ABN 73 006 645 754 oldsearch Limited Level 420 Loftus...

ABN 73 006 645 754 oldsearch Limited Level 4
20 Loftus Street
SYDNEY
NSW 2000
Telephone: (02) 9241 5999 Fax: (02) 9241 5599
email: [email protected] G
G
gsh/psh/gsh700
20 April 2007
The Manager - Company Announcements Office
Australian Securities Exchange Limited
Level 4
20 Bridge Street
SYDNEY NSW 2000
Via ASX Online Number of pages – 15
Dear Sir,
Re: Quarterly activity report to 31 March 2007
Enclosed for release to the market is the Company’s activity report for the quarter ended 31
March 2007 together with a duly completed Appendix 5B report.
For and on behalf of the directors of
Goldsearch Limited
P S Hewson
Secretary
G oldsearch Limited A.B.N.73 006 645 754 Telephone : (02) 9241 5999 Fax : (02) 9241 5599
email: [email protected]
Level 4
20 Loftus Street
SYDNEY
NSW 2000
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QUARTERLY REPORT
(Quarter ended 31 March 2007)
MAJOR DEVELOPMENTS
• Compilation of historical data for the Mary Kathleen
Project, highlighted significant drilling results at
Elaine Dorothy.
• Preliminary access approval granted and physical
exploration access currently being established at
Mount Wellington.
• Sandy Creek drilling program to commence soon.
• East Musgrave joint venture agreement finalised
with Independence Group and BHP Billiton.
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QUEENSLAND
MARY KATHLEEN PROJECT (Goldsearch earning 75%)
(uranium, copper, gold)
The Mary Kathleen Project is a joint venture between Goldsearch Limited and Central West Gold NL.
Goldsearch is currently earning a 75% interest in the project.
Unfortunately, during the early part of the March 2007 quarter, much of the planned field-based
exploration activities were delayed due to particularly heavy seasonal rainfall.
Elaine Dorothy target
As recently announced to the ASX on 11 April 2007, during the March quarter, Goldsearch was able to
locate a number of key historical reports which detail drilling programs and results at the Elaine
Dorothy prospect completed by previous explorers. The programs, which consisted of both percussion
and diamond drilling, were completed in two phases. The first phase was undertaken by Mineral
Ventures NL in 1955. The second phase was undertaken in 1978-1979 by Mary Kathleen Uranium
Ltd, the operators of the former Mary Kathleen Uranium Mine.
The Elaine Dorothy prospect is located approximately 6 kilometres south of the Mary Kathleen Uranium
Mine which has produced a total of 8,882 tonnes of uranium between 1958 and 1963 and a second
phase between 1975 and 1982.
Goldsearch has been able to compile all of this data and confirm in the field the position of a number of
the holes in order to accurately position all holes relative to the four holes (MKRC01-04) drilled by
Goldsearch in December 2006.
The previous results are considered encouraging as they define a continuous zone of U3O8
mineralisation over a strike length of approximately 500 metres. Better results in the previous drilling
include 2.3 metres @ 0.262% U3O8 from 26 metres in hole ED2, 9.5 metres @ 0.036% U3O8 from
13.5 metres in hole ED4 and 2 metres @ 0.134% U3O8 from 100 metres in hole ED11 (Figure One).
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Figure One: Elaine Dorothy Zone, surface projection of drill holes.
This zone is open to the north-west and down dip/plunge (Figure Two) and Goldsearch believes
further drilling is required to fully evaluate the potential of this zone as only a limited amount of drilling
appears to have been completed to date, particularly towards the north western end of the system.
Elaine Dorothy - Drill Hole location data
Hole North (GDA94 Z54) East (GDA94 Z54) Dip Azimuth Total depth
metres metres degrees degrees metres
MKRC01 7699413 398344 -60 204 132
MKRC02 7699413 398344 -80 220 138
MKRC03 7699445 398348 -60 244 132
MKRC04 7699444 398346 -70 160 126
ED1 7699389 398346 -90 - 61
ED2 7699408 398313 -90 - 68
ED3 7699441 398270 -90 - 106
ED4 7699415 398275 -90 - 39
ED5 7699408 398344 -60 160 49
ED11 7699457 398225 -90 - 122
ED12 7699526 398250 -70 171 272.5
ED13 7699472 398332 -70 171 166
ED14 7699525 398185 -75 171 212
EP1 7699530 398060 -70 171 184
EP4 7699590 397940 -70 171 130
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Elaine Dorothy drilling results
Hole
From
(metres)
To
(metres)
Intercept
(metres)
%
U3O8*
MKRC01 53 57 4 0.013
MKRC02 56 57 1 0.019
MKRC03 84 85 1 0.015
MKRC03 94 100 6 0.012
MKRC04 67 72 5 0.011
MKRC04 83 84 1 0.047
ED2 26 28 2 0.262
ED4 13.5 23 9.5 0.036
ED3 55 57 2 0.050
ED3 63 64 1 0.143
ED11 100 102 2 0.134
ED11 106.5 107 0.5 0.100
ED12 148 156 8 0.026
ED14 150 151 1 0.025
ED14 160 169 9 0.017
EP1 32 34 2 0.011
EP1 46 48 2 0.010
EP4 104 106 2 0.015
EP4 118 122 4 0.012
* Note U3O8 values are in some cases calculated values based on an element to oxide conversion factor of 1.179.
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Figure Two: Elaine Dorothy drill section 398250mE
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MacGregor target
During the March quarter further reconnaissance mapping and prospecting in the MacGregor target
area defined an apparent structurally controlled zone of oxide copper mineralisation hosted by the
prospective black shale sequence. It is proposed to test this zone at depth as part of forthcoming
drilling programs.
Regional targets
Reconnaissance exploration was also completed at a number of other targets during the March quarter
including the Prince of Wales and Pindora target areas.
Forward programs
Goldsearch currently expects to complete a program of drilling at Mary Kathleen Project during the
June 2007 quarter with further drilling scheduled for the September 2007 quarter. The drilling, which is
subject to relevant approvals, will be completed at both the MacGregor and Elaine Dorothy targets.
First pass exploration activities will also commence at a number of regional targets during the June
2007 quarter.
VICTORIA
MOUNT WELLINGTON PROJECT (100% Goldsearch)
(gold,silver,copper)
Figure Three: Mount Wellington regional geology and main prospects
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At Mount Wellington, Goldsearch is currently working towards final government approvals from both
relevant forestry and minerals sections of the Department of Primary Industries. Preliminary approval
to re-establish access tracks has been granted with this work commencing and it is expected that
approvals will be finalised in April and exploration activities will commence immediately. These
programs include detailed mapping and a program of IP geophysics at the Rhyolite Hill target.
Goldsearch hopes to commence drilling at Rhyolite Hill during the June 2007 quarter prior to winter
months when access to the area is restricted.
Previous exploration conducted at Rhyolite Hill has identified significant gold and silver mineralisation
associated with an extensive precious and base metals alteration system. Better drilling results at
Rhyolite Hill by previous explorers are 12.6 metres at 1.01 grams/tonne gold from six metres in hole
RCK002 and 32 metres at 27.25 grams/tonne silver and 0.32 grams/tonne gold from 69.5 metres in
hole RCK003.
Goldsearch is currently awaiting the outcome of negotiations for an Indigenous Land Use Agreement
(ILUA) between the Mineral Council of Australia (Victoria) and native title parties which is relevant to its
application for EL 4835. EL 4835 covers the Hill 800 prospect where drilling by previous explorers has
returned numerous encouraging drilling results (Figure Four). Goldsearch currently anticipates
completion of native title negotiations by the middle of 2007.
Hole ID East (GDA94 zone 55) North (GDA94 zone 55) Intercept
Gold
[grams/tonne]
from
(metres)
to
(metres)
HEC1 444767.21 5868594.33 33 4.3 0 33
HEC8 444779.04 5868580.88 27 1.83 0 27
HEC13 444783.07 5868670.54 13 10.88 0 13
incl. 3 38.76 0 3
HEC18 444810.24 5868737.51 22 1.35 38 60
HEC45 444767.21 5868606.02 25 4.72 3 28
HEC48 444749.63 5868735.97 18 5.06 86 104
HEC49 444755.16 5868730.15 28 4.45 79 107
HEC8 444779.04 5868580.88 27 1.83 0 27
HED1 444769.74 5868585.84 32.2 4.28 0.5 32.7
7 22.05 184 191
incl. 1 122 188 189
incl. 1 28.9 184 185
Significant drill results Hill 800 Prospect.
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Figure Four: Oblique drill section Mount Wellington, Hill 800 Prospect.
The Mount Wellington project covers an area of Cambrian age volcanic rocks in central-eastern
Victoria where work by previous explorers has identified a number of areas of encouraging precious
and base metal mineralisation. These rocks, and the styles of mineralisation identified, have
numerous similarities to the Mount Read metallogenic province of Western Tasmania. Based on these
similarities, the Mount Wellington belt has been considered by many to represent geological
equivalents to the Mount Read area.
SANDY CREEK PROJECT (100% Goldsearch)
(gold)
Final preparation work for the proposed drilling program to test the high grade O’Dells gold target on
EL 4812 has been completed and drilling is now expected to commence within the next week as the
arrival on site of the drilling rig has been slightly delayed. The program is planned to test the potential
for additional high grade mineralisation to be located, based on the interpreted structural controls of the
known mineralisation. Historical production from a number of small mines in the Sandy Creek area in
the late 1800’s and early 1900’s is estimated to be 72,000 tonnes at an average grade of 50 grams per
tonne gold.
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NORTHERN TERRITORY
BLOODS RANGE (Goldsearch earning 70%))
(gold, copper)
During the March 2007 quarter Goldsearch withdrew from the joint venture over EL 5701. Goldsearch
still retains various rights over a total of nine exploration licence applications in this region.
SOUTH AUSTRALIA
MUSGRAVE BLOCK SOUTH AUSTRALIA – (49% Goldsearch, 51% Independence Group –
BHP Billiton earning 65%)
(nickel, copper, gold)
During the March 2007 quarter, and as announced to ASX on the 16 February 2007, Goldsearch
finalised the proposed East Musgrave joint venture arrangement with Independence Group and BHP
Billiton.
As part of the arrangement, Independence Group was to issue Goldsearch with 200,000 fully paid IGO
ordinary shares. The issue of these shares has now been finalised.
Anthropological work has been ongoing over four priority tenement areas and, the joint venture is
confident that approvals for exploration access are imminent.
STATEMENT
Technical information contained in this report was prepared by Mr Greg Duncan and Mr Heath Hellewell, Consulting Geologists,
who are Members of the Australasian Institute of Mining and Metallurgy and/or Geological Society of Australia, and accurately
reflects the information compiled by them. Mr Duncan has in excess of 20 years relevant experience in mineral exploration and
mine development, Mr Hellewell has 15 years of relevant experience, and they qualify as Competent Persons as defined in the
2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Mr Duncan and Mr Hellewell consent to the inclusion in this report of the matters based on their information in the form and
context in which it appears.
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 1
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98. 30/9/2001
Name of entity
Goldsearch Limited
ABN Quarter ended (“current quarter”)
73 006 645 754 31 March 2007
Consolidated statement of cash flows
Cash flows related to operating activities
Current quarter
$A’000
Year to date (9.months)
$A’000
1.1 Receipts from product sales and related debtors
- -
1.2 Payments for (a) exploration and evaluation
(b) development
(c) production
(d) administration
(239)
-
-
(189)
(742)
-
-
(542)
1.3 Dividends received 9 20
1.4 Interest and other items of a similar nature received 16 66
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other – JV Income - 25
Net operating cash flows (403) (1,173)
Cash flows related to investing activities
1.8 Payment for
purchases of: (a) prospects
(b) equity investments
(c) other fixed assets
-
-
(4)
-
-
(15)
1.9 Proceeds from
sale of: (a) prospects
(b) equity investments
(c) other fixed assets
-
162
-
-
474
-
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if material) - -
Net investing cash flows 158 459
1.13 Total operating and investing cash flows (carried
forward) (245) (714)
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
Appendix 5B Page 2 1/7/98*
1.13 Total operating and investing cash flows (brought
forward) (245) (714)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 227 227
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (provide details if material) – issue costs - -
Net financing cash flows 227 227
Net increase (decrease) in cash held (18) (487)
1.20 Cash at beginning of quarter/year to date 1,344 1,813
1.21 Exchange rate adjustments to item 1.20 - -
1.22 Cash at end of quarter 1,326 1,326
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 77
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
- Directors’ fees & expenses 68,514
- Directors’ superannuation 5,086
- Legal fees paid to Landerer & Company ( J Landerer) 3,044
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
N/A
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
On 16 March 2007 Independence Group NL issued the Company 200,000 IGO shares as consideration to
complete the earning of a 51% of the East Musgrave Project.
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 3
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available
$A’000
Amount used
$A’000
3.1 Loan facilities Nil N/A
3.2 Credit standby arrangements N/A N/A
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation 350
4.2 Development -
Total 350
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in
the consolidated statement of cash flows) to the related items
in the accounts is as follows.
Current quarter
$A’000
Previous quarter
$A’000
5.1 Cash on hand and at bank 1,280 1,298
5.2 Deposits at call 46 46
5.3 Bank overdraft
5.4 Other (provide details)
Total: cash at end of quarter (item 1.22) 1,326 1,344
Changes in interests in mining tenements
Tenement
reference
Nature of interest (note (2)) Interest at
beginning of
quarter
Interest at end of
quarter
6.1 Interests in mining
tenements relinquished,
reduced or lapsed
EL 5701
West Bloods
Range, NT
East Musgrave
Project, SA
(EL 2910 and EL
3031; ELAs
198/96;260/96;
262/96; 336-
343/96; 534/96
and ELA 35/99)
Joint venture with
Allender/Hosking/ LeBrun
syndicate over exploration
licence covering an area of 569
square kilometres. Goldsearch
withdrew from the joint venture
in January 2007
15 South Australian mineral
tenements covering a total area
of 17,331 square kilometres –
Independence Group (IGO)
completed earning a 51%
interest in the project tenements
during the quarter prior to a new
joint venture with BHP Billiton.
Allender/Hosking/
LeBrun - 100%
with Goldsearch
earning 75%
Goldsearch 100%
with Independence
Group earning 51%
Nil
Goldsearch - 49%;
IGO - 51% with
BHP Billiton
earning up to 65%
and Goldsearch
and IGO diluting to
17.15% & 17.85%
respectively.
6.2 Interests in mining
tenements acquired or
increased
N/A
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
Appendix 5B Page 4 1/7/98*
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 Issue price per
security (cents)
(see note 3)
Amount paid up per
security (cents)
(see note 3)
7.1 Preference +securities
(description)
Nil
N/A
N/A
N/A
7.2 Changes during quarter
(a) Increases through
issues
(b) Decreases through
returns of capital, buybacks,
redemptions
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
7.3 +Ordinary securities 279,347,422 279,347,422 N/A N/A
7.4 Changes during quarter
(a) Increases through
issues – (exercise of
quoted options)
(b) Decreases through
returns of capital, buybacks
4,533,400
Nil
4,533,400
N/A
5.0
N/A
N/A
N/A
7.5 +Convertible debt
securities (description)
Nil
N/A
N/A
N/A
7.6 Changes during quarter
(a) Increases through
issues
(b) Decreases through
securities matured,
converted
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
7.7 Options
Listed options
Unlisted options:
87,071,274
800,000
800,000
400,000
8,000,000
8,000,000
87,071,274
-
-
-
-
-
Exercise price
5.0 cents
5.5 cents
7.5 cents
10.0 cents
5.0 cents
7.5 cents
Expiry date
31 October 2007
30 June 2007
30 June 2008
30 June 2009
31 January 2010
31 January 2010
7.8 Issued during quarter Nil
N/A
7.9 Exercised during
quarter – Listed options
4,533,400
4,533,400
5.0 cents
31 October 2007
7.10 Expired during quarter N/A
N/A
N/A
N/A
7.11 Debentures
(totals only)
Nil
N/A
7.12 Unsecured notes
(totals only)
Nil
N/A
Appendix 5B
Mining exploration entity quarterly report
+ See chapter 19 for defined terms.
30/9/2001 Appendix 5B Page 5
Compliance statement
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: 20 April 2007
(Company secretary)
Print name: P S Hewson
Notes
1 The quarterly report provides 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.