SUMMARY and HIGHLIGHTS - Heron Resources Limited

For Quarter Ending 30 September 2012 

SUMMARY and HIGHLIGHTS 

CORPORATE 

Management Changes 

After the end of the reporting period, Heron’s incumbent Managing Director Jonathan Shellabear resigned effective 

9 October 2012. Ian Buchhorn resumed the Managing Director role he previously held from 1996 to 2007. 

Non-executive Director Ken Hellsten announced that he would retire at the 16 November 2012 Annual General 

Meeting, ending six years of outstanding contribution to Heron. The Board will now comprise three persons, Craig 

Readhead (Chairman) and Stephen Dennis, both Non-executives, and Managing Director Ian Buchhorn. 

Finance 

Cash is $42.4 million and listed investments $7.3 million, with cash and shares valued around $0.20 per share. 

BUSINESS DEVELOPMENT 

The Company continues to review business development opportunities in Australia and overseas, to acquire predevelopment 

or operating mining assets. It remains a key objective of the Company to complete a significant 

transaction when a suitable opportunity is identified. 

EXPLORATION 

New South Wales Copper-Gold Exploration 

� 55 line kilometres of moving loop EM, 746 soil samples and seven reconnaissance RC holes for 1,270m have 

been completed at the Girilambone Project, representing first pass exploration for Tritton style copper-gold 

deposits. 

� A number of gossan-epithermal quartz zones have been have been identified and sampled at the Mt Allen and 

McKinnon’s South Projects south of Cobar in the Lachlan Fold Belt of NSW. 

West Australia Nickel-Copper Exploration 

� A number of exciting “Nova-style” nickel-copper sulphide targets were identified at Heron’s Bedonia and Rocky 

Gully Projects in the Albany Fraser Mobile Zone – auger sampling and EM surveys are being executed. 

PROJECT DEVELOPMENT 

Kalgoorlie Nickel Project (KNP) 

Various metallurgical techniques for processing nickel laterite ore continue to be bench-scale tested, including: 

� Direct Nickel Testwork – recent testwork indicates that 98% nickel recoveries can be achieved using both 

fresh and saline process water. Based on these results, further studies have commenced to determine the 

effect of saline process water and the likely capital cost of such an operation. 

� Update of Information Memorandum – the Company retains full confidence in the KNP as a potential 

nickel laterite development, and notes that recently there has been an increased interest in the project from 

offshore groups. The Company is therefore in the process of updating its Information Memorandum and 

Data Room to facilitate the review of project information by potential development partners.

EXPLORATION PROJECTS 

NEW SOUTH WALES COPPER-GOLD PROJECTS 

During the Quarter, the Company has significantly increased exploration work in NSW on the two recently granted 

tenements near Girilambone (EL7951 and EL 7955). The tenements are wholly owned by Heron and are situated 

adjacent to new copper-gold discoveries reported by Straits Resources Limited over the last 12 months, namely Avoca 

Tank and Kurrajong. The copper-gold deposits in the Girilambone-Tritton area represent Besshi style Volcanogenic 

Massive Sulphide (VMS) mineralisation, hosted within Ordovician Girilambone Beds meta-sediments and meta-basalts. 

The Girilambone Beds are a sequence of strongly deformed sediments that extend from east of Cobar to west of Parkes 

in central NSW. Within the mineralised sequence at Girilambone, weakly magnetic mafic intrusive rocks tend to occur at 

the base of the mineralized sequence and a magnetic mineral assemblage of quartz-haematite-magnetite (QMH) tends 

to occur at the top or directly above the zone of massive sulphide mineralisation. Detailed magnetic surveys play an 

important role in mapping out the prospective stratigraphy with discrete magnetic highs providing direct exploration 

targets. Reconnaissance sampling by Heron over a number of magnetic highs on the Heron ground has found scattered 

occurrences of sulphidic QMH equivalent rocks with anomalous VMS indicator geochemistry (gold, silver, copper, 

arsenic, barium and antimony). This is a very positive indication that the prospective stratigraphy is present. 

During the Quarter the Company has completed the following: 

� 55.2 line kilometres of moving loop electromagnetic (EM) surveys. 

� 746 soil samples including orientation surveys (combination of surface soil and shallow auger soil). 

� 7 reconnaissance Reverse Circulation (RC) holes (1,270metres) on a variety of geological, EM, magnetic and 

geochemical targets, aimed at better quantifying mineralization and alteration styles. 

The RC drilling has provided first-pass geological information in the four target areas shown in Figure 1. While assays 

are still pending, a summary of the drilling is provided below. Strong alteration was intersected in most of the holes and 

provided encouragement for future work. Petrological sampling of sulphidic and alteration zones was completed. 

Target 1 - GBRC001-003 

Figure 1 Heron tenements and regional magnetics. 

Drilling under scattered gossan float (GBRC001-002) intersected 

strongly chlorite-sericite-carbonate altered sediments with minor 

sulphides. The strong alteration indicates potential proximity to 

mineralisation and further work is warranted. The third hole in this 

area (GBRC003) drilled into a coincident magnetic/EM anomaly 

and intersected strongly sheared chlorite-magnetite-epidotecarbonate 

altered sediments with intervals containing moderate 

amounts of sulphide. Down hole EM is being undertaken to 

determine if the conductive zones strengthen at depth. The strong 

alteration in this hole is again encouraging. 

Target 2 - GBRC004 

A single hole was drilled into a linear magnetic anomaly with 

sulphidic exhalative rock fragments as float. Drilling intersected 

magnetite-chlorite-sericite schist with minor epidote, carbonate and 

sulphides. This appears to be more of a skarn-type alteration (high 

temperature event related to a nearby igneous intrusion) and more 

work is warranted to determine the significance of this zone of 

alteration. 

Heron Resources Limited September 2012 Quarterly Report 2

Target 3 - GBRC005-006 

The target is a subtle EM anomaly adjacent to a magnetic anomaly. Drilling indicates that the EM response is 

associated with a narrow graphite shear zone - possibly the strike continuation or a comparable structural setting to the 

graphite shear seen in the Straits Girilambone copper open-pits to the north-west. 

The drillhole intersected granite within the first 30m before transitioning to a highly sheared, altered sediment containing 

moderate to strong silica-chlorite-biotite-sulphide alteration. Minor disseminated copper sulphide (chalcopyrite) was 

identified in the zones of stronger alteration, again indicating potential proximity to significant mineralisation. Downhole 

EM is being undertaken to provide possible further drill targets. 

Target 4 - GBRC007 

A single drill hole tested a discrete 

magnetic high within pyritic sediments at 

surface: Drilling has intersected quartz 

veined pyritic shales (part of the 

Girilambone Beds) and a thin ultramafic 

unit at 183m, being the possible source 

for the magnetic anomaly. The hole was 

characterised by frequent occurrences of 

pyrite (with occasional >3mm euhedral 

aggregates) and quite strong bleaching 

due to sericite-carbonate alteration. 

RC rig at GBRC007, Girilambone Project, all drilling is in cleared cropping paddocks, excellent exploration access and 

highly supportive local landowners, for whom Heron acknowledges their most productive assistance. 

The various identification of ultramafic rocks within the Girilambone sediments of Targets 1 to 4 is encouraging as these 

are frequently pathfinders to copper-gold mineralisation within Tritton and Girilambone style settings. 

As discussed above, downhole EM is being conducted. Results for both drill chip assays and down-hole EM are 

pending. 

Regional 

Heron has applied for a number of additional tenements in the eastern Lachlan Fold Belt of NSW, where there is good 

potential for high grade copper-gold and base-metal deposits (see Figure 2): 

� Sussex (~600km2 ) – located 50km east of Cobar, the area contains a strong magnetic high within Girilambone 

Beds under shallow cover along strike from historical copper workings and other base metal and gold 

occurrences. 

� McKinnons South (~300km2 ) – located 25km southwest of Cobar, the area contains a magnetic high along strike 

to the south-east from the McKinnons epithermal gold deposit that was mined in the mid 1990s. A number of 

historical geochemical anomalies are present on Heron tenure as immediate follow-up targets. 

� Mt Allen (~300km2 ) – located approximately 100km south of Cobar, the area is adjacent to a number of gold and 

copper-gold mines and occurrences, including the recent Mallee Bull discovery of Peel Mining Limited. Several 

mineralised structures pass through the Mt Allen tenement application. 

Heron’s reconnaissance field work in the Mt Allen and McKinnons South areas found a number of gossan zones with 

strongly anomalous geochemical signatures (Figure 3). These tenement areas are progressing through to grant with 

immediate exploration targets being developed for testing as soon as they are granted. 

On the basis of field work during the Quarter, target generation studies have continued, with new applications in train. 


Figure 2 Lachlan Fold Belt, Heron tenement locations and regional mineralized centres. 

Figure 3 Examples of gossan zones at McKinnons South and Mt Allen Projects (assays from laboratory). 

McKinnons South - gossanous high level quartz veins, 

48ppb gold, 0.56g/t silver, 542ppm copper and 3,670ppm 

arsenic. 

Mt Allen – gossanous ironstone and quartz, 78ppm 

copper, 245ppm lead, 80ppm molybdenum and 82ppm 

arsenic. 


BEDONIA AND ROCKY GULLY NICKEL-COPPER PROJECTS, WESTERN AUSTRALIA 

Figure 4 Southern Western Australia Location Map – Aeromagnetics with key structural elements and Heron projects. 

Exploration targets have been 

identified at Heron’s wholly owned 

Bedonia Nickel Project, located 

65km east northeast of Norseman, 

Western Australia and some 60km 

west southwest of the recent Sirius 

Resources NL Nova nickel-copper 

sulphide discovery (Figures 4-6). 

The Bedonia Project is underlain by 

the Proterozoic Mount Andrews 

Migmatites and contains a number 

of magnetic features (ten current 

targets) characteristic of intrusive 

mafic rocks (the host rocks for the 

Nova nickel-copper discovery). 

In addition to the magnetic targets, 

the Company has re-processed 

airborne electromagnetic data from 

a previous uranium exploration 

program and has generated a 

number of potential bedrock 

conductive zones. 

While ground follow-up is required, such conductors in the Bedonia region may be related to nickel-copper sulphide 

mineralisation. 

A number of the currently defined targets are shown in Figure 6. It should be noted that the mapped conductors are in 

all cases associated with the margins of discrete magnetic anomalies. Such positioning may reflect a chonolithic host 

setting (lava conduit) favourable for Mafic Complex nickel-copper sulphide accumulations (Nova, Voisey’s Bay style). 

The Company is particularly encouraged by the association of magnetics and possible bedrock conductivity and is 

currently executing a soil auger sampling and field reconnaissance program to make on-ground assessments. The area 

has been explored in the past for oil-shale and uranium, however, no specific nickel exploration has been previously 

carried out. While a number of palaeo-channels with deep cover are present (previous uranium targets), the Company is 

initially targeting areas of basement outcrop or shallow cover. 

Figure 5 Location Bedonia Project – Tenement magnetics. Figure 6 Bedonia Project EM targets on magnetics. 


The Rocky Gully Nickel Project (100% Heron) is located 85km northwest of Albany within the western part of the 

Albany Fraser Mobile Zone and is underlain by the Proterozoic rocks of the Birunup Gneiss. Late stage mafic to 

ultramafic intrusions have been identified in the area and are favourable hosts for nickel-copper sulphide mineralisation. 

Soil sampling has defined a number of coincident nickel and copper anomalies and previous Heron reconnaissance 

drilling has identified primary nickel sulphide mineralisation (Figures 7 and 8). 

Heron commenced exploring the area in 2009 for nickel-copper sulphide, but on recognizing carbonatite material in 

drilling, changed the exploration focus to Rare Earth Elements. With the Nova discovery, and the resultant new insights 

into the Albany Fraser Mobile Zone metallogeny, the Heron exploration data has been re-interpreted, and exploration 

focus returned to nickel-copper sulphide. 

The Nova nickel-copper discovery regolith expression (as described in Sirius Resources NL ASX release 10 May 2012) 

is characterized by laterite with 4-32m of consistently anomalous nickel (typically 0.2-0.3%), copper (typically 0.02 to 

0.15%) and cobalt (typically 0.02 to 0.09%). Peak Nova laterite intercept was 52m at 0.61% nickel, 0.06% copper and 

0.07% cobalt. Significantly, deeper intersections in weathered ultramafic bedrock included 8m at 1.06% nickel and 

0.12% copper. 

Reconnaissance drilling by Heron at Rocky Gully in 2009 intersected several strongly anomalous nickel, copper and 

cobalt zones in the lateritic horizons in the areas shown in Figure 7; significant results are shown in Table 1 below. 

Table 1: Heron’s 2009 RAB drilling at Rocky Gully – significant intercepts (in lateritic horizons). 

Hole ID From To Intercept Nickel Copper Cobalt 

Metres metres metres % % % 

RGRC003 12 16 4 0.57 0.04 0.03 

RGRC005 8 16 8 0.58 0.02 0.06 

RGRC006 8 16 8 0.59 0.02 0.04 

RGRC009 24 28 4 0.55 0.06 0.07 

RGRC009 32 36 4 0.46 0.03 0.04 

RGRC010 16 20 4 0.51 0.01 0.04 

RGRC017 16 20 4 0.50 0.06 0.03 

RGRC018 8 20 12 0.62 0.002 0.07 

RGRC019 12 16 4 0.55 0.02 0.02 

RGRC020 8 16 8 0.75 0.05 0.04 

RGRC021 8 20 12 0.71 0.01 0.03 

The dominant lithology in Heron drilling was a coarse-grained metamorphic amphibolite facies ultramafic unit. This was 

usually in close association with mafic and high magnesium rocks, suggesting magmatic differentiation of the ultramafic 

bodies. The drilling at end of hole also indicated that sulphides are regularly present in altered peridotite and pyroxenite 

gneisses underlying the mineralized laterite. The nickel threshold appears to be quite low, with nickel sulphides present 

in samples with grades as low as 0.15% nickel (suggesting sulphide as opposed to silicate nickel host, important 

implications for metallurgical recovery). Fine grained nickel and copper sulphides indentified in petrography included 

pentlandite, millerite and chalcopyrite in association with pyrrhotite and pyrite (Figure 8). 

With the benefit of the recent Nova discovery, these 2009 Heron results are now considered particularly significant. 

Heron is now planning a detailed ground electromagnetic survey over the soil and regolith anomalies to provide targets 

for further drilling. The area is very accessible, with the Muir Highway traversing the tenement and the ground consists 

mostly of blue gum plantations. Landowner permission for the EM surveys has been secured and contractor retained. 


Figure 7 Rocky Gully Project – tenement on aeromagnetic image showing target areas. In all cases, nickel-copper 

anomalism is associated with discrete magnetic features. 

Figure 8 Nickel/Copper Sulphides in Drill Chips from Target 3: Pn = pentlandite (nickel sulphide), Cpy = chalcopyrite 

(copper sulphide), Po = pyrrhotite (iron sulphide) and Mt = magnetite (iron oxide); Field of view = approx 0.5mm 


MT ZEPHYR GOLD AND BASE-METAL 

PROJECT, WESTERN AUSTRALIA 

The Mt Zephyr Project is located 80km north 

northeast of Leonora and represents a 5km long 

package of volcaniclastic sediments and volcanic 

units with strong indications of Volcanogenic 

Massive Sulphide (VMS) style mineralisation. 

The Company completed a diamond core hole 

ZNDD0011 beneath ZNDD06 where broad zones of 

massive and semi-massive sulphides were 

previously intersected including a number of 

chalcopyrite rich volcanic clasts (grading up to 4% 

copper with hand held XRF analysis). 

The recently drilled ZNDD0011 intersected a similar 

sequence to that found in ZNDD0006 and the 

assays have confirmed that sequence continues 

down dip, but unfortunately with a similar base-metal 

tenor. At this stage no further drilling is planned on 

this section. 

The results for ZNDD0011 included 19m @ 0.21% 

zinc and 0.04% copper from 231m and 27m @ 

0.14% zinc and 0.02% copper from 303m. 

The Mt Zephyr tenure is a contiguous greenstone 

package, and remains highly prospective. 

Figure 9 Mt Zephyr Cross Section showing location of ZNDD011. 

Horse Rocks Gold Project, Western Australia 

At Heron’s wholly owned Horse Rocks Project, located 25km southeast of Coolgardie, a small program of 28 RAB holes 

for 607m was completed late in the previous Quarter. The program tested historic RAB drilling and soil gold anomalies 

including a result of 2m @ 2.3g/t gold from 23m to end of hole. The gold mineralisation is associated with an ultramafic 

and sediment/porphyry contact along the western edge of the greenstone belt. Assays for the program were received 

but failed to generate significant anomalies in the drilled area. Further work on newly generated targets is planned. 

Hardman’s Copper-Gold Project, Western Australia 

The Hardman’s copper-gold project is located some 120km east of Halls Creek within the Proterozoic Amhurst 

Metamorphic belt. A 6km long zone of gold-base metal gossans has been mapped in the area along the Glidden Fault 

Zone by previous explorers dating back to the late1960s when some six holes were drilled by Newmont. The best of 

these holes intersected relatively broad zones of pyrite/chalcopyrite mineralisation associated with breccia zones. 

A moving loop EM survey was completed over the area during the Quarter to identify potential zones of massive 

sulphide mineralisation for drill testing. The results for the survey indicate no significant conductors are present and at 

this stage the Company is reviewing the project for a possible farm-out. 


Northwest Queensland Copper-Gold Project 

Figure 10 Northwest Queensland Heron Tenement Locations and Mineralized Centres. 

The Company completed 

tenement acquisitions during 2011 

in the Mt Isa Inlier of northwest 

Queensland, targeting coppergold-REE 

mineralisation in Iron 

Ore Copper Gold (IOCG) settings. 

To date, Heron has applied for 15 

tenements covering 1,717km2 . 

District-scale initial reconnaissance 

has confirmed potential for largescale 

alteration systems on the 

Heron tenure. Heron has 

commissioned an open-file data 

compilation of the tenements with 

a number of interesting prospects 

being located. 

In particular, within EPM19168 and 

EPM 19122 previous exploration in 

the late 1980s identified a zone of 

high-level quartz veining with 

reconnaissance drilling (4 RC 

holes) intersecting strong gold, 

copper and lead anomalism. The 

focus of this exploration was 

actually diamonds in kimberlites 

and no further work has apparently 

been completed since that time. 

Such prospects provide an 

immediate target for on ground 

exploration. 

The northwest Queensland 

acquisitions reflect the Company’s 

positive view of Proterozoic 

copper-gold systems. 


PROJECT DEVELOPMENT 

KALGOORLIE NICKEL PROJECT (KNP) (HERON 100%) 

Figure 11 Kalgoorlie Nickel Project location. 

RESOURCE INVENTORY 

The KNP has a nickel laterite resource 

totalling 727 million tonnes grading 

0.72% nickel and 0.044% cobalt (for 

details of resource categories and 

distribution between project areas see the 

attached statement of mineral resources, 

page 14 following). 

METALLURGICAL TEST WORK PROGRAMS 

The Company recognises the potential 

inherent value of the KNP, and is pursuing 

a multi-disciplinary strategy to enhance and 

ultimately crystallise project value. 

There is an increased focus on new nickel 

laterite extractive technology which, in part, 

reflects the tightening situation of traditional 

sources of supply from nickel sulphides. 

Heron’s strategy is to match these various 

technologies to specific ore types within the 

KNP. 

Discussions are current with several third 

parties concerning technology options for 

the nickel laterite deposits within the KNP. 

Iron-Nickel Study 

The iron-nickel mineral resource for Goongarrie South was estimated as 48.5Mt grading 41% iron and 0.65% 

nickel and formed the basis for initial testwork and studies looking at the potential to produce a viable iron-nickel 

product. From the testwork this goethite-rich material generated an upgraded iron-nickel sinter product which 

assayed up to 73.4% Fe and 3.71% Ni with a 49.5% mass recovery. 

The testwork was undertaken at SGS Lakefield Oretest in Perth, utilising bulk samples collected at Goongarrie South: 

� Mineralogy by XRD to determine material classification. 

� Reductive roast tests followed by magnetic separation. 

� Agitated acid leaching of roast products. 

� Segregation roast tests followed magnetic separation. 

The final report for this work has now been received. While providing encouragement that this approach can produce a 

iron-nickel product from the goethite-rich nickel laterite ore, considerably more testwork is required to prove the 

commercial viability of this option. 


Direct Nickel Study 

Heron continues to evaluate alternate hydro-metallurgical processing technologies that may be applicable to the KNP 

ore types. As part of this assessment, a metallurgical testwork program is being progressed with Direct Nickel. The 

Direct Nickel process is an emerging hydro-metallurgical process for extracting nickel from laterite deposits, at 

substantially lower capex and opex compared with existing Pressure Acid Leach technologies. The process is capable 

of treating the full laterite profile, from limonitic to saprolitic ores using a single flowsheet. 

To date five samples of goethite and goethite-silica ore have been tested in both fresh and saline waters (results 

reported previously). Extraction of nickel via the Direct Nickel process have mostly been up to range 97-99% showing 

the process is applicable. A new round of testwork has now been commissioned aimed at identifying where chlorine 

(from saline process water and also within the nickel laterite ore) reports in any processing plant. Depending on where 

the chlorine reports and in what phase, it could have significant ramifications on the design of the plant and resultant 

capital costs. 

This next phase of testwork will be completed in the current Quarter. 

Other Metallurgical Processes 

Heron has been approached by several groups that are in the process of developing alternative technologies for treating 

nickel laterite ores. The Company will continue to monitor these alternative technologies and where appropriate support 

their development through providing KNP ore samples for testing. 

KNP GOLD INITIATIVES 

BIG FOUR GOLD PROJECT, WESTERN AUSTRALIA 

The Company conducted no further drilling at the Big Four Gold Project during the Quarter and initial rehabilitation of the 

drill sites was completed. The drilling data has been compiled and modelled with a number of local Kalgoorlie contractor 

groups expressing an interest in developing a small scale open pit operation at the project. The Company is currently 

pursuing a number of options in this regard. 

The Company has also identified several other drill targets for gold within the granted mining leases making up the Big 

Four project area. Reconnaissance RAB drill programs are being planned to follow-up some of these targets. 

Figure 12 Project Locations. Figure 13 Big Four Cross Section 1040N. 


SIBERIA SOUTH GOLD PROJECT, WESTERN AUSTRALIA 

Figure 14 Siberia South Gold Project: Soil Gold Anomaly and RAB Drill Lines. 

At Heron’s wholly owned Siberia South 

Project, located approximately 80km 

northwest of Kalgoorlie, a RAB drilling 

program was completed late in the last 

Quarter (55 holes for 924m) to test a soil 

gold anomaly that extends from the 

historical Cave Hill workings for some 3km 

along strike. 

This area has received scant gold 

exploration since the mid 1990s and the 

Company believes there is potential for 

economic mineralisation associated with 

porphyry units along the contact between 

the Walter Williams Formation and Siberia 

Komatiite. 

The soil anomaly ranges from 15ppb to 490pbb and the RAB drilling was designed to test for and delineate supergene 

and bedrock mineralisation prior to follow-up with Reverse Circulation drilling. Several anomalous RAB gold results were 

generated in the range of 0.1-0.4g/t gold with best results of: 

� SBRB012 4m @ 0.36g/t Au from 28m 

� SBRB032 4m @ 0.39g/t Au from 24m. 

A number of other areas in the Siberia South area are also being assessed for their gold potential and the Company has 

been alerted to one area of interest where local prospectors (under agreement with Heron) have reported new finds of 

gold nuggets. Soil auger programs are currently being planned to provide follow-up geochemical coverage before 

conducting further rounds of RC drill testing. 

YERILLA NICKEL-COBALT PROJECT (YERILLA) (SHANSHAN MAY EARN 70%) 

The Yerilla Project is a partnership between Heron and 

Shanshan Ningbo. Shanshan may earn their 70% interest in the 

project upon the project reaching 50% of name plate capacity 

following commissioning. 

Shanshan has completed a Scoping Study for a combined 

agitated leach and heap leach process for the Yerilla project. 

Operating and capital expenditures were estimated for both 

Australia and China-located plants. The process flow sheet aims 

at beneficiation of the ore prior to sulphuric acid leaching in a 

stirred tank environment. This will be complemented by a study 

to look at the potential of heap leaching the beneficiation coarse 

rejects. 

A Deed of Variation to extend the joint venture (original 

completion date was May 2011) has yet to be executed with 

Shanshan to facilitate an extension of the current joint venture. 

In the event that the extension agreement is not executed, Heron 

reverts to 100% unencumbered ownership of the Yerilla Project. 

Figure 15 Yerilla Nickel Cobalt Project Location. 


JOINT VENTURE PROJECTS, WESTERN AUSTRALIA 

Langey Project (Heron 100%, Potash West NL right to earn 70%) 

Potash West have indicated that due to restrictions imposed by the local Aboriginal claimant group on gaining access to 

the ground, they wish to withdraw from this farm-in agreement. The Company will retain the ground 100% and consider 

its options for advancing this project. 

Bulong Gold Project (Heron 40%, Southern Gold Limited 60% and right to earn 80%, Heron retains 100% of all 

nickel laterite rights) 

Southern Gold continued its gold exploration programs at the Bulong tenements, following its successful regional soilgeochemical 

auger program. Having identified approximately 30 gold-in-soil anomalies, Southern Gold is systematically 

testing the anomalies, analysing each anomaly to identify whether they have similar geochemical “signatures” to that of 

the nearby Cannon Gold resource. 

Results from a 61 hole RC drill program (for 2,545m) were received during the quarter, testing four anomalies identified 

in the southern portion of the tenement package. Following positive intersections from the first pass testing of three 

northern anomalies earlier in the year (including 4m @ 6.8g/t gold and 4m @ 4.5g/t gold at Turnpike), this program has 

also returned encouraging results with all three targets returning anomalous gold. While the tenor of the grades 

intersected were low (with the best intersection of 4m @ 1.5g/t), the importance of the results is the combination of the 

gold intercepts with anomalous multi-element results. These suggest a similar geochemical signature to that seen at 

Cannon, in particular the Amersham anomaly. As a first pass test of these anomalies, these results are encouraging and 

warrant follow up test work. 

Planned activities for the December 2012 Quarter include planning follow-up drilling of the high priority targets and 

ground-based geophysical programs. 

Bulong Clinker Hill Gold Project (Heron 49%, Southern Gold Limited 51% and right to earn 80%) 

During the Quarter, field inspection of gold-in-soil anomalous areas plus interpretation and modelling work on large scale 

geological and structural features commenced to provide context for the anomalous soil geochemical results achieved in 

these tenements. The results of this assessment will assist with the planning of drill-based programs. The viability of 

ground-based geophysics will also be assessed for use in this area. 

Figure 16 Location Map Showing Heron/Southern Gold Bulong JV Tenure 


Kalgoorlie Nickel Project, Statement of Mineral Resources 

Project Prospect Million Ni Co Ni Co Cut-off Category Estimation 

tonnes % % tonnes tonnes %Ni Method 

Goongarrie Big Four 40.4 0.77 0.049 311,000 19,800 0.5 Indicated Recoverable 

Goongarrie Big Four 13.4 0.71 0.045 95,000 6,100 0.5 Inferred Recoverable 

Goongarrie Goongarrie Hill 66.6 0.67 0.031 446,000 20,600 0.5 Inferred Recoverable 

Goongarrie Goongarrie South 5.6 1.11 0.107 62,000 6,000 0.5 Measured Recoverable 

Goongarrie Goongarrie South 48.1 0.85 0.067 409,000 32,200 0.5 Indicated Recoverable 

Goongarrie Goongarrie South 47.0 0.69 0.035 324,000 16,500 0.5 Inferred Recoverable 

Goongarrie Highway 52.6 0.72 0.039 379,000 20,500 0.5 Indicated Recoverable 

Goongarrie Highway 40.4 0.70 0.038 283,000 15,400 0.5 Inferred Recoverable 

Goongarrie Scotia 11.2 0.77 0.080 86,000 9,000 0.5 Inferred Krige 

Sub-Total Goongarrie 325.3 0.74 0.045 2,395,000 146,100 

Siberia Siberia South 111.8 0.65 0.035 727,000 39,100 0.5 Inferred Krige 

Siberia Siberia North 15.5 0.71 0.040 110,000 6,200 0.5 Indicated Recoverable 

Siberia Siberia North 75.9 0.73 0.033 554,000 25,100 0.5 Inferred Recoverable 

Siberia Black Range 20.4 0.75 0.102 153,000 20,800 0.5 Inferred Krige 

Siberia Ghost Rocks 47.3 0.66 0.042 312,000 19,900 0.5 Inferred Krige 

Sub-Total Siberia 270.9 0.69 0.041 1,856,000 111,100 

Total KNP West 596.2 0.71 0.043 4,251,000 257,200 

Bulong East 16.7 0.90 0.047 150,000 7,800 0.5 Indicated Krige 

Bulong East 38.0 0.81 0.053 308,000 20,200 0.5 Inferred Krige 

Sub-Total Bulong 54.7 0.84 0.051 458,000 28,000 

Hampton Kalpini 76.4 0.73 0.044 558,000 33,600 0.5 Inferred Krige 

Total KNP East 131.1 0.77 0.047 1,016,000 61,600 

Total KNP 727.3 0.72 0.044 5,267,000 318,800 

JORC COMPLIANCE STATEMENTS 

The information in this report that relates to Mineral Resources is based on information compiled by James Ridley who is a Member of the 

Australasian Institute of Mining and Metallurgy. James Ridley was a full time employee of Heron Resources Limited and had sufficient 

experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the resource estimation activities 

undertaken to qualify as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, 

Mineral Resources and Ore Reserves’. James Ridley has previously consented to the inclusion in this report of the matters based on his 

information in the form and context that it appears. Note that Mineral Resources that are not Ore Reserves do not have demonstrated viability. 

The information in this report that is related to Exploration is based on information compiled by David von Perger who is a member of Australian 

Institute of Mining and Metallurgy. David von Perger is a full time employee of Heron Resources Limited. David von Perger has sufficient 

experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the exploration activity that he is 

undertaking to qualify as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, 

Mineral Resources and Ore Reserves. David von Perger consents to the inclusion in this report of the matters based on his information in the 

form and context that it appears. 

Ian Buchhorn 

Managing Director 


Name of entity 

HERON RESOURCES LIMITED 

Appendix 5B 

MINING EXPLORATION ENTITY QUARTERLY REPORT 

ABN Quarter ended 

30 068 263 098 

Consolidated statement of cash flows 

30 September 2012 

Current Qtr Year to Date 

Cash flows related to operating activities 

(3 months) 

$A’000 $A’000 

1.1 Receipts from product sales and related debtors 

1.2 Payments for: (a) exploration and evaluation 

(b) development 

(c) production 

(994) (994) 

(d) administration 

1.3 Dividends received 

(204) (204) 

1.4 Interest and other items of similar nature received 

1.5 Interest and other costs of finance paid 

1.6 Income taxes paid 

521 521 

1.7 Other –GST (122) (122) 

Net Operating Cash Flows (799) (799) 

Cash flows related to investing activities 

1.8 Payment for purchases of: (a) prospects (5) (5) 

(b) equity investment 

(c) other fixed assets 

1.9 Proceeds from sale of: (a) prospects 40 40 

(b) equity investment 

(c) other fixed assets 

1.10 Loans to other entities 

1.11 Loans repaid by other entities 

Net Investing Cash Flows 35 35 

1.12 Total operating and investing cash flows 

(carried forward) 

Heron Resources Limited September 2012 Quarterly Report 15 

(764) 

(764)

1.12 Total operating and investing cash flows 

(brought forward) 

Cash flows related to financing activities 

1.13 Proceeds from the issue of shares, options, etc. 

1.14 Proceeds from the sale of forfeited shares 

1.15 Proceeds from borrowings 

1.16 Repayment of borrowings 

1.17 Dividends paid 

1.18 Other (provide details if material) 


(764) 

Net financing cash flows - - 

Net increase (decrease) in cash held 

(764) 

(764) (764) 

1.19 Cash at beginning of quarter/year 43,171 43,171 

1.20 Exchange rate adjustments 

1.21 Cash at end of quarter 42,407 42,407 

Payments to directors of the entity and associates of the directors, 

payments to related entities of the entity and associates of the related entities 

1.22 Aggregate amount of payments to the parties included in item 1.2 

1.23 Aggregate amount of loans to the parties included in item 1.10 

1.24 Explanation necessary for an understanding of the transactions 

Directors fees, salaries and superannuation (A$271,034). 

Provision of office accommodation by director related entity (A$18,000) 

Provision of legal services by director related entity (A$14,201) 

Non-cash financing and investing activities 

2.1 Details of financing and investing transactions which have had a material effect on 

consolidated assets and liabilities but did not involve cash flows 

2.2 Details of outlays made by other entities to establish or increase their share in 

projects in which the reporting entity has an interest 

See attached schedule 

Current Qtr 

$A’000 

303

Financing facilities available 

Add notes as necessary for an understanding of the position 

3.1 Loan facilities 

3.2 Credit standby arrangements 

Estimated cash outflows for next quarter 

Amount available 

$A’000 

Amount used 

$A’000 

$A’000 

4.1 Exploration and evaluation 1,400 

4.2 Development 

4.3 Production 

4.4 Administration 

Total 2,000 

Reconciliation of cash 

Reconciliation of cash at the end of the quarter (as 

shown in the consolidated statement of cash flows) to 

related items in the accounts as follows. 

Current Quarter 

$A’000 


- 

- 

600 

Previous Quarter 

$A’000 

5.1 Cash on hand and at bank 74 108 

5.2 Deposits at call 41,801 42,531 

5.3 Bank Overdraft 

5.4 Other (provide details) 

Property Rental bond 47 47 

Environmental bonds 485 485 

Escrow Accounts 

Total: cash at end of quarter (Item 1.21) 

42,407 

43,171

Changes in interests in mining tenements 

6.1 Interests in mining 

tenements relinquished, 

reduced or lapsed 

6.2 Interests in mining 

tenements acquired or 

increased 

Tenement Nature of interest Interest at Interest at 

reference (note (2)) Begin of 

Quarter 

See attached 

schedule 

See attached 

schedule 

End of 

Quarter 

Issued and quoted securities at end of current quarter 

Description includes rate of interest and any redemption or conversion rights together with prices and dates. 

Total 

number 

Number 

quoted 

7.1 Preference securities 

(description) 

7.2 Changes during Quarter 

(a) Increases through share 

issues 

(b) Decreases through 

returns of capital, 

buybacks, redemptions 

Ordinary securities 252,985,787 252,985,787 

7.3 Changes during Quarter * 

(a) Increases through share 

issues 


returns of capital, 

buybacks 

7.4 Convertible debt securities 

(description) 

7.5 Changes during Quarter 

(a) Increases through issues 


securities matured, 

converted 

Issue price per 

security 

(see note 3) 

($) 

Amount paid up 

per security (see 

note 3) 

($) 


7.6 Options 

(description and conversion 

factor) 

7.7 Issued during Quarter 

7.8 Exercised during Quarter 

7.9 Expired during Quarter 

7.10 Debentures 

(totals only) 

7.11 Unsecured notes 

(totals only) 

5,000,000 

2,500,000 

3,500,000 

5,250,000 

4,818,776 

2,600,000 

4,750,000 

4,750,000 

4,750,000 


Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

Exercise Price 

$0.6864 

$1.50 

$2.00 

$2.50 

$0.30 

$0.425 

$0.22 

$0.27 

$0.31 

Expiry Date 

7/09/2016 

05/06/2013 

05/06/2013 

05/06/2014 

09/06/2014 

25/06/2014 

23/06/2014 

23/06/2015 

23/06/2016 

Compliance 2.2 Details of outlays made by other entities to establish or increase their share in projects in 

which the reporting entity has an interest. 

Nothing to report 

6.1 Interests in Mining Tenements transferred, relinquished, withdrawn, reduced or lapsed. 

Tenement Nature of Interest 

% Beginning of 

Quarter 

% At end of 

Quarter 

E16/373 Registered Holder 100 0 










P29/1951 Registered Holder 100 0 



E39/1120 Registered Holder 100 0

Interests in Mining Tenements acquired or increased 

Compliance Statement 

Tenement Nature of Interest 

% Beginning of 

Quarter 

% At end of 

Quarter 

E27/00492 Registered Applicant 0 100 



ELA4609 Registered Applicant 0 100 





M39/01085 Registered Applicant 0 100 

1. This statement has been prepared under accounting policies which comply with accounting standards as defined 

in the Corporations Act or other standards acceptable to ASX (see note 4). 

2. This statement does give a true and fair view of the matters disclosed. 

Sign here: Date: 30/10/2012 

Company Secretary 

Print name: Bryan Horan 

Notes 

1. The Quarterly Report is to provide a basis for informing the market how the entity’s activities have been financed 

for the past Quarter and the effect on its cash position. An entity wanting to disclose additional information is 

encouraged to do so, in a note or notes attached to this report. 

2. The “Nature of Interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, 

exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are 

conditions precedent which will change its percentage interest in a mining tenement, it should disclose the 

change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2. 

3. Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully 

paid securities. 

4. The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement 

of Cash Flows apply to this report. 

5. Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign 

entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be 

complied with.

SUMMARY and HIGHLIGHTS - Heron Resources Limited

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