Overview

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Figure 1- NAE Gold Exploration Permits in Otago, New Zealand

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Lammerlaw Project (Prospecting Permit 60544)

In December 2019, NAE was granted a 265 km2 Prospecting Permit (PP60544) covering the prospective Lammerlaw area in Otago, New Zealand. The Lammerlaw Prospecting Permit was granted to NAE after winning a competitive Newly Available Acreage process when the area became available in early 2019.

The Lammerlaw Prospecting Permit adjoins NAE’s Otago Pioneer Quartz Exploration Permit 60502 to the southeast.

Historic Mining

The Permit contains the historically mined Bella Lode where gold was mined in the late 1800’s with an average grade of 15 g/tonne Au over 0.6-1.8m thickness, before the mine closed in 1901. The Permit also contains a historically mined antimony lode and scheelite (tungsten) workings with minor occurrences of copper, silver and mercury.

New Zealand’s largest alluvial gold deposit, Gabriels Gully (>0.5 Moz produced), is located approximately 3km directly to the south of the Permit the source of the gold remains unidentified.

Macraes Style Shear Hosted Gold Exploration Targets

The regional geology is dominated by the Otago Schist belt, a high-grade metamorphic schist, which has a long history of both hard rock and alluvial gold mining. The Otago Schist is divided into structural blocks or zones of increasing metamorphic grade known as; Sub-Greenschist Facies, Lower Greenschist Facies, Upper Greenschist Facies and Amphibolite Facies. Gold mineralisation at the >10Moz Au Macraes deposits, hosted in the Hyde Macraes Shear Zone (“HMSZ”), occurs entirely within the Lower Greenschist Facies zone in the northeast of the Otago Schist belt.

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Geological Map – Shear Zone Hosted Gold Mineralisation within the Otago Schist Belt

MacKenzie and Craw (2016) identified the potential for Macraes style shear zone hosted gold deposits to occur in the southern part of the Otago Schist belt within the Lower Greenschist Facies zone, inside the Permit area.  These southern shear zone gold exploration targets have been identified as being a ‘mirror image’ of the geology present in the northern margin of the Otago Schist belt (approximately 60km to the northeast) containing the Hyde Macraes Shear Zone (“HMSZ”) which hosts the Macraes gold mine (>10 Moz).

Gold mineralisation such as that found along the HSMZ on the northeastern side of the Otago Schist belt may therefore also be present on the southwestern side of the Otago Schist belt within the Permit as illustrated in the schematic cross section below.

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Geological Cross section – Otago Schist Belt & Southern Shear Zone Gold Exploration Targets

Comparison with Macraes Gold Deposit

The Macraes gold deposit, including the Frasers Open Pit and Underground mine, is the largest gold mine in New Zealand and has produced more than 4 million ounces of gold since opening in 1990.  It has a current mineral resource of over 6 Moz making the deposit >10 Moz in total. The Macraes mine is developed in a regionally continuous shear zone known as the Hyde Macraes Shear Zone (“HMSZ”). The HMSZ is up to 150m thick and dips at approximately 20° to the northeast.

The mineralised HMSZ and associated cross faults correlate with conductivity highs (resistivity lows) from an airborne geophysical survey flown for Glass Earth NZ Ltd in 2007.

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Conductivity Lineaments over the Hyde Macraes Shear Zone

Conductivity/resistivity lineaments may therefore be used as a tool to help identify the occurrence of potentially mineralised shear zones in the ‘mirror image’ geological setting within Lower Greenschist Facies target zone in the southern part of the Otago Schist belt within the Permit.

Conductivity/Resistivity Lineaments as an Exploration Tool

Conductivity (or resistivity) lineaments within the Lower Greenschist zone can therefore be used to target Macraes Style shear hosted gold exploration targets zone in the southern part of the Otago Schist belt within the Permit.

More specifically, MacKenzie & Craw (2016) propose that the boundary of a lens shaped block in the south of the Otago schist belt as defined by conductivity features may be analogous to the contact between Upper and Lower Greenschist Facies schist where the Macraes Footwall Fault and gold mines are located and the Tuapeka Fault Zone near the southern boundary of the Permit may be analogous to the Waihemo Fault System to the north of the Hyde Macraes Shear Zone. The main part of the lens shaped block lies within NAE’s Permits and remains untested.

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Conductivity Lineaments over NAE Lammerlaw Prospecting Permit with Priority Exploration Target (Soil Sampling Lines) Marked (Black)

Priority Gold Exploration Targets Identified by Geophysical Data Review (March 2020)

In March 2020, NAE commissioned Anthony Coote (APSAR Ltd) to examine regional geophysical and other data over the Lammerlaw and OPQ permits including;

  • Magnetic and EM airborne geophysics flown by Fugro Ltd for Glass Earth NZ Ltd in 2007
  • Geology, structure and petrology
  • Previous geochemical sampling including soil sampling, stream sediments and drilling

Priority targets for follow up exploration were identified and exploration recommendations produced. The Priority targets are based on contacts between contrasting metamorphic rocktypes comprising carbonaceous pelitic schists overlying psammitic mafic schists which preferentially host mineralised shearing and veining in other deposits in Otago. These areas are identified by sharp boundaries between high and low response on airborne EM surveys as shown in the figures below.

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Target Areas on Airborne Resistivity

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Conceptual Cross Section Lammerlaw Permit

Work Program

The culmination of the geological setting being analogous to the Hyde Macraes Shear Zone, the presence of conductivity/resistivity lineaments similar to the Hyde Macraes Shear Zone to target exploration, the close proximity of New Zealand’s largest alluvial gold deposit (Gabriels Gully), and historic mines being located on the Permit make it particularly prospective for gold exploration.

In June 2020, following restrictions due to COVID19 being lifted, NAE’s New Zealand based technical team completed the first phase of follow up ground exploration targeting Macraes style shear hosted gold targets on the Lammerlaw Permit. Further ground exploration was also completed at the same time in June 2020 on the OPQ Permit targeting Macraes style shear hosted gold targets.

Work completed in June 2020 on the Lammerlaw Permit included soil and rock chip sampling along with geological mapping completed over 7 of 21 planned soil lines identified by the APSAR Geophysical Data Review (see figure below). The 7 soil lines completed were located withing the OPQ Permit and within the lower-lying south eastern end of the Lammerlaw permit around the Bella Lode. Poor weather prevented sampling at the other 14 soil lines on the Lammerlaw Permit due to their high altitude and early snow cover. In total;

  • 217 soil samples were collected for analysis by pXRF and fire assay for Au.
  • 52 rock chip samples were collected for analysis by pXRF and fire assay for Au.
  • Structural measurements & lithological descriptions collected at 61 outcrop locations

All soil and rock chip samples collected were analysed with portable XRF in the field and have been sent to SGS in Waihi, NZ to be analysed for Au by fire assay.

The remaining soil lines are planned to be sampled in Spring 2020 with drilling expected to follow.

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2020 Planned Soil Sampling Lines shown in blue dashed lines

Otago Pioneer Quartz Gold Exploration Project (Exploration Permit 60502)

In January 2019, NAE was granted a 71.6 km2 Exploration Permit (EP 60502) covering the Otago Pioneer Quartz (“OPQ”) Gold Target located in the Mahinerangi area of Otago, New Zealand.

The OPQ Exploration Permit adjoins NAE’s Lammerlaw Prospecting Permit 60544 to the northwest.

The OPQ Permit contains two gold exploration targets:

  1. The OPQ Reef Gold Target
  2. Macraes Style Shear Hosted Gold Exploration Targets

Otago Pioneer Quartz Reef Historic Gold Mine

Historic records indicate that the Otago Pioneer Quartz (OPQ) reef was mined over 100 years ago averaging 2m wide, to a depth of 65m, over a strike length of at least 1,200m and yielding an average of around 13 grams per tonne Au.

OPQ Reef Gold Target – Exploration Results

Exploration around the OPQ historic mine area by Macraes Mining Company between 1991 and 1997 further demonstrated As and Au soil anomalies over ~1km strike length above the area of the OPQ Reef historically mined.

NAE undertook soil sampling programs over the OPQ Reef gold target using a man-portable drill and hand auger in February 2018 and September 2018 with key results including:

  • 2 samples located ~700m southeast and along strike of the OPQ Reef historic mine recorded gold values of 1.4 g/t and 0.6 g/t
  • 66 g/t gold located ~2,700m southeast and along strike of the OPQ Reef historic mine
  • 55 g/t and 0.25 g/t gold on a line located north of Lake Mahinerangi ~3,000m northwest and along strike of the OPQ Reef historic mine

In September and October 2019, NAE undertook a further soil sampling program, over the OPQ Reef gold target using a man-portable drill and hand auger with key results including:

  • 5 high-grade anomalous gold results ranging between 0.1 g/t and 2.5 g/t gold in man-portable drilholes
  • A further 3 soil and man-portable drill results showed anomalous gold above background levels

The December 2019 results extend the total number of high-grade anomalous gold results obtained by NAE over the OPQ Reef gold target to 10 results ranging between 0.1 g/t and 2.5 g/t gold from shallow man-portable holes and hand auger drilled holes. A further 5 high-grade anomalous gold results between 0.1 g/t and 0.31 g/t gold were also previously obtained by Macraes Mining Company over the OPQ Reef gold target above the historic OPQ Gold Mine area, increasing the number of high-grade anomalous gold results >0.1 g/t gold over the OPQ Reef gold target to a total of 15.

Results to date confirm a ~6 km potential strike length for the OPQ Reef gold target defined by anomalous gold soil results highlighting the potential for one or more narrow zones of high-grade gold mineralization.

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September 2018 Fieldwork – soil sampling with man-portable drill

OPQ Reef Gold Target – Work Program

A Phase 2 exploration program comprising of drilling (~20m deep holes) and trenching over the OPQ gold target was planned to be undertaken in 2020 to follow up on the encouraging results to date. Commencement has been delayed due to COVID 19 however is now being reviewed again by NAE after lifting of NZ COVID restrictions in June 2020.

A follow up Phase 3 program, comprising of deeper RC and/or diamond drilling (>50m deep holes), is also planned subject to the results of Phase 2.

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OPQ Reef Gold Exploration Project Results – 2019 Program Results Highlighted

OPQ Permit Macraes Style Shear Hosted Gold Exploration Targets

The OPQ Permit is also prospective for Macraes style shear hosted gold targets as outlined above in the Lammerlaw Permit section.

OPQ Permit Macraes Style Shear Hosted Gold Exploration Targets – Work Program

In June 2020, following restrictions due to COVID19 being lifted, NAE’s New Zealand based technical team completed ground exploration on the OPQ Permit targeting Macraes style shear hosted gold targets, in conjunction with work undertaken on the Lammerlaw Permit at the same time.

A total of 5 soil lines on the OPQ Permit were completed in June 2020. All samples were analysed with portable XRF in the field and have been sent to SGS in Waihi, NZ to be analysed for Au by fire assay.