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Ardea Resources Limited

Other Projects in Western Australia

The Ardea WA tenure represents a large strategic land holding in one of Australia’s premier nickel sulphide and gold provinces. Ardea has several additional project mineralisation styles outside of the GNCP goethite. In addition to the other laterite hosted nickel-cobalt opportunities, Ardea’s tenure also hosts significant “greenfields” nickel sulphide and/or gold mineralisation.

Kalpini - Emu Lake nickel sulphide and gold prospect

Emu Lake is part of the Kalpini group of tenements and located 70km north-east of Kalgoorlie. The Kalpini group is home to significant lateritic nickel resources of the KNP (75Mt at 0.73% Ni and 0.04% Co, for contained metal of 476.1kt nickel and 28.8kt cobalt). There are multiple historic nickel sulphide drill hole intersections exceeding 1% nickel. Previous explorers include Jubilee Mines, Emu Nickel, Xstrata and Pioneer Nickel. The komatiite belt is known to be fertile for nickel sulphide, with previous explorers recording significant drilling results, such as 2m @ 6.2% nickel in historic core drilling (Heron Resources Limited ASX release 26 November 2013. ELD015, 2m at 6.2% Ni, 1.78% Cu, and 2.17g/t PGEs). Results of this tenor confirm unequivocal nickel sulphide endowment and prospectivity. A limited RC drilling program by Ardea in 2019 identified VMS base metal sulphides in the footwall of the nickel sulphide stratigraphy. This is most favourable in terms of komatiite channel nickel sulphide models.

Recent detailed consultant review resulted in several compelling targets identified. In particular, the area directly south of Binti Gossan is considered a high priority with a number of down hole electromagnetic (DHEM) anomalies warranting drill testing. Previous drilling in the Binti Gossan area has returned several high-grade intercepts including:

The large number of historic nickel-copper intercepts are mostly from an area of drilling below and immediately along strike form the Binti Gossan covering a 1.3km strike length. These results demonstrate the fertility of the ultramafic flow whilst highlighting that only a small portion of the host unit has been effectively explored. Field work is underway and further work planned along the 20km strike length of this fertile and under-explored ultramafic horizon at Kalpini.

Several areas have been identified where higher-powered and more effective Moving Loop EM (MLEM) surveys can be undertaken such as the Binti North, Binti South and Heron prospects. Historic drilling at each of these sites intersected strong mineralisation indicators representing potential “near-miss” cases.

Other project work being undertaken at the Kalpini Project includes detailed assessment of drill hole geochemical data to determine where zones of anomalism are located and if additional assay data is required. Where the original drill hole pulps are still available at Ardea’s West Kalgoorlie Operations Office, these are being sourced and sent for assay as part of the Critical Minerals R&D. Following the receipt of assay results, detailed data review will be undertaken with additional targets for Critical Minerals, nickel sulphides, REE and gold are expected to be defined.

Ardea was successful in obtaining Exploration Incentive Scheme funding (50% of drilling costs) for a 600m deep diamond drill hole targeting an off-hole conductor at Emu Lake. The target ultramafic unit has seen almost no historic drill testing, despite the intense nearby drilling of the Binti Gossan Prospect, due to the geometry of the nickel sulphide mineralisation. The final location of the hole will be confirmed following the completion of the upcoming DHEM survey and is planned to be drilled in the first half of 2021.

The initial diamond drillhole at Emu Lake (AELD0001) was completed at 450m in mid-December 2020, targeting a strong DHEM conductor at 400m depth. The hole passed through the prospective Western Ultramafic basal contact at 382m but no massive sulphides were present and the target EM plate remains unexplained. A number of dolerite intrusive units occur above and below the contact and it is possible that where drilled, any sulphides associated with the conductor have been stoped out by the intrusive dolerite units. PVC has been installed and the hole will be DHEM surveyed in early 2021 for “near-miss” massive sulphides.

A thin (0.65m) nickel sulphide stringer was intersected at 336.7m in a sheared mafic unit. The stringer zone is remobilised sulphides from a primary source and finding the primary source is the aim of the upcoming DHEM surveys.

A number of zones of sericite/pyrite and carbonate alteration with quartz veining have also been selected for assay as potential distal style gold and/or VMS mineralisation. Assay results are expected in February 2021.

Black Range Project

The Black Range Project is located 65km north-west of Kalgoorlie Boulder and contains a 5km zone of the Ora Banda Sill mafic/ultramafic complex enriched in nickel, cobalt, copper, scandium and PGE metals. The Ardea Black Range resource comprises 19.2Mt at 0.68% nickel and 0.09% cobalt, for 130.7kt nickel and 17.8kt cobalt, as well as 8.70Mt at 65.6g/t Scandium for 570,000kg scandium, and 6.55Mt at 0.33g/t Pt and 0.21g/t Pd for 70,300oz Platinum and 44,000oz Palladium.

Past drilling programs have delineated a zoned lateritic distribution of nickel, cobalt, copper, scandium and PGE metals. Highly anomalous copper-PGE zones include:

This geochemical signature is consistent with a sulphidic nickel metal source and is different to the usual KNP nickel laterite geochemistry.

The target zone is located at a specific rock unit contact within the Layered Mafic Complex with potential for Nova or Julimar style intrusion-related nickel-copper-PGE sulphide. A Moving Loop EM survey from 2011 identified a number of conductors on the western side of the package and these are being reviewed and possibly re-surveyed with modern higher-powered EM systems. Concentration of PGEs and related metals is clearly happening in the lateritic regolith and is an economic target in its own right, however, finding the bedrock sulphide source of the nickel-copper PGE metals is the current focus.

With this in mind, two lines of IP were completed during the March 2021 Quarter and a strong chargeability anomaly has been identified, that is located below the geochemical anomaly (ASX release 19 April 2021). The coincident geochemical and IP anomaly represents a compelling target and a follow-up exploration hole has been planned and will be completed, once a suitable drill rig can be sourced.

Highway nickel prospect

The Highway prospect, located 110km north of Kalgoorlie Boulder, is within a wholly owned and granted mining lease which hosts the Company’s Highway nickel laterite resource (87.0Mt at 0.65% nickel and 0.04% cobalt, for 567.2kt nickel and 35.1kt cobalt). Magmatic nickel sulphide has been identified in RC drilling near the basal contact of the Walter Williams Formation. A MLEM survey in 2009 identified two subtle conductors along strike from the disseminated sulphide occurrence, however, drilling did not intersect massive sulphides. But it raises the possibility of nickel sulphide occurrences beneath the GNCP to the south.

With modern geophysical techniques, such as Induced Polarisation (IP), it is possible to map disseminated sulphides to extensive depths (>800m) and this approach has been applied at Highway during the March 2021 Quarter with five lines of IP completed. Results are currently being interpreted.

In addition, at Moriaty immediately east of the Highway Project, historical drilling has reportedly intersected fine disseminated pyrrhotite, chalcopyrite and violarite (nickel sulphide) in a talc-carbonate komatiite unit. This area is also being reviewed for IP and MLEM follow up.

Jump-Up Dam – Nickel Sulphide Target

The Jump-Up Dam Project, located 150km north east of Kalgoorlie Boulder and wholly owned by Ardea, contains a modest nickel laterite resource of 64Mt at 0.75% nickel and 0.04% cobalt for 479kt nickel and 26.1kt cobalt, associated with an Archaean ultramafic complex. Drilling on the eastern side of the ultramafic has defined a 400m long, north-south trending, zone of copper-nickel enrichment in the regolith profile and in places extending into the upper saprolite. The anomalous zone includes an intercept of 18m at 0.10% copper and 0.52% nickel from 18m to end of hole in hole JDRC0127. Interestingly, gold is also slightly anomalous in this intercept – up to 0.21g/t Au over 2m. The litho-geochemistry is strongly suggesting a sulphide source for these metals which has resulted in the observed copper plume in the regolith. To follow-up on this strong geochemical anomaly, a MLEM survey is being planned to quickly test for any bedrock conductors associated with massive sulphides. Drilling will then test any conductors identified.

Ghost Rocks Project

The Ghost Rocks Project, located 140km north of Kalgoorlie Boulder, contains a mixed package of mafic and ultramafic stratigraphy associated with the Walter Williams Formation and hosts Ardea’s Ghost Rocks laterite resource (47.3Mt at 0.66% nickel and 0.04% cobalt, for 312.9kt nickel and 19.9kt cobalt).

It was extensively prospected for nickel and copper sulphide deposits in the late 1960s and early 1970s where copper gossan zones were mapped in the mafic/ultramafic package. Drilling of these gossan zones by Newmont in the early 1970s returned a best result in the oxide zone of 3.3m (10 foot) grading 2.14% copper to end of hole from 12m depth. Work by Heron Resources in 2008/09 identified a number of MLEM anomalies that were drilled and intersected broad zones of “cloud nickel sulphides” in ultramafic rocks and copper assays up to 0.53% over 2m in a differentiated mafic unit. No follow-up was completed at the time.

Re-assessing the MLEM anomalies and effectiveness of the drilling is a priority at Ghost Rocks, with a modern MLEM survey planned to be completed in 2021. There is potential to complete DHEM on the existing drilling to vector towards massive sulphides. The broad zone of copper mineralisation is also of significant interest and an IP survey is being considered to map out this sulphide zone which extends for some 4km along strike.

Perrinvale nickel sulphide and gold prospect

Perrinvale is located approximately 100km west of Leonora. The Ardea exploration model is based on recent nickel sulphide discoveries immediately west of Perrinvale made by St George Mining. Regional magnetic data highlights that the feature which hosts the St George Mining nickel sulphide discoveries within the Cathedrals Belt, has an east-northeast strike and extends into Perrinvale. At Perrinvale, this prospective trend is overlain by transported cover, requiring geophysical methods such as moving loop Electro Magnetic (MLEM) surveys for exploration targeting.

MLEM surveys have been completed by Ardea over three separate zones at Perrinvale with a consultant’s field report received during the December 2019 Quarter which recommended follow-up exploration including shallow aircore drilling beneath transported cover to determine basement geology and the geochemical signature associated with the EM anomalies defined. Surface EM surveys were recommended over the areas not covered by the initial trial survey.

A gold targeting review was completed by Ardea and reaffirmed that the eastern part of the tenure overlies poorly exposed greenstones along the northern extension of the Zuleika Shear system, which is a known gold-bearing structure at Kundana, south of Ardea’s tenure. The fact that there are no gazetted gold occurrences over the greenstone belt within Ardea’s tenure is believed to be a function of the surface cover hiding the prospective basement rocks.

An internal review of geophysical datasets, focused predominantly on the interpretation of aeromagnetic data, has defined a number of gold exploration targets which have been ranked and added to Ardea’s ranking system and represent regional targets that would be best explored with wide spaced RAB or Aircore drilling through the surface cover for geological logging and geochemical sampling. This data would then be used to help vector in on any bedrock gold anomalism defined, targeting a greenfields discovery.

Bulong and Taurus gold prospect

Ardea’s Bulong tenements are located approximately 30km east of the City of Kalgoorlie Boulder. The regionally significant crustal scale gold-controlling structure, the Goddard Fault, trends north-south and passes through Ardea’s Bulong tenure. This structure represents a northern splay of the regionally significant Mount Monger Fault, which hosts gold mineralisation to the south, with the best-known operating mine in the area at Daisy Milano.

Historically, the focus on the Bulong tenements has been on high grade laterite hosted nickel-cobalt mineralisation (54.1Mt at 0.88% Ni and 0.05% Co, for contained metal of 476.1kt nickel and 28.8kt cobalt) as part of the KNP resource base, with minimal historical gold exploration.

Ardea commenced systematic gold exploration with a detailed mapping and sampling program around the historic Taurus underlay shaft and multiple workings in the area. Fifty four rock chip samples were collected during the mapping program with 22 samples (40%) 1g/t Au or greater and the average grade for all samples collected in this program was 4.86g/t Au. This program has refined the controls on gold mineralisation in the project area.

Mapping has identified several other possible Taurus lode repeats as well as providing orientation and shear sense indicators. This information will be used to complement historic drill data, which is presently being compiled in detail, and other historic datasets. 3D models will be constructed from these datasets to enable definition of drill targets.

Ardea works with Kalgoorlie-Boulder prospectors who have been recovering alluvial, eluvial and primary gold in the area which is assisting with Ardea target generation and furthering the understanding of the controls on Bulong gold mineralisation.

In addition to the significant nickel-cobalt resources hosted at Bulong, 36 exploration targets have been defined. These range from gold, PGEs and base metals (nickel, copper, lead and zinc).

Limited historic nickel-cobalt laterite drill holes have been located over some of the gold targets and a search for the historic pulps within Ardea’s West Kalgoorlie sample archive facilities has been completed and samples submitted for multi-element assay, including gold for the first time. This is a low impact and much cheaper form of exploration, as it removes the need to redrill holes.

Laverton Tectonic Zone – Pinjin gold

The Laverton Tectonic Zone (LTZ) hosts some of the largest gold camps in Western Australia, including Sunrise Dam and Granny Smith. The LTZ also hosts several recent gold discoveries such as Rebecca and Duchess. Additionally, the Mount Weld REE deposit is associated with the LTZ.

Ardea continues to evaluate other mineral exploration opportunities that can complement its existing project portfolio and has applied for a number of exploration licences and acquired another in the LTZ, in the Pinjin area.

With the regolith obscuring the prospective basement rocks, Ardea can apply the same exploration methodology that has been successful in making gold discoveries under cover at Goongarrie, to the Pinjin leases to help ensure the best chance of exploration success. This area covered by Ardea’s tenement applications is considered highly prospective for gold and Critical Mineral mineralisation and is under-explored. The recently acquired tenure is suited to the proposed gold spin-out IPO, as well as REE targets for the GNCP.

Mt Zephyr-Darlot East Red 5 Joint Venture

In November 2020, Ardea executed a Farm-in Joint Venture Agreement with ASX-listed gold producer Red 5 Limited (ASX: RED, Red 5). Red 5 can earn up to an 80% interest in Ardea’s Mt Zephyr and Darlot East Gold Projects, both located in close proximity to the Red 5 Darlot Gold Mine. Under the terms of the Agreement, Red 5, through its 100%-owned subsidiary, Darlot Mining Company Pty Ltd (Darlot), has executed a Farm-in Joint Venture Agreement (Agreement) with Ardea Exploration Pty Ltd, a wholly-owned subsidiary of Ardea Resources Ltd, over the Mt Zephyr and Darlot East Gold Projects in Western Australia. (ASX Announcement, 19 November 2020)

Background

Mt Zephyr contains both primary gold and nickel mineralisation and encapsulates more than two thirds of an underexplored greenstone belt called Celia Lineament. The area east of the Celia Lineament is considered highly prospective for the following reasons:

(January 2021)