Black Fire Minerals Limited is a diversified resources company based in Perth, Western Australia and listed on ASX (Ticker symbols BFE and BFEO).  Our vision is to build a highly regarded, dynamic mid-cap resources company that creates substantial stakeholder value.  The corporate strategy entails a Mining House structure that allows direct participation in and investment within the resources industry.  Our primary commodity focus is gold and copper, however, the company will acquire/invest in other commodities provided the specific business case indicates the potential for superior returns.

MYSTIQUE GOLD JV

Location: 240km ESE of Kalgoorlie, Western Australia
Area: 433 sq km
Black Fire Interest: Earning 75%
Manager: Black Fire

Background

Black Fire entered into the Mystique JV with PacMag Metals Ltd in September 2009. The project is located in the Proterozoic Albany - Fraser Belt (also referred to as the Tropicana Belt) whose gold prospectivity has only become apparent in the last 10 years and as such has a low exploration maturity. The discovery of the +5Moz Tropicana gold deposit by the Anglogold - Independence Group JV using simple calcrete soil geochemical techniques has resulted in much exploration interest in the Belt with a number of other encouraging prospects such as Beachcomber (Anglogold - Independence JV) and Plumridge (Corvette Resources) being reported.

The Mystique project is centred on a substantial historic gold soil anomaly, defined before the discovery of Tropicana and that has to date been ineffectively drill tested and thus represents a "walk-up target" for Black Fire.

Under the JV agreement with PacMag Metals, Black Fire may earn up to 75% equity in the project with the expenditure of A$2.5M over 5 years.

Geology

At the regional scale the project is located within the Albany - Fraser Belt which is a Proterozoic collision zone between the Achaean Yilgarn and Gawler Cratons. Rocks in the belt are generally high grade metamorphics including mafic and felsic granulites and garnetiferous metasediments which represent both reworked Archaean protoliths and Proterozoic sediments and intrusives. Outcrop is generally poor and covered by aeolian sands and pedogenic carbonate, and the eastern edge of the Belt is covered by rapidly thickening sedimentary units of the Tertiary Eucla Basin, including gravels, sands, silts and lignites. Despite this extensive cover, geophysics and particularly aeromagnetics allow for detailed geological interpretations to be made.

Locally the project area has little to no outcrop, however historic aircore drilling has indicated the presence of interleaved felsic and mafic granulites overlain by 10-80m (thickening eastwards) of Eucla Basin sediments. Within the cover sequences, distinct bands of geochemically significant lignite (effectively very low grade coal) have been defined. Importantly, the project is located on the western edge of a distinct aeromagnetic low and straddles the projected "exit" of a number of Tertiary palaeodrainages from the Yilgarn Craton to the west.

Targets

Torquata Prospect

Historic broad spaced calcrete soil sampling of a large part of the central Albany - Fraser Belt by Geographe Resources in the mid to late 1990?s lead to the definition of numerous gold, copper and nickel anomalies. The most significant gold anomaly defined, Torquata, was subsequently infill sampled with the resultant definition of a 4km long by 2.2km wide +10ppb gold anomaly with a peak result of 600ppb (0.6g/t Au). This anomaly is larger and stronger than that publically reported as defining Tropicana.

Subsequent vertical aircore drilling of parts of the anomaly on an average 200m x 200m pattern, initially by Geographe Resources and subsequently by the Homestake - Geographe joint venture and later by Sipa Resources, highlighted the presence of a cover sequence of Eucla Basin sediments overlaying interleaved felsic and mafic granulites. Numerous +0.1g/t gold results were returned both from within the lignite horizons in the cover stratigraphy and to a lesser extent in the targeted Proterozoic bedrock. Best aircore drill intersections reported to date include 3m @ 2.92g/t Au, 1m @ 0.62g/t Au, 6m @ 0.2g/t Au and 1m @ 0.84g/t Au. A total of three follow-up RC holes were drilled by Homestake, but these represent an ineffective test of such an extensive area of gold anomalism. Within the limited bedrock intersections to date, the mineralisation comprises narrow, weakly sulphidic quartz veinlets hosted within both the felsic and mafic granulites.

Past exploration at Torquata was completed prior to the discovery of Tropicana (now +5Moz Au resource) in August 2005 and in that light, the significance of the scale and tenor of the Torquata soil anomaly makes this prospect a priority for further exploration. The opportunity for Black Fire relates to the largely ineffective drill testing of this very substantial soil geochemical anomaly in that (a) the aircore drilling was vertical and penetrated less than a few metres into the Proterozoic bedrock, and (b) this drilling has indicated that a large proportion of the surface calcrete soil geochemical anomaly lies "above" highly gold anomalous lignite beds within the Tertiary cover sequences. The gold in these lignite beds, which have in places returned +1g/t Au assays, is discrete and is interpreted as representing remobilised gold from the bedrock. In summary, the majority of the historic drilling has targeted a "transported anomaly", the source of which has yet to be adequately explained.

Regional Targets

In addition to the exciting Torquata Prospect, a number of other less advanced, but significant gold calcrete soil anomalies that were defined by the broad spaced Geographe Resources sampling in the mid to late 1990's also fall within the Mystique tenements. These anomalies require further follow-up work and will be initially targeted with infill geochemical sampling.

Activities & Results To Date

The Mystique project tenements are yet to be granted by the DMP, however this is expected to occur in late 2009. To date, data compilation of the historic exploration results has been completed and exploration programmes planned. The initial work will involve infill calcrete soil geochemical sampling around a number of the regional anomalies and a programme of aircore drilling to test a number of targets at Torquata. A programme of RC drilling is also planned to test at depth beneath a number of the historically defined +1g/t Au aircore drilling intersections at Torquata.

KARIBIB LITHIUM PEGMATITE PROJECT

Location: 120km NW of Windhoek, Namibia
Area: 765sq km
Black Fire Interest: 100%
Manager: Black Fire 

Background

Black Fire purchased the Karibib Lithium Pegmatite Project from Sunrise Minerals Pty Ltd in November 2009. The project comprises two granted and adjoining Exclusive Prospecting Licences covering 765km2 and is located approximately 25km east-southeast of the town of Karibib and 120km northwest of Namibia’s capital, Windhoek. The project is located on open grazing lands and is proximal to excellent infrastructure including the town of Karibib and the major B2 sealed highway and railway that connects Windhoek to the ports of Swakopmund and Walvis Bay. Karibib is a centre of marble and granite quarrying and also supports the nearby Anglogold Ashanti Navachab gold mine.

Project tenure includes the historic Rubicon, Helikon and Fricke’s lithium-tantalum-cesium mines which operated intermittently from 1930 to 1994. Historic mine production data is poorly recorded, but the Rubicon mine reportedly produced some 17,000t of lithium mineral concentrates from small scale open pit and underground mining between 1980 and 1994.

The Karibib Project has not been subjected to modern exploration, and the historic lithium mining activities were largely small scale gouging operations that only exploited small portions of the outcropping pegmatites. This provides a significant opportunity for Black Fire to carry out drilling programs to test the down dip and strike potential of the historic deposits and utilise modern regional exploration techniques to assess the entire project area for new outcropping and/or blind lithium bearing pegmatite targets.

Karibib Project Geology

The project area covers a portion of the Cambrian Karibib Pegmatite Field with the pegmatite intrusions being hosted in biotite schists and carbonate lithologies of the Karibib Formation, in quartzites of the Chuos Formation, in basement gneisses of the Abbabis Complex and in granites of Damaran age (Neoproterozoic). The individual lithium bearing pegmatites mapped to date are up to 1.6km long, 5 to 40 metres wide and often show well defined regular internal zoning. Lithium minerals including spodumene (Li2O.Al2O3.2SiO4), petalilte (Li2O.Al2O3.8SiO4), lepidolite (K(Li,Al)3(SiAl)4O10(OH,F)2), amblygonite ((Li,Na)AlPO4(F,OH)) and their weathering products including hectorite (Na0.3(Mg,Li)3Si4O10(OH)2), have been recorded within the pegmatites.

The western tenement includes a number of former mine sites including the Rubicon, Helikon and Fricke’s mines together with a number of other intrusive bodies which were mined on a small scale in the past. No significant mining has been reported within the eastern tenement, although pegmatite bodies are reported. Historic mining has targeted lithium, beryl, bismuth, pollucite and other rare metals.

At Rubicon, the main pegmatite has been mapped for over 1km of northwest-southeast strike within an anticlinal structure and is open down plunge in both directions. Where exposed in the Rubicon I open pit, the pegmatite is over 320 metres long, between 25 metres and 30 metres in width and dips northeast at between 20 to 40 degrees. Where exposed in the Rubicon II pit, the pegmatite is over 230 metres long, has an average width of 10 metres and dips northeast at 30 degrees. A PhD thesis undertaken by C. Roering in 1963 demonstrated that the Rubicon pegmatite is strongly zoned with bands of well developed lithium minerals including petalite & lepidolite.

The Helikon I pegmatite has been mapped over 433 metres of east-west strike with both ends disappearing under scree cover. Where exposed in the open pit, the pegmatite is dipping 60 to 70 degrees to the north and is up to 60 metres wide. At Helikon II, the pegmatite has been mapped over 1,600 metres of east-west strike and the body dips southerly at between 55 and 80 degrees. The thickness of the pegmatite averages between 10 metres and 16 metres. Roering’s geological mapping of these bodies in 1963 also confirmed well developed mineral zonation, including bands of lithium minerals, similar to Rubicon.

Historic Production

The historic lithium-tantalum-cesium mines within the project area operated intermittently from 1930 to 1994. Due largely to the small scale of operation, historic mine production figures are poorly recorded or lost, but the Rubicon mine reportedly produced at least 14,700t of petalite, 2,002t of lepidolite and 880t of amblygonite concentrate from small scale mining between 1980 and 1994. Reported mining head grades varied between 1.7% and 3.75% LiO2. The specific concentrate grades are unknown.

Proposed Exploration

Black Fire believes that the Karibib Project represents a significant opportunity for the Company to capitalize on the increasing demand for lithium in the energy storage/Li-Ion battery business. While the historic work completed to date has proven the significance of the pegmatite field as a source of lithium (and other rare metals), the field has suffered greatly from the lack of any real methodical exploration, particularly exploratory drilling, meaning that the mining activities to date were largely small scale gouging operations that simply exploited small portions of the outcropping pegmatites.

The Company intends to undertake two parallel exploration programs at the Project. The first will include the rapid commencement of drilling programs at Rubicon and Helicon to test the down dip and strike potential of the known deposits. The second will involve using regional exploration techniques to assess the entire project area for new lithium bearing pegmatite (including blind) targets that can subsequently be prioritized and drill tested. 

Why Lithium?

Lithium (Li) is the lightest metal and the least dense solid element and possesses attributes such as high electrochemical reactivity, a low thermal expansion coefficient and the highest specific heat. These attributes lead to a wide range of applications including the manufacture of glass, grease, pharmaceuticals and more recently, lithium-ion batteries. The development and growth in demand for Li-ion batteries for use in electric vehicles, computers, mobile phones and other electronic equipment has seen significant growth in the demand for lithium over the last few years with numerous analysts forecasting continuing significant future growth, particularly from the electric vehicle market.

Due to its high reactivity, lithium is only found in compounds that require various refinement processes in order to yield specific lithium products for an intended application. The industry traditionally refers to lithium in terms of lithium carbonate equivalent (LCE) or lithium oxide (lithia) rather than lithium metal (Li). Lithium carbonate (Li2CO3) is colourless and a slightly soluble salt while lithium oxide (Li2O) is an inorganic chemical compound formed when lithium metal is burned in the presence of oxygen.

Lithium has two major sources; lithium mineral rich pegmatite rocks and lithium rich geothermal brines.

Namibia - Country Background

Namibia is the ex-German colony of South-West Africa which won independence in 1990. The economy is heavily dependent on the extraction and processing of minerals for export. Mining accounts for 8% of GDP, but provides more than 50% of foreign exchange earnings. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Namibia is the fourth-largest exporter of nonfuel minerals in Africa, the world's fifth-largest producer of uranium, and a producer of lead, zinc, tin, silver, and tungsten. The mining sector employs an estimated 3% of the population while approximately half of the population depends on subsistence agriculture for its livelihood. Namibia is considered one of the lower risk countries in Africa and in recent years has been a well supported destination for ASX junior resource companies.

PARROTT HILL JV - EP435

Location: Exmouth, Western Australia
Basin: Carnarvon Onshore
Area: 317 sq km
Black Fire Interest: 10%
Manager: Rough Range Oil Pty Ltd

Background

In 2007 Black Fire listed on the ASX as an energy company (Black Fire Energy Limited) with interests in three Western Australian petroleum projects, two located within the onshore Carnarvon Basin (EP435 & EP439) and the other within the onshore Perth Basin (EP426). Black Fire has subsequently withdrawn from its interests in EP439 and EP426, having participated in the drilling of a well in each of the permits without any evidence of commercial hydrocarbons.

The Company continues with its participation in EP435 - Parrott Hill, which is located proximal to Exmouth Gulf and covers part of the productive Rough Range Field including the first petroleum discovery in Australia at Rough Range 1. The Company holds a 10% interest in the licence, having earned this interest by way of a Farm-in Agreement with Rough Range Oil Pty Ltd (38%). The other participants in the licence include Phoenix Resources PLC (25%), Australian Oil Company Ltd (17%) and Bounty Oil & Gas N.L (10%)

Geology

The project is located within the Merlinleigh Sub-Basin of the Carnarvon Basin and is underlain by a thick Carboniferous to Permian sequence capped by Jurassic rocks, in particular the Birdrong Sandstone (host to the Rough Range Oil Field), and the Muderong Shale (the seal).

Oil migration into the Birdrong Sandstone Reservoir and the effectiveness of the Muderong Shale seal is proven by the numerous small pools along the sizeable Rough Range structure.

Activities & Results To Date

The Parrott Hill 2 well was spudded in March 2007 and completed in April 2007 with no commercial hydrocarbon indications within the reservoir objectives. This well was plugged and abandoned.

Subsequent analysis of the data has suggested that the targeted structure is later than thought and thus much of the oil had probably already migrated further up dip when the trap was formed. The JV Operator (Rough Range Oil) is now proposing to test older structures in the field and has advised that they will be drilling their Bee Eater target, which straddles the tenement boundary between the Parrott Hill EP435 and their EP359 permit. The Bee Eater 1 well will be spudded within EP359, approximately 300m south of the boundary with EP435 and has reservoir objectives of 5 million barrels. Black Fire Energy has no commercial interest in EP359, however if Rough Range Oil is successful in discovering commercial hydrocarbons in this permit, then there may be a case for drilling additional wells on the Bee Eater target where it extends northwards into EP435.

Mr Simon Rigby (B. App Sc, BSc (Hons), MAIG) - Managing Director

Simon Rigby has twenty-one years experience in mineral exploration and business development predominantly with major mining companies including Newmont Australia, Newcrest Mining, Homestake Gold of Australia and Barrick Gold Corporation where he held the position of Exploration Manager - Australia and PNG. Most recently Simon was the Principal of Beaumont Geological Consulting which he founded in 2007.

Simon has broad geological experience with a strong knowledge of gold and base metal mineralised systems and has been involved in the discovery and resource definition of such systems. In addition to working throughout Australia, Simon has extensive offshore exploration experience including working in the Solomon Islands, Papua New Guinea and Greece.

Simon was appointed to the Board of the Company on the 9th September 2009 and appointed as Managing Director on the 30th October 2009.

Directorships in other listed entities - None

Mr Mike Chester (B. Com, ACA) - Non-Executive Director

Mike Chester has 25 years experience in the areas of investment banking, mining company research and analysis and funds management with companies including Salomon Smith Barney/County Natwest, Grange Securities and McIntosh Securities. Mike is currently Managing Director of Axiom Advisory Pty Ltd, a boutique corporate advisory firm, and also Investment Manager for the Lowell Resources Fund.

Mike was a top rated mining analyst for many years prior to moving into corporate advisory/investment banking roles. He has originated IPO's and equity placements across the industrial and mining sectors for listed and unlisted entities, and has significant expertise in financial modeling, funds management and project analysis. In addition, he has provided corporate advisory and investor relations services for a number of industrial and resources companies.

Mike was appointed to the Board of the Company on the 9th September 2009.

Directorships in other listed entities - 

Non-Executive Director of Carpentaria Exploration Limited

Non-Executive Director of NuCoal Resources NL

Mr Matthew Sheldrick (B. Com, ACA) - Non-Executive Director & Company Secretary

Matthew Sheldrick has 10 years experience in the securities industry with companies including Patersons Securities and Hartleys, advising domestic and international institutional clients on Australian resource equities. Matthew is a Chartered Accountant by training and had formerly spent 4 years with KPMG. He has previously been CEO of ASX listed Gawler Resources Ltd and Eureka Energy Ltd having founded these companies and assisted with their IPO's.

Matthew was appointed CEO of Black Fire in 2007, having founded the Company and assisted with its IPO during that year. He resigned from this position on the 30th October 2009, whereupon he was appointed as a Non-Executive Director and Company Secretary.

Directorships in other listed entities -

Non-Executive Director of WAG Limited

BLACK FIRE MINERALS LTD

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