The Gidgee Project includes nineteen tenements located in the Gidgee area of the Yilgarn Craton of Western Australia, approximately 80km north of the town of Sandstone and 800km NE by road from Perth. The tenements, with a total area of 44.5 square kilometres, are located over part of the Gum Creek Greenstone Belt, and include a number of previously mined gold open pits. The location of the Gum Creek Greenstone Belt is shown in figure 1 below and tenement details in figure 2.
Work to date has defined a number of gold and one copper target ready for immediate drill testing.
Historically the Gidgee area has produced over 1 million ounces of gold, largely from the previously mined Australian Resources Limited‘s (“Australian Resources”) Gidgee Gold Mine and Herald Resources Limited’s (“Herald”) Montague Gold Project.
Two joint venture letter agreements agreed on June 15, 2010 have been entered into with Gateway Mining Limited (“Gateway”). One JV letter agreement covers three exploration and eleven prospecting
licences held 100% by Gateway (39.359km2), with Avenue Resources earning 80% by the expenditure of $1.1 million over five years. The second JV letter agreement covers four mining and one general purpose lease currently held 85% by Gateway and 15% by Goldfan Limited (“Goldfan”) (a wholly owned subsidiary of Herald , 5.184km2), with Avenue Resources earning 70% by the expenditure of $1.45 million over five years. Goldfan will retain their current 15% interest in these tenements.
Regional Geology
The tenements are located over the Gum Creek Greenstone Belt, at the northern end of the Southern Cross province of the Achaean Yilgarn Craton. The belt is 110km long and up to 25km wide, and is bounded to the east and west by granitoids. The belt also contains a number of “internal” granitoid stocks, including the Montague Granodiorite which is located within the project area.
The greenstones comprise a package of metamorphosed sedimentary and volcanic units. The lowermost units include a sequence of mafic and ultramafic intrusive and extrusive rocks, overlain by a sequence of felsic and mafic volcanics and sediments, with the sediments being dominated by black shales.
Project Geology and Mineralisation
The project area is located over the western margin of the Montague Granodiorite and greenstones to the north and west of the granodiorite (Figure 3).
The greenstones in the area comprise a lower metabasic sequence and an upper felsic volcano-sedimentary sequence. A series of major mafic and ultramafic sills intrude the lower part of the felsic pile. The metabasics include a series of intercalated banded iron formation (BIF) units which provide strong magnetic markers. The felsic rocks include agglomerates, tuffs and quartz feldspar porphyries. Exposure throughout the area is generally poor.
The core of the project area is dominated by the Montague Granodiorite, which includes a more mafic magnetic phase on its western side, as well as a generally sheared contact with the greenstones to the west. Dominant structural directions are NNW and NE, with these largely controlling the distribution of mineralisation.
Gold mineralisation identified to date within the project area is largely located along the western contact between the granodiorite and greenstones, a zone referred to as the Airport Gold Trend, which hosts all of the mined occurrences with the exception of Whistler. A number of occurrences, including Central and Bullseyel, have also been discovered within the granodiorite. Mineralisation is generally structurally controlled and associated with quartz and/or carbonate veining, and is commonly associated with NNW and NE trending structures and possibly with more mafic diorites intruded along the western edge of the Montague Granodiorite. Orientation of mineralized zones is variable – the Whistler shoot is subvertical, mineralisation mined at Caledonian formed a zone dipping at about 50° to the west and the lode in the North-East zone dips at 25° to the NW. The majority of mineralisation delineated and mined to date has been in the oxide and supergene zone; however a number of high grade occurrences have been intersected within fresh rock, including the Whistler shoot as discussed below.
Exploration and Mining History
Regionally gold was first discovered in Sandstone, 80km to the south of the project area in the late 1800’s, and in the Montague mining district in 1905. Recorded production in the period 1905 to 1913 for the Caledonian and Montague Boulder Leases was approximately 5300oz of gold from 8009 tonnes of ore.
Exploration during the 1980’s discovered a number of oxide gold occurrences along the western edge of the Montague Granodiorite, which were subsequently mined in four shallow open pits by Herald (1987-1990 and 1992-1993) and one open pit (Whistler) by Polaris Pacific N.L. (“Polaris”, 1990-1992). Approximately 100,000oz of oxide gold was extracted from these pits, which are located within the granted Mining Leases into which Avenue Resources is earning.
Initial company exploration was carried out by Amoco Minerals Australia Co. (“Amoco”) in 1982-1984, with subsequent explorers including CRA Exploration Limited (“CRAE”), Abelle Limited (“Abelle”), Forrest Gold Pty. Ltd. (“Forrest”) and Herald.
Australian Resources operated the nearby Gidgee Gold Mine from 1987 to 1999, with this being subsequently operated by Abelle (2000 to 2002) and Legend Mining Limited (“Legend”, 2003 to 2005). During these periods the mine produced approximately one million ounces of gold. The mine is currently owned by Apex Minerals N.L. (“Apex”), and is currently under care and maintenance.
Gateway first acquired leases in the area in 1994, subsequently acquiring their interest in the Goldfan Mining Leases in 2001. Work since 1994 over the JV leases has included the following:
- Surface geochemical sampling
- Geological and structural mapping
- RAB drilling (1088 holes for 40,658m)
- Aircore drilling (8 holes for 415m)
- RC drilling (137 holes for 11,393m)
- Geophysical surveys, including airborne magnetic, ground gravity, ground EM, and sub-audio magnetics (SAM) surveys
- Integration and interpretation of the results
- Delineation of further drill targets
The Whistler area includes a JORC compliant inferred resource of 117,637t @ 6.57 g/t gold (15 g/t top cut) for 24,800oz of contained gold in a steeply dipping shear zone in fresh rock below the previously mined Whistler open pit.
WCP Resources Limited (“WCP”) drilled eight RC drillholes in the project area under an option agreement in 2006, with a few of these including diamond tails. These holes were designed to test for mineralisation in the vicinity of the historical open pits. One of these holes tested and intersected the sulphide shoot below the Whistler open pit, @ 33.8 g/t Au in a broader intersection of 22m @ 14.94g/t Au.
The majority of previous work has concentrated on shallow oxide mineralisation with only approximately 5% of holes being drilled into fresh rock. The Whistler resource shows the potential of the area to host high grade gold mineralisation in fresh rock.
This work to date has delineated a number of both tested and untested drill-ready targets, with targets including:
- Rosie Northeast – an untested gold target within the Montague Granodiorite to the north east of the Rosie Castle pit, which includes a broad lowgrade RC gold intersection that is yet to be followed up
- Whistler/Dead Roo Shoot – targets are extensions of the Whistler shoot and interpreted hanging wall veins
- Montague-Boulder – test for mineralisation peripheral to and underneath the existing open pit
- Rosie North – a previously drilled gold target north of the Rosie Castle pit which remains open to the north and at depth
- The Cup copper – located on the western edge of the tenement package
- A number of structural targets interpreted from geophysical surveys
- Victory Well – EM targets associated with outcropping ironstones
- Western Tenements – EM and structural targets
A number of prospects are described below.
Rosie Area
The Rosie area (Figures 3, 4 and 5) includes a number of targets in the vicinity of the Rosie Castle Pit that was mined by Herald. The Rosie area comprises part of the Airport Gold Trend.
Past work by Gateway resulted in gold intersections at the Rosie and S-Bend prospects, located to the north of the Rosie Castle open pit. More recent work by WCP under a JV with Gateway in 2006/2007 intersected broad zones of low grade mineralisation at Rosie North-east to the north-east of the Rosie Castle pit. Some indicative intersections from the Rosie area are presented in table 1 below.
| Hole | Type | From | To | Length | Au_ppm | Cutoff | Prospect |
| GRC178 | RC | 95 | 100 | 5 | 5.8 | 1 g/t | Rosie East |
| GRB1430 | RAB | 25 | 35 | 10 | 3.02 | 1 g/t | Rosie East |
| GRB1563 | RAB | 35 | 40 | 5 | 5.56 | 1 g/t | Rosie East |
| GRC118 | RC | 52 | 57 | 5 | 6.35 | 1 g/t | Rosie North |
| GRC104 | RC | 82 | 84 | 2 | 12.76 | 1 g/t | Rosie North |
| GRC108 | RC | 45 | 47 | 2 | 10.95 | 1 g/t | Rosie North |
| GRB1450 | RAB | 15 | 20 | 5 | 19.12 | 1 g/t | Rosie North |
| GRC118 | RC | 40 | 62 | 22 | 2.07 | 0.1 g/t | Rosie North |
| GRB1450 | RAB | 15 | 41 | 26 | 4.02 | 0.1 g/t | Rosie North |
| GRC177 | RC | 87 | 89 | 2 | 13.58 | 1 g/t | Rosie Northeast |
| WRC010 | RC | 25 | 62 | 35 | 0.31 | 0.1 g/t | Rosie Northeast |
| WRC010 | RC | 66 | 80 | 12 | 0.23 | 0.1 g/t | Rosie Northeast |
| WRC012 | RC | 66 | 168 | 102 | 0.42 | 0.1 g/t | Rosie Northeast |
| WRC012 | RC | 37 | 60 | 23 | 0.67 | 0.1 g/t | Rosie Northeast |
0.1g/t intersections – 0.1g/t cutoff, minimum intersection grade 0.1g/t, minimum intersection width 10m, maximum 3m internal dilution
1.0g/t intersections – 1.0g/t cutoff, minimum intersection grade 1.0g/t, minimum intersection width 2m, maximum 3m internal dilution
RAB holes – 5m samples, RC holes 1m samples
Mineralisation at Rosie North is interpreted as occurring in a north trending structure, extending for 300m from the northern end of the Rosie Castle open cut. Mineralisation is open to the north and at depth. In addition an interpreted hanging wall structure was intersected in hole GRC177, approximately 90m east of the Rosie North trend which is yet to be adequately followed up.
The broad zones of mineralisation intersected at Rosie Northeast by WCP (holes WRC010 and WRC012) are yet to be followed up. These intersections are open, in the case of WRC012 in all directions, and in the case of WRC010 to the east, north and south. As can be seen in Figure 3, hole WRC012 is the easternmost RC hole in the area, however shallow RAB holes to the east intersected +0.1g/t Au at or close to the bottom of hole.
A number of preliminary conclusions can be reached regarding the intersections in these holes:
- These intersections may represent a halo to higher grade mineralisation, and, given the length of the intersections may indicate a substantial target
- Hole WRC012 is located in the vicinity of north and NE trending structures, which are considered important controls on mineralisation in the project area
- A gravity high to the east of WRC012 may indicate a flexure in, or an uplifted block of the basalt underlying the granite – the contact between the basalts and granite is another important control on mineralisation
Given the above results and preliminary observations, this area is considered an exciting prospect and follow up drilling is planned to be carried out as part of the first year’s exploration programme.
Whistler
The Whistler area (Figures 3, 6 and 7) includes a JORC-compliant inferred resource of 117,637t @ 6.57 g/t gold (15 g/t top cut) for 24,800oz of contained gold. This resource is located immediately below the Whistler open pit, which was mined by Polaris. The mineralisation remains open along strike and at depth.
The shoot was confirmed by drilling carried out by former Gateway JV partner WCP, with 22m @ 14.94g/t Au (including 9m @ 33.82 g/t Au) being intersected in hole WRC017. The mineralisation
occurs in a complex steeply plunging shoot largely within basalts close to the granodiorite contact, and
is associated with carbonate veining and minor sulphides.
Hole WRC018 intersected 5m @ 4.88g/t Au from 96m which has been interpreted as a hanging wall shoot to the Whistler mineralisation. Interpretations indicate that this intersection may be associated with a NNW trending zone that is interpreted as being related to intersections in historic holes 88MRD24 (3m @ 7.7g/t Au from 134m) and 86MORC35 (4m @ 12.65g/t Au from 16m).
These results require follow up, and it is planned to test this with RC drilling as part of the first year’s work programme.
The Cup
The Cup copper prospect is located on the western edge of E57/417, and to date has returned a number of broad copper intersections (Figures 8 and 9)
The prospect comprises strongly altered interbedded carbonaceous and non-carbonaceous shales, overlying what are interpreted as leached/altered basalts. The contact is interpreted to dip moderately to the west. The mineralisation appears to occur near the contact of the sediments and basalt and may include a number of shallowly westward dipping zones. Mineralisation includes disseminated to massive sulphides (dominantly pyrite) and significant oxide and sulphide copper minerals above the base of oxidation, including abundant chalcocite.
Mineralisation has been intersected for 350m N-S along strike, and is still open to the north, south and down dip to the west.
Other Prospects
Montague Boulder is the most structurally complex of the mined deposits, and has had little drilling below the oxide zone. A number of targets underneath and around the pit require testing, including the blind battery zone at the southern end of the pit and the granite-basalt contact to the north. An initial programme of two or three holes has been planned to test these targets.
Recent EM work has delineated a number of anomalies at Victory Well, in the northern group of tenements. These anomalies, which extend for a strike length of approximately one kilometre in the tenements, are spatially associated with gossanous outcrops, and rock chip sampling has resulted in elevated Au, Bi, Te, W and Mo values. An attempt to RAB drill these ironstones was unsuccessful due to lack of penetration of the drilling.
The tenements contain a number of other targets defined from the interpretation of geophysical data as shown in figure 3 that are worthy of further work.
Exploration Programmes and Budgets
Initial work by Avenue Resources (managed by Gateway) will be concentrated on RC drilling given the number of drill ready targets, with some aircore drilling required to test earlier stage geophysical targets.
A number of priority targets have been selected for initial drill testing and have been planned to at least meet the minimum expenditure commitments. These targets include:
- Rosie Northeast – follow up of significant gold intersections that remain open
- Montague-Boulder – test for gold mineralisation adjacent to and below current open pit
- Whistler/Dead Roo Shoot – test for extensions and repeats of the high grade Whistler shoot
- Victory Well – test EM anomalies associated with outcropping ironstone
The scope of ongoing work will be partly determined by the results of the initial drilling programme as well as the amount of funds raised under this Prospectus. It is emphasized that the programmes and budgets proposed rely on current knowledge and exploration concepts and are based on the assumption that results will be sufficiently encouraging to justify a continuous work programme. The actual activities carried out and the allocation of funds will be subject to frequent rigorous technical review, and may be varied depending on the results achieved as the exploration programmes progress.