Microsoft Word - 004 LSR June 2015 Quarterly Activities Report
ASX ANNOUNCEMENT
22 July 2015 Electronic lodgement
COMPANY SNAPSHOT
LODESTAR MINERALS LIMITED ABN: 32 127 026 528
CONTACT DETAILS
Bill Clayton, Managing Director
+61 8 9423 3200
Registered and Principal OfficeLevel 2, 55 Carrington Street Nedlands, WA 6009
PO Box 985
Nedlands, WA, 6909 [email protected] www.lodestarminerals.com.au
CAPITAL STRUCTURE
Shares on Issue:
324,546,575 (LSR)
Options on Issue:
20,750,000 (unlisted)
36,077,402 (listed ‐ 31 Mar 2016)
ASX: LSR
PROJECTS
Peak Hill - Doolgunna:
Base metals, gold
JUNE 2015
QUARTERLY ACTIVITIES REPORT HIGHLIGHTS
CAMEL HILLS PROJECT (GOLD)
Lodestar (ASX Code: LSR, the "Company") received approvals for trench sampling and drilling at the Big Sky priority gold target.
Subsequent to end of quarter, shallow trench sampling commenced; RAB drilling to commence early August.
Historic sampling in the Big Sky area has reported extensive gold in soil anomalies with up to 970ppb (0.97g/t) gold1, up to 2.8g/t gold in rock samples2 and 0.36g/t over 2m (with wide intercepts of elevated gold) in drilling3.
The Big Sky target is associated with a strongly sheared, east northeast trending contact between a magnetic and a non‐magnetic sequence, with potential to host structurally‐controlled lode gold mineralisation. This contact is located immediately north of historic drilling and has not been conclusively tested.
NED'S CREEK PROJECT
The Company entered into a farm out agreement with Australian Mines Limited (ASX Code: AUZ) to advance base metal exploration on the Ned's Creek project (Lodestar's Contessa and Brumby gold discoveries are excluded from the agreement).
Lodestar retains the right to contribute on a pro rata basis after AUZ
has satisfied its earn‐in obligations and attains an interest of 51%.
If the farm out and joint venture agreements proceed to their full conclusion, the farm out will be worth $3.3 million.
1 Aurora Minerals Limited 26th July 2012, ASX Announcement - Quarterly Activities and
Cashflow Report
2 Aurora Minerals Limited 31st July 2009, ASX Announcement - Quarterly Activities and
Cashflow
3 Desert Mines and Metals Limited 22nd April 2013, ASX Announcement - Camel Hills
Drilling Update
June 2015 Quarterly Activities Report 22 July 2015
CAMEL HILLS
(E09/2099, E09/2100, E09/2138, E09/2139 & E52/3064)
Lodestar applied for 924 square kilometres (90 kilometres of strike) over the Errabiddy Shear Zone in the Gascoyne Province of Western Australia. The three key tenements have now been granted and a negotiated native title agreement signed with the traditional owners.
The tenements are located 170 kilometres northwest of Meekatharra and 60 kilometres south and east of Gascoyne Resource's Glenburgh gold deposits (Figure 1). The Errabiddy Shear Zone is 5 to 20 kilometres wide and is linked at depth to the Cardilya Fault, a major tectonic boundary between the Archaean Narryer Terrane and the accreted Palaeoproterozoic Glenburgh Terrane to the north.
The shear zone has been reactivated during the collision of the Yilgarn and Pilbara cratons and is intensely deformed. Recent mineral systems prospectivity mapping by the GSWA has identified the Errabiddy Shear Zone as a favourable site for large‐scale gold mineralisation, this view is supported by historic surface sampling that has identified strong gold anomalies associated with outcropping gneiss in the Main Grid (re‐ named Big Sky) area. Limited drilling completed by previous explorers is not regarded as a conclusive test of the gold potential at Camel Hills.
Figure 1 Location Plan ‐ Lodestar's Camel Hills tenements
Lodestar is targeting a large orogenic gold system within the Errabiddy Shear Zone, part of a major crustal suture at the northern margin of the Yilgarn Craton.
Re‐worked craton margins are fundamental structures that act as a deep plumbing system, allowing long‐ lived, repeated transfer of fluids and heat from the upper mantle to the upper crust. These margins are a favourable location for the formation of world‐class orebodies (e.g. Tropicana gold deposit located on the southeast margin of the Yilgarn Craton).
P a g e | 2
June 2015 Quarterly Activities Report 22 July 2015
Work Completed
In preparation for testing the Big Sky gold target a heritage survey was completed over the target area. Lodestar subsequently received approval for the planned programme of work and heritage clearance. The details of the work programme were discussed in Lodestar's ASX announcement of 24th June 2015.
Trench sampling totalling approximately 2900 metres commenced early July and is in progress. Individual trenches are up to 280 metres in length and will test a wide area across a shear zone partly concealed by shallow colluvial cover. Planned drill traverses between the trenches are more tightly focused on the contact between magnetic and non‐magnetic rocks (Figure 2) where shallow, close‐spaced RAB drilling is targeting a lode gold system.
Observation of geological structures in the vicinity of the target indicates that lodes may have short strike lengths and be steeply plunging. The combination of trench sampling and drilling will provide close‐spaced coverage of the prospective contact on average 25 metre line spacing, over a strike distance of approximately 600 metres.
This programme is a scoping investigation of an auriferous contact zone defined by historic soil, drainage and rock chip sampling. The limited and widely spaced historic drilling that tested these anomalies is believed to be located south of the prospective contact and may have intersected the margin of a lode gold system.
Figure 2 Planned test of auriferous shear zone, Big Sky prospect
Activity
|
July
|
August
|
September
|
Trenching
|
Drilling
Sample Dispatch
Results
|
Drilling
Sample Dispatch
Results
|
Drilling
Sample Dispatch
Results
|
Table 1 Planned timeline of activities, Big Sky
P a g e | 3
June 2015 Quarterly Activities Report 22 July 2015
NED'S CREEK
(E52/2440; E52/2444; E52/2456; E52/2468; E52/2492; E52/2493; E52/2733 & E52/2734)
On 11th June 2015 Lodestar signed a farm out agreement with Australian Mines Limited (ASX Code: AUZ) in relation to the non‐gold interests over the Ned's Creek and Marymia tenements E52/2440, E52/2444, E52/2456, E52/2468, E52/2492 and E52/2493 within the Ned's Creek project (see Lodestar's announcement to the ASX dated 11th June 2015).
The key terms of the agreement are as follows:
AUZ paid $100,000 to Lodestar on signing of the agreement.
AUZ has the right to withdraw within six months of signing the agreement subject to spending a minimum of $150,000 on exploration.
If AUZ exercises its option to continue following the $150,000 minimum expenditure, it must make a cash payment of $250,000 to Lodestar.
AUZ can earn a 51% interest in the base metal rights (all minerals excluding gold) by spending $1M on exploration within 24 months of signing, AUZ may acquire an additional 29% interest (taking the total to 80%) by spending a further $2M on exploration within a following 24 month period. Under this agreement "all minerals excluding gold" means any mineralisation where gold either is absent or, if present, is not the dominant mineral within a maiden Mineral Resource. Lodestar's Contessa and Brumby gold discoveries are excluded from the farm out agreement.
Once AUZ has satisfied its earn‐in obligations, with either a 51% or 80% interest, Lodestar may elect to contribute on a pro rata basis or dilute their interest according to standard industry formula.
The farm out agreement allows Lodestar to focus on testing its advanced, large‐scale gold targets at Big Sky and Contessa, whilst maintaining a significant interest in any base metal discovery at Ned's Creek.
Competent Person Statement
The information in this report that relates to Exploration Results is based on information compiled by Bill Clayton, Managing Director, who is a Member of the Australasian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Clayton consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.
P a g e | 4
June 2015 Quarterly Activities Report 22 July 2015
About Lodestar Minerals
Lodestar Minerals Limited is a Western Australian active explorer with projects in the Peak Hill district and bordering the northern Yilgarn margin. The Ned's Creek project forms the core of Lodestar's project portfolio and represents a strategic landholding of 830 square kilometres over the north eastern margin of the Yerrida Basin and the Jenkin Fault, a fundamentally significant regional fault system that is adjacent to the DeGrussa Cu‐Au deposit.
The Ned's Creek tenements are located 170 kilometres north east of Meekatharra, 7 kilometres east of the Thaduna‐Green Dragon copper mines being evaluated by Ventnor Resources and Sandfire Resources and 5 kilometres east of Sandfire Resources and Sipa Resources' Enigma copper discovery. The Yerrida Basin contains thick volcano‐sedimentary sequences that are bounded by major structures, the Jenkin and McDonald Well Faults and there is good potential for large‐scale base metal and gold mineralisation adjacent to these structures.
In 2013 Lodestar discovered significant gold mineralisation at the Contessa prospect. Contessa lies within a 5 kilometre long gold anomaly overlying Archaean greenstone, on the southern margin of the Marymia inlier. Lodestar believes that this structural position marks a major crustal break, a highly favourable environment for magma‐driven metal accumulation during cyclic reactivation of a former continental margin represented by the northern boundary of the Yilgarn Craton.
The region has potential to host a number of styles of base metal and gold deposits and Lodestar has embarked on an aggressive exploration program to assess the potential of Ned's Creek and the tectonic margin of the northern Yilgarn Craton.
Lodestar is specifically targeting palaeo‐arc and back arc settings of similar age to the Bryah Basin at Camel Hills and Imbin where historic exploration has identified gold and copper mineralisation, respectively. The Camel Hills and Imbin projects have recently proceeded to grant of the key tenements and exploration is underway at Camel Hills.
P a g e | 5
June 2015 Quarterly Activities Report 22 July 2015
APPENDIX 1: Schedule of Exploration Tenements as at 22 July 2015
Tenement Description Tenement Status Percentage Interest
Numbers
|
Ned's Creek
Marymia Marymia Yowerrena Hill Little Well Yowerreena Hill Yowerreena Hill
Marymia
Yowerrena Hill
Imbin - Troy Creek
Mount Salvado Troy Creek Ingebong Hills Troy Creek Slate Bluff Pierre Spring
Camel Hill / Mt Erong
Camel Hills Mount Erong Billycan Bore
|
E52/2440 (1) E52/2444 (1) E52/2456 (1) E52/2468 (1) E52/2492 (1) E52/2493 (1)
E52/2733
E52/2734
E69/3254
E69/3255
E69/3261
E69/3263
E69/3265
E69/3271
E09/2099
E09/2100
E52/3064
|
Granted Granted Granted Granted Granted Granted
Granted
Granted
Granted Granted Granted Granted Granted Granted
Granted Granted Granted
|
100% - Farmee may earn up to 51% of all non- gold mineral rights
100% - Farmee may earn up to 51% of all non- gold mineral rights
100% - Farmee may earn up to 51% of all non- gold mineral rights
100% - Farmee may earn up to 51% of all non- gold mineral rights
100% - Farmee may earn up to 51% of all non- gold mineral rights
100% - Farmee may earn up to 51% of all non- gold mineral rights
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
|
(1) Australian Mines Limited (ASX: AUZ) earning up to 51% of the non-gold rights (see Lodestar's ASX
release dated 11th June 2015).
P a g e | 6
Appendix 5B Mining exploration entity quarterly report
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/01, 01/06/10, 17/12/10
Name of entity
LODESTAR MINERALS LIMITED
Rule 5.3
ABN Quarter ended ("current quarter")
32 127 026 528 30 JUNE 2015
Consolidated statement of cash flows
Cash flows related to operating activities
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration and evaluation
(b) development
(c) production
(d) administration
1.3 Dividends received
1.4 Interest and other items of a similar nature received
1.5 Interest and other costs of finance paid
1.6 Income taxes received / (paid)
1.7 Other - Acceptance of Farm-out agreement
Net Operating Cash Flows
+ See chapter 19 for defined terms.
17/12/2010 - Appendix 5B Page 1
Appendix 5B
Mining exploration entity quarterly report
1.13 Total operating and investing cash flows
(brought forward)
|
(120)
|
(1,113)
|
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other - capital raising costs
Net financing cash flows
|
-
-
-
-
-
-
|
1,295
-
-
-
- (102)
|
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other - capital raising costs
Net financing cash flows
|
-
|
1,193
|
Net increase (decrease) in cash held
1.20 Cash at beginning of quarter/year to date
1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter
|
(120)
426
-
|
80
226
-
|
Net increase (decrease) in cash held
1.20 Cash at beginning of quarter/year to date
1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter
|
306
|
306
|
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 95
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
1.23 - Includes salaries paid to directors, as well as superannuation paid on behalf of directors. Also includes corporate and accounting services paid to a company associated with one of the directors. A percentage of the Managing Director's salary has been expensed to exploration activities.
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
None
2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
None
+ See chapter 19 for defined terms.
Page 2 17/12/2010 - Appendix 5B
Financing facilities available
Add notes as necessary for an understanding of the position.
Appendix 5B Mining exploration entity quarterly report
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
4.1 Exploration and evaluation
4.2 Development
4.3 Production
4.4 Administration
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Changes in interests in mining tenements
6.1 Interests in mining tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements acquired or increased
+ See chapter 19 for defined terms.
17/12/2010 - Appendix 5B Page 3
Appendix 5B
Mining exploration entity quarterly report
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number
|
Number quoted
|
Issue price per security (see note 3) (cents)
|
Amount paid up per security (see note 3) (cents)
|
7.1 Preference
+securities
(description)
7.2 Changes during quarter
(a) Increases through issues (b) Decreases
through returns of
capital, buy-backs, redemptions
|
Nil
|
N/A
|
N/A
|
N/A
|
7.1 Preference
+securities
(description)
7.2 Changes during quarter
(a) Increases through issues (b) Decreases
through returns of
capital, buy-backs, redemptions
|
N/A
|
N/A
|
N/A
|
N/A
|
7.3 +Ordinary securities **
7.4 Changes during quarter
(a) Increases through issues (b) Decreases
through returns of
capital, buy-backs
|
324,546,575
|
324,546,575
|
N/A
|
N/A
|
7.3 +Ordinary securities **
7.4 Changes during quarter
(a) Increases through issues (b) Decreases
through returns of
capital, buy-backs
|
189
|
189
|
3
|
3
|
7.5 +Convertible debt securities
(description)
7.6 Changes during quarter
(a) Increases through issues (b) Decreases
through securities
matured, converted
|
Nil
|
N/A
|
N/A
|
N/A
|
7.5 +Convertible debt securities
(description)
7.6 Changes during quarter
(a) Increases through issues (b) Decreases
through securities
matured, converted
|
N/A
|
N/A
|
N/A
|
N/A
|
7.7 Options
(description and conversion factor)
7.8 Issued during quarter
7.9 Exercised during quarter
7.10 Expired during quarter
|
2,500,000
2,250,000
36,077,402
16,000,000
|
-
-
36,077,402
-
|
Exercise price Various Various
3 cents
5 cents
|
Expiry date
29 November 2016
8 May 2017
31 March 2016
16 December 2017
|
7.7 Options
(description and conversion factor)
7.8 Issued during quarter
7.9 Exercised during quarter
7.10 Expired during quarter
|
7.7 Options
(description and conversion factor)
7.8 Issued during quarter
7.9 Exercised during quarter
7.10 Expired during quarter
|
189
|
189
|
3 cents
|
31 March 2016
|
7.7 Options
(description and conversion factor)
7.8 Issued during quarter
7.9 Exercised during quarter
7.10 Expired during quarter
|
N/A
|
N/A
|
N/A
|
N/A
|
7.11 Debentures
(totals only)
|
Nil
|
N/A
|
7.12 Unsecured notes
(totals only)
|
Nil
|
N/A
|
+ See chapter 19 for defined terms.
Page 4 17/12/2010 - Appendix 5B
Compliance statement
Appendix 5B Mining exploration entity quarterly report
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 22 July 2015
Company Secretary
Print name: David M McArthur
Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==
+ See chapter 19 for defined terms.
17/12/2010 - Appendix 5B Page 5