Model Financial Accounts
DRAKE RESOURCES LIMITED ABN 12 108 560 069
ANNUAL REPORT 30 JUNE 2015
CORPORATE DIRECTORY
Directors
Brett Fraser
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Non-executive Chairman
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Jay Stephenson
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Non-executive Director
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Robert Beeson
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Non-executive Director
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Company Secretary
Jay Stephenson
Auditor
Bentleys Audit & Corporate (WA) Pty Ltd Level 1, 12 Kings Park Road
West Perth WA 6005
Share Registry
Computershare Registry Services Level 11 / 172 St Georges Terrace Perth WA 6000
Securities Exchange
Australian Securities Exchange
ASX Code
DRK
CONTENTS
Chairman's Letter
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3
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Activities Report
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4
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Corporate Governance Statement
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20
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Directors' Report
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29
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Remuneration Report
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33
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Auditor's Independence Declaration
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41
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Financial Statements
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42
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Directors' Declaration
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78
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Independent Auditor's Report
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79
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Additional Information for Listed Public Companies
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81
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Tenement Report
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83
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CHAIRMAN'S LETTER
Dear Shareholder
On behalf of the Board of Directors of Drake Resources Limited it is my pleasure to present the annual report for the financial year ended 30 June 2015.
True to Drake's stated strategy and objectives, priority projects have progressed during the year. Drake endeavour to maximise investment in-ground and this is in part, why Drake enjoy continued support from its shareholders successfully completing a number of capital raisings during the period when many juniors struggled to secure backing.
During the year Drake completed drilling programs at Seimana, Nordgruva and Lokken and two rounds of geophysics at Sulitjelma. I wish to thank those loyal and new shareholders who continue to support Drake's endeavours and focus on progressing its projects.
Drake continues with its pragmatic strategy of spreading risk across projects,
Brett Fraser - Chairman
jurisdictions and commodities to partly insulate it from the extremes of the markets. Whilst the impact of future market conditions remains a great concern, Drake remains sensitive to market conditions and nimble to opportunities as they emerge. The ongoing challenge for your C.E.O, Jason Stirbinskis, is to continue to progress projects, minimise non-exploration spend and embrace strategic opportunities.
I personally want to congratulate Jason on successfully navigating Drake through challenging paths over these recent, difficult years with limited financial capacity and reduced technical support. Jason's dedication to Drake and its shareholders is truly appreciated. I would like to extend that appreciation to our team and network of extremely skilled and knowledgeable contractors for their ongoing support of Drake.
Brett Fraser
Chairman, Drake Resources Limited
ACTIVITIES REPORT
Drake has held to a strategy developed three years ago to accommodate what was assessed to be a sustained, fundamental shift in market sentiment towards junior explorers. Like most juniors, that included rationalisation and cost cutting but Drake also committed to targeted advancement of its priority projects rather than putting the company in a holding pattern waiting for a market upswing. Of course the strategy meant Drake would need to raise funds earlier or more frequently than explorers in partial hiatus, but the message from our shareholders was supportive and this was subsequently validated by successful raisings.
Drake continues on the path of rationalising its project base, releasing non- priority projects to release cashflow whilst also investing in regional exploration at key asset areas allowing Drake to confidently relinquish or partially relinquish ground of less prospectively. Drake has also set about identifying and realising numerous cost cutting initiatives diverting funds from in-ground investment. Drake's Directors continue to defer taking their
Jason Stirbinskis - CEO
fees and have converted some accrued fees regularly in DRK shares since 2013. Even some of Drake's partners and contractors have taken shares as payment and in some cases waiving payments. This belief and support in the company from the Board and suppliers is incredibly supportive of Drake's objectives. With additional recent changes coming into effect in the new financial year, Drake's non-exploration burn rate at $45k/month is probably one of the lowest for an active listed explorer.
The differentiator for Drake is its dedication to progressing its projects. On the back of encouraging field and drilling results at Seimana in early 2014, Drake returned with another drilling program of 1250m. The campaign delivered solid results in light of no western exploration of the region prior to Drake's first field program in 2014. In conjunction with our JV partner we also committed to drilling programs and Nordgruva and Lokken copper zinc projects in Norway. Whilst the results were not encouraging, they did allow us to confidently relinquish the areas, avoid substantial renewal costs and direct that saving to progressing the Sulitjelma copper/zinc project. The helicopter geophysics program at Sulitjelma identified a great number of EM anomalies with six standing out as particularly interesting. Subsequent, more accurate ground EM and field mapping has further defined these copper targets and we anticipate drilling at Sulitjelma in the 2015/16 year.
Drake enters the new financial year with exploration programs at Seimana, Granumuren and Sulitjelma. Results of this activity will dictate our next steps but within our strategy of progressing our projects. Drake also remains committed to investigating new opportunities that complement its strategy and have potential to enhance shareholder wealth.
Seimana Gold Prospect - Guinea
Drake commenced field work on newly acquired Seimana permits in February 2014, carrying out surface sampling and mapping of the abundant, small scale artisanal gold mines scattered over much of the area of the Drake permits. This work identified +40 targets with strongly developed and high grade gold mineralisation in this previously undrilled area. Surface sampling gold results included the following collected across nearly 18kms of the licence area.
70.8g/t
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42.9g/t
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29.4g/t
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26.7g/t
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15.8g/t
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15.1g/t
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15.1g/t
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13.1g/t
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10.9g/t
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9.9g/t
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9.2g/t
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7.9g/t
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During this financial year the Company has released results from two RC drilling programs consisting of 31 holes totalling 3000m at 9 (fig 1) of the 40+ gold targets currently identified (table 1). Results from the programs include -
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4m @ 19.8g/t from 50m including 1m @ 56g/t from 51m in TAMRC001
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7m @ 1.55g/t from 34m including 1m @ 8.13g/t from 40m and 5m @ 2.64g/t from 61m in TAMRC002
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2m @ 7.0g/t from 44m in TAMRC004
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10m @ 2.58g/t from 36m in KROURC001
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5m @ 2.02g/t from 55m and 3m @ 3.50g/t from 66m in KROURC002
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3m @ 5.6g/t from 26m in KOTRC001
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3m @ 5.06g/t from 21m and 3m @ 3.50g/t from 66m in KRDRC002
Of the 31 holes drilled to date, 11 holes returned intersections of over 4g/t gold (for a minimum of 1m) spread over multiple locations with sites such Kroudaoulen and Tamdian (fig 2 and 3) showing indications of mineralisation continuity over significant shallow lengths.
Thousands of individual pits have been mapped over Seimana, occurring in some 55 clusters. Of these, 42 artisanal mine clusters have clearly mined quartz veins, the remainder being alluvial (streams) or eluvial (soils). Seventeen of the clusters have been classified as Priority A sites (having workings over a strike length of at least 100 metres and width of 10 metres) with a further 19 clusters rated Priority B (having many shafts but less extensive than Priority A).
Despite the abundance of artisanal activity, there is no evidence of prior exploration and certainly no previous drilling, within the permit area. This could be explained in-part by much of the Seimana permit area being blanketed by lateritic ferricrete which obscures the underlying geology. Given the scarcity of outcrop it is very possible that other occurrences remain undetected and for many of the artisanal clusters to only define a portion of larger gold bearing zones.
With positive drilling results on most of the targets tested to date; with many more targets still to test, and the possibility of greater targets buried beneath lateritic cover, Drake intends to carry out geophysical work over the permits to help prioritise drilling targets and provide better understanding of geology in this poorly exposed area.
ACTIVITIES REPORT (CONTINUED)
DRAKE RESOURCES LIMITED
AND CONTROLLED ENTITIES ABN 12 108 560 069
ANNUAL REPORT 30 JUNE 2015
Figure One: Field sampling and mapping at Seimana identified numerous gold targets, 9 of which have been followed up with RC drilling.
Figure Two: The Tamdian target recorded high grade gold surface sampling and drilling results with indications of mineralisation continuity and showing alignment and structural similarities to the largest deposit of the Tri- K project to its south
P a g e | 6
Figure Three: The Kroudaoulen shows early signs of minerlation continuity over extended strike lengths. Figure Four: Seimana lies within the gold rich Birrimian with numerous 1+Moz deposits in the vicinity
ACTIVITIES REPORT (CONTINUED)
DRAKE RESOURCES LIMITED
AND CONTROLLED ENTITIES ABN 12 108 560 069
ANNUAL REPORT 30 JUNE 2015
The Company appreciates the importance of sustaining good relationships within the region. In addition to regular communications with village elders, Drake employs local labourers, maintain a storage/camp facility within one of the villages and this year installed two water wells (photo 1) at two villages that sit within the licence area.
The Seimana project lies within the Birrimian age Siguiri Basin which hosts at least ten +1 million ounce gold resources, including the +5 million ounce deposits of Siguiri and Lero. The +2 million ounce Koulekoun deposits lie 7 km along strike to the south of Drake's permits, and the +0.5 million ounce Mandiana-Magana deposits lie 12 km to the east in similar geological settings (fig 4). With extensive, shallow, potentially economic gold grades so widespread within Seimana permits and the geological similarities with multimillion ounce neighbouring deposits, the Seimana project remains an exciting prospect.
Excluding the temporary but widespread impact of the Ebola virus in West Africa, Guinea's recent political stability and proactive mining policies have translated to substantial advancement in several large scale projects such as the $US20 billion Simandou South high grade hematite project and $US5B bauxite / alumina project funded out of the UAE.
Photo 1: The water well commissioning ceremony was a significant local event
P a g e | 8
Target
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Hole
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From (m)
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To (m)
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Width (m)
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Gold (g/t)
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Kroudaoulen
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KRDRC01
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34
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35
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1
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3.0
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KRDRC02
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18
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25
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7
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2.6
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incl
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22
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25
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3
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5.1
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66
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69
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3
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3.5
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15KRDRC04
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18
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21
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3
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4.4
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15KRDRC05
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48
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49
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1
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1.0
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54
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56
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2
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1.1
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62
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63
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1
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1.0
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74
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75
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1
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1.3
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83
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84
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1
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1.3
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Tamdian
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TAMRC001
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50
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54
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4
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19.8
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incl
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51
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52
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1
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52.6
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TAMRC002
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34
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41
|
7
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1.6
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incl
|
40
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41
|
1
|
8.1
|
59
|
67
|
8
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1.8
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incl
|
61
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66
|
5
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2.6
|
15TAMRC004
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38
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40
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2
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1.8
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44
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46
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2
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7.0
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15TAMRC005
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70
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70
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1
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1.1
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15TAMRC006
|
48
|
49
|
1
|
1.4
|
65
|
70
|
5
|
1.9
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incl.
|
67
|
69
|
2
|
3.7
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incl.
|
68
|
69
|
1
|
6.1
|
Bananikoro
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15BANRC01
|
56
|
57
|
1
|
4.2
|
67
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70
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3
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1.3
|
15BANRC02
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20
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21
|
1
|
8.8
|
Kroufilate
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KROUFRC01
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36
|
46
|
10
|
2.6
|
KROUFRC02
|
55
|
69
|
14
|
1.7
|
incl
|
55
|
60
|
5
|
2.0
|
66
|
69
|
3
|
3.5
|
15KRFRC03
|
3
|
4
|
1
|
1.7
|
15KRFRC04
|
30
|
31
|
1
|
1.1
|
32
|
33
|
1
|
1.4
|
Bougnegbesse
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15BOURC02
|
11
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12
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1
|
1.2
|
Kotromakolen
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KOTRC001
|
26
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29
|
3
|
5.6
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incl
|
29
|
30
|
1
|
16.0
|
39
|
40
|
1
|
3.9
|
KOTRC002
|
29
|
30
|
1
|
1.2
|
48
|
49
|
1
|
1.0
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Table One: Significant results from the 2014 (orange) and 2015 (black) RC drilling at Seimana.
ACTIVITIES REPORT (CONTINUED)
DRAKE RESOURCES LIMITED
AND CONTROLLED ENTITIES ABN 12 108 560 069
ANNUAL REPORT 30 JUNE 2015
Sulitjelma Copper - Zinc Project - Norway
VTEM and EM geophysical surveys were conducted over the Company's Sulitjelma prospects during the year revealing 6 high priority copper/zinc drill targets (fig 5).
Four targets of interest lie within the western thrust ore field which is an area of known massive sulphide mineralisation mapped over ~10kms. The western field also hosts the Sagmo (1.9Mt mined of 1.6% Cu and 0.23% Zn) and the Jakobsbakken (4.47Mt mined of 1.55% Cu and 2.42% Zn) historic orebodies and a significant amount of historic exploration and mine data is available.
Of particular interest is Anomaly 1, a large conductor (1300mx1100m) located ~100m immediately above the Avilon Stoll access drive and historic workings (fig 6). This may represent easily accessible mineralisation unsuspected by the past miners. Anomaly 12 produced a similar size EM plate on the other side of the old Sagmo mine and also has a similar geometry with copper mineralisation intercepted at a near-by historic drill hole at target depths. Anomalies 8 and 13 also present encouraging similarities with the near-by historic mines referenced above in addition to Anna mine located very close to anomaly 8 with historic production of 0.25Mt @ 3.86% Cu.
Two targets of interest lie within the eastern Nordgruvefeltet region. Anomaly 3 (fig 7) occurs at the eastern extreme of the Drake/Panoramic JV portfolio and field mapping to the west of the anomaly has confirmed the presence of outcropping massive sulphides and dump samples from old workings and composite chip samples generated results including 10.7% copper and 15.1% zinc. Anomaly 4 occurs near an area of known massive sulphide mineralisation with nearby mines of Gudrun and Ny Sulitjelma, the latter producing 2.59Mt @ 1.99% Cu and 0.55% Zn
Next steps at Sulitjelma involves drilling of the established targets.
Photo Two: Dump sample from the Sulitjelma licence region.
P a g e | 10
Figure Five: Plan showing area flown with VTEM in 2014 and 6 targets explored via ground EM in 2015. As can be seen by the number of mined ore bodies, a large number of underground access paths exist and might be a considerable help during both exploration and potential operations stages.