Company Presentations – Dalrymple Resources NL

FRIDAY 27th APRIL 2001

Marcus Harris

THUNDERBOX GOLD DEPOSIT

Successful strategies for a major discovery

by a persistent junior Australian Explorer-Dalrymple Resources

Marcus F Harris

Managing Director

Dalrymple Resources NL

PO Box 689

WEST PERTH WA 6872

INTRODUCTION

Incorporated in 1987 and listed on the ASX in 1989, Dalrymple is a persistent junior explorer, which was ultimately successful in achieving its Eldorado, the two million-ounce Thunderbox Gold Deposit. Since its inception, the Company has been actively exploring for gold and base metals and with LionOre, a Canadian miner, contributed to the discovery of Thunderbox, which is situated near Leinster in the North Eastern Goldfields of Western Australia.

Dalrymple’s role in the Thunderbox discovery, as it evolved from the Company’s successful exploration strategies, is the subject of this paper. [Fig1]

Historical Overview

The current malaise in mineral exploration in Australia is not novel to the industry. Dalrymple is itself a phoenix, rising from the ashes of the October 1987 stock market crash, which completely collapsed the public funding of junior explorers. How did Dalrymple survive the crash with only $200,000 seed capital and continue for 13 years until Thunderbox was discovered?

In the six months of the gold boom before the 1987 crash, the Company pegged, purchased and optioned several sizeable land positions and packaged them up as discrete exploration projects. This was done with private seed capital, convertible to Dalrymple shares. We then survived for another two years by enticing prominent miners, Metana and Reynolds Metals into joint venturing with us to explore these properties. Critical to Dalrymple' survival was the willingness of these companies to allow us to manage the joint ventures.

Then, early in 1989, Joshua Pitt and Neil Tomkinsion joined Dalrymple to with an injection of new seed capital, restructure the Company, with an injection of new private capital. That same year Iin November, 1989Dalrymple was listed with an IPO of 8 million $0.25 shares raising $ 2 million. Dalrymple was the first explorer to float on the ASX after the 1987 crash.

Prior to Thunderbox discovery, joint ventures added nearly $ 12 million to Dalrymple’s exploration efforts. This effectively doubled the amount we have spent to date from our own funds to date.

For long periods we went from year to year raising a little money to keep exploring. Unlike quite a few other junior explorers we did not just preserve funds for a rainy day. We had the prospects and we drilled them and frequently abandoned them. If they reached an advanced stage, we farmed them out to bigger operators.

In our experience, protection against dilution of our equity is imperative especially for nickel sulphides, which are difficult targets to define and drill out.

With a maximum of $3 million in the bank at any one time, joint ventures allowed us to retain a diversity of interests while contributing 40% to the Thunderbox feasibility study.

The Company’s New Objective & Strategies

In 1989, the new board of Dalrymple determined to discover a major orebody rather than acquire an existing mine. We envisaged it would take five to ten-years to be successful, with and this required tight management and plenty of good fortune.

Collectively the Company’s directors have many years of exploration, mining, legal and commercial expertise and we have a good track record of discovery. Our expertise is in gold, copper, zinc and nickel explorationexploration As Tthese readily marketable commodities are very well represented in Australia, so it was logical for us, that we should only explore for them alone, sticking within Australia and in particular within Queensland and Western Australia.

With our limited budget, wWe has adopted a modern prospecting approach to discovery and it has worked well for us. Our lean and mean attitude means that we only have two permanent staff, because we can readily contract from the excellent service industry.

Orebody Models

Having worked for major league mining companies where rigorous conceptual modelling is imperative in generating prospects and then ranking them for budgets, we know from experience that many opportunities will be foregone by over-modelling. So often there are other features, which make it difficult to recognise a new orebody, even if it does eventually fit into a model. Our opportunities have arisen from thinking laterally, “outside the box”

Two good examples of this are linked to the discovery of Gossan Hill and Scuddles ore bodies at Golden Grove. Joshua Pitt discovered Gossan Hill copper orebody, by recognising that not all of the outcropping ironstones on that hill were the same. Some ironstones were formed from massive magnetite, but others were gossans after copper-zinc sulphide. Previous explorers had simply written off Gossan Hill as a typical Archaean banded iron formation. Scuddles zinc-copper orebody was discovered years later. A detailed aeromagnetic survey showed a small but discrete anomaly sitting in a position, which had previously been drilled by another company and which had no copper-lead-zinc anomalism. However closer inspection showed that this drilling had been too shallow and that their geologist believed he was logging the bedrock volcanics, when in fact it was intensely leached, pallid zone clays within lateritised cover. By RAB drilling a little deeper to penetrate the bedrock interface, distinctly anomalous copper-lead-zinc samples resulted. The Scuddles orebody was then discovered by diamond drilling below the regolith.

Eastern Goldfields Exploration Focus

In 1991, we made the decision to dedicate more effort to exploring the Eastern Goldfields of Western Australia. From personal experience we were sure that many ultramafic rich greenstone belts prospective for nickel sulphides had last not been seriously explored in since the late 1970’s. By exploring for both gold and nickel on common ground we aimed to double the chance of discovery. Also by focusing our efforts on just a few key areas we were able be more effective with limited resources.

Old nickel–copper and gold exploration reports and records were scrutinised rigorously concentrating on the strip between Kalgoorlie and Leinster. Unexplained mineralisation and written-off anomalies were investigated further by prospecting. This confirmed that the Scotia-Lake Goongarrie and Mt Clifford-Wildara were highly prospective localities, crying out for more serious exploration. We then claimed these localities and several others as they became available consolidating them over time into significant landholdings. For Dalrymple, they are very much enhanced by being close to mining centres, having excellent infrastructure, covering major structures which cut a variety of rock units and being relatively poorly explored.

Thunderbox Discovery –PRELUDE

Rainbow-The Road to Thunderbox Discovery

Before stepping back to review events pre-1999Dalrymple progressively secured the key tenements at Wildara, consolidating a land position over three years. We then were successful in discovering the Rainbow Gold Prospect as described below.

A number of other targets/prospects were identified and prospected by us before a joint venture was formed with LionOre formerly Forrestania Gold.

Once we had mining title to the Wildara locality, a whole series of overlapping activities took place including data compilation and geological mapping. We purchased new generation aeromagnetic data and satellite imagery from service companies and geological data from government Geological Surveys.

The composite 100,000 scale aeromagnetic image extending north and south of our Wildara-Mt Clifford project highlighted the close relationship of nickel mining centres to Perseverance-Wiluna Belt and of many gold mines including Bronzewing and Tarmoola to the Yandal-Leonora Belt. This is significant, as these structural corridors come together in our Wildara project. Thunderbox is located right at the junction of these two belts on a major shear zone boundary. The satellite TM image clearly showed the existing Double A mine workings and a prominent fault outcropping as a series of en-echelon quartz veins forming a ridgeline [Fig2]

This fault had been mapped long ago by the WA Geological Survey and probably forms part of the western margin of the Yandal Belt.

In ?1981 BHP had taken grid based soil samples along the western edge of the ridge. Their soil sampling method was not described but indicated several consistent gold values of ≥0.15 ppm on three 800 metre spaced lines. This is up to 100 times the normal background for this regolith-covered area. I initially believed the source of this gold might have been the quartz-veined fault, which was not covered by the soil sampling.

The obvious way to assess this would have been systematic rock chip sampling of the veins, however the fastest way was to sample the sediments in the upper part of the drainage system which covered the full extent of the exposed fault ridge. These samples collected as 0.5 kg fine fraction [– 0.5 mm] and digested by bottle roll cyanide leach then analysed to 0.1 ppb produced values up to 16 times background values. However, surprisingly, the area to the east and south of the fault ridge produced the best gold values. So an old cut line grid was extended and we collected soil samples over this eastern side of the ridge, on 800 metre spaced lines. These samples were collected over partially stripped regolith on 25 metre centres and the samples were then composited to make one sample per 50 metres on each line. Samples averaged 0.25 kgs and were analysed for gold after AR40 digest and B/ETA extraction with an AAS finish. The analysis was recorded to 0.1 ppb DL with repeats every 15 samples by Genalysis Labs. Arsenic levels were also recorded in ppm with nominal 20 ppm DL from the same digest and AAS instrumentation. Another significantA completely new gold- arsenic anomaly [Rainbow Prospect] was noted on the far ends of three of these lines. Gold values ranging between 10 and 90 ppb and coincident with 10 to 130 ppm arsenic, stood out against very low background.

While collecting these soil samples a sheared contact between felsic and mafic rocks was identified in sub-outcrop. The shear zone was marked by rubble of ribbon quartz, representing mylonite, as well as gossanous material indicative of sulphide. This gave us confidence that we had found a brand new gold prospect of some significance. It is important to note that while the lateritic duricrust has been partially stripped in this area, further away from the ridge it has been redeposited as a transported blanket and in channels up to 30 metres thick.

Subsequent infill and extension soil sampling by Dalrymple, identified stronger gold arsenic anomalism on what is now Rainbow Prospect, while the BHP anomaly became the northern end of the new Morniung Glory Prospect.

It was then clear that there were outstanding possibilities for discovering gold hidden beneath both the laterite surface and alluvial channels. Amazingly these areas were either partly or totally unexplored, despite the fact they are within a few kilometres of a highway and an operating gold mine.

In hindsight we should have continued exploring Wildara alone, however we wanted to test some nickel gossans at Fly Bore and Marsh Prospects, which was going to be too expensive for our resources at the time. So, in 1996, successful nickel explorers, LionOre were invited into the Wildara project and earned their 60% interest by spending $1.2 million. Two years later, they drilled the Thunderbox discovery holes along strike from Rainbow and proceeded to define a gold resource of 2 million ounces. Joint ventures have effectively added $ 11 Million to our exploration efforts and substantially preserved our shareholders funds, which are now needed for our 40 % contribution to Thunderbox

Our first joint venture program RAB drilled the RainbowAINBOW Pprospect soil anomaly. This confirmed a west dipping shear zone with mylonite and disseminated arsenopyrite and pyrite, below the gold anomalous soil values and the ribbon quartz bands. Gold intercepts such as 8 metres @ 3 grams per tonne[g/t], and 29 metres @ 2 g/t are typical of the results to date and similar results were obtained from Morning Glory.

The budgeted program for the first quarter of 1997, concluded with a series of reconnaissance RAB holes drilled at 100 metre spacing from west to east along the Smith Bore fence line. The strategy was simply to step-out south of Morning Glory and traverse the Yandal Belt boundary structure, however rain stopped play before all of this drilling could be completed. One of the last RAB holes( WDR ), recorded 4 metres @ 1.4 g/t gold from 32 metres, which is highly anomalous. This was the Thunderbox discovery hole, however another year passed before the follow-up drilling program took place.

You might ask why did it take another year to follow this up? One reason is that we were looking for bedrock interface anomalies below the transported alluvial and regolith cover but this gold interval was perched 30 metres above the bedrock oxidation interface. Secondly, Rainbow and Morning Glory were still open-ended prospects demanding more attention. Thirdly, there were many other targets to drill including the nickel gossans at Fly Bore. Fourthly Dave Hutton, the Supervising Geologist, was transferred to another site.

Thunderbox Discovery -INTERMEZZO

Discovery Details

The significance of this intercept was confirmed a year later when in it was followed up under the direction of LionOre’s Chief Geologist, Dr. Mark Bennett. He programmed two RAB lines each 800 metres north and south of the discovery hole.

The last two RAB holes on the northern line discovered Thunderbox Zone A

Hole 411 recorded 4 metres @ 11.7 g/t, plus another 5 metres @ 8.3 g/t and Hole 412 recorded 4 metres @ 5.7, and 10 metres @ 4.9 g/t gold.

These intersections, although in completely oxidised material coincided with vein quartz, visually distinctive laminated quartz (mylonite), orange to dark brown clays and gossanous ironstones [goethite, limonite] indicative of sulphide. Thus, there were some notable similarities to RainbowAINBOW Prospect geology. It was not possible to determine the prototype rock and surprisingly little visible gold was seen. What gold was visible consisted of fine coatings on quartz, i.e. not gold grains in a prospectors panning dish.

Continuation RAB drilling outlined the core of the ore deposit named Zone C, a short distance to the north. The mineralisation extends for 1800 metres and is up to 90 metres wide in the core of Zone C. [Fig3]

Thunderbox Geology

A resource definition RC and Diamond drilling program commenced in October 1999 and has confirmed the integrity of the deposit.

The primary sulphidic zone is intensely hydrothermally altered siliceous lode and gold mineralisation is interspersed with coarse-grained arsenopyrite and minor pyrite, which averages about 3 percent, by volume. This tabular lode contains most of the gold and is commonly flanked by strongly foliated and moderately altered metabasalts. The footwall is marked by an intensely reworked, dominantly ultramafic tectonite, which is the locus of a major fault. This fault, which is only ten metres wide, is close to the continuation of the fault dividing BHP prospect from Rainbow Prospect mentioned earlier.

Diamond core drilling to below 350 metres has shown exceptional widths of mineralisation in the lode underneath some rich supergene gold in the oxidised lode in the saprolite layer of the regolith.

We now believe that the Thunderbox deposit originated as the multistage hydrothermal replacement of a zoned intrusive granitoid with porphyry affiliations. Its ultimate depth is yet to be determined but it is expected to be at least 500metres below surface.

The Wildara joint venture now controls 450 square kilometres around Thunderbox, and Dalrymple has another 150 square kilometres in its own right, abutting Wildara to the south.

Thunderbox Discovery –finale

In January 2001, the joint venture agreed to complete a 14-16 week bankable feasibility study based on the favourable results to date. It is expected that the study will recommend a low cost, open-pit operation supplying a 2 million TPA CIL gold operation, producing in excess of 200,000 ounces pa for many years. Thunderbox discovery cost for Dalrymple represents less than $2 per resource ounce, or much less if the clock starts with the first Wildara tenement pickup, rather than the start-up of the Company.

by

RECAP

Important factors in Dalrymple’s success maybe summarised as

q We had a Track Record of Discovery

q We are Cost effective –Lean and Mean.

q We have the Flexibility to react quickly to opportunity

q We scrutinised available data looking for the unexplained

q We are first and foremost Rock Kickers.

q We Spread the risk with long life joint ventures

q We Explore in Elephant Country

q We are Persistent

The author acknowledges Chairman, Neil Tomkinson and director Joshua Pitt, for their dedication to Dalrymple over the last eleven years, without their strong support and the encouragement of other discoveries, which are at a less advanced stage, we may not have persisted. The ultimate Thunderbox discovery followed programs designed by LionOre exploration team, which is also acknowledged.

More corporate information is available on our website www.dalrymple.com.au and on display in our Information Booth

Figure 1

Figure 2

Figure 3

Reference: Bennett M.A & Buck P.S, Discovery and geology of the Thunderbox gold deposit, Yandal belt; AIG Bulletin 32, 200, pages 373-379