Olary Iron Project Mineral Resource Estimate in South Australia
The  iron  ore  mineralisation  is  ho sted  by  the  Neoproterozoic  Braemar  ironstone  facies  of  the  Olary  Block.    The  Braemar  ironstone  facies  consists of  laminated  and  diamictic  ironstones  interbedded  with   calcareous   or   dolomitic   siltstone.      Petrographical   study   shows   that   these   rocks   have   metamorphosed up to amphibolite facies, but subsequently retrogressed pervasively to greenschist facies.    The  entire  succession  is  further  cut  by  centimetre-scale  olivine  phyric  basaltic  to  doleritic  dykes in places. With the exception of a few exposures cropped out in the North Zone,themineralisation is covered by  Quaternary  sediments.    The  geometry  of  the  modelled  mineralisation  is  controlled  by  an  asymmetric  east-northeast  trending synform  and  north–east  trending  open  folds  to  a  lesser  extent.    The  mineralisation  is  cut  by  a  sub-vertical  east–west  trending  fault  zone  that  subdivides  the  mineralisation into the North and South Zones.

Deposit Types

The  iron  ore  deposit  at  Olary  is  an  example  of  Neoproterozoic  ironstones  that  are  related  to  glaciation and formed during the “Snowball Earth” period, when there was a global-scale glaciation even at low latitudes.  The Braemar facies ironstone is envisaged to have accumulated in a marine basin  along  the  border  of  a  continental  glaciated  highland  and  a  low-lying  weathered  landmass.    The   interlayering   relationship   between   dolostones,   manganiferous   siltstones,   ironstones   and   diamictites are related to a transgressive event during a postglacial period.   

The  geology  of  the  Project  area  is  described  in  the  1:25,000  scale  Olary  (SI  54-2)  geological  map  and  the  1:10,000  Oakvale  geological  map,  prepared  by  Department  of  Primary  Industries  and  Resources of South Australia.  The area is also covered by the regional aeromagnetic survey, which was  flowed  by  the Targeted  Exploration  Initiative,  South  Australia  (TEiSA)  in  1999-2000  at  200  m  spacing.  In the regional aeromagnetic data, the Braemar facies ironstones show up as pronounced, curvilinear, high magnetic anomalies.  The mostly covered Braemar facies ironstones appear to have been folded and extend discontinuously for at least 180 km. In  late  2010,  Avocet  completed  6  RC  holes  for  a  total  of  689  m  to  test  the  geophysical  anomalies,  interpreted to represent the Braemar facies ironstones.  In July 2011, a ground magnetic survey was completed over the area of interest by Yukuang.  The survey was performed using a WCZ-1 Proton Magnetometer.  Line and survey station spacing was 100 m and 20 m respectively.  The survey was conducted between 467300E – 470400 E and 6399700N–6403200N, measuring 11.2 km2

Interpretation and Conclusions

SRK  considers  that  the  drilling  methods  and  procedures  used  at  the  Olary Iron  are  consistent  with  generally accepted industry best practices and are therefore appropriate. In  the  opinion  of  SRK,  the  sampling  preparation,  security  and  analytical  procedures  used  by  Yukuang   are   consistent   with   generally   accepted   industry   best   practices   and   are   therefore   appropriate. The  Olary  Iron  deposit  Resource  estimate  classifications  could  be  improved  by  tighter  geological  modelling  in  the  areas  where  the  banding  of  Iron  grades demonstrates  high  downhole  variability  within  the  current  modelled  domains.   To  enable  a  coherent  volume  model  based  on  tighter  geological  definition  additional  infill  drilling  along  strike  is  required  to  confidently  align  the  correct  units  with  each  other  along  strike.    The  aim  of  the  infill  drilling  would  be  to  enable  explicit  domain  definition for the high grade iron population, averaging around 40% Fe, as seen in the histogram of the current fresh domains. Infill  drilling  and  tighter  domaining  should  enable  coherent  variograms  to  be  modelled  for  each  variable which will in turn improve the confidence in the estimate on a block by block scale as well as on the whole.  

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