Exploration at Majors Creek,

New South Wales

The Majors Creek Gold Project (100% CRC) is located in the highly prospective Lachlan Fold Belt of the Southern Tablelands region of NSW. The town of Braidwood, 60km southeast of Canberra, is positioned in the centre of the 659 sqkm tenement package. The project area covers a significant portion of the Majors Creek (Elrington) goldfield, the Jembaicumbene alluvial goldfield and a portion of the Araluen alluvial goldfield. This area represents the largest alluvial goldfield in NSW, with gold production at the turn of last century of 1.25Moz.

During the 19th century high grade, structurally controlled, primary gold mineralisation was discovered and mined from a number of localities in the “roof zone” of the prospective I-type Braidwood Granodiorite. Dargues Reef, Cortona’s principal exploration target, was mined from 1870-1891 and again from 1914-1916 reaching a maximum depth of 70m. The Dargues gold mine represents only one of the potential sources of the regions extensive alluvial gold occurrences. The Majors Creek area contains at least 24 other historic hard rock mines, including Snobs, United Miners, Dunsheas, Big Hill, Rise & Shine and Camages, all which have verified historic head grades ranging from ¼ to 4ozs.

The Majors Creek Project has been actively explored by Cortona since its acquisition in 2006; exploration activities include regional geological mapping, rock chip sampling programs, +30,000m of RC and diamond drilling, extensive soil geochemistry programs as well as compilation of comprehensive geophysical surveys such as heli-magnetic, gravity, induced polarisation and remote sensing imagery.

Mineralisation, occurs in quartz veins in the form of free gold, or associated with altered quartz-sericite-calcite-pyrite felsic and phyllic lodes and occasional quartz/calcite veining. Gold is frequently associated with pyrite and chalcopyrite with higher grade mineralisation often restricted to discrete ore shoots, true widths range between 5 and 15 metres, surrounded by a large medium grade mineralised envelope. Drilled intercepts include contained sectional grades of up to 25g/t Au over the widths of up to 3m. Interpretation of the geological data indicates an extensive multi-lode ore system ranging from 3m to 20m in width comprising high-grade gold bearing ore shoots that remain open at depth (+500m).

Gold mineralisation at Dargues Reef occurs in the footwall and the hanging wall as a steeply dipping, fracture controlled lode systems within zones of intense alteration in the host Braidwood Granodiorite. The lodes follow a well-developed fracture system adjacent to an intrusive dolerite dyke. At Dargues the two main lodes thicken where they intersect creating a broad steep easterly plunging ore shoot. Several smaller sub-parallel lodes have also been intersected in the adjacent wall rocks (4m @ 28g/t Au from 103m & 1m @ 13.5g/t Au from 110m in DREX140).

The Measured, Indicated and Inferred resource (JORC compliant) at Dargues Reef is currently

1,615,000t @ 6.3g/t Au for 327,300oz Au (<2g/t cut-off).

The ore body remains open at depth (+500m), as indicate by some of the deepest holes drilled to date:

  • 5.7m @ 97.13 g/t Au from 454m in DREX226 (open at depth)
  • 9.9m @ 32.2 g/t Au from 511.3m (DREX225W2) (open at depth)
  • 8.2m @ 5.2 g/t Au from 556.6m in DREX083 (Approximately 50m below the mineable resource)

Results of the Feasibility Study on the viability of development of the Dargues Reef underground mine has returned positive results with initial production of 248,900 oz over an initial =6 year mine life with an average production rate of 50,000 oz/year and cash operating costs of $628/oz with an estimated pre-tax profit of A$47M (an IRR of 30%, a NPV8% and a gold price of 1,250/oz). The study confirmed a 42% increase in recovered metal, compared to the original Scoping Study and that the proposed development is technically and economically viable using a cut-off grade of 3 g/t, assuming 30% planned and unplanned mining dilution and an average 95.7% gold recovery. The approvals process is well underway and mining of the box cut is scheduled to commence in the second Quarter of 2011 with underground development commencing in Q3 of that year and full production reached by Q2 of 2012.

Recent capital raising of A$10M (January 2010) and $4.3M (October 2010) has allowed the company to up grade the reserves at Dargues with round the clock drilling, conduct environmental studies, complete metallurgical testwork, geotechnical studies and finalize site infrastructure and mine design.

Encouraging drill results continue to define and expand the known mineralized envelope; a revised geological model and upgraded resource calculation has been released 1.6Mt @ 6.3g/t Au (June 2010). RC drilling during 2011 will focus on drilling shallow targets such as the Ruby Lode and Chainman’s, Scarlet, Carmine and Thompsons Prospects, all of which are positioned close to the current development proposal (<300m) as well as drill testing regional targets within the broader Majors Creek Project area. 

Diamond drill and RC results at Dargues Reef include the following highlights:

  • 24m @ 7.9 g/t Au in DREX007 from 148m
  • 70.2m @ 2.7 g/t Au in DREX028 from 300m
  • 13m @ 5.53 g/t Au and 12m @ 6.27 g/t Au in DREX040.
  • 9m @ 6.63 g/t Au and 4m @ 7.01 g/t Au in DREX039.
  • 16m @ 3.38 g/t Au and 4m @ 7.04 g/t Au in DREX038.
  • 11m @ 7.2 g/t Au in DREX085.
  • 13m @ 8.33 g/t Au in DREX043.
  • 12.4m @ 16.40 g/t Au in DREX221.
  • 22m @ 5.74 g/t Au DREX193.
  • 17m @ 6.27g/t Au in DREX182.
  • 9.9m @ 32.2 g/t (incl. 3m @ 101.3 g/t Au) in DREX225W2
  • 19m @ 9.13 g/t Au in DREX206
  • 8.9m @ 15.2 g/t and 11.3m @ 12.4 g/t and 5.3m @ 6.78 g/t and 8m @ 7.7 g/t Au in DREX225

The known mineralisation extends east of Dargues and on into the adjoining Plums and Chianti prospects, a strike distance of +500 metres. Plums (drilled to 250m) and Chianti remain open and untested at depth, the possibility of a Dargues like ore body duplication at both these prospects, along strike, of Dargues, presents as a possibility. Drilling in this adjacent zone has identified Dargues type alteration and gold mineralisation (20m @ 6g/t Au from 158m in DREX135 – Plums lode).

Recent drilling of Plums Lode, east of Main Lode on the Dargues Reef line, has discovered a highly anomalous zone that may represent a structural duplication of the high-grade Main Lode. The recent intercept at Plums, 125m east of the Dargues resource envelope (DREX119) returned the following significant intersection:

28.7m @ 5.88 g/t Au from 195.5m including 10.5m @ 8.17 g/t Au and11.2m @ 6.98 g/t Au in DREX119.

This intercept highlights the potential at Plums, which is only drilled to 250m. The latest results from Plums drilling include:

  • 20m @ 5.99 g/t Au from 158m (DREX135)
  • 16m @ 4.66 g/t Au from 124m (DREX122)

The Plums intercepts indicate a pipe like ore shoot, with a strike length in the order of 40 to 50m, extending from 20m below surface to at least 250m where it remains open and untested at depth.

During 2009-10 RC drilling at Dargues successfully targeted the top 150-200m with the objective of increasing the total ounces per vertical metre in the proven category and extending the existing resource further east. Diamond drilling during the first half of 2010 has retuned some outstanding intersections and confirmed the robust nature of the ore body, intercepts include:

  • 9.9m @ 32.2 g/t Au from 511.3m (DREX225W2)
  • 19m @ 9.13 g/t Au from 99m (DREX206)
  • 5.7m @ 97.10 g/t Au from 454m (DREX226)
  • 13.2m @ 8.60 g/t Au from 235m (DREX223)

The Dargues Reef gold deposit at a ’late’ stage of appraisal and geological analysis remains ongoing. The mining study confirmed that the deposit is a substantial gold resource with grades, widths and near vertical orientation of the lodes that are eminently suitable to an underground mining operation. The final mine design is completed with the preferred miming method being Sub-Level Open Stoping and continuous retreat stoping with paste fill. 

Cortona continue to target a +500,000 oz gold resource at Dargues Reef.

The Company has expanded exploration efforts to include the near mine zone - within 3km of Dargues Reef. Targets include IP generated anomalies such as Tulloch, Thompsons, Glencoe and Hughen; recent targets including the Ruby Lode (12.2m @ 9.90g/t Au), historic workings along the Snobs-United Miners line (1m @ 8.13 g/t Au from 107m in MCRC022 and 1m @ 7.70 g/t Au from 177m in MCRC028) and gold-in-soil anomalies such as Dreadnought (16m @ 1.12 g/t Au from 60m in MCRC014) as well as previously explored prospects such as Copper Ridge and Exeter Farm (19m @ 5.6 g/t Au from 47m in EXEX007).

Mining scoping studies commenced in 2008 with initial metallurgical test work on a typical mineralised section of Dargues Reef Main lode, testwork results returned outstanding (99%) gold recoveries.

Cortona now control unfettered access to all areas within the Dargues Mining Lease and immediate surrounds following the purchase of 319Ha of freehold farmland last year and more recently an additional adjoining 120Ha of freehold farmland was acquired. The land acquisition will allow greater flexibility for infrastructure planning and the ability to target the resource with precise rig positioning.
Recent drilling at Exeter Farm (2009), 2km north of Dargues, has confirmed a new discovery. Exeter displays a chargeability IP anomaly, several anomalous drill intercepts and an extensive mineralised alteration zone. Exeter Farm, originally drilled in 2008 at the Tory Boy prospect, returned a significant intersection from the first hole (EXEX007) drilled.

  • 19m @ 5.6 g/t Au from 47m in EXEX007 incl. 2m @ 1.3% Cu plus 2m @ 5.0 g/t Ag from 71m within a broader mineralized envelope of 37m @ 3.32 g/t Au from 43m

Recent follow up RC drilling (Sept 2009) at Tory Boy has also returned several significant intersections from shallow depths including:

  • 5m @ 4.88 g/t Au from 76m in EXEX014
  • 7m @ 4.07 g/t Au from 25m and 6m @ 1.35 g/t from surface in EXEX026
  • 9m @ 5.2 g/t Au from 51m in EXEX028

The identified gold mineralisation is within multiple strongly developed sulphide rich felsic lodes, akin to the alteration characteristics and mineralisation widths of Dargues. The newly discovered lode system remains open in all directions and will be evaluated further. Exploration at Exeter Farm is at an early stage however the discovery of a broad Dargues Reef style lode, close to the surface, is viewed as very encouraging.

The Majors Creek area presents numerous exploration targets within a 2-3km radius of Dargues such as Plums, Chianti, Dreadnought, Thompsons, Copper Ridge, Exeter Farm and numerous historic underground workings in a relatively unexplored historic goldfield. Cortona have recently initiated near mine exploration campaigns aimed at complementing the Dargues resource with near mine shallow resources such as the Ruby Lode, Scarlet and Chinaman’s Prospects. Recent drilling at the Hughen Prospect (500m north of Dargues) returned an outstanding silver intercept of 1m @ 687 g/t Ag (22oz) from 49m with associated anomalous copper (0.22%) and lead (1.81%). 

The company strategy is to fast track the development of a high quality gold operation at Dargues which will provide the cash flow to fund mine development and ongoing exploration. Regional exploration continues with the objective of discovering a pipeline of satellite production opportunities in the immediate Dargues area and beyond. The extensive tenement holding (659 sq km) is viewed as highly prospective and several new exploration targets have been discovered in highly altered rocks of the northern tenements.

Cortona is extremely positive with the exploration results received to date and believe that the emerging gold camp hosts numerous prospective areas that will, with further exploration and a positive gold price, reveal considerable wealth to shareholders.

Drilling during the past year along the Dargues line of lode has returned numerous significant intersections including an outstanding 3.8m @ 143.6 g/t Au in DREX226.

  • 16m @ 11.0 g/t Au in DREX050.
  • 5m @ 16.2 g/t Au in DREX054.
  • 10m @ 7.64 g/t and 7m @ 7.25g/t Au in DREX059.
  • 11m @ 6.85 g/t Au in DREX067
  • 14m @ 6.95 g/t Au in DREX079
  • 12m @ 6.80 g/t Au in DREX071.
  • 7m @ 6.44 g/t Au and 5m @ 9.94 g/t Au in DREX094.
  • 14m @ 8.11g/t in DREX095.
  • 7m @ 10 g/t Au and 4m @ 10.8 g/t Au and 3m @ 6.2 g/t Au in DREX100.
  • 17m @ 6.34 g/t Au and 8m @ 3.40 g/t Au in DREX106.
  • 11.5m @ 8.19 g/t Au and 12.2m @ 6.98 g/t Au in DREX119
  • 6.3m @ 7.30 g/t Au in DREX122
  • 16m @ 4.66 g/t Au in DREX128
  • 20m @ 5.99 g/t Au in DREX135
  • 4m @ 28.0 g/t Au in DREX140
  • 17m @ 7.44 g/t Au in DREX166
  • 5.7m @ 97.1 g/t (incl. 3.8m @ 143.6 g/t) and 2.8m @ 39.1 g/t and 5.5m @ 14.4 g/t Au in DREX226
  • 19m @ 6.62g/t Au in DREX167
  • 13.2m @ 10.9 g/t and 2.5m @ 3.77 g/t and 1.0m @ 10.8 g/t Au in DREX223
  • 6.7m @ 3.08g/t and 1.5m @ 22.30 g/t and 18.5m @ 4.88 g/t Au and 8.4m @ 4.46 g/t Au and 13.25m @ 10.88 g/t Au in DREX225W1

 

core_diamond_core_2_162 rc_drill_set_up_in_paddock_162 general_rig_shot_2_162