2. Balmoral South BlockThe Balmoral South Block deposit is...

2. Balmoral South Block
The Balmoral South Block deposit is located about 1km south of the George Palmer deposit and
appears to be a direct continuation of it. The two deposits are separated by a creek drainage and
Mr.D Hedley,Sherlock Bay Nickel Corporation Limited 28 December 2005
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sand/alluvium cover, which may represent a fault zone, though offset appears to minimal. There
has been very little work done on the South Block except for mapping of surface outcrop from air
photos. There is no record of any drilling or surface sampling.
There is every likelihood of delineating a minimum of 400Mt of resources from the Southern Block
at Balmoral because it appears to be a direct continuation of the George Palmer deposit and the iron
ore should have very similar properties.
Previous work has defined substantial quantities of potential magnetite mineralisation based on
surface outcrop mapping. A reworking of these numbers projected to a depth of 200m below
surface is given in the table below. The thickness of 160m allows for 40m of non-magnetic oxidised
BIF from surface, which is the average thickness found at the adjacent George Palmer deposit.
These represent the “potential mineralisation” or exploration target sizes.
Block Unit Area (km2) Thickness Volume SG Bt
1 Joffre 0.92 160 147 3.40 0.50
2 Joffre 0.93 160 149 3.40 0.51
3 Joffre 0.31 160 49 4.40 0.22
4 Joffre 0.27 160 43 5.40 0.23
5 Joffre 1.24 160 198 3.40 0.67
Total Joffre 3.67 160 587 3.40 2.13
1 Dales Gorge 0.18 160 29 3.40 0.10
2 Dales Gorge 0.27 160 43 3.40 0.15
3 Dales Gorge 0.39 160 63 3.40 0.21
4 Dales Gorge 0.08 160 12 4.40 0.05
5 Dales Gorge 0.22 160 35 3.40 0.12
Total Dales Gorge 1.13 160 182 3.40 0.63
GRAND TOTAL 4.80 160 768 3.40 2.76
The total potential magnetite mineralisation based on a simple projection of surface outcrop to 200m
below surface is in the order of 2.76 billion tonnes. This does not allow for extensions of the BIF
under cover, nor does it allow for truncation of BIF at depth by faults or intrusion by dolerite dykes.
The aeromagnetic signature for the Southern Block is similar to those for the Northern and Central
blocks.
Describing these numbers in terms of section 18 of the JORC reporting code, these exploration
results define potential magnetite mineralisation of between 2.0 and 3.5 billion tonnes with grades
assumed to be comparable to those for the George Palmer deposit. The potential quantity and
grade is conceptual in nature - there has been insufficient exploration to define a Mineral Resource
and it is uncertain if further exploration will result in the determination of a Mineral Resource.
All areas of BIF outcrop are considered to be of similar prospectivity. However, the Joffre member
is substantially thicker than the Dales Gorge member (~300m versus ~150m) and the two are
separated by ~60m of Whaleback Shale member. Therefore the Joffre member is the preferred
target.