2000 Annual Report - Heron Resources Limited

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Operations Review 2.0 Continued INDEPENDENT RESOURCE AUDIT An Independent Consultant has completed a draft audit of the Heron Nickel Laterite resource base. Heron’s methodology, quality assurance measures and data management were favourably assessed. Comparisons of resource estimates in respect of audited project areas were: Table 4 - RESOURCE COMPARISONS INDEPENDENT CONSULTANT Recoverable Resource Estimation 0.5% Ni Cut-off Grade - Block Model HERON RESOURCES NL Fully Diluted One Metre Selvedge 0.5% Ni Cut-off Grade - Polygonal End Area Project million tonne % Ni % Co million tonne % Ni % Co Goongarrie 229 0.74 0.06 233 0.74 0.06 Kalpini 103 0.73 0.04 104 0.74 0.05 Lake Rebecca 26 0.84 0.04 24 0.87 0.05 TOTAL 358 0.74 0.05 361 0.75 0.05 Results appear to be quite acceptable at a 0.5% Ni cut-off grade. At progressively higher cut-off grades, the Block Model tonnage estimates are increasingly lower than the Polygonal estimates. This is as expected when wide spaced drilling (400x80m) is used in Block Modelling. In view of the excellent continuity results to date at Goongarrie South using an 80x80m pattern, and subject to detailed lateral continuity studies, Heron may be able to use a 20x20m pattern for the Measured Mineral Resource estimates in its future Goongarrie South BFS. Figure 6 - GOONGARRIE SOUTH CROSS SECTIONS GOONGARRIE SOUTH 69,200mN GSRC027 GSRC028 GSRC029 GSRC030 GSRC031 GSRC034 GSRC035 GSRC036 13/1.15/0.09 5/1.34/0.12 4/0.93/0.10 4/1.09/0.10 17/0.9/0.06 20/1.36/0.05 48/1.15/0.10 76m 2600 mE 75m 68m 2800 mE 63m 51m 60m 3000 mE 60m 66m GOONGARRIE SOUTH 68,800mN GSRC190 GSRC191 GSRC192 GSRC193 GSRC194 GSRC195 GSRC196 GSRC197 GSRC198 4/0.86/0.07 11/1.39/0.23 12/1.23/0.12 18/0.83/0.02 2/1.4/0.03 6/1.01/0.49 8/0.85/0.02 18/1.52/0.29 37/1.01/0.08 71m 89m 2600 mE 65m 71m 2800 mE 89m 80m 81m 3000 mE 89m 74m GOONGARRIE SOUTH 68,400mN GSRC047 GSRC040 GSRC041 GSRC042 GSRC043 GSRC044 GSRC045 GSRC046 GSRC200 GSRC201 GSRC202 70m 5/0.86/0.13 64m 2600 mE 53/1/0.05 76m 12/1.53/0.40 15/1.35/0.11 64m 81m 2800 mE 68m 78m 2/0.87/0.54 10/1.36/0.16 25/1.00/0.04 58m 3000 mE 77m 20/1.2/0.16 3200 mE 13/0.95/0.02 30/0.93/0.07 8/1.07/0.06 83m 89m LEGEND >0.75 % Ni 0.50 - 0.74 % Ni 25m 10/1.36/0.16 INTERCEPT METRES / %Ni / %Co Photo Strip: This excavator was used for previous prospector exploration and mining at Goongarrie Hill. By chance, it opened up part of Heron’s Goongarrie Hill Nickel Laterite deposit. This excavation records large slabs of barren silica within the Nickel Laterite ore. This silica can be screened out, to increase Ni-Co grades by 35%. ‘Dump Truck’ Shane Stokes “This is a painting of a dump truck carrying yellow sand. The sky is a grey-blue colour because of rain.” page 12 Heron Resources NL Annual Report 2000
2.0 Continued Operations Review 2.1 HERON RESOURCES NL - CENTAUR MINING & EXPLORATION LIMITED STRATEGIC ALLIANCE NICKEL LATERITE RESOURCE, PRE-FEASIBILITY STUDY FOR PROPOSED CAWSE STAGE II. The priority for the Strategic Alliance during 2000 has been to drill out the various Goongarrie resources to an 80x80m pattern, for inclusion in the Cawse Stage II PFS. This program, and the completion of Heron’s $3 million Strategic Alliance expenditure requirement, should be finalised in 2001. After that point, the more detailed drilling patterns (at least 20x20m) required for a BFS would be to Centaur’s account. There has been a seamless exchange of data and ideas between Heron and the Cawse minesite throughout 2000, which has contributed to the success of the Heron-Centaur Strategic Alliance. 2.1.1 Goongarrie Nickel Project Heron 100%. Heron Toll Milling rights for ore processing through Centaur’s proposed Cawse Stage II plant. Nickel (- gold). The 181km 2 contiguous project area covering 24 tenements is located 60-100km NNW of Kalgoorlie along the eastern flank of the Goongarrie Dome. The western flank of this structure hosts the Cawse lateritic nickel mine. The lithological precursor of the Goongarrie and Cawse lateritic nickel mineralisation is the Walter Williams Formation komatiite, which unit defines the margin of the Dome. The Goongarrie Nickel Project is located 25km N of the Cawse processing plant. The Heron project area straddles the Kalgoorlie- Leonora Highway and Railway, and Goldfields Gas Transmission natural gas pipeline is located immediately to the east. Infrastructure is thus excellent in terms of Nickel Laterite mining and processing. Heron’s Goongarrie expenditure to date has been $1.77 million. Goongarrie Hill Prospect During 2000, Heron completed 155 RC drill holes at Goongarrie Hill for 5,211 metres. Significant intercepts include: Table 5 - GOONGARRIE HILL PROSPECT RC Drilling Significant Intersections, 0.75% Ni Cut-off Hole No. North East From To Interval Ni Co Ni4Co Ni4Co%* m m m m m % % % x m GWRC036 76,400 1,599 8 19 11 0.94 0.042 1.11 12.21 GWRC040 77,205 1,520 6 16 10 1.06 0.093 1.43 14.30 GWRC056 78,803 1,045 12 20 8 1.32 0.047 1.51 12.08 GWRC062 78,780 1,450 0 14 14 0.91 0.051 1.11 15.54 GWRC064 79,608 1,201 6 13 7 2.01 0.155 2.63 18.41 GWRC098 76,557 1,561 4 24 20 1.06 0.023 1.15 23.00 GWRC123 76,558 1,600 13 24 11 0.94 0.051 1.15 12.65 * ”Ni4Co% x m” for a drill intercept is the value of %Ni plus 4 times %Co of the interval multiplied by the intercept in metres. Section interpretation and resource estimation has been completed for the area covered by the above drilling, with a current Inferred Mineral Resource of 17.7 million tonne at 1.08% Ni and 0.06% Co at a 0.75% Ni cut-off. Shallow high grade ore centred on drill holes GWRC088-091 (peak 2m at 1.97% Ni) has been targeted for processing through Cawse Stage I. The ore zone is on a granted Mining Lease. Environmental Performance Bonds have been lodged with the DME, and a Notice of Intent to Commence Mining is awaiting the final Flora and Fauna Survey report. Drill site rehabilitation outside the proposed mining area has been completed. Mineralised zones at Goongarrie Hill tend to consist of lower grade siliceous ore occurring at shallow depths. A total of 137 drill composites were submitted for screen upgrade assessment. Screen upgrades for nickel and cobalt are both very good. At a -0.5mm screen size, there is a 40% coarse (silica) reject, increasing both nickel and cobalt grades by 35%, with 76% of metal retained. This result is comparable to the published data for the Cawse nickel project, and is typical of Walter Williams Formation Siliceous Ore. Heron Resources NL Annual Report 2000 page 13
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Heron Resources NL In the Community
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2000 Annual Report - Heron Resources Limited

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