The Ned's Creek Project

Australian Mines Ltd  (ASX:AUZ) earning 51% of base metal (non-gold) rights

The Ned’s Creek project is located 150 kilometres north east of Meekatharra, Western Australia in the northern Murchison gold field. The discovery of Sandfire Resource’s DeGrussa Cu-Au deposit (10.7Mt at 5.1% Cu and 1.7g/t Au) in 2009 highlighted the potential of the region to host significant, high-grade copper deposits and initiated a new era of exploration within the host Proterozoic volcano-sedimentary basins. The northern Murchison district has now become one of Australia’s exploration “hotspots” with sustained exploration spending and a growing endowment of base metal and gold targets.

In addition to the DeGrussa deposit, the region hosts the Horseshoe Lights Cu-Au deposit (73,000t Cu metal), the Abra deposit (93Mt at 4.0% Pb and 10g/t Ag), the Magellan deposit (15Mt at 5.6% Pb), and is a significant gold producer. The Plutonic and Marymia gold deposits (5M oz. Au), the Peak Hill/Harmony gold deposits (1Moz. Au) and numerous copper and gold workings all occur along major structural and lithological boundaries. Lodestar’s tenements span a distance of 40 kilometres in a north easterly direction along the Jenkin Fault zone, a regional scale thrust fault adjacent to the DeGrussa deposit and the structural divide between the Marymia Inlier and the Proterozoic volcanosedimentary basins.

The volcano-sedimentary basins are prospective for base metal mineralisation, as sediment and volcanic-hosted deposits or as structurally-emplaced remobilised deposits. Lodestar’s regional exploration is targeting base metal deposits of significant scale, utilising advanced airborne and surface geophysical surveys, regional multi-element geochemical sampling and geological mapping. Anomalies defined by these methods are tested by detailed geochemical sampling and drilling.

The project comprises seven tenements with a combined area of 1100 square kilometres.

Lodestar commenced exploration in December 2010 and has since identified numerous base metal drill targets at McDonald Well. Significant gold targets have been identified at Brumby and Contessa with the first high- grade gold drill intersections reported from Contessa in March 2013.

Ned's Creek - Exploration

The Neds Creek project covers the north eastern margin of the Yerrida Basin, where the contact with the Baumgarten and Marymia granite-greenstone basement is exposed. The project area includes sediments of the Juderina and Johnsons Cairn Formations and lies at the intersection of northwest and east north east trending regional faults. Lodestar’s tenements adjoin the Thaduna copper project, comprising the large Enigma copper anomaly and the Thaduna copper deposits (both in joint venture with Sandfire Resources).

The Ned's Creek tenements have received limited previous exploration for base metals and gold. Western Mining Corporation explored and mapped the area in 1969 - 1970 during exploration for sediment-hosted Zambian Copper Belt-style mineralisation and identified the McDonald Well prospect within a wider area of copper anomalism extending over 60 square kilometres.

CRA Exploration carried out an auger geochemical survey over the McDonald Well area and identified a number of multi-element geochemical anomalies associated with the black shale unit of the Johnson Cairn Formation.

Lodestar has completed a regional VTEM survey over the northern and western part of the Ned's Creek tenements.  The VTEM survey identified numerous anomalies (electromagnetic conductors) within the sedimentary sequence and five of these anomalies were the target of the first phase of RC drilling completed at the McDonald Well prospect in February 2011.  These drill holes tested targets within a black shale horizon (a common host to sediment-hosted copper mineralisation) and returned wide intervals anomalous in base metal and associated elements from the weathered zone.  First-pass drilling at Little Well reported elevated copper from the Thaduna greywacke; disseminated chalcopyrite was observed in LNR466 – 5m at 635ppm Cu from 40m to end of hole and LNR515 – 5m at 1550ppm Cu from 55m to end of hole.

Figure 1 Ned's Creek Project

Detailed geochemical sampling, geological mapping, surface moving loop EM, a reconnaissance gravity survey and reconnaissance RAB drilling have now been completed at McDonald Well. Geochemistry, geological mapping and drilling have highlighted areas anomalous in copper and chalcophile (sulphide-associated) elements associated with major structural breaks in the sequence and along strike from the sequence hosting Enigma.

 --------- Figure 3 Ned's Creek Prospects

Figure 2 Ned's Creek Prospects 

North west and north east trending faults on the margins of the basement highs (Archaean inliers) exhibit evidence of brecciation, fluid flow and geochemical anomalism. These faults may represent graben (sub-basins) and linking structures that are important conduits for mineralising fluids in volcano-sedimentary basins. Base metal geochemical anomalies associated with these structures or chemically reactive zones at the margins of shale units are key targets for drilling at McDonald Well.

Geochemical sampling along the contact between granite and the lower sedimentary units of the Yerrida Basin has identified strongly anomalous gold and base metals in lag samples from the Brumby and Contessa areas. Visible gold was identified in samples from quartz veins within the granite at Brumby, the high-grade gold has a polymetallic association with bismuth, molybdenum, silver and tellurium, characteristic of lode gold systems. Five kilometres east of Brumby at Contessa, a strong bismuth-molybdenum geochemical lag anomaly extends for over 1200m along the granite contact. Interpretation of the aeromagnetic data suggests that the host sequence extends between Brumby and Contessa and to the northeast of Contessa within Lodestar’s tenement, with a potential strike extent of 10 kilometres. Aircore drilling to test the Contessa lag anomaly and the anomalous gold intersections reported from scout drilling in 2011 has intersected supergene gold mineralisation within weathered intermediate rocks (diorite) and strongly foliated metavolcanics, below the geochemical anomaly. RC drilling completed in November 2014 confirmed gold mineralisation and extensive alteration, characteristic of Archaean lode gold systems, in a large diorite intrusion underlying the supergene anomalies. The Contessa geology is regarded as highly prospective for lode gold and a number of targets have been identified on the basis of interpreted structural and lithological relationships analogous to the setting of major gold deposits (e.g. Wallaby, St. Ives) in the Eastern Goldfields Province.

Significant drill intersections reported to date include;


  • 5 metres at 6.6g/t gold from 55 metres in LNR532
  • 10 metres at 5.6g/t gold from 55 metres in LNR533

  • 5 metres at 2.4g/t gold from 55 metres in LNR543

  • 10 metres at 1.2g/t gold from 50 metres in LNR545

  • 15 metres at 3.1g/t gold from 40 metres in LNR546

  • 21 metres at 3.01g/t gold from 40 metres in LNR656

  • 3 metres at 2.6g/t gold from 68 metres in LNR674


  • 10 metres at 2.6g/t gold from 10 metres (including 3m at 8.2g/t) in LNR598

--------- Figure 4 Contessa drilling and lode gold targets extending over 4 kilometres of strike

                        Figure 3 Contessa drilling and lode gold targets extending over 4 kilometres of strike