The Camel Hills Project covers part of the northwest margin of the Archaean Yilgarn Block and adjacent Errabiddy Shear Zone. Previous exploration has been limited to reconnaissance sampling for magnetite-iron, gold and copper-nickel which has yielded numerous anomalies and targets for follow-up and possible drill-testing (Figure 2).
Prospecting and rock-chip sampling by Desert’s geological team in the southwest of the project area have discovered a previously unknown ultramafic complex, the Far West prospect, cropping out intermittently over an area of 9km2, with surface rock-chip samples up to maximum values of 5.2% Cr, 4260ppm Ni, 818ppm Cu and 1920ppm Zn, with anomalous Pt and Pd (29ppb and 14ppb respectively). Follow-up soil sampling is in progress.
A discrete airborne-magnetic high located only 9km to the east in an area of alluvial cover, suggests the presence of a second complex
Eight other similar airborne-magnetic anomalies and mapped ultramafic bodies occur within the Camel Hills project; none of which are known to have been drill tested. The program of prospecting and rock-chip sampling, with follow-up soil sampling, is continuing. Drill testing of identified mineralisation is then planned.
The historic Byro East Cu-Ni prospect lies 7km south of Far West, outside the Camel Hills Project. Reported drilling results are 13.7m at 1.2% Ni, and 67m at 0.7% Cu, 0.3% Ni, from the weathered (saprolite) zone.
The northern part of the Camel Hills Project covers over 80km of strike of the Errabiddy Shear Zone (Figure 2), a major ENE trending shear zone and gneiss belt which marks the collision zone between the Yilgarn Craton and the Gascoyne Metamorphic Complex to the north. Previous explorers had identified discrete gold anomalies in streams throughout the project area, with only limited follow-up.
Prospecting and sampling has commenced in the west, moving east, and has already identified two sub-parallel prominent high-strain (shear) zones in the gneissic terrane. The target is gold mineralisation similar to the multi-million ounce Tropicana deposit which sits in a similar geological setting on the eastern edge of the Yilgarn Craton.
The southern part of the Camel Hills Project contains numerous magnetite-quartzite horizons which are considered to be metamorphosed banded iron formation. Previous reconnaissance sampling by Aurora Minerals identified Fe values over 40%, and initial metallurgical testwork determined that a ~70% Fe product with low impurities was possible.
Mapping and sampling of the magnetite-quartzite horizons has identified several drill targets to be tested once permits have been approved and relevent heritage surveys completed.
Under the joint venture Desert can earn a 51% interest by sole funding the first $3.8 million of exploration expenditure within a maximum of 4 years of which $1.5m must be spent in the first year. Desert can elect to continue sole funding to earn an additional 19% interest in the project, for a total 70% interest. Background on the transaction is also discussed in the Notice of Meeting dated 11 May 2010.