What a Difference a Hole Makes...the Evolution of the Darwin Zone, Henty, Tasmania

Rob Taylor, General Manager Exploration, AurionGold Limited

Introduction

The Henty gold mine is located in the temperate rainforest region of Western Tasmania, near Mount Read about 30km north of Queenstown. It is owned and operated by AurionGold Limited. Production commenced from underground in January 1996, the first gold was poured in May 1996 and to end June 2002 the mine had produced 480,839 ounces of gold. Mineralisation is hosted by the Cambrian Mount Read Volcanics and bears close similarities to VHMS deposits. Individual high-grade gold deposits occur in structurally controlled zones within a bedding parallel, though now near-vertical, continuous alteration zone. Gold is free-milling with a high gravity recoverable component.

Recent Exploration History at Henty

1989 to 1991 Drill-out on Zone 96 and the Sill Zone; 506,000 tonnes at 26.9 g/t for 440,000oz.

1991 to 1994 35.3% JV partner unable to raise finance for development; exploration halted; equity converted to 10% NSR royalty; JV dissolved

June 1994 Exploration recommences.

July 1994 to June 1995 4 holes drilled at Mount Julia; in hindsight, these holes were drilled just over the top of the Mount Julia and Darwin Zone orebodies.

September 1995 MJ005; Mount Julia discovery hole; 43m grading 2.4g/t Au

Sept 1995 to Sept 1997 Drill-out on Mount Julia; Inferred Resource of 760,000tonnes at 7.6g/t for 180,000oz gold; marginal grades, but contains zones of higher grade; still open north and south.

1997 Down-plunge extension of Zone 96 reassessed and tested;

July 1997 MJ015; Zone 15 discovery hole; 7m at 14g/t Au

October 1997 MJ018; Tyndall Zone discovery hole; 4m at 5g/t Au

September 1998 MJ020; Darwin Zone discovery hole; 32m at 7g/t Au

September 1998 Decision on exploration decline to Zone 15; future assessment of Mount Julia to be from underground

March 1999 Positive results from Zone 15 drilling lead to go-ahead for exploration decline to Mount Julia

June 1999 Zone 15; 112,000 tonnes at 15.3g/t for 64,000oz gold.

June 2000 Tyndall Zone; 180,000 tonnes at 8g/t for 46,000oz gold.

December 2000 Positive results from Mount Julia drilling lead to go-ahead for exploration decline to Darwin Zone

June 2002 Darwin Zone Reserve; 1,063,000 tonnes grading 10.3g/t for 352,000oz gold. Mount Julia Reserve; 198,600 tonnes at 8.5g/t for 54,200oz gold.

Looking back on the exploration history at Henty, there have been a number of critical events that have influenced key decision points. During the last seven years of exploration, a large mineralised system was outlined, 1 to 2km south of the original Henty Mine. Because of the high capital cost and commercial risk involved in accessing and evaluating this resource, it took a considerable period of time before a commitment was made to the project.

Some of the more critical factors in the discovery were:

· continuity of staff involved in the project which ensured that knowledge was retained,

· very sound geological understanding that was built up from the exploration and mining of Zone 96 and the Sill Zone and then extrapolated to the rest of the system.

However, at a time when the options were being critically evaluated, it was the result from one hole that tipped the balance: MJ020; Darwin Zone discovery hole; 32m at 7g/t gold.