Narraburra Rare Earth Element Project (Farm-in)

Highlights

  • Godolphin has signed a farm-in and joint venture agreement to earn up to a 75% interest in the Narraburra Rare Earth Element Project
  • Follows an extensive review of the Rare Earth Element potential of the Lachlan Fold Belt, including assessing GRL’s own tenements
  • Narraburra has a previously reported a Mineral Resource Estimate of 73.2M tonnes at 1250g/t ZrO₂, 327g/t REO, 146g/t Y₂O₃, 126g/t Nb₂O₅, 45g/t HfO₂, 54g/t Ga₂O₃ and 118g/t Li₂O, which was classified as Inferred under JORC (2004) by its previous owner Capital Mining Limited (ASX: CMY) not the Company. This previously reported MRE may not conform to the requirements in the JORC Code 2012.
  • Narraburra is located in the central west of NSW, host to Australia’s most advanced Zirconium, Rare Earth Element and Rare Metals project, the Dubbo Project of Australian Strategic Materials
  • Project is listed as a critical minerals project by the Australian Government’s Australian Trade and Investment Commission
  • Previous exploration includes airborne magnetic surveys, geological mapping, mineralogical studies, preliminary metallurgical test work, with irregular wide-spaced RAB and RC drilling
  • GRL will obtain a considerable suite of historical data to progress a systematic resource drill-out to JORC 2012 standard, commencing once statutory approvals are secured - expected Q2 2022
  • Earn-in terms – two tranche agreement allows Godolphin to progress to 51% ownership with $1M exploration spend and 75% ownership through an additional $2M in expenditure
  • Issue of success-based Godolphin shares to the counterparty, with A$1M of shares upon the 51% earn-in and A$1M of shares upon the 75% earn-in, subject to 12-month escrow period

Overview

The Narraburra Rare Earth Element Project is located approximately 340km west of Sydney and 15km north of Temora in central west NSW. The farm-in and joint venture agreement includes two tenements, EL 8420 and EL 9258, and covers a total of 349km². Mineralisation is hosted in a fractionated, peralkaline intrusive complex of Late Devonian age.

Since 1999, there has been considerable exploration work completed on the Project, including airborne magnetic and radiometric surveying, geological mapping, ground radiometric surveying, bedrock geochemical sampling, whole-rock analysis, petrological and mineralogical studies, preliminary metallurgical testing and RC drilling. The programs confirmed significant occurrences of Rare Earth Elements (REE) (oxide is REO) including neodymium (Nd) and praseodymium (Pr) and Rare Metals (RM) including zirconium (Zr), Yttrium (Y), niobium (Nb), hafnium (Hf), gallium (Ga) and lithium (Li). Thorium (Th) is reasonably low.

The Project has a previously reported JORC 2004 compliant Inferred resource, by previous owner Capital Mining Limited (ASX: CMY) not the Company, of 73.2M tonnes at 1250g/t ZrO₂, 327g/t REO, 146g/t Y₂O₃, 126g/t Nb₂O₅, 45g/t HfO₂, 54g/t Ga₂O₃ and 118 g/t Li₂O (refer ASX Announcement: Capital Mining Limited, ASX: CMY 09 December 2011) . It should be noted that the estimate may not conform to the requirements in the JORC Code 2012. The methodology utilised in the previous estimate were appropriate at the time of the estimate and due to the reported wide drill spacing an Inferred resource was reported.

Cautionary Statement: the estimates of Mineral Resources or Ore Reserves are not reported in accordance with the JORC Code 2012; a Competent Person has not done sufficient work to classify the estimates of Mineral Resources or Ore Reserves in accordance with the JORC Code 2012; it is possible that following evaluation and/or further exploration work the currently reported estimates may materially change and hence will need to be reported afresh under and in accordance with the JORC Code 2012; that nothing has come to the attention of GRL that causes it to question the accuracy or reliability of the former owner’s estimates; but GRL has not independently validated the former owner’s estimates and therefore is not to be regarded as reporting, adopting or endorsing those estimates.

The previously reported resource estimate by Capital Mining Limited was estimated based on a work program of 17 reverse circulation percussion and reverse circulation aircore drill holes. Drill samples were collected at 1m intervals and composited to 4m for analysis due to the interpreted consistency of the disseminated oxide mineralisation. All samples were assayed by NATA registered laboratories and the resource estimated by interpreting 11 cross sections through the deposit spaced at 100m to 200m. Continuity of the mineralisation was noted to be evident from the radiometric signature of the deposit and the geological correlation between sections and drill holes.

Godolphin believes there is considerable potential to expand the existing mineralisation with the planned work program, as additional drilling is completed to allow the mineral resource to be classified in compliance with JORC 2012. More importantly, a more detailed close spaced drilling pattern with an expanded analytical suite and systematic Material Type allocation should enable resource estimation at a higher cut-off grade for optimised tonnes at significantly higher head grade and a JORC Code 2012 compliant resource estimate.

The previous owner noted that mineralisation extends from the surface to a depth of 40-50 metres at end-of-hole, with shallow overburden where present consisting of clay, sand, silt, and marginal grade mineralisation at 0.5-3 metres thick. It is of note that a significant number of the historic drill holes finished in the highest grades of RM and REE and remarkably none of the drill holes intersected fresh bedrock. The resource potential at depth is completely untested.

Previous metallurgical testing of bulk samples has also been undertaken, with results indicating that there are acceptable recoveries for a range of REO components, including zirconium, niobium and lithium with clean exclusion of thorium. An historical review of this data has been undertaken and outlines that utilising a combination of conventional methods such as spiralling, flotation, hydrometallurgical and pyrometallurgical techniques has the potential to yield favourable returns.

Farm-in

Godolphin has entered a two-tranche farm-in and joint venture agreement to earn up to a 75% interest in the Project. The counterparty is EX9 Pty Ltd (“EX9”), a private exploration company.

Under the first tranche, the Company will contribute $1M in expenditure towards the Project within two years, allowing Godolphin to earn a 51% interest in the Project.

Under the second tranche, to earn a total of 75% in the Project Godolphin has agreed to contribute a further $2M within 4 years in exploration and development expenditure.

Effective from the farm-in date, Godolphin and EX9 will associate in an unincorporated joint venture for the purpose of exploring and developing the tenements.

Next Steps and Exploration Plan

Prior to the completion of the EX9 agreement, Godolphin has undertaken an extensive review of historical data associated with the Project and devised an active works program.

The Company will continue its data assessment and commence work towards infill and extensional RC drilling of the deposit including quantifying primary mineralisation at depth and confirmation core drilling to enable a JORC (2012) compliant Mineral Resource Estimate to be completed.

The core drilling will additionally generate materials for bench-scale metallurgical test work.