Exploration heats up in Southern Australia

Vancouver Having cut significant copper-gold mineralization with partner BHP Billiton (BHP-N) at its Prominent Hill prospect, Australian-listed Minotaur Resources has inked a deal allowing Perilya Mining to earn up to an 80% stake in two exploration licenses in the northern Gawler craton of south Australia.

Under the agreement, a wholly-owned subsidiary of Perilya can acquire 51% interest in the tenements by spending A$1 million. The company can then boost its stake to 80% by spending an additional A$1 million.

The claims lies on the projection of the Roxby Downs – Mount Woods structural trend, and are considered prospective for hosting similar styles of copper gold mineralization.

Earlier this year, Minotaur and BHP cut significant Olympic Dam-style copper-gold mineralization in the Mt. Woods area. The first hole into the Prominent Hill prospect returned a 107-metre intercept averaging 1.94% copper and 0.65 gram gold per tonne. The discovery hole passed through 107.8 metres of younger sediments before intersecting a sequence of mineralized hematitic breccias. The upper 20.2 metres of the breccia ran 3.03 grams gold per tonne, followed farther down-hole by 107 metres of 1.94% copper and 0.65 gram gold (including 35 metres at the base of the intercept grading 3.86% copper, 0.82 gram gold and 4.5 grams silver) at a depth of 200-307 metres. The vertically drilled hole was shut down in mineralization at 450 metres of depth, pending assay results and mineralogical assessment. The final 21 metres of the hole averaged 0.9% copper and 0.46 gram gold.

Prominent Hill marks the fourth of six iron-oxide, copper-gold targets on the Mt. Woods joint venture to be tested since drilling began in August. Minotaur has entered into an agreement with BHP Billiton (through Billiton Exploration Australia) regarding 600,000 sq. km in South Australia and western New South Wales. Minotaur is responsible for generating prospects with potential for large tonnage copper-gold and/or zinc-lead mineralization, whereas BHP Billiton has first rights to acquire joint-venture interests in these projects.

Minotaur and BHP Billiton are currently involved in four joint ventures, including Mt. Woods, which covers 3,800 sq. km of exploration licences along a major northwest-striking structure between Coober Pedy and Roxby Downs.

The Prominent Hill discovery is 125 km northwest of WMC’s (WMC-N) Olympic Dam operations. Olympic Dam is the world’s sixth-largest copper deposit and largest uranium deposit. Proven and probable underground reserves at the end of 2000 stood at 707 million tonnes grading 1.7% copper and 0.05% U3O8, plus 0.5 gram gold. Total resources are estimated at 2.5 billion tonnes grading 1.3% copper, 0.04% U3O8 and 0.5 gram gold.

Minotaur is earning a 19% interest in Mt. Woods as the initial operator, and BHP Billiton is earning 51% by spending A$4 million on exploration. Normandy Mining (NDY-T), Sons of Gwalia and Sabatica are the current tenement-holders.

Over the past 20 years, the Mt. Woods area has been explored by Normandy, CRA Exploration and Burmine. Their efforts led to the identification of large skarns and widespread iron-oxide breccias anomalous in base metal mineralization. Early drill holes encountered intercepts of 287 metres grading 0.23% copper and 186 metres of 0.13% copper in magnetite breccia.