Doolgunna Project - DeGrussa

In mid-2009, Sandfire discovered high-grade VMS copper-gold mineralisation at DeGrussa, located in the north-eastern portion of its Doolgunna Project tenements, which comprises the DeGrussa and underlying Conductor 1 lenses. A third lens was subsequently discovered at Conductor 4.

Initial drilling returned some of the best intersections seen in the Western Australian mining industry in recent times. For example, the discovery hole, DGDD-001, intersected a total of 78.3 metres of high-grade copper-gold mineralisation including:

• 53.2m @ 17.3% Cu and 2.5g/t Au in DeGrussa; and
• 25.1m @ 3.4% Cu, 3.4g/t Au and 1.6% Zn in Conductor 1

In addition to in-fill drilling within the main resource envelope, drilling was also undertaken during 2009 to test the immediate surrounds of the DeGrussa deposit for further copper-gold-zinc lodes.

This led to the discovery in October 2009 of the Conductor 4 deposit, which is located immediately adjacent on the eastern flank of the DeGrussa and Conductor 1 deposits, stratigraphically some 120 metres below Conductor 1.

In conjunction with further geophysical surveys, exploration drilling has continued during 2010 to test the immediate surrounds of the DeGrussa deposit for further copper-gold-zinc lodes.

This led to the discovery in June 2010 of the Conductor 5 deposit, which is located approximately 900 metres north-east of the DeGrussa/Conductor 1 deposits.

Conductor 5 was discovered by follow-up diamond drilling to test a strong off-hole conductor generated by down-hole electro-magnetic (EM) surveys undertaken on recently completed drill holes to the north-east of the Conductor 4 deposit.