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EPIC: GUN
Market: ASX
Sector: General Mining - Copper
Gunson Resources

Gunson Resources

Gunson Resources (ASX: GUN) is an exploration company with interests in mineral sands, nickel, gold and copper projects in Australia. The company’s most advanced project is the Coburn mineral sands project in Western Australia.

Gunson Resources

www.gunson.com.au

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Gunson Resources Snapshot

Gunson Resources Limited is a Perth based Australian mineral exploration company listed in May 2000.

Two of its assets, the Coburn and Mount Gunson projects were divested from Stuart Petroleum NL, formerly Stuart Metals NL but the other projects were initiated since listing. For asset locations, see map of Australia on front page.

Gunson Resources was named after one of its principal assets, the Mount Gunson copper exploration project in South Australia. Mount Gunson is a flat topped hill named in 1875 after Dr. John Michael Gunson (1822-1881) who was one of the first medical doctors in Adelaide. An Irishman, he was a pioneer member of the senate of Adelaide University and president of the Catholic Young Men's Society.

Coburn Project (Mineral Sands) - Western Australia

This project covers 1200 square km of a fossil coastline which has the potential to host a world class heavy mineral sand field (Figure 1).
    
Drilling since 2000 has outlined a major heavy mineral sand deposit known as Amy Zone (Figure 2) which is over 35 kilometres long, up to 3 kilometres wide and between 10-50 metres thick.
    
Approximately two thirds of Amy Zone has government environmental approval for mining and this area has JORC-compliant ore reserves of 308 million tonnes averaging 1.2% heavy minerals. Zircon comprises 23% of the heavy mineral suite, high titanium ilmenite (61% TiO2) 48%, rutile 7% and leucoxene 5%. The northern third of Amy Zone has not yet been approved for mining but contains a non-JORC potentially mineable resource of 106 million tonnes averaging 1.3% heavy minerals.
    
Gunson completed a Definitive Feasibility Study at the end of 2009, the results of which were announced on 7th January 2010. This study revealed that Amy Zone can support a high volume, low cost, long life mining operation producing quality mineral products.
    
In February 2013, results of an Optimisation Study were announced, assuming an annual ore production of 23.4 million tonnes from an additional 29 million tonnes of ore in the southern permitted area in addition to the 308 million tonnes described in dot point 3 above.  Total mine life was reduced from 23 to 19 years and the total capital cost increased to $202 million.
    
Annual mineral product output was increased by 22% to 49,500 tpa of zircon, 109,000 tpa of ilmenite and 23,500 tpa of HiTi, a blend of rutile and leucoxene containing 90% Ti02.
    
An offtake agreement for 54,000 tpa of the ilmenite product was signed with the world's largest pigment producer DuPont in March 2012 and negotiations for the remainder of the ilmenite, and the HiTi product are in progress with DuPont.
    
The Company is currently seeking to attract a minority partner to help fund the mine development, in exchange for an assured long term supply of zircon.

Mount Gunson (Copper) - South Australia

Strategic location in the best endowed copper belt in Australia, the Olympic Copper-Gold Province ( Figure 1). This belt is over 500 km long and contains about 75% of the known copper resources in Australia. Olympic Dam is the fourth largest copper and largest uranium deposit in the world, containing some 40% of known global uranium resources.   Two discoveries since 2000 at Prominent Hill, approximately 100 kms north west of Olympic Dam and Carrapateena, 20 kms east of Gunson's Chianti Prospect at Mount Gunson, have heightened exploration interest for large deposits in the basement rocks of this belt.
        
The Project straddles about 10% of the Olympic Copper-Gold Province as four contiguous exploration licences covering about 1,154 square km.
        
Exploration for large copper-gold deposits in the basement at Mount Gunson (Figure 2) is being funded by a subsidiary of Xstrata Copper, which has the right to earn a 75% interest in the Project by spending $A10 million by mid 2013.   Approximately $6.62 million had been spent to the end of March, 2013.
        
Copper mineralisation of Central African Copper Belt style is also widespread in the overlying cover rocks (Figure 2, eg. Mount Gunson mine) and two areas covering the shallow MG14 and Windabout deposits have been excised from the Xstrata Copper farm-in (Figure 3).
        
Since late 2011, negotiations have been held with a small-mine operator that proposes to recover metallic copper, cobalt and silver at the mine site by a solvent extraction-electrowin process.  Production of saleable metal products at the mine site avoids the problem of non-payment by smelting customers for cobalt contained in copper concentrates, which led to the susupension of a bankable feasibility study in 2011.  This problem was particularly acute for the Windabout deposit, where the cobalt value exceeds the value of copper in the concentrate.
        
Preparation of an Information Memorandum to facilitate the raising of finance for a 20 year mine commenced in May, 2013.

Tennant Creek (Gold - Copper) - Northern Territory

Project comprises one approved and two soon to be approved exploration licences and one exploration licence application over a combined area of 76.6 square km in the Tennant Creek district.  These result from geological targeting work conducted on BHP Billiton's extensive Australian database by the Company's geological consultant, Douglas Haynes Discovery Pty Ltd.  
              
The Tennant Creek district has yielded some 5 million ounces of gold and 350,000 tonnes of copper since large scale mining began in 1934. Gold-copper ore bodies in the district are typically high grade averaging 9 g/t gold and 2.1% copper, and are associated with distinctive magnetic anomalies, due to the abundance of the magnetic iron oxide, magnetite.
               
Significantly less exploration has been conducted in the district for non-magnetic gold-copper ore bodies. Such ore bodies are predicted to occur in the Tennant Creek district, but will not have the usual geophysical characteristics of the known gold-copper deposits. They will be associated with discrete gravity anomalies, with either a very weak coincident or adjacent magnetic anomaly, like Oz Minerals' Prominent Hill and BHP Billiton's Olympic Dam deposits in South Australia.
               
Gunson's tenements and tenement applications cover weak magnetic anomalies with associated gravity responses in favourable geological settings, where little or no previous exploration has been carried out. The targets on these areas can be tested quickly and cheaply with ground geophysics and shallow drilling.
                
A single diamond drill hole, TCD1, on the Gosse 5 approved exploration licence (Figure 1) was completed in May 2010, with prospective basement intersected beneath 93 metres of basinal cover rocks.  No significant copper or gold values were recorded in the basement and subsequent geophysical interpretation suggested that the gravity anomaly tested may be a basement high.
               
A new geophysical anomaly some 3.5 km to the west of TCD 1 has been chosen for a second phase of drilling because it has been interpreted as a hematitic ironstone body in the 100 - 150 m depth range, underlain by a magnetic zone.  This geophysical signature matches the Company's modelled target.

Fowler's Bay (Nickel) - South Australia

Fowlers Bay comprises a 700 square kilometre exploration licence located about 150 kilometres west of Ceduna (Figure 1).
          
The exploration target is craton margin Proterozoic nickel sulphide deposits within a northerly trending belt of magnetic anomalies near the western margin of the Gawler Craton.

Interpretation of the results of an airborne transient electromagnetic (TEM) geophysical survey in the northern part of the Project flown by a neighbouring tenement holder in 2007 indicated 2 promising nickel sulphide targets beneath thin (30-50 m thick) Eucla Basin cover (Figure 1).

The magnetic anomalies are interpreted to be Proterozoic mafic and ultramafic rocks prospective for nickel sulphides.  Evidence for this comes from widely scattered drill holes completed by previous explorers which penetrated to basement through the Eucla Basin cover.

Ground TEM surveys to better define the two anomalies for possible drill testing were completed in December 2008 and April 2009 respectively and a high priority drill targets chosen. 

Diamond drilling of these targets was completed in early 2011, both holes revealing gneissic basement beneath 30-50 metres of cover.  No mafic or ultramafic rocks prospective for nickel sulphides were intersected.

A regional target definition study based on geophysical and limited drilling data was completed in early 2013.  Targets defined by this study are to be prioritised with first pass magnetic and gravity geophysical surveys in mid to late 2013.

Chairman:
David A Craig B.Juris (Hons) LLB (Hons) LLM (London) GDipAppFin (Finsia) MAICD


David Craig is an experienced Chairman and Director with an accomplished background in business and law. Current and past Board appointments have involved the law, mining, construction, mining services, financial services and the oil and gas industry, as well as with professional bodies and not-for-profit community organisations. As a partner of a major Perth law firm he specialised in resources and commercial legal advice which included work on resources joint ventures, the acquisition and disposal of interests in companies and projects, and capital raisings by companies, This was followed by ten years in the financial services industry as a stockbroker and an executive director in a national stockbroking and investment banking company. Mr Craig then spent five years working with Woodside Petroleum Ltd in an executive position in the field of public and government affairs. He is Non-Executive Chairman of Forge Group Ltd and Southern Hemisphere Mining Ltd as well as a Non-Executive-Director of Moly Mines Ltd.

Managing Director:
David N Harley BSc (Hons) MSc., F.Aus. I.M.M.


David Harley is a geologist with over 30 years experience in the mining industry, mostly in senior exploration management positions with WMC Resources Limited. He is a past President of the Association of Mining and Exploration Companies, AMEC and was Chairman of Gallery Gold Ltd for 5 years until November 2003.

Non-Executive Director:
Garret Dixon B.Eng(Hons), MBA, MAICD


Garret Dixon is an experienced and accomplished senior executive with extensive experience in the mining, transport and contracting industries in Australia and overseas. Mr Dixon worked for mining contractor Henry Walker Eltin Group Ltd for 18 years, serving in various positions including Executive General Manager, Mining prior to joining Mitchell Corporation as Managing Director in April 2006. He was appointed as Managing Director of Gindalble Metals Ltd in December 2006 until leaving that company in 2011.


  Sunzone  7.8%

  Grey Willow 7.5%

  Investors Mutual 5.5%

  Top 20 Shareholders    43.0%

L1, 985 Wellington Street
West Perth
Western Australia 6005

Telephone: (08) 9226 3130
Facsimile: (08) 9226 3136
E-mail: enquiries@gunson.com.au
Postal Address: PO Box 1217  West Perth, Western Australia 6872

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