Conquistador Joint Venture (Zinc Co Australia Limited earning up to 75%, Giralia retains certain gold rights)

The Conquistador zinc Joint Venture covers most of the area of the Company's Snake Well gold project, excluding the mafic hosted Mixy, Calisi, Warren gold lode systems and the Lop and Buckshot laterite deposits.  Zinc Co Australia Limited ("Zinc Co") can earn up to 75% interest, with Giralia retaining certain gold exploration rights.

The JV area covers 50 strike kilometres of volcanic rocks in the Tallering Greenstone Belt.  These rocks are prospective for high unit value volcanic hosted massive sulphide (VHMS) deposits.  The setting is similar to that of the world class Golden Grove VHMS deposits (Gossan Hill, Scuddles) 150 kilometres to the south east.

Diamond drilling has previously intersected mineralisation of VHMS style including; 4 metres @ 8.25% Zn, 20.5 g/t Ag, 0.53% Cu and 0.63% Pb from 88 metres and 6.7 metres @ 6.1% Zn including 2 metres @ 18% Zn from 118 metres at Conquistador, and 1 metre @ 4.90% Zn, 14.0 g/t Ag, 0.51% Cu, 0.90% Pb and 5.63 g/t Au from 154 metres, and 2.1 metres @ 2.34% Zn, 13.5 g/t Ag, 0.69 % Cu, 0.22 % Pb and 1.81 g/t Au from 131.4 metres from A-Zone.

 Conquistador/Snake Well JV area

Zinc Co completed an initial program of  reverse circulation (RC) drilling in 13 holes ( 1810 metres) at the Conquistador prospect soon after farm in commencement. Significant drilling intersections include hole CNQRC045; 21 metres @ 2.56 % Zn, 0.68 %Pb, 1.08 grams per tonne Au, including 2 metres @ 8.49%Zn, 2.94%Pb, and 1 metre at end of hole @ 12.2 % Zn. Follow up drilling with hole CNQRC052 returned an updip intersection of 6 metres @ 2.29% Zn, 0.34% Pb, 1.07grams per tonne Au.
In September 2007 a fixed loop electromagnetic (EM) survey (21 line kilometres) and 2 line kilometres of moving loop EM survey over three strike kilometres of the area of RC drilling. No significant conductive responses were detected possibly due to the low iron sulphide content of the known zinc mineralisation at Conquistador, as iron sulphides (pyrite, pyrrhotite) are the minerals which principally determine EM conductivity.

A gradient array induced polarisation (IP) geophysical survey was completed over 16 strike kilometres of prospective felsic volcanics of the expanded project area.  The IP method responds strongly to the sulphide rich footwall alteration which underlies the target massive sulphide zone of volcanic hosted massive sulphide (VHMS) ore systems. The new IP data defines extensive zones of IP anomalism which have a combined strike length greater than 5 kilometres. These IP zones are untested by previous RC or diamond drilling.

A comprehensive review of geophysical surveys completed on the property is nearing completion.  Reprocessing of a 1993 airborne electromagnetic (Geotem) survey which covers the entire project area was completed using modern software. Five targets were identified, and follow up will focus on an anomaly adjacent to the A Zone prospect where previous diamond drilling has intersected gold rich footwall stringer alteration.

Snake Well prospect locations on grey scale aeromagnetic image