Ardea Resources Limited Project Update Sydney, A

Sydney, Australia, Jan. 06, 2017 (GLOBE NEWSWIRE) --

Heron Resources Limited (ASX: HRR TSX: HER, "Heron" or the "Company") is pleased to provide an update on Ardea Resources Limited (Ardea) and its project activities, as disclosed in the prospectus (Prospectus) lodged with the Australian Securities and Investments Commission on 9 November 2016 and Supplementary Prospectus lodged 18 November 2016.

Recent technical advancements have been realised within Ardea’s projects:

• Kalgoorlie Nickel Project (KNP)
  • Cobalt development focus in light of surging demand from tech industry
  • KNP Cobalt Zone has a JORC 2012-compliant resource of 7Mt at 0.12% cobalt and 0.86% nickel
  • Cobalt-enriched zones are contained within and are a subset of the broader KNP resource of 805Mt at 0.05% cobalt and 0.7% nickel ^[1] , being Australia and the developed world’s largest cobalt resource
  • KNP Chrysoprase (semi-precious gemstone) mechanised bulk production opportunity identified
• Lewis Ponds
  • Bulk tonnage Exploration Target defined
  • Significant base metal-gold open-pit potential, with orogenic gold and base metal mineralisation defined which is very similar to other large deposits in the region
  • Lewis Ponds Main Zone and Tom’s Zone main shaft mullock sampling by Ardea returned assays of 9.9–12.1g/t gold and 272–539g/t silver, possible epithermal mineralised affinity
• New tenement applications complementing existing Ardea projects
  • Lewis Ponds, NSW – several licence applications secured and already recommended for grant
  • Bedonia West and Perrinvale, WA – high quality Ni-Cu-PGM targets acquired

Ardea’s management team has completed preparatory field programs including rock chip sampling ahead of the 2017 listing and project drilling.  The recent focus has been on resource estimation and preparation of drilling approvals at Goongarrie South, Black Range and Kalpini (KNP Cobalt Zones) and at Lewis Ponds, and scoping of metallurgical and feasibility work for the KNP Cobalt Zone deposits and the Lewis Ponds stringer mineralisation.   

1.      Cobalt focus for the Kalgoorlie Nickel Project

1.1.    High-grade cobalt resource

The global KNP resource of 805Mt at 0.05% cobalt and 0.7% nickel contains within it high-grade concentrations of cobalt-rich mineralisation at Goongarrie South, Big Four, Scotia Dam, Aubils and Black Range (refer Ardea Prospectus pages 84-87 for global resource details).  

An upgraded cobalt-focused global resource for the KNP was defined as 49.7Mt at 0.12% Co and 0.86% Ni (refer Heron ASX announcement 6 January 2017 for global resource details).   This resource comprises a recalculation of cobalt resources at Goongarrie South, Big Four, Scotia Dam and Aubils combined with the historic resource calculated for the Black Range area as defined in the Prospectus.

This new KNP Cobalt Zone resource is comprised as follows:

Table 1 – KNP Cobalt Zone – Resource Statement from independent consultancy Ridley Mineral Resource Consulting Pty Ltd

Figure 1 - KNP pyrolusitic ore.  This drill sample from 2001 assayed approximately 1% Co and 2% Ni.  The cobalt-rich material occurs within the upper part of the cobalt-nickel laterite profile.  

Figure 2 – Run-of-mine KNP siliceous ore.  This mine face includes green chrysoprase veining.  Chrysoprase material tends to occur within the lower part of the cobalt-nickel laterite profile.

Figure 3 – Ardea WA projects, showing the Goongarrie South, Big Four, Scotia Dam, Black Range and Aubils Cobalt Zones.

Figure 4 - Goongarrie South – work currently underway, showing 0.08% Co trimmed block model grade shell

1.1.1. Goongarrie South

The resource estimation reviewed existing KNP 0.5% Ni cut-off grade blocks which coincidentally exceed 0.08% Co and where they define coherent mining shapes.  These grade shells were subsequently trimmed on an individual wireframe basis, excluding wireframe pods with less than three mineralised drillhole intersections, except where nearby adjacent drillhole intersections demonstrate continuity of the mineralisation above the 0.08% Co cut-off grade. 1.1.1. Goongarrie South

The cobalt review included the Goongarrie South–Big Four–Scotia Dam resource belt.  This area will clearly will be the focus of Ardea’s future cobalt program.

The current working concept is a Goongarrie South to Scotia Dam production rate of 2Mtpa at 0.12% Co and 0.94% Ni for approximately 2ktpa cobalt in intermediate product (a cobalt- and nickel-bearing manganese oxide) with in addition some 16ktpa nickel (distributed between battery feedstock and conventional nickel refinery feed).  Plant site location would be at Goongarrie South at the northern end of the cobalt belt, with initial mine scheduling being a zone at Goongarrie South termed the “Pamela Jean Deeps”.

1.1.2. KNP, Australia’s largest cobalt resource

Containing 386,400 tonnes of contained cobalt metal, the KNP is Australia’s largest cobalt deposit.  By this measure, it is more than three times larger than Australia’s second largest cobalt deposit.  The newly-reported cobalt resource from the high-grade KNP Cobalt Zone is a subset of the larger KNP resource, and this subset is by itself Australia’s fourth largest cobalt resource, containing 59,600 tonnes of cobalt metal.  The KNP Cobalt Zone also has one of the highest cobalt grades in Australia.

The updated resource reporting for cobalt-rich zones provides an insight into the potential to define further cobalt-rich zones in the KNP on the basis of remodeling work planned by Ardea that is focused on cobalt.  Updated resource reporting on the cobalt-rich mineralisation at the KNP marks the first part of a refocusing for the KNP onto the cobalt component of the deposit. 

Forthcoming drilling and metallurgical studies will move the KNP towards a PFS focusing on feedstocks for the lithium ion battery industry (Lithium Nickel Manganese Cobalt Oxide - LiNiMnCoO ₂ or NMC).

The drilling focus in ranking will be the contiguous cobalt zones in the Goongarrie South belt and at Black Range and Kalpini.  The drilling will secure material for bench-scale metallurgical assessment.

1.2.     Semi-precious gemstones within the KNP – Chrysoprase (“Australian Jade”)

The Kalgoorlie Nickel Project is characterised by widespread occurrences of the semi-precious gemstone chrysoprase.  Chrysoprase is a rare, highly valued, nickel-bearing variety of chalcedony.  Colour varies from apple green to deep green, and the highest quality material is translucent.  Chrysoprase is commonly known by gemologists as “Australian jade” and is often used in jewellery as a substitute for jade due to its harder wearing characteristics.  Chrysoprase is highly valued in east Asia notably China.

The occurrence of chrysoprase in shallow strongly weathered horizons throughout the KNP is directly analogous to the occurrence of opal in the opal fields of Coober Pedy (SA) and Lightning Ridge (NSW).  As in the opal fields, chrysoprase has developed in veins within cracks and crevices in the clay-rich host rocks.  In the KNP, the highest quality, deepest green chrysoprase shows a direct spatial relationship to the cobalt- and nickel-rich parts of the orebodies.  Ardea has defined five advanced stage chrysoprase pit opportunities within the KNP.

Figure 5 - As mined chrysoprase, KNP.  Indicative value $8-20 per kilogram.  Forecasts of chrysoprase values are very difficult due to a lack of open markets, and confirm the desirability of securing a partnership with a downstream gemstone processor

Ardea estimates open-pit mining costs of approximately $6/t with run-of-mine chrysoprase valued at approximately $8-20/kg, and gem quality in excess of $20/kg (break-even grade 1kg/t of lower quality chrysoprase).  Kalgoorlie chrysoprase mining has traditionally been labour-intensive and conducted by small scale tributers.  Ardea has scoped a mechanised production model using ore sorting technology.

Ardea believes an east Asia jewellery producer would be a preferred chrysoprase development partner.

2.      Lewis Ponds zinc-gold project – Updates

2.1.    Bulk tonnage model for exploration and development

At Lewis Ponds, “ the mineralisation is accepted as Volcanogenic Massive Sulphide (VMS) type ” (Prospectus, page 46).  The mineralisation as described is multiple lenses (1, 2 and 3) of massive stratabound base metal sulphides hosted within the Anson Formation pyritic siltstones.  Exploration has historically been on the basis of a narrow high grade underground mining model, and has generated a mineral resource totaling 6.6Mt at 1.5g/t gold and 2.4% zinc ^[2] estimated at a 3% ZnEq cut-off grade (refer Prospectus Table 3.2 for full description of resource status).

As noted in the Prospectus (page 44), Lewis Ponds “ occurs on the Lewis Ponds Fault; a subsidiary fault to the Godolphin Fault.  The region is well known for being prospective for a variety of deposit types, especially VMS deposits and orogenic gold deposits .”

Having now completed regional geological orientation programs in the Lewis Ponds area, it is clear that Lewis Ponds has a significant potential for orogenic gold deposits of the style of Regis Resources’ McPhillamys deposit, located “ 15km south along the Godolphin Fault ” from Lewis Ponds (Prospectus page 44).

As well as the traditional zinc-dominant VMS model, there is now a requirement to additionally evaluate Lewis Ponds as a bulk tonnage orogenic gold-base metal system, with the clear mining model being McPhillamys (resource 73Mt at 0.93g/t Au at 0.4g/t Au cut-off grade, Regis Resources, 31 March 2015).

Figure 6 – Ardea NSW Projects showing Lewis Ponds, the recent applications of Yeoval-Mt Aubury immediately northwest of Copper Hill and Wisemans Creek immediately southeast of Lewis Ponds.  The McPhillamys gold discovery is shown 20km SE from Lewis Ponds.

There are very clear geo-metallurgical associations at Lewis Ponds, possibly representing separate mineralising events, in order of abundance:

1. Dominant Zn-Pb-Ag-Au (stringer dominant but significant massive sulphide interbands).
2. Au-Ag only (which is poorly sampled, thus difficult to quantify as an orogenic gold system).
3. Minor Zn-Pb only.
4. Rare Cu only, always in the footwall.

Lewis Ponds mineralisation is dominantly a 20-50 metre wide stringer (shear vein) system with 2-10 metre thick bands of massive Zn-Pb-Ag-Au mineralisation able to carry sub-grade stringers, with typically 2-5 m internal waste bands.

The mining implications for Lewis Ponds are:

• Drill intercepts are required to be bulked into broad lower grade intervals of the McPhillamys style, using a 1% ZnEq cut-off (approximately 0.5g/t AuEq)
• Open-pit bulk mining is more likely to be feasible, given the favourable Lewis Ponds strip ratios and consistent shallow high-grade mineralised

At Lewis Ponds, the bulk tonnage potential is confirmed in Prospectus Figure 3.3 (refer gold-equivalent calculation), with the following gold-equivalent intercepts on Section 940mN representative of the overall Lewis Ponds mineralised system. 

• Western Lode
  • TLPRC-02 90m at 1.02g/t AuEq from 18m
  • SLP-7 27m at 1.59g/t AuEq from 62m
  • TLPD-02W 30m at 2.44g/t AuEq from 271m
• Central Lode
  • LPRC-32 54m at 1.72g/t AuEq from 26m
  • TLPD-40 37m at 0.92g/t AuEq from 199m
• Eastern Lode
  • TLPD-40                 68m at 0.97g/t AuEq from 57m

Having now completed field reconnaissance, it is felt that Lewis Ponds is better evaluated as a base metal-gold stringer system.  Table 2 summarises the more significant “bulk-tonnage” intercepts at Lewis Ponds.  More detailed drill intercept data has been previously published by TriAusMin Limited in ASX announcements between 2002 to 2014 (Prospectus page 71) and these reports may be obtained from Ardea.

From reviewing available drill core at site and archived core photographs, it is clear that extensive zones of sericite-pyrite alteration (potential gold mineralised host) have not been sampled.  There is thus a requirement to cut and sample this core (assuming the individual core is still available), with the potential to establish “McPhillamy-style” mineralised systems.

The Ardea intention is to drill a single orientated core hole on Sections 1000mN, 800mN, 600mN and 400mN, and all available core on these 200 metre spaced sections will be re-logged, re-photographed and assayed.

This program will act as a control to allow a resource update based on bulk-tonnage parameters.  The known high grade zone extends from Section 300mN to Section 1500mN and ultimately all historic drill holes within this zone will require re-logging and assay.  This requirement was not anticipated within the Prospectus work program and has arisen through field studies subsequent to November 2016 Prospectus lodgment.

2.2.    Field exploration results

Whilst siting drill collars for the initial proposed Ardea drill program, a suite of samples was collected as a first pass in defining Lewis Ponds geo-metallurgical types (GeoMet study).  At the old Lewis Ponds Main Zone and Tom’s Zone main shafts, the main producers in the field, it was apparent that the dominant shaft mullock at both locations (600m apart along strike) is a distinctive white vuggy quartz-pyrite “sinter” (which appeared to have the appearance of epithermal style mineralization). 

Table 3 – Lewis Ponds Rock chip sampling

The high-grade Au-Ag with anomalous As-Sb is consistent with epithermal style mineralisation, and the low base metal values are not indicative of a VMS setting at the shaft areas.

Base metal and gold production is unknown for the Lewis Ponds shaft.  Toms produced 30,000 tonnes of pyrite ore for sulphuric acid production.  It is puzzling that such high grade precious metal mineralisation remains at both locations as shaft mullock and was not treated in the historic operation.

This mineralisation style was not predicted within the Prospectus and is of significant economic potential.  In particular, “Gold Stringer” is a geo-metallurgical type recognized in Ardea’s work but not described in historic Lewis Ponds records.

Drill approval environmental submissions are being prepared, with Department of Resources and Energy approvals anticipated in time for February 2017 drilling.

Figure 7 - Lewis Ponds, tenement and key prospects map 

Table 2   Lewis Ponds – Polymetallic-Gold Stringer Zones, Significant Intercepts

Geo-Metallurgy (GeoMet) – PS Polymetallic Stringer, PM Polymetallic Massive, CS Copper Stringer (no intercepts are significant), GS Gold Stringer (no intercepts are significant)

³ m.ZnEq = intercept width x ZnEq value

Scoping study level financial model for a 1.5Mtpa open-pit with base metal float circuit indicates 1.6% ZnEq is a suitable break-even cut-off grade.

2.3.    Exploration target

In consideration of the broad mineralised intercepts over a strike length of 1.15km between Section 350mN and Section1500mN, the initial Lewis Ponds Exploration Target is estimated at 15 - 25Mt at 2.2 - 3.7% ZnEq (1.2 -2.0g/t AuEq) ^[3] (see Table 2 for values used in defining zinc and gold equivalents).  The estimated breakeven mining grade is 1.6% ZnEq.

The potential quantity and grade is conceptual in nature, and there has been insufficient exploration based on the “bulk-tonnage” concept to estimate a mineral resource and it is uncertain if further exploration will result in the estimation of a “bulk tonnage” mineral resource.

The system is open north and south along strike within areas of historic workings and soil geochemical anomalism.  Significantly, there are extensive runs of historic drill core with no assays at all or only base metal assays (i.e. no gold assays). 

Commonly within the Lewis Ponds lode envelopes, the runs of non-assayed material correspond to core photography which clearly shows the core is altered and likely mineralised.  These intervals are ascribed nil grade within intercept calculations, meaning the Exploration Target grade is likely under-estimated.

Funds raised under Ardea’s initial public offer will be used, amongst other things, to test the exploration target through diamond drilling on 100 metre spaced sections over the next 12 months.

3.      Exploration update

3.1.    Western Australian projects

As exploration ramps up, Ardea intends to consolidate its substantial portfolio of exploration tenements in the Eastern Goldfields of Western Australia that are prospective for Archean-style nickel sulphide and gold mineralisation.  The consolidation process has commenced.

3.1.1. Mt Zephyr Gold-Nickel Project - Ardea 100%

Mt Zephyr is a section of greenstone belt localised on the Celia Lineament and located 60km NNE of Leonora.

Referring to section 2(a) of the Supplementary Prospectus dated 18 November 2016, the objection to the grant of the main tenement has been withdrawn and accordingly the tenement has been recommended for grant.  An archaeologist for assessing proposed Gale and Dunns New Find drill sites has been retained.

Gale gold prospect

Gale is a 273ppb Au soil anomaly which Aurora Gold ^[4] RAB drilled in the 1990s and intersected consistent >0.25g/t Au from surface to RAB refusal with intercepts of 6-18m at 0.5g/t Au and peak 6m at 1.3g/t Au.  The anomaly is clearly a sub-horizontal geometry and not the narrow sub-vertical interpretation of previous explorers.

The Gale RAB gold anomaly at a 0.25g/t Au cut-off grade defines an open sub-horizontal sheet with 700m N-S strike, 100m E-W width with up to 18m thick (corresponding to RAB refusal depths).

A site visit confirmed the anomaly has not been followed up with previous RC drilling, apart from a very limited program at the extreme northwest corner of the soil anomaly.  Old RAB chips mixed with aeolian sand located at the old RAB collars returned consistent 0.1-0.4g/t Au.  RAB chips included silica-pyrite-sericite alteration, which have the appearance of a “late stage mineraliser”.  The geological expression of Gale is felt to be closely analogous to the Dacian Gold Jupiter syenite-hosted gold discovery, located 50km southeast along strike on the Celia Lineament.

The RAB chip anomalism is supported by up to 1.4 g/t Au in an “unaltered” granite float composite south of the RAB-drilled area, and 1.2-1.5g/t Au in gossanous limonite-white quartz vein float to the east of the RAB-drilled area.

The observed sub-horizontal RAB litho-geochemistry is a primary protolith attribute, since very clear-cut sharp barren RAB assays occur at the east and west contacts (if solely a supergene blanket enrichment, diffuse contacts with wider and more gradual dispersion would be expected).

Ardea plans to follow up the Gale RAB anomaly with systematic RC drill traverses.

Figure 8 – Mt Zephyr, tenement and key prospects map

Dunns Line of gold prospects

The model for gold mineralisation has been refined with the recognition that historic workings are closely associated with NE trending cross-faults within the N-S trending main BIF horizon.  Ardea’s exploration model has evolved to be closely analogous to the Hill 50 “Boogardie Breaks” at Mt Magnet in Western Australia.

Rock chip and historic percussion drill chips along the target zone were sampled.  It is planned to complete systematic soil auger geochemistry along the 4km of exposures along Dunns Line and extending into soil covered (altered) areas along strike of the main BIF.

Jones Area A and B nickel sulphide prospects

Olivine adcumulate komatiite channel facies have been identified by Ardea within a stratigraphic horizon which is felt to correlate with the Mt Windarra nickel sulphide mine stratigraphy.  A sulphide facies BIF underlies the komatiite channel at Jones A, which is an excellent setting for “Silver Swan-style” nickel sulphide occurrences.  Ironstone assays by Ardea at Jones Area B returned 0.3% Ni, confirming a prospective nickel sulphide setting.

Soil auger geochemistry is planned ahead of ground EM surveys.

There has been no previous RC drill testing of the Jones targets.

The Mt Zephyr E39/1854 application containing the Gale, Dunns and Jones prospects has been recommended for grant and consultant retained for a heritage survey.

3.1.2.  Bardoc Tectonic Zone Gold Project - Ardea 100%

Ghost Rocks gold prospect

The Lady Isobel group of workings trend NNW over an area of 170m x 70m.  The workings include a substantial underlay shaft dipping approximately 45 ⁰ towards 120 ⁰ (discordant to the overall trend of workings), with smaller subsidiary workings distributed over the full area on multiple structural orientations.  Mullock consists of white quartz vein stockworks within an amphibolite host. 

Random mullock sampling by Ardea on the main shaft assayed up to 5.3 g/t Au.  There appears to be a deficiency of mullock when considering the depth of shafts, suggesting part of the excavated material has been milled.

Big Four gold prospect

The Big Four gold prospect is being evaluated as a potential open-pit.  The main lode has excellent visual expression, being a subvertical quartz lode within clay-limonite altered dioritic porphyry.  Visual grade control should be possible in any open-pit mining.

Reconnaissance in late 2016 was aimed at assessing additional exploration targets along strike, notably soil geochemical anomalies to the south.

The target concept at Big Four is an open-pit developed over the historic workings.  Elsewhere in the Bardoc Tectonic Zone (BTZ), such occurrences were drilled and mined during the various “gold booms” of the 1990-2000s.  With Heron’s historical focus on the KNP nickel laterite within the BTZ tenure, gold exploration was minimal.

A proposal was received by Ardea from a local contractor to complete a trial pit at Big Four under a profit share arrangement.  In view of open ore positions at Big Four, it was concluded that further exploration was required at Big Four before a transaction could be considered.

Figure 9 – Big Four workings, facing north, note white quartz reef in left foreground

Various gold joint ventures were also proposed, but decisions will await completion of the Ardea IPO.

4.      Tenement acquisition update

Ardea has applied for several new tenements in New South Wales and Western Australia, subsequent to the Ardea Prospectus “Technical Assessment Report” and so these projects are not covered in the Prospectus.  The following sections briefly describe the geology and prospectivity of these new project areas.

4.1.    Lachlan Fold Belt, NSW

As part of the Ardea Prospectus preparation, a significant gold prospect has been generated for the Lewis Ponds project around the Godolphin Fault, a shallow east-dipping domain boundary structure separating the Ordovician Macquarie Arc in the west from the Silurian Hill End Trough in the east.  From southeast to northwest, the structure hosts gold mining centres and targets from McPhillamys, Springfield, Mt Shorter, Calula and Copper Hill East.  This Godolphin Fault trend is held within Ardea’s tenement package, a 50km strike of continuous tenure abutting the McPhillamy’s deposit in the south and the Commonwealth (Silica Hill) deposit in the north.

4.1.1. Yeoval Porphyry Copper-Gold-Molybdenum-Rhenium Project (ELA5368, recommended for grant) - Ardea 100%

Yeoval (ELA 5368) is located within the Macquarie Arc, 60km northeast of the Northparkes copper-gold mine.  The tenement application covers an area of 138km ² and is intensely mineralised with more than 60 historic copper workings trending in a north-easterly direction, along a 20km strike.  The project area encompasses the eastern section of the Early Devonian Yeoval Complex, with the major host being the Devonian-aged Naringla Granodiorite including gabbro-diorite and quartz monzo-diorites.  The co-magmatic Canowindra Volcanics of the Cudal Group occur to the east and south.  The Ardea exploration target is a large tonnage porphyry copper-gold-molybdenum-rhenium system.

This report section contains exploration results and estimates reported by ASX-listed Augur Resources Limited on 17 September 2012 under the JORC Code 2004 ^[5] .  The information has not been updated to comply with the JORC Code 2012, and it is uncertain whether following evaluation or further exploration work that the estimate will be able to be reported in accordance with the JORC Code 2012.

The known Yeoval deposit comprises two main near-surface zones of bornite-chalcopyrite mineralisation.  Initial drilling in 1972 produced best intercepts of 42.7m at 0.93% Cu and 18m at 0.8g/t Au.  Drilling in 2008 by Augur Resources produced best intercepts of 90m at 0.90% Cu and 0.14g/t Au and 50m at 0.54% Cu and 0.48g/t Au.  Augur Resources ^[5] reported on 17 September and 2 December 2008 an Inferred Mineral Resource in compliance with JORC 2004 guidelines and based on this, Augur Resources considered an Exploration Target of approximately 10Mt – 13Mt at grades of approximately 0.38% Cu and 0.14g/t Au as achievable. ^[7]

Table 4: Augur Resources Ltd announcement of drill hole YZ-04, 17 October 2012

4.1.2. Mt Aubrey Epithermal Gold-Silver Project (ELA5369, recommended for grant) - Ardea 100%

Mt Aubrey (ELA 5369) is located at the east contact of the Macquarie Arc Ordovician andesites some 30km northeast of Parkes and 30km southeast of Peak Hill.

The property was acquired by Ardea as an epithermal gold system hosted in Upper Silurian to Lower Devonian-aged Dulladerry Volcanics, a bimodal subaerial suite of quartz eye porphyry with rhyolitic ash-flow lapilli tuff, pyroclastic and breccia and amygdaloidal basalt.  Gold mineralisation is typically hosted by 0.5-3m thick chalcedonic epithermal quartz veins and stockworks.  All assays reported in Table 5 below are from open file reports and are not able to be verified by Ardea.

Although an epithermal-style of gold mineralisation, the Mt Aubrey mineralisation isn’t refractory, with the published run-of-mine grade (3.73g/t Au) returning 95.7% recovery in historic metallurgical test work.

Gold mineralisation at the Mt Aubrey vein system remains open at depth and along strike, as the historical drilling done by BHP Gold was only designed to define shallow oxide resources.  The Mount Aubrey deposit was mined by BHP Gold in 1990 and 1991 as shallow open-pit satellite operations to the Parkes Gold Mine.  It is estimated that up to 120,000 tonnes of ore at 3.3g/t Au was trucked to Parkes for processing.  As part of the operating agreement with the landowner all three of the small open-pits were back filled.

It is presumed that the shallower of the drill intercepts as reported above were mined in the BHP open-pits.  Historic pit pick-ups will be sought to quantify the status ore positions beneath the historic pit floors.

In 2007, Aurelia Metals Limited ^[8] completed three diamond core holes beneath the former Mt Aubrey Gold Mine for a total of 916.6m.  The holes were designed to test the down dip extension of high grade epithermal quartz veining mined in the Mt Aubrey open-pits.  Holes MAD002 and MAD003 each intersected broad zones of epithermal quartz-carbonate vein stockworks associated with epidote, sericite and bleaching alteration and minor sulphides.

Table 5    Mt Aubrey historic RC drill results.

At the Mt Aubrey South prospect drill hole MAD004 intersected a broad zone hosting abundant mineralised crustiform textured quartz-carbonate-pyrite veining with a gold intersection of 88m at 0.22g/t Au from 2m.  The gold mineralisation in MAD004 represents an un-mined new gold-bearing structure to the south of the main Mt Aubrey vein system.

The Blue Hills prospect is an area of outcropping, gold bearing veins and minor workings 2km along strike to the northwest of Mount Aubrey.  Rock chip samples of up to 13.4g/t Au have been recorded and two costeans returned results of 2m at 1.35g/t Au and 6.5m at 1.40g/t Au.  The area between Mt Aubrey and Blue Hills is mainly covered by modern alluvium but is also thought to contain quartz veining.

The Emu Swamp prospect is located 3km to the east of Mt Aubrey and contains outcropping veining with rock chip gold values to 3.3 g/t Au associated with pyritic alteration.  The 6km Blue Hills – Mt Aubrey – Emu Swamp trend represents a significant epithermal vein system target.

Mt Aubrey along with the adjoining Yeoval tenure is interpreted by Ardea as the manifestation of a major NE-trending zoned porphyry copper-gold-molybdenum-rhenium to epithermal gold-silver intrusive centre.

4.1.3. Wiseman’s Creek Gold-Copper Project (ELA5378, recommended for grant) - Ardea 100%

The Black Bullock prospect is located at Wiseman’s Creek, 35km southeast of Bathurst, NSW.  Epithermal gold mineralisation within the tenure is hosted largely within Late-Silurian – Early Devonian-aged slates, shales and sediments of the Kildrummie and Campbell’s Groups, with geology through the centre of the tenure comprising the andesitic Ordovician-aged Rockley Volcanics. 

Mineralisation has been reported as predominantly associated with silicified zones with epithermal textures such as open-space filling in quartz veins, quartz vein breccias, chalcedonic silicification and colloform banding.  The units strike NNW and dip steeply eastwards.

The Wiseman’s Creek area was held as EL2098 by Windsor Resources ^[9] during the 1980s and was part of a JV arrangement, which saw a total of 80 RC and three diamond holes drilled between the years 1985 - 1989.  In Windsor’s 1988 Annual Operations report, the major historic gold mine production was noted as being from Black Bullock Mine, reporting production of some 40,000oz of silver and 2,098oz of gold from 4,700 tonnes of ore (at an average grade of 14g/t gold).  Three main areas of interest were identified, some within State Forest and some on freehold land. 

At the gold prices of the day, the deposit was not considered economic, however gold intercepts at shallow depths were reported that warrant further investigation.  Table 6 above lists only some of the more significant gold intercepts recorded in the Windsor Annual Report.  An additional 23 RC and 3 diamond drill holes (not listed in Table 6) contained significant intercepts at or above 0.5g/t Au.  In 2006 Central West Gold ^[10] completed an IP survey and drilled follow up RC holes based on modelling of the earlier historic drilling and which reportedly contained a best result of 3m at 0.36g/t Au from 9m.

Table 6: Black Bullock prospect historic drill results

The above table represents historic data from GS1988_277 Windsor Resources report, recorded as a statutory requirement, for the NSW government department.  The quality of the data has yet to be ascertained as historic QAQC work was poorly reported, but is included to establish that the Wiseman’s Creek prospect is gold-endowed and warrants further investigation.

Duckmaloi Tungsten prospect

From 2012 to 2014 part of the tenement area now held by Ardea was held by Resmetco Ltd ^[11] who explored for tungsten within a prospect known as “Duckmaloi” hosted within skarn style mineralisation.  The prospect itself was estimated in an open file report to have an Exploration Target ^[3] of approximately 375,000 tonnes at 0.2% WO ₃   The potential quantity and grade is conceptual in nature and there is insufficient information to estimate a Mineral Resource and it remains uncertain if further exploration will result in the estimation of a Mineral Resource in this area of drilling.

The existence of this deposit style as well as the nearby epithermal occurrences does suggest evidence for a larger mineralizing system and also warrants further investigation.   

4.1.4. Status of NSW Applications

The Wisemans Creek, Yeoval and Mt Aubury applications have been recommended for grant.

4.2.    Eastern Goldfields, WA

4.2.1. Bedonia West- Ardea 100%

E63/1827 and E63/1828 covering 358km ² complete Ardea’s coverage of the Jimberlana Dyke west of the existing Bedonia prospect.  Recent Ardea work has confirmed the anomalous Ni-Cu-PGM soil auger geochemistry previously identified by Heron is coincident with a specific intrusive phase of the Jimberlana Dyke lopolith.  The new applications consolidate Ardea’s coverage of the favourable Proterozoic Dyke lopolith geological setting.

4.2.2. Perrinvale- Ardea 100%

E29/1006 covers 175km ² along the eastern strike continuation of the “Cathedrals” Proterozoic Dyke complex.  The application was predicated on Ardea’s recognition of lopolith mineralisation controls at its Bedonia Project, and aims to secure similarly endowed lopolith geological settings, as well as the northern strike continuation of the domain boundary Ida Fault hosting the Mt Ida gold mining centre to the immediate south.

4.2.3. Status of WA Applications

The WA applications at Perrinvale, Bedonia West and Jimberlana are proceeding towards grant with no objections pending.

5.      Corporate update – Ardea share applications

A copy of the Prospectus and First and Second Supplementary Prospectus is available at www.ardearesources.com.au .  Anyone considering investing should read the Prospectuses in their entirety before deciding whether to do so.  Applications can only be made via the application form which is in the Prospectus.

Please contact Ardea’s Company Secretary, Mr Sam Middlemas, on +61 8 6500 9200 if a hard-copy of the Prospectus is required.

About Heron Resources Limited:

Heron’s project focus is commissioning the high-grade Woodlawn Zinc-Copper Project located 250km southwest of Sydney, New South Wales.  In addition, the Company holds a number of other high quality base metal exploration properties located in the immediate Woodlawn area of the Lachlan Fold Belt, New South Wales.

With Heron’s focus on Woodlawn and the securing of finance for commissioning the operation, the spin-off of the non-Woodlawn assets into Ardea was commenced in August 2016.  It is anticipated that Ardea will commence trading on ASX in February 2017.

Compliance Statement (JORC 2012 and NI43-101)

A competent person’s statement for the purposes of Listing Rule 5.22 has previously been announced by the Company for:

1. Lewis Ponds on 9 November 2016 (prospectus lodged by Ardea and Heron);
2. Kalgoorlie Nickel Project on 21 October 2013 and 31 July 2014, 27 October 2016, 2016 Heron Annual Report and 6 January 2017;
3. Big Four-Goongarrie on 13 March 2012, 26 June 2012 and 24 July 2012.
4. KNP Cobalt Zone Study on 6 January 2017  

The Company confirms that it is not aware of any new information or data that materially affects information included in previous announcements, and all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.  All projects will be subject to new work programs following the listing of Ardea, notably drilling, metallurgy and JORC Code 2012 resource estimation as applicable.

The exploration target for Lewis Ponds, exploration results for Lewis Ponds, Gundagai, Mt Zephyr, BTZ and Kalgoorlie East Tenements, and forward programs contained in this announcement are based on, and fairly represents, information reviewed by Mr Ian Buchhorn, who is a Member of the Australian Institute of Mining and Metallurgy. Mr Buchhorn is a full-time employee of Heron Resources Limited and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results’. Mr Buchhorn has reviewed the Heron announcements the subject of the Second Supplementary Prospectus and consents to the inclusion of the information in the form and context in which it appears.  Mr Buchhorn states that the historical exploration results and estimates are an accurate representation of available data and studies for the Yeoval, Mt Aubury and Wiseman’s Creek projects and are reflect Mr Buchhorn’s on-the-ground knowledge of the regional project areas.

The information in this report that relates to KNP Exploration Results is based on information originally compiled by previous and current full time employees of Heron Resources Limited.  The Exploration Results and data collection processes have been reviewed, verified and re-interpreted by Mr Ian Buchhorn who is a Member of the Australasian Institute of Mining and Metallurgy and currently a full-time employee of Heron Resources Limited.  Mr Buchhorn has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the exploration activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  Mr Buchhorn consents to the inclusion in this report of the matters based on his information in the form and context that it appears.

The information in this report that relates to Mineral Resources for the Goongarrie South, Big Four and Aubils Prospects is based on information originally compiled by Mr James Ridley in 2008 and 2009 when employed as a Senior Resource Geologist with Heron Resources Limited.  The information in this report that relates to Mineral Resources for the Scotia and Black Range Prospects is based on information originally compiled by Snowden Mining Industry Consultants on behalf of Heron in 2004.  The Mineral Resource estimates for all five prospect areas have been reviewed, validated and re-interpreted by James Ridley who is a Member of the Australasian Institute of Mining and Metallurgy.  Mr Ridley is now a full-time employee of Ridley Mineral Resource Consulting Pty Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the resource estimation activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  Mr Ridley consents to the inclusion in this report of the matters based on his information in the form and context that it appears.  Note that Mineral Resources that are not Ore Reserves do not have demonstrated viability.

The exploration and industry benchmarking summaries are based on information reviewed by Mr Ian Buchhorn, who is a Member of the Australian Institute of Mining and Metallurgy. Mr Buchhorn is a full-time employee of Heron Resources Limited and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  Mr Buchhorn has reviewed this press release and consents to the inclusion in this report of the information in the form and context in which it appears.  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This news release contains forward-looking statements and forward-looking information within the meaning of applicable Australian and Canadian securities laws, which are based on expectations, estimates and projections as of the date of this news release.   

This forward-looking information includes, or may be based upon, without limitation, estimates, forecasts and statements as to management’s expectations with respect to, among other things, the timing and ability to complete the Ardea spin-out, the timing and amount of funding required to execute the Company’s exploration, development and business plans, capital and exploration expenditures, the effect on the Company of any changes to existing legislation or policy, government regulation of mining operations, the length of time required to obtain permits, certifications and approvals, the success of exploration, development and mining activities, the geology of the Company’s properties, environmental risks, the availability of labour, the focus of the Company in the future, demand and market outlook for precious metals and the prices thereof, progress in development of mineral properties, the Company’s ability to raise funding privately or on a public market in the future, the Company’s future growth, results of operations, performance, and business prospects and opportunities. Wherever possible, words such as “anticipate”, “believe”, “expect”, “intend”, “may” and similar expressions have been used to identify such forward-looking information. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and on information available to management at such time. Forward-looking information involves significant risks, uncertainties, assumptions and other factors that could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. These factors, including, but not limited to, the ability to complete the Ardea spin-out on the basis of the proposed terms and timing or at all, fluctuations in currency markets, fluctuations in commodity prices, the ability of the Company to access sufficient capital on favourable terms or at all, changes in national and local government legislation, taxation, controls, regulations, political or economic developments in Canada, Australia or other countries in which the Company does business or may carry on business in the future, operational or technical difficulties in connection with exploration or development activities, employee relations, the speculative nature of mineral exploration and development, obtaining necessary licenses and permits, diminishing quantities and grades of mineral reserves, contests over title to properties, especially title to undeveloped properties, the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other geological data, environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding, limitations of insurance coverage and the possibility of project cost overruns or unanticipated costs and expenses, and should be considered carefully. Many of these uncertainties and contingencies can affect the Company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Prospective investors should not place undue reliance on any forward-looking information.  

Although the forward-looking information contained in this news release is based upon what management believes, or believed at the time, to be reasonable assumptions, the Company cannot assure prospective purchasers that actual results will be consistent with such forward-looking information, as there may be other factors that cause results not to be as anticipated, estimated or intended, and neither the Company nor any other person assumes responsibility for the accuracy and completeness of any such forward-looking information. The Company does not undertake, and assumes no obligation, to update or revise any such forward-looking statements or forward-looking information contained herein to reflect new events or circumstances, except as may be required by law.

No stock exchange, regulation services provider, securities commission or other regulatory authority has approved or disapproved the information contained in this news release.

  http://www.globenewswire.com/NewsRoom/Attachm...c9eed1b352  

JORC Code, 2012 Edition – Table 1 (Mt Zephyr, Mt Aubury, Yeoval, Wiseman’s Creek)

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Section 2 Reporting of Exploration Results - (Criteria listed in the preceding section also apply to this section.)

JORC Code, 2012 Edition – Table 1 (Lewis Ponds Exploration Target)

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Section 2 Reporting of Exploration Results - (Criteria listed in the preceding section also apply to this section.)

^[1] The breakdown for the full KNP resource categories is as follows:

^[2] The breakdown for the full Lewis Ponds resource categories is as follows:

^[3] An Exploration Target is a term used within the JORC2012 Code for an estimate of the exploration potential of a mineral deposit.  As used in this release the stated Exploration Target is based upon the parameters described in the text, however the potential quantity and grade is conceptual in nature and there is insufficient information to estimate a Mineral Resource and it remains uncertain if further exploration will result in the estimation of a Mineral Resource in this area of drilling.

^[4] Aurora Gold has not consented to the use of the historical geological report reference in this announcement.  The potential quantity and grade of any mineralisation is conceptual in nature, there has been insufficient exploration to estimate a mineral resource and it is uncertain if further exploration will result in the estimation of a mineral resource.

^[5] Augur Resources has not consented to the use of the historical geological report reference in this announcement.  This section contains exploration results and estimates reported by Augur Resources Limited on 17 September 2012 under the JORC Code 2004.  The information has not been updated to comply with the JORC Code 2012, and it is uncertain whether following evaluation and or further exploration work that the estimate will be able to be reported in accordance with the JORC Code 2012.

^[7] The potential quantity and grade is conceptual in nature and there is insufficient information to estimate a Mineral Resource and it remains uncertain if further exploration will result in the estimation of a Mineral Resource in this area of drilling.

^[8] Aurelia Metals Limited has not consented to the use of the historical geological report reference in this announcement

^[9] Windsor Resources has not consented to the use of the historical geological report reference in this announcement.

^[10] Central West Gold has not consented to the use of the historical geological report reference in this announcement.

^[11] Resmetco Ltd has not consented to the use of the historical geological report reference in this announcement.

For further information regarding Ardea, please visit www.ardearesources.com.au or www.heronresources.com.au or contact: Ardea Resources: Dr Matt Painter Managing Director of Ardea Resources Limited Tel +61 8 6500 9200 Australia: Mr Wayne Taylor Managing Director and Chief Executive Officer of Heron Resources Tel: +61 2 9119 8111 or +61 8 6500 9200 Email: heron@heronresources.com.au Canada: Tel: +1 905 727 8688 (Toronto)