aae0e801-8642-4633-a350-9de4576af700.pdf
29 April 2016
Australian Mines closes in on high-grade gold zones at its emerging Dixon prospect
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Diamond drilling points to structural control of high-grade gold mineralisation
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Key results include;
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1.1 metres @ 5.07 g/t gold from 186.9 metres down hole (DXDD001)
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11 metres @ 1.10 g/t gold from 136.0 metres down hole (DXRC003)
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Detailed modelling of key controlling structures currently in progress
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will enable accurate testing of priority gold zones in upcoming drill program
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Follow-up RC and diamond core drill program scheduled to commence in May
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Entitlement Offer extended to 2 June 2016
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allowing shareholders to review upcoming drilling prior to closing date
Australian Mines Limited ("Australian Mines" or "the Company") advises that the Company has now received the final assay results from its diamond core and reverse circulation (RC) drill program at the emerging Dixon gold prospect - part of its joint venture with Riedel Resources (ASX: RIE)1.
The Dixon prospect was first identified by Australian Mines in late 2015 when a single RC hole designed to test a conceptual gold target successfully intersected high-grade primary gold mineralisation: (10 metres @ 8.79 g/t gold from 130 metres downhole in drill hole MMRC016) at the interpreted eastern contact of a magnetic dolerite unit2.
Like the nearby Plutonic ore bodies, the gold mineralisation intersected by the Company at Dixon appeared to be associated with an increase in sulphide and quartz content3.
Consequently, in late 2015 Australian Mines commissioned an induced polarisation (IP) survey over the immediate Dixon prospect area. This survey sought to accurately determine the location and strike
1 Australian Mines Limited, Australian Mines secures majority ownership of Marymia Project, released 29 May 2015
2 Australian Mines Limited, High-grade gold zone extended at Dixon prospect, released 6 November 2015
3 Terra Resources Pty Ltd, Dixon prospect, Internal company report dated 24 December 2015
extent of the disseminated sulphides interpreted to be associated with, but not bound to, the bedrock- hosted gold mineralisation at Dixon.
As announced on 27 January 2016, this IP survey successfully detected a significant chargeability anomaly directly over the high-grade gold zone intersected by the Company's 2015 drill hole4. Moreover, this geophysical survey also indicated that this interpreted sulphidic body was continuous for at least several hundred metres both at depth and along strike.
Encouraged by the apparent relationship between gold mineralisation and sulphide alteration, last month Australian Mines drilled five stratigraphic holes into this geophysical anomaly.
This first-pass reconnaissance drill program in March 2016 confirmed that the source of the chargeability anomaly was indeed a gold-bearing sulphide (pyrite-pyrrhotite-arsenopyrite) body of significant width5, reinforcing that a substantial fluid flow event with the propensity to generate an economic-grade gold deposit had occurred across the Dixon prospect area6.
The Company notes that whilst the thickness and grade of the gold mineralisation encountered within the extensive sulphidic corridor (Appendix 1) does not appear too dissimilar to that typically observed at the Plutonic or Marymia gold mines7,8, the results nonetheless did not replicate the tenor of the mineralisation intersected by the Company's discovery hole MMRC016. This suggests, therefore, that the high-grade mineralisation at Dixon may have a structural component, which acts to localise and concentrate the gold-bearing fluid thus producing grades in excess of 10 g/t gold within these structures.
Having reviewed the core returned from Australian Mines' diamond hole DXDD001, it now appears that there are two orientations of gold-bearing quartz veining at Dixon, with the favourable setting more likely to be a north-dipping vein set as opposed to the west-dipping veins targeted by the Company's recent drill program.
Preliminary work by Australian Mines similarly suggests that drill hole MMRC016 may be located close to one of three large cross-cutting (east-west trending), secondary fault structures. These structures potentially provide the favourable geological environment necessarily for concentrating (and depositing) the gold mineralisation at Dixon. Again, this is not surprising given that individual deposits at Plutonic are typically located along the main northeast trend where it has been cut by east-west oriented structures9.
Should this north-dipping (east-west trending) structure prove to be a significant control on gold mineralisation at Dixon, it would appear that Australian Mines' March 2016 drill program was oriented sub-parallel to the preferred target zone. Such an orientation would mean that the Company's March 2016 drill program potentially intersected the narrower, secondary veinlets rather than testing the main geological structure thought to host the high-grade gold mineralisation.
4 Australian Mines Limited, IP survey expands gold prospectivity at Dixon, released 27 January 2016
5 Australian Mines Limited, Drilling confirms extensive sulphidic corridor at Dixon, released 29 March 2016
6 Galtrad Pty Ltd, Annual Report - E52/594, received by the WA Department of Mines and Petroleum 16 September 1996
7 Northern Star Resources Limited, Plutonic Operations Fact Sheet http://www.nsrltd.com/wp-content/uploads/2015/06/NSR- Plutonic-Operations-Fact-Sheet-May-2015.pdf, 28 April 2016
8 Dampier Gold Limited, Prospectus, released 19 July 2010
9 Dampier Gold Limited, Prospectus, released 19 July 2010
Motivated by this greater understanding of possible control on gold mineralisation at Dixon, Australian Mines is presently completing a detailed three-dimensional geological and geophysical model of the Dixon prospect area. This work, which is expected to be completed by early-May, will enable the Company to accurately target the apparent high-grade, structurally controlled gold horizon during its next round of drilling which is expected to commence around mid-May.
Precise details of the Company's upcoming drill program will be announced closer to its commencement date but it is anticipated that the program will comprise up to 2,500 metres of RC drilling and 500 metres of diamond core.
In light of the Company's evolving understanding of the controls on mineralisation at Dixon and increased confidence in the long term potential of this project, Australian Mines has extended the closing date of the Entitlement Offer in order to allow shareholders time to review the results to this upcoming drill program.
The closing date of the Entitlement Offer is now 2 June 2016. Other dates related to the Offer are similarly extended as set out in the below table10.
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Activity
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Date
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Offer period closes.
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5pm (Melbourne time) 2 June 2016
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Securities quoted on a deferred settlement basis
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3 June 2016
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Notification of under subscriptions
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7 June 2016
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Issue and allot offer shares and announce completion of offer and lodge final Appendix 3B.
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9 June 2016
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Commencement of normal trading.
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10 June 2016
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Dispatch of holding statement.
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10 June 2016
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Managing Director, Benjamin Bell commented, "The recently received results from the Company's maiden diamond hole at Dixon, together with the previously announced RC drilling is enabling us to quickly vector into the high-grade gold zones within this emerging greenfields gold discovery.
10 The above dates are indicative and subject to the discretion of Australian Mines to make further amendments, including extending the closing date or closing the rights issue early, subject to the ASX Listing Rules and Corporations Act.
Having established that the sulphidic corridor at Dixon is carrying gold mineralisation, the focus of our upcoming drill campaign is the junctions where the recently-identified east-west secondary structures cut the broader northeast-trending structures - much like where the gold deposits were discovered at Plutonic.
With at least three cross-cutting structures known to exist across the Dixon prospect area, and thus the potential for multiple gold discoveries, Australian Mines is gearing up for a year of active exploration and drilling at Doolgunna-Marymia".
***ENDS***
For further information, shareholders and media please contact:
Benjamin Bell Managing Director Ph: +61 8 9481 5811
E: [email protected]