Wilcherry Project, South Australia (Alliance 75.01%)

The Wilcherry Project is located within the Gawler Craton, northern Eyre Peninsula, 40 km north of Kimba in South Australia and is a joint venture between Alliance Craton Explorer Pty Ltd (75.01%) and Trafford Resources Pty Ltd (24.99%). Alliance is sole funding $3.2 million exploration in FY2019, and subject to expenditure, may move to approximately 83.6% ownership.

Weednanna Gold Deposit - Maiden Mineral Resource (announced 6 September 2018)

Maiden Mineral Resource Estimate of 1.097 Mt @ 5.1 g/t gold for 181,000 oz gold confirms Weednanna as a quality gold deposit with outstanding economic potential

The reported Mineral Resource is that proportion of gold contained within $2,000 AUD pit shells (>0.5 g/t gold) and >2.0 g/t gold underground potential

Significant potential to increase the size of the Mineral Resource with further drilling as all 13 modelled gold shoots are open at in at least one direction

83% of Mineral Resource occurs within 120 metres of surface (1,253 ounces per vertical metre) and is readily accessible using open pit or underground mining techniques

Potential exists for new gold shoots not included in current Mineral Resource, e.g. previously announced major mineralised quartz vein

Maiden mineral resource delivered 18 months after first drilling by the joint venture with a low discovery cost equivalent to $7.90 per ounce gold

Approximately 45% of the Mineral Resource >0.5 g/t Au has been classified as Indicated and 55% classified as Inferred. The Indicated classification corresponds with areas of higher drilling density and the Inferred classification with areas of lower drilling density. Therefore, the Inferred Mineral Resource reflects both modelled gold shoots with limited drilling and a decrease in the density of drilling with depth.

Weednanna_BM_GT_0.5gpt

Figure 1. Mineral Resource block model 0.5 g/t Au showing Indicated and Inferred classifications

The dimensions of the Mineral Resource area are 1,100m (north-south), 500m (east-west) and from surface to a maximum depth of 200m. The bulk of the Mineral Resource (83%) occurs within 120m of surface where there is a higher drilling density, representing a gold endowment of 1,253 ounces per vertical metre (OPVM). The overall gold endowment is 900 OPVM which reflects the abovementioned lower density of drilling with depth.

All gold shoots contributing to the Mineral Resource are open either at depth, or down plunge.

In addition, there are zones within the top 100m of the Mineral Resource area that lack drilling and which have potential for the discovery of new gold shoots based on historical drilling.

Extensional drilling and drilling at depth is planned to identify additional gold mineralisation and infill drilling is planned to upgrade the Inferred Mineral Resource to the Indicated category.

Open pit optimisation studies were completed on the Mineral Resource using Whittle software, with mining and processing cost assumptions provided by Mining One and a base case gold price of A$2,000 per ounce (Table 1).

The underground mining potential was derived by the amount of Mineral Resource below pit shells and above a cut-off grade of 2.0 g/t gold (Table 1). The cut-off grade was defined using underground mining and processing costs based on Mining One’s experience. In future, as the underground mining costs are better defined, underground optimisations will be run on the Mineral Resource which will model development and stope design.

Classification

Tonnes

Grade (g/t gold)

Gold (Ounces)

Above Pit Shells ($2,000 AUD) >0.5 g/t Au

Indicated

   488,000

3.8

  59,000

Inferred

   209,000

2.8

  19,000

Sub-Total

   697,000

3.5

  78,000

Below Pit Shells ($2,000 AUD) >2.0 g/t Au – Underground Potential

Indicated

   102,000

8.8

  29,000

Inferred

   298,000

7.8

  74,000

Sub-Total

   400,000

8.0

103,000

Total – Open Pit & Underground

Indicated

   590,000

4.6

  88,000

Inferred

   507,000

5.7

  93,000

Total

1,097,000

5.1

181,000

Table 1. Weednanna Mineral Resource contained within pit shells using a gold price A$2,000/oz & >0.5 g/t Au plus underground potential above a cut-off grade of 2.0 g/t gold

 Weednanna_MR_within_$2000_shells

Figure 2. Mineral Resource Blocks (Au ppm) within $2000 AUD Pit Shells - Oblique View

The results of the pit optimisation studies and assessment of the underground potential of the Weednanna Mineral Resource show that a significant proportion of the global Mineral Resource has been constrained, indicating a robust deposit with outstanding economic potential.

Weednanna_MR_below_$2000_shells

Figure 3. Mineral Resource Blocks (Au ppm) below $2000 AUD Pit Shell - Looking West

Refer Alliance’s ASX announcement dated 6 September 2018.

Weednanna Gold Deposit (background)

Weednanna is the most advanced gold prospect at the Wilcherry Project.

High-grade gold is associated with sulphide replacement of magnetite along a Hiltaba-age granite and calc-silicate contact.

Historic exploration from identified a calc-silicate and magnetite (iron) skarn system containing discrete intersections of high grade gold.

In 2017-18, Alliance completed 92 hole RC drill holes for 14,345m to define the geometry of Shoots 1, 2, 3 and 4, plus initial drilling at Shoot 5.

Fifty-eight holes reported intercepts >1g/t Au, including the following >100 g/t x m (grade x thickness) intercepts:

  • 17WDRC003 (S1): 49m @ 6.3 g/t Au from 45m
  • 17WDRC012 (S2):   2m @ 61.09 g/t Au from 167m
  • 17WDRC017 (S3): 14m @ 36.1 g/t Au from 118m
  • 17WDRC030 (S1): 16m @ 7.66 g/t Au from 81m
  • 17WDRC032 (S1): 60m @ 5.65 g/t Au from 47m
  • 17WDRC051 (S1): 35m @ 3.65 g/t Au from 43m
  • 17WDRC067 (S4): 15m @ 18.21 g/t Au from 107m

Refer Alliance’s ASX announcements dated 3 April 2017, 10 April 2017, 28 August 2017, 30 November 2017, 17 January 2018, 4 April 2018 and 23 April 2018.

Preliminary metallurgical testwork from Shoots 1, 2, 3 and 4 indicates the gold mineralisation is amenable to conventional grinding and cyanide recovery techniques.

Weednanna 3D Modelling

Thirteen gold shoots are currently 3D modelled and all are unconstrained by drilling in at least one direction and have the potential to increase in size with further drilling.

Weednanna 3D model

Figure 4. Weednanna 3D Model showing gold mineralised shoots and geology

A major quartz vein up to 20m thick has been identified in the hangingwall of Shoot 1, including 48m @ 2.0 g/t Au from 54m in 00WDRC072.

This quartz vein does not form part of the mineral resource estimate. Further drilling is warranted to test for extensions to these gold-bearing zones.

Refer Alliance’s ASX announcement dated 16 July 2018.

Regional Gold Potential – Wilcherry Gold Camp

Within 10 km of Weednanna there is >25 km strike length of magnetic iron formations that may be prospective for gold (similar to Weednanna).

These iron formations are known to host gold in three locations at the Mawson, Ultima Dam South and Weednanna North prospects.

Regional Gold Potential

Figure 5. Regional Gold Prospectivity

Alliance has commenced a high-resolution airborne magnetic survey over all tenements at Wilcherry to better define the regional magnetic formations and to assist with structural interpretation. This will in turn be combined with a review of regional litho-geochemical datasets to assist with gold target identification and prospect ranking.

Refer Alliance’s ASX announcements dated 7 May 2018, 30 July 2018 and 13 August 2018.

Background and Previous Exploration

The Project area is predominantly overlain by a shallow veneer of transported cover that has prevented exploration by early prospectors. Drilling by modern explorers has identified significant mineralised systems hosted within Palaeoproterozoic calcareous and iron-rich metasediments which are intruded by Hiltaba Suite Granites that are responsible for widespread gold, uranium and base metal mineralisation in the Gawler Craton. The recent discovery of high grade tin, which had previously not been recognised in the district, suggests a more complex mineralised history than previously thought.

The Project area has been explored since the 1970’s by companies including Pan Continental Mining, Asarco and Marumba Minerals for uranium and Broken Hill Type base metals associated with the Paleoproterozoic Hutchison Group metasediments. This resulted in the discovery of the Menninnie Dam lead-zinc-silver deposit (not part of the Project) and the Telephone Dam lead-zinc-silver occurrence.

During the 1980’s The Shell Company of Australia and WMC continued to explore the area for lead and zinc. Shell (later Acacia) in joint venture with Aberfoyle then refocussed exploration onto copper and gold utilising calcrete sampling to identify and prioritise target areas for drill testing.

In 1997 Acacia, identified a strong gold-in-calcrete anomaly at the Weednanna prospect which is coincident with a prominent NNW-trending magnetic anomaly. Successive drilling campaigns identified gold mineralisation associated with skarn alteration and brecciation in the contact aureole of the adjacent granite. Weednanna is now known to be a magnetite breccia in carbonate altered rocks forming a skarn near the contact with a granite intrusion and containing elevated gold, bismuth, tin, uranium, lead and zinc.

In 2002, Aquila Resources acquired the Project tenements to explore for IOCG deposits similar to Olympic Dam. In 2006, Trafford Resources Ltd (Trafford) acquired the Project tenements from Aquila.

Trafford and IronClad Mining Limited (IronClad) made a substantial investment on the Project, including but not limited to, defining Direct Shipping [iron] Ore (DSO) in magnetite skarns, banded iron formations and near surface iron oxide deposits. Trafford established Mineral Resources totalling 224 Mt @ 28.8% iron in seven deposits, with 2.9 Mt @ 55.5% iron being either DSO or Dry Magnetic Separation product (source: Trafford Annual Report 2014).

In 2012-13, drilling programs by IronClad to test an outcrop of high grade hematite at the Zealous prospect, 13km NE of Wilcherry Hill, intersected high grade tin (cassiterite) hosted by a magnetite skarn which has been weathered to goethite and limonite. The best intercepts from these programs returned 7m @ 3.28 % Sn from 52m in 12ZLRC007 and 5m @ 2.29 % Sn from 128m in 13ZLRC001. The host rocks are Palaeoproterozoic sediments adjacent to a granite footwall.

The discovery of high grade tin in this region potentially represents a new and significant tin province in South Australia.

Refer to Tyranna ASX Announcement dated 2 August 2016 for further details.