Mt Caudan Iron Ore


Mt Caudan Iron Ore Farm In Agreement

Cazaly Iron Pty Ltd earning 80% interest in Iron Ore Rights)


An agreement was entered into between Cazaly Iron Pty Ltd and Gondwana in July 2007 (varied by further agreement signed in October 2007) to accelerate the evaluation of the Mt Caudan iron prospect within the Company’s landholdings. Cazaly Iron, a subsidiary of Cazaly Resources Limited (ASX:CAZ), may earn an 80% interest in the iron ore within the project tenements by spending $1.0M over three years, subject to certain conditions precedent.

A review of historic data indicates that the Mt Caudan area hosts significant iron mineralisation with investigations made 1965-1969 suggesting exploration targets ranging between 5M and 30M tonnes (these targets are conceptual in nature and should not be construed as an estimate of Mineral Resources or Ore Reserves).

The project area overlies ~11 kms of strike length of the Mt Caudan BIF horizon which forms a prominent ridge at Mt Caudan approximately 1.3kms long and dips approximately 50º to the west.

Cazaly Iron completed first pass drilling program of 13 reverse circulation (RC) drillholes for 882m at Mt Caudan in December 2007. Results included 51m @ 58.8% Fe, 34m @ 57.8% Fe, and 12m @ 58.6%. Iron mineralisation was intersected in all holes over a 900m strike distance. Continuing the same program, a further 1,300m of drilling is planned for March 2008.

The Mt Caudan area is coincident with a gold anomaly and, accordingly, Gondwana submitted Cazaly’s drill samples for separate gold analysis. PKR004 intersected 8m @ 1.23 g/t Au from 37m within the Mt Caudan BIF (see below). Remaining holes returned only minor sporadic intercepts of low grade gold which may become significant if some form of iron ore development occurs in conjunction with gold operations.

Cazaly Iron has reported that a small further program of drilling for iron ore has been completed at Mt Caudan during the March 2008 quarter. The program comprised a total of 16 holes drilled for 1,070 metres.

Results from the first few holes received to date are as follows:


Hole ID

East

North

Hole

Local

Intercept

Depth

Azm

Dip

From

Length

Fe %

SiO2%

P%

S%

LOI%

PKRC0014

742,248

6,498,728

38

113

-60

7

13

56.4

4.35

0.01

0.12

10.36

   “    “

23

8

58.9

3.09

0.01

0.12

9.19

    “    “

34

4

53.4

13.40

0.01

0.07

9.07

PKRC0015

742,170

6,498,764

9

113

-60

0

NSA

PKRC0016

742,165

6,498,765

112

104

-60

58

5

58.2

4.19

0.01

0.03

10.61

    “    “

66

7

58.7

4.65

0.01

0.03

10.14

    “    “

77

12

55.8

9.33

0.02

0.03

9.60

    “    “

101

6

56.8

5.22

0.01

0.24

9.49

PKRC0017

742,421

6,499,439

65

123

-60

6

29

59.5

2.74

0.05

0.13

9.30

PKRC0018

742,401

6,499,449

75

117

-60

31

17

56.8

3.73

0.01

0.09

9.73

PKRC0019

742,372

6,499,461

90

115

-60

29

4

57.0

2.65

0.00

0.09

10.44

    “    “

52

17

57.6

3.35

0.02

0.06

9.86


  • Holes located on WGS84 Zone 50.
  • All assays conducted by XRF spectrometry on fused bead with Loss on Ignition (LOI) determined by Thermo-Gravimetric Analysers.
  • Significant results calculated over a minimum 2m width using 55% Fe lower cut-off and up to 2m of internal dilution.

There were some drill problems and 4 holes had to be abandoned prior to reaching target. Canga was observed in some holes (commonly with magnetite), varying in thickness between a few metres up to 14 metres. Goethite is the predominant ore mineral in the ore body, with lesser Hematite and Martite.

High grade of weathering was observed and some holes had thick layer of clay, where samples were collected as composite. Interpretation is ongoing with results due in the June 2008 quarter.

Holes PKRC0014 and 0015 had to be abandoned before target depths were reached. Results from the remaining holes drilled may be delayed due to re-checking and laboratory backlog.

In early 2008, pursuant to a settlement agreement in respect of plaints by William Richmond over some of the Mt Caudan tenements, if Cazaly Iron earns its interest in the iron ore rights, Richmond will become entitled to a 5% interest and Gondwana’s will retain a 15% interest in the iron ore rights, carried to the completion of a bankable feasibility study. Gondwana retains 100% interest in gold and other minerals in the project tenements.


Mt caudan Iron Ore

Mt Caudan Iron JV Tenements in Red Showing BIF Horizon in Brown


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