- 10%

0.01

0.1

1

10

100

0.01 0.1 1 10 100

asce

ndin

g D

uplic

ate

Cu

(%)

ascending Cu (%)

Log Scale QQ PlotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu

+/- 10%

0.001

0.01

0.1

0.001 0.01 0.1 1 10

half

abso

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diff

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f the

pai

red

valu

es

mean of paired values (%)

Precision PlotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu

Sample Pairs 5% 10% 20% Line of Significance Graph Limit

Number of sample pairs0-5% 2975-10% 1710-20% 120-100% 0Total 315

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Half

Abso

lute

Rel

ativ

e Di

ffere

nce

(HAR

D %

)

HARD Rank (%)

Ranked HARD PlotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu

90th Percentile = 4.3%

Historical – field duplicates

0.001

0.01

0.1

1

10

100

0.001 0.01 0.1 1 10 100

Dup

licat

e C

u (%

)

Cu (%)

Logscale ScatterplotAnthill April 2011, field duplicates Historical

Cu vs Duplicate Cu


+/- 10%

0.01

0.1

1

10

100

0.01 0.1 1 10 100

asce

ndin

g D

uplic

ate

Cu

(%)

ascending Cu (%)

Log Scale QQ PlotAnthill April 2011, field duplicates Historical

Cu vs Duplicate Cu

+/- 10%

0.001

0.01

0.1

1

0.001 0.01 0.1 1 10

half

abso

lute

diff

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ce o

f the

pai

red

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es


Precision PlotAnthill April 2011, field duplicates Historical

Cu vs Duplicate Cu


Number of sample pairs0-5% 455-10% 810-20% 620-100% 3Total 62

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Half

Abso

lute

Rel

ativ

e Di

ffere

nce

(HAR

D %

)

HARD Rank (%)

Ranked HARD PlotAnthill April 2011, field duplicates Historical

Cu vs Duplicate Cu


Historical – re-split duplicates

0.001

0.01

0.1

1

10

100

0.001 0.01 0.1 1 10 100

Dup

licat

e C

u (%

)

Cu (%)

Logscale ScatterplotAnthill April 2011, re-splits

Cu vs Duplicate Cu


+/- 10%

0.01

0.1

1

10

100

0.01 0.1 1 10 100

asce

ndin

g D

uplic

ate

Cu

(%)

ascending Cu (%)

Log Scale QQ PlotAnthill April 2011, re-splits

Cu vs Duplicate Cu

+/- 10%

0.001

0.01

0.1

1

0.001 0.01 0.1 1 10

half

abso

lute

diff

eren

ce o

f the

pai

red

valu

es


Precision PlotAnthill April 2011, re-splits

Cu vs Duplicate Cu


Number of sample pairs0-5% 3695-10% 17510-20% 12120-100% 78

Total 743

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Half

Abso

lute

Rel

ativ

e Di

ffere

nce

(HAR

D %

)

HARD Rank (%)

Ranked HARD PlotAnthill April 2011, re-splits

Cu vs Duplicate Cu


2010 – laboratory check duplicates

0.001

0.01

0.1

1

10

100

0.001 0.01 0.1 1 10 100

Dup

licat

e C

u (%

)

Cu (%)

Logscale ScatterplotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu


+/- 10%

0.01

0.1

1

10

100

0.01 0.1 1 10 100

asce

ndin

g D

uplic

ate

Cu

(%)

ascending Cu (%)

Log Scale QQ PlotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu

+/- 10%

0.001

0.01

0.1

0.001 0.01 0.1 1 10

half

abso

lute

diff

eren

ce o

f the

pai

red

valu

es


Precision PlotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu


Number of sample pairs0-5% 160

5-10% 510-20% 020-100% 0Total 165

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Half

Abso

lute

Rel

ativ

e Di

ffere

nce

(HAR

D %

)

HARD Rank (%)

Ranked HARD PlotAnthill April 2011, laboratory check duplicates

Cu vs Duplicate Cu


2010 – field duplicates

0.001

0.01

0.1

1

10

100

0.001 0.01 0.1 1 10 100

Dup

licat

e C

u (%

)

Cu (%)

Logscale ScatterplotAnthill April 2011, field duplicates 2010

Cu vs Duplicate Cu


+/- 10%

0.01

0.1

1

10

100

0.01 0.1 1 10 100

asce

ndin

g D

uplic

ate

Cu

(%)

ascending Cu (%)

Log Scale QQ PlotAnthill April 2011, field duplicates 2010

Cu vs Duplicate Cu

+/- 10%

0.001

0.01

0.1

1

10

0.001 0.01 0.1 1 10

half

abso

lute

diff

eren

ce o

f the

pai

red

valu

es


Precision PlotAnthill April 2011, field duplicates 2010

Cu vs Duplicate Cu


Number of sample pairs0-5% 325-10% 1810-20% 13

20-100% 16Total 79

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Half

Abso

lute

Rel

ativ

e Di

ffere

nce

(HAR

D %

)

HARD Rank (%)

Ranked HARD PlotAnthill April 2011, field duplicates 2010

Cu vs Duplicate Cu


Documents

CST Minerals Lady Annie Pty Ltd: Anthill Project No. …acquired the Lady Annie Project from Cape Lambert Lady Annie Exploration Pty Limited in 2010. The previous estimate for Anthill