Project overview

KGL acquired Jervois in 2011 and by 2015 had increased the estimated Resource to 30.5 million tonnes containing 327,000 tonnes of copper and 22.6 million ounces of silver together with gold, lead and zinc.

The Company is now pursuing a strategy of increasing the quality and size of the Jervois Resource to one that will sustain a mining project in the bottom half of the international cost curve for copper mines before proceeding to mine development.

Jervois is located on existing mining leases and benefits from road access to Darwin and Alice Springs by the Stuart and Plenty Highways, being 360km by road north-east of Alice Springs.

The known resources at Jervois are spread across multiple prospects that extend along a 12km strike length in the shape of a J curve. Several prospects have the potential for both open pit and underground mining.

However, the Company has concentrated recent exploration on the Rockface prospect where new mineralised zones of increasingly high grade have been discovered using modern Down Hole Electromagnetic (DHEM) surveying and targeted drilling. None of the Rockface high grade discoveries is included in the 2015 Resource estimate for Jervois.

DHEM surveying at Rockface has identified new drill targets from which drilling has produced high grade intersections and extensive mineralised zones. More DHEM surveys in the new drill holes have in turn identified new target areas (conductors) with drilling resulting in further high grade mineralisation.

Grades at Rockface have increased progressively with depth. To illustrate the trend, results of drilling since late 2015, from the surface to approximately 650m, include

7.34m @ 1.22% copper from 0m,

13m @ 2.14% copper from 255m,

9m @ 2.91% copper from 284m,

16m @ 3.34% copper from 362m,

28m @ 5.08% copper from 435m (including 14m % 8.89% copper from 436m),

10.5m @ 8.76% copper from 478.4m,

9.4m @ 11.53% copper from 535.4m,

15m @ 7.11% copper from 558m, and

10.5m @ 8.99% copper from 645.65m.

All intersections have reported silver and gold values.

Metallurgical testwork on Rockface mineralisation has confirmed good recovery and concentrate grade – more than 95% recovery at 25% concentrate grade.

Exploration in 2017 is aimed at discovering more mineralised areas indicated by DHEM surveying and improving knowledge of known areas to support a Resource update.

The Company has sought to employ financial resources in the most efficient way, engaging in cost effective exploration while minimising corporate costs. Two capital raisings since January 2016 have been by way of a rights issue and a share purchase plan to facilitate the participation of shareholders and avoid diluting their interests in the Company.

KGL also acquired in 2015 two exploration licences at Yambah, 60km north and northeast of Alice Springs, because of the similarity of the style and age of the mineralisation to Jervois which is 150km to the east. Rock chip and soil sampling in late 2016 confirmed the base metal and gold potential, the best result being 22.2% copper, 4.01% zinc and 1.05 grams per tonne gold at Yambah’s Emily prospect.

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