Cue Diamond Project

Cue Diamond Project

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Project Overview

The Company is exploring for diamonds in an area 70km to the north-west of the town of Cue in the Murchison Mineral Field in the Yilgarn Craton of Western Australia.

The project area was explored by De Beers in the period 1994-2002 during which time De Beers discovered a number of kimberlite dykes in two separate areas within the Company's licence area - Cue 1 and Soapy Bore. Kimberlites in these localities are diamondiferous.

Drill samples of the Cue 1 and Soapy Bore kimberlite were assessed as indicating an overall low diamond grade for this particular kimberlite but the geochemical evaluation using Mineral Services' Mantle Mapper™ technology has indicated a high prospectivity for the region.

The Company has discovered a number of surface occurrences of kimberlite float which point to the potential for new diamond discoveries. One of these, Target 5, has yielded a strong microdiamond count which makes it a priority target for further work.

Mantle Mapper™

It is well established that the diamond content of individual kimberlite bodies within a kimberlite field can be highly variable with non-diamondiferous, low-grade and high-grade kimberlites often present in the same field. Furthermore, the diamond content of an individual kimberlite body can be variable between different phases of that same kimberlite.

Mantle Mapper™ is a procedure developed by Mineral Services to quantitatively analyse the abundance and composition of key mantle-derived minerals (indicator minerals) in kimberlite. This allows quick, cost-effective and reliable evaluation of the diamond potential of the host body as well as an assessment of the nature and general diamond prospectivity of the mantle sampled.

Diamond Prospectivity

The samples so far evaluated for diamond grade come from a very limited part of the Cue 1 kimberlite dyke and the Soapy Bore dyke so it is important at this early stage of exploration to establish not just the prospectivity of different parts of the same body but also the general diamond prospectivity of other kimberlites in the same field. Mineral Services proprietary Mantle Mapper™ procedure is a powerful tool in this evaluation.

Mineral Services has processed a 10kg sample of the Cue 1 kimberlite for recovery of kimberlite indicator minerals ("KIMs"). The sample was processed for extraction of KIMs and their composition determined by microprobe analysis. This mineral composition data was combined with similar data obtained for KIMs extracted from the 36kg Cue 1 kimberlite surface sample.

The KIMs recovered from the samples have characteristics consistent with derivation from a kimberlite. The concentration of KIMs in the samples is very low. While weathering processes may have played a role in reducing KIM abundance (in particular that of the silicate minerals garnet and clinopyroxene), the data are interpreted by Mineral Services to indicate low original concentrations of these minerals, consistent with the low macrodiamond grade inferred on the basis of microdiamond results.

Significant and positive technical findings of the Mantle Mapper™ analysis reported by Mineral Services are as follows:

Mineral Services concludes that whilst the results obtained for samples evaluated to date indicate a very low diamond potential for that part of the body that they represent, the indicator mineral data suggests the area in which it occurs is broadly prospective for diamonds.

Other Targets

The Company's field work has led to the discovery of a number of surface occurrences of kimberlite float which point to the potential for new diamond discoveries.

One of these, Target 5 has yielded a strong microdiamond count which makes it a priority target for further work.

The Company's latest drilling programme has resulted in the discovery of three new kimberlite dykes which now require further evaluation.

Drill Target Areas 2014

Drill Target Areas 2014

Cue Regional Geology

Cue Regional Geology

De Beers Drill Plan - Soapy Bore

De Beers Drill Plan - Soapy Bore

 Drilling at Cue

Drilling at Cue

 Drilling at Cue

Drilling at Cue